Zimmer Biomet has announced that, because of the effect of the pandemic, it estimates revenue growth for the first quarter 2020 will be approximately -9.5 to -10.5% on a reported basis and -8.5 to -9.5% on a constant currency basis when compared to the first quarter of 2019. Additionally, the company is taking several steps to help reinforce business continuity in its manufacturing facilities and overall supply chain. This includes president and CEO Bryan Hanson forgoing 100% of his salary.
According to a press release, Zimmer Biomet expects the decline in elective procedure volumes observed in the first quarter to continue to have a significant negative impact in the second quarter of 2020. Given the ongoing uncertainty around the scope and duration of COVID-19, Zimmer Biomet is currently unable to quantify the impact on its results of operations, financial condition and cash flows, which could be material, for 2020 and is withdrawing the full-year financial guidance it previously issued on 4 February 2020. During the pandemic, Zimmer Biomet is taking several measures to contain costs and to further support its liquidity profile, including, among others:
- Positioning the company to support healthcare systems, customers and patients now and as elective procedures return to normal volumes
- Taking steps to further reinforce business continuity in its manufacturing facilities and overall supply chain
- Modulating manufacturing output
- Proactively reducing certain variable costs and discretionary spending
- Implementing compensation reductions for its leadership team and Board of Directors, with president and CEO Bryan Hanson forgoing 100% of his salary.
Hanson comments: “The coronavirus pandemic has had an unprecedented impact on global economic activity and we are responding by taking decisive actions designed to ensure the safety of our team members, strengthen our financial position and navigate this new environment. While we cannot predict the duration of this crisis, we remain confident in our team, our strategy and in the long-term underlying strength of the Zimmer Biomet portfolio and innovation pipeline.”
Final results for the first quarter are scheduled to be announced on 11 May 2020.