01—Abstract
Summary
Summary of the 10-K filed June 21, 2019. Cited figures are marked; the original filing is the authoritative source.
Medtronic plc's 2019 10-K filing reveals a company focused on global health through its diverse medical technology offerings.
The company operates across four key segments: Cardiac and Vascular, Minimally Invasive Therapies, Restorative Therapies, and Diabetes. These segments provide a broad range of products and services aimed at alleviating pain, restoring health, and extending life for millions worldwide. Financially, the company demonstrated a modest increase in net sales for fiscal year 2019, driven by strong performance in its Restorative Therapies and Diabetes segments, although this was partially offset by a divestiture within the Minimally Invasive Therapies Group.
Medtronic continues to prioritize its three growth strategies: Therapy Innovation, Globalization, and Economic Value, evident in its ongoing investment in research and development and its expansion into emerging markets. The company also maintains a strong commitment to returning capital to shareholders through share repurchases and dividends, supported by robust operating cash flow.
02—Key points
Key Highlights
- Medtronic operates through four primary segments: Cardiac and Vascular, Minimally Invasive Therapies, Restorative Therapies, and Diabetes, offering a wide range of medical technologies.
- Net sales saw a modest increase in fiscal year 2019, driven by growth in the Restorative Therapies and Diabetes segments, though impacted by a divestiture in the Minimally Invasive Therapies Group.
- The company is actively pursuing its growth strategies: Therapy Innovation, Globalization (with emerging markets growing 6% in FY19), and Economic Value, focusing on value-based healthcare solutions.
- Research and Development expenses remained substantial, reflecting a commitment to innovation, with R&D spending at $2.3 billion for fiscal years 2019 and 2018.
- Medtronic maintained a strong liquidity position, with $4.4 billion in cash and cash equivalents and $5.5 billion in current investments at the end of fiscal year 2019.
- The company actively returned capital to shareholders, with an authorized share repurchase program of $11.0 billion, having utilized approximately $3.8 billion by April 2019.
- Medtronic's balance sheet shows significant goodwill ($39.9 billion) and other intangible assets ($20.5 billion), primarily resulting from past acquisitions and reflecting strategic investments in technology and brands.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2019, Medtronic plc kept $0.15.
- Revenue$30.56B100.0%
- Cost of revenue−$9.15B30.0%
- Gross profit$21.40B70.0%
- Operating costs−$15.13B49.5%
- Operating income$6.27B20.5%
- Interest, other & tax−$1.62B5.3%
- Net income$4.65B15.2%
Where FY2019 revenue went
$30.56B- SG&A: $10.42B, 34% of revenue
- Cost of revenue: $9.15B, 30% of revenue
- Other operating costs: $4.72B, 15% of revenue
- Net income: $4.65B, 15% of revenue
- Interest, other & tax: $1.62B, 5.3% of revenue
Kept 15% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2019filed June 21, 2019Financial Statements
FY2019 against FY2018
| Line item | FY2019FY2018 | Change |
|---|---|---|
| Revenue | $30.56B$29.95B | +2.0% |
| Cost of Revenue | $9.15B$9.07B | +1.0% |
| Gross Profit | $21.40B$20.90B | +2.4% |
| SG&A Expenses | $10.42B$10.24B | +1.8% |
| Operating Income | $6.27B$6.64B | −5.6% |
| Interest Expense | $1.44B$1.15B | +26.0% |
| Net Income | $4.65B$3.10B | +49.8% |
| EPS (Basic) | $3.44$2.29 | +50.2% |
| EPS (Diluted) | $3.41$2.27 | +50.2% |
| Shares Outstanding (Basic) | 1.35B1.36B | −0.8% |
| Shares Outstanding (Diluted) | 1.36B1.37B | −0.8% |
05—Questions
Frequently Asked Questions
What are Medtronic's main business segments?
Medtronic operates through four principal operating and reportable segments: the Cardiac and Vascular Group, the Minimally Invasive Therapies Group, the Restorative Therapies Group, and the Diabetes Group. These segments cover a broad spectrum of medical technologies and solutions.
How did Medtronic perform financially in fiscal year 2019?
For the fiscal year ended April 26, 2019, Medtronic reported net sales of $30.56 billion, an increase of 2% compared to the previous year. Net income attributable to Medtronic was $4.63 billion, a significant increase from $3.10 billion in fiscal year 2018, primarily due to a large tax charge in FY18 related to U.S. tax reform.
What is Medtronic's approach to innovation and growth?
Medtronic's growth is driven by three key strategies: Therapy Innovation (launching meaningful therapies and procedures), Globalization (expanding access in emerging markets), and Economic Value (offering services and solutions to improve outcomes and efficiency). The company invests heavily in R&D and strategic acquisitions to support these strategies.
What are the key risks Medtronic highlighted in its 10-K filing?
Medtronic identified several key risks, including intense competition in the medical technology market, potential disruptions in supply and manufacturing, the impact of stringent government regulations and adverse regulatory actions, the need to protect intellectual property, product quality issues leading to liability claims, and changes in healthcare policies and reimbursement. Risks associated with global operations, such as currency fluctuations and trade regulations, were also noted.
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