01—Abstract
Summary
Summary of the 10-K filed June 22, 2018. Cited figures are marked; the original filing is the authoritative source.
Medtronic plc's 2018 10-K filing highlights a year of steady net sales growth, reaching $29.95 billiona, despite a slight overall percentage increase of 1%.
This growth was driven by strong performance in key segments like Cardiac and Vascular, which saw a 8% increase in net sales, particularly in its Coronary & Structural Heart division. The company successfully divested its Patient Care, Deep Vein Thrombosis, and Nutritional Insufficiency businesses, generating $6.1 billionb in proceeds and a $697 million gain, which significantly bolstered its liquidity and financial position. This strategic move allowed Medtronic to focus on its core growth areas and innovation pipeline.
Despite facing a substantial $2.4 billionc tax charge related to U.S. tax reform, Medtronic demonstrated resilience. The company's commitment to research and development remained strong, with R&D expenses totaling $2.3 billion.
Furthermore, Medtronic continued to return value to shareholders, repurchasing $2.17 billiond of its ordinary shares and paying $2.49 billion in dividends. The company's liquidity remains robust, with $11.2 billion in cash and current investments, supported by a $3.5 billion credit facility.
02—Key points
Key Highlights
- Net sales for fiscal year 2018 reached $29.95 billion, representing a 1% increase over the prior year, primarily driven by strong performance in the Cardiac and Vascular Group (+8%).
- The company divested its Patient Care, Deep Vein Thrombosis, and Nutritional Insufficiency businesses for $6.1 billion, resulting in a $697 million gain on sale.
- Diluted earnings per share were $2.27, significantly impacted by a $2.4 billion tax charge related to the U.S. Tax Cuts and Jobs Act.
- Research and development expenses were $2.25 billion, supporting innovation across the company's four operating segments.
- Medtronic returned $4.26 billion to shareholders through dividends ($2.49 billion) and share repurchases ($2.17 billion) during fiscal year 2018.
- The company maintained strong liquidity with $11.2 billion in cash and current investments, alongside a $3.5 billion credit facility.
- Emerging markets showed robust growth, with net sales increasing by 12% compared to the prior year.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2018, Medtronic plc kept $0.10.
- Revenue$29.95B100.0%
- Cost of revenue−$9.05B30.2%
- Gross profit$20.90B69.8%
- Operating costs−$14.26B47.6%
- Operating income$6.64B22.2%
- Interest, other & tax−$3.54B11.8%
- Net income$3.10B10.4%
Where FY2018 revenue went
$29.95B- SG&A: $10.24B, 34% of revenue
- Cost of revenue: $9.07B, 30% of revenue
- Other operating costs: $4.01B, 13% of revenue
- Net income: $3.10B, 10% of revenue
- Interest, other & tax: $3.54B, 12% of revenue
Kept 10% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2018filed June 22, 2018Financial Statements
FY2018 against FY2017
| Line item | FY2018FY2017 | Change |
|---|---|---|
| Revenue | $29.95B$29.71B | +0.8% |
| Cost of Revenue | $9.07B$9.29B | −2.4% |
| Gross Profit | $20.90B$20.42B | +2.3% |
| SG&A Expenses | $10.24B$10.02B | +2.2% |
| Operating Income | $6.64B$5.38B | +23.4% |
| Interest Expense | $1.15B$1.09B | +4.8% |
| Net Income | $3.10B$4.03B | −22.9% |
| EPS (Basic) | $2.29$2.92 | −21.6% |
| EPS (Diluted) | $2.27$2.89 | −21.5% |
| Shares Outstanding (Basic) | 1.36B1.38B | −1.6% |
| Shares Outstanding (Diluted) | 1.37B1.39B | −1.7% |
05—Questions
Frequently Asked Questions
What was Medtronic's financial performance in fiscal year 2018?
Medtronic reported net sales of $29.95 billion for fiscal year 2018, a slight increase of 1% compared to fiscal year 2017. The company experienced strong growth in its Cardiac and Vascular Group (+8%), while the Minimally Invasive Therapies Group saw a 12% decrease primarily due to the divestiture of certain businesses. Diluted earnings per share were $2.27, impacted by a significant tax charge related to U.S. tax reform.
How did the divestiture of the Patient Care businesses affect Medtronic?
The divestiture of the Patient Care, Deep Vein Thrombosis, and Nutritional Insufficiency businesses on July 29, 2017, generated $6.1 billion in proceeds and a $697 million gain. This strategic move allowed Medtronic to focus on its core medical technology offerings and streamline its business operations.
What is Medtronic's strategy for future growth?
Medtronic's growth strategy centers on three key pillars: Therapy Innovation (launching meaningful new therapies), Globalization (expanding access in emerging markets), and Economic Value (leading in value-based healthcare solutions). The company continues to invest in R&D to drive product development and expand its market reach.
How is Medtronic managing its debt and capital structure?
Medtronic maintained a strong liquidity position with $11.2 billion in cash and current investments at the end of fiscal year 2018. The company also had access to a $3.5 billion revolving credit facility. During fiscal year 2018, Medtronic repaid approximately $7.4 billion in debt obligations, demonstrating a commitment to deleveraging while continuing to support shareholder returns through dividends and share repurchases.
06—Continue