Zimmer Biomet Holdings Inc at JPMorgan Healthcare Conference Transcript

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

Question: Robert Marcus - JPMorgan - Analyst : I've been following Zimmer Biomet for a long time. And I would say that's the most robust product pipeline slide I've ever seen from the company. So maybe we could start there. Is this just a change in messaging? Or is this actually most robust pipeline that you've ever had? 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 14, 2025 / 4:15PM, ZBH.N - Zimmer Biomet Holdings Inc at JPMorgan Healthcare Conference

Question: Robert Marcus - JPMorgan - Analyst : Maybe just some housekeeping. There was an ERP implementation that didn't go to plan, brought down second half guidance in 2024. Where do you stand in that? And is that now fully resolved in 2025?

Question: Robert Marcus - JPMorgan - Analyst : If I'm doing my math right, that reduction in growth is actually a little less than the implied guidance. Is that saying that fourth quarter was better than expected or?

Question: Robert Marcus - JPMorgan - Analyst : Great. Maybe we could talk about volumes because it's one of the questions I get a lot from investors, where they're saying, when is this excess demand going to roll over, particularly in orthopedics, hip knee. If you take what should have happened during the pandemic and you see what actually happened, there's still in excess of procedures. But are you actually seeing pent-up demand? Or do you think this is just the new normal on a global basis?

Question: Robert Marcus - JPMorgan - Analyst : We could touch on pricing. That's also -- it's awkward to see a positive number in orthopedics after negative [2, 3] for such a long time. How durable do you think it is to have pricing or less negative pricing? Is this a durable phenomenon?

Question: Robert Marcus - JPMorgan - Analyst : How much of the equation is just pure price like-for-like and mix? If we look at the back to the product slide and the whole suite of new products coming, are those coming at higher prices, higher margins than you typically had before? Or is it actual flat like-for-like price?

Question: Robert Marcus - JPMorgan - Analyst : Maybe we could focus on the new products for 2025. Most of them, like you said, were launched in 2024. You typically do limited launches. So it's phased over a period of time. But it wasn't just hips. It wasn't knees. It was across almost every part of the portfolio. So maybe you could spend a minute on the impact, the most important and the ones you think investors might actually be able to see a tangible impact from 2025?

Question: Robert Marcus - JPMorgan - Analyst : Maybe we could touch on ROSA and robotics. Just simply as you're rolling out all of these cementless products, cementless has used a much higher rate with robotics. So where do you stand in terms of penetration of ROSA? Is it mostly in a hospital? Are you seeing adopted in the ASC? And any kind of metrics you could provide?

Question: Robert Marcus - JPMorgan - Analyst : Maybe we could touch on some financials for a minute. And maybe we could start with guidance. In 2024, let's say, the first half of the year was good, second half of the year had the issue. But throughout all of that, we didn't necessarily see raises to the guidance range. And I remember, at the conference last year, you said we're going to put out a great range, and we're going to do what we set out to do. Has this changed at all as we come into '25 guidance? I know you're not pre-announcing you're guiding here, but how are you approaching the initial guide?

Question: Robert Marcus - JPMorgan - Analyst : Investors love a beat and raise.

Question: Robert Marcus - JPMorgan - Analyst : Suky, the long-range plan you put out at the Analyst Day in the summer, I believe it was EPS leverage, at least 1.5 times top-line growth. Maybe just spend a minute on the drivers to get there. Is it gross margin? Is it operating expense? Is it a mixture of both? How do we get there?

Question: Robert Marcus - JPMorgan - Analyst : Currency after the election moved pretty meaningfully. That's not a Zimmer headwind. That's a multinational headwind. Is there any way investors

Question: Robert Marcus - JPMorgan - Analyst : I know you do natural and synthetic hedges. Is there any rule of thumb on what drops through to the bottom line typically?

Question: Robert Marcus - JPMorgan - Analyst : Ivan, over the past few years, I've heard you talk more and more about the ASC and how important that is. It's the fastest-growing site of care within orthopedics. How do you feel Zimmer is positioning in the ASC is? And how much more room is there for growth in the ASC setting?

Question: Robert Marcus - JPMorgan - Analyst : How do we think about the growth you're seeing in ASCs versus the in-hospital segment?

Question: Robert Marcus - JPMorgan - Analyst : Maybe we could touch on M&A. And I would say after the big Zimmer Biomet acquisition nearly a decade ago, we've seen several small tuck-in deals from Zimmer Biomet. Two parts, how are you thinking about M&A as a part of Zimmer Biomet going forward? And what does the market look like to you right now?

Question: Robert Marcus - JPMorgan - Analyst : Are you looking just product based? Or would you look for geographic expansion opportunities as well?

Question: Robert Marcus - JPMorgan - Analyst : Well, we're just about out of time here. So maybe that's a good point. We could wrap it up. Thank you very much for a great conversation. Thanks, everyone, for attending.