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Medtronic's Cardiac & Vascular Group To Account For 37% of The Company's Total Sales In 2020, But The Company's Restorative Therapies Group Is Key To The Near Term Revenue Growth
Cardiac & Vascular Group expected to be the single-biggest revenue driver with $11.6 billion in revenues (37% of Total Revenues), which is 1.4x the size of its Restorative Therapies Group revenue in 2020.
Restorative Therapies Group will be the fastest-growing segment - adding $1.2 billion over fiscal 2017-2020 (71% of $1.7 billion in incremental revenues).
Cardiac & Vascular Group will add about $1.1 billion over fiscal 2017-2020 (65% of the $1.7 billion in incremental revenue).
The growth in the above two segments will be offset by a decline of around $1.2 billion (-67% of $1.7 billion in incremental revenues) in Minimally Invasive Therapies Group, due to the impact of divestitures.

Total Revenues

What Is Big?

1. Cardiac & Vascular Group: $11.6 Bil (37%)

2. Minimally Invasive Therapies Group: $8.8 Bil (28%)

3. Restorative Therapies Group: $8.6 Bil (27%)

4. Diabetes Group: $2.5 Bil (8%)

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Total Expected Revenue 2020: $31.4 Bil

What Has Changed?

From Fiscal 2017 To Fiscal 2020E:

Cardiac & Vascular Group: $1.1 Bil

+ Minimally Invasive Therapies Group: $(1.2) Bil

+ Restorative Therapies Group: $1.2 Bil

+ Diabetes Group: $0.5 Bil

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Total Revenue Change (2017-2020): $1.7 Bil

+ Medtronic's Revenue In Fiscal 2017: $29.7 Bil

= Total Expected Revenue In Fiscal 2020: $31.4 Bil

Medtronic's Business Model

What Need Does It Serve?

Medtronic primarily serves the medical devices market. These medical devices are used primarily by various healthcare institutions in over 150 countries.

Who Pays To Medtronic?

Hospitals and clinics.

Various surgeons, including ENT surgeons, neurosurgeons, spinal surgeons, cardiovascular surgeons, orthopedic surgeons, among others.

Neurologists, pain management specialists, anesthesiologists, physiatrists, electrophysiologists, implanting cardiologists, heart failure specialists, diabetologists, endocrinologists, and internists.

What Are The Alternatives To Medtronic?

Other companies that manufacture medical devices, include Abbott Labs, Johnson & Johnson, Boston Scientific, and Intuitive Surgical among others.

Medtronic Has 4 Operating Segments

Cardiac & Vascular Group includes cardiac rhythm management devices for the diagnosis, treatment, and management of heart rhythm disorders and heart failure. It also includes coronary balloons, drug-coated balloons, and thoracic stent graft systems, among others.

Minimally Invasive Therapies Group includes devices and therapies for neurological problems and imaging systems among other products.

Restorative Therapies Group primarily includes devices and implants for conditions relating to the spine, musculoskeletal system, brain, and nerves.

Diabetes Group includes sales of diabetes management products, which primarily consist of insulin pumps, and continuous glucose monitoring systems.

Medtronic's Total Revenue Has Grown 6% From Around $28.8 Billion In Fiscal 2016 To $30.6 Billion In Fiscal 2019, And We Expect Revenues To Grow Over 11% To $34.1 Billion In Fiscal 2022

Total Revenues

Change in Revenues

Comparing Medtronic's Total Revenue Growth With That of Its Peers

MDT Change in Revenues

BSX Change In Revenue

ABT Change In Revenue

ISRG Change In Revwnue

Revenue Growth of Around $3.6 Billion Over The Next Three Years To Be Largely Driven By Restorative Therapies And Minimally Invasive Therapies Group

Total Revenues = A + B + C + D

Cardiac & Vascular Group (A)

Restorative Therapies Group (B)

Minimally Invasive Therapies Group (C)

Diabetes (D)

Cardiac & Vascular Group To See Steady Revenue Growth
The Cardiac & Vascular Group’s products include pacemakers, cardiac monitors, cardiac resynchronization therapy devices (CRT-D), implantable cardioverter defibrillators (ICD), electrophysiology catheters, coronary and peripheral stents, balloons and endovascular stent graft systems, among others.
Cardiac & vascular group revenue grew 12% from $10.2 billion in fiscal 2016 to $11.5 billion in fiscal 2019, and it could grow 8% to $12.5 billion in fiscal 2022. The sales growth will likely be led by higher Evolut PRO valve sales, and the company's expected launch of new devices.

Cardiac & Vascular Group Revenue

Change In Cardiac & Vascular Revenues

Restorative Therapies Group To Grow In Mid-Single-Digits
The Restorative Therapies Group products are designed for the treatment of chronic pain, movement disorders, epilepsy, overactive bladder, and urinary retention, among others. The product offerings also includes imaging systems and robotic guidance systems.
The segment revenue grew 13% from $7.2 billion in fiscal 2016 to $8.2 billion in fiscal 2019, and it could grow 14% to $9.4 billion in fiscal 2022.
This growth will likely be led higher demand for its brain and specialty therapies, which have seen strong growth in the recent quarters, driven by its Intellis spinal cord stimulation platform, Solitaire X stent retriever, and StealthStation surgical navigation systems.
The company has lost some share in pain stimulator market of late, and the overall pain therapies market has remained sluggish, which could impact the average segment revenue growth rate in the coming years.

Restorative Therapies Group

Change In Restorative Therapies Group Revenues

Minimally Invasive Therapies Group Could See Steady Growth Going Forward
The Minimally Invasive Therapies Group products include surgical stapling devices, vessel sealing instruments, wound closure, electrosurgery products, hernia mechanical devices, mesh implants, and ventilators, among others.
Minimally invasive therapies group revenue declined 11% from $9.6 billion in fiscal 2016 to $8.5 billion in fiscal 2019, but it could grow 12% to $9.6 billion in fiscal 2022, in our view.
The decline earlier was due to the divestiture of the Patient Care, Deep Vein Thrombosis, and Nutritional Insufficiency businesses.
Looking forward, the growth will likely be led by higher demand for its patient monitoring products, along with sealing instruments, and advanced stapling products, a trend seen in the recent quarters.

Minimally Invasive Therapies Group

Change In Minimally Invasive Therapies Group Revenues

Diabetes Group Sales Growth Rate Could Slow Going Forward
The Diabetes Group products include insulin pumps, continuous glucose monitoring (CGM) systems, and insulin pump consumables.
Diabetes group revenue grew 26% from $1.9 billion in fiscal 2016 to $2.4 billion in fiscal 2019, and we estimate it to grow 13% to $2.7 billion in fiscal 2022.
The grow going forward will likely come from the expansion of 670G, along with expected launch of 780G, which is an advanced version of its hybrid closed-loop system.
The slowdown in average segment revenue growth rate going forward, can be attributed to the increased competition in the U.S. for Diabetes devices, including Roche's Accu-Chek, and Abbott's FreeStyle Libre.

Diabetes

Change In Diabetes Revenues

Related Analysis

See our complete set of analyses on Medtronic

Disagree With Our Forecasts? Create Your Own

1. How to save your forecasts for Medtronic:

Click on the blue "Try Trefis" button in the header to create an account, then navigate back to this dashboard. Now, any changes you make to these inputs will be auto-saved as a scenario (see left panel of dashboard).

2. How to monitor your scenario vs. actual results

Once you've saved your forecast, you can "rename" your scenario by clicking on the gear icon next to the scenario (on the left panel). For more info, see this quick, 30-sec video (look at the 9 sec mark)

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