Zimmer Biomet(ZBH)2025-02-06 16:54Financial Data and Key Metrics Changes - In Q4 2024, Zimmer Biomet achieved nearly 5% constant currency revenue growth, marking the 12th consecutive quarter of mid-single digit or better growth [10][32] - Adjusted earnings per share (EPS) grew by 6% to 1 billion [32][50] - The company provided full-year 2025 financial guidance of constant currency revenue growth of 3% to 5% and adjusted EPS of 8.35, excluding the impact of the Paragon 28 acquisition [13][44] Business Line Data and Key Metrics Changes - The S.E.T. segment grew by 8.4%, with notable growth in CMFT at 13% and Sports at 22% [38] - Global knees grew by 5.6%, with U.S. growth at 3.9% and international growth at 8% [35] - Global hips grew by 4%, with U.S. growth at 3.2% and international growth at 4.8% [36] Market Data and Key Metrics Changes - The U.S. business grew by 4.7%, driven by strong high single-digit growth in S.E.T., while international growth was 5.2% [34] - The ASC market is rapidly expanding, with the company seeing a significant increase in sales from this segment, which has grown from 2-3% in 2019 to nearly 20% today [120] Company Strategy and Development Direction - The company plans to focus on people and culture, operational excellence, and innovation and diversification as key priorities for 2025 [15][26] - A four-point plan has been established to enhance performance in these areas, including leadership changes and a commitment to operational excellence in the U.S. market [16][17] - The acquisition of Paragon 28 is expected to enhance Zimmer Biomet's offerings in the foot and ankle space, complementing existing portfolios and driving growth [27][28] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth of end markets, driven by an aging population, technological advancements, and a shift to outpatient procedures [12] - The company anticipates continued growth in the S.E.T. segment and expects to maintain a strong balance sheet post-acquisition of Paragon 28 [49][50] - Management acknowledged challenges from foreign exchange impacts but remains optimistic about achieving financial goals in 2025 [46][130] Other Important Information - The company reported a decline in the Technology and Data segment by 4.3% due to tough comparisons from the prior year [39] - Adjusted gross margin was 71.3%, lower than the previous year, primarily due to capitalized cost increases [41] - The company ended 2024 with $526 million in cash and cash equivalents and plans to continue share repurchases opportunistically [42][50] Q&A Session Summary Question: Guidance Philosophy for 2025 - Management indicated a more appropriate guidance range for 2025, considering one less selling day and potential drivers for upper range performance [55][58] Question: Integration of Paragon 28 - Management expressed confidence in minimal disruption during the integration of Paragon 28, highlighting the strong culture and innovation within the company [63][66] Question: Sales Growth and Margin Progression - Management provided insights on expected revenue growth and margin progression, indicating a stronger second half of 2025 due to new product uptake and easier comparisons [80][81] Question: EPS Growth Guidance - Management attributed the EPS guidance to foreign exchange impacts and emphasized the importance of investments for long-term growth [130] Question: ASC Opportunity - Management highlighted the significant growth potential in the ASC market, with plans to leverage the Paragon acquisition to enhance offerings in this space [120][123]