Medtronic hosted an investor and analyst day in New York City, highlighting their plans for sustainable long-term growth through a focus on innovation and value within their portfolio. Further, they plan to streamline manufacturing to enhance their operational performance. With these efforts combined, the company is targeting 4% revenue growth and 8% earnings growth over the next few years, among other execution milestones.
The majority of the presentations, available here, focused on their product portfolio and new markets – which encompass both markets created by novel, disruptive technologies as well as expansion into emerging geographic markets. Chairman and CEO Omar Ishrak, in his introduction, described their product strategy along the following dimensions:
- Continuous innovation. “Enhancing the clinical outcomes and economic value of existing products.”
- Examples: Visia AF ICD, Azure Pacing System, Intellis
- Invention. “Creating and developing new therapies that result in new markets.”
- Examples: CoreValve TAVR, PillCam, Solitaire
- Disruption. “Disruptive therapies in existing markets.”
- Examples: MiniMed 670 insulin pump, Surgical Robotics System, Arctic Front Advance Cryoballoon
Ishrak also highlighted the effort to shift their product mix from traditional segments to higher-growth products. Medtronic has plans to evolve from high-growth markets today (examples include TAVR, afib, diabetes) to projected high-growth markets in the near future (mitral valve replacement, neuromodulation, and, consistently, diabetes). The impact of this technology focus aims to achieve 4% market growth, with 3-5% growth coming from developed markets, and low double-digit growth in emerging markets. On a group level, cardiovascular, minimally invasive therapies and the restorative therapies groups are expected to perform in line with corporate overall; the diabetes group is expected to perform above the overall corporate growth rate.
The company described plans to increase operational efficiencies as well. They intend to continue to decrease the number of manufacturing sites from 92 to 55, enhance their lean manufacturing practices and consolidate their distribution network, among other initiatives.