Medtronic Investor Meeting - Omar Ishrak

8/15/2019 Medtronic Investor Meeting - Omar Ishrak

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INVESTOR DAYJUNE 6, 2016NEW YORK CITY


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OMAR ISHRAKCHAIRMAN & CEO


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2016 Investor D

FORWARD LOOKING STATEMENT

This presentation contains forward-looking statements which provide current expectations or forecasts, includingrelating to market and sales growth, growth strategies, financial results, use of free cash flow, product developmintroduction, partnerships, regulatory matters, restructuring initiatives, mergers/acquisitions/divestitures and related ef

accounting estimates, financing activities, working capital adequacy, competitive strengths and sales efforts. They aron current assumptions and expectations that involve uncertainties or risks. These uncertainties and risks include, but limited to, those described in our periodic reports on file with the U.S. Securities and Exchange Commission (SEresults may differ materially from anticipated results. Forward-looking statements are made as of today's date,undertake no duty to update them or any of the information contained in this presentation.

Financial Data

Certain information in this presentation includes calculations or figures that have been prepared internally and have reviewed or audited by our independent registered public accounting firm. Use of different methods for preparing, caor presenting information may lead to differences and such differences may be material. This presentation also contaiGAAP financial measures such as free cash flow and historical revenue on a comparable constant currency basis, whistorical data of Medtronic and Covidien, aligns Covidien’s prior year monthly revenue to Medtronic’s fiscal qadjusts for the impact of foreign currency translation. We believe these measures provide a useful way to evaunderlying performance. Detail concerning how all non-GAAP measures are calculated, including all non-GAAreconciliations, are posted to our website.


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2016 Investor D

THE MEDTRONIC MISSIONTENET ONE

“To contribute to human welfareby application of biomedicalengineering in the research,design, manufacture, and sale ofinstruments or appliances thatalleviate pain, restore health, andextend life .”

Medtronic is a technology company and one that is dedicatedto improving patient outcomes


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Innovation

Size / Scale

Profitability

Consistency

WHY INVEST IN MEDTRONIC?

$40 BFree Cash Flow

Next 5 Years

CashAccessibility

DisciplinedAllocator

ReturnsFocused

$

2Return toMedtronicDifferentiators

MedtronicDifferentiators

N

$M&A and

$1Finan


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2016 Investor D

LAST 5 YEARS: ADDED NEW CAPABILITIESEXECUTING ON A BROADENED, MORE SUSTAINABLE GROWTH

THERAPY INNOVATION: Improved R&D productivity to create newmarkets and reinvigorate growth

GLOBALIZATION: Expanded our global reach to realize themassive emerging market opportunity

ECONOMIC VALUE:Redefined the business to broaden ourscope beyond devices

Created a runway for strong operating leverageover next 5+ years, supplemented by financialleverage

Significantly enhanced our accessible cashgeneration capabilities to generate moreinvestment power and returns for shareholders

REVENUEGROWTH

EPSLEVERAGE

CAPITALALLOCATION

B U S I N E S S

G E O G R A P H Y

FY1

INCREASED

INCREAS

LARGER

FinancialLeverage

OperatingLeverage

TrappedFCF

AccessibleFCF

$15.9


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2016 Investor D

LAST 5 YEARS: EXECUTED ON THE LARGEST ACQUISITION IN MEDTECH H

Delivering on CommitmentsMade at Deal Announcement

Preserving and accelerating corestrategies: Therapy Innovation,Globalization & Economic Value

Offering a more comprehensiveand competitive growth platform

Diversifying revenue mix

Capturing operational synergies

Accretive to FY16 cash EPS andsignificantly accretive thereafter

Increasing access to capital andoptimizing shareholder returnsthrough deployment flexibility

Preserve

Accelerate

Op

Tra

Maintaining businessmomentum at bothcompanies while deliveringconsecutive quarters ofstrong businessperformance.

Integsystemfacilioursegrowt

Delivhealth

Alignemerpaym

Partnstake

Realizing synergyopportunities for Covidien’sPeripheral Vascular andNeurovascular divisions.

Increasing capitaldeployment and access to“trapped” cash.


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2016 Investor D

0.0%

2.0%

4.0%

6.0%

8.0%

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

Constant currency. Q1 FY11 and Q1 FY16 adjusted for extra week impact. Q4FY15 through Q3 FY16 on a comparable basis.Non-GAAP EPS on a constant currency basis. Leverage rounded to the nearest 50bps.FCF is operating cash flow minus capital expenditures. Adjusted for litigation payments.

NON-GAAP EPS 2 & LEVERAGE

ADJUSTED FREE CASH FLOW 3 & RETURN

$3.00$3.50$4.00$4.50

FY11 FY12 FY13 FY14 FY15Billions

REVENUE GROWTH 1 (Y/Y)

FY11 FY12 FY13 FY14 FY15

+6.0% +4.0% +4.5% +2.0% +1.0%

02,5005,0007,500

FY11 FY12 FY13 FY14 FY15

400 bps of ccleverage

200bps 400bps

400bps 100bps

= Returned to shareholders.

-3.5%

LAST 5 YEARS: IMPROVED REVENUE, EPS, AND FREE CASH FLOW GROWT


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2016 Investor D

Total

LowtDividend Yield

Low-Single Digits

EPS GrowthDouble Digits

MEDTRONIC GROWTH MODELEXPECT TO GENERATE STRONG TOTAL SHAREHOLDER RETURN

All growth rates and leverage targets given on a constant-currency basis.

Revenue GrowthMid-Single Digits

Financial LeverageLow-Single Digits

Operating LeverageLow to Mid-Single

Digits

Therapy Innovation

Services & Solutions

Emerging Markets

Interest Income

Share Repurchases

Tax

Covidien Synergies

G&A Leverage

COGS Reduction


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2016 Investor D

TODAY’S AGENDACREATING LONG-TERM VALUE IN HEALTHCARE

MorningTwo15 minute

breaks

Afternoon

Lunch

Focus Grou

Revenue Growth

Margin Expansion

Free Cash Flow &Capital Allocation

Session

CVG RTG

TherapyInnovation

Globalization

Economic Value

Americas EMEA China Asia Pacific


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REVENUE GROWTHABOVE MARKET,CONSISTANT, RELIABLE


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2016 Investor D

UNIVERSAL HEALTHCARENEEDS:

PERPETUAL SOURCE OF OPPORTUNITY

MEDTRONIC STRATEGIES TOCAPTURE GROWTH:

THREEGROWT

Improve Clinical Outcomes

Expand Access

Optimize Cost & Efficiency

New 200

Emergi

150

Services40

DIVERSIFIED SOURCES OF REVENUE GROWTHCOMMITTED TO SUSTAINABLE MID-SINGLE DIGIT TOPLINE GRO

Therapy Innovation

Globalization

Economic Value


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THERAPY INNOVATION


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FOCUSED NEW THERAPIES ARE KEY TO SUSTAINABLE MID SINGLE DIGI


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2016 Investor D

FOCUSED: NEW THERAPIES ARE KEY TO SUSTAINABLE MID-SINGLE DIGI

Cardiac & VascularGroup

Minimally InvasiveTherapies Group

RestorativeTherapies Group

FY17

FY16

FY18

FY19

FY20 &Beyond

MicraTM (EU / US)

Visia AF MRITM (US)

Drug Filled Stents (EU)

Resolute ONYXTM (US)

CoreValve EvolutTM R XL(EU & US)

AzureTM (EU)

IN.PACT® Admiral® (US)

Polaris (US / EU)LINQ IITM

CoreValve EvolutTM PRO

>80 product launchesover the next 3 yearsgenerating ~$4B in

cumulative revenue fromnew products by FY21

SigniaTM

PoweredStapler

ValleylabTM FT10

Robotics Platform

Renal Solutions

NextGenO-Arm®

Stealth-Midas®v

Medina Embolization (US)

IntellisTM RC

Atlantis EssentialsTM Anterior Cervical Plate

Valiant ® Evo

Harmo

3T MRITM Pacing (US)

Evera MRITM ICD (US)

IntrepidTMTMVRExtravascular ICD

Stealth-Connect ®

Cranial Robot4th Generation

Pipeline

DBS PC/RC with Sensing

DBS Lead Refresh

Solitaire

Platinum®


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WHAT YOU WILL HEAR NEXT


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2016 Investor D

DIABETES

WHAT YOU WILL HEAR NEXTTHERAPY INNOVATION DRIVING GROWTH ACROSS GROUPS

CVG

RTG

MITG

Sustainable Therapy Innovation across allbusinesses driven by changes in culture,structure, and processes.

Changes to structure and talent willreinvigorate Therapy Innovation anddeliver meaningful innovation through aconsistent cadence of new products.

Committed to moving from type 1 pump & sensor coglobal, holistic diabetes mbusiness focused on outcomes

Bringing less invasive soimprove patient outcomes whon high growth submarket~80 new products over the ne

Medtronic Investor Meeting - Omar Ishrak

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