All right, we're going to get started here. Thanks a lot. I'm Robbie Marcus, MedTech Analyst at J.P. Morgan. Really happy to bring in our next session, Enovis. CEO Matt Trerotola will do a presentation followed by some Q&A after. Matt
All right, thanks a lot, Robbie. Thanks, everybody, for coming. It's great to be back here at JPMorgan, and the sun is shining for the first time since I've ever been coming here, so that's a good thing. I'm really glad to give you an update on our company. You can read the forward-looking statements. So, as Enovis, we're a MedTech growth company with a little over $2 billion in revenues, with our portfolio pretty evenly balanced between our high growth, high gross margin recon segment, and prevention and recovery, which is leading positions in bracing and recovery technologies. And we're also quite global. The majority of the revenue in the very large and attractive U.S. market, but then an attractive international position as well in attractive markets around the world.
You can see on the top of the page our most recent guidance, which we are reaffirming today and really also had a good, strong finish to the year. Expect to come in towards the upper end of both the growth as well as the adjusted EBIT that's shown here and was in our last guidance. Our strategy is really focused on aggressively growing and expanding our recon business organically and through acquisitions, and really shaping our P&R business for consistent growth and very strong cash flow. We do it through our focus on operational excellence, driving improvements throughout the business, continuous innovation, both traditional innovation, but also more and more digital innovation and technology innovation, and strategic acquisitions that accelerate our strategy and create strong contributions in shaping of the portfolio.
This is all underpinned by our EGX Enovis Growth Excellence Business System, a lean, continuous improvement business system that we use to drive improvements in all of our processes. A little bit of history. We were founded as Colfax by the Rales brothers, who founded the enormously successful Danaher Corporation about 10 or so years before they founded Colfax. I worked for Danaher for a good portion of my career. We spent about 25 years as a diversified industrial and really building a lean, continuous improvement culture into the system, developing our EGX business system, and also driving a compounding type of growth strategy in the business. Then over the past five years, we've transformed our portfolio and emerged as two standalone-focused companies. We spun out our fabrication technology business, ESAB, and they've had a very successful path.
And we are Enovis, a focused MedTech growth company focused in the orthopedics part of MedTech today, and we've got some great momentum building as a company. We've had some really strong performance since the separation into two public companies. Enovis has had some really strong performance. You can see that our organic growth was in the 6%-8% range for the first couple of years. Our margins have been continuously expanding, so really performing in kind of in line with our long-range objectives and goals. And then in 2024, we had a transformational acquisition. Lima added about $300 million of revenue to our recon portfolio. A lot of great strategic benefits that I'll talk about.
That led to a step change in the revenues, a step change in the EBITDA margins, and also had some in-year integration impacts that put a little bit of pressure on our organic growth as we were working through those last year. We've been very focused on shaping our company for higher organic growth, and this is something that we do organically through the areas that we focus and invest to grow, but also that we do inorganically through our acquisitions and through small divestitures or discontinuations of product lines. You can see very substantial effect that we've had over the past five years in terms of shaping the portfolio to have a much larger portion in high single-digit to low double-digit growth areas of our portfolio and a much smaller portion in the lower growth area.
What's really good about this as well is that all of the product lines that are shown in the high growth categories here have gross margins that are significantly higher than the ones in the low growth areas. There's a structural gross margin shaping that is going on as we execute the strategy as well. Acquisitions are a key part of how we grow and drive value, and you can see the significant impact that acquisitions have had on our company over the last five years here in the MedTech space. We've globalized our recon business through a couple of large acquisitions, most recently Lima that closed about a year ago.
We've built out a foot and ankle business that's about $100 million of revenue, growing well into the double digits, consistently grow above the market rates in that attractive market, and continue to have great opportunities to keep growing those businesses that we put together. We've done some key enabling tech acquisitions into our surgical business that have helped to build out a strong set of workflow solutions there, and in P&R, we acquired a high-growth laser business that is a double-digit grower, helping to shape that business in a positive direction, so this is something that's a capability that we've built over a long time. We're great at cultivating acquisitions, doing them well, and very importantly, executing the integration on the backside to make sure that the financial benefits come to fruition, but also that the strategic benefits come to pass over time as well.
We've been globalizing our company very thoughtfully. You can see the increase in the portion of the revenues that are outside of the U.S. at the company level. This has been mostly on the Recon expansion inorganically, but also in P&R, we've continued to expand organically to other attractive markets around the world. And so we've been expanding our revenue footprint, but we've also been focused on building regional supply chains that are low-cost supply chains to serve those regions with great customer focus, but then also globally optimizing those supply chains to really get the power of that combination of regional focus and global optimization. Something that's unique about us is the way that we play along the continuum of care in orthopedics. We've got strong positions both before, during, and after surgical procedures and injuries.
And that's something that historically has created strategic benefits in terms of contracting, leveraged brand awareness, collaboration with surgeons and distribution partners that might cut across these parts of the continuum of care. And those benefits are going to continue to be important on a go-forward basis, but also with the opportunity for digital patient recovery paths and the growth of ASCs, which tend to cut across multiple parts of this continuum of care. The strategic benefits of playing along this full continuum on a go-forward basis will be more significant, and we've got a focus on making sure that we get more and more benefit from this strong position along the orthopedic continuum of care. Our recon business is a little over $1 billion, and one of the things that's really great about this business is that about half of the business is in the high-growth extremities.
Extremities is a smaller part of the overall global orthopedics market, but it is the highest growth part. It grows high single digits, and we're in shoulder with a leading position there. We've got a strong position in foot and ankle that I talked about, and that shapes our Recon portfolio to be a very attractive portfolio. We've also got great positions in the very large hip and knee segments, and we grow very fast in those segments. We've got great technologies, very strong KOL network, and a very strong focused channel, and have been able to grow this business very fast over time and expect it to continue to be a strong growth engine for our company on a go-forward basis. As I mentioned earlier, we did a very large acquisition that closed just over a year ago of a company called Lima.
Added about $300 million in revenue into this recon portfolio, globalized the business further, brought some great technologies. Lima came in with an attractive mix in terms of being weighted towards extremities as well. And the first year of the acquisition has gone tremendously well. We've beat or exceeded our financial goals in terms of growth, revenue, margin performance, cost impact from synergies. We've held on to the great talent that came and great customers and channel partners around the world. And we've really gotten through the first year of the integration and the critical channel integration that's a part of that first year, as well as some of the organizational integrations that are part of that first year.
We got through that first year in great shape and with terrific plans and initiatives in place to get after the three-year opportunity in terms of significantly more cost over time, as well as cross-selling opportunities and the opportunity to leverage the combined technology portfolio we have in recon now for stronger and stronger innovation-driven growth over time. Our recon business has been a very fast grower, and this shows you some of the history here in terms of the strength of the growth of this business. These are organic growth numbers. For the shoulder and hip and knee business in the U.S., we've shown 10 years here, and we've put some of the historical Lima data in so you can see the business like if we owned all of it today.
You can see very strong, around about 15% growth, well above market in each of these anatomies over time. Then on the right, you can see that the foot and ankle and international, we've put these businesses together more recently, so we've just got a couple of years of growth, but a great start with each of those business portfolios as well. A lot of great products that underpin this great growth, as well as very great channel positions. You can see that for 2024, in shoulder, hip, and knee, things decelerate a little bit. That's one, the impact of the integration and some of the dyssynergy that we signaled when we announced the deal. We talked about some year-one dyssynergy as we put things together.
That was fully within the range that we guided, but it was a little bit of a tug on our growth in shoulder and hip and knee last year. We also were between some innovation cycles and a couple of product lines. We had a good, strong finish to the year with growth for the last two quarters of last year, more within our strategic growth guide range for recon, and so we're confident in our ability to get back to more normal growth for our recon segment here in 2025. So how have we been growing so strongly, and how will we continue to do it on a go-forward basis? It starts with powerful differentiated technologies.
We've got a knee and a shoulder and some key products in the ankle space that are really fundamentally differentiated, that provide better kinematics in terms of the patient's experience after the surgery and/or better surgical procedure outcomes, and those enable us to continuously take share as we introduce surgeons to those great technologies. We've then continually innovated around those technologies through additional implant solutions, but also now through enabling tech solutions, and I'll talk about some of the things that we've been doing there, and then we've got a terrific channel that is aligned and focused on success with us and that is focused on driving high growth, and so that's how we've grown the business historically, well into the double digits.
Going forward, we've got that same formula at work, but we also have cross-selling opportunities, initially cross-selling in the coming years, and then really cross-pollination opportunities in terms of bringing these technologies together in our innovation pipeline and bringing them to market over time. And so all of that is what's going to enable us to do high single-digit to low double-digit growth consistently in our Recon portfolio, supporting that high single-digit company organic growth. We're about $1 billion in a $23 billion industry that's got real healthy growth fundamentals, so plenty of runway for growth and more tools now to be able to apply, as well as more channel positions around the world to be able to get after more and more of this great growth opportunity.
This page provides just a little bit of the details behind how we're going to get at the growth over time in our Recon business. And you can see kind of each of the different pieces of the business and how much of the business they make up. And really just to focus on the bottom line here, the mix of our Recon business gives us a weighted average market growth rate of about 5%-6%. And this is about a point higher from what the kind of normal industry market growth rate would be and what kind of a larger player with a normal mix might have. So we start with a head start in terms of driving above market growth with that higher weighted average market growth rate from our mix.
And if we drove the kind of growth that we drove historically versus the market, we would have Recon growth well into the double digits. But we're conscious that we've got a $1 billion Recon business now that takes more revenue every year to get the growth. We've got also the shoulder industry is more competitive. Our products are still differentiated, but not by as wide a margin as they were in the past. And so we've been very thoughtful about our growth plans and goals going forward in terms of what performance versus the market is achievable in each of our anatomies in different places around the world. And you can see that that adds up to about one and a half to two times growth versus our historical growth of more than two times the market.
And will enable us in normal times to be in the high single- to double-digit growth range in our surgical business. We've been investing for that in terms of our channel and our instruments and our innovation engine, and we'll be executing against this over time. What's really great about the diversification that we now have in terms of anatomies and global is that there's a lot of optionality in terms of how we get to this growth in any given quarter or in any given year. And I think as an example, we're back in our strategic growth range in the back half of last year in Recon, but with hip in the U.S. still negative as we've had some pressure there from some key products that we'll be bringing out early this year.
So that just gives you an idea of the resilience that we don't have to have everything perfect in every part of the portfolio every quarter to have good, strong growth in our recon business that supports that high single-digit growth at the company level. And we'll be driving hard to try to figure out any quarter that we can be growing in the double digits by hitting on all cylinders everywhere in the business. And we'll do that. But in quarters where we're growing high single digits, we're still going to be able to get to that high single-digit company growth. Enabling tech is a key part of how we'll grow in the future in our recon business. This is a big part of where the industry is today and how we're going to be competing in the industry in the future.
This is really all about using technology to improve the workflow in the industry, whether it's the patient journey and the workflow of the patient through the industry or specifically the surgical workflow and what happens before, during, and after the surgery to make it as efficient as possible to get the best possible outcome and the best possible patient satisfaction from how that experience happens in the industry. We have led here in the past with our Match Point Planning System for shoulder, industry-leading Match Point Planning System for shoulder and 3D-printed patient-specific instruments to go with that. We've been leading in recent years bringing augmented reality to the industry through our ARVIS solution in knee and now in shoulder.
And we plan to continue to lead going forward by strengthening our position in multiple forms of navigation, not just ARVIS, but we've also launched a more traditional navigation system, 360 Nav, to make sure that we can address multiple segments in the market. And we've started to bring initial automation support, knee gap balancing. We'll be launching this year as a building on that core navigation with something that facilitates the surgical procedure. And we see plenty of opportunities to add additional execution functionality onto a very strong nav core. One of the things that is an attractive opportunity for us is getting at the post-operative workflow.
We've got Motion iQ as a solution that integrates into MotionMD and orthopedic clinics and really gives the surgeon the opportunity to monitor the recovery paths of the patients and make sure that those are as effective as possible in terms of leading to a great outcome and to learn from those recovery paths in a way that helps to improve the procedures and even over time the designs of the implants. We continue to invest in our enabling technologies and have some exciting things coming through in 2025. We are ramping our navigation. In 2024, we had a healthy ramp of our knee navigation in ARVIS and then the launch of our 360 Nav. We also had an initial launch of our ARVIS for shoulder.
Here in 2025, we'll continue to ramp in knee and have navigation play a more and more significant role, adding soft tissue balancing early in the year. We'll continue to roll out ARVIS in shoulder, continuing to do a controlled rollout, learning and improving as we go and continue to sustain that innovation leadership in the shoulder. As we get later in the year, we'll be globalizing ARVIS, which is something very important. We continue to invest in solutions that we can build on the navigation foundation that we are making stronger and stronger and bring more and more forms of surgical assistance to the surgeons in different segments of the market based on what their desires and needs are. Our P&R segment is global leader embracing and recovery technologies.
This is a segment that has a nice diversified set of growth drivers that lead to good, healthy, stable growth. And also, this is a set of businesses that have very healthy cash flow dynamics. And we're focused on driving continuous innovation in these businesses to have that healthy growth and strong cash flow. This page gives a little bit more details on our P&R strategic shaping that we're doing, both organic improvements in the business as well as acquisitions like Lima's that accelerate the growth of the business. We've built out with our EGX toolkit a very strong supply chain that supports great patient service here, our great customer service here, but also supports continuous improvements in our margins and our cash flows. And our healthcare solutions, our MotionMD software and the solutions that we wrap around that enable us to continuously take share in the U.S.
market for bracing and have a real stickiness in terms of how that share comes over and sticks. So wrapping up, our strategic long-range objectives are unchanged to drive high single-digit growth organically in the business, continually expand the margins of the business, and to climb over time up the cash conversion curve. And while we'll give our detailed guidance when we report Q4, we're giving directional guidance at this time that is consistent with our long-range plan of 6%-6.5% organic growth, 60-70 basis points of EBITDA expansion, and starting to drive up the curve on free cash flow. So we're very excited about the momentum stepping into 2025, and we'll share more about the fourth quarter as well as our guidance on our fourth quarter call. Thanks a lot. I think we're going to move to Q&A.
Ben Berry, our CFO, and Louie Vogt who heads up our Recon business. They're going to join us. Robbie, we'll jump in wherever you want to. Thank you.
Great. Thanks for that. Maybe we can kick it off. You talked about 2025 guidance, and we're skipping over fourth quarter here. Any qualitative comments you could provide on fourth quarter for us?
Yeah, I think, Robbie, qualitatively, we talked about when we guided the fourth quarter that we expected probably a little bit slower start in the U.S. with some of the disruptions that were going on at the time there, and then a healthy drive to the finish that would set up 2025 well. We talked about accelerating our overall global recon growth rate as well. And what we're sharing here today is that we're at the upper end of what we guided for the quarter. The U.S. market, I'd say, played out as we expected with November and December returning to much normal healthy growth rates and a good healthy finish. The outside of the U.S. markets actually picked back up a little bit. They've been a little bit slower in Q3. And the outside of the U.S. recon markets picked up down the stretch.
We're still expecting them to normalize a bit here in Q1, but we had a good strong finish there that supported the strong finish as well.
Great. Maybe before we jump into new products and the 2025 guidance, I want to kind of ask an intermediary question. I get a lot in orthopedics, especially, when's all the pent-up demand going to roll over and when are volumes going to drop off? And I say that a little facetiously because we're now several years after the pandemic and people are still asking the question. Rather, what are you seeing in the market in terms of, and I believe it's probably more a function of underlying volumes, but also pricing that's really driving what people are looking at, which is organic sales growth?
Yeah, I think we still see mathematically there's some demand that was missed through COVID that has never been recovered. And so we think the industry still got the potential for a little bit of tailwind over time. But we don't see the specific sort of piles of pent-up demand like certain countries that had six-month, 12-month patient backlogs. We don't really see that anymore. We see it's kind of a more normal environment. The U.S. last year had a little bit of pressure on it at certain places in the year from either the comps or from what was going on in the year. We expect the U.S. to be in a more normal zone this year, normal healthy zone. So we're planning for kind of a normal market year here in the U.S.
Outside the U.S., we expect things to be normal and healthy, but the first half of the year was so strong last year that we think sort of there's probably going to be some mathematical normalization of the growth rates that could happen outside the U.S.
What about on pricing? And how does that look between the two businesses for 2024 and what's factored in for 2025?
Yeah, so we have the recon business obviously went through a period where pricing went more flattish in the industry and for us. And we see that returning to a little bit of negative price in recon in the industry, whether it's kind of 1%-2% or 2%-3% that it was historically globally. We'll kind of see how that plays out. We're counting on a little bit of return to price down in the recon industry. P&R, we were planning for flat pricing. We had a couple of years of good healthy price recovery from all the inflation. We also built some great muscle to be able to get strategic price.
And so we think even with some of the things that tend to lead to some price pressure in P&R, we think there's enough good things to be able to offset that have more flatter price in P&R. So certainly across the whole business, we're always looking for ways to drive better mix, drive better price, and support our gross margin expansion. But that's what the picture's looking like right now.
Your company historically has always participated in, whether it's addition or subtraction of the portfolio. Lima was a big addition, really started in early 2024. You touched on this in the presentation, but where are you in terms of the integration process and how did it go versus your plan so far?
Yeah, I mean, so we're a little over a year in. We had spent several months preparing even before we closed, and so we hit the ground running at the close, had a terrific first year by all measures, and now really, I would say we're transitioning from the first year where there are a lot of things going on, a lot of fronts, very important ongoing integration, channel integration, getting the combined new product pipeline defined, et cetera. So a lot of things going on in the first year, and it's now really a pivot to, on the one hand, the execution embedding into the businesses, so getting after the cross-selling is just something that each of the businesses have in their plans and are now executing against.
And then some specific projects like the operational synergy projects that are all set up with steering and teams and plans that we'll be executing. So it's really a pivot to kind of normal execution and project-based execution of some of the multi-year aspects of that. Definitely significantly lower risk after we've come through the first year.
Ortho is always a really difficult industry to have integrations like that given how rep-intensive it is. Do you feel like all of the disruption, at least on the sell side, is now in the rearview?
Yeah, I really do. We came out and we were already starting to work on that late in 2023, kind of getting ready for it. And then we really came out and hit it hard in the first half of last year in the U.S. And by the time we got into the third quarter, we had kind of worked through that and signed up the reps that we were going to keep and kind of moved away from the reps that we were going to leave. And so from a U.S. standpoint, we step into the year having worked through all of that, all that work. Q2 was the peak of the impact last year. And so by the time we get to Q2, we'll be kind of hitting the peak again in the U.S. We'll be comparing to the peak.
I would say to be completely in the rearview mirror. Outside the U.S., we worked through all the direct stuff pretty quickly. Some of the markets where we were hybrid, direct in one business and distributing the other, took a little bit longer. Some of the final things were just getting put in place in Q4 and Q1. We can see that there's no big next wave of integration impacts that are going to hit us in 2025. We're confident in our guide and feel like we're just executing against the next year of the acquisition.
Maybe that's a good segue. We can jump into 2025. 6%-6.5% organic sales growth, I believe it's high single digit, Recon low single digit, P&R. That's kind of right down the middle of where street consensus numbers are, but it's a little lower than the long-range plan you put out on both different businesses. And I always appreciate conservatism early in the year, but maybe give us a little more color on why it's a little below the long-range plan and how you're thinking about it, just given the desire for investors to want to see positive estimate revisions through the year.
Yeah, well, so first of all, we have the opportunity to accelerate from last year to this year as we just get past the acquisition impacts, and so we're planning for that and we're committing to that. Certainly, there's a lot of things we're doing to keep working on improving the growth of the business, and in any given year, we're going to want to get a guide out there that we're comfortable with and that we can execute against and then do everything we can to exceed that guide as we work our way through the year.
Maybe if I think about just the high single versus low double digit on recon and low single versus low to mid on P&R, what are some of the factors driving those two growth rates versus long-range plan?
Yeah, so in P&R, I think we've been kind of three to four has always been where we are today, certainly working to try to shape that up to mid single over time. But three to four is where the business kind of has been and still is. And so the markets were a little bit tougher last year, and so there's an opportunity to come back up a little bit from that. But that's still very much the range where we are in P&R. In Recon, we've really just tried to, as I talked about in the presentation, now that we've got a $1 billion business and a lot more complexity there and different competitive dynamics in different places, we believe there's plenty of opportunity to grow that business double digits in certain quarters and certain years. We've done it before.
We're confident that we can do it at times again. But we feel like the right long-range commitment is to be high single- to low double-digit because sometimes the market growth might be a little bit less. Sometimes we might be kind of a little bit between innovation cycles in one or two businesses. And we can get to that high single-digit as a company with three- to four- in P&R and healthy high single- in Recon. And so we feel like it's important to have a long-range plan that has some optionality in it and that gives us the opportunity to consistently deliver and have opportunities to outperform.
I mean, obviously to grow in the high single digit range, you're taking share in Ortho as that's not where the growth rate is, even if you combine extremities into it. Where do you see the ability? Where are you taking share the most today, whether it's ASC and large joints or extremities or vice versa in hospital or all? And how do you feel about your ability to consistently take share over the coming years?
Yeah, so we have consistently taken share in the U.S. with our great shoulder product, AltiVate, and being able to keep introducing surgeons to that differentiated shoulder product and with our EMPOWR Knee that has better kinematics for the patient and introducing more and more surgeons. And we've brought those great solutions through a great channel, continuously innovated around that, and that's how we've taken share. The move to the ASC has helped us because it sets up well for us as a company and our simpler offerings and for our knee that is better for more active patients. And so that's been a good positive contributor as well. And then as we sell in with knee, we then get to sell the hip into surgeons. And so we've taken hip share as well.
And that kind of hip share gain sort of stalled because of some changes in the hip industry and what they look for and care about. And we've got some products that address that coming out here in the first half of this year. And so we'll be able to kind of get back to share gain in shoulder with great product, share gain in knee with a great product, and share gain in hip as we sell deeper and deeper into the knee folks that come over. And so that's how we've done it in the U.S. And we've continuously taken share over time. In hip and knee, we don't have to take all that much share to get our growth two times, three times the market. And so we're confident we can keep doing that.
In shoulder, as you can see, we tapered the expectations a little bit there to say, "Hey, you've been getting one and a half to two times market as a large player. We got to take a decent chunk of share," and we're confident we can keep doing that, and then outside the U.S., super hip product from Mathys, some great products that came with Lima, some super strong channels in different places, and now cross-selling on top of that. I think those are the ways that we'll take share out there.
You had a great slide with a number of new product launches in 2025. We all like to say, "How do these impact the financial model?" Are there any one or two that you think are more impactful to the models as you look to 2025 and 2026?
Yeah, Lou, why don't you talk a little bit about recon and some of the key things coming through there, yeah?
Sure, yeah. So I would say the biggest thing is in the shoulder portfolio. It's one of our biggest businesses. We're coming out with a product called the ARG, the AltiVate Reverse Revisable Glenoid. So it's a product that kind of bridges the primary shoulder to the revision shoulder world. It's been a gap in our portfolio for a few years now, and it really opens up the aperture to who we can talk to, what problems we can solve in terms of bone loss. So that's probably the biggest one. We started getting that out in Q4. It's had a big impact quickly, particularly towards the end of the quarter. So almost a full year of annualization left in 2025. We expect big things from that one.
We have a maturing tech foundation that Matt showed and some of the ingredients we need to continue to drive and get more penetration with tech. So very much looking forward to doing that, entering the shoulder space with tech with our proprietary AR and expanding globally. I think by the end of Q1, early Q2, we should be launching some of those technologies outside the United States. So that's exciting. Matt talked a little bit about the gaps in hips. We do have a couple of glaring gaps that have hurt us a lot on a big trend that seems to be very positive for patients. And by end of year, we should have that shored up as well. So a lot of good things pointing in the direction of getting the momentum back in hips and continuing to outperform the market in knee and shoulder.
If I shift to the P&L, 50-70 basis points of EBITDA growth in 2025, how do I think about the drivers, gross margin versus SG&A versus R&D to get there?
Yeah, I'd say that we continue to work the business to where we're going to get a positive mix from gross margin primarily. So as we continue to drive, and you saw, I think on one of the slides, our progress since the spin where we've continually been ticking up in terms of our margins primarily driven by gross margin, that will continue to be the key contributor. On top of that, we'll get another year of Lima synergies, which is going to help. That's more on the SG&A side. And then next year, we'll start to get more operational synergies from Lima as well, which will continue to help us on our margin expansion goals.
So it's really creating the right positive mix within the business, shaping both within the businesses themselves to positive mix that come with higher gross margins and then at the company mix level as well, getting Lima synergies and then just getting scale back off of scale as we continue to grow. Those are really the key components of our margin expansion. And we have a nice long runway of continuous margin expansion over time.
Below the line, you took on a decent amount of debt to acquire Lima. Where did you end 2024? And remind us of your targets moving forward and how that might impact interest expense in 2025.
Yeah, so we're about 3.5 times leverage right now. I'd say our goals are to be lower than that. But we also want to create the flexibility for the company to be able to continue to execute our strategy where there's technologies or bolt-on M&A that continue to help the business with regards to our strategic goals. So I think our view right now is that we'll continue to drive organic performance within the business and use the positive momentum there to pay down some of the debt and create more or reduced leverage levels that then open the aperture back up for us to think about what do we want to do next from an M&A standpoint. So we feel like we've got positive momentum there.
We were able to put some net investment hedges in as well to reduce the interest expense, which will give us some favorability as we roll into 2025, but overall, we're in a comfortable position to continue to execute against our strategy.
With the last minute, it's great to see positive free cash flow in 2025. Are you willing to put a timeline on when you'll return to the 70%-80% target you have in the long-range plan?
Yeah, I think you'll see us to have continued step-up improvement on free cash flow. We were currently in a heavy investment cycle with regards to bringing in Lima, continuing to get up the scale curve in terms of investing in growth of the business across the board and setting us up to be able to overperform the market. And then also we're still investing in EU MDR and things like that. So those are starting to step down, but it's going to take another year or two for them to really go back to more normalized levels. So I think you'll see a continuous improvement from us in terms of getting up that curve to the goal of the 70%-80% conversion over time.
Great. Well, we're out of time. Thank you very much. Thanks, everybody, for joining.
Thanks, everyone. Thanks, Robbie. All right, we're ready to go. Adam?
Good morning, everyone. My name's David Low. I cover healthcare for J.P. Morgan out of Australia. And with us today, I have the pleasure of introducing Adam Grossman, CEO of ADMA Biologics. Over to you, Adam. Sorry, excuse me. We'll get Adam to do a presentation, and then we'll go into Q&A for the second half. So I'll be looking forward to audience participation. Thanks, Adam.
Thank you, David. Good morning, everybody. And thank you to J.P. Morgan, to the analysts and banking team. Truly, it is an honor to be able to present. It's my first time presenting at the conference, so.