BOSTON SCIENTIFIC

Mike Farkas

PROFILE

• Headquarters- Marlborough, MA

• Incorporation- Delaware

• Brief History:

• John Abele worked for Medi-Tech in 1969

• Started raising funds in a Holding Company with Pete Nicholas

• Abele & Nicholas purchased Med-Tech in 1979,

• Renamed Medi-Tech Boston Scientific

ABOUT BOSTON SCIENTIFIC• 1970s (Medi-Tech):

• Lung cancer detection and removal tool.

• 1980s (Boston Scientific):• Acquisition put Boston Scientific in cardiology.

• 1990s (BSX):• ‘92 IPO + International expansion + >$1 B Revenues

• 2000s:• Hugely successful TAXUS product launch ($2 B Revenue)

• 2010s:• Focus on satisfying unmet clinical needs + significant investments in

China & India

INDUSTRY

• Invasive medical supplies company

• Sector: Healthcare

• SIC: 3841

• Surgical and Medical Instruments an Apparatus

BUSINESS OVERVIEW

• “[…] a worldwide developer, manufacturer and marketer of medical devices that are used in a broad range of interventional medical specialties.”

• Cardiology

• Endoscopy

• Urology

• Neuromodulation

BUSINESS SEGMENTS

• Products:

• Cardiovascular • (Stent System, Heart Therapy)

• Rhythm Management• (Pacemakers, Implantable Coronary Defibrillators)

• Endoscopy• (Gastroenterology, Interventional Bronchoscopy)

• Urology• (Devices for urological and gynecological disorders)

• Neuromodulation• (Management of chronic pain)

3-YEAR SEGMENT SALES

0

500

1000

1500

2000

2500

3000

3500

2011 2012 2013

Sales by Segments ($Millions)

Cardio Vascular Rhythm Mgt. MedSurg

COMPETITORS BY MARKET CAPITALIZATION

63.0%

26.5%

4.7%4.6%

1.2%

Medical Supplies Industry (%)

Smith & Nephew

Rest of Industry

Medtronic

Abbott Lab.

BSX

*Total Market Cap:

$1.311 Trillion

COMPETITORS BY SALES

$4,351

$16,590

$5,551

$7,143 2013 Sales ($B)

Smith & Nephew

Medtronic

Abbott Lab.

BSX

2009-2019 SALES AND NET INOME FIGURES

81887143

8700

-6000

-4000

-2000

0

2000

4000

6000

8000

10000

2009 2010 2011 2012 2013 2014 E 2015 E 2019 E

Millio

ns

($)

Sales

Net Income

SALES AND NET INCOME GROWTH

Year Sales Net Income

2009 8188 -1025

2010 7806 -1065

2011 7622 441

2012 7249 -4068

2013 7143 -121

2014 E 7400 735

2015 E 7650 860

2019 E 8700 1200

2009 - 2013

SalesGrowth -2.7%Net

Income Growth

-34.78%(NM)

2013-2019

Sales Growth 3%Net

IncomeGrowth

239%(NM)

PERFORMANCE

10

10.5

11

11.5

12

12.5

13

13.5

Adj Close

$12.77

$13.10+2.58%

Beta P/E…………Forward P/E P/B P/CF P/S

1.08 16………….14.9 2.4 9.8 2.37