XRAY - Earnings call 3 2023 | DENTSPLY SIRONA Inc.

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Operator

Good day, and thank you for standing by. Welcome to the Dentsply Sirona Third Quarter 2023 Earnings Conference Call.

[Operator Instructions] Please be advised that today's conference is being recorded.

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

Andrea Daley

good and Amy, you, morning, everyone. Thank the to Dentsply Sirona Call. Earnings XXXX Quarter Third Welcome

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

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

to also available website. Additionally, is historical on segments financial our new data related our

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

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

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

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

website the section of A of call on the today's company's the webcast following Investors will available be call. replay

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

Simon Campion

the this providing then 'XX XXXX call. thank outlook. of recent an and Today, cover and you I'll revised and us morning our for QX by Andrea, earnings will results performance, you, overview our QX start Glenn all for Thank joining

and in the terrorist recent we East. on Israel recent and loss of the attacks the continued saddened by horrific wanted the events performance, to deeply Before the on innocent discuss lives. am Middle I comment injuries I

of Glenn our utmost our this will have in We the and XXX covers assumptions. their our employees business he over and Currently, remains employees and the when in operational, outlook Israel touch upon families safety again topic is the country priority.

to Thursday, all Investor including the the X, plan our to where like are detail, our to would of X-year more that we remind EPS Day I plan you adjusted $X. November hosting cover target strategy and next in path we

for will primarily As remarks key be messages, such, a year. the rest call, outlook focused the on for today's our QX few prepared and of and our brief financials

starting Slide plan execute sustainable business we X. QX, performance deliver the to the In Now on term. continued on to long strategic over to our transform

We led on revised that our are conditions the in making impacted the progress growth to macroeconomic despite line the top quarter negatively objectives and outlook. XXXX meaningful challenging

U.S. CAD/CAM headwinds markets, in however, the growth quarter, from the in on in The and I'll business. were, and bright ADA, the sure There double-digit certain our particularly our Germany data growth including momentarily and survey business data. U.S. I'm own in China XX% experienced you're spots some seeing comment

Our SureSmile Aligners double-digit of and business delivered with growth. Byte quarter another also

rate margins EBITDA full with by points, initiatives track to on These expanded our QX, In million restructuring deliver our XX additional program. contributions $XXX generated remain run by basis the mid-XXXX. savings

in repurchases Additionally, share our to during fourth $XXX today, announced the million we execute plan quarter.

focused we transformation quarter, continue the on and journey. build in faced we headwinds stay our to capability the Despite

X, DSOs. Slide let's start to moving Now with

results seeing relationships from We DSOs. with our are into reinvestment positive our

important relationships our rebuild with customer We continue on and to this refocus segment. growing and repair,

performance this quarter Our was sequentially. flat in

next healthy several We quarters. are DSO building opportunities a the positive momentum of funnel with over

to renewed our We are clinical fulfilling commitment education. also

clinical engage an World overall give education provides the clinical infrastructure. DS as education. opportunity important such to unparalleled events education These us component events customers our live serve Our as of and with delivered X This past this attended education the quarter. and World year, X,XXX Approximately in we we Spain, participants XXX DS and globally, with Italy hosted held X over U.S., events, courses. Dubai,

We digital patients. Core this DS delivering important shift care and at care play in expanding increasingly products At DS element role Future will a Vegas, in year's of presented World Las our we the the paradigm technologies delivering event. future an of as believe we and in key Care. the highlighted connects strategy, It's features to of

DS Now Core, feedback. to the simulator have experience innovation. efficiency Core. We and generated a positive into simulator SureSmile recently focus of on continue Customers which highlighted with integration we DS course, patient launched new of has benefits the on

also the functionalities. have and lab to including ordering released DS Core, viewer canvas communication We updates and

capabilities pleased patient's customers. our clinical particularly in Investor at in the from Day indicates next a place. communication week. plan treatment as enables of it it Anecdotal are with highlight data drives with We canvas commentary entirety customers the depth DS increase one to rates showcasing Core's treatment We proposed discussing that greater forward in and an to acceptance and customers look

an education, execution. have to I'd launched which we to increase continue our Implants of of OSSIX portfolio, regeneration commercial a as our investment highlight robust clearly also like part portfolio. expand our part and important of remains bone And business. we implants, incentivize Agile recently the in teams, commercial while clinical capabilities we

opportunity LatAm. review our customers. and us we and business and And of with These finally, with provide deeper dive in continued in APAC quarterly meetings employees cadence into business the to to meetings regional each engage meetings QX,

feedback employees potential this in have result have for taken from consistent and XXXX. opportunities identified The key a region reviews, customers of these each action our continuing highly on and support some. As in already growth strongly investments we and positive

to I it comment I'd detail, to in before to a our take outlook. Glenn moment turn third more like discuss our over to quarter on revised just Now results

discipline a continue focus of organization, as centricity and to stand continue we greater As theme. accountability, on transformation customer our will including to core driving the

believe helped us we inform such, surveys trends. As quarterly market of view our have and

during QX, revise call earnings in U.S., set especially reduced sits With year, we the continued of in reduced the the in decided Germany. by to Australian a guidance in led which followed and sentiment at our beginning in range Germany exhibit volume QX the QX, in August, presence in Australia in given and The patient weak among Germany sentiment our negativity worsening caution German to our within despite customers, macroeconomic addition outlook, trends now environment. us to

hand And Glenn? with over to that, Glenn. I'll it

Glenn Coleman

Simon. thank results XXXX full Thanks, for all us. our I'll joining quarter our outlook. Good on third more detail morning, year an and on update you provide and Today,

on after-tax recorded a this charge the well result our in environment. of impacting interest as Europe, as asset I'd segment. noncash so, doing like goodwill impairments, other Technology demand, Solutions reflecting higher macroeconomic to charge adverse including We weakened and increased primarily discount $XXX rates, Before intangible the comment to rate QX related factors, million as in particularly Connected

transformation now Despite our in to our this rate, came a me EPS basis pressure, work which to below and financial adjusted resulted organizational Let our with year-over-year, XX enabled quarter projections. line results. third in XX% points, growth These move results, margin tax us expand lower expectations. line alignment impacted trends top and with in our EBITDA of

X. move to Slide now Let's

organic million, quarter was third $XXX year-over-year. flat Our with sales reported and essentially revenue

constant due year-over-year and slightly was grew QX. the a lower sales saw in to sequentially in currency strong performance a quarter, Foreign improved from basis, dollar. anticipated On XX% favorable a than we was China stronger U.S. currency however, which

grew in Aligners U.S. double business Global addition, XX% the and In CAD/CAM digits grew our

were such demand and impacting offset implants most These Germany and as in the improvements softer notably by key imaging, U.S., consumables. markets

was to The quarter basis of Despite improvement while expansion the $X.XX, in points cost price in flat infrastructure. performance year-over-year third headwinds, implemented commercial continuing as continued was the up We to XX.X%, invest inflationary revenue from adjusted by result and primarily our management teams reductions XX XX%. earlier EBITDA cost margin adjusted this and restructuring EPS driven program, the increases our in a achieved year. effective benefit and of of

growth EPS to In rate addition, lower mix. favorable a tax a by due our impacted was geographic adjusted

In in prior accounts the of year. timing profitability, flow driven XX% XX% improved we million build and generated conversion third of XX% the cash compared prior in accounts quarter, by lower the receivable up and quarter to payable cash inventory compared year. of Free a year-over-year, was the to the operating flow, $XXX

cash our cash initiatives. basis outlays once to the move free transformation our long-term on with a past conversion associated a goal we is consistent As achieve XXX% reminder, flow

cash X.Xx, which to to ratio equivalents $XXX in is amounted And our and million improved long-term with Cash leverage at targeted our September line XX. rate.

and In million combination shareholders of the third to through of through repurchases. $XX a million share dividends, quarter, returned total we dividends returned a with year-to-date $XXX

also million shares of Simon year-end. repurchase additional announced morning this $XXX an to intend we noted, we that by As

digits, single X.X%. World by in global with Within U.S. now X. to CTS, CEREC U.S. performance CAD/CAM inventory of quarter segment driven Let's third ahead sales segment. our in Primescan. Slide Organic on higher our Underlying CTS, and declined grew Starting strong, volume business Connected distributors low Primemill Technology also CAD/CAM Solutions demand wholesale was retail as September. particularly the increased for DS turn

are business support The interest recessionary Equipment rising our our with to & the in we imaging attribute partners rates financing in working quarter concerns the we demand distribution in the digits Europe, term, customers. In U.S. single and high to the equipment softening declined due for to Instruments near alternatives on which market. and

rest We volumes of Dental Moving and endo/resto declined to in did sales which of organic lower about Solutions this Essential X%, by EDS the world, strength products, U.S. which the in some negative preventive see and segment, Europe. the impact. includes or driven mitigated the

by Byte. segment, the to grew product was This differentiated Aligners driven grew fifth and digits and new X.X%. consecutive gains, grew SureSmile growth market offerings strong to XX% organic share double Implant Shifting outcomes. & both and from in SureSmile quarter. continues Orthodontic the benefit sales Solutions performance for

customer aligner Our saw we grew Byte X% rates. direct-to-consumer conversion as higher brand

basis, anticipate year in Aligners single-digit pressures we growth On but business markets. macro fourth a our digits given grow quarter in full our largest double the expect to

[ grew the in Prosthetics in for digits Implants highlighted well growth VBP low gains. as On as & XX% sequential China in China share value to demand third the and implants single increased a grew implants by market quarter. due basis, ] quarter,

X.X%, flexible, And new across wrapping catheter, invasive LoFric product product which launches all intermittent benefited irrigation with an organic bowel been up Origo care also from by both have male regions. sales with a X received segment, the minimally Wellspect grew Navina growth Healthcare of well Wellspect and Mini, customers. with the for

Wellspect in further expect to growth of about QX, For a we year-over-year. XX% acceleration

offset X U.S. Now let's in discuss about restorative by quarter partially implants imaging equipment. region. financial lower products, aligners equipment, sales and sales third growth to of CAD/CAM X% due declined to Slide strong to and by performance turn

the CAD/CAM U.S. by Vegas levels $XX build increased driven by in World sequentially in DS a advance approximately inventory normal Las quarter of in distributor million, September.

inventory in this We And of the lower installs support be because expect of QX. by that likely of end will most will this, year. the levels

declined and X.X% Germany, sales Organic due primarily Europe. largest prolonged impacts EDS recessionary Turning as see we to demand continue second market to globally. to lower CTS in our

to Excluding sales were flat year. Germany, organic compared the in Europe prior

our strong aligners. the posted segment we SureSmile Wellspect performance said, That and in with

Rest X.X% and led of world organic sales in delivered by China, significant quarter, which EDS. growth in implants grew the

China third and in us, smaller was volume the a positive but sooner more With fast-growing performance growth our performance, bright another Mexico. Latin with improved impact expected. has sales quarter spot digits double now in pricing the and for America, turned offsetting strong Brazil year-to-date than with than grew increases region

With outlook for discuss X updated that, Slide let's to our move to XXXX.

impact continue We conditions QX. see current to to expect

visits X,XXX and Our seeing other customers, data, together recent we're over suggests that negative patient with industry survey research with trends, increased cancellations. of decreased dental

rates interest of result higher-end will equipment In higher in addition, purchases. likely some deferral

impact range coupled billion to additional for outlook. led $XX factors, $X.XX year a now from year outlook. our headwind macroeconomic us year, lower the an remainder expect FX of have to billion. includes to more We of This full the full expected prior our $X.XX net sales million unfavorable compared These with FX to

estimate compared prior expect organic about growth. X% of about to X% sales We grow to our

Israel, comments. to echo like I'd Regarding Simon's

of have our an and Our resources, manufacturing Israel colleagues X move generate limit to country alternative thoughts the operations, identify families sales. that potential we their implant priority. our underway Initiatives Israel is call all are inventory, total with where that supply roughly important disruptions. top is including sites safety impacted, are and including X% home, the

impact to remains on continue significant the to a closely. business And situation monitor events while date, the have We we our fluid. not seen

Our in assumes impact conflict QX from the outlook Israel. minimal

volumes year prior to impact to from and the profitability. We and EBITDA be lower than estimate our full XX%, business. lower greater absorption margin sales in Moving outlook, CTS due the expected down unfavorable of to

the a $XXX driven Germany lower are updated tax quarter. count to reduction share pretax mix, repurchases to in as includes that Our a outlook due million fourth rate lower due geographic income by largely well a share as projections of in in additional the planned

$X.XX organic per a this share updates, is outlook representing our is these from CTS range partially of due is gross full which in decrease tailwind. due tax expected given additional a range. a $X.XX projections, the to compared be to lower prior $X.XX, earnings $X.XX margins adjusted $X.XX $X.XX and $X.XX midpoint headwinds. lower of is now to to is year With Of sales, amount, by This offset lower volume a lower is FX rate, to

that, I'll With questions. for open the call now

Operator

[Operator Instructions] comes ISI. Evercore Our Anderson from first Elizabeth question with

Elizabeth Anderson

the to changed Thanks XXXX demand help to changing take was so environment that's thoughts you sort of updated wondering for much macro environment? the has the about based if how of sort bridge in to appreciate your and you on very operational could in that for need $X helpful. that the EPS steps question. on I the like think anything us get outlook, you I

Glenn Coleman

answer lot mean for the our macro is no. question. thanks Elizabeth, not on the The towards the $X of environment. is is control, progress the short dependent I a in

what are And out will at so I in specific those next quantification. actions Investor week Day lay

most doing. of being the Obviously, of the macro rationalization initiatives program. annualized that work. $XXX continuing track and piece SKU and all That environment about. things to The optimization ERP by million mid-XXXX. talked that deliver transformation is work previously We're in savings we on of restructuring the control, is The we're move the $X bridge with improving, our the but to a so forward it we're

And that's our we're so control. track, all on in and continuing,

plans. So our nothing to changed has relative

Elizabeth Anderson

it. Got

obviously feel can mentioned you're you that? Are the gaining focus some are sort you you increased in provide driving you Can be land getting in an share helpful. DSO products there. of on that and areas? Anything you're You segment. that momentum have sales How for of certain kind certain of there sort resonating, know about like the what's talk expand? you I that opportunity do would .

Simon Campion

Sure. Elizabeth.

So as have year, and them. commercial more DSOs robust with a you relationship a last know, we our in invested with footprint team leading we

our We portfolio. are with approaching all broad them

more acceptance. I the as workflows with actually ability to things is make think that efficient resonates our in treatment survey to that results well. them of came one And and our particularly out increase

some are lot to in can begin of So here. and to DSOs, we're having focus are a very Core, a that interested like lot growing on the they DS of segment. other it's capability traction with But that to We that things bring them, focus them. with a need they to need -- we

speak We will next at week to more that Day. Investor

so very past and far in received big engagements that change the months. has in good, and return we've positive so And a been the XX

Operator

from Caliendo question Kevin comes with next UBS. Our

Kevin Caliendo

issues You from didn't the call of any impact -- out the of any of distributors. some at big the one

contributed Just at wondering that the if all in quarter.

Glenn Coleman

answer Short the no Kevin, is was for no, QX. thanks to impact question. Yes. there

our largest you But Henry situation, rough the do our to up to of Over is XX-K. the of business Schein impact to about in sales, order distributor. we just the mean, size which about of Germany. Just We've XX% those U.S., give about of our the in I frame though, consolidated XX% is the numbers, of annually, $XXX million in revenues. are our half disclosed magnitude

revenues. products, alone consumable of So so preventive the and products. markets those represent X And restorative it's mostly XX%

long-term over in We've they partner possible issue. We're the great internal as a been been has everything what Schein weeks. contact their to they doing with regular support through them Henry work with several need us. last

supported continuing making and we're transition being customers this I think, most get to during importantly, sure product. are period

difficult fourth the results you to quarter don't long for orders are we potential the how to in the last products distributors tell is to impact for interim. right other know us our not quantify going any that our just going whether since to now and to shift it's situation would I or actually the

our of in modest fourth guidance that some in impact all we But conservatism So quarter. see level the the potential no level I third in may of quarter. in we factored would just being said, disruption for the say

Simon Campion

Ron Glenn has ] contact well. the with Bergman And close Kevin, CFO, in would touch [ with as that. in been I've and Stan been to add just I South,

both So possible. all least to make the to together are extent are organizations levels sure of impacted the that organization working or customers

Kevin Caliendo

That's ask from I heard traded super we've the quick now helpful, -- fourth X Understanding can the pretty guys. a If quarter other down publicly companies step where follow-up. of meaningful. is dental

we're that just in -- forward on see what's what Is this think the You like underwriting have What the marketplace. trying of seeing visibility are space? happened seeing happening all at the into sort October I'm predicating October? the really you September that what's the guidance sort sort same. down? you the of -- macro is something I the end going across deteriorating? you Do step we're wondering If worsened, have of did to of in the that

Glenn Coleman

Yes.

things. So you expecting. we couple the Kevin, that necessarily we see a relative we and that previous see months were years. as one, would falloff September I September, to a obviously, in would typically coming saw summer uptick obviously, an the didn't the And to say not off extent same Number of

September. what was by in at closed an would sales When caveat we businesses as were trends, it we if environment. how we pretty because looking exclude started But pretty had results look much we've daily clearly, and where China our I macro And in what pretty off, we when from not easier our our the it's consistent of and a down look we there September, the QX comp, books down had of month most at at see with step September. our it And October, October. of just for seen I September consistent saying in with

forecast a with spent here we the fourth dropped the quarter. of obviously, survey. that's the And lot do our reason So customers and in why we've time

feedback as you maybe, some So got survey Simon, of can on comment our we the well. on

Simon Campion

Sure.

know, of business so is our or as outside Kevin, you So XX% the U.S.

we we more we France, So geography that survey, XXX over Germany, this every Italy, global had quarter, X,XXX and China. than with in respondents U.S., do surveyed: this

And the themes up. Volumes are common. cancellations down. Patient are are

XX% surveyed bit. was coming declined In not small New that and Australia of flat U.S. clinics. they And into in Sentiments well. enough injury said have a little flat. fact, The their Germany as did those was Zealand appointments

there are are and is thoughts volumes some cancellations it's for but our -- some of driving So not that here. are there Brazil, doom all some -- indicators and around gloom, positive. that example,

bit mixed a So of bag. a

I as for and answered for again, in they're environments canvas we like But help, more do efficient are our looking customers can profitable previous that's to in us, looking treatment Core the more opportunities workflows, the and for increase an question, And why to communication looking acceptance. they're this feel, are DS procedures.

help feel we're the of light that be business in the with grow we customers even good So to conditions. we macroeconomic position their a in offer and more technologies profitable

Kevin Caliendo

guys. Super helpful. Thank you week. so you See next much,

Operator

with next Our Goldman Nathan from question Sachs. Rich comes

Unknown Analyst

I QX the into performance projecting are Sarah on going weakness. the you're about pullback you Nate. thinking just guess to segment, How for for macro is demand -- and and relative This relative back QX? impact the by

Glenn Coleman

Yes.

though remarks. I that some So to I'll did give not specific prepared going one. guidance color by We're take segment. in my give

and place. It's the repayments combination we're to or and the going a projecting macro the past also in in back to we're Obviously, environment see what So single-digit likely of some pressures slowdown for we single-digit loan saw being low a quarters. from growth. have orthodontics, put X student Byte with growth that's SureSmile

ortho, in see we fourth And more being growth so although bit on still quarter. cautious to the expect a we're

new of to that A of out expect driven Wellspect, growth from We products. lot very see strong

in the mentioned close quarter. to double-digit I growth quarter. the here third in growth fourth X% So, organic

we to those grow. segments So that are X expect

When down quarter, something QX. we were go third look pretty so at that about we we as or X.X% consistent probably the CTS, in modeling with into

we're And point there. the then segment projecting improvement a expecting So really for we're or to minus EDS, not probably again, any in be plus there. flat, overall

So gives high-level the that color just segments. some for you

Unknown Analyst

the you with? any Helpful. on question the other Henry off seen And work Have change then to distributors ordering you just Schein. patterns going from Kevin's

Glenn Coleman

yet. not Yes,

I too it's still think early.

weeks seen how I significant change. the we of the think impact haven't play our But next over now, and couple will see any business. right in purchasing other may or out shift distributors

Operator

Johnson Our Baird. next with from Jeff question comes

Jeff Baird, Johnson with open. line is your

on unmute you, you're If please yourself.

Please for stand by question. our next

from Justin with comes question Lin Blair. next William Our

me, Hello, unmute Justin if please you're Lin, on yourself.

Andrea Daley

go to question we next the can Amy, please?

Operator

from with Our Jason Bednar comes next Piper question Sandler.

Jason Bednar

Can you me okay? hear

Simon Campion

Yes.

Andrea Daley

We can. Thanks, Jason.

Jason Bednar

pretty campaign on Any I to Do effects any anticorruption you're there feeling is Great. obviously the across wanted that Are think that China. was areas held still start from impressive. where you and the been improved any situation all, better, specific lines, seen September, that there segment? we've The growth it underway you that's doctors, with the market. training as campaign? There back growth August, that guess, in your challenges in category And here October? at interacting has along I gone get or any have education? same

Glenn Coleman

very think seen haven't and I impact don't grew Implants in change I business were date. year-over-year, really almost XX%. with mentioned from it actually growth happy several Yes. the performance year-over-year doubled. We the XX% our China. of strong we months, we've seen the sequentially on last to any an

implants here quarter. really put we fourth very So some good strong and growth in we're expecting the up performance, to had

though China positive. actually in a on year-to-date one business think positives real of our Implants is is the now I basis

VBP offset for we're fully from volume of seeing really on all ]. [ side the erosion implants. we And strong momentum the So pricing

same So CTS just pressures the with China. though whole, well. would we the on say China see in is doing business I our

in areas larger equipment So we're here high-end third up even growth that, with quarter. putting of some And the like and imaging down. the XX% are

it's growth across board. So not the

an But and happy implants what as We like China. markets on the with we're higher-end in example. very seeing overall performance some are seeing seeing in impact, many other around we're equipment

Simon Campion

obviously that compliant is spoke Dentsply Asia XXX% to of I that. before I -- would conduct a just new about think out code China, here compliant at now. add to rolled internally XX.X% to which we that. We've Pacific, We're includes business Sirona. And I over

Chinese very also take here, and we seriously, said we out, would are that behalf take when training we we've well. rolled compliance So to and as our the on required ethics, that arrived

Jason Bednar

helpful. All Very right.

orthodontics For my out the of this on is other question, your same past week. peers We've pressured now. adult evidence over pretty right my follow-up topic there, heard here, from there's plenty thing

is say, relatively business Orthodontic Your I'd well. holding up,

where softer But think the in trying you've to put talked a this again, part little you see hear loan together We love Glenn, the your repayment this XQ. filing to market you about market, outlook making given the adult SmileDirect investments situation stimulate a months, orthodontic of the XX for over going just all and student of these been business, about macro, to the next the to XX the I'm bit in bankruptcy. restarting, and category elements, growth.

of do how see that now? market part Just you the right

Simon Campion

let relation we the In jump first just Jason. SureSmile, can some in to Simulator. into me Glenn and get launched So specifics, SureSmile

to in gone innovate That areas So as we those continue has well. very well.

we Our in suggesting with And the also with of to as pilot are this because is SureSmile initial Byte simulator. rollout that Plus respect well. is up treatment acceptance program

by pilot received well been has that our customers. So

from innovation and an So engagement we're doing well. perspective,

over specifics some scores Glenn deal NPS on your it up, Our to the hand to particularly program. I'll And with Byte of question. of are the

Glenn Coleman

when longer attractive market, is this area the term, think at intermediate very in and we look the fastest-growing I dentistry. a

student The business. and loans to the short-term it macro that's still the us we going growth to what for we're term. as see our being mid-teens given very a market So seeing cautious long with over situation, direct-to-consumer environment, mean just what given strong we're type

as opportunity. SmileDirect we And Club an the at look obviously,

being announcement see that. think things we're environment is I and from and ultimately the we what there happens the given going get fourth we're prudent respect we'll their So other with to cautious now, bankruptcy seeing. But which just right macro that quarter, some could what into

this of we acute double-digit But for past the top that a in we're once seeing range move is term. focus we pressures think in these and area we an short grow some again, consistently us can the

Operator

next [Operator Stifel. Instructions] Jon comes question Block Our with from

Jonathan Block

seems Is exit the to was of heavily just rate experienced that or think maybe the velocity the in in quarter? it about there was It a what impacted you the call later headwinds experienced like way September.

think that was that CTS, acute? a sort was you've importantly, in EMEA, the quick guide? as And it ask was of looking both? it factored assumption that but follow-up. Glenn, just the then what of it your like of you balance seems I'll embedded what's rounding more we at most terms about the And breakout, maybe where mean calendar the So was year I for U.S., XXXX out then just into

Glenn Coleman

Yes.

I think imaging, for the a the things. instrument CTS, some Europe. treatment we falloff. was the categories. and X the And that in saw really One, falloff had that saw are the we But impact, drop. Those markets definitely of the major those the U.S. saw X we it in probably largest sure, even areas were centers,

the U.S. overall, positive of month September, CEREC to the as business. and CAD/CAM On including side, milling our well really strong quarter relative as our Primescan had the a

very by that. were encouraged we So

categories, were also on And also we acutely did see were a more other the most consumables I'd But we say, than fall expecting. down off. side,

the their that dealers reduced inventory of some part was of Now levels.

I necessarily as even think that restorative. doesn't lighter results. consumables bit we well, a that, reflect So the retail wholesale demand show with But in in were our especially the sales

we're the say we our here terms what we why the I assumptions In of fourth trends assuming reduced would much Jon, pretty September. moving from just saw quarter. forecast And forward, in consistent in that's

Jonathan Block

guess going sort I on was obviously Okay. on very get next something. me just 'XX. But we're noodle helpful. of more let week to That And details

Q. releases, in your a and disclosures your lot got your of presentations You great

you going some year implemented increases. into I price think this 'XX,

least right, with first And macro. 'XX. we've of as environment, at half you to think like that now got of driver growth, a I a in more the alluded if would, you difficult

power we top think we when really have And bit that that frame so Or about on might volume be was more we is a when little think lever drawn price? to 'XX, start down And relative 'XX? in in pricing the dependent there portfolio? line, to to 'XX

Simon Campion

and I than volume point, would our I after thus far that's need what we're would Jon. say we have price, to with in we globally. At that's benefited driving from get teams commercial more get say our our what -- 'XX, price this after

up. for know, on Connect you well And introduced we we And segments scanners. impacted price and that by also sure, saw volumes -- being reduced price, Primescan we globally. done ago, on well and Some certain which our a why customers for pretty year are we has with about in pick scanners, specifically resonated as geographies that's us

So well. we volume our on as sales our need to and after because need stop price and get for plans growth, relying that

Operator

from comes Jeff question next with Baird. Johnson Our

Jeffrey Johnson

Can here. line different you me a try me Let hear now?

Simon Campion

Yes.

Jeffrey Johnson

All right. Good.

Analyst beginning this the next it's comments dollar $X stronger now and the the correctly. waiting XXXX. that been I'm more reiterating has about year, for want Simon, persistent have this you that market a much inflation of you end concerns the LRP, probably importantly, sounds just number to for until more contemplated ago. put that commitment that we've make So but looks around than out obviously, flared at least have And trying higher week in I that to got got we've as at would of to some like year, the staying guess, up U.S. $X I been think that sure, year sure some Day Glenn, are like I hearing respect number I'm your it the

assume spending anything. tried to control So And is put go-to-market you or $X or from you're that that R&D not my have back then I happened your is, since factors commercialization you out? or question going how much I just would have incremental to Simon, of guess number my point cut outside headwind quantify

incremental year? that So up you how those here do of the all that issues past kind in across has headwind bridge come

Simon Campion

through in session $X from we Firstly, during the week. and will $X will reaffirming to the next bridge at Day we walk our where Glen 'XX next our are week, Investor be his

after SG&A how our with get my market how to question sure, reduce what we force that where need to we do we not For we in ago, can we after, with volume moment innovate. a intend we response all go how We spend Jon's get we and to in geographies. our in innovate so in to more sales our dollars, and or innovate simply judicious can we be

We have areas. us. our just to to and money commercial wisely spend So are more R&D in sacred those

Jeffrey Johnson

Fair Yes. enough.

Glenn Coleman

Jeff.

your comment just question. on other of Sorry, going was your to I part

to relative we laid target, in year this the our for headwinds the guidance when $X. Keep was $X to So impact mind, $X.XX to and out our $X.

we've reduction. still even we're range, a guidance had that recent So though within

off we we're But we're dealing much the headwinds that with pretty laid at to moment. we're at some stronger, and and that range. obviously had $X the $X.XX just started So year we in when out,

that that's can the why we confident we're So to $X. get still

the path we've get the takeaway probably to discuss $X in will to things the I already and most week and most are important completed there. next control more to of path get that in our is message is But or process.

not so on way within X/X and macro the the environment. of there our control And dependent is all probably

of So we're can point prolonged key I'll give that's the this but extends and a that But think get for it on of more still specifics period is is get macro the a acute why will short-term there. if more challenging next is confident on a macro be week, $X. our more view Obviously, environment. we I time, long situation to the environment much to

Jeffrey Johnson

follow-up I my helpful. That's business. then And right. as just on the implant question, guess dental All

view when last back I putting you've soften maybe near heard of more of see. years of think, efforts other I you the you education kind X, out that clinical Simon, sales know implant more reps putting couple about now in instead on expect been in the been we've that commercialization market especially more and there, business, talking term. might you've to But maybe U.S. that business. over a behind a from your to turnaround, month or getting

more I maybe the reliance a like Does increase year how lower-priced and to guess, MIS, the product issues now. to trying or Is do Implant Do right your take market? get strategy over spending issue? that on just But notwithstanding, the need that Israel you back you pricing at next business, a X look there to it there? that just

Simon Campion

Thanks, Jeff.

completed performed survey not So were categories, I think, we interesting to growth, we offering I with respect all including that overwhelming have the We over say, space. work would nice across our word respondents. lightly, business, in but favorability margins, spoke on historically Implants, this overwhelmingly, we it's QX very good call, that that and about our don't and an use portfolio with before, QX I doing, implants. X,XXX a and in And

in portfolio is band them, areas. have have than a it implants of that other the over our lot tighter I robust we in is But X,XXX think customers, a said Implants. in

But number where teams past in years. of do to that the around we is and the over have work the made of we've capabilities clinical commercial our education investments

first. piece deal me the second with let So

have an World had Warsaw rebuilding education year. this people a earlier with heavily XXX clinicians our Symposium We -- in over implants attend through session. of Greece over earlier this group year, We in relationships clinical programs another Athens, in with Turkey year We Polish had Warsaw. Implant just attending. this sorry, invested XXX

We continue education. implantologists rebuilding in our reinvest relationship through to with

the of that about of down. capability on our implant it's then capability, whittled XX% months that the on. has that XX experienced of And we sales the of force including past we've And around sales group force people turnover tenure, brought think side clinical number years in over the the over new capability things, I

are We had I those training We And that a to second them or it's resonate. think training in heavily. May. with -- team beginning third

their accounts, pretty challenge volume been that right that those The not accounts new And offset losses. we've now the is bring lost, we significant. volume it's as has to is enough on

lot are in review every there not referral also in However, but we terms their manager a green went shoots U.S. with where of complete just And a through the as had implantologists, business only well. the we network engagement sales of

we're our in customer investing in came the And and capability We're survey. hoped, investing So the for out are but relationships we customers that our longer of with our from their we would main in team. are sure, which investing education, things network. it's rebuilding have than taking

Operator

And I'm showing turn like comments. no to I Simon for further the conference Campion closing this now back would questions at time. to

Simon Campion

I you, attendance we points everyone, would close. today's key reiterate some for to your call. before like on Thank

execution. on and Firstly, through innovation driving stakeholders for focused all value intently we remain

plans. Day Secondly, us hosting while about to navigate the position all in look macro strategy join will environment as improving is thirdly, we uncertain, encourage forward challenges. our share we to better see our external us bright I week, next spots And in which we and the business to and Investor confidence first you long-term and we believe execution, maintain details our

thanks who And continue want especially interest departed in transformation express in to investors, the of underway. the the employees management have phase them necessary that I work will company stakeholders, best quarter patients, careers. their on the dedication organization all to for to our act including the prudently customers our Sirona we of want the thank next We their last and wish and business in well Dentsply employees to and the to our is employees. and the all of finally, behalf team, And

Operator

for concludes Thank This call. you conference today's participating.

You may disconnect. now

DENTSPLY SIRONA (XRAY) 2 Nov 232023 Q3 Earnings call transcript