Enovis (ENOV) 2024 Wells Fargo Healthcare Conference summary

Market trends and outlook

• US procedural volumes have normalized post-COVID, with continued steady growth expected through 2024 and into 2025.

• International markets saw a tailwind in the first half of the year, but are expected to normalize in the second half.

• Backlog from the pandemic is largely being worked through, especially outside the US.

• Recon market growth is expected to return to pre-COVID levels, with enabling technology providing incremental benefits.

• GLP-1 drugs have not materially impacted procedure volumes, though healthier patients may provide a slight upside.

Financial guidance and performance

• Guidance for 2024 is 5%-6% growth, with acceleration expected in the second half as integration headwinds subside.

• Q3 is expected to be softer due to seasonality and the international mix from the Lima acquisition, with a stronger Q4 anticipated.

• High-end guidance depends on strong volume, successful cross-selling, and new product launches; low-end reflects ongoing integration challenges.

• Margins are expected to improve in 2024 and continue progressing in 2025, with Lima's accretive margins and synergy realization.

Pricing and segment performance

• Pricing in the prevention and recovery (P&R) segment is flat due to competitive pressures, after previous years of 1%-2% benefit.

• Recon segment faces about 1% price erosion, less than historical norms due to enabling technology and innovation.

• P&R business is stable, growing 3%-4% versus a 2%-3% market, and is a strong cash flow generator.