Zimmer Biomet Holdings, Inc. · NYSE:ZBH
Zimmer Biomet — Q4 2017 Earnings Presentation
32 slides from Zimmer Biomet's earnings presentation, Jan 30, 2018
Slide 1: Zimmer Biomet 4th Quarter 2017 Earnings Call Presentation
Zimmer Biomet Holdings, Inc. 4th Quarter 2017 Earnings Call Presentation January 30, 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 • Our discussions during this presentation will include forward-looking statements concerning, among other things, our anticipated future operating and financial performance, business plans and prospects, product and serv
Slide 3: Table of Contents
Table of Contents 2017 Q4 Financial Summary 2018 Q1 Guidance & Outlook Company Overview Appendix 3
Slide 4: 2017 Q4 Financial Summary
2017 Q4 Financial Summary
Slide 5: 4th Quarter 2017 Net Sales Results
4th Quarter 2017 Net Sales Results Product Category Performance Q4 Q4 2017 Net Sales Constant Currency % Net Sales Constant Currency % Product (in millions) Change (3) (in millions) Change (3) Knees $731 -0.1% $2,737 -0.6% Hips 499 1.6% 1,879 0.6% S.E.T. 454 4.6% 1,709 4.0% Dental 108 -0.4% 419 -2.6
Slide 6: Knees & Hips Product Categories
Knees & Hips Product Categories Persona® Personalized Knee System KNEES Persona® Partial Knee System • Continued growth of Persona® The Personalized Knee System • The Persona® Partial Knee receiving positive feedback following H2 2017 global launch • Addition of cementless and revision systems to th
Slide 7: S.E.T. Product Category
S.E.T. Product Category S.E.T. GLOBAL REVENUE IntelliCart™ System • Continued market acceptance of the IntelliCart™ System SURGICAL • Strong demand for the VasoPress® Compression Therapy Pumps • Increased sales of our Universal Power System surgical instruments Gel-One® • Specialized sales represent
Slide 8: Spine, CMF & Thoracic and Dental Product Categories
Spine, CMF & Thoracic and Dental Product Categories SPINE & CMF GLOBAL REVENUE Mobi-C® Cervical Disc • Recent senior leadership changes • Strong demand for Mobi-C® Cervical Disc SPINE • Focused on resolution of U.S. salesforce integration dis-synergies • Future cross-sell opportunities expected to p
Slide 9: Innovative Solutions Across the Continuum of Care
Innovative Solutions Across the Continuum of Care Recently Launched Persona® Partial Knee (Introduced September 2017) • Fixed bearing partial knee • Clearance received in major markets across the globe Persona® Innovating to: Partial Knee System Minimize Complications Product Pipeline Reduce Surgery
Slide 10: Key 4th Quarter Financials
Key 4th Quarter Financials Metric (in millions) 2017 Q4 2016 Q4 Y/Y Change (1) Net Sales $2,074.3 $2,013.1 3.0% Adj. Gross Profit (2) 72.7% 74.6% - R&D (% of sales) 4.6% 4.8% - (3) SG&A (% of sales) 37.1% 37.6% - Adj. Operating Margin (2) 31.0% 32.3% - Adj. Net Earnings (2) $428.5 $434.1 -1.3% Adj.
Slide 11: Free Cash Flow
Free Cash Flow (in millions) 2017 2016 Inc/(Dec) vs PY Operating Cash Flow $1,582 $1,632 (50) CapEx Instruments (337) (345) Traditional PP&E (156) (185) Total CapEx (493) (530) (1) Free Cash Flow $1,089 $1,102 (13) Beginning Cash Balance (12/31/2016) $634 Ending Cash Balance (12/31/2017) $524 Beginn
Slide 12: 2018 Q1 Guidance and Outlook
2018 Q1 Guidance and Outlook
Slide 13: Q1 2018 Guidance
Q1 2018 Guidance Metric Q1 2018 (in millions, excluding EPS data) Constant Currency Revenue Growth (1) (4.0)% to (2.0)% Revenue $1,955 to $1,995 Free Cash Flow (2) $250 to $300 GAAP EPS $0.73 to $0.88 Adj. Diluted EPS (1) $1.84 to $1.91 (1) Non-GAAP financial measure; see reconciliation (2) Free cas
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: 6% share regenerative portfolio CMF: 15% share $4B MARKET 10% share Hip & Knee Global market share leader S.E.T. $14B MARKET Diverse and fast growing category Hip
Slide 16: Drivers of Sustainable Market Growth
Drivers of Sustainable Market Growth • Favorable global demographics − Increasing percentage of population 65 and older World Population 65 and Older 16.6% • Penetration opportunity in Source: United Nations Population Division ShareProcedure of World Volume 14.6% Growing global 1,562M developed mar
Slide 17: 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 18: Focus Areas to Improve Execution and Address Near-Term Challenges
Focus Areas to Improve Execution and Address Near-Term Challenges Execute Quality Remediation Enhance Commercial Execution • Significant investment in remediation • Embrace the commercial organization activities and enhance culture • Making progress toward key milestones • Resolve supply issues • Th
Slide 19: Global Footprint: Operating Locations
Global Footprint: Operating Locations Making a Global Impact In Patients’ Lives • 39 Manufacturing sites globally • Sales in 100+ countries 19
Slide 20: Appendix
Appendix (@ zimmer BIOMET
Slide 21: Reconciliation of Reported Net Sales % Change to Constant Currency % Change
Reconciliation of Reported Net Sales % Change to Constant Currency % Change and % Change (unaudited) For the Three Months Ended December 31, 2017 Foreign Constant Exchange Currency % Change Impact % Change Geographic Results Americas 0.9 % 0.1 % 0.8 % EMEA 6.4 6.7 (0.3) Asia Pacific 7.0 (0.2) 7.2 To
Slide 22: Reconciliation of Net Sales % Change, Year Ended 2017, Excluding LDR
Reconciliation of Reported Net Sales % Change to Constant Currency % Change and % Change Excluding LDR Holding Corporation (unaudited) For the Year Ended December 31, 2017 Foreign Constant Exchange Currency % Change Impact % Change Geographic Results Americas 1.3 % 0.1 % 1.2 % EMEA 0.9 0.7 0.2 Asia
Slide 23: Reconciliation of Cash Flow from Operating Activities to Free Cash Flow
Reconciliation of Cash Flow from Operating Activities to Free Cash Flow For the Quarterly and Year-to-Date Periods in Calendar Year Ending 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 Se
Slide 24: Reconciliation of Gross Profit & Margin to Adjusted (2017)
Reconciliation of Gross Profit & Margin to Adjusted Gross Profit & Margin For the Quarterly and Year-to-Date Periods in Calendar Year Ending 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
Slide 25: Reconciliation of Gross Profit & Margin to Adjusted (2016)
Reconciliation of Gross Profit & Margin to Adjusted Gross Profit & Margin For the Quarterly and Year-to-Date Periods in Calendar Year Ending December 31, 2016 (in millions, unaudited) Three Months Ended Three Months Ended Three Months Ended Three Months Ended Year Ended March 31, 2016 June 30, 2016
Slide 26: Reconciliation of Operating Profit & Margin to Adjusted (2017)
Reconciliation of Operating Profit & Margin to Adjusted Operating Profit & Margin For the Quarterly and Year-to-Date Periods in Calendar Year Ending December 31, 2017 (in millions, unaudited) Three Months Ended Three Months Ended Three Months Ended Three Months Ended Year Ended March 31, 2017 June 3
Slide 27: Reconciliation of Operating Profit & Margin to Adjusted (2016)
Reconciliation of Operating Profit & Margin to Adjusted Operating Profit & Margin For the Quarterly and Year-to-Date Periods in Calendar Year Ending December 31, 2016 (in millions, unaudited) Three Months Ended Three Months Ended Three Months Ended Three Months Ended Year Ended March 31, 2016 June 3
Slide 28: Reconciliation of Net Earnings to Adjusted Net Earnings
Reconciliation of Net Earnings to Adjusted Net Earnings FOR THE THREE MONTHS ENDED DECEMBER 31, 2017 and 2016 (in millions, unaudited) Three Months Ended December 31, 2017 2016 Net Earnings of Zimmer Biomet Holdings, Inc. $ 1,257.2 $ 69.6 Inventory step-up and other inventory and manufacturing-relat
Slide 29: Reconciliation of Diluted EPS to Adjusted EPS
Reconciliation of Diluted EPS to Adjusted EPS FOR THE THREE MONTHS ENDED DECEMBER 31, 2017 and 2016 (unaudited) Three Months Ended December 31, 2017 2016 Diluted EPS $ 6.16 $ 0.34 Inventory step-up and other inventory and manufacturing-related charges 0.13 0.55 Intangible asset amortization 0.74 0.7
Slide 30: Reconciliation of Q1 2018 Projected Revenue % Change to Constant Currency
Reconciliation of First Quarter 2018 Projected Revenue % Change to Projected Constant Currency % Change (unaudited) Projected Three Months Ended March 31, 2018: High Low Revenue % change 1.0 % (1.0) % Foreign exchange impact (3.0) (3.0) Constant currency % change (2.0) % (4.0) % 30
Slide 31: Reconciliation of Q1 2018 Projected Diluted EPS to Adjusted Diluted EPS
Reconciliation of First Quarter 2018 Projected Diluted EPS to Projected Adjusted Diluted EPS (unaudited) Projected Three Months Ended March 31, 2018: High Low Diluted EPS $ 0.88 $ 0.73 Inventory step-up and other inventory and manufacturing related charges, intangible asset amortization, special ite
Slide 32: @ ZIMMER BIOMET
@ ZIMMER BIOMET
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