Citi's Global Health Care Conference February 25,...

1 Boston Scientific Citi Global Healthcare Conference, Feb 25, 2013. †Refer to appendix to this presentation for certain regulatory and financial disclosures.

Citi's Global Health Care Conference

February 25, 2013

™


This presentation contains forward-looking statements within the meaning of

Section 27A of the Securities Act of 1933 and Section 21E of the Securities

Exchange Act of 1934. Forward-looking statements may be identified by words like

“anticipate,” “expect,” “project,” “believe,” “plan,” “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. We disclaim any intention or obligation to publicly update or

revise 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/


Focused on Turning Around Performance in 2013…

A turnaround in markets that are challenging but improving

Making significant changes to improve execution and performance

A clear strategy to accelerate revenue and earnings growth

Delivering strong cash flow and balanced capital allocation strategy

Advancing science for lifeTM – committed leadership team

…and Driving Consistent Revenue and Adjusted Earnings Growth


Tailwinds

Demographics

(e.g. aging population,

comorbidities)

Emerging Markets growth

New treatments for: Hypertension, Transaortic Valve, Left

Atrial Appendage and Asthma

Convergence of device and

informatics; increasing patient

awareness

Increasing scale of Accountable

Care Organization model

Headwinds

Significantly stronger economic

buyer, increased pricing pressure

Medical device tax

Economic conditions in Europe,

Middle East, Africa (EMEA)

Local competitors in Emerging

Markets

Increasing scale of Accountable

Care Organization model

Market Changes…

…are Driving both New Challenges and Global Opportunities


ICD Battery Longevity

Alair ®

S-ICD© LOTUS™

Renal Ablation

Increase Patient

Access to Therapy

Reduce Healthcare Costs

Improve Patient Outcomes

SYNERGY™

…Aligning Incentives Between our Customers and BSC

Boston Scientific Platforms Drive Unique Value…


2012 Served Market †

$30B -1%

2017E Served Market †

$40B +4%

MedSurg ~18% CRV

~78%

MedSurg ~19%

CRV ~66%

Percent of Market Revenue

CRV Mkt Share

MedSurg Mkt Share

BSC’s Portfolio Transformation…

MedSurg Mkt Share

CRV Mkt Share

Adjacencies ~4%

Adjacencies ~15%

…is Well Underway Source: BSC Internal Estimates

Percent of Market Revenue


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


2012 Percent of Revenue†

Adjacencies

6%

Adjacencies

13%

2015E Percent of Revenue†

2017E Percent of Revenue†

MedSurg/PI

40% EP

4%

IC/CRM

43%

MedSurg/PI

42%

IC/CRM

49%

EP

3%

Adjacencies

0.4%

MedSurg/PI

40%

IC/CRM

58%

EP

2%

Source: BSC Internal Estimates

…and ~60% of our Business in Higher Growth Markets

More Balanced Portfolio: IC/CRM Returning to Growth…


Creating a global operating model

New Asia-Pacific leadership and Emerging Markets infrastructure

Strengthening sales model in the U.S. and EMEA

Stronger corporate sales organization

R&D alignment to improve productivity

Leaner organization to improve speed

…to Drive Growth and Improve Global Execution

Operational Changes Being Made...


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

Boston Scientific – Advancing science for lifeTM

Strategic Imperatives


We are Strengthening our CRV Pipeline…

S-ICD®

EpicTM Iliac SES

SynergyTM

Next Gen ICD/CRT-D System

Promus

PREMIERTM

iLab® Polaris

CrossBoss® and Stingray® CTO System

Rhythm Management Interventional Cardiology Peripheral Interventions

IntellaTip MiFi™

Constellation CE

OffRoad™

Rubicon™

18/35

…with Meaningful Innovation to Gain Share


BSC’s Unmatched Commitment to IC…

Complex PCI Future Growth Opportunities

DES Core IVUS Specialty Coronary

CTO LAAC

HTN

(RD) TAVR FFR

BSC

ABT

MDT

STJ

…Broadest and Deepest IC Product Portfolio Source: BSC Internal Estimates

Standard PCI


Rhythm Management Strategy is Focused…

…on Providing the EP a Comprehensive Set of Solutions

Comprehensive EP Product Offering

S-ICD®

System WATCHMAN®

Rhythmia

Medical

Next Gen

ICD/CRT-D

System

Patient Management

Next Gen Stim /

Ablation

Therapies


…Expanding Share and Global Reach

Differentiated Pipeline in MedSurg…

Genesys

HTA®

Ablation

Endoscopic Bronchial Ultrasound

Endoscopy Urology / Women’s Health Neuromodulation

StarFireTM

Laser Obtryx®IITM

WallFlex® Transhepatic

NEXT GENERATION

Precision SPECTRATM


Hypertension Severe Asthma

Left Atrial Appendage

EP / Atrial Fibrillation

Deep Brain Stimulation

Expanding into New Adjacencies…

Transcatheter Aortic Valve

Replacement

2017E

Market†

$700M

2017E

Revenue † Goal

$50M+

2017E

Market†

$2,600M

2017E

Revenue † Goal

$150M+

2017E

Market†

$4,300M

2017E

Revenue † Goal

$350M+

2017E

Market†

$1,500M

2017E

Revenue † Goal

$200M+

2017E

Market†

$400M

2017E

Revenue † Goal

$200M+

2017E

Market†

$500M

2017E

Revenue † Goal

$200M+

…Accelerating Our Growth and Leveraging Our Capabilities Source: BSC Internal Estimates


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


Gross margin expansion

Transitioned to self-manufactured stents

Manufacturing Value Improvement Programs (VIPs)

Strategic pricing

Continued focus on productivity initiatives

Delivering on restructuring program

R&D productivity

Corporate function and SG&A initiatives

…to Help Drive Profitability

Funding the Journey to Fuel Growth…

19 Boston Scientific Global Healthcare Conference, Feb 25, 2013. †Refer to appendix to this presentation for certain regulatory and financial disclosures.

2017E† 2012A†

Adjusted Operating Margin Expansion Opportunity…

19%

Opex† Gross Margin†

% of Sales

25% 4%

2%

…Expected to Yield 600 bps over 5 Years Source: BSC Internal Estimates

Note: Adjusted Operating Margin is 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.


Estimate through 2017†

Adjusted Free Cash

Flow†1

$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 new $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.



Operational

Revenue*

Adjusted

OI*

Adjusted

EPS*

Adjusted

FCF*

2014 – 2015E †

• Low-single digit

• Improve by 100 bps

annually

2013E†

• (2%) to 2%

• 18% to 19% (19+% excluding Med Device tax)

• $0.64 to $0.70 (Includes $0.04 of Med Device tax

impact)

Projected to Return to Growth in H2 2013…

…Followed by Consistent Revenue and Adjusted Earnings Growth Source: BSC Internal Estimates

2016 – 2017E†

• Mid-single digit

• Improve by over

100 bps annually

*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


Q&A


Thank You


Appendix


Regulatory Disclosures CRM

WATCHMAN® Left Atrial Appendage Closure Device CE Marked.

In the U.S., this is an investigational device and not available for use or sale.

ADVANTIO® – INGENIO® – INVIVE® pacemakers MRI

Compatibility

CE Marked.

In the U.S., these are investigational devices and not available for use or sale.

RELIANCE® 4-FRONT lead

CE Marked.


INGEVITY™ pacing leads Worldwide, this is an investigational device and not available for use or sale.

Next Gen ICD/CRT-D System Device under development. Not available for use or sale worldwide.

IntellaTip MiFi™ Open Irrigated Catheter Worldwide, this is an investigational device and not available for use or sale.

Blazer® OI A-Fib Catheter

CE Marked.

In the U.S., these are investigational devices and not available for use or sale.

Rhythmia™ Medical Mapping System Device under development. Not available for use or sale worldwide.

Interventional Cardiology

Synergy™ bioabsorbable polymer drug-eluting stent CE Marked.

In the US, this device is investigational and is not available for use or sale.

Promus PREMIER™ Everolimus-Eluting PtCr Stent

Worldwide, this device is investigational and is not available for use or sale.

Note – CE mark is expected any time. Once it is CE mark, the caution can change to:

CE Marked.

In the US, this device is investigational and is not available for use or sale.

Lotus™ Aortic Valve System This is an investigational device worldwide and is not available for use or sale.

iLab® Polaris Device under development. Not available for use or sale worldwide.

OptiCross™ Imaging Catheter Device under development. Not available for use or sale worldwide.

Guidezilla™Guide Extension Catheter Device under development. Not available for use or sale worldwide.

Agent™Drug Coated Balloon Catheter Device under development. Not available for use or sale worldwide.

Neuromodulation

GUIDE™ DBS programming system Device under development. Not available for use or sale worldwide.

Peripheral Interventions

Vessix™ Renal Denervation System CE Marked.

In the U.S., this device is not available for use or sale.

Innova™ SFA Stent CE Marked.


Cobalt-Chromium Iliac BES CE Marked.

In the U.S., this device is not available for use or sale.

Ranger™ Drug-Coated Balloon Device under development. Not available for use or sale worldwide.

OffRoadTM Re-Entry Catheter CE Marked.


Direxion™ Microcatheter Device under development. Not available for use or sale worldwide.

Expel™ Device under development. Not available for use or sale worldwide.


Financial Disclosures

Market Represent Boston Scientific’s served markets. Identified growth markets CAGRS are for 2012-2017.

Operational Revenue and Growth Represents revenue on a constant currency basis excluding divested businesses.

Adjusted Gross Margins Represents gross margins excluding restructuring related costs.

Adjusted Operating Expense, Adjusted Operating Income and Adjusted EPS These results exclude acquisition and divestiture- related net charges, litigation, and restructuring-related

charges, discrete tax items and amortization expense.

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.

Non-GAAP Financial Measures 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.


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