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Zimmer Biomet(ZBH) - 2024 Q2 - Quarterly Results
ZBHZimmer Biomet(ZBH)2024-08-07 10:30

Financial Performance - Second quarter net sales of 1.942billionincreased3.91.942 billion increased 3.9% and 5.6% on a constant currency basis[1] - Net sales for Q2 2024 increased to 1,942.0 million, up 3.9% from 1,869.6millioninQ22023[20]−Netsalesforthefirstsixmonthsof2024reached1,869.6 million in Q2 2023[20] - Net sales for the first six months of 2024 reached 3,831.2 million, a 3.5% increase from 3,700.6millioninthesameperiodof2023[22]−TotalconstantcurrencynetsalesgrowthforthesixmonthsendedJune30,2024,was5.63,700.6 million in the same period of 2023[22] - Total constant currency net sales growth for the six months ended June 30, 2024, was 5.6%, with international growth at 8.5% and U.S. growth at 3.5%[25] - Net sales for the six months ended June 30, 2024, were 3,831.2 million, with adjusted gross profit of 2,769.1million[34]EarningsandProfitability−Secondquarterdilutedearningspersharewere2,769.1 million[34] Earnings and Profitability - Second quarter diluted earnings per share were 1.18; adjusted diluted earnings per share were 2.01[1]−Netearningsforthesecondquarterwere2.01[1] - Net earnings for the second quarter were 242.8 million, or 415.0milliononanadjustedbasis[1]−NetearningsforQ22024roseto415.0 million on an adjusted basis[1] - Net earnings for Q2 2024 rose to 242.8 million, compared to 209.6millioninQ22023[20]−OperatingprofitforQ22024grewto209.6 million in Q2 2023[20] - Operating profit for Q2 2024 grew to 351.3 million, up from 329.6millioninQ22023[20]−Netearningsforthefirstsixmonthsof2024were329.6 million in Q2 2023[20] - Net earnings for the first six months of 2024 were 415.2 million, down from 442.1millioninthesameperiodof2023[22]−NetearningsforthesixmonthsendedJune30,2024,were442.1 million in the same period of 2023[22] - Net earnings for the six months ended June 30, 2024, were 415.9 million, compared to 442.6millionin2023[24]−AdjustednetearningsforthethreemonthsendedJune30,2024,were442.6 million in 2023[24] - Adjusted net earnings for the three months ended June 30, 2024, were 415.0 million, compared to 382.8millionin2023[27][28]−AdjusteddilutedearningspershareforthethreemonthsendedJune30,2024,were382.8 million in 2023[27][28] - Adjusted diluted earnings per share for the three months ended June 30, 2024, were 2.01, up from 1.82in2023[27][28]−NetEarningsforthesixmonthsendedJune30,2024,were1.82 in 2023[27][28] - Net Earnings for the six months ended June 30, 2024, were 415.2 million, with adjusted net earnings of 814.7million[29]−DilutedearningspercommonshareforthesixmonthsendedJune30,2024,were814.7 million[29] - Diluted earnings per common share for the six months ended June 30, 2024, were 2.01, with adjusted diluted earnings per share of 3.95[29]−AdjustedoperatingprofitforQ22024increasedto3.95[29] - Adjusted operating profit for Q2 2024 increased to 552.6 million, up from 514.3millioninQ22023[35]−AdjustedoperatingprofitmarginforQ22024improvedto28.5514.3 million in Q2 2023[35] - Adjusted operating profit margin for Q2 2024 improved to 28.5%, compared to 27.5% in Q2 2023[36] - Operating profit margin for Q2 2024 was 18.1%, up from 17.6% in Q2 2023[36] Regional and Product Sales - United States net sales for the second quarter were 1,106.2 million, a 3.5% increase[4] - International net sales for the second quarter were 835.8million,a4.4835.8 million, a 4.4% increase (8.5% on a constant currency basis)[4] - Knees product category sales totaled 801.1 million, a 3.9% increase (5.5% on a constant currency basis)[4] - Hips product category sales totaled 506.5million,a0.4506.5 million, a 0.4% increase (2.8% on a constant currency basis)[4] - Knees product category showed a constant currency growth of 5.5%, with international growth at 11.5% and U.S. growth at 0.8%[25] - Hips product category had a constant currency growth of 2.8%, with international growth at 3.7% and U.S. growth at 1.8%[25] - S.E.T. product category grew by 7.3% in constant currency, while the Other category grew by 11.3%[25] Cash Flow and Liquidity - Cash and cash equivalents as of June 30, 2024, stood at 420.1 million, slightly up from 415.8millionattheendof2023[23]−NetcashprovidedbyoperatingactivitiesforthesixmonthsendedJune30,2024,was415.8 million at the end of 2023[23] - Net cash provided by operating activities for the six months ended June 30, 2024, was 597.4 million, down from 655.6millionin2023[24]−NetcashusedininvestingactivitiesforthesixmonthsendedJune30,2024,was655.6 million in 2023[24] - Net cash used in investing activities for the six months ended June 30, 2024, was 442.0 million, compared to 392.5millionin2023[24]−CashandcashequivalentsattheendofJune30,2024,were392.5 million in 2023[24] - Cash and cash equivalents at the end of June 30, 2024, were 420.1 million, up from 319.8millionin2023[24]−NetcashprovidedbyoperatingactivitiesforthesixmonthsendedJune30,2024,was319.8 million in 2023[24] - Net cash provided by operating activities for the six months ended June 30, 2024, was 597.4 million, with free cash flow of 342.4million[33]−CashandcashequivalentsasofJune30,2024,were342.4 million[33] - Cash and cash equivalents as of June 30, 2024, were 420.1 million, slightly lower than 415.8millionattheendof2023[38]DebtandAssets−TotalassetsasofJune30,2024,were415.8 million at the end of 2023[38] Debt and Assets - Total assets as of June 30, 2024, were 21,520.0 million, compared to 21,496.9millionattheendof2023[23]−Long−termdebtdecreasedto21,496.9 million at the end of 2023[23] - Long-term debt decreased to 3,956.7 million as of June 30, 2024, from 4,867.9millionattheendof2023[23]−NetdebtasofJune30,2024,stoodat4,867.9 million at the end of 2023[23] - Net debt as of June 30, 2024, stood at 5,414.6 million, slightly higher than 5,352.1millionattheendof2023[38]ExpensesandCosts−ResearchanddevelopmentexpensesforQ22024were5,352.1 million at the end of 2023[38] Expenses and Costs - Research and development expenses for Q2 2024 were 109.4 million, down from 118.1millioninQ22023[20]−RestructuringandothercostreductioninitiativesforQ22024increasedto118.1 million in Q2 2023[20] - Restructuring and other cost reduction initiatives for Q2 2024 increased to 41.5 million, up from 24.4millioninQ22023[20]−IntangibleassetamortizationforthesixmonthsendedJune30,2024,was24.4 million in Q2 2023[20] - Intangible asset amortization for the six months ended June 30, 2024, was 286.1 million[29] - Restructuring and other cost reduction initiatives for the six months ended June 30, 2024, amounted to 165.9million[29]−EuropeanUnionMedicalDeviceRegulationcostsforthesixmonthsendedJune30,2024,were165.9 million[29] - European Union Medical Device Regulation costs for the six months ended June 30, 2024, were 13.4 million[29] - Inventory and manufacturing-related charges for the six months ended June 30, 2024, were 3.8million[29]−OthercertaintaxadjustmentsforthesixmonthsendedJune30,2024,resultedina3.8 million[29] - Other certain tax adjustments for the six months ended June 30, 2024, resulted in a 20.5 million benefit[29] - Intangible asset amortization for Q2 2024 was 144.0million,upfrom144.0 million, up from 138.2 million in Q2 2023[35] - Restructuring and cost reduction initiatives cost 41.5millioninQ22024,comparedto41.5 million in Q2 2024, compared to 24.4 million in Q2 2023[35] - European Union Medical Device Regulation costs decreased to 7.6millioninQ22024from7.6 million in Q2 2024 from 15.2 million in Q2 2023[35] - Litigation charges in Q2 2024 were minimal at 0.1million,comparedtoacreditof0.1 million, compared to a credit of 3.8 million in Q2 2023[35] Guidance and Forecasts - The company updated 2024 reported revenue guidance to 4.0% - 5.0% due to currency expectations[7] - The company reaffirmed 2024 constant currency revenue growth guidance of 5.0% - 6.0%[7] - Adjusted diluted EPS guidance for 2024 remains unchanged at 8.00−8.00 - 8.15[7] Gross Margin and Profitability Metrics - Gross margin for the six months ended June 30, 2024, was 64.7%, with an adjusted gross margin of 72.3%[34] - Adjusted effective tax rate for Q2 2024 was 18.2%, down from 19.6% in the same period last year[37]