Medline (MDLN) 46th Annual William Blair Growth Stock Conference summary

Business overview and growth strategy

• Largest manufacturer and distributor of medical surgical supplies, with a vertically integrated model and 190,000 branded items.

• Operates 45 U.S. distribution centers, 30 manufacturing sites globally, and maintains $5 billion in inventory.

• Prime vendor contracts are central, typically five years, with 98% retention and a focus on converting supply chain solutions to higher-margin branded products.

• Growth driven by both new customer signings and expanding share within existing accounts, targeting high single-digit organic sales growth.

• Product portfolio covers about 60% of the market, with ongoing organic and selective inorganic expansion.

Competitive advantages and operational investments

• Billions invested in distribution, automation, and supply chain resiliency, enabling next-day delivery to 95% of U.S. customers.

• Only provider serving the full continuum of care, including hospitals, nursing homes, home health, and surgery centers.

• Large, segmented sales force of 4,000+ employees focused on customer relationships and value delivery.

• Guarantees 5%-10% savings for customers converting to branded products, driving both customer value and margin improvement.

• Product development is highly customer-centric, with empowered product managers identifying needs and driving innovation.

Financial performance and guidance

• Raised 2026 sales guidance to 8.5%-9.5% after 11% Q1 growth; EBITDA guidance maintained at $3.5-$3.6 billion despite Middle East cost headwinds.

• Tariff impacts partially offset by favorable Supreme Court ruling; Middle East inflation affecting raw materials and diesel costs.

• New prime vendor contracts are initially margin-dilutive but become accretive as branded product penetration increases.

• Long-term EBITDA growth targeted at or above sales growth, with a focus on margin dollar growth rather than margin percent.

• Guidance assumes some moderation in same-store sales in H2 2026 due to ACA and Medicaid headwinds, though Q1 showed no impact.