Medtronic plc (NYSE:MDT) Q2 2023 Earnings Call Transcript

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There is a lot that goes into them and that revenue went back after the supply situation was resolved. And so that €“ we’ve seen that over the years on multiple times. So these are contracted €“ like I said, contracted business for us. And based on our dialogue, with the health systems, we’re confident this is going to come back as our supply, which we mentioned. We did get past the most acute part of our supply issues in the Surgical Innovations business, was this packaging issue. It did come later in the quarter and slower momentum, but we do have momentum now, and you should see that business recover. On the back half, I’ll ask Karen to…

Karen Parkhill: Yes. Thanks, Vijay. When we look at our back half ramp, we have new products. We’ve got TAVR with Evolut FX that Sean has mentioned, was only in the market for a month in Q2. So we expect continued growth from that. We’ve got Hugo starting to ramp. We’ve got our Harmony valve returning to the market. We’ve also got our diabetic painful neuropathy opportunity that will be driving more in the back half. and we’ve got supply returning. We’ve got supply returning for our LINQ II product in our cardiac diagnostics and also better supply in SI and ICDs. And we’ve got reduced headwinds. Our sale events and aortic graphs are normalizing. So, all of those things really lead to the back half ramp. Hopefully, that’s helpful.

Geoff Martha: Yes. So I mean, beyond the supply returning, the back half, as Karen walked through a lot of it, is really powered by very tangible things beyond supply, product-related they are tangible and compelling.

Vijay Kumar: Yes, that’s helpful, Geoff. And then maybe one related, I think in the past, Medtronic has thought about itself as a mid single-digit top line company in light of these results, is that mid single-digit LRP still intact, I guess Medtronic lead to your supplement is growth with ? Thank you.

Geoff Martha: I didn’t hear the very last part of it, does Medtronic €“ but the answer to your question is yes. I mean, the mid-single-digit growth, we will exit the year at mid-single digits. You see throughout this year, you’re seeing the acceleration from the first quarter, which was the depth of our supply issues. We’re really in a tough spot. We were down minus 4%. Then this past quarter, on an organic basis, up 2% and then Karen walked you through the back half guide. But we exited the year at mid-single digits, and we believe that’s durable. Like I said, based on these product launches that are here now immediate drivers and then we €“ Karen brought up a list of things that are already kind of tangible in the back half, but there is a number of other things that are still coming.

The Aurora EV-ICD, PFA and Afib and Inceptiv with ECAPs and our SCS business and then there is the whole diabetes discussion with those products coming on in the U.S. in the next year. And the Hugo ramp will go on for a while. So there is a number of things that keep us going. And so that’s why we feel good about the mid-single digit. Thank you, Vijay. Next question please, Ryan.

Ryan Weispfenning: The next question comes from Larry Biegelsen at Wells Fargo. Larry, please go ahead.

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