Summary of DENTSPLY SIRONA Conference Call Company Overview - **Company**: DENTSPLY SIRONA (NasdaqGS: XRAY) - **Date**: March 10, 2026 - **Context**: Discussion at the Leerink Partners Global Healthcare Conference Key Points Return to Growth Strategy - The CEO emphasized a focus on a "return to growth opportunity" and the urgency in tracking progress on a day-to-day basis rather than quarterly [4][10] - Metrics for success include engaging and expanding dealer relationships, which are crucial for the U.S. CTS business recovery [10][11] Dealer Engagement and Simplification - New leadership among dealers has allowed for a fresh start in relationships, focusing on simplicity in deal structures to enhance volume and efficiency [13][14] - The dropship model is being implemented to streamline inventory management and improve cash flow, reducing the burden of excess inventory on dealers [16][19] R&D Investments - Incremental R&D spending is being allocated to enhance product vitality across various verticals, including endodontics, orthodontics, and implants [22][23] - The focus is on leveraging the DS Core platform to accelerate software development and improve product offerings [22][28] Market Dynamics and Product Penetration - The CEO noted that the market appears stable, but the company's challenges are internal rather than market-driven [50][51] - EMEA is identified as a strong market for implants, while Asia Pacific holds significant growth potential [68][69] Clinical Education and Sales Force - Investments in clinical education and sales force training are prioritized to enhance product awareness and improve sales execution [42][49] - The CEO plans to establish a CEO advisory board with dentists to refine strategies and enhance clinical education [41][42] AI and Technology Integration - AI is being explored both as an external tool for customer service and as an internal efficiency tool to streamline operations [63][66] - The company is looking to modernize its software and improve internal processes using AI technologies [66] Orthodontics and SureSmile - The SureSmile platform is being positioned to regain market share, with a focus on modernizing software and enhancing clinical outcomes [91][92] - The CEO acknowledged the need to rebuild trust with orthodontists after previous missteps [101][102] Financial Outlook - The company is undergoing restructuring, which may lead to EPS pressures in the first half of the year, with expectations for improvement in the second half [108][109] - The focus is on long-term growth rather than short-term gains, with plans to strengthen cash flow and shareholder value [109][110] Conclusion - DENTSPLY SIRONA is actively working on a comprehensive strategy to return to growth through dealer engagement, R&D investments, and market penetration, while addressing internal challenges and leveraging technology for future success [4][50][108]

Financial Data and Key Metrics Changes - In Q4 2025, revenue was $961 million, a reported sales increase of 6.2% and constant currency growth of 2.5% compared to the prior year [9][10] - Adjusted EBITDA margins declined by 10 basis points to 14.1%, with a gross profit decline of 300 basis points due to lower volume and sales mix changes [10] - Adjusted EPS for the quarter was $0.27, up $0.01 or 4.9% from the prior year [10] - Full-year sales were $3.68 billion, representing a reported sales decline of 3% and a 4.3% decline on a constant currency basis [14][15] - Full-year adjusted EPS was $1.60, down $0.07 or -4.6% year-on-year [15] Business Line Data and Key Metrics Changes - CTS segment constant currency sales declined 1.9%, with lower sales in CAD/CAM in the rest of the world and Europe, partially offset by high single-digit growth in the U.S. [11] - EDS segment sales increased 4% on a constant currency basis, led by a 17% increase in preventative products [12] - OIS segment sales increased 6.9% on a constant currency basis, with a decline in IPS driven by lower implant volumes [12] - Wellspect HealthCare constant currency sales increased 1.9%, with 15% growth in the U.S. [13] Market Data and Key Metrics Changes - In China, implant sales saw single-digit growth in the first half of the year but a double-digit decline in the second half due to procurement expectations [13] - Premium implants declined, while value implants were slightly down, primarily due to challenges in China [13] - The U.S. market showed low distributor inventory levels relative to historical averages, indicating potential for growth [11] Company Strategy and Development Direction - The company is focused on a 24-month Return to Growth action plan aimed at restoring momentum and delivering sustained profitable growth [17] - Key pillars of the strategy include a customer-centric mindset, reigniting sustainable growth, empowering performance, scaling the organization, and financial strength [17][18] - The company plans to increase R&D investment by double digits to accelerate capabilities and drive innovation across various segments [20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's potential and the execution of the Return to Growth plan, emphasizing the importance of customer focus [7][17] - The company anticipates positive sequential sales momentum in the second half of 2026, despite challenges in the first half [28][56] - Management noted that the return to health is not market-dependent and emphasized the need for improved execution [76] Other Important Information - The company initiated a restructuring program expected to unlock approximately $120 million annually, which will be reinvested in the Return to Growth plan [26] - The decision to eliminate dividends was made to reallocate funds toward debt retirement and share repurchases [27] Q&A Session Summary Question: Impact of dividend elimination on capital deployment - Management indicated that the elimination of dividends would free up $128 million annually for capital deployment, focusing on debt retirement and share repurchases [32][33] Question: Revenue headwind from new dealer inventory model - Management estimated a revenue headwind of about $30 million due to the transition to a drop ship model, expected to be resolved in the first half of 2026 [35][36] Question: Timing of recent dealer agreements - Management noted that benefits from new dealer agreements are not significantly included in guidance and expect to see results in the latter half of 2026 [39][40] Question: R&D spending and product launches - Management stated that increased R&D spending would not pull forward product launches into 2026, with most benefits expected in 2027 and beyond [81][82] Question: Commercial team reorganization - Management confirmed that the reorganization of the commercial team is complete and will be active in the new structure soon [51] Question: Strategy for DSOs - Management acknowledged the importance of DSOs and indicated ongoing exploratory discussions to enhance partnerships with them [70][71]

Financial Data and Key Metrics Changes - In Q4 2025, revenue was $961 million, a reported sales increase of 6.2% and constant currency growth of 2.5% compared to the prior year [9][10] - Adjusted EBITDA margins declined 10 basis points to 14.1%, with a $15 million impact from tariffs [10] - Adjusted EPS for the quarter was $0.27, up 4.9% from the prior year [10] - Full-year sales were $3.68 billion, representing a reported sales decline of 3% and a 4.3% decline on a constant currency basis [14][15] - Full-year adjusted EPS was $1.60, down 4.6% year-on-year [15] Business Line Data and Key Metrics Changes - The CTS segment saw constant currency sales decline 1.9%, with lower sales in CAD/CAM in Europe and the rest of the world, partially offset by high single-digit growth in the U.S. [11] - The EDS segment, which includes endo, resto, and preventative products, experienced a 4% increase in constant currency sales, led by a 17% growth in preventative products [12] - OIS segment sales increased 6.9% in constant currency, while IPS declined due to lower implant volumes [12] - Wellspect HealthCare constant currency sales increased 1.9%, with 15% growth in the U.S. [12] Market Data and Key Metrics Changes - In China, implant sales saw a single-digit growth in the first half of the year but a double-digit decline in the second half due to changes in buying behavior [13] - Premium implants declined, while value implants were slightly down, primarily due to challenges in China [13] Company Strategy and Development Direction - The company is focused on a 24-month Return-to-Growth action plan aimed at restoring momentum and delivering sustained profitable growth [17] - The plan includes five pillars: customer-centric mindset, reigniting sustainable growth, empowering performance, scaling the organization, and financial strength [17][18] - The company aims to strengthen its U.S. business and improve its competitive position through strategic partnerships and enhanced sales force training [22][23] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's potential and the effectiveness of the Return-to-Growth plan [7][29] - The company anticipates a net sales range of $3.5 billion to $3.6 billion for 2026, reflecting a -3% to -1% operational growth [28] - Management emphasized that the return to health is not market-dependent and that improvements will come from better execution [75] Other Important Information - The company initiated a restructuring program expected to unlock approximately $120 million annually, which will be reinvested in the Return-to-Growth action plan [26] - The decision to eliminate dividends will allow for capital reallocation towards debt retirement and share repurchases [27] Q&A Session Summary Question: Discussion on dividend elimination and capital deployment - Management indicated that the elimination of dividends would free up $128 million annually for capital deployment, focusing on debt retirement first and then share repurchases [32][33] Question: Impact of new dealer inventory model on revenue - Management explained that transitioning to a drop ship model would result in an estimated revenue headwind of about $30 million, expected to be resolved in the first half of 2026 [35][36] Question: Timing of recent dealer agreements and their impact - Management noted that benefits from new dealer agreements are not significantly included in guidance and are expected to materialize in the latter half of 2026 [39][40] Question: R&D spending and product development cadence - Management stated that increased R&D spending would not yield immediate results in 2026 but would accelerate product development for future years [80][81] Question: Commercial team reorganization status - Management confirmed that the reorganization of the commercial team is complete and that the new structure is already being implemented [51] Question: Strategy for DSO penetration - Management acknowledged the importance of DSOs and indicated ongoing discussions to enhance partnerships, although significant moves are not expected until 2027 or 2028 [69][70]

DENTSPLY SIRONA (NasdaqGS:XRAY) Q4 2025 Earnings call February 26, 2026 04:30 PM ET Speaker12Good day. Thank you for standing by. Welcome to the Q4 2025 Dentsply Sirona Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your ...

Financial Data and Key Metrics Changes - In Q1, the company reported revenue of $879 million, representing a decline of 7.7% year-over-year, with organic sales down 4.4% due to a negative 4% BiTE impact [23][24] - Adjusted EPS for the quarter was $0.43, up 3.7% from the prior year, driven by higher adjusted EBITDA margins and a lower share count [25] - Adjusted EBITDA margins expanded by 220 basis points, benefiting from lower operating expenses and transformational savings [25] Business Line Data and Key Metrics Changes - Essential Dental Solutions segment saw organic sales increase by 0.4%, driven by growth in Europe and the rest of the world, despite lower volumes in the U.S. [27] - Orthodontic and Implant Solutions segment experienced a significant organic sales decline of 17.7%, primarily due to the loss of a DSO customer in the U.S. and lower lab volumes globally [28] - Connected Technology Solutions segment reported a slight organic sales decline of 0.5%, largely due to CADCAM declines in the U.S., although imaging performance showed growth across all regions [29] Market Data and Key Metrics Changes - U.S. organic sales declined by 14.9%, primarily impacted by a negative 9.8% from BiTE, while imaging growth was noted [31] - Europe saw organic sales increase by 1.1%, driven by strong performance in Germany, particularly in equipment and instruments [34] - Rest of World organic sales grew by 3.1%, with growth in imaging and WellSpec in China, offset by CADCAM declines [35] Company Strategy and Development Direction - The company is focused on driving reliable and sustainable performance, emphasizing customer-centric product innovation and operational efficiency [8][10] - The strategy includes enhancing the digital ecosystem through the DS Core platform, which has gained traction with over 42,000 unique users [14] - The company aims to improve customer engagement through revamped websites and a new e-commerce platform [19][20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating global trade challenges and has developed plans to mitigate potential impacts from tariffs [7][12] - Despite a challenging macroeconomic environment, the company maintained its outlook for organic sales and adjusted EPS for 2025, while increasing reported sales expectations due to foreign currency translation changes [12][36] - Management noted stable patient volume and procedure utilization, although U.S. dentists expressed concerns about economic conditions affecting patient footfall [11] Other Important Information - The company is actively managing its balance sheet and has taken actions to strengthen its position, including entering into a bridge loan agreement [26] - The company has completed the closure of 10 manufacturing and distribution sites as part of its supply chain optimization efforts [23] Q&A Session Summary Question: Can you expand on the tariff impact? - Management indicated that tariffs have been factored into guidance, estimating an annualized impact of approximately $50 million, with about $0.10 impact on EPS [49][50] Question: Update on CFO search? - Management reported good progress in the CFO search, with candidates in the late phases of the process [52] Question: Insights on orthodontics and SureSmile? - Management acknowledged the need to reengage with the orthodontist community and improve user experience for SureSmile [58] Question: Clarification on EBIT margin? - Management noted that Q1 EBIT margin improvements are indicative of future performance, with a focus on judicious SG&A management [62] Question: Cash flow and CapEx expectations? - Management expects CapEx to decrease as ERP projects roll off, leading to improved free cash flow [108]

Financial Data and Key Metrics Changes - In Q1 2025, the company's revenue was $879 million, representing a decline of 7.7% year-over-year. Organic sales decreased by 4.4%, impacted by a negative 4% BiTE effect [23][24]. - Adjusted EBITDA margins expanded by 220 basis points, benefiting from lower operating expenses and transformational savings [25]. - Adjusted EPS for the quarter was $0.43, up 3.7% from the prior year, primarily due to higher adjusted EBITDA margins and a lower share count [25]. Business Line Data and Key Metrics Changes - Essential Dental Solutions segment saw organic sales increase by 0.4%, driven by growth in Europe and the rest of the world, despite lower volumes in the U.S. [26]. - Orthodontic and Implant Solutions segment experienced a significant organic sales decline of 17.7%, largely due to a negative BiTE impact and a loss of a DSO customer in the U.S. [27]. - Connected Technology Solutions segment had a slight organic sales decline of 0.5%, primarily due to CADCAM declines in the U.S., although imaging performance grew across all regions [28]. Market Data and Key Metrics Changes - U.S. organic sales declined by 14.9%, primarily due to a negative 9.8% impact from BiTE, while imaging growth was noted [30]. - Europe saw organic sales increase by 1.1%, driven by strong performance in Germany, which posted growth for the second consecutive quarter [33]. - The Rest of World segment experienced organic sales growth of 3.1%, with notable growth in imaging and WellSpec in China [34]. Company Strategy and Development Direction - The company is focused on driving reliable and sustainable performance, emphasizing customer-centric product innovation and operational efficiency [7][10]. - The strategy includes enhancing the digital ecosystem through the DS Core platform, which has gained traction with over 42,000 unique users [14]. - The company aims to improve customer engagement and experience through revamped websites and a new e-commerce platform [19][20]. Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges posed by global trade situations and tariffs but expressed confidence in the company's ability to navigate these risks [6]. - The outlook for 2025 remains unchanged for organic sales and adjusted EPS, with reported sales revised to reflect foreign currency changes [12][35]. - Management noted stable patient volume and procedure utilization, despite some concerns among U.S. dentists regarding economic conditions [11]. Other Important Information - The company is actively managing its balance sheet and has taken steps to strengthen its position, including entering into a bridge loan agreement [25]. - The company has completed the closure of 10 manufacturing and distribution sites as part of its supply chain optimization efforts [23]. Q&A Session Summary Question: Can you expand on the tariff impact? - Management indicated that tariffs have been factored into guidance, estimating a $0.10 impact, with an annualized exposure of about $50 million [47][48]. Question: Update on the CFO search? - Progress is being made with several candidates in the late phases of the process [50]. Question: Insights on the orthodontics side? - Management noted the need to reengage with the orthodontist community and improve user experience with SureSmile [56]. Question: Context behind EBIT margin? - The improvement in Q1 EBIT margin is seen as a reasonable run rate for the rest of the year, with a focus on judicious SG&A management [62]. Question: Cash flow and CapEx expectations? - CapEx is expected to improve as ERP projects roll off, leading to better free cash flow [107].