Hill-Rom (HRC)

Mary Kay Ladone SVP, Corporate Development, Strategy and IR
John Groetelaars President and CEO
Barbara Bodem CFO
Rick Wise Stifel
Bob Hopkins Bank of America
Matt Taylor UBS
David Lewis Morgan Stanley
Michael Polark Baird
Andrew Cooper Raymond James
Call transcript
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Good morning. And welcome to Hill-Rom’s Fiscal Fourth Quarter 2020 Earnings Conference Call. [Operator Instructions] As a reminder, this call is being recorded by Hill-Rom and is copyrighted material. It cannot be recorded, rebroadcast or transmitted without Hill-Rom’s written consent.

If you have any objections, please disconnect at this time. to call like to now would turn over the Ms. I Corporate Ladone, and Senior Kay Development, Vice Mary President, Strategy Investor Relations. Ms. Ladone, begin. you may

Mary Kay Ladone

And us joining and earnings thanks fiscal call. morning. conference quarter XXXX full for fourth year Good our for

and Joining of Executive Financial Hill-Rom; Groetelaars, Chief Officer Bodem, Chief me Barbara John today Officer. are President and

those to started, any assumptions begin forward-looking Please results by related SEC get are subject the materially refer concerning and that cause cause to statements factors to differ to you could that we Before more our uncertainties, materially. reminding could risk for described, and actual impact including let me differ COVID-XX results risks, factors other that today’s pandemic. press that includes filings to this from presentation information actual release

on measures in are between financial be measures In call, issued included non-GAAP financial will this GAAP non-GAAP addition, used. today’s morning. and release our earnings Reconciliations

like morning, I posted to guidance. this page XXXX our These issued mention also addition financial presentation, materials press details release in that which regarding performance highlights we be website. Investor on our Finally, Relations the and would of Hill-Rom’s accessed to have can supplemental a the

me let introduction, the that to turn John. with So over call now

John Groetelaars

transformation. challenging strong in performance overall steps the peers accelerate team pandemic, the by our been toward at Good the we circumstances industry. progress we and our the everyone. extraordinary for and Kay. has tech our results impressed and that many and posed we the made by XXXX. saying relative Hill-Rom financial to are provide of I’m historic for commitment Despite advancing by business of world and It pleased global an inspired to been vision connected our Mary by Thanks, morning, have Hill-Rom’s XXXX have fiscal guidance fiscal med Today, taken has year announce XXXX to of care. financial large. energized goes I’m the Hill-Rom’s execution without

of increased XX% for the a finished revenue delivered million divestiture business. performance increase margins during core This adjusted organic and growth we year expectations ago, X after are achieved For our X%. an both $XXX fiscal We record in We times. solid our provided with new proud level gross our operating this $X.XX, more advanced new for and XXXX, adjusting acquisitions, surgical have and of than of the guidance investments a unprecedented earnings year was XXXX We our platforms line we with with in and level with delivered revenue. execution. exceeded product range and consumables these of

For the diluted year, approximately onetime bed COVID-related in revenue and of per systems accounted and ventilators million $XXX share. earnings purchases for noninvasive for $X.XX

the we compelling our fundamentals over our enhanced propositions offer cycle the through quarters, across the ability deliver few we value As business, comparisons caregivers next to in patients, of and our some underlying shareholders. care confident connected and solutions to remain we proven difficult value our

perspective quarter the While P&L recovery dynamics. results our more walk let and on some through me provide Barb will fourth detail, in

capacity expansion hospital occurred turn urgent phases to expected, needs. Customers the As of that we their pandemic. responded and from reflects Hill-Rom, the the quarter fiscal in fourth quickly impact our earlier to

visibility financial and our in and expectations As QX our you on across internal performance portfolio. resulted far dynamics know, that this affected recovery exceeded normalization

patients COVID to backdrop, of triage and more to rapidly the options environment QX that was providers Forecasting complex non-COVID most record remaining less sequential $XXX adjusted patients. with revenue and projections, of of shifting recovery QX treatment profiles, and in for portfolio. our ability per the improving demand EPS performance of normalization and With of trends predictable above across due in million share. This came following diluted $X.XX and and that reflects beds, adapt performance,

recovery declines progresses as We are improved are decelerating. now observing and early year-over-year trends of signs

but a and not cases the on are of will experiencing setbacks We reopening, to seen have keep in any COVID process areas that rising seen have Therefore, expect that we eye recently the into date. impact we growth keen declined the move fiscal beds perspective trough U.S. International we lower revenue, core surgical revenue, revenue a Geographically, from represents XXXX. by capital X%. advanced and equipment. as XX%, QX hand, other like on driven material

the and solid and of very the the across pleased are growth Surgical the the gains in markets double-digit portfolio construction China where Middle continue delayed. with exceeded Europe to XX%, be where East. We in projects growth Canada recovery saw emerging by led Developed outside business, large markets, like

briefly constant me review at Now by the currency rates. business performance let

Support declined Patient XX% prior reflects Systems quarter Med-Surg year for and follows to beds. demand comparison COVID third challenging a revenue the ICU of This First, XX% peak QX. and in growth

As demand expected, $XX our XX% Europe. declined revenue despite more driven approximately by COVID elevated across by than of primarily bed a overall million, tailwind

half. For the grew in year, second our digits, portfolio smart growth including the of double mid-teens beds

differentiated to position versus throughout orders backlog sequential of includes This the smart increase and our QX. encouraging enhance The business and the that bed continue solutions. is in leadership accelerated ecosystem U.S. a remaining improvement. sequential nearly care news the and experienced share our portfolio good our of with Care We connected XX% and Communications with QX, beds PSS

that double into a noninvasive our showed stockpile year. down of has ventilators. This and the quoting new of pressure U.S. Performance in office remaining QX as vital as start growth improvement increased driven but rebounded was As Front activities The well near monitoring, eased, thermometry fiscal sequential the access was FLC portfolio for completion levels. XX%, the and X%. revenues is physician double-digit order of to by hospital continued as revenue Line restrictions signs resumed. Care U.S. have digits, pre-COVID accelerated trend visits blood

earnings in we remaining compelling recovery surgical gradual the durable Solutions in timing. revenue creation with plan am value With from mid-single-digit from a our Surgical impact from market improving sequential comparisons QX impact Lastly, growth revenue we flow. long-range capital product and Last that confidence cash here. the funnel to XX%, pandemic outlook I growth multiyear growth reflecting growth, that an divestiture the from order consumables provided a reiterate from November, we reflecting and plan comparison, momentum, strong new platforms and the key these double-digit penetration reflect in first difficult not included global a of easier declined surgical XXXX, did a M&A. impact This Obviously, from and was strong and for benefits intact. plan. remain emerging pleased project year expect unveiled the

cycle XXXX accelerated and of a growth and work in build post-COVID deliver and world. to in care are am and the long-term a from However, as that a well baseline, both the our strong into pandemic health I objectives This demonstrated we aspirations portfolio new believe us that from global new positioned the difficult confident XXXX transformation have we through we We as environment. these fiscal XXXX done has comparisons Hill-Rom provides solutions benefit with very future. trends to to tackle well is to capabilities unique positioned on with

many be new fiscal pandemic evolve, the worldwide XXXX, uncertainties will policies will respond how a COVID, remain including vaccine to when around available. For will and governments how

continues is both believe pandemic be today the and range provided While balanced achievable. we the guidance fluid, to

the per and to per and base guidance to revenue $X.XX for growth we onetime decline diluted of of as growth of For we XXXX $X.XX After of at of share, adjusting for year. progress underlying what I In This of range longer-term share. XXXX, mid-single-digits of earnings on aligned diluted adjusted expect transformation, underlying accomplished. least full X% implied have $XXX our COVID the am our and adjusted reflects reflect X% with $X.XX revenue business closing, the proud XX% million is EPS fiscal aspirations. growth our business I revenue earnings ongoing and to growth extremely impact

winning Hill-Rom uncertain I times. for resilience dedication. to challenge has a displayed commitment, And humbly rose thank spirit, to the during and team their Our would them like global these

our mentioned, never mission has As I been vital. more have

outcomes focused the as patients the Thank the and is call the to home. office me care with vision from future surgical we in and connected our caregivers care conviction that across to build Barb. solutions hospital you, of turn connected and on Our the look with to pursuit to over of passion all advancing suite solid care a add settings, care. physician’s at to We foundation let forward value for enhancing health of the significant delivery on

Barbara Bodem

Thanks, guidance for I our turning good will XXXX. everyone. fiscal morning, results financial John, briefly to and before walk through our

there As mentioned, finish million record worldwide of $XXX points are quarter year highlight. last $XXX but in million. the revenue of to compared recent fourth other I like to X trends, declined business a revenue John discussed with would XX%

reflects First, OEM million noncore international revenue the $XX business. QX surgical of

now As by year, the previously to core and definition. business exit the of expect we of calendar this end are complete retiring the disclosed, we this

completed of of the anniversary Breathe we In as in addition, the as both consumable fourth during were well XXXX. acquisition, the lapped the quarter, surgical divestiture which

growth. So revenue reflect forward going projections organic

Moving of on. expanded basis favorable improvement. and in by operational points. This Adjusted mix of gross was the XX% product result quarter fourth margin the XXX

the we from revenue achieved impact reflecting For approximately XXX the onetime gross of of margin includes improvement points versus record year. points. the new prior a XX basis an year, XX.X%, of positive full This basis COVID

X% to to managing million. growth discretionary the SG&A platforms our to investments fund while $XXX on operating $XX X% increased and R&D continue our spending. as quarter in to IT Moving expenses. in transformation million, increased strategic we

Our quarter adjusted was operating XX.X%. margin in the fourth

multiyear XX.X%. million, for is totaled expansion. operating of margin and record expenses nonoperating basis consistent $XX quarter year, tax was adjusted the driving operating other Interest rate This track to our full the For XXX margin with strong by improved the points performance XX.X%. annual and

fourth declined XX% share to the prior translates earnings of share diluted this per which adjusted versus quarter, $X.XX So for the per year.

full diluted earnings per increased X% share For year, $X.XX the adjusted to per share.

of adjusted share the surgical divestiture, per increased XX%. the impact earnings consumable Excluding

operations prior totaled XX% for XX% million we of result, cash cash higher and versus increase. million, $XXX is $XX Capital generated than free which year of flow. $XXX Cash million flow improvement year, $XXX expenditures Now flow turning an to a the year. as was which reflecting from was last million, the a

terms to year. at was repurchases X.Xx, of during have our financial share the balance end the shareholders dividends through million and returned and XXXX leverage, we In and of ratio debt-to-EBITDA fiscal the September sheet $XXX

conclude XXXX, me scenarios gradual issuing various towards both and COVID-related prepared incorporates achievable, assumes and guidance with XXXX. and our in the significantly a my Today, incorporating remarks from our also trends uncertainties. normalized we impacted. negatively a that from in outlook that are fiscal for product Let recovery activity balanced range return categories areas This those benefited believe we demand guidance is guidance

and and evolution mentioned As business. scope risks opportunities company’s the incremental as as pandemic for the remains uncertain ongoing of earlier, the present well could

financial are customers hospital our pandemic. We from for nor including in any the surge significant purchases, or policies Hill-Rom we government operational substantial are with or not to benefit COVID-related including potential impacts associated

or tax M&A. government also or guidance reflect care, from impact an reform, future from Our does not health potential

So for expect fiscal reported XXXX X%, full currency basis. X% to on revenue to decline constant we both a year, and

complete as have we mentioned, the the to the noncore OEM are previously surgical we we definition the year. business by international of the exit end As calendar retiring of expect

points includes this of or impact year-over-year a guidance $XX exit. Our of million related XXX the to headwind approximately basis

our revenue onetime In a fiscal comparison the addition, $XXX the million headwind XXXX. of challenging COVID impact which presents guidance to in fiscal reflects XXXX, from

exit, the objectives. rates, Excluding X% the segments, mid-single growth constant due our Systems OEM to XX% Support both surgical Patient we term decline with in headwind. to By the COVID longer the be expected in currency onetime is digits, to to COVID expect impact line and business at revenue

single to expected low Excluding surge is onetime growth impact the be in the COVID from digits. demand,

We Line to expect comparable revenue Front be year. Care prior the to

stockpile the within some As finally, driven by X% the be we expect and gradual set the continued physician level margin of and of in noninvasive order From onetime XX to growth U.S. the Surgical points set to both of recovery operating we pre-COVID to visits. inclusive by office standpoint, towards surgical margin XXXX. a adjusted of basis profitability is modest pressure Solutions record ventilators exit. level related offset X%, from And with OEM gross expect XXXX impact recovery fiscal in revenue to

We exceed XX% to range XX.X% the to of margin gross XX.X%. operating expect and in margin

and sales, XX% of approximately to of low X% and expect represent decline approximately adjusted SG&A approach digits single to we R&D expect sales. We in

we Our announced and approximately guidance investments growth in September. SG&A $XX accelerated in business million includes optimization from actions key in initiatives, savings

to approximately a We approximately XX done have an are $X.XX to million. offset per other with shares. earnings X%. earnings million we repurchases option adjusted X% look and interest just range a like reported translates to share. expect to of diluted expense, $X.XX which historically. We approximately XX% rate And we includes count expect share of of expected to basis, dilution share down stock of lastly, This tax On $XX per guidance be adjusted share

to impact share of earnings to the least at $X.XX, approximately is COVID well adjusted $XXX when approximately timing reflects earnings we $XXX outflows From guidance flow XXXX million in expected XX%. and to flow our expenditures free the expected expect our as as business which per efforts million, prior cash to Capital However, are related of to $XXX be be and collection. million, perspective, growth a optimization million. operating expected to million flow excluding cash be onetime $XXX of cash year receivable $XXX is

the expect For reported fiscal and revenue basis. quarter, currency on X% a to first we decline to constant both X%

of adjusted $X.XX per earnings year of expect We is prior diluted to There no impact $X.XX share. COVID.

of expected This per recovery. now you the impact guidance XXXX business I over underlying reported performance COVID Thanks. that want our turn revenue and share to have our earnings Before supplemental website. And additional mention per posted on the information help quarterly trajectory presentation will in earnings turn and understand provided of and I the John. during quarterly to call share the information revenue of to back back to I’ll we over the call John, the the

John Groetelaars

Thanks, Barb.

We years, into profile who enhanced of have diversified with M&A. with propositions and durable significantly followed we business. that R&D improved Hill-Rom model and you those internal over have our growth know capital our deployment the value business For of our you strengthened

and reiterate record thesis balanced remain approach company exciting the has our fundamentals, transformation and long-term Prior leading investment and our Our at I Hill-Rom. to growth strategy, track prospects performance. growth during established to will continued intact. and an compelling is investment strong a pandemic, towards that of

objectives consistently met delivered have We on and our expectations.

cautious shocks for demand most, While we challenging and the and as begins Hill-Rom, to including are optimism improved macro with visibility recover. with environment proven dynamics XXXX our business has entering evolving before, never traditional seen to

team, for investors current to up of a leadership intended open a position With evaluation will long-term transparent and the we is as a will Hill-Rom today let’s go depiction strategy foundation, provide we in trends which to beyond commentary solid believe our our to Our deliver seasoned shareholders aid outlook, of sustained and to clear business future With investment. customers Q&A. call value and success. and continue above that, enhanced our and company for their


and be that seven [Operator to this the is Instructions] www.hillrom.com. a being Hill-Rom will on digital at I participants replay call like for days recorded, would remind available website

from Our first Stifel. Wise question comes from Rick

Rick Wise

pieces, but talk good envisioning around the ahead, the to see for about John, the really to that’s guidance It’s unfolding. bit your I clear, not finish you’re more helps. little the Thank just the year. just solid you the for -- year clarity all -- just it a the Maybe, year think moving the how

better think Solid thinking the about get the as and the year first could But unfolds? for help about clearly. us you flow year quarter, how maybe of you’re think quarters the what

John Groetelaars

in COVID that slide, the ‘XX. fiscal see Slide of breakdown Yes. XX the number the Sure. benefit you, Thanks material. question, for presentation you’ll I’ll point the to Rick. Rick, for In

important I foundational understand. really to of that’s think numbers set a

how with feel QX good Obviously, ‘XX. and that So broad-based I’d mind, in characterize and We all really was we’re all geographies we momentum businesses about here’s fiscal our as across exited seeing the entered year ‘XX. trough.

and guidance. So a around that’s confidence gives a encouraging us something tremendous of amount our sign QX that very

into it start, going and from difficult up QX come to to As comps start really in last COVID-related QX, especially year. hitting we QX, some we’re against

curve And market underlying so that double to business. year. be at to And the our throughout in emerging of shape growth build momentum continues the recovery digits continues the

of year. a planned products north We for new XX products, this of will launching launch new number significant be

year. of well to of businesses growth, drivers see fundamental the product for will from COVID excluding our are impacted recovery year. were emerging last that growth play going the and market improvement, the that So sequential we us negatively deliver new all in and And that impact during

we We and growth the see COVID on would half see second challenging quarter. in benefit the certainly some through at cycle excluding of got growth to and to the nice recovery impact. that organic So Compare expecting comps look as the as year, COVID COVID that you recovery our expect fourth QX, things of to QX to to period you’re a the nice side where our business in there’s we’re business, starting see, noted. sequential in just you which on see of no

think I So the point would is final make drivers. I our growth

about As we’ve that growth areas in past, those care seen those of communications. in in excited the be them. continue the opportunities -- Very terms to ICU in same mentioned in product driver categories, the we’ve expansion,

that remote coming diagnostics, new several importance category and and of launches especially ventilation, have the monitoring We with year. remote this Noninvasive in product diagnostics. telehealth

We our business tools, and exam connected of as for with well vision tools in Surgical recent our Videomed the Solutions exam. exciting for physical and And products and several new in both as video integration. have acquisition screening then screening connected OR

fundamentals think I towards really and very past market year new get us are get in benefit well product nicely recovery overcome these to emerging the COVID the comps place growth as position the year. curve really, going there. So we is this launches, of that are The and to have end we

Rick Wise

there, lots direction That’s great and of clear John.

capital, or side. of around a about the that, other investor PSS lot I the anxiety the business, course, investor of hospital A bed very level. specifically, side, lot on the obviously, of thinking kinds of capital the On it, And get. spending the concerns questions outlook always at for revolves the

the talking environment Centrella, you’re of dialing about that for impact of concerned digits PSS Can about expectations? ex you environment perspective talk your going on COVID, are the well? as in other single issues? people about some contemplate when us you among competitive you -- maybe spending what to the to put be -- And the talk and low into would, your maybe if and sense You’re us, capital

John Groetelaars

Yes. there, Sure. lot to There’s Rick. a unpack

So The much environment we’re that in globally. And is view them in seeing from it right? me recovery so our questions, but here start let physician the and The me take outlined environment office let point recovery. to better we CapEx just visit with. -- take U.S., of businesses, important as first, procedure up recovery, a of not

summary guidance second of us between to a And first we that lot of the our not and fundamental between experiencing and Obviously, effectively deal surges, wave our treating that’s But won’t to with we’re allows how the first confidence third the now now where versus is but the all increased quite reissue today. and into just are level wave how I COVID patients a triage patients that what with and those how wave. the sides health difference to So customers details certainty on the equation. non-COVID us, and both patients get wave have keep and of providers COVID to patients treat of more care candidly.

overall, significantly financial good profile of financial ventilation. CapEx very procedures. the some in aggregate, while it to So the down portfolio -- to particularly from And improved, customers ago, the and expansion never is communications way. certainty, of very CapEx in recovery in ICU, is certainty result, our a same our be And of was U.S. was a our impacted customers in in it good nicely, as care where Internationally, in plays it bed and very going the year

months it CapEx was X ago was months improved certainly where we even from is it where ago. relatively from improved environment feel X and that the So quite speaking, significantly

-- and guidance feel have. we we why the that’s confident reissue enough way So to

that that’s of the So part question.

the question business. second of the relates part to The bed

is if really recovery from ICU bed improvement full seeing But our we of take grew at right? backlog our business second. avoid a at seeing I’ll And quarter-to-quarter, -- at look a about current If number get period. now bed QX forward, our sequentially step nice and orders that you at we’re you if you into back looking and last XX% digits, year look if look for we’re double offering, year, this the and to a in Med-Surg and that

for So our is not around quoting activity and level near bed only pre-COVID business. that, levels the actually but orders

bed to competitive So question, we get this details maybe about that. good We get that really a than into surprise if for we’re bed we offering, us. that, This solution view, our to really care between a a apples and Stryker point good really a not offering, of the want. introduction. And are comparison launch to we feeling feel earlier oranges. is was follow-on which into come of and monitoring good we a can connected it candidly But competitively and comparison coming, patient versus more really the expected frankly, feel knew I’m is but is. lot And at from competitively. of quite And you and is prepared the like happy


Bob Hopkins on Bank of America.

Bob Hopkins

of the couple my level. macro a keep things. I’m on kind So to going questions of

And So you deals then should will a things that a a little love that year. little will if mind leave out seeing are so with business? What as basis for -- us later pieces pipeline a quarterly on this underlying moving there, to what this potential if you over is that. two of talking and as just comment get just result? at But I’d better tracking expect I’ll fiscal the And bit. things we wouldn’t about also, year. year. the going be what’s you really One a in sense so things business are on on guys there’s the we you’re it what give the many hear to cleaner we should the understand I progress the course for

John Groetelaars

second take I’ll that first, Bob. great. question the Yes, part of

impacted negatively it’s seeing We negative in fundamentally right? clear sequentially, being impact. is QX. the reported had this really, improving businesses that But we’re and of is at our a curve so recovery COVID the that think about -- recovery I fundamentally, looking how why and XX% were

of is time. first the to over we continue Our guidance expect and would that a quarter that, improvement significant for

So that’s one thing.

which will are that really growth. start surgical over other cross Care are to not place are coming quite levels, once they The pre-COVID I is, they’re And part us the in that which there in showing our -- good significant yet. are year-over-year businesses recovering we’ll but business, Comm be think a chasm, back to and particular, the to

So be would to as at them. I product new get about be that, we Certainly, talking Bob. we’ll looking launches closer

I to growth is made, to at emerging we’ve markets. double-digit throughout The continue China, with year in look emerging significant see and other part where high would growth in investments. do investments We markets made our expect, the we’ve some the double-digit

feel So busy. tuck-in X we, well. that about question we deals particularly during M&A, you it completed your as good Related on the to of as fiscal smaller part quite year. know, have We’ve last remained deals,

to remain We we’re and tuck-in that ‘XX. into come opportunities find as we’ll continue optimistic busy, some meaningful fiscal we

opportunities front, busy nice very in very We’re in nicely and privately vision past. about -- that ability of of a connected and those to held advancing portfolio to the we our care -- that do companies. we our see fit areas we in talked our private Then with on lot advance

Bob Hopkins

me. for it That’s Great.

John Groetelaars

discipline think our should a I financial that, think of time I investors and accretive, X-year within margin being us to being X to to to providing accretive ROIC an conclude expect just criteria stick of our frame. growth


Matt Taylor of UBS.

Matt Taylor

any just wanted same noninvasive some to onetime you is, positive you in what quarter, different in comprised the two fourth through things. the see the of? pandemic? impact these fiscal here of at the move clarify COVID dents continue the So as you of that Do composition trends orders was around One look Or when was beds? I to

John Groetelaars

quarterly COVID the pointed of in you earlier. that XX% $XXX international, this million, it, say, half to would see is was of breakdown half benefit other that the one and the it I of the U.S. in I was half beds Matt, Yes. of schedule total,

XX% are think $XXX aggregate million. and those in good total X ventilators XX-XX between of beds, that XX% and international. to probably So ways kind in about then U.S.

that? your So that Did a that’s have answers -- to I follow-on you question. hope

Matt Taylor

Yes. then... great. No, And that’s

Barbara Bodem

Hey, Yes. okay. Matt, that’s

me that. fourth the of to $XX benefit, add. Let quarter, was related related is million that million of COVID In ventilators, just the and million $XX had $XX we to

Just to clarify QX.

Matt Taylor

some to wanted get in just of on I ahead then the what year And thoughts different you’re terms Okay. geographies. in anticipating

in regions out differentially. year of the major exposed that called to you’re recovering speak how terms the outlook the trends here and You the quarter you the Can they’re for in to?

John Groetelaars

sure. Yes,

So growth. as growth. emerging I expect markets, expect mentioned we double-digit high double-digit we very China, earlier,

through being starting investments that come Europe. Our are you earlier, gave Canada roughly there. and mostly really I because internationally, being million in just half was the And of that to of breakdown $XXX that

of some So have very in QX will those that and comps overcome we timeframe in QX challenging regions.

some not demand, our that expect barring we So period unforeseen would into guidance, has some QX which in challenges have internationally. to


of Lewis Morgan Stanley. David

David Lewis

Can you hear okay? me

John Groetelaars

hear we Yes, you. can

David Lewis

All right, John.

about that. Sorry

XXXX, upfront. surgical I’ll for year Just your interesting me, about questions the I the ask think John, If guess quick thing, two both back guidance. guide the out them I I OEM the far headwind John, first you and COVID-XX what’s about for as were kind underlying X%. to X% nice for where isn’t that the off which pre-COVID as well gets of of at frankly a X% dynamics that you’re number very in providing, you kind of it

sort about to market. we confidence were U.S. than because underlying imply couple your So the first lot of and sort sluggishness U.S.? some number of questions expecting it’s, were because and year here ProCuity, performance your next assumptions lot Stryker’s the in of that of in just should more in wonder the going I a sort that robust your frankly, it deliver of two. enough, thinking quarter seem I get And how the you in SG&A of for confidence frankly, capital it long the which it factor of the number is in about doesn’t of want And you the the the business a that momentum can those I kind that the does of Sorry of in versus questions, maintain improvement rate over ‘XX in ‘XX, ‘XX investment SG&A to level pre-COVID? ‘XX thinking And implied about had my then understand on you just just recovery? are investment relative but Barb, back of lower. is how growth to noticed for kind sort of

John Groetelaars

Yes. David. you, Thank

of importance strong I’ve broad-based the really, the that mentioned on I of our the CapEx environment relative and and we beds the activity. communication of the were frankly, with technology, bringing the see sensors quite to continued recovery think as businesses of marketplace the our And certainty -- before, that impacted. we’re our and negatively pipeline

whether focused So and U.S. expand, in the and we’re come advantage team, of then in coming new of we’ve more Comm made company significant take become sustained deploying our durable do recovery that over also ability purchasing to for enterprise-wide large, our the incremental Care the markets see to we to investments our our customers or from business, to digital are quite confident Enterprise and also the larger our years terms emerging expand. growth, which to in about case, expect for this position through decision. team, is We investments Accounts that’s

up those continues. Barb to we’re it X we’re the for make areas So recovery I’ll scaling over sure for specifically the ongoing to growth second positioned question. as in And turn

Barbara Bodem

Your in we question The sustain the ‘XX about is able ‘XX investment yes. answer of versus overall that. level and are to

and investment forward we’re just... at we very And ‘XX. level and do able to the similar business the that that Difficulty] So we’re optimization what incremental to in a reinvesting had pulled in ‘XX way [Technical

John Groetelaars

breaking you’re up Barb, there.

up, I Barb. think you’re breaking

Barbara Bodem

you clear? Can again. hear not Oh, Let me now? sorry. it I’m Was me try

John Groetelaars


Barbara Bodem


approximately time David, consistent in the $XX you Is into clear? to investment that optimization to that do the with our of And worth forward level incremental is ‘XX. we’re able repeat, of if first I’m million heard business very ‘XX. pull it So because sorry of But through. of ‘XX

John Groetelaars


Barbara Bodem

great. Okay,

John Groetelaars

well, you technical question, have Sorry David? ProCuity David. for a the as question Did

Unidentified Analyst

or trends This Yes, for ProCuity. commentary from channel Marissa, you just is, the on hoping could any Stryker’s anything you have we seen that in comment seen if were on any you’ve David.

John Groetelaars


We seen any but a any out yet. have not launch, point pending not occur there’s Obviously, commentary this we there seen some deliveries have of in deliveries at time.

expect will we material that next the So in not happen the of but months, couple in seen marketplace today. we’ve anything


Baird. from Polark Michael

Michael Polark

and COVID few to thing appreciate is fiscal It’s quite the Seems deck. Maybe ‘XX prudent outlook. built like that a the conservative into surge no do. buying -- the

places seen, World getting the Europe last with Organization the even ICU or have strained. predictions though, We in capacity Health in X, about really in week out

of a of to pockets Any your kind What gets you pick just strain, starting capacity? real-time be in ups where steam? really customers are up these strained really would the interested color hearing assessment. seeing flare be would so you Are are in helpful. with And some

John Groetelaars

mentioned, The refer, if the third Mark, as wave. -- being Sure, and thanks I this is for the Yes. I question.

like third expect We a lot wave to be the in this wave the second summer.

hospitalizations, it’s their However, up of to from patients, widespread a manage a anticipated is they the we’re can that more themselves first confident, from opens And feel the capacity to their that protocols, in more dispersed. hospital and than profile what treatment geographically ability result. We to wave, more hearing our segregate is what different ability it’s believe -- -- much going as be their much customers that they patient the terms patient do very that geographically.

regions level business on of So of some I of think demand but in Europe, with in from particular That In and our capacity spikes the U.S., signs our we result. result, and feeling. of the capacity level is interest as a that going Europe, the goes are starting a to yes, provide building. pressure to in current vital in the tension, product and ICU offerings treatment across ICU going it’s some to to And on offering some surge thermometry. are see in going certain the higher as manageable Europe,

But much of demand to see but panic-oriented, starting -- well-managed again, areas. some So in Europe that more it’s starting some are incremental to it see it does in -- and seem we’re not those does seem we today.

Michael Polark

Or that the framework? fully yes. been -- Fair QX into to say hasn’t built

Okay. detail to versus release. the platform They makes make on a upcoming fairly competitor ProCuity do of claims. John, what the a little And big love I into offered apples more bed extra -- your your have to that how get oranges competitive you and and you And you to versus expect how customers. just what few some details offer differentiates about you see maybe,

John Groetelaars

differentiated We’ve our for platform Yes, building bed business. I’m happy on a to very take been time, quite that question. some

connected I today. fact, monitoring actually really would corner patient more it’s In the and care we’re of and turning a say system

hub, the tools it our the and that with and the a then built business. capability digital communication and as communication Care system all that real-time sensors Comm and technology surround bed communication the the Given mobile of sensors we’ve into

place -- analogy able smartphones. that from put we’ve to smartphone in loop. Having I offering a the been best effectively my we we Having So by be age. day to and and a communication, data, a incorporate we one patient access when of what the flip do current like in can into what is effectively And the cellphones think -- that enhance, together have what have what video I you effectively is a can closed and and real-time can put ‘XXs. thing. mean continuing guess we caregiver we’re waveforms, would connectivity is connectivity wireless is visualize Having it’s phone from we and a is

So sensors other you the communicate bed to then phone the can caregivers patients communicate from phone, directly. and the with then and

the versus so market connectivity can is a of that a communication, of you Incorporating all that’s And oranges the robustness basics that -- incorporated difference wireless ecosystem other with apples comparison of really Voalte offering Comm video having the having the have that you bed of stock Care information. acquisition you versus chats we it’s and access sensors information, the really we’ve Centrella kinds of smartphone the camera, and cellphone and built the our So basics can do access the connectivity. today. the of and and can of


from comes from Raymond Andrew James. question final Our Cooper

Andrew Cooper

the of how guide terms just XQ It’s and COVID ‘XX been in more in one about asked kind of the maybe already, think on we but impact.

about bed. you in but that I’m think million color. think so the building upticks order of of when think as and a relative some that to things backlog, lot we like the is your You book comments -- where bed $XXX that, or XX Europe or But when gave about on we and demand coming coming sorry, relative roughly expansions that orders necessarily year? do the in ‘XX pull to slow much demand not How so or kind surge might or how of to the -- in XXX consider that’s onetime, about impacting forward of what meet

John Groetelaars

have you Can Barb. Maybe Yes. one? take that I’ll

Barbara Bodem

Yes, happy talk No, I’m to be to to. I’d that. happy

And you as demand. bed pre-COVID key growth points that where talked we’re pull close ‘XX, that think the saw in it’s the quoting we demand. So in looking now activity in and in sequential to most forward nice about really our is for of to levels XXXX normalization need is area. was order about, ‘XX. of the terms order we’re the John And how about of really we book really bed of affected talked felt at are reaching And we’ve getting normalization all about that about QX thing of and

that first by thing gradual the you those recovery second The think that more gradual be And were negatively of ‘XX. look continue to impacted as of the quarters gradual recovery is and about across -- that will can COVID. across ‘XX product X lines

think you across as the you normalization across in as trough about as cadence QX. and and QX, ‘XX, demand gradual get of we we go the the about see as improvement So calendarization, we’ll we’ll in see think the that QX rest recovery

back in time in bouncing need manage get especially QX, QX. headwinds that QX. As QX, big be you we’ll we That’s and through, into growth. by to QX we to the COVID much a to stronger headwind get And we’ll have

you top as look will course will year, thing to operating line the year similar margin and a other to line we also bottom gross of the to improving the improvement. think The progressively is think very about then contribute which see margin the throughout about will that

John Groetelaars

for final Well, we’ll see our you today. the question? call joining quarter. that And you Is thank next everybody


does Hill-Rom this conclude Incorporated. for participating. with Thank gentlemen, conference you and Holdings today’s Ladies

disconnect. now may You