Earnings call transcript Q4 2022

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Operator

Good day, and thank you for standing by. Welcome to the Fourth Quarter 2022 Dentsply Sirona Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. [Operator Instructions] Also be advised that today's conference is being recorded.

to Investor conference Relations. like Daley, to now President, Vice would hand over the Andrea I Please ahead. go

Andrea Daley

Thank you, Carmen, our Fourth and good morning, XXXX Call. everyone. Earnings Quarter Welcome to

Chief is Joining today's Chief Simon Executive Officer; Campion, Financial me Officer. and call Dentsply for Coleman, Glenn Sirona,

to remind section related of at call like our slide to press and in that website you I'd are earnings available an release presentation the Investors the www.dentsplysirona.com.

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

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

some cause recently factors XX-K Our filed of results information actual and most Form in important differ that updating predictions. risk from filings, our could most any the to lists subsequent SEC

be financial our We information, investors today's about call, believe business for Additionally, financial may comparison our GAAP results non-GAAP between non-GAAP management and business. of items remarks results. refer with our financial that results. periods on on provide where performance enable business, measures will non-GAAP the financial supplemental in of press used of with useful performance key between independently vary transparency operating allow for by our to Please the respect to reconciliation certain release greater metrics and based

turn over to call like Simon. the And to with now I that, would

Simon Campion

XXXX will then morning providing update. and cover XXXX finish Glenn for providing and financial Thank you, an QX this performance we our Andrea, start and share of and recent a also XXXX work and will the have our us all thank call. operating our results joining overview Today, outlook, you QX earnings by I transformation strategic for underway. I'll by

that key much Starting on across navigate pleased high ability while and our the this end the with were of We work by doing close than our challenging, prior the we results to outlook successfully. difficult are metrics. macro I'm now, organization we to months remains slide for financial it Having exceeding momentum XXXX expected, better aid five environment confident have energized the led out will X. now

We from as DSOs. fruits with the efforts wins interest renewed seeing are with of such and quick early already our

we the us we progress are details, into can't While in get the gives making. confidence it already that

announced I You may doing we drive alignment, have performance. just to act to to restructuring Sirona are to that. future improved and to and heard Dentsply performance feel discipline, that, improve we organizational recently operational We plan our to committed urgency, and process position for with begin increase

to action, long-term We collectively are deliver performance other deliberately moving to shareholder will and this that from confident discovery value. improve and are initiatives we plan

slide Moving X. to

the Let me a we are making. to changes few take minutes explain

deliver while company that focuses inclusivity, better We compliance. enable and are model, a on importantly, which will also ethics new putting the our operating on on at transparency our tone to strategic focusing objectives place into the top and

five of drive The in implementation XX% one communication seamless and designed units our plan reducing business by commercial number to following invest the to workforce of X% approximately global Number global organizations. one, global while the consists elements: the into continuing to growth Company’s enterprise teams. are with reporting global commercial leader, the strategy drive our units business to align portfolio to product the integration two,

beyond to and the future the on in this management bring sustainable hiring Number simplification efficiency organization. to of number growth. and the XXXX quality of fund investments regulatory delivering company five, line position six, the company and Number the sit to leadership of a three, team, elevating thus the visibility and function and optimization structure support industry best within savings with in to practices; cost critical for leader functions organization. critical commencement of new central to importance four, overall the infrastructure of Number

workforce expect As believe actions XX Dentsply $XXX are We Sirona teams. already, in to base but we stakeholders. and create plan, months. the slide achieve as And total this sales will our all right deliver annual the with for set we more results underway global employee of other over summarized and, up that outlined have least next along reduced on to X, value path to targeting cost significant on in consistent turn, not we better by the our savings million XX% at the

respective The members of such team paths. leadership their undertaken work the have in

when partnership team, taken industry difficult this and bring of So who we work lightly. independent decisions an impact is these This the best transformational benchmarking external firms therefore, is our and this work. experience, with view, not actions practice particularly coupled benefiting have

We leadership we are is team the making Sirona for the confident for have sustainable changes talented success. better to very unite position that employees long-term will Dentsply and organization the

feel provide right Importantly, the we a and top, organization compliance within the leaders our culture, change and tone in board. the of North with authenticity, starts example, sales focused accountability. engagement improvement The having on a recent beginning becoming force resonate for culture and survey, will meaningful are is at the across and highlights to the I organization significant more American tone foster inclusive that right most creating fostering this with employees. who This arguably

and customers first-ever momentum, hosted the World, employee programs. education our it In leveraging attendees event from with of addition to DS interact seeing than World to than more the clinical dental XX by X,XXX Dubai months professionals. six also strength registered our the with in globally countries. we're our XXX This recently We positive was with our enables DS us last more fourth

that let externally, and fulfills the discuss are a company and Before us I our internally engagement increased we that to the turn seeing be performance, that commitments to over company. internally reiterate externally it and to that a feel I financial helping we be pathway Glenn? want me to is Glenn establish

Glenn Coleman

our as outlook for thank Simon. you, for provided in topics, our XXXX you outlook as quarter we margin and adjusted the year end Today, us. November cover well forward. several fourth Thank including Overall, joining all full I'll morning Good XXXX. EPS that our this and move results we believe and as milestone early of an high important exceeded and is ranges revenue, operating we

So let's X. on begin Slide

revenue Our $XXX a year, sales dollar. and prior which million, X.X% impacted US sales X.X%. grew the of by reported X.X%, grew foreign a a fourth largely versus stronger decreased basis represented if Sequentially, China, Organic currency on was by decline versus QX. revenue XX.X% organic exclude but quarter

due much which than operating better On operating by XXX inflation third XX.X%. was margin income by FX $XXX basis, quarter, a a million versus and On of Operating contracted headwinds, continued the margin partially with price. expected. improved operating offset basis year-over-year to sequential was basis points, margin

basis, performance. in exceeded by a our high to quarter $X.XX, and $X.XX by Adjusted and $X.XX fourth end the was below-the-line revenues from pressures revenues, lower due year-over-year EPS about of $X.XX. coming declined organic EPS We adjusted the decline operating to margin largely and FX the of remainder EPS organic the foreign year-over-year outlook On inflationary with attribute better-than-expected expenses. range currency,

fourth We prior we flow operating which to adjusted flow translating $XXX in the shareholders million, at from quarter, $XX in XXX%, conversion In the also strong came million in dividends. quarter, delivered XXX% up year. cash conversion the cash to returned of through free

was declined sales our sales demand offset softer Equipment, to Organic turn aligners. X.X%, me primarily The in our the decline due XX. Technologies partially T&E implants on Let X.X%. consumables or performance declined T&E segment for while volume, quarter & continued organic by Slide to segment now segment in the strong

growth over fourth driven grew SureSmile strong quarter, the Aligners and in XX% by in Byte. both

offerings. SureSmile growth business. this continues to quarter the regional with part of from was row our new in double-digit This product a in second expansion, particularly quarter and in benefit Europe

brand, direct-to-consumer also conversion strong Byte trends despite consumer seeing as slowing growth in customer we're a Our aligner spending very saw improvement rates.

Japan strong Korea. driven growth in CAD/CAM in Our returned and also demand business to QX, by

growth. versus & due in Equipment parts our the in demand China softer the ongoing and did were softening some by digits down well chain Europe. positives of US Implants in declined value by double showed Instruments business The year-over-year prior supply quarter year see as implants implants in the driven constraints. We quarter, as to demand as single and business low digits

sales primarily blocks in launches, increases preventative recent and the due lower were segment. China. modest growth ProTaper to Organic and Ultimate restorative These CEREC in Consumables Moving price to products. headwinds including declined partially by and offset and volume product

the X% quarter. organically fourth approximately year the grew segment China, prior over Consumables Excluding

sales to Now, growth let's discuss $XXX X.X%, of slide million, US turn decline an partially aligners. lab in sales by XX implants in were strong These representing offset to organic lower region. CAD/CAM, consumables. performance volume financial headwinds were fourth and by by quarter driven

$XX was volume were reduced also CAD/CAM the by million sequentially. inventory levels down While dealer quarter, in

as softness the million due Turning a versus organic of prior to X% of as to to Europe. World an and continued were the in retail down on an were $XXX volume. lower down $XXX We environment. X.X% supply constraints, basis demand organic million well on sales year. basis implants Rest and equipment weaker equipment Sales attribute

China, lower due due In expected, of well COVID in sales the as we across product implants experienced shutdowns, to VBP. as headwinds as to impact groups

strong Rest grew double sales very had Excluding organic quarter a and China, World digits. of

cover X% due pleased performance nearly global Sales to company prior XX, supply organic XXXX an significantly chain year an year. currency on grew in softness were the XXXX, constraints is basis grew full Rest year by headwinds, reductions largely of Moving our in by which key decline growth organic for impacted to the US China, are were World, aligners China which area in of regional with in slide CAD/CAM now these US, dealer business, excluding over the Europe, let our inventory. and Notably, sales In XX%. grew Despite decline $X.X XX% X.X%. a the me which we headwinds, representing the our and performance. sales billion, and foreign

exceeded full our XX.X%, of year Operating greater was for XX%. margin than which margin the outlook

due XXXX, to volume, which and inflation headwinds, XXX full year exchange points partially basis by operating unfavorable was compared foreign price. lower to contracted margin mix, As offset

in $XXX margin to For debt-to-EBITDA of exchange headwinds delivered compared cash impact to equivalents EPS cash foreign year, ratio of XXX full a and strong a impacted We sheet year. times. $X.XX of approximately X.X points. basis operating the with $X.XX on balance maintain The million finished the of FX, by prior net year company the with excluding hand $X.XX or full continues year the and

XX% the our we to represents flow dividend. in approximately plans. cash shareholders of a confidence free increase three double-digit increases and And our year, signifies dividends This repurchases. the share of of today, dividend to consecutive announced the long-term we our XX% combination returned and to For years through

external slide XXXX. environment processes and XX that this improves. With the structure that, underway have fix work the to XXXX year. is work shareholder reviewing issues, as and value internal and significant to transition drive our Significant let's will company expectations results company to for position improve recent move the to now discuss we're hindered a Overall, the when

credible and With that a much includes investments that profitable growth to needed the create said, have cost we long-term savings for plan business. in sustain XXXX and

we the XXX $X.XX in to up will For point represents sales to sales be of year current range range full $X.XX to a be billion. on X% year to net FX the down XXXX, a Based expect full of sales. net X%, organic rates, which headwind billion basis

strong benefit market half. performance On in from better an expansion gains, share larger areas. that slightly and be over half FX-neutral fairly sales year balanced remain sales the basis, expect we will continue implants. Aligners the the in We anticipate cadence we to growth compared first key will of of to the and in to demand the second strategic expect as year regional with

an Core cautious on anticipate, demand. Connect, including launched we uplift remain but We equipment CAD/CAM also Primescan overall DS recently Primeprint, and products,

to dynamics. Turning regional

see commercial investments and in US critical half the to In were in challenge in QX, China. of made expect US XXXX. the the team, geographies a that improvement We which an continue will XXXX, to our two we first

commission higher also address CAD/CAM growth inventory We levels. enhanced to our and incentivize plans dealer the

business actions growth US these return starting to quarter. to will expect XXXX, first in that, in We enable the our

after outlook cautious In significant China, demand in as remain organic we year on on a remains. but flat expect be uncertainty of near-term will XXXX, an we sales the decline basis significant

price XX% top in will implants headwind the be our a VBP see business. due we will Additionally, impact line to China

we of signs positive While seeing are remain, uncertainties many recovery.

week, For in-person with an this example, China XX,XXX commercial dental trade in attendance. team dental our in participated show professionals

using be to we'll the XXXX, better with profitability our primary and our align peers. performance operational measure in forward move as we margin EBITDA track As

fourth a EBITDA we but basis is quarter which XXXX, our For the our margin be XX.X%. to points prior XXX rate XX% of from than greater year, decline of above run expect

share earnings a to We expect range basis. adjusted be of $X in $X.XX full the per on year to

decline to Overall, takes second the Let's savings full accelerate XXXX turn XX EPS midpoint EPS the to quarter, mid-XXXX. range. are by approximately starting from $X.XX that our rate in of at of $X.XX outlook. will XXXX run adjusted the discuss expected in puts our contributing $X.XX the in restructuring XXXX, the slide EPS in we to Cost to and anticipate in achieved with plan outlook from XXXX

a levels. elevated raw remain We material sequential moderation inflation anticipate at in XXXX, but throughout

will a to increases, We price which the offset with will portion headwind a to inflation of $X.XX earnings. net

than a brings to $X.XX of net Other This EPS year, us to items FX the versus interest EPS. to $X.XX $X.XX, will of and excluding the impact investments. up the prior headwind

be will These $X.XX. impact overdue investments long to undertaking expected activities commercial XXXX. making We EPS investments and are by in integration

outlook. and see in On risks we slide XX, we'll our cover opportunities the

enable our balance healthy could of to market The risks outlook economy our the is Our as is overall outperformance. on the largest today. opportunities dental economy. based and the and we outlook recent XXXX that see a view Overall, variable having of of most health

last to remains challenging environment external and year, is high. Similar uncertainty the

we interest purchases. and capital concerns, has been equipment change elective could consumer that largely demand While behavior, in and procedures stable inflation turn lead rates cause a believe to in in high slowdown could to-date, which recessionary rising a

and the our include outlook could investments that our Beyond performance to faster opportunities earlier impact from or recovery. relative key chain external greater sustained drive supply environment, commercial

savings is on side, risk risk restructuring the monitoring realizing which our the It as acknowledge variables, we're large-scale with associated many closely is some global timing On a execute. program there we we with organizational plan. to

given out for the first that in laid to the quarter. at expectations Turning the We've details have we quarter, slide stage our visibility this on XX. additional

year. US organic For continued remainder sales approximately driven by headwinds continued year-over-year to gradually the the the expect offset our quarter, by growth China, first X%, growth aligners business in the we growth improve we over be in expect strong of and which to in

be comps year, of CAD/CAM lower forward. and aligned said of US organic return year. dealer Entering levels sales and orders. sequentially then to growth levels has easier to going dealer timing will from to in inventory retail in inventory increase expect will and favorable do benefit much the course the the we to dealer that, the Having lower QX returned CAD/CAM over largely

growth performance US to be slight the We year. expect quarterly in full choppy the XXXX with for

by sales $XX Based to we current impacting anticipate that first the on a FX exchange continue million. negatively in foreign will net be quarter rates, headwind, approximately

each plan least demand EBITDA savings and margins We expect XX% at the begin to as will realization be we accelerate restructuring of improve recovery will and the sequentially quarter regions. see in certain

wrap slide as touch allocation to now XX, me plan We free up through continue we've least capital on share quickly increased shareholders repurchases. consecutive at which well to flow priorities. dividends, on of three years cash returning Let and XX% as

balance is predicated maintaining strategy with deployment capital sheet investment-grade credit while an in on leverage the keeping rating. Our low flexibility

cash reflects a our full ratio XX%, and restructuring have of the program. cash We a conversion balance free cash expected flow leverage approximately expect strong which flow to outlays generation low year sheet, and healthy support XXXX

the goal we portfolio you improve chain well capital the as cash XXX% past to conversion discussed work XXXX outlays and move one-time working organization and that optimization. is today through in Our supply once to as

with that, turn to And back call now Simon. the I'll

Simon Campion

Thank you, Glenn.

our Moving on on XX. strategic update, Slide to starting

long-term attractive, sustainable We will right faced fundamentals our performance. we a and into foundation. organization internal industry are the challenges solid capitalize foundation growth move are forward lay of supported to enable well opportunities placed putting as by have our address and organizational plans we that the the The on to remain motion we

an the and exceptional and service patient the that by our right an delivering digitalizing forward workflows, workforce customer starts innovation by to one. and engaged path confirmation product diverse is experience transform driving industry strategy Our through and dental with

of we strategy customers, employees. are focused this We to will predictable, how in improve elements on repeatable, a the intensely now on delivery tactical shareholders manner the of and reliable

Changing to is much heavy this ahead have of transformational initiated Slide with XX, we work us. of lifting

five that objectives. sustain deliver our and profitability. a core we strategic create Year, two, commitments growth to: focused one, Number shared. And accelerate Number high-performance aligners this just These are Glenn in five, annual and four, implants. and number wind has and on enterprise objectives our Number As enhance culture. on we digitalization. New on are embark tactical three, number margin

As increase on an make to with we on and so our we industry profitability. do return eye objectives, commitment these progress growth fulfilling to

Turning margin are we Slide outlook, to XX. plan. achieving taking would that to the I reiterate we and to to have committed like objectives. XXXX growth key achieve are these actions our we provided and Today,

We will customer by have silos implement model, objectives reallocate meaningful to organizational a company four we will detail segments employee enable the and operating underway eliminate do us laid experience. the the to have connect through geographies, out. Notably, so which discussed we needed progress and as that new changes improve capital have on making we in other to the and

topic our trust on our of In that work, will treatment our of intent parallel, patient we shaping we defining several has decisions for been far workflow have winning profitable better customers clinic a lab experience strategic dental made, the final much future the a our been part confirm and portfolio thus and of to about secure received inbound and this are simple, Healthcare I have and no journeys discussion connected portfolio. Related winning The portfolio portfolio our of asset. significant can outcomes. inquiries Wellspect the status focus ultimate about business.

parties. We such engagements and to feel inquiries investigate commenced have several interested compelled with

until have We to further make definitive we a conclusion comments not this any on matter will discussions. these

simplification. portfolio of our involves Another key aspect winning

portfolio and on the to We basis size deliver offerings be that actions the higher inform a the product of SKU reviewing level returns. to company's streamline are taken can

that Our overly is the complex. early indicate portfolio insights

revenue costs functions. significant adds generate business, the now that across complexity those categories. know This consumables SKUs use XX% of our to XX% of inefficient approximately For business resources our example, to of the and leads in we internal in

with of the Specifically, we SKUs have platforms making up XXX XX% that different files SKUs revenue. of in Endo, endodontic X% over X, of

this is plants further opportunity and network in effectiveness, complexity, levels also sales quality. and we increasing there unlock work benefits, reducing and improvement long-term simplify While additional ongoing, optimizing drive improving service margin These to the know including efficiencies to force operational inventory, risk and is reducing efforts yield expansion.

has review associated and The integration overdue future Importantly, need goal of preserving effective the customer we drive our investments of see business enable these with strategic disciplined comprehensive execution important through benefits to and growth. areas the revenue partnerships. that suffered

sales investment systems US sales in resources great The Key expansion. force meeting. areas hired were for vast have and commenced, of to majority progress the include recently on our global are our investments these trained America sales IT our have, in teams, example, compliance. and made ensure for already Many North we and

Investments modernize our systems our and our further necessary integration. are to in landscape IT enterprise

they investment, these While are requiring typically optimal in a to the journey ERP deliver large-scale types land critical most operating business, are importantly, able being an of efficiently multiyear and customers to endeavors way. for

to We this past the of transformation number have the process over understand commenced weeks.

Investing on Operating plan XXXX. do, remediation critically the the important and the with developed all compliant another everything we a the manner is Board. in us important team is and and Compliance in support to leadership compliance will area. on utmost in integrity

groups has investment the underway. support As of is such, and this complete both

our in while or structure end in share We Sirona profitability. of revenue XXXX, earnings Sirona The are targets, conjunction the with long-term within above adjusted our to can targeted the of $X earnings historical these of changes of factors per normalized with the market more XXXX. can these with expected and also increasing positive enable confident meaningful by organization process significant improvement at deliver that grow Dentsply combination conditions, in actions our Dentsply

few positive commitments We So by let quarter. ended XX. in XXXX exceeding slide outlook prior remarks on our on a a note the fourth close me with

teams Importantly, transition future, XXXX plan challenging commission restructuring there commercial and a a is as by action positivity sense changes, external changes. be undoubtedly, is year of transparency about our plan a the environment. the driven against the within into put the will structural the

for However, our clear organization, a execute its confident employees the its in capability and and to investors. path we forward are it establish

decisive at taking restructuring action, dental We but fund the alignment action the ours on capitalize action and I improve and investments. this want growth opportunity believe we critical that industry not right an the internal are taking to Sirona, to We're and decisive that like enables us its believe taking Dentsply and organization performance. committed to drive to only company, the accountability, to affords simplified improve

improvement that It to and achieving we is delivering you earnings our key expect that five objectives essential the expect. meaningful

this can with embarking are on of and that organization. belief our Board transform experience, the this We with collective the in confidence we road support

it with And I questions. for up that, will open

Operator

with you. from the Q&A. Thank And first the will And proceed. the I comes of Kevin now Caliendo question Instructions] begin line Please [Operator UBS.

Dylan Finley

XXXX. Kevin $X kind target Based actually you a of by amount Caliendo. XX% you buybacks Thank is frame, of side, hit on on rate growth revenue on for a margin, some put you X.X%. on Congrats math for you that guys. landed very This assuming EPS operating much. we did on the out Finley average Dylan great and of an Question that for we around that so, assuming some quarter, moderate time

little any XXXX, based the where visibility Thanks. expecting your growth internal own year, if consistent you're I'm you yet expect and is it assumptions So will a have exiting you this bit. definitely if on grow? wondering this to accelerate that with

Glenn Coleman

look market the to out growth get are think when you of two our Day expectations back haven't the to I we to an first term. would long But that our in laid Investor and up No, part do three years clearly, coming now. Yeah. as I revenue We'll to do years would above expect at we rates to foremost, out say, X.X% November. over And plan. coming our from expectations X%,

be So the get part of to expectations how $X. on our would we that

Dylan Finley

Great. you. Thank

Glenn Coleman

you. Thank

Andrea Daley

please. Next question,

Operator

line Elizabeth, it of Thank And you. if ISI. One Please Elizabeth comes Evercore proceed. you're muted. moment with please. Anderson All right. check from

Simon Campion

Elizabeth. morning, Good

Elizabeth Anderson

shorter-term guys. question, on question question. I'm for Sorry. so talking one mute, myself, I to longer-term the one guess, and apologize. much Thanks

about was some Simon, maybe time you of know cetera? of pointed out and spend, continued the of translate about sort but also investments and have you I you the of maintain. about the R&D count, the talked, like with for initiatives reducing details SKU into new cadence the innovation, how some you and I investments think line this wondering, as how product really these I sort of imagine et of As is et new cetera, helpful launches, strategic sort

So I guess that question. would first be my

sort I And question you're you. just on the in of across the shorter-term We're was way And two-thirds geographies? wondering, your of currently Thank first if second sort my market cadence. the the just quarter. what is of through sort of you could through talk major seeing

Simon Campion

Yes, you good the thank for Elizabeth, morning, questions.

So start with let R&D me the piece.

getting One on and R&D and I through those dollars we're think, returns we of to the how obtained where reorganization invested the the been now that our going and historically. visibility benefits, we're that has we've more to have more

discipline R&D of global evaluate dollars one that bring during spend seamlessly benefit decide and our business R&D to process cycle. even we where how we into more the The want massive value as moving cycle monitor and we unit will able commercial progress to the to the to as to be and

expect us Analyst or Investor should you on more So, to from at certainly that. Day Day hear

use with investments then as and commercial the to US team respect an I’ll And example.

prepared in noted I remarks, well we the underway. As are

and on on I In as the the that DSO fact, investment Implant We've we're traction, already DSOs. with experienced team complete noted, team. the almost with

sell. clinical very In relation it's a the Implants, to

we sales space. meaningful in clearly, destiny, that tail think implant we we have And with But win arena a to of the have before in would force. we were training we US. the performance that they control their It's a it's expect an in direct and we begin own our can profitable growing. And it's portfolio on area so deliver where

expect would the Implant year over we next from and into increasing the So performance year team.

Glenn Coleman

than And say, months a QX on we're we're quarter. your into months more the two question and would first now we where I much few just around positive foremost, Elizabeth, ago. were Obviously, QX. around

think, record positive. that about was do expect SureSmile, coming month portfolio. in We growth for up see January I the really QX, So surprise a talking was out organic the for fact to putting us. of a strong which pleasant growth is a Ortho we're

that So momentum is continuing.

should where the quarter are with US, with also given with seeing dealer we we're inventory levels success in very have along strong a the Primeprint. CAD/CAM the

we're still coming were, CAD/CAM. seeing on looking say, at more headwinds in than from we're whole, and QX few ago growth a months So the China. positively Ortho Obviously, we with

a should So are improve modeling we China that get in in sizable past but decline pretty we QX, after QX.

So that's the story. QX

volumes a way again, upon of will currently. expecting year headwind year I a the modeled FX just to environment, to right full full would be million line we've point in on We the stable. to the still relative our based EPS patient say, top are about FX growth be headwind expect be down organic and $X.XX. QX. full outlook is we X% out a stable On basis, $XX to rates modeled pretty a where large now X% up organically,

a made challenges and have around our in comments prepared number in improvements we've for both been Regionally, big the us XXXX. US, China remarks of which expecting we're in

be to coming growth of a America. down on out then to flat then in be up that's off And going rest of coming world and flat, full be down when maybe Latin and should should slightly QX. China US Europe China year quarter you So a of slightly exclude basis,

on playing out. how So, that's see we the whole, a regions

good show portfolio, should really at be year-over-year. and Implants again, growth you should And CAD/CAM if aligner should improving growing. look the be

I back-end to point we've important I and it when that I just the second So, heard year will means be on of is that's the we half, which top whole, at made, slightly our wanted half an outlook. year that basis ensure our expect of we would look everyone the the the out constant laid currency say higher terms how first line, top in on loaded line. the a is than not

of probably our half in restructuring latter of will I'd year the about the be until year half XX% means just back quarter, half say which of in in our keep not And directionally mind, savings I for year. However, of full the bottle EPS, the will second the XX% in the EPS loaded. kick first and would EPS back-end

So bit a year. question. the that full around QX gives color and little hopefully, for of our you Thanks

Elizabeth Anderson

Thanks much. so

Operator

moment And of from tt Couillard line our comes One you. Thank the with next for Brandon Please question. proceed. Jefferies.

Brandon Couillard

thanks. Hey, the of morning. XXXX, Good $X Simon, XXXX target on EPS.

putting you in restructuring today, understand pretty front us especially right a how help program. comfortable target Just major there that out of got

Simon Campion

Yes.

would that network activities that including that, So, remarks, plans morning. the other say, Brandon, to quickly. alluded We projection with we say a SKU between got underway I comfortable efficiency. lot and we and would driving have it prepared in restructuring and good pretty I our again, rationalization of the

In think that at fact, with we're have get in we levers to -- I to we the Glenn, meeting our don't any put January. further you we frankly, achieve going think. do that if to it know have comments, out it. JPMorgan And we quite confidence that have the disposal I I all

Glenn Coleman

putting a to that think SKU optimization side good that more and the the looks when quantification facility towards around I work but of actions November, to impact place cost of color think including equation, already give you've of the what We'll we the $X we're number. we we seen the in No, us like, get that EPS the drive that have piece.

this, part key a back growth. to though, of market think is getting I

normalized north $X innovation. the cost four coupled we'll growth, number a So macro going over more back to feel new next taking drive the get with again, a see that's to to of and that confident by years, actions launches coupled three with we're to we're need XXXX. environment, market will we product And

Brandon Couillard

between does versus in capture the the terms Glenn, Thank year for give you. pricing for intend Excellent. net can more you us organic of color consumables T&E the year? any what guide, growth full sub-segments, that and And

Glenn Coleman

Yes.

So in I is of low out pricing, we terms increases. it the single-digit laid think way

note, to being important pricing. it's think we're surgical where I around though, we're that very increasing

just net the it not the We're we're in of So doing it across parts that's And and portfolio. regions number. certain board. certain doing a

actually prices the and some as So example obviously, also other China being an reducing we're one in portfolio. of and cases, parts discounting

whole, So XXXX. into low single-digit tailwinds as go on on the we we're price counting

one have year two plan rolled so benefit we for mind, XXXX the price get And the that. at of in moment. in Keep we out XXXX, we'll full increases

consumables, the that's how about give So to not for see of how increases. I'm thoughtful the we've very been specifics thought in question. between and Thanks terms obviously, you we price pricing. but we T&E going

Operator

Goldman line One the comes you. please. moment it for Nathan Thank question, Rich Please And Sachs. from our with proceed. of next

Nathan Rich

up, CAD/CAM Thanks kind kind the Great. questions. in a it had good the performance. the US growth give size on given there, what the so and the detail that on morning. definitely tough Good of drove of QX, in relative was you the a comps few I for segment. little surprised bit Can of CAD/CAM more

be drove in quarter. what Just the curious that

expect about On the you to talk changes, in could said QX. that inventory volatility expect And levels? the hearing return benefit inventory distributors excluding what growth growth you're you Is XXXX. why CAD/CAM maybe that to restocking from you on dealer Thank the there's in the to you. you

Glenn Coleman

Yes.

Korea an QX as performance Asia for in is example. by strong Japan in and saw almost CAD/CAM all driven our So, performance really We Pac.

fourth growth some the progress but the of to other where see in growth in world, from. came the of that's quarter. primary that's the Obviously, we parts driver So, here regionally, continue

think, and down levels the to changes, I foremost, XXXX. first inventory we did take nice On throughout a inventory job really the

$XX over we full my million. sequentially were QX QX. On year down So in basis, I to prepared we were from remarks, mentioned $XX a million down

year, very means for a we every in we So we're of which is good, dollar see sale, wholesale see XXXX. retail actually started which dollar should which didn't we below the sales, the levels

in better should see we seeing the in our still the we happening dealers cautious. So, we're still market US. speaking as with and in and move equipment around the marketplace, what's cautious obviously, we're now, CAD/CAM US And forward performance

guidance are, is fact they that out got in the laid we've a where how bit launched we do new XXXX. levels our think inventory keep I being cautious space. dealer our we've products the for some in So have mind, we've But

overall. are to expecting We see growth

that's so did add how XXXX. we've Simon, laid want anything? out to And you

Simon Campion

with think focus we're quarter. our we're US, I well. on the a you renewed execution at. had and strong covered global We've comfortable where that We got

Nathan Rich

Great. Thank you.

Operator

comes of R. Baird. Johnson from One Jeff next you. the please. moment And with Thank for question our it W. line

Simon Campion

Good morning.

Operator

All right.

line. We next to issues have technical Can question, I please? move with the his

Andrea Daley

the question? have Do we next

Operator

from Yes, proceed. Stanley. Wright with ma'am. Please Morgan It Erin comes

Erin Wright

for taking Thanks the Great. question.

the on guidance, breaking we And you I sales? of margin SKU you're count in on initiative, and us, that outside give magnitude restructuring on a that is meaningful should I the timing that will can areas of perspective? for of of rationalization. on this be alluded And Thanks. understand and to front. something business, any something impact But say details limited near-term potential would in that the great. that. Does both that also you the of your can on how us just And profile you're So think longer-term have about Wellspect medical, this is other you thinking what embedded out be be then divestitures, kind the divestitures on

Simon Campion

the you Thank question. for

we SKUs, don't some XXXX. any some work the organization in a expect SKU to few on we customers SKU I distribution rationalization and on we years the offset ago. ran And partners. offset execute meaningful think, a program of So, our The

through a going in this we're So manner. very thoughtful

the to this SKU we out any hear at be that. prepared remarks And to Investor in the of some granularity expect of about expect and more this you will Day some have the in scale year, some We their about laid so color provided the but revenue. should November the contribution offerings plans changes we don't and year,

additional So hopefully, that around color you there. some provided

developer a too. considered more With commercial dental we our regard being other manufacturer thoughts and are divestitures, to with the team. of around they our But obviously parts consistent business, and

at along ones portfolio, one and to further right HealthCare of number Glenn? then, we plans we a have we're there that Wellspect portfolio, And several looked rationalize while the close So look at. different about to do opportunities now is the are at any no received that taking and our inbounds

Erin Wright

Okay.

Glenn Coleman

to it just would is the your add of question profitability I the Thanks. yeah, business, average. on Wellspect our Yeah, just corporate overall answer to accretive

Erin Wright

Okay. Thanks.

Operator

along Baird. moment. line All the it We next with And question. comes Johnson from for of Please Please proceed. one the RW right. Jeff move

Jeff Johnson

if of to just I We just that And part the Wellspect Wellspect. the ballpark as of other drive comment cash the confirm accretive in Thank current whether or is, do that big year the top on tied down question in buyback, at going morning, debt? full other forward? or dental I this you line to margin go in up maybe $X.XX so to Good Does infusion, guidance. it around or that that keeping one annually And to can maybe was guess guidance as guys. and you get reason, is there. or acquisitions I you. any were for reason a to it follow pay on least into a Glenn, pump other does for you. go that Thank right get the contribution share want kind portfolio that maybe potentially back that EPS

Glenn Coleman

Jeff, thanks for questions. the

is I evaluating And around foremost, we're First say again, our in yes, this and that just year our Wellspect would full numbers. options business. included point, at

So year our that were in Obviously, what have about already business with if to is we'd the be divested, full levered. very included We're do proceeds. cash expectations. low think to business to those

to would point how transaction. the at not potentially that's to dilution around specific plans any But EPS most good going lay offset So news out decisions any do. we're than appropriate time, we you. this relative Thank we make in could the to other what relative to

Jeff Johnson

I maybe Thank you. if then can. And question, follow-up one

on, you I'll narrow and a implants to orthodontics or just different guess, or the equipment here. areas, force of a it pick few hub try about down talked adding couple it's Just to areas to or I the but out here different implants, the whether increase trying there. within commercial in I sales could pick

You're are bigger and of in a push kind growth that two fully could tapered implants on which player implants, implants, although probably five in are back number kind under-indexed recently. value under-indexed of under-indexed, you the those areas

I the sales if of turnaround Implants winning Thanks. are up How about really of to side get is Simon, talked the product here you one as add kind you do end doing you what but to it, if reps, Implants, recently? in So keys on here. you

Simon Campion

Yes. Jeff. Thanks,

So, points just on couple that. of a

paying we to for our historically, -- more drive think teams. reflect focus our we so commission plan commission commercial been to what growth I would changes have that from our liked, changed plans our on have want hasn't growth

parts thus far visibility more changes from perform. those a certainly So, And on portfolio. People getting them different of plan to positive. lot get want feedback to our we've been very when paid commission we're they received have the

So we that. do expect

dollars think I getting get visibility are to where we returns portfolio, relation what now response my we In now our noted, in visibility. to We as spend and from I our question, to have Elizabeth's them. we

force segment, likely it's to direct, fast-growing that more about Implants, like would spaces differentiate a that invest we So then have ourselves elsewhere. sales point in where a an your is to than opportunity we

that need for we -- develop is get sure meaningful to we What products are make that our customers. the

have just we've resonated well, some think up taper launched of I customers there. as with our products which

appropriate the I moving you've work So forward. we already think we're in will And to absolutely commitment appropriate of doing our the to. some alluded spaces R&D that reinforcing be

Jeff Johnson

you. Thank

Operator

question the for of line next it moment our One comes you. Stifel. proceed. Please please. with Block Jon And from Thank

Unidentified Analyst

for point But, shake Ortho, thinking segment total it growth, think growth if we consumables I range, is down the be low it it total maybe this company the be about rough maybe engine. may the guidance within you. X% helpful how Glenn, guess, where on is Jon. will could each be Thanks This is and Tom of high in would put end or stepping up that guys. how potentially? we on Implants out start organic we guess, should them should finer maybe end company I the about for think reaching for between relative a T&E T&E I X% to like Hi the guidance. and XXXX questions. with I'll sounds But of to terms,

Glenn Coleman

range. question. in as we're faster time. part consumables the point to not guidance. specifics But this on all I Tom that's would at guidance to T&E grow give our thanks too than segment much on we for our going just We're to expecting of going are say comment

Unidentified Analyst

throughout how ones prior just Got for than those that growth. the the is trying what some apply and expected, of current time Thanks. from the learnings you're potentially And different around? were the gives the on on may guess, gave the then be to have very more you maybe this Simon, from be it my helpful this But some talk sort And you what bit maybe it. restructuring. follow-up won't impact more a confidence call. ultimately company. color about maybe restructuring you disruptive can and I

Simon Campion

for question. the Thanks Yeah.

this been very thoughtful about So, restructuring. we've

at You we that will have teams hopefully are all. our sales not impacting noted

In fact, we're sales US. net the globally and our positive Europe on including investments team in

about extremely thoughtful the think I we're being it. here, is, difference we're

we We giving RCOs, regions a and alignment units. between our global single And are the business driving global units are between voice. the the business

more and going between and because to improved the be be now decision-making it to so all to and as better units we going the of and have and aspects -- have to or we of we So visibility is or business is agility regions other so forth. can like investments quality financial in the appropriate spaces different R&D move around money and plan, on either fund communications commercially

commercial I And think noted we've meaningfully team, of So in in the very doubled what tone where in some the I of different was the remarks to from here change particular, top think as some we prepared We -- that we it's as is at before. as a have metrics the months. well, material commented done feedback in those six received prepared well. the past again, remarks, on US the the

and better make we're expect and a at inclusive. So we We're company, investments work results a we this driving improving are We're that company and to changing making better being place and and deliver discipline being the you that place expect. the process tone transparent. here to to

Unidentified Analyst

Thanks. helpful. Very

Operator

with One please. comes Bank it go of America. Thank you. from moment next And Cherny the our line Michael of ahead. for Please question,

Michael Cherny

trajectory on key terms not versus business. mix their I'm looking for into your as their $X.XX in you about revenue particularly dynamics, to that desire own about out of one heard going here. build about taking number, direct you and but specialty going think focus of one partners a into direct. question. how build you from the But how We I'm your for I do think distribution going about of the think, to bunch the not the think Thank topics, wrap you yesterday the

as versus on view that distribution does of control can take your you build? to more of X-rays how so think impact and own do destiny you what multi-year your rely this about And go-to-market strategy partners of

Simon Campion

for meaningfulness different Thanks in of different growth partnership that our areas, to regions, and tend direct have to of the very have degrees distributors. aligners. But with as are organization They Michael. begun do they're meaningful, in have I US the we great value certainly build, to we question, certain we and We think, constructive from them. have Yes. our a we the there where areas. course, with relationships such And presence, see implants those

within the So same we our environment distributors, unique partners while a is it time. and that constructive have your within and competitors where developing -- at relationships dental, with

So the we with US are in driving with in particular. our distributors -- those with transparency our respect to thought process

Michael Cherny

good That's me. for it. you. Thank Got

Operator

with for Lin One William Please our from it you. proceed. question. And of Blair. Justin line moment the Thank comes next

Justin Lin

Hi. morning. Good

You mentioned share improving what's driving the in so the beyond expanding you macro? record are or more for your quarter SureSmile. market? guess, taking success you view, I And had a

Glenn Coleman

Yes.

January, So it quarter. was a record month in not

it's was think clear, are to to a stay. want just be We I momentum market. really continues. still much underpenetrated SureSmile But the around So very here month. January obviously, strong a Aesthetics

us. share engagement So that gains leading positive seeing fewer is market has dynamics. those and high SureSmile perspective, a of customer are But geographic we're expansion, for revisions from us, clinical and to all for

and continue really SureSmile to we had both will year, and So, good we robust in that in expect Byte XXXX. a growth, see XXXX

Justin Lin

do you sort you. around me Aligner longer-term of that's your of into to other portion guess more part make may. my question that of more the if Clear next being the your of push all meaningful channel, question, And strategy. How Ortho follow-up plan Got sort if I a the direct-to-consumer. with guess I you at kind leads business of

Simon Campion

Yes.

had We've for Byte September. over we lot very of questions Byte since the well last performed and acquisition So the on quarters. here past has joined us a two

performed well synergistic we've here. with It is SureSmile very business. since has I arrived think, it our

app, is them, it's customer the performing have which satisfaction well. through Byte great My We and scores had really with resonating

and portfolio, driving increase our customer appropriately drive as see as scores meaningful it customer one that of diligent and and in traffic we trying being expenses on manner. around customer So, satisfaction web and to a part we're a investing conversion acquisition, that the

Glenn Coleman

mentioned becoming top improvement Ortho profitable, is more much with businesses of well. would just I in both line and around Byte. margin our doing a in on part this in add, better as the our Ortho big previous discussions. And a SureSmile I Obviously, line, and some Yes, story expansion are bottom

XXXX, relative into to for and nice EBITDA think contributor a question. we Ortho be about be also higher to that's to should we the getting the should that very So for sure. tailwind Thanks go XXXX, operating a business XXXX margins, our when encouraging margins, how

Justin Lin

Thank you.

Operator

line the Please And please. JPMorgan our moment Chase. one go last And ahead. Vatnsdal of comes question, Rachel with from it

Rachel Vatnsdal

Thanks in. for guys. fitting me Hi

So questions I the some year. the around margin follow earlier wanted to and of the up for guidance on P&L

a there's So pieces moving of amount fair throughout P&L given restructuring. that the

and EBITDA EPS appreciate XX:XX we cadence on I you half. year? than half then to the [ph] So, margin a second rate color exit on Going between year, us throughout Can expect margins XQ I being give really and XX in for have greater what should your follow-up a XX% as the from from well. XQ comments first some that Thanks.

Glenn Coleman

quarter on back greater the provide exiting of XX% the lowest be highest too year QX half just would more QX think would I doing performance. rate. the margins expected Obviously, we is that at Yes, XX% EBITDA with of margin said the We of don't EBITDA to to than imply north margins. want much the I color say, year.

laid for So, margins. again, And it I overall. be EBITDA full our than think that's how greater for out expect to we've we year, XX%

the we're think going color point. to Rachel. that's I at all this So provide Thanks,

Rachel Vatnsdal

you're then follow-up continue. that it. constraints chain off quick supply a just on those you Got guys play just And and

what forward talk constraints So can supply you throughout just chain from XXXX? about is assumed heading

Glenn Coleman

Yeah.

one components. any first What right the we worse. but really gotten chain in challenges. It surround electronics constraints hasn't moving we remarks, better we in bit the we're little foremost, upside modeling. have did than supply It improvement is I things and a throughout of I in have possibilities mention think prepared is and assumed a electronic what XXXX get the my direction, seeing XXXX. better is still

So and conservative a is would better supply than view some I lead dealing If chance we're I our have actually on of a it assumptions, modeled it pretty chain us to to the constraints overachieve. think with.

we've conservative that out. think pretty I been So, you. we've Thank laid how in

Rachel Vatnsdal

you. Thank Great.

Operator

Q&A And with final will back turn conclude remarks. that, to call you. Thank and session, the Simon Campion for the I

Simon Campion

Carmen. you, Thank

organization like and closing to their us past the challenging ahead and have to team, in my our entire commitment easy. would of those today, for unwavering So their I the customers. not was employees to reiterate will work year thanks left The including to valuable Sirona contributions recently Dentsply be transformational we who've the

I However, bright has am future a Dentsply ahead. Sirona confident that

will the significant term making for already stakeholders are time you employees Thank long over We benefit customers from which investors. progress, to all to your today.

Glenn Coleman

all. you Thank

Operator

thank with your may participation, And you. and we you disconnect. Thank for that, now you

DENTSPLY SIRONA (XRAY) 28 Feb 232022 Q4 Earnings call transcript