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    Robert Davies • Morgan Stanley

    Robert Davies's questions to Smith & Nephew PLC (SNN) leadership

    Robert Davies's questions to Smith & Nephew PLC (SNN) leadership • H1 2025

    Question

    Robert Davies of Morgan Stanley asked about the strategic position of the Orthopedics business, the margin trajectory beyond 2025, and the future product pipeline to ensure sustainable growth.

    Answer

    CEO Deepak Nath asserted that the best way to create shareholder value is to improve the performance of the Orthopedics business, highlighting the progress made under the 12-Point Plan. He stated that the 2025 margin target is not an endpoint and expects further expansion, particularly from Ortho. He emphasized that innovation remains a key growth driver, with details on the future strategy to be shared at the upcoming Capital Markets Day. CFO John Rogers noted future margin gains must offset headwinds like tariffs and skin sub changes.

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    Robert Davies's questions to Smith & Nephew PLC (SNN) leadership • H1 2025

    Question

    Robert Davies from Morgan Stanley asked about the strategic position of the Ortho business, the margin trajectory beyond 2025, and the future product pipeline needed to sustain growth.

    Answer

    CEO Deepak Nath reiterated that fixing the Ortho business is the top priority for shareholder value, highlighting progress and the goal for continued margin expansion beyond 2025. He noted future growth will be driven by innovation, which accounted for 75% of H1 growth. CFO John Rogers added that future margin gains must offset headwinds like tariffs and Skin Subs reimbursement changes.

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    Robert Davies's questions to Fresenius Medical Care AG (FMS) leadership

    Robert Davies's questions to Fresenius Medical Care AG (FMS) leadership • Q1 2025

    Question

    Robert Davies of Morgan Stanley asked about the margin profile for the equipment (Care Enablement) business, questioning its seasonality, and inquired about the key drivers for improving Return on Capital Employed (ROCE) back to historical levels.

    Answer

    CEO Helen Giza noted that while Q4 is typically strongest for Care Enablement, the Q1 margin of 8.3% provides a strong start toward the 8-12% target band for the year. CFO Martin Fischer attributed the ROCE improvement to both operational performance gains and stringent capital management, stating the goal is to drive it above mid-single-digit levels.

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    Robert Davies's questions to Fresenius Medical Care AG (FMS) leadership • Q4 2024

    Question

    Robert Davies from Morgan Stanley requested a breakdown of the additional FME25 savings and their phasing, and asked for more detail on the primary drivers of labor cost inflation.

    Answer

    CFO Martin Fischer detailed that the FME25 savings are driven primarily by a more efficient functional setup (50%), significant contributions from Care Enablement through manufacturing and logistics optimization, and a smaller portion from the Care Delivery clinic network. CEO Helen Giza explained the labor headwind assumes a net 3% wage increase, which reflects both managing wage inflation and having more employees as open positions have normalized, which is positive for operations.

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    Robert Davies's questions to Fresenius Medical Care AG (FMS) leadership • Q2 2024

    Question

    Robert Davies of Morgan Stanley questioned if the current excess mortality represents a 'new norm' and how that would affect medium-term profitability targets. He also asked if there were any noticeable market share shifts versus competitor DaVita over the last 6-12 months.

    Answer

    CEO Helen Giza stated she does not believe the current elevated mortality is a 'new norm,' but rather a function of a pronounced flu/COVID season, expecting the U.S. to normalize similar to Europe. She also pointed to the future mortality benefits of the 5008X machine. Giza declined to comment on competitors but acknowledged that Fresenius has internal operational improvements to make, which are now being addressed and showing early positive signs.

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    Robert Davies's questions to Koninklijke Philips NV (PHG) leadership

    Robert Davies's questions to Koninklijke Philips NV (PHG) leadership • Q1 2025

    Question

    Robert Davies asked for an update on the U.S. hospital CapEx environment and customer sentiment. He also inquired about the phasing of order book conversion through the year and whether the U.S. manufacturing expansion involves new sites or existing facilities.

    Answer

    CEO Roy Jakobs reported that underlying U.S. hospital demand remains strong, with customers investing to meet high patient volumes and seeking productivity partners, reflected in Philips' strong order intake. CFO Charlotte Hanneman noted order momentum is expected to continue into Q2 and the rest of the year. Jakobs added that U.S. manufacturing expansion will primarily leverage existing facilities for speed and lower cost, supplemented by investments in new expansions like in Minnesota.

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    Robert Davies's questions to Koninklijke Philips NV (PHG) leadership • Q4 2024

    Question

    Robert Davies requested more color on the Q4 margin dynamics in the Diagnosis & Treatment (D&T) segment and asked for details on the remaining restructuring costs through 2025, including any further headcount impact.

    Answer

    CFO Charlotte Hanneman explained that the D&T segment's Q4 margin stepped up by 160 basis points, driven by positive mix, productivity, and pricing, which offset the impact of lower sales in high-profitability China. Regarding restructuring, she stated that the company is diligently working to reduce these charges, which stem from both Respironics-related activities and ongoing business simplification efforts, including operating model and footprint changes that will involve some headcount reductions.

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    Robert Davies's questions to Koninklijke Philips NV (PHG) leadership • Q2 2024

    Question

    Robert Davies from Morgan Stanley inquired about the competitive environment in Diagnosis & Treatment in North America, the confidence in achieving the full-year free cash flow guidance, and the performance of the Personal Health business in North America.

    Answer

    CEO Roy Jakobs highlighted that in D&T, the interplay between software, AI, informatics, and the hardware portfolio is a key differentiator in North America. CFO Abhijit Bhattacharya expressed high confidence in the free cash flow guide, explaining that H1 was skewed by the timing of a settlement payment and an insurance receipt, and that Q4 is typically a very strong cash quarter. He also noted that in Personal Health, Philips appears to be gaining share in a solid, though not buoyant, North American market.

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