Hill Rom : Presentation ()

HILLROM TO ACQUIRE BARDY DIAGNOSTICS, INC.

January 19, 2021

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© 2021 Hill-Rom Services, Inc. ALL RIGHTS RESERVED. Confidential

Forward Looking Statements And Non-GAAP Financial Measures

This presentation contains forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995. All statements included herein that are not historical facts are forward-looking statements, including without limitation statements regarding Hillrom's ability to drive sustainable profitable growth and shareholder value, the timing and success of new product launches and portfolio expansion, the achievement of long-range financial objectives, the continuation of stable customer demand trends, a stable U.S. capital environment, the timing and success of M&A and business optimization initiatives (including Hillrom's acquisition of Bardy Diagnostics), our ability to reduce debt, implementation of our IT transformation, the impact of tariffs, any change to the one-time impact from U.S. tax reform legislation, and all other statements concerning future strategy, plans, objectives, projections, expectations and intentions. Such forward-looking statements involve a number of risks and uncertainties and are subject to change at any time. In the event such risks or uncertainties materialize, Hillrom's results could be materially adversely affected. Hillrom's actual results also could be materially adversely impacted by the length and severity of the coronavirus pandemic ("COVID-19," "COVID," or "the pandemic") and related impacts on our business, results of operations, financial condition and prospects. For a more in-depth discussion of factors that could cause actual results to differ from those contained in forward-looking statements, see the discussions under the heading "Risk Factors" in the company's previously filed most recent Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q. Except as required by applicable law or regulations Hillrom assumes no obligation to update or revise any forward-looking statements.

Certain financial figures presented herein have been presented on an adjusted basis (non-GAAP). Reconciliation between non-GAAP financial measures and reported GAAP financial measures are included in the appendices to this slide deck.

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© 2021 Hill-Rom Services, Inc. ALL RIGHTS RESERVED. Confidential

Hillrom

OUR MISSION

Enhancing outcomes for patients and their caregivers

OUR VISION

Creating Meaningful Value

With Hillrom's Connected Care Vision

	Diversified Portfolio		Innovation Pipeline		Strong Financials
•	Accelerating transformation		• Delivering $570M+ in New		• Driving durable top-line growth
	with category leadership		Product (NP) revenue in fiscal		and record margins in fiscal
	strategy globally		2020 with 6+ new launches		2020
•	Creating value across acute		• Launching 10+ new products in		• Enhancing long-term financial
	care, primary care and home		fiscal 2021; adding $50M+ of		performance with MSD revenue
	care settings		incremental NP revenue		and DD adjusted EPS growth

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Successfully Transforming Our Portfolio

Patient Support Systems		Front Line Care		Surgical Solutions

Accelerates leadership in attractive Mobile	Leverages existing Respiratory Health	Provides operating room video and data
Communications Market with a well-	platform to bring a differentiated product	integration entry point into "Connected
established product, industry recognition,	offering into new, attractive adjacent	Surgery" with a scalable platform for
and high levels of customer satisfaction	segment that leverages our business model	surgical data management

					Surgical Consumables (Divestiture)
	Differentiates Hillrom as only provider of		Captures vital signs data from monitors with		Divestiture of lower-growth and lower-
	comprehensive mobile communications		stand-alone connectivity solution and		margin business of surgical consumables to
	solution (voice, text, patient context, alert &		provides patient monitoring visualization in		strengthen focus of resources on building a
	alarm, MDI and digital waveforms)		acute care environments		suite of differentiated connected solutions

Strategically Deploying Capital To Advance Category Leadership

Across Attractive Growth Platforms

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Hillrom To Acquire Bardy Diagnostics, Inc.

High Growth Segment	Differentiated	Platform
With Attractive	Connected Care	Technology For
Margin Profile	Platform	Future Innovation

Providing Attractive Revenue Growth And Margin Profile In Diagnostic Cardiology And

Future Roadmap For Hillrom's Digital Transformation

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Compelling Strategic Opportunity

Complements Hillrom's vision of Advancing Connected Care

High-growth,high-margin connected platform for diagnostic cardiology

Provides differentiated wearable bio-sensing technology

Patient-comfort device design; superior P-wave clarity, clinical accuracy, and diagnostic yield

Enhances Hillrom's strategic priority of category leadership

#2 player in Long-Term Holter (LTH) segment with profitable recurring revenue stream

Drives competitive advantage and accelerates adoption

Leverages HRC capabilities: market access, payor contracting, data security, and EMR integration

Leverages existing U.S. brand, channel and presence

Across acute care, primary care, and cardiology customer segments

Affords future optionality in expanding platform technology

Across remote patient monitoring within diagnostic cardiology

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© 2021 Hill-Rom Services, Inc. ALL RIGHTS RESERVED. Confidential

Driving Competitive Advantage With Unique Digital Offering

BardyDx Profile

Product Overview

Financial Highlights

						$30M	60%+	10%
		CAM™	BardyDx	CAM™ Report		Annualized	Gross	Expected ROIC
		Patch	Connect	Monarch (AI)
			Revenue	Margins	In Year 5
						Run Rate
✓ Digital health innovator and #2 LTH		✓ Differentiated, wearable bio-sensing		✓ Profitable recurring revenue growing
device and services provider		technology promotes compliance		20%+; accretive gross margin
✓ Based in Seattle, WA with 230		✓ Approved in the U.S., Canada, and		✓ Established CMS and private payor
employees		the UK				Level 1 CPT reimbursement code
✓ Inspired mission of saving patient lives		✓ Yields clinically actionable data with		✓ Robust innovation roadmap to drive
with differentiated platform		P-wave centric ECG technology		future value
✓ IDTFs process data and provide		✓ Aids clinical decisions and enables		✓ Attractive ROIC expected by Year 5
diagnostic CAM Reports to physicians		identification of specific arrhythmias

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Attractive High-Growth Market

Ambulatory Cardiology	Long-Term Holter
Market	Segment
+10%+	+20%+
CAGR	CAGR
~$1.7B
	~$800M
~$1.0B
	~$300M

2020

2025

2020

2025

Growth Drivers

• Underlying symptomatic patient population growing 4%-5%
• • Due to age and prevalence of comorbidities
  • Rise of consumer wearables and investment in clinical studies on asymptomatic screening
• Shift from other modalities to higher- growth LTH segment
• • Improved diagnostic yield and preference for patient-centric form factors (patch)
  • Establishment of permanent Category 1 CPT code for LTH

Compelling Market Growth Potential With Stable Reimbursement Landscape

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Transaction Summary

Key Deal

Terms

Financial

Implications

Other

Considerations

• $375M upfront cash consideration
• Potential future commercial tiered milestone payments
• Financed with cash on hand and borrowings under existing credit facilities
• Acquiring net operating losses valued at $20M+ resulting in future tax benefits
• 2020 annualized revenue run rate of $30M; gross margin of 60%+
• Transaction expected to be dilutive in fiscal 2021 by ~$0.10 per diluted share
• Transaction expected to be dilutive in the first twelve months and increasingly accretive thereafter
• Transaction expected to generate 10% return on invested capital in year five
• Expected to close during fiscal Q2 2021 subject to customary closing conditions
• Do not expect the transaction to have an impact on previously-issued fiscal 2021 financial guidance

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© 2021 Hill-Rom Services, Inc. ALL RIGHTS RESERVED. Confidential