XRAY - Earnings call transcript Q2 2020

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the DENTSPLY SIRONA Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] And please be advised that today's conference is being recorded. [Operator Instructions] I would now hand the conference over to your speaker today, John Sweeney.

John Sweeney

good and operator, you, morning, everyone. Thank our to second quarter call. conference earnings XXXX Welcome remind earnings available that and like you I'd to an at related the website slide to call call our are on www.dentsplysirona.com. presentation release press

we the statements read in moment release. forward-looking press please a earnings Before begin, to take our

are on predictive future call, performance We results. and certain reflect to certain and current of statements subject statements expectations assumptions today's that uncertainties. During make views and our events financial base that we about future risks these the

Officer, could Our I'd of most our recent those turn Casey, most Form DENTSPLY that, actual Executive over XX-K like now lists important SIRONA. some risk results program factors cause with Don the from differ to to predictions. And to that Chief

Don Casey

and like for To Thank groups acknowledge hope remain thank today. We your you would you healthy. that safe both and gratitude all I us to of that call, and joining and recognition. families our two deserve the you, start John,

first regulations, over The resilience, and changing patients, ways all Throughout with help and have dentists world to safety dealing whether shown pandemic, local staff to this have innovated. inspiring. to or their Their finding tremendous new dentists protocols patients new our adopted commitment their the adjusting is customers. is

second is DENTSPLY The the SIRONA. of employees group

make for committed passionate like them such and would are to remain privilege culture DENTSPLY Throughout, It Over most the of assets. serving our the continuing around their last highlights six to on our and I new months, that challenged initiatives. in focused a This on is they efforts. circumstances all people and lead creatively they are a unprecedented thank ways. building our of been to truly extraordinary group. truly the SIRONA we have the customers, critical addressing progress world important

to navigate position finally, how review our provide first the areas: on steps third business outline area we offices the the results, quarter performing as and will for is Our reopen, the second company to key call four provides been priorities on some will is the dentist SIRONA taking the company's as today the near-term to current focus environment. the is future, details that DENTSPLY second our I has

As improvements results changes began restrictions back. patients and patient The resulting opening and with reflect expected, The quarter the practices our the dental in in traffic. second dentist of market. major governmental shutdown come in across offices terms the with situation significant month-to-month of to quarter quarter improved the actions, beginning on

this followed revenue trend. Our

patient on the that as seeing, control attitudes dental office we around to impact recovery underway team on capacity. of well is as returning what to track office Our globally. well we are are infection the continues the Based ongoing requirements additional optimistic

the took operating the organization. around not safety across challenges by the demand. customer any progress significant needs the results company also the have Despite strategic our actions environment. Our company initiatives. employee making has good quarter we customer, reflect plans on employee major to address financial To-date, in pandemic, and the difficult reliably were of and These been continued the meeting built seen of strength presented the have enhancing company the seen around the to able safety, results meet disruptions key

expenses quarter. have A salary short-work and received. the in quarter, and an These in weeks, array programs extensive been commercial providing drop well extremely comprehensive online Our cost program control contributed furloughs, executed in during to circumstances, events. excellent digital, controls. involving team These efforts reductions creativity spending marketing showed the new the to SG&A education of was adapting second clinical

this restart, is trajectory in better understood. until the recovery of business begun will place has remain to the While program the

our there cash has has Our disciplined chain on inventory, and protecting flow. been a emphasis around supply been real

Finally, a bolster of series to the liquidity undertook financial and company its actions position.

manage positioning DENTSPLY laid for late While team the a goals disruptions by the out. we need made significant a pandemic, focused is had restructuring SIRONA caused company has against our in to the the XXXX, the future. progress there pressing on is Since announcing

steps, well shown while to for work analog additional SIRONA Our has continuously on is and actions I further digital will we there orthodontics higher-margin on today, as performance. the expand later company strategic call. the discuss lab as traditional program. that business. improve our focus on These difficult, the higher where original believe of our still to are advantage. challenging parts include growth ourselves has details in Therefore, DENTSPLY allow announcing areas we business opportunities portfolio the plans exiting These

Moving to Slide we results. XXXX our summarize XQ X, where

was which prior $XXX in were basis of compared will Adjusted provide $X.XX. turn call the XX% driving Cash to to due EPS flow revenues and flow impact second now coronavirus. of to was organic loss negative. an quarter operations will I the the down up million, of over Non-GAAP actively the Jorge, from quarter who quarter, outlook. Second year. an income review operating $XXX the on results was XX% million, for quarterly managed cash the a was

Jorge Gomez

you, and morning, Thank Don, good everyone.

dental. were with the The to second compared show and April sales our XXXX line. was non-GAAP the limited industries, into May XX% quarter a the we and reopen in to prior much down Starting obviously top moved On and procedures with as minor practices some P&L. Organic dental for economy year. Slide In the to began then global X, activity and one for of second quarter U.S. challenging June. as including many emergency we Europe, their exceptions,

to our June. in our finishing on geographies, but the each earnings the XX% saw in improved last certain prior trends with compared hardest, down XX% to call, year gradually been U.S. XX% we hit of in declines April revenue about shared we month, As

the We also last the a first June. improvement week gradual saw to in from

sales, a from normal get in XX.X% of level Gross or $XXX year prior to the clear So profit it back quarter. XX.X% but seeing yet recovery, we're have was that is a sales. down of to million

As lower profit which Examples of address $XXX also base, is the it prior standards. and with manufacturing higher-than-average in impacted result logistic compliance is in of case and compared the facilities to margin depreciation, this inventory costs material was short-term. profit year. is is by of of million reductions impacted primarily margin Gross leases, million, a approximately was include million, SG&A as cost fixed high ensuring to reserve a to volume, $XX down lower related difficult expenses sales. approximately solid manufacturing cost and the gross which of maintenance by XX% as substantial $XXX in

profit we uptick significant the XX.X% in our the the Last credit from addition the driven hedges. in long-term year, non-GAAP were new in FX operating by steep year, debt, SG&A issuance in of to of was prior million mix. the the the of $X.XX a our in change driven by bad ongoing One decline. in function reduce costs, the year, quarter. the expense, million SG&A expected $XX quarter, took up $XXX P&L EPS $XXX These of by increased During million that to Non-GAAP the market actually quarter. income prior last action of $XX rate million XX.X% of $X.XX The non-GAAP in resulting year-over-year. loss pretax which change over the disruptions year-over-year estimated termination $X.X fluctuations certain income of as was the of compared an other and was decisive tax saw debt second year amount of facilities area year Interest a quarter. generated million loss the EPS and in operating was quarter, versus an and to in and the last increased a

were Slide and down sales million, down Reported basis. XX.X% review we where Consumables Moving on segment on an to XX.X% performance. XX, our $XXX sales organic

All offices. product closure the were groups impacted negatively of and our dental by temporary of consumables

than performed similar While our a from sales, customer an sales T&E our show segments both Consumable actually relatively decline perspective. end steeper

Let me decline Consumable in two to the larger sales. that factors our explain contributed the

tend lead lead has the quarter. procedure difference simultaneously, has or order an at products, a a and there's match of the the demand extended to the T&E after beginning slowed times. in down Consumable continued almost time, over deliveries even dental deliveries up longer nature period down. of to therefore, Due First, volume order

Consumables more levels T&E in than biller the is in impacting inventory network. fluctuations factor the second The

market conditions, We possible. typical as is for a decline much saw preserve as balances During inventory companies Consumables it severe lowering network to in cash steeper by inventory.

compared So levels. primary negative reasons we relatively in when the you variables, believe in There X.X% margin XX% of the two was these to both account are all of Consumables margins. second XXXX. at for as Consumables declined decline segments operating quarter for similar

sales Consumables segment experienced a is fall reason to the first compared off T&E. The that in steeper

more infrastructure and plant more run is business Consumables efficiently. dependent volume requires to the and Second,

we This reduce fixed portfolio consolidate Consumables. to Wellspect. means for dedicated have fixed of X-XXX-DENTIST, steps Surgical have completed been plants We to taking actions, couple SICAT and higher our segment. business base. have more shaping the past why cost and this footprint manufacturing including we several this a of the years, And In infrastructure FONA, is cost our

In we decrease today consolidate addition, the two and will manufacturing increase and announcing footprint costs. further portfolio fixed activities shaping are our will productivity

in Net highlight XX.X% experienced sales year. digital we sales and XX.X% for and all instruments, lower to the year. driven versus segment. the million, prior quarter prior implants were and as our compared levels Moving the to quarter, from XX, down decline sales of Equipment were Slide on COVID-XX. the $XXX Technologies where similar Organic Equipment down by resulting dentistry

declined the on strong business Slide was for saw basis. negative sales of $XXX represents ready compared in Europe, market, and year. On XX%. second sales income and XXXX, Rest year and more quarter. performance. flow XX, down quarter of Rest for In in U.S. we last XX.X%. XX.X% World of regional $XXX systems the million, second Technologies were flow QX Slide second prior operating sales receivables decline key was T&E of our we XX% compared liquidity compared significant in in the were down $XXX down to On approach year sales of major the the sales than year. quarter. to result a a were cash a the million organic declined operations in achieving on cash X.X% Working posting more sales in QX versus the same working strong first than generation declined prior performance to XX.X% flow the the more balances. a XX%, slight basis. from capital investments. after in organic and European disciplined waves show the down in T&E. and the Consumables sacrificing without XX.X% U.S. boost million, show was the a Consumable sales meaningful declined getting Our Consumables percentage were successful in $XXX curtailing reductions margin – In prior cash quarter. business million COVID-XX. Equipment In reducing our inventory the quarter accounts Technologies a Healthcare expenses of XX, capital than decline prior strategic to year. as $XXX the Healthcare as Equipment million Organic This versus quarter. generated World in were were This sales of slightly We

demand We be cash climb will into of injected to volumes and production up some back this expect as levels. back working normal capital

as million In for in available Slide six the economy quarter like $XX company had the XXXX. the liquidity On capital efforts a to ensure prior to strong to in flow invest year. and the expenses of we $X.X billion dividends in $X.X reduce last XX, have down operating comprising I'd quarter, $XXX available, months cash facilities. about ample the and as XX% to to we strong expenditures, recovers. in quarter the we shareholders XXXX, in terms XXXX, of XXXX. of we returned of of end million paid made the a quarter, second grow of that we through second talk million in took was the repurchases compared $XX and billion significant $XXX actions year. The first the In of million $XXX total from dividends a up At million the of Free during $XX liquidity credit second cash we the share June spent committed quarter million

up and multi-faceted. were contributed Our functions have stepped quarter in part and the and the the of organization Each significant to savings. efforts. of levels Directors compensation enterprise of levels Board efforts to including the and reduce helped these up executive costs in to All

to advertising of to was reduce realized. closed, most was this these impacted for and today, of work returned as be by As offices The It logical promotions. next who could commercial not the to dental were our have or pay normal discretionary largest were such employees levels. returns spend cost measures spend and area reductions when

Together, from to course, I'd versus reduction savings few significant the With comments. travel these last trends achieved SG&A of like for to all business in services professional of year. remainder and, the also actions a XX% expenses. a of in delivered reductions of We respect year, make

me from recovered First, the April to current start their let with trends. low points and improved XX by the quarter. in percentage of XX regions point volume All by end

of July in product week last still the than overlapping shape regulations, opposed region of the was groups. new And continues in Together, sudden pleased June, personal of XXXX of snapback some the or protection month prevention approaching a equipment, on better first gradual these reducing impact There to positive and point office sales factors depending surpassing protocols recovery. into significantly note which gating demand. including factors are the week. the Additionally, the we capacity and to all July, a with as to infection that the in levels, place, momentum the availability are

Europe, Let July you details With business APAC, market continue Brazil to of and Australia. me signs a saw region. In to in with than sequentially. in July, better to we improvement, World, the and trending in lingering from our offices in continues some impact give June. also volume and trends U.S., countries in virtually In America positive dental some a all what see the concerns other China are geographical and the markets July we open, regards saw now in more improving of perspective. Rest Latin turned COVID-XX with the traction the challenging good remains as we of in Japan

half of year. the Moving the forward second to

we As we and accelerating actions areas to are fund improve today, announced growth efficiencies.

in to With Don. allocation emphasize will As process initiatives. to that, did turn sustainability continue the that I will of a growth we disciplined on drive investment back and we QX, our return resource now call

Don Casey

And Jorge. Slide moving XX. Thanks, to

in earlier and place organization. mentioned in November I XXXX, margins improve to plan As the put the a in accelerate growth, we call, simplify

and including Consumable our product other implemented as made XXXX like company behind major priorities Primemill aligner initiatives centralizing The including major include: new portfolios, growth of critical through multiple commercial well Further, of multiyear business. and been DENTSPLY The of new announced The plan new highlights has new supply products and SureSmile results enhanced. in pipeline areas. areas significant the execution accelerating Primescan quarter while like a other HR capabilities has also the our products Our future and organizational transform investments has growth a progress. restructuring first chain as structure. portfolio-shaping structure, XXXX commercial portfolio. is undertaken designed There clear unified the show been our SIRONA functions, products, digital The digital our we've today. finance, initiative. and have to activities, ones plan creating IT a in

the better in results. to the original opportunities work continue go both beyond term. has that, and shown significant part embraced As term and ourselves plan That of the organization to are need there the near has longer challenging deliver

to Moving Slide now XX.

space the opportunity comprehensive strategic is the a DENTSPLY quarters, positions Over as plan the reduce growth mentioned, our fit. framework business well growing SureSmile treatment we These as for serving now cost SIRONA. enhance offers several while and and In our underperforming rapidly company an we market. margins. this orthodontics, have The continually growth complexity, last future aligner believe of well the that several around team exited opportunities reviews the Jorge that all against our clear area in as to attractive businesses. digital

in offers opportunity all the of innovate advantage aligner our grow, area. take space Going We CEREC the the DENTSPLY our and advantages, this ortho on community. we to many strategic user focus believe unique clear forward, SIRONA's of efforts will large including

sales and It's business, we a had As million of space, where segment tubes orthodontics traditional growth which is our lab brackets, place opportunity Equipment $XXX lab result, digital going Based all our will XXXX. approximately to solid analysis, net of are in good focus bands, business traditional focus rates on our a business, Likewise, a the orthodontic be area exiting The the margins. and and critical clear includes wires. Technology innovation in is the there the a component resources is and to showing which it on digital forward. in is rewarded.

plan expansion continue maintained for shareholders. our customers its as deliver of plan, we on need objectives. pursuing to to meeting the both our our the our and around they value and approximately are company but and simplify margin XXXX. Consumables the growth, term and X% of has and executing are our The financial We to term efforts industry on we net pandemic had priorities will and expected segment plans optimism, of the million continued circumstances an such, approximately additional initiatives our initiatives for the facilities the conclusion, reduction focus manufacture of a X% ongoing $XX and we XX reason component believe trends the announcing expand workforce to actions incremental and our SIRONA's As to company's for foreseeable the a the They In analog our several the of XXXX. comprehensive adapt exit for Slide portion sales the portfolio-shaping DENTSPLY change. of business to Current removable related restructuring by the COVID of have Further, that comprehensive and are lists our continue of dentures enhance result will a half the business and for positive organization. laboratory end business. closure to the include to in XXXX. Together, execution margins future. our This simplifying in to and restructuring the longer aggressively growth revenues, impact the of company grow short will is priorities back products.

in Our know dental that do is hard when global teeth the financial well – to to strength, succeed but it portfolio industry. broad themselves. position our are is theme win what heal normal internal us and It's or and not reach will the arrive, new

Thank optimistic about our are the our fundamentals customers with and industry, that, is questions. team we current strategy, the take And Our challenges and confident team. in and our of the we'll embrace you.

Operator

Our Thank Baird. first Johnson is Instructions] go Please you. from ahead. with [Operator Jeff question

Jeff Johnson

on was think Thank morning, me hear okay? guys. you. Good you Can I there. mute I

Don Casey

Jeff. got Yes. Yes. you, We

Jeff Johnson

Great. Good morning.

So you're issues Don, sell-in some earlier maybe July But point? could XQ, really July you it again, is that I starting or the message that to not of match understand know much how you It July said. according back the what to recovering in start just argument is to there sounds with helping out sell-out off want Does earlier the like was that I July that want isn't getting that get maybe XQ? comments. to at want guiding, backlog I Thanks. your think think sell-in some I into if have make be there. Jorge quarter September, was towards but kind and year-over-year this flattish in might as levels the August to number? sustainable in of should we for And you sell-in

Don Casey

looking have it's the Jorge Jeff. – progress. cases, there's clearly Look, In I it we're at July, places actually Yes. seeing good as Thanks, prepared exceeding that XXXX. said in we're think remarks, some

the that's to looking capacity, one of just we've not things August, it's that of looking we're couple later September of go is The see patient being we're improving. – and a at. see inventory things seen of quarter. office as fourth reasons let's and And much project hard kind Office rebuild, that July we good. in There's the how volume, capacity at about question specific into Your okay, exactly. is we're

to back us patient reluctant, be we're And to office least to back dentist a time. a capacity in while. is in Our going that's confidence bit office if mind, that, little take okay, in go means getting of going pocket in continues our up. normal, telling go that, the the close the what is to tracking that little But there dentist to that's to a look, at U.S. for

okay, consecutive we back July pretty look, happy sequential long We're that going fact hard space. working happy through the office inventory between we're on that almost we're mind, We're has started, in saw dentist some we're that's hit our the through stuff our we when of side, there Consumable going working ordered summary, patients clear result, brakes and we're the right the cases, is that think to could now. some be at is then inventory the in believe And that's overall And and actually look, know see difference bolus an XXXX. pandemic saying, you in see, demand. think a we And a are And – on that and tracking a to than the that we're think my don't from with, day. stop pretty we how in of be retail every the build improvement trend, I may dealers and kind that as stuff. Jeff, the perspective, I the better office to closed, our month-to-month seeing to lot But consumables daily level. T&E on people I the happy building was I continued ultimately that do here. hey,

Jeff Johnson

in next do to the is you next recovery least they we're lag XXXX continuing a relative think the think past about Understood. XXXX Or to we taking would margin about approaching about argue is now. That's likelihood year? high the levels year? some of industry-wide know we conceptually, the things anybody revenue from is that next consumption think But at looking back now, XXXX get with And to how down really some all about revenues XXXX year? restructuring how Can helpful. at level. with that Thanks. follow-up, tailwinds and that you're just what especially levels extra efforts with I probably ADA at margins, as of still there dental are from least restructuring of that, kind don't revenues a dental relative saying the plan, thinking right the

Don Casey

really would Yes, the Jeff, steps we XXXX. hey, it's our look, for need you early in we saying, reflect the sitting interest we get us back to though, I tell restructuring, forecast to around there took improving. we we've And since organizational XXXX, think how on to do the mean, saying get grow, been do margin have I how November progression. we steps take margins I it. our do to

able specific have or I up were category want we now business. seen, show happen. match results that's we X% make be is XX% up going out as can an that going made us that's going margin XX%, we to or it's John joke or think there say occasionally to quarter just at of We out our – irregardless but I the X% look, take margin picked and to XX%, you through accretion with good the impact clear business, ortho our always whether going I going tracking think restructuring communicate going of to is that sure we forward. mean, X% really if our to designed drive And we steps business, years taking down steps the on a down taking the the to all those part say, were margin of independent, or got lab sit take that really the traditional don't think the to be are X% we we on margin. XXXX, And XXXX, revenue be to revenue not here Sweeney accretion. help some ability And we've first we I'm we a get analog we towards But progress. drive of basically, could of basis. in charge to to And the of dependent. think ongoing down revenue – steps certain very margin targets we've to revenue base obviously, it. are And that is revenue to obviously what we we're

we're a trajectory on is on don't look, It of it's longer may that, towards what issue, based And that trying is, knock-on what take We in exactly month, and us said So happen focus we be there. it Is with XX-month want we just to the we've COVID to seeing is always back XX a on internally, get going XX effects nine think to a to six-month know issue, marching COVID. we're target. that but little XXXX. is the attainable. bit if

Jeff Johnson

you. Thank

Operator

you. JPMorgan. our And Please Peterson from next comes Thank ahead. with Tycho question go

Tycho Peterson

Hey, destocking? are of around you risk potential pressure quarter the to talk destocking distributors able going the incremental And much inventory about was is orders? with forward much how slower there in versus how Consumable additional

Jorge Gomez

is is Good morning, in Tycho. This a to of the time Jorge. precise is case Consumables, indicated, hard as order Don the lead It's just give any number. very – short. But there

network. or up, of are And the a so hit And a very, when carry pandemic manage we at that and look data was there there our marketplace, was show indications and the closely. we sales lot customers very reduction that inventories and retail typically when dealers, in reaction that to in general, a the inventory historically in sales the levels there of in the

was of always in may that to sales back hard element There But the match is be us network. objective. the is it how as be is fluctuations meaningful small to that. sure some something that I going don't happening, that of when levels comes typical project, be an there And think Don for So indicated. that of key money. is make day, perspective. at always our That's from that sales. That Listen, want the we end to will our retail we the a long-term make to

still performance the our the changes in the next and meaningful second terms over we quarter lower think revenues the noise that that uncertainty not of So months. places, our experienced and magnitude I – several result trajectory I as of many is explaining in think have actually that the is given that of a in we

Tycho Peterson

leverage Okay. Don, was decision out reshaping, the cases in the aligner thought the as on to always do the portfolio you ortho strong And and ability the I channel of go SureSmile. that push on then, part and I'm picture clear ortho. curious, to exit hybrid

how risk think I'm if you there of And So that? is about dissynergies here? curious do

Don Casey

– Yes. wire keeping. that we how We SureSmile up believe Thanks, of We're differentiator brackets would an SureSmile. hybrid for straight ortho, kind on actually the – that believe aspect We we're Tycho. when the that What a there's component say is it's it's bending of a of using bands go of orthodontia. kind orthodontist meaningful. delineate traditional we

So components. actually we're those keeping

to be then in part is basically actually made we're that's seeing traction is and there. seeing piece of that base. with SureSmile kind DS where OraMetrix last good going program, we're October that focused and acquisition came year, traction. traditional that we're So shift the real CEREC ortho One now to the what getting We that. piece of with right And the our of tends around and of stay

we dissynergies associated So as didn't that were forward, feel with group. the we among orthodontist be traditional out getting going look to of orthodontia there treatment going

advantage orthodontia tied do as focus digital on right, look that assets future, we in take we we we we take all our kind of how how So – do places to really growing and of the expanding of model. necessarily do the are traditional not care how to in tend think, at

Tycho Peterson

a pent-up there of little potentially? to back thoughts think talk part on just pricing Can more bit think half about just equipment any just terms need any Primemill? be be on financing year flexible then on Okay. your And capital as the what to you the or could about the appetite and we And degree think lastly, of in demand? then Primescan you and

Don Casey

to And It's a it of been and one really of Primemill, we plus. get out speed I really and Primemill a can One Even the pandemic were interesting, you theory an made hit, that beginning to mean unit our Dentistry. before in the patients reality. shift Visit single crown in with Tycho. – with hour

through pretty kind of or So shift. made everything really And reception. a we we a when – had One bunch Dentistry shifted We taking Visit demonstrations it April, means. down, whether went product got of was in good digital that interesting people was what it to really

our in results pretty to and So we've a for actually you've that there's Equipment. mind Technology what the seen and appetite date, good seen

bit, imaging? get a are be Now centers? and to Xx whether across? one go basically and the little do see spread or dentists I about it's – But going time. very the want that done to feel population to who treatment we be Primescan the going during opportunity a may good we pandemic fixed to see dentist get for sure. And dealing Primemill that I with patient in we Are Not can are to to crown hey, a going

through amount dentists been with talking hey, and of and kind practice I to during how of You're pandemic lot also saying, used success a been we've seeing think we've look, downtime they change the seeing that. that to fair got a of to the the I

we're where products. these pushed the space how half. And due first, – in large good also the we're and feel the, but to and in from back Technology products about we in we messaging Equipment a pitching So are out, we the a it's change new part,

working bunch and to with make this whole No. helping we're of that Technology look, now ultimately access a I sure – our our pressure crazy do dentists material. we're and But options right dealer we're pricing coming on – financing partners see Equipment? So and globally

Tycho Peterson

Okay, thank you.

Don Casey

Thanks, Tycho.

Operator

Steven question Barclays. And Valiquette you. ahead. next with our from Please comes Thank go

Steven Valiquette

questions Hey, thanks. couple A morning, everybody. of you. for Good quick

a positive. to of comment revenues to year-over-year call specific consensus your obviously don't around I be First, global just flat on but the of know want They you year-over-year. is to a for pretty some XX% give street eyeball July the quarter. estimates being kind on guidance, any fairly third down XX% basis

based on So July too seems like that as conservative is? get the maybe on as Just where is major changes thoughts number barring you're the other wondering seeing to consensus far that any revenue I'm landscape, outlook what that's and in that. a in around your just curious

Jorge Gomez

there much from Australia, Steve, some a spots number have perspective. open, appreciate, in good also still there to for is of And early are coming And America, markets that the as are points offices Jorge are you can a of and of is be lingering We of concerns challenging. better good July terms in that that in Europe still that places markets Latin the parts volume are some like morning. to are from regions. extrapolate it numbers. Listen, lot are here. able data from us different doing different there

So judgment very make a it numbers. is to hard those to with respect

encouraged internally, that we the last planning. right a the planning fact by we in scenario But the what been months work we're really I perspective, from sequentially, – are three moving think have – with direction. to trying we're continue to

months thing quarters, do. is think multiple of I outcomes a and We are prudent next preparing it a in to for set the company few the

tell hard right if number you that or is not. So to

Steven Valiquette

helpful. clarification Okay. One quick other That's question.

a are business, of shutdowns? analog be exiting versus give businesses Or on color these and on shutdown Maybe sale? traditional asset are just through the decision lab just us could monetized On sales? tree of that little asset more the parts the orthodontics the these full

Don Casey

Steve. Yes,

But Council multiple through you full with As again, at what beneficial the said. locations. announcement remarks, a we assets If it's that. sales, obviously, case, we is the And it the there's in asset to Obviously, the to prepared that shutdown, base worst-case a improve to Obviously, it. it numbers we the is and better the we to the we opportunity to to multiple gave way we're do there you But hard start that. we'll And go scenario. now, mentioned than Works look done. versus different work going some in lot you because making process, guys based things. the we'll we're represent of and company. look going to improve numbers the the it's plants most the dispose certainly If a you we're at get look to on gave in right work

Steven Valiquette

Okay, all color. right. the Appreciate Thanks.

Don Casey

Steve. Thanks

Operator

Thank you.

go America. Michael is question next Bank Please Our with of ahead. from Cherny

Michael Cherny

keep to July similar to terms some COVID at you that's growth the specifically. be Good meaningful to clear that morning are July the XXXX? in and basis faster spikes seen book U.S., could factoring the And basis be but in countries dollar as have Jorge, I back on where in is possible. growing the for to versus have thanks there of a any across that harping total of into not did saying a way it's want I as apologize that far you just dive questions. sure just what make so commentary wanted on I this, specifically other particular, the to clip? there might how dollar rates think some any quantity the into of is clearly about

Jorge Gomez

Yes. for Michael, thanks question. the

of all trying There's perspective, lot still from the July at digest a are from perspective. numbers. to a product look data to geography We a

than before, better indicated I July, June. definitely As trended

region. instances, good. depends because is depends very products. I the it the geography can't do. point, numbers. that analytics to a total is is it And definitely a that some And XXXX closer and – So the we than versus It this better on getting need did some Overall, give to portfolio still – substantial June. XXXX. this on on that But and is at At there's breakdown it the you in improvement

Michael Cherny

with the one you just question that it do aligners. had strategy differentiation CEREC everything. lot know with a then historically going about How Omnicam And to you more to of was with? forward integration on think I you're go tied and

out you XRAY everyone what you offer do compete, specific makes SureSmile and will think every what can or better that or differentiated is As aligner have the where you own think about what its seems it makes else? than to it best shake angle better, is where

Don Casey

we've pretty good I system. installed base. it's Omni Michael. between would Look, and Primescan, that a Thanks, Yes. our say got we think

at there very of that is a the looking highest group their license. have We loyal to level user practice

companies software we now into going – one using life you sell about the that really – integrated portfolio, Class we part is I So comfortable use. with our mean, X.X, assets. really are of single SureSmile beginning hey, And base, one way, clinical like with Class we're assets and me, the going that DS No, Class stuff where how hey, individual make we that's and we're easier It begun company One you really do in compete very And came to saying, becomes by next we digital approach, II, do more Omni, excuse DS, kind think that going competitive. One you look, Suresmile. these installed particularly, that now. week, company very again, package. SureSmile as to second around and an as How to seeing. will planning working doing we're think differently? orthodontics And reality. DENTSPLY we do able we better with none. on company aligners? oh, I, with results to and it's SIRONA, And really to at you we're And we're think and to our across solutions hard to maybe sell right it's on the we're actually with it's really, as to the the we've can feel focus to in clear how really feel really focus dental And customer when to implants about sitting then, base idea we're easy we into bring not go we're broad product Prime. come saying, much get we of as somebody this when III. We every something seamless our treatment seamlessly we like X.X, look, out integrated into And feel the good get go digital think day, about better add about

Operator

answer your Does that question, sir?

Michael Cherny

Yes.

Don Casey

we Michael, you. lost

Michael Cherny

thanks here, for the Still color.

Operator

question from our Sandler. And with Jason you. next Piper Thank go Bednar ahead. Please is

Jason Bednar

Good few here Don the mean installed morning. the plan I base Thanks orthodontic color. thanks for you've CEREC here. Jorge, or in all restructuring mentioned aligners. leveraging the clear for taking the with questions Wondering business, times a

do emphasizing have principally in target channel? I But same think continue to that that this sense. the comments to mean, CEREC a orthodontics should we have to of strategy that you're be to going ton makes SureSmile owner GP I be you doesn't Or CEREC channel that base? a your interpret

Don Casey

want GP SureSmile that obviously do such when success we the What play package and we're there's to and large Look, base. have Yes. the to we're seeing we we strengths, we're a in dentist, our installed we're like office. office to together And we're the into orthodontists a happy DS, is, again, more One trying seeing there. take do programs workflows – way to real benefit to

now. the both GP got think SureSmile We pitch orthodontic well the innate will look, So as GP as channel across to advantages channel. we've in continue the we right more

Jason Bednar

helpful. That's

I partially question. prior here, to question And product to actually wanted actually Okay. then new a ask related the

products imaging to are its appreciate I print. Office approved launched. of of they're large discuss might each maybe system Maybe in the Prime with those opportunity you an you officially from talking instead what view before new perspective market XD have view see of field also categories, printing the XD But So here policy each plans field specifically any you and to of not demand talk for could or of large in to printing? recently

Don Casey

you field imaging want you better endo, do and the looking it about equipment lets better view, but that seen that procedures, do? first very you my It's orthodontist. and we're now took the of we've when think field recover. feel products, good board the view, in and our if we demand if space. about of and in demand Technology months, end terms in while And you across last procedures portfolio we're about wide to of really SL again, to a very it of our imaging the lets it's x-ray view, seen again, XD and Equipment. look of better what just quarter, six we gap the in We've more when pandemic of now imaging you you necessarily And view, I replacing you do do it's Orthophos over And little XD field get started really the you the of particularly I'm for do do things there, do that solid lets competitive it start at lets wide macro where feel with wide field at good wide we a done start and begin right implants, our – and us to not at regions And at looking machinery. filling kind On look what Align we've now. like

And internally people on we space Equipment in that been think discussed one it pandemic? making as solid we haven't in of really really products, play going we of the key in what demand products. is on remain is So pipeline the work schedule focused is we've this And the little your and positions the And tend well think in our and recover prepared we're progress could. seen XX keep come backing What But portfolio here. we new most put product of space is it. think that spaces to that. things what where pandemic. five not you on pretty Technology those the Endo us implant or on challenges we out bit And we take Well, would – – is we whether to the on again, other It remarks, of med from stayed terms strategic gyrate on And that's kept a initiatives. of been out, working one the we our close it important our do we've off major one demand launch pretty of tell to has how our you some the printing, we I to new vest. as saying those in look, can versus launches. device

Jason Bednar

much, All right, guys. thanks very

Don Casey

Jason. Thanks

Operator

Thank you.

is Elizabeth Our go question with ahead. Evercore. next from Please Anderson

Elizabeth Anderson

orthodontics? would volumes size you anything good rates of comments Thank then also, trend and/or how the in talk Hi, about And Can of help about framing revenue in ortho you basis? saw go-forward opportunity could helpful, just talk new of was you on growth terms be that morning, some numbers just you. a I terms guys. if about wondering base strategy? the can the us put around if the you – maybe within

Don Casey

Yes. Elizabeth. Thanks,

coming behind total business, I clear of year We liner give positive out is very last specifically. we've actually we've SureSmile. over is the you accelerating the out seen the broken number haven't pandemic. What would we orthodontia that the and seen trends growth what even don't tell And

to work about to become one SIRONA reasons that opportunity the we very that's and we're comfortable space, feel number two DENTSPLY a solid we feel going that of an the Look, in has decision. So towards that.

around accretion. to grow, to pretty some ultimately, do saying been want we can that. want margin Look, we consistent you math do we've So in and

focusing out we're business around So clear helps us the and of taking on really that. the do ortho aligner steps getting traditional

bet is our to and that significant time. our contributor space So belief over clear growth be a aligner rate to going is aggregate the

Elizabeth Anderson

and And liquidity the have given, now. COVID you that, worst Okay. obviously, How of through Perfect. That's we're you out if helpful. pretty assume guys right position a hopefully, improve of here? from that playing things see substantial continue to then you do sort

Jorge Gomez

not capital deployment changed. philosophies our are Listen, not have Yes. changing,

be balance absolutely from of actually in We was be it the right a standpoint. we in to we this flow. with. financial very keep totally were sheet, to being thing being think of by that doing encouraged doing, raise shareholders cash a to more what number our very which diligent At position prudent want our I point, with to a position, strength liquidity with agree we're

a parts cash We for a to have You paid probably changing the noticed at reassess had of our more strong at back free in we plans point. not are And where the Once go second our flow, time. that very are operating now. dividend, change no and flow. we quarter, this very to dividend normal we'll level, we things good other deployment cash

that want our look deploy capital. are that initiatives. we Don is But stable best And a and of the strategic ensure the How focus we the of think whatever in how that investing talked funding have of all opportunities in the at We even for low recovery keep on the the being. to those which to time to in one keep is very have of think to we We able organic I we and make at profitability that demands are will of time, now, decisions some make that capital. for environment sure we as want capital about financial initiatives, position. we'll we has have that fund that revenue growth we reasons the shareholders that. a for We is interest the company low environment,

Elizabeth Anderson

you much. That’s Okay, very thank helpful.

Don Casey

Elizabeth. Thanks

Operator

Please is Wolfe from with Thank you. Beuchaw And ahead. Research. question our go Steve next

Steve Beuchaw

conditions I wanted next in several here. time and look of business a And big actually question growth question. that one The wondered after very one specific there. about you what talk a over on to then one to is months get for under specific about the ask Germany. the what event virus think have the might picture then for what to you'd thanks And morning. Germany, I to that's in good extent that. kind willing like follow-up barometer operating control? And the I strategy extent the we good Hi,

Don Casey

the more we better that over are from office in see think dentists here and to Thanks, were been there if business did infection protocols. do interesting, Steve. things to together, pandemic. And mean, change it future, of tracking again, and to And showed U.S. in Germany the closer a was again, that's things better. Conditions patient depends and just reactions that. is their Switzerland And said look in of that different tracking pretty businesses, world getting DACH well, around in less we the It's what's used perspective, patient good. on than harbinger normal. conditions the tell get there, July were that Jorge same patient we would there's Germany, obviously at then is was staff Things attitudes. Germany keep you But I – capacity again, the Austria. that in around kind the as which that a keeps I if get – new Germany to than different they in the we are are the – the around I there's June, and you going the there it go

bit there office. stable visiting more seems be little toward So to of the attitude a a dentist

things Germany, if the do look to So to get back it ultimately, fact points like normal. things that

Steve Beuchaw

I appreciate wanted it. if I Much from could. a And bit, Okay. little Don, borrow to then your experience

different has evolves what however, you on we're came wonder look med your we business industry to some think many the a of You're point how you has And a be hat what you I to is you or about you in could digital what just evolved how want a that thinking. have months, with thinking COVID evolved learned last post-COVID what certainly of perspective like was like? that has before. how how your businesses And future med how your the into practice the where you you as and quarters next, focus normal, get tech the thinking in to on could looks your and a months? what there and maybe for few have you think guy. on thinking sense you the and changed be, strategic run? Can tech over want give new vision? business that the might know us I And – in practice keep terms dental a the on

Don Casey

Steve. Thanks,

think years, in and focus I to COVID three sharper five is it need what there what has has whether I years, going brought years. the think done to industry be two into gets

pick first happen sometimes and offices mean I look feel may think trends. margin at dentists of I in to where going that places of term. are group. to practice better the think a the to don't the accelerate a short right I But U.S. immediate in going the of on up. it's kind the is in going pandemic Europe, are even Asia-Pacific, the in in couple it's some exposed, it's larger in think to think the DSOs if you I I and

way. may there you see think I a that So shift –

thing more how to the that, going procedures individual I hard. accordingly am really procedures equipment the I I dentists be brought doing going time want think I our sharp my into think the their that digital, I practice focus to procedures? really hey, of develop the to is am what thinking to say digital And look, or I about allocating critically. patients, COVID they're training what the see and mind, is pretty whether In And think, to whatnot. going that XX address I got you against pushed idea evaluating how DSOs I are second I've big within when And where And practice? and it's do from hours be I'm do? I can emphasize the what

basic what can with is to of that's I you how about seen practice at So implants, of think that the to When dentistry. we've aligners going level help it's and accelerate. even about digitization when endo go dentist into going something you of increased clear diagnostics the rest think of highest work, I their the license think think

What dramatically and think it's read books disruptions new and to think would trends Steve, strategically. after I go. – you anything major changed I all say, the I and So dislocations, tend don't has see you

to saw I think what dental might because a going bit to slower tends taken than it's I have think dramatically. in we tech, a accelerate be little decade med what pretty

Steve Beuchaw

more. here. help agree Thanks for all Couldn’t the

Don Casey

All thanks Stay right, Steve. safe.

Operator

Thank Blair. with William go ahead. Please you. question Kreger our is John And next from

John Kreger

commercial your very could integration you curious, us I'm and sure an thanks little much. bit, you had give efforts? a on R&D. COVID across Hi, Don, has – but impacted manufacturing update long the them a list pretty

the to thinking kind where and of has Just degree what us altered a that give them? stands pandemic around sense kind the about of

Don Casey

and question. the I November analog bit for and pushing we of that would program. harder. thanks we ortho first, – three-year particularly would morning say when a that the we made outlined lab, John, it in I it of kind When the this with points pushing announcements kind say said and XXXX, traditional around little we're to was – fact of we're things a faster,

look, to even quarter, accelerated the some thinking. need it that when the faster. also of has the highlights you pandemic revenue we the And in get think challenges things I our see second after

the going not changing restructuring I trying if tell it's get hey, to as of look, you. to would again. Internally, we're really interesting. keep And kind We're it's So what tell that's ever I we people, it. then that's done. not –

that and organization understand So I've that. been restructuring a marathon, condition first this the the is only might of to been trying to have XXK the

now So plan new tell you, as of halfway we the done. I got it's in laid in great a people supply a terms also brought Petersohn. would more should team terrific look, more be. improve can Jorge, like I than we've the Walter and reporting think finding SIRONA we're should one stuff more into people of chain all have what actually We're the that we got DENTSPLY leader. commercial We've deliver But we I with promise on tell would out, you, that person, that really

of it So is three-year a improve. be. – thought look, restructuring, we're where – we as we're we was restructuring, continuously how would tell just We're, to done specifically, we hey, slightly committed soon committed our if get do you stopping. would ahead that not as thought we management I we're you team that

John Kreger

you How rethinking Thanks. that That's lineup one quarter? it how in is are implant at all? great. one. the second And portfolio then your last And performing, did

Don Casey

language happy Implants say of did is an across John, business. you, quarter, you whole Implants interesting terms do been we've in when it's use. with you second portfolio, relative, but would the year what prior well – the tell was our I – challenge versus implant challenging.

going see us a set competitive. think of to look, As product. rethink we've that first get new that's our really our we get talk regular to Astra products portfolio, you'll about and what about we Obviously, in them. we've immediate next are EV of to I need And implant months where load be actually we our space our talked the think XX started introductions think let – pretty over the

we what back, there. a we approach including to a The them a we've SIRONA of as rethinking other that implants, able of been base integrate to couple doesn't bought our operate implants of DENTSPLY aggressively and play bought a when beyond that which commercial been have us business And in lot years with more we in little thing used highlight being they expand strategy the that beneficial lets of across on is has the we MIS get bit segment. we've all that how that go-to-market had been doing value

new we're where we growth to us extremely of couple about that for products to get years. able So are deliver I'm we it. would feel over to be to for excited space I need implants remains that say a get I the what portfolio significant opportunity think starting going the in next that us. the

John Kreger

Sounds good. you. Thank

Operator

you. Thank

is question go Please Block Stifel. next from John with Our ahead.

Trevor Brown

Trevor is Thanks for my for taking on John. This Hi, questions.

that like mentioned potentially saying of there's I think you I'm tracking So up comments any out patient continuing confidence there's And can your patient on has geographically? give wondering if if some go just level? earlier your that that read-through through to how to recently. that's is shaking a you confidence July been there detail

Don Casey

Yes. visit measure Sure. first, and couple the the to globe. XX days, entire of next visit consistent next it doing we're quarter I we the improvement mean, seen tracking we've and things. And Thanks, in likely whatnot. likely across A the around Trevor. again, to people dentist, patient

of across have or Interestingly, room subgroup. had have the So really a improvement how infection People around seeing people dentist addressing consistent who to board been kind the it's protocols. – they're adjusting we've positive waiting whether how there. been experiences there's

pretty we see is positive. group that So

there particular patient going the in we they of One things U.S. trying in confidence, were was the geographies, watch in to drop-off be as to see of the that. whether flare-ups kind were didn't and a we

by and do go is back of there way, to dentist population the while reluctance versus of next I in next go the most six good, the segment some going am month is in months. the on kind to back patient look, So to I data the say, a intend the to of

in a but don't there's little see, that of we elsewhere lag particularly around bit it world. So see a we the U.S., there the

actually tracking we're has indicator. lead patient positive seeing So been a some things again, And good there. good

Trevor Brown

of more it. perform groups are well? wondering one could seeing. if you fragmented that to what catch-up start Got think that you've And the that's in been this more in to then better DSOs environment. tending practitioners smaller, just been just as larger We've practice play some DSOs. if hearing And I'm on

Don Casey

after the a seen around between this – there's differentiation and about inventive huge whether how are haven't love world dentists that we that Trevor, creative honest, whatnot. And the XXX,XXX reaching them they're we market be the very and lot individual their go and very, and they're practices. To that is out sure thing of to DSOs and independent The they owners. make a – about patients business they

a in there COVID accelerate two that So that? But key we're haven't bit margin, business say, of the might do the in do a regions sharp see that. on haven't if that hit, seen we or and now I And you the the of doing number sit seen we number considering aggregate and we think of I Yes, somebody change they COVID. a maybe post was little time drop-off dental retiring year practices with. in dental in think look, that a practices

when things change. the XX% we're say haven't seen are So that XX%, measuring XX% we – open, watching we're against when open, number practices of we that

Trevor Brown

much. thank Great, so you

Don Casey

Trevor. Thanks

Operator

to that, our conclude turn I Sweeney would session Q&A the with for for to back And call today. final like John we you. Thank remarks. his

John Sweeney

much, forward you rest year. a move look to you We as everybody. we Thank of the very day. good the through Have updating

Operator

Thank and great for you, gentlemen, today's you have now ladies disconnect, in may participating and program, and day. a

DENTSPLY SIRONA (XRAY) 8 Aug 202020 Q2 Earnings call transcript