Medical Design Briefs - April 2024 - 10

Inside the OEM: Zimmer Biomet
tinued financial flexibility and strategic
options for the future. Looking ahead
to 2024, Upadhyay said the financial
outlook considers key assumptions
such as pricing erosion of 100-150 basis
points but indicates a continued improvement
trend.
Revenue growth is forecast to be 5-6
percent in constant currency, with adjusted
diluted earnings per share expected
to range between $8 and $8.15, representing
a growth of 6-8 percent. Despite
headwinds from currency and the implementation
of Pillar Two, the company
anticipates operating margin expansion
of greater than 50 basis points compared
to 2023.
ROSA Shoulder is the world's first robotic surgery system for shoulder replacement. (Credit: Zimmer Biomet)
Upadhyay said that Zimmer anticipates
slightly lower year-over-year gross
margins, which will be offset by efficiency
and restructuring programs initiated in
2023. Net interest and other nonoperating
expenses are expected to be around
$205 million, with an effective tax rate
stepping up to 18 percent due to the implementation
of Pillar Two. The company
expects to end the year with approximately
207 million shares outstanding,
lower than in 2023 due to a $500 million
share buyback plan. Free cash flow is
forecast to be in the range of $1.05 billion
to $1.1 billion, reflecting a growth of
about 10 percent at the midpoint.
Zimmer Biomet initiated a global
restructuring program and other costsaving
initiatives in late 2023, with expected
cash charges of $125 million to
$150 million over the next two years
and anticipated run rate savings of up
to $200 million by the end of 2025. Revenue
growth for the first half of 2024
is projected to be at the lower end of
mid-single digits, with the second half
expected to be at the higher end.
Quarterly results may be " choppy " due
to billing day impacts, Upadhyay said,
with varying headwinds and tailwinds
throughout the year. Gross margin is
expected to decrease slightly compared
to 2023, and operating margin is expected
to be higher in the second half
of the year, with Q4 projected to be the
high watermark, followed by Q2. Overall,
the company plans to maintain its
momentum from 2023 into 2024 and
beyond.
" We are very excited about where
we're at for the track record over the
last two years, and most importantly,
we're deeply excited in terms of where
we're going to go in 2024 and beyond, "
Tornos said. " The team is ready. We are
establishing the right trend and we're
going to continue to drive execution,
delivering our commitments along the
way. We're going to help patients, we're
going to create shareholder value, and
we will have a mission of alleviating
pain and improving the quality of life
for people around the world. "
This article was written by Sherrie
The HAMMR Automated Hip Impaction System is designed to address surgeon strain, fatigue, and repetitive motion
associated with traditional mallets. (Credit: Zimmer Biomet)
10
www.medicaldesignbriefs.com
Trigg, Editor and Director of Medical
Content. She can be reached at sherrie.
trigg@saemediagroup.com.
Medical Design Briefs, April 2024
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Medical Design Briefs - April 2024

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