Medtronic Reports Fourth Quarter and Fiscal Year 2020 Financial Results; Announces Dividend Increase
Medtronic plc (NYSE: MDT) reported Q4 2020 revenue of $6.0 billion, down 26% reported and 25% organic, impacted by COVID-19. Q4 GAAP diluted EPS was $0.48, while non-GAAP diluted EPS stood at $0.58, reflecting a 62% decline. FY20 revenue totaled $28.913 billion, a decrease of 5.4%. Despite these challenges, Medtronic announced a quarterly dividend increase to $0.58 per share, marking its 43rd consecutive year of dividend growth. The company also reported robust cash flow from operations of $7.2 billion and free cash flow of $6.0 billion, showcasing its strong financial position.
- Quarterly dividend increased to $0.58, annual dividend of $2.32, marking 43 consecutive years of dividend increases.
- FY20 cash flow from operations of $7.2 billion; FY20 free cash flow of $6.0 billion with 97% conversion.
- Q4 revenue decreased 26% reported and 25% organic, reflecting significant impact from COVID-19.
- Q4 GAAP net income and diluted EPS down 63% and 62%, respectively.
- FY20 revenue decreased 5.4% with net earnings of $4.789 billion, down from previous year.
- Q4 Revenue of
$6.0 Billion Decreased26% Reported and25% Organic - Q4 GAAP Diluted EPS of
$0.48 ; Q4 Non-GAAP Diluted EPS of$0.58 - Financial Results In-Line with Update Provided on April 21 and Consistent with Impact Felt Across MedTech Industry
- FY20 Cash Flow from Operations of
$7.2 Billion ; FY20 Free Cash Flow of$6.0 Billion ; Conversion of97% - Quarterly Dividend Increased to
$0.58 , Annual$2.32 from Prior$2.16 ; 43rd Consecutive Year of Dividend Increases
DUBLIN, May 21, 2020 (GLOBE NEWSWIRE) -- Medtronic plc (NYSE:MDT) today announced financial results for its fourth quarter and fiscal year 2020, which ended April 24, 2020. The results were in-line with the update the company provided on April 21, 2020, which detailed the impact of the COVID-19 pandemic on its operations and financials. Medtronic’s results were also consistent with the impact felt across the MedTech industry from deferred procedures as a result of the pandemic. Medtronic is in a strong financial position, as represented by the increase in its cash dividend announced today, and the company continues to drive its long-term strategies.
The company reported fourth quarter worldwide revenue of
Fourth quarter U.S. revenue of
Medtronic’s fiscal year 2020 revenue of
Fiscal year 2020 cash flow from operations was
“It is important to acknowledge the incredible heroism, resolve and sacrifice of the frontline healthcare workers fighting the COVID-19 pandemic, as well as our employees who are supporting them,” said Geoff Martha, Medtronic chief executive officer. “This pandemic presented the world with an unprecedented challenge, which required an unprecedented response, including by our team at Medtronic. I’m extremely proud of the way our employees have risen to the occasion to help healthcare systems and workers, governments and NGOs, and for the way that they’ve continued to support their communities and families through this time.”
Cardiac and Vascular Group
The Cardiac and Vascular Group (CVG) includes the Cardiac Rhythm & Heart Failure (CRHF), Coronary & Structural Heart (CSH), and Aortic, Peripheral & Venous (APV) divisions. CVG fiscal year 2020 revenue of
- Cardiac Rhythm & Heart Failure fourth quarter revenue of
$940 million decreased 40 percent as reported and 38 percent constant currency. Arrhythmia Management revenue, including implantable defibrillators (ICDs), Pacemakers, Implantable Diagnostics, and AF Solutions declined in the high-thirties. This included high-single digit growth in Leadless Pacemakers, and specifically low-twenties growth in the United States, on the continued adoption of the company’s Micra™ transcatheter pacing system. Heart Failure declined in the high-thirties on a constant currency basis, reflecting declines in cardiac resynchronization therapy defibrillators (CRT-Ds), cardiac resynchronization therapy pacemakers (CRT-Ps), and left ventricular assist devices (LVADs).
- Coronary & Structural Heart fourth quarter revenue of
$697 million decreased 30 percent as reported and 28 percent constant currency, reflecting low-thirties declines in drug-eluting stents and transcatheter aortic valves (TAVR).
- Aortic, Peripheral & Venous fourth quarter revenue of
$367 million decreased 27 percent as reported and 26 percent constant currency. Aortic and Peripheral declined in the low-twenties and Venous declined in the low-thirties.
Minimally Invasive Therapies Group
The Minimally Invasive Therapies Group (MITG) includes the Surgical Innovations (SI) and the Respiratory, Gastrointestinal & Renal (RGR) divisions. MITG fiscal year 2020 revenue of
- Surgical Innovations fourth quarter revenue of
$1.16 8 billion decreased 24 percent as reported and 22 percent constant currency. The decline of worldwide surgical procedures resulted in lower demand for Advanced Stapling and Advanced Energy products, which both declined in the low-twenties, and General Surgery products, which also declined in the low-twenties.
- Respiratory, Gastrointestinal & Renal fourth quarter revenue of
$766 million increased 6 percent as reported and 8 percent constant currency, reflecting the increased demand for Respiratory and Patient Monitoring products. Respiratory & Patient Monitoring grew in the mid-teens, including high-eighties growth in ventilators as production increased to address global needs.
Restorative Therapies Group
The Restorative Therapies Group (RTG) includes the Brain Therapies, Spine, Specialty Therapies, and Pain Therapies divisions. RTG fiscal year 2020 revenue of
- Brain Therapies fourth quarter revenue of
$615 million decreased 26 percent as reported and 25 percent constant currency, reflecting high-twenties declines in Neurosurgery and high-thirties declines in DBS and high-single digit declines in Neurovascular, which included high-single digit growth in Ischemic Stroke.
- Spine fourth quarter revenue of
$480 million decreased 31 percent as reported and 32 percent on an organic basis. Core Spine declined in the high-twenties, both in the U.S. and globally. Sales of bone morphogenetic protein (BMP) declined in the high-thirties.
- Specialty Therapies fourth quarter revenue of
$197 million decreased 44 percent as reported and 43 percent constant currency. ENT declined in the high-twenties and Pelvic Health declined in the high-fifties, all on a constant currency basis.
- Pain Therapies fourth quarter revenue of
$198 million decreased 42 percent as reported and 42 percent constant currency.
Diabetes Group
Diabetes Group fiscal year 2020 revenue of
Guidance
Given the uncertainty on near-term financial results caused by the COVID-19 pandemic, the company is not providing formal annual or quarterly financial guidance at this time.
Dividend Increase
The company today announced that on May 20, 2020, the Medtronic board of directors approved an increase in Medtronic’s cash dividend for the first quarter of fiscal year 2021, raising the quarterly amount to
Medtronic has a strong track record of returning capital to its shareholders, including returning
“Our financial position remains strong, and we’re differentially using our balance sheet during the pandemic. Today, we announced a significant increase in our dividend, and we are purposely investing to drive not only a strong recovery, but also consistent, long-term growth,” said Martha. “As we emerge, the investments that we’ve made will be evident in our attraction and retention of top talent, and in the new, innovative products and solutions that we’ll offer physicians, patients, and healthcare systems.”
Webcast Information
Medtronic will host a webcast today, May 21, at 8:00 a.m. EDT (7:00 a.m. CDT) to provide information about its businesses for the public, investors, analysts, and news media. This quarterly webcast can be accessed by clicking on the Investor Events link at investorrelations.medtronic.com and this earnings release will be archived at newsroom.medtronic.com. Medtronic will be live tweeting during the webcast on its Newsroom Twitter account, @Medtronic. Within 24 hours of the webcast, a replay of the webcast and transcript of the company’s prepared remarks will be available by clicking on the Investor Events link at investorrelations.medtronic.com.
Medtronic plans to report its fiscal year 2021 first, second, third, and fourth quarter results on Tuesday, August 25, 2020, Tuesday, November 24, 2020, Tuesday, February 23, 2021, and Thursday, May 27, 2021, respectively. As a result of the COVID-19 pandemic, Medtronic has postponed its biennial Institutional Investor & Analyst Day, which originally was scheduled for Tuesday, June 2, 2020, to a date that is to be determined. For all of these events, confirmation and additional details will be provided closer to the specific event.
Financial Schedules
To view the fourth quarter and FY20 financial schedules and non-GAAP reconciliations, click here. To view the fourth quarter and FY20 earnings presentation, click here. Both documents can also be accessed by visiting newsroom.medtronic.com.
About Medtronic
Medtronic plc (www.medtronic.com), headquartered in Dublin, Ireland, is among the world’s largest medical technology, services and solutions companies – alleviating pain, restoring health and extending life for millions of people around the world. Medtronic employs more than 90,000 people worldwide, serving physicians, hospitals and patients in more than 150 countries. The company is focused on collaborating with stakeholders around the world to take healthcare Further, Together.
FORWARD LOOKING STATEMENTS
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which are subject to risks and uncertainties, including risks related to the impact COVID-19 has had and is expected to continue to have on our business, operations and production, as well as demand for our offerings, and on our employees, medical professional and healthcare system, communities in which we operate, and our financial results and condition, competitive factors, difficulties and delays inherent in the development, manufacturing, marketing and sale of medical products, government regulation and general economic conditions and other risks and uncertainties described in the company’s periodic reports on file with the U.S. Securities and Exchange Commission including the most recent Annual Report on Form 10-K of the company, as filed with the U.S. Securities and Exchange Commission. In some cases, you can identify these statements by forward-looking words, such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “forecast,” “intend,” “looking ahead,” “may,” “plan,” “possible,” “potential,” “project,” “should,” “will,” and similar words or expressions, the negative or plural of such words or expressions and other comparable terminology. Actual results may differ materially from anticipated results. Medtronic does not undertake to update its forward-looking statements or any of the information contained in this press release, including to reflect future events or circumstances.
NON-GAAP FINANCIAL MEASURES
This press release contains financial measures, including adjusted net income and adjusted diluted EPS, which are considered “non-GAAP” financial measures under applicable SEC rules and regulations. References to quarterly and annual figures increasing, decreasing or remaining flat are in comparison to fiscal year 2019.
Medtronic management believes that non-GAAP financial measures provide information useful to investors in understanding the company’s underlying operational performance and trends and to facilitate comparisons with the performance of other companies in the med tech industry. Non-GAAP net income and diluted EPS exclude the effect of certain charges or gains that contribute to or reduce earnings but that result from transactions or events that management believes may or may not recur with similar materiality or impact to operations in future periods (Non-GAAP Adjustments). Medtronic generally uses non-GAAP financial measures to facilitate management’s review of the operational performance of the company and as a basis for strategic planning. Non-GAAP financial measures should be considered supplemental to and not a substitute for financial information prepared in accordance with U.S. generally accepted accounting principles (GAAP), and investors are cautioned that Medtronic may calculate non-GAAP financial measures in a way that is different from other companies. Management strongly encourages investors to review the company’s consolidated financial statements and publicly filed reports in their entirety. Reconciliations of the non-GAAP financial measures to the most directly comparable GAAP financial measures are included in the financial schedules accompanying this press release.
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View Fourth Quarter and FY20 Financial Schedules & Non-GAAP Reconciliations
View Fourth Quarter and FY20 Earnings Presentation
Erika Winkels
Public Relations
+1-763-526-8478
Ryan Weispfenning
Investor Relations
+1-763-505-4626
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