DENTSPLY SIRONA(XRAY)2025-05-28 14:45Summary of Dentsply Sirona Conference Call Company Overview - Dentsply Sirona is a leading company in the dental market, with a global reach and significant international market presence [1] Key Financial Performance - Q1 2025 results exceeded guidance, with revenue down mid-single digits year-over-year primarily due to Byte [2][4] - EPS was well above guidance, indicating strong operational performance despite revenue challenges [2] Market Landscape - The overall dental market remains stable but has not returned to pre-COVID levels after five years [4][11] - Patient traffic is stable but still below pre-COVID levels, with slight degradation in customer sentiment noted [4][5] - Germany has shown decent performance and slight improvement in the last couple of quarters [7] Customer Sentiment and Behavior - Customer sentiment in the U.S. has shifted slightly from "not concerned" to "a little bit concerned," but this is more of a numerical shift than a significant change in behavior [5][9] - No significant changes in footfall or purchase intent reported by customers [10] Challenges in the Dental Market - Awareness around oral health and sensitivity to pricing are ongoing challenges affecting the dental market [12] - High interest rates have constrained capital equipment investments, particularly impacting the CTS (Capital Equipment) division [12][16] Division Performance and Growth Strategies - CTS and Implants/Prosthetics: Both divisions are expected to decline in 2025, accounting for nearly 50% of revenue. The company is focused on improving customer sentiment and investing in efficiency [14][16] - DS Core Platform: Significant investments have been made in the DS Core platform, with a 14% increase in users and a 25% increase in connected devices quarter-over-quarter [18][19] - Implants: The importance of the sales force in the implant community has been underestimated, and efforts are being made to improve sales rep training and customer engagement [20][21] - Orthodontics: Growth is expected to resume as the impact of the DSO loss is lapped, with double-digit growth reported in Europe for SureSmile [30][33] Margin and Expense Management - Despite negative revenue growth, all divisions reported year-over-year margin increases due to reduced expenditures and improved operational efficiency [35][36] - OpEx was down 14% year-over-year in Q1 2025, with expectations for continued reductions in the future [39][40] Future Outlook - The company aims to return to growth, with expectations for normalized growth in 2025 and acceleration into 2026 [42][44] - Continued focus on innovation and customer engagement is seen as critical for future success [44][46] Distributor Relationships - Ongoing discussions with key distributors, including Patterson, have deepened, with positive engagement noted [50][52] - The company is working to restore relationships with key distributors in Europe and the U.S. [51] Virtual Sales Force Initiative - A virtual sales force initiative has been launched, with approximately 100 reps making 2,000 calls daily and generating meaningful engagement with accounts [58][59] - The initiative aims to create demand independently of distributors and has already resulted in sales [64] Tariff Impact - The impact of U.S.-China tariffs on Dentsply Sirona is minimal, accounting for less than a couple of percentage points of revenue [67][68] - The company is taking proactive measures to mitigate potential tariff risks, including redistributing products to U.S. distribution sites [69][70]