Emerging Markets: Medtronic’s Key Revenue Driver in 2019

In the fourth quarter, Medtronic (MDT) earned revenue of $4.28 billion in the US market, a YoY (year-over-year) rise of 2.3% on a reported and constant-currency basis. The company earned revenue of $2.58 billion from non-US developed markets, a YoY fall of 5.3% on a reported basis but a 1.7% rise on a constant-currency basis.

In the fourth quarter, emerging markets contributed $1.29 billion worth of Medtronic’s revenue, YoY rises of 3.9% on a reported basis and 12.0% on a constant-currency basis. According to its fourth-quarter earnings conference call, this performance was driven by YoY revenue growth of 13% in China, 22% in South Asia, 20% in Southeast Asia, 13% in the Middle East and Africa, and 8% in East Africa and Latin America. Medtronic has managed to attain these robust growth rates based on strategies such as public and private partnerships, a strong distribution channel, and the localization of manufacturing and research and development activities.

In the fourth quarter, US, non-US developed, and emerging markets accounted for 52%, 32%, and 16% of Medtronic’s total revenue, respectively.

In fiscal 2019, Medtronic earned revenue of $16.19 billion from the US market, a YoY rise of 2.0% on a reported basis and a rise of 4.7% on a constant-currency basis. The company earned revenue of $9.63 billion from non-US developed markets, a flat YoY performance on a reported basis and a 3.4% rise on a constant-currency basis. Emerging markets contributed $4.73 billion worth of Medtronic’s revenue, YoY rises of 6.3% on a reported basis and 12.7% on a constant-currency basis.

In fiscal 2019, US, non-US developed, and emerging markets accounted for 53%, 32%, and 15% of Medtronic’s total revenue, respectively.

In fiscal 2019, the restorative therapies group, minimally invasive therapies group, cardiac and vascular group, and diabetes group accounted for 27%, 28%, 37%, and 8% of Medtronic’s total revenue, respectively.

The restorative therapies group reported revenue of $8.18 billion in fiscal 2019, reflecting YoY rises of 5.7% on a reported basis and 6.6% on a constant-currency basis. The cardiac and vascular group reported revenue of $11.51 billion, reflecting YoY rises of 1.3% on a reported basis and 2.9% on a constant-currency basis. The minimally invasive therapies group reported revenue of $8.48 billion, a YoY fall of 2.7% on a reported basis but a rise of 5.8% on a constant-currency basis. Finally, the diabetes group reported revenue of $2.39 billion in fiscal 2019, reflecting YoY rises of 11.7% on a reported basis and 13.4% on a constant-currency basis.