Medtronic (MDT) Barclays 28th Annual Global Healthcare Conference summary

Exposure to Middle East and oil price impacts

• Middle East represents 2%-3% of annual revenue, mainly from essential healthcare products; minimal expected impact from regional conflict.

• Logistics disruptions are the main risk, but current systems are in place to manage shipping and inventory.

• Petroleum derivatives account for less than 1% of cost of goods sold; contracts and productivity commitments limit exposure to oil price volatility.

• Shipping and logistics costs are a minor portion of the cost base, with no major impact anticipated.

• Inventory cycles are about 35 weeks, so any cost impacts would take 6-8 months to appear in financials.

MiniMed separation and strategic rationale

• IPO of MiniMed completed as the first step in a planned separation, with full divestiture targeted by end of 2026.

• MiniMed represents about 7% of revenue but only 3% of EBIT, with higher R&D intensity than the rest of the portfolio.

• Second stage will allow shareholders to convert shares at a discount, reducing share count and increasing EPS.

• The separation enables focused capital allocation and redeployment of resources to higher-growth, higher-margin areas.

Growth outlook and financial commitments for 2027

• Organic growth is expected to accelerate into fiscal 2027, with gross margin improvement as MiniMed is deconsolidated.

• Growth in cardiac ablation systems (CAS) is currently dilutive to gross margin but accretive to operating margin.

• R&D as a percentage of sales will continue to increase, but only part of volume leverage will be reinvested.

• SG&A leverage is expected, with operational profit and EPS growth targeted in the high single digits.

• Tariff carryover, M&A dilution, and a 53rd week in fiscal 2027 are factored into the EPS growth algorithm.