INVESTOR DAY

JUNE 6, 2016
NEW YORK CITY

OMAR ISHRAK
CHAIRMAN & CEO

FORWARD LOOKING STATEMENT

This presentation contains forward-looking statements which provide current expectations or forecasts, including those
relating to market and sales growth, growth strategies, financial results, use of free cash flow, product development and
introduction, partnerships, regulatory matters, restructuring initiatives, mergers/acquisitions/divestitures and related effects,
accounting estimates, financing activities, working capital adequacy, competitive strengths and sales efforts. They are based
on current assumptions and expectations that involve uncertainties or risks. These uncertainties and risks include, but are not
limited to, those described in our periodic reports on file with the U.S. Securities and Exchange Commission (SEC). Actual
results may differ materially from anticipated results. Forward-looking statements are made as of today's date, and we
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 not been
reviewed or audited by our independent registered public accounting firm. Use of different methods for preparing, calculating
or presenting information may lead to differences and such differences may be material. This presentation also contains nonGAAP financial measures such as free cash flow and historical revenue on a comparable constant currency basis, which sums
historical data of Medtronic and Covidien, aligns Covidiens prior year monthly revenue to Medtronics fiscal quarters and
adjusts for the impact of foreign currency translation. We believe these measures provide a useful way to evaluate our
underlying performance. Detail concerning how all non-GAAP measures are calculated, including all non-GAAP to GAAP
reconciliations, are posted to our website.

2016 Investor Day | 3

THE MEDTRONIC MISSION

TENET ONE
To contribute to human welfare
by application of biomedical
engineering in the research,
design, manufacture, and sale of
instruments or appliances that
alleviate pain, restore health, and
extend life.

Medtronic is a technology company and one that is dedicated

to improving patient outcomes

2016 Investor Day | 4

WHY INVEST IN MEDTRONIC?

Next 5 Years

Medtronic
Differentiators

Innovation
Size / Scale
Profitability
Consistency

$40B
Free Cash Flow
Next 5 Years

Medtronic
Differentiators

Cash
Accessibility
Disciplined
Allocator
Returns
Focused

$20B

Return to Shareholders

$10B

M&A and Debt Reduction

$10B

Financial Flexibility
2016 Investor Day | 5

USING OUR SIZE & SCALE TO CREATE MASSIVE VALUE IN GLOBAL HEALTHCARE
EXECUTING ON A BROAD, SUSTAINABLE GROWTH PLATFORM
REVENUE
GROWTH

EPS
LEVERAGE

CAPITAL
ALLOCATION

Robust innovation pipeline,

geographic reach, and new
healthcare business models to
sustain consistent and reliable
above-market revenue growth
Multiple operating and financial
leverage levers to deliver consistent
and reliable double-digit earnings per
share growth
Strategic capital deployment
prioritizing disciplined M&A and
substantial cash returns to
shareholders

Consistent Commitments

MID-SINGLE DIGIT
CONSTANT CURRENCY REVENUE GROWTH

DOUBLE-DIGIT
CONSTANT CURRENCY EPS GROWTH

>50 PERCENT
FREE CASH FLOW RETURNED TO
SHAREHOLDERS
2016 Investor Day | 6

LAST 5 YEARS: ADDED NEW CAPABILITIES

EXECUTING ON A BROADENED, MORE SUSTAINABLE GROWTH PLATFORM
LARGER, MORE DIVERSE
REVENUE BASE

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

ECONOMIC VALUE:
Redefined the business to broaden our
scope beyond devices

EPS
LEVERAGE

Created a runway for strong operating leverage

over next 5+ years, supplemented by financial
leverage

CAPITAL
ALLOCATION

Significantly enhanced our accessible cash

generation capabilities to generate more
investment power and returns for shareholders

BUSINESS

GLOBALIZATION:
Expanded our global reach to realize the
massive emerging market opportunity

FY16

$28.8B

GEOGRAPHY

REVENUE
GROWTH

FY11

$15.9B

INCREASED OPERATING LEVERAGE

Operating
Leverage
Financial
Leverage
INCREASED ACCESSBLE CASH
Accessible
FCF
Trapped
FCF

2016 Investor Day | 7

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

Delivering on Commitments
Made at Deal Announcement

Preserving and accelerating core

strategies: Therapy Innovation,
Globalization & Economic Value

Offering a more comprehensive

and competitive growth platform

Diversifying revenue mix

Capturing operational synergies

Accretive to FY16 cash EPS and

significantly accretive thereafter

Increasing access to capital and

optimizing shareholder returns
through deployment flexibility

Preserve

Optimize

Maintaining business
momentum at both
companies while delivering
consecutive quarters of
strong business
performance.

Accelerate

Integrating the best of our

systems, policies and
facilities reinventing
ourselves to achieve global
growth and savings.

Transform

Realizing synergy
opportunities for Covidiens
Peripheral Vascular and
Neurovascular divisions.
Increasing capital
deployment and access to
trapped cash.

Delivering higher value in

healthcare.
Aligning solutions to
emerging value-based
payment models.
Partnering with new
stakeholders.

2016 Investor Day | 8

LAST 5 YEARS: IMPROVED REVENUE, EPS, AND FREE CASH FLOW GROWTH
REVENUE GROWTH1 (Y/Y)
+1.0%

+2.0%

+4.5%

+4.0%

+6.0%

+6.0%

8.0%
6.0%

4.0%
2.0%

-3.5%

0.0%
Q1

Q2

Q3

Q4

FY11

Q1

Q2

Q3

Q4

Q1

Q2

FY12

Q3

FY13

Q4

Q1

Q2

Q3

FY14

NON-GAAP EPS2 & LEVERAGE

$4.50
$4.00
$3.50
$3.00
Billions

400 bps of cc
leverage

FY11

100bps

400bps

FY12

400bps

Q4

Q1

Q2

Q3

Q4

Q1

Q2

FY15

200bps

Q3

FY16

780bps

FY13

FY14

FY15

FY16

FY13

FY14

FY15

FY16

ADJUSTED FREE CASH FLOW3 & RETURN

7,500
5,000
2,500
0

= Returned to shareholders.

FY11

FY12

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.

2016 Investor Day | 9

Q4

MidSingle
Digit
Range

MEDTRONIC GROWTH MODEL

EXPECT TO GENERATE STRONG TOTAL SHAREHOLDER RETURN
Therapy Innovation
Emerging Markets
Services & Solutions

Covidien Synergies
COGS Reduction
G&A Leverage

Interest Income

Revenue Growth
Mid-Single Digits
Operating Leverage
Low to Mid-Single
Digits
Financial Leverage
Low-Single Digits

Tax

EPS Growth
Double Digits

Dividend Yield

Total Shareholder
Return
Low-Double Digits
to Mid-Teens

Low-Single Digits

Share Repurchases

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

2016 Investor Day | 10

2016 INVESTOR DAY: KEY MESSAGES

A GLOBAL HEALTHCARE LEADER WITH DIFFERENTIATED PLATFORMS
TO DELIVER ATTRACTIVE SHAREHOLDER VALUE
1

REVENUE GROWTH

Unmatched pipeline and attractive, diversified

markets lead to consistent, sustainable
mid-single digit constant currency revenue growth

FREE CASH FLOW

Utilizing systems and structure at scale across the

enterprise to drive margin expansion

Strong revenue growth and high profitability

generates significant and increasingly accessible
free cash flow

EPS GROWTH
EPS GROWTH
Committed to consistently delivering strong double
Committed
to delivering
consistent
double digit
digit constant
currency
EPS growth
constant currency EPS growth

MARGIN EXPANSION

CAPITAL DEPLOYMENT
Deploying massive amounts of capital
strategically, consistently, and with discipline

TOTAL SHAREHOLDER RETURN

Overall performance results in low-double digit to
mid-teens total shareholder return
2016 Investor Day | 11

TODAYS AGENDA
CREATING LONG-TERM VALUE IN HEALTHCARE
Session

Morning
Two15 minute
breaks

Group / Region

Focus

Therapy
Innovation

Revenue Growth

Globalization
Economic Value

CVG
RTG

Americas
EMEA
China
Asia Pacific

Lunch

Margin Expansion
Afternoon

Free Cash Flow &

Capital Allocation
2016 Investor Day | 12

MITG
Diabetes

CVG
RTG
MITG
Diabetes

REVENUE GROWTH
ABOVE MARKET,CONSISTANT,& RELIABLE

DIVERSIFIED SOURCES OF REVENUE GROWTH

COMMITTED TO SUSTAINABLE MID-SINGLE DIGIT TOPLINE GROWTH
UNIVERSAL HEALTHCARE
NEEDS:
PERPETUAL SOURCE OF OPPORTUNITY

Improve Clinical Outcomes

MEDTRONIC STRATEGIES TO
CAPTURE GROWTH:

THREE DIVERSIFIED
GROWTH VECTORS

Therapy Innovation

New Therapies
200 350 bps

Expand Access

Emerging Markets
Globalization

Optimize Cost & Efficiency

150 200 bps

Services & Solutions

40 60 bps
Economic Value
2016 Investor Day | 14

THERAPY INNOVATION

BROAD PRINCIPLES OF THERAPY INNOVATION

HOW MEDTRONIC IS EXECUTING

BREADTH

FOCUSED

Choosing the Right Product

Product Cadence

Clinical and economic value in PDP process

Cross-Selling

Technology-Sharing

TYRX through NeuroStim & Spine

Reveal LINQ through Neurovascular
Peak Plasmablade through CHRF

New therapies key to sustainable midsingle digit growth

GM Structure
Ensure breadth of offerings across BUs
Partner with physicians to champion next
major innovation

RF Generator Design (MITG & CVG)

Vascular Embolics (RTG & CVG)
Patient Management Database Architecture
(Diabetes & CVG)

Marketplace Leadership
2016 Investor Day | 16

FOCUSED: NEW THERAPIES ARE KEY TO SUSTAINABLE MID-SINGLE DIGIT GROWTH

FY20 &
Beyond
FY19

Extravascular ICD
IntrepidTM TMVR
LINQ IITM

Beyond MiniMed 670G

Renal Solutions

Polaris (US / EU)

Drug Filled Stents (EU)

Robotics Platform

Resolute ONYXTM
(US)
CoreValve EvolutTM R XL(EU & US)
AzureTM (EU)

3T MRITM Pacing (US)

FY16

Harmony 1

Cranial Robot
>80 product launches
over the next 3 years
generating ~$4B in
cumulative revenue from
new products by FY21
SigniaTM Powered
Stapler

Evera MRITM ICD (US)

FY17

iPro 4

DBS Lead Refresh

IntellisTM RC

Valiant Evo

Visia AF MRITM

iPro 5

Harmony 2

DBS PC/RC with Sensing

CoreValve EvolutTM PRO

FY18

Medina Embolization (US)

(US)

IN.PACT Admiral (US)

MicraTM (EU / US)

Cardiac & Vascular

Group

ValleylabTM FT10

Minimally Invasive
Therapies Group

4th Generation
Pipeline

iPro 3

Stealth-Midasv
Stealth-Connect
Solitaire
Platinum

MiniMed 670G (US)

Guardian Connect with
EnliteTM 3 (US)

Atlantis EssentialsTM
Anterior Cervical Plate
NextGen
O-Arm

Restorative
Therapies Group

MiniMed 640G (EU)

Diabetes
Group

2016 Investor Day | 17

BREADTH: CROSS-GROUP / BUSINESS UNIT TECHNOLOGY & SALES SYNERGY

TECHNOLOGY
SHARING ACROSS
BUSINESS UNITS

TECHNOLOGY
SHARING ACROSS
GROUPS

GROUP
CROSS-SELLING
OPPORTUNITIES

LEVERAGING GLOBAL
OPERATIONS CENTERS
OF EXCELLENCE

Drug Device Combinations

(e.g. CSH & APV)

RF Generator Design
(e.g. MITG & CVG)

TYRXTM through NeuroStim

& Spine

ECT Cannula
from MITG Mexico

Therapy Delivery Catheters

(e.g. CRHF & CSH)

LAA Stapler, Endoscopic

Vein Harvesting (e.g. CVG &
MITG)

Navigation & Imaging

(e.g. Spine & Brain)

Reveal LINQTM
through Neurovascular

Vascular Embolics
(e.g. RTG & CVG)
Patient Management
Database Architecture
(e.g. Diabetes & CVG)

Peak Plasmablade
through CRHF

Chip-based Glucose
Sensors from MTC Tempe
Transcatheter
Valve/Endovascular
Delivery Systems from
Galway

2016 Investor Day | 18

WHAT YOU WILL HEAR NEXT

THERAPY INNOVATION DRIVING GROWTH ACROSS GROUPS

CVG
Sustainable Therapy Innovation across all
businesses driven by changes in culture,
structure, and processes.

RTG
Changes to structure and talent will
reinvigorate Therapy Innovation and
deliver meaningful innovation through a
consistent cadence of new products.

MITG
Bringing less invasive solutions that
improve patient outcomes while focusing
on high growth submarkets delivering
~80 new products over the next 3 years.

DIABETES
Committed to moving from a domestic
type 1 pump & sensor company to a
global, holistic diabetes management
business focused on outcomes.

2016 Investor Day | 19