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Zimmer Biomet reported 2Q20 orthopedic revenue of USD $1,111.6 million, -37.3% vs. 2Q19. The company benefitted from a faster than expected market recovery in the second quarter, despite a resurgence of the virus in many U.S. states. Even hotspots like Florida, Texas and Arizona continue to operate at 80% of procedural volumes compared to the prior year. Overall, Zimmer Biomet exited June down only -13.5% after being down -70% in April. The company values its current procedure backlog between $700 million to $800 million.
Like Stryker, Zimmer Biomet found success in placing its ROSA robotic system during the quarter. The company now has 150 units installed globally and expects between 200 and 300 total placements by the end of the year. Current usage trends are on target for 3,000 per quarter, more than double the 4Q19 usage rate. The Persona Revision Knee also surpassed expectations in 2Q by delivering its best quarter to date. The product is on track for $100 million in 2020 revenue, although 60% of that will cannibalize legacy products.
Zimmer Biomet’s longterm strategy for growth calls for increased investment and focus on high-growth segments. The company seeks to drive above-market growth in knee replacement, robotics and informatics while achieving market-growth parity in hip replacement, sports medicine and trauma. Underperforming businesses like spine will receive less investment and different management, though the company stopped short of talking about divestitures.
“You do not need a CT scan to use ROSA, and that helps us quite a bit in the ASC setting. Volume is very important to people in the ASC setting. They have to get the throughput of patients to be able to get the same reimbursement and business dynamics they want. The ability to use ROSA without a change in procedure time matters to them.” – Bryan Hanson, Zimmer Biomet President and CEO
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
| 2Q20 | 2Q19 | $ Chg | % Chg | |
|---|---|---|---|---|
| Joint Replacement | $774.6 | $1,289.1 | ($514.5) | (39.9%) |
| Knees | $374.2 | $703.6 | ($329.4) | (46.8%) |
| Hips | $329.7 | $478.5 | ($148.8) | (31.1%) |
| Extremities | $70.7 | $107.1 | ($36.4) | (34%) |
| Spine | $80.7 | $124.3 | ($43.6) | (35.1%) |
| Trauma | $126.7 | $166.9 | ($40.2) | (24.1%) |
| Sports Medicine | $25.6 | $41.8 | ($16.2) | (38.7%) |
| Orthobiologics | $52.8 | $76.3 | ($23.5) | (30.8%) |
| Other (CMF) | $51.2 | $74.6 | ($23.4) | (31.3%) |
| Total | $1,111.6 | $1,773.0 | ($661.3) | (37.3%) |
| 1H20 | 1H19 | $ Chg | % Chg | |
|---|---|---|---|---|
| Joint Replacement | $1,933.8 | $2,573.7 | ($639.9) | (24.9%) |
| Knees | $1,004.0 | $1,397.7 | ($393.7) | (28.2%) |
| Hips | $762.3 | $961.9 | ($199.6) | (20.7%) |
| Extremities | $167.5 | $214.1 | ($46.7) | (21.8%) |
| Spine | $189.8 | $246.4 | ($56.6) | (23%) |
| Trauma | $288.3 | $333.7 | ($45.4) | (13.6%) |
| Sports Medicine | $62.0 | $83.5 | ($21.5) | (25.7%) |
| Orthobiologics | $122.6 | $152.0 | ($29.4) | (19.3%) |
| Other (CMF) | $117.5 | $147.8 | ($30.3) | (20.5%) |
| Total | $2,714.0 | $3,537.1 | ($823.1) | (23.3%) |
Geographic Sales
| 2Q20 | 2Q19 | $ Chg | % Chg | |
|---|---|---|---|---|
| US | $665.2 | $1,082.6 | ($417.4) | (38.6%) |
| OUS | $446.4 | $690.3 | ($243.9) | (35.3%) |
| EMEA | $198.3 | $390.5 | ($192.2) | (49.2%) |
| Asia Pacific | $248.1 | $299.8 | ($51.7) | (17.2%) |
| Total | $1,111.6 | $1,773.0 | ($661.3) | (37.3%) |
| 1H20 | 1H19 | $ Chg | % Chg | |
|---|---|---|---|---|
| US | $1,654.5 | $2,149.0 | ($494.5) | (23%) |
| OUS | $1,059.5 | $1,388.1 | ($328.6) | (23.7%) |
| EMEA | $555.9 | $804.8 | ($248.9) | (30.9%) |
| Asia Pacific | $503.6 | $583.4 | ($79.7) | (13.7%) |
| Total | $2,714.0 | $3,537.1 | ($823.1) | (23.3%) |
Earnings
| Amt | % of Sales | |
|---|---|---|
| Sales | $1,226.1 | |
| Cost of Sales | $424.5 | 34.6% |
| Selling and Admin | $665.0 | 54.2% |
| R & D | $87.7 | 7.2% |
| Other | $87.7 | 20.8% |
| Net Earnings | ($206.6) | (16.9%) |
Mike Evers is ORTHOWORLD’s Digital Content Strategist. He can be reached by email.
Zimmer Biomet reported 2Q20 orthopedic revenue of USD $1,111.6 million, -37.3% vs. 2Q19. The company benefitted from a faster than expected market recovery in the second quarter, despite a resurgence of the virus in many U.S. states. Even hotspots like Florida, Texas and Arizona continue to operate at 80% of procedural volumes compared to...
Zimmer Biomet reported 2Q20 orthopedic revenue of USD $1,111.6 million, -37.3% vs. 2Q19. The company benefitted from a faster than expected market recovery in the second quarter, despite a resurgence of the virus in many U.S. states. Even hotspots like Florida, Texas and Arizona continue to operate at 80% of procedural volumes compared to the prior year. Overall, Zimmer Biomet exited June down only -13.5% after being down -70% in April. The company values its current procedure backlog between $700 million to $800 million.
Like Stryker, Zimmer Biomet found success in placing its ROSA robotic system during the quarter. The company now has 150 units installed globally and expects between 200 and 300 total placements by the end of the year. Current usage trends are on target for 3,000 per quarter, more than double the 4Q19 usage rate. The Persona Revision Knee also surpassed expectations in 2Q by delivering its best quarter to date. The product is on track for $100 million in 2020 revenue, although 60% of that will cannibalize legacy products.
Zimmer Biomet’s longterm strategy for growth calls for increased investment and focus on high-growth segments. The company seeks to drive above-market growth in knee replacement, robotics and informatics while achieving market-growth parity in hip replacement, sports medicine and trauma. Underperforming businesses like spine will receive less investment and different management, though the company stopped short of talking about divestitures.
“You do not need a CT scan to use ROSA, and that helps us quite a bit in the ASC setting. Volume is very important to people in the ASC setting. They have to get the throughput of patients to be able to get the same reimbursement and business dynamics they want. The ability to use ROSA without a change in procedure time matters to them.” – Bryan Hanson, Zimmer Biomet President and CEO
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
| 2Q20 | 2Q19 | $ Chg | % Chg | |
|---|---|---|---|---|
| Joint Replacement | $774.6 | $1,289.1 | ($514.5) | (39.9%) |
| Knees | $374.2 | $703.6 | ($329.4) | (46.8%) |
| Hips | $329.7 | $478.5 | ($148.8) | (31.1%) |
| Extremities | $70.7 | $107.1 | ($36.4) | (34%) |
| Spine | $80.7 | $124.3 | ($43.6) | (35.1%) |
| Trauma | $126.7 | $166.9 | ($40.2) | (24.1%) |
| Sports Medicine | $25.6 | $41.8 | ($16.2) | (38.7%) |
| Orthobiologics | $52.8 | $76.3 | ($23.5) | (30.8%) |
| Other (CMF) | $51.2 | $74.6 | ($23.4) | (31.3%) |
| Total | $1,111.6 | $1,773.0 | ($661.3) | (37.3%) |
| 1H20 | 1H19 | $ Chg | % Chg | |
|---|---|---|---|---|
| Joint Replacement | $1,933.8 | $2,573.7 | ($639.9) | (24.9%) |
| Knees | $1,004.0 | $1,397.7 | ($393.7) | (28.2%) |
| Hips | $762.3 | $961.9 | ($199.6) | (20.7%) |
| Extremities | $167.5 | $214.1 | ($46.7) | (21.8%) |
| Spine | $189.8 | $246.4 | ($56.6) | (23%) |
| Trauma | $288.3 | $333.7 | ($45.4) | (13.6%) |
| Sports Medicine | $62.0 | $83.5 | ($21.5) | (25.7%) |
| Orthobiologics | $122.6 | $152.0 | ($29.4) | (19.3%) |
| Other (CMF) | $117.5 | $147.8 | ($30.3) | (20.5%) |
| Total | $2,714.0 | $3,537.1 | ($823.1) | (23.3%) |
Geographic Sales
| 2Q20 | 2Q19 | $ Chg | % Chg | |
|---|---|---|---|---|
| US | $665.2 | $1,082.6 | ($417.4) | (38.6%) |
| OUS | $446.4 | $690.3 | ($243.9) | (35.3%) |
| EMEA | $198.3 | $390.5 | ($192.2) | (49.2%) |
| Asia Pacific | $248.1 | $299.8 | ($51.7) | (17.2%) |
| Total | $1,111.6 | $1,773.0 | ($661.3) | (37.3%) |
| 1H20 | 1H19 | $ Chg | % Chg | |
|---|---|---|---|---|
| US | $1,654.5 | $2,149.0 | ($494.5) | (23%) |
| OUS | $1,059.5 | $1,388.1 | ($328.6) | (23.7%) |
| EMEA | $555.9 | $804.8 | ($248.9) | (30.9%) |
| Asia Pacific | $503.6 | $583.4 | ($79.7) | (13.7%) |
| Total | $2,714.0 | $3,537.1 | ($823.1) | (23.3%) |
Earnings
| Amt | % of Sales | |
|---|---|---|
| Sales | $1,226.1 | |
| Cost of Sales | $424.5 | 34.6% |
| Selling and Admin | $665.0 | 54.2% |
| R & D | $87.7 | 7.2% |
| Other | $87.7 | 20.8% |
| Net Earnings | ($206.6) | (16.9%) |
Mike Evers is ORTHOWORLD’s Digital Content Strategist. He can be reached by email.
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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.
