The Fridley, Minn.-based company said it plans to achieve the growth rates by investing in higher growth markets, through initiatives supporting globalization and promoting economic value in its leading technology sectors and through continued growth in its emerging market businesses.
“We are highly focused on creating shareholder value, and that starts with technology. We are leaders in many of the fastest growth markets in our industry, and we continue to invest in the technology of tomorrow that will fuel our long-term growth. We are committed to continuous innovation to stay ahead of our competition, inventing new therapies and markets, and disrupting existing markets. We will be showing technology examples across all of our business groups at today’s Investor Day,” chair & CEO Omar Ishrak said in prepared remarks..
Medtronic said it expects to report underlying operating margin expansion of 40 to 50 basis points per year over the coming years, with an 80% free cash flow conversion within the next two to three years. The company also stated it expects to see a minimum of 50% of its free cash flow returned to its shareholders.
“We have increased our focus on our core growth drivers, on allocating capital efficiently across our businesses, and on optimizing our portfolio. And, as we execute and deliver on growth, leverage, and cash flow conversion, we expect that to result in sustainable returns and durable value for our shareholders,” CFO Karen Parkhill said in a press release.
Last Friday, the FDA slapped a Class I label on a Medtronic voluntary select recall of its HeartWare HVAD systems over issues with unexpected power source switching.