Stryker in 2019: 7 things to know about K2M, Mako and projected business growth

Written by Laura Dyrda | January 30, 2019 | Print  |

Stryker reported 9.4 percent sales growth in 2018, reaching $413 billion for the year.


During the fourth quarter and full year conference call, Stryker Chairman and CEO Kevin Lobo, CFO Glenn Boehnlein and Vice President of Strategy and Investor Relations Katherine Owen discussed last year's success and the factors that will contribute to growth in 2019.

Seven key quotes from the call, as transcribed by Seeking Alpha.

Katherine Owen on trauma success: "We've launched several new trauma products including a new instrumentation nailing system that was launched late in the fourth quarter and that helped drive the accelerations sequentially in trauma and will be faster as we look to this year."

KO on post-K2M acquisition: "We're looking for continued acceleration in spine to get that pro forma spine revenue growth of 5 percent for 2019."

Kevin Lobo on international business growth: "What's really different about 2018 is the performance that we saw outside the United States. We actually grew faster organically than we did inside the U.S. and we had a very good U.S. performance. So that has been a multi-year effort to really improve our globalization. Europe has been a star for us the last two years, but in addition to that we really stepped it up in Japan and emerging markets pretty much across the board."

KL on spine after the K2M acquisition: "We expect mid-single digit performance on a pro forma basis [in 2019] and then obviously in 2020 that will then roll into organic. So we're really excited with the speed of that integration and being able to post these numbers with the spine business that's been essentially flat for the past five years is pretty remarkable."

KL on future acquisitions: "In the hypothetical sense, if we saw [a company] that was really a fantastic asset and it caused us to be lower in the range [of the operating margin], well then we would then communicate that. I wouldn't say it would be off the table, but that doesn't take away from the efforts we're going to make to continue to drive margin in our core underlying business."

KO on the future of spine: "The key here right now is with K2M we get an immediate product refresh, we get a strong foothold in the deformity market that has a big impact with the thought leaders in this market. We have a much more expanded offering across the board and a larger sales force and we also have an expanded 3D-printed offering. And then longer term, I think this positions us well in the out-years and we bring the spine robot to market, but that's years off."

KO on Mako: "Combined, we believe these data underscore that Mako is undoubtedly a powerful marketing tool for hospitals [and] that continued demand for the robot and steady acceleration in the utilization by surgeons is being driven more by the powerful clinical results and patient benefit. Looking ahead to 2019, we believe we are well-positioned to continue to drive Mako momentum as we exited the year with a healthy orders pipeline for the robot."

More articles on orthopedic devices:
Zimmer Biomet receives FDA approval for robotically assisted knee system: 3 insights
SpineGuard reports 7% drop in 2018 revenue: 5 details
Johnson & Johnson settles hip implant lawsuit with US for $120M: 7 things to know

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