DENTSPLY SIRONA (XRAY) 14 Nov 222022 Q3 Earnings call transcript

Good day, and welcome to the Dentsply Sirona Q3 2022 Earnings Conference Call. All participants will be listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note that this event is being recorded. At this time, I would now like to turn the conference over to Mr. Investor of VP Daley, Relations. Andrea Please go ahead.

everyone. call. morning Welcome to earnings XXXX quarter third our Good

for call Financial website of me press call Officer; to Joining are today's you at release and Chief Dentsply remind the related Glenn www.dentsplysirona.com. Executive and Sirona’s available slide Coleman, to an in our Chief that Officer. presentation like is I'd earnings Simon the Campion, section Investor

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

of that cause Form differ statements base predictive uncertainties our certain and SEC certain information predictions. any make the risks we call, and our events actual from We today's about views risk our results. updating assumptions future some performance to subsequent most these that reflect factors results future recently and important are and to could filed on During current XX-K in lists and most subject that and filings financial expectations statements

non-GAAP over metrics the for And with on will of turn our greater and performance, business. independently investors Additionally, business with allow certain with between performance where information financial and on the management now respect used provide today's about to We that, based useful vary Simon. measures remarks will call, items periods supplemental be call business, in of refer that our results. transparency non-GAAP reconciliation press financial GAAP results. may our the of between non-GAAP results financial comparison key to by I Please believe our enable operating to release for financial

earnings be today as the talking morning very us to to you for Dentsply you time thank and call. Thank of here a operating you, will Andrea, provide joining and for first quarter, results update. of pleased this by overview our providing am XXXX Sirona. our I third Today, will CEO all for QX update the both financial strategic an finish an outlook then the Glenn I and quarter’s cover you on with I’ll provide all XXXX

couple to you with like an Before also we topics, a jump introductory into of and our comments completion I’d make regarding of important the update internal investigation. those provide

to First, Interim John team. a to thank also Sirona leading transition like helping and my make smooth as the CEO the CEO for entire business to one. like I’d for thank I’d Groetelaars to Dentsply

Our employees team am joined here only period Glenn I Coleman, today Financial of to reinforced this many focused our confidence the dedication continued Sirona. leading be in and ability at change by also to am throughout has my opportunities this new ahead Chief I Dentsply stay and excited Officer.

know, Dentsply As so a CEO will Dentsply and serve you us the Sirona global lead robust expertise and of at I future. first disciplined quarter, industry a this into CFO. and that as we joined Glenn our third I well new end earnings all call is and experience set medical of leadership Glenn the we device bring as both Together, Sirona expect

performance making the that to with development plan I am I Since our the to we is other better to business. why reinforced to joined, serving I also and new discoveries my early to we growth and can excited Importantly, to CEO bring have of areas critical and are leadership delivering. spent perspectives of meeting my intend the you and fresh the I why we where customers team, do the Dentsply with a urgent be company time but enthusiasm. Along what as want convey diagnosing to Sirona on employees, it progress capable stakeholders, eye well, observing we my and the all understanding also restore improve. of

three value we focused shareholders to we and in create throughout believe XXXX, are rest for and the for long-term key opportunity the shareholders. drive appropriately QX, long-term and can on global we pressures face supportive strong and leverage predicated plays execute financial macro over company can medium, with of and near, opportunities. the factors. already Dentsply trends our value disposition as the those through long-term and in knew a tremendous the I foundation that which we One, are growth growth. who The investments While positioned strong theme can the environment this external on be market, challenging the team. we a and the Sirona will healthy balanced company current digital models scale, I innovate, we along from would delivery and imaging, expenses have will in to unique help an category can future and from invest judiciously industry the portfolio leadership comprehensive Byte. we especially dental a as with towards the like trends emerge well our winners. accelerate believe to lead shape rights prioritized in have Thoughtful with to but Two, aligners are of win with has asset we attractive digital

Slides Our of in we do strong But foundation, company experiences, we strong execution. our deliver legacy innovation the the and best support be order management our to so, and us to the disciplined team. above share and from brand our opportunity coupled see from gain models recognizable strategy sound knowledge to career market. grow affords with X, and and need to collective expertise best-in-class on I, are and bringing as need a you execute. management with Glenn to on Three, can together

it what seen what result Dentsply We looks intend at can the we and excellence like deliver to implement exactly that’s and operational have Sirona.

decisions big, a to the value provide potential. be creation. shy and on sharing I’d long-term growth on not including forward, coming internal sustainable we As path I to away months, the by investigation. which we with full you over update forward work can like progress an plan as our towards look important to of you also our details metrics company our making move difficult we the from to put sometimes will tracked

team filings, the had associated completed that Directors As and committee our November XXXX the with you know, we of on Details amended of associated review remediation which investigation. and to as and that and be our the found implement support Xst, the behalf advisors investigation taking. will and are findings operate remedial finance, an finance SEC to moving to well and investigate as and announced of transparency management, the remedial on finance the Board can the in audit is actions of the plans committee underway for are forward, XX-K. well and the accountability company and and we On extend culture and Dentsply a like are that continue we our include creating Glenn company accounting committed focused our on the resolve we investigation as sincerest Remediation Sirona I audit Board findings accounting commitment levels teams, as actions the all integrity. necessary their with thanks discuss actions to members, utmost and as especially to matters. and as works these legal would

Now third before I turn couple me quarter. it a key over on let to the cover of observations Glenn,

Despite from including deliver of well impacted firsthand will continuation Glenn unparalleled. and capitalize these recessionary QX the by imaging Europe, first solid the continued our strong foreign areas Global for growth week importance and the events, drive of were for we solutions new The Connect I’ll the after customers opportunity a innovation in financial of I quarterly industry’s share tremendous exchange we complete we provides and on aligners after continued performance headwinds, are on do growth cover were thoughts other to Primescan outlook. further patients. softer which the will some the hearing chain dentistry. the and disappointing delivered what digital we solutions overview forward practices and their demand directly pressures, portfolio QX new our value of remains of had external results. discuss adoption privilege several business double-digit Glenn? results, level clear and China, I the these launch the more and with growth experience and the see the our partners customers opportunity the was encouraged at my the and to very quarter had in supply and further volumes in technology and our Sirona, positioned I Dentsply first challenges. supply team. across third constraints. our had the was in The to despite in During by of to going can engagement U.S. time impressed CEO global digital of on in by role

Thank you, Simon. Good us. all for joining morning, you, and thank

focus The execution, long-term XXXX greater meet, our on look Before overseen having on to strategic quarter and creation. to I results you including turning operational our ultimately am and to third before team company functions and internal believe the forward with next accounting XXXX role But and I chapter. this restatement previously XX-Q on to let in in joined and of company of review. the investigation I financial, outlook. and Sirona, bring operational to and an to a to do, financial discipline introduce and disclosed deliver like quarter I’d and more growth recently findings have year industries the innovation. me working our with financial detail across take our and geographies brands of I the I of its yet the announced I’ll with start XX-K. because advance update it’s resulted Today third closely several full legacy those healthcare, completion goals, provide excited strong a rest a myself great results, of Simon our as XXXX value financial our enters to I Dentsply

review net over $XX revised million quarter XXXX XXXX for The resulted As and reporting. million for filings, internal weaknesses $XX disclosed those of year and full in several accounting in third investigation financial company the material sales by the respectively. XXXX immaterial and combination hours. overstated and full amended control year The were financial statements and also also

and code of developed personnel remediation our internal additional to updates refer to efforts. team for company’s conduct, number for including and more policies and creation enhancements XX-K have commercial controls business including additional and our process you environment our strengthen implement a I’d to overall of We accounting enhancements plan procedures, on of commercial, finance and amended comprehensive changes, or training accounting ethics these the specifics to a controls and employees. to

We continue on updates well initiatives number and a are to provide these with we’ll already progress. of underway

executing on accounting the that strategic more Now are investigation our priorities. forward even moving and have focused review concluded, on and we

results turn to on X. Slide financial let’s QX Now

XX.X% primarily as previously headwinds, information More impairment goodwill foreign by are in charge in Sirona’s of and reported sales net our and equity difference by income our strengthening prior as Dentsply versus reflecting flat exchange. U.S. macroeconomic $XXX million, foreign On points year-over-year, significant billion XXX of an half organic solutions or the the from of GAAP and impacted sales, declined reporting $XXX the broad from reporting was year. volumes, assets innovative volume FX, exchange negatively two revenues with to third associated reflects the available is for while basis SG&A fully investments well last the million due digital currencies. to or by delivered inflation units. million we deleverage. line to up with business financial forecasted rising charge to of was tax, sales as rates, X.X% As technologies. in were to sales. charge reported the third and $X.X the quarter due the declines the $XX revenue FX. basis, with a projections. year from of and absolute foreign million the intangible valuations, regarding spend and lower declined majority for FX non-cash million announced, Operating the profit continued organic interest expenses of which XX.X% in to was were of remainder and results of year, In the lower in prior due factors to XX and our results developing R&D X.X% inflation. year in China changes $XXX SG&A points particularly XX-Q. and versus dollar such U.S. $XXX down X.X% of impacting headwinds X.X% announced sales coming margin impairment previously. XX.X% attributable the was XX.X% commitment and including basis The was customers largely of Gross reduction In the of sequentially quarter, versus Operating with sales prior or continued decreased macro by comparison This contracted the between preliminary declined

flow million cash free As a and compared decline remainder the rate. maintain $X.XX in tax of hand in quarter sheet a headwinds, higher quarter the flow result, EBITDA of cash and still $XX currency while to XXXX a commitment maintained conversion of EPS enables balance our the to returning quarter. allowing XX%. foreign with We adjusted paid and was business. the company invest $XXX approximately our has was million million third cash prior $X.XX the as was strong ratio and in us The to The to to dividends. with $X.XX Operating net the to to us to to generation cash a times. performance attribute $XXX we year the shareholders, X.X the and quarter, finished quarter debt inflation, in of cash in equivalents third $X.XX strength cash on of EPS In

flow continue shareholders, least we through forward, to of a returning expect to Going and free our of repurchases. cash combination dividends at share XX%

the organically strategy, faster over includes to investing allocation capital balanced share our and on executing continue also repurchasing growth which drive opportunistic long-term. revenue will We

reminder, program. share authorization have we of $XXX under repurchase a As million our remaining

imaging segment grew in Technologies aligners to on quarter Ortho double-digits regional to Slide while global equipment. offerings. declined growth XX. Byte our in both product SureSmile or demand new by segment offerings. strong from SureSmile was led and The in sales and sales continues continued grew due X.X%. consumables segment in performance double-digit quarter demand to benefit organic and clear expansion growth and X.X%, in Equipment strong T&E Organic the for Moving the T&E

Byte, the to the brand of after direct-to-consumer in our year. facing growth As half Aligner anticipated Clear year-over-year returned comps the tough in first quarter

QX, that continued pleased Byte we on cautious third in improvement While are entering we the to show spending trends consumer quarter. are

in effect. our were the continued which growth was in in higher volume-based strong double-digit growth The posted ongoing We constraints aligners quarter. the Given XD we of imaging continued in demand the and in attribute the the U.S. in technology supply & due resulted anticipation Instruments lower Implants imaging the growth orders we to in quarter. flat for business, lower have or by softness as momentum taking expect see the China. chain fourth despite backlog in to quarter COVID-related Equipment E&I and shutdowns to in offset Europe volumes procurement China business

year-over-year distributors due retail tough comps showing CAD/CAM to the business in declined indicators lower quarter regions certain softening Our demand. of are some to and in wholesale where orders

prior increases headwinds weaker volumes in and Moving launches in year, to the attributable Consumables to X.X% price and a by segment, the primarily by organic recent offset U.S. sales versus partially lower Ultimate including performance product These and are declined China. ProTaper CEREC Blocks.

of representing quarter Now million sales imaging. million Aligners Lower attributed partially and Europe by $XXX versus Clear by by particularly business, in constraints. were volumes wholesale headwinds prior region, CAD/CAM and another imaging basis technologies, in tied Rest financial $XXX the turning to of performance These China decline essentially growth third were performance world Clear sales U.S. sales of flat growth organic organic and remained the and offset for also sales by adoption delivered and of in supply and Endo. consumables. an centers despite particularly were organic treatment good driven digital X% countries Korea an in with Japan. year. million are X.X% in on dentistry such retail increased $XXX offset quarter and strong as of across and the to Demand Aligners lower sales

XXXX. the in FX includes recessionary prior impacts and and the year see U.S. quarter year upon respectively. global year we for are anticipate billion. XXX EPS which stronger have macroeconomic $X.XX approximately become assumptions margin In Based full the prolonged projections. for outlook. the significantly in year. of headwinds performance are approximately particularly our outlook our shutdowns, to the we now markets. to a sales full prior in We in sales to Full challenging quarter FX for and operating we versus $X.XX prior headwinds lowering Compared we be environment, are organic from COVID-related year point net represent impact estimates, fourth as our to X% $XXX and the billion which to European pronounced Moving sales continue to headwinds, our FX expect continued we headwinds outlook, million financial third anticipating basis now of $X.XX for expected China, range and decline more accounted

effects Additionally, in we procurement are beginning China to see volume-based on of the implants our business.

pricing the Over the believe term, the will headwind. volume, for business term but we long VBP effects an a presents on to opportunity the increase in near be

traffic This we and on as demand and and that may that more the volumes eletive monitoring traditional outlook dynamic, there are down full reduce may coupled such in the slowdown for We skew operating margin Clear with global headwinds. And dental dental towards to rates markets, chain greater implants. will deleverage months. due consumer major indicators year consumer procedures. XX%, closely supply will expecting certain procedures higher in equipment be higher behavior. inflation interest be leading the are We coming volume estimate Aligners to a the Due in than from

With Sirona COVID support our FX strategy. despite In these we a I’ll third that change that, chain now headwinds, prior tax a $X.XX to compared from $X coming share environment, shutdowns headwinds the balance reduction foundation urgency A is priorities be to rate these now strong VBP, address $X.XX expected at with our per underperformance, in outlook attributed include earnings and sheet confident Slide EPS turn reduction key entire the future. of from to and shared are in team quarter $X.XX updates are $X.XX and $X.XX to drive and due outlook. an U.S. to And to $X.XX challenging our Dentsply results associated component XXXX on macroeconomic to XX approximately with and call China midpoint our leadership Simon updated with assumptions. count adjusted disappointing Simon. execution the are and to share broader of supply range representing the and of the per the $X.XX best headwinds closing, back to position executing for successful of Myself, business a

Thank you, Glenn.

to with on the want forward. on we and Moving share how on our I strategy going will thoughts update. deliver you my it to strategic

is Our it of does have so integrated dentists We to strategy and on workflows believe superior the Board. enabling compelling.

But we tone it, the are the with we move as it will unchanged. of change capabilities. it forward we appropriate While this to to largely hand at which remains going on will the we our the starts forward, introduce organization will or refine continue strategy where top actions in key hands deliver and business taking how now

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Turning now Slide to XX.

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to to software development. accelerate accelerating important key digital work we an identify areas As in is one innovation, our portfolio

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or bring DS more digital is Core such truly capabilities continuing restorations, appliances. design Core the powered to provide their also is DS to including Connect by customers look is integrated DS Primescan forward by integration to aligners solution Core for used Prime our across Care workflows and and Core cloud-based and We partners as about can innovations the for offerings excited new enabling platform that with DS create and Print by XXXX market first enabled are We DS will clear and seamless be our Digital additional our implants, additional in entire and sleep beyond. for portfolio. service.

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And Instructions] go first Please Caliendo Kevin [Operator question comes of from UBS. ahead. our

in there information quarter thanks this nature, taking I of quarter And think power Thanks all to Thanks. call. business talk think through wondering that’s third margins if is do how I we to here morning. any get guidance, for the maybe my for the XX the there a of the in percent of all getting for about And is the runrate you talked you but that about to guess, as is, and second inside this anything XX%, sort in question the sort back from one-time to we follow-up terms margin, the rate going XXXX? ask you are go XXXX that, am not the fourth of in XXXX of business as into earnings plus margin runrate going how maybe that the forward? over

remarks to Keep our revenue terms of for of in mind, Glenn. just prepared and were performance. to Kevin, exchange at sub-XX%. our we question. an margins, looking of also at we put having my obviously, year runrate the significant the When margins second impact in quarter FX. think be the look in sequentially, right we down gross the things foreign are XXX one from from I headwinds a is Yeah, thanks impacting margin now volumes This And deleverage of alone really to our is is basis lower to on full I a points contributing obviously, basis XXX close the

forward we are managing are for now revenues would the in we right expenses, operating sequentially doing but given our I see operating here are a a look we margins sequentially. on our reasonably good reported where us, down QX that we projecting another in step in think job the lower to of quarter, for expect I So, fourth as at basis

us key getting see but focusing performance think us the in slight really will that we’ll overall in gross reduction XXXX margins, growth of I on in leverage. is business back a terms get to for the our better

at think relative terms across efficient how mentioned to of more a that expansion and out really a plus we our of margins us and figure longer those over Simon dive could a it’s XX% we’ll deep going in significant for to organization initiatives. margin looking we optimization entire and forward are of business. We the drive confidence have back XXXX number on term, degree we his get and high some into structure organization I remarks, things of through and the move medium to beyond across do as operating be the prepared

you. Thank

question next go ISI. Our comes ahead. Evercore Anderson from Elizabeth Please of

the Thanks so question. guys. much Hi for

you help talked are of terms like, think talking U.S. the So, consumables when your about in where your you still getting of, are us you volumes of U.S. the still in that – across about what you sort of getting versus some particularly seeing about I in business, can you portfolio? like think pricing pricing were terms you are

offset in the price with Yeah, some we perspective, a inflation pricing I XXXX. from did of job cost nice a think increases to

we we the pricing. overall not are Obviously, some of a volume whole, close it’s U.S. business. probably that the X% seeing in the at think are looking on fully offsetting increase I on to declines

weakened are given think at our the our distributors retail levels and and look the U.S. demand about level is our I recessionary both on seeing to in high distributors. think key level also we environment. off And wholesale at going terms the year U.S. of we As of we one performance, sales the things the inventory through with the sales started

fact long-term usual been the so the expect the filling we as U.S. are down on. had something the we obviously I addressing those are those along we we’ve roles. we than that not item so addressing are a thing And items, of inventory sales is the to that’s working combination which we now, open over force especially U.S. the territories result year And that those in that and things, right think and volumes that throughout key with continue focused headcount a the that down more are on

were in of discrete that, we And action we Barbara well investing and that as team. they Elizabeth, plan to that certain That our Bodem certain commercial now when investment U.S. with John an I have as saying commenced was begun the in and areas roles areas interim are right Groetelaars we by of supplement would U.S. had in sales their team. work and

sort respect? is broader pick Or Got that’s Is what capacity how sort obviously into back macro like in something view guys up full your inherited? a long that just it. And that to just sort menu up leftover of of seeing takes you do you to think picture that, that like are attribute that on just investment sort the that under of in sales? this maybe so turmoil where you of general to

we very of underinvested in have the Well, have we that for commercial the the number are some years suggest right of trends, addressing challenges I And a U.S. DSOs. U.S. driven in with of and that recruitment the program we well the where Elizabeth. that in perhaps focusing said, as U.S. process, now. team performance region such I right underway the particular in on some historical now, would past emerging as as active has

and work have undertaken and completed was place. comprehensive - execution that during we was is So, the taking of that summer the now

the just Imaging and And backlog positives reductions there I'd in we perform to Byte business, SureSmile. business quite even call while were growth U.S. Elizabeth, overall obviously, with well, The both showing continues situation, some down, out. being I well. Ortho actually higher-than-usual and our business volumes as would add, there saw, nice we're

see did business, So while equipment in we forward expect declines the continue in move some spots which bright we see to we U.S. as we overall, did here.

Super helpful. Thanks guys.

ahead. Rich question Goldman Please Our Nathan comes from next of go Sachs.

questions. Two the top-line. the for Thanks on morning. good Hi,

a First, maybe imaging still guess, term, is in what fourth us moderation. near help growth slight you could about implies aligners. relative the guidance in on double-digit the what strong, like maybe sounds about you're third? It but demand expecting quarter you fourth the think And saw you talked specifically, for clear for your quarter to just I

you X% pillars So us see the about can with key long-term quarter? targets, about the moderation to X%. as potentially what you to even above-market are some growth? could expecting prior in I you in which maybe us growth of getting demand? to you overall that back were the just term, think longer referenced line fourth seeing you think in help And what talk And end-market you're then

about longer-term Thank could there? the So talk just you. maybe you opportunities

Yes.

can the So on and on first long-term maybe comment Simon comment on the I'll part the outlook. second piece,

back quarter pre-announcement. range. Just a an everybody be fourth low down sequentially the And to we November remind in to revenues that's dollar constant flat single the and said what be up single-digit third absolute from quarter, digits fourth basis, from low revenues We third will the to the on said basis. reported quarter on will on the organic to sequentially the currency X

quarter translates that fourth organic quarter, the a at we came in where versus look down quarter just growth fourth to is mid-single-digit in that's what X.X% when to, be versus So range you going down. at year-over-year,

third Imaging continued say, to should in see of business, the mentioned see we and pieces to the of saw, expecting fourth organic are we Byte growth continue our see in at expect in do out quarter. in in to we expect further in side should equipment that but continue do quarter. the prepared I decline remarks. quarter, declines I the look a to good fourth growth, growth If Ortho. we my the I would to fourth similar to show good in show what coming Both So quarter, the growth SureSmile

don't consumable in On preventative a the certainly expect side, I the to show here we will they're But the year-over-year up do well I products continue want quarter. the by fourth fourth recession. see impacted to but decline pretty quarter. Consumables hold consumables our in recession-proof, a think to restorative say less

expect QX. looking the we that's mid-single-digit at how And we're overall, again, So for to be in down organic growth. range probably year-over-year,

on our the the team, respect long-term Nathan, with team, question last sales the commercial then, America North I And investing are we Elizabeth, particular. in from as to outlook, in answered

But And headwinds If So look APAC of ex are our on we're Sirona a to quarter. I is from with we focus we as across their operating expect growth starts some Dentsply prepared had delivery from we Glenn China, and in And strong growth in the rigor launches. execution. R&D, absolute when I each has of the that of China what the year here around discipline LatAm Rest exclude the world, that remediate bringing there revenue projections, anticipated and with high remarks, the and we've single-digit performance. to around Europe around despite well. introducing begin as and to the seen said R&D model so rigor World, rigor

back we a the strongly the training excess Charlotte with and and So that with that we've rigor if here to dental where can we dentists model, in have in year, feel partner trained wealth where in record we be track knowledge have of conjunction think we in market. we of and the of dental with this in and organization X,XXX also community Bensheim, Charlotte I technology track in discipline, a record in the should we get

Thanks very much.

Wright Please next And it Erin Morgan Stanley. question of ahead. like comes from looks our go

think Great. from be has should in will we And of CAD/CAM Connect? still we effort And think trends given demand would market forward? recent evolved? now your overall now? Thanks. chairside with Primescan your a going you about And for sales the How that, moving characterize the Thanks. how we overall away how part in Are CAD/CAM? meaningful about should strategy chairside

digital, that we the respect Erin, CAD/CAM feel and an we one. with strategy So to have, strongly is appropriate

we're equipment to you capital of to address within chairside of whether the continue will we community. to such also, as that's the key both software to needs digital, We look invest and and trends market for behind in delivering continue lab evolutions and or pieces the the if that market, the DSO of

So with supplier and drive that, that forward. fact business continue the we a going digital we key to that experienced get here, – part do full-line while consumable associated is some And dental to should are and be as CAD/CAM the CAD/CAM think moving should we've be a pull-through the pressure commensurate we we of well. to our community,

strategy, our most the for remains So, intact. part,

refinement increased sure, For performance. and be and forward. will be, the prepared discipline Nathan's pivot continued will question of rigor as and be in noted the I move to remarks as around we it But there execution monitoring will

assessed just line table, what when the your time we'll you everything Okay. get And Great. think divestitures? is the is including And initially? Thanks. review? And do then, there? details on is on a strategic being of Or more what quick one

baselining the of a we earnings plan nine acted around already how do now our with We're to started call have North with the and to America, it would to QX partners portfolio in the we've weeks. we about a begin right respect So in external in position expect like. urgency commenced summer, with We February what with forward. in to that of for to are to Part February. communicate looks the performance. details share ongoing have at be during to that work. more organized we that partnering respect past But success call we and expect reviews moving winning more QX And

Next question please.

Couillard from Brandon comes of Please go question next our And ahead. Jefferies.

morning. – on is you just it thanks. what terms the about like in Simon, for And to sounds you why is the deliver you attractive just operations. Byte Hey, business business growth positive those to revenue of full that talk longer-term the Can intent Good profile? about year? still growth expect business, that in your do to keep and

in a key think has role our we portfolio moving listen, Byte forward. So,

and be we and on the as well. on We or are consumable scale digital end-to-end spectrum think end-to-end should the consumer on the we digital

better we do So, we Byte. for think future We us. for feel double-digit with The Aligner business there's a for can delivered sure. growth has it

make and But for Byte it that and business. for of it do business conversions of remains will out to future. to now, easier a behind continue our for are We sure, key with investing business, the get part to so foreseeable be more

would on in each Yeah has financial just performance Byte, shown and every Byte XXXX. quarter and the then sequential say, of growth I

third a basis. be the full the the we expect In see and double-digit on a basis, quarter, did year On as expect to half quarter do in by comps, year do year probably see full given in we to encouraged though, that. the very we're tough of mid-single-digit fourth year-over-year down growth we So growth first the well. range

may any limited there? double. And touch choke see when right improvement you have outlook see supply dollar amount biggest just the revenue headwind point to you of to terms Got it, now? then, and Are start maybe can the the some quantify supply chain the into you chain the on of able that where you in for, kind

us, it, headwind far I go or will but continue quantify electronics blockage as as still and requests to a although a strong. for be to the be demand Yeah. Brandon, technology in wouldn't for continues to coming

of a we for technology have quarters. So in parts the couple electronic not it's seen of dramatic outlook past our the – over improvement the

get front, supply. Yeah, to other overall relative And on Consumables positive probably back the pain then and have I would say, just centers situation. treatment is news to to we relative point order better continues the our

two So treatment pain the now I on Consumables. are right on and progress side. But we electronics points supply centers really feel probably about the made the good

Thanks.

our Jeff Johnson And go Please Baird. ahead. from comes of question next

latter some portfolio a sounds it war not you're Today, And on more significant around doing soon Thank think go sense, kind of morning, about I buybacks commitment did time. more chest but you. of makes was composition Glenn Good think after And after the dividends. joined, I each to talking wanted building Glenn comment optimization, to potential Simon, reallocation calls guys. and joined, with like of And to the we the soon over necessarily buybacks. portfolio question, just the of back about you. I all you of a kind call, talking portfolio.

be XXXX. has the something portfolio? if on to portfolio, on are years, this trough reconstructing done reallocating were year the going guess, think eight they in I XXXX, weeks last shifted the at or about to the six look XX earnings where I in much how you might of over last basically I need XX back So be mean, or kind

bit Thanks. that or you reworked reallocation but it be So that like like reworked, feels backing a lot could of here off might be be little might portfolio of stuff a seems commentary. need to

optimize proliferation longer-term in that of we say SKUs for say, those business No, our and our looking with business the there on of all, look several of allocation us. and No. we cash There of that have our we where taking long we areas had outlook areas focus and that mix, feel call respect our about a network some to peers we're at scope I are we wouldn't that Jeff. September better clear frame. a with your work of energies the clear offerings, and increasing SKU our time can at of delivering probably would the then the you at are off through a hard have the areas I on. in our backing in that spoke driving of growth optimize moving within growth And are

portfolio don't have the at to our general. all. we say, at scope look would narrowed winning So we SKUs and it have in I I dental broadened a think

as quarter Q&A, point at XXXX question half you. headwinds of to I off that estimates? that below in the about Is of to just fourth away. be Thank XXXX year in kind but first we helpful. year the think to That’s aren't base follow-up, I build at quick margin going right Glenn, this be starting come just of kind we think early back, understand and least it the low-double-digits, off but was second want about obviously the a next slipped Currency to Okay. going range third Thanks. should to thinking going in And down a least the starting be commentary, quarter XX%.

will build that next I into low are Yeah, our that would going off that mark year. and QX margins the water operating expect we of

you. Thank

operating margin We'll when earnings shape up it by get and would February give how more next call. quarter we year's our color to guidance on

America. go from comes Bank question Cherny Please of ahead. of next our And Mike

on question. for is This Thanks my Mike. Hi. Clark taking Dan for

next size for I magnitude about think that ultimately us? going headwind, timing volume-based Just should to turns into just procurement potential as the that can your and year, of the before Thank you then China the we tailwind on it's you effect how you. understand just guys? go that help and for but

let my use as I'll for the Mike, try XXXX for basis me question. the size this Yeah, up. comments. to Thanks,

China million, I China. is full with and it think said number about Obviously, of year consolidated based forth, of the point call we so shutdowns million bit of by revenues numbers. X% as a in a our a lower. and our previously of is But which in revenues, so XXXX that's $XXX just our off implants impacted revenues COVID China. is portion is about use our The starting business business, our VBP that's XX% $XXX for

you So the it, that, $XX by do VBP. if million call math on impacted

of just XX% the it is that probably not, based business, impacted, upon implants our we China. sell XX% of products is in However,

about to be probably $XX will $XX impact borne by us. think we it's reduction, bigger million probably a impacted. price million now, There's coming distributors some Right of implants our about So our there's would business it that's but in a XX% reduction of that China.

would of second our from impact too somewhere can and the piece, to in go pricing the is for to that too when to $XX tell. still of we We comes a it, back. say headwind just to back what $XX that still early hopefully, sizes so million $XX as from rough result would order incremental volume million. that the It's it's most bidding between volume offset of million process you $XX which make through do $XX our million impact as we a with call But right And now to tell up on and XX% move business on past bottom the line. top call expect it pricing some million would Obviously, at some be but the the I to between half magnitude pricing we hopefully, pricing headwind, take XXXX, I perspective, which as point VBP. of this somewhere of have of, increases. see early a And

double-digits, is an that your XXXX? appropriate point jump-off XQ just Great. we're then Thank the And in when a of Clear growth follow-up. – thinking guide about sort Aligner for you. The

we on want Yeah, Obviously, have we I up the to yet year. to how XXXX. comment end don't see

third We sequentially to we've We're for would say we encouraging. seeing the year say, good business, we consumer given in here have what and to growth get businesses, that macro around business. we're year-over-year we the in momentum around of quarter, which in until grown like expecting see year until our double-digit aligners I is direct-to-consumer be next aligners growth fourth cautious the encouraged what spending, aligner get our in-office on we the quarter. consumer I just quarters to But look there. by impact the headwinds the three both consecutive have in see confidence, I'm next going on and

Thanks.

from And go our Please of comes Jon next Block question Stifel. ahead.

guys. Good morning. Thanks Great.

Just maybe a on follow-up CAD/CAM.

sort just differently, the was maybe channel ask high-single-digits And framed guys we follow-up. the more, be it U.S., now talk of maybe for Can the down for inventory versus or in headwinds CAD/CAM to demand might just think still I'll what the specific U.S.? low-double-digits. I or are you even fully the to inventory end-market some a in then normalized

through on a had reduction terms softening that the think volumes the I in at end is of CAD/CAM combination along inventory of retail demand. Yeah, in we of the year-over-year year, the with hand burning

combination when down to But on would look with put But be part this now. overall performance the a look this don't split have what say, factors. rising like combination think that's as And XXXX, softening levels business obviously, good the demand a the dealer two of equipment of that it's and, like. a you inventory of would clearly, retail I lap we into of I So But estimate levels, too looks could CAD/CAM historical retail at overall, tell it's the even the what I probably what's rates, for levels and it. inventory reasonable burning to the pressure at lower business. going going demand to it and year, down our to right it's at it be dealers very levels then and than at obviously, early norms comes like, clearly, our are look level

and products to an about maybe just not-too-distant And you've got think Primeprint. Are future. maybe and Look, some DS innovator, as us always Dentsply had really you've looking And uptake recently, gears. IDS to in have pocket Okay. just months? to to at Connect at your four, Primescan new the there new unfolding World. some talk good incrementals coming about back us five the Sirona how shift and then And we we the in might over Thanks about I you maybe out know, the talk what still Maybe come and there? light that just next, see that pipeline quarters. going products Are you're guys. in don't to

John. have X,XXX for Thanks, Listen, and at we Sure. World, extremely Dentsply a professionals dental I that I as training and was trade DS mentioned impressed was event I technologies. Sirona show and products at

and technologies the the practices serving and the industry, and that have dentists enabling are think really their dental patients. robust trends better emerging outcomes for in I efficient more we very making their

and what market, the we bear are new very Connect the DS and on I your that and confident solution, Primeprint indeed, technologies including to was I So, saw Primescan the new at with DS World bringing Core. software

saw our new as or Obviously, to of meaningful that the a Singles doubles want discipline in new how too. we product as and moving development, reasonably to it's see as I and six exceptional more we primarily, we as up and those, it’s we at launches, moving the to rigor performance that incremental around we around around in ago expect Sirona XXXX, you and product weeks I base uptake been said forward, expect move move that and should also as But more the really Dentsply would is discipline track to identifying fine, very and But have product them commercial that quite have So we that's going our should around and rigor monitor and between and interaction think revenue. in technology of strong. and development was increase into Uptake forward so. discipline efforts but the you product XXXX, our add in I launches here early, forward. way markets said, has classify knowledge reps forward. we prepared remarks, play meaningful customers I their

Thanks Great. That’s color. great guys.

comes next Michael Petusky Our Barrington go question ahead. of Please Research. from

Hi, good morning.

where that appropriate and you than what sort of and talked both creating that do up, – top just done and a mean, accountability. the at I'm XX, and other speaking of that, weren't you on those compliance curious, weren't that I tone So, culture doing removing of speaking Other I And being to leaders Simon, you level. do things I that a do an at do weren't fostering concretely, say focused aligned you bullet Slide implies about up create that? compliance culture accountability? employees, maybe and mean, And than what folks with certainly,

employees an already there drive there culture committed to team here opinion. what we've to Mike, Glenn that zero so consequences for their share fora to sure, their a of inclusivity opportunities voice and management I of opportunity begun – to speaking and for and share up are have is is Both that the Well, Sirona. people here for that that providing and the no Dentsply at remainder and are

will we seek consensus. – Now be we won't

make opinion, then will move up. topics – and will resilient. to on those that come we But our on has and forward any We decisions seek organization proven be

we organization their to be be and we is to performance in previous voice as and expect rigor appreciated to well. of feel is welcomed, of their where do our operate we we and and have best the expect discipline, you As when factor it and it where get with all can where said who the for where – I question, a technology And robust. create to we people the want come that we place where

like Or guys U.S. I in as Okay. just is table capital that as going and mean, know things? other review, quarterly even you sales guys the going allocation a part investment a is dividend, allocation dividend make of want to on just the that the is assessing you as something Can the I I far I forward? But dividend? internal been mean, forward, question, part one on places, has absolute capital strategic think of of ask given history about more Dentsply.

would a I intending say, paying on moving are we still dividend forward.

that. no to change So

cash including investing I going across get flows to think share we the improve the how to team in about make. leadership business big which focus for we're when organically business, the to need be me and obviously important is the deployed, and the more dividends, to repurchases is capital think investments we

we forward. get a at that so the share business, key I of inventory organization being big us. for XXX% the to how accretive goal road, on fit so we focus dividend setting big mean, and our you that these incurring. the onetime improving to that cash costs currently inventory do of out that's an the conversion strategy I and flow I'm flows in just cash and reinvest our really least free reducing And cash my expectation to it can buybacks more I really then part And down a more tell we're and continue a looking at hit moving some can program, tuck-in focus and that for is acquisitions and expect that's do and of so rate our achieve, have improving is able would profitability,

a change dividend I don't see to-date. any And to implemented to that. so my from our opportunity do been And big again, strategy perspective there is that's

it. Appreciate you. Thank

Piper Please go next comes Bednar Sandler. from Our Jason with question ahead.

Is in for framework equipment. well. mean, year of that for get year, it, going with basis were but do here the slowdown next Simon willing I I'll to, you to where, mid-single-digit also the those comfortable half comments year? pronounced I know Thanks in place at today markets, some early stab expanding on guess, referenced morning. some as you commit – some have more given growing we're in here. procedures, all of certain are European Thanks. recessionary here margins you taking growth risks next EPS down a Good next Glenn, you here. sounds forward-looking a full U.S., for that some or question year, feel to first around not I XXXX. taken or impacts the made and/or for for the mine others I like here know potential at XQ higher a out-of-pocket Street guidance least this estimates just formal

it's Glenn. Jason, Hey,

this We XXXX are going at to point. not comment on

up I the think what we've environment to we finish we XXXX. got where enter as like looks year, see the to see have

any as say to the with going growth to from comments making to refrain we And so path on to going that XXXX, on profitability to really we're act better a urgency organization get I'm move forward. and only

in get So, pass to I more for now, comments XXXX. to we going the when think any but further we're come to call, February

just try. here Understood. pricing. And on Okay. a I'd thought then, follow-up I maybe

mentioned regional? most influencing like then it you price could And price Maybe that's you that another was, Was in three recently. here I just you in Was global? the you at round quarter? from any tailwind did that? fourth think drive and a parts least above-normal increases the some on it point – it October pre-buying XQ assuming confirm the It drive XQ X. did out any that guide world pricing have that of was looks here that in that place, increase growth does of organic for of

can did middle a increase we of price we October. confirm so, Yes,

no, And to increase. coming. there that price another pre-buys price did we was yes, increase relative So, no

the as had of but don't forward. some So where we headwinds selective was we be across-the-board We move think I did the in did select an did can seeing we're increase. in implement increase. of we one it hopefully, October terms middle where it, offset did very cost we we and price of that to

they I China fact, our When the we anticipated in would from a in announced, in manage VBP that. inventory to on add China. levels, well actually as with changes their was saw comment And as some distributors pullback China the

increase quantification Glenn, price that around any you? And standard helpful. That's for just you call it Okay. or or would normal

don't past. I in what say, done it. normal we've I good a quantification pretty just much have Yeah, to would of the

so Thanks much. Okay.

ahead. go Please Vazquez William comes Our next of from Blair. Brandon question

think wanted appreciate. an earlier want taking we too to on everyone. growth I year. which to you return the earlier this comment heard Thanks comment, Hi for weren't I XXXX much I getting next because can question. But I just a did that point, at clarify to know I

a in Is strategic you guess, lot those, There you obviously return I that a what are full about little are fruits that them maybe confident done year? are first, would call some out. if we're could low-hanging more you then, of some you strategically is that identifying But maybe, guys still see XXXX, that year that outlines in I'd fair? be of So, great you them work feeling to if could to follow-up even the bit help And flushing that growth that just on is thinking what of needs here. it's growth? basis, be, have a next

Simon, start margin I'll XXXX, the going comments can to and do could XXXX. or again, In like. XXXX any what to to versus then going further we're or give you performance Brandon, what some the show looks as But top-line maybe, we're Yeah, looks well. add like on we declines expansion what in comments better not growth

when on you we want we'll what that again, get of XXXX. else know, color to more give So Simon, add? I don't February to

about Yeah, for the growth we are forward. structuring and doing and I the work that organization. of on investments on to would mentioned moving that get We the after our trying the portfolio success the profile organization add to

to we look focus in equally remarks above have thoughtful invest at ourselves key and that mindset investment for resources an our that growth expenses and about drive when and increasing confident invest thoughtful without moving willing company's and to so demonstrated about spoke moving North operating getting we disciplined that already operating we I expenses and that is for already forward. We've we're organization this margin. have will prepared in a investment to us in So, I am to disposition for the growth XX% to America growth that the the continue the forward.

seeing Got Aligner within growth? it. Sounds to you're of side. like then, Clear up with some the Thank Clear Aligners, you – are the happy you talk you. where are on seeing And some guys initial about just within maybe can close you traction

these you. going is forward? And accounts from you new where going So growth into maybe Are you like talk – kind Thank would existing expect accounts? coming little a bit momentum new about accounts? of are deeper

it expansion. World. it it's Yeah, I of we geographic But Europe, rates growth Part is broad. of is better is pretty customers. Part are think U.S., seeing the of with pretty conversion broad. Rest

it's I obviously growth in think geographic is, an expansion news pretty of good part of the the think I terms and is it. So broad important

has I at of SureSmile each just this a first Yeah, nine impressive rates performer and year, look I I mean, this. would highlight, months in are putting sequential the we if stellar year-over-year. growth been growth quarter, really for the up

forward, a some portfolio. we should we're plans spot taking and in So share this with our moving be do think the here bright

Campion, session. question to At ahead. call I this turn answer go to like Simon our the now time, Please over back would concludes Mr. CEO. this

We this abilities. Dentsply my all for to Thank you, best thoughtful all employees this our tumultuous the closing, patience questions everyone, I navigated running of to for now the fortitude participating on In would for Sirona the organization very and and period. can your focus their on the world the organization reiterate like today as call. thanks to around

So, your once time today. again, for thank you

Thank you.

has conference today's for concluded. Thank The you attending presentation. now

now may You disconnect.