XRAY - Earnings call transcript Q3 2024

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Operator

Good day, and thank you for standing by. Welcome to the Quarter 3 2024 Dentsply Sirona 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.

Andrea Daley

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

Development Campion, call Officer; of www.dentsplysirona.com. and Joining press I'd release Corporate to an today's section presentation call you Simon to Rich General Chief remind like EVP, and Officer; me for Investors earnings Financial at are is available Executive our that the Counsel. website Chief Glenn Rosenzweig, related slide and the Coleman, on

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

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

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

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

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

Simon Campion

financial I Byte, start QX and our joining an outlook I finish performance covering revised us of then XXXX our highlights. XXXX over with all an will Thank you, earnings operating morning this for update. QX on go Andrea, for Glenn and a provide and QX results, and overview by update strategic you our will call. thank

past him thank his Glenn transformation contributions X We and a future well for want and years. many moment to the and first, to to take I him our over his wish At its acknowledge company leadership endeavors. journey in

In of while Let's points voluntary shipments of and start with October, Byte Impression Slide and suspension key related we company a Aligners certain sales, of conducts marketing its to Kits, late on products. announced requirements the regulatory these review some X.

We made right we close that customers Patients not and selling it new the in are and mid-treatment. be contact Impression will to this processing in doing Byte decision to continue communication for with for is to or committed with communicated them. remained top and Kits, what's our patients starting has them. FDA priority, are refinements cases

all We or our thoroughly are are to some a decision include evaluating concerning make a business. of and may discontinuation at this analysis in of Byte, strategic point we which definitive options, a not

taking will the regulatory be the and account which may environment, review, longer-term Our require data-driven, recent ongoing time investment. decision legislative performance, additional into prospects and take

moved have this on We we parts the we already are Byte to to steps as leverage business. to resources spending. for other are be to philosophy will reduce day next the We we continue capabilities and and significantly discretionary you, our In swiftly the at to redeploying determine X transparent opportunities promised of continuing with assess for assets Byte. meantime,

purchasing first our by revenue, with timing distributors organic of in quarter of with anticipation U.S. Turning ERP deployment. EDS delivered sales sales X.X%, million performance. to up in third $XXX We driven

sales were Excluding this, X.X%. down

in growth to was equipment business, pressure the propelled and Primescan on September. in implants CAD/CAM We continue our X launch by part of and see

experienced year quarter growth mid-single-digit drove over decline, Reduced sequential conversion rates prior the the for double-digit Byte SureSmile a period. in while

to guidance. Now let's shift

will cover full of as a well are our Byte, which as equipment, year revising U.S. As impact later. we I result continue to that XXXX market pressures outlook,

you we while and Byte dilutive Byte the adjusted to with approximately EPS. As million sales $XX told QX in had announcement, in

important our catalyst environment innovation electric see environment. growth driver procedure third value we remains and throughout macroeconomic for a equipment the customers, quarter headwinds we on as persisted uncertain. Capital the While and and the remain overall cautious

of Our in remain decrease October U.S. a in X,XXX China, elective respondents both customer while saw indicated major declines results Germany, and and slight survey over traffic Patient procedures. particularly utilization, our in was unchanged. that and largely flat showed markets the Japan

least improvement equipment. at in to but in was desire Sentiment to negative, Germany some practices encouraging purchase remained it for capital see now

X. November business in discuss Now cover first recent I'll with the we we in to deployment our more On on ERP operational the U.K., live bit results Slide Starting updates. on in rollout a QX our in went detail detail, U.S., highlights X, shortly. more share previous which some before building I'd like with

We and run majority full savings deliver on have now our executed of the rate II the transformation Phase to track activities end of are XXXX. by

X of Dentistry. wireless efficiency new September, Digital while represents sets The in also a in Moving Core. a Primescan better enabling our our their and customers is between powered patient experience, within X provides practice pleased digital DS were Primescan launch hardware more all It practice further integration ecosystem to DS which milestone by growth. which and Core innovation. supports flexibility and link We independent, and to

of over the Last higher into sequentially. identified quarter, had Core, end programs. return growth unique DS QX, reallocate to approximately that drive users continue XX% with funds adoption shared XX,XXX as representing opportunities I we R&D to of With

our Core to invest across DS software, further make in orthodontic Specifically, investments our we plan platforms. accelerate and Connected Technology capabilities SureSmile

and updates, over launch XX the software adding we platform. have Since of DS the delivered functionality capability to Core, new

adoption healthy we innovation demonstrated when Core significant and functionality. accelerated DS have for pipeline add a have We

digital hub. a connectivity drive component of our Core as innovation, with is continue strategy we key As to the DS serving

a and planning. of The gateway Primescan treatment linked transformation to Core to DS and Digital provides to portability Dentistry with options starts with the X scan its versatility a and

dollars Within allocating CTS, accelerate to get in pace to Pac. and by it bringing we EMEA plan Looking expanded and to Asia advance the to R&D forward, area. see markets also Orthophos SL the our we there more opportunities that our X we line relaunch additional of of many technologies imaging connected more

tabletop regulatory QX, In EDS, year has execution of engagement Through clearances endermotor. to full Pro+, launched exceeded rep already for the made these also we received our testament products. we Initial our strong processes, bringing endermotor with the have we QX. our market. a in XXX(k) NPD reception Sales been is achieved the of end innovations having and has sold successfully X-Smart expectations projections by U.S. to with improvements look reps in This XXX% our forward we the to of and X

education U.S., exceeded component multiple how QX, of value events bring important and Implants education to than our DS highlights. world, this our Europe. our we DS customers. courses, Vegas, Clinical remains and the we World, XXX Las World up In participants Italy, event. sales the Spain MIS around an conference projections and offered including At in more Wrapping X,XXX for we clinical we hosted in over and our hosted total

financials. in holding more with that, inaugural QX World in and provide QX, to we on details it Additionally, DS I'll over Japan are to turn Glenn? Glenn Brazil. And

Glenn Coleman

a driving and morning, the vision privilege want Dentsply in I'm I all remain confident Simon. proud Thanks, what transformation start thank what us. expressing Sirona the by to accomplished Good the of be strategy that's for company's together of team. and part we've it's journey. joining been to and you

our a turn segment. impacting recorded discussion and non-GAAP noncash let Solutions we a in Orthodontic Implant charge to financial quarter mention roughly goodwill, QX me million Before third related that the on results, $XXX we after-tax to

sustained of demand result the macroeconomic challenges Byte in was charge implants. impacting and weakened This pressures, pressures competitive legislative and

to move to X a the basis quarter now and million, prior Slide discuss increase representing me on basis an X.X% Let X.X% year on quarter. compared an Revenue was third $XXX results. to organic of reported

anticipated, Foreign had million currency than negative or impact XX a sales. but point headwinds $X were less on basis still

to million U.S. revenue was as EDS, growth On the distributor included the in November that orders deployment a U.S. ERP quarter. which currency constant and in estimated an basis, the in of shipped $XX in recognized was third advance placed X attributed

sales timing these declined X.X%. impacts, overall Excluding organic

innovation recent growth of the and supported also Primescan launch X. in We saw by CAD/CAM

continue However, points due EBITDA in margins prior a in and versus was decline basis lower and to unfavorable and elective Orthodontic equipment offset margin Solutions Instruments in Implant pricing Equipment this see CTS. mainly pressures as gross and XX mix lower product declined procedures. from to growth by volume year, we declines and market shift,

versus Cost savings as sequential of the realized offset some quarter, the partially previously in of improvement EPS X% our for restructuring orders through Adjusted contributed and was programs, distributor year driven the timing prior up this $X.XX, to margins. the noted. quarter EBITDA by decline

We higher tax also a was by lower which partially benefited rate. count, share from offset

cash shareholders $XXX through with $XXX inventory improved X.Xx. equivalents repurchases, year We prior up share increased to and maintained as total the Operating and payable compared million to year-to-date completed leverage of bringing cash and was accounts slightly to cash cash return quarter, the strong million million. In of repurchases XX, dividends September $XXX flow $XXX share X% we a timing our balance of the and million, due the third ratio of quarter, to management. of of sheet

World includes to turn and organic the timing Let's and year mentioned impact impact QX revenue segment, for is the from shift to was Rest the by orders. preventive endo, with QX of This sales China an X.X%, the Starting year products, Canada. a guidance full of in sales X Slide Essential also distributor increased with and previously growth showed U.S. of resto to quarter driven for Dental impact EDS. revenue over improvement prior from primarily Solutions not segment which performance. our expected

and sales X%. lower commercial decline World. partially approximately professional investments and Implant Orthodontic in force. other rates legislative aligners. Organic Solutions adverse grew X% our from was U.S. brand, quarter This saw another due We Europe Byte, challenges impacts Moving aligner performance in aligner X% soft and our declined states. primarily made sequentially, strong declined offset of to and a sales XX% by SureSmile, recent in direct-to-consumer conversion in and of the X.X% segment. certain We've our with the to expanded demand of year-over-year Rest brand,

prior digits period Sales in the full Moving to were U.S. due the declined, the declined included Implants facing versus procurement to difficult largely quarter first Europe, as the prior and Sales and Prosthetics. versus down recent the X.X% volume-based China sequentially, quarter. on year our sales program. comp increased CAD/CAM year which Primescan and a of declined from grew Solutions the and the Switching the increased mid-single Connected due scanners prior X. distributors, segment. benefit sales to Organic to intraoral of digits Global Technology mills includes launch quarter. year but to mid-single the

digits high to interest mid-single be rates. as declined soft the for pressures demand to competitive due macro Instruments environment and headwinds, equipment Equipment and continues

were HealthCare While by rates up sales prior impacts Wellspect quarter. the negatively segment in not see any We in flat certain while did continued of Organic year the the orders in growth countries QX, versus and we started U.S. interest saw quarter. timing World, the Rest distributor. from to Wrapping large were sales impacted results. notable reduce Europe a in for of

full expected still driven a to product launches. basis, by digits, new On Wellspect largely year grow is mid-single

X performance sales third discuss to Now the quarter of primarily Slide X.X%, let's to turn orders financial due EDS. U.S. increased in region. organic distributor to by timing

in at the the CTS While of level, X which distributor a sequential increase. of expected included million, initial lagged This also the quarter. contributed inventory and grew wholesale in increase approximately the seasonal $XX to stocking retail Primescan demand

million sequential quarter. prior to the a in $XX year compares This increase

the averages distributor by retail historical closely We return wholesale the to year. expect to and dynamics, we continue inventory monitor of to and end levels

U.S. in aligners our by prior clear Byte demand the declined Our versus largely trends. and business declines softer business driven quarter, year X%

declined implants addition, year-over-year In market pressures. due to

for We're in time was Europe. see This demand signs slight sentiment notably growth improvement. lower declined Turning due and SureSmile the and continued but Organic we've see X% Wellspect this in most further over in partially implants quarters. pressure growth to growth to equipment, of market, Germany XX% seen the imaging. in remain on HealthCare. offset cautious in continued improvements by quarter, in of grew to X we sales first until starting

call in by full offset China, despite Growth the Simon a the Rest to strategic discuss recent Implants organic of region and spots comp the over for in the X.X% Instruments. operating and back also turn these outlook benefiting to grew was and in were decline tough bright sales year EDS Equipment And areas grew launches. and CAD/CAM quarter. in update. I'll World now product the from

Simon Campion

Thank Glenn. you,

into get cover update. XXXX I'll updated First, our Slide then outlook for on our and operating strategic X

based We our are U.S. in outlook revising XXXX as as on market continued Byte. the full with the well pressures year equipment

decisions additional assessment any options impacts Let business. take of the not our me we our we revisions note continued or that may from may make do remediation include Byte to for strategic forecast measures potential related

of provide in you we the wanted updates forecast to our transparency. said, spirit with current to That ongoing

organic of X.X% expect to down estimate sales to X.X% prior down We flat to to compared be our X%.

sales rates. We $X.XX less an expect in full on current billion year to $X.XX the to billion of of based net range FX with be headwind

adjusted from down the for mix from greater lower to EBITDA outlook our margin offset initiatives. positive Our now prior contributions and than XX%, by unfavorable margin, which profitability of volume gross sales XX.X%, estimate is approximately our multiple driven impacting

With these $X.XX adjusted range. midpoint year expect over XXXX we the growth EPS to in slight prior the updates, at of $X.XX, be now representing of to the range the

Byte, Clearly, XXXX. issue like macro you an our will I this target, provide plan of our year-end created have we While hurdles original guidance and achieving other the February, we you and update to EPS surrounds with results. $X until have pressures, don't to for many adjusted think significant question the target will obvious

our on Slide update, challenges such most market have impacted strategic This and dynamics year, have to and X. Moving recently, Byte. on our as starting faced that other negatively we performance,

second Specifically, of told we for we year the the We underperformed growth acceleration in expected you, and at we categories. the not progress beginning we in the that and anticipated. product implants major have geographies have certain delivered example, in half,

company. address of to accountable the we in of steps these and high-performance, to we a disciplined continue a to one have made culture leadership As as changes issues, number evolve this

confident planned, in and strategy to transform we to further The quarter, initiatives execute on priorities through are remain the a and transformation. as second phase Dentsply we we shared unlock to set have the them. Last we've our Sirona progressing plans efficiency underway of

over XX% track the and executed We X deliver goal. on our remain of on actions have on savings identified now Phase to

initiatives. on efficiency moving with on our foundational network our our Slide portfolio, landscape. and an simplifying to modernizing initiatives XX ERP focus update Now driving These

endo XX% We our and already resto are eliminated. with work SKU portfolios advancing optimization SKUs approximately on nonrevenue-generating focused our of

We remainder to expect these expect of SKUs XXXX. we the to migrate of this most SKUs of end and the eliminated be revenue-generating year, the in by

seek supply to to Our continues our chain performance. network improve opportunities team

operations one have drive of sites. X and U.S. This centers To closed date, we and manufacturing explore X opportunities quarter, we more to distribution ceased continue our at efficiency. more sites to manufacturing network

at of rollout S/XHANA. in our now have live of X resumed deployments mentioned activities with days. I went and full As completed X as we earlier, U.K. part August volumes SAP ERP We within the business

and you very like U.K. As from are have would we implementations, our patience executed and fine-tuning these we expect would we launch initiative. recognize distributors customers to with collaboration Overall, with this as the made some the limited and pleased adjustments processes. and to

deployment Earlier XXXX. preventive of scheduled first also This this throughout deployments rollouts EDS. and with with we primarily into resto XXXX the a in month, additional to involving first and series the is our went within businesses in continue the U.S., live U.S.

opportunity get and I'd to tremendous implementations require As us teams global to like you to point. great effort, for to our their know, work ERP thank all this take this

Earlier, in I noted reinvestment transformation reps sales of of of an to our customers and week. place business journey focuses already very we Phase began own To at have reducing XXXX. plan expenses We end fund XXX on XX DS' our creating key QX to have operating approximately and virtual hired efforts. over with that part reps important both touched demand the we distributor this the end, Trained augmenting our aimed by engaging previously that this of reinvestments. on X

proximately way a with And our cost-effective virtual improve and team to end as our to again, customers. relationships having sales we view a

of you team relates more efforts the little undertaking it are the we Byte. color to as on redeployment some me at Let a give

We the funnel, have very there presence, and sets data patient media talented recruited a advanced customer social with requiring and of for e-commerce, service, skill workforce developing planning. dynamics technology assessment this robust business software, treatment strong a

and demand accelerate experience. getting user initiatives to potentially well and own customer, last other like software SureSmile skills our our our and the can quarter improving generating closer efforts to Many e-commerce very translate of businesses discussed these and our

close Aligners a Kits. of summary and and XX the me Slide shipment October sales, the marketing suspension announced Impression let on remarks. voluntary Byte XX, we On with Now few of

have Byte forward. conducting we and regulatory we evaluating options As discussed, are strategic review for a moving

of mix quarter, organic CTS a by distributor we In sales the of order posted sales in driven X.X%, X.X%. EDS timing and growth Without impact, the timing orders. declined

EBITDA. anticipated, As our benefits to contributed work transformation positively from

the September Primescan committed of the pressures the U.S. in the our Byte. of in We as innovation in revising Pro+ of light X evidenced XXXX impacting the are launch and We U.S. and market X-Smart launch remain by outlook the in landscape to evolving equipment the with

have healthy We total we opportunity we process, of pipeline. return it the focus, pipeline. as a discipline our innovation couple And and trajectory alter better innovation to with see

strategic business more Dentsply up transformation take company. continues to questions. as journey shape open I Lastly, it And make our more effective plans for stronger will with to execute and we that, Sirona initiatives a efficient, and

Operator

Instructions] start it to over I CEO, to would To it Campion. [Operator off, turn like Simon the

Simon Campion

and morning, ongoing I developing of to want Germany. you all spirit the about inform situation thank Good In today in you. transparency, a

and at that and aware is with are facilities intend Han and out to Obviously, tax we in a authorities development, very and investigators morning. this the this recent arrived federal authorities. We local cooperate our

operating at are ethics that Our normal. want we and facilities And everything in as center of to do is compliance continue Germany the we emphasize to do.

matter, I'll subject will any And to back status the be through the to unable that, given this Q&A. of questions you. evolving And operator with walk we to it situation, Q&A. on during hand answer this this finally, Thank on us

Operator

Saxon David from at Needham comes question Company. first Our Instructions] [Operator &

David Saxon

on And chapter. your Glenn, luck next good

Glenn Coleman

you. Thank

David Saxon

great. questions have yes, -- I two

on questions, two implants. one Just on one Byte,

you and Byte include And can just does think go OpEx side, us at in can how that reallocate just parts like cost that or or if might an Byte, -- or give viewed away? much least, the business of long on tied around as in quarter, other terms $XX discretionary? much to COGS Does to then suspension sounds cost OpEx percent how you the the on last? Byte, be it you And more of update the what in range. So on OpEx? And then how million was would the

Simon Campion

It's we I David, part that part review it that will question. regulatory, then to ourselves Listen, and involves find account and performance, second at need analysis multifactorial of all assessments we a I'll in, this. this that Glenn into commercial a and first business. into crack take still your recent the necessary say technical, conducting go prospects have of take operational, legislative would and the does the the environment are longer-term

time review, And as I our ongoing take noted, and the investment which may further on part. regulatory require

So possible. and trying ceased We've side. be want our very get answer an all, but you swift as to We've as but diligent marketing cost we all to the on action fast employees swiftly taken to also to activities.

the informed our And other the be of such already exist will developers as yesterday of is we all their that jobs groups couple employees next of weeks. over -- relevant the assets different example, ceasing have -- be we ongoing, redeployed redeployment people, of areas business. that but shall say, to For think software over we moved to can we

And Glenn, a part want the question? do to of crack that so at you have cost

Glenn Coleman

Yes.

prior obviously the down versus down P&L so. can we of did most sequentially It's close we revenue. the $XX about year. XX% That's thing is Byte quarter, around say the I think to recent only or million

has business EBITDA the but to So It our margins, dilutive to gross margin. declining. accretive is been

with associated cost OpEx business. high this a there's So

a operated think I in quarter. recent recently, that the said most we've most even we've at loss

profit, gross has And business recent actually a to to dilutive but in our declining, quarter. most loss the we're the it operating and is been overall in margins, position deteriorating. So accretive

where So possible I to cost think about general action much in here this the term has. And a mentioned, we you OpEx take impact. of to idea as gives that the minimize potential the short out Simon business we're can as type taking

David Saxon

then helpful. And on my question super second That's just implants. is Okay.

value China, expecting sequentially. that So premium? implants. I it comps? And you And guess, then down performance it you on the lap versus weakened VBP until about be as across relates are region talk to could then the you I guess lastly, to

market talk Can changes. see You on to returning kind some talked about And of strategy just update you of how growth? the forward? around kind growth about going expectations any leadership you and

Simon Campion

David. thanks, Yes,

XX on the you a The we first that in of value part And percent events. Middle -- so this That year for on represents as this situation, informed That's quarter the with QX. products total side, our Israel. unique won't was a of decline far year lapping the manufactured so impact some we've -- or any in by time impacted in in our with one. the So business. obviously saw business. situation before, significant East had that's China we're Turkey, so they this and We're import again us that

issue with Central in And then there respect Europe is timing to a as well.

China. So decline In that degradation and in us. no electives, saw general, and in X,XXX fortunately, of, U.S. in But is survey our said, saw Japan the we further people, a impacting we Germany. certainly as around particularly over I

So we are the performance with in that's the quarter. where

end on value And Implants. listen, of to MIS to simply our We've at we we bring own the communicate expectations range we and middle live the the upper that the this. to want internal low our failed -- with made up have

needed. change up And we so freshening some and felt was

And we win have and taken portfolio have this we that and is -- feel in we to space. feel the it so customers our

and in space. sales education in clinical in of heavily this expansion invested have the particularly the team, U.S. We

are -- us internal to are reasons. there So for reasons the fail only

trying those right And now. so we're to remediate

Operator

Kevin from UBS. Caliendo comes question of next Our

Kevin Caliendo

about At as in things like, you an provide? more take question, versus macro the throw problem Simon, are and Or can share is things how how let's opportunity at sit any educate you and we'll macro. cost a of all on given guess, macro bad everybody the you as where, Germany you let's first the is situation? such how is, other saves? this to Thanks remind situation. for numbers And bad, as this are the then, get point hey, circle investment the try you in it's there, really Can wagons. money at that like point, just a better, or which us, be think and to good I it's sales Like terms big just do for transparency second you

And have the you I but savings think you saves extending than this cost just know do versus program, how you investment imagined? when macro had is cost about worse

Simon Campion

Yes. Thank Kevin. you,

in represents cannot the So business. about of XX% that Sirona our we in a to first quite part, there's cut business, cuts total the to Connected Germany to relation we've our I healthy Technology, and way that investment, With it -- versus that's is of proportion said think growth. respect legacy

think I of areas that are very certain out be costs to our taking customer-facing. respect not business with tried diligent we've to in

feel Just will taking are are categories. areas higher and unnecessary that out infrastructure in growth investing we areas costs that in stimulate growth that

and it easier to a of of competitive say, We shall with, presentation. with you in respect cetera. getting Investor should and disadvantage on cetera, hey, we do also I by business that. our we making company getting Day to that e-commerce market, to we invest up, growing our at that's hygiene that digits in believe we the up, by and are feet Byte et sort those implants, by in example, back what be websites the growth double But capabilities at do want in et a street to this our invest strong refer mid- I to Obviously, impacted areas aligners. market has said, For single-digit high

spent So we the are -- enhancing demand are see and we customer where areas in not money have we driving that experience. creating

to investing in said my from forward. we're ourselves moving as up, money company a I us, to there and remarks, stronger so taking it And set make

Operator

comes question from next Baird. Our Jeff of Johnson

Jeffrey Johnson

people some you about to just moving the down all to the involved of you call like first parts business public on and saying sounds question like there's down that. effectively, in and And just it's it Q&A going notices the Simon, in mean, of us your here employees company, telling other shutting the employees obviously, the without here that. out I made shutting and of a other maybe the I understand you're business. things Byte commentary you're you issues

But a how is take the out of at our now should investor least out go-forward table But looking we comes for of basis if on an for expectations side way that's things things? at then. that our at model, about And the from with Infineum? at from we to least it then it back, deal can it standpoint, our be taken think now, maybe of safe

Simon Campion

-- that of a to No, have situation that of we I'm saying not people And -- as a ourselves Jeff. what I'm you saying, It's that's is find lot work in. we a said, do. that impacts complex in that lot rightly business.

to And get to back the lot a figure for viability commercial the do, project there the in market. a then market. back path of have We trying out FDA, to a path of technical work this to regulatory being work, is with if consultation

the in As Glenn P&L in this XX business. did about is was noted of response quarter. David's we our The It to dilutive to burdensome in million question, this his quite middle or so business. last

the we how so get climb to to going back And look environment, take climb at have we the legislative that if when if it's market, as into is much the to worth view possible. then the determine

not and the see now. are yet. question, I'm saying them to we're they we as dive duck right trying about it facts anything So but your not

Jeffrey Johnson

XXXX volatility lot you last on these help quarters. us exiting the by No, run I'm at one. can P&L, savings savings to in number of through would the That's rate run just of we just maybe great. savings fair. rate cost then, XXXX? couple potential Glenn, expected cost you XXXX expect initiatives? of the Can what a Yes. out And level those incremental here really what are kind all set Where looking be kind the still are So cost of savings end of us

lot from you're anywhere XXXX, just And year, use I number of number two, anywhere different at a can of near using typical me is I of at but your to the XX. of for percentage believe that seems of sitting to use get that The $X.XX looking guidance as for I next thinking a know for last kind QX, earnings X at kind my to correct mid-$X.XX pre-COVID can couple as not next low years, year. Street guiding to I $X can It of of impossible QX I get can ways more to a we look year. the range. that's years

mid-XXs to to low we that to and kind suggested. that more in of it quarter take percentage of kind So range of kind want fourth I be whatever apply

Glenn Coleman

Yes. Jeff. No, thanks the for question,

I XXXX. restructuring restructuring the QX. of on first from is We've relates was $XX will $XXX those program savings. to rate it seen which million. track in savings as complete. be and say, completed the $XXX run restructuring of That million I'd anywhere in That's, program, a million It was second savings, announced obviously think the is lot to annualized

how So we look at program. that's the restructuring

and have going respect be doing reinvested. quantified Obviously, that how business, But business, in bottom we're through much be programs we as our line with haven't flow some on to look of track at the the been the we announced. reinvestment that we're Simon mentioned restructuring the will versus to

business with beyond the QX low and essentially our we Byte when fourth to relates all ship shipments the hold. We've on large a keep initiated is I which type removed in XX, just revenue October $X.XX forecast. mind number, having it is As quarter associated impact

all XXXX those And basis to you is XXXX. right? obviously work this going that there's while still working be so items. in an we're we're further And a go less you business through me, could But we removed, not any as nevertheless, into comment of that impact through, costs on of take quarterly to and on once should there the revenue

Simon Campion

say, that just would I to statement Glenn business. have spending in we that in made, relation cost Jeff, discretionary this stopped

So costs for right now. most are people costs part the

Operator

comes Piper Sandler. question Our Jason from at Bednar

Jason Bednar

with CTS ahead coming that talk and on of the printers? seeing you questions, the competitive of or Good in bouncing already headwinds actually headwinds you're maybe be might these to whether how might your of a couple what little your calls. PSX you now the rate scanners launch to do maybe luck CAD/CAM more and trying you much to Really I'm and can level comments exit versus have at And that here. what the has much exogenous just endeavors in to the attribute understand is launch? this might a bit been in the a look then Wanted dig retail segment, in between all addressed. you cleaner if interest in But and apologies demand out there? like rates next about you, CAD/CAM, and come trend sense Glenn, maybe be macro how your CAD/CAM PSX this lower

Simon Campion

variables. was Jason, between two reasonable. board. between in those QX think the QX It's we just And delta in saw the retail QX and Yes. pretty and significant demand I not the on a across delta scanner It's business.

we to it year XXX have since well It's think and pent-up world. So Primescan quarter this we launched, of done in the terms best was quarter scanners the units, in cameras for for sold in best related years. it very where demand X of X I it with X, Primescan the been was of around don't excess any scanners although second have

think investments of interesting survey we that actually previous I past is German German the shared that came had only at quarter. the in certainly the If scanner. of stopped point, But some now -- helped you'll our us that's the in areas. back dentists in workflows. degradation some that sentiments, this And the had in customers digital prepared actually their the and a results Germany So are agree, reconsidering customer data it have XX% I look remarks degraded

once of lot Germany macro headwinds. for get past the in there's of a So we some digitalization room think I

small part XD on printers XD a those quarter And our good in a a had of are We had printers. mills. business. quarter We good

moving reasonably So sold the with retail be thing quarter. what an in given just we're survey cautious we had And forward. the have, that pleased we want we It's the impact. to data

Jason Bednar

bit critical And a what Jeff on That's X% seen by -- asked, bigger year-over-year. count don't to enough. to mean materialize you've a about of in the and at strategically then really bottom despite savings I follow-up, had picture a just the for here. down haven't but think follow-up shareholders plans basically coming be when had Fair are place, flat Right. down and this But we line. these year. my bit and maybe little -- maybe little Okay. sorry, Earnings coming or share about headcount --

You've hasn't talked of just growth materialized. really chunk a savings growth those about of the Phase the large deploying Phase into savings back X initiatives, some -- but X

you justify there that those returns a reevaluating the whether point where look to to you investments here on to growing And get drop where question shareholders think can about some how the or that maybe investment? the of come so is more back business the earnings? line you bottom spend So does at

Simon Campion

entirely That's here that an that's we about one think think Jason. frequently. question, fair I

As to dentistry trenches. Jeff's growth Sirona out can I been that And those noted question way in here. and response in we our we business and represent areas areas of are feel we noted of particular. under-resourced response in my areas growth are that to have we cut don't for in our to Dentsply think the in where there I for

We have the portfolio.

investing teams, on got Byte. We with clinical piece the example. We're sales have software this been fixing We've headwind in education, in SureSmile. for

the is -- very we of top so posted we us we solid to considerable year expect the us with in importance importance in and driving growth Rest indeed of growth we preeminent that We And will World. And the aligners this where making grow. feel line demonstrated us. We've investments get Europe are there. to

America, if mid-single actually headwind significant grew In our a we North X digits. we you SureSmile with, that partner, business, where exclude have

areas when done true of more make Sirona the the such company. that benefit we the is the that's going leverage been value. invest significant we show And work other in, on exception efficient from to with the the have turns, we implants, are actions as to So great Dentsply begin hygiene to taken factors the operations we'll a unlocking macro get

Glenn Coleman

operating comments to to year-over-year going I'd The thing expenses add our are Simon's only be down.

So the levels faster down revenue that. I think the challenge than we coming is are have

revenue as EPS a why operating are have we year-over-year. challenge, overall but which that we seeing result reduction a is of actions flat is have So taken, expenses a we the in

Simon Campion

million, returned share of this so or think Glenn, year, I in haven't $XXX to form over dividends. we investors buybacks And and

Operator

comes Jon from at Stifel. question Our Block next

Jonathan Block

organic that implied might be so single we down Glenn, or the when for XQ, high digits XQ tie out.

So we do we to with where from we impact to 'XX, just XXX sharpen single can But it digits, Byte, this go $XX closer arrive it's impact pull I'm down think typical. the think into of single point million? we from 'XX? XQ low to trying little maybe guess high on pencils about XQ, some core do a our into from revenue the fair XQ it's when some notably and again, it's forward all off EDS most adjustments EDS those a of like a sort might be say is trajectory basis pull I better or to again, digits a you just down jump the year-over-year forward to get for at maybe normalized as optically, make Byte

Simon Campion

that it's into QX $XX the Yes, if out of for consumables single there's down QX. from to organic being we you guidance I pulled growth mind, And digits. at called million keep relative QX, high in forward revenue think look implied

to So shipping to the then context, rest of we decline on the really, have from And you is So Byte situation in that. stopped the the coming million adjust $XX right? put for XX. October and just

rest out the is revenues on from so quarterly type million a a quarter of the the perspective of $XX numbers. And business

coming can North that figure and of do and soft out on then the impact the America out is it retail rest what demand. of math the to Byte you So is of

So right we're that's how QX looking at now.

Jonathan Block

guess, chatter and doesn't I reduced talk about then more a specifically, of amount good out does bigger benefits the [indiscernible], enough. it. being Okay. there mean just Got a maybe what for And industry Fair picture there's dental that on some and or question. implants. and There's,

your for would and on what Dentsply not thoughts initiatives, XXXX market that that America Sirona's implants? mean even maybe you for more may how love implant specifically notably into may or most and So in view going North the

Simon Campion

on perhaps reductions for an Definitely, are, John. on to impact pay top Thanks, of so of out and implants, and to these have for I Yes. willingness macro, going are on. aligners customers' think, more benefits pocket

I an turn So still growers when you to to will Jason's that dentistry. core they to it But think question, back are attractive compare are segments again we impact. see

in for us. and have of invest is interest that still areas And get so rid of those to an we would still the feel that internal there growth continuing get we immense to area

in downturns a willingness doubt China. particularly patient in seen, that and capital rates, So recent it's with macro then headwind, the invest lack to no coupled equipment and we've interest of Japan these

for a had think of period in slightly everyone I we're -- compression it's than here hoped. longer

Operator

Erin at Our question comes Morgan from Wright Stanley.

Erin Wilson Wright

like of how your you about think of since channel, the should channel, conversations the so there And business? your distribution of importance some how recent relationships? revisiting dynamics on about the we what's the Could kind in update think of the we some of kind been give kind us also do across that? an And those forward, stocking pull around just just relationship sort the going disclosure have how distribution those of and of

Simon Campion

Yes.

and the stocking. the on take then I'll first So channel Glenn there part can comment

work friends we our They great to are With our for Patterson, heavily with in work to them We on distributors. continue and still respect closely day do reliant us. day at out.

a them In them level of over senior -- meeting senior fact, past meeting with couple had with we the weeks.

hope to I great enable work of of not-too-distant QX, we discussion in noted, point as to continue amicable get future. success. us. between But to be a in do lot the here We their we about in that And an back we solution contention the

Glenn, comment do the challenge that's so have. And we And that of on you to crux the orders? want the

Glenn Coleman

special increase X. that in incentives highlight $XX dealer year. there the to I to inventory Primescan uptick that. just prior equipment in an of from orders orders Part were with would QX saw business. dealers from to that's increase our sequential also Just And our third normal the $XX a mentioned seasonality that we increase, million in provided saw had healthy in that World, in surrounding orders, we of DS And terms I from QX these compares quarter. with dealers million no sequential

inventory consumables demand that being just earlier and it retail into careful forward in of inventories And in around $XX created million the that then we directly any we're that QX. we I associated that QX making we're was ERP with and with conversion. risk as levels, our move seeing So what minimize was associated terms also situation in increase given elevated conversion mentioned whole the and dealer sure

with delivered So but Again, earlier and got intentional. that, of orders the got no in that we was some that special third our incentives were associated given one in quarter.

Erin Wilson Wright

at Okay. it there any the of earlier, that of has of you're And on terms in cadence changes on but where SKU just SKU necessarily in remind been now me, then terms impact right you differently commented for efforts? just meaningfully the -- terms the that you in doesn't that like of And of Are line some mix? rationalization top thinking about you? rationalization,

Glenn Coleman

our update, since changes last major No Yes. Erin.

'XX. to be expect to migrated we the expect by gone have revenue SKUs the And nonrevenue by majority end all the the SKUs generating of We end of year. of the

our thinking to -- that's change update. So no our last material since

Operator

from question Leerink This comes Michael Cherny at Partners.

Unknown Analyst

Mike. This is for Ahmad on

orthodontic? more Looking assuming focused Other that the the to into from expected and I ahead, growth Ortho is should than company team SureSmile? how know by, SureSmile update, Ortho the space anything what investments else are And be software that's uptake Ortho there keeping market. would the with back excluding on those you the the there in push the should branching into lastly, how characterize current SureSmile can and making software think about in organic be we

Simon Campion

part me second Let the maybe start with your question. of

sales our dentistry. Our commercial for teams focus the on -- general most team part

our that of from clinicians. majority small the that's revenue group of so And short comes

to the then last growth. even a get fixed, that on general noted we try more is that's accelerate feedback begin the that and we our to on As we in software commercial the end we community, of get orthodontists going from will because when front invest the call, calling team

be that's in SureSmile Obviously, that that comment it's that anchoring your from clinical whether efficiency based refinements have they're should and friends benefits In you our offering to Europe down consider our very invested to an and take like battle. GPs going relation fewer to and points clinicians, confers -- we've comments do feel turf orthodontists. earlier, we We've and competitor Japan won't growth, the about grown a we on Brazil. fewer those. But or where line healthily I think

that listen we grew excluding think stopped comments, in partner mid-single America. I my to if had that we X we has purchasing, that digits in North the And SureSmile on

some to why talented reasons prepared any wouldn't software further that I in back people continue. to and foresee remarks, deploying we the and clear back cannot side, then help have the help of would some noted we stimulate of demand those And as aligner awareness likely on some be So linking to as significant us we the Byte, it backed SureSmile the brand in generation with a to SureSmile us very software and marketplace. by

Unknown Analyst

of in idea The SKU I'm that coming the it. one. EDS reduction one segment? has correct, sneak revenue-generating XXXX, on impact mostly the from that, in any line? Is if if Got I could And top last

Simon Campion

Yes.

businesses very The So impact is we've businesses today. I on about it would shared we've resto we top endo primarily work those don't on that, today. think be on -- the Obviously, is the and cautious focused what the been ever focused line. and

Operator

question Vazquez comes at Our next from Brandon William Blair.

Brandon Vazquez

quarters But understand be you're adjusting expect kind go-forward sure it go can maybe of a I'm a Simon, today. you And on I things guys to fixed was still a on kind back internally have X hiring basis, on worked you And it you plan second you're what of like hasn't a guys and we or curious, what basis? think for you postmortem I'm better where implants. know just where or are, of needs leadership. of kind that done to go-forward new couple year a in past hasn't the to to be what gone

Simon Campion

Thanks, Brandon. Yes.

I investment the in of I a number product think introduced that over development significant the we've education, past and and all years Street moves. the very are investments new plans we've right clinical commission couple think, the of on made feet in the in

have with more have to And -- market. in be a far top team teams the successful portfolio. the in very And meaningful the way a against our we be to strong products comes in very convey so at of the are equipping competitor far middle we to back it value and the to and just equip marketplace be robust a right the we aggressive end the to more implant of our at way

not new So net-net, our the rate past over accounts of the that seen years. several decline offset has we've

a -- we even reason and reset. not do But be have have successful no we this everything is should have just we. we there's go heard, to marketplace again, we in why Brandon, when So to

that sites egregious. Our were not

the be growth. XXXX, rate. was at for That Let's market grow the at market let's plan

plan. an So I egregious don't think it or aggressive was

I plan. think it a fair was

delivered. We have not

that a go made. have So more and do people further we have to accountable been and commitments to postmortem hold

Brandon Vazquez

Okay. And if squeeze follow-up, I one one maybe real in quick. it quick could --

You guys new a virtual sales had internal team. mentioned hiring

curious team you going if could virtual start forward? benefits those that Just where P&L the you envision from and you us really might give examples sales organization of to see some investments plugging when into commercial

Simon Campion

Brandon. Thanks, Yes.

of have I portfolio. the to calls to we as with XX generating today actually opportunity in think to The but will our prepared customers across they remarks, begin it's noted targets. We region 'XX, specific make starting right think, us revenue the 'XX, a in in the these that in late, now. I have U.S. would mean they I They're build obviously. of, So individuals in expect for there's targets, I very relationships hired excess

say, of breakdown get leave Certainly, we a lot think the table. straightforward in we it's probably I side, at the EDS serve, on customers account But little the a that look to when money there. I more would of we

of We have think dollars a -- their to slightly I a us thousand of who only year. an account that in of get of type a And slice couple each there's opportunity couple business. product of only worth bigger long from thousands of a purchased of tail accounts of

closer about And whatever channel product demand it's that's So getting all that to what line. served they're focused for the on. by creating particular is customer,

U.S. demonstrating U.S., to we'll all it's further serve distributors getting XXX,XXX it's or some endodontics, it's more Dentsply we serve preventive from business if we acquire can the and dental or But about into that other community, right the the the the trying all dentists resto name If it. out earn in in So the it. value bring will to

Operator

Allen comes Bank final of Our at from question America. Lutz

Unknown Analyst

Allen for market some had conversation of getting XXXX the of a on any as Deb competitive quick XXXX? below think given BofA. about sitting is expectations to growth think And here, growth investments an implants, what -- Lutz commentary to just and in one, question following product This to in required landscape on I just just XXXX on expectation? or curious Considering get the the still at you there. is we should there sorry, market there? and what up about pricing changes And on changes additional in needed some

Simon Campion

market, that our I've response that egregious we to should we're provide respect think I gaps. previous at with said be any portfolio I thought in The don't major growing going to or of think have as said, the it's that we several lack work growth that implants. guidance growth in this or an noted assess at point to to as we've more has 'XX any question. we've 'XX times done don't don't

challenges pivot us have that to that need these We education unlock get referral seem at to education. clinical invested the in those. more Maybe drive be and causing we to and networks local

Not we I issue it log while and demand. into disappointed in with way. marketplace I on. our get and their this used reputation, with we implants. comes creating the own earlier reps sit robust out equip to begin the today filled reps think a faster are referral a to for but have to faster do down up our implantologist it simply, to they execute I use is that multifactorial and quite network ability word sure. educate community, where It's the and on conversations as And have our much sale That

Unknown Analyst

Absolutely. last then just one me. And for

SKU a was benefit through gross efforts seems It optimization Investor in something more progressing are us the Day, of profit optimization an gross million SKU on give at think like well. from a that's $XX event benefit terms stands you of if -- that mention And XXXX. the there efforts profit gross benefit? a of update just or that's Could where XXXX? XXXX I

Simon Campion

Yes.

do track. just our I update we are will February. think I optimization, provide that all when robust all for transformational and intents late efforts, more that So year-end on noted purposes, SKU And earnings we including in, a guess,

our now. be have to that alarms are with respect we that. ringing So But will in thoughts right there -- SKUs no

Operator

CEO, am no Simon like I this to time. closing showing conference I at turn back the further now our for would remarks. questions Campion, to

Simon Campion

Thank operator. you,

today, for to in transformation want and thanks So us the all express of to their for Sirona you team closing our Dentsply I our entire to my to ongoing and joining our customers company. commitment

more While to we we making know we are lots have do, progress.

Dentsply you creating more innovation that culture disciplined, term. marketplace. bringing your the And time Sirona will a the benefit first are Thank stakeholders we over for long and to all We are accountable today.

Operator

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

disconnect. now You may

DENTSPLY SIRONA (XRAY) 7 Nov 242024 Q3 Earnings call transcript