Envista (NVST) 2 Aug 232023 Q2 Earnings call transcript

Hello. My name is Chelsea, and I will be your conference call facilitator this afternoon. At this time, I would like to welcome everyone to Envista Holdings Corporation’s Second Quarter 2023 Earnings Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. Instructions] [Operator

call. turn Investor to Mr. Relations may your now Vice Stephen Keller, call begin of President of conference the will Mr. over Keller, you I Envista Holdings.

call. Good With our afternoon and Officer; Financial our Executive Howard Chief for Officer. and joining President us are Amir thanks today Aghdaei, Yu, Chief and the

non-GAAP the I our portion Events presentation information website heading Investors and any on call and quarterly next later will other section measures the supplementing of required this archived related point SEC until financial the on the under and that G our earnings call. our the website, all out Presentations. to www.envistaco.com.com. The during today’s want be our today of release, It audio Investors slide will Regulation by call of section archived the provided available reconciliations call to remain are

During describe our the that describe performance. factors will year-over-year The of factors significant more additional some the presentation, performance. we supplemental that materials impacted year-over-year impacted

Unless company-specific the financial increases are otherwise decreases and XXXX in metrics remarks to or references year-over-year. to these quarter of to financial second relate metrics references in noted, period-to-period

devices call, in on describe may the products have available certain pending During submitted applications certain and the and are we approvals regulatory that only markets.

forward-looking SEC are we risks forth in statements anticipate forward-looking set believe, or We a of filings. the in the developments that future. uncertainties, regarding to make within These and will federal also those statements number meaning may statements or our securities laws, including events including subject the of occur

of and do statements, obligation update forward-looking today. statements forward-looking they not assume that required are statements forward-looking made from make we results Actual materially that might any as speak law. as only date differ by These any except to the any we

turn call the to Amir. I’d that, to like With over

you Welcome Envista’s time quarter us appreciate taking Thank XXXX earnings We you, Stephen. today. second the join call. to to

on focus quarter professionals digitize, accelerated partnering care. the personalize to to as oral anticipated, and we continue performance second in democratize with our As dental

an This quarter, margin margin we QX delivered of XX.X%. core revenue increased achieved our XXXX. points EBITDA growth Sequentially, XX basis versus X.X% adjusted EBITDA and of adjusted

We our positioned guidance accelerate single-digit EBITDA the year XXXX in of continue meet growth are or to and of margin performance our we full and greater. expect low second XX% to of to adjusted half

Howard priorities. detail, Before take more I I an over progress this perspective our environment turn offer then to our further in operating it provide discuss quarter to want second update to results the on our strategic opportunity current and towards on to

dental remains Globally, the dynamic. market

remains heavily risks uncertainties, demand macro of an to uneven creating environment. geopolitical resilient, including continue mind operating weigh both patient and While in patients the clinicians

in dental second came saw This not arch and weakness we widespread including mostly the of adult cancelling higher procedures. patients postponing cases in form procedures, quarter, treatments versus notable, weakness restorations. In but some full and the orthodontic the

Offsetting in dental this a further make weakness, care selective to in the demand for restorative continued commitment we saw clinician strength have practices. investments from their seen and

in we a digitize the growth DEXIS second a strong our to are Clinicians business practices, working in as IOS result, their quarter. and saw

As quarter on focus demand as we of second look remain we to execution. year, half and strengthen we performance to or the second to our expect resilient dental

it our our capabilities our execution continue our underpins margins to improve and continuously operational day we growth, portfolio. to EBS, rigor order serve better customers deliver and System, accelerate core every our Envista Long-term, work expand in use transform to Business shareholders. to and our our we

operations improving orthodontic include streamlining and Annual the successful action in a our and customer Kaizen business. examples product our our recent development of launch EBS in internal new President’s of an on Orascoptic business Two in and focus satisfaction

dentists all dental segment. and our leading dental our provider surgeons, For The orthodontists, operates Technologies of hygienists. with is Orascoptic including portfolio, those familiar for full business & of you loupes Specialty a oral within less Products professionals,

towards the a traditionally to use dental need a tool and predominantly leadership female hygienist that a market, Orascoptic the of underserved. targeted innovation the market the team growth, Recognizing drive to been customer has the Elevate generation design loupes, EBS RDH next

is designed are prioritizing while and The fashion-centric a option. to a RDH titanium It’s affordable. Elevate discomfort, custom with frame designs style eliminate quality a that still lightweight high

our our plans, great satisfaction. rapid debut, growth adoption its we demonstration and igniting is EBS business. improving a of Since single-digit accelerate growth recent how have high This product seen development contributing this in utilizing customer to can

advancing continuous President’s Ormco our at EBS to throughout In leadership driving aimed journey organization. business. at our while orthodontic the second Kaizen, improvement the team ran Turning quarter, the

on During team a orthodontics the was Kaizens employees. individual Kaizen XX over concentrated week a Each standardized, focused different was improved. that the and ran simplified long process involving XXX [ph],

and of successfully journey customer’s annual we including identified Demand consistently team and improving concrete improvements savings, in enhancing over our margins. experience. Our produce is in impact step million another consistency Spark while implemented that cost our our full business, $X the -- orthodontic positively

Focus QX, was performance driven on Once sustained perform in again, to drive while able -- significant on also our sequentially. our in by uniquely continues Spark orthodontic digits the positioned progress to well, growing Spark double business year-over-year focusing Aligners. growth, our Clear

Spark case. increasing revenue the continue doctors positioned and to doctors, per well We contribute is Envista’s EBS adding volumes Spark leverage formula to existing consistently case to to long-term and growth new are at growth. our growing drive we

continues system sanctions of of Russia, with bracket U.S., more our to was Ultima. orthodontist faster, XX% In impacted In our Europe, progress control continue for provides U.S. to bracket of more on finishing. make wire now more Ultima accelerate. and and penetration Damon precise sales consists Damon we products Damon the than wire While solution traditional This innovative business our by worldwide. negatively

in impacted growth by America. solutions Our tooth in for replacements of low weakness geographies solid with and North single in digits implant-based declined across most declines Russia the pockets quarter

for accelerated as as In we in an pricing, of value-based meaningful offsetting mid-single-digit, well driven demand China, implants, grew volumes increased gain through by impact the VBP, share.

the Biocare in this encouraged Nobel competitors pricing to clinicians and has narrowed our solutions. difference local trade implant has VBP many leading to market up the and other between

quarter the XXXX, temporary continued price basis expansion impact in Russia, margin first and reductions to an the VBP to in sequentially our our growth of expected, reduction a XX improved sales This of As despite China the high XX.X%. occurred investments margin initiatives. adjusted over increasing EBITDA long-term points

less structural leverage a manage optimization, focus controls, systematic To to margins businesses geographies. EBS deemphasizing cost of reductions through and non-strategic profitable on and price cost and

in second the margin of to full remain in track will guidance, investments XXXX expect growth. to year We expand on meaningful we and long-term making while deliver half

it IOS business is focused differentiated year, remains included one DEXIS improvements for our margin well and We underpenetrated capitalize stronger contributing growth in The growth-oriented both building and and in and in our than this growth within business. a DEXIS positioned Having remain & more Consumables area. core is IOS now to growth to IOS and market Equipment on our portfolio. owned is

In July, we the Osteogenics of Biomaterials reached the one-year acquisition. anniversary

Moving be & reported within Products Technologies forward, Osteogenics will as the segment. core growth Specialty

business growth or contribute core This be businesses accretive beyond. greater our XXXX well in to XX are points expected will and sales in of to XXXX. for growth Envista to basis Combined, perform and continues both acquired

see the additional While today, we moves made strategic we excited that about we portfolio. improve opportunities our are to further have

and a pursuing to opportunities. strategic partnerships to driven robust and deployment. EBS of cultivating investments disciplined utilize inorganic continuously a We to approach pipeline capital M&A our and new We’re manage committed approach

call quarter Howard over on more go turn financials now provide I will our to performance. and through the details to our segment second

foreign quarter XXXX In X.X%. of Amir. of sales exchange impacted currency delivered of X.X% $XXX.X the X.X% over Thanks, while we Core by represents on an quarter the second grew basis. quarter, contributed reported increase for second sales the Acquisitions negatively million. X.X%. sales growth, rates This of a

well a Equipment growth Technologies & return to segment, in Products segment. as Our reflects Consumables as our growth Specialty growth continuing & our in

mid-single single with VBP From a North down markets Europe quarter in the markets, perspective, growth grew digits a in Russia. America the Emerging most the weighed low declines. in strong declined digits, rebound but volume price single with China being grew strong related offsetting while by decline in digits. geographic grew high

net VBP of impact. the to For XXXX, pricing expect modest we China show growth

quarter to and mix, VBP was long-term growth. investment continued our unfavorable declines is from XX Our The points gross decline XX.X%, in down adjusted gross an prior year. driven price in margins product attributable primarily second margin which basis was

EBITDA a versus adjusted represents decline of QX from QX improvement margin sequential XX-basis-point was XX-basis-point XX.X%, XXXX. which a of Our XXXX and

an diluted EPS prior $X.XX the quarter compared adjusted to year. The interest $X.XX, interest by EPS rates. from in for Our the expense the increase period in comparable was was driven in primarily of in the quarter higher reduction the

Technologies to the X.X%. in grew business our expand single digits revenue quarter, segment Specialty high our combined Products second Core orthodontic with Spark continuing & grew rapidly. In

wires digits, and bracket negatively by impacted the sanctions. single declined Our high traditional Russian business

Russia these the in impact resume this expected third anticipate in again we able quarter. the of and discussed, have to to shipment being we As quarter we products

the replacements saw pricing. We across of of North tooth offsetting impact digits business VBP America. single implant-based China strong the Our pockets in declined growth digits most weakness mid-single quarter. grew by geographies, with offset in volumes low solid

managing driven XX.X% both continue in the our VBP as year-over-year are of quarter. price down was this we long-term and profit operating impact and is segment Adjusted second the in growth declines. sequentially to This in invest

by sales we as return our compared Turning distribution X.X% Consumables our in and the driving ensure clinic. with EBS our E&C focused second to QX to to as The key strong our all well partnership in strong Equipment helps growth of core which the sellout driven XXXX. are is segment, & performance increased the drive way customers, to quarter continued execution, segment

where strong accelerate Our important deemphasize driven solutions our improving term. advantage. us over of Equipment traditional growth note in growth This and is can now business. business to order digits to by a the performance both efforts single markets part non-strategic in which will low imaging long competitive concentrate allow to grew that in we sustainable geographies build IOS, and our of continue growth and It margins we by core to is the

growth driven business. side, and Infection strong modest On growth by Endodontics the Restoratives Consumables delivered in businesses, and Prevention mid-single-digit our performance we in our

the continue healthy inventories and Consumable perform throughout to continues of Globally, business market. we distributor we believe the our sellout outpace XXXX. solutions well to that this Channel expect to remain

of the the the operating This a segment EBS. prior of profit year. performance demonstration points XXX the Equipment Consumables margin Equipment quarter, second XX.X%. versus truly improvement segment in is Consumables of adjusted power basis represents In & in & Margin was

focused and margins. on We relentlessly structure deliver and driving managing optimizing our protect productivity, price are to improving operating

$XX with cash. we quarter In the million second flow of ended and cash in generated free over million $XXX the quarter,

and We continue of net to flow fee cash -- management to make income. progress excess committed remain in our annual cash on on free midterm of flow cash delivering our goal our

us when available inorganic additional at assets We pursue have to valuations. flexibility opportunities a strong become growth balance right sheet the attractive that provides the

to Amir comments. discuss outlook to Now for over balance turn our I will and year the closing the provide the call of

Howard. Thanks,

Looking remain year in forward, the as ability our strategy, outlook XXXX. to we confident our full deliver long-term our for as well

to EBITDA We grow digits sales low of XX% expect single year. or margin the achieve to full adjusted greater and for core

confident continued quarterly are that our is in important to volatility. we for we some While XXXX, note anticipate outlook do it

half of relatively The much a second followed was by volatile, quarter strong third fourth quarter. last a year weaker with

and year’s to expect quarter results the performance, accelerate both our fourth for the be last to we Given margins. XXXX quarter for growth and throughout remainder strongest of

the like week. years Before Howard to After dental new friend, than Danaher pursue with change the a XX opportunity would partner, I announced in decided that to we conclude my last industry. leadership acknowledge we Envista, has outside call, the Envista more

leaves Envista, many Howard September. CFO will we the adviser partnership Howard? He our helped a for and important impact investor your business for long-term team to As growth. to leadership, and been of us had in and him whole an the miss has on has Envista. position tremendous he late and original you Thank after contributions me your

entire accelerate the am I you its public positioned further continue Envista portfolio. margins to that dental the as growth, care. to well I and proud continue accomplished we I’m to on will is to confident of digitizing, of the democratizing company Thank you, with vision transform what Amir. opportunity expand deliver work and Envista personalizing truly a team. new and appreciated Envista and

active priorities reiterate same. capital to through that improve operating the our disciplined expand growth, and and further remain intend I portfolio accelerate transform our margins deployment. want and to We our

while culture Our and targets. continuous EBS our volatility, manage help long-term towards focus short-term through improvement us progressing will

leader EBS tools each We and is and operations, best our knowledgeable Envista across practices. within in retrained are exceptionally that institutionalizing culture our ensuring our and

continuous of one-week leader execute improvement forward. further XX performance, approach. held basics to our training have in each enabling move to designed continue hasn’t to our leaders only we as also we our business to Year-to-date, EBS re-immerse our This system. but been and and back initiative training We our to engaging enhance impactful business intend

based be an to positioned implant tooth well and -- both in orthodontics are replacement. tooth implant-based leader a We

the them Our comprehensive personalized including and of predictable and each solutions productivity our to professionals, imaging diagnostic clinical deliver plan treatment dental will improve patient. offerings, and for while empowering

lives purpose care. Our to improve to professionals personalizing by is dental partner digitizing, patient’s and with democratizing dental

focused for our shareholders. We’re employees patients, delivering on long-term our our customers, value and

comments. Thanks, Amir. our That concludes formal

ready questions. for are now We

[Operator ISI. with come Evercore Elizabeth Instructions] from Anderson And our first will question

Your line is open.

the Thanks guys. Hi, see question. your Congratulations new you much so sorry on for Howard, opportunity. go. to

in of I of I just go we demand current call. we’ve the question ups the the through of parse speaking, last by earnings as about a and would helpful last third North you a with quarter Europe of to maybe that like think like How America, sort we be downs and sort first of your China, second half hear into think of environment? Thank kind there? do to and talked apart year over sort quarter. started the maybe we as some as color broadly more the you. But know be the about

practices, demand patient we’re doctors, Overall, resilient. macroeconomic risks. we from long-term the outlook remain group bullish Elizabeth. for dental and What they remains but the DSOs, you, Thank demand, Yeah. of mindful hear

from is What caution in such implant in We continued as and and seen resulting are restorative have inventory, format canceling in see full dental seeing managing it. versus and of some we These before, bracket treatment of support type lot we on care. weakness a are some more the isolated are adult restoration the strict side. seeing higher clinician ortho And postponement we arch some that general specifically on end wire. procedures strength

is On in seeing and weakness but are some demand, and widespread a challenges segment-by-segment, notable there. resilient, implant-based some Ortho tooth that we replacements end. except but -- have volatile not we is high resilient Russia

but we macro go Our weak the interest remains are demand traditional as rate. also lot imaging, half. to to we have comps our improved easier But high it and due a significantly, becoming manage through concern second

a are they IOS, and And demand and is expand capabilities. as is continued and Consumable, both to resilient. practices demand group well we digitize intend we from stable see DSOs, as strong their seeing doctors, because our what

southern and imagine, significant we I When is some North north, at as this We change. Europe is demand you part geography-by-geography, In demand summer be America, vacation the any haven’t continue see look rolling can resilient, to but vacation the resilient. seen of Europe. to

As I mentioned, pockets of weakness in high-end procedures.

demand for China travel COVID see key spending -- we as compared week half, are sentiment, a in some to but there expect expected some week well as care. as the increase I last saw as comparables on was we what second versus such improved to dental in further customer and focus China has significantly issues, is impacted

world have performed the of has been you market, the emerging well. conflict direct and doesn’t have to rest can continues expect be extremely a demand allow quarter-to-quarter. we Russia on resilient to continuing volatile, in forecast what you really And there, our

it year. here the that together, together all as and low So put think, forecast given back for deliver the acquisition, second some you these considers and all and of we variable whole feel half about single-digit EBS, well I a as positive in we can we communicated what in the put

looking we’re do and are improving just year took Q-over-Q. Got drivers quarter the who any two up ramp at or you maybe of a quarter okay, nice for Any people are for very yes, and sort that? it. into the to details last other us of similarly, super sequentially That’s how And the margin of helpful. for guidance the provide step two think margins saying, like hey, in, How full out the can definitely you fourth third that step to think the versus in sort about profitability versus year? particular quarters about quarters

go to & is and where through and Specialty break that as Products second if large say, We better from? little down be And half stronger, I coming is we a to going going we’re come the said performance. bit in have degree it Growth expect -- going growth Technologies. we to before the year, to to that the see is

existing new cases. add doctors, to continues doctors. Spark new putting more They’re

geographies, We’re of becoming growth part our prices core of different Osteogenics. IOS is growth acquisition are going to margin improving, improving, plus combination

China. core improve by with We in much impact and to last then considering expect Russia those specifically a And we on have over our two had growth and basis XX deal points. we year easier would comp Equipment, what

So these being core by on we growth top our how go-to-market operates. on factors very driven talked that are targeted about of

thus mix is our obvious. the margin On EBITDA and Profitability in quarter visible part. the improving, the Specialty is volume EBS impact and specific productivity side, of our driven far, gross every very and improving is

seen have in you that continue in to Equipment As as drive we QX, to Consumable go business we expect in forward our & half. second

now off before, mentioned about we we we and from half. really do second They’re systematically in and They’re growing. very advantaged. businesses geographies, what but the moved we quarter-after-quarter feel we that really to not away targeted not is that more to we them work have ahead as profitable. have beginning And they’re of in here, confident have And competitively pay have very not been us

Got it. so Thanks much.

you. Thank

come next Bank of Our with from Cherny America. will Michael question

Your open/ line is

taking for Thanks the afternoon. Good question.

to the year-over-year of year, terms comps. Howard, the to So half I if commentary the a bit back dive want around cadence in could, in I the you the little more made and of

moving like between comps, fairly to and from know the aside giving normal. to we how pieces, XQ growth? ramp, expecting guidance. not differences specifically we but commenting some You something steeper think sounds those biggest in of than XQ of you’re quarterly on I XQ expected XQ terms have it tend some the about be level of But should should

Yeah.

see bit I terms have this think do both around as and when context in in margin growth, half provided sluggish, we first So, that, the of we throughout, anticipated think, Michael, a profile. I with we even guidance, slower, and being as well talked

as come margins. some pull effect Certainly, we clearly through, and Amir’s in positive have growth volume improved that manner as that’s the going to see the a described, on

And one so thing. that’s

emphasized part Spark. we’ve further of look than EBS, improvement, no productivity And as

we second that a every the in we’ll improvements see well. quarter, sequentially, think profile, that in see and I to significant here step-up as margin half continue

talked that going those see We which we’re and that business, fall if China to is profitability as faster certainly and talked VBP about continues grows about show that’s feel to margins We improved the impact, the to and ramp, even going that we confident IOS acquired up. China but so growing, growth recovering, as through margins. improve that with as is, we see so we’ll happen. also that business that

here And basic in we’ve the to going that which drive of going that, confident some some Clearly, yield the revenue EBS improvements be see significantly actions to largely feel largest step half help QX so that’s because quarter we the and the taken productivity and around that. margins then do, the to for second it’s second between we most results look in going you’re so to quarter, some and just even significant, up us QX. will is QX and

those the a relative you’ve overall something step to Is per than other we versus one done? expenses. Is metrics? anything be had profit in that housekeeping the down consider just sequential last that to targeted you quarters question maybe And part sustainable but of should restructuring that few more pretty nice else, corporate

Yeah.

manufacturing things mean, folks I around about in restructuring, things I to the customer-facing want least. think productivity we to be are mindful those when plants the impact look that and gains, at we

our impact ahead seen we take so can, clearly, you’ve we focus And centricity there, the to not will so, and impacting actions and continued customer already. on as where see we’re corporate and go going

it. Got so much. Thanks

Sure.

Thank you.

comes question with next from Our Johnson Jeff Baird.

Your line is open.

new Thanks had Good Hey, good so the and luck evening. we’ve good the the best and role, conversations the in Howard, the for question, guys. taking past, luck of almost detailed on that. dinners in

Thank you.

ask I Amir could Europe a on maybe, question implants. Amir, -- Maybe a And and on yeah. you question

all answer to we that. you now. in as not through hear some I Europe. I said right indicator economic ticking But is that Elizabeth, were maybe Europe, mean your you vacations So the know leading and best frequently

tonight with legacy out They One Obviously, in business they competitors of your a softer-than-expected Germany report standpoint. a have European cited from big reported Germany. and specifically a macro came performance.

that. seeing to we’re in But profile can that just you the the So in continue Europe to maybe how it’s growth nothing stay business with are healthy contribute what comfortable half? more macro-wise European and second improving here than that

have past, but second, have Yeah. what Thanks, I’ll say, of our macro business from well the Jeff. question, about I’ll is in it? doing Europe. comes in want And this you performed Over extremely quarters, in been to your outperformance. for eight would results I Europe. answer we XX% And a driving tell what talk I we

and in network and Our the purely training systematic geography-by-geography expanding and Europe rapidly business of very started throughout in we France because our going into we business that rollout Clear fastest-growing the Spain effect, have it’s the business part Europe. are Aligner of very that and is we and are segmentation, and extending education

and talked this business, a our in years Europe. that, implant execution about improve we ago to we Our have few think, I is

We have the delayered organization.

that to have relationship very that. focus experience. and building geography We customer growing is Every the improved targeted customers

extremely performs single every business has been geographies for the look compared digits past And to worldwide. other growing the business implant our our quarter So eight quarters. well Consumable high at

in macro, the exactly like want Macro about I Europe, So our you thing out macro same talk figure said, versus let’s the are Jeff, look hearing performance. thing. but to same we the what

customer center what and factory in so are new deliberate building a segments and can ground, for Spark turnaround being we’re time by Europe. we and going improved very have the after, new reduce in delivery, we execute, significantly we’re experience building we the customer Prague consolidating targeted, throughout the a very Europe we on But

that’s in execution emerging done and stories well. has it be China, always extremely well done what we we have And Europe, to that in of those All markets. in success done macro. U.S. doing are lot it replicating allowed important, of in Macro have us trumped we as a

We are go North as it replicating in we forward. America

I Thank All I does right. that about down detail is, how implant on And in digits just compare know maybe other with and company at the thing American about mid-single kind to you’ve back do to can expect your talked helpful. this number regards America When then that XQ close, We that some then Europe that growth? gave to [Technical re-stimulate it was of dental Is get this quarter. specific performance? China question, the the Difficulty] that into and the That’s business. year-over-year. enough a kind North North especially growth not And efforts of probably to positive you. to business you back we’re if think, scaling hearing on point. you market,

waiting value but trade not happening to the still some some U.S. to to for of in the down Implant maybe some Direct also So business, other evidence but that’s value going there, players the

throw So just… there, things out kind those of as I

Yeah.

business the with set to and of what seems maybe do you about months? to six over that XX seeing you’re Thanks. this how of much next kind think how … months

Yeah. Those really all Jeff. Yeah. question, good are

what of versus the what a we are. issues And away challenges and macro on from point tremendous usual, have exactly As not we’re discussing what the challenges are. insight shying are amount executions the

North America resilient. continues in macro The be to

implant has says are radically We business changed. that anything not the seeing

it. bit little postpone it. canceling the they’re not of some hand, $XX,XXX longer, for if it, they $XX,XXX they other the full postpone selective procedures will like They’re wait people to wait arch it, high-end a is investment. restorations On can And

of work to radical a ground tighter we little see see When oral seeing postponement. surgeons the that the come a that not in number bit we control. a they are the and with, patients the we inventory shift They of in What is through. on people talk they

be very of inventory they’re the month’s worth to weeks you specific, at if the buying used two oral to surgeon, one time. buy And now at

level, have that geography, things at at level. go regional level, managed we the code is the to at local the why then even important? so And We zip the been

of great business they got fundamental. does the got brand. out of that there got the pockets We’ve North point well. implant community extremely We’ve product we great are because We’ve surgeons. America basics challenge, dedicated well, pockets very They of portfolio. a When a do do

execution pockets challenge. of localized We have

For territory. is to the jump that see by somebody that example, territory, don’t, they cover territory, regions six takes three drug. there, they there don’t they it months in and an standing to months a Those those that have fill open

outcome, we a see in an drop segment. that As

a funnel they that management, have they see ground a don’t, work, performance the between inventory good managed those of daily we on discrepancy really Those performance. see management, they all that through significant

Europe, In able problem. lot a have we to of solve this been

same next. through consistency region open from have one In funnel to work, the U.S., region standardizing replacement going of We we’re management, each those the process, is daily the territories.

that this our go this to We for improve every we intention is in performing market. we’re full are our fact confident quarter, growth we know as that to At and a forward, point, not going is get the potential. at above or

you. Thank

Brandon come question Jefferies. with from next Our will Couillard

is line open. Your

a about was Good that basis segment second It how the Thanks. in and half of would just afternoon. you easier the it imaging quarter, unpack the year? in Yeah. if saw function year-over-year that of thinking you’re just on comps improvement could up be down exactly a what and second or you helpful in whether

sure it imaging, performance. Thanks, business about Yeah. a Brandon. soft, make To bit Imaging you correct? that, was little asked

Yes, sir.

Absolutely. Okay.

you well, If say, setup resources. has because to new a a some a or One, if DSO, -- That of you’re product. to a open location. existing new macro about because little degree out let’s imaging add you There issue you buys bit you slowdown to, group actually a of open operator, of interest rate, people. just of you three are recall, figure we a talked who

products six and that existing that replacement, also been to degree. do a of we replacement years, Two, seven old are years, years has impacted they five

but had it. not you And least, last haven’t

able put in has IOS have to talked be to CDCT in been place. about, we have the want to in a expand the in, segment, IOS you capabilities that You we growth put want to the in, That order office. as

have macro put the you we done. But side,

are linked we and that product geographies at impact. and to really we long had really We the Starting of in have in QX, that have segments QX growth categories last run. and advantage year, that geographies, exiting an competitive our in looking specific started overall strategy segment, potential have started

we Then have customer deploy been experience. proposition, of value go-to-market, work. around, a whole roadmap standards set management, at These

We’re beginning all that of the QX. of see in to outcome

QX. at improvement QX. in you without double-digit in expect It positive, imaging significantly declined in IOS look throughout imaging transparent improved it versus in the low but year. continues single-digit that additional to If our we business positive, business traditional be and even a improved IOS put significantly QX Obviously, QX

So focus macro we’re at growth what growth things more high That’s what our manage is through doing. we and investment continue go-to-market. and that try second resources half sum to our to up, XXXX. to that improve the back do profitable categories get That’s and outcome is. product EBS it and it portfolio, expect, the differentiated to continue right, work

Thank Howard wish you. best all you Helpful. well. as the

for the in Just day flow of Thanks. then quarter the two cash What should in was we what for conversion one benefit the pencil and free year? you. extra for selling the

Yeah.

I -- thanks, So think Brandon.

going a on as wasn’t to one and impact. of I we extra as business an day say more or meaningful, I have would distributor to growth the which because think in selling E&C have not be side, that’s of with is the that mostly regards so quarter, did much type didn’t it

we getting continue midterm net free second talked that about as flow, profitability And improving. feel as capital, cash flow look, a it We of disciplined some more how of working we improve. income. in goal to to as of relates illustration relates it is good quarter We introduce to excess then free well as the cash

contributor. here the so second half the see And being QX largest that with we’ll in certainly

Okay. you. Thank

next Our Jon come will with Block question Stifel. from

open. Your is line

Thanks, guys. Good afternoon.

guidance, a is have still seem market to For for about but slope a the it Amir, you confidence, XH. XXXX you slowdown. some And that guys talked showed steep dental

I end higher part think you of said in the the market.

a got billion-ish $X You’ve implant business.

rate $X.XX Clear from off far in not You’re Aligner. billion almost run

with pickup for the -- guess of trends there the what does it, I’m as extrapolating can current guys pick of an cases? it the the a is, guidance markup this you’re some call and of I those, you assumption describing get out, assume for types So going end Are where is market you what higher balance or embed a year? underlying with or

you, Jon. thank So,

we We that have place through. continue a work process to in

in what and expectation plan, Danaher consider We that that’s different into that model. look all from plan, and since continue have the like a scenario and separation variables done the scenario we a

model, that In uptick going to an is but we be VBP volatile. is going assume important significant volume. didn’t we in knew anticipated Russia really We that the be to factor,

a a have We on model growth Spark.

what we look placement. that doctors. a would we days, about training we that days, our happens conversion days days at know NPIs, the the exactly, place, How marketing XX program. know in XX we people and put a do funnel get many in, funnel least implant at We We the XX XX from product we active after. well at look ratios, as like, what can they And introduction, look take know as because have time program, new the cases put

assumption had on Acquisition growth it. core moving over growth growth. our degree, full is driving the together, April. came only basis core but & the that is impact of end of XX Spark a to on play points for IOS Specialty all in second here. full a put half in based half We we starting got technologies of is large second Products year, We When to the to

second in half. Osteogenics our have We

for comps, We have easier Equipment. specifically

the all China, the place. is taking ramp cohort, have We

As I was week. last mentioned, I there

good We’re uptick here. a seeing in

improvement of what far, that going the to margin we as see in on changes mix, second Howard that an talked So have that QX, the of plus a What like. some is G&A half we the confidence what done about look to margin, combination we’re are improving gross gives us productivity of seeing all profitability, getting.

have this the playing We said so previous we quarter plan, what it’s so As far exactly built is better than we going to be expected. every quarter.

lot off, better the provided. and guidance seasonalities going proven we than in we expect have is that assuming would a can the second QX have that that first half and to the that what half result some QX deliver we and of We confident look QX, we take between think

guess businesses to very momentum step-up, I two-week some sounds and if those Okay. that of on pickup market. confidence in of you in sort the like you’re That company-specific just mean, was you’re the I a correct. variables helpful. just… that’s embedding give it in the not pointing Maybe

Yeah.

bit just specific Russia. more to Okay. a to little pivot you. Great. Thank Maybe

XQ In your the bps maybe, that somewhat a can nearly that and wires returns? that staggered you give growth the swing can X,XXX XXXX? number? could and more words, revenue is So that, between other headwinds, and event if rate all you in specific if then Russia brackets in be implies million XQ, a opinion $XX is Thanks, And it quantify Howard, of XXXX the and how guys. sort of million change, $XX or XQ or maybe

Yeah. Sure. Jon. Sure,

So to So it mostly impact didn’t impact the all born because we majority pertains right? products it it’s products. of U.S. as sanction, Russia, the

that so on our our had and little impact bit as had a well. disproportionate implant bracket And a on wire, of impact

would think I by be in segment that up said that million. had so And to particular sales we $XX impacted

we that impact, probably the profitable was very think but a business it of for relates in end, clearly, as I the little us. shy to

And should what get should and resume we the third these shipping in we’ve said licenses products able all to that is be quarter. the cleared here that,

broader third we that out. certainly, up here whether made they Amir’s all so as not there’s pretty get anticipate whether pointed that or in Russia, volatile, quarter in going the we’re would are quarter associated or orders, the those some fourth it’s things impacts with losing And on

Specialty position pertains get component to that to there. our particularly confident our key to of business in able as markets, think our feel Products. But as we’ll growth the our in a we be continue it emerging We

be to second feel we’re to about we going so in do what able confident half. the And there

Perfect. Okay. for the Thanks guys. color

Sure.

you. Thank

from Sandler. Bednar come will Jason question with next Piper Our

Your open. line is

of I’ll and margin taking Thanks. we I calls. EBITDA the I’ve have second Howard. But in the improvement another the question and you the on with And two half. maybe reporting any out this, sentiments missed if here, trying Congrats I’m of the the ramp guidance wanted Thanks role here on just margin in of I here to segments reconcile there. here, upfront margin second that questions new the apologies question implied working your quarter for you and the start been EBITDA in hopping half context second to for the that the between posted you. maybe with echo a miss will couple

the further after first Where you’re we’re margin the So the margin build question the expect saying low second does I hear more in come guess improvement E&C given is, what Spark. half here what from see you to in that was really I does nice the even momentum at segment? improvements SP&T, a level, have thought And on the in I from you quarter, the quarter. here in

margin ramp So really that a just XH? of the of steeper to about think sense improvement we the source trying get as in

Yeah.

thanks, Jason. So

than are get higher I to we of And to coming second from clearly, and about those the in think the some see significant fleet margins, business through and improvement implant will as as with and wire sanctions, bracket Russia. so of we the that bring those, We margin at relates profile half associated going associated Russia the much that’s back the business impact right? average SP&T with the talked it segment.

to we’ve profitability second sequentially, in happen and the relates or quarter first so profile about the we’ll it to as that comparison, then half talked well. half, sequential as continuing half here second every Spark clearly improve see And

some Osteogenics side. on core, we volume into just margins anticipate. along improving brings then And the overall improved volumes through Specialty goes with of then that business, some even the as And with well acquisitions, the

And here we half anticipate in bit that will growth be in the have did accelerated quarter, second so so the and the little growth case. Specialty while we second being the some in a

points. commit We’re yet. that want We -- E&C going around saying to to over with basis XXX that’s further clearly pleased to expansion on don’t the improve performance of margin XXX basis

the We also functions, additional there. about around And that to continue get talked we’re see to corporate in going improvement then earlier culture some the EBS to call you’ll productivity margin know with that we look too. as the

definitely SP&T. a was it sounds really That’s step declines was, the was right. the quarter? about points. growth second helpful. in here I a on bigger what move E&C the Consumables Can basis working It down in much was XQ? but the in quarter-to-quarter what from the It something All But price that maybe X-point quarter, volume down to you about XQ trying also pricing XX for basis sequential from a seeing, source strategic how follow-up, saw maybe better & just than It step of year-over-year talk down. think, this probably of here accustomed delta and understand that drive second the we’re Equipment a was change pricing to we was to like

at is mean, growth, about, look ahead and we the of talked maximize pricing of opcos each to part go I how that profitability as Yeah. we they allow equation. and

on that need meet around on E&C the where some the side, it. was and to want I the they there so With And imaging say will customers side. concerns pricing given hardware rates the like, concessions we interest

and secure and honestly, and bit certainly, doing that being the front we’ve in on that be we’ll mindful profile, ahead go quite And so pricing of to to move a margin nice done on focus a we’ll think that continue of ahead so job and And well. willing business. go as executing on that making little And that. overall I to

have matter a in I that, topic as that. And talked about related things second here quarter, maybe some and here, around like come inflation the particular that moderation hasn’t in materials. up, seen we direct we know but

opportunity little that those so bit And the to us imaging on pricing a side. work deals around affords of to secure

it to the clearly Pricing, So big upticks as in the that, we than The and feel pricing regards are as as some Other China. nice good little areas we’ve a seen in our well to wire, businesses E&C. Spark, Consumables impact VBP and as as about pricing each of bracket relates is like that. opcos coming from with well Specialty different that. bit within

the plan as manage profitability. is let the growth, well as to this is exactly And so, opcos again, to improve

on the for Thanks pressure helpful. color Very Yeah. well as there the there. extra inflationary

you. Thank

Goldman Sachs. Our last Nathan question from Rich come will with

line Your open. is

from months, talk over demand maybe a your out how coming to I’d taking year the Great. they into expectations what Thanks of as you three played me consumer back standpoint. months and relative last over were well. wishes how congratulations especially guess, ago my best add of change few curious for a the Howard, could to the question, maybe sense and China year? about China And let half get for be the or the I

Nat. Thanks, Yeah.

week played out Shanghai, mentioned, really had as largest as exactly team. expected. in largest meet customers, in is China, great some I a our own as the China with many well and I VBP hospitals of As DSOs

but almost really So somewhere and close XX%, the sector, to public down volume the brought prices increased. the has

You definitely see can increased. the has volume

have an gone of beginning very XX to place. next and like take that, through side, on this that They implant impact is were see outcome this the they’re And on the they before pausing price. take provinces have VBP, ortho watching increased expected, carefully they they ramp step. as we but to the what’s

has we a other the are between patient unpacking significantly. the gap phenomenons premium are seeing value that, grown now One, And two here. So traffic. happening and strong the in

clinicians making the of decision, that for if So closed, a brand, go the hey, a much. lot is buy gap not a are because gap is Nobel, go that

not the to it become beginning implant. to part DSOs And is bridge, better implants given three-unit others, gap implant. much in two doing procedure grown and think, that price of they’re And is difference that beginning we bridge The the hey, is price clinicians very lot the versus and are a really some significantly. comfortable has than place at witnessed the second The between three-unit that placing much. the that play

we significant carefully as has and playing what than much the prices to we had on with outcome, implant, anticipated. been growth. the seeing what’s going pricing very exactly on we better volume are pretty expected and a an Watch volume are what’s growth the As see going it

dealing housing small Specialty going What we’re to resilient is talking ground, aside, that of we are the as going growth, of it. there the be that a still as on the China is continue spending, all think Now challenges slower a to on market, putting whole with that consumer which forward. such segment is specifically realities crisis, the part, some economy

more given We but was that XXXX the improvement -- in huge for has it and expect impact improved flat see a VBP half. QX be to a we quarter, impacting with to China and on second difficult expect really

quick And follow-up color Great. I on the Howard, you. EBS. a appreciate maybe, for

you’re business. certain looking actions that I China of to right-size at of restructuring in kind think also kind

curious to actions some of just margin you’ve Equipment. magnitude think you help are a comes taken could half I help about of it was we think year maybe standpoint? should the those back expect in I the those to and that us if also savings the when

Yeah. Nate, that. I think do

to continuously as commensurate. we -- are look We of and that the at have it of the cost structure sure all our relates the operations and size operations make the like

actions, taken have restructurings so, week, and in to-date, is more last some of we’ve even as come customer-facing the those impacted China, even And think, I anything, certainly, And team back Amir’s none the focused. components. if

side. also that’s that, the on true imaging say would I

so now the business we that the As not that been also thing several to and to alluded quarters was do. for growing right business right-size had appropriate taking actions to,

impact clearly some And of that this year. as year, in the of this actions so throughout were those rest as see taken we’ll well earlier

you. Thank Great.

Sure.

Thanks.

look the time. forward talking Thanks, Thank everyone. very much. Appreciate guys you quarter. you to next to We

today’s we conclude participation. your and This does gentlemen. ladies appreciate and conference you, call Thank

You any at time. may disconnect