Zimmer Biomet Holdings, Inc. (NYSE:ZBH) Q4 2022 Earnings Call Transcript

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Bryan Hanson: Yes, so when we come into 2023, even though it’s not going to be a normal market, we’re still thinking about SET as being able to be a mid single digit grower. That’s the way we’re looking at that. In an undisturbed market, we would think the same thing. Remember in the first half, though, we’re going to be a bit pressured still by the restorative therapies group and that change in reimbursement, but even with that throughout the year, we believe that that segment can grow in the mid single digits. The key drivers for that, because we don’t treat all the businesses the same from an investment standpoint, will be our growth drivers, which would be upper extremities for us, our sports business, and in certain portions of our CMFT business.

Larry Biegelsen: Thank you.

Keri Mattox: Thanks Larry. Katie, could we go to the next question in the queue?

Operator: We’ll go next to Travis Steed with Bank of America.

Travis Steed: Hi, good morning, and congrats on a nice quarter. I wanted to ask about the robotic shoulder opportunity. I think before you’d said you’d be first or second to market. Now that Stryker has given more definitive timelines, I wonder if you can kind of clarify if you’ll be first or second, or some timing there, and how you’re thinking about the opportunity from a mix and share perspective.

Ivan Tornos: Hey Travis, good morning – Ivan here. I don’t know where they are, we don’t pay attention to where competitors are. We pay attention to where we are in the process. I’ll tell you frankly, I’ll be very surprised if we’re not first to market, given where we are in the development cycle. My expectation remains that we’re going to be ahead. The most important part is not just the speed in the actual launch, it’s the quality, the features and benefits that we have in the platform. Given the mix of developers that we have involved in the project, I do think it’s going to be transformational for our platform, so that would be my answer.

Travis Steed: Okay, and then–that’s fair, and then a quick clarification. On the 3% to 5% constant currency growth, how much of the revenue is coming from Embody in that? Then Bryan, a question for you on M&A. Just kind of curious what your willingness is in 2023 now that markets are a little more diversified beyond electives, or if 2023 is more of a tuck-in year from an M&A perspective. Thank you.

Bryan Hanson: Sure. Maybe I’ll just start with the Embody thing. That’s a relatively small acquisition. I would probably think more about that as a product launch, so it’s not overly material but it’s a very attractive subspace of sports. As we’re building our that commercial channel, it’s one of those things you really need in your bag to attract talent to that commercial channel, so it’s important to us but I wouldn’t look at that as a significant or a material impact to the year, only in the sense that we’re going to be able to bring that channel in place and get good momentum in sports overall. From an M&A standpoint, yes, we are clearly in Phase 3 of the transformation of the company, which I’ve clearly talked about looks at portfolio transformation, focused on getting more revenue in faster growth markets in its simplest form, and that’s exactly what we’re going to concentrate on.

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