ResMed gains on 2030 strategy, 5-year financial outlook
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The news: ResMed shares rose on the ASX after the medical equipment maker unveiled its '2030 strategy' to drive growth, profitability and shareholder returns at its investor day in New York City.
The numbers: ResMed shares were up 2.3% to $35.78 by 1:20pm AEST, after climbing more than 40% since January.
The context: The new 2030 strategy comprises three pillars to drive growth:
- Grow and differentiate ResMed’s core sleep apnea franchise, led by demand generation and demand capture;
- Capitalise on ResMed’s market opportunity and brand advantage in broader sleep health and breathing health adjacencies; and
- Invest 7% of revenue into research and development, to invent, create, and differentiate a fully integrated digital ecosystem for health technology delivered at home.
Driven by the new strategy, dual-listed ResMed said it expects to help more than 500 million people worldwide achieve their full health potential in 2030.
The San Diego-based company also announced a five-year revenue and earnings growth outlook, including plans to "accelerate product and technology innovation, operational excellence, commercial execution, and financial strength".
ResMed said the new financial outlook comprises "high-single-digit revenue growth" and "earnings growth higher than revenue growth".
What they said: "Today, more than 2.3 billion people suffer from major sleep health and breathing issues, the vast majority of which are undiagnosed," ResMed chair and CEO Mick Farrell said.
"By building on our leadership in connected digital health, our 2030 Strategy will further enable us to transform sleep health, breathing health, and health tech at home through world-class products and digital solutions," he said.
On the five-year financial outlook, ResMed's chief financial officer Brett Sandercock said: "Since our last investor day in 2021, we have delivered on our commitments, and this new outlook reinforces that ResMed is well positioned to maintain its track record of strong financial performance".
"Our financial strength and low capital requirements create robust cash generation, and our capital allocation strategy will continue to prioritise innovation – through reinvestment in our core business, a disciplined and strategic approach to mergers and acquisitions, and a balanced capital return policy," he said.
The source: ResMed media release
