01—Abstract
Summary
Summary of the 10-K filed February 11, 2022. Cited figures are marked; the original filing is the authoritative source.
Stryker Corporation's 2021 10-K filing reveals a strong recovery and growth trajectory following the disruptions of 2020.
The company reported a 19.2% increase in net sales, reaching $17.1 billiona, with organic growth of 13.4% driven by increased unit volume across most product lines. The company's strategic focus on key segments like MedSurg and Neurotechnology, and Orthopaedics and Spine, has yielded positive results.
Significant growth was observed in the Orthopaedics and Spine segment, up 26.0%, indicating a robust rebound in elective procedures. Stryker continues to invest in innovation and acquisitions, with the notable pending acquisition of Vocera Communications, Inc. for approximately $3.1 billionb, aiming to further enhance its market position and service offerings.
02—Key points
Key Highlights
- Stryker reported a 19.2% increase in net sales to $17.1 billion in 2021, signaling a strong recovery from the previous year.
- Organic sales growth was robust at 13.4%, primarily driven by an increase in unit volume across all product lines.
- The Orthopaedics and Spine segment experienced significant growth of 26.0%, indicating a rebound in demand for elective procedures.
- Stryker announced its intention to acquire Vocera Communications, Inc. for approximately $3.1 billion, expanding its digital care coordination and communication capabilities.
- The company maintained strong financial health, with net cash provided by operating activities of $3.26 billion.
- Gross profit as a percentage of net sales improved to 64.1% in 2021 from 63.1% in 2020, driven by higher volumes and favorable product mix.
- Research, development, and engineering expenses increased to 7.2% of net sales, reflecting continued investment in innovation.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2021, Stryker Corp kept $0.12.
- Revenue$17.11B100.0%
- Cost of revenue−$6.14B35.9%
- Gross profit$10.97B64.1%
- Operating costs−$8.38B49.0%
- Operating income$2.58B15.1%
- Interest, other & tax−$590.0M3.4%
- Net income$1.99B11.7%
Where FY2021 revenue went
$17.11B- SG&A: $6.43B, 38% of revenue
- Cost of revenue: $6.14B, 36% of revenue
- Net income: $1.99B, 12% of revenue
- R&D: $1.24B, 7.2% of revenue
- Other operating costs: $722.0M, 4.2% of revenue
- Interest, other & tax: $590.0M, 3.4% of revenue
Kept 12% as net incomeNet income $1.99B · 12%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2021filed February 11, 2022Financial Statements
FY2021 against FY2020
| Line item | FY2021FY2020 | Change |
|---|---|---|
| Revenue | $17.11B$14.35B | +19.2% |
| Cost of Revenue | $6.14B$5.29B | +16.0% |
| Gross Profit | $10.97B$9.06B | +21.1% |
| R&D Expenses | $1.24B$984.00M | +25.5% |
| SG&A Expenses | $6.43B$5.36B | +19.9% |
| Operating Expenses | $8.38B$6.83B | +22.7% |
| Operating Income | $2.58B$2.22B | +16.2% |
| Interest Expense | $337.00M$315.00M | +7.0% |
| Net Income | $1.99B$1.60B | +24.7% |
| EPS (Basic) | $5.29$4.26 | +24.2% |
| EPS (Diluted) | $5.21$4.20 | +24.0% |
| Shares Outstanding (Basic) | 377.00M375.50M | +0.4% |
| Shares Outstanding (Diluted) | 382.30M380.30M | +0.5% |
05—Questions
Frequently Asked Questions
What was the overall financial performance of Stryker in 2021?
Stryker demonstrated strong financial performance in 2021, with reported net sales growth of 19.2% to $17.1 billion. Excluding the impact of acquisitions and divestitures, sales grew 12.6% in constant currency. The company also reported net earnings of $1.99 billion and adjusted net earnings per diluted share of $9.09, indicating a significant recovery and growth from 2020.
How did the different business segments perform in 2021?
Stryker's two main business segments, MedSurg and Neurotechnology, and Orthopaedics and Spine, both showed growth. MedSurg and Neurotechnology net sales increased by 14.3% as reported, while Orthopaedics and Spine saw a significant increase of 26.0% as reported. This strong performance in Orthopaedics and Spine is attributed to higher shipments across all its product lines, reflecting a recovery in elective surgical procedures.
What are the key risks facing Stryker, as highlighted in the 10-K?
Key risks include the ongoing impact of the COVID-19 pandemic on operations, supply chain, and elective procedures. Other significant risks involve legal and regulatory compliance, particularly concerning medical device regulations in the US and Europe, and potential product liability claims. The company also faces market risks such as exchange rate fluctuations and operational risks related to competition, global operations, and potential cybersecurity threats.
What is Stryker's strategy for capital allocation?
Stryker's capital allocation strategy prioritizes acquisitions, followed by dividends and share repurchases. In 2021, the company invested $339 million in acquisitions and paid $950 million in dividends. They also maintained a significant repurchase authorization of $1,033 million as of December 31, 2021, though no shares were repurchased in 2021.
06—Continue