Zimmer Biomet Holdings, Inc. (NYSE:ZBH) Q2 2023 Earnings Call Transcript

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Frederick Wise: And maybe starting off with a couple of the key new product launches that you highlighted. Bryan, you said as you were talking about the 4 pillars of Knee growth that ROSA+ the cementless Knee launch, were — that was your first comment, your first focus area, taking cementless from mid-teens to 50% over time. Related to that point, where are you in the rollout? When, or are you even at full launch now or what’s required? And how do we think about the acceleration of that launch over the next year or 2?

Bryan Hanson: Thanks, Rick. What I’d say first is just to make sure that I clarify. I’m saying that both ROSA and cementless will move from the mid-teens to 50% plus, 5-0 percent plus. So not just cementless. And they kind of do play off of each other. They benefit each other as they’re trying to get adoption in the marketplace. But speaking specifically to cementless, maybe I can pass that to you.

Ivan Tornos: Yes, I would say, Rick, that it’s early innings, frankly, both for ROSA as well as cementless. We are in what I think is not still a full launch for cementless, given some of the supply constraints. I think as we exit 2023 and early 2024, we’ll have as much supply as we need to meaningfully drive the penetration of cementless with a goal of going from 15% to 50%. I won’t say when 50% is going to happen, but that’s definitely the North Star. ROSA is the same situation. We launched 2 platforms in Knee. We are about to launch ROSA Partial this summer, a new and improved version of that. We’re working actively on next-generation total knee, which will be a meaningful launch going into ’24. We got all kind of ZBEdge add-ons data technology solutions that are going to augment the penetration there. But I would say net-net, both for ROSA, cementless and some of the peripheral launches around those 2 components, we are in the early innings.

Frederick Wise: Great. And Bryan, if I could, for a second question, I would like to hear from you your personal priorities. It seems like execution is going well. Ivan did a great job, and the team is doing a great job with the pipeline and execution and driving the business forward, Suky is taking the financial organization in a positive direction. What are your priorities now as you look ahead to the next year or 2? Are you focused on efficiency portfolio? What just — what are you thinking about and that we should hear about and ask about today?

Bryan Hanson: Thanks, Rick. I mean I’ll kind of tongue-in-cheek say we’re thinking about everything. But obviously, that doesn’t get you anywhere you focus. And we’ve been very clear from the very beginning that we had 3 phases of the transformation of this company. Phase one is always going to be alive, but we’re in great shape Phase 2 is kind of what you just said. We have a great innovation pipeline. We’re executing from an organic standpoint. We feel very confident in that phase. And now we’re squarely in Phase 3, as we’ve been saying, and the big focus for us is that portfolio transformation that will leverage our balance sheet. And the balance sheet is strong and strengthening us in the prepared remarks, and that is the area of focus for us.

How do we continue to move our weighted average market growth forward. I can tell you we’ve already made great progress in the focus area here. We’ve already moved it North. With the balance sheet strength, we expect it to continue to move in the right direction. So that’s an area of focus, not just for me but for this entire team.

Operator: We’ll go next to Josh Jennings with TD Cowen.

Joshua Jennings: Hi good morning…

Bryan Hanson: Do we still have you?

Unidentified Company Representative: I think he got electrocuted…

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