DENTSPLY SIRONA(US:XRAY)2022-02-28 18:00Financial Performance - Dentsply Sirona reported revenues of $4.25 billion for 2021, reflecting a 24.6% organic growth compared to 2020 and a 4.9% increase compared to 2019 [12][23] - For Q4 2021, revenue was $1.088 billion, with organic sales growth of 1.8% and reported growth of 0.6% [15] - The operating margin for 2021 was 20.5%, with adjusted EPS at $2.87, and operating cash flow of $657 million [12][28] Business Segment Performance - In Q4, technology and equipment organic sales grew by 6.5%, while consumables declined by 4.6% [19] - Clear aligners, implants, and CAD/CAM businesses showed strong growth despite supply chain challenges [15][19] - The full year 2021 saw clear aligners generating $270 million, with SureSmile exceeding the $100 million annual run rate goal [24] Market Performance - U.S. sales in Q4 were $385 million, with slight organic growth year-on-year, while European sales were $437 million with 1.8% organic growth [22] - The rest of the world sales reached $266 million, representing 4% organic growth, impacted by COVID restrictions in APAC, particularly China [22] Company Strategy and Industry Competition - The company aims for reliable 4% to 5% revenue growth, continuous margin improvement, and double-digit earnings growth [40] - Dentsply Sirona is focusing on digital dentistry, with significant investments in R&D and strategic collaborations, such as with Google Cloud [11][45] - The company is committed to enhancing its digital portfolio and improving operational efficiencies while navigating supply chain challenges [35][53] Management's Comments on Operating Environment and Future Outlook - Management acknowledged ongoing supply chain constraints and anticipated challenges for at least one or two quarters in 2022 [15][30] - The effective tax rate is expected to be between 23% and 24%, with EPS projected in the range of $3.05 to $3.25 for 2022 [31][31] - Management expressed confidence in the resilience of the dental market and the company's ability to expand revenue and earnings over time [36][56] Other Important Information - The company plans to return at least 50% of free cash flow to shareholders through dividends and share repurchases [35] - Dentsply Sirona is developing global standards for cleft treatment protocols and sponsoring the 2022 World Oral Health Campaign [37] Q&A Session Summary Question: Impact of Omicron on Q4 results and January performance - Management noted that December saw complications due to staffing shortages, leading to lower volumes, which continued into January, particularly in regions with strict COVID policies [60][61] Question: Commercial launch calendar for Primeprint - The global launch is expected towards the end of Q2, primarily in North America and Central Europe, with further details to be refined as the launch date approaches [63][66] Question: Supply chain disruptions and visibility on components - Management indicated that visibility into electronic component shortages is complicated, with expectations that issues may persist into the first half of the year [71][73] Question: Confidence in supply chain improvement in the second half - Management expressed cautious optimism based on supplier feedback and ongoing efforts to manage inventory levels [110] Question: Strategy regarding portfolio evolution - The company continues to evaluate its portfolio based on growth potential, margin accretion, and alignment with digital workflows, with no immediate plans for major divestitures [88]