Zimmer Biomet Holdings Inc.

Overview Key strengths Key risks Leading market position in key product categories of hips and knees and considerable scale (2021 revenue of about $7.8 billion). Substantial revenue concentration in the hip and knee segments (57% of 2021 revenue, combined). Substantial intellectual property and high barriers to entry. Competition-driven pricing pressure and technological obsolescence risk. One of the strongest profitability profiles among rated medical devices peers, with EBITDA margins in the 29%-30% range. Periodic COVID-19 resurgences pressure elective procedure volumes. Zimmer reported 3.9% revenue growth in the first quarter of 2022, which was ahead of our expectations and reflected a strong recovery in elective procedure volumes in the second half of the quarter, with a particularly strong performance in its large

...Zimmer's performance in the first quarter of 2022 exceeded our expectations, reflecting a strong procedure volume recovery. However, we still project the COVID-19 pandemic and ongoing customer staffing shortages will remain as headwinds through 2022, leading to a slight revenue decline. Zimmer reported 3.9% revenue growth in the first quarter of 2022, which was ahead of our expectations and reflected a strong recovery in elective procedure volumes in the second half of the quarter, with a particularly strong performance in its large joint products. However, given that about 80% of Zimmer's revenue comes from elective procedures, we expect periodic resurgences in COVID-19 cases to negatively affect the company's operating performance in 2022. We also expect...

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