Hill-Rom Holdings, Inc. (HRC) Bank of America Merrill Lynch 2012 Health Care Conference May 16, 2012, 1:40 p.m. ET Executives John Greisch – President and CEO Mark Guinan – CFO Analysts Lennox Ketner – BofA Merrill Lynch Presentation Operator Lennox Ketner – Bank of America, Merrill Lynch
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The real strengths of the company, in addition to very, very strong market share here in the U.S. and in Europe, the Hill-Rom brand is a very strong brand, particularly in the acute care setting here, and one which we intend to leverage going forward as we expand the company.Most of our businesses are either strong number one or number two positions in the global segments in which we operate. Our largest business segment, patient support systems, is primarily bed frames and surfaces, therapeutic mattresses, if you will, we also have a large rental business of specialized products that both acute care, extended care and home care segments rent products from us, as well as purchase capital sales. And again, our respiratory care business, one of our smaller franchises, but one of our faster-growing, and certainly one of our higher-margin franchises, all of which are number one in their market positions. And as you see on the right hand side of the slide here, our surgical business, furniture, patient lifts, a strong number two in global markets in which we operate. Just to give you a cut of our business, we enjoy a nice diverse portfolio, whether it’s in terms of how we run our business, as you can see on the left side of this slide. Our North American acute care segment is our largest business. It represents just over 60% of the total revenues of the company. Post-acute business, which is extended care, home care and respiratory care, about 13% of the company. Then international is roughly a quarter of the company. This is 2011 data here. Following the Volker acquisition that we made here in 2012, our international revenues are closer to 30% for us. Again, capital and rental split, good diversity here, and geographically, as I mentioned, roughly 70-30, if you include the Volker acquisition. So, a nice, diverse portfolio to give us opportunity to really manage through some of the cycles that we see.
I don’t need to tell anybody in this room about the challenges that our customers are facing. Clearly, governments and providers here in the United States are all pressured to provide better value at lower cost to patients around the world. We think we’re in a good position to respond to those needs. A lot of our outcome-enhancing products, caregiver productivity-enhancing products, addressing some of the core needs that our customers are facing. Clearly, rising acuities across the care continuum are driving demand for some of our products. Healthcare movement out of the acute care space and into other environments, home care as well as additional post-acute facilities, is clearly a trend that we’re going to continue to see going forward. Internationally, more governments are providing enhanced care to more patients around the world, all of which is leading towards demand for products that we provide, and a lot of these demand drivers are going to enable us to grow and support our customers’ needs with the products that we have and products that we’ll be looking to add to the portfolio going forward.In terms of where we’ve been focusing our time, I got here a couple years ago, Mark joined a little over a year ago, and we’re really identifying on this slide the six key focus areas for strategically going forward. As I mentioned, the Hill-Rom brand, the Hill-Rom market position here in the United States, and particularly in Europe, significant assets for the company that we hope to leverage by adding additional products, additional services, again really to provide our customers the opportunity to not only improve outcomes but reduce their operating costs, clearly objectives that they’re all following. Read the rest of this transcript for free on seekingalpha.com