Zimmer Biomet Holdings, Inc. · NYSE:ZBH
Zimmer Biomet — Q1 2018 Earnings Presentation
27 slides from Zimmer Biomet's earnings presentation, Apr 26, 2018
Slide 1: Zimmer Biomet Holdings, Inc. 1st Quarter 2018 Earnings Call Presentation
Zimmer Biomet Holdings, Inc. 1st Quarter 2018 Earnings Call Presentation April 26, 2018
Slide 2: Cautionary Note on Forward-Looking Statements and Non-GAAP Financial Measures
Cautionary Note on Forward-Looking Statements and Non- GAAP Financial Measures • Cautionary Note on Forward-Looking Statements. Our discussions during this presentation will include forward-looking statements concerning, among other things, our anticipated future operating and financial performance,
Slide 3: Table of Contents
Table of Contents 2018 Q1 Financial Summary 2018 Guidance & Outlook Company Overview Appendix 3
Slide 4: 2018 Q1 Financial Summary
2018 Q1 Financial Summary ZIMMER BIOMET
Slide 5: 1st Quarter 2018 Net Sales Results
1st Quarter 2018 Net Sales Results Product Category Performance Q1 Q1 Net Sales Constant Currency Product (in millions) (3) (1) % Change (1) (3) Knees $713 -2.1% Hips 492 -0.9% S.E.T. 443 1.1% Dental 108 -4.8% Spine & CMF 183 -3.8% Other 79 -4.0% Total $2,018 (1) -1.5% (2) Geographic Region Performa
Slide 6: Knees & Hips Product Categories
Knees & Hips Product Categories Persona® Q1 Personalized Knee System Revenue Constant Currency (in m illions) (1) % Change KNEES Americas EMEA $ 417 189 -2.7% -0.1% APAC 107 -3.0% Total Knees $ 713 -2.1% Persona® Partial Knee System • Strong growth from Persona® The Personalized Knee System • Contin
Slide 7: S.E.T. Product Category
S.E.T. Product Category Q1 Revenue Constant Currency S.E.T. GLOBAL REVENUE (in m illions) % Change (1) S.E.T. $443 1.1% IntelliCart™ System • Steady demand for wound debridement and skin graft portfolios SURGICAL • Strong growth for Universal Power System surgical instruments Gel-One® • Specialized
Slide 8: Spine, CMF & Thoracic and Dental Product Categories
Spine, CMF & Thoracic and Dental Product Categories Q1 SPINE & CMF Revenue Constant Currency (1) (in m illions) % Change GLOBAL REVENUE Spine & CMF $183 -3.8% Mobi-C® Cervical Disc • Growth of Vitality Spinal Fixation platform contributed to Q1 sales SPINE • Continued strong market acceptance of Mob
Slide 9: Innovative Solutions Across the Continuum of Care
Innovative Solutions Across the Continuum of Care Recently Launched Sidus® Stem-Free Shoulder (Introduced February 2018 - US) • Total shoulder arthroplasty solution • Available in EMEA since 2012, now available in US Innovating to: with recent FDA clearance and launch Sidus® • Second stemless should
Slide 10: Key 1st Quarter Financials
Key 1st Quarter Financials Metric 2018 Q1 2017 Q1 Y/Y Change ($ in millions, except per share amounts) Net Sales $2,017.6 $1,972.4 2.3%(1) Adj. Gross Profit Margin (2) 72.0% 75.2% - R&D (% of sales) 4.7% 4.6% - SG&A (% of sales) (3) 38.9% 38.4% - Adj. Operating Margin (2) 28.3% 32.1% - Adj. Net Earn
Slide 11: Free Cash Flow
Free Cash Flow (in millions) 2018 Q1 2017 Q1 Inc/(Dec) vs PY Operating Cash Flow $490.5 $275.4 215.1 CapEx Instruments (60.4) (86.4) Traditional PP&E (26.7) (43.1) Total CapEx 87.1 129.5 Free Cash Flow (1) $403.4 $145.9 257.5 Beginning Cash Balance (12/31/2017) $524 Ending Cash Balance (03/31/2018)
Slide 12: 2018 Guidance and Outlook
2018 Guidance and Outlook ZIMMER BIOMET
Slide 13: 2018 Guidance
2018 Guidance Projected Year Ending December 31, 2018 2018 Sales Growth vs Prior Year (1) 1.5% - 3.5% Adjusted Operating Profit Margin (2) 27.5% - 28.5% (2) Adjusted Tax Rate 18.5% - 19.5% (2) Adjusted Diluted EPS $7.60 - $7.80 Free Cash Flow (3) $1.1 billion - $1.3 billion (1) 2018 sales growth vs
Slide 14: Company Overview
Company Overview (@ ZIMMER BIOMET
Slide 15: Broad Portfolio of Musculoskeletal Solutions
Broad Portfolio of Musculoskeletal Solutions Spine & CMF Innovative products and solutions Dental $10B MARKET Complete implant and Spine: 7% share regenerative portfolio CMF: 15% share $5B MARKET 9% share Hip & Knee Global market share leader S.E.T. $14B MARKET Diverse and fast growing category Hip:
Slide 16: Broad Portfolio
Broad Portfolio Mobi-C® Osseotite® Quattro® Timberline® MPF Link Knotless Anchors Lateral Fusion System Comprehensive® Reverse Persona® Shoulder DVR® Crosslock Distal Personalized Knee System System Radius Plating System & ePAK® Delivery System New SternaLock Vanguard® ID Blu® Total Knee System G7®
Slide 17: Global Footprint: Operating Locations
Global Footprint: Operating Locations Making a Global Impact In Patients’ Lives • 39 Manufacturing sites globally • Sales in 100+ countries 17
Slide 18: Appendix
Appendix (@ ZIMMER BIOMET
Slide 19: Reconciliation of Reported Net Sales % Change to Constant Currency % Change
Reconciliation of Reported Net Sales % Change to Constant Currency % Change (unaudited) For the Three Months Ended March 31, 2018 Foreign Constant Exchange Currency % Change Impact % Change Geographic Results Americas (1.8) % 0.2 % (2.0) % EMEA 9.6 12.6 (3.0) Asia Pacific 8.2 5.6 2.6 Total 2.3 % 3.8
Slide 20: Reconciliation of Cash Flow from Operating Activities to Free Cash Flow
Reconciliation of Cash Flow from Operating Activities to Free Cash Flow For the Three Months Ended March 31, 2018 (in millions, unaudited) Three Months Ended March 31, 2018 Net cash provided by operating activities $ 490.5 Additions to instruments (60.4) Additions to other property, plant and equipm
Slide 21: Reconciliation of Gross Profit & Margin to Adjusted Gross Profit & Margin
Reconciliation of Gross Profit & Margin to Adjusted Gross Profit & Margin For the Three Months Ended March 31, 2018 (in millions, unaudited) Three Months Ended March 31, 2018 Net Sales $ 2,017.6 Cost of products sold, excluding intangible asset amortization 575.8 Intangible asset amortization 150.8
Slide 22: Reconciliation of Gross Profit & Margin to Adjusted Gross Profit & Margin
Reconciliation of Gross Profit & Margin to Adjusted Gross Profit & Margin For the Quarterly and Year-to-Date Periods in Calendar Year Ended December 31, 2017 (in millions, unaudited) Three Months Ended Three Months Ended Three Months Ended Three Months Ended Year Ended March 31, 2017 June 30, 2017 S
Slide 23: Reconciliation of Operating Profit & Margin to Adjusted Operating Profit & Margin
Reconciliation of Operating Profit & Margin to Adjusted Operating Profit & Margin For the Three Months Ended March 31, 2018 (in millions, unaudited) Three Months Ended March 31, 2018 Operating profit $ 305.0 Inventory step-up and other inventory and manufacturing related charges 10.8 Intangible asse
Slide 24: Reconciliation of Operating Profit & Margin to Adjusted Operating Profit & Margin
Reconciliation of Operating Profit & Margin to Adjusted Operating Profit & Margin For the Quarterly and Year-to-Date Periods in Calendar Year Ended December 31, 2017 (in millions, unaudited) Three Months Ended Three Months Ended Three Months Ended Three Months Ended Year Ended March 31, 2017 June 30
Slide 25: Reconciliation of Net Earnings to Adjusted Net Earnings
Reconciliation of Net Earnings to Adjusted Net Earnings FOR THE THREE MONTHS ENDED MARCH 31, 2018 and 2017 (in millions, unaudited) Three Months Ended March 31, 2018 2017 Net Earnings of Zimmer Biomet Holdings, Inc. $ 174.7 $ 299.4 Inventory step-up and other inventory and manufacturing-related char
Slide 26: Reconciliation of Diluted EPS to Adjusted Diluted EPS
Reconciliation of Diluted EPS to Adjusted Diluted EPS FOR THE THREE MONTHS ENDED MARCH 31, 2018 and 2017 (unaudited) Three Months Ended March 31, 2018 2017 Diluted EPS $ 0.85 $ 1.47 Inventory step-up and other inventory and manufacturing-related charges 0.05 0.11 Intangible asset amortization 0.74 0
Slide 27: @ ZIMMER BIOMET
@ ZIMMER BIOMET
Zimmer Biomet Holdings — Q1 2018 Earnings Presentation on 6ix