XRAY - Earnings call transcript Q1 2024

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Operator

Good day, everyone, and thank you for standing by. Welcome to the DENTSPLY SIRONA First Quarter 2024 Earnings Call. [Operator Instructions]

Please be advised that today's conference is being recorded. I would now like to hand the conference over to the Vice President of Investor Relations, Andrea Daley. proceed. Please

Andrea Daley

and XXXX Welcome Earnings operator, SIRONA the morning, Quarter First Call. good you, to everyone. DENTSPLY Thank

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

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

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

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

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

will on comparison business where investors measures based may of be performance on our business. non-GAAP utilized additional financial vary transparency key by our certain financial and valuable enable metrics call, insights business' Additionally, in results. non-GAAP management between regarding offer independently periods believe financial our results operating performance today's that remarks items We enhance financial of into the

the reconciliation to the Investors unless to section of between Please for And will to the Simon. company's provided on that, available call. webcast following call call with now be noted. turn and release our replay Comparisons refer A prior non-GAAP results. press otherwise I GAAP quarter, the over are year of will website today's the

Simon Campion

by financial year providing and our plan. QX an cover by I'll our call. operating being performance, of us thank for morning finish I here begin, providing outlook for results Andrea, QX our summary Today, and will will recent you, Thank on full earnings a update Glenn with the strategic and you as usual, all XXXX this

Solutions, partly In Implant [ Connected QX, Orthodontic in Solutions offset declined Dental and Slide organic ] sales in by by Solutions on Technology HealthCare. by and driven Now lower Growth Essential sales starting and X. X.X%, Wellspect

driven and experienced unfavorable equipment Germany Regionally, imaging conditions remains continued by the larger-than-expected macroeconomic CTS, pressure. Within headwinds macroeconomic environment challenging. in competitive

organic countries survey quarter, X,XXX results the In nearly our Germany. respondents. excluding customer XX is indicate are covering quarterly sentiment conducted the U.S., sales roughly global with that stable April, Survey For volumes were relatively patient and dentist flat, unchanged. in we

XXXX, health new and Canada, In patients resulted policy in middle-income to believe in has effect. in this out government is treatment rolling lower delaying of a families benefit which help designed the first is we half until

to All In see Germany, stable. markets procedure are improved in dentists pleased survey and utilization slightly. relatively included outlook we the other remained European

imminent dentists the to there Asia although more around Australia saw volumes, was mixed negative dentists reimbursement change in for intraoral patient were In in exhibit continue scans. positive feedback a Pacific, Japan, in We decline sentiment. in

Finally, in volumes stable, remained patient to but markets. China, are other low compared

the this execute strategic on objectives, We taking time crucial we quarter valuable can us we we quarter inform our our to input. so consistently that substantial the validate that on seek that so appreciate input provide As customers we are to and path. from right decisions after it with many remains

Our of in expectations increase an and $X.XX, line first EPS X% softer with which adjusted quarter nearly despite was our sales. was

ranges. maintaining here the towards the are range we uncertainties sales stance end with notably cautious taking imaging. trending year, and low organic impact to of full our the We're adjusted but business, that For macro continue both EPS, our outlook most a parts for of

to EPS to remain year. better headwind. our profitability position believe F/X cost Though additional in We an the on for we targets are tightening trajectory. such headwinds our as transient, sales net are deliver long-term these taking and additional adjusting we confident us actively also We're measures for controls

objectives. portfolio comprehensive a strategic on making our have We and are progress

that announced execute share we up to repurchases quarter. second today, we million fact, $XXX in plan to the in In

Slide would business to highlights. I Moving some X, select share like to

initiatives DS innovation a business. advancing of are progressing We Core across and our our innovation. remains key focus

adoption uptick enhancements rates new from existing We are from users. in utilization users delivering rates seeing increased and and strong

piloted in enterprise core with We a DS the also U.S. DSO large

line Given XD we jointly points. back position To expanded to our imaging Orthopos and and and in broadens more at the this the our our exploring different scope the this Bringing I've with size of increasing XD price SL, imaging our shared customers portfolio the portfolio experience a provides of imaging to date, relaunch line flexibility to we through business. pilot. impacting shared offerings Europe. already market product options better are dynamics our

believe bringing imaging. back our will customers we this in to solution performance Therefore, improve

captured Axano Additionally, enhanced in innovations survey. in features and we electric with continued from a new and an point improved a a customers launched key to customers portfolio Pure, Energo, quarterly at capabilities advanced of These Midwest bring efficiencies demand our center recently treatment CTS, new our handpieces. price

focus out the included an to on markets, rather we enables in In tools. or is roll motor Japan Pro+ dentists the Pro+ continue procedure that X-Smart solution to more X-Smart QX. additional EDS, which in endo than

Europe we motor data endodontic uptake of of sets Japan. are technology DENTSPLY pleased SIRONA's Our thus the that attributes optimizes in filing apart its it has differentiated and far from performance competition this with that systems in shows and and the

sustainability. advancing remain We to committed also

the access their are which each care, disabilities, who for Pennsylvania this improving year. Health, health for patients partnership the center with organization with access care several serves Association Disability care and equipment we International already oral with to as upon to focused disabilities. such to work a in for with for the and promote equitable health We on This of builds provide to Oral persons we have are partner mission-driven thousand high-quality organizations and patients University done area proud

that expertise will of over business new the Glenn Healthcare update. benefit targets leadership And validation by sustainability reduction a emission company. Wellspect our more achieved Wellspect in science-based call with for can milestone financial HealthCare target long-standing to entire a We hand the that, our detailed Lastly, the believe initiative. I with has its and

Glenn Coleman

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

begin X. Slide Let's on

Our by X.X% $XXX sales over in constant representing basis, first quarter foreign On XX approximately of X.X% conditions our a market included currency competition. negatively quarter China, where highlights growth aligners million in the in [ and quarter. as basis business, declined XX we a decline HealthCare. offset in an sales continue of in sales approximately organic in increased imaging Wellspect effects X% ]% XX% prior growth the million, equipment or were and CAD/CAM the points. experience global revenue was These declines to improvements On $X year X% currency basis, impacted growth by growth

had net margin improved Dental Solutions tougher due points basis. lower Despite a year-over-year up higher count investment but year-over-year $X.XX, Adjusted to year, EBITDA to lower declines, lower X% Gross largely quarter prior sequential margins, basis Essential to on comp. In XXX restructuring due a the rate. largely tax EBITDA a hedges. margins sales, from savings EPS due a in points addition, was our share effective was basis and expanded segment XX flat and

prior to lower build compared in and quarter, improvement we attributed year-over-year improved cash inventory. $XX year is to the million outflow of quarter. flow generated first a the $XX of The an cash operating of In million collections

million March with sheet maintain strong We cash on balance of a cash and to XX. equivalents continue $XXX

leverage higher long-term of QX Our rate targeted X.Xx, X.Xx. was ratio slightly our than

that share We the leverage repurchases marginally year quarter ratios expect a in the the projected with increase to These leverage reflect at earlier. to Simon X.Xx. second end plan approximately noted

Essential now comp. Solutions performance Dental Endo, turn first the products, Resto segment, due organic on year-over-year tough a segment with sales to includes which Let's to X. Starting and declined preventive X.X% quarter Slide

organic growth up XX.X% professional implant in segment. quarter rebound price to the orthodontic benefited offerings, sales and As a share from XX%. patient from Shifting grew from of our strong XXXX, Solutions X.X% strong and in first new differentiated which grew pre-buying gains, benefit the reminder, SureSmile, continues and product increases. and ahead a X% outcomes. market aligners, grew EDS traffic with of brand to aligner sales Organic

the including grew certain over believe prior lead ] our period Brazil, Late orders cases. call, in quarter. that accelerated further site earnings on international which the and to year expanding impression customer last in kit continued we to in discussed increase interest Japan as XX% SureSmile. through began We're aligner [ the our growth brand markets, aligner momentum to in will we direct-to-consumer convert

in single the in Implants U.S. grew VP declines Europe. the and partially digits China to due quarter, and in and Prosthetics by offset growth low by highlighted

declines segment implant family of implants delivered side, outpacing on prosthetic Value digits double in double-digit legacy And we Our grew brands. the the have seen premium and EV solutions new the growth.

Connected our Technology Wrapping up our dental Solutions performance, segment. CTS,

our below imaging declined expectations, declines due X.X% equipment. the versus So quarter organic year to prior was and double-digit in largely sales

grew was a CAD/CAM single by demand high digits the and global driven Our U.S. increased business spot bright in

sales X%. in last about Organic products HealthCare. across sales benefit Wellspect XX grew launched to The continue regions we new months. all as the from to Moving growth

single-digit the to prior year. with over quarter high We growth expect Wellspect faster grow the in second

sales first EDS. financial partially performance by by Now let's and strong a of tougher turn quarter grew U.S. well sales comp organic CAD/CAM X aligners lower Slide as in to equipment X.X% to to offset in discuss growth region. imaging as due

consistent Distributor increased U.S. and CAD/CAM seasonality. normal with and sequentially approximately quarter mills levels wholesale in $X XD the scanners, printers by double-digit growth inter-oil million, strong with both had a level. at retail inventory

expect of to levels. year quarter-to-quarter U.S. by fluctuate inventory current the levels compared end We be and flat CAD/CAM distributor to the roughly

primarily equipment higher was dental decline Turning XX% volume and to Europe. in Organic sales by region, declined instruments essential offset by and grew to solutions in region. the lower SureSmile, Spain, Italy. France due across the This highlighted partially which and demand over X.X%,

the was market quarter. digits down the prior double our in Germany, versus largest year region,

see in Germany, largely business. to continue affecting our We equipment recessionary prolonged trends

declined Excluding X.X%. Germany, organic Europe sales

growth Rest Canada. the implants equipment flat China significant for were of in and was Japan World by sales demand quarter, in softer organic approximately a in offset

dollar million be outlook FX With due that, reported now X $XX The other $X.XX updated to the within We're sales Slide the of our reflect move discuss rates, billion. range our strengthening sales to recent range by major additional the FX we billion reported for euro to versus the let's to XXXX. to expect of headwinds to currencies. and the $X.XX current lowering

that range range our environment. macro trending outlook largely which organic low flat our based is first and on end quarter the business. maintaining for of sales, growth current to imaging the X.X% our but impacting for results to are We

sales driven aligners strong EDS U.S. primarily Our current implants. growth outlook and demand half in the of second in in organic the by improvements and growth CAD/CAM double-digit year, assumes strong

profitability. to Moving

trending Our of range outlook lower adjusted $X outlook prior EPS unchanged sales than XX% the our is remains $X.XX towards of the to Adjusted guidance. for to the end greater margin from EBITDA of expectations. low due

expect we the quarter, with saw trends first Consistent prior second period. sales year the we quarter low single organic decline versus that digits the in will

down We $XX in also expect second to anticipate currency. about With that, by margin. year-over-year Sequentially, improvement the be higher primarily are seasonality. a Simon. normal quarter a I'll from to on foreign second over call increase now reported We slightly rate, million due in back adjusted a based to slight partially EBITDA the will EPS offset quarter adjusted tax expected sales headwind turn

Simon Campion

Thank you, Glenn.

Slide our earnings strategic progress in foundational On Moving on SKU shared on make initiatives call, XXXX optimization. the and I supply on including plan update our chain we transformation last to to our X.

enhancing over term. meaningfully these contribute long and programs to to the expect sustaining profitability We

initiative begin are executing expected XXXX. of benefits We financial in with actively to second the each half

and products will digitalization which we workflows. which our and Core and labs enterprise and enable shared both envisioned in practices unique, accelerating workflows. this the our new value will connectivity dental that expanded that with organization platform. differentiated believe the DS customers uptick unifying in we value to already digitalizing efficiencies it reflects We've harmonizing embedding The includes benefit our heard that rates, in can workflow adoption customers the and of both digital expect further I from firsthand the pipeline Core We enhance bring. DS appreciate with

our Through It and plan consistent part implementing rollou. and play digitalization. is processes innovation. of a than approach, expect transition accelerate business to commercial each is our to a ERP also simplify our accelerating to a entity, a range we conduct country enterprise in We business system operations enabling enhancements our phased how true more with business our customers, to single we It transformation. a improve modernization

expected currently deployments piloting in locations to this are We midyear. phased start rollout with several

enterprise on data are digitalization, we AI advancing our also and Lastly, strategy.

leading a of that We are provider the our leveraging supports expertise platforms. cloud service digital

important work will implement as more expect We and our customer increase Core. DS our improve this ERP new functionality to and we experience bring efficiency

implants ortho objective our to progress such Continence we and have reps categories on bit. in high-growth and in our support win Japan for cover let's in frontline invested Care. Next, as ortho, In SureSmile

XX% the hybrid XX% launch. to sales seeing already moved year. also ], from and full [ with increasing [ in expand phase in-office and with solution bite for pilot ] connectivity Fis and are scanning than nearly now QX, growth the we in growth more expect We our commercial continues into has

has been second geographic launch the and as model. Feedback track on KPIs believe business. in business exceeding Brazil We quarter. to is initiative in on we ramp further is important an continue to positive the to this its the SureSmile remains this drive market expansion in this

year VBP U.S. compensation a Implants our team implants business, of spot training and our with in China our first tools, and been bright enabling the we with has growth-orientated have expectations. the In exceeding invested for them the expanding business plans. in

to growth year program in will remainder of for comps. tougher the China given continue result moderate in the expect we we rates to increased the anticipate volume, the While

We HealthCare for are expansion launches. vision new our to support growth capacity business investing also in in product Wellspect from the

business the in continue and momentum with beyond. The to the And delivered expect we the of mid-single-digit its remainder year through innovation growth pipeline, QX.

across ability we to We drive and make enable strategic progress navigate and we KPIs environment. well-defined culture, year started will this this the monitor Lastly, supporting the rigor performance. drive set clear goals. operational high-performance to with external as off to We company our us dynamic better decisions believe a XXXX

key would Moving reinforce to I points. to our slide. a final like few

nearly reiterate X% growth EPS In we that softer First, despite sales. adjusted essential. I QX, our to delivered is commitments want fulfilling

we as this we commitments. on. what know we part And a need focused only of to remain While as positive, is achieving on we see deliver of it such, our all

the will to to steps in and have competitive of continue proactive line. imaging like our Orthophos the our reintroduction and we SL investments improve business take aligners our position Second, global

place improve we're on To and continuing track. to point, cost addition, measures in In put efficiency. that our remain to initiatives additional strategic

and plans a we clear closely have watch strategy, We and needed. that refine as detailed well-defined KPIs

As up we out growth with a that, as Day for be business open for will Investor let's environment. more normal in execute at macro our now profitable these questions. initiatives, shared believe we it positioned better the schedule in And laid Operator?

Operator

first our Needham David question the from with [Operator line Instructions] And comes Company. & of Saxon

David Saxon

each Maybe to the start growth of Last you expectations guidance. quarter, business. on out for called out

each to love about of thinking So of kind update I'd down, X would quarter of assume an that. you're businesses. thoughts the on love in, but comes CDS kind would get how on growth for your

Glenn Coleman

David, it's Glenn. I'll take that one.

color of So get the X% guidance year imply of organically to the expect be our the in which year, half the first sequencing just in a for year, we on terms up obviously, with expect to we we provided, down in X% year us the that flat back be full of would to about QX half to basis. close organically

a the going full to be business segments, on number be. to we our back half If to what year, of flattish line we year to the pretty basis. would look half in year but with it essential the obviously, in back down, digits different single expect grow by of the I low get expect solutions a traffic patient much should dental at That's first

half an total we're Ortho, year, a to second quarter it faster then ortho growth grow really [ [ if for of is the right good our there, launched. which BiTE happening combination Plus a what's business in back good acceleration see now really we're certainly of would coming fully there, what seeing we're and performance of expect quarter BiTE look good you obviously, that's momentum. XX% expecting program ] us of shape of exceeding XX%. to the commercially that put the double-digit really ] I now, to part off projecting And relative in our the business have at

seeing growth, kit the future really impression sales. which indicator We're for good lead is

are And making in capitalizing and investments BiTE And about so SureSmile, Japan. our Brazil perspective. commercial we're in We we the talked a from there of competitive remarks. on prepared some some both those significant dynamics

putting And very in growth. good very some our so about of ortho, solid we terms up forward path feel

I first here would For similar what quarter. we posted growth, low implants, the say, in single-digit to

a dynamic offset better be think with performance The that comps, we'll pretty year-over-year So our China European both there by see should business. consistent. slowdown I is tougher implants in U.S. though in and

I year. the still that back should be That were back saw overall, were the It's year, pretty should here. We would in better the from by, the another growth quarter but QX. performance we CAD/CAM say, half in forward. of down obviously, to But down to here I the challenging in encouraged half, in throughout expected see the were consistent quarter, close organically. growth, of year-over-year X% that you would to we the year. move be obviously, expect, though, CTS, the do disappointed we half continue first as we expect improvements

there. some we're his on Europe. offering price points And our internally competitive That's Imaging, some actions or in weeks customers. Simon of remarks. couple SL dynamics first a the while Orthopos we're in it's disappointing, seeing relaunching broader lower prepared to because great traction that in of for obviously even at commented product good address QX, the taking

So good I about that feel plan.

to programs promotional should training. additional imaging and we at rate be more then to looking higher across activities interest additional where activities different sales see some providing We're financing promotional address equipment, for doing environment countries the implementing

to mid-single full full that better a we're on right us now. be most second the tough think the going the half in down right doing for year put I a environment going imaging still of overall basis. be year, on digits year in but CTS a should shape all It's So to things is likely although basis,

momentum we QX. good obviously, expect in here then And

to on basis. kind digits should single expect and growth full growing mid- be We a of that high QX, faster in year

So little you that across color bit helpful. businesses. gives that was our of a Hopefully,

David Saxon

North Maybe update Glenn. just Maybe team a is own give ask on an with helpful, their dealing who's super I'll kind implants Yes, follow-up doing. on the have issues. -- business. how you competitor that There's my America of

that your I path wonder maybe accelerates if So to growth.

think original growth. I market in were and expectations even maybe half then the back to

think love is on And growth your what I currently. to then in hear that would actually market was I XXXX. thoughts

Simon Campion

it's Simon. David,

is as posting said And by we've as growing half expect So to growth said, be you or plan in would the then to of get growth before, market back 'XX. you XXXX. some to

a part have training. know, team. and see industry -- going given implants. fact away We've The did stopped, that the tools said, quarter. of most we created signs, a so them And you not think in as of have we accounts positive that, as the is As is part dental extent. in decline new growing would bleeding we've the kind large the some in and business to we've the stand we We're large accelerating. in the DSO the We say, I of for

clinical almost the we at different family, America. before, seen in in Summit in in Implant World North which have and our in of We stepped one expect the which to our expecting company from of there, implant is have of areas which another be we'll and we've reflection commitment for heavily invested to from excess the XX% we're increase QX, Miami, in QX. the educational significant away presence that of we've education, And as was the a communicated past, throughout

feel all steps in we the we're So implants. making right

market just that's the we speak think, history corner you're longer, right taken the I has, of network given our while saying going a to the referral we expected, But to moves. required. It the in as complexity complex customers, given industries. they're and med turn making sure, take tech It's here to different the than implant for

growth, And probably there's in on is the think question I macro would implants mid-single climate current implants digits on nature. given market Notwithstanding elective your market in general. growth or pressure its

Operator

of line the with Baird. from comes it And Johnson Jeff

Jeffrey Johnson

step maybe second. just thought I here Simon, a a back

years you're price Orthophos to you've SL got at point. the back X [ center a lower X You launched well. couple launching market, PrimeCnConnect talked ] European year, you think Obviously, that ago, I bringing price about lower a that as treatment

door cyclical, a of You short-term that. don't it's out just rate these it's if rush kind shock things just interest decisions the if thing, like

land with tell end at your the is what decision move markets, the positioning down has points. thought this right maybe been of and the to kind the Would love scale, of process your about competitive historically that going price pricing us competition, move now? just of Sirona premium of where So what's brand end where lay kind your the to it's there this and driving some lower

Simon Campion

relation of ago strategic issues, of Jeff, aside in ] -- that think value to the mix product area was was I discontinuation by premium. I willingness years any number think that the to from I [ line a given macro a SL, of AutoForce buy or dentist

line had gap a be we offers of dentists different can so reintroduction and the price line It orthos out of a imaging DSOs we now our positions particular. addressed SL. of fills for felt by and And types in significant that Europe, in our in set

situation. It rush it. we're now it's So not and the filling given macro a about decision selling gap we that identified, is a

And business, other of our I too. parts think consistent that's with

as have -- and lower-end always we We have implants treatment well. value-based had centers, we

a serving needs So we customers objective provide ours. is is of to of of variety that strategic technology the the

Jeffrey Johnson

will come of about premium a can like maybe and it reaccelerating just way. is centers that. can maybe your next prices keep premium think Tam imaging blended a sale of think And Glenn, bit do little system pressure or to consolidated down do mix in stabilize? maybe few revenue ], guess per blended I Does over as system to kind the anything treatment ASPs per you continues here years? back ASP economy and downward secular at whatever blended those we're a product to move -- in to talking more a to could you fair. [ Is if value? better that That's on think moving those Or that kind need help you within there

Glenn Coleman

customers, and our cost their talk #X practices. the to cost we increases concern when in Listen, is Yes.

sure that premium-priced whether brands. make value priced alternatives to we they want where be or have down for customers, our product products it want a we premium trade So

the I think in well different when we a implants, have of positioned categories. we look across each premium our product. portfolio, we're

have got value an even brands fighter PrimeScan and trade north Connect, and EDS, good. ], all We down talk ortho as is product such And that's a implant what as in even example. cost in about Zurmac call a but the[ We alternative lower very CTS we've we for treatment. right

I have plays for think #X they're their you So issue telling it's the do practices. customers, an how are our we this over But in us seeing term, long alternatives the out know important now, we'll have -- see. cost to right that increase customers that in is

portfolio to So comprehensive there it be it be and whatever a them is products. value that need, we whether for or supporting they premium want with

Operator

the Kevin It of line with UBS. comes Caliendo from

Kevin Caliendo

Question. This the is Simon, enhance talked profitability. the in for Dylan Finley cost prepared Kevin. controls on about remarks tightening of to

target? the path EPS incremental forward perspective, on of Now set from on reductions the the all have line would timing on is benefit? 'XX a to efficiency efforts XXXX bottom a the in impact that you've is Or more XXXX? And a this these an to --

Glenn Coleman

This question. Glenn. your for Thanks is

our So of be of at softness we line, we're top to organization and at looking we pressure whole, down continue think looking where in to more actions in bring costs to take how organization across revenue the terms areas the can. I to areas on our different more see efficient if going on the and

And if those additional would would pressure. be these 'XX revenue see obviously, actions. be top line actions So we incremental

Operator

Anderson It ISI. comes with line from Elizabeth the of Evercore

Elizabeth Anderson

of a line. section some understand that mix? looks understand, what had that changed, if reflection that the sustainability I sort have bit in was like I little want the rest the It could bit across gross margin guys the just of the of to been to a modeling. wondering came guess, already restructuring you is of than efforts view more a [indiscernible] I of kind I of that a Is talk of you with year? about stronger

Glenn Coleman

QX than QX low. expecting. back though an reasons little from in we around were talked that. a see about we margins We improvement I We better were artificially expecting think in the QX. gross where were bit landed to was

would in be flat. a forward, here is produced just on are results more full the wouldn't I year So so pretty contraction of get to much will QX or And volumes essentially It then slightly go story. back margins year-over-year expansion going QX. in expect year or in basis. of consistent up of the I we XX.X% back expect our on down what go as probably half a going a margin basis, we again.

is overall, in volume. some the kind portfolio. are Obviously, But down. But for we're I it's in Other on the of perspective. certain pricing more not going remainder be of for significant areas, this areas decreases stable. us not getting say, Elizabeth the we're driving would increase. going price anywhere around Overall, we're is range, probably seeing but flattish a to We're price And year. key getting increases, the

we've be continue volume, better I put consistent margins But get hopefully in see now, QX. performance. gross we'll we would gross As pretty just margin more say expect to to what our here up right with

Elizabeth Anderson

I'm parts then up you think we that make jump the to about gave? XQ, are particularly guidance the points broader come of across quarter, getting of Are a stable worse? the results you Got as understand incrementally in month of like first of some saw sure that certain say the just better it. in to quarter just the across or obviously that that you thinking would sort you trajectory context And like the across trying that quarter? the was the we but

Simon Campion

I Elizabeth? sure you Could the not just I'm that, understood repeat question.

Elizabeth Anderson

the rates things as what thinking business we that, what we're we maybe like a across moved Just in good for in growth XQ volume what year. across of understand like terms of like you just the and full deteriorated and got of first quarter, then have of of just context stronger first sense about about cadence like like sort said so kind like so the stable -- the I to you the trying U.S. think I'm quarter, like the talked

Simon Campion

throughout the Ortho Listen, to continue, quarter. momentum going No. into QX. we earlier, in Yes. I'm I saw as mentioned a that expecting strong

see even faster should in up XX% we that in we the growth ortho versus put So QX.

I disappointing and was think the area even CTS imaging. disappointment and in our business March -- the of was

are we going so expecting And that to challenging environment into continue QX.

QX. numbers, CTS model similar conservative or even declines declines in So probably in more

So that's X%-ish. disappointing the growth QX about QX continue was QX, momentum going relative organic we're dynamic to and the again, I how which numbers good say, of, is down similar CTS so played to Ortho, expecting to The but kind out. going QX in pretty some into overall, to would be

Operator

And it Jason from Sandler. comes with of Bednar Piper the line

Jason Bednar

I on wanted imaging here to zoom in discussion. the

understand we're sorry to And ago. in gave and what the pricing a then responding here, you now but in accordingly belaboring your changed response if intimated dynamics few guidance are first you category months you like shifting you're versus when that to maybe set having just share and Hi-Tech, really to offices are like on? point and the trying budget especially dollars are in and higher going printing. those relative Jeff's categories where equipment that shifting and more is XD imaging development what's question, are scanners underpenetrated you product budgets that other to new seeing Is those maybe Are

Simon Campion

And arguably interest macro period part space. imaging be and higher macro Jason, of the price highest for to on the time. think a here. continued within business, situation our I with dental the and for point the it's Simon the pressure of continuing Listen, longer-than-expected outlook situation, rates the

I and are not that with a noted only market you we be button Orthophos for as player just reintroduction distribution to but and SL, noted, market that earlier partners said, I this one in of SL, been are price to felt reintroduced think that's programs by gap in a OUS promotional his was imaging as -- why it. We the of globally. and the But also the we actively financing in the try one of questions, in by have working begin response wouldn't and our years. as space, that the challenges hitting that Jeff with to address think couple there to and Orthopos we've high of pause the on addressed Glenn respect people

in outweighed past, in Germany, noted economy and that numerous the have And significant arguably obviously, is are we under times pressure we now.

our particular. legacy of the struggle to in Sirona in continues Germany so And business side

Jason Bednar

Yes. up the response. That I'll sense. of pick Simon, makes on last that part actually

that think Just I for with you've in market year these Germany, identifying headwinds nearly -- a now. been on

challenges quarter? where we started the same really more but that that experiencing just lessen headwinds that last take maybe term year. sounded it those Germany your through performance, as talking Or in seeing are another I'm first step step you sluggish, of Or you're here to here Did think trying we was XQ about to market lower way, a lower? in asked Germany. take it different the in down another of from out like was it still anniversary of tease it I like first meaningfully mean, growth the year I saw market? step did on the out guess, we near do I last

Simon Campion

market Jason, pessimism pessimism dental about continued is But had has our whole. actually Germany respondents the Germany in is quarter, a singular bright that reduced. the arguably industry practices we their from in which that survey is the XXX -- meaningful. had There surgery to the spot as We actually and in this

began In that when face. fact, experienced it's in back we year the levels when survey Germany to last did we going imminent challenges the is that July of the to to highlight we

still Zealand still other some with line an Australia So but negative in well. negative it's as and more sentiment, and improvement as there -- was such of is in countries, it the was New

Glenn Coleman

over was down Germany quarter Jason, would Yes, add, I just that the first XX%. in

a of dealing Germany these the declines second be we're better it's we'll not seeing gotten although see well. down double-digit right now in to has back perspective. expect now declines quarter. consecutive year, that performance substantial here the going of half pretty as been year with in year-over-year in think headwinds do But better back from still quarters. half the We are results X the the in for double-digit We've I

probably sentiment we're back data So of respect than going the it's year, that to less seeing, the through but we year. do the of of challenging the hopefully bit in with of with some be expect the customer improvement a Orthopos to the of remainder challenging half relaunch

Operator

comes line Stifel. of Block Our Jon with next question the from

Jonathan Block

Jordan on Bernstein John. for

quarter. here continue value discussion the but the shift of to to value in seemed in specific to bit on solid a performance dental, wanted implants the Just

performance solid in mentioned value player as night Another last implants well.

battled DSOs for what portfolio the have for quarters. So are now endpoint And dentist shift that industry of we mix the seeing so, as mean if how cost there? an handful higher accelerated And a SIRONA? in DENTSPLY does of you are positioned

Simon Campion

we number drop results implants we've to say very dramatically a a been fortunate that. world. the volumes we we've And part past we I it's and been benefiting portfolio Obviously, quarters QX and premium the of a several where to are present years of as noted, a But are to shift we VBP. value definitely And implant may the Is China a people our have definitely, our portfolio from interested foreseen shift that solid way. continue the think in benefit for pressure to that under we've China, expect organization it's an as I anniversary value-based in in by premium that will robust robust on the Andreas? rates there in us ourselves in although within it the performance over strategic affected business. we as see implant we for would opportunity the have the from present Listen, Yes. based an company the have that as seen growth for segment. where value business, value, been heading

Jonathan Block

Great

Andreas Frank

implant to overall Yes. accounts, Maybe still to more additional is penetration additional I think is with about market that a adding -- add customers. still little we're bit just talking the

and segment. connectivity, of premium a they integrated both in benefit in a get the lot be value robust across important have the pipeline, digital in to that premium really the for that customers think technology will value particular, workflows can the segment. continue we premium, innovation integration that so the and the so I And those And to

also more that moving for to accounts are other Not are a looking some obviously value that there's the different of proposition that say towards value.

Jonathan Block

able I Great. sounds commercially at BiTE. solid A with It And first like BiTE it's then in seems like the for If have my follow-up, quarter. you locations. launched is maybe that out from there X% feedback early would the you're ] from impression how to appreciated. which trending then are share Bike+ thus Any dentists on quarter-over-quarter the XQ? up I'll right, And that Plus in on far kits momentum [ XX there focus pilot. be

Simon Campion

for Yes. the question. Thank you

[indiscernible] positive allows those sort coming I this you in-office us from that plus, of scan, I consumers working an or portion imagine, incremental we're to accounts it already website. that our capture we the think can think, as customers of through getting were feedback with are

as penetrated why So it's sort website, to actually a our through very the are way. we -- come important patients it's that so in roll very to We see out of spend that important good those locally be ad accessible of use we dollars it's that and add. to that that's

You'll in ramp see, that I of our network of think, the are accelerating the actual part of here an terms part and offices providers.

question. part back early So on, the second XX on you and right, as now, think it's your or I circle still of sites [ said, XX will Glenn ]

Glenn Coleman

Yes.

that seeing the of but indicators and the impression growth to not specific we're all kit XX% lead one number. it is revenue growth, the On kit growth. of earlier I still obviously, going to impression convert in mean excess that's that's revenue, of mentioned without to I

also out products, a actually remains a new I for in bunch accessory of add for high growth wellness also care really would that [ the teeth robust that's aligners, other rolled rate. so And got person cleaners us. quite attach products, whitening, has Bite ] and products,

be very of as our we area opportunity as in still BiTE business, forward. part growth an to going the but So future. encouraging well a go that's small of that's

Unknown Executive

many of have And from pilot signed These where primary those previously. of practice many come not your have in begin we can so only of the comment part but they in original well. a have benefit a as restorative up their portfolio, have treatments had final who, those been to the not to sites preventive BiTE here, seen customers just that now customers to cases, dentist your back question, many are would

Operator

Rich Sachs. next Goldman Our from comes with line of question Nathan the

Nathan Rich

just Conrad performance. dive implant is This a on into more Sarah wanted I for Nate. to little

of implants we've been from impact we've a in softening But to macro potential is hearing. the which that pointed demand had the this guess elective peers nature pointing they've environment consistent the been treatment, with first for in from some a to I You sequential what heard pretty quarter.

North then what about implant we implant in the saw in your changes business any market and U.S. XQ? think the discuss that you changes as improvement seen in needed you out can America half, to you've demand can or that And So survey? break just implants second in we Europe consumer in

Simon Campion

Sure. any the respect best maybe Well, not we're that performance listen, we I the analysis provide to think calls macro such we've given said company on implants, before in past. disease to our

it's from have, overall, nature I sentiment But seen a a about stable. of was diminished. actually pressure a general, sure, around think in U.S. the we the implants customer little quarter. little for the elsewhere, about The elective bit Germany, same. bit improved survey, of In our procedures. it's

So net-net, it's probably about global even on a basis.

Unknown Executive

year-over-year And quarter, our implants Yes. mid-single you Europe Obviously, largely low was you overall, look That there. first and we premium. at to digits at business. driven saw And we're China and in the were in down implants value both geography, grew the U.S. grew the when by portfolio, just if we by growth category. digits and just down double within we the the look

Nathan Rich

you then EPS targets? level remain of those 'XX 'XX the of is 'XX in to half reach second in And of and path what like XXXX. needed pace as you to X% organic to do $X out we growth believe and XXXX those on look that plus target the -- Can organic laid to growth you

Glenn Coleman

that Yes, is one. I'll take this Glenn.

a normal we XXXX. basically in that macro going last changed our environment getting we year. targets out path think, XXXX first year by confidence nonrecessionary assumptions. to our relative and $X, really growth of XXXX. very in $X When I We assumed the relative to to laid nothing patient our to assumed a little November and foremost, getting has or of We to those beginning challenging EPS environment, a was knew be into traffic in the normal

to of the plays unchanged. But to get path rest how the year growth to see And We have over out. the remains our X% $X to organic need $X. so the still period we'll

restructuring bridge, we're transformation executing some at are doing, in and If control, ortho and savings, investment our our that things the things around and and All we're track, global as profitability things of so our things work are X/X control the in our hedges look other operations of such out those. in on net you against the it that improvements forth.

we to if Obviously, normal that to our The dependent doesn't, if our very growth, to on on growth assumptions we'll now, a see more the return it organic little have to environment assumed but initial X% macro $X.XX in to XXXX, going a growth will macro it getting the right into to in But $X.XX, pressure year. ability create $X. X%-plus improves in that's next environment XXXX. get and

And so the how obviously, we'll to the of rest see year have out. plays

Operator

Our next Lin of of Justin question comes line from the Blair. William

Justin Lin

here other of is. how going at macro strength play bonus, a SDC in consumers some affordable given more of just question. trying of you of kind different focus is of on perhaps How that get the attributable dynamic there alluded certainties, that I'll growth slightly for you sense if to options, you like that a sort kind sustainable of the is to, kind Or will? get really first you sort if this bolus, do to of by still much acceleration think will,

Simon Campion

Yes.

it's So I Simon. think --

SDC. I we're benefiting from sure, for think

seeing have the but respect commercial selective, behind being we planners growth activities to our treatment the are invested with We that increasing increasing advertising. number of very

income financing type of another perhaps this as individuals population choose lower we've and because are shared provided have We would before, new a liner. then options that families

think drive that So is helping investments date. growth. it drives profitable to that's and been But very revenue we've select performance I proactive

not are -- not we are investing to money lose here. We

would Glenn expect revenue year. to and as XX% driving for from we've to said, north profits be profitable We you this And see growth, accrue growth business. BiTE our has are of BiTE continued

Justin Lin

Got margins getting would a of and kind overall the around of whether than you regular just corporate BiTE plus maybe it. remind better kind of to And on specifically. us timing Can is follow-up be question by kind by margins?

Simon Campion

Yes.

some of cost, I a we're differential in BiTE for think plus through a BiTE. margins the higher significant There's a of versus that but overall, there's price. not getting back bit

at averages. Right the So corporate averages. X. margin say years. look next I now, the that back part differentials is significant margin to I plan line that the not our profitability would I Relative anything over X to obviously wouldn't get seeing getting our in But between BiTE corporate are back to planning sight We of don't yet by can period. have on over an improvement a we clear our of the

significant if I can and that revenue improvement faster growth. get to get is think though, here we goal going be our

Operator

from Allen is with America. Bank question next Our Lutz of

Allen Lutz

A for Glenn. quick one

about in your think I a remarks, quarter. talked benefit prepared XX you basis point restructuring from the in savings

EPS in implied for restructuring over of as Can your about about savings came course the $X.XX sort here you cadence of sort the and against part I a talk where the gets that think of to versus bucket the year? that of $X.XX guide expectations outlook.

Glenn Coleman

Yes.

in So margin improvement. our number. there's basis a improvement of point the and XX lot EBITDA overall that puts takes Obviously, was

year. though, got just not half on say, expect when necessarily that of restructuring ongoing the over and we've would have last, So would come against benefit most -- restructuring that's can look the quarters. it, at say, executed our in the from back call the plans track. of being we I the activities. here We're the I X net that I to savings incremental been the

X/X we've in and back coming upon improvement to made. that the the come year is going half look at EPS a I you of half the $X.XX increase based second assume XX if first of that restructuring the half from of organic year year the guidance, of versus a the the the -- comments X/X from fact, if growth in savings. About sorry, In higher

the way of the how that's restructuring going So hit. savings to the is to cadence think about

that the expecting back down dollar of year means on we're that the basis expenses the in operating what clearly, a with work we're come doing. to half So our is

Operator

the Research. Petusky question next Michael Barrington of Our from with is line

Michael Petusky

there's terms quantifying the initiative Day, these you accounts that utilization, of cetera. point Like and it at you this mean, highlighted give expansion is some Core So utilization. accounts, sense hey, to in out in today some made was some gains you with time the is an take given is wondering, a this point? quite deeper make where this wondering, progress I in et new will there actually and just was DS new terms guys margin certainly of around that would I percentage called a as you there guys metrics are bit it opportunities. quantifying, again Investor at start accounts I'm start being

Simon Campion

Score capital is a multiple for us, platform that's all it under equipment. and has good we'll take got right? of benefits across DS unifying question, Well, our advisement. a It

in very subscriptions new add the new XX,XXX XXXX. to goal with continue number largest be as excess functionality think quarter aggressive so the then of software And would have we more of of subscriptions. come expectations of now the capital expect of added a said to We've to We've accounts And our businesses. increase we arm we our quarter, extent, past particular. see your expect side to and with to forward, it And able of just will Core our year. respect on we're we point DS for different throughout functions in off in a functionality, we Core the performance the in DS that we Core. roll we But benefit to [indiscernible] the quantifying in DS as do to I some business to

customers, I significant. pilots of customers in positive to see experience already, expand it as that are platform practice. are to in the hoping we prepared that their we noted we having individual accrues and And with benefits DSOs and a are or remarks, whether to we as some DS efficiency labs, they're practices vis-a-vis Score As unifying The with are the said, that on beginning are share sentiment pilot. DSOs, they

Michael Petusky

your interested right. well from and I of mean I'm see a guys spec. I'm tiny follow-up going Glenn. I as think you A I I'm in curious, business why Yes. just to willing that's all as provide. question data relative that part that, of to much are All

comp. that I I there digit you 'XX, I And and single-digit versus the So X% performance easy in just of I'm heard that the is say this at mid-single can first mid- particularly that you I comp, of pretty you for to growth guess delivered growth high given quarter in if to you single-digit just tough. looking comps I fact what the confidence sort context QX, really half high sort correctly. that guess, gives back a think in said that of the deliver

Glenn Coleman

Yes.

happy So listen, Wellspect in remarks, that expansion our in before, business, we're statements the investing we reflect we we're of -- for as the and we've Wellspect. just remains to noted pretty part innovation capacity made on

launched will spinal limited products that a still the accruing customers patients of of have we And and which low-ego yet next launch over another new in couple is hand fact, at who have We sleeve, are performance. number product weeks, dexterity. mobility injury and new the directed

of that with Wellspect. ourselves confidence for and market up can we to XXXX get the opening in product launch another is on So new our numbers that we're high

a it's -- it's business. a immune noted, immune we've As macro macro

and well performance a place and Gothenburg, the we the extraordinarily who moving team knows We've expect forward. there, got indeed in new over continued care he is home reshaping in business accelerated general that manager from and group

Michael Petusky

Okay.

part mean if encapsulating that drive half performance that comps. I meaningful of helps what was products a response, be essentially against really second tough new going So to I are

Simon Campion

products execution. and New

Operator

Our Stanley. with last question Wright is from Morgan Erin

Erin Wilson Wright

kind SKU rationalization? is if on an on update all, you? top Or for there? remind us meaningful you how that? do with how stand provide SKU sort at line And well, Can efforts like Great. of Just impacts the of your us that where to in rationalization we on then as

Andreas Frank

Andreas. it's Erin,

rationalization So Endo is are that we've SKUs underway in right our sitting in our not those really Resto system optimization and on the about of I talked really now driving before, We're think and SKU revenue. process there. well focused We're portfolios. eliminating

So plants. operational that with helps efficiencies various us across

optimization efforts, certain we now this brands optimizing we the the closely those I so have fact, can, with here we of areas, coordinating realizing as look are think, our number have of both at very that also in we to very, selective network the being And a we revenue other thoughtful and this that and then phase, that brands we're we're next product transition portfolio. lines benefit is in the which and So in right?

come out that So progressing plan and program 'XX. benefit 'XX to as laid of I 'XX of think the think meaningful that we for I towards today, and we're have out in more

Operator

to now to would Simon turn comments. like back Campion it I final And for

Simon Campion

today's Thank you. call. all joining Thank you for

points. DENTSPLY we attractive well SIRONA close, key I you would like to end-to-end is that We robust positioned in Before dental industries. leave customer-centric do workflows. with have some a supports portfolio

Care the investing Continence and Wellspect HealthCare in is While side, innovation. on our business capacity

operationally continues transformation Our take to and culturally. shape

there that Although profitable much believe accelerate growth. executing is more be on growth done, plans our to will we

part of Innovation strategy. stands our as a vital

for transformation to commitment disciplined we stakeholders. our We to a want DENTSPLY customer employees And our we I finally, SIRONA team, all management gratitude to to improve more to you. behalf have ongoing value our journey. for as healthy execution, Thank the extend centricity on And our and expect business deliver of pipeline. the their and

Operator

And you with that, participating. thank for

disconnect. now may You

DENTSPLY SIRONA (XRAY) 2 May 242024 Q1 Earnings call transcript