Medtronic plc (MDT) JPMorgan 42nd Annual Global Healthcare Conference (Transcript)

Company and Industry Overview * Company: Medtronic plc (NYSE: MDT) * Industry: Medical technology (med tech) * Event: JP Morgan 42nd Annual Global Healthcare Conference, January 8, 2024 Key Points 1. Company Performance and Strategy * Consistent Results: Medtronic has delivered improved and durable results, with a focus on innovation and growth. * Product Approvals: Several major product approvals in key markets, including cardiac ablation, diabetes, and structural heart. * Transformation: Comprehensive transformation over the past few years, including changes to the operating model, incentives, culture, and leadership. * Earnings Power: Prioritizing the restoration of earnings power, driven by efficiency improvements and cost savings. 2. Portfolio Strategy * Three Categories: * Highest-Growth: 20% of revenue, growing faster than the overall company, receiving disproportionate capital investments. * Synergistic: Businesses with near-term catalysts, including M&A and organic R&D. * Established Market Leaders: Largest businesses with commanding market positions, responsible for half of revenue and profits. 3. Highest-Growth Opportunities * Cardiac Ablation: Significant investments in EP, leading in pulse field ablation with PulseSelect technology. * Diabetes: Transitioning from stand-alone CGM to smart dosing systems, with strong performance of 780G system and Simplera Sync CGM. * Structural Heart: Strong position in TAVR market with Evolut X technology and differentiated clinical data. 4. Synergistic Businesses * M&A: Acquisitions in ENT (Intersect ENT), cardiac surgery (Penditure LAA exclusion system), and neuromodulation (Percept RC recharge and Inceptiv). * Innovation: New devices and technologies in neuromodulation, endoscopy (GI Genius), and other areas. 5. Established Market Leaders * CRM: Disruptive EV-ICD launch, next-generation pacemakers, and 3830 lead. * Cranial & Spine Technologies: Strong position in enabling technology, with robotics, imaging, navigation, and preoperative planning software. * Surgical: Hugo robot, Touch Surgery, and market-leading surgical instruments. * Symplicity Spyral renal denervation system: Approved by FDA, with significant market opportunity. 6. Transformation Initiatives * Operating Model: Centralized operations and supply chain, with P&L responsibility to businesses. * Leadership: New leaders with domain expertise in areas like global operations and supply chain. * Capital Allocation: Focused on highest-growth opportunities. * Incentives: Performance-driven culture. 7. Global Operations and Supply Chain * Efficiency Improvements: Focus on cost of goods sold (COGS) efficiency, supplier performance, network optimization, and automation. * Expected Impact: Stabilization and improvement of margins, and earnings leverage. 8. AI and Machine Learning * Applications: Clinical decision support, new indications, personalized treatments, and improved patient outcomes. * Examples: GI Genius, Touch Surgery, Spine AI, Diabetes algorithms, and cardiology AI. 9. Future Outlook * Revenue Growth: Confident in the durability of top-line growth due to product approvals and technology pipeline. * Earnings Power: Focused on improving earnings power and delivering strong shareholder returns. * Long-Term Vision: Becoming an "and" company, balancing mission-driven and performance-driven approaches.