Stryker(SYK) - 2024 Q4 - Annual Report

Financial Performance - In 2024, Stryker Corporation achieved reported net sales growth of 10.2%, with net sales totaling $22,595 million[141]. - The company reported net earnings of$ 2,993 million, resulting in net earnings per diluted share of $7.76, a decrease of 5.9% compared to 2023[144]. - Adjusted net earnings per diluted share increased by 15.0% to$ 12.19, up from $10.60 in 2023[144]. - Gross profit increased to$ 14,440 million in 2024, with a gross profit margin of 63.9%, up from 63.7% in 2023 and 62.8% in 2022, driven by higher sales pricing and favorable volume[152][154][155]. - Operating income was $3,689 million in 2024, with an operating income margin of 16.3%, down from 19.0% in 2023 but up from 15.4% in 2022[164]. - Comprehensive income for 2024 was$ 3,116 million, compared to $2,970 million in 2023, showing an increase in overall financial performance[245]. - Net earnings for 2024 decreased to$ 2,993 million or $7.76 per diluted share, down from$ 3,165 million or $8.25 per diluted share in 2023[173]. Sales and Revenue - MedSurg and Neurotechnology net sales increased by 11.1% to$ 13,518 million, while Orthopaedics net sales grew by 8.9% to $9,077 million[145]. - Net sales for 2024 reached$ 22,595 million, an increase of 10.7% from $20,498 million in 2023[243]. - Neuro Cranial sales for 2024 were$ 2,136 million, a 13.9% increase from $1,876 million in 2023[306]. - Excluding acquisitions and divestitures, net sales in constant currency increased by 9.1% due to higher unit volume and 1.1% from price increases[146]. Expenses and Costs - Research, development and engineering expenses as a percentage of net sales decreased to 6.5% in 2024 from 6.8% in 2023, primarily due to lower spending on medical device regulations in the European Union[157]. - Selling, general and administrative expenses as a percentage of net sales decreased to 34.0% in 2024 from 34.7% in 2023, attributed to continued spend discipline and lower charges for structural optimization[159]. - Research, development, and engineering expenses increased to$ 1,466 million in 2024 from $1,388 million in 2023, indicating a focus on innovation[243]. Cash Flow and Investments - Cash provided by operating activities in 2024 was$ 4,242 million, compared to $3,711 million in 2023, marking a 14.3% increase[186]. - Cash used in investing activities was$ 3,000 million in 2024, significantly higher than $962 million in 2023, primarily due to acquisitions[188]. - Cash used in financing activities decreased to$ 525 million in 2024 from $1,594 million in 2023, driven by lower debt repayments[189]. - Total cash and cash equivalents increased by$ 681 million in 2024, compared to an increase of $1,127 million in 2023[184]. Acquisitions and Capital Allocation - Stryker invested$ 1,628 million in acquisitions and paid $1,219 million in dividends to shareholders in 2024[141]. - In 2024, Stryker completed various acquisitions with total consideration of$ 1,628 million, plus $400 million contingent on achieving certain milestones[142]. - The company plans to utilize excess operating cash for acquisitions, dividends, and share repurchases as part of its capital allocation strategy[185]. - Goodwill attributable to acquisitions in 2024 amounted to$ 1.154 billion, reflecting strategic benefits and market expansion[331]. Debt and Liabilities - The company repaid $600 million of senior unsecured notes in May 2024 and issued new senior unsecured notes totaling$ 2,100 million in September 2024[143]. - Long-term debt, excluding current maturities, increased to $12,188 million in 2024 from$ 10,901 million in 2023, an increase of 11.8%[248]. - Total contractual obligations are projected to be $21,187 million, with$ 4,801 million due in 2025[198]. Impairments and Taxation - Goodwill impairment charges of $456 million were recorded in 2024 related to the Spine business[162]. - The effective tax rate was 14.3% in 2024, an increase from 13.8% in 2023, influenced by deferred tax benefits related to the anticipated sale of the Spinal Implants business[171]. - Goodwill and other impairments in 2024 amounted to$ 977 million, a significant increase from $36 million in 2023[181]. Assets and Equity - Total assets increased to$ 42,971 million in 2024, up from $39,912 million in 2023, representing a growth of 5.2%[248]. - Total shareholders' equity rose to$ 20,634 million in 2024, up from $18,593 million in 2023, indicating an increase of 11%[251]. - Current assets exceeded current liabilities by$ 7,231 million in 2024, up from $4,597 million in 2023, showing a significant improvement in liquidity[192]. Currency and Foreign Exchange - The company experienced a 0.5% negative impact on net sales due to foreign currency exchange rates in 2024[146]. - A hypothetical 10% change in foreign currencies relative to the United States Dollar would change the fair value of derivative instruments by approximately$ 489 million[228]. - The company recognized a total of $106 million in currency exchange rate gains in net earnings for 2024, an increase from$ 98 million in 2023[326]. Legal and Regulatory Matters - The company is currently involved in investigations regarding potential violations of the FCPA, cooperating with regulatory authorities[336]. - The company recorded charges of $17 million related to ongoing legal claims in 2024, with an accrual of$ 202 million at year-end[338].