Stryker (SYK) 31 Jan 232022 Q4 Earnings call transcript

Welcome to the Fourth Quarter and Full Year 2022 Stryker Earnings Call. My name is Tanya, and I will 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.

would conference remind statements. call I discussions that begin, this during will we like you to the Before include forward-looking that recent results in actual could materially Factors discussed are to the with filings differ most the SEC. company’s cause

SEC. non-GAAP that include most GAAP to on current is can an discussions measures Reconciliations in found Form comparable measures. today report certain exhibit the to financial X-K with Also, today’s financial be will the directly press the filed release Stryker’s

now call Officer. Lobo, the will Chair and Kevin I to Mr. turn over Chief Executive

You may proceed, sir.

fourth Stryker’s to quarter Welcome earnings call.

Stryker’s Joining and me today are Glenn Relations. Beach, Boehnlein, Investor President CFO; of Vice Jason

For saw Vocera Medical. guidance Glenn today’s call by we during followed the details comments, will then quarter, to the and Q&A. Wright provide insights will our XXXX call, on and provide additional quarterly Mako results opening updates before trends Jason with regarding open the performance we I and

the alongside million faced the a and with for pressures. was We for macroeconomic these XXXX faced begin all customers our challenges and inflationary world. chain XXX over companies, will supply delivered many I and environment. we, patients challenges where over year unprecedented

unrelenting progress remain and our and super the on also as pipeline determination want to launches future, I a employees XXXX. We innovation, their of agility. portfolio XX,XXX enabling cycle we for product focused new XXXX of our across in our thank

which year brought In the full XX.X%, fourth X.X%. quarter, our of organic we sales growth growth delivered organic sales to

these growth rates. this During my annual XX-plus years were record and role, quarterly in

organic and was division, our regions over disposables across and capital in which sales equipment, was XX%. of Medical balanced growth The by growth implants, our had QX businesses highlighted and

ahead by rate, opportunity we international growth fifth U.S. Europe, remains significant consecutive posted Canada, rate in emerging the a complement which years in and highlighted globalization. should all year, business. quarter. double-digit our are continue strong progress Additionally, that to demonstrating growth markets, the This our organic the was U.S. growth International on for Australia the our exceeded making growth

and EPS range. This adjusted was Next, latest we full foreign $X delivered respectively, and quarterly performance, our which exceeding pressures sales year of our currency. $X.XX, driven strong by offset inflationary negative and guidance

progressing pricing costs, targeted actions address restructuring higher Also, plans. and to we both include which our with are

to impact course these an We have begun of the and improving expect the XXXX. see initiatives over of trend

the be need recovery We demand will alongside procedural do for it also for component the the products. XXXX, that throughout we while in to buys. And to lessening expect strong spot trends variable positive expect capital year, availability will continue in improve gradually continue

of XXXX $XX.XX translate in to $X.XX continued reflected spend in the including environment, growth sales We disciplined continue outlook with the will end organic will an combined continue our of X.X%. actions of our We to remain full year challenging per emit share. with to and our invest the and remain which med tech, M&A. of tuck-in growth is business and confident expect innovation, high to our cost we deliver sales X% growth pricing EPS of will per at share potential in to guidance adjusted to This macro

turn now the will to Jason. I call over

continue countries. Thanks, as fourth Kevin. well Wright Mako, as Vocera on will current the the providing Procedural environment, Medical. in most My an quarter update comments on today volumes and recover focus to throughout

due to however, ongoing Asia-Pacific, COVID-related to impacts. be have of Parts continued volatile more

have pressures and recovering, hospital globe staffing continued pockets backlog the are around in remains. volumes While patient

this we tailwind we the QX likely a mentioned move will to XXXX. gradually as moderate As be resolve expect will through continue challenges on these call, and

order Endoscopy growth and book. with the from we very very Even of the a exited Medical, Additionally, double-digit year demand the for quarter, remained our finish, considering seen our capital in divisions. strong healthy Instruments organic our products as

installations U.S. in of Next, and record specific internationally. to Mako, both we the quarter a had

equipment. be offer to customers the flexible acquire continue options for We capital deals to our continue to form these will and to take agnostic

offense The almost approximately in of great performed U.S., the Mako progress In our XX% our we installed in alongside utilization. and base XX% quarter. has of the of knees Mako resulted strong saw of hips using continued in increases growth

Also, with in make X our million index December, higher accounts. surpassed knees cementless we to continuing procedure knee cementless in

robotic-assisted the also addition ahead in surgery, cementless on to So being knee leader are well adoption. in we

and with at expect back half launch the making spine the Mako the and initial are initial shoulder shoulder and of XXXX. XXXX we development launch end good of of of progress in to Finally, our the spine have applications, the

to integration reminder, a consistent Vocera in to progress were year. beginning this February results with QX earnings our activities, key well, QX Now the of our on is acquisition expected this we will anniversary as continues last year. commentary as integration the call, ramp in sales our and and of

our Medical, have Wright the This to been page mark now passed integration largest we to-date. the acquisition Medical. Turning has the of Wright two-year of

our on we both the cultural implemented assumptions, and was very expectations playbook Now complete, and exceeded effectively. sales have integration fit synergy we strong as our

drove serve are Overall, acquisition core has was the we upper proven future extremities and trauma, and a customers and what business a of units, and foot about unique with to year this be terrific momentum catalyst strong businesses success that R&D three All the holds. allowing great across the separate Additionally, exited ankle. creation excited it pipelines. us three to

that, over will With now to I turn Glenn. call the

our Thanks, related results quarter drivers. comments Jason. on I my and Today, financial the focus fourth will

today’s detailed in Our press been provided results release. financial have

growth the quarter. XX.X% Our in organic sales was

was X.X%. in The fourth days line quarter impact in average with pricing quarter’s selling by were XXXX. The unfavorable from the

We in all pricing quarter. which pricing positive particularly our trend contributed continue initiatives, our for businesses, a MedSurg the from to U.S. positive see

a supply strong. currency chain from and book our robust had quarter customers very unfavorable disruption as on the capital be X.X% remains sales, lessened the to continues impact during somewhat Foreign order our demand

of sales was our In most positive the International across organic by markets. growth was international momentum growth quarter, U.S. impacted sales XX.X%. organic XX.X%, sales

of and of XX.X%. organic growth with days was year, same the The sales of X.X% X.X% pricing as from organic unfavorable XXXX. by selling impact was XXXX had growth the year number sales For growth in international and the organic X.X% U.S.

Our adjusted up offset higher of translation, partially was EPS driven sales exchange was inflationary from $X.XX. discipline, the XX.X% $X foreign and in currency by unfavorable pressures XXXX, impact which the by strict and quarter cost of

offset $X.XX. full lower foreign Our and $X.XX, a year growth XXXX, of X.X% inflationary adjusted the tax EPS was of the year impact costs unfavorable rate, net which full impact interest growth, from currency of translation pressures favorable lower represents and reflecting exchange partially of by effective sales

around XX.X%, growth with performance. growth U.S. Neurotechnology international growth organic which of included currency of organic sales some segment XX.X% constant and Now highlights In XX.X%, MedSurg and provide organic sales I our quarterly will of the had of XX.X% growth. quarter,

XX.X%, and by double-digit Technology From of smoke the growth a sales organic tools, U.S. business. growth Steri-Shield, product perspective, evacuation. sales waste had power Surgical by led in led management growth Instruments was

sales organic communications, by had strong X.X%, sports in U.S. Endoscopy of medicine, surgery and growth growth highlighted ProCare. video, general

sales in and growth our from organic acute by U.S. and also was driven throughout XX.X%, care businesses. Structure fueled and our growth had improvement emergency benefited by the product quarter. double-digit Prime supply businesses, The of emergency across Medical care growth

business market bipolar iQ, forceps Signature product business Neurovascular our Neuro silver sales of driven which growth double-digit softness Speed Max glide organic had XX.X%, included lines. Neurocranial growth Our High Drills, impressive The continued U.S. Sonopet and had and by organic X.X%, growth competitive space pressures. U.S. of in

Internationally, XX.X%, performances businesses. MedSurg growth organic Geographically, double-digit emerging and reflecting in this sales strong had Australia Europe, Neurotechnology growth and of included all in markets.

which of currency internationally. Orthopedics with X.X%, of growth organic the X.X% X.X% in XX.X% sales constant and growth included U.S. Spine sales growth of had organic and

grew business continued Stem, ongoing procedural upgrade growth our the reflecting growth. XX.X% hip organically, the recent of THA X.X Mako primary hip launch the and fueled by U.S. Our Insignia strong of software Hip success

business in Our This our strong very U.S. a over grew X.X% knee XXXX knee of comparable robotic-assisted QX position against reflects market-leading organically XX%. procedures.

all XX.X% grew by business businesses, and foot with led Extremities upper organically performances in three strong across and nailing. and Trauma plating U.S. and and strong growth extremities ankle, double-digit in performances Our

Spine led business performance Q U.S. by enabling Guidance including business, the X.X%, recently in grew navigation launched our Our system. technology

quarter. by by mix organically Other U.S. the to more deal impact the driven specifically rentals primarily of in XX.X%, declined related Mako installations Ortho changes,

performances India. and grew Internationally, reflects Orthopaedics strong Australia, and Europe, Spine XX.X% Canada in which organically,

Now I quarter. fourth in operating on the highlights will focus

gross unfavorable, of in adjusted impact primarily from prices of purchases the basis electronic the related and and unfavorable fourth premium with pressures and XXX of margin XXXX business quarter points approximately of reflecting at steel to the transportation XX.X% components and mix. Our XXXX, was line costs, inflationary labor, other QX

the represents a XXXX than X.X% which was sales, decrease year from adjusted X.X% quarter Full sales. of XX-basis-point spending of was X.X% adjusted of was our of slightly higher R&D which of XXXX. fourth sales, spending spending R&D R&D Adjusted

and of quarter XXX the XXXX. reflects on of increased headcount XX.X% was points SG&A than cost discretionary adjusted sales, was impact discipline. the focus fourth lower control basis which This Our of

which approximately XX discipline. negative somewhat operating from translation, unfavorable In impact, is XXXX. summary, our quarter, currency cost basis was and the the the performance of on margin sales, by aforementioned margin fourth offset primarily points resulting to inflationary This quarter for XX.X% the primarily pressures, driven gross adjusted foreign exchange by was of

to Other XXXX, favorable income. the primarily interest for income and from due expense of net quarter million decreased $XX

run quarterly expense. rate a and million expect we XXXX, other $XX income For of for

discrete quarter year and impact full tax the fourth tax reflecting certain of effective XX.X% geographic and adjusted respectively, Our XX%, of rate an and had mix items.

to tax our to rate in expect XX.X%. range effective For XX.X% XXXX, we be full of year the

the the sheet, of ended $XXX $XXX $X.X was and $XX we year-to-date balance of Approximately payments billion. loan term cash securities, total down debt billion to in on Focusing marketable brings debt of with quarter and our fourth million. the paid which quarter, million

sales certain year-to-date This operations $X.X the critical Turning at the collections higher performance to offset of of higher for costs to is earnings, other results inventory due raw by receivable the material year, our certain impact during the accounts cash lower end net partially reflects and of pre-buying flow, year. cash the components electronic billion. of from

will we will capital that not share do Again, buybacks $XXX further focus on XXXX, to anticipate debt we to reduction. XXXX, any we be million. do plan in and approximately spending continue For

guidance. year And XXXX I will provide now full and sales earnings

will believe operating including there As we macroeconomic chain currency risks supply environment, assess that fluctuations. and recession current be constraints, the volatility, inflationary to continue and we

this XXXX, a recovery, many Despite positive new procedural capital in into including business products. environment, for of book momentum introductions many continued we our order heading our parts very robust product have and

sales our zero be with same X% percent less of XXXX QX. and organic we in to one price impact of expect of days year to one number we on Based to extra XXXX. be would year X.X% QX steady progress actions, full pricing in XXXX, There are between expect X.X%. range of day above, the in the when to the full compared to growth and XXXX for compared the minus the selling Given day the in

anticipate we being first and EPS levels, If in will our more foreign in is modestly sales negative current exchange year. rates the This for impacted the of guidance. year, be full hold near unfavorably included the half

specifically pressures you While QX experiencing. now guiding keep the not the that the XXXX first we quarters, quarter, quarter compare prior are that mind year as to in have not the did we are inflationary

outlook, despite a EPS QX So XXXX. better growth much be to not than strong expect we do QX

Finally, $X.XX environment, earnings of global disruptions range for including representing gradual share of per throughout adjusted the progressive to operating the return chain diluted net supply expect to the the easing full a XXXX, of guidance margin range a year to expansion. we assumes This year. $XX.XX, op a be improvement in

up I Q&A. And open the for call will now,

Marcus Robbie [Operator from of Our line question Instructions] with JPMorgan. first comes the

You may proceed.

the taking to quarter. really side congrats quarter. in the questions fourth had MedSurg where performance start strong I Great. really, for on the you Thanks on wanted business, the of out really and nice a

could there, a this underlying give about exactly into you visibility or more saw, healthy but a I was a book, order all was talked of was demand there what You you bolus little hoping just catch-up about to to in your capital what the order clients you continue hospital talked around healthy are seeing demand world a and terms here? of buy but and book, desire then their you

Yeah.

digging and of terrific out can of in had you quarter orders. a the Endoscopy some all the growth particular, tell, of quarter, a for that they Medical. of really in backlog had Instruments, was Medical giant Robbie, As it

the at look you XXXX, than higher it’s XXXX. had at the If end what backlog entering actually of we

but next strong quarters, the So about it from year, next divisions year. for we all right, was a little is think prior bit of again catch-up outlook as

lot products a new coming those divisions. have also three in We of

was three even they demand for back This order new you single-digit cans strong -- terrific from pipeline, there strong year high these leadership or strong book, been, that of XXXX, our XXXX. if in are teams. double-digit So and have no different either product, low -- really divisions growers every go

follow-up color first a being call half. this quarter first bit for before call you think think about been variable a much maybe you Thanks. and given EPS Glenn, you have about about some better topline rates topline, than things to we Great. talked year-over-year. are And give us well as other probably, the talked Any this as half, highly both on about on down just second on better I as could not margin P&L? the growth the XXXX, there

Yeah. Yeah.

First off, if entering of growth big capital Kevin up where to topline, order such the our you it’s businesses. left about of picking going year of book, all, strong just with for kind really think a bode well the

in feel and and thing hips procedural knees other this are we extremities. momentum, and really especially good so we expansion trauma The our seeing and is really about

well. those grow see So we are to going to as continue

think we get be working to some dollar that first last of of half through was higher our that gross do the way That built mix year end when the We of down plays into margin. we see we at will up the of what inventory the year.

seeing are bright supply chain. spots We some in

we of our will that gross We be go an margin into less progressively are think environment seeing will improving of terms op so and spot there us our and both buys margin. all in where

and thing other on too, I and actions in really think hold is the our we that, initiatives the in QX to keep side. took MedSurg especially that felt mind, pricing

those in actions full from XXXX. benefit the will We for year

premium see prices. Kevin that price. come in will those also at will new products that’s about out We launch, included All that the talked we not

also help and So our us that with improvement. margin op benefit will

And restructurings in thing place is, XXXX, targeted will some last of have then that half especially still in XXXX. the first we take the

in also So second we those of the will begin half. to the feel benefit

the in that op margin, is to QX op the I growth think year’s I sitting margin progresses, pressured margin. EPS the But because think XXXX that it little year-over-year we is and that to. drive and in op So obviously, to will year as a inflation improve guided last sitting just continue we wasn’t on will

again. Congrats helpful. Really Thanks.

Thank you.

from line O'Brien the Thank of with you. comes next question Sandler. Matthew The Piper

You may proceed.

Kevin, was in really at The exercised this really been was ago, that when Day, Analyst wondering a and just quarter of afternoon. Good years I international. strong. the it, the you the performance couple phenomenal durability the was of am XXXX should year, that how and and Thank something growth should think the we topline half in level. this guys about around on quite international even you that not of it’s for Is you. but beyond? international be being important

is, years in now, Yeah. Rather Five than just thinking about what it? U.S. percentage of of has is has how a row really and contribute sales growth, XXXX. China organic growth course, the is the didn’t anything organic in growth sales durable exceeded

stride seven last for So we engine Europe Europe was double-digit or talked hitting grower. Stryker. I growth the for It’s have about six years years a and Europe. our are in

to feels hit exciting. America, whether started really Asia, it’s East But have even parts stride. the other our markets, East, Latin whether it’s of Middle Europe, we Eastern emerging It

leadership great have teams. We

of We up fluorescence penetration starting power Mako some great now effectively. now brands imaging, those to show are really are getting and with

So grow to and growth like these growth double it is overall, the I’d Stryker’s we that emerging roughly growth should should continue grow think rate, the markets. in about international to rate above of the rate Stryker way markets

really you in of you impact small, an But acquisitive United bigger a to our and sales time, will outstanding roughly still don’t in continue in it’s But U.S. over have about if it’s the business. then and quarter as think States. QX. become that starting And a of to if percentage have large we acquisitions our pretty bigger the are XX% material saw being

Got it. Thank you.

you. Thank

Evercore. question from Vijay comes next Kumar with Our

proceed. may You

some taking finish Thanks really one put basis my this on strong it guys. it just gains Sequentially, this understand -- if year. your context for maybe XX% supply am improving? and in stellar there for the on chain situation can quite Kevin, in that -- question organic, performance put here quarter? congratulations looks was in that’s share headwind by us those Is accelerated you number could XXX the some fourth least growth help first maybe or assuming at a points. the like from quantify went the quarter, pretty I into numbers outstanding. Hi, fourth and what this you And us? China, your is Is

I division, up growth for Look, in Yeah. Medical really, the right? outsized outsized is making going think, the XX% Medical division it, organic, isn’t let’s So right? typically call that’s grow That’s supply. to and

to get orders in of the of shipments happen were could That kind able huge we some were out of get and able product healthy lot variability to from and the had lines quarter-to-quarter. a they we door. So

look year rate, XX%, growth rolling organic Instruments kind XX%, XX%, of you outstanding Those if basis. results. four-quarter are kind a full But Medical on at really a Endoscopy of

it’s a wonder. So quarter one not

of highest I having in kind would as would products, since new my been of role. we organic have say, X.X%. set had I I overall at a I good of had look they year are growth this the have I the as That’s tenure. pipeline have have in And

bodes that year. well So next for

starting are guide that be and very, very growth everything, year. highest ever the go strong another well have with assuming started we with this We launches organic and should

a see a the have I the all Medical, largest they think with backlog the little the the house. implants you with because of of of quarter-to-quarter more in divisions do side consistent primarily company bit and performance volatility will

Kevin, improve levels? off the guidance? did to so that comps that versus at X% starting given to is are chain maybe I you Glenn X.X% maybe down guide for that chain, front-loaded look Understood. for perhaps you that just here work front-loaded? to grow XXXX, that those it QX is on fiscal And what well, or And quarter of X.X% and a comments, backlog is for the XXXX, as order the we of backlog? when supply Kevin, third And assuming supply for mentioned, are assuming off Just

Hi, a of take Vijay. part, these. I you If some miss I will correct me. can

First is be the from you not all, and will loaded. is the just growth feeling quarters there sort going see to that quarter. each fourth are steady It’s solid the throughout of front-end momentum we given of of pretty that growth

exited the in year-over-year. increase XXXX In book book, we order an of the terms with order

bullish So customer’s buy our to actually about very feeling willingness capital we sales, capital. are about

year the So we miss and that’s the whole I part? great -- we a don’t did feel for like tailwind third

No.

I probably… think you

Yeah.

Okay.

Sorry, on situation. chain supply the

Yeah.

will to set chain. We visible really vendors we improvement work actually but chain As of our suppliers of high buys, the happen handle some so we We see food supply we good to with we saw supply better that the of going in feel a chip with actually good original which with those a in what’s and up are improvement we going improvement mentioned, year. pretty half I with to that and assume our seeing also the feel supply, of gradual are items back are spot we on reduced working volume that the cost quarter-to-quarter-to-quarter QX. access and in become about good like have also it should chain, and beginning

Understood. Thanks, guys.

Thank you.

you. Thank

from Our with RBC. Singh next question comes Shagun

proceed. may You

expecting. about out for little drivers a on talk to a new wondering came XXXX does [ph] could them Great. for have a and the for at we we outlook hip have conversion, Do have hips you you see the just account meaningful as I what In could gains the competitive mix assumed your and basis knees? talk expansion share could if least if you or launch. on Thank you if bit and was that I benefit see for major points a VCON side, And of XX that in cementless Thank taking than competitor question. about something drive in was wondering questions. so what taking much we similar you I little the price seen could business then the to bit you stronger previously knees. what your just relative was shared. in margin were then you it wondering hips, knees, that

touch Yeah. guide do typically op not on the margins. question. margin Yeah. We will and I start expansion. Great just out on

to are So number. we not going an pinpoint expansion

expand up are will backing think and I tax where from unless op see doesn’t sales we OI&E you with and and EPS we work math that the margin. that, at looking

expansion, the is So I think progressive is. see our year, a plan inflation the improvement quarter as so from comparable especially that’s what you will that includes prior each what in

had than double-digit we And in Yeah. Insignia related hip the about terrific. global are with knees. as strength launch little less that delighted The hips Hip clearly is a both and by the through reminder, driven the we year only joints, and hips of in obviously, have launch. to both growth that are Having knees Stem, and a we halfway

to still maybe of be launched lot get fully we first It a bit take So of out. will have this and of to little us a sets all with into quarter year of the XXXX Insignia.

So and we are that’s of with gaining in the still with coupled hip momentum the mode Insignia X.X kind software. Mako

strong. -- we So be continue we to expect very can to hips

to relates the past since outperformer clearly, it seven the application. for an As years, years we Mako six for Knee Total us launched that’s been knees,

competitive worried move just cementless product done tremendous be Mako And really with a not where our product competitors going going I to competitive when to million that and cementless. is for They on very gain, proven, we all at X synergy awfully away they and and to have another Jason something People we are theirs. aren’t with about starting cementless continue from procedures on to entrants to cementless, significant. cautious am before move already launch that mentioned, like

Last new like did X.X, TKA software. are with software, thing it, the call we we X.X launching is, just we hip Mako with I’d say

are middle in well. we launch. of -- It’s a exceptionally the limited We going have just

on experience, and the for very sometime of new by better feedback teaching residents better full training so software user around hospitals, creates which expect that QX good launch We upgrade, that. very,

hips and So both we do expect XXXX. in to again outperform knees in continue to

the Thank color. you for

you. Thank

with Zimmerman Our comes BTIG. next from question Ryan

may You proceed.

take but would to a quarter, in the the consider segment on this come your a maybe want what segments terms about ask that the Not both good of are Thanks do for expectations. those I really commentary of on both to questions. we and little in away, comps than what think I and this what Spine quarter Kevin, two back of challenge on Neurovascular softer you Hey. taking areas Spine, for is that. Neurovascular you easier for and results? guidance XXXX, what are just probably me and can But contemplating growth kind impacted the and

the on ago we Neurovascular Certainly, have Neurovascular. No. I in did comps, -- Yeah. pretty good year performance a

the I XXXX. at the think that and challenge Neurovascular of back is going year versus prior looking kind then versus

So, our but had the with challenges certainly, have in we Neurovascular U.S.

I had have and that I calls States segment gotten and has mentioned that prior up growth on are We of outside more lot the kind taking time. distracting continued the competitors There certainly have softer. a good United market are ischemic think

it’s market. We that -- There’s great have still lot been think a still not of that a treated. are patients

of percentage people occlusions have these treating the brain. small vessel large in only a that are We

long-term market. So good we think do it’s a

a called States, Tetra We new exciting. which the United are Coil launching coil is here in

we And continue to will invest.

one regulatory have on it clearances deal that’s done for segment. pending. closes We hemorrhagic a before a Obviously, the and

very give arm. shot another us that. are That the will about We acquisition. excited in

have year. we U.S. in yes, the had So, challenges our this

to. we a very to are very United well of States. committed grow We side. continue still kind market Neurovascular on the the It’s That’s outside

Q really obviously, segment. The Spine gap, very We for a Spine the the with us. that enabling important be is in look, important well side, to Guidance the is Mako had going launch launch On technologies, was of and which critical. Spine is going

a I launch to then really start So market able ready believe do and grow the for of market. to continue is, around get will growth XXXX be Mako we where to year be the this above grow will to rate kind

long-term they market, well our the profitable, yes, But growing certainly below, not maybe the highly a Stryker. divisions. still the as but other in highly of bit as to businesses some now the in glowing, they are roughly little important So, right line marketplace, competing are future divisions, of with

time then a And first shoulder. I mean just on ask helpful. this if put and think, I really, lines Very was could spine time follow-up. those out I you the

topics comfort time of you time time. with is out outlined? those that ensure to a put kind for lines around What have We on will those now some danced that’s these the there it be and

Yeah.

trying As a robotics. getting are time heart whether to robots to launch and in tend tissue company, of we Ask pretty companies lines Robots they are any soft the are difficult. robotics be right? are on robots, or conservative hard, who

What confidence are gives built. us is our prototypes

tested have We surgeons. with it

We have feedback. gotten

We one case idea some with pathway. meetings the have to had get on agency an in regulatory the

bit we around expect and things, slow then But the gate, we doing bit the of the get little those cases. always little a you have might approved launch, in you start right? a refine to as cases, do And was will the There’s pipeline right be and So now. launch. out training So enough used so uncertainty approvals to initial see. it initial I of do might full and notice term have some of to we

and the of that’s them to know, of same robot being out is beauty hips approach we as thousands our there. used and be knees it’s The that’s for you going now have, used

exciting week of on have robot then can spine. the being initially the dedicated a attachment we different they hospitals used just can if and be and they robots able and able day about that for the that for the increases, I that be to one have a demand do will then as lot same So spine is have be think being and not of software a will a robot used to that excited upgrade use and

with one money, lot of we time. robot had based will we we of where a Having to So its on own. sort started this. different sort than believe over each applications will it be we be powerful lot we But of different a feel these on spent just confident really all when time that spent of justify on robot and

The longer. shoulder one took a little

the recall, Tornier to spine, you to but our initially As BLUEPRINT move planning we to that we were use away we to be was thought implants the from decided implants software. going -- before and

really seeing a But -- So extremely the that getting we from the well positive. surgeons and are are delay. are are that teams we feedback caused is slight working it

Great.

to my questions. you it. forward Looking for Thank taking

Yeah.

are too. We

The from you. Vik next Wells Chopra with comes question Thank Fargo.

Your line is open.

Thanks super the about Biegelsen. on Hi. talked This new Kevin, of for taking products. Larry cycle Vik for you a is question.

us they provide seeing could question their maybe in sort color just are what in trend sort and And helpful? a impact there should of how maybe China, you Neurovascular, Thank you about your what XXXX. any think you. and would of just second remind are comment on we on my Just the be is, impact

Okay. in There’s questions a few there.

So do then will super Jason I cycle to and for the I it China. pass will

the X, tool super of and so our at new Instruments end just last launched On cycle, year. the System power

are the of initial first see extremely We how XXXX, feedback, year So we to in positive. do know here these. real to impact going

from X. have to now X we know, you As -- to X System to X

So of flagship the that’s product. one

We the launched camera that have XX in initially QX. will be Endoscopy in

past, We pickup XX, have you XX, QX, a the done which, will new it’s as we probably see in more a camera, XX, whether of in XX. fabulous but know, QX,

products. know we how do things these are and to these So are fabulous

us. for new a Neptune that GI designed S, have terrific is Neptune market is really small which product for footprint We

the course, day, used the -- in we in polyps. being that teams love believe they designed really absolutely GI increase going of today can could actually a are So this. which, It’s purpose it not catch Neptune’s do are going love. to to for procedures special that GI. the We Nurses are to

another So excited we also powerful are about. product really that that’s

It a big in then end in life and the in which a early of year States, and defibrillator. XXXX is in pre-hospital inside expensive, XXXX the be XXXX defibrillator. XXXX, be complex Towards United impact big much United the the won’t States but certainly the going will more is to have outside new pack

So that rare that’s three super -- flagship cycle. to those an period. That’s all big a are of products XX-month kind very have within them

But continue launch. beyond that, product is Insignia obviously, to to going

Next are product, perception We have which for the as allows CD drilling. you depth

of I another just list is in ankle year have this is foot could neurocranial, in and X Signature have which drills. launched bunch And -- which the We full year, which next neuro products. for a to going effect whole power is

We have in products got shoulder the space.

I list mentioned is, have in there’s full -- not two that’s every years those cycle timeframe. three of But big a a I short products. ones normally or a are all those super it So of compressed full, one it you years, call what

ProCuity the reviews rave of continuing of its that’s You get to the kind still have and bed in got that’s early phases launch.

as So, Stryker in product in at time of as had terms cadence. On healthy new I have China? here my

as it relates Yeah. total X% you relates less to Vic, it sales. know, than Stryker right, all as our as of China, to China,

the lockdowns of immaterial our So you as QX. in things consider and in terms to even XXXX, of results some

XXXX, Neurovascular Then early as it you about days as think relates VBP. to

anything are We call, we full and there’s if earnings and QX on we of certainly when next an year the to XXXX, about at certainly that as material it disclose, keeping think to we do eye get that the will time.

Miksic question next with comes Barclays. from Matt The

You may proceed.

many that of things it’s the robot and Yeah. talking making, then, maybe kind launches But time portability Spine, you wanted sense investments whether implant the Q really the as that significant, introduction that great. it’s that Kevin, could head follow-up Guidance robot get about up about to spend the in is anything you going that now of maybe the launches into well into is and see we in or as well system you driving as as gradually investment could you described, next I and -- the you hardware a would or just or that you momentum year? of on go business upgrading of a can whether year. are Between are get talk app, just know a this I lot and

Matt. Sure, Yeah. Yeah.

I’d wait that have you and feedback actually Customer for been has Mako we expectations. Guidance those can’t just has tell certainly, exceeded and our So, of on the Q excellent systems sales terrific. only been that

for three so a We those. we of have expandables, entered products, or also distribution for have that deals different bunch of into two

well which We Tritanium, have the Monterey new with exciting. is product as pretty

through will a, planned it of be cadence gaps. Stryker help have what a either do we it’s fill product developed we call distribution will new by that products or to So --

pretty through to of he business moved big Spine. and of I the give decade, midway I a and part as leader, sports was at if we Head who’s our And last excited R&D, Hamel, think you team. Andy our the over moved fastest will of of of He has am look have medicine sports the to launcher the products across over team all year arm. kind have Stryker last excited that in him shot the

for you future. I our other pretty am team their the within changes and As made know, bullish we have prospects management on

And Sales are was of already, those the won’t Spine momentum lot. distribution good and kind course, teams on a that, just the and helps hands is of products, the knowing we really deal, our some helping really Kickoff even sit at meeting wait. for the Life those products So I strong. The are coming, that feeling of year. Makos Spine The future about

it’s planned, gap-filling feel yeah, will as long pretty it’s tough a like the that going even some the products, market, But a and been it for distribution filled you know, a this put be we new market have we tough combination to But, should to a of good us time. as position prior well in I call has -- products launch. as

Thanks excellent. so much. That’s

problem. No

Thanks, Matt.

Thank you. Please Bank. proceed. The Chickering from question Pito with Deutsche next comes

taking Hey. Can hear guys me? Thanks for my you question.

We Yes. can.

can. We

you, Thank Pito.

Great. right. All

of XX% EPS. the So is first quarter the pre-COVID, annualized about

back on it annual understand XX% XQ the about So with take for EPS growth we margin first or underweight should guided versus EPS be the should expansion as number just for commentary comps why like EPS. XXXX, half this inflationary XQ, years but annual looks in hard quarter of no recovered I you XXXX? the

Yeah.

half margin for it expansion think astute back will your XXXX. be numbers. I you Definitely, in are

are guided. QX, EPS obviously, relative and we right, drive starting to in and we that the EPS then expansion accelerating will but flat see really in first QX the So meaningful in QX you to quarter,

then And much. so XXXX what fourth quarter new compared Thanks the commentary quantify bullish. here XXXX? Okay. quarter just just in the and is to your Can you of a quick it capital one outlook, fourth orders how us were on very

won’t It’s We the even quantify and But when we is book, from Pito. larger think, would I earlier point order exited Jason. it what perspective. XXXX. Hey, But have than as we to, an around in book terms exited was Kevin. just I maybe of Glenn XXXX order we back said what

the to So the on quite side we enter New be Year. bullish we continue capital as

commentary. Yeah. new And that’s not a

four think, months, has I on So our consistent the capital. been last very commentary

hospitals -- challenges yet Our some it’s having not not with it their seeing P&L are we orders. cases, in and in sure,

are seeing We orders. of cancellation not any

is Sure. kind material type impact for of Again, lot capital on any a Are really it some outlook and our revenue-producing capital. capital. having there? here delayed of being projects of not our But is

So expect slowdown. you wouldn’t any kind of

drive book next the cycles large fantastic deferred. had look into within in a have area, been a that Endoscopy at the they and sometimes growth I business and even capital have capital order year, But large that’s some if going Endoscopy, helped prior of our communications year recessionary terrific

So we just aren’t it seeing yet.

kind So on that for of optimism us gives at XXXX. the least for lean to in growth

Thanks so Great. much.

The next Lichtman with comes from Steven question Oppenheimer.

open. Your line is

Great. Okay.

Just in of on was to, pointed you volume growth procedural one the factors quarter, Kevin, recovery. the

terms to in was be of in color throughout in U.S. obviously, procedures hospital you that here on factor, easing of staffing. capturing One that any XXXX discussed, seeing see of terms the helpful? are those Are you would the starting factors of an

a The end a and hospital surgeons at good with Yeah. a but some four pent-up in through kind dealing the steady do Look, challenge, is from where are three are There’s months, building clearly you to September question general. of no it. nice demand a saw kind there. year, there are out we and for months that better booked demand see of procedure through high of the there’s as staffing of And volume. getting flashpoints systems the

very of I a and These And pretty you they come some throughout will think of rest nice, and improving look short if tailwind Europe worry, see strikes gone had of would areas steady be kind the so the year. we of in that to moderate and a flashpoints for and of I we the causes tend it, in this some are even -- have seeing, call quickly. trend real kind and

a and so a procedure we be this the are tailwind expect outlook good throughout And standpoint feeling the about on year. to

for don’t you I looking specific or Got talk inflation, provide call or quickly, guidance. real that either it. and did was Great. you in Glenn, what directionally just on you know to relative impact XXXX to generally margin in out gross specifically XXXX inflationary And from are want what the But then, margin about headwinds could front? to you

Yeah.

inventory. I we the we made keep materials felt that But numbers of prices, especially in in as the that say, think QX, mind, occurred purchased those inflated material impact raw our of in A would to raw the I were inflation, large. very QX. that the obviously, you in inventory, that, inflation that’s capitalized -- were moderation in think about or extent

in The for up be other feel labor are and inflation baked carries went this solidly will that year. now going year place the to that to really we is that in it over costs that

baked into experiencing pretty costs, We them, are inflation have in and now Europe, our costs. transportation a it in inflation high freight we still especially there. Energy will feel

are we continue to that showing thinking, thinking as at inflation the XXXX, is will -- be we it what we we think at though, are not look XXXX. was not are in that I that levels

guidance. and will our that, included moderate So we feeling that’s are in that what’s

Thanks, guys. Sure. Understood.

Thank you.

Thank you.

Thank you.

from Our Morgan Ranieri next Stanley. question comes with Drew

may You proceed.

Thanks for just everyone. the to you Hi, Kevin, questions. taking start. for

You in are capital versus in entering even have as of are XXXX? the have But you specifically ASC -- bit maybe And you being we what in the then book order a year-over-year. procedures can you in noticeable hospital I little a trends Any stronger have ASC talked setting? about follow-up. -- in talk more the the seeing

Yeah.

the It pandemic, it’s say, year, a really installations, ASC shifted being ASC that Even slowing the setting. this So, in to procedures would continuing. is but if of accelerated this clearly, I the I trend number our Mako signs there’s no look during towards record at down.

procedures down. to that’s think they certainly I and the great as move technology don’t to So use going slow ASC, want to

that we around We will more and saw increase are which system talk so ASCs more going capacity, that every QX Obviously, think QX, construction build to takes trend. time -- versus in has but just to increased undeniable that’s plans and hospital future -- an take versus to out it you QX. I

hip surgery shoulders. don’t to and done I years. over seeing continue also So trend in just am talking are And even and some slowdown, procedures few the it’s knee to being think a it’s going just steady replacements, just the centers gradual but spine next I we any about there’s mostly

sounds Thank Got half, cash Glenn, cash free it. the talked free any but generation, inventory thoughts what XXXX of Could XXXX? just will about like flow broad-based kind tough in expecting is for flow highlight you. And obviously year? for just a you on you better It for just for are back XXXX. then you maybe margin expansion the get

Yeah.

honestly, I biggest earnings. you to flow, it’s think contributor about think cash the as

earnings as throughout the see I see year, we into that will in progressive So over improvement think, we cash carry flow.

a and bolus one-offs kind are obviously, that better AR felt some that had XXXX, That we at we collect of end DSO. XXXX. regular were the of maybe we hope cadence we things of in get that of that back get There in that to the will year will

stocks finally, safety supply, some inventory then, feel we of down as we had moderate costs And confident and we the pre-buy. on that about draw will more

and of lower to cost should raw flow, too. in carry over materials just cash that see also inventory will We

days, And and terms improvements other to and made out to of to and would AP continue beyond highlight as continue XX that area I on we attention in a working with have well. days over maybe doesn’t incredible work get three of then work years that AP lot and pushing that is, the past two we years will to the AP we vendors our on

improvement. you as bodes is I earnings. what you improvement So see I progressive will flow all But well think of in for cash generally, that see think,

fall see flow also cash will You out.

you. Thank

comes Matson with Michael question Needham Company. from & next Our

proceed. You may

one fitting ask on for me M&A. to in. Thanks Yeah. guess want I I

just want. and between and the get are with expectations So comment in willing from realistic mean you would can that there you to now past to sort just of generally seems be What of flow? starting sellers there buyers looking I to targets? been there you I seeing terms potential think what that do the valuation -- are what disconnect out out more the pay tuck-ins. there’s maybe in like seeing are was regard some It called a deal more what year, the is you to you

pretty market obviously, takes as company Yeah. that acquisitive it over new to year profits And with that harsh. is last a But call that, time But the let’s to time. set making was weren’t sell. in the a there’s, been companies for reality over want reaction stock and people on it, that acquisitive has

of couple necessarily the bode private lot for be -- well a that tuck-ins companies, over tuck-ins of if next publicly the stay years could traded This level. this not companies. kind the us valuations at we of do Obviously, tend to

But we have that an look active we of companies at. list

paying so We are debt, one. that’s given job kind took for focused Vocera, of down and on also we that Wright a Medical on debt of lot

term Let’s continue keep down that paying to loan.

pay small want of time some about We We million to down. $XXX on things same at good debt, left tuck-in there we down the can to wait, tuck-ins. to sure make do do loan. nature, We going and do we also we aren’t that. two will term we and pay the see the continue opportunities have But but that if still

the to pursuing right. ready will divisions actively those the so if be we are are And and strike prices

I But this positive. going think is to environment pricing be

to of on and just given sort be do were companies of of matter period a fast time the lot valuation, run us, sight. valuations was and there from were of profits they out just Now growing where a away that honest,

make just returns. pay meet just whatever like sure for financial to we to something, And have going it’s the we even technology, we won’t if

thanks question. for the So

to thread down and being then we needle continue debt between the will look of We paying sort the can. opportunistic and where

you. Thank

you. Thank

Our from Joanne comes Citi. with question Wuensch following

proceed. You may

Was numbers And people to the this There you of maybe MedSurg want more did it the in and this growth were head is How I beginning a my addressed. I just their is get rattling year expect sort end this been wrong pent-up go. and of level maybe this equipment may a different in moment year? happen? there of understand these some the the am all the this capital word, of effort off, Neurotechnoology. of when you not demand budgets do cycle, was curious of just what rattling be has some around let Help the and have in and in me depleted money could

news Yeah. one the about Joanne, Look, this quarter. of great

First do describe a firing record felt at of pre-pandemic is normally our it, they the way I were where of teams it quarter Stryker. sales all, like kind the way

and past covering in the for some time. seen have have you us been You

quarter for Having a is new fourth not big Stryker.

many, big times. many have many, We quarters fourth had

numbers. how teams finish. Our know They chase their to

hospitals also cycle on -- their some if on their of want to are up calendar budgets they Our of kind that depending use are they on.

such medical, new. not exciting sales. sales so the And orders. continue to would still going still next is but not momentum year and of a say, to that’s some dig have pull-forward saw out not strong able that’s you deplete. We These that’s on we a, We have growth I why backlog, were guide positive really in organic are growth. that specifically What’s of

are a calling and think, that soft not not are topline even a soft QX. QX, I in we Glenn in for Q&A mentioned calling We for the

continuing to businesses implant hum. Our are

their And these just businesses businesses. special are

these units. have business dedicated We

They instruments are XX% split right? and a well. Instruments few they have had We within ago If years them XXXX Instruments, look and organic times. growing have circular split extremely products, I growth and in at orthopedic both we to new because that’s technologies both many decided

it tool. rep new was of We a and new we those. the a the same trying Neptune In have old have sell both power to days,

selling we Now reps different have them.

with dedication. to launches better our so and So specialization is scale those much ability

growth it’s formula -- that’s That’s kind and happening absolutely of just our formula, company. our our in

teams So terrific. our leadership are

units are flowing. the are dedicated e-business Our products firing and

the So same. more expect of I

even XXXX right? and and instruments, we Instruments you an really separately. has that’s it and three of look back, the as Medical, Neurocranial, And but at mention been if home if But it’s which before, look not back these absolute of going organic kind growth, you divisions, run I to mentioned to report run, Ortho by

product now tends X%, to you launches new be They when have -- XX%. they it. that are And XX%, on that have side That’s growing higher XX%, the not every of X%, year, unusual.

especially Stryker a to now, be good those point it’s yeah, right a businesses. So, in

may, I a discuss new you product If of times. do cycle couple

You have got a new power tool.

got What to you would have a like else new You highlight? Neptune.

blockbuster Medicine before mentioned of helps camera, that bag. number product. in camera. flagship out that has Sports are a are new launching. products Those the of I Endoscopy, of big so fill a new -- but Yeah. sort the sort shoulder they That’s

At the They Care beginning Emergency a the of year. new of this we even the have launched power year, a business. defibrillator launched end within -- our new didn’t at they chair I new the mention

to want It’s a we which that have called one. up is apartment you go in I fabulous. Expedition. chair, even So powered now didn’t if these mention buildings,

and there’s sales years, mean we close over R&D years mean it’s past -- the X% pretty six heavily seven flowing. years, and I the just end. years, invested of products are have I four no five in spending new to

for look you. mentioned good I of before, ones other that -- are Joanne, those hopefully couple So a is a but

much. you so Thank is. It

you. Thank

you. Thank

question next with from Cowen. proceed. Eric Our Anderson Please comes

Hi. This is Eric you Josh. for guys me? Can on hear

Yes. We can.

Yeah.

about Maybe knees. cementless Excellent. thinking

what maybe exiting are your you am longer cementless, XXXX Where correct be you I do think if and then your could portion now half I about be think going in cementless? term, there. needs of knees will thinking rate do me of think that ultimately wrong

great It’s a question. Yeah.

U.S. on So versus are it’s hips climb, on frankly. steady a exited be more countries The been the weight-bearing -- being our vary knees but to we we the cementless year in rate does we hips. than They cementless. of XX% now -- in going over world, it’s other conservative have the just because

we like of I weight-bearing. steady it because not this to because been think do just XXX to not, And march. hips? will Probably close it’s It’s quality, seen a But slowdown. get of bone just kind have

think kind you north If years continue it and to then of now will steady ago, just a you to XX%, was see now it’s climb. that up of of XX%, few kind recall it XX% I moved

I predict, probably think Where kind it XX%s will. to the we in -- don’t somewhere end, I what know. would is hard of will I but It’s

have to delivering terrific that proven and still that’s run obviously, million have a we there’s already. on results, X of long-term done room them system we So cementless, given

I that it, are selling XXXX And need day Understood. Thanks we any that. to if missed apologies but for consider? impacts there in

days. day selling it’s for day, one Yeah. year, extra But less QX. the There’s one the same selling of in full number

Okay. Understood. you. Thank

you. Thank Okay.

with question final our from James. And Eric you. Raymond Fleming Thank comes

may You proceed.

on there Raymond that your Hey, guys. all? Thank for Eric impact from Jayson particular James. a is question A outlook, on across pricing or quick have are segments you. any it

MedSurg the biggest The QX we the XXXX. segment side, and as structures is mean and pretty impact good our to has the into expect Ortho positive obviously, -- Yeah. across a I much well we pricing and rebates, businesses. and being all that of that momentum that saw continue around MedSurg so We really said, are on work there’s contracts there lot on seeing pricing. impacts so

is to legacy premium over thing It will product over generally the legacy pricing we launch be in product, other these in the so the mind won’t included in that gets it product talking launches, we but have keep think product like about, and I volume. pricing that, to that included Kevin with extent really pricing statistic. is was legacy

out great of more coming are the Ortho So but net-net, making will I probably you the businesses, think, we too. MedSurg side, favorable pricing on see progress

no further to remarks. Thank much. concluding will back it for questions. There you now over are Kevin Lobo I so pass

Okay. Great.

through patience all, challenges. I technical of our all thank working of first want your So, you to for

see, have sales our to going chance last out it to a to year. It can the a across supply I like be you had and but we terrific experienced the feels spotting and is finish be to in teams to going really palpable. worst momentum around chain, it’s had a challenges some us the you with is strong As good could continue feels as We, year. we like tell this year, behind year this are -- have last obviously, a Stryker start certainly

our I April. want sharing in you thank all you. call. We you first look quarter results joining with to So forward our to for Thank

you call. your the participation. conference concludes Thank This for

your disconnect lines. You now may