The global medtech sector has faced disruptions for several years, such as a steep drop in medical procedures during the height of the pandemic and, more recently, surging inflation. Since 2019, industry margins have declined by about 100 basis points, and the gap between the top and bottom performers has grown. Now, as the financial landscape stabilizes, the strategies distinguishing industry leaders from laggards are becoming clear, note senior partner Delphine Nain Zurkiya and colleagues.
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A line graph plots the quarterly earnings before interest, taxes, and amortization margin for the top 30 global medtech companies, by 2022 sales, from 2019 to August 31, 2024. The exhibits show the 75th percentile, median, and 25th percentile margins. The 75th percentile margin peaked in 2020 at ~31% and has generally trended downward to 27% in 2024. The median margin peaked shortly thereafter in early 2021 at ~27% and has trended down to ~22% in 2024. The 25th percentile margin has generally fluctuated between 12% and 21% from 2019 to 2023, before settling to 15% in 2024. A table below shows the compound annual growth rate (CAGR) from 2019 to 2024 for each percentile, with the 75th percentile at 27.3% CAGR in Q2 2024, the median at 22.4% Q2 2024, and the 25th percentile at 15.2% in Q2 2024.
Source: S&P Capital IQ, accessed August 31, 2024.
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To read the article, see “Value creation priorities shaping medtech,” October 16, 2024.