Zimmer Biomet Holdings, Inc. (ZBH) 2024 Q2 Earnings Call Summary
August 7, 2024 
Zimmer Biomet Holdings, Inc. (ZBH)
| Market Cap | 0.21T |
|---|---|
| Beta | |
| P/E | 39.75452774136047 |
| EPS | 12.247158441111395 |
| Dividend | 0 |
| Dividend Yield | 0.00% |
Optimistic Highlights
Strong Performance and Growth
Zimmer Biomet reported a 5.6% growth on a constant currency basis in Q2 2024, marking the 10th consecutive quarter of mid-single digit or above growth.
International Business Above Expectations
The company's international business delivered strong demand, particularly in key markets across both Recon and S.E.T. categories, contributing to diversified solid performance.
Advances in Hips Portfolio
Significant strides in the hips portfolio with 510(k) approval for Z1 or triple taper stem and partnerships to enhance navigation in hip arthroplasty, aiming to regain market share.
ROSA Technology Demand
Strong demand for ROSA, growing double-digit, and the introduction of ROSA Shoulder as a potential growth driver in 2025.
Financial Strength
Generated $2.01 of adjusted earnings per share in Q2, a growth of 10%, aligning with long-range plan targets.
Pessimistic Highlights
U.S. Market Weakness Early in Q2
Some weakness observed in the U.S. market early in the second quarter, attributed to high volume surgeons being out, supply constraints in knee platforms, and tough comparisons to previous year's growth.
Company Outlook
Confident in Full Year Guidance
Zimmer Biomet is confident in its full year guidance for 2024, expecting 5% to 6% constant currency revenue growth and $8.00 to $8.15 in adjusted earnings per share, despite facing currency headwinds.
Q & A Highlights
Q: Can you discuss the impact of the conversion to cementless and cementless robotic on the U.S. knee business? (David Roman, Goldman Sachs)
A: The U.S. knee business faced challenges in Q2, but these are solvable. Cementless adoption is tracking nicely, with expectations for accelerated adoption in the second half of 2024 and into 2025. (Ivan Tornos)
Q: How do you view the progress of the restructuring program and its impact on the P&L? (David Roman, Goldman Sachs)
A: The restructuring program is slightly ahead of schedule, contributing to operating margin expansion. Savings are being reinvested in R&D and commercial areas, aligning with the company's strategic priorities. (Suky Upadhyay)
Q: Could you provide more details on the expected progress in the hip segment and how it supports the overall strategy? (Matt Taylor, Jefferies)
A: Significant progress has been made in the hip segment with new product introductions. The acquisition of OrthoGrid and the development of ROSA Hip are expected to support share regaining and contribute to growth. (Ivan Tornos)
Q: Can you elaborate on the expected impact of new ROSA robots over the next few years? (Joanne Wuensch, Citi)
A: Several new ROSA modalities are planned for launch over the next four to eight quarters, including posterior applications for hips and a CT scan-based system for knees, expected to drive continued growth in enabling technologies. (Ivan Tornos)
Q: How do you see the OrthoGrid acquisition fitting into your strategy for hips and potentially other areas? (Drew Ranieri, Morgan Stanley)
A: The OrthoGrid acquisition provides optionality with three different forms of navigation, complementing ROSA Hip and supporting the strategy to regain market share in hips. (Ivan Tornos)