XRAY - Earnings call transcript Q4 2024

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day, and thank you for standing by. Welcome to the Q4 2024 Dentsply Sirona Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions]

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

Andrea Daley

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

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

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

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

believe and that additional by on be could predictions. actual from recently transparency our information financial insights performance some On periods our Form independently updating enhanced today's lists that business certain filings, of differ metrics comparison will key results. most in cause factors the based SEC filed most risk call, non-GAAP our items into of investors operating financial XX-K any results We where results to financial important of valuable offer enable subsequent the business' may performance and our management Our vary financial in regarding used measures non-GAAP business. between remarks

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

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

Simon Campion

strategic Today, our earnings a then financial Herman I'll all by our thank us results XXXX for and with overview outlook, this and will of call. morning Andrea, performance QX for will joining and operating finish QX year recent update. an providing you, full XXXX start our you XXXX I and Thank

with with that this Medical we the was Dan and product earlier commercial with over Globus deployment digital and including additive Barber, sets of management skill the a company's Globus innovation, Board expertise led the roles Dan, transformation having continue NuVasive. years brings deep responsible the executive transformation and of month, is we augmented the successfully seasoned of leaders at as integration, for started, our that of in addition and highly in experience execute we business on executive CEO to of to Mike where are program. beneficial Mike XX and proven he GE, Scavilla Before get leadership X-ray strategy. be our will Board X merger

organic let's to on green Imaging start of see nearly year. X. return some Fourth quarter, the exceeded shoots we In XX% business, Wellspect posting in sales and approximately in pleased growth prior and Europe of of Europe momentum in including the growth. with XX%. continued Germany. quarter with growth Slide growth the points rates nearly included globally, approximately results increase in for X% grow full a were quarter in year over key to areas fourth to a X% several achieving global the SureSmile continued Now estimated over X% QX market Europe growth in

opportunities improve The and included Orthophos step the positive XXXX. encouraged our improving change dynamics we reintroducing significant market and growth We of customer address to half actions in directing by personnel key towards are performance by the our commercial needs. in enhancing SL, training execution to saw performance second most address sales we took

XXXX. us targets for This success translated relaunch into and sales positions results that the since in exceeded better

of and in year The the top QX the guide, by almost X% [indiscernible] almost taken outperformed our associated latest incremental the midpoint business charges line guidance guidance. with adjusted the latest with in our fourth quarter. Excluding X% full EPS on our above Byte

give color by impact from there a this. and X.X% CTS. X.X% some was Let reduced you sales Byte around me

While just mentioned Primescan volume year second imaging the faced propelled of price we'll X throughout we is CTS single-digit patient both quarters little on of later growth scanners, speak the clinical row scanners. to in and global I've about our to have aligners in posted that investments to double-digit row SL of accelerate year that and macroeconomic half SureSmile our growth X launch demonstrated relaunch growth gateway high business. a pressure, a This in volume and the growth and our in facilitated treatment on workflows. in the third and SureSmile Orthophos a

in Endo new half our regions. demonstrated year delivered second and launches Motor to Pro+ Blue the strong importance the leading of conversions U.S. growth competitive Wellspect the with another all year. X-Smart the of during of Reciproc across file innovation

continued continue also major softness Survey indicated our Our through procedures. most in our elective slight in of with with that January showing results survey remain improvement, strong to interest X,XXX driving markets efficiencies improvement across strategy. over respondents workflow relatively with aligns utilization categories, indicate which unchanged

the organic down largely X% to for X% For to such, unchanged. the year, sales external environment Byte as to a be XXXX, remain expect impact. including And we we negative expect

We customer and patient software team offerings, our upgrading drive who to key direct-to-consumer reimagining interface on commercial we our drivers. clinical resources of key redeploy to As as experience. scale resources a user said, have product simplified we our creating value the their to capabilities software commenced decision transitioned portfolio SureSmile we've revamp They education view and demand platform. current made have innovation to strategic the leveraging Furthermore, to Byte focus the now strong and e-commerce. engine, SureSmile certain innovation platform and

early of launch improvements We expect as some mid-XXXX. these as to

exploring alternatives significant taking month, also announced our we value our business. Wellspect unlock We that are stakeholders. we HealthCare strategic this for this Earlier for that step can believe

and in meet prioritizing demand revenue X business. and We to future strategically innovation profitable growth. positioned this and its the last have product strengthened investing we invested the Over for anticipated very years, in foundation growth it by capacity

strong developed to opportunities pipeline markets Importantly, and untapped access product Wellspect's a in business potential core with we've other adjacencies. significant

line attractive an process. and outcome top focus has added look to Our evaluation determining We in growth attention and this for to resulted profitability. business forward this

we sustainable a to evaluating company disciplined the committed growth. investments pathways regularly structure, profitable drive maintaining approach and in additional portfolio, our As said, to is cost

I on, strategically to engagement the allocate move actions that we and committed remain enhanced to We focus. have we XXXX a with on more reshape meaningful initiatives reiterate made update into before progress on milestones our customer But a momentum unlock and in journey, spend with efficiencies continuing share transformational to our key foundational detailed and taking our later. highly want organization, return initiatives plans XXXX. I'll completing

that that track. that confident originally for capitalize a these are dental on to The during us will organization We to initiatives these enable financial our out remain steps Investor contributions the offer. broad-based XXXX on Day to laid we advantages continue has

we share savings in more full transformation track like Phase are Slide to I'd in August. Action with now We recent Starting announced X. before financial the of results by largely highlights activities our detail, business Now deliver run rate to some complete on on back steps XXXX. II end discuss operational updates. and

individual the of August in expectation which And sales and has in virtual were staffed and for also we've ERP QX We with the in live in also touch phases. as points we that phase The a shared, laid U.S. the to X. calling customer future completed up date. the our unique on team important deployment This went some needed is announced of X,XXX already stood would made investing now XXXX. November customers over be team that in the the team deployment largest fully U.S., we foundation

to we we X LYNX. versatile, a QX, XXXX, these progress Moving received we reflects applications. range and of cost-effectiveness, In reliable were our choice for processes, already LYNX successfully innovation. of in wide of have combines thoughtful of launched of our U.S. development have part LYNX clinical alike. to a pleased out to launch market, MIS product complete This offering implant offering. X we patients and to excellent including It a is the X regulatory the value design Implants value with Primescan and execution clinicians X In innovations clearances. XXX(k) the made new of and the

drive approximately we experience, This ecosystem. launched core, XX% integration all I sequentially. and September, practice and DS core we customers digital adoption to better representing their of within patient enables unique link In over provides Primescan which flexibility XX,XXX With growth in practice more and users growth. with its represents our surpassing integration a supports QX, continue our DS further efficiency

Core, key X Core. other with powered to nice increase seen we've adds which we the Primescan subscriptions related saw by DS to is DS in functionality launch, As a

education our we DS in events Clinical highlights. we customers. Wrapping including how with hosted globe, participants. of XXXX, training the thousands locations and an to In World education over up bring important remains component our X,XXX across hosted different X of value

financial for that, And I'll with the update. Herman turn Herman? over it to

Herman Cueto

Thanks, and year joining Simon. and financial fourth you quarter XXXX cover well full for our morning, Good as Today, as us. XXXX I results all thank outlook. the will

intangibles recorded net noncash implant non-GAAP We approximately impairment results, on other Technology recorded fourth solutions Before Byte of charges of our operating million the and of to and charges sustained of fourth full discussion and financial Connected demand $XXX Implants future the Solutions and segments. in mention me business. result largely of model aligner turn quarter within orthodontic in in we let our the tax included goodwill do impairments the charges in quarter. the These and a from to plan trademark of as was not use we the macroeconomic write-off weakened pressures the were competitive Also equipment. for it

QX. which to drove Europe. higher full $XX The primarily on business X. rate. impacted latest better the revenue from cover CTS incremental Since Byte by an associated impacted adjusted with million of in contributed year refunds November, $X.XX by 'XX approximately EPS customer remaining million sales tax in driven bridge shown was than recognized guidance adjusted incremental approximately remaining Byte estimated business me let expected, Now performed also Similarly, outperformance. negatively stronger as Slide The $X.XX, by EPS $XX a an

X. Slide to Moving

representing reported of XX.X%. quarter XX.X% quarter our Two sales impacted fourth fourth discrete $XXX revenue was organic million, decline Our of results. a sales decline items and

First, resulted total, refunds In contemplated sales November Byte suspension our a charge the call. in had voluntary aligners $XX of marketing customer Byte year-over-year of million on QX. what a in above and impact we for

November our an orders in was of between X distributor $XX ahead ERP Second placed timing of approximately resulted which quarters. deployment, million the shift EDS

had As sales. effect primarily Global and in U.S. growth SureSmile QX drivers Imaging, CAD/CAM, Other year and partially This disclosed, QX Wellspect. on impacted in demand in retail soft was negatively decline Europe, we this were in and IPS. no previously impacted a full positively but offset by the

due basis Byte. margin which driven basis gross in XXX lower a XXX declined margins by EBITDA contracted points largely to quarter, the mainly points,

the due in lower EPS continued was XX.X% a down Our Adjusted year In quarter OpEx million reducing the focus higher due partially offsets as operating prior margins generated to well to cash, $XX quarter, XX.X% the issued $X.XX, year-over-year the customers. on fourth of and Byte of capital timing working adjustments refunds to rate. down decline. from we as tax

segment Slide from Let's with segment, on quarter X. which orders. endo, impact Dental now driven resto performance U.S. the Essential and sales Solutions of products, X.X%, turn Starting declined includes mentioned to the organic timing distributor fourth the by previously preventive

impact, stable volumes EDS in of higher in the quarter benefited this World. Excluding and traffic patient from Rest

and XX%-plus segment, Shifting low of by When driven impact delivered SureSmile single we $XX & single volumes and U.S. Byte. to growth growth from supported look digits versus in sales grew lower Implants organic primarily sequentially quarter due digits of single-digit the of another Solutions to XX.X% globally, specifically, increased quarter year-over-year the the we aligner another Europe, the in lower Implant rest implant in million world. Orthodontic declined quarter in mid-single-digit but sales Organic prior high prosthetics by sales lab SureSmile high growth. at and declined year

Connected Wrapping organic Technology Solutions X.X% our year saw up our sales decline prior dental versus segment performance, the quarter. CTS,

the retail growth spot equipment double low Our and delivering in for improvement. quarter. growth while posting bright quarter, the second instruments driven to environment for pleased to business global was demand CAD/CAM We the return a business were declined in by Germany a digits, see consecutive single-digit CAD/CAM, U.S., softer the

quarter SL our ahead the focus and expectations. quarters, sales This said, represented led and Europe of Imaging as improved Orthophos to Simon and commercial benefited highest APAC execution from relaunch on of internal X in performance in the

across Moving as to to contribute. product growth new launches driven all by Organic X.X%, positively X Wellspect. grew continue regions sales

Wellspect discuss and offset Byte, was XX.X%, fourth year-over-year partially impact. by to growth Imaging, inventory declined sequentially in Now in let's approximately the inventory move U.S. the Slide in quarter to X EDS Motor. to million. of $XX million financial region. of performance low quarter growth by distributor Endo, driven majority by CAD/CAM represents the was low. our which in This previously driven X-Smart sales single-digit and mentioned U.S. timing remain decreased a continued Relative levels $XX This distributor by Pro+ historical distributor adoption levels inventory. CTS averages, by decrease

volumes with sales to sales and digits SureSmile SureSmile growth. last in sales XX%, Germany, growth had X.X% difficult driven and double-digit EDS as increased result a in highest commercial program. in execution performance for posting market imaging declined organic of volume-based performance largest in quarters CTS, equipment X Organic grew CTS digits as Turning our grew growth with World Endo quarter, instruments and single and sales region, Implants declines mid-single Europe. driving improved. the the and is the CTS China of comp Spain. sales which increased high organic quarter. Wellspect the in X%, China. strong lab. Italy rebounded notable quarter of procurement for and over despite increased the Rest the by from in the with a

X X.X% and the year full let's were our turn $X.XX sales sales decline full to of to Now cover a year representing organic Sales briefly reported of performance. decline 'XX for billion X.X%. Slide

The CTS rates first impacted the in negatively and the market impact sales currency higher a other China. and by interest to that markets that offset stronger attributed of this, well purchasing SL major took IDS dollar relaunch. Foreign high dampened as single year. decline including developed mostly partially declined and as most negatively XX translation Orthophos course points the majority the the in Byte. basis in to negatively was or actions competitive capital digits currencies. we second was $XX half over Germany growth improvement by in U.S., by versus performance pressures driven negative equipment the the impacted CTS the in of half million by lab Despite was a drove by of strong impacted double-digit Implants, year due

in collections growing margins for spots in basis XX.X%, as for to mid-single-digit growth company bright million, points $XXX driven and margin was foundational double was lower SureSmile equivalents suspension. volumes XX%, CTS mid-single-digit by Performance increase with timing changes other as The flow Xx. the year. million debt-to-EBITDA by XX.X% ratio XX%. approximately for Wellspect. cash and of driven the and growth This from by measures. lower over savings China attributed of product partially was increase Byte. cash cash EBITDA growth customer cash attributed year in the the contracted to included year digit working XX representing with inventory Operating double-digit a year-over-year, and was was of Free initiatives. gross and mix offset up of net The capital $X.XX Byte to a in partially OpEx well EPS $XXX Adjusted aligners finished year-over-year flow conversion and

share our shareholders capital in million $XXX dividends. quarterly through returned repurchases to $XXX our we XXXX, and In million of

of $X.X future for board company authorization share As repurchases. December had XX, XXXX, remaining billion of the available

XXXX XX. let cover our Slide me outlook Next, on

including negative net Byte we XXXX, down expect sales sales to For range X% X% organic which of sales $X.X to be a a billion represents X% $X.X impact, billion. to

We we expect particularly for cautious on based a and the reported remain on headwind equipment. FX be current to sales macro environment, to rates,

EDS, drive Pro+. as to global largely and growth launches expect remained Wellspect product offsetting in line CTS. in in We anticipated to patient continue recent expect we XXXX, partially declines the in by traffic, SureSmile X-Smart with augmented In such stable which XXXX, growth

our will like performance CTS and commercial also for XXXX execution in and Implants. actions planned those the believe and We improve areas taken XXXX in

greater as margin than to be and of improving margin we on the with year through EBITDA in savings. progress XXXX XX% the expect timing based We investments restructuring

income increase full which year impact occurred performance an geographic trends, rate in few of project the and the unfavorable certain years. tax We to due have declining over the mix last

in range and of has high a which tough to to share expect the Byte primarily in be decline in CTS QX, that CAD/CAM, anticipate impacting increases improvements. year to to in earnings current said, year-over-year volume In over expansion of adjusted as margin outsized lower largely in the inventory headwinds due attributed single impact This course sales drive distributor we the digits QX. levels an With the manufacturing comparison $X. absorption expected U.S. organic per to contributes expect the We we forecasted $X.XX operational to quarter.

of line to For slightly modeling XXXX as be adjusted purposes please of EPS, EBITDA expect fourth the and quarter in look of to ahead those results. to we margin

down items. this walk moving XX the parts. Slide bridge, and of through you wanted break listing EPS and We shows some driver for adjusted try to major the our

Let me base then EPS EPS expected we $X.XX we of onetime of back where XXXX an with From layer $X.XX. updated gives spoke adjusted lower we that in about $X.XX. of finish This add items with from $X.XX sales. earlier. there, organic start We Byte negative impact

EPS from tax XXXX. increase reduction roughly to Net-net, We expect resources. headwind. for adjusted $X.XX a headwind an basis and X% yields EPS basis. translates is combined transformational XXX on of of in expected a be approximately the to Byte anticipated rate An $X.XX about in FX-neutral point growth this an $X.XX initiatives FX benefit

back call With will Simon. to turn that, I over the

Simon Campion

Thank you, Herman.

on and strategic as XXXX, areas in agenda successfully In move performance we our adjusted position let's for strategic our long-term our XX. and update, certain Slide approach advanced Now foundation to the to necessary. transformational our and starting company strengthen

of shown the XX. foundational Let's cover on initiatives briefly on an update Slide each

seek manufacturing XX% centers, target. to manufacturing X To our to and XX% opportunities network improve performance. reduction distribution X sites continues closed and footprint distribution team to towards have chain progressing supply Our date, we

part and plan first focus with and We organization. also we to working SKUs and implemented as XXXX. rollout us resto will initiative the our in completed to in improve revenue-generating XXXX. continue of of the X optimization are SKU portfolios ERP endo We XXXX, we migrating customers when the are efficiencies on the experience gain the this In across deployments advancing program with our and

Lastly, in Phase our business. transformation have you and the can our on X see of made progress reinvestments Phase X and the we

environment, underway Since we I largely variable within was in headwinds created continue importantly, organic we dynamics to Organic key that have EPS initiatives. XX. which was our the Now Byte on on and XXXX, to the all XXXX. pressure have in our our target plan. And positively X/X our then, the address contributing with unachievable That $X our on to that's macro of sales. coming noted, contributions EPS would in sales value In the declines is Slide EPS underperformance in driving EPS. the in component. adjusted long-range organic that like including targets shareholders. focus other said, as bridge of track, on marketing I've These on long-term cash from company control work time, laid At adjusted transformational is out margins, our put flow Implants we X/X free to foundational objective conversion and the defined growth on most competitive challenging to return initiatives, making indicated

applicable facilitate treatment importance needs. Now dentistry to through planned XX. broadest patients' flexible of and this XX-plus can DS education on We regularly move XXXX believe GPs platform specialists. new and of a from through and digital Moreover, hear reasons enterprise digitalization the workflow all of one let's both our improvements sustainable, of customers these about the to accelerating With enhancing let's connectivity efficiency. innovation pipeline address we Core Dentsply product plans. most our launches focused We industry, Slide of Sirona profitable think growth, take a workflow portfolio well to and education and positioned across deliver platforms clinical to innovation, the our will moment and the acceptance about of are why increasing is increase in the and

We've enhance our our proximity. own and spoken about improve demand, opportunities experience create to customer customer our the

and that. sales just to e-commerce in and do digital example, to team sales invest Implants, the Our effectiveness we efforts are drive were for customer virtual force service In increasing items, a establish customer and developed deep performance. localized These and plans connectivity our portfolio driving more dive of messaging. review all gained derived important simplifying insights action education from implant our at on designed our are

in we the create capabilities and on based from commercial enhancement clinical the teams skills feedback prioritizing to success. our improved customers, of across both business, our are sales and opportunities force Additionally, selling for

process to the reduction, further transformation a As in G&A partnering party a facilitate with accelerate to OpEx to further footprint. are we third initiative our of

not program as with believe procedures our finally, result our at in this not customers' Wellspect policies we market reduce the are to harmonization significantly While will the commentary of on of and And is of closer bring our improve we XXXX benchmarks. will with a initiated, and contemplated and just this of Moreover, partnering cost outlook, this current this XXXX experience structure evaluation G&A sustainably further us us. time. providing initiative

FY to wrap progress. I'll a be our proved driving investment. internal further and transformational a Now with shaping made enabling few strides 'XX initiatives and a XX our mix the Slide factors on XXXX, remarks. efficiencies hampering That on up said, summary meaningful in organization, have external of we year with challenging

to to act with customer overall cost continue structure. transform our and experience We urgency

Our clinical hinges education, formula sales best-in-class deliver and innovation customer experience. execution education. and for clinical innovation, on We growth

customer of with open us scalable for the it Dentsply a I'll XXXX will on for execution with coupled Sirona. that, sales improving structure potential true experience. and enable and up Our focus And formula, strategic to This priorities realize cost lean questions.

Operator

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

Elizabeth Anderson

manufacturing businesses. you there? business, then of the two, mesh issues sort be last correctly, you're question of of in the can opportunities the remember terms in a there. was alternatives. to details bit of and Maybe the about you for one, review sort little if launch all about new new one your of some of the a dental the product continued had Obviously, talk of strategic in of investment And what of product expect that areas alternatives Wellspect terms thanks I the on the working with the I that footprint strategic in some

you part give you address And as that And be helpful. since so could would on update that guys that of -- if transition? an to well, last as that us worked have

Simon Campion

here. Simon Elizabeth,

and Let me to question. separated. largely purposes, start with based Sweden in businesses and dental intents Really, Wellspect our the second all that part are of your are

there for of Wellspect. do, we say, So there's lot to explore is unplugging opportunity not an shall whole to alternative a an if

sleeved intermittent say stand-alone that catheter, year, need we with and innovation, helped is reasons, So And unmet pretty which it well. for largely significantly or this leadership within working Wellspect. on I growth a of stand-alone customer to the the well question addressed innovations disclosing say, launch on, time. has In unmet be gone would contribute we that portfolio not profile would as then would at very our a last other relation enhanced are with has comparative team need rather your significant the we of to that I a

Operator

comes Erin from with Our Morgan next Wright question Stanley.

Erin Wilson Wright

mentioned you the if third thinking industry you're that? address a the that consistent balance in pretty margins, achieved? guess, with heard could that what ramp of magnitude margins to assuming about over I of first be guess confidence front? what are time cost, guess, says On of you getting I you're on party What to sort margins. closer that I gives that in working for frame assumes it sort meaningful And year. a quarter, correctly, the then you you if I

Herman Cueto

Thank for Erin, it's Herman the Cueto. question. you

start just maybe the margin. with So

the get quarters. we progresses, each of point that throughout will that mind So what you're and up through see the be from year do in Keep as sequentially better ramp it the you'll see that the to of cycle going lowest next to year the X will impact have is Byte. QX

margins, on So QX. QX, that will pressure put especially the

as but have start already into outer initiatives have will get also foundational ramp quarters. up that We the begun, the to we

then Simon what believe be into would our and depending there could back-office and into be out. I XXXX And we None is move quickly in as 'XX on dialed transformation how that your has answers things it get There do upside figured plan. some on of would We 'XX. this XXXX, could finally, upside benefit say about. I spoke have hope head a question. longer-term but we some potentially that that

Simon Campion

if work. build little on that I -- a Erin, bit think statements could if just around I Herman's

when here, spoken and across the being systems processes know, in you a We've the before we company. about As of Dentsply our merger. Sirona them harmonization being said of and acquisitions, a came we series then many about series of

processes in over And systems them and quality systematically the regulatory X such as areas harmonizing we're across We've the been so we've and company. and our benefit a there lot more that but that us remains just efficient to of opportunity affords we or past that an office be seeing a work had R&D, to just to referred back the company. at years, so

Erin Wilson Wright

And Great. then trends. just on dental utilization Okay.

we and we you broader in for across now consumables trends the expected So where volume the [indiscernible]. how the think across do guess, of stand same continuation markets? And what XXXX. do the mean? I EDS about key mentioned does that And for instance,

Simon Campion

Erin. Thanks,

EDS, impact I obviously on So volumes significantly. would say EDS patient

there's it's from pretty globally, stable as And global. think large you and pretty -- I is seen. know, our we've survey what

respondents X,XXX this about it's So past quarter.

And an results room I from in it's the showed think with still Germany. that synchronous optimism. So it's Germany, stable EDS pretty negative for some posted has that's again we've while perspective.

investments, think staffing But appetite in I more there business, particularly there's shortages. big the the a for I world, around for little our CTS customers example. issue will that for say our

the customers to those so solutions shortages. that to our digital staffing And can some of leverage solutions efficiency around and afford offset our messages need we workflow

Operator

comes Vazquez Blair. question with William from next Brandon Our

Brandon Vazquez

entire together bucket off both the here. they're name, both I because was Byte. on you I'll The them They're call around -- correctly. just brand related, upfront so X ask if there that that wrote heard a question is I'll comment the on

the basically And after to like 'XX. perspective is about about maybe then a like bit rolled kind some that XX into going months? that commercial gets are. it strategy talk to the of little talk look restructuring just next XX tailwind the implications of what is this of the sounds P&L a becomes like follow-up It into Byte a from what does this SureSmile, implies what It So here? sounds over strategy

going So commercial then talk through impacts P&L the -- the strategy that how forward.

Simon Campion

it's again. Simon Brandon,

your aligner interplay would So X start product the patient Herman can generation, e-commerce, team and component, around I Byte experience, so part take way software, itself deep whatnot. second It's let has the on clinicians and with Byte, it's components. so that the forth. question. the and of then and essentially demand The about me And the capabilities think

we've customers resonated thing one around And done and So has and resonates for the guess Byte -- of customers we demand in with customers the potential our of ] create -- many have lot to our it with work well. October ability through many particular customers. is capabilities existing [ us funnel of since potential a or customers to as XX I help and rather

So capability our that platform. we redeploying are SureSmile to

also It's which at teams past capability. R&D on has call well, the and we trusted have say, immense as to our in a great a solution today's brackets SureSmile as short, noted wires originated software, And The orthodontics. we've it. Byte back end in and software for

a software the something has However, be of the front at the to desired of be proven end. unlock new leads to customers difficulty quite challenge to and it end that because front

the SureSmile user interface to deployed piece. now and experience of these focusing we've we In user the to the product, SureSmile. on are resources the help relation exclusively on Byte upgrading the with So

challenges from the market previously time cost the perspective. line mentioned clinical to product we think and bringing Byte I with regulatory back a

Herman it SureSmile on dentistry. from model aligner increased educated business into direct-to-consumer leveraging our also awareness but other business aligner And second an think our our our part. And parts we where also may business but so example, I'll drive over chairside capabilities we for of, of for to into bite into pass the potentially focus will

Herman Cueto

Cueto. question. for Thank the you Herman it's Brandon,

the bit implications Byte through XX little kind you I to of a walks where we talk would the which refer just about I'll to P&L. Slide So were.

finished one-timers then $X.XX really XXXX the So about we into you put we with should $X.XX, back the of base. how think We put that that. is

there benefits us look, bar I for would $X.XX. going XX-XX. if our simplicity, probably initiatives talks also a would there's in So I adjusted the resources some that call an And marketing. And maybe up, that combination, see split gives away, is you it, also do that you from of that I there's like things the of what just And foundational a base say captured about bucket. think Byte

target I you enough will context. That after. a close think that's go give to some

a spend I sales because that's minute me think Let on important.

that do of we bit continue. little will a So sales have

recognized the So was plan that treatment number months. over of there a was

will It's growth that hope believe under carry XXXX, the on I as over small to little substantial that but headwind a little bit a a $XX a number. answers of course So bit into and of question, it's your Dentsply in Byte 'XX, think very I Brandon. XXXX. million,

Operator

with Saxon Company. David Our next comes question Needham & from

David Saxon

Maybe it Herman. implants, and quarter. wanted It U.S. was looks team. I ask like on the down Simon specifically to the in

thoughts So growth timing just progress time? over market of can kind returning of you potentially to in the you're and talk that of and team seeing about growth then

Simon Campion

the for you thank question. David, Yes.

we this trying have fair disappointed I to to dive, in we address in think the to a on our prepared in deep the U.S., be it's approach and performance X And X core digital and this, part implant recently over X-phase has completely will immensely Core. disappointed the expectations it's the that my around business Implants have more say year, our just I our DS launching we're digitalizing us on first us DS connectivity, of way growth my a noted that completed and years. past remarks,

clinical that about it's a on over done by they several was that past we've that months implant customers education a in GP. referring We have that over world. reinvesting And feedback spoken of our A the the have level education. we are are past in macro is the level, and programs sought years. But received the X local previously suite while

be we're that go-forward So a on on to to doing basis. -- going we're focused be going

messaging. our simplifying And

but We around our have complex. broad it is messaging a portfolio,

is customers our given this Our board our messaging to them just embrace challenge a commercial the X and complex messaging of has in the proven came years. that past on ability for many fact to teams

are -- force in speak. of and we done in as training, And recalibrating we process an capabilities happening assessment also in them that's have We our completed the of added with particular. sales Implants

need expect we customers change reps sales year. this digital. approach be is performance robust. We in We've We we to our we with well Again, China, say. our the for education, do So done help way to we said, implants clinically need to more shall as we portfolio enhance and example. need in astute,

David Saxon

of And the the just ask you Okay. help targeting? percent are I can where to partner I at that kind sales Great. a of benefit. as as And follow-up, potential you idea a of was kind like so wanted just for of that's benchmark guess currently? to to then I'd this love you're what's hear an helpful. about we G&A G&A, That going with get

Herman Cueto

a But bit. Herman. been Maybe where of the that's And office a to company get benchmarks. opportunity. you more do certainly especially to won't an just SG&A the understand following David, relative We the are about in our little back area business, think for industry into to is. we I'll the to parts as where it's specific long time, look averages where for that over-indexed are me relative talk are this let I you've are. work company, simplify There we

time. might us a little different help believe It a to of do Now out for But of us. is It time from time and the us us teams. XXXX be things. kind unlock bit it on it we focused years a But are. in of value lot the little this over ramp will happen would true will then there. That what the see a really little up take a of bit take will opportunities to bit

you is entity. there's there's always do it imagine, efforts, duplicative just work? big Where make the do simple? policies, you there's you done? overlap. acquisitions processes How Where and Sometimes it legal whenever is As can being there's

said, really there's a would I on more us like an unlock do we to of So the it that. in simplify future. to that lot value there. opportunity a give David. believe come But And Thanks,

Operator

Our next question Baird. comes Johnson from with Jeff

Jeffrey Johnson

cost wanted I process. on to transformational just start the

million the model level doing how the of or is the basis of benefit end pretax at and $XX look into to those right, that's in in to about in us cost a So a I'm pretax, taking run you $XX Slide to when Herman, rate $XX if XXXX, Is of what savings? to, on that that $XX a kind much math million Is And can pretax much that think XXXX XXXX? as million primarily set benefit. up XXXX? that makes up through at be I million has of XX, million benefit, flow-through that savings the incremental $XX incremental just referred you've that remind that us you to the going I targeted $XXX How of XXXX? $X.XX to million

Simon Campion

was Jeff, be actually then finish much start your never how it drop-through occur between going [indiscernible]. to Herman split I'll were and can or in of We and how question. communicated to going 'XX savings those 'XX,

have this reached you a reinvested reinvested. that particular, simply not cannot know, invested value we We these the accounts. we of for the team year, those we rather we these virtual As in past customers accounts, time do in long to sales of, or a or reach example, location have in because -- maybe reach of

customers -- customers to excess with now And noted calls out and the I U.S. of unique over as around touch in this phone program have in made XX,XXX since we rolled XX,XXX in remarks, X,XXX been have prepared the we

demand created are sales opportunities reps -- are field-based And sales team have not they understood to otherwise that team we our themselves. field We for with also, the may they to partnering direct virtual those have existed.

are we drive was business we we of never So flowing have that really. But Herman? for breakdown expect investing we the where to that our share have all been of demand money -- again, we in -- -- into. we areas

Herman Cueto

to the finding the done in actually here I to touched it's out investments. high top into come of Simon, here on not days. job take shareholder say has the And would areas create only very in wouldn't is Simon team add I've will What through line the much line the that but drop also the Yes, future in, XX too future. more. for around all to wonderful that contemplated I've bottom in been high-impact growth, value, guide. I impact a think invest resources the I

Jeffrey Johnson

X me Okay. X-part at let I way it one or guess just or a follow-up ask other go follow-up.

that of that cost $X.XX don't that's spending think U.S. for all savings on going Just stuff SureSmile in Or number through in from so SureSmile, that just deck, markets in I is number making been one. get of in What of with my transformational I the challenged discretionary two, digits side? there is primarily weightings when flow I'd one, U.S. digits. there Just $X.XX? on that the is is I have understand double efforts listen are I to end down savings is the you've down, But tight. that, other is. that And U.S., the been slide in I I description on your think, SureSmile Rest the U.S.? Europe, the World double the But else know and sure, the there? geographic anything

Herman Cueto

Yes.

some call with of $X.XX more me I question. could do have a the Let start modeling savings. backs. think we'll we It's what follow-up Maybe is

could So it do what question maybe take then And is why off-line? handle we to it turn there? I don't Simon. from over We'll the SureSmile

Simon Campion

Herman. Thanks, Yes.

SureSmile several quarters the as been well, -- Europe. And U.S. of very meaningful is think noted and about before, balance our XX% rather we've we've for has becoming now the as rather I in Europe doing we you're to the Jeff, -- business majority of it's So And meaningful said us. in now. is

Your we products some When business, It's impacting of within that aligners. really us that question business, are our make on than more on is about your There too, performance. the think we in category, SureSmile say. business. there are that XX% that -- that the -- about our statement area on shall up U.S. SureSmile XX% XX%, components just that in legacy

losses noted And some you see that continue true growing unique continue the had is quarters GP our if our of had in to those, solid U.S. across digits business progress to look U.S. within alone. posted business, at actually -- And small in the unique in in rather to our category aligners And SureSmile. the high or is small prepared mid-single aligners, business, in growth on growth I we exclude our we Obviously, we've aligner I XXXX. single shared XXXX orthodontic GPs. or U.S. we make as the footprint specialist in we're we've remarks, our X double-digit we've rather that with But experiences If before. footprint in the with digits

Operator

UBS. with Caliendo Kevin from comes question next Our

Kevin Caliendo

disruption us for going know First, any? you? Second any it, German your the in but this there your shape your primary you question or opportunity? to like I is affect situation form, I or of business any how you being taken through take Is is at seen it you wholesalers an that that didn't forward? any visibility strategy mention given private. point? on way, it Have could Is was if can there Is one us outlook update tax provide timing guess, or had I there transaction any

Simon Campion

to I X -- the this say on parts situation, -- time. German update So no would question, obviously, your on no at meaningful tax the

with in to the providing We and their requests. authorities work to information responding continue them Germany,

get likely a than to and we spot. but And I don't it's that a We better exist. this through gone we to the -- think -- think have, continue it's to of continue answer again occasions. while. that this, rather And as that, Germans say. reinforced said, In recently that to them are and work can believe, out and them to teams have partner multiple our we issues them to believe resolution I difficult the with a relation we we on had we've wish they good we with I all try

the In relation distributors to in on question your the U.S.

We good them. continue with really a have to relationship working

partner in the with continue We to them field.

partner them We our a for to in They product to very speak levels. America. continue order to at and important continue us North be management

are efficient. efficient that digital our practices. provide, grow we feedback anything reinforced to treatment their be I the our by more We acceptance of to for their to looking are many enable And We're that reason is that and Customers of own solutions a meaningful to a have to change. aware and component the in If customers seen to particular, survey. you more continually of opportunity think to solutions, patient be believe any rates business. and going have grow and not customers is increased to

well. distribution to customers have successful we to the successful in question, be significantly of context be technology the enables us enables and our to be partners So successful, enables as your

Operator

Our Michael with next Partners. question from comes Leerink Cherny

Michael Cherny

obviously, Thanks bigger so a detail far. just of Maybe picture question. a asking ton for

You down. have the Byte wind

being You Wellspect place. have in values put the

it work benchmarking of doing, time. that very G&A the all you're have this logical at seems in point You

about forward may how take Given pieces the sense on other coming forward out further right you side and not relative going market-oriented the side, of especially that long work. the get benchmark business, have, obviously within kind have broader look basis. assets pieces a many term, noted even of portfolio broader to that think some and it you the want the the in nature the you Does the you do going moving to make on, How you've have it the a from while through sure as a that leaner Simon? of do you top weaknesses that line fit assets better be broader Dentsply going focusing far to make will that

a question, I weird it. appreciate it's Sorry, but

Simon Campion

that's alright, Michael. No, question. It's good a

we you Number our portfolio folks, ways different are then Wellspect. there the discussing can that's and streamline like I've of X think, many there it, work rationalization we SKU are one, as regularly my call are the streamline I'll underway. including, assess I manner So to ways parts. it first we And in times, it, for as such with in opportunities all answer noted which

hindered you we noted that an on challenges. when some challenges some end-to-end here, ad that's are internal we've of macro nauseam also dental my been unique have a remarks execution prepared by you in and moment really some If position company a reflect as

our They and essential about enable specialist the And moving think do in further and markets. then to think parts point certain we But for digitalization we'll through in position workflow for to But are to Core, a digital where there starting our being the implants, underpenetrated do dentistry The in out we DS building forward great practice broad-based hub that them. and our example, But workflows clinical get our of world, dentistry, procedures it's community, are use even are into of back century, developed everything the step we scanners efficiency in of do after digital said, you portfolio of if moving a into the workflow our -- absolutely evaluate think workflows this major the believe future continue and more the the our dental the across believe aligners, of across each business. that we're in denser I in digital. decade. your the all to are endodontics, customers so GP the be we these importantly, practices. the

practices in the digitalized shared have before, intra-oral picture And from community with world. Germany everyone dental is Only XX% the where a you scanner. the of Germany of most I all data has an Germany, in

that of sounds moving opportunity of ton Sirona forward So digital only as customers. the dentistry that value the and a we ecosystem value like the can convey of Dentsply provide to

Operator

Block Our next question comes from Jon with Stifel.

Jonathan Block

in and X, negative guidance be like hit $XX November terms not from out looks I the the but drop something must million the But a here, Slide Byte on and it get closer laid XXX%, of $XX $X.XX like $X.XX if wrong just bottom $X.XX. million flow the hit, line, to Herman, doing was you a I it headwind. I a just to lot through the even

then I'll you And just doing ask Can there? me just I'll follow-up. out wrong maybe just what's there. off? what help So Or start a I'm

Herman Cueto

rate. tax the it's John, Yes,

say anticipating to close in XX%, was I up you ended original November, the it guide and we If want somewhere XX%. XX% being the to about it back XX%, of -- or go in to neighborhood were

it how as make answers you your and need that jurisdictional So consider question. just the rate that all this I work. to That's math the income -- to substantially. arithmetic I the hope tax the describe impacted worked the

Jonathan Block

out, the right $XXX about in ZIP just enough adjusted if in revenue, me helpful, [ Byte on to well. the once $X.XX]. if off get Byte I've for EPS you of It team, really slides I'll is And be the accretive a I'll XXXX bp Page you I'm can of million the to me. know as called XX growth. the it refunds, in company but headwind let you Certainly Byte stay Code factor The total correctly, I'm on reading shows figures XX it's got going bridge and does. maybe good XXX And to XXXX to just it the

be it And this land to so $XX asset XXXX, those free about accretive are down down be feel to million? maybe, year-over-year on maybe costs going to EPS in Byte all But million $XX assumptions. So in just $XX involved is this many million business. revenues comment year-over-year, if Simon, growth variable to just there's

assumptions be or would great. So around any those clarity color all

Herman Cueto

in Jon, Jon, as way we'll a is call, example. was happy But lot definitely the offline it there and not in into detail. a in from walk more to of in lot was the a investment level, it think of business, about highest P&L this middle the -- this an marketing, particularly to modeling a this think bit question at you get little through I I'm of the maybe

a taking this different So really shape. business with

you're I we'll could, And are the We take a pickup model. more bit opportunity talking around you math can to build about out. bit ZIP of little And an revenue, you do in later. detail numbers your think And that's happy have I'm some see the that those why the in a EPS. walk so and costs to code. that they I you -- little like in through more we said,

Operator

next with Piper Sandler. question from Our Bednar comes Jason

Jason Bednar

more commentary. soft the me, several in of did of struck so impact some that kind a I numbers got last a the load-in really can some your some was CAD/CAM bit X anticipated macro. maybe at challenged I actually commentary scanner launch on Seems in a time wanted quarter. numbers. given Look, when of the Primescan I softness first understand surprising like you've just here, to just some retail retail but focus the the it in years, especially Actually, that even of that, inventory

CAD/CAM be PSX better do do Patterson? isn't can you going what think And with how relations in all then in to think at So traced U.S.? of much pressure on, the strain is Why you the resonating Simon?

Simon Campion

full-line And profitable be said, with elective businesses, any Reimbursement a and preventive of I practice have Patterson growth. think issue been on X, in America -- think you of part. call, The us have resto that consecutive around high their some as we in or on any I -- being continues me and their most mainly are In to about let matter, and with important too. with I placements, else don't where fund quite of XX% second -- in pressurized is is Q&A North noted don't is model for rather as really as and for demonstrating relation we seen fund think X Primescan growth call I endo it the as to compressed for environment honest. the when level the as patients. have digital in in the think again, they for to a others Jason. noted be -- an years I to anyone the start scanner -- dental procedures. a which, is supplier. said extraordinarily dental macro not Patients footprint I

footfall and investing That it's Patterson. think in about of of you about were reticent the pieces continue customers, when different so with disappointed dental being practices, think with the think performance we CAD/CAM. don't the clinic in environment And i.e., we imaging I may reflective certainly about said, in U.S. be think anything you But saw I capital. macro in it's -- And to solid

of it's think macro. reflective I

Jason Bednar

a But prove right. then be up to on actually. challenges. question That's broader I of your actually if And All Okay. bit had a focusing You I experiencing what higher-level if commercial a could wonder Germany you're back business? helpful. of and maybe microcosm little Germany

and with talk globe. big and It's to the low in some that how reintroduce about portfolio pivot end offering tried really push helps struggled your then tough Germany across You growth And market. and lower-priced high to positioning think contributor competition. tide. macro a price that the the the informs a you and turn a you experience in really how Maybe it about in that returning but

Simon Campion

I X of as Again, it thanks think tale Listen, is for cities the question, Jason. were. a Germany

one Orthophos was reintroduction midpoint scanner. of in I the SL think a

within I the renewed The Imaging focus again remarks other to discipline a piece in Germany. referred the in that execution was team on prepared

And and there to selling around workflow creating funneling things professional with I demand think for of around Europe through customers months it's clinical in over as business. conversations skills different past them commercial our factors doing example, reigniting in business teams also conversations we is whether endo the parts are in equipping whether then that. and equipment our their training the our have to on appropriate so capital been distribution aligners, direct for our have partners X and of their own the What it's such U.S. it and number channel, or and

U.S. the process speak. we think product, the from the in also doing and is about can that Germany lesson I it's not the So that of the capabilities about team sales it's we're of just here enhance, the as we in that's why

Operator

closing to to the Simon call I you. now Campion remarks. turn for Thank back over like would

Simon Campion

Thank to customers In for closing, transformation. entire you, questions. and and thoughtful our team your thank want you Sirona our to Dentsply for the all thank their I dedication

stakeholders. there market the and to Sirona still remain work is execution, Through driving Thank positioning disciplined focused our mindset we and bringing long-term selling are ahead, decision-making shareholders and a and value success. progress, and for making accountability all While Dentsply innovation performance-orientated in enhanced on culture you. we for

Operator

participation. concludes you for Thank the conference. you. Thank This your

You now disconnect. may

DENTSPLY SIRONA (XRAY) 27 Feb 252024 Q4 Earnings call transcript