Stryker Corporation (NYSE:SYK) Q3 2023 Earnings Call Transcript

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Yang Li: This is Yang Li in for Matt. I guess to start, I was wondering price was positive this quarter, continuing the trend from early in the year. I guess I’m just wondering how sustainable do you think the positive price momentum can be going forward?

Glenn Boehnlein: Sure. You’re right. Q3 kind of continued our favorable pricing trend with sort of 0.3% coming off of Q2, that was 0.5%. And A couple of comments I would say. As we look at the full year, we think that will be positive for the full year. And we also have put in place kind of the incentive process as well as the contracting process to really make sure that we’re considering price as we think about working with our customers on buying products. So I feel good that we have the sort of mechanism that is going to continue to look at price. That being said, you’re absolutely right. We’ll anniversary on product over product year-over-year, which may make things a little bit tougher. One thing that I would keep in mind though, that Kevin talks about this product super cycle and a lot of next-gen products coming out.

So if you think about our pricing calculation of statistic, it really doesn’t include the impact of price increases that we get on those products because of the technologies that they’re bringing to market. So I think that is actually an element of pricing that’s going to help us as we think about next year. And I don’t think it’s something going to walk away from as long as inflation is having an impact, we’ll continue to have those discussions with our customers about pricing.

Yang Li: All right. Great. And then, I guess, for the follow-up, I wanted to hear a little bit more on potentially hiring more robotic or capital reps ahead of the shoulder and in robotic launches. I wanted to maybe get a better sense of how you’d be entering the market. Is it more of a hybrid sales process with the clinical reps? I mean I would assume you would focus initially on the existing customers, but maybe how long before you start going on offense and try to convert surgeons with Mako?

Kevin Lobo: Yes. Listen, we have a very dedicated sales force offense that we run. So even before you think about spine or shoulder, even within joint replacement, we had specialized capital salespeople. We have the same thing with power tools. We have specialized people that sell power tools. So we don’t believe in this hybrid model, we’re going to have dedicated capital reps, and they will go to the market and they will sell to competitive and new surgeons right out of the gate. That’s what they do. And that’s what we do at Stryker. So I wouldn’t expect that we would just go to our friendlies. We’re going to go to people that want technology, and we really don’t care if they’re existing customers or if they’re competitive customers because the — there really is — we don’t like to have implant reps also selling capital.

It’s just not our model. And so we think we can solve more and faster if we have these dedicated people, and we’ll have that dedicated approach as we add additional applications to make.

Operator: Thank you. There are no further questions in the queue. I will now turn the call over to Kevin Lobo for closing remarks.

Kevin Lobo: Thank you for joining our call. We look forward to sharing our Investor Day with you on November 8 and our fourth quarter and full year results with you in January 2024. Thank you.

Operator: This call has concluded. You may disconnect at any time.

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