Anton Gvozdikov's questions to Avanos Medical Inc (AVNS) leadership • Q4 2024
Question
Anton Gvozdikov questioned the rationale behind the forecasted pause in margin improvement for 2025, asking if it was conservatism given ongoing transformation efforts and strong performance in key product lines like NeoMed and Trident. He also inquired about the strategic direction for the Hyaluronic Acid (HA) business, noting the recent impairment charge and whether it created more urgency for a decision.
Answer
Interim CEO Michael Greiner explained that the 2025 margin pause is primarily due to a significant shortfall in high-margin HA revenue compared to original transformation plans, which offset cost-saving achievements. He acknowledged the guidance contains some conservatism due to macroeconomic uncertainty but expects to reignite margin expansion in 2026. Regarding the HA business, Greiner confirmed its performance drove the impairment charge and that it will be de-emphasized and managed for cash optimization within the new 'Corporate and Other' segment due to persistent pricing pressures.