Zimmer Biomet (ZBH) Jefferies London Healthcare Conference 2024 summary

Company transformation and strategic focus

• Overcame post-merger challenges by shifting from size-driven to clinically focused strategy, emphasizing safety, efficiency, and outcomes.

• Streamlined operations, improved culture, and prioritized value creation, resulting in higher employee engagement and a stronger balance sheet.

• Committed to returning 65% of free cash flow to investors via dividends, buybacks, and strategic M&A.

Financial performance and guidance

• Achieved consistent revenue and EPS growth from 2021 to 2024, with 2024 guidance at 4.25%-4.75% ex-FX after ERP-related adjustments.

• LRP through 2027 targets 4%-6% ex-FX top-line growth, earnings growth at least 1.5x revenue, and free cash flow outpacing earnings by 100 bps.

• No expected ERP-related shipping interruptions in 2025; some headwinds and tailwinds anticipated due to product launches and case recovery.

Market trends and growth drivers

• Orthopedic end markets are experiencing durable 4%-4.5% growth, driven by ASC shift, innovation, sustainable pricing, and favorable demographics.

• ASC sales grew from 2% to 15% of total, with the company now leading in reconstructive ASC procedures in the U.S.

• Partnerships and expanded sales force support ASC growth, with no portfolio gaps in products, partnerships, or people.