Medtronic plc (MDT) Management Presents at 42nd Annual Cowen Health Care Conference Call Transcript

Medtronic plc (NYSE:MDT) 42nd Annual Cowen Health Care Conference Call Summary Company Overview - Company: Medtronic plc - Event: 42nd Annual Cowen Health Care Conference Call - Date: March 7, 2022 - Participants: - Karen Parkhill - Executive Vice President and Chief Financial Officer - Josh Jennings - Cowen & Company Key Points Industry and Market Trends - Fiscal Q4 Trends: February was expected to be the lightest month, with modest underlying procedure acceleration. Greater acceleration is anticipated in March and April [4][3] - Impact of Russia/Ukraine Conflict: Medtronic has minimal exposure, with revenue from these regions being less than 1% of total revenue. No manufacturing or direct material suppliers are located in these countries [5] Financial Performance and Guidance - Supply Chain and Inflation: No changes in supply chain guidance since the fiscal third quarter earnings call. Inflationary pressures are expected to continue into FY 2023, impacting EPS growth [6][32] - EPS Growth Expectations: FY 2023 is expected to be challenging, with EPS growth anticipated but not exceeding revenue growth. Currency fluctuations and acquisition dilution are expected to impact EPS by a few hundred basis points [33][32] Product Development and Regulatory Updates - Diabetes Franchise: Ongoing discussions with the FDA regarding the warning letter and the approval of key diabetes products (780G and Guardian 4). Progress is being made on remediation efforts [9][11] - Renal Denervation: Confidence in the approval of renal denervation therapy based on previous studies. The ON MED trial results are expected to be shared at a major cardiovascular meeting [16][20] - Hugo Surgical System: Positive feedback from surgeons on the Hugo system's features. The system is currently in limited market release, with high demand and ongoing data collection for regulatory filings [21][23] Strategic Initiatives - Portfolio Review: Medtronic is intensively reviewing its portfolio to optimize business units and drive sustainable revenue growth. Decisions regarding potential divestitures or spinouts are expected within the fiscal 2023 timeframe [36][40] - Macro Challenges: Ongoing challenges include staffing shortages, supply chain issues (particularly in semiconductors and resins), and inflation. These factors are expected to persist into FY 2023 and potentially FY 2024 [43][46] Acquisitions - Intersect ENT Acquisition: The acquisition is progressing well, with expectations for closing soon [48] Additional Insights - Long-term Growth Commitment: Medtronic remains committed to its long-range plan, with expectations for a return to organic revenue growth post FY 2023 [35][34] - Investment in R&D: Continued investment in R&D is crucial for future growth, despite current economic challenges [33][32] This summary encapsulates the key discussions and insights from the Medtronic conference call, highlighting the company's strategic direction, financial outlook, and product development efforts.