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Zimmer Biomet reported 4Q20 orthopedic revenue of USD $1,868.3 million, -1.5% vs. 4Q19 with full-year 2020 revenue of $6,297.3 million, -11.5% vs. 2019. Company leadership said pressure from the pandemic’s surge increased throughout the fourth quarter and carried into this year. Zimmer Biomet expects 1Q21 to be more challenging than 4Q20.
The company kicked off its active portfolio initiative in earnest in 4Q by announcing its spine and dental businesses’ planned spinoff into an independent and publicly-traded company. The transaction is expected to close in mid-2022. Zimmer Biomet enhanced its focus on high growth orthopedic segments but currently lacks the capital for major acquisitions. According to company leadership, the spinoff is a pathway to significant positive portfolio impact in a capital-constrained environment. Zimmer Biomet CEO Bryan Hanson acknowledged the lack of synergy between spine and dental, but pointed to the importance of achieving scale in the $1 billion revenue range, a benchmark for what he called “a viable publicly-traded company.”
Zimmer Biomet outperformed the market average for knee and hip replacement in the fourth quarter, partially owed to beneficial timing of bulk buys and stocking orders from converted accounts. The company placed 115 ROSA knee robots in the quarter, with over 300 total units now in the field. Another crucial pillar of Zimmer Biomet’s strategy is realizing high growth rates in sports medicine and extremities through its growing ASC presence.
The company declined to provide full-year 2021 guidance, but expects 1Q21 to decline in the mid-single-digits compared to the prior year.
“If you go back to last year, we’re hopeful that this is a 1- to 2-month trough, and we begin to see a V-shaped recovery as we did last year within Q2, leading into Q3. If that happens into Q2, and we start to see a stabilization of market growth in the back end of the year and then potentially that tailwind that we’ve been talking about with preferred patients, that could present a nice trajectory for us and one of those pathways to potential growth for this year. ” – Suky Upadhyay, Zimmer Biomet CFO
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
| 4Q20 | 4Q19 | $ Chg | % Chg | |
|---|---|---|---|---|
| Joint Replacement | $1,354.0 | $1,385.7 | ($31.7) | (2.3%) |
| Knees | $737.1 | $760.6 | ($23.5) | (3.1%) |
| Hips | $504.1 | $510.6 | ($6.5) | (1.3%) |
| Extremities | $112.8 | $114.5 | ($1.7) | (1.5%) |
| Spine | $133.5 | $130.1 | $3.4 | 2.6% |
| Trauma | $175.7 | $178.4 | ($2.7) | (1.5%) |
| Sports Medicine | $44.0 | $44.7 | ($0.7) | (1.5%) |
| Orthobiologics | $81.1 | $80.8 | $0.3 | 0.4% |
| Other (CMF) | $80.1 | $78.0 | $2.0 | 2.6% |
| Total | $1,868.3 | $1,897.7 | ($29.4) | (1.5%) |
| FY20 | FY19 | $ Chg | % Chg | |
|---|---|---|---|---|
| Joint Replacement | $4,534.4 | $5,174.8 | ($640.4) | (12.4%) |
| Knees | $2,389.8 | $2,810.0 | ($420.2) | (15%) |
| Hips | $1,750.5 | $1,931.6 | ($181.1) | (9.4%) |
| Extremities | $394.1 | $433.2 | ($39.1) | (9%) |
| Spine | $443.6 | $493.5 | ($50.0) | (10.1%) |
| Trauma | $622.3 | $675.0 | ($52.7) | (7.8%) |
| Sports Medicine | $152.7 | $168.9 | ($16.2) | (9.6%) |
| Orthobiologics | $278.1 | $306.1 | ($28.0) | (9.1%) |
| Other (CMF) | $266.1 | $296.1 | ($30.0) | (10.1%) |
| Total | $6,297.3 | $7,114.5 | ($817.3) | (11.5%) |
Geographic Sales
| 4Q20 | 4Q19 | $ Chg | % Chg | |
|---|---|---|---|---|
| US | $1,150.3 | $1,150.0 | $0.3 | 0% |
| OUS | $718.0 | $747.7 | ($29.7) | (4%) |
| EMEA | $365.8 | $419.9 | ($54.1) | (12.9%) |
| Asia Pacific | $352.2 | $327.7 | $24.5 | 7.5% |
| Total | $1,868.3 | $1,897.7 | ($29.4) | (1.5%) |
| FY20 | FY19 | $ Chg | % Chg | |
|---|---|---|---|---|
| US | $3,919.7 | $4,375.1 | ($455.4) | (10.4%) |
| OUS | $2,377.6 | $2,739.5 | ($361.9) | (13.2%) |
| EMEA | $1,223.4 | $1,537.0 | ($313.6) | (20.4%) |
| Asia Pacific | $1,154.2 | $1,202.5 | ($48.3) | (4%) |
| Total | $6,297.3 | $7,114.5 | ($817.3) | (11.5%) |
Earnings
| Amt | % of Sales | |
|---|---|---|
| Sales | $2,085.3 | |
| Cost of Sales | $647.3 | 31% |
| Selling and Admin | $893.9 | 42.9% |
| R & D | $100.0 | 4.8% |
| Other | $110.4 | 5.3% |
| Net Earnings | $333.7 | 16% |
Mike Evers is ORTHOWORLD’s Digital Content Strategist. He can be reached by email.
Zimmer Biomet reported 4Q20 orthopedic revenue of USD $1,868.3 million, -1.5% vs. 4Q19 with full-year 2020 revenue of $6,297.3 million, -11.5% vs. 2019. Company leadership said pressure from the pandemic's surge increased throughout the fourth quarter and carried into this year. Zimmer Biomet expects 1Q21 to be more challenging than 4Q20.
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Zimmer Biomet reported 4Q20 orthopedic revenue of USD $1,868.3 million, -1.5% vs. 4Q19 with full-year 2020 revenue of $6,297.3 million, -11.5% vs. 2019. Company leadership said pressure from the pandemic’s surge increased throughout the fourth quarter and carried into this year. Zimmer Biomet expects 1Q21 to be more challenging than 4Q20.
The company kicked off its active portfolio initiative in earnest in 4Q by announcing its spine and dental businesses’ planned spinoff into an independent and publicly-traded company. The transaction is expected to close in mid-2022. Zimmer Biomet enhanced its focus on high growth orthopedic segments but currently lacks the capital for major acquisitions. According to company leadership, the spinoff is a pathway to significant positive portfolio impact in a capital-constrained environment. Zimmer Biomet CEO Bryan Hanson acknowledged the lack of synergy between spine and dental, but pointed to the importance of achieving scale in the $1 billion revenue range, a benchmark for what he called “a viable publicly-traded company.”
Zimmer Biomet outperformed the market average for knee and hip replacement in the fourth quarter, partially owed to beneficial timing of bulk buys and stocking orders from converted accounts. The company placed 115 ROSA knee robots in the quarter, with over 300 total units now in the field. Another crucial pillar of Zimmer Biomet’s strategy is realizing high growth rates in sports medicine and extremities through its growing ASC presence.
The company declined to provide full-year 2021 guidance, but expects 1Q21 to decline in the mid-single-digits compared to the prior year.
“If you go back to last year, we’re hopeful that this is a 1- to 2-month trough, and we begin to see a V-shaped recovery as we did last year within Q2, leading into Q3. If that happens into Q2, and we start to see a stabilization of market growth in the back end of the year and then potentially that tailwind that we’ve been talking about with preferred patients, that could present a nice trajectory for us and one of those pathways to potential growth for this year. ” – Suky Upadhyay, Zimmer Biomet CFO
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
| 4Q20 | 4Q19 | $ Chg | % Chg | |
|---|---|---|---|---|
| Joint Replacement | $1,354.0 | $1,385.7 | ($31.7) | (2.3%) |
| Knees | $737.1 | $760.6 | ($23.5) | (3.1%) |
| Hips | $504.1 | $510.6 | ($6.5) | (1.3%) |
| Extremities | $112.8 | $114.5 | ($1.7) | (1.5%) |
| Spine | $133.5 | $130.1 | $3.4 | 2.6% |
| Trauma | $175.7 | $178.4 | ($2.7) | (1.5%) |
| Sports Medicine | $44.0 | $44.7 | ($0.7) | (1.5%) |
| Orthobiologics | $81.1 | $80.8 | $0.3 | 0.4% |
| Other (CMF) | $80.1 | $78.0 | $2.0 | 2.6% |
| Total | $1,868.3 | $1,897.7 | ($29.4) | (1.5%) |
| FY20 | FY19 | $ Chg | % Chg | |
|---|---|---|---|---|
| Joint Replacement | $4,534.4 | $5,174.8 | ($640.4) | (12.4%) |
| Knees | $2,389.8 | $2,810.0 | ($420.2) | (15%) |
| Hips | $1,750.5 | $1,931.6 | ($181.1) | (9.4%) |
| Extremities | $394.1 | $433.2 | ($39.1) | (9%) |
| Spine | $443.6 | $493.5 | ($50.0) | (10.1%) |
| Trauma | $622.3 | $675.0 | ($52.7) | (7.8%) |
| Sports Medicine | $152.7 | $168.9 | ($16.2) | (9.6%) |
| Orthobiologics | $278.1 | $306.1 | ($28.0) | (9.1%) |
| Other (CMF) | $266.1 | $296.1 | ($30.0) | (10.1%) |
| Total | $6,297.3 | $7,114.5 | ($817.3) | (11.5%) |
Geographic Sales
| 4Q20 | 4Q19 | $ Chg | % Chg | |
|---|---|---|---|---|
| US | $1,150.3 | $1,150.0 | $0.3 | 0% |
| OUS | $718.0 | $747.7 | ($29.7) | (4%) |
| EMEA | $365.8 | $419.9 | ($54.1) | (12.9%) |
| Asia Pacific | $352.2 | $327.7 | $24.5 | 7.5% |
| Total | $1,868.3 | $1,897.7 | ($29.4) | (1.5%) |
| FY20 | FY19 | $ Chg | % Chg | |
|---|---|---|---|---|
| US | $3,919.7 | $4,375.1 | ($455.4) | (10.4%) |
| OUS | $2,377.6 | $2,739.5 | ($361.9) | (13.2%) |
| EMEA | $1,223.4 | $1,537.0 | ($313.6) | (20.4%) |
| Asia Pacific | $1,154.2 | $1,202.5 | ($48.3) | (4%) |
| Total | $6,297.3 | $7,114.5 | ($817.3) | (11.5%) |
Earnings
| Amt | % of Sales | |
|---|---|---|
| Sales | $2,085.3 | |
| Cost of Sales | $647.3 | 31% |
| Selling and Admin | $893.9 | 42.9% |
| R & D | $100.0 | 4.8% |
| Other | $110.4 | 5.3% |
| Net Earnings | $333.7 | 16% |
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.
