J.P. Morgan Healthcare Conference John Groetelaars ...

JANUARY 15, 2020

J.P. Morgan Healthcare Conference

John Groetelaars, President and CEO

This presentation contains forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of1995. All statements included herein that are not historical facts are forward-looking statements, including without limitationstatements regarding Hill-Rom’s ability to drive sustainable profitable growth and shareholder value, the timing and successof new product launches and portfolio expansion, the achievement of long-range financial objectives, the continuation ofstable customer demand trends, a stable U.S. capital environment, the timing and success of M&A and businessoptimization initiatives, our ability to reduce debt, implementation of our IT transformation, the impact of tariffs, any changeto the one-time impact from U.S. tax reform legislation, and all other statements concerning future strategy, plans,objectives, projections, expectations and intentions. Such forward-looking statements involve a number of risks anduncertainties and are subject to change at any time. In the event such risks or uncertainties materialize, Hill-Rom’s resultscould be materially adversely affected. For a more in-depth discussion of factors that could cause actual results to differfrom those contained in forward-looking statements, see the discussions under the heading “Risk Factors” in the company'spreviously filed most recent Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q. Except as requiredby applicable law or regulations Hill-Rom assumes no obligation to update or revise any forward-looking statements.

Certain financial figures presented herein have been presented on an adjusted basis (non-GAAP). Reconciliation betweennon-GAAP financial measures and reported GAAP financial measures are included on the Hillrom Investor Relations page.

Hill-Rom’s results contained herein reflect the new revenue recognition accounting standard, ASC 606, which Hill-Romadopted on a modified retrospective basis beginning in the fiscal first quarter 2019. All comparisons contained herein willinclude the new standard for the current and prior year periods.

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© 2020 Hill-Rom Services, Inc. ALL RIGHTS RESERVED. Confidential. APR36401. REV1

Forward Looking StatementsAnd Non-GAAP Financial Measures

3

OUR MISSION

Enhancing outcomes for patients and their caregivers

Hillrom

OUR VISION


4

Patient

Support

SystemsFront

Line Care

Surgical

Solutions

$2.9BFY 2019

Leadership

2019 Revenue by BusinessUS$ Billions

Global medical technology leader with a diversified portfolio across care settings

FY 2017 FY 2018 FY 2019

$150M+

$300M+

$450M+

Innovation

New Product RevenueUS$ Millions

Advancing category leadership with healthcare solutions

Transforming to drive sustainable profitable growth and shareholder value

Value

Market

Capitalization

Enterprise

Value

Fiscal 2019

Returned to

Shareholders*

$7.6B $9.8B

$177M+29%LTM Total

Shareholder

Return*


Key Valuation MetricsAs of 12/31/2019

Hillrom: A Trusted Medical Technology Innovator

Note: Hillrom’s fiscal year end is September 30; *Includes dividends and share repurchases

Driving operational execution and strong financial performance• Drove accelerated core revenue growth and margin expansion while investing for future growth

• Exceeded revenue and EPS guidance each quarter

Expanding internationally and penetrating emerging markets (EM)• Realigned international operations with new leadership, improved visibility and performance

• Reinvigorated emerging markets with targeted investments to drive accelerated top-line growth

Transforming the portfolio with select M&A and optimization initiatives• Executed disciplined M&A strategy with the acquisition of Voalte® and Breathe Technologies

• Redirected resources toward higher-growth opportunities with divestiture of surgical consumables

Advancing category leadership with differentiated solutions and innovation• Achieved $450M+ in new product revenue; exceeded 2020 objective one year early, above goal

• Launched new and unified Hillrom brand, EarlySense, WatchCare™ and Welch Allyn® RetinaVue® 700 Imager

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Hillrom: 2019 Highlights

Enhancing Shareholder Value By Executing Our Strategy

FY 2018 FY 2019

$2.8B

$2.9B

GlobalRevenue

FY 2018 FY 2019

17.0%

17.8%

OperatingMargin

FY 2018 FY 2019

$4.65

$5.08

Adj. EarningsPer Share

FY 2018 FY 2019

$395M$401M

OperatingCash Flow

6

+80 BPSMargin

Expansion

+2%GrowthCore*

Growth

+6%Core Ex.

Acquisitions

+7% +14%Growth

Ex. SBC**

+9%Growth


Achieving Strong 2019 Financial Results

Accelerating Core Revenue Growth While Delivering Strong Earnings & Cash Flow

Note: Axis not to scale; Adjusted gross margin, operating margin and EPS are non-GAAP measures. See reconciliation to reported GAAP numbers in the

appendix to this presentation; *Core revenue excludes foreign currency, divestitures and non-strategic assets the company may exit, including Surgical Solutions

international OEM business; **Stock based compensation (SBC) tax benefit was $0.07 per diluted share in FY 2019 and $0.24 per diluted share in FY 2018

Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019

6%

4%

8%

6%

7

100+ BPS

150+ BPS

Core Growth Impact of Acquisitions

2%

6%

2%

4%


Accelerating Core* Revenue Growth

*Core revenue excludes foreign currency, divestitures and non-strategic assets the company may exit, including Surgical Solutions international OEM business

$6B+

$2B+

$1B+

$4B+ $4B+

$9B+

$7B+

+1% - 3% +6% - 7% +3% - 5% +2% - 4% +1% - 3% +5% - 6% +1% - 3%

2%-3%WAMGR

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Smart Beds,

Surfaces &

Mobility

Care

Comms

Respiratory

Health

Physical

Exams &

Diagnostics

Vision

Screening &

Diagnostics

Surgical

Workflow &

Positioning

Patient

Monitoring

MARKET GROWTH

$33B+Global Market

Opportunity

HRC GROWTH RELATIVE TO

MARKET GROWTH(2019 - 2022)

PSS

FLC

Surgical


Diversifying Portfolio Across Key Care Categories

Non-Core Revenue

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FY 2018 FY 2019 FY 2020

Outlook

FY 2021

Outlook

FY 2022

Outlook

~$210M

~$150M

~$25M

~$0M ~$0M

$300M+Divested

Annualized Revenue

~80%

~30% ~20%

~70%

Revenue Mix% of Total Revenue ~30%

2022 Revenue

Growing Double Digits

<4% Growth >4%+ Growth

10%+ Growth


FY 2017 FY 2022

Outlook

FY 2017

Transforming Portfolio To Drive Higher Durable Growth

FY 2022

Outlook

10

$27B

$36B

2.5M

80%+

$426K

Key Healthcare

Challenges


Creating Value Across The Care Continuum

Note: See references

Advancing Connected Care With Strong Value Proposition

RetinaVue®

ImagerSpot™ Vision

Screener

90%

Diabetic Retinal Exam Compliance Rate7

87%

Vision ScreeningCompletion Rate6

62%

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Centrella®

Smart + BedConnex®

Spot Monitor

Reduction InTotal Falls With NaviCare®

Patient Safety System9

Monarch® AirwayClearance System

20%

Life2000®

Compressor

68%

Reduction In In-Patient Admissions With Vest Therapy10

IN T

HE

OFFIC

E

IN T

HE

HO

SPIT

AL

IN T

HE

HO

ME

Integrated Table Motion

20 min

Average Time Saved Per Surgery

Due To ITM8


Note: ITM – Integrated Table Motion; NIV – Non-Invasive Ventilation. See references

Reduction In ER Visits With NIV Therapy11

Centrella® Smart+ Bed

Vital Signs Monitoring

NaviCare® Patient Safety System

Liko® Smart Lift

WatchCare™ Incontinence

Continuous, Contact-Free HR/RR Monitoring

Third-Party Medical Devices

12

~1

.3M

Co

nn

ec

tab

le H

illr

om

De

vic

es

CONNECTED CARE SOLUTIONS

Data

Hillrom Digital Health Gateway

REAL-TIME CLINICALCOMMUNICATIONS

NURSE CALL

MOBILITY SOLUTION

INTEROPERABILITY

PREDICTIVE ANALYTICS


Connecting Care With Our Digital Ecosystem

Insights Action

Five people die from sepsis every hour in the UK; earlier detection and medical intervention could

help prevent such tragedies

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7 patients rescuedclinically significant detections of patient deterioration in a 26-bed

unit over a 90-day period13

9 minutes

54 minutes

Reduction In Exposure12

WatchCareTM EarlySenseTM

Exclusive partnership with the UK Sepsis Trust – Provides awareness and training to UK hospitals on how to use existing technology to identify deteriorating patients earlier

UK Sepsis Trust


WatchCare™ Incontinence Management System – Provides real-time incontinence alerts to help reduce patient exposure to moisture

Heart Rate and Respiratory Rate Monitoring – Provides contact free continuous monitoring of respiratory rate and heart rate to enable earlier detection of patient deterioration

Enhancing Outcomes With Real-Time Interventions


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NURSE CALL: NAVICARE®

MOBILITY SOLUTION: VOALTE®

INTEROPERABILITY PREDICTIVE ANALYTICS

Demonstrating Category Leadership With Only

Comprehensive Solution In Underpenetrated $5B+ Market

100%penetrated

< 25%penetrated

< 20%penetrated

< 10%penetrated

TAM

~$0.4B

TAM

~$2.1B

TAM

~$1.6B

TAM

~$1.0B


Solving Unmet Needs With Digital Innovation

Note: TAM – Total addressable market. TAM and penetration rates represent U.S. market across category only

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REAL-TIME WAVEFORMS

ALERT & ALARM MANAGEMENT* ALARM STRIPSALARM TRENDS

Alarm Navigator: Reporting on alarms on a unit, facility or

IDN basis

Allows for clinical assignments,

filtering, routing and escalation

Capture and display waveforms digitally

on computer, tablet or mobile device or

within the EHR

Storing waveforms in digital format for

reference and trending information

© 2020 Hillrom Services, Inc. ALL RIGHTS RESERVED. Confidential. APR36401. REV1

Improving Clinical And Economic Outcomes With Integrated Mobile Platform

Delivering Real-Time Digital Solutions And Insights

*Product in development, launching in 2020

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Advancing category

leadership with

differentiated solutions

and innovation

Expanding

internationally and

penetrating emerging

markets

Transforming the

portfolio with select

M&A and optimization

initiatives

Driving operational

execution and strong

financial performance


Executing Our Strategic Priorities

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New Product Revenue

FY 2017 FY 2019 FY 2022

$150M+

$450M+

$750M+

$250M+

WatchCare™

Incontinence*

$1B+

SmartBeds

Significant Market Potential

$2B+

CareCommunications

$400M+

VisionScreening

$300M+

AutomatedVitals Market*

$1B+

Respiratory Airway Clearance & NIV*

2020 New Product Launches

Volara™

Digital Health Offering(Patient Deterioration & Falls)

Mobile Surgical TableYellofins Apex™

Adaptable Therapy Med-Surg Surface

PSS

FLC

Su

rgic

al

DigitalPhysical Assessment


PSS

FLC

Surgical

Delivering Differentiated Solutions And Innovation

Contributing Annual Growth Of ~200 BPS From New Products

Note: NIV - Non-Invasive Ventilation; *U.S. market potential only

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FY 2019 FY 2022

International Revenue Penetration

+LSDInt’l Developed

2019 - 2022 CAGR

+DDEmerging Markets2019 - 2022 CAGR

Int’l Developed Emerging Markets

~70%~60%

~30%

~40%

• Unleashing untapped potential by

expanding penetration from ~9% of

revenue today to double digits

• Focusing investment and developing

market for targeted product categories

• Strengthening Hillrom’s leadership in

primary care and driving demand

• Reducing international volatility with

improved EM growth

• Enhancing visibility while managing

distributors and channel effectively

Emerging Market Drivers


Expanding Internationally And Penetrating EM

Delivering ~100 BPS Of Growth From Emerging Markets

Note: LSD - Low-Single Digits, DD - Double Digits

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• Advancing our Advancing Connected CareTM vision

• Providing real-time insights at point of care

• Integrating Voalte into our digital offering and Care Communications business

• Leveraging strong Hillrom acute care relationships

• Utilizing smart phone platform to enhance clinical workflows

Breathe Technologies AcquisitionVoalte Acquisition

Americans with COPD

Addressable COPD Market (Stage 4)

NIV MarketGrowth

30M+ $4.5B+ 10%+Devices on Voalte’s

Mobile PlatformMarket

Growth Rate

93K+ 15%+ Total Addressable

Market

$5B+

• Addressing growing market needs

• Shifting care closer to home with a mobile solution

• Strengthening our Respiratory Health portfolio

• Leveraging existing customer base and business model

• Adopting NIV therapy drives 91% compliance within

1 year of adoption14; may reduce ER visits by 68% and

total costs by 79%15


Transforming The Portfolio With Disciplined M&A


Compelling 2022 Outlook Focused On Driving Value Creation

FY 2019 FY 2022

Global Revenue

$2.9B~$3.2B

~5%Core* CAGR

FY 2019 2020-2022

Cumulative

OperatingCash Flow

~$1.4B

$401M

~$1.4BCumulative

FY 2019 FY 2022

Adj. Earnings Per Share

$5.08

$6.80+

CAGR

12%+10%+Reported Ex.Divestiture

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Focusing On Durable Revenue Growth And Enhanced Profitability

*Core revenue excludes foreign currency, divestitures and non-strategic assets the company may exit, including Surgical Solutions international OEM business

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For “Sustainable Procurement”

Dave Thomas

Foundation Award recognizes Adoption

Benefits

American Heart Association Workplace

Health Achievement Award (Gold Level)

Diversity & Inclusion Award*

Silver Cradle Award recognizes Adoption

Benefits

The Corporate Board Initiative acknowledges

the advancement of women on Boards

Newsweek List of America’s Most

Responsible Companies


Promoting Excellence In The Workplace

External Recognition Validates Hillrom’s Cultural Impact

*Awarded in Mexico and France

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Key Takeaways

✓ Connected Care vision delivers value and differentiation

✓ Compelling outlook builds on recent momentum; includes

durable, sustainable revenue and EPS growth

✓ Portfolio diversification creates stronger, more resilient

business across care settings

✓ Digital strategy, innovation and Emerging Market

penetration represent significant untapped opportunities

✓ Future M&A transactions additive to outlook

✓ Disciplined execution on strategic priorities will drive

enhanced value for patients, caregivers and shareholders


JANUARY 15, 2020

J.P. Morgan Healthcare Conference

John Groetelaars, President and CEO

References

• Slide 10: 1https://journal.chestnet.org. 2CDC. 3https://ahrq.gov/patient-safety/settings/hospital/resource/pressureulcer/tool/intro.html . 4 CMS/

Advisory Board. 5Advisory Board/CMS.

• Slide 11: 6Implementation of Instrument-Based Vision Screening for Preschool-Age Children in Primary Care (Published: July 2017 – PEDIATRICS). 7Comparing the Effectiveness of Telemedicine and Traditional Surveillance in Providing Diabetic Retinopathy Screening Examinations: A

Randomized Controlled Trial; Mansberger et al, Telemedicine and e-Health, Vol. 19 No. 12, Dec. 2013. 8https://trumpfmedical.com/it/solutions/robotic-or/trusystem-7000dv/. 9Hillrom customer (HC). Navicare© Patient Safety Customer Interview.

August 2017. Email results on file. 10The Impact of High-Frequency Chest Wall Oscillation on Healthcare Use in Patients with Neuromuscular

Diseases. Lechtzin N, Wolfe LF, Frick KD. Ann Am Thorac Soc. 2016 Jun;13(6):904-9. 11Dalal AA, Shah M, D’Souza AO, Rane P. Costs of inpatient

and emergency department care for chronic obstructive pulmonary disease in an elderly Medicare population. J Med Econ. 2010;13(4):591–

598. 17 Machlin S, Chowdhury S. Expenses and Characteristics of Physician Visits in Different Ambulatory CareSettings, 2008. Statistical Brief

#318. March 2011. Agency for Healthcare Research and Quality, Rockville, MD.

• Slide 13: 12Evaluation of an Incontinence Management System in the Critical Care Environment: A Case Series. Rachel Kennedy, MSN, RN,

Christine Slaughter, MSN, RN, CCRN-K, CCNS; Heather Raygoza, RN, BSN, CWOCN, CFCN and Peggle Brooks, RN, BSN, CWOCN, CFCN. 13Identifying Patient Deterioration Early Using Contact-Free Continuous Monitoring on an Inpatient Medical-Surgical Unit. Jan Linderberry MSM,

RN and Shelley Derr BSN, RN.

• Slide 19:14Breathe: Health care utilization and respiratory status following the addition of a portable non-invasive open ventilator to the

treatment regimen. Presented at CHEST, 2015.. 15Neil R. MacIntyre, MD. Clinical Chief, Pulmonary/Critical Care Division. Medical Director,

Respiratory Care Services. Professor of Medicine. Duke University.

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OVERVIEW

https://www.ahrq.gov/patient-safety/settings/hospital/resource/pressureulcer/tool/intro.html

https://www.trumpfmedical.com/it/solutions/robotic-or/trusystem-7000dv/

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