Dear shareholders,


We had an excellent year in 2019, as we reached 40 consecutive years of sales growth and recorded our seventh consecutive year of accelerated organic sales growth. We also posted strong adjusted net earnings per share and continued to execute on our strategy of customer focus, innovation, globalization and cost transformation. 

Culture and leadership

The bedrock of our company is our mission — Together with our customers, we are driven to make healthcare better — and values: Integrity, Accountability, People and Performance. We hire people who are driven, team-oriented and humble. We continue to be regarded as a great place to work and are honored by the accolades that reflect our inclusive culture. We’re pleased to have been rated #1 best workplace for diversity in the U.S. by Fortune and Great Place to Work. 

We will have one change to our Board of Directors as Louise Francesconi has announced that she will not stand for re‑election in May 2020. Louise has made strong contributions during her 14 years on our Board and we thank her for her dedicated service. 

Financial performance

Our U.S. and international organic sales growth were both 8.1 percent, with strong international performances in emerging markets and Europe. Reported sales growth was 9.4 percent, including 2.6 percent growth from acquisitions and 9.0 percent growth from increased unit volume, which was partially offset by a 1.3 percent impact from foreign exchange and a 0.9 percent impact from lower prices.

Our cash position remains strong with a year-end cash and marketable securities position of $4.4 billion, enabling us to increase our dividend rate by 10.6 percent for the January 2020 payment. Our reported net earnings decreased 41.4 percent, largely due to tax benefits in 2018, and our adjusted net earnings grew by 13.0 percent.



“We had an excellent year in 2019, as we reached 40
consecutive years of sales growth.”

— Kevin Lobo Chairman and Chief Executive Officer

History of net sales growth


Straight years of sales growth


CAGR in net sales over 40-year period



We continue to drive innovation through R&D and acquisitions with a steady stream of new product introductions and closed several deals in the year. In addition, we signed a definitive agreement to acquire Wright Medical for approximately $5.4 billion (including convertible debt), which is expected to close in the second half of 2020. This acquisition should add nearly $1 billion of revenue to our fast-growing Trauma & Extremities business. 

Cost transformation

We remain committed to systematically reducing costs to enable growth. We were pleased to deliver 40 basis points of adjusted operating margin expansion in 2019 despite significant dilution from acquisitions. We successfully implemented a large-scale enterprise resource planning (ERP) deployment at our Instruments division and are on track to roll it out to our other businesses across the world over the next few years. We also made significant progress with our finance shared services, including starting up a center in Costa Rica, and continued to drive improvements within our supply chain. 


We are working to improve healthcare responsibly and sustainably because we believe the health of the world is as important as the people who live in it. Our activities and progress are outlined in our Corporate Responsibility Review, which is available on our website. We are committed to delivering positive results for our employees, customers, communities and the planet. 

Reflecting on our 2019 accomplishments, I would like to thank our management teams, our Board of Directors and our roughly 40,000 employees worldwide who live our mission and values every day. Our strategy, people and culture will enable us to continue to deliver strong performance in the years ahead.



Kevin A. Lobo
Chairman and
Chief Executive Officer


Download the 2019 Annual Review PDF