STRYKER CORP Q4 FY2024 earnings call

Kevin Lobo noted 2024 results were excellent with organic sales growth over 10% for Q4 and full year, exceeded adjusted operating margin goals, and announced sale of Spinal Implants business. Andy Pierce discussed Inari acquisition, entering peripheral vascular market, Inari's revenue growth and synergies. Jason Beach provided updates on procedural volumes, Mako progress, product launches, and external reporting adjustments. Glenn Boehnlein detailed Q4 and full-year financial results, operating highlights, balance sheet, cash flow, 2025 guidance, and Inari acquisition and Spine divestiture details.

In the fourth quarter, MedSurg and Neurotechnology had constant currency sales growth of 11.1% and organic sales growth of 10.1%, with U.S. organic growth at 11.5% and international at 5.8%. Instruments saw U.S. organic sales growth of 8.8% led by smoke evacuation, waste management, etc. Endoscopy had U.S. organic sales growth of 12.9% driven by OR infrastructure and 1788 video platform. Medical had U.S. organic sales growth of 11.1% with LIFEPAK 35 driving sales. Neurovascular had U.S. organic sales growth of 12%, and Neurocranial had 13.3% growth. Orthopaedics had constant currency sales growth of 11.3% and organic sales growth of 10.2%, with knee business at 8.5%, hip at 7.1%, Trauma and Extremities at 16.2%, Spinal Implants at 2.3%, and other ortho at 1.3%. Internationally, orthopaedics had 10.5% organic growth.

Full year 2025 organic sales growth guidance is 8%-9%, adjusted EPS $13.45-$13.70 before Inari. Inari acquisition expected to close end of February, expected to contribute ~$590M sales over 10 months, dilutive to op margin 0-20bps and EPS $0.20-$0.30. Spine divestiture impact absorbed into guidance.

Q: On the Spine sale, why now and economics?

A: Kevin Lobo explained strategic reasons, partnership with VB Brothers, divestiture of $700M.

Q: Inari deal assumptions and ROIC?

A: Glenn Boehnlein discussed ROIC target, synergies, and dilution.

Q: M&A focus post-Inari?

A: Kevin Lobo mentioned continued offense with tuck-in deals, adjacencies in peripheral vascular, urology, etc.

Q: Mako Shoulder rollout?

A: Kevin Lobo and Andy Pierce discussed slow rollout, surgeon feedback, and future growth.

Q: R&D spend and productivity?

A: Glenn Boehnlein talked about R&D focus, 6%-7% of sales, and synergies with Inari.