Boston Scientific(BSX) - 2024 Q4 - Annual Report

Financial Performance - In 2024, Boston Scientific's net sales reached $16.747 billion, a 17.6% increase from$ 14.240 billion in 2023, driven by operational net sales growth of 18.5%[184] - The reported net income attributable to common stockholders in 2024 was $1.853 billion, or$ 1.25 per diluted share, compared to $1.570 billion, or$ 1.07 per diluted share in 2023[184] - Total net sales increased to $16.747 billion in 2024 from$ 14.240 billion in 2023, representing a growth of 17.6%, with operational growth of 13.1% and an 80 basis point negative impact from foreign currency fluctuations[202][203] Business Segments - The Endoscopy business generated net sales of $2.687 billion in 2024, representing 16% of consolidated net sales, with an 8.3% increase from 2023[189] - Urology products net sales were$ 2.200 billion in 2024, accounting for 13% of consolidated net sales, reflecting a 12.0% increase compared to 2023[191] - Neuromodulation products net sales reached $1.106 billion in 2024, a 13.3% increase from 2023, representing 7% of consolidated net sales[193] - Cardiology products net sales were$ 8.344 billion in 2024, a 24.4% increase from 2023, making up 50% of consolidated net sales[195] - Peripheral Interventions net sales totaled $2.410 billion in 2024, a 14.2% increase from 2023, representing 14% of consolidated net sales[197] Growth and Acquisitions - The company experienced organic net sales growth of 16.4% in 2024, with acquisitions contributing an additional 210 basis points[184] - The acquisition of Axonics in Q4 2024 positively impacted Urology's organic net sales growth by 330 basis points[191] - Boston Scientific aims to expand its global presence, particularly in Emerging Markets, to drive net sales and market share growth[199] - Emerging Markets net sales accounted for 16% of consolidated net sales in both 2024 and 2023, with a growth of 16.1% in 2024 driven by operational growth of 19.6% despite a 360 basis point negative impact from foreign currency fluctuations[200] Expenses and Profitability - Gross profit for 2024 was$ 11.490 billion, with a gross profit margin of 68.6%, down from 69.5% in 2023, primarily due to inventory charges and strategic manufacturing capacity investments[204][205] - Selling, General and Administrative (SG&A) expenses rose to $5.984 billion in 2024, a 15% increase from 2023, while as a percentage of net sales, it decreased by 70 basis points[209] - Research and Development (R&D) expenses increased to$ 1.615 billion in 2024, a 14% rise compared to 2023, reflecting the company's commitment to advancing medical technologies[211] Debt and Financing - Total debt as of December 31, 2024, was $10.746 billion, an increase from$ 9.102 billion in 2023, with current debt obligations rising to $1.778 billion[242] - Cash used for investing activities in 2024 was$ (5.687) billion, primarily for acquisitions including Axonics and Silk Road Medical[235] - Cash provided by financing activities included $2.145 billion from the Eurobonds offering, used to fund the Axonics acquisition and repay senior notes[236] Tax and Compliance - The reported tax rate for 2024 was 19.1%, down from 19.8% in 2023, with a rate from continuing operations of 18.0%[222] - The company expects the impact of the Pillar Two global minimum tax on its 2024 tax rate to be immaterial, with similar expectations for 2025[226] - The company expects to incur significant expenditures related to compliance with the EU MDR regulatory requirements, which are not considered ordinary course expenditures[285] Restructuring and Future Plans - The company recorded restructuring charges of$ 16 million and restructuring-related charges of $212 million in 2024 as part of its global restructuring program[217] - The 2023 Restructuring Plan is estimated to incur total pre-tax charges of approximately$ 450 million to $550 million, with cash outlays expected to be between$ 350 million and $450 million[251] - The restructuring plan aims to reduce gross annual pre-tax expenses by approximately$ 225 million to $275 million as benefits are realized[251] Legal and Regulatory Matters - The company is involved in various legal and regulatory proceedings, which may require significant expenditures or impact product sales[272] - Anticipated costs of settlement and damages for product liability claims are accrued based on historical experience, with significant judgment required in estimating these accruals[272] Internal Controls and Risk Management - The company's internal control over financial reporting was assessed as effective as of December 31, 2024[289] - The independent auditor expressed an unqualified opinion on the effectiveness of the company's internal control over financial reporting[294] - The company uses a risk management program that includes derivative financial instruments to address market risks from changes in currency exchange rates and interest rates[303]