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Medtronic reported FY 4Q20 orthopedic revenue of USD $528.3 million, -35.1% vs. 4Q19, with full-year FY20 revenue of $2,874 million, -7.6% vs. FY19. The company’s fiscal year ended in late April and therefore includes an additional month of COVID-19 impact compared to its competitors on calendar year cycles. Procedure deferrals, over-reliance of bulk purchases at quarter-end and postponed capital equipment sales all contributed to Medtronic’s orthopedic shortfalls. While the company observed improving trends during May, it expects FY 1Q21 revenue to be modestly worse than FY 4Q20.
Despite the negative impact from the pandemic, Medtronic boasts a strong balance sheet and is taking steps to mitigate COVID’s financial impact on employees. The company has implemented reward programs for on-site workers and protections for sales rep incentive compensation. It has also developed an extensive emergency leave plan to provide temporary pay for employees who can’t work remotely. Medtronic also sees market conditions as an opportunity to be aggressive with tuck-in acquisitions.
“Asset prices are down. We can play offense. Our focus remains the same on tuck-ins. I’m partial to the tuck-ins that are more meaningful and can affect our growth rate, our long-term growth rate. There are some opportunities that I felt were out of our reach, too expensive before and now are more in line with what we think are reasonable returns for those investments.” – Geoff Martha, Chief Executive Officer
Revenue Data
All revenue data is provided in USD millions unless otherwise noted. Sales and growth rates are estimated on an as-reported basis.
Segment Sales
| FY 4Q20 | FY 4Q19 | $ Chg | % Chg | |
|---|---|---|---|---|
| Spine | $466.3 | $677.3 | ($211.0) | (31.2%) |
| Orthobiologics | $62.0 | $137.0 | ($75.0) | (54.7%) |
| Total | $528.3 | $814.3 | ($286.0) | (35.1%) |
| FY 20 | FY 19 | $ Chg | % Chg | |
|---|---|---|---|---|
| Spine | $2,423.0 | $2,588.7 | ($165.8) | (6.4%) |
| Orthobiologics | $451.0 | $520.0 | ($69.0) | (13.3%) |
| Total | $2,874.0 | $3,108.7 | ($234.8) | (7.6%) |
Geographic Sales
| FY 4Q20 | FY 4Q19 | $ Chg | % Chg | |
|---|---|---|---|---|
| US | $365.4 | $568.0 | ($202.6) | (35.7%) |
| OUS | $162.9 | $246.3 | ($83.4) | (33.9%) |
| Total | $528.3 | $814.3 | ($286.0) | (35.1%) |
Earnings
| Amt | % of Sales | |
|---|---|---|
| Sales | $5,998.0 | |
| Cost of Goods | ($2,264.0) | 37.7% |
| R & D | ($567.0) | 9.5% |
| Selling and Admin | ($2,360.0) | 39.3% |
| Other | ($167.0) | 2.8% |
| Net Earnings | $640.0 | 10.7% |
Mike Evers is ORTHOWORLD’s Digital Content Strategist. He can be reached by email.
Medtronic reported FY 4Q20 orthopedic revenue of USD $528.3 million, -35.1% vs. 4Q19, with full-year FY20 revenue of $2,874 million, -7.6% vs. FY19. The company’s fiscal year ended in late April and therefore includes an additional month of COVID-19 impact compared to its competitors on calendar year cycles. Procedure deferrals, over-reliance...
Medtronic reported FY 4Q20 orthopedic revenue of USD $528.3 million, -35.1% vs. 4Q19, with full-year FY20 revenue of $2,874 million, -7.6% vs. FY19. The company’s fiscal year ended in late April and therefore includes an additional month of COVID-19 impact compared to its competitors on calendar year cycles. Procedure deferrals, over-reliance of bulk purchases at quarter-end and postponed capital equipment sales all contributed to Medtronic’s orthopedic shortfalls. While the company observed improving trends during May, it expects FY 1Q21 revenue to be modestly worse than FY 4Q20.
Despite the negative impact from the pandemic, Medtronic boasts a strong balance sheet and is taking steps to mitigate COVID’s financial impact on employees. The company has implemented reward programs for on-site workers and protections for sales rep incentive compensation. It has also developed an extensive emergency leave plan to provide temporary pay for employees who can’t work remotely. Medtronic also sees market conditions as an opportunity to be aggressive with tuck-in acquisitions.
“Asset prices are down. We can play offense. Our focus remains the same on tuck-ins. I’m partial to the tuck-ins that are more meaningful and can affect our growth rate, our long-term growth rate. There are some opportunities that I felt were out of our reach, too expensive before and now are more in line with what we think are reasonable returns for those investments.” – Geoff Martha, Chief Executive Officer
Revenue Data
All revenue data is provided in USD millions unless otherwise noted. Sales and growth rates are estimated on an as-reported basis.
Segment Sales
| FY 4Q20 | FY 4Q19 | $ Chg | % Chg | |
|---|---|---|---|---|
| Spine | $466.3 | $677.3 | ($211.0) | (31.2%) |
| Orthobiologics | $62.0 | $137.0 | ($75.0) | (54.7%) |
| Total | $528.3 | $814.3 | ($286.0) | (35.1%) |
| FY 20 | FY 19 | $ Chg | % Chg | |
|---|---|---|---|---|
| Spine | $2,423.0 | $2,588.7 | ($165.8) | (6.4%) |
| Orthobiologics | $451.0 | $520.0 | ($69.0) | (13.3%) |
| Total | $2,874.0 | $3,108.7 | ($234.8) | (7.6%) |
Geographic Sales
| FY 4Q20 | FY 4Q19 | $ Chg | % Chg | |
|---|---|---|---|---|
| US | $365.4 | $568.0 | ($202.6) | (35.7%) |
| OUS | $162.9 | $246.3 | ($83.4) | (33.9%) |
| Total | $528.3 | $814.3 | ($286.0) | (35.1%) |
Earnings
| Amt | % of Sales | |
|---|---|---|
| Sales | $5,998.0 | |
| Cost of Goods | ($2,264.0) | 37.7% |
| R & D | ($567.0) | 9.5% |
| Selling and Admin | ($2,360.0) | 39.3% |
| Other | ($167.0) | 2.8% |
| Net Earnings | $640.0 | 10.7% |
Mike Evers is ORTHOWORLD’s Digital Content Strategist. He can be reached by email.
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Mike Evers is a Senior Market Analyst and writer with over 15 years of experience in the medical industry, spanning cardiac rhythm management, ER coding and billing, and orthopedics. He joined ORTHOWORLD in 2018, where he provides market analysis and editorial coverage.
