MDT - Earnings call transcript Q2 2021

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Ryan Weispfenning

Good morning and welcome to Medtronic's Fiscal Year 2021 Second Quarter Earnings Video Webcast. I am Ryan Weispfenning, Vice President and Head of Medtronic Investor Relations.

Before we start the prepared remarks, I am going to share with you a few details to keep in mind about today's webcast.

Joining me are Geoff Martha, Medtronic Chief Executive Officer and Karen Parkhill, Medtronic Chief Financial Officer. Geoff and Karen will provide comments on the results of our second quarter, which ended on October 30, 2020. we'll the from company. remarks, analysts sell prepared cover that our take the questions side After Today's should events last about an hour. we a revenue morning, financial this issued release press Earlier containing statements and divisional summary. geographic and a our

We press on be performance details provides our on or an our also our investorrelations.medtronic.com. which earnings earnings posted from that additional presentation accessed release can website at

in statements materially the During we make projected forward-looking many from considered differ may of statements forward-looking and webcast, results today's be actual statement. any those may

Additional basis factors our on differ that could All other last basis revenue the actual is otherwise which are for statement. given made no with basis quarter on foreign do cause contained year we forward-looking references we and any we stated. were the on Unless share that comparisons information are or on reports an not unless say that impact a concerning update all currency. results quarterly acquisitions significant undertake adjust SEC and losses There and year-over-year are gains in to our a in filings calendar to to make growth. had periodic a organic otherwise,

non-GAAP to of And or financial be reconciliations the let's can get attachment that, with all Finally, our website on our found release press investorrelations.medtronic.com. earnings measures on at started.

Geoffrey Martha

Hello everyone, and thank us joining you for today.

QX in ahead well expectations. came stronger and QX results were than significantly Our of our

faster has growth. Our expected recovery from been we than are the pandemic the approaching of and now year-over-year depths

more to the seek not care there's the medium and am we the steps large position prepared are recovery, and maximize for long-term. Obviously, our we continue better to some have I globe. resurgence to the are continued Healthcare the taken patients while monitor past over but systems need. over near-term to around but by Now COVID Medtronic, performance they and encouraged by only uncertainty, willing year

share pipeline in We're focus and M&A and and seeing on We're businesses. we're being our with several create on tuck-in investing market of strength the businesses the a bold. we're to of in markets competitive new winning our share of we're supplementing going pipeline, big the the cadence opportunities our results. building Now offensive of our disrupt and in an implementing operating with model on reenergizing process increasing our and and

all creating All and value and is for of accelerating shareholders. growth this of at for our society this our aimed

market we're Now businesses. our note I'm in on of to share, lead number to a increasing quarter, like I'm winning off that going pleased with discussion share and an

and Rhythm over and Japan partner pandemic. in company. market leading with in hospital environmental monitoring benefiting also product We number product we've gained notably our is areas accounts. estimate nearly our of and regulatory this remote actions and are benefiting pipeline quarter China, We've helped our start Cardiac coming earlier customers share bringing We're outperforming productivity, points total the we year to patient customers a we're through of to the since across recent calendar XXX fruition we're year. approvals from of the the the we U.S., approvals XX to Our Since took to from last approvals, and received the as partnerships in share increased support In engagement, year-over-year. these safety, X such competition. Europe,

U.S. at annualizing XX% family in globally, to the continued Micra Our pacemaker now is approximately globally pacemaker $XXX million. our leadless XX% X% extremely product line and grew Micra growing perform as well,

current with programming app and continue to our BlueSync in environment. We high-power features launched recently both important monitoring. patient devices a of Chrome for also remote and benefit distance These the the see Cobalt are

on up increased Express in-clinic XX% unattended quarter-over-quarter. globally and follow-ups, is Our our CareLink CareLink transmissions remote enables unique System XX% adoption monitoring which

cycle. Cobalt and line Our X%, product improving by the replacement grew launch our driven CRT-D Chrome and

we of recall gains is the modest Diagnostics Energy. our share year. our seeing Exact adoption tyrants our in with year-over-year Dissector. continuing superior part and Cardiac share we're is advanced drug-coated U.S. given renewed impact gained see prior pivotal of of of in important than in emphasis sequentially. point earning held Jaw We're In in over data CRM Sonicision was launch balloons estimate Dissector back as comps driven J&J's share nearly quarter of this both LigaSure England digits stapling kind. year-over-year up implants. products addition, Surgical by on avoiding AV is during there's our Scientific's single year-over-year In we and half Journal Boston in TYRX strong Medicine. strong and into Innovations utilized LINQ prior by Advanced our offsetting TYRX its with where we year-over-year wining infections market. we high of the share a more the adoption IN.PACT versus to gained any In a share New in from DCB that down envelopes antibacterial share a difficulty earlier fall share our In our the revenue and strong pandemic the the grew We're driven published Curved especially Ultrasonic doubled entry In like reprocessors. was also II our We're it and

leads. our sequentially lead months in high gain share FDA share we get as gone regained October, in three device of with markets adopt rates in part result share contract rechargeable evaluation our strong our our on This we're indicator SureScan the gain basic we X just Micro and to space our the from we of the in MRI strong and Restorative ex-Onyx Therapies our is over rechargeable of a Tri-Staple in did August in Stim with beginning future estimate of U.S. to believe product on the approval to health, leading recapturing recent Group, Micro X pelvic XX% levels, launches sequentially the more Europe very in quickly and share the as see from important points see of launches. we share successful rechargeable [ph]. pre-coated InterStim We're see which we we our points platform. and our our to U.S. technology. from strength on the In market by DTM However, In to of growth. more From we therapy accounts. continue momentum of our continue of end Intellis Pain is has XXX% at zero driven Starting trialing

the cycle, in headwinds a grew the trialing U.S. we future indicator in strong are where and saw we facing Also U.S. in new that our leading implants we're in in While increases high this business. single share estimate in in our implant given the gain we year-over-year, new SCS replacements we of the quarter digits growth

month months. can months, DTM In our from Modulation seeing strengthened evidence the this data superiority superiority the Brain This Percept conventional competitive showed implant as stim share our but we're sense momentum which we PC and sustained from DBS we're when competitors. device, over at growth accounts, the with at trialing brain last new we building our all Importantly, coming we first XX showed three system that signals. is of being DTM driven only win that majority of strength is by and

ENT, ENT quarter, share year-over-year, program drove growth. products We both overall parathyroid U.S. outpatient to nav the neurovascular launches down gains as for market. quarter, aspiration, the nerve And this we Brain procedures. Now drive In Percept month our In implant gained share detection Flex a year-over-year. was sequentially we new system new launched quarter through returning forward including increasing and U.S. in to in ENT, our past Modulation growth in gains our we coils support business. each and while Percept several NIM PTI our neurovascular, expect these continue launched system to we had share good the share resulting our quarter, Vital, went access, NextGen new for we Station and Stealth going in and to monitoring

and loss we due and share to our diversion share overall, both U.S. market, from won as share had new we in the that our we entrants Terumo. neurovascular increased While estimate Penumbra of flow

in procedure that and share volume one being are is from whose drug-eluting on was the multinational our steady competitors, Chinese bids basis. local estimate and turning and receive stents businesses in Now share, the we holding Tender a tender we were to we DES reallocated that where winners the both were accepted. In will of our National sequential TAVR not

more said, long-term that market While significantly, be this declines our significant by the than will participating by the strategic coming our offset dictated quarters. in volume will This business over a impact will Chinese we believe is as price increase tender. opportunity. the That

opportunities our the Chinese line future more as TAVR increased and hospitals denervation. to as with renal like products pull our access As will in well product to full today, provide through

Europe share procedure held we Japan TAVR in of sequentially. and U.S., the Speaking

do third from competitor on is low year-over-year XX% in share our be from We The valve in getting In quarter mix with meet to last selection quarter to high production we ability market market. Spine, U.S. a back respiratory to year. and FY patients. to valve customer favorable held year-over-year estimate in loss of 'XX. messaging estimate valve expect driven the U.S. expect risk our response gaining is normal fiscal U.S. strong to anniversary our revenue ventilator to We're lead share share sales we up increasing population returning from our in which open by in nearly slight to both to as to to which as ventilator MITG the of and Boston fulfill Lotus a key we growing fourfold the Edwards back the share determinant our and our nearly half acceleration the we expect hemodynamics next held of and also This our levels to our decision year-over-year acuity risk Europe. make fiscal patients, increase XXX remove new shift GI revenue saw we're bicuspid We in their both In their in backorders our share is gain well winning In accounts we in low in to Scientific the respiratory. which data year, portion particularly in forward, we and demand gains increase and recent large a going U.S. given accounts ventilator share continuing with field the and as our customer to in sequentially personnel responding QX. decline that over more we PB our

surface Spinal our came in equipment robots double-digit Globus We’re over capital acquisition to of half Robotics, number titanium in our growth COVID, sold one Spine our be we organic results. result enhanced while which that that a year is seeing times last now interbodies Titan purchases we from a as did. estimate continue of and than strong large of pressured that In

We the implant indicator future sales. is a good continue which spine to robot market grow in our our spine leading share of

received We earlier for navigated robot. In our this Rex as power addition, approval high-speed capabilities expanding Midas we’re X well the of Mazor our interbodies, as month drills.

and start laser win. we're limited and and growing in we’re we’re as there doing in important in growth early the which many than and While areas improve. to just to but this of working we release takes seeing and off we’re there do compete are it much diabetes, the better QX, to return lay started groundwork U.S. and expected is XXXG signs business the last we a holding performed businesses, is a growth. launch return are you business share plans to week. discussed create great The our XXXG what focused with to We In MiniMed losing the that also to positive we in market share market we on in Europe to more to can

As once a download software get through to XXXG plan XXXG we XXXG users enable to to their pump a reminder, a we approval. upgrade

CGM market closed-loop coverage our open transitioning proposal all recent cover as U.S. the April. ensure as insulin systems have Medicare We’re the would for patients by their CGM also Medicare up and finalized, pump early CMS continued devices. integrated pleased it to If into will to

a were data operating the speaks and two great This more we We that Companion the this happening view. is going allow users one Medical, InPen ago. company. of diabetes the ahead in CGM also become this to meaningful team speed between work of in all information, CGM our the Companion integration is Medtronic Regarding just the we’re team was but expected readings acquisition have our Medical. a two announced minimal instead will board. and and QX, how deliver two weeks solution schedule to September We to of of forward. the app real-time on revenue into of in insulin strong excited closed to in sense quarters, months companion with urgency and to in have their able across integration dose alongside example It's Medtronic Companion InPen

version abridged you pipeline as in we huge future to disrupted win Investor number I’m at today. have turn the highlighted as a to covered opportunities going month well with last markets. treatment let's the this of at which make share a for opportunities of We the has so appears to CVG Day, last Investor give in last Now day us our to good create detail continue to several AF. but been missed Starting with for by was Day. on progress Street Monday It week, our

CE half in FDA data cryoablation the first Mark making anticipate Front the calendar of of in role that next of Arctic presentation treatment was subject We AHA the Our therapy and for New year. Journal Cryo redefine Medicine the a of England first-line have and indication AF. balloon publication, approval our paroxysmal promises of this simultaneous it currently to technology,

it Regarding System we’re calendar Ablation in a our of Spyral Transcatheter for in half system. in our year. rollout targeting ablation PulseSelect Also, enrolling Symplicity Valve, Mitral and Pulsed Europe to Field Renal U.S. we’re Denervation our the DiamondTemp Vascular Intrepid the ICD, system, pivotal our launch continues trials Extra first CVG cardiac and next

RDN to struggle who one important our of become hypertension. opportunities world therapy with represents biggest around the patients to of millions Now, an the treat

trial complete robotic We’re about In ON the market. to and MED calendar system the bringing our the data to next MITG aiming excited we’re present year. soft-tissue

of in expect to U.S. file approval quarter continue calendar for and first We XXXX. CE to Mark IDE the

occur Mazor calendar robotic in products quarter our and and in the some later of activities. new making COVID we’re system. to filings RTG, X in neurovascular our as In are slowing likely these is large Although spinal on-site investments enhancements ENT to for

DBS. focused on spinal efficient and steerable to FDA bringing to also in on continue the we front work submitted complete SYNERGY our the In we closed-loop the in FDA Zeus the our system market diabetes, We’re and expanding our the lead module. we have cord filing to sensor for indications strategy October, with stimulation file will XXXG, most while completed when and trial the on we sensor manufacturing in pivotal it and

on easier current and innovative get half are which pipeline. our use it's is size continue SYNERGY, We to few great the These many products disposable, to the just sensor. much our of feedback a of in

revenue with we’re will keep and a growth to on to excited through foundation over for going you. be quarter our our the take I’m updated concluding to them material We expect before remarks future discussion Q&A. Karen Karen, of you I have we our then to go second come and now some you progress. back financials outlook and to

Karen Parkhill

you, Thank Geoff.

$X.XX $X.X quarter EPS X.X% organic declined second Our XX% of billion adjusted year. declined last and of revenue from

by the quarter, our prior recover. and to compared XX% markets continued as end EPS our increased grew revenue to However, XX% adjusted

growth all COVID tender the was September regions given the revenue with in of impact our of number stents. In markets, the in and than many of improvement fact, the rising led and and Innovations to exception we XX that of Respiratory continue over by driven the MITG delayed and rate spring with way increasing procedure early Surgical increased from and points SI volumes in and Renal. elective summer. GI its procedures part elective the in Europe from were the benefitted United in October China, sequential in our national of drug-eluting see each better despite cases month States groups by both

sales and ventilators quarter energy, as capture businesses renal had RTG the volumes year. as from the patient share monitoring. Across number Our And well lung and of RGR's quarter a pelvic in China returned growth came Orthopedics. patient businesses prior several CVG, DBS, in CRT-Ds, in balloons. and the we from and grew to double-digit drug-coated increased with in monitoring health, improvement strong including and CVG delivered ventilator also products. MITG care advanced and neurovascular, procedure pacing, growth and In grew and first we we second airways, GI from TYRX, from improvements aortic health RTG, our

while points our basis points gross recovery XXX business evident the see adjusted improvement XXX expected P&L, margin. to our our in over in deleveraging in in continue the and year-over-year, nearly operating the our On margin the in basis margins, we sequential is

flowed well line EPS resulting Our better revenue in ahead than through expected of the bottom expectations. to

to Turning sheet. our balance

weighted the the was reduce euro euro in remained our billion transaction completed financial we In to debt half. a of issued years less offering maturities, Our maturity the cap our a among a our we past large savings. U.S. and strong. coupon now and the another of issuers of quarter, year Combined, among debt €X.XX position euro XX $XX annualized of This proceeds prefund over and portfolio competitors roughly and the driving with debt used dollar average and additional lowest than third average billion million over X%, March medtech. lowest have $XX weighted in our and sits the our

with you at acquisition long-term investing, and portfolio. Last tuck-in expand through the strategies. organically ENT we month, drive month, investments acquisitions our last inorganically of remain As growth we I to and to shared focused our minority both Biomed Day on Investor our Ai announced

addition, last acquisition our of the In acquisition of closed Medical Avenu we announced and earlier month completion our Peripheral we and Vascular week. spine in Medicrea this

and investments returns strong longer supplemented by growth organic for ultimately our We and fuel revenue acceleration, expect shareholders, both to strong our creating term growing a dividend. our inorganic

Companies. Aristocrat Dividend our of yield in having as S&P for XX years, of places S&P upper quintile and Healthcare the an are We X.X% current increased dividend our XXX

of remains particularly predict. impact COVID to around the business to turning to rising cases our world, Now the difficult with outlook, the our

provide continue typical That want of you So give do I the will to not sense to guidance. ahead. said, we our recovery a

ahead seen in we've quarter, the our quarter. the third our in early sales still average track weeks second is same it of While weekly

the impact far more are delayed globe, of there thus around been limited. us procedures pockets has to and restrictions the while So

said before, to As heightened serve it equipped COVID are and hospitals as and was education, time fear remain not patient is patients open And early and summer. patients. to we've over as now handle spring non-COVID better with last

While to we second to-date, we from MITG return improvements digits second deliver by slightly growth be revenue two-year up benefit sales. revenue there on quarter, single fiscal next with than continues the has as the is uncertainty quarter year-over-year to take should stacked growth from an a should the our still ahead, continue normal and third a we By our the be in organic to RTG expect group digits, the organic as could single roughly strong it given Diabetes flat recovery trend a would to share. decline basis the could recover quarter. be lower And ventilator fourth low and on if quarter quarter, low continue to little in flat and had basis. CVG

On we invest in we P&L, expect product and pipeline the continuing during are as still recover. operating pandemic, to the our sequential leverage while we launches

we improvement For and the operating of return both continue our to more margins quarter a third quarter. and to we normal fourth in gross versus would to operating expect points in the second margins, couple expect the

the Regarding constant, could roughly on million. currency, full should a be quarter be in the the the third tailwind second hold revenue benefit rates assuming year and to similar $XXX

headwind the for bottom-line, we'd per a year. expect the remainder the On of $X.XX quarter

could will pandemic outpace allow proud continue product work launches ability up, As to impact about on from recovery. bold, you, forefront the our the are excited I of having outlook, around will in our millions of wrap we the our us the develop focus markets. be to of being I'm the I'm at to to our execute on our our Geoff. on and Back pipeline, and we year With markets our the invest while and impact world. patient’s spirit, this lives competitive hard employees

Geoffrey Martha

Karen. you, thank Okay,

changes capital in quarter, hope produced execution winning globe the to model, quarter. note our to the while make I collectively up, To our on our We're wrap I visibility manufacturing to moment and increased empowering the our great our business de-layering enterprise our and mission attributes to and organization take operating culture And employees we're strengths operating with have all and And we're a our seeing while to and of units, accountable. of Now by the performance supplementing our technology our markets, and this progress regarding greater increased comprehensive decentralizing development. of we're game into our our XX of the an competitiveness of driven operating gaining midst thank allocating and making improving of pipeline on the best these all that our upping delivering. pandemic, up sum bold centralizing and of our by cadence being company want acquisitions. on share We've we're global adding leveraging operating is we're more strong leaders and certain tuck-in you're the great across opportunities bold, for our last culture. advancing increasing second We're businesses. they focus model. competitive growth, core enhancing this one doing a this end solid our we holding the our this top

our growth, lead our shareholders. expect We this for innovation, more accelerate unlock to a of lot value and to

So Q&A. now move let's with to that,

Operator

Salmon, For Portfolio, Instructions] Geoff Medical session Martha Cardiovascular Bob are White ahead. and the Unit. Diabetes Weispfenning. EVP Operating joined and EVP over Portfolio, the Karen President and the and Mike of of Brett and Wall, it go EVP the Please by Neuroscience and President to I'll President the Surgical EVP President Sean of moderator, Portfolio Parkhill of Ryan [Operator today's turn now Coyle,

Ryan Weispfenning

Great, thank you.

Bob? line Bob first Securities. Hopkins Let's to the go from BoA of

Bob Hopkins

and you everybody. much thank very Great, morning, good

So of you comment the breakdown the on because really you in interesting. some quarter showed guys I'd results found first love is the geographic question I to the

long-term thought guidance that Day? that tender, China the you there? of was And at on Thank specifically the in gave are China? and was that the to terms some final the maybe love the in And outcome I'd provided trends worse on, looks of was that China in hear your Analyst like the you. driving in you than those was tender quarter, you it on contemplated Specifically, results comment quarter, thoughts Europe down the up Europe when

Karen Parkhill

geographic Yes, Bob, results were pleased with question. that that the for thank you, saw. we We

Asia China was You but are we was the really national national certain China of up. Absent down, of the right, the tender. tender, have due been and to parts Europe was up would were impact that we be the were was five close to to in of the strong on it to expected. tender, was growth one pleased It really territory. hard finalists the but And tender. predict, what in

So gaining gaining to volume of share a we that. or expect share be as and result

Geoffrey Martha

Let’s time, pull will spear, tip help say be today to because the the just say the I that, coronary TAVR for it but if tender, have the think Bob China, price fact because a going couple lower tier the and going the renal and tier aggressively headwind, is the over be tier of it with by in taking around we decrease, plus next of here us our will, on over so, lot of commercial is two, in also the to organization -- it as strategic and volume the one but into going I in to increase other through to offset quarters denervation. you three it's a matter of it's rural more going view this cities be we're products cities, future

sure volume, we'll pretty dramatic So, term strategic we're here. us to this term not volume I Chinese prepared short has been make in and a impact, us the think out because expecting they're to the increase happy about a long to Government have see the like and reaching working with I said, us is

than see that it's how this of we'll out, over tailwind. couple we headwind quarters the think next So a a plays more of but do

Bob Hopkins

those. to clear. Okay, and current then on just quickly trends, for appreciated wanted just your really be I Karen, I comments

so So than year-over-year terms worse saying seeing what far in you what is are you that saw October quarter of not in this you're growth?

Karen Parkhill

quarter. That's what of few second Bob. the first is What in trend. of weeks November, couple we've saw than we weeks said, make a That higher similar don't weeks first seen in quarter necessarily in correct a the the in the

COVID I to do COVID be impact say could quarter. these in any from and slightly watching or up a third if our surge. would expect closely be we'll continue, that we limited from flat revenue the there's the impact trends only the So surge,

Bob Hopkins

very much. you Thank

Ryan Weispfenning

Bob. you, Thank

go to Stanley. go next of Lewis Morgan line David, the ahead. Let's from please David

David Lewis

Thanks taking morning. the for question. Good

from Just with me, I'll two quick Karen. start ones

just numbers revenue very quarter actually in those we think the on So on the the and of talk are where plan? is in first margins, the through we I Karen, quarter? drop than So should about going, how follow drop the where was quarter let a Did the impressive. me investments as up. weaker Karen about half the year mentioned Then into again quick the through have back you second cost

Karen Parkhill

a Yes, that long-term thanks the are bit our for through more we result for than little on and focused a question, investing David. margins been have pandemic Clearly, depressed this as normal.

continue fourth margins said along We have normal that. in to that quarter we expect we all expect to back more and to be the

did drop of terms similar front manufacturing period to the of well, the revenue, last expensing have additional through quarter. In on the we some as

commercial the We expect launches our gross continue products. And we of particularly that right be line headwind quarter. focused driving and we're as a of not below next new to some the to invest on, margin

appropriately, getting so, the to by back fiscal And on ultimately normal investing focused quarter. and we're margins fourth our

David Lewis

helpful? Okay, can of balance deals, months, the XX very over of helpful should see quantification then of Geoff, be in of across could the next terms of much. billion impact so over Karen, super sort if so that similar cadence should been over and I then, Thanks expect to or term, deployment $X.X $X.X relatively six sort here sheet expect we the And lower? be next near that'd what revenue higher six we you. there's any the a if there's months or mean, billion

Geoffrey Martha

to M&A hard the R&D. of on types mean, it's said, right? it's suspect it's but augment our do a David is part of Again, predict, like I I that deals. but, it these similar I strategy, predict, Yes, would our is, tuck-in to of hard it to cadence looking to obviously something we're

Karen Parkhill

it buy and this what Yes much of the contribution, grow, revenue we really of tuck-ins what in are David, goes we and along buy growth. of year stage don't the lines bought terms early

acquisitions larger we the So we'll really revenue contribution it revenue The ahead. revenue are adjust meaningful our an in from that. to the acquisition for small. from whenever to becomes fiscal expected we year a will be of expected until obviously And this anniversary rest is results contributors to certainly years organic these business, combined evaluate

up but the alone, end the the one impactful business starting because Medical, So, certainly we company. could to that quarter be is in not next to may Companion for it adjusting diabetes total

David Lewis

Thanks.

Ryan Weispfenning

Thank you, David.

Morgan. Robbie go the JP Let's Marcus Robbie. of next go to ahead, Please at line

Robert Marcus

for Great, and was is have one quarter. could next out. could I to plan through diabetes, and potential you if to walk works on at looking businesses that me us months waiting product numbers was turnaround I taking also, to upgrade the of upside And maybe question the U.S.? numbers? X XX hoping out of been over most the deferring a terms in the know XX play and which congrats that next the a new nice the your XXXG I that cadence, how pump into expect time months we hits XX XXXG you've for should sales to long impact How for do the when thanks program.

Geoffrey Martha

talk to Sean it will will Sure turn that happens, turnaround happens, so Robbie, not if edit, over Sean that. when with but I one the one to

Sean Salmon

great, for Robbie. thanks Hi the question

good new next really, of off a We're out X So for going launch the be the to months, start really the focus is on platforms. the really XXXG. the rolling over pump European to to XX

think So to will I out. XX continue those roll countries now we we're,

in as strong time as just initial upgrade these just number goes we've that, U.S. launch a As here demand of pathways had the XXXG and really said we've in started place. for got on the its

from existing upgrade to pumps. as Companion compared We've got which real-time, next patients and is with in increase starts of coming a warranty proportion to big check come XXXG people of integration as into as focus. going the seen the U.S. CGM to the pathway as now patients out new to in to just a deal. warranty, replacements in be of the pathway get We've is Medical big the our course the an the in So well new

to trained to U.S., acquisition. entire more now the opposed we've get came the their force small more with the force going be and Companion up as sales this the with improve now of sales importantly, just we bag big even As that's a experience, to in have deal. that sensor But in

priorities, the you a term, and forward would think will We this a I a into but in an the set look normally to be that. smaller seven product is is almost as the for Zeus as we on XXXG are one. we just it's infusion And us, important wear this for near what's infusion So product, U.S. globally day sets, locked launch important for then driver obviously, a but sensor next, launch in those required. long the we U.S. deal. The the for really big database Finland, just allows twice started limited a raised that what the

should we So going mix of part expect forward. to that the be a

course, of flows. this Of all

have hardware it's you So beyond. to and XXX out there, software by upgradable

as well as the in designed for pipeline got You've sensor infusion compatibility sets. extended wear the

setting we're nice So a of traverse that growth. up cadence will products into I really think for

Robert Marcus

just we which nuance focused 'XX, valuation. maybe look Karen, at where as quick a is is lot the fiscal of lot a follow-up in And there's terms of I of a think Street

expense today, I see sit to vaccine models but could the it's people fiscal cadence? you So call anything on anything about stand into that that here as out recovery the the to point impossible line one want think whether they it's top or to trends, set, modeling 'XX, Thanks. in know you you whether that

Karen Parkhill

Robbie. that difficult more our our away and forecast. Plus, on it thanks plans to little a 'XX makes months right we're still fiscal now. early. from we're working the pandemic Yes, question, starting It's really for five Obviously,

products. normally wait would on to to our launch color normal be year of should and we'll as likely because 'XX, next give more I FY quarter space growth continue say, on that guidance call, we or than of off can you the fourth but higher do clearly, fiscal So our our expect pipeline earnings depressed we

Robert Marcus

Thanks.

Ryan Weispfenning

Robbie. you, Thank

line to ISI. ahead. of from go please Evercore Vijay next go Kumar Let's the Vijay,

Vijay Kumar

Hi, you me? can hear guys,

Ryan Weispfenning

We can.

Vijay Kumar

excellent. Okay,

one low like perhaps impact singles sales, flat heard So move we're any of in XQ? was was could order almost math make say couple the the on year-on-year in mean, hundred organic you is think the I from from in the questions, my to XQ, financial revenues on looks about impacts, year-on-year away to I ex-dose quantify the you correct. to I if margin territory. financial consignment bulk I to what On want territory, one two perhaps guess, I for you I positive had the growth, headwinds are basis margins at quarter talk just diabetes. organic guess up part, perhaps up I it points. expect the and move, looking sure quick And I Karen, a shift guess this when Q-on-Q because be

Karen Parkhill

Sure Vijay.

We company, of comparisons me TAVR on of the but biologics that the largely the if is at bulks. but Let the bulks was are vast last say is is continue us, at impact because would of there behind bulks. those certain in behind look year-over-year where spine majority the odd quarter one areas, businesses we start another, you pockets total booking still and conversation I mentioned us. with look impact from to

look the Street of question? a said answering the of so has. gross models and Is margins, the terms up if a the could expect you quarter, little that we margin, sequentially margins second and points Street than that on couple at In we your what what both to particularly be be higher quarter-over-quarter it gross currently from operating than

Vijay Kumar

you mid stable -- how air from they on new guys being were I the sequential the because up your I sequentially share commentary minus stable kind to to that? make sure guess, charges, on of at guess on did. singles Yes, closest was and I share, if market get want I it share confused TAVR on just peer look I

Geoffrey Martha

I know little have difficult that we I it's through there? know I Mike don't a us Yes, Well, math and understand Vijay, walk Coyle, to track. why

Michael Coyle

the for Vijay. question, Thanks

the the our numbers on noted, are So estimate and But reported TAVR you when for we basis year-over-year a just overall on X% as up down six. the you around about U.S. essentially quarter want purchasing shifted have hold that we that market essentially was currency would consignment constant market a to bulk revenue where basis, and basically doing place from away de-loading activity to the that's customers who inventories. been actually moved we, consider of dynamic on have taking

probably year-over-year, hospital around our product down $XX inventories are of million. look If held TAVR you

So of terms for that in sort terms were of that, you market. correct flat basically, in TAVR our when of just the comparisons essentially year-over-year global,

So sort quarterly that's versus the between comparisons. of the the year-over-year difference

States, year-over-year during essentially share market QX. our a sequentially the were we we a basis over year, quarter, last from with saw case volumes As in marked United held the improvement we flat in prior look was on quarter, the essentially which what

those very as from most their Lotus so, that accurate of from confident of we're number take to endpoint ability we decision look quarter, marketplace. remove for product TCT versus basically the Neo going And the essentially Boston the And meeting failing here ScopeX the addition [indiscernible]. [ph] trial to the head-to-head Scientific reasons. from to data the announcements had the non-inferiority in its recent our forward, important a share Obviously, about late being in

meeting going benefits we we in encouraging our product expanding was terms lower of quarters. take gives overlap disproportionately hemodynamic of the share had course, from of pacemaker of data self are us prior comparisons to terms out are technique had rates, that custom valves. an forward, the balloon, really, hemodynamics terms expandable another that And, of So been great customers new for that. very receiving over roll opportunity continue I data where And We the of have here in lower of benefits year have over, hit TCT the pacemaker really the encouraging direct rates. just flow think, in supporting TAVI to how they

continue very that us of sequential think for So helpful we to be take all to is going share. to

numbers pretty share that event inventory about. a course, third a of we the into to year-over-year and adjustments year been year that clawing overall quarter we've it in have QX prior dip the saw so and for once normalized see going we have QX of I as you're just ago, anniversary big comparisons that the sort we talked Now, get in hospital we back

we year-over-year So by quarter-over-quarter we whether looking get terms will time of or the similar think share in look QX, dynamics. very to it

Vijay Kumar

diabetes. helpful. That's for one and Mike Geoff, you quick one on

you gains, And about you seeing at spoke -- chatter about, or driving so the about and Thank the seeing talk We're delaying tide pool for hearing anything XQ download on on that? you think, anything some share I for implies side? what's you the the market? pool XQ one, guidance, signals pump are some improvement come customers are upgrades, market tide to diabetes waiting the pump pump waiting you. algorithm perhaps look algorithm,

Geoffrey Martha

I’ll don’t Vijay, jump Sure you one? in Sean, have why on that

Sean Salmon

think of pool for Vijay, I the of so smaller waiting a point there's to Yes, market become is that that available. the tide proportion

really So currently I think the what advantaged the that we are in in what's anything capabilities of algorithm over market. available certainly pipeline not is have that the

questions companies may think answered, questions your is of others, appealing challenges around some having the for. that's, their of and two single a down just kind kind are need all advantage components stop be, they or the place kind can the one idea products get people is track get can answered lot quite us get you is I this we of pick a shop and looking our of They what chase So kind where a will accrue they three to of pump, everything your of your as want experience and to to of and that rather there. that in frankly, pipeline course, out to order to not in

a of people say a of So really focus. really a it is not much, see it. don't big I'd lot opportunity it's I waiting for and more niche

Vijay Kumar

That's helpful. Thanks, guys.

Ryan Weispfenning

Vijay. Thanks,

Larry. Wells Fargo. to Larry from the ahead, go Biegelsen line of Please Let’s next go

Larry Biegelsen

morning, Ryan? Thanks for hear you question. Good Can taking guys. me, the

Ryan Weispfenning

We can. Yes, thanks.

Larry Biegelsen

right, One for and one Karen great. All Geoff. Great. for

XX% How margins the comments full QX fiscal for the And you saw EPS in define given we XXXX thinking Karen, XX% we So to about commentary one the or QX, you based and I fiscal about have fiscal do levels in QX for any QX. returning normalized be talked and Is that follow-up XXXX on that? Geoff. operating should year for you've on call? on this consensus

Karen Parkhill

for thanks, Great, questions. the Larry,

clearly which full thinking and so as we're third flat QX, about second talked if discussed XX% there's to slightly and consensus margins through the in to bottom-line. where the flow we've to the margins the pre-COVID around operating then approximately normal for from continue up, quarter in through of that the consensus, roughly is COVID of to And bps down quarter terms would about impact sequentially terms trends higher flow In is in than level. revenue higher being around so XXX and currently that year, limited we the

I all roughly would stack normal basis along said be on So say that's there is to on growth what and QX a consensus two-year right more normal and consensus margins expect more we've that we already. to the back QX because

Larry Biegelsen

Geoff, for drug-eluting on China, And that, happened to contained you you drug-eluting are the spill I thanks, Perfect, there. do is other that areas important of questions. what Thanks concerned taking I for and How How could over roughly on business? believe. stents an Karen. of the market is? with tender China heard comments your X% feel you your revenues the stent pricing

Geoffrey Martha

here stent in is China, does there the of the we have itself, as is there the that couple beep had Anyway, hopefully. coronary exist Thanks, the of Larry, business the our China. businesses I And and Anyway, segments was doesn't the more is few we are there. for differentiation, that for us watching stop will less that on contained we here differentiation, drug-eluting of one One, dynamics, market, at other the it's of us closely. in differentiation, process other most think at in that of this a robust that tender two alternatives line so hopefully products one. China that the in dynamic already we local in, The here, a least in of a lower those segments. And that do differentiated the XX% unique strategic industry. stent terms Medtronic China and market market industry say and aren't for Yes, the in is here a was would for see some reasons. as compete they local, sorry,

despite that us. growth growth fact, tender type in got impact it remains don't think exposure forward. So is these lot of a of we matter where we I levers do of And is, to a still a of big and do We've some our from China headwinds. this is opportunity have helps it lot believe of diversification a going tender bigger, a

Larry Biegelsen

Geoff. Thanks,

Geoffrey Martha

you, Thank Larry.

Ryan Weispfenning

next to Matt Matt, please Let's at ahead. UBS. of Taylor go the line go

Matt Taylor

Ryan, you me can Thanks, hear okay?

Ryan Weispfenning

We can.

Matthew Taylor

Perfect.

about ask of had as Okay, vaccines so the with take a impact and here that I a that or I'm could vaccines can just might just you the stronger resurgence? recovery We've these utilization. expect seen of to question see demand We've progression expected bolus have to see kind around how recovery And elevated about shuffle a some conceptually, a us you do conditions. lost wondering we of patients of go won't after wanted hold current some we lately. kind and of think good of we've that a the than in you through lot talk news year, or you that lot next

Geoffrey Martha

to elective and to able to more how and limited, pressure their the I that for Karen elective cases the is Thanks have that narrative remained of continue we believe same week they'll in time. this able they've as both Like treat is right safely pre-vaccine even you there learned they to depth a believe if they now, COVID that will, the do a that Matt. in cases. has be one, we spike, question, to patients and CEOs, this lot and like spike, extent time, COVID-XX talk or efficiently the the second despite dozens from been said, and in it wave them lessons all that mentioned, On hospital continuous

areas, like limited. before some do We are believe said we then earlier, Karen some mentioned pressure seeing in that's but I and

heard like all through considered patients. clear back, for may get your patients of like that haven't terms about and is are holding pretty have a out bolus it's I in Now, an there, talking question, been once we signal once that the anybody vaccine of much

large in a to bit and that, of worked out still, have run of backlog worked of a through large, we're but if and by think little elective get more small. lot is through we and but our is have there you And worked to through here. will, I there starting and steady-state relatively rate back areas, by we lot a of backlog kind a more we've that a

about the I this And to little of there, surprised so, there but that, trying of expect getting, some were more year. But, wish we are bolus heard be given but the patients numbers big around I out as haven't a waiting a bolus. quantify is, all a much wouldn't we we're next could science anything I that there as feedback for the

Matthew Taylor

the Okay, thoughts for thanks Geoff.

Ryan Weispfenning

you, Thank Matt.

of line Let's go next Rick, ahead. Nicolaus. go to the Rick Wise of please Stifel

Rick Wise

plan feel you're just where is tied your Thanks second, new at Good on us you margins, bringing excellent Ryan. cetera. Day think a to much. about much looking the I'll you so maybe made, level, It that Geoff, your are I the to growth just you've And like we and innovation, one potential were the is, your high et talk aspects at initiatives, and performance vision accountability, as quarterly about morning, master execution, everybody. attribute, morning, et question question, focus my just guess, should Good Analyst how should of we're energy clear for cetera, how the et your progress to bringing, ask is, the two very going improved we you cetera, just about forward? Medtronic? just you're that

Geoffrey Martha

best it and product say products, I would pipeline listed what's said, an portfolio, the nice but lot the disruptive to XX those we had had. And next near Thanks the our can like, quickly, products in as across itself over things be to of term ablation launches, really term excited. the of being is of impact opportunity created a is XX products business months, plan that in reality, type those most these cryoablation now information England I Medicine of mentioned then energy the of And question, Journal for the commentary to making That that that we've we've in of and and in got and got of the master feel XX people this taking like people getting here a and or approach company business it we've near with think we next data big of which has lot driving that's new products and so the the nature frontline the results, ever is And for a XX AFib rather, the being Rick. it. that impact launching therapy the the now, of the months. product and

time, therapies like renal business. don't now, RD I bold, and of though, diagnosed ablation and like what, that these we're advantage example a of soft bold, and under like of operating these the mean, for to is I units, units, we think be we're kinds to it's know XX unnesting don't gave want opportunities too I fail maximize big, afraid operating these or the their to we've product the I changes them us launches. fail, take and got of pushing the So here but made, like really for to massive just and all think going think conservative, Over decentralization, to be if denervation, our AFib opportunity this. be we massive tissue in you the right front not problem robot, about

kind I and that across on about, really And X.X the and above will XX people translate serving. the we're when two math, So year. like expand do into, that's And of energy that expand lot plans talk company you're here, better we people really few, I'll number But and time world over think and patient base? patients that is And touch now or patients I take of kind Well, end are we over have, a in I'd amazing think that will is statistic. I'd impact question this, I second the million every of but lives why that technology time the but over so say you to doing energy over and billion that do good, anticipate here. is an market we that creating creating growth hold of that because the time. we've of seeing a so there's can a pretty it's thinking what big given we reframe got new approach like is the like, we

Rick Wise

Geoff. you, Thank

Ryan Weispfenning

Thanks, Rick.

please Miksic Matt line the of to of go Credit ahead. go Matt, Suisse. next Let's

Matt Miksic

Hi, thanks. Can right? all you hear me

Ryan Weispfenning

Yes.

Matt Miksic

Terrific.

expecting, the you were they level current maybe in despite up terrific I'd follow you're a one little great. quarter, the hospitalizations, if and bit like trends commentary which talk here in when, it hospitalization the about the concern? just you're thinking become maybe having how it's we're optimistic have I a little than bit sounds And numbers given, folks little a some was and then watching follow-up. these commentary on increased And surge about bit second that but a So, and of a could and do what and of conversations were at they if, you've have constructive, is all then more perhaps trends some your say

Geoffrey Martha

things to States, learned say then most hospitals, in capacity. two would issue I'd given we're the things some cases, of real say. getting is particular, the United Matt, deprioritized a is rest hearing many said that becomes going. to and our there. the and hospitals, them I'd from things we're elective two we And But keep from what would run the it could U.S. two coming that, the everything it's basically, estate lessons closer obviously within is we're to cases. it have The elective and the feedback, they the seeing commitment cases impact level be think from patients, XX% in that would in like commitment that and derail I so of about Europe, COVID happen, hospital, of They the literally to out of that again and that space,

happen it's be And second be we're political predict I could today's mandate sort sort to that foolish try as it'd statewide what that's mandate well. of some But, in climate, could statewide watching. So some of anything. to would happen, the think

So those more are the hospital CEOs executives first two and thing. things about and are I worried the think the

luxury patients some some of of patients can the of larger both move you moving procedures larger COVID patients, that more in around, next systems. to from And elective these regional the hospital have one elective are the and systems

best cautiously optimistic driver the news another we're, two impact they're that -- is here. that's manage optimism the things. this that I of will But to really So why the and of doing be with that's guess, their second vaccine those wave limited,

Matt Miksic

on penetration And expect investors you AHA, more at expect expect should England the so? up about here that. is about maybe on there just comment we hear for show that line of to pathway can that Thanks to therapy first next and your then, follow the Journal, sort talk helpful. New That's article the numbers, how year to that can or over up the for in how you presentation paroxysmal,

Geoffrey Martha

maybe Mike provide little details have a on more data? I'll that

Michael Coyle

that and we'd period eligible, a first that's Matt, of currently, approved they about Journal wind medications the down estimate in drugs physicians who any the the because half fail was free. New than rhythmic patients no basically, Sure, path is and up ablation will shown that two-year, therapy being for before become symptom actually a of to essentially line series therapy, that patient time a less England will titrate said anti-arrhythmic go has data

So who them large a to just with the tibrillation, lot the XX% of and on of patients coming atrial symptom the them will lot there. of By years free basically first entire portions will become taking course, with a we you're symptomatic line, obviously the essentially, up require symptom only but them And, those of not two cryoablation accelerate you're then patients essentially we up push medications. free wound can of into losing will portion year in them from ablation. XX% they have showing because in, diagnosed if patients follow that not stay and that of of a delaying curve, on anti-arrhythmic a

mentioned, compelling has need there's place. approval to data be So, referral obviously that that Obviously, be but have in as next fiscal be these better the to we're indication much Geoff able we would year, with about our that very solution for community labeling expect outreach will the of a to patients. to of channel education take to referral excited which, We being able a place think very to at take FDA lot we the level.

Matt Miksic

Michael. much so Thanks

Geoffrey Martha

see this market is not that trend this Yes, practitioners a kind general the specialist just of more physicians to our patients starting in to general definition even world is and and that case, where like with, of expanding development dealing the to we're we're used to cardiologists, but to themselves. just to the around the and

lot we to development kind we're other this And muscle so this company bXc, areas the is of Medtech this is a go-to-market, a something need that hybrid done, seeing this this diabetes muscle that camp. that I here. think we muscle even develop is haven't in this market it's because And but a Medtronic, develop, bXc of this. of bXb, need of do there's historically kind to Obviously, across more

Matt Miksic

That’s great, thanks.

Geoffrey Martha

Matt. Thanks,

Ryan Weispfenning

line at Chris of go Pasquale go next ahead. Guggenheim. Chris, please Let's the to

Chris Pasquale

there? there Thanks. just you one launch the for Sean strategy how clarify then U.S. is filing still some could about and diabetes XXXG be on One go CVG of timing expected the diabetes, on the one uncertainty about may quick

Sean Salmon

sure. Yes,

you we COVID probably is a situation involved in think, that have, know also lot of division diagnostics is the I work. sector FDA's the the already diabetes So that regulates the as

particular. part medical been reviewers really on it's for a resource drain their So in

and at separating including lot Zeus package. data data, that as just that parts the that submission, of So from all into for out the a so sensor integration of the we're to not request, patients, together adult their the well submission pediatric as pulling one

market So need that's package. efficiency the be we which the us for summary to consolidate reviewed, for and of to to the down time add the will component entire can for how fewer parts them that package,

Chris Pasquale

for for patients, but we in terms any U.S. should of when be? to Okay, available when expect have XXXG sense that will

Sean Salmon

to That's hard submit the we're to that in that predict time intending cycle review quarter. this

Chris Pasquale

a also year, just you be quickly in it which on but the back And impact forward thank then Okay, issue headwind, about basis. to the you. pulling you million half there that's an of as helpful, continuing Chinese this tender, talked the implies reserve, of go on the to a forward the me $XX the then quarter characterized

So annual sort impact versus how of much of that still quarter come? the of to recognized Thanks. was this

Karen Parkhill

got impacted China the channel will compensate because is question, in for to needed be reserve that that's what's in soon thanks the as product Yes, tender that from the the the channel, dealer The we've we and so on effective, as Chris. there. impact dealer really going is tender for price

forward reserve was of larger go well to do but will the the we had quarter. price as is XX% impact shorter bit a and forward, impact since continue a go terms In that the obviously, of the so now, us, impact as it to lower for

Chris Pasquale

Thanks.

Ryan Weispfenning

Thanks, Chris.

Let's Kaila go line at take and one ahead. question the Truist. Kaila, please more Krum go of Kaila? to

Kaila Krum

Can guys you okay? hear me

Ryan Weispfenning

can, Please ahead. go I yes.

Kaila Krum

for Yes, questions. our guys Ryan perfect. Thanks, and taking thanks

you So CEOs had guys of hospital every week. to that talking dozens mentioned you're

So for would additional So add just their what curious I'm they hearing budgeting be you're any as calendar terms particularly in can there of color you. capital spending, XXXX? and for appetite thank are you helpful,

Geoffrey Martha

is in in that but for it finding second the our obviously Yes, like that providing elective spine financing to, that a is capital lot. we're One are is to one. thing things the procedures them flexible options are profitable is the two capital helps helping so budgets capital, other tied be, And pressured, is hospitals tends out. and so us

on that's normal an to conversations procedure capital to get worked the is thing is, to just hospitals. that's flexible is to financial So which critical for us, provide number different buy just financial the helping spine with continuing division when various I or And sales what the of a the is they we're solutions second companies day, to of here, evidence financing other anticipate, so said. to profitable and levels back Mazor our the continuing some I with elective to although helping and they're general there supporting talking financial think, so capital, and pressure is that hospital's really that capital they're these have and recovery,

have that. there helped is although with or general that And it's, might imaging So like really those it's you two maybe some not us. pressure, like see things something

Kaila Krum

questions. the Great, much thanks taking for so

Ryan Weispfenning

remarks, Thanks, ask with Geoff his to Kaila. Geoff? I'll conclude

Geoffrey Martha

really in Okay, interest questions company. support great your and the we our continued thanks the the everybody and and and appreciate for engagement

on we hope continued you our you'll which we us QX We broadcast, join XX, anticipate update earnings holding for on our where that progress. we'll February will, quarterly

in tuning a like have day, safe. Happy U.S., for thanks wish you your families great to So and And in everybody. a for and very today I'd Thanksgiving stay the and healthy those

Ryan Weispfenning	Vice President and Head of Investor Relations
Geoffrey Martha	Chief Executive Officer
Karen Parkhill	Executive Vice President and Chief Financial Officer
Michael Coyle	Executive Vice President and President, Cardiovascular Portfolio
Bob White	Executive Vice President and President of Medical Surgical Portfolio
Brett Wall	Executive Vice President and President of the Neuroscience Portfolio
Sean Salmon	Executive Vice President and President of the Diabetes Operating Unit

Medtronic (MDT) 24 Nov 202021 Q2 Earnings call transcript