introductory report
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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
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