Medtronic(MDT)2025-05-21 13:02Financial Data and Key Metrics Changes - The company reported Q4 revenue of 1.62, up 11% [46][49] - For the full fiscal year 2025, revenue grew 5% organically and EPS grew 6% or 10% on a constant currency basis [50][56] - Adjusted gross margin was 65.1%, down 70 basis points year over year, while adjusted operating margin increased to 27.8%, up 90 basis points [47][49] Business Line Data and Key Metrics Changes - The cardiovascular portfolio grew 8%, with nearly 30% growth in cardiac ablation solutions [6][9] - Neuromodulation and diabetes segments delivered double-digit growth, while cranial and spinal technologies saw high single-digit growth in the US [7][25] - The diabetes business grew 12%, marking the sixth consecutive quarter of double-digit growth [25][26] Market Data and Key Metrics Changes - The US market experienced its strongest quarterly growth in 15 quarters, growing 5% [46] - Japan grew high single digits, while Western Europe and emerging markets grew mid single digits [46] - The company noted strong growth in India, Southeast Asia, and Eastern Europe [46] Company Strategy and Development Direction - The company plans to separate its diabetes business into a standalone public company, which is expected to enhance focus on high-margin growth markets [28][29] - The separation is seen as a strategic move to improve capital allocation and increase growth accretive investments in core businesses [44][45] - The company aims to continue delivering mid single-digit organic revenue growth and accelerating earnings leverage [30][61] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth drivers, highlighting strong positions in key markets and the potential for continued growth [88][90] - The company anticipates a return to high single-digit EPS growth in fiscal year 2027, driven by strong revenue growth and benefits from the diabetes separation [55][101] - Management emphasized the importance of operational improvements and cost management to enhance profitability [92][95] Other Important Information - The company announced an increase in its dividend for the 48th consecutive year [50] - The new CFO, Thierry Piéton, emphasized the focus on enhancing operations and driving value creation [39][42] - The company is investing significantly in R&D for the first time in four years, planning to grow R&D faster than revenue [53][92] Q&A Session Questions and Answers Question: Guidance philosophy with the new CFO - The company is bullish on growth drivers, with markets growing 7% even without diabetes, and expects strong contributions from key portfolios [88][90] Question: EPS growth expectations and below-the-line items - The company anticipates operating profit growth around 7%, despite pressures from tax and interest expenses [92][93] Question: Impact of tariffs and diabetes business separation - The impact of tariffs is expected to be between 350 million, while the diabetes business separation is projected to be immediately accretive to EPS [106][101]