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Zimmer Biomet reported 1Q20 orthopedic revenue of USD $1,602.4 million, -9.2% vs. 1Q19. Procedure and capital purchase deferrals due to COVID-19 significantly impacted the company’s results, with revenue down -60% in the last two weeks of March. ROSA contributed little to sales in the quarter, as system sales are generally weighted heavily toward the U.S. and quarter-end. Overall revenue decline in April approached -70% with the most severe drops in the Americas and EMEA, but offset somewhat by improving volumes in China. Assuming no significant recurrences of COVID, Zimmer Biomet expects sequential improvement monthly through the third and fourth quarters.
The company has $1.3 billion of immediately liquidity available in combined cash and credit facilities. Cost containment measures include modulating schedules and hours at manufacturing facilities, temporary 20% base pay reductions for all salaried employees, 25% pay reductions for the executive team as well as 100% pay reductions for board members and CEO Bryan Hanson. Zimmer Biomet is committed to continuing investment to high priority R&D and commercial projects.
“We look at ROSA and other robotics-related initiatives as key priorities. Our investment, if anything, will accelerate right now and certainly focus on these projects. We’re going to continue to build out our dedicated specialty sales teams and other high-value commercial programs. These things will not stop during this time.” – Bryan Hanson, Zimmer Biomet President, CEO and Director
Revenue Data
All revenue data is provided in USD millions unless otherwise noted. Sales and growth rates are estimated on an as-reported basis.
Segment Sales
| 1Q20 | 1Q19 | $ Chg | % Chg | |
|---|---|---|---|---|
| Joint Replacement | $1,159.1 | $1,284.5 | ($125.4) | (9.8%) |
| Knees | $629.8 | $694.1 | ($64.3) | (9.3%) |
| Hips | $432.6 | $483.4 | ($50.8) | (10.5%) |
| Extremities | $96.7 | $107.0 | ($10.3) | (9.6%) |
| Spine | $109.1 | $122.1 | ($13.0) | (10.6%) |
| Trauma | $161.6 | $166.8 | ($5.2) | (3.1%) |
| Sports Medicine | $36.4 | $41.7 | ($5.3) | (12.7%) |
| Orthobiologics | $69.8 | $75.7 | ($5.9) | (7.8%) |
| Other (CMF) | $66.3 | $73.3 | ($6.9) | (9.5%) |
| Total | $1,602.4 | $1,764.1 | ($161.7) | (9.2%) |
Geographic Sales
| 1Q20 | 1Q19 | $ Chg | % Chg | |
|---|---|---|---|---|
| US | $989.3 | $1,066.3 | ($77.0) | (7.2%) |
| OUS | $613.1 | $697.8 | ($84.7) | (12.1%) |
| EMEA | $357.6 | $414.3 | ($56.7) | (13.7%) |
| Asia Pacific | $255.5 | $283.5 | ($28.1) | (9.9%) |
| Total | $1,602.4 | $1,764.1 | ($161.7) | (9.2%) |
Earnings
| Amt | % of Sales | |
|---|---|---|
| Sales | $1,783.8 | |
| Cost of Sales | $487.1 | 27.3% |
| Selling and Admin | $828.9 | 46.5% |
| R & D | $98.4 | 5.5% |
| Other | $877.9 | 49.2% |
| Net Earnings | ($508.5) | (28.5%) |
Mike Evers is ORTHOWORLD’s Digital Content Strategist. He can be reached by email.
Zimmer Biomet reported 1Q20 orthopedic revenue of USD $1,602.4 million, -9.2% vs. 1Q19. Procedure and capital purchase deferrals due to COVID-19 significantly impacted the company’s results, with revenue down -60% in the last two weeks of March. ROSA contributed little to sales in the quarter, as system sales are generally weighted heavily...
Zimmer Biomet reported 1Q20 orthopedic revenue of USD $1,602.4 million, -9.2% vs. 1Q19. Procedure and capital purchase deferrals due to COVID-19 significantly impacted the company’s results, with revenue down -60% in the last two weeks of March. ROSA contributed little to sales in the quarter, as system sales are generally weighted heavily toward the U.S. and quarter-end. Overall revenue decline in April approached -70% with the most severe drops in the Americas and EMEA, but offset somewhat by improving volumes in China. Assuming no significant recurrences of COVID, Zimmer Biomet expects sequential improvement monthly through the third and fourth quarters.
The company has $1.3 billion of immediately liquidity available in combined cash and credit facilities. Cost containment measures include modulating schedules and hours at manufacturing facilities, temporary 20% base pay reductions for all salaried employees, 25% pay reductions for the executive team as well as 100% pay reductions for board members and CEO Bryan Hanson. Zimmer Biomet is committed to continuing investment to high priority R&D and commercial projects.
“We look at ROSA and other robotics-related initiatives as key priorities. Our investment, if anything, will accelerate right now and certainly focus on these projects. We’re going to continue to build out our dedicated specialty sales teams and other high-value commercial programs. These things will not stop during this time.” – Bryan Hanson, Zimmer Biomet President, CEO and Director
Revenue Data
All revenue data is provided in USD millions unless otherwise noted. Sales and growth rates are estimated on an as-reported basis.
Segment Sales
| 1Q20 | 1Q19 | $ Chg | % Chg | |
|---|---|---|---|---|
| Joint Replacement | $1,159.1 | $1,284.5 | ($125.4) | (9.8%) |
| Knees | $629.8 | $694.1 | ($64.3) | (9.3%) |
| Hips | $432.6 | $483.4 | ($50.8) | (10.5%) |
| Extremities | $96.7 | $107.0 | ($10.3) | (9.6%) |
| Spine | $109.1 | $122.1 | ($13.0) | (10.6%) |
| Trauma | $161.6 | $166.8 | ($5.2) | (3.1%) |
| Sports Medicine | $36.4 | $41.7 | ($5.3) | (12.7%) |
| Orthobiologics | $69.8 | $75.7 | ($5.9) | (7.8%) |
| Other (CMF) | $66.3 | $73.3 | ($6.9) | (9.5%) |
| Total | $1,602.4 | $1,764.1 | ($161.7) | (9.2%) |
Geographic Sales
| 1Q20 | 1Q19 | $ Chg | % Chg | |
|---|---|---|---|---|
| US | $989.3 | $1,066.3 | ($77.0) | (7.2%) |
| OUS | $613.1 | $697.8 | ($84.7) | (12.1%) |
| EMEA | $357.6 | $414.3 | ($56.7) | (13.7%) |
| Asia Pacific | $255.5 | $283.5 | ($28.1) | (9.9%) |
| Total | $1,602.4 | $1,764.1 | ($161.7) | (9.2%) |
Earnings
| Amt | % of Sales | |
|---|---|---|
| Sales | $1,783.8 | |
| Cost of Sales | $487.1 | 27.3% |
| Selling and Admin | $828.9 | 46.5% |
| R & D | $98.4 | 5.5% |
| Other | $877.9 | 49.2% |
| Net Earnings | ($508.5) | (28.5%) |
Mike Evers is ORTHOWORLD’s Digital Content Strategist. He can be reached by email.
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ME
Mike Evers is a Senior Market Analyst and writer with over 15 years of experience in the medical industry, spanning cardiac rhythm management, ER coding and billing, and orthopedics. He joined ORTHOWORLD in 2018, where he provides market analysis and editorial coverage.
