Medtronic (NYSE:MDT) outgoing CEO Omar Ishrak said on the company’s latest earnings call that his successor Geoff Martha is poised to prosper in the role, having already taken over as president and being given a seat on the board this month.
The Fridley, Minn.–based company announced in August that Martha would take over for Ishrak, who will leave his current role ahead of Medtronic’s mandatory retirement age.
Ishrak is slated to assume a newly created executive chairman role on April 27, 2020, providing “counsel and guidance to Medtronic’s leadership, oversee CEO succession, and drive the ongoing successful execution of Medtronic’s long-term strategic plan.”
Martha spent the last four years leading Medtronic’s restorative therapies group and will have his role taken by Brett Wall, the current leader of the brain therapies group. In Martha’s final quarter leading RTG, the group posted 6% organic growth, landing 150 basis points ahead of the company’s expectations.
“Over his four-year tenure, Geoff revitalized the group,” Ishrak said on yesterday’s call. “He implemented a strong strategy, built a robust management team and invested in an innovative pipeline.”
Martha said he is looking to put emphasis on innovation-driven growth, relying on technology as “the lifeblood” of the company. One priority he highlighted is reinvigorating Medtronic’s diabetes business, with an “exciting pipeline” of technology including pumps and sensors. Sean Salmon, Medtronic’s former coronary and structural heart executive, was tabbed to head the company’s diabetes group in October.
The new CEO added that organic revenue growth rates and increased aggression with tuck-in mergers and acquisitions will help to increase the company’s weighted average market growth rate.
“I’m incredibly excited about Medtronic’s future,” Martha said. “We have several product launches coming up, and you could be assured that executing on these is top of my list of priorities. Actually, the entire Medtronic leadership team is focused and committed to delivering on our pipeline, allowing us to build momentum as we head in the back half of the fiscal year and into the next. Also during this transition period, I’m connecting with many important Medtronic stakeholders, and thinking about how our strategy will evolve and how we will achieve that next level of performance.”
- Medtronic posted organic revenue growth of 4.1% and an adjusted EPS of $1.31, growing 7.4% in the last quarter.
- Free cash flow in the quarter was at $1.6 billion, up 66% from last year.
- The company posted Street-beating sales of $7.7 billion in the quarter.
- Ishrak said the company wants to keep it simple by growing weighted average market growth rate and measuring business performance on whether the company is taking share or not.
- Medtronic will unveil plans in more detail during its “Investor Day” in June 2020.