Zimmer Biomet Holdings Inc at JPMorgan Healthcare Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Robert Justin Marcus - JPMorgan Chase & Co, Research Division - Analyst : But Bryan, Suky maybe to kick it off, Bryan, you've been at Zimmer Biomet for 4 years now. You've undergone this really big transformation process. Where do you sit now in the total process for Zimmer Biomet?

Question: Robert Justin Marcus - JPMorgan Chase & Co, Research Division - Analyst : Great. And Bryan, did that transformation process continue in 2021? Maybe spend a minute about how Zimmer Biomet navigated last year.

Question: Robert Justin Marcus - JPMorgan Chase & Co, Research Division - Analyst : And Bryan, let's shift that focus forward into 2022 and beyond. How should investors think about Zimmer Biomet's long-term growth? Maybe how are you differentiated and positioned to compete versus peers, especially in what's appearing to be a new normal environment?

Question: Robert Justin Marcus - JPMorgan Chase & Co, Research Division - Analyst : Great. Maybe we could shift focus a little bit here. you haven't preannounced sales, so I won't put this on you, but any kind of high-level comments you could give on fourth quarter, especially just given all the ups and downs that took everyone by surprise at different points?

Question: Robert Justin Marcus - JPMorgan Chase & Co, Research Division - Analyst : I'll say, I don't envy you having to be in the position to give guidance. It's challenging to predict the next quarter, let alone a whole year. So kudos to you. Bryan, something you used to talk about was a potential backlog and procedure recapture. And I know that's become very tricky in this market and -- is that still a potential opportunity once staffing shortages, simmer out, and we do get into my view is, hopefully, the antivirals can help keep unvaccinated patients out of the hospital later this year. Is there still an opportunity for this backlog? Or should we put that out of our minds for now?

Question: Robert Justin Marcus - JPMorgan Chase & Co, Research Division - Analyst : What is the -- I imagine the U.S. system is different than outside the U.S. But what do you see is the U.S. and outside U.S. capacity to flex up? Are we talking 5%, 10% of extra volumes? Or is -- can some number higher than that realistically happen?

Question: Robert Justin Marcus - JPMorgan Chase & Co, Research Division - Analyst : So there's a lot on the pipeline side I want to get to. But I would say most of my investor conversations have been focused more down the P&L. So I want to spend some time there first, and we'll definitely get back to some of the interesting pipeline products and revenue drivers. But maybe to start, something that's been coming more front of mind are inflationary pressures, both on the cost of good lines and also on the OpEx lines, especially as we came into the end of 2021. So maybe talk about how those are progressing and how we should, from a high level, think about those heading into next year, realizing that there's no formal guidance yet?

Question: Robert Justin Marcus - JPMorgan Chase & Co, Research Division - Analyst : So maybe we could take that to my next question, which is touching on some of the margin expansion targets you've put out there. You have a focus on improving top line growth and reaching margin expansion at greater than 30% or 30% or greater at some point during 2023, I believe. The latest commentary is on RemainCo. And I'm just going to stay away from RemainCo and ZimVie because of my restriction through research. But maybe just on that margin expansion comment, walk us through the ways you get there. What do you need to deliver on the top line? And how confident are you on the leverage assumptions that you can get there in this new normal? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JANUARY 10, 2022 / 8:00PM, ZBH.N - Zimmer Biomet Holdings Inc at JPMorgan Healthcare Conference

Question: Robert Justin Marcus - JPMorgan Chase & Co, Research Division - Analyst : Okay. Maybe shifting gears because I would tell you, I think -- and Bryan, you've been saying this since you first came on, and investors would probably back me up here, but I think everybody wants to see the focus on the top line. And so there's a lot of interesting and exciting drivers here. And I want to go through and give them each their due. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JANUARY 10, 2022 / 8:00PM, ZBH.N - Zimmer Biomet Holdings Inc at JPMorgan Healthcare Conference First on iQ, I want to start off here. This, to me, has the potential to really move markets in the future. I can see this being a go-to type of innovation that can shift share in a fairly meaningful way. But the -- it seems to me more like there's more work to be done before you get to that level of confidence in the product. Am I wrong on that? Or how are you thinking about it as it impacts your revenue growth over the next, let's call it, 1 to 3 years?

Question: Robert Justin Marcus - JPMorgan Chase & Co, Research Division - Analyst : So Bryan, how do we think about when we might see that rounded data collection that you can submit for -- or Canary would be able to submit to the FDA with a label for being able to predict whether it's infection or poor healing or whatever outcomes they're able to show? How long should we think between now and then when you can really put a claim on it?

Question: Robert Justin Marcus - JPMorgan Chase & Co, Research Division - Analyst : And given there's a fixed reimbursement, do you think within the existing DRG codes and outpatient reimbursement for knee surgery that this type of technology at a price premium would be accepted? Or do you think you need differentiated reimbursement for something like this? And is that likely with the claim? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JANUARY 10, 2022 / 8:00PM, ZBH.N - Zimmer Biomet Holdings Inc at JPMorgan Healthcare Conference

Question: Robert Justin Marcus - JPMorgan Chase & Co, Research Division - Analyst : Got it. Maybe shifting gears a little bit. Usually, we lead with ROSA, but I thought I'd save the best for last. You now have hundreds of robots around the world. I was wondering if you could give us just any high-level thoughts on how you closed out the year with placements versus expectations and how the environment remains on a global level for ROSA heading into 2022?

Question: Robert Justin Marcus - JPMorgan Chase & Co, Research Division - Analyst : I got to see a little bit of ZBEdge at the AOS conference, and it really is integrating the entire platform. Are there any areas that you think Zimmer Biomet needs to add to the platform to be a little more competitive? I'm not saying you are, I'm just asking, is there -- are there any gaps in the portfolio that you think need to be filled, whether it's more on the capital side or a device side?

Question: Robert Justin Marcus - JPMorgan Chase & Co, Research Division - Analyst : So as I think about the entire product portfolio, there's clearly preoperative planning along with ROSA. Where can I expect to see some of the biggest improvements in the ZBEdge ecosystem, whether it's pre or post or even well post and follow-up? Where can I think of some of the biggest improvements in the ZBEdge platform on a tangible basis?

Question: Robert Justin Marcus - JPMorgan Chase & Co, Research Division - Analyst : I would not want to see the mymobility data on me today. It's just lots of sitting. Bryan, I want to ask one more question, then there's a couple of questions that came in I want to make sure I get to. But how do I think about you have these -- all these ROSA robots around the world. Any sort of utilization data or what percentage of total knee surgeries across Zimmer Biomet at a center with ROSA that are being done on it that you can share with us?

Question: Robert Justin Marcus - JPMorgan Chase & Co, Research Division - Analyst : Got it. One question that came in, you touched on this a little bit, but is Omicron so far worse, better or the same as Delta was on orthopedic surgeries?

Question: Robert Justin Marcus - JPMorgan Chase & Co, Research Division - Analyst : Got it. Probably last question before we're going to run out of time. Bryan, there's been an undeniable shift into the ASC setting that's been accelerated with COVID. How do you feel about Zimmer Biomet's competitiveness in the ASC environment?

Question: Robert Justin Marcus - JPMorgan Chase & Co, Research Division - Analyst : All right. Well, unfortunately, we're out of time. I really appreciate the conversation, the insight and hope you have a great rest of the day.