Zimmer Biomet Holdings, Inc. · NYSE:ZBH
Zimmer Biomet — Zimmer Holdings — Merrill Lynch Conference (February 2004)
33 slides from Zimmer Biomet's conference presentation, Feb 4, 2004
Slide 1: Merrill Lynch Conference
Merrill Lynch Conference Merrill Lynch Conference Merrill Lynch Conference Ray Elliott Chairman, President and CEO Zimmer Holdings, Inc. Zimmer Holdings, Inc.
Slide 2: Disclaimer
Disclaimer Zimmer has filed a registration statement, including a proxy statement/prospectus and other relevant materials with the SEC, for the issuance of its shares in connection with the proposed acquisition of Implex. Shareholders of Implex are urged to read the relevant materials when they beco
Slide 3: Today's Presentation
Today's Presentation 1. Strategic Direction Innovation and Education Investment and Expansion 2. Centerpulse Integration
Slide 4: Zimmer Growth Goals 1998-2003
New Markets Spine, Sports Med, Pain Mgmt. and IGS New Products "New Patient" Strategies New Geographies Europe Zimmer Growth Goals 1998-2003
Slide 5: But the 2004-2006 Strategies Reflect Fine-Tuning
But the 2004-2006 Strategies Reflect Fine-Tuning New Geographies New Products New Markets Become Innovation & Education Investment & Expansion Innovation & Education Integration
Slide 6: And the Tactics Too Are More Targeted
And the Tactics Too Are More Targeted Innovation & Education Investment & Expansion Integration But always dedicated to sales and cashflow excellence. New Patient's Continuum of Care MIS Zimmer Institute Spine Orthobiologics Centerpulse Implex
Slide 7: Zimmer Innovation and Education Review
Innovation & Education Investment & Expansion Integration New Patient's Continuum of Care MIS Zimmer Institute Spine Orthobiologics Centerpulse Implex Zimmer Innovation and Education Review
Slide 8: Hip Innovation and Education Focus on the New Patient's Continuum of Care
Hip Innovation and Education Focus on the New Patient's Continuum of Care Innovative, new technologies MIS Implants and Techniques Hip Resurfacing Trabecular Metal, EPOCH Alternate Bearing Computer Assisted Surgery DTC with the surgeon TV, Radio and Magazines pacewithlife.com Public Forums and MLC P
Slide 9: Knee Innovation and Education Focus on the New Patient's Continuum of Care
Knee Innovation and Education Focus on the New Patient's Continuum of Care Innovative, new technologies MIS Implants and Techniques Focus on Interpositional, CR, Revision, and MB Trabecular Metal New Polyethylene Computer Assisted Surgery Cartilage and Meniscus DTC with the surgeon TV, Radio and Mag
Slide 10: 2-Incision Hip for 2004
2-Incision Hip for 2004 2-Incision Hip for 2004 First live I-G surgery Patents issuance Procedure tracking EVA beta-site analysis Outcomes publishing Actions
Slide 11: Potentially Five More MIS 2-Incision Patents
Potentially Five More MIS 2-Incision Patents MIS(tm) 2-Incision Hip MIS(tm) 2-Incision Hip MIS(tm) 2-Incision Hip TITLE NUMBER OF CLAIMS STATUS Lit Anterior Retractor 28 Pending Ligametum Teres Femoris Cutter 42 Pending Method and Apparatus for Performing Total Hip Arthroplasty (broad technique) 17
Slide 12: The Sad Story of Hip Fixation
The Sad Story of Hip Fixation 4% of patients die during initial hospitalization 25% of patients die within one year of surgery 40% of patients require long- term care 50% of patients never walk unassisted 90% of hip fractures are associated with osteoporosis Source: AAOS, "Hip fracture epidemic requ
Slide 13: Zimmer's Transformational MIS Hip Fixation
Zimmer's Transformational MIS Hip Fixation First patient surgery trial - March 2004, Australia
Slide 14: Potentially Five More "T2" MIS Hip Fracture Patents
Potentially Five More "T2" MIS Hip Fracture Patents Hip Fracture Transformation Technologies Hip Fracture Transformation Technologies Hip Fracture Transformation Technologies TITLE NUMBER OF CLAIMS STATUS Contoured Polymer Filled Implant 13 Issued Polymer Filled Hip Fracture Fixation Device 9 Issued
Slide 15: Zimmer MIS "Quad-Sparing" Total Knee
Zimmer MIS "Quad-Sparing(tm)" Total Knee Zimmer MIS "Quad-Sparing(tm)" Total Knee Mini Medial Parapatellar 9-14 cm 2- 4 cm Quad Snip Standard Knee 20-30 cm Quad incision Mini Sub- Vastus 9-12 cm No Quad Snip Zimmer MIS Quad Sparing(tm) 7-10 cm No Quad Snip Release at AAOS, March 2004
Slide 16: Potentially Seven MIS Knee Patents
Potentially Seven MIS Knee Patents MIS Knee MIS Knee MIS Knee TITLE NUMBER OF CLAIMS STATUS Minimally Invasive Total Knee Arthroplasty Method & Instrumentation 47 Pending Knee Arthroplasty Prosthesis & Method 62 Pending Patella Resection Guide 36 Pending Femoral Saw Guide & Method 47 Pending Minimal
Slide 17: Zimmer MIS Requires World Class Education
Zimmer MIS Requires World Class Education 2003 Total Surgeons Trained in Zimmer MIS Institutes MIS 2-Incision MIS "Mini" Hip MIS "Mini" Knee All Other TOTAL 493 1162 1030 687 3372
Slide 18: Zimmer Investment and Expansion Review
Innovation & Education Investment & Expansion Integration New Patient's Continuum of Care MIS Zimmer Institute Spine Orthobiologics Centerpulse Implex Zimmer Investment and Expansion Review
Slide 19: Zimmer Spine Will Be a Primary Investment
Integrate Trabecular Metal spine Leverage MIS programs Optimize salesforce leverage Merge disc / nucleus discovery Invest in targeted biologics Expand Non-Fusion Zimmer Spine Will Be a Primary Investment North America Europe Japan Growth Strategies GeoMix
Slide 20: Zimmer Dental Will Provide Diversification
Zimmer Dental Will Provide Diversification Attractive Market Growth Rate 12-15% Low implant penetration rates Potential positive reimbursement Drive demand with DTC Utilize Zimmer R&D critical mass Transfer "Recon" technologies
Slide 21: Zimmer Orthobiologics Targets the Future
Cartilage and Soft Tissue Complement to ISTO Program Leverage ReGen/CMI opportunity Launch Permacol(tm) rotator cuff patch Awarded $2MM State of Indiana grant Bone Graft Distribution of Allograft (Tutogen) Distribution License for Structural Acquire Human Growth Factor tech Zimmer Orthobiologics Tar
Slide 22: The "New" Zimmer R&D Investment Focus
The "New" Zimmer R&D Investment Focus New Zimmer Orthobiologics group Trabecular Metal applications "MIS friendly", conservative implants Transformational hip fracture/spine Creation of "Lifestyle Designs" Image Guidance integration Unique alternate bearings Unique alternate bearings Unique alternat
Slide 23: Centerpulse Integration Review
Innovation & Education Investment & Expansion Integration New Patient's Continuum of Care MIS Zimmer Institute Spine Orthobiologics Centerpulse Implex Centerpulse Integration Review
Slide 24: Perfect Fit
Perfect Fit = + Our Deal Remains . . .
Slide 25: Premier, Innovative, Global Orthopaedics Company
Premier, Innovative, Global Orthopaedics Company Leading Technology MIS Alternate Materials CAS Biologics Disc / Nucleus Leading Scale 100,000+ SKUs 2,000+ sales people 1,000,000+ ft2 mfg 1,000+ patents 100,000+ outcomes Leading Positions #1 Reconstructive #1 Hips #1 Knees #1 Europe #1 US & Japan An
Slide 26: And With the Right Outcome
And With the Right Outcome . . . JNJ Stryker Zimmer Biomet Centerpulse Smith & Nephew Wright Exactech Other Market Share 23.2 21.4 30 11.4 0.103 7.7 2.6 0.8 3.8 The $6.4 Billion Reconstructive market growing at 13%
Slide 27: Where Are We in the Process?
Where Are We in the Process? ae [Team process [Trainteam leads ontracking provesstemplates Zen | Mo integration sub-team tracking training) Geb _| Team leads [Tracking templates completed byteams E-feb | Teamleads [Financial activities [One-time sass reconciliation en | __ Wo lHRbaseline andiesues [
Slide 28: Centerpulse Salesforce Integration Update
Centerpulse Salesforce Integration Update US Sales Force Distributor negotiations & re-alignments complete Inventory & asset verifications in progress Combined sales force effective January 1st, 2004 Single billing system to go live April 1st, 2004 1,000 attendees to first National Sales Meeting Pro
Slide 29: Centerpulse Distributor Status
Centerpulse Distributor Status Successful completion* Completion is unlikely IMPLANT SOLUTIONS INTERWEST ORTHOPEDICS PROJOINT MEDICAL ORTHO SOURCE H & H GREAT LAKES INNOVATIVE CSA Z-CAROLINA JET STREAM ADVANCED ORTHOPEDICS INLAND ZIMMER ROCKY MTN. CAROLINA SURGICAL WILKINS MEDICAL PRECISION JOINT VE
Slide 30: Targeted Synergies - $'s and Timing
Targeted Synergies - $'s and Timing 2004 2005 2006 2007 2008 Sales Dis-Synergies $ (50) $ (25) - - - Op Profit from Sales Dis-Synergies (20) (10) - - - Expense synergies: COGS 2 8 30 30 30 R&D 6 15 15 15 15 Selling 2 5 5 5 5 Marketing and Distribution 3 15 15 15 15 G & A 8 23 25 25 25 Total Expense
Slide 31: Implex Trabecular Metal Integration
Implex Trabecular Metal(tm) Integration "Best Thing Next to Bone" 7 new development projects Recon, Spine and Sports Med Acquiring 100% of Implex stock Anticipated close Qtr. 1, 2004 (r)
Slide 32: The Scoreboard
Zimmer (+162.46%) S&P HC Equipment & Supplies (+36.18%) S&P 500 (4.40%) Peer Index (+51.51%) (BMET, SNN & SYK) The Scoreboard
Slide 33: Thank You
Thank You Thank You
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