Transcript Stephen Cosgrove, Vice President, Corporate Controller, Chief

1
“Caring for the world, one person at a time…inspires and
unites the people of Johnson & Johnson.”
2
Founded 1886
New Brunswick, New Jersey
In a Former Wallpaper Factory
3
44
OUR FOUNDATION
Strategic
Framework
Our Credo
Our Aspiration
OUR STRATEGIC PRINCIPLES
Broadly Based
in Human
Health Care
Managed for
the Long Term
Decentralized
Management
Approach
Our People
and Values
OUR GROWTH DRIVERS
Creating Value
through
Innovation
Global Reach /
Local Focus
Excellence in
Execution
Leading
with Purpose
5
Manage for the Long-Term
- Consistent Performance
• 76 Consecutive years of sales increases through
2008
• 30 Consecutive years of adjusted earnings increases
*
• 52 Consecutive years of dividend increases**
• ~70% of sales from #1 or #2 global market share
position
• ~25% of sales from new products introduced in the
past 5 years
* Non-GAAP: Excludes special items
* * Reflects dividend increases through April 2014
6
Historical Performance
Through 2013 Year-End
Year
100
Reported Sales
Net Income*
10.1%
10.5%
50
10.6
14.1
20
8.5
11.5
10
5.5
7.6
5
2.3
4.2
1
6.1
10.7
* Excludes special items
Note: Above %’s represent CGR’s
7
Business Structure - Segments
 Consumer – Products marketed to the general public and sold both to retail outlets
and distributors.
 Pharmaceuticals – Products distributed directly to retailers, wholesalers, and health
care professionals for prescription use.
 Medical Devices & Diagnostics – Products distributed to wholesalers, hospitals, and
retailers used principally in the professional field by physicians, nurses, therapists,
hospitals, diagnostic laboratories, and clinics.






Baby
Skin Care
Oral Care
Women’s Health
Wound Care
OTC/Nutritionals
Medical Devices &
Diagnostics
Pharmaceuticals
Consumer

Therapeutic Areas
 Immunology
 Neuroscience
 Infectious
Diseases/ Vaccines
 Oncology
 Cardiovascular &
Metabolism/Other




Vision Care / Diabetes
Global Surgery
 Surgical Care
 Specialty Surgery
 Infection
Prevention
 Cardiovascular Care
Global Orthopaedics
Diagnostics
8
Building On Our Foundation Of Growth
2013 Sales by Segment
Total Sales $71.3 Billion
Operational Change 7.7%
Medical Devices
& Diagnostics
40%
Pharmaceutical
39%
$28.5B
$27.4 B
6.1%*
41%
$14.4 B
21%
$14.7B
$14.4B
2.8%*
0.5%*
Consumer
21%
$28.1B
$25.4
12.0%*
B
38%
* Operational change
Note: Excluding the net impact of the Synthes acquisition, WW Operational sales change = 5.2%;
MD&D ex. Synthes = 0.1% OPS
9
Consumer
10
2013 Consumer Segment Sales
& Operational Growth Rates
Sales: $14.7 Billion
Wound Care /
Other*
$ U.S. Billions
$4.0
+7%
OTC
Oral Care
Ops Change: 2.8%
$3.7
+3%
$1.6
+1%
$1.5
(5%)
$1.6
(1%)
Women's Health
Please note: Growth rates represent operational YOY change
*Nutritionals is now included in “Wound Care/Other”
Skin Care
$2.3
+5%
Baby Care
*Rounded for visual accuracy
11
Pharmaceuticals
12
Best Drug Companies of the
Past 15 Years
Based on new molecular entities produced in the last 15 years
1.
Novartis
21
2.
Merck & Co.
16
3. Johnson & Johnson
15
4.
Pfizer
14
5.
Wyeth
13
6.
Bristol-Myers Squibb
11
7.
Hoffmann - La Roche
11
8.
Lilly
11
9.
GlaxoSmithKline
10
10. Abbott
*per Forbes Magazine
9
13
Creating Value Through Innovation
End-to-End Strategy Focused on Five Therapeutic Areas
IMMUNOLOGY NEUROSCIENCE
INFECTIOUS
CARDIOVASCULAR &
ONCOLOGY
DISEASE/VACCINES
METABOLISM
Inflammatory
bowel disease
Alzheimer's
Disease
HIV
Cardiovascular disease
Prostate
Rheumatoid
arthritis
Mood disorders
HCV
Diabetes
Lung
Psoriasis
Schizophrenia
Respiratory
Pulmonary
Chronic Pain
Vaccines
$9.2B
$6.7B
$3.5B
$28.1B
2013 YE Sales
B-Cell
malignancies
$4.9B
$3.8B
14
Medical Devices
& Diagnostics
15
Medical Devices & Diagnostics
$28.5
Billion
2013 Sales
* Source Internal Data
#1
Worldwide MD&D
Market Rank*
6.1%
Operational Growth**
** Ex. Net Synthes 0.1%
16
Medical Devices & Diagnostics Segment
2013 Sales & Operational Change
Sales: $28.5 Billion
Ops Growth Rate: 6%
$ US Billions
$2.6
+4%
Specialty Surgery
Orthopaedics
Infection Prevention /
Other
$2.9
+3%
$9.5
+23%
$6.3
(1%)
$2.1
+7%
Vision Care
Cardiovascular Care
$2.3
(11%)
Diabetes Care
$1.9
(7%)
Diagnostics
Surgical Care
$.9
0%
Note: Growth rates represent operational YOY change
Excluding the net impact of the Synthes acquisition, MD&D Operational change = 0.1% and Orthopaedics Operational change = 2.2%
Note: Growth rates represent operational YOY change
Excluding the net impact of the Synthes acquisition, MD&D Operational change = 0.1% and Orthopaedics Operational change = 2.2%
17
Enterprise Growth Drivers
Leveraging the Power of Our Enterprise
OUR GROWTH DRIVERS
Creating Value
Through Innovation
Global Reach /
Local Focus
Excellence in
Execution
Leading with
Purpose
New Models for Innovation
China Strategy
High Quality
Products
Access to Care
Customer Focused
Solutions
One Johnson & Johnson
in Southeast Asia
Standardization
and Productivity
Engaged
Global Team
18
Market share
Evolving Our Business Model
Integrated
Solutions
Value
Revenue
Innovative
Contracting
Clinical
Pathway
Programs
Patient
Engagement Tools
Co-Creation through
Strategic Partnership
Supply Chain
Solutions
Contracting & New Solutions
Unrivaled Solutions
2014
Through 2018
Risk Sharing
Contract Agreements
19
Global Reach/Local Focus
2013 Johnson & Johnson Sales: $71.3 Billion
Emerging**
OUS
55%
22%
45%
US
78%
Developed*
* Developed = US; Canada; Australia; Western Europe; Japan; and New Zealand
** Emerging = all other remaining countries
20
Reliable, High-Quality Products
An Enterprise Approach
Creating Value
through
Innovation
Excellence in
Execution
• Ensuring our products meet
rigorous standards
• Strengthening and streamlining
Supply Chain
• Implementing new quality and
compliance operating model
• Setting new benchmarks for
medical safety
21
Access to Care
Global Reach /
Local Focus
CARE INSPIRES CARE
TM
• Supporting over 500 community
programs in more than 60
countries
• Advancing global health by
ensuring access to infectious
disease vaccines
• Supporting health and wellness
Gateway to a Healthy CommunityTM
22
caring for the
world…
23
23
…one person at a time.
24
Our Credo
We believe our first responsibility is to the doctors, nurses and patients,
to mothers and fathers and all others who use our products and services.
In meeting their needs, everything we do must be of high quality. We must
constantly strive to reduce our costs in order to maintain reasonable
prices. Customers’ orders must be serviced promptly and accurately. Our
suppliers and distributors must have an opportunity to make a fair profit.
We are responsible to our employees, the men and women who work with
us throughout the world. Everyone must be considered as an individual. We
must respect their dignity and recognize their merit. They must have a
sense of security in their jobs. Compensation must be fair and adequate,
and working conditions clean, orderly and safe. We must be mindful of
ways to help our employees fulfill their family responsibilities. Employees
must feel free to make suggestions and complaints. There must be equal
opportunity for employment, development and advancement for those
qualified. We must provide competent management, and their actions
must be just and ethical.
We are responsible to the communities in which we live and work and to
the world community as well. We must be good citizens—support good
works and charities and bear our fair share of taxes. We must encourage
civic improvements and better health and education. We must maintain in
good order the property we are privileged to use, protecting the
environment and natural resources.
Our final responsibility is to our stockholders. Business must make a sound
profit. We must experiment with new ideas. Research must be carried on,
innovative programs developed and mistakes paid for. New equipment must
be purchased, new facilities provided and new products launched. Reserves
must be created to provide for adverse times. When we operate according
to these principles, the stockholders should realize a fair return.
25