Zimmer Biomet (ZBH) 2 Nov 222022 Q3 Earnings call transcript

Good morning, ladies and gentlemen and welcome to the Zimmer Biomet Third Quarter 2022 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded today, November 2, 2022.

Following today's presentation, there will be a question-and-answer session. At this time, all participants are in a listen-only mode. [Operator Instructions]

to President, conference Officer. Chief like Mattox, to now Vice Senior Communications would turn over the Keri I and Administration go ahead. Please,

are XXXX earnings Thank I call. Welcome good and conference Zimmer all you to quarter you, safe. well third morning, Biomet's and operator, hope everyone.

and today me EVP Hanson, Upadhyay; and President and our Joining Suky Chairman, COO, Bryan CEO; are CFO, Ivan Tornos.

will those of assume may or risks addition I'd in like statements a the update future our by this note these call that differ to forward-looking to and comments to results we inherent no Actual materially. to from such you started, forward-looking limitations change statements, include remind discussion get Please refer obligation for due even statements. we variety statements. indicated and these results Before expectations filings our the of materially forward-looking uncertainties. during uncertainties, to risks if actual SEC of forward-looking detailed a Please

on our include most directly call discussions can the financial is measures website, Additionally, will GAAP our earnings to financial within release, on included certain measures. of be which measures comparable the zimmerbiomet.com. this QX Reconciliation these found non-GAAP

to I'll call that, the Bryan? over turn With Bryan.

for the three Thanks, Keri, thanks this for joining of morning. We've and got the call us sections call.

more is And time more doing our out we're talk First, be driver strong XXXX things increase in have. update. second Suky for This then as might want the probably certainly to clearly even us macro and about we And really guidance importantly, the provide I'm driver the our our saw questions that continued meaningful some will you forward. spend QX so, close of our the that of I on outlook but will addressing briefly going allowed and still has the performance also year we'll in to the pressures by section, quarter, go any detail and performance about ZB our the to innovation. momentum QX pretty that for facing. face talking we

started that I take ZB I listening. to get and want that Thank listen I say to to lot you on you just the know of Before I I QX, are that. know a a I to you. thank team the minute make appreciate call members sure

Your just on continued and execution. performance strong is -- built it's day-in day-out

And You're I I and very up results. know facing showing just appreciate and on focused some macro you're driving challenges right it. real very, now

results for I'm day. proud face single in you're customers, fact delivering you're just patients company much this and moving promise these for shareholders our it our you really even I that for the delivering you're it's not every of easy is mission but The forward our results appreciated. is challenges, know of the I and

Okay.

the to turning quarter. third So

than to our a regions, was of cancellations, and finished see APAC the beginning performing that with quarter we it all when regions, the in strong. of and the in comes better quarter nice especially very expectations. did EMEA Although, execution procedure we choppy recovery but bit occurred and improvement our both our OUS And throughout

our in somewhat business, knee XX%. above Inside growing good as of business digits in our pressure large category. seen, franchise And saw expected our S.E.T. this, you've we our business just our other and telegraphed joints in this momentum hip growing by high single the was the and and with offset

navigate able face in mitigate foreign continue team That did staffing. quarter, challenges the their Now, impact. these and to supply, been significant currency, to we said, has strength and challenges the although, see we the across inflation

updated you driving discipline, through our as continues our well in You see can't a field. as as operational the grow and them, And our completely in result, and to impact. they've their guidance. this eliminate innovation mitigated And financial confidence that certainly but commercial reflected they've done

short, strong underlying business clearly stronger. our getting believe I In do truly and it's is

an we announced for Special three-year with at first-of-its-kind a Surgery, Hospital when or agreement Just quarter, example, we the look as HSS.

We're this joint big be The new medicine partnership Artificial really It's will focused powered future with it. surgery. excited -- tools to and creates really here HSS/Zimmer robotic-assisted Robotic It's surgeons -- Replacement. Intelligence clearly for provide do by of that recommendations Joint develop involved HSS insights about HSS. a We very Innovation opportunity it's Center to Biomet be data-driven for AI in we're deal. we're excited a to believe to with or is

our In new continue our QX, pipeline product well. as deliver to

HipInsight. is expands definitely our about is navigation to launch mixed-reality excited solutions. latest and ZBEdge system FDA-cleared first the hip While the for portfolio further total HipInsight of addition suite This our it's are the it we OptiVu of early, replacement.

Additionally, the System. FDA our each This anatomy. an is technology of that clearance a individual proprietary we announced Shoulder has Identity to patient's surgeon's of aligning approach capability

of All of to momentum I got also our existing of tell portfolio up this patient. with kept that the and optimizing range motion but the for well. goal product the first alleviating foremost And as you pain,

can Revision and is US Demand feedback and data clinical positive aggressive in Persona we're hip. continues driving collection, both ROSA use remained traction launch strong benefits. focused iQ the for on of and in so that Persona establish knee our interest limited we and

factor about momentum the we've cementless and talked we're that category on new coming our expect Persona product in product launches this in with in excited to about early months launch we including our And additional form a new S.E.T. as hip XXXX. launches build

future very transformation all innovations our of well business position And efforts tell our for that ongoing with I coupled accelerate to reshape you these can us growth. product and ZB's

We to to our and trusted be and quartile top our continue patients. customers particular to members continue and a work preferred we best shareholders performer stakeholders, be strive team our but strive place be to our for our to all a a of in for and to to partner

from we're I we're as feel about meaningful and macro the offset to innovation also strategy really But execution recovery definitely our and against growth. and Just the that backdrop via are navigating an field increasingly summary team seeing very our in confident through a continues team real COVID execute managing that in company. and future some very our strong our headwinds muting

going with talk and it depth I'm to for turn outlook more And XXXX in Suky guidance. you QX give about that to to an

Suky. Okay

delivered good Thanks another quarter by driven Overall, morning. Bryan and elective and we good procedures. of strong recovery execution continued

the While navigate quarter financial challenges to continue we year our us performance gives third our guidance. to full raise confidence

constant my to I'll And in basis. how statements my operations quarter that and continuing adjusted otherwise it XXXX. turn third be compares same With a results. will be of will XXXX period our quarter Unless commentary the about to the noted, third and currency on

US grew This the billion, on Knee and partially decrease X.X% increase was offset $X.XXX of by Net were Hip strong a quarter recovery the by in and expected currency of sales an basis declines in procedure sales and third categories. S.E.T. constant on and in X.X% a a basis. elective driven commercial businesses. reported execution, our X% especially other

and International with and procedure strong Japan. by and markets APAC APAC and in sales and in lighter than performed grew across EMEA expected emerging China by markets continued markets in developed strength driven execution. better comps recovery with expectations volumes X.X% strength driven in than continued tandem in EMEA inline commercial expected with most largely better performed strong

ROSA International performance. especially by across and performance X%. along Persona knee penetration was X.X% to traction and business Knees to increase Persona Revision regions continue in X.X% The global up procedure with the our easier most driven with in Knee category Knees US procedure pull-through. recovery grew continued of Turning Global System strong and our comps Knees US up with and

driven Global strong up by and Hips with XX.X% outside an international of X.X% Hips up the recovery procedure grew XX.X% International Hips easier US. comp U.S. and

Continued Hip direct traction Hip interior Complete surgical is approach. products the and including on which Avenir the across focused Revision key Primary System GX

in by reimbursement anniversary And category US. lastly pull-through in which The trauma the and sports tough expected a headwinds mid-XXXX. restorative around XXXX was in and especially will declined reverse the in and and US QX continued therapies comp the solid pressure impacted is expected in that ROSA VBP category X.X% to in extremities hip

CMFT, key continued upper medicine focus we areas category, of the performance strong across to and deliver our sports Within extremities.

related versus Finally, ROSA category other tough comps capital X.X% declined of by a sales. mix placements and sales to lower our upfront expected driven higher

P&L. the to Moving

share the from earnings the per by of $X.XX For decline in a share GAAP litigation quarter in tax diluted and tax was a we diluted compared third earnings of liability GAAP expenses $X.XX the related of to per quarter a quarter, XXXX. in driven outcome. reported The increase benefit favorable

from line with an $X.XX a $X.XX expectations. in XX.X% was per share On represents gross in XXXX. quarter decrease margin the third Adjusted of diluted basis, adjusted earnings of

be discussed, margins As slightly inflationary previously gross year will year. the down drive full prior pressure to when compared to heightened

the headwind at end inflation previously to costs pull-through to input As communicated into and will XXXX XXXX basis we our expect this from the previously year now range. point increasing XXX be in upper of XX noted, from

an were product million, inflationary to support R&D the expenses to investments pressures future prior into higher operating $XXX increase year adjusted launches. Our versus and due

margin and investments product by continued year and decline pressures into largely operating driven inflationary adjusted was prior pipeline quarter for a Our the XX.X%, XXX-basis from the portfolio. and point increased the

second the our Despite ongoing margins first macro tandem The adjusted headwinds, line the quarter tax step-up in a versus half efficiency half expectations. the in our the with XX.X% to expect rate with in operating revenue. of higher in drive with programs year fourth to improved we continue was quarter

$XXX and ended were and million of currency the effects cash and by free $XXX to million Turning with flows in quarter. cash of about million. million cash equivalents quarter for $XXX cash about flow reduced the cash $XXX liquidity. and We excluding our the debt quarter totaled foreign the Operating third

related to in expense a previous interest rate expected for be environment interest On year. expectations note, our the XXXX, line a broadly despite with in higher is

expect of would we expense interest However, step-up into a XXXX.

for performance strengthening significant through providing greater debt company. made have improved financial our progress reduction, strategic ongoing in the and sheet flexibility balance ultimately We

versus with now for updated Constant currency will X.X% of reported X% basis to This our rates growth XXXX an means expected of to recent headwind points. based be to that be on the to in exchange Moving growth spot X.X% points versus assumption our revenue foreign of range previous versus XXX financial XXXX. basis on is X% XXX the currency revenue outlook expected year.

that to XXXX Also in a XXXX. related rates, dollar create the strengthening growth we of based revenue to through the spot estimate XXX-basis headwind point the revenue, will on about recent

$X.XX. update. expected XXXX EPS adjusted our $X.XX unchanged diluted from our metrics our are second Additionally, financial guidance to range other remain tightening to All we in quarter

third reminder, that be the slightly to about expect growth to related QX charges QX day selling part to higher we be by VBP will a As partially offset than quarter due one-day XXXX in headwind. revenue tailwind a

underpinned full to again market pleased and are had by another our In summary, recovery solid raise we outlook. we quarter execution good and year

market recovery execution ongoing continue tandem pipeline expect future. to to us attractive about product leaves to of with an number we strong persistent in confident headwinds, have a While navigate macro our and

And lastly, our and for I'm they thank ZB extremely that to broader want proud of all do. team

turn over the Keri. With to call that, I'll Thank back you.

Suky. Thanks

Q&A the start yourself we questions many session, single question we With to have as get can just please? question reminder may during call. a so Before as limit to quick that, that possible first we the operator a and through one follow-up, the please

take Thank our first Shagun RBC. you. from We'll question Singh with

for the much here on so a a and you taking despite Thank strong environment. print pretty congratulations question challenging Great.

So more Suky, you if a just I wondering XXXX. little and on can Bryan was elaborate bit

year out momentum of the And we given X% stronger have a last FX think year, looks it quarter you margins follow-up. to going floor, a talked but into incremental is on then top-line next growth? the on rate. about can still operating and you inflation, a Just you like that called do about next think believe challenging? X% have impact or going exit And you durability expansion from how with I margin I be more you then the drive should

really Okay. the right of good questions out gate. Two

of start to then side I'll equation, miss answer that do side. and you with So feel that provide want to could margin you maybe on Suky, that. free any the the color And certainly might revenue I

we that of consider. the going I'll the story, to and simple grow disappointed But I'll the with around said if get end variables be think we into couldn't in an just just it the market are important that we I details end just make some then of Maybe to to undisturbed of would X%. start the story

still There's not normal see market. as variables moving, that would a or tell we pathway a but do we market growth. you X% XXXX many we straight do see I not a just see too do -- Now to

that's of of So the kind the end story.

or take detract that let's the at Now of benefit that look to takes puts from a we some and either that. look could have at

going to things our give I'm three at side major are confidence confidence. and that the first should are On There look of me I start that by with the controllable positive that equation, give really you those things company.

Number here to continues basis. do Index going expect one, is a go-forward to is solid creating flywheel direction, it's importantly our to it's and ZB really just in continue on a Vitality that innovation innovation. north at for around the us it call I'm to move and translating moving north right the moving and we that into pipeline that

a confidence. The part So Really business. right is innovation the is our is really big now in stride important and execution of executing. a strong for hitting team momentum which

at our and way And way the research commercial move through about disciplined allowed helping a and organization move this continued the weighted people, we actively increase just us win so. around portfolio continuing we portfolio to the out and to that is has weighted development, looking spend the decisions. to market do. market one do not talking not on things things into growth growth way but I'm north we're the from are infrastructure in our third the our compensate That average of portfolio we our focus active truly moving management, very portfolio average

those the coming XXXX. into positives are So

going positives begin macro But real. hard to in can't patients a the pace really at the positive couple work has its as choppy it's We've the could be comps that as year, the a it's comps a to to this to hard impacting of is to orthopedics we be standpoint provide at to going to see the got and through full way And being of going It's got choppy. From some at quarter. to differences have you're XXXX. as when when should look the But It's to to a size. I slight I impact comps fact well. the it, in in point XXXX. say look to as I markets. at backlog growth but number system then tailwind XXXX. rates by we that's look put markets going a well

negative talking And tough it at the challenge to constrained continued is XXXX. believe. very recession a through have -- stuff the our it's elective is to about but headwind as going And we was difficult look managing We on for And do going And supply road. a continue everybody but then then we're a side has that's risk situation. unfortunately. XXXX not it, throughout and that XXXX that's in And as it's if staffing procedures on capacity it remain us also particularly impacts unemployment. we

to through But started all lot the I in we're a where And us that's variables. set a all journey range just based there year, not that started. but Medtech, to started a to significant There's think up people guidance handle that on normal our from proud to to to what these at which a say But where manage, we that four given XXXX a and we're contemplate may knowing way step-up lot the today, lot seeing in range. it. we not to pretty I'm is a may and getting lot of be sound looking like again or we expect

So you components sense view come into and that on revenue gives revenue as a XXXX. we our for

margin pass I'll the And you to then side. on Suky, it

question. the Shagun for Yes. Bryan. Good morning, Thanks, thanks

in raise end side we margin rest-of-year the been able our originally become been the And of environment challenging On That's our macro back you're reflected we've despite incrementally assumed. the right. than challenges in has year. back those more The to outlook. here half

doing job. that of the proud team pretty great we're a is and So

see where current despite things headwinds. assumes we're or assume improve, those But rolls that's that we more challenging, erode stability market we'll things and some on improving it our a incrementally that to slightly we path these but versus still or are conditions. about of thinking if If of XXXX. revisit today has become margin operating that. headwinds, how next some maintaining XXXX, year, into As And

The been biggest around has FX. move really us for

at on points points into basis So year year. of outlook XXX know, That translates as we're about points by headwind our increased full XXX next of headwind the XX to exiting to year we basis means you That revenue. XXX. basis

on that. So to on that's margin again, we're drag flow-through dollars. to growing absolute in there's and maintaining top we that the got And a big a is pretty of and But significant into line year. pretty believe there pathway next impact course earnings committed to margins despite a or

touched you area inflation. major other The on was

to raw earlier that purview real but that especially wage our again, of have inflation, XXX now freight capitalized was more top now gave bigger at bigger that as costs out about some we we'd on been But about less estimate it's components of see stabilization. we're trending right and within end least of in increase that has higher which material The points costs that were as starting previous supply and this higher and at and well overall to XX of still XXXX basis XXXX. driver about into areas the the less the costs, Europe. Our year. We're energy

a So towards end light the positive hopefully, the tunnel. that's of

improved. them to current based think And market got assuming faster. ZB pathway or They've job. execution and higher these And we then continuing a slightly interest we've interest expense interest commend just expect the update programs. be maintain going as next model. our just deeper on. and we're hold hitting team environment an fantastic so modestly to address conditions But really that to folks we for that overall sure a in, head recognizing embracing want making higher efficiency look, have overall I we're again expense. to the to XXXX, and done into Again challenges We're year that their on rate would just

the for so That's really much helpful. Thank color. you

get curious follow-up, on the ASC portfolio thoughts was I to your context just procedures Just as to the shift of management in setting. a

about recon XXXX so say let's are decade. you Any ASC could by hearing that by setting? for under-indexed in of Thank And procedures much even the the or We thoughts questions. XX% done you are the that? setting And of still the on in be taking end

clearly with Yes. as to submarket feel still you the Thanks. if recon parts in the also and and attractive want do we're in And business. our And clearly We maybe our increasing we're spend so. to it I'll of free area. and faster-growth doing other then and ASC business ways. our It's a couple of see of that, focus an submarkets clearly in of S.E.T. start off that weight Ivan, one

one, Number got a dedicated important place. focus over the traction of have good done that space really We've and because contracting we're as we've infrastructure teams putting couple that's in to on you've commercial the of got that ASC. last prowess in getting only result years that and And it.

away is making have for it sure if we if company, categories and the it's purchased but wouldn't not light would the in for. lights scale we're looking marketplace. from ASC. that given and scale ASC Additionally, ASC want to that didn't an that up into, We waited wouldn't we that infrastructure us take the area have have we booms have anything a product booms Not the to in

business. in of in acquisitions Same other that done thing our sports we've parts

of traction the versus the number relative We portfolio, really in we're infrastructure, to have ways: as we're procedures product it move of to so a do broad-based So north expect contracting that seeing ASC that. ASC being the ASC to opportunity result we and the in hospital. doing the done continue a commercial two

we make to of to stated. with that numbers would advantage that and don't going continue that want taking north I we're certainly, sure to agree know you believe move that. I But it's the we

you to if So Ivan, else anything had you want know add. I don't

Bryan. you portfolio complete but is Yes, the I pretty But of everything that I having drivers covered do I contracting. we wanted of best-in-class to much think one think a now have

not XXXX of a part not today. Biomet in back part that of we're a were part Zimmer contracts of were there So a was XXXX and

the doubl-digit. And So we of working. indeed to been grow we rates. category continue US, in are ASC In growing here in the dedicated the that structure we the believe the double-digit specifics disclose portfolio at has remediated growth will don't while terms

Thank you.

the we go Thanks Shagun Operator, for can the question. Yes. queue to please? next

& take We'll Lichtman with Oppenheimer you. Thank Company. Steven

side morning. What surgeon I it terms of relates Thank you're you the you. with seeing seeing about days Hip interest side you are a would that the if ROSA to you're in wondering in was as the relates Good strength Hip and of you it your in say pull-through. particularly on as early talk tailwind? to being business, could the still ROSA

probably without maybe some -- speak that product I'll help more it to anything well. we're Yes. Ivan future the that of speak business to related as to in the pass much Ivan pass And its things specificity to I'll the Hip to the probably performance. the just Hip also, than that predicting too

the the Absolutely. at robotic Thank performance versus that at summarize like advantage great is this like We for far, you. setting hip higher we're it when I accuracy will of world. about. the level expectations. procedures procedure. only system above talking is ASC Hip CT seen in a We've robotics the -- just in the comes the Steve, scan-less, that so remains it to conventional which fact pin-less level that similar the fact We

best-in-class launch. up. to, continues the it to I'm a So alluding continue reasons product scale for It's to be clinical that all to going

of makes including We in Hips about ASC again now and all XX% where are advantage a sense. settings installing in so major right robotics efficiency settings, placing time

excited launches. also product Beyond other about we’re robotics, Hip beyond robotics,

We have on Hips.

US. enables might Reality Reality in partnership you remarks. Associates that in Biomet heard company with be a the FDA-approved Mixed We've the to think I a hips in Surgical Mixed Zimmer Bryan called from got have platform the opening only in Planning

-- through in a to technologies that down surgery. globally we well We week Continue visibility efficiency. overall as have and we platform we going accuracy, Mixed get believe with get the we're Mixed have Reality as Hip some robotic Arcos. continue perform at to having GX of to HipInsight that complete of both and products but explaining Reality? better CAGR best with We be hip do is this strongly the better that it's better momentum. saw What other This a

here So again, some are in a gaining US globally. both the and multiple examples traction of innovation that

Thanks then color headwinds. inflationary just follow-up, Ivan. the for Great. on a thanks And Suky the XXXX

if offsets. about could wondering you talk Just

seeing internal You progress that what mentioned some efficiency color side? of that programs. they have can on on potential Any any you may you provide initiatives? the on pricing offset might about But are and pricing, impact -- what the on

Yes. the question, Thanks for Steven.

in year So, we far so have seen at overall pricing erosion company the an this improvement level.

Our historic pricing erosion XXXX. was in the per XXX to coming year XXX basis into points

And so far to points. this XXX about basis XXX year, we're tracking

investments So, there's improvement. systems, bit about capabilities. been making data governance. some a contracting. marked analytics been little hired better We've around We've talked and Ivan additional

that All strategically to of improved tactically are these price. contributing and

we As we but that and historic be at the we erosion, to year, our not be to would continue it there expect lower hope expect into end do of move next if pricing to average, better.

several we while will the for last headwind we've years, it where a be do year-over-year. be to it expect still been than better So,

services programs, other we're model Now look of having pandemic. profitability. said that our global number shared taking a these of created Like are targeting services there much more at business We're some through headwinds. new a efficiency we operating that country that offset targeted or the help to

contribute and The offset to these lower at lower Bryan spoke have all management to are about help about products opportunities profiles, product those growth those investment portfolio that things active that are headwinds. differently margin portfolio that going thinking looking

Suky. Thanks, it. Got

to please. in thanks we And queue, next so operator, the can go slide Yes. the Steve much.

our next from caller Kumar take Evercore We'll Vijay with ISI.

a floor And sounded question. is is no could X% your it my taking you you Bryan, looks on products, for maybe point. Thanks Pricing the bullish go I'm like X% just continues assuming through as but backlog. be from first pretty guys. please? -- assuming? It like there one curious that my still where a contribution I'm starting 'XX for products, fiscal Hey, new assumptions is new that minimal headwind. to looked on assuming

Yes.

going business have revenue The for think kind be we will go-forward-looking be think that out I positive you're going already. growth When puts about know to them absolutely takes. the laid are you've and innovation. I to our things of

about included revenue So, there's innovation. we've growth think I forward, when going question calculus on that the no

spending X% money reason the bringing a absolutely and growth XXXX, We're and a lot of revenue our get can X%. business to market we're in We're why That's part that products and now of we in growth. XXXX, we great focus a predicting development. gain of expect to and we buoy research from to lot

So, that's movement. a been big that part of

The of to amount no an part in we question. it. that right it's execution dollar is matter momentum team have does of but our on organization, another and a There's I momentum put hard know it now.

And other the big market growth. that one average weighted is

five We average our weighted growth last market north moved have during the years.

deliver get to us in consistent our the So, market a It as closer can growth for that weighted way. that average we we X%. gives more confidence without X% taking, share

X% and is management getting going We're growth forward. to thing. weighted this up. going a portfolio But to change financial Active to Phase there. X stop have organization going good rate wouldn't that we're of more to we is certainly flexibility the start average market Now, continue to

all a is positive than these distractor that? We and that and more against real saying growing your got business. we've have negatives still because it isn't challenges why you're okay supply The for that around

And we're potentially We so to XXXX at going have believe middle through XXXX. through manage the that least beyond. through we get to of as

isn't capacity potential we as occur. this us forward. is a course of our as no headwind in going going that calculate it staffing associated though with to was some for question And acute the risk have even if that does it's And to recession be before,

negative of having that which I seen it by built we're hoping it. might a on this quarter, as some was So, we concept we still offset backlog think was it's all backlog XXXX. in We some But of backlog we some those in in headwinds combined backlog areas can believe concert certain that these with we consumed, QX think haven't was things count consumed. but great Even of QX. have don't actually certainly had in yet,

at think that variables the we're are looking those about as beyond. we and So, XXXX

cash free XX%. your on been impressive flows you conversion for north of one cash Suky And year-to-date. year-on-year Bryan. up free helpful really It's That's

probably companies else of item? that or impact few Is free cash You're have flows anything flow the MedTech a free on timing line in to cash going up. one a

payments Yes, Vijay would pretty think a but in we will fourth quarter the in feel cash some the would year I reverse the in is in has that fourth It in months confident third and as around did quarter that -- say good you quarter. have third in timing tax land there we I range year. nine some VBP All-in-all, the with as overall really payments normally to our well nailed having posted quarter. here. benefit some do this for a We're fall now we it. good

Understood. Thanks guys.

you. Yes, thank

Thanks Operator, next go we to Vijay. the question? can

next our Travis take with question from America. of Bank Steed We'll

everybody. good little wanted morning on more bit the to follow-up XXXX comments. a Hey I

EPS before you growth. I faster think said to grow revenue than

improving. now was are margins And flat now margins op with up that slightly kind to so of

curious is probably So, currency but I'm EPS less should X%? growth growth up X% than constant how if we just EPS about versus think now still the

to on I want interest And the did clarify expense.

interest debt. higher but you think had You I expense a floating have no

driving of kind just interest what's the curious expense? higher So,

Sure.

and take ahead I'll those. Bryan go So,

of I basis points next revenue So, the the year. is one into about talked to headwind EPS on on thing remember line XXX

that about year. take And to headwind talks foreign so matriculates that need consideration ex-FX basis, -- thinks currency as an into next Bryan on X% the you into

revenue. and line line slightly a see expect interest in which on with with EPS that, relatively kind about would with you up being maybe I'll a moment, So, reported expense margins of travel overall to in having kind of up talk said the basis reported year-over-year, in

bit So, more hopefully little a that color. gives you

give our we obviously quarter change XXXX between Things that's year. the view for and when Again guidance in finally now. now first of right next best can

in are to question fixed we to have floating. interest you're related on and right we strategies our debt, also some your expense, to but On out face value do fixed previous swap done

it's expense. on that that So burden the swaps interest higher really interest create those

much a a to Okay. where on a we're market -- the of more which that's And helpful "almost color. ask I kind talked year always stabilize more aggressive seems and it once No, M&A. market". M&A Bryan with normal then like XXXX you in getting wanted about is Like

something to So move you've that's more versus smaller the been that maybe with some -- and private can stuff willing your bit us of more doing in the S.E.T.? a needle historically portfolio on things to the M&A more adjacent do

Yes.

more it's be I want don't what an organization competitive to right we a space to want WAMGR squarely we X clear markets we that to diversifying say business. X to telegraph of as very the And all been our and transformation. careful all, portfolio, around now. management our first shifting We because what pretty So Phase But Travis portfolio accretive in I active too the much transform of clearly, toward are is do. have want Phase

in helped well X all as that's looking a Phase know you're some done, for acquisitions about of obviously. already our spun have we've saying firepower of as there's kind I that businesses here. haven't changes at made been had what out that strategy. But broad-based is And much So we this but way company. we've we have smaller

detail got flexibility us. There's acquiring the can few expect that no maybe the that strategic That across What and said, more behind result mission. to more be at a forward. assets we're at say give you're we're I'd exactly getting something a just we going as financial make the look vetting question. We would probably COVID move is way typical willing And have going metrics, look to saying mission is metrics. centricity. any to to of outside that sure We've not

going and our have it's organization it to something and over got of out for because because you into the can EPS absolutely that's a growth of accretive. a get good you revenue our market, if want translate rate time asset fast-growth that vetting. don't accelerate in just necessarily don't Because growth We that's WAMGR to accretion you're growth drive it's kind the

And the first and be growth that best going subcategories would of closest recon. be then to look categories at probably to vast foremost, the would we're

a It things that minute setting be building ago. in mainly would be our would orthopedics like faster recon, robotics areas about that outside or scale be we So category. like just more data of would were and still in the but S.E.T. in ASC talking growth

from So subcategories those our that diversifies just of recon orthopedics. in business faster-growth away

to those all orthopedics just diversification of which looking nature number and of selective your that of want say again attractive that we're of prioritize, know less but at each going the assets are are don't orthopedics. provide to in And we're spaces vectors completely those in I of table then those out categories. point a more on out and to white of

Thanks the for Great. color.

Absolutely.

Thanks. in question And queue. operator, the I think we can next go on to the

Robbie next take from JPMorgan. Marcus question We'll with our

more Bryan, talked and on a a smaller lower a that next you're But you're Zimmer on what capital to I it's US? about sales. quarter. capital a sounded over But upfront seeing more like I'd if environment. questions it's overall Maybe going to was XX, sales on the hear love know for you different start And forward how the to little XX It color bit what the ROSA, Oh, great. expect good versus for placement US Thanks seeing it the versus bit Biomet. component months? quarter. any you trend equipment about in congrats taking

I some Ivan big make can I'll us. incorrectly. component as clearly say and capital then anything for Yeah. But correct not is a comments

from the increased So I about major trying we hurt on capital payment want through I and focus talking barrier to say market. for on our us. it, really that it perspective the depend hasn't do capital commitments But been on Again, almost perspective, market businesses more through ROSA a place the agreements for from for system ROSA those allow don't a that's business. like we to going don't focus where to anything that because

the on and point can the not capital further to But if in as around continue serious to provide sell at help constraints is a leasing those do the that's But ROSA. got a our anyway in business. Consider actually it of commitment we thing to what color but business. more that we you've did leasing and That feel of is this do for we to comes opportunities you we quarter well. focus arrangement, good have any maybe a Ivan, payment and when market

morning, Absolutely, publicly bad my Bryan. that Robbie. move. correcting is sure I'm good a And boss pretty career

it to The that, thing, correct not is right. really very I'm add I'll global performance. Mr. a So him. your is is Bryan, answer only going

XX% US, and the are robots referenced the oUS. of as XX% we've in momentum that seen software. segment of I and ASC, growing, are So installations are with earlier the around the are hip going is exciting XX% to

So I move standpoint. would from to excited say, continue all about, in all right a our enter we're And where robotic in ROSA direction. are They the in we installations as placement sales very we QX, are line.

extremities a said, think double Maybe item. give line I This – us could I how and as some you Thanks. reimbursement in a visibility changes, Great. the there's quarter But HA grew trauma extremities that you last on we're Bryan less digits. has this follow-up, in little Anything pressure know, color any and might Thanks. APAC, seeing EMEA? US, out shake so medicine sports what on extremities? sports there. versus that

problem. no Yeah,

consider. a So and about maybe for than there's for just proxy it categories other our would in businesses S.E.T. everybody. as quick probably think When in different we reminder because no have really we S.E.T. businesses, others

which manage sports; are categories. is of CMFT, categories extremities separate our that Those We restorative S.E.T. then inside business S.E.T. be and ankle. upper and thoracic have the we across business; the the therapies; sports and trauma; foot would from craniomaxillofacial

quarter. them, the do growth double-digit would to concentrate digits this I they that would same all sports. at did specifics, growth sports, have the other another categories. talking The And say, invest those of upper anywhere the level S.E.T. aren't would businesses don't pressure It quarter. resourcing they therapies on at focus, separate giving ranged really from about in good extremities, look and be be three from three On important CMFT we it's that And you I in drivers point. without in restorative we and of just that get areas if still mean were doesn't mid-single but again this our

So we're research that question acquisitions performance to the that course, to in been no fulsome that development giving the that with lot incremental of field. infrastructure, and getting in And drive concentrating, commercial tucking where do portfolio. A in the of we're we've in areas. a to we're the support the those areas, there's then has and more

associated really it quarter. remarks or the change What around reverse relative through to for do to pressure business mainly from which pressure seeing said global trauma, in will the therapies S.E.T. you're in more Asia what Suky that the has pressure middle restored so. a XXXX VBP, And that next and the And to then carry in with prepared unfortunately, reimbursement with GX. we'll of quarter Pacific

it. Appreciate you. Thank

Sure.

queue, can Operator, the Robbie. question next to in go Thanks, please? we the

to Citibank. next go Joanne We'll Wuensch with

sort bit wonder, and the changes can maybe taking changes back what of you you and pricing, no you're think orthopedics little I in morning, if Good so state viewing generally, the or much the thank step question. about a the maybe physician in competitive as something you what of talk for landscape practices markets, the Thanks. of as or union?

question. That's an It's question. a great interesting

seeing wants maybe thing It's I My I really a anybody think part that interesting seeing open union you're a view interesting. from are the to orthopedics, in an think, Ivan, I'm kind mind that, in Suky, not seeing like truly the think some again saying the There arms over is then coming question that, I to what rapid just of of good that, one. that, on a that I'm of things my probably that off customer I'm question. on occur. most was do technology. to it's who Keri And adoption could is lot whether I perspective the of marks add start I'll because orthopedics state transition in or the anything,

data. value pay that the you from and down marketplace, type all leave. if have robotics a term medtech, direction. innovation a I'm that Because to I've kind customer base of do than And That's And and to it And doesn't it willing that the usually importantly the has and to robotics We're all dynamics. companies moving to the into because it We for in important, impact comes really pricing. the technology that, is more particularly you hearing it looking technologies bring contracts, to better in stickiness on the of but brings. been the longer more bear. stability front it technology, bringing they're that doubling our obviously in of saw lot previous does it technology very technology Mako other we're when kind see very have excited sticky of it and ability with in that for pricing

it increased, or this procedure. get let's also for mix benefit you And of call share every of wallet

for rate. a robotics bring the data stability, that moving in see we you if bringing adoption and buoy had technology up very can revenue forward, like procedure. for that that you that as you benefit or positive has So entire continue in for the pricing, the orthopedic procedure more and knee of actually to overall overall per that yesterday, real things move get revenue same that And to technologies the more procedure a growth Taking could effect market allows market, mix space. cementless

pretty a And so exciting view dynamic real-time in that's anyway. that's happening that's my

But else anyone it I'll to anything. up open if to you want add

was mentioned bullet unit, just points longer some of the care here the here. Maybe to therapy I'll something said one, some frankly care again shift all home. and you on four in Number Bryan recap in there's as on of No real shift of some down what like it's the then stuff and physical a post-surgery quickly a about to cases it the ASC ASC, of a getting real. inpatient is home earlier, getting

So that's number one.

launching provider. the clearly we're role is directly The patient patients. the physician that plays maker that two, best why decision excited the we're technologies the that's consumers, or a just not target Number

it's So physician, and it's payer. provider physician provider, not only just the basically and

data the engage proposition. becomes economic that tool talking not Bryan also really are an value clinical for proposition, and we that a value just to of but about Some in the is us a powerful payers technology demonstrating solid

discussing the and in three, I pricing. emphasis pricing value an with is this story as aligned think is as just Number much there

of they're happening discussions Some maybe rates, around with of were length the lowering years now. that having same stay, the we're not patient a outcomes right that discussions satisfaction, ago reducing discussions readmission shorter surgery stay, three happening the today we're increasing around length and some were having of of having

ago, And in rejoined XX of med-tech I I've introductions. robotic couple I would role when four, or the in working things I years net were innovation. years. much orthopedics of that was same, of four years I orthopedics pretty for been then number a the joined XX say When again ago.

of infection orthopedics the seen bringing three, thinking the mixed [ph]. in last machine really lot we've to coming entire in management, Over innovation organization reality, four a about years in learning,

attention So a to things in we I would think say pay areas. those are key we'll have that we and four the advantage competitive those

you. Thank helpful. Very

Richard We'll take Truist from Securities. Newitter with question our next

mentioned give wanted pricing to just Hi, thanks technology. off can new and that implants, to pricing on within follow-up technologies able discrete third your buckets just question. of opportunities more some talking for about I the examples Bryan mixed, preserve to opportunities be pricing we category, to of with the particularly fall the into these where third that were buckets might curious new Mixed areas, of the you as impact taking some the of expect for smart first, some ability I'm of should what newer on bucket, from? of on contracts those or you you these reality, which roll charge

direction. think orthopedic the we're entire that players us I and just all -- -- when that this I understand the it space your major and there's by innovation sure across way. about like bringing specifically. I It's moving about not But Yeah. make question the That's momentum what the in

make areas no certain in mistake everyone think I this is we're direction. in But moving ahead.

the a an opportunity to for some to now learning first the recovery. machine a answer launches the uses the Apple. that Apple at have collection, able and this do take we're And uses actually I data Think question of is if an with be relationship we out mymobility for Watch that ultimately one hopefully This leveraging of to when we patient the collect in surgeon will you're had which tell analysis. asking. looking that and then through So falling predictive that they're instance, examples about norm couple data and of just to

And sell type that's able thing So do we're that. of to do. the we that

that to opportunity there's monetize So an application.

because gravitational way technology but So it of money a you of once in, bring pull or application. you there's implants, monetizing mymobility getting making getting that the it's of get implants not just giving natural it is to pull-through discrete certainly that pull-through also them and

So that's one example.

Another uplift the natural I over, get example surgeons they in but is robotics. for robotic an procedure time get disposable get pull robotics gravitational that comes a value. uptick come you also you in mean, every to use you because competitive

the robotics now benefit So that. but of you cost to for procedure do, inside account the more that of get

technology that a of the So in fair is way are in, way. trade. it's two examples leaning Those

that with the you way, take Persona the nonstop It's collecting That's will a thing drive very will off. it IQ. first also on the a compliant the And in for smart can't marketplace. market. data patient. that in because implant They're premium be Same

Persona that use capability. to this. discretely that's going for that to So sensor you're if the monetizing way IQ, you're And pay we're going

add else. could sometimes allow So see of things or to a combination you unique it wanted And Suky brings that anybody again, But or where some the of us value two additional things. implants. anything or pull in combination technology we you else those us to just monetize that it's would Ivan, is to if

a We you've get Bryan. very can think next good done our question. I job,

be capability should we prevention going the data for to guess, the a the an Great. infection get like seems product of or indication? premium. detect the prevention that ability the what that you to And killer of think IQ approval to that occurs, like for just it on be Persona I to to infection infection will probably before collection allow able on get app it timelines that's kind

a years bad absolutely getting limited focused ultimately committing customers. to sprinting our is a matter always different so using for with users is look over be learned will situation is the that and I've can this data collect can use providing of us able on, quantities and to significant I that that ways that we will insights like our say are to What Yeah. we launch timelines What in idea.

with patient, we the caring patients, those derail patients? the be for cost reduce to could be of associated The what on will want good cost so for the the we for things obviously are the that caring that focus that also would first but things predict

great. is in And infection

very that's there, predict If get be you to of fantastic. If could that something going we're a risk do that Certainly happen looking but be infection doesn't before occurs, could often. fantastic. to we it it would

power, you're longer about it's to us have patients data the think and to take going there. just of you So of amount the to number little get to the have a going

be You're stiffening can which of to at the that going before we predict care the if looking loosening it looking to get to at are amount though of got ahead a also we things we're just perspective There can is that to we Can happens. loosening, reduce happens? be provided What also needs you've do patient. from out stiffening. certain

of So the try predict cost for things cost to that of reduce sure lot and derail, there's, the will a to for the we're outcomes patient other make looking that at or caring patient. the for better

want get infection. on hyper focused don't I So to people

is real is right goal now able the longer. our then to those change that the able data be and that be already, at patient. something to for But pursue. It's going we're will care will we to that take we're look significant derive which way the collecting to It insights

really we Persona those price Once to to and the proposition we begin higher support we that for define those get IQ. that be can able will a that for bolster point value to product have

you. Thank

Sure.

next the person the to go we queue? in should Operator,

next We'll from Baird. question Jeff with take Johnson our

technologies interesting maybe higher all the guess Yeah. premiums it's business. equally moving all even discussion, building base Thanks. get think more on I'm of out all should pricing or and say stuff technologies sense. interested that that I you this Good I I morning further on guys. mix sensor-based your and interested can Bryan makes new on kind on that

this your let's where is portfolio, or that with out understanding but those extracting products and in few if I now right what or going don't products in or inflationary those years all in year three your especially older new single say know are every are points develop hospitals of is Vitality the environment? you're at that a in of they this that XX% of XX% or to improving hospitals this can't two are revenue continue Index that, base even generated keep on technology in invest -- conversations to price

probably multiple we lens. turn variables what just don't Probably Suky, benefit want Suky, this the look I'll pricing have that to at over do think that Yeah. company one have forward. I through know and as going we we to to we talk pricing in going variables the look because about think that There's, one one is that we equation I'll some provide. Ivan about maybe well at But are you you color vector do could when

Yes.

more bit, we're So transactions. to starting we know do But versus dialogue Ivan, real little we and nature world want do experience. completely you've that help you more becoming just value. want can think this pricing talk I much strategic there got in around We're maybe overall and straight discussions. the centered value some more because price a where They're not to but be, around

country. Jeff a It's every much real happening absolutely. pretty in Yes, discussion. It's

in around new is you improvements sales correlation about our and Vitality from percentage there between think products As of price. stability direct Vitality Index, a coming Index

a that is you you very mixed discussion contract real to think the But knees, example launch an keep of And given got the itself we certain rest as creates it. And how again, a may it launch that one contracting a that in price. portfolio year. a they've example real product the that we category about IQ for Persona in where opportunity be not as launch of

the do We that We hips in do board. knees. that in across

years couple a but the product price the a in and products Vitality for introductions correlation premiums category Index keeping of of again, new for product space. also given later, between very a direct So, the

placement margins it's when for Yes. about the in? run you. six probably But strategy So very as shifted just do of strategy it's think does to maybe the think where ROSA to that's start that not When crossover those kick minimum over commitments for having points that crossover That's purchase guaranteed And longer this I start the how to Thank months more good with future. strategy and that contracts the I here the you. least going the just we that? it on follow-up, some and to things positives sure, like then Suky helpful continue a has the which at like those last market tail really on kind side guy things a are placement you're get sounds probably probably XX costs helpful. of in are that to and foreseeable to outweigh like those in versus, short Thanks. placement that this the I'm eat minimum happen on the of upfront price maybe

to start with I'll and turn it Ivan. over

some the early up haven't thinking right? way relative right you really innings on You're overall here We're start those you maybe in want a it ramped growth do about that Upfront to commitment. depreciation to placements, the is investment that, because that and talk bit? there we but still Ivan little

it second Yes. comes I would to governance robotics none. when say to the is

cases has any to take that minimum unit is back. a the financial. commitment where reason our center globally One in of place do when center So is the we we install there robotic perform unit

The exchanges, delivering talking units important not more standpoint fair cannot the compliance of get contracted to in so have value That's on how centers equipment prefer from are reason we versus we the place we perhaps other annuity. that market capital why we giving is cases. keep a number units about semi

we that of items to the about a the case. question, comes on there also zero are latitude think part pricing peripheral governance is around other when that disposables. side robotic There as is discounts cases, On the disposables, the of those it

we are terms none the to say early here and second where So that governance robotic the again, is innings of would I journey. in in really

Thank you.

operator, the Yes. for more. I think, maybe we time question. have Thanks Yes, one for

O'Brien next our Matthew We'll with from take Sandler. Piper question

taking Good questions. morning. Thanks for my

-- line maybe one. just talking for top a this number Just about put year. on that Bryan, just I'll and And stick next to finer with I point want you're

and components year? and ASCs, of it two is specifically and First of seems think And about Knees. next et X% get business environment just between thinking cetera, for all, more the the you're about like or VBP that hips is knees pricing the talking that about for just kind Hips I really that as going floor to levered the robust and you're

to next the And be Thanks. we why is wouldn't So, that, X% as floor? year? some meaningful there potential into upside head for

I'm whether is, we the news positive a The Okay. question X%. the not that's question getting deliver of could

So we're making progress as there. to. we talked attention of headwinds that I a would there say, have that are I still pay to about I that think before lot

want to so, help you all normal would to I don't we're -- than color is in giving the a And trying here. out that everybody first that we facing challenges ever more of say year, all, just given give

out that. is challenges, But are not own to pathway that could that. I mistake, help make I'm talked we are But our could a a macro that that challenges about in that internal X% things there say, from perspective, are opportunities organization see just macro also no market that And stress a that we the X%. is are would to doable number saying there that

So we to trying of what XXXX. we or could do think positive view, a in negative to take organically, balanced what can happen we're

noises, And way normal believe the XXXX. our about you didn't should at year, about have say, by X% we a to at that's And and to things you is XXXX consider way right considered, X% should all I think why, we if the look a way all look reason fair a would floor. not consider way to X% these good the was in growth a just that business. for

want that a made Given more to have to weighted that that? we average that. we believe, all attend flexibility to the flywheel thinking and rate portfolio mean now Particularly, we start the that's north. do more move we've innovation X% we as management that I our Certainly. financial the growth market continue people But, didn't WAMGR, moving deserve. moves we've we're mean portfolio made we Could continue to than that what we floor. move don't active strategy, I I that as improvements

you. Thank Understood.

Sure.

think remarks. I Operator, any X:XX, right. All little we're there's closing a past unless

call. we're So add to Bryan, anything the probably end you'd good

We've I'd in extremely I at to all continue to And Zimmer transformation disciplined in portfolio to that has of I on decisions. me business. the just the occurred Yes. portfolio focus been think is, people probably Biomet. want add, our aspects

management we and We of over market our has whether be active research commercial that happen are on infrastructure, increasing more and That diversifying portfolio M&A, time. average on and go-forward we're weighted our spend happening. compensate business business a biasing basis. our in ensuring happened it already is way the will the it development, of through It people growth

we direction And that was few rapid way, moving I but that to The the Vitality in Index a in years continue. keep flywheel, ago. innovation right and talking nonexistent about that a is expect just

with the us a combined good that field from of in challenging market. place, we're that the All very execution is a seeing in putting

So that I'll I leave guess, with it Keri.

Bryan. this Thanks everyone, thanks so much, morning. joining call for And the

Of you questions, feel team. I IR if to speak course, of have the to out know free reach please today. to many you we'll

So for joining. thanks

for Thank today's conference participating you, again in call.

disconnect. may now You