DENTSPLY SIRONA(US:XRAY)2023-05-03 17:08Financial Data and Key Metrics Changes - Dentsply Sirona reported Q1 2023 revenue of $978 million, representing a reported sales growth of 0.9% [14] - Organic sales growth was 5.1%, exceeding the outlook of approximately 1% [13] - Adjusted EPS in Q1 was $0.39 compared to $0.54 in the prior year quarter, with a decline attributed to commercial investments, higher inflation, and foreign currency headwinds [16][17] Business Line Data and Key Metrics Changes - Organic sales in the Consumables segment grew approximately 10%, driven by strong demand for restorative and preventive products [21] - Technologies & Equipment segment saw organic sales growth of 1.7%, with Aligners growing over 25% [18] - The Equipment & Instruments business declined by mid-single digits, while Implants were down high single digits [20] Market Data and Key Metrics Changes - U.S. organic sales grew 14.6%, driven by higher volume in Consumables, Aligners, and CAD/CAM [22] - Europe saw organic sales growth of 1.1%, primarily due to strong growth in Consumables and Aligners [23] - Rest of World organic sales were flat, but excluding China, growth was 5.7% [23] Company Strategy and Development Direction - The company aims to transform dentistry by digitalizing workflows and enhancing customer experience [30] - Strategic objectives include delivering annual growth and margin commitments, enhancing profitability, and accelerating enterprise digitalization [31] - A new segment structure will be implemented starting Q2 2023 to provide greater transparency in financial reporting [29] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the trajectory through the transition year, raising the low end of the 2023 outlook for net sales and adjusted EPS [8][24] - The company remains cautious about the external environment, particularly in capital equipment and certain markets like China, Brazil, and Australia [28] - Management expects EBITDA margins to be at least 16% in Q2 and greater than 18% for the full year [26][28] Other Important Information - The company announced a $150 million accelerated share repurchase program [17] - Dentsply Sirona is committed to ESG initiatives, including developing global standard protocols for digitalized cleft treatment [12] Q&A Session Summary Question: Trends observed towards the end of the quarter and Aligner profitability - Management noted strong trends in January and February, with March being weaker, but April showed stability [41] - Aligner profitability is driven by improved customer conversion rates and reduced acquisition costs [44] Question: Guidance for Q2 and organic growth expectations - Management expects slight sequential increases in revenue and EPS for Q2, but cautioned about tougher comps from the previous year [48][49] Question: Performance of the Implant business and recovery in China - Excluding China, the implant business was down low single digits, with expectations for recovery in both U.S. and China markets [55] Question: Equipment demand trends and order book shaping - Distributor timing dynamics were primarily related to the U.S. business, with good volume gains in CAD/CAM [58][59] Question: Portfolio optimization and potential divestitures - The company is evaluating alternatives for its Wellspect asset, with no significant divestitures expected in the near term [66]