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Zimmer Biomet reported 3Q20 orthopedic revenue of USD $1,729.1 million, +2.9% vs. 3Q19. The company observed mixed recovery dynamics during the third quarter, as it returned to growth faster than expected but also saw the rate of recovery flatten by September. Zimmer Biomet performed especially well in the U.S., where its knee franchise grew +3% and hips grew +10%. Company leadership pointed to four factors underlying its momentum: a shift away from triaging execution challenges toward launching new products, better operation discipline, a new compensation plan that “disproportionately” rewards sales growth and renewed commercial confidence among the sales team.
Zimmer Biomet passed 200 worldwide ROSA knee placements in the quarter and remains on track to realize $100 million in revenue from Persona Revision in 2020. As the company continues its lengthy transformation, it sees itself moving into Phase 3 of its strategic plan with a focus on active portfolio management.
Two early moves in this phase are the tuck-in acquisitions of Incisive and Relign, both privately held companies. Incisive is in the $1.2 billion integrated operation room market, while Relign’s portfolio includes three differentiated arthroscopy tower components into a single system. These moves clearly position sports medicine in ASC settings as a priority market for Zimmer Biomet.
“Active portfolio management includes three components. First, disproportionately investing in our priority businesses and markets. Number two, being selective in M&A, prioritizing opportunities that are accretive to our weighted average market growth and aligned to our strategy. Finally, when appropriate and inline with our overall strategy, divesting non-core assets that are financially less attractive in our core businesses.” –Bryan Hanson, Zimmer Biomet President & 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
| 3Q20 | 3Q19 | $ Chg | % Chg | |
|---|---|---|---|---|
| Joint Replacement | $1,240.8 | $1,215.4 | $25.3 | 2.1% |
| Knees | $648.7 | $651.8 | ($3.1) | (0.5%) |
| Hips | $484.1 | $459.1 | $25.0 | 5.4% |
| Extremities | $108.0 | $104.6 | $3.4 | 3.3% |
| Spine | $125.6 | $117.1 | $8.5 | 7.3% |
| Trauma | $168.3 | $162.9 | $5.3 | 3.3% |
| Sports Medicine | $42.1 | $40.8 | $1.3 | 3.3% |
| Orthobiologics | $77.0 | $73.3 | $3.7 | 5.1% |
| Other (CMF) | $75.4 | $70.3 | $5.1 | 7.3% |
| Total | $1,729.1 | $1,679.8 | $49.3 | 2.9% |
| 9m20 | 9m19 | $ Chg | % Chg | |
|---|---|---|---|---|
| Joint Replacement | $3,180.4 | $3,789.1 | ($608.7) | (16.1%) |
| Knees | $1,652.7 | $2,049.4 | ($396.7) | (19.4%) |
| Hips | $1,246.4 | $1,421.0 | ($174.6) | (12.3%) |
| Extremities | $281.3 | $318.7 | ($37.4) | (11.7%) |
| Spine | $310.1 | $363.5 | ($53.3) | (14.7%) |
| Trauma | $446.6 | $496.6 | ($50.0) | (10.1%) |
| Sports Medicine | $108.7 | $124.3 | ($15.6) | (12.5%) |
| Orthobiologics | $197.0 | $225.3 | ($28.3) | (12.6%) |
| Other (CMF) | $186.1 | $218.1 | ($32.0) | (14.7%) |
| Total | $4,429.0 | $5,216.9 | ($787.9) | (15.1%) |
Geographic Sales
| 3Q20 | 3Q19 | $ Chg | % Chg | |
|---|---|---|---|---|
| US | $1,123.4 | $1,076.1 | $47.3 | 4.4% |
| OUS | $605.7 | $603.7 | $2.0 | 0.3% |
| EMEA | $304.4 | $312.3 | ($7.8) | (2.5%) |
| Asia Pacific | $301.2 | $291.4 | $9.8 | 3.4% |
| Total | $1,729.1 | $1,679.8 | $49.3 | 2.9% |
| 9m20 | 9m19 | $ Chg | % Chg | |
|---|---|---|---|---|
| US | $2,769.4 | $3,225.0 | ($455.7) | (14.1%) |
| OUS | $1,659.6 | $1,991.8 | ($332.2) | (16.7%) |
| EMEA | $857.6 | $1,117.0 | ($259.4) | (23.2%) |
| Asia Pacific | $802.0 | $874.8 | ($72.8) | (8.3%) |
| Total | $4,429.0 | $5,216.9 | ($787.9) | (15.1%) |
Earnings
| Amt | % of Sales | |
|---|---|---|
| Sales | $1,929.3 | |
| Cost of Sales | $569.4 | 29.5% |
| Selling and Admin | $790.0 | 40.9% |
| R & D | $85.9 | 4.5% |
| Other | $241.5 | 12.5% |
| Net Earnings | $242.5 | 12.6% |
Mike Evers is ORTHOWORLD’s Digital Content Strategist. He can be reached by email.
Zimmer Biomet reported 3Q20 orthopedic revenue of USD $1,729.1 million, +2.9% vs. 3Q19. The company observed mixed recovery dynamics during the third quarter, as it returned to growth faster than expected but also saw the rate of recovery flatten by September. Zimmer Biomet performed especially well in the U.S., where its knee franchise grew...
Zimmer Biomet reported 3Q20 orthopedic revenue of USD $1,729.1 million, +2.9% vs. 3Q19. The company observed mixed recovery dynamics during the third quarter, as it returned to growth faster than expected but also saw the rate of recovery flatten by September. Zimmer Biomet performed especially well in the U.S., where its knee franchise grew +3% and hips grew +10%. Company leadership pointed to four factors underlying its momentum: a shift away from triaging execution challenges toward launching new products, better operation discipline, a new compensation plan that “disproportionately” rewards sales growth and renewed commercial confidence among the sales team.
Zimmer Biomet passed 200 worldwide ROSA knee placements in the quarter and remains on track to realize $100 million in revenue from Persona Revision in 2020. As the company continues its lengthy transformation, it sees itself moving into Phase 3 of its strategic plan with a focus on active portfolio management.
Two early moves in this phase are the tuck-in acquisitions of Incisive and Relign, both privately held companies. Incisive is in the $1.2 billion integrated operation room market, while Relign’s portfolio includes three differentiated arthroscopy tower components into a single system. These moves clearly position sports medicine in ASC settings as a priority market for Zimmer Biomet.
“Active portfolio management includes three components. First, disproportionately investing in our priority businesses and markets. Number two, being selective in M&A, prioritizing opportunities that are accretive to our weighted average market growth and aligned to our strategy. Finally, when appropriate and inline with our overall strategy, divesting non-core assets that are financially less attractive in our core businesses.” –Bryan Hanson, Zimmer Biomet President & 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
| 3Q20 | 3Q19 | $ Chg | % Chg | |
|---|---|---|---|---|
| Joint Replacement | $1,240.8 | $1,215.4 | $25.3 | 2.1% |
| Knees | $648.7 | $651.8 | ($3.1) | (0.5%) |
| Hips | $484.1 | $459.1 | $25.0 | 5.4% |
| Extremities | $108.0 | $104.6 | $3.4 | 3.3% |
| Spine | $125.6 | $117.1 | $8.5 | 7.3% |
| Trauma | $168.3 | $162.9 | $5.3 | 3.3% |
| Sports Medicine | $42.1 | $40.8 | $1.3 | 3.3% |
| Orthobiologics | $77.0 | $73.3 | $3.7 | 5.1% |
| Other (CMF) | $75.4 | $70.3 | $5.1 | 7.3% |
| Total | $1,729.1 | $1,679.8 | $49.3 | 2.9% |
| 9m20 | 9m19 | $ Chg | % Chg | |
|---|---|---|---|---|
| Joint Replacement | $3,180.4 | $3,789.1 | ($608.7) | (16.1%) |
| Knees | $1,652.7 | $2,049.4 | ($396.7) | (19.4%) |
| Hips | $1,246.4 | $1,421.0 | ($174.6) | (12.3%) |
| Extremities | $281.3 | $318.7 | ($37.4) | (11.7%) |
| Spine | $310.1 | $363.5 | ($53.3) | (14.7%) |
| Trauma | $446.6 | $496.6 | ($50.0) | (10.1%) |
| Sports Medicine | $108.7 | $124.3 | ($15.6) | (12.5%) |
| Orthobiologics | $197.0 | $225.3 | ($28.3) | (12.6%) |
| Other (CMF) | $186.1 | $218.1 | ($32.0) | (14.7%) |
| Total | $4,429.0 | $5,216.9 | ($787.9) | (15.1%) |
Geographic Sales
| 3Q20 | 3Q19 | $ Chg | % Chg | |
|---|---|---|---|---|
| US | $1,123.4 | $1,076.1 | $47.3 | 4.4% |
| OUS | $605.7 | $603.7 | $2.0 | 0.3% |
| EMEA | $304.4 | $312.3 | ($7.8) | (2.5%) |
| Asia Pacific | $301.2 | $291.4 | $9.8 | 3.4% |
| Total | $1,729.1 | $1,679.8 | $49.3 | 2.9% |
| 9m20 | 9m19 | $ Chg | % Chg | |
|---|---|---|---|---|
| US | $2,769.4 | $3,225.0 | ($455.7) | (14.1%) |
| OUS | $1,659.6 | $1,991.8 | ($332.2) | (16.7%) |
| EMEA | $857.6 | $1,117.0 | ($259.4) | (23.2%) |
| Asia Pacific | $802.0 | $874.8 | ($72.8) | (8.3%) |
| Total | $4,429.0 | $5,216.9 | ($787.9) | (15.1%) |
Earnings
| Amt | % of Sales | |
|---|---|---|
| Sales | $1,929.3 | |
| Cost of Sales | $569.4 | 29.5% |
| Selling and Admin | $790.0 | 40.9% |
| R & D | $85.9 | 4.5% |
| Other | $241.5 | 12.5% |
| Net Earnings | $242.5 | 12.6% |
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.
