Solventum (SOLV) Goldman Sachs 46th Annual Global Healthcare Conference 2025 summary

Strategic priorities and transformation progress

• Leadership team has been refreshed, with a focus on clarifying and executing a growth-driven strategy.

• Transformation is structured in three phases: resetting mission and structure, commercial productivity and innovation, and future growth initiatives.

• Significant progress has been made in phase one, with current focus on commercial productivity and innovation.

• Divestiture of P&F is expected to accelerate balance sheet improvements and enable more aggressive M&A activity.

• Operating margin expansion and free cash flow improvements are key priorities, supported by efficiency initiatives.

Financial performance and guidance

• 2024 saw a 1.2% growth rate, exceeding initial guidance; 2025 guidance is set at 1-2% growth, with normalized Q1 growth at 2.5%.

• Q1 2025 growth was boosted by inventory pre-buys ahead of ERP and SKU changes, with normalization expected in Q3 as inventories are drawn down.

• Volume-driven improvements are evident across all four business segments, with minimal pricing impact.

• Tariff impacts remain fluid, but recent developments suggest a more favorable outlook compared to Q1; updates will be provided quarterly.

Market outlook and growth drivers

• Five key growth drivers are expected to contribute over 80% of future growth, with a focus on MedSurg, HIS, and Dental segments.

• MedSurg growth is led by negative pressure wound therapy, sterilization assurance, and IV therapy, with strong market positions and innovation pipelines.

• HIS segment is focusing on revenue cycle management and autonomous coding, leveraging AI and machine learning partnerships.

• Dental segment is biased toward essential care, with co-restorative as the primary growth driver and recent successful product launches.

• Dental market is expected to rebound to 3%-5% growth over time, driven by demographic trends and increased healthcare focus.