22 Annual Credit Suisse Healthcare...

1 22nd Annual Credit Suisse Healthcare Conference – November 12, 2013.

22nd Annual Credit Suisse

Healthcare Conference

November 12, 2013

™


This presentation contains forward-looking statements within the meaning of

Section 27A of the Securities Act of 1933, as amended, and Section 21E of the

Securities Exchange Act of 1934, as amended. Forward-looking statements may be

identified by words like “anticipate,” “expect,” “project,” “believe,” “plan,” “may,”

“estimate,” “intend” and similar words. These forward-looking statements are

based on our beliefs, assumptions and estimates using information available to us

at the time and are not intended to be guarantees of future events or performance.

If our underlying assumptions turn out to be incorrect, or if certain risks or

uncertainties materialize, actual results could differ materially from the

expectations and projections expressed or implied by our forward-looking

statements. Factors that may cause such differences can be found in our most

recent Form 10-K and Forms 10-Q filed or to be filed with the Securities and

Exchange Commission under the headings “Risk Factors” and “Safe Harbor for

Forward-Looking Statements.” Accordingly, you are cautioned not to place undue

reliance on any of our forward-looking statements. Except as required by law, we

do not intend to update any forward-looking statements to reflect any change in

our expectations or in events, conditions, or circumstances on which they may be

based, or that may affect the likelihood that actual results will differ from those

contained in the forward-looking statements.

Safe Harbor For Forward-Looking Statements


This presentation includes products that have not been approved

or cleared by the U.S. Food and Drug Administration and

are not available for sale in the U.S.

All future product approval and launch dates are based on estimates

of completion of regulatory submissions, review and/or approval or

clearance, as well as other business considerations.

For reconciliations of non-GAAP financial measures used in these

presentations to the most directly comparable GAAP figures, please

refer to the Investor Relations section of our website at

www.bostonscientific.com.

Disclaimers

http://www.bostonscientific.com/


$2.2

$0.8

$1.9

$0.1

$1.2 $0.5

$0.4

Our large and diverse portfolio of innovative products…

Our Mission: Boston Scientific is dedicated to transforming

lives through innovative medical solutions that improve the

health of patients around the world.

Advancing science for lifeTM

…drives leadership in our served markets

Neuromodulation

Electrophysiology

Urology & Women’s Health

Peripheral Intervention

Endoscopy

Cardiac Rhythm Management

Interventional Cardiology

1 Represents Boston Scientific’s 2012 revenue excluding $122M of revenue from our Neurovascular businesses, which we sold in 2011.

Interventional

Cardiology

Cardiac

Rhythm

Management

Endoscopy

Peripheral

Interventions

Urology &

Women’s

Health

Neuromodulation

Electrophysiology

2012 Revenue: $7.1B1

Cardiovascular

Rhythm

Management

MedSurg


Large End Markets Expected to Stabilize…

CRV

MedSurg

2012A

Growth

2013E

Growth

2014-2015E

Growth

2016-2017E

Growth

IC (4%) (4%) (2%) (1%)

CRM (5%) (3%) (2%) (1%)

EP 10% 12% 12% 11%

PI 4% 5% 5% 5%

Endo 4% 4% 5% 5%

Uro/WH (3%) 2% 5% 5%

Neuromodulation 6% 6% 7% 8%

Core Market Total (1%) 0% 2% 2%

Adjacencies 30%+ 30%+ 30%+ 30%+

Total Served Market (1%) 1%+ 2%+ 4%+

…with Growth Accelerating from Adjacencies Source: BSC Internal Estimates


STRENGTHEN

Execution to

Grow Share

EXPAND

into High Growth

Adjacencies

DRIVE

Global

Expansion

FUND

the Journey

to Fuel Growth

DEVELOP

Key

Capabilities

Our People: Engagement, Development, Retention

Our Values: Caring, Meaningful Innovation, High Performance, Global Collaboration, Diversity, Winning Spirit

Strategic Imperatives…

Advancing science for lifeTM

…to accelerate growth and enhance profitability


Rhythm management strategy is focused…

…on providing the EP a comprehensive set of solutions

Comprehensive EP Product Offering

S-ICD®

System

WATCHMAN®

Rhythmia

Mapping System

Next Gen ICD/

CRT-D System

Patient Management

Next Gen Stim /

Ablation Therapies

CE Marked. In the U.S., this is

an investigational device and

not available for use or sale.

U.S. approved and CE Marked.

Device under development.

Not available for use or sale worldwide.

U.S. cleared and CE Marked.

Completed acquisition of Bard

Electrophysiology on November 1.


Strengthening our Cardiovascular pipeline…

EpicTM Iliac SES U.S. approved and CE Marked.

SynergyTM

CE Marked. In the U.S., this

device is investigational and is


Promus PREMIERTM

CE Marked. In the U.S., this device is not available

for use or sale.

iLab® Polaris Device under development.

Not available for use or sale

worldwide.

CrossBoss® and Stingray® CTO System U.S. cleared and CE marked.

Interventional Cardiology Peripheral Interventions

OffRoad™ CE Marked. In the U.S., this device is


Rubicon™ 18/35 U.S. cleared and CE Marked.

…with meaningful innovation to grow share


…to expand share and global reach

Differentiated pipeline in MedSurg…

Endobronchial Ultrasound

Endoscopy Urology / Women’s Health Neuromodulation

StarFireTM

Laser

Obtryx®IITM

WallFlex® Transhepatic

Next Generation

Precision SpectraTM

FlexivaTM

TracTip



US approved and CE Marked.



Device under development. Not

available for use or sale worldwide.




Hypertension Severe Asthma

Left Atrial Appendage

EP / Atrial Fibrillation2

Deep Brain Stimulation (DBS)

Expanding into new adjacencies…

Transcatheter Aortic Valve

Replacement

…accelerating our growth and leveraging our capabilities * Source: BSC Internal Estimates

• Only device to treat severe asthma

• 88% reduction in ER visits over five years1

• FDA and CE mark approved

• Treats Parkinson’s movement disorders

• 1 million U.S. adults affected by

Parkinson’s disease

• CE Marked; began U.S. pivotal study in

2013

• 3D Image and catheter guidance

• Mapping system designed for faster diagnostics

• U.S. cleared and CE marked

• Permanent closure of left atrial appendage

• Demonstrated stroke risk reduction vs. Warfarin

• CE Marked; projected FDA approval in 1H 2014*

• Over-the-wire balloon with RF electrodes

• Enhanced patient safety and efficacy

• CE marked; projected to begin U.S. IDE

trial in Q1 2014*

• Structural Heart (TAVR)

• REPRISE I complete; REPRISE II

enrollment complete

• CE Marked; projected to begin U.S. IDE

trial in 2014*

1 Source: Five-year data from the Asthma Intervention Research 2 (AIR2) clinical trial. 2 We do not have an indication to treat Atrial Fibrillation in the US.


2012A 2017E Total Company

Revenue

Total Company

Revenue

Aligned globally for growth

More balanced global portfolio

Building new capabilities in

Emerging Markets

Brazil, Russia, India and China

(BRIC) growing ~30%

BRIC 4%

International

41%

U.S.

53%

International

43%

BRIC 10%

International

41%

U.S.

50%

International

40%

Driving Global Expansion…

…to Accelerate Growth and Establish New Capabilities Source: BSC Internal Estimates


…expand operating margins by 600 basis points over time

Operating income improvement initiatives…

• Reduce Product Cost

• Improve Portfolio Health

• New Products with

Accretive Gross Margin

• Reduce ‘Other Cost of

Sales’

For Example: Emerging Markets

Key Areas Include:

• Finance

• I/S

• HR

• Legal

• Clinical Trials

• Product Development

• Quality

• Customer Service

Key Partners

Gross Margin Improvements Operating Expense Improvements


Estimate through

2017

Adjusted Free Cash

Flow1

$6.5B+

Q4 2012 Cash on

Hand

$0.2B

$6.7B+

Expected Future Capacity for:

Acquisitions:

Growth adjacencies

Near-term revenue contribution

Stock repurchases under $1B program

Risk contingencies

Legal & tax

…Continued Strong Free Cash Flow

Improved Profitability to Drive…

Source: BSC Internal Estimates

1 - Adjusted Free Cash Flow excludes any potential amounts related to acquisition-, divestiture- and litigation-related items, significant tax audit settlements and restructuring and

restructuring-related items. For reconciliations of our non-GAAP financial measures, please refer to the Investor Relations section of our website at www.bostonscientific.com.

http://www.bostonscientific.com/


Operational

Revenue*

Adjusted

EPS*

Adjusted

FCF*

2014 – 2015E

• Low-single digit

2013E

• 0.8% - 1.5%

• $0.69 to $0.71 (Includes $0.04 of Med Device tax

impact)

Projected to return to growth in 2013…

…with goal of consistent revenue and adjusted earnings growth Source: BSC Internal Estimates

2016 – 2017E

• Mid-single digit

*All numbers are Non-GAAP and exclude goodwill and other intangible asset impairment charges, acquisition and divestiture- related net credits, litigation, and

restructuring-related charges, discrete tax items and amortization expense. For reconciliations of non-GAAP financial measures to the most directly comparable

GAAP figures, please refer to the Investor Relations section of our website at www.bostonscientific.com.

• Mid-high single digit

growth

• Strong cash flow

• High-single to low

double digit growth

• Strong cash flow • Strong cash flow


Thank You

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