Pulse of the industry - medical technology report 2012

Financial performance remains strong amid uncertainty

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US and European publicly held medtech companies delivered another strong performance in 2011.

European med tech growth outperformed the US across the majority of financial indicators.

For both conglomerates and pure-play companies, revenue growth in 2011 outpaced 2010 growth rates. Net income increased by 14% — the third consecutive year of double digit growth, and certainly impressive in today's challenging economic climate. The industry's financial performance will likely continue to be challenged by low economic growth in developed markets, the prospect of austerity measures in many countries, a looming Eurozone debt crisis and an imminent 2.3% medical device tax in the US.

Medical technology at a glance, 2010-11

United States shows med tech growth

For the second consecutive year, US public medtechs produced positive growth across the majority of financial indicators, albeit at a lower rate than the prior year.

Overall US revenues rose 4% in 2011, versus 6% in 2010, and were led by conglomerates that produced a growth rate of 7%. Prior to the economic downturn that began in 2008, the US medtech industry would typically generate double-digit top-line growth rates.

However, since the recession, single-digit growth has become the norm as the industry continues to grapple with the mounting financial pressures of payers and considerable regulatory uncertainties.

See more of our US findings at www.ey.com/MedTechData.

Europe's med tech growth stronger than US growth 

In general, the European medtech industry grew at a higher rate in 2011 than in 2010. European growth also outperformed the US across the majority of financial indicators.

Top-line growth in Europe was up 8% to nearly US$127 billion in 2011 (compared to 7% in 2010) and was equally driven by both pure-play and conglomerate companies.

While 83% of all European medtechs increased their revenues last year, the top line was principally bolstered by commercial leaders and conglomerates such as Covidien (which is incorporated in Ireland), Siemens and Roche, as well as pure-play firms such as Sonova (+27%) and Amplifon (+22%).

With 77% of companies increasing their R&D spending, R&D bounced back from a 4% drop in 2010 to a 12% increase in 2011.

See more of our Europe findings at www.ey.com/MedTechData.

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