2024-01-30 21:28:06 ET
Stryker Corporation (SYK)
Q4 2023 Earnings Conference Call
January 30, 2024 4:30 PM ET
Company Participants
Kevin Lobo – Chair and Chief Executive Officer
Jason Beach – Vice President-Investor Relations
Glenn Boehnlein – Chief Financial Officer
Conference Call Participants
Robbie Marcus – JPMorgan
Lawrence Biegelsen – Wells Fargo
Ryan Zimmerman – BTIG
Joanne Wuensch – Citi
Vijay Kumar – Evercore ISI
Shagun Singh – RBC
Pito Chickering – Deutsche Bank
Travis Steed – Bank of America
Matthew O’Brien – Piper Sandler
Josh Jennings – TD Cowen
Chris Pasquale – Nephron
Danielle Antalffy – UBS
Matt Miksic – Barclays
Caitlin Cronin – Canaccord Genuity
Steven Lichtman – Oppenheimer
Mike Matson – Needham & Company, Inc.
Drew Ranieri – Morgan Stanley
Matt Taylor – Jefferies
Richard Newitter – Truist Securities
Presentation
Operator
Welcome to the Fourth Quarter and Full Year 2023 Stryker Earnings Call. My name is Luke, and I'll be your operator for today's call. At this time all participants are in a listen-only mode. Following the conference, we will conduct a question-and-answer session. This conference call is being recorded for replay purposes.
Before we begin, I'd like to remind you that discussions during this conference call will include forward-looking statements. Factors that could cause actual results to differ materially are discussed in the company's most recent filings with the SEC. Also, the discussions will include certain non-GAAP financial measures. Reconciliations to the most directly comparable GAAP financial measures can be found in today's press release that is an exhibit to Stryker's current report on Form 8-K filed today with the SEC.
I'd now like to turn the call over to Mr. Kevin Lobo, Chair and Chief Executive Officer. You may proceed, sir.
Kevin Lobo
Welcome to Stryker's fourth quarter earnings call. Joining me today are Glenn Boehnlein, Stryker's CFO; and Jason Beach, Vice President of Investor Relations. For today's call, I'll provide opening comments, followed by Jason with the trends we saw during the quarter, MAKO performance insights and updates on recent acquisitions. Glenn will then provide additional details regarding our quarterly results and 2024 guidance before opening the call to Q&A.
First, I want to recognize and celebrate our achievement of surpassing $20 billion in sales. We continue to be a high-growth company with a focus on our mission to deliver for our patients and customers. As we begin 2024, I am very excited about our future. We are in a strong position with robust demand across both procedures and capital, easing macro constraints and a strong pipeline of innovation. I want to thank our over 50,000 employees for their unrelenting determination, agility and performance.
We've delivered terrific sales growth of over 11% in Q4 and the full year despite strong comparatives from the prior year. Our commercial execution, including many successful product introductions was excellent across our businesses and regions. Globally, for both Q4 and the full year, we had double-digit organic sales growth in instruments, endoscopy, medical, neuro cranial, hips, knees and trauma and extremities. For the full year, we also had double-digit organic sales growth both in the U.S. and internationally. Spine and neurovascular also demonstrated good performances while making notable advancements in future innovations and acquisitions. It was a comprehensive performance across our businesses, and we have built significant momentum entering 2024.
For the sixth straight year, our international sales growth, excluding China VBP outpaced our strong U.S. business. Canada, Australia and most emerging markets had double-digit growth, while Europe and Japan grew in high single digits. International continues to be a large growth opportunity for us. Next, we delivered quarterly and full year adjusted EPS of $3.46 and $10.60, respectively, which represents 15% growth for Q4 and 13% growth compared to the full year of 2022. This was driven by our strong sales, but also demonstrates our continued operating margin recovery. We remain focused on driving high growth now and in the future through investments in organic innovation and M&A. We expect to continue to deliver sales growth at the high end of medtech, which is reflected in our full year 2024 guidance of organic sales growth of 7.5% to 9%. This growth, combined with an accelerated margin expansion plan, translates to an adjusted EPS of $11.70 to $12 per share.
I will now turn the call over to Jason.
Jason Beach
Thanks, Kevin. My comments today will focus on providing an update on the current environment as well as MAKO, Vocera and our recently announced agreement to acquire SERF. During the quarter, we saw strong procedural demand. We continue to expect the ortho markets will remain strong in 2024, driven by continued adoption in robotic-assisted surgery, demographics, a more favorable pricing environment and healthy patient activity levels with surgeons. While supply constraints continue in pockets around the globe, our supply is stable overall and gradually improving.
Additionally, demand for our capital products remained very robust in the quarter with double-digit organic growth in medical, instruments and endoscopy. Hospital CapEx budgets remain healthy, and our capital order book remains elevated as we enter 2024. Next, specific to MAKO, we had a record quarter of installations globally. The progress of our MAKO offense, including our recent direct-to-consumer campaign, has resulted in strong growth of our installed base alongside continued increases in utilization. In the U.S., we saw 60% of knees and 34% of hips performed using MAKO as we exited the year. Globally, we exited the year with just over 40% of knees and nearing 20% of hips performed using MAKO....
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Stryker Corporation (SYK) Q4 2023 Earnings Call Transcript