Enovis (ENOV) investor relations material

Strategic focus and business overview

• Emphasis on organic growth and strengthening the balance sheet after a period of acquisitions, with a shift toward operational excellence and financial discipline.

• Recon (reconstructive) business is prioritized for above-market growth, supported by a strong innovation pipeline and commercial execution.

• Prevention and recovery (P&R) business remains a significant cash generator, supporting the overall portfolio and enabling investment flexibility.

• Integration of acquisitions is largely complete at the top level, with ongoing efforts to build operational 'connective tissue' through the Enovis Growth Excellence (EGX) model.

• Macro trends such as longevity and mobility are seen as key growth drivers, positioning the company to address evolving healthcare needs.

Market trends, product innovation, and technology

• Hip and knee demand remains strong, with positive responses to new product launches and resilience in the second half of the year.

• The Arvis® Augmented Reality System is viewed as a versatile, capital-light enabling technology, with a significant upgrade (2.0) planned to support expansion in ambulatory surgery centers and international markets.

• ARVIS 2.0 launch is delayed, creating a temporary headwind for U.S. hip and knee growth, but broader adoption and flexible sales models are expected to drive future penetration.

• R&D investment is targeted to increase, with a focus on strengthening internal processes and reallocating resources from G&A to R&D, while leveraging M&A as a form of pipeline development.

• New product launches in shoulder and hip segments, such as ARG and Nebula, are expected to drive continued growth and cross-selling opportunities.

Financial performance, capital allocation, and outlook

• CapEx has normalized post-acquisitions, currently slightly above 7% of sales, with efficiency improvements expected as integration and operational projects mature.

• Cash flow is projected to improve through 2025 and see a significant step up in 2026, aided by reduced regulatory spend, LEMA integration, and working capital efficiencies.

• Tariff headwinds have lessened due to delays in China-related tariffs, with 2025 expected to be more mitigated and further improvement anticipated if current conditions persist.

• LEMA acquisition synergies are on track, with cost savings realized as planned and further operational transfers expected to deliver additional benefits.

• Operating margin expansion of 50–75 basis points annually remains the target, contingent on stable trade conditions.