Zimmer Biomet Holdings, Inc., together with its subsidiaries, designs, manufactures, and markets musculoskeletal healthcare products and solutions in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. It operates through four segments: Americas Spine, Office Based Technologies, Craniomaxillofacial and Thoracic (CMF), and Dental. The company provides orthopedic reconstructive products, such as knee and hip reconstructive products; S.E.T. products, including surgical, sports medicine, biologics, foot and ankle, extremities, and trauma products; spine products comprising medical devices and surgical instruments; and face and skull reconstruction products, as well as products that fixate and stabilize the bones of the chest to facilitate healing or reconstruction after open heart surgery, trauma, or for deformities of the chest. It also offers dental products that include dental reconstructive implants, and dental prosthetic and regenerative products; and bone cement and spinal fusion stimulators. The company's products and solutions are used to treat patients suffering from disorders of, or injuries to, bones, joints, or supporting soft tissues. It serves orthopaedic surgeons, neurosurgeons, oral surgeons, dentists, hospitals, stocking distributors, healthcare dealers, and other specialists, as well as agents, healthcare purchasing organizations, or buying groups. The company was formerly known as Zimmer Holdings, Inc. and changed its name to Zimmer Biomet Holdings, Inc. in June 2015. Zimmer Biomet Holdings, Inc. was founded in 1927 and is headquartered in Warsaw, Indiana.
Business Analysis of Zimmer Biomet
The Life Sciences Sector is witnessing a major shakeup, new age business models in the industry are transforming both customers and businesses. Faced with this uncertainity, companies are investing resources to transform their business. An in-depth business analysis is a valuable resource to identify and articulate the need for a business model change. At R&P Research we believe, the starting point for a business analysis is Benchmarking. Business benchmarking can be done at various levels: 1) Industry Benchmarking 2) Peer Benchmarking 3) Disruptors Benchmarking. In this report, we share the snapshot of how Zimmer Biomet compares against the industry on the major performance indicators. This analysis, along with peer group/disruptors benchmarking and revenue model understanding can help identify growth and cost optimization opportunities to maximize the value delivered by Zimmer Biomet to its stakeholders. R&P Research Industry Intelligence Platform provides historical data for last 15 years with an easy to use benchmarking interface for an in-depth comparative business analysis.
Here is the performance snapshot of Zimmer Biomet with an interactive chart.
- Revenue Growth: Zimmer Biomet reported a revenue growth of 28.1% year-on-year during 2016. Medical Devices Industry grew at 20.5% in the same period
- COGS share of Revenues: As a percentage of revenue, Zimmer Biomet spent 31.0% of its total revenues on COGS. Medical Devices industry average (COGS share of revenue) in the same period was 41.0%
- R&D share of Revenues: As a percentage of revenue, Zimmer Biomet spent 4.8% of its total revenues on R&D. Medical Devices industry average R&D spending in the same period was 7.2%
- SG&A share of Revenues: As a percentage of revenue, Zimmer Biomet spent 38.2% of its total revenues on Sales, Marketing, and General Administration (SG&A). Medical Devices industry average SG&A spending in the same period was 33.2%
- Inventory share of Revenues: As a percentage of revenue, Zimmer Biomet spent 25.5% of its total revenues on Inventories. Medical Devices industry average Inventory spending in the same period was 14.8%
- Accounts Payable share of Revenues: As a percentage of revenue, Zimmer Biomet invested 4.7% of its total revenues on Accounts Payable (A/P) Medical Devices industry average Accounts Payable investment in the same period was 9.1%
- Accounts Receivable share of Revenues: As a percentage of revenue, Zimmer Biomet invested 20.9% of its total revenues on Accounts Receivable (A/R). Medical Devices industry average Accounts Receivable investment in the same period was 17.3%
- PP&E share of Revenues: As a percentage of revenue, Zimmer Biomet invested 26.5% of its total revenues on Property, Plants, and Equipments (PP&E). Medical Devices industry average PPE investment in the same period was 22.2%
- Intangibles share of Revenues: As a percentage of revenue, Zimmer Biomet invested 252.9% of its total revenues on Intangibles. Medical Devices industry average Intangibles investment in the same period was 124.7%
- Net Margins: Zimmer Biomet Net Margins in the year 2016 were 4.0%. Medical Devices industry average Net Margins in the same period were 11.7%
Sector and Industry Association of Zimmer Biomet
For the purpose of performance benchmarking of a company with a sector or industry average, R&P Research associates every company with one sector and one industry. An industry consists of companies with related/similar business models. A sector comprises of a group of related/similar industries. For high-level analysis purposes, related/similar sectors are grouped into sector groups.
Zimmer Biomet is associated with Healthcare Sector Group, Life Sciences Sector, and Medical Devices Industry.
Life Sciences sector is comprised of the following industries: Pharmaceuticals; Medical Devices; Biotechnology; Diagnostics & Scientific Instruments. The definitions for each of the industries is as follows:
- Pharmaceuticals industry includes companies that discover, develop, manufacture, and market medicines licensed for use as medications. In general these companies offer pharmaceutical products that can be described as prescription or over-the-counter medicines. Many Pharmaceutical companies also offer a diverse portfolio of animal health products, services and solutions. Many diversified pharmaceutical companies operate in more than two operating segments like consumer health products, medical devices and pharmaceutical.
- Medical Devices industry includes manufacturers and distributors of medical equipments and medical supplies. Medical equipments include large scale capital equipmets such as X-Ray machines and MRI scanners and other nondisposable medical devices like stents and pacemakers. Medical supplies include makers of contact lenses, eyeglass lenses, bandages and other disposable products.
- Biotechnology industry includes Biotechnology product companies, subscription companies, and service companies. Biotechnology product companies offer pharmaceutical drug products that are manufactured in, extracted from, or semi synthesized from biological sources. Subscription-based companies develop genome databases, which can be used to develop medicinal drugs. Service companies offer solutions based on a common technology or generic tool of other large pharmaceutical or biopharmaceutical companies.
- Diagnostics & Scientific Instruments industry includes companies that provide testing products, diagnostic reagents, instruments and diagnostic services to aid in the detection and treatment of a wide range of diseases. It also includes molecular diagnostic and genetic testing companies that develop, manufacture, market and provide diagnostic tests, diagnostic systems and related products and services. Also included are companies that manufacture and market analytical instruments, equipment, reagents and consumables, software and services for research, manufacturing, analysis, discovery and diagnostics.
Industry Ranking of Zimmer Biomet
With $7.7 billion revenues, Zimmer Biomet ranked number 6 of all the companies in the US Medical Devices industry. There were a total of 81 public companies in the US Medical Devices industry that had revenues greater than $50 million during 2016.
The top-10 companies in the US Medical Devices industry by revenues during 2016 were:
- Medtronic ($28.8 billion)
- Becton Dickinson ($12.5 billion)
- Stryker ($11.3 billion)
- Baxter International ($10.2 billion)
- Boston Scientific ($8.4 billion)
- Zimmer Biomet ($7.7 billion)
- Dentsply Sirona ($3.7 billion)
- C. R. Brad ($3.7 billion)
- Varian Medical Systems ($3.2 billion)
- Edwards Lifesciences ($3 billion)
Business Model Analysis (BMA) Framework
We use the following framework to assess the business model of a company. Business Model Analysis framework can be used by organizations to articulate growth strategies and identify cost optimization opportunities. Technology and consulting companies can use this framework to identify the value drivers and pain points of their targeted customers. Entrepreneurs can use this framework to understand the language of business and identify promising business opportunities. This framework can be used by any professional aspiring to take up a leadership role to better understand the businesses challenges, articulate growth strategy, and monitor the business improvement requirements for the organization.
- Conduct a holistic benchmarking; to identify and target additional sources of value
- Get in touch with us to learn more about Business Model Analysis Framework
- Get free data, charts, and analysis of Zimmer Biometand its peers on select key performance indicators by clicking the reports provided below