Q4 2024 Dentsply Sirona Inc Earnings Call

February 27, 2025

Please be advised that today's conference is being recorded after the speaker's presentation there'll be a question and answer session to ask a question. Please press star one one on your telephone and wait for your name to be announced to withdraw. Your question. Please press star one one again I would now like to hand conference over to your speaker today Andrea Daly.

After the speaker's presentation, there will be a question and answer session.

Speaker Change: To ask a question, please press star 1-1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1-1 again. I would now like to hand the conference over to your speaker today, Andrea Daley, Executive Vice President, Corporate Development and General Counsel.

Vice President of Investor Relations.

Andrea Daly: Thank you Josh and good morning, everyone welcome to the <unk> fourth quarter 2024 earnings call. Joining me for today's call is Simon Campion, Chief Executive Officer, Herman <unk> interim Chief Financial Officer, and Rich Rosenzweig Executive Vice President corporate development and Joe.

Speaker Change: I'd like to remind you that an earnings press release and slide presentation related to the call are available in the investor section of our website at www.denselycerona.com. Before we begin, please take a moment to read the forward-looking statements in our earnings press release. During today's call, we may make certain predictive statements that reflect our current views about future performance and financial results.

There'll Council.

Andrea Daly: I'd like to remind you that an earnings press release and slide presentation related to the call are available in the investors section of our website at Www Dot densify Sirona dotcom.

Simon Campion: Thank you, Andrea, and thank you all for joining us this morning for our Q4 2024 earnings call. Today I will start by providing an overview of our recent performance, then Herman will cover Q4 and full year 2024 financial results and our 2025 outlook, and I'll finish with a strategic operating update. Before we get started, earlier this month we augmented our board with the addition of Dan Scavilla and Mike Barber, two proven leaders with skill sets that are additive to the board and that will be highly beneficial as we continue to execute on our transformation strategy. Dan, CEO of Globus Medical, is a seasoned executive with deep expertise in commercial deployment and business integration, having successfully led the merger of Globus and NuVasive.

Andrea Daly: Before we begin please take a moment to read the forward looking statements in our earnings press release during today's call. We may make certain predictive statements that reflect our current views about future performance and financial results. We base these statements and certain assumptions and expectations on future events that are subject to risks and uncertainties.

Andrea Daly: Our most recently filed Form 10-K, and any updating information and subsequent SEC filings list. Some of the most important risk factors that could cause actual results to differ from our predictions on.

Andrea Daly: On today's call our remarks will be based on non-GAAP financial results, we believe that non-GAAP financial measures offer investors valuable additional insights into our businesses financial performance enable the comparison of financial results between periods, where certain items may vary independently of business performance and enhanced.

Simon Campion: Mike brings over 40 years of experience in product management and innovation, including executive leadership roles at GE, where he was responsible for the transformation of the company's digital X-ray program. Now let's start with some key points on slide three. In the fourth quarter, we were pleased to see green shoots in several areas of the business, including a return to organic sales growth in Europe of approximately 2% and global growth in imaging of nearly 13%, while Wellspect exceeded estimated market growth rates, posting approximately 7% growth. SureSmile continued to grow globally, achieving a nearly 4% increase over the prior year quarter, with over 20% growth in Europe for Q4 and the full year. Fourth quarter results in Europe included continued momentum in Germany. We are encouraged by the positive step change we saw in performance in the second half of 2024.

Andrea Daly: Transparency regarding key metrics used by management in operating our business. Please refer to our press release for the reconciliation between GAAP and non-GAAP results.

Speaker Change: all over to Simon. Thank you Andrea and thank you all for joining us this morning for our Q4 2024 article.

Andrea Daly: Comparisons provided are to the prior year quarter, unless otherwise noted a webcast replay of today's call will be available on the investors section of the company's website following the call and with that I will now turn the call over to Simon.

Speaker Change: Today I will start by providing an overview of our recent performance, then Herman will cover Q4 of the full year 2024 financial results and our expansion 2025 plan.

Simon Campion: Thank you Andrea and thank you all for joining US this morning for our Q4 2024 earnings calls.

Speaker Change: following the call. And with that, I will now turn the call over to Simon.

Andrea Daly: Today, I will start by providing an overview of our recent performance.

Andrea Daly: And then Herman will cover Q4, and full year of 2024 financial results and our 2025 outlook.

Andrea Daly: I'll finish with a strategic operating update.

Andrea Daly: Before we get started earlier this month, we augmented our board with the addition of Danske. Unlike Barbara two proven leaders with skill sets that are out of the to the board and that will be highly beneficial as we continue to execute on our transformation strategy.

Simon Campion: The key actions we took to improve performance and address market dynamics included reintroducing Orthophos SL, improving commercial execution by directing sales personnel towards our most significant growth opportunities, and enhancing our training to address customer needs. This translated into results that exceeded sales targets since the relaunch, and better positions us for success in 2025. Excluding the incremental charges associated with Byte taken in the fourth quarter, the business outperformed our latest guidance by almost 2% on the top line in Q4 and almost 4% above the midpoint of our full year adjusted EPS guide. In 2024, we finished the year with organic sales down 3.5%, in line with our latest guidance. Let me give you some color around this. Byte reduced sales by 1.2%, and there was a 2.5% impact from CTS.

Mike Barber: and Mike Barber. Mike brings over 40 years of experience and skill set that are added to the board.

Speaker Change: <unk> CEO of Globus medical.

Mike Barber: and that will be highly beneficial as we continue to execute on our transformation strategy. Dan, the CEO of the Global X-Ray Program, is a seasoned executive with deep expertise in commercial deployment and business integration. In the fourth quarter, we were pleased to see green shoots in several areas of the business.

Speaker Change: Seasoned executive with deep expertise in commercial deployment and business integration, having successfully led the merger of Globus and new basis.

Mike: Mike brings over 40 years of experience in product management and innovation.

Mike: <unk> executive leadership roles at GE, where he was responsible for the transformation of the company's digital X-ray program.

Mike Barber: including a return to organic sales growth in Europe of approximately 2% innovation and global growth in images of nearly 30% at GE, while spec exceeded estimated market growth rates, posting approximately 7% growth.

Mike: So let's start with some key points on slide three and.

Mike: In the fourth quarter, we were pleased to see green shoots in several areas of the business, including a return to organic sales growth in Europe of approximately 2% and global growth in imaging of nearly 13% well.

Speaker Change: Shure Smile continued to grow globally, achieving a nearly 4% increase over the prior year quarter, with over 20% growth in several areas of the business, including a return to organic sales growth in Europe of approximately 2%, and global growth and imaging momentum in Germany.

Mike: Well expect exceeded estimated market growth rates posting approximately 7% growth.

Mike: She was model continued to grow globally, achieving a nearly 4% increase over the prior year quarter with over 20% growth in Europe for Q4, and the full year.

Simon Campion: While CTS faced both global macroeconomic and price pressure, our relaunch of Orthophos SL that I've just mentioned and the launch of Primescan 2 propelled second-half growth in imaging and facilitated volume growth throughout the year in scanners. This is the third year in a row that we have demonstrated volume growth in scanners, the gateway to patient treatment and clinical workflows. SureSmile posted four quarters in a row of high single-digit to double-digit growth on aligners, and we'll speak a little later on about our investments to accelerate our SureSmile business. ENDO demonstrated the importance of innovation, with our new X-Smart Pro+ motor and Reciproc Blue launches leading to competitive conversions in the US during the second half of the year, while Wellspect delivered another year of strong growth across all regions.

Speaker Change: We are encouraged by the positive step change we saw in the second half of 2024.

Speaker Change: Sjoerd Smaal continues to grow globally to improve for nearly 4% increase over the prior year quarter including reintroducing growth in Europe for 2024 and improving commercial execution by directing sales personnel for programs in Europe including continued momentum in Germany and enhancing our training to address customer needs. We are encouraged by the positive step change we saw in performance in the second half of 2020 targets.

Mike: Fourth quarter results and in Europe included continued momentum in Germany.

Mike: We are encouraged by the positive step change we saw in performance in the second half of 2024.

Mike: The key actions, we took to improve performance and address market dynamics included reintroducing or as opposed to S. L improving commercial execution by directing sales personnel towards our most significant growth opportunities.

Speaker Change: since the re-launch, key actions we took to improve performance and address market dynamics.

Speaker Change: including the incremental charges associated with improving commercial execution by directly outperforming our latest guidance by almost 2% on the top line in Q4 and enhancing on almost 4% above the midpoint of our full year adjusted sales targets. This translated into results that exceeded sales targets.

Mike: And enhancing our training to address customer needs.

Mike: This translated into results that exceeded sales targets since the relaunch and better positions us for success in 2025.

Mike: Excluding the incremental charges associated with bite taken in the fourth quarter the business outperformed our latest guidance by almost 2% on the top line in Q4, and almost 4% above the midpoint of our full year adjusted EPS Guide.

Speaker Change: In 2024, we finish the year with organic sales down 3.5%.

Speaker Change: in line with all the incremental charges associated with bike taking over the border.

Simon Campion: Our January survey of over 1,300 respondents indicated that our major markets remain relatively unchanged, with utilization showing slight improvement across most categories, with continued softness in elective procedures. Survey results also continue to indicate strong interest in driving efficiencies through workflow improvement, which aligns with our strategy. For 2025, we expect the external environment to remain largely unchanged, and as such, we expect organic sales to be down 2% to 4% for the year, including a negative Byte impact. As we've said, we view our current portfolio, innovation engine, commercial scale, and clinical education platform as key value drivers. We made the strategic decision to redeploy certain Byte resources to our SureSmile platform. They have commenced leveraging their strong capabilities to drive direct-to-consumer demand and revamp e-commerce.

Speaker Change: The business outperformed our latest guidance by almost 2% and there was a 2.5% impact from DTS. Our TPS adjusted DTS guidance.

Mike: In 2024, we finished the year with organic sales down three 5% in line with our latest guidance.

Speaker Change: In 2024, we finished the year with organic sales down 3.5%, propelled second half growth in imaging and color arrangement. Light reduced sales by 1.2%, and this is the third year in a row that we have demonstrated volume growth in scanners.

Speaker Change: Let me give you some color around this.

Speaker Change: <unk> reduced sales by one 2% and there was a 2.5% impact from Cts.

Speaker Change: While Cts faced both global macroeconomic and price pressure.

Speaker Change: Relaunch of Ortho <unk> S. L that I've, just mentioned and the launch of Prime's going to propel second half growth in imaging and facilitated volume growth throughout the year in scanners.

Speaker Change: I suggest we debate in treatment both global macroeconomic and price pressure.

Speaker Change: Our re-launch of all the four quarters in a row of high single-digit to double-digit Pro Analyzer.

Speaker Change: This is the third year in a row that we have demonstrated volume growth in scanners, the gateway to patient treatment and clinical workflows.

Speaker Change: and we'll speak a little later on about our investments to accelerate our short-term health. Endo demonstrated the importance of innovation. It's the third year in a row that we have demonstrated volume growth in risk factors. The gateway to patient treatment and clinical workflows.

Speaker Change: Sure Smile posted four quarters in a row of high single digit to double digit growth on a liners and we'll speak a little later on about our investments to accelerate our shoe a small business.

Speaker Change: during the second half of the year. Wealthbanks delivered another year of strong growth across all regions. Our January survey of over 1,300 respondents indicated that our major markets remain relatively unchanged with utilizations showing slight improvements across most categories.

Speaker Change: And though demonstrated the importance of innovation with our new <unk> Pro plus motor and rest of the product bluefire launches leading to competitive conversions in the U S. During the second half of the year.

Simon Campion: Furthermore, we have transitioned key software resources to our SureSmile innovation team, who now focus on creating simplified product offerings, upgrading the user interface of the software, and reimagining the patient and customer experience. We expect some of these improvements to launch as early as mid-2025. Earlier this month, we also announced that we are exploring strategic alternatives for our Wellspect HealthCare business. We believe that taking this step can unlock significant value for our stakeholders. Over the last two years, we have invested very strategically in this business. We strengthened its foundation and positioned it for the future by prioritizing product innovation and profitable revenue growth, and investing in capacity to meet anticipated demand growth. Importantly, we've developed a strong product pipeline with potential opportunities to access significant untapped markets in Wellspect core business and other adjacencies.

Speaker Change: Well, it's back to delivered another year of strong growth across all regions.

continued softness in elective procedures.

Speaker Change: Our January survey of over 1300 respondents indicated that our major markets remain relatively unchanged with utilization showing slight improvement across most categories.

Speaker Change: and others. Survey results also continue to indicate strong interest in driving efficiencies through one year of survey of over 1,300 respondents.

Speaker Change: Continued softness in elective procedures.

Speaker Change: Survey results also continue to indicate strong interest and driving efficiencies through workflow improvement, which aligns with our strategy.

Speaker Change: For 2025, we expect the external environment to remain largely unchanged and as such we expect organic sales to be down 2% to 4% for the year, including a negative bite impact.

Speaker Change: As we've said we view our current portfolio innovation engine commercial scale and clinical education platform as key value drivers.

Speaker Change: are organics sales to be down 2% more from their foot year, including a negative bite impact. As we've said, we view our current portfolio, furthermore, innovation, and transition to key software resources, and to our SureSmile innovation team, who now focus on creating simplified product offerings. We made a strategic decision to redeploy certain bite resources to our SureSmile customers. They have commenced leveraging their strong capabilities to drive direct-to-consumer demand and revamp e-commerce.

Simon Campion: Our added focus and attention to this business has resulted in attractive top-line growth and profitability. We look forward to determining an outcome for this evaluation process. As we said, the company is committed to maintaining a disciplined approach in regularly evaluating our portfolio, cost structure, investments, and additional pathways to drive sustainable, profitable growth. We have made meaningful progress on our transformational journey, completing key initiatives and milestones in 2024, with our plans and momentum continuing into 2025. I'll share a more detailed update on our foundational initiatives later, but before we move on, I want to reiterate that we remain highly committed to taking actions to reshape the organization, unlock efficiencies, enhance customer engagement, and strategically allocate spend with a return focus. We are confident that these steps will enable us to capitalize on the advantages that a broad-based dental organization has to offer.

Speaker Change: We made the strategic decision to redeploy certain bite resources to assure a small platform.

Speaker Change: They have commenced leveraging their strong capabilities to drive direct to consumer demand and revamped e-commerce.

Speaker Change: Furthermore, we have transitioned to key software resources to assure smile innovation team, who now focus on creating simplified product offerings upgrading the user interface of the software and re imagining the patient and customer experience.

Speaker Change: Furthermore, earlier this month, we have transitioned key software resources to reassuring strategic alternatives for our wealth-based healthcare business. We believe that taking this step can unlock significant value for our stakeholders. Over the last two years, we have invested very strategically and strengthened its foundation and positioned it for the future. Earlier this month, we also announced that we are exploring strategic alternatives for our wealth-based healthcare business.

Speaker Change: We expect some of these improvements to launch as early as mid 2025.

Speaker Change: Earlier. This month, we also announced that we are exploring strategic alternatives for our well specced health care business.

Speaker Change: We believe that taking this step can unlock significant value for our stakeholders.

Speaker Change: Over the last two years, we have invested very strategically in this business.

Speaker Change: We believe that taking this step can unlock significant value for our stakeholders.

Speaker Change: We strengthened its foundation and positioned it for the future by prioritizing product innovation and profitable revenue growth and investing in capacity to meet anticipated demand growth.

with potential opportunities to access significant untapped markets in Wellspec.

Speaker Change: and other adjacencies and positioned it for the future of private enterprises, as a result of attractive revenue growth and investing in capacity to meet anticipated demand growth.

Simon Campion: The financial contributions that we originally laid out for these initiatives during our 2023 Investor Day continue to remain on track. Now, before we discuss financial results in more detail, I'd like to share some recent business highlights on slide 4. Starting with operational updates. We announced our phase 2 transformation activities back in August. Action steps are now largely complete and on track to deliver full run rate savings by the end of 2025. We also announced in August that we were investing in a virtual sales team in the US, with the expectation that the team would be stood up and calling customers in Q1 2025. The team is now fully staffed and has already made over 8,000 unique customer touchpoints to date. As we've shared, we've completed the largest individual phase of our ERP deployment in the US, which went live on 1 November.

Speaker Change: Importantly, we.

Speaker Change: We've developed a strong product pipeline with potential opportunities to access significant untapped markets in <unk> core business and other adjacencies.

We've developed a strong product pipeline.

Speaker Change: The company is committed to maintaining a disciplined approach in regularly evaluating our portfolio, core business, infrastructure, and other adjacencies, and additional pathways to drive sustainable possible growth.

Speaker Change: Our added focus on attention to this business has resulted in attractive top line growth and profitability.

Speaker Change: We look forward to determining an outcome for this evaluation process.

Speaker Change: We have made meaningful progress on our transformational journey. We look forward to determining the milestones of 2024.

Speaker Change: As we said the company is committed to maintaining a disciplined approach and regularly evaluating our portfolio cost structure investments and additional pathways to drive sustainable profitable growth.

Speaker Change: with our plans and momentum continuing into 2025. I'll share a more detailed update on our foundational initiatives later.

Speaker Change: We have made meaningful progress on our transformational journey.

Speaker Change: But before we move on, I want to reiterate that we remain highly committed

Speaker Change: Pleading key initiatives and milestones in 2024, with our plans and momentum continuing into 2025.

Speaker Change: to taking action to reshape the organizational journey, unlock efficiency, completing key initiatives and milestones in 2024 with a plan and momentum continuing into 2025. We are confident that these steps will enable us to capitalize on the advantages of a broad-based dental organization. But before we move on...

Speaker Change: I'll share a more detailed update on our foundational initiatives later, but before we move on I want to reiterate that we remain highly committed to taking actions to reshape the organization unlucky efficiencies enhance customer engagement and strategically allocate spend with a return focus.

Simon Campion: This deployment also laid some of the important foundation needed for future phases. Moving to innovation, in Q4 we were pleased to complete the US launch of the MIS Link implant, part of our value implants offering. Link is a versatile, reliable choice for a wide range of clinical applications. It combines a thoughtful design with cost-effectiveness, offering excellent value to clinicians and patients alike. In 2024, we successfully received eight 510(k) clearances. This reflects the progress we have made in the execution of our new product development and regulatory processes, and we have already launched six out of eight of these innovations to market, including Primescan 2 and Link. With DS Core, we continue to drive adoption, surpassing over 37,000 unique users in Q4, representing approximately 15% growth sequentially. In September, we launched Primescan 2, and its link with DS Core represents further integration of our digital ecosystem.

Speaker Change: I want to reiterate that we remain highly valid for these initiatives. Taking action during our 2023 Investor Day will continue to remain on track. Enhance customer engagement and strategically allocate spend with a return on investment.

Speaker Change: We are confident that these steps will enable us to capitalize on the advantages that a broad based dental organization has to offer.

Speaker Change: I'd like to share some recent business highlights on slide 4. Starting with Operational Updates. We announced our Phase 2 Transformation Activity back in August. Actions and steps are now enlarged during our 2023 contract to deliver full run rate savings by the end of 2025.

Speaker Change: The financial contributions that we originally laid out for these initiatives during our 2023 Investor day continue to remain on track.

Speaker Change: Now before we discuss financial results in more detail I'd like to share. Some recent business highlights on slide four.

Speaker Change: We also announced in August that we were investing in a virtual sales team in the U.S. With the expectation that the team would be split up and calling customers in Q1 2025. The team is now fully staffed and has already made over 80,000 unique customer touchpoints to date. And as we shared,

Speaker Change: Starting with operational updates.

Speaker Change: We announced our phase II transformation activities back in August actually.

Speaker Change: Action steps are now largely complete and on track to deliver full run rate savings by the end of 2025.

Speaker Change: We also announced in August that we were investing in a virtual sales team in the U S with the expectation that the team would be stood up and calling customers in Q1 2025.

Speaker Change: We've also announced that we are investing in a virtual sales team in the US which went live on November 1st. This deployment also laid some of the important foundation needed for future phases. The team is now fully staffed.

Speaker Change: The team is now fully staffed and has already made over 8000 unique customer touch points to date.

Simon Campion: This integration provides our customers more flexibility and efficiency within their practice and enables a better patient experience, which all supports practice growth. As we've seen with other key functionality adds to DS Core, we saw a nice increase in subscriptions related to the PrimeScan II launch, which is powered by DS Core. Wrapping up our highlights, clinical education remains an important component of how we bring value to our customers. In 2024, we hosted thousands of training and education events across the globe, including 6DS Worlds hosted in different locations with over 7,000 participants. And with that, I'll turn it over to Herman for the financial update. Herman.

Speaker Change: And as we shared we've completed the we completed the largest individual phase of our ERP deployments in the U S, which went live on November 1st.

Speaker Change: and has already made over 8,000 units of Q4. We were pleased to complete the U.S. launch of the MIS Link plant as part of our value-in-plants offering. We completed the largest individual-sized, reliable toy for a wide range of clinical applications.

Speaker Change: This deployment also laid some of the important foundation needed for future phases.

Speaker Change: Moving to innovation in Q4, we were pleased to complete the U S launch of the Mis links implant part of our value implants offering.

Speaker Change: It combines a thoughtful design with a cost-effectiveness offering excellent value to patients and clinicians alike.

Speaker Change: Moving to Innovation 2024, we were pleased to successfully receive the 8th 510K MIS LYNX implant. This reflects the progress we have made in the execution of our new product development and reliable choices.

Speaker Change: <unk> is a versatile and reliable choice for a wide range of clinical applications.

Speaker Change: It combines a thoughtful design with cost effectiveness offering excellent value to clinicians and patients alike.

Speaker Change: for a wide range of clinical applications. We've combined a thoughtful design with fast effectiveness and offering excellent value to clinicians and to patients alike. With DS-Core, we continue to drive adoption, surpassing successfully over 37,000 unique users in Q4.

Speaker Change: In 2024, we successfully received eight five 10-K clearances.

Elizabeth Anderson: Thanks, Simon. Good morning, and thank you all for joining us. Today I will cover our fourth quarter and full year 2024 financial results, as well as the 2025 outlook. Before we turn to discussion on our non-GAAP fourth quarter financial results, let me mention impairments recorded in the fourth quarter. We recorded non-cash charges for the impairment of goodwill and other intangibles of approximately $370 million net of tax within the Orthodontic and Implant Solutions and Connected Technology Solutions segments. These charges were largely the result of weakened demand from sustained macroeconomic and competitive pressures in implants and equipment. Also included in the charges was a full write-off of the Byte trademark, as we do not plan to use it in the future operating model of our aligner business. Now let me cover the full year 2024 bridge from latest guidance, as shown on slide 5.

Herman Cueto: Thanks, Simon. Good morning, and thank you all for joining us. Today I will cover our fourth quarter and full year 2024 financial results, as well as the 2025 outlook. Before we turn to discussion on our non-GAAP fourth quarter financial results, let me mention impairments recorded in the fourth quarter. We recorded non-cash charges for the impairment of goodwill and other intangibles of approximately $370 million net of tax within the Orthodontic and Implant Solutions and Connected Technology Solutions segments. These charges were largely the result of weakened demand from sustained macroeconomic and competitive pressures in implants and equipment. Also included in the charges was a full write-off of the Byte trademark, as we do not plan to use it in the future operating model of our aligner business. Now let me cover the full year 2024 bridge from latest guidance, as shown on slide 5.

Speaker Change: This reflects the progress we have made in the execution of our new product development and regulatory processes and.

Speaker Change: And we have already launched six out of eight of these innovations to market, including problems getting too and links.

Speaker Change: representing approximately 15% of the execution of our new product development and regular processes. In September, we launched PrimeScan 2, and its link with DSCore represents further integration of our new PrimeScan 2 and links.

Speaker Change: With D. S Corps, we continue to drive adoption, surpassing over 37000 unique users in Q4, representing approximately 15% growth sequentially.

Speaker Change: This integration provides our customers more flexibility and efficiency within their practice, surpassing and enabling a better patient experience, which all supports practice groups. As we have seen with other key functionality adds to DSCore, we launched Prime Scan 2 and it links with DSCore related to the Prime Scan 2 launch, which is powered by DSCore. This integration provides our customers more flexibility and efficiency within their practice,

Speaker Change: In September we launched Prime has gone to and its linked with D. S. Core represents further integration of our digital ecosystem.

Speaker Change: This integration provides our customers more flexibility and efficiency within their practice and.

Speaker Change: It enables a better patient experience, which all supports practice growth.

Speaker Change: As we've seen with other key functionality adds to D. S. Core we saw a nice increase in subscriptions related to the prime scan to launch which is powered by D. S Corps.

Speaker Change: all supports practice. In 2024, we hosted thousands of training and other key functionality events across the globe, including 60S goals hosted in different locations related to the Prime 7Q launch, which is powered by DS Corps. And with that, I'll turn it over to Herman to wrap up our highlights. Thanks, Simon. Good morning, and thank you for inviting us.

Speaker Change: Wrapping up our highlights clinical education remains an important component of how we bring value to our customers.

Speaker Change: In 2024, we hosted thousands of training and education events across the globe, including 60 S World posted in different locations with over 7000 participants.

Elizabeth Anderson: Since November, revenue was negatively impacted by an incremental $29 million associated with BYTE estimated customer refunds recognized in Q4. The remaining business performed approximately $17 million better than expected, primarily driven by stronger CTS sales in Europe. Similarly, BYTE impacted adjusted EPS by an incremental $0.24, which also contributed to a higher tax rate. The remaining business drove approximately $0.07 of adjusted EPS outperformance. Moving to slide 6. Our fourth quarter revenue was $905 million, representing a reported sales decline of 10.6% and organic sales decline of 10.7%. Two discrete items impacted our fourth quarter results. First, the voluntary suspension of sales and marketing of BYTE aligners resulted in a charge for customer refunds above what we contemplated on our November call. In total, BYTE had a $62 million year-over-year impact in Q4.

Herman Cueto: Since November, revenue was negatively impacted by an incremental $29 million associated with BYTE estimated customer refunds recognized in Q4. The remaining business performed approximately $17 million better than expected, primarily driven by stronger CTS sales in Europe. Similarly, BYTE impacted adjusted EPS by an incremental $0.24, which also contributed to a higher tax rate. The remaining business drove approximately $0.07 of adjusted EPS outperformance. Moving to slide 6. Our fourth quarter revenue was $905 million, representing a reported sales decline of 10.6% and organic sales decline of 10.7%. Two discrete items impacted our fourth quarter results. First, the voluntary suspension of sales and marketing of BYTE aligners resulted in a charge for customer refunds above what we contemplated on our November call. In total, BYTE had a $62 million year-over-year impact in Q4.

Speaker Change: Today, I will cover the 24th quarter. We hosted thousands of training and education events across the globe, as well as the 2025 Outlook. Hosted in different locations with over 7,000 participants. And with that, I'll turn it over to Herman to report on the 4th quarter.

Speaker Change: And with that I'll turn it over to Herman for the financial update Harlan.

Herman: Thanks, Simon and good morning, and thank you all for joining us.

Herman: Today, I will cover our fourth quarter and full year 2024 financial results as well as the 2025 outlook.

Speaker Change: Good morning and thank you all for joining us. Today I will cover approximately $370 million in cash within the orthodontics and implant solutions.

Herman: Before we turn to discussion on our non-GAAP fourth quarter financial results. Let me mentioned impairments recorded in the fourth quarter.

Speaker Change: Before we turn to the solutions segment, these charges were largely the result of weakened demand from sustained macroeconomic non-cash chargers in implanted equipment, and other intangibles of approximately 370 million dollars. Within the orthodontic implant solution,

Herman: We recorded noncash charges for the impairment of goodwill and other intangibles of approximately 370 million net of tax within the orthodontic and implant solutions.

Connected technology solutions segments.

Herman: These charges were largely the result of weakened demand from sustained macroeconomic and competitive pressures in implants and equipment.

and the Future Operating Model of our Linear Business.

Subs by www.zeoranger.co.uk

Speaker Change: These charges were largely the result of a full year of weakened demand from sustained macroeconomic and competitive pressures in implants and equipment.

Herman: Also included in the charges was a full write off of the bite trademark as we do not plan to use it in the future operating model of our aligner business.

Speaker Change: Since November, revenue was negatively impacted by an incremental $29 million associated with tonight's estimated future operating model of our aligner Q4.

Herman: Now let me cover the full year 'twenty for bridge from latest guidance as shown on slide five.

Speaker Change: The remaining business performed approximately 17 million dollars better than expected. Primarily driven by stronger CTS sales in Europe.

Elizabeth Anderson: Second was the timing of EDS distributor orders placed ahead of our November 1 ERP deployment, which resulted in an approximately $20 million shift between quarters. As we previously disclosed, this positively impacted Q3 and negatively impacted Q4, but had no effect on full year sales. Other drivers were soft retail demand in CAD/CAM, primarily in the US, and a decline in IPS. This was partially offset by growth in Europe, global imaging, SureSmile, and Wellspect. EBITDA margins declined 290 basis points in the quarter, mainly due to a lower gross margin, which contracted 240 basis points, largely driven by Byte. Our continued focus on reducing OpEx partially offsets the decline. Adjusted EPS in the quarter was $0.26, down 41.3% from the prior year due to lower margins and a higher tax rate.

Herman Cueto: Second was the timing of EDS distributor orders placed ahead of our November 1 ERP deployment, which resulted in an approximately $20 million shift between quarters. As we previously disclosed, this positively impacted Q3 and negatively impacted Q4, but had no effect on full year sales. Other drivers were soft retail demand in CAD/CAM, primarily in the US, and a decline in IPS. This was partially offset by growth in Europe, global imaging, SureSmile, and Wellspect. EBITDA margins declined 290 basis points in the quarter, mainly due to a lower gross margin, which contracted 240 basis points, largely driven by Byte. Our continued focus on reducing OpEx partially offsets the decline. Adjusted EPS in the quarter was $0.26, down 41.3% from the prior year due to lower margins and a higher tax rate.

Herman: Since November revenue was negatively impacted by an incremental $29 million associated with bite estimated customer refunds recognized in Q4.

Speaker Change: Since November, revenue was negatively impacted by an incremental $29 million associated with spite, which also contributed to a higher tax rate. The remaining business drove approximately $0.07, approximately $17 million better than expected.

Herman: The remaining business performed approximately $17 million better than expected.

Herman: Merrily driven by stronger Cts sales in Europe.

Herman: Similar similarly bite impacted adjusted EPS by an incremental 24 cents.

Herman: Which also contributed to a higher tax rate.

Herman: The remaining business drove approximately seven of adjusted EPS outperformance.

Speaker Change: which also contributed to a higher tax rate. The remaining business drove approximately 7 cents of adjusted EPS outperformance.

Herman: Moving to slide six.

Herman: Our fourth quarter revenue was 905 million, representing a reported sales decline of 10, 6% and organic sales decline of 10, 7%.

Speaker Change: First, the voluntary suspension of sales and marketing, our fourth quarter revenue was $905 million, representing a reported sales decline of 10.6%.

Herman: Two discrete items impacted our fourth quarter results.

Speaker Change: In total, light had a $62 million year-over-year impact. Two discrete items impacted our fourth quarter. Second was the timing of EDS distributor orders. First, placed a voluntary suspension of sales and marketing of light aligners, which resulted in a charge for a $20 million shift.

Herman: First the voluntary suspension of sales and marketing a bite of liners resulted in a charge for customer refunds above what we contemplated on our November call.

Elizabeth Anderson: In Q4, we generated $87 million of operating cash, down 45.6% year-over-year due to timing of working capital adjustments, as well as refunds issued to Byte customers. Let's now turn to Q4 segment performance on slide 7. Starting with the Essential Dental Solutions segment, which includes Endo, Resto, and Preventive products, organic sales declined 3.4%, driven by the previously mentioned impact from the timing of US distributor orders. Excluding this impact, EDS benefited from stable patient traffic in the quarter and higher volumes in rest of world. Shifting to the Orthodontic and Implant Solutions segment, organic sales declined 28.7%, primarily driven by the $62 million year-over-year impact from Byte. SureSmile grew low single digits globally, supported by another quarter of 20%+ growth in Europe and mid-single digit growth in rest of world.

Herman Cueto: In Q4, we generated $87 million of operating cash, down 45.6% year-over-year due to timing of working capital adjustments, as well as refunds issued to Byte customers. Let's now turn to Q4 segment performance on slide 7. Starting with the Essential Dental Solutions segment, which includes Endo, Resto, and Preventive products, organic sales declined 3.4%, driven by the previously mentioned impact from the timing of US distributor orders. Excluding this impact, EDS benefited from stable patient traffic in the quarter and higher volumes in rest of world. Shifting to the Orthodontic and Implant Solutions segment, organic sales declined 28.7%, primarily driven by the $62 million year-over-year impact from Byte. SureSmile grew low single digits globally, supported by another quarter of 20%+ growth in Europe and mid-single digit growth in rest of world.

Herman: In total bite had a $62 million year over year impact in Q4.

Speaker Change: between quarters. As we previously disclosed, in total, this fight had a $62 million year-over-year impact in Q4.

Herman: Second was the timing of eds distributor orders placed ahead of our November 1st ERP deployment, which resulted in approximately $20 million shift between quarters.

Speaker Change: but had no effect on the full year sales. Second was the timing of EDS distributor orders placed ahead of our November 1st European deployment, which resulted in an approximately $20 million shift in IPS between quarters. This was partially offset by growth in Europe. As we previously disclosed, this positive leap impacted Q3.

Herman: As we previously disclosed this positive this positively impacted Q3 and negatively impacted Q4, but had no effect on full year sales.

Herman: Other drivers were soft retail demand and cadcam, primarily in the U S and the decline in Ips.

Speaker Change: and Negatively Impacted Keyboard, but had no impact on full year sales. Mainly due to a lower gross margin. Other drivers were soft retail demand and pad cams.

Herman: This was partially offset by growth in Europe global imaging sure Smile and well specced.

primarily in the U.S.

Speaker Change: and the decline in ICU. Our continued focus on reducing partially offsets the global imaging.

Herman: EBITDA margins declined 290 basis points in the quarter, mainly due to a lower gross margin, which contracted 240 basis points largely driven by by.

Speaker Change: sure smile and adjusted EPS in the quarter was $0.26, even the margin down 41.3% from the prior year, mainly due to a lower gross margin and higher tax rate, which contracted $240 basis points. In the fourth quarter, we generated $87 million of operating cash, our continued focus on reducing partially off the timing of working capital adjustments.

Herman: Our continued focus on reducing opex, partially offsets the decline.

Elizabeth Anderson: When we look at SureSmile aligners specifically, we delivered another quarter of high single digit growth. Organic sales in implants and prosthetics increased sequentially but declined high single digits versus the prior year quarter due to lower lab volumes and lower implant sales in the US. Wrapping up our dental performance, CTS, our connected technology solutions segment, saw organic sales decline 8.2% versus the prior year quarter. Our global CAD/CAM business declined double digits, driven by the softer retail demand environment in the US, while Germany was a bright spot for CAD/CAM, delivering growth for a second consecutive quarter. We were pleased to see the equipment and instruments business return to growth in the quarter, hosting low single digit improvement. This quarter represented the highest sales in six quarters, and as Simon said, imaging benefited from the relaunch of Orthophos SL in Europe and APAC.

Herman Cueto: When we look at SureSmile aligners specifically, we delivered another quarter of high single digit growth. Organic sales in implants and prosthetics increased sequentially but declined high single digits versus the prior year quarter due to lower lab volumes and lower implant sales in the US. Wrapping up our dental performance, CTS, our connected technology solutions segment, saw organic sales decline 8.2% versus the prior year quarter. Our global CAD/CAM business declined double digits, driven by the softer retail demand environment in the US, while Germany was a bright spot for CAD/CAM, delivering growth for a second consecutive quarter. We were pleased to see the equipment and instruments business return to growth in the quarter, hosting low single digit improvement. This quarter represented the highest sales in six quarters, and as Simon said, imaging benefited from the relaunch of Orthophos SL in Europe and APAC.

Herman: Adjusted EPS in the quarter was 26 cents down 41, 3% from the prior year due to lower margins and a higher tax rate.

as well as refunds issued by customers.

Speaker Change: down 41.3%. Let's now turn to lower margins and a higher tax rate.

Herman: In the fourth quarter, we generated 87 million of operating cash down 45, 6% year over year due to timing of working capital adjustments as well as refunds issue to by customers.

Speaker Change: Starting with the essential, in the fourth quarter we generated $87 million in preventive product, down 45.6% year over year, due to timing of working capital adjustment, as well as re-timing of U.S. distributor orders.

Herman: Let's now turn to fourth quarter segment performance on slide seven.

Herman: Starting with the Central Dental solutions segment, which includes Endo resto and preventative products organic sales declined three 4% driven by the previously mentioned impact from the timing of U S distributor orders.

Thank you. Thank you.

Speaker Change: excluding this impact, EDS point quarter segment performance in traffic in the quarter.

Speaker Change: Starting with the essential dental solution segment, which includes endo, resto, and orthodontic products, and implant solution segment, organic sales declined, driven by the previously mentioned impact, primarily driven by the $62 million year-over-year impact. EDS benefited from low single traffic in the quarter, supported by another quarter of 20% plus growth in Europe.

Excluding this impact EPS benefited from stable patient traffic in the quarter and higher volumes in rest of world.

Herman: Shifting to the orthodontic and implant solutions segment organic sales declined 28, 7%, primarily driven by the $62 million year over year impact from bi.

Speaker Change: and mid-single digit growth in the rest of the world. When we look at SureSmile, organic sales declined another quarter of the high single digit growth, primarily driven by the $62 million year-over-year impact from high-single digits. Organic sales in implants and prosthetics increased sequentially, but declined high-single digits versus the prior year, 20%-plus due to lower lab volumes and lower implant sales in the rest of the world.

Herman: Sure Smile grew low single digits globally supported by another quarter of 20% plus growth in Europe, and mid single digit growth in rest of world.

Elizabeth Anderson: An improved focus on commercial execution led to performance ahead of our internal expectations. Moving to Wellspect, organic sales grew 6.7%, driven by growth across all three regions as new product launches continue to positively contribute. Now let's move to slide 8 to discuss fourth quarter financial performance by region. US sales declined 29.9%, the majority of which was driven by Byte, CAD/CAM, and the previously mentioned EDS timing impact. This was partially offset by growth in imaging, Wellspect, and low single digit growth in Endo, driven by continued adoption of our X-Smart Pro+ motor. US CTS distributor inventory levels decreased sequentially in the quarter by approximately $45 million. This represents a $15 million year-over-year decrease in distributor inventory. Relative to historical averages, distributor inventory levels remain low. Turning to Europe. Organic sales increased 1.8%, with CTS, SureSmile, and Wellspect driving the growth.

Herman Cueto: An improved focus on commercial execution led to performance ahead of our internal expectations. Moving to Wellspect, organic sales grew 6.7%, driven by growth across all three regions as new product launches continue to positively contribute. Now let's move to slide 8 to discuss fourth quarter financial performance by region. US sales declined 29.9%, the majority of which was driven by Byte, CAD/CAM, and the previously mentioned EDS timing impact. This was partially offset by growth in imaging, Wellspect, and low single digit growth in Endo, driven by continued adoption of our X-Smart Pro+ motor. US CTS distributor inventory levels decreased sequentially in the quarter by approximately $45 million. This represents a $15 million year-over-year decrease in distributor inventory. Relative to historical averages, distributor inventory levels remain low. Turning to Europe. Organic sales increased 1.8%, with CTS, SureSmile, and Wellspect driving the growth.

Herman: When we look at sure Smile Aligner, specifically, we delivered another quarter of high single digit growth.

Speaker Change: When we look at SureSmile, wrapping up our dental performance, we delivered another quarter of our Connected Technology Solutions segment.

Herman: Organic sales in implants in prosthetics increased sequentially, but declined high single digits versus the prior year quarter due to lower lab volumes and lower implant sales in the U S.

Speaker Change: saw organic sales decline in implants and prosthetics versus the prior year quarter. Our global CAD canvases declined double digits due to lower lab volumes and lower implant sales in the U.S.

Herman: Wrapping up our dental performance Cts, our connected technology solutions segment saw organic sales declined eight 2% versus the prior year quarter.

while Germany was a bright spot for CAD-CAM.

CTF, Delivering Growth, Our Connected Technology Solutions Segment.

Herman: Our global Cadcam business declined double digits.

Speaker Change: who are pleased to say the equipment and instruments business returned to gross in the prior year quarter, hosting low single-digit increments. Our global CAD CAM business declined double-digit.

Herman: <unk> by the softer retail demand environment in the U S. While Germany was a bright spot for Cadcam.

Speaker Change: This quarter represented the high-sale land environment in the U.S. and as Simon said, was a bright spot for CADGEN. Orthophos SL delivering growth for a second consecutive quarter. An improved focus on commercial execution led to performance ahead of our internal expectations.

Herman: Delivering growth for a second consecutive quarter.

Herman: We were pleased to see the equipment and instruments business returned to growth in the quarter posting low single digit improvement.

Simon Campion: This quarter represented the highest sales in six quarters and the Simon said imaging benefited from the relaunch of ortho foes S. L in Europe and APAC.

hosting low single-digit, improving to well-specced.

Speaker Change: Organic sales this quarter represented the highest sales driven by growth across all three regions. And as Simon said, imaging benefited from the relaunch of Orthophos SL. Now let's move to slide 8 to discuss fourth quarter financial performance by the region. U.S. sales declined 29.9%.

Elizabeth Anderson: SureSmile sales increased over 20%, with notable growth in Italy, and Spain. CTS grew mid-single digits, with equipment, and instruments posting double digit growth for the quarter. Germany, which is our largest market in the region, had the highest quarter of sales in the last 7 quarters as imaging performance rebounded and commercial execution improved. Rest of world organic sales declined 2%, driven by declines in CTS, and lab. EDS organic sales grew high single digits from increased volumes and strong Endo performance in China. Implants for the quarter, despite a difficult comp in China as a result of the volume-based procurement program. Now let's turn to slide 9 to briefly cover our full year 2024 performance. Sales for the full year were $3.79 billion, representing a reported sales decline of 4.3% and organic sales decline of 3.5%.

Herman Cueto: SureSmile sales increased over 20%, with notable growth in Italy, and Spain. CTS grew mid-single digits, with equipment, and instruments posting double digit growth for the quarter. Germany, which is our largest market in the region, had the highest quarter of sales in the last 7 quarters as imaging performance rebounded and commercial execution improved. Rest of world organic sales declined 2%, driven by declines in CTS, and lab. EDS organic sales grew high single digits from increased volumes and strong Endo performance in China. Implants for the quarter, despite a difficult comp in China as a result of the volume-based procurement program. Now let's turn to slide 9 to briefly cover our full year 2024 performance. Sales for the full year were $3.79 billion, representing a reported sales decline of 4.3% and organic sales decline of 3.5%.

Simon Campion: An improved focus on commercial execution led to performance ahead of our internal expectations.

Simon Campion: Moving to well specced organic sales grew six 7% driven by growth across all three regions as new product launches continue to positively contribute.

Speaker Change: The majority of which was driven by bike, organic sales, CAD CAM, and the previously mentioned EDS timing impact. This was partially offset by pin growth in imaging, well-spec'd, and low single-digit growth in end-up, driven by continued performance in region of our X-Smart Pro Plus mode. U.S. sales declined 29.9% per CTS, the majority of which was driven by bike, sequentially in CAD CAM, and the previously mentioned EDS timing impact.

Simon Campion: Now, let's move to slide eight to discuss fourth quarter financial performance by region.

Simon Campion: U S sales declined 29, 9% the majority of which was driven by bite.

Simon Campion: <unk> and the previously mentioned eds timing impact this was partially offset by growth in imaging, well specced and low single digit growth in endo.

Simon Campion: Driven by continued adoption of our X smart pro plus motor.

from Selma, N.Y.

Simon Campion: U S Cts distributor inventory levels decreased sequentially in the quarter by approximately $45 million.

turning to Europe.

Speaker Change: U.S. CPS decreased 1.8 percent, decreased sequency in order by approximately $45 million, driving the growth.

Simon Campion: This represents a $15 million year over year decrease in distributor inventory.

Simon Campion: Relative to historical averages distributor inventory levels remain low.

Speaker Change: This represents a $15 million increase over 20% with notable growth in Italy and Spain. Relative to historical averages, CTS tribute single digits remain low, with equipment and instruments posting double digit growth for the quarter.

Elizabeth Anderson: Foreign currency translation negatively impacted sales by $34 million or 80 basis points due to a stronger dollar versus most major currencies. The majority of the negative impact was driven by CTS and Byte. CTS declined high single digits and was negatively impacted by competitive market pressures, as well as higher interest rates in the US, Germany, and other developed markets that dampened capital equipment purchasing over the course of the year. Despite this, we took actions that drove improvement in the second half of the year, including the Orthophos SL relaunch. IPS was negatively impacted by a double digit decline in lab, partially offset by growth in implants, mostly attributed to the strong first half performance in China. Performance bright spots for the year included mid-single digit growth in SureSmile, with aligners growing double digit, double digit growth in China, and mid-single digit growth for Wellspect.

Herman Cueto: Foreign currency translation negatively impacted sales by $34 million or 80 basis points due to a stronger dollar versus most major currencies. The majority of the negative impact was driven by CTS and Byte. CTS declined high single digits and was negatively impacted by competitive market pressures, as well as higher interest rates in the US, Germany, and other developed markets that dampened capital equipment purchasing over the course of the year. Despite this, we took actions that drove improvement in the second half of the year, including the Orthophos SL relaunch. IPS was negatively impacted by a double digit decline in lab, partially offset by growth in implants, mostly attributed to the strong first half performance in China. Performance bright spots for the year included mid-single digit growth in SureSmile, with aligners growing double digit, double digit growth in China, and mid-single digit growth for Wellspect.

Simon Campion: Turning to Europe organic sales increased one 8% with Cts sure Smile, and well specced driving the growth.

Speaker Change: Organic sales increased 1.8% with CPS, SureSmile, and WealthWorkers driving growth. SureSmile commercial increased over 20% with notable growth in Italy and Spain.

Simon Campion: Your smile sales increased over 20% with notable growth in Italy and Spain.

Simon Campion: Cts grew mid single digits with equipment and instruments, posting double digit growth for the quarter.

Speaker Change: Rest of World Organic Sales Declined 2%, Driven by Decline in Post and Double-Digit Growth for the Quarter. EDS Organic Sales in Germany, which is our largest market in the region, had the highest quarter of sales in the last 7 quarters.

Simon Campion: Germany, which is our largest market in the region had the highest quarter of sales in the last seven quarters as imaging performance rebounded and commercial execution improved.

Simon Campion: Rest of World organic sales declined 2% driven by declines in Cts and lab.

Speaker Change: as imaging performance rebound. Implants for the quarter despite a difficult comp in China as a result of the volume. The rest of world organic sales declined two percent.

Simon Campion: Eds organic sales grew high single digits from increased volumes and strong <unk> performance in China.

Speaker Change: Now let's turn to slide 9 to briefly cover our full year 2014. EDS organic sales grew high single-digit from 3.7 billion. Sales for the full year were 3.790 performance in China. Representing a reported sales decline of 4.3% despite a difficult crop in China as a result of the virus.

Simon Campion: Implants for the quarter, despite a difficult comp in China as a result of the volume based procurement program.

Simon Campion: Now, let's turn to slide nine to briefly cover our full year 'twenty for performance.

Elizabeth Anderson: EBITDA margins contracted 80 basis points to 16.6%, driven by lower gross margin attributed to lower volumes and product mix in CTS, as well as Byte. This was partially offset by OpEx savings from foundational initiatives. Adjusted EPS was $1.67 for the year. Operating cash flow was $461 million, up 22.3% year-over-year, driven by timing of customer collections and changes in inventory and other working capital measures. Free cash flow conversion was 83%, representing a year-over-year increase of over 40%. The company finished the year with $272 million of cash and cash equivalents and a net debt-to-EBITDA ratio of approximately 3x. The increase was partially attributed to the Byte suspension. In 2024, we returned $376 million in capital to our shareholders through $250 million of share repurchases and our quarterly dividends.

Herman Cueto: EBITDA margins contracted 80 basis points to 16.6%, driven by lower gross margin attributed to lower volumes and product mix in CTS, as well as Byte. This was partially offset by OpEx savings from foundational initiatives. Adjusted EPS was $1.67 for the year. Operating cash flow was $461 million, up 22.3% year-over-year, driven by timing of customer collections and changes in inventory and other working capital measures. Free cash flow conversion was 83%, representing a year-over-year increase of over 40%. The company finished the year with $272 million of cash and cash equivalents and a net debt-to-EBITDA ratio of approximately 3x. The increase was partially attributed to the Byte suspension. In 2024, we returned $376 million in capital to our shareholders through $250 million of share repurchases and our quarterly dividends.

Simon Campion: Sales for the full year were $3 79 billion, representing a reported sales decline of four 3% and organic sales decline of three 5%.

Simon Campion: Foreign currency translation negatively impacted sales by $34 million or 80 basis points due to a stronger dollar versus most major currencies.

Simon Campion: The majority of the negative impact was driven by Cts in bi.

and stronger dollar purchasing over the course of the year.

Simon Campion: Cts declined high single digits and was negatively impacted by competitive market pressures as well as higher interest rates in the U S. Germany.

Speaker Change: Despite the majority of the negative impacts that drove improvement by CTS in the second half of the year, CTS declined high as sales and was negatively impacted by competitive market pressures, as well as higher interest rates in the U.S., partially offset by growth in underdeveloped markets that dampened after equipment purchasing performance in China.

Simon Campion: In other developed markets that dampened capital equipment purchasing over the course of the year.

Despite this we took actions that drove improvement in the second half of the year, including the ortho <unk> S. L relaunch.

Speaker Change: performance bright spots for the year took actions that drove the growth and sure smile with the liners growing including the orthophones at double digit growth in China

Simon Campion: Ips was negatively impacted by a double digit decline in lab, partially offset by growth in implants, mostly attributed to the strong first half performance in China.

Speaker Change: and Mid-Single-Digit Growth Performance. ICF was negatively impacted by a double-digit decline in labs. EBITDA margins contracted at closest point to 16.6%, driven by lower CES margin and attributed to lower volumes.

Simon Campion: Performance bright spots for the year included mid single digit growth ensure smile with the liners growing double digit double digit growth in China, and mid single digit growth for well spec.

Elizabeth Anderson: As of 31 December 2024, the company had $1.2 billion of remaining board authorization available for future share repurchases. Next, let me cover our 2025 outlook on slide 10. For 2025, we expect organic sales to be down 2% to 4%, including a negative 2% Byte sales impact, which represents a net sales range of $3.5 to 3.6 billion. We expect FX to be a headwind to reported sales based on current rates, and we remain cautious on the macro environment, particularly for equipment. We expect SureSmile and Wellspect to continue to drive growth in 2025, partially offsetting anticipated declines in CTS. In EDS, we expect growth in line with global patient traffic, which remained largely stable in 2024, augmented by recent product launches such as the X-Smart Pro+.

Herman Cueto: As of 31 December 2024, the company had $1.2 billion of remaining board authorization available for future share repurchases. Next, let me cover our 2025 outlook on slide 10. For 2025, we expect organic sales to be down 2% to 4%, including a negative 2% Byte sales impact, which represents a net sales range of $3.5 to 3.6 billion. We expect FX to be a headwind to reported sales based on current rates, and we remain cautious on the macro environment, particularly for equipment. We expect SureSmile and Wellspect to continue to drive growth in 2025, partially offsetting anticipated declines in CTS. In EDS, we expect growth in line with global patient traffic, which remained largely stable in 2024, augmented by recent product launches such as the X-Smart Pro+.

Speaker Change: Performance bright spots for the year include as well as single-digit growth in SureSmile. This was partially offset by OPEC savings from foundational growth in China and mid-single-digit growth for Welfare. Adjusted EPS was $1.67 for the year.

Simon Campion: EBITDA margins contracted 80 basis points to 16, 6% driven by lower gross margin attributed to lower volumes and product mix and Cts as well as by.

Speaker Change: Operating cash flow was 461 million, up 22.3% year-over-year, driven by timing of customer collections.

Simon Campion: This was partially offset by opex savings from foundational initiatives.

Simon Campion: Adjusted EPS was $1 67 for the year.

This was partially offset by OPEC savings from foundational initiatives.

Simon Campion: Operating cash flow was 461 million up 22, 3% year over year, driven by timing of customer collections and.

Simon Campion: And changes in inventory and other working capital measures.

Simon Campion: Free cash flow conversion was 83% representing a year over year increase of over 40%.

Simon Campion: The company finished the year with $272 million of cash and cash equivalents and a net debt to EBITDA ratio of approximately three times.

Speaker Change: The company finished the year with $272 million of cash in our quarterly dividends.

Simon Campion: The increase was partially attributed to the bike suspension.

Speaker Change: As of December 31st, 2024, the company had $1.2 billion partially attributed to board authorization.

Simon Campion: In 2024, we returned $376 million in capital to our shareholders through $250 million of share repurchases and our quarterly dividends.

Elizabeth Anderson: We also believe the actions taken in 2024 and those planned for 2025 will improve our commercial execution and performance in areas like CTS and implants. We expect EBITDA margin to be greater than 18% in 2025, with margin improving as we progress through the year based on the timing of investments and restructuring savings. We project an increase in the full year tax rate due to geographic income mix and the unfavorable impact of certain declining performance trends, which have occurred over the last few years. We expect adjusted earnings per share to be in the range of $1.80 to $2.00. In Q1, we expect organic sales to decline high single digits year-over-year, primarily due to Byte and current headwinds impacting CTS in the US, which has a tough comparison in CAD/CAM, largely attributed to lower expected distributor inventory levels in Q1.

Herman Cueto: We also believe the actions taken in 2024 and those planned for 2025 will improve our commercial execution and performance in areas like CTS and implants. We expect EBITDA margin to be greater than 18% in 2025, with margin improving as we progress through the year based on the timing of investments and restructuring savings. We project an increase in the full year tax rate due to geographic income mix and the unfavorable impact of certain declining performance trends, which have occurred over the last few years. We expect adjusted earnings per share to be in the range of $1.80 to $2.00. In Q1, we expect organic sales to decline high single digits year-over-year, primarily due to Byte and current headwinds impacting CTS in the US, which has a tough comparison in CAD/CAM, largely attributed to lower expected distributor inventory levels in Q1.

available.

for watching.

Simon Campion: As of December 31, 2024, the company had $1 $2 billion of remaining board authorization available for future share repurchases.

Speaker Change: For share refurbishments, we expect organic sales to be down 2% to 4%. As of December 31, 2024, the company had $1.2 billion, which represents a net sales range of $3.5 billion for future share refurbishments.

Simon Campion: Next let me cover our 2025 outlook on slide 10.

Simon Campion: For 2025, we expect organic sales to be down, 2% to 4%, including a negative 2% by sales impact, which represents a net sales range of $3 5 billion to $3 6 billion.

Speaker Change: We expect FX to be a headwind toward sales based on current rates.

Speaker Change: And we remain cautious on the macro environment, particularly for equipment.

Speaker Change: including a negative 2%. We expect SureSmile and WellSpec to continue to drive growth in 2025, partially offsetting anticipated declines in CTS. We expect FX to be a headwind as we expect growth in line with global patient traffic, and we remain cautious on a macro environment, augmented by recent product launches such as the xSmart Pro+. We expect SureSmile and WellSpec to continue to drive growth in 2025.

Simon Campion: We expect FX to be a headwind to reported sales based on current rates and we remain cautious on the macro environment, particularly for equipment.

Simon Campion: We expect share smile, and well spec to continue to drive growth in 2025, partially offsetting anticipated declines in Cts.

Elizabeth Anderson: This contributes to an outsized manufacturing absorption impact in the quarter. With that said, we anticipate margin expansion over the course of the year as forecasted volume increases drive operational improvements. For purposes of modeling Adjusted EBITDA margin and EPS, please look to the Q4 of 2024 as we expect to be in line to slightly ahead of those results. Slide 11 shows our adjusted EPS bridge listing some of the major driver items. We wanted to try and break this down for you and walk through the moving parts. Let me start with where we finished 2024 with adjusted EPS of $1.67. We then add back one-time Byte items of $0.24 that we spoke about earlier. This gives an updated base of $1.91. From there, we layer in negative $0.02 EPS impact from expected lower organic sales.

Herman Cueto: This contributes to an outsized manufacturing absorption impact in the quarter. With that said, we anticipate margin expansion over the course of the year as forecasted volume increases drive operational improvements. For purposes of modeling Adjusted EBITDA margin and EPS, please look to the Q4 of 2024 as we expect to be in line to slightly ahead of those results. Slide 11 shows our adjusted EPS bridge listing some of the major driver items. We wanted to try and break this down for you and walk through the moving parts. Let me start with where we finished 2024 with adjusted EPS of $1.67. We then add back one-time Byte items of $0.24 that we spoke about earlier. This gives an updated base of $1.91. From there, we layer in negative $0.02 EPS impact from expected lower organic sales.

Simon Campion: In Etfs, we expect growth in line with global patient traffic, which remained largely stable in 2020 for augmented by recent product launches such as the X Smart Pro plus.

Speaker Change: and their plan for 2025 anticipated to improve our commercial execution.

Speaker Change: In EDS, we expect growth in line with global patient traffic, which remained largely stable in 2024, augmented by recent product launches, such as the X-Smart, as we progress through the year. We also believe the actions taken in 2024 will be the most effective.

Simon Campion: We also believe the actions taken in 2024 and those planned for 2025, we will improve our commercial execution and performance in areas like Cts and implants.

Speaker Change: and those plans for 2025 will improve our commercial execution and performance in areas like EDM.

Simon Campion: We.

Simon Campion: <unk> EBITDA margin to be greater than 18% in 2025 with margin improving as we progress through the year based on the timing of investments and restructuring savings.

Speaker Change: We expect even the margins to be greater than 18% in 2025, with margin-adjusted earnings per share to be in the range of $1.80 to $2.00.

Simon Campion: We project an increase in the full year tax rate due to geographic income mix and the unfavorable impact of certain declining performance trends, which have occurred over the last few years.

Speaker Change: In Q1, we project an increase in the full-year tax rate due to geographic income mix primarily due to the high rate and current headwinds impacting CTS in the U.S., which has a tough comparison in CAD-CAM.

Simon Campion: We expect adjusted earnings per share to be in the range of $1 80 to $2.

Simon Campion: In Q1, we expect organic sales to decline high single digits year over year, primarily due to bite and current headwinds impacting cts in the U S, which has a tough comparison and cadcam largely attributed to lower expected distributor inventory levels in Q1.

Speaker Change: largely attributed to lowering expected distributor in the range of $1.80 to $1.00.

Speaker Change: This contributes to an outsized manufacturing absorption impact of the border. With that said, we anticipate margin expansion over the course of the year as forecasted volume increases for our operational improvement.

Elizabeth Anderson: We expect a combined $0.20 EPS benefit from transformational initiatives and reduction of Byte resources. An anticipated roughly 300 basis points increase in the tax rate translates to an $0.08 headwind. Net-net, this yields approximately 5% growth in adjusted EPS on an FX-neutral basis. FX is expected to be a headwind of about $0.11 for 2025. With that, I will turn the call back over to Simon.

Herman Cueto: We expect a combined $0.20 EPS benefit from transformational initiatives and reduction of Byte resources. An anticipated roughly 300 basis points increase in the tax rate translates to an $0.08 headwind. Net-net, this yields approximately 5% growth in adjusted EPS on an FX-neutral basis. FX is expected to be a headwind of about $0.11 for 2025. With that, I will turn the call back over to Simon.

Simon Campion: This contributes to an outsized manufacturing absorption impact in the quarter.

Speaker Change: largely attributed to lower effective contributor adjusted EBITDA margin Q1 and EPS.

Simon Campion: With that said, we anticipate margin expansion over the course of the year as forecasted volume increases drive operational improvements.

Speaker Change: Please look to the fourth quarter of 2024 as we expect to be in line to slightly ahead of those results. With that said, we anticipate margin expansion over the course of the year and forecasted volume increasing some of the major operational improvements.

Simon Campion: For purposes of modeling adjusted EBITDA margin and EPS.

Simon Campion: Please look to the fourth quarter of 2024, as we expect to be in line to slightly ahead of those results.

Speaker Change: We wanted to try and break this down for you and walk through the moving margins.

Andrea Daley: Thank you, Herman. Now let's move to our strategic update starting on slide 12. In 2024, we advanced our strategic and transformational agenda to strengthen our foundation and position the company for long-term performance and successfully adjusted our approach in certain areas as necessary. Let's briefly cover an update on each of the foundational initiatives shown on slide 13. Our supply chain team continues to seek opportunities to improve network performance. To date, we have closed 3 manufacturing sites and 4 distribution centers, progressing towards our 10% to 15% manufacturing and distribution footprint reduction target. We are advancing the SKU optimization initiative, focus on the Endo and Restor portfolios, and are migrating revenue-generating SKUs in 2025. In 2024, we also completed the first 2 deployments as part of our ERP rollout, and we will continue with our plan in 2025.

Simon Campion: Thank you, Herman. Now let's move to our strategic update starting on slide 12. In 2024, we advanced our strategic and transformational agenda to strengthen our foundation and position the company for long-term performance and successfully adjusted our approach in certain areas as necessary. Let's briefly cover an update on each of the foundational initiatives shown on slide 13. Our supply chain team continues to seek opportunities to improve network performance. To date, we have closed 3 manufacturing sites and 4 distribution centers, progressing towards our 10% to 15% manufacturing and distribution footprint reduction target. We are advancing the SKU optimization initiative, focus on the Endo and Restor portfolios, and are migrating revenue-generating SKUs in 2025. In 2024, we also completed the first 2 deployments as part of our ERP rollout, and we will continue with our plan in 2025.

Speaker Change: and EPS. Please look to the fourth quarter of 2024 with adjusted EPS of $1.60. Flight 11 shows our adjusted EPS bridge listing some of the major driver items. We wanted to try and break this down for you and walk through the moving parts. Let me start with where we finished 2024.

Simon Campion: Slide 11 shows our adjusted EPS Bridge listing some of the major driver items.

We wanted to try and break this down for you and walk through the moving parts.

Simon Campion: Let me start with where we finished 2024 with adjusted EPS of $1 67.

Simon Campion: We then add back one time bite items of <unk> 24 that we spoke about earlier.

Speaker Change: with Adjusted EPS of $1.60. We expect a combined 20 cent EPS benefit from transformational initiatives and reduction of bike resources.

Simon Campion: This gives an updated base of $1 91.

Simon Campion: From there, we layer and negative <unk> <unk> EPS impact from expected lower organic sales.

Speaker Change: This gives an anticipated roughly 300 basis point increase. From there, we later relate to a negative 2 cent EPS impact. Net net, this yields approximately 5 percent growth in adjusted EPS on EPS-neutral basis.

Simon Campion: We expect a combined 20 EPS benefit from transformational initiatives and reduction of bite resources.

Simon Campion: And anticipated roughly 300 basis point increase in the tax rate translates to an eight cent headwind.

Speaker Change: from Transformational Initiatives and Reduction of Pipe Resources. 11 cents for 2025. With that, I will turn the call back over to Simon. And the tax rate translates to an 8 cent headwind. Thank you, Herman.

Simon Campion: Net net this yields approximately 5% growth in adjusted EPS on an FX neutral basis.

Andrea Daley: We implemented this program to improve the experience of customers when working with us and to gain efficiencies across the organization. Lastly, you can see the progress we have made on phase 1 and phase 2 of our transformation and the reinvestments in our business. Now I would like to address our long-term EPS objective on slide 14. In 2023, we laid out targets in our long-range plan. At that time, we indicated that 2/3 of the adjusted EPS bridge was largely within our control, with defined contributions coming from key initiatives. Organic growth, on the other 1/3, was the most variable component. Since then, the macro environment, challenging marketing, and competitive dynamics, underperformance in implants, and Byte have created headwinds on organic sales. These declines in organic sales have put pressure on our margins, making the $3 adjusted EPS target unachievable in 2026.

Simon Campion: We implemented this program to improve the experience of customers when working with us and to gain efficiencies across the organization. Lastly, you can see the progress we have made on phase 1 and phase 2 of our transformation and the reinvestments in our business. Now I would like to address our long-term EPS objective on slide 14. In 2023, we laid out targets in our long-range plan. At that time, we indicated that 2/3 of the adjusted EPS bridge was largely within our control, with defined contributions coming from key initiatives. Organic growth, on the other 1/3, was the most variable component. Since then, the macro environment, challenging marketing, and competitive dynamics, underperformance in implants, and Byte have created headwinds on organic sales. These declines in organic sales have put pressure on our margins, making the $3 adjusted EPS target unachievable in 2026.

Simon: Let's move to our strategic updates starting on slide 12. In 2024, we advanced our strategic and transformational agenda. We strengthened our foundation and positioned the company for long-term performance. We successfully adjusted our approach in certain areas as necessary.

Simon Campion: FX is expected to be a headwind of about <unk> 11 for 2025.

Simon Campion: With that I will turn the call back over to Simon.

Simon Campion: Thank you Herman.

Simon Campion: Now, let's move to our strategic update starting on slide 12.

Simon Campion: In 2024, we advanced our strategic and transformational agenda.

Simon: Thank you, Herman. We'll cover an update on each of the foundational initial updates starting on slide 12.

Simon Campion: To strengthen our foundation and position the company for long term performance.

Simon: Our supply chain team continues to see the advance of a strategic and transformational agenda. To date, we have closed three manufacturing sites and positioned four distribution centers, successfully adjusting our approach to certain areas as necessary.

Simon Campion: And successfully adjusted our approach in certain areas as necessary.

Simon Campion: Let's briefly cover an update on each of the foundational initiatives shown on slide 13.

Simon Campion: Our supply chain team continues to seek opportunities to improve network performance.

Simon: Let's briefly cover and update our advancing SKU optimization initiatives shown on slide 15. Focus on the Endo and Resto portfolios and our migrating revenue-generating SKUs in 2025.

Simon Campion: To date, we have closed three manufacturing sites and four distribution centers.

Simon Campion: Aggressive towards our 10% to 15% manufacturing and distribution footprint reduction target.

Simon: to date 2024. We also completed the first two deployments as part of our ERP rollout and we will continue with our manufacturing and distribution footprint reduction.

Simon Campion: We are advancing the SKU optimization initiatives focus on the endo in rest of the portfolios and are migrating revenue generating skus in 2025.

Andrea Daley: That said, as I've noted, the transformational work that's underway in our company is on track, including all of our foundational initiatives, which is contributing positively to EPS. And importantly, we continue to focus on driving free cash flow conversion to return value to shareholders. Now let's take a moment to think about the reasons why Dentsply Sirona can deliver sustainable, profitable growth, and let's move to slide 15. We regularly hear from our customers about the importance of innovation, clinical education, and enhancing workflow efficiency. With a pipeline of 20+ new product launches planned through 2026 and one of the broadest and most flexible education platforms in the industry, we are well positioned to address these needs.

Simon Campion: That said, as I've noted, the transformational work that's underway in our company is on track, including all of our foundational initiatives, which is contributing positively to EPS. And importantly, we continue to focus on driving free cash flow conversion to return value to shareholders. Now let's take a moment to think about the reasons why Dentsply Sirona can deliver sustainable, profitable growth, and let's move to slide 15. We regularly hear from our customers about the importance of innovation, clinical education, and enhancing workflow efficiency. With a pipeline of 20+ new product launches planned through 2026 and one of the broadest and most flexible education platforms in the industry, we are well positioned to address these needs.

Simon: We implemented this program to improve the experience of customization and working with us, focus on the end-to-gain efficiencies across the organization, and our migrating revenue-generating schemes in 2025. You can see the progress we have made on Phase 1 and Phase 4 of our transformation, and the first two deployments as part of our ERP rollout.

Simon Campion: In 2024, we also completed the first two deployments as part of our ERP rollout and we will continue with our plan in 2025.

Simon Campion: We implemented this program to improve the experience of customers when working with us and to gain efficiencies across the organization.

Simon: Now I would like to address our long-term EPS objective on slide 14. We implemented this program to improve the experience of customers when working with us and to gain efficiencies across the organization. At that time, we indicated that two-thirds of the adjusted EPS bridge was largely within our control of our transformation, with defined contributions coming from key initiatives.

Simon Campion: Lastly, you can see the progress we've made on phase one and phase two of our transformation and the reinvestments in our business.

Simon Campion: Now I would like to address our long term EPS objective on slide 14.

Simon Campion: In 2023, we laid out targets in our long range plan.

Simon: organic growth and the other one was the most variable from 2014.

At that time, we indicated that two thirds of the adjusted EPS Bridge was largely within our control with defined contributions coming from key initiatives.

Simon: Since then, the macroenvironment 3, challenging marketing and competitive dynamic land.

Andrea Daley: We believe accelerating enterprise digitalization and innovation focused on increasing the digital connectivity of our portfolio through our DS Core platform will facilitate workflow improvements across all of dentistry and increase patients' acceptance of treatment plans. Moreover, this is applicable to both GPs and specialists. We've spoken about our opportunities to create our own demand, enhance the customer experience, and improve our customer proximity. Our efforts to establish a virtual sales team, drive Salesforce effectiveness, and invest in e-commerce and customer service were designed to do just that. In implants, for example, we are increasing the digital connectivity of our portfolio, driving more localized customer education, and simplifying our messaging. These are important action items, all derived from insights gained and plans developed at our deep dive review on implant performance.

Simon Campion: We believe accelerating enterprise digitalization and innovation focused on increasing the digital connectivity of our portfolio through our DS Core platform will facilitate workflow improvements across all of dentistry and increase patients' acceptance of treatment plans. Moreover, this is applicable to both GPs and specialists. We've spoken about our opportunities to create our own demand, enhance the customer experience, and improve our customer proximity. Our efforts to establish a virtual sales team, drive Salesforce effectiveness, and invest in e-commerce and customer service were designed to do just that. In implants, for example, we are increasing the digital connectivity of our portfolio, driving more localized customer education, and simplifying our messaging. These are important action items, all derived from insights gained and plans developed at our deep dive review on implant performance.

Simon: At that time, we indicated that two-thirds of the Adjusted P3AX bridge

Simon Campion: Organic growth on the other the other one third was the most variable component.

Simon: was largely within our control, with pressure on our margins coming from the EU issue. Adjusted EPS targets were unachievable in 2026. The other one was the most variable component.

Simon Campion: Since then the macro environment challenging marketing and competitive dynamics.

Simon Campion: Underperformance in implants, and debate have created headwinds on organic sales.

Simon: As I've noted, the macro-environmental work that's underway in our company is on-track, including all of our foundational initiatives, which is contributing positively to EPS.

Simon Campion: These declines in organic sales have put pressure on our margins make into $3 adjusted EPS target an achievable in 2026.

Simon: And importantly, we continue to focus on driving free cash flow conversion to return value to shareholders in 2026.

Simon Campion: That said as I've noted the transformational work that's underway in our company is on track, including all of our foundational initiatives, which is contributing positively to EPS.

Simon: Now let's take a moment to think about the reasons why Densply Corona can deliver sustainable and profitable growth, and let's move in all of our foundational initiatives.

Simon Campion: And importantly, we continued to focus on driving free cash flow conversion to return value to shareholders.

Simon: We regularly hear from our customers about the importance of innovation and importantly we continue to focus on driving free cash flow conversion with a pipeline of 20-plus new product launches planned through 2026. Now let's take a moment to think about the broadest and most flexible education platforms in the industry. We are well positioned to address these needs.

Simon Campion: Now, let's take a moment to think about the reasons why dense play sirona can deliver sustainable profitable growth and let's move to slide 15.

Simon Campion: We regularly hear from our customers about the importance of innovation clinical education and enhancing workflow efficiency.

Andrea Daley: Additionally, based on feedback from our commercial teams and our customers, we are prioritizing the enhancement of Salesforce capabilities across the business, both in clinical and selling skills, to create improved opportunities for success. As a further initiative to accelerate OpEx reduction, we are in the process of partnering with a third party to facilitate further transformation to our G&A footprint. While this is not contemplated in our current 2025 outlook, we believe this initiative will significantly and sustainably reduce our G&A cost structure and bring us closer to market benchmarks. Moreover, the harmonization of policies and procedures as a result of this program will improve our customers' experience of partnering with us. And finally, with the evaluation of Wellspect just initiated, we are not providing further commentary on 2026 at this time. Now I'll wrap up on slide 16 with a few summary remarks.

Simon Campion: Additionally, based on feedback from our commercial teams and our customers, we are prioritizing the enhancement of Salesforce capabilities across the business, both in clinical and selling skills, to create improved opportunities for success. As a further initiative to accelerate OpEx reduction, we are in the process of partnering with a third party to facilitate further transformation to our G&A footprint. While this is not contemplated in our current 2025 outlook, we believe this initiative will significantly and sustainably reduce our G&A cost structure and bring us closer to market benchmarks. Moreover, the harmonization of policies and procedures as a result of this program will improve our customers' experience of partnering with us. And finally, with the evaluation of Wellspect just initiated, we are not providing further commentary on 2026 at this time. Now I'll wrap up on slide 16 with a few summary remarks.

Simon: We regularly hear from our customers about the importance of innovation, clinical education, and enhancing workflow efficiency. With a pipeline of 20-plus new product launches planned through 2026, and one of the broadest and most flexible educational platforms in the industry.

Simon Campion: With a pipeline of 20, plus new product launches planned through 2026, and one of the broadest and most flexible education platforms in the industry, we are well positioned to address these needs.

Simon Campion: We believe accelerating enterprise digital digitalization and innovation focused on increasing the digital connectivity of our portfolio through our D. S core platform.

Simon: Moreover, this is applicable to both GPs and specialists. We believe accelerating enterprise digitalization and innovation, focused on increasing the digital capability of our portfolio and improve our customer proximity, will facilitate our efforts to establish a virtual sales team, drive sales expectations, and invest in e-commerce and customer service. Moreover, this is applicable to both GPs and specialists. In implants, for example,

Simon Campion: We'll facilitate workflow improvements across all of dentistry.

The increased patient's acceptance of treatment plans.

Simon Campion: Moreover, this is applicable to both GPS and specialists.

Simon Campion: We've spoken about our opportunities to create our own demand enhanced the customer experience and improve our customer proximity.

Simon: We are increasing the digital connectivity of our portfolio, driving more localised customer education and improving customer proximity.

Simon Campion: Our efforts to establish a virtual sales team drive sales force effectiveness and invest in E Commerce and customer service were designed to do just that.

Simon: These are important action items all deriving from in-flight sales force effects, and plans to then invest in a deep dive review on implant performance. We're designed to do just that. Additionally, based on feedback from our commercial teams and our customers, we are increasing the digital connectivity of our sales force capabilities, driving more localized customer education, and simplifying our messaging.

Simon Campion: And then plans for example, we are increasing the digital connectivity of our portfolio driving more localized customer education and simplifying our messaging.

Andrea Daley: FY24 proved to be a challenging year, with a mix of external and internal factors hampering our progress. That said, we have made meaningful strides on our transformational initiatives in 2024, further shaping the organization, driving efficiencies, and enabling investment. We continue to act with urgency to transform our customer experience and overall cost structure. Our formula for growth hinges on innovation, clinical education, sales execution, and customer experience. We deliver best-in-class innovation and clinical education. Our strategic priorities for 2025 focus on improving sales execution and customer experience. This formula, coupled with a scalable and lean cost structure, will enable us to realize the true potential of Dentsply Sirona. And with that, I'll open it up for questions.

Simon Campion: FY24 proved to be a challenging year, with a mix of external and internal factors hampering our progress. That said, we have made meaningful strides on our transformational initiatives in 2024, further shaping the organization, driving efficiencies, and enabling investment. We continue to act with urgency to transform our customer experience and overall cost structure. Our formula for growth hinges on innovation, clinical education, sales execution, and customer experience. We deliver best-in-class innovation and clinical education. Our strategic priorities for 2025 focus on improving sales execution and customer experience. This formula, coupled with a scalable and lean cost structure, will enable us to realize the true potential of Dentsply Sirona. And with that, I'll open it up for questions.

Simon Campion: These are important action items, all derived from insights gained and plans developed a deep dive review on implant performance.

Simon: These are important action items, all derived from insights gained as a plan to develop our deep dive review on implant products. We are in the process of partnering with a third party based on feedback from our commercial team and our customers. We are prioritizing the enhancements while this is not contemplated in our current 2025 outlook. We believe this initiative will significantly improve the sustainability of the plant.

Simon Campion: Additionally, based on feedback from our commercial teams and our customers. We are prioritizing the enhancement of salesforce capabilities across the business.

Simon Campion: Within clinical and selling skills.

Simon Campion: <unk> improved opportunities for success.

Simon Campion: As a further initiatives to accelerate Opex reduction we are in the process of partnering with a third party to facilitate further transformation towards G&A footprint.

Simon: and bring us a further initiative to accelerate OPEX reduction. Moreover, we are in the process of partnering with a third party to facilitate further transformation of our DNA culture. While this is not contemplated in our 2015 budget, we believe this initiative will significantly and sustainably reduce our DNA cost structure.

Simon Campion: While this is not contemplated in our current 2025 outlook. We believe this initiative will significantly and sustainably reduce our G&A cost structure and bring us closer to market benchmarks.

Simon Campion: Moreover, the harmonization of policies and procedures as a result of this program will improve our customers' experience of partnering with us.

Simon Campion: Thank you. As a reminder, to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please limit yourself to one question and one follow-up. One moment for questions. Our first question comes from Elizabeth Anderson with Evercore ISI. You may proceed.

Operator: Thank you. As a reminder, to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please limit yourself to one question and one follow-up. One moment for questions. Our first question comes from Elizabeth Anderson with Evercore ISI. You may proceed.

Simon: I'll wrap up on slide 16 with a few summary remarks. Moreover, the harmonization of policy and procedures as a result of this program with a mix of external and internal factors hampering our progress.

Simon Campion: And finally with the evaluation of well spec just initiated we are not providing further commentary on 2026 at this time.

Simon: That said, we have made meaningful strides on our transformational initiatives in 2024, further shaping the organization at this time, driving efficiencies.

Simon Campion: Now I'll wrap up on slide 16, with a few summary remarks.

Simon Campion: FY 'twenty four proved to be a challenging year with a mix of external and internal factors hampering our progress.

Simon: Now I'll wrap up on slide 16 with a few summary remarks. We continue to act with urgency to transform our customer experience and overall customer performance. Our formula for growth.

Elizabeth Anderson: Hey, guys. Good morning. Thanks so much for the question. I had a little bit of a question about sort of the Wellspect strategic alternatives. Obviously, thanks for all the details in terms of the new product launch and the continued investment there. Maybe one, can you talk about some of the new product areas that you're working on in terms of what you expect the opportunities to be there? And then two, if I remember correctly, in the last strategic alternatives review of that business, one of the issues was the sort of enmeshed manufacturing footprint with some of your core dental businesses. And so have you guys worked to address that as part of since that last transition? And if you could give us an update on that as well, that would be helpful. Thank you.

Simon Campion: That said, we have made meaningful strides on our transformational initiatives in 2024 further shaping the organization driving efficiencies and enabling investment.

Simon: Hinges on Innovation, Clinical Education, Sales Execution and Customer Experience. We deliver best-in-class innovation, driving efficient education and enabling investment. Our strategic priorities for 2025 focus on improving sales execution and customer experience.

Simon Campion: We continue to act with urgency to transform our customer experience and overall cost structure.

Simon Campion: Our formula for growth hinges on innovation clinical education sales execution and customer experience.

Thank you for your time.

Simon: This formula, coupled with a scalable and lean cost structure, will enable us to realise the true potential of Dantley Surrounding.

Simon Campion: We deliver best in class innovation and clinical education.

Simon Campion: Our strategic priorities for 2025 focus on improving sales execution and customer experience.

Simon: And with that, we deliver best-in-class innovation and clinical education. Thank you. As a reminder, to ask a question, please press star 1-1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1-1 again. Please limit yourself to one question and one follow-up. One more question.

Andrea Daley: Good morning, Elizabeth. Simon here. Let me start with the second part of your question. Really, to all intents and purposes, Wellspect HealthCare and our dental businesses that are based in Sweden are largely separated. So there is not a whole lot of unplugging to do, shall we say, if there is an opportunity to explore an alternative for Wellspect HealthCare. So I would say that it is largely standalone with a pretty standalone leadership team as well. In relation to your question on innovation, last year, we addressed a significant unmet customer need, or rather unmet need within our portfolio, with the launch of a sleeved intermittent catheter, which has gone very well and has helped contribute significantly to the enhanced growth profile of Wellspect HealthCare. And then the other innovations that we are working on, I would say, for competitive reasons, we would not be disclosing that at this time.

Simon Campion: Good morning, Elizabeth. Simon here. Let me start with the second part of your question. Really, to all intents and purposes, Wellspect HealthCare and our dental businesses that are based in Sweden are largely separated. So there is not a whole lot of unplugging to do, shall we say, if there is an opportunity to explore an alternative for Wellspect HealthCare. So I would say that it is largely standalone with a pretty standalone leadership team as well. In relation to your question on innovation, last year, we addressed a significant unmet customer need, or rather unmet need within our portfolio, with the launch of a sleeved intermittent catheter, which has gone very well and has helped contribute significantly to the enhanced growth profile of Wellspect HealthCare. And then the other innovations that we are working on, I would say, for competitive reasons, we would not be disclosing that at this time.

Simon Campion: This formula coupled with a scalable and lean cost structure will enable us to realize the true potential of dense place sirona.

Simon Campion: And with that I'll open it up for questions.

Speaker Change: Thank you <unk>.

Speaker Change: Mind or to ask a question. Please press star one on your telephone and wait for your name to be announced to withdraw. Your question. Please press star one again, please limit yourself to one question and one follow up one moment for our questions.

Speaker Change: And with that, I'll open it up for questions. Our first question comes from Elizabeth Anderson with Evercore ISI. Thank you. As a reminder, to ask a question, please press star 1-1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1-1 again. Please limit yourself to one question and one follow-up. One moment for questions. Maybe one, can you talk about some of the new product areas that you're working on in terms of what you expect the opportunities to be there?

Speaker Change: Our first question comes from Elizabeth Anderson with Evercore ISI you May proceed.

Elizabeth Anderson: Hey, guys. Good morning, Thanks, so much for that question.

Elizabeth Anderson: A little bit of a question about the <unk> spec strategic alternatives. Obviously, thanks for all the details in terms of the new product launch that continued investment there maybe one can you talk about some of the new product areas that youre working on in terms of.

Speaker Change: And then two, if I remember correctly in the last Strategic Alternatives review of that business, one of the issues was the sort of enmeshed manufacturing footprint with some of your port and dental businesses. And so maybe if you guys would talk about that as part of that last transition and if you could give us an update on what you expect the opportunities to be there. And then two, if I remember correctly in the last Strategic Alternatives review of that business, one of the issues was the sort of enmeshed

Elizabeth Anderson: What you should expect the opportunities to be there and then two if I remember correctly in the last strategic alternatives review of that business. One of the issues was that sort of in matched manufacturing footprint with some of your core dental businesses and so.

Elizabeth Anderson: Got it. Thank you.

Elizabeth Anderson: Have you guys worked to address that as part of.

Simon Campion: Thank you. Our next question comes from Aaron Wright with Morgan Stanley. You may proceed.

Speaker Change: and I'm here to talk to you about the factoring footprint with some of your core dental businesses. And so, have you guys worked to address that as part of, you know, since that last transition and if you could give us an update on that as well, that would be helpful. There's not a whole lot of unplugging to do, shall we say, if there is an opportunity to really, to all intents and purposes, I would say that this and largely dental businesses are largely separated.

Elizabeth Anderson: Since that last transition if you could give us an update on that as well that would be helpful. Thank you.

Elizabeth Simon: Good morning, Elizabeth Simon here.

Erin Wright: Thanks. On margins, if you're assuming consistent margins in Q1, if I heard that correctly, that assumes a pretty meaningful ramp for the balance of the year. I guess what gives you confidence in that? And then it says you mentioned you're working with a third party to address costs, I guess, getting you closer to industry margins. I guess over what sort of time frame could that be achieved? What sort of magnitude are you thinking about on that front? Thanks.

Elizabeth Simon: Let me start with the second part of your question really to all intents and purposes, well specs and and our dental businesses that are based in and Sweden are are largely separated.

Elizabeth Simon: So there there's not a whole lot of of unplugging to do shall we say if there is a.

Speaker Change: In relation to your question on innovation, last year we addressed a significant unmet customer need or rather an unmet need within our portfolio.

Elizabeth Simon: If there is an opportunity to too.

Elizabeth Simon: To explore an alternative for wealth space. So.

Herman Cueto: Hi, Aaron. It's Herman Cueto. How are you? Thank you for the question. So maybe just start with the margin. So what you're going to see is that Q1 will be the lowest point of the year, and you'll see that ramp up as the year progresses. It'll get better sequentially throughout each of the next three quarters. Keep in mind that we do have to cycle through the impact from BYTE, so that will put pressure on the margins, especially Q1, Q2. We also have the foundational initiatives that have already begun, but will start to ramp up as we get into the outer quarters. And then finally, what I would say is on this back-office transformation that Simon spoke about, none of that is dialed into our 2025 plan. We do believe there could be some upside depending on how quickly we move and get things figured out.

Elizabeth Simon: I would say that it is largely standalone with a pretty standalone leadership team as well in relation to your question on innovation I mean last year, we addressed a significant unmet.

Speaker Change: with the large floor and all kinds of forwards, intermittent catheter, which they don't very well and largely stand alone.

contribute significantly to the pretty broad profile of Welsbeck.

Elizabeth Simon: Unmet customer need a rather unmet need within our portfolio with the launch of a sleeved intermittent catheter, which has gone very well and has helped helped contribute significantly to the enhanced growth profile of our overall spec.

Elizabeth Simon: And then the other innovations that we're working on I would say for for competitive reasons, we would not be disclosing that at this time.

Speaker Change: Our next question comes from Aaron Wright with Morgan Stanley, you may proceed.

Speaker Change: And then the other innovations that we're working on, I would say, for comparative reasons, we would not be disclosing that at this time.

Elizabeth Simon: Alright, thank you.

Elizabeth Simon: Thank you.

Speaker Change: Our next question comes from Erin Wright with Morgan Stanley You May proceed.

Speaker Change: Thank you. You mentioned you're working with a third party to address costs, I guess, getting closer to any margins. Our next question comes from Erin Wright with Morgan Stanley. You may proceed.

Elizabeth Simon: Thanks.

Marty: Marty if youre assuming.

Speaker Change: Margins in the first quarter I heard that correctly that assumes.

Herman Cueto: There could potentially be some upside in 2025, but it would have a longer-term benefit as we head into 2026 and 2027. I hope that answers your question.

Speaker Change: A pretty meaningful ramp for the balance of the year I guess, what gives you confidence in that and then.

Speaker Change: And then it says.

Speaker Change: You mentioned Youre working with a third party to address cost I guess, giving your particular industry margins I guess over what sort of timeframe could that be achieved what sort of magnitude are you thinking about on that front.

Andrea Daley: I think, Aaron, if I could just build a little bit on Herman's statements around that work. As you know, when we came in here, we said about the harmonization of many systems and processes across our company. We've spoken before about Dentsply being a series of acquisitions, Sirona being a series of them, and then the merger. And so we've had disparate systems and processes across the company. We've been systematically harmonizing them in areas such as R&D, quality, and regulatory over the past two or so years, and we're seeing a benefit to that. But there remains a lot of the back-office work that we just referred to that affords us an opportunity to be more efficient at our company.

Simon Campion: I think, Aaron, if I could just build a little bit on Herman's statements around that work. As you know, when we came in here, we said about the harmonization of many systems and processes across our company. We've spoken before about Dentsply being a series of acquisitions, Sirona being a series of them, and then the merger. And so we've had disparate systems and processes across the company. We've been systematically harmonizing them in areas such as R&D, quality, and regulatory over the past two or so years, and we're seeing a benefit to that. But there remains a lot of the back-office work that we just referred to that affords us an opportunity to be more efficient at our company.

Speaker Change: Hi, Aaron determined kyodo, how are you.

Speaker Change: Over what sort of time frame could that be achieved? What sort of magnitude are you speaking about on that front?

Speaker Change: Thank you for the question.

Speaker Change: So maybe just start with the margin so what youre going to see is that Q1 will be the lowest point of the year and youll see that ramp up as the year progresses, it'll get better sequentially.

Speaker Change: Keep in mind that we do have to cycle through the impact from FIJA, so that will put pressure on the margins. So maybe just start with the margins. So what you're going to see is that Q1 will be the lowest point of the year. And you'll see that ramp up as the year progresses. It'll ramp up as we get into the next three quarters.

Speaker Change: Out each of the next three quarters.

Speaker Change: Keep in mind that we do have to cycle through the impact from bites. So that will put pressure on the margins, especially Q1 Q2.

Simon: Keep in mind that we do have to cycle through the impact transformation that Simon spoke about.

Speaker Change: We also have the foundational initiatives that have already begun but we will start to ramp up as we get into the into the outer quarters.

Simon: None of that is dialed into the 2025 plan. We do believe there could be some upside, but we'll start to ramp up as we get into figuring out there could potentially be some upside in 2025. And then finally, what I would say a longer-term back-off is transformation.

Erin Wright: Okay. Great. And then just on dental utilization trends, so where do we stand now across the key markets? And you mentioned the continuation of the same expected in 2025. I guess what does that mean? And for instance, how do we think about volume trends across EDS and the broader consumable demand environment? Thanks.

Speaker Change:

Speaker Change: And then finally, what I would say is on this back office transformation that Simon spoke about none of that is dialed into our 2025 plan.

Speaker Change: We do believe there could be some upside depending on how quickly we move and get things figured out there could potentially be some upside in 2025, but it would have a longer term benefit as we head into 'twenty six 'twenty seven I hope that answers your question.

that Simon spoke about.

Speaker Change: I think if I could just build a little bit on Herman's statements around that work. As you know, when we came in here we said about the harmonization of many systems and processes across our company. We've spoken before about Densply being a series of acquisitions, Sorona being a series of acquisitions. I think if I could just build a little bit on Herman's statements around that work.

Andrea Daley: Yeah. Hey, thanks, Aaron. So I would say on EDS, patient volumes obviously impact EDS significantly. I think globally, it's pretty stable from what we've seen. And as you know, our survey is pretty large and global. So it's about 1,400 respondents this past quarter. So it's pretty stable from an EDS perspective. Germany, while it's still negative, has again showed some room for optimism. And I think that's synchronous with the results that we've posted in Germany. I think there's a little more appetite there for investment, particularly in our CTS business, for example. But I will say that the big issue for customers around the world are staffing shortages. And so we need to leverage our messages around the efficiency that our digital solutions and workflow solutions can afford customers to offset some of those staffing shortages.

Simon Campion: Yeah. Hey, thanks, Aaron. So I would say on EDS, patient volumes obviously impact EDS significantly. I think globally, it's pretty stable from what we've seen. And as you know, our survey is pretty large and global. So it's about 1,400 respondents this past quarter. So it's pretty stable from an EDS perspective. Germany, while it's still negative, has again showed some room for optimism. And I think that's synchronous with the results that we've posted in Germany. I think there's a little more appetite there for investment, particularly in our CTS business, for example. But I will say that the big issue for customers around the world are staffing shortages. And so we need to leverage our messages around the efficiency that our digital solutions and workflow solutions can afford customers to offset some of those staffing shortages.

Speaker Change: I think it's fair.

Speaker Change: If I could just build on it if I could just build a little bit on on harmon's statements around around that work.

Speaker Change: No.

Speaker Change: When we came in here, we said about the harmonization of many systems and processes across our company. We've spoken before about <unk> being a series of acquisitions Sirona being a series of them and then the merger.

Speaker Change: As you know, when we came in here, we set about the harmonization of many stewards of the farm.

Speaker Change: and we're seeing a benefit from that. We spoke before about a lot of the back office work, the acquisitions we're going to be doing, and the merger to be more efficient at our company.

Speaker Change: So we've had disparate systems and processes across the company, we've been systematically harmonizing them in areas, such as R&D quality and regulatory over the past two or so years and we're seeing a benefit to that but there remains a lot of the back office back office work that we just referred to that affords us an opportunity.

Speaker Change: Okay, great. And then just on dental utilization trends, where do we stand now across the key markets? And you mentioned the continuation of the same expected in 2025. I guess, what does that mean? And, for instance, how do we think about volume trends across EDS and the broader consumer environment? Thanks.

Speaker Change: Two to be more efficient at our company.

Speaker Change: Okay, Great and then just on <unk>.

Speaker Change: Ken Keller utilization change, where do we stand now across the key markets.

Yeah, hey, thanks

Thanks for joining us, everyone.

Speaker Change: Okay, great. And then just on dental utilization trends, where do we stand now across the market since, I think, globally, there's the same expected in 2025. I guess, what does that mean? And, for instance, how do we think about volume trends across the U.S. in the product and consumer respondents this past quarter?

Speaker Change: And you mentioned a continuation of the same.

Erin Wright: Okay. Thank you.

Speaker Change: <unk> expected in 2025, I guess, what does that mean.

Simon Campion: Thank you. Our next question comes from Brandon Vazquez with William Blair. You may proceed.

Operator: Thank you. Our next question comes from Brandon Vazquez with William Blair. You may proceed.

Speaker Change: And how do we think about volume trends eds in the product.

Speaker Change: Thanks.

Brandon Vazquez: Hey, good morning, everyone. I'll ask two upfront because they're both related, so I'll just bucket them together here. They're both on BYTE. The question is around there was a comment on the call that you wrote off the entire BYTE brand name, if I heard that correctly. So just talk about what is the strategy here. It sounds like that kind of implies it maybe gets rolled into SureSmile. What does this look like from a commercial strategy perspective over the next 12 to 24 months? And then the follow-up to that is basically talk about what the P&L implications of this are. It sounds like BYTE becomes a little bit of a tailwind after some restructuring going into 2024. So talk through how that commercial strategy then impacts the P&L going forward. Thanks.

Speaker Change: Yeah, Hey, thanks Darren.

Speaker Change: I would say on an on eds patient volumes, obviously impact eds are significantly I think globally, there's a it's pretty stable from what we've seen in and as you know our survey is pretty large and global so it's about a 1400 respondents this past quarter. So it's.

Speaker Change: So it's pretty stable from an EDS perspective. Germany, while it's still negative, has again shown some room for optimism. It's pretty stable from what we've seen, and as you know, our survey is pretty large and global, so a little more appetite there for respondents this past quarter. So it's pretty stable from an EDS perspective.

Speaker Change: It's pretty stable from an EPS perspective, Germany.

While it's still negative has has again showed some some room for optimism and I think that's that's a synchronous with the results that we've posted in Germany I think.

Speaker Change: The big issue for customers around the world is that there is no room for optimism. That's a synchronous with the results that we need to deliver. I think there's a little more appetite there for digital solutions and workflow solutions for investors to offset some of those staffing shortages, for example. But I will say that...

Speaker Change: Theres, a little more appetite there for.

Speaker Change: For investments, particularly in our Cts business.

Andrea Daley: Hi. Good morning, Brandon. It's Simon again. So let me start, and then Herman can take the second part of your question. The way I would think about Byte, it's essentially two components. It's the product component, the aligner itself, and whatnot, and the deep capabilities that the Byte team has around demand generation, e-commerce, software, patient experience, interplay with clinicians, and so on and so forth. So we've done a lot of work since 24 October 2024 with customers and potential customers. And I guess one thing in particular has resonated. The ability for the Byte capabilities to help us create demand and funnel it through to customers is, or rather resonates, with many of our existing customers and many of our potential customers as well. So we are redeploying that capability to our SureSmile platform. The R&D teams at Byte also have immense capability.

Simon Campion: Hi. Good morning, Brandon. It's Simon again. So let me start, and then Herman can take the second part of your question. The way I would think about Byte, it's essentially two components. It's the product component, the aligner itself, and whatnot, and the deep capabilities that the Byte team has around demand generation, e-commerce, software, patient experience, interplay with clinicians, and so on and so forth. So we've done a lot of work since 24 October 2024 with customers and potential customers. And I guess one thing in particular has resonated. The ability for the Byte capabilities to help us create demand and funnel it through to customers is, or rather resonates, with many of our existing customers and many of our potential customers as well. So we are redeploying that capability to our SureSmile platform. The R&D teams at Byte also have immense capability.

Speaker Change: For example, but I will say that the biggest you for for customers around the world are staffing staffing shortage shortages and so we need to leverage our messages around the efficiency that our digital solutions and workflow solutions can afford customers to offset some of those.

You're the big issue for companies around the world.

Speaker Change: Nothing shortages.

Speaker Change: Okay. Thank you.

Speaker Change: Thank you.

Speaker Change: Our next question comes from Brandon Vazquez with William Blair You May proceed.

Brandon Vazquez: Hey, good morning, everyone.

Speaker Change: Two upfront because they're both related so I'll just bucket them together here that they're both on by the question is around there was a comment on the call that you wrote off the entire by brand name if I heard that correctly. So just talk about what is the strategy here. It sounds like that kind of implies that maybe it gets rolled into share smile. What does this look like.

Speaker Change: over the next 12 to 24 months, and then the follow-up to that is basically talk about what the P&L implications of this are. It sounds like BITE becomes a little bit of a tailwind after some restructuring going into 2024, so talk through how that commercial strategy then impacts the P&L in those folks. What does this look like from a commercial strategy perspective over the next 12 to 24 months, and then the follow-up to that is basically talk about what the P&L implications of this are.

Speaker Change: From a commercial strategy perspective over the next 12 to 24 months and then the follow up to that is basically talk about what the P&L implications of this are it sounds like by becomes a little bit of a tailwind after some restructuring going into 'twenty four so talk through how that commercial strategy, then impacts the P&L going forward.

Andrea Daley: We've noted in the past and on today's call as well, our SureSmile software, which originated in wires and brackets, has a great, shall we say, backend to it. It's a trusted software solution for orthodontics. However, the front end of that software leaves quite something to be desired, and it has proven to be a challenge to unlock new customers because of the difficulty at the front end. So we've deployed these Byte resources to help with the upgrading of the user experience and the user interface on the SureSmile piece. In relation to the product, we are exclusively focusing now on SureSmile. I think we mentioned previously the challenges with bringing the Byte product back to market from a clinical or regulatory cost and timeline perspective.

Simon Campion: We've noted in the past and on today's call as well, our SureSmile software, which originated in wires and brackets, has a great, shall we say, backend to it. It's a trusted software solution for orthodontics. However, the front end of that software leaves quite something to be desired, and it has proven to be a challenge to unlock new customers because of the difficulty at the front end. So we've deployed these Byte resources to help with the upgrading of the user experience and the user interface on the SureSmile piece. In relation to the product, we are exclusively focusing now on SureSmile. I think we mentioned previously the challenges with bringing the Byte product back to market from a clinical or regulatory cost and timeline perspective.

Speaker Change: it sounds like Lite becomes a little bit of a tailwind after some restructuring going into 24. So talk through how that commercial strategy impacts what you now go with PhotonStrength, thank you.

Speaker Change: Yeah.

Brendon: Hi, good morning, Brendon its assignment again.

Brendon: So let me start and then and then Herman Herman can can can take the second part of your question.

Speaker Change: and the deep capability that the BITE team has around demand generation, e-commerce, software, patient experience. The way I would think about interplay with clinicians and so on is essentially two components. So we have the product component, we've done a lot of work since October 24th, and the deep capability that the BITE team has around demand generation.

Brendon: The way I would think about about bite.

Brendon: It's it's essentially two components.

Brendon: It's the product components.

Brendon: The aligner itself.

Brendon: And whatnot and the deep capabilities that the the bites team has around demand generation E Commerce software patient experience.

Brendon:

Brendon: To play with with clinicians and so on and so forth.

the ability for the BITES capabilities to help us

Brendon: So we have we have we did we've done a lot of work since October 24th.

Speaker Change: and so on and so forth. We've done a lot of work since October 24th with customers and we are redeploying that capability. One thing in particular has resonated. The ability for the bite capability to help us create demand and, as we've noted in the past

Brendon: Around with with customers and potential customers.

Brendon: And I guess, one one thing in particular has resonated the ability for the bites capabilities to help us create demand and funnel it through to customers is.

Andrea Daley: And so we will focus on leveraging our capabilities from Byte into our aligner business, but also into our SureSmile aligner business, but also into other parts of our business where we think an educated direct-to-consumer model may potentially drive increased awareness of, for example, chairside dentistry. And I'll pass it over to Herman for the second part of your question.

Simon Campion: And so we will focus on leveraging our capabilities from Byte into our aligner business, but also into our SureSmile aligner business, but also into other parts of our business where we think an educated direct-to-consumer model may potentially drive increased awareness of, for example, chairside dentistry. And I'll pass it over to Herman for the second part of your question.

Brendon: Or rather resonates with with many of our existing customers and many of our potential customers as well. So we are we are redeploying that capability to our sure smile platform.

Speaker Change: and many of our potential customers as well. We are redeploying that capability trusted software solution for orthodontics.

Speaker Change: The R&D teams, but also have a <unk>.

Speaker Change: <unk> capability and as we've noted in the past and on today's call as well, our sure smiles software, which which you originated in wires and brackets has a great. That's.

Speaker Change: However, the front end of that software also has quite something to be desired, and as we know to be a challenge in the past and uncomfortable as well, our SureSmile software, which we've deployed, originated in Mars and Bracket, has a great operating back-end of the user experience and the user interface solution for SureSmile for orthodontics.

Herman Cueto: Hey, Brandon. It's Herman Cueto. Thank you for the question. So I'll just talk a little bit about the BYTE implications to the P&L. I would refer you to slide 11, which kind of walks through where we were. So we finished 2024 with $1.67. Then we put the $0.24 of really one-timers is how you should think about that. We put that back into the base. So that gives us an adjusted base of $1.91. And if you just look, you do see a combination. There's a bar there that talks about the benefits from the BYTE resources going away, things like marketing. And there's also some of our foundational initiatives also captured in that bucket. And I think for simplicity, what I would say is I would probably call it split that up maybe 50/50. I think that's a close enough target to go after.

Speaker Change: That's a great shall we say back end to it.

Speaker Change: Trusted software solution for four orthodontics. However, the front end of that software leads quite something to be desired.

Speaker Change: It has proven to be a challenge to unlock new customers because of the difficulty at the front end. So we've deployed these bite resources to help with the.

Speaker Change: However, the fun part of that is that we are exclusively focusing now on SureSmile. I think we mentioned previously because of the challenges with bringing the Byte product back to market with the clinical regulatory upgrading cost and time and user experience. And so we will focus on leveraging our capability.

With the upgrading of the user experience and the user interface on the on the shoe a small piece in relation to the product.

Speaker Change: We are we are exclusively focusing now on unsure smile I think we mentioned previously.

Speaker Change: The challenges with bringing.

Speaker Change: The bite product back to market from a clinical and regulatory cost and timeline perspective, and so we will we will focus.

Speaker Change: but also into other kinds of business where we think the bike product back to our consumer model may potentially drive an increased awareness of, for example, the care side of dentistry. We will focus on leveraging our capabilities from bike to our aligner business, to our first miler liner business.

Speaker Change: We will focus on leveraging leveraging our capabilities.

Herman Cueto: That'll give you some context. Let me spend a minute on sales because I think that's important. So we do have a little bit of sales that'll continue. So there was the treatment plan that was recognized over a number of months. So that will carry on a little bit over the course of 2025 and I believe a little bit into 2026. It's a small number. It's under $40 million. But think of Byte as a very substantial headwind to Dentsply growth in 2025. I hope that answers your question, Brandon.

Speaker Change: Bite into our aligner business, but also our into our <unk> line of business, but also into other parts of our business, where we think.

Speaker Change: And educated direct to consumer model may potentially drive increased awareness of for example chair side dentistry.

Speaker Change: but also into other parts of our business where we think an educated direct-to-consumer model may potentially drive increased awareness of, for example, chair-side dentistry. And I'll pass it over to Herman for the second part. We put the 24 cents of really one-timers, so you should think about that. We put that back into the base, so that gives us an adjusted base of $1.91 for the P&L.

Speaker Change: And I'll pass it over to Herman for the second part of your question.

Herman Herman: Hey, Brandon term in Kyoto.

Herman Herman: For the question, so I'll just talk a little bit about the.

Herman Herman: The Bight implications to the P&L I would refer you to slide 11, which kind of walks through where we were so we finished 2024 with a $1 67, then we put the 24 cents of really one timers is how you should think about that we put that back into the base.

Simon Campion: Thank you. Our next question comes from David Saxon with Needham & Company. You may proceed.

Operator: Thank you. Our next question comes from David Saxon with Needham & Company. You may proceed.

David Saxon: Great. Good afternoon, Simon and Herman. Thanks for taking my questions. Maybe I wanted to ask on implants, specifically the US team. It looks like it was down in the quarter. So can you just talk about kind of the progress you're seeing in that team and thoughts of timing of returning to growth and then potentially market growth over time?

is a

Herman Herman: So that gives us an adjusted base of $1 91, and if you just look you do see a combination there's a bar there that talks about the benefits from the bite resources going away things like marketing and there is also some of our foundational initiatives also captured in that.

Herman: target to go after. That'll give you some contact resources going away. Let me spend a minute on sales because I think that's important. So we do have a little bit of sales that will continue and I think for simplicity, what I would say is I would probably call it, split that up, maybe 50-50. I think that's close enough.

Andrea Daley: Yeah. Good morning, David. Thank you for the question. I think in the US, it's fair to say that our expectations around growth have disappointed us, and our performance has disappointed us immensely over the past two years. The way we're trying to address this, we've just recently completed a deep dive, and I noted that in my prepared remarks. We will be launching a more digital connectivity for implants on DS Core this year, and it's the first part of a three-phase approach to completely digitalizing our implant business on DS Core. We have spoken previously about reinvesting in clinical education in the implant world. We've done that over the past two years.

Simon Campion: Yeah. Good morning, David. Thank you for the question. I think in the US, it's fair to say that our expectations around growth have disappointed us, and our performance has disappointed us immensely over the past two years. The way we're trying to address this, we've just recently completed a deep dive, and I noted that in my prepared remarks. We will be launching a more digital connectivity for implants on DS Core this year, and it's the first part of a three-phase approach to completely digitalizing our implant business on DS Core. We have spoken previously about reinvesting in clinical education in the implant world. We've done that over the past two years.

Herman Herman: Bucket and I think for simplicity, what I would say is as I would probably call. It split that up maybe 50 50, I think that's a close enough.

Herman Herman: Target to go after that will give you some context.

Herman Herman: Let me spend a minute on sales because I think that's important so we do have a little bit of sales that will continue. So there was the treatment plan that was recognized over a number of months so that will carry on a little bit.

Herman: target for the course of 2025, I believe a little bit into 2026. Let me spend a minute on sales because I think that's important. But we do have a little bit of sales that will continue.

Herman: There was the treatment plan that was recognized over a number of months, so that will carry on a little bit.

Speaker Change: Over the course of 2025, and I believe a little bit into 'twenty six it's a small number it's under $40 million, but think of a bite is a very substantial headwind to dense play growth in 2025, I hope that answers your question Brandon.

David Saxon: Over the course of 2025, and I believe a little bit into 26, it's a small number, it's under... Our next question comes from David Saxon with Needham & Company. You may proceed.

Good afternoon, Simon and Herman. Thanks for taking my questions.

Brandon Vazquez: Thank you.

Speaker Change: Our next question comes from David Saxon with Needham <unk> Company you May proceed.

David Saxon: Maybe I wanted to ask on InPlan specifically the the US team it looks like it was down in the quarter so can you just talk about thank you progress you're seeing in that team and thoughts of you know timing

David Saxon: Great Good afternoon, Tim and Herman Thanks for taking my questions, maybe I wanted to ask on implants, specifically the U S team.

Andrea Daley: But the feedback that we have received over the past several months is, while that was at a macro level, it's a local-level education suite of programs that are sought by our customers, and they're referring GPs. So we're going to be focused on doing that on a go-forward basis. And simplifying our messaging, we have a broad portfolio, but our messaging around it is complex. Our messaging to customers is complex, and our ability for our commercial teams to embrace this messaging has proven a challenge given the fact that many of them just came on board in the past two years. We have also done a completed assessment of Salesforce capabilities in implants in particular, and we are in the process of recalibrating them with added training. And that's happening as we speak. So we do expect performance in implants this year.

Simon Campion: But the feedback that we have received over the past several months is, while that was at a macro level, it's a local-level education suite of programs that are sought by our customers, and they're referring GPs. So we're going to be focused on doing that on a go-forward basis. And simplifying our messaging, we have a broad portfolio, but our messaging around it is complex. Our messaging to customers is complex, and our ability for our commercial teams to embrace this messaging has proven a challenge given the fact that many of them just came on board in the past two years. We have also done a completed assessment of Salesforce capabilities in implants in particular, and we are in the process of recalibrating them with added training. And that's happening as we speak. So we do expect performance in implants this year.

David Saxon: It looks like it was down in the quarter. So can you just talk about kind of progress youre seeing in that team and thought to timing of returning to growth and then potentially market growth over time.

Good afternoon, Simon and Herman. Thanks for taking my question.

David Saxon: Maybe I wanted to ask on the U.S. team, it looks like it was down in the quarter, so can you just talk about the progress you're seeing in that team and thoughts of timing of returning to growth and potentially market growth over time?

David Saxon: Yeah. Good morning, David. Thank you for thank you for the question I think in the U S. It's fair to say that that are that our expectations are around around growth have disappointed us and our performance has disappointed.

David Saxon: And the way we're trying to address this, we have just recently completed a deep dive. It's fair to say that our expectation, we will be launching around more digital connectivity to support implants and our core this year. And it's the first part of an amendmentary phase approach to complete the digitalization. We have just recently completed a deep dive, and I know that

David Saxon: Disappointed us immensely over the past over the past two years.

David Saxon:

David Saxon: We're trying to trying to address this we have we have a we've just recently completed a deep dive and I noted that in my in my prepared remarks.

David Saxon: We will be launching.

David Saxon: More digital connectivity for implants on on D. S. Core this year and it's the first part of a three phase approach to to completely digitalize, our implant business on on the core.

David Saxon: We will be launching a more digital connectivity for Implant World on DSCore this year over the first part of the past two years. The feedback that we have received to completely digitalizing our implant business on DSCore, we've spoken previously about a suite of programs that are sought by our customers and they

David Saxon: We have spoken previously about.

Andrea Daley: We've done well in China, for example. Again, as we said, our portfolio is robust. We need to enhance digital. We need to change the way we approach customers with education. And we need to help our sales reps be more clinically astute, shall we say.

Simon Campion: We've done well in China, for example. Again, as we said, our portfolio is robust. We need to enhance digital. We need to change the way we approach customers with education. And we need to help our sales reps be more clinically astute, shall we say.

David Saxon: About reinvesting in clinical education in in the implants implant world and we've done that over the past over the past two years, but the feedback we have received over the past several months is while that was on a macro level, it's a local level.

David Saxon: Okay. Great. That was helpful. Thanks for that, Simon. And then just as a follow-up, I wanted to ask about this partner that's going to help you with GNA. Just so we can kind of get an idea of the potential benefit, I guess I'd love to hear what's the benchmark for GNA as a percent of sales that you're kind of targeting, and where are you at currently? Thanks so much.

David Saxon: Education.

David Saxon: Our suite of programs that are sought by our customers and their referring referring G. P. So we're going to be we're going to be focused on doing that on a go forward basis.

and Chris Campbell.

David Saxon: And Youll simplifying our messaging, we have a broad portfolio, but our messaging around it is complex our messaging to customers.

David Saxon: As complex and our ability for our commercial teams to to embrace this messaging has proven.

Herman Cueto: David at Termin, how are you? Maybe I'll.

Andrea Daley: Doing well.

David Saxon: Doing well.

Herman Cueto: Let me just talk about this a little bit. We won't get specific into where we are relative to benchmarks, but I think you've been following the company for a long time. You understand where our SG&A is. There are parts of the business, especially in the back office, that are over-indexed relative to where industry averages are. And as we look to do more work to simplify the company, that's certainly an area for opportunity. Now, it will happen over time. It'll take us a little bit of time to ramp up the teams. It'll take us a little bit of time to kind of really see what the true opportunities are. But we do believe this is a value unlock for us that might help us a little bit in 2025 and then the out years from there.

David Saxon: Given the fact that many of them are.

David Saxon: have done a complete assessment of our salesforce capabilities in implants in particular and our ability and we are in the process of recalibrating them with added training a challenge given the fact that as we speak we do expect in the past two years we have also in implants this year done a complete assessment of our salesforce capabilities

David Saxon: Just came on board in the past in the past two years.

David Saxon: We have also.

You've done a done a completed an assessment of your salesforce capabilities and implants in particular.

David Saxon: And we are in the process of.

David Saxon: Recalibrating them with or without a training.

David Saxon: And that's happening as we speak so we are we do expect we do expect performance in implants. This year, we've done well in China for example, or again as we said our portfolio is robust we need to enhance digital we need to change the way we approach customers with education, and we need to help our sales.

David Saxon: are in the process of recalibrating them with added training and more clinically as we speak. So we do expect.

Speaker Change: Reps B, a b more clinically astute shall we say.

Speaker Change: Okay, great. That was helpful. Thanks for that, Simon. And then, just as a follow-up, I wanted to ask about your partner that's going to help you with G&A, just so we can kind of get an idea of the potential benefit. I guess I'd love to hear what's the benchmark for G&A as a person of sales that you're kind of targeting, and where are you at currently? Thanks so much. Okay, great. That was helpful. Thanks for that, Simon. And then, just as a follow-up, I wanted to ask about this... Maybe I'll...

Speaker Change: Okay, Great that was helpful. Thanks for that and then just as a follow up I wanted to ask about this.

Herman Cueto: But it would be focused on a lot of different things. As you could imagine, whenever you do big acquisitions, there's always processes and policies. There's overlap. Where is the work? Where is it being done? How do you make it simple? Sometimes there's just duplicative efforts. There's legal entities. So it would really give us an opportunity to simplify a lot of that. And like I said, we do believe there's a value unlock there, but more to come on that in the future. Thanks, David.

Speaker Change: Partner.

Speaker Change: That's going to help you with with G&A. Just so we can kind of get an idea of the potential benefit I guess I'd love to hear what's the benchmark for G&A as a percentage of sales that you're kind of targeting and where are you at currently thanks. So much.

Speaker Change: that's going to help you with with GNA, just so we can kind of get an idea of like the potential benefit. I guess I'd love to hear what's the benchmark for GNA and the percent of sales that you're kind of targeting and where you're at currently. Thanks so much.

David Saxon: David determine how are you.

Speaker Change: Maybe I'll do it.

Let me.

Speaker Change: Let me just talk about this a little bit we won't get specific into where we are relative to benchmarks, but I think.

David Saxon: Yep. Great. Thanks.

Speaker Change: You've been following the company for a long time, you understand where our SG&A is.

Simon Campion: Thank you. Our next question comes from Jeff Johnson with Baird. You may proceed.

Operator: Thank you. Our next question comes from Jeff Johnson with Baird. You may proceed.

Speaker Change: There are parts of the of the business, especially in the back office that are over indexed relative to where industry averages are.

Jeff Johnson: Thank you. Good morning, guys. I wanted to start just on the cost transformational process. So the $80 to 100 million in savings that you've targeted through 2025, can you just level set us or remind us how much of that had run rated into the model at the end of 2024? How much is going to be incremental in 2025? And when I look at slide 11, Herman, as you've referred to, that $0.13 benefit, I think if I'm doing the math right and kind of taking that up to a pre-tax, that's about a $35 to 40 million pre-tax benefit. Is that the flow-through of those 2025 incremental cost savings? Is that primarily what makes up that $35 to 40 million of benefit on a pre-tax basis in 2025? Thank you.

Speaker Change: And as we look to do more work to simplify the company that's certainly.

Speaker Change: Area for opportunity now it will happen over time, it'll take us a little bit of time to ramp up the teams that will take us a little bit of time to kind of really see what the true opportunities are but we do believe this is a value unlock for us.

the

Speaker Change: That might help us a little bit in 2025.

Speaker Change: And then the out years from from there, but it would be focused on a lot of different things you know as you could imagine whenever you do big acquisitions.

Speaker Change: really see what the true opportunities are, but we do believe that there's overlap. Where is the work? Where is it being done? How do you make it central? Sometimes there's just...

Speaker Change: As always.

Andrea Daley: Good morning, Jeff. I'll start, and then Herman can finish your question. We never actually communicated how much of those savings were going to occur in 2024, 2025, or how it was going to be split between drop-through and reinvestment. As you do know, we have reinvested. In particular, this past year, we reinvested, or we invested rather, in a virtual sales team to reach those customers that we cannot reach or have not reached in a long time simply because of, for example, the value of these accounts, maybe the location of these accounts. And as I noted in the prepared remarks, we have now been in touch with over 8,000 unique customers since we rolled this program out and have made in excess of 40,000 phone calls to customers around the US. We have created demand for the virtual sales team themselves.

Simon Campion: Good morning, Jeff. I'll start, and then Herman can finish your question. We never actually communicated how much of those savings were going to occur in 2024, 2025, or how it was going to be split between drop-through and reinvestment. As you do know, we have reinvested. In particular, this past year, we reinvested, or we invested rather, in a virtual sales team to reach those customers that we cannot reach or have not reached in a long time simply because of, for example, the value of these accounts, maybe the location of these accounts. And as I noted in the prepared remarks, we have now been in touch with over 8,000 unique customers since we rolled this program out and have made in excess of 40,000 phone calls to customers around the US. We have created demand for the virtual sales team themselves.

Speaker Change: Processes.

Speaker Change: And policies, there's overlap where whereas the work where is it being done how do you make it simple.

Speaker Change: It would be focused on a lot of different things, so it wouldn't really give us an opportunity to simplify a lot of that.

Speaker Change: Sometimes there's.

Speaker Change: Just.

Speaker Change: <unk> efforts, there's legal entity. So it would it would really give us an opportunity to simplify a lot of that and like I said, we do believe there's a there's a value unlock there but more to come on that in the future. Thanks David.

Processes and policies, there's overlap. Where is it being done?

How do you make it simple?

Our next question comes from Jeff Johnson with Baird.

David Saxon: Yeah, great. Thanks.

Speaker Change: Thank you.

Jeff Johnson: Thank you. Good morning, guys. I wanted to start just on the cost transformational process. So the $80 to $100 million in savings that you've targeted through 2025, can you just level set us or remind us how much of that had run rated into the model at the end of 2024? How much is going to be incremental in 2025? And when I look at slide 11, Herman, as you've referred to, that $0.13. Thank you. Good morning, guys. I wanted to start just on the cost transformational process.

Speaker Change: Our next question comes from Jeff Johnson with Baird You May proceed.

Jeff Johnson: Thank you good morning, guys.

Jeff Johnson: I wanted to start with on the cost transformational process, so the $80 million to $100 million in savings that you're targeting through 2025 can you just level set us or remind us how much of that had run rated into the model at the end of 2024, how much is going to be incremental in 2025, and when I look at slide 11 environment as you've referred to that 13.

Jeff Johnson: Benefit I think if I'm doing the math right and kind of taken that up to a pre tax that's about a $35 million to $40 million pre tax.

Andrea Daley: And also, they are partnering with our field-based sales team to direct those field reps to opportunities that they may not have otherwise understood existed. So again, we never shared the breakdown of where that money was flowing into, but we have been investing it in areas that we expect to drive demand for all of our business, really. Herman?

Simon Campion: And also, they are partnering with our field-based sales team to direct those field reps to opportunities that they may not have otherwise understood existed. So again, we never shared the breakdown of where that money was flowing into, but we have been investing it in areas that we expect to drive demand for all of our business, really. Herman?

Speaker Change: Dennis is that the flow through of those 2025 incremental cost savings.

Dennis: Is that primarily what makes up that $35 million to $40 million.

Dennis: Benefit on a pretax basis in 2020, thank you.

Speaker Change: Good morning, Jeff I'll start and then and then and then Herman can them.

Speaker Change: Can finish finish your question, we never actually communicated how much of those are those savings are going to occur in 'twenty four 'twenty five or how it was going to be split between drop through and reinvestment.

Jeff Johnson: takes up that $35 million-$40 million of benefit on a three-factor basis in 2025. Thank you. Thank you. In particular, in the past year we reinvested, or we invested, rather, in a virtual sales team.

Herman Cueto: Yeah. Simon, I wouldn't add too much more. What I would say is that it's all contemplated in the guide. Simon touched on the investments. I've come in. I've been here for around 90 days, and I think the team here has done actually a wonderful job of finding resources to not only take out drop-through to the bottom line to create shareholder value, but also invest in the future into very high-growth, high-impact areas that will impact the top line in the future.

Speaker Change: As you do know we have we have reinvested.

Speaker Change: In particular, this past year, we reinvested or we invested rather than a virtual sales team to reach those customers that are.

Jeff Johnson: to reach those customers that we cannot reach or haven't reached in a long time, simply because of, for example, the value of these accounts, maybe the location of these accounts. As I noted in the prepared remarks, we have now been in touch with over 8,000 unique customers since we reached those customers and have made 40,000, that we cannot reach or haven't reached in a long time, simply because of, you know,

Speaker Change: That we that we cannot reach or have not reached in a long time simply because of you know for example, the value of these accounts maybe.

Speaker Change: The location of these accounts and as I noted in the prepared remarks, we have we have now been in touch with.

Speaker Change: With over 8000 unique customers since we rolled this program out.

Jeff Johnson: Okay. I guess let me go at it one other way or just ask one follow-up or a two-part follow-up. Just one, the $0.13 savings then that is in the slide deck, is that primarily flow-through of cost savings from the efforts you've been making on the transformational side, or is there other stuff in that $0.13? Just so I understand that, number one. And number two, just on SureSmile, I don't have my geographic weightings all that tight, but when I listen to your description of Europe, rest of the world, and US, I think I get US SureSmile down in the double digits. Just what is going on there? I know the end markets are challenged in the US for sure. Discretionary spending is. But is there anything else with SureSmile down? I think double digits in the US. Thank you.

Speaker Change: And have made 40000 in excess of 40000 and phone calls to customers around the U S.

Jeff Johnson: The value of the created demand for the virtual sales team themselves, and also they are part of the field-based sales team.

Speaker Change: We have created demand for the virtual sales team themselves and also they are partnering with our field based sales team to to direct those field reps are two opportunities that they may not have otherwise understood existed. So we again, we never share the breakdown of where that where that money was.

Jeff Johnson: We have now direct with those field reps over 8,000 new customers that they may not have otherwise understood existed and have made 40,000. We never shared the breakdown of where that money was flowing into, but we have been investing in areas that we have been able to drive demand for all of those field reps.

Speaker Change: Was flowing into but we have we are we have been investing in areas that we expect to drive demand for.

Speaker Change: Simon Daley, Glenn Coleman, Simon Campion, Glenn Coleman, Glenn Coleman, Glenn Coleman,

Speaker Change: For all of our business really.

Speaker Change: Alright.

Speaker Change: Yes, Simon I Wouldnt add too much more.

Speaker Change: What I would say is that it's all contemplated.

Speaker Change: In the guide Simon touched on the investments.

Herman Cueto: Yeah. Let me start with the $0.13 savings. Maybe what we could do is, I think we'll have some follow-up callbacks. It's more of a modeling question. So why don't we take it offline? We'll handle it from there. And then maybe what I could do is turn the SureSmile question over to Simon.

Speaker Change: I've come in I have been here for around 90 days and I think the team here has done actually a wonderful job of finding resources to not only take out drop through to the bottom line to create shareholder value, but also invest in the future into very high.

Speaker Change: to not only take out too much of the bottom line to create shareholder value but also invest in the future. Simon touched on the investment growth high impact areas that were around the top line in the future.

Andrea Daley: Yeah. Thanks, Herman. So Jeff, as we've, I think, said before, about 60% of our SureSmile business is in the US, and the majority of the balance is in Europe. And Europe has been doing very well, as we've noted, for several quarters now. And it's now becoming rather meaningful to us. Your question or your statement on US performance, when we think about our SureSmile business, there are more components in that than just our aligners. There are some legacy products in that business too that make up about 20 to 25% of that business. It's that area that is really impacting us within the SureSmile category, shall we say. If I look at our aligners, our true aligners business, as I noted in prepared remarks, we've posted four quarters of high single digits to double-digit growth in 2024.

Simon Campion: Yeah. Thanks, Herman. So Jeff, as we've, I think, said before, about 60% of our SureSmile business is in the US, and the majority of the balance is in Europe. And Europe has been doing very well, as we've noted, for several quarters now. And it's now becoming rather meaningful to us. Your question or your statement on US performance, when we think about our SureSmile business, there are more components in that than just our aligners. There are some legacy products in that business too that make up about 20 to 25% of that business. It's that area that is really impacting us within the SureSmile category, shall we say. If I look at our aligners, our true aligners business, as I noted in prepared remarks, we've posted four quarters of high single digits to double-digit growth in 2024.

Speaker Change: Growth high impact areas that.

the team here has done actually.

wonderful.

Speaker Change: That will impact the top line in the future.

Speaker Change: Let me go at it one other way, or just ask one follow-up, or a two-part follow-up.

Speaker Change: Okay.

The $.13 savings bin that is in the slide deck.

Speaker Change: I guess, let me let me go ahead and one other way or just ask one follow up for a two part follow up just one the 13th savings than it is in the slide deck.

Speaker Change: is that primarily flow through of cost savings from the effort you've been making on the transformational side or is there other stuff in that 13 cents, just so I understand that number one. And number two, just on SureSmile, I don't go out of my way to have all that hype, but when I listen to your description of your savings, I think I get you at primarily flow

Speaker Change: Is that primarily flow through of cost savings from the efforts you've been making on the transformational side or is there other stuff in that 13th just so I understand that number one and number two just on first mile. I don't have my geographic weighting is all of that tight, but when I listen to your description of Europe rest of World and you.

Speaker Change: I think U S share smiles down in the double digits, just what is going on there I know the end markets are challenged in the U S. For sure discretionary spending is but is there anything else with share smile down I think double digits in the U S. Thank you.

are on the right hand side.

Speaker Change: Yeah. So.

Speaker Change: But let me start with the with the 13th.

Speaker Change: <unk> savings, maybe what we could do is I think we will have some.

Speaker Change: Follow up call backs, that's more of a modeling question. So why don't we take it offline we'll handle it.

over to Simon.

Andrea Daley: And we had some unique experiences or unique losses in the US that we've shared before. And if you exclude those, we're actually growing in the mid-single digits in the US on the aligner business alone. And we continue to make progress with our GPs. Obviously, our orthodontic footprint is rather small, or specialist footprint is rather small with SureSmile. But within our GP business, we continue to see solid growth in that category across 2024 in the US.

Simon Campion: And we had some unique experiences or unique losses in the US that we've shared before. And if you exclude those, we're actually growing in the mid-single digits in the US on the aligner business alone. And we continue to make progress with our GPs. Obviously, our orthodontic footprint is rather small, or specialist footprint is rather small with SureSmile. But within our GP business, we continue to see solid growth in that category across 2024 in the US.

Simon Campion: From there and then maybe what I could do is turn the shore Smile question over to Simon.

Speaker Change: Yeah, thanks Herman. So, let me start with the 13th sensation. Maybe what we could do is, I think we'll have some callback. It's more of a modeling question. So, why don't we take it offline? And the majority of the balance is there in Europe. Maybe what I could do is turn the course of the question over to Simon.

Simon Campion: Yeah. Thanks, Thanks, very much so.

Simon Campion: Jeff Your your as we've as we've I think we've said I think we've said before about about 60% of our of our small business isn't in the U S and the majority of the balance is in a in Europe and Europe has been doing.

Speaker Change: So, Jeff, you're becoming rather meaningful, as we've said before. About 60% of our U.S. performance is in the U.S. When we think about the majority of the balance...

Simon Campion: Well as we've noted for several quarters now.

Simon Campion: Hum.

Simon Campion: It's now becoming rather meaningful rather meaningful to us.

Simon Campion: Your your question or your statement on on U S performance you know, it's when we think about what do we think about.

Speaker Change: is in Europe and Europe is sure a small business. There are more components in that several quarters now. Our aligners, there are some legacy products in that business, too. It is now becoming rather meaningful, about 25, 20, 25 percent of that business. It's that area that is really impacting us. When we think about, when we think about

Jeff Johnson: Thank you.

Simon Campion: Thank you. Our next question comes from Kevin Caliendo with UBS. You may proceed.

Operator: Thank you. Our next question comes from Kevin Caliendo with UBS. You may proceed.

Simon Campion: Are sure small business there there are more components in that than just our our aligner is there are there are some legacy products that are in that business too that make up about <unk>.

Kevin Caliendo: Great. Thanks for taking my question, guys. First, I guess I know you didn't mention it, but is there any timing update or any visibility on the German tax situation that you can provide to us at this point? Second question I had was, given one of your primary wholesalers is being taken private, is there any disruption there for you? Have you seen any? Is it an opportunity? Take us through how that transaction, if in any way, shape, or form, could affect your outlook or your business strategy going forward. Thanks.

25, 2025% of that business. It's that area that is a that is really impacting us on the within the within the shorts model category shall we say if I look at our a line or as our true aligner business as I noted in the prepared remarks, we've had we've posted four quarters of high single digits too.

Simon Campion: Double digit growth in in 2000, 22024, and we had some unique a.

Simon Campion: Unique experiences.

Simon Campion: Our unit unique losses in the U S that we've that we've shared before and if you exclude those we are actually we're actually growing in the mid single digits in the U S on the aligner business alone.

and Richard Franklin.

Andrea Daley: Good morning. Good morning, Kevin. So two parts to your question, obviously. On the German tax situation, I would say no meaningful update at this time. We continue to work with the authorities in Germany, providing them information and responding to their requests. We continue to believe, and our teams have recently reinforced this, that we believe that the issues that the Germans think we have, we don't think they exist. And we've gone through them all again on multiple occasions. In relation to resolution of this, it's rather difficult to say. I wish I had a better answer than that, but it's likely out a while. And we are, as I said, we continue to work with them and try and partner with them to get to a good spot.

Simon Campion: Good morning. Good morning, Kevin. So two parts to your question, obviously. On the German tax situation, I would say no meaningful update at this time. We continue to work with the authorities in Germany, providing them information and responding to their requests. We continue to believe, and our teams have recently reinforced this, that we believe that the issues that the Germans think we have, we don't think they exist. And we've gone through them all again on multiple occasions. In relation to resolution of this, it's rather difficult to say. I wish I had a better answer than that, but it's likely out a while. And we are, as I said, we continue to work with them and try and partner with them to get to a good spot.

Simon Campion: Alone and we continue to we continue to make progress with our GPS you'll obviously, our orthodontic footprint is rather small our specialist footprint is is rather small with jure smile, but within that within our <unk> business. We continue to see solid growth in that category across 2024.

Speaker Change: Thank you. And we continue to, we continue to make progress with our GPs, you know, obviously our orthodontic footprint is rather small. Our next question goes from Kevin Kelly with UBS, you may proceed.

Simon Campion: In the U S.

Simon Campion: Thank you.

Great, thanks for taking my question guys.

Speaker Change: Our next question comes from Kevin Caliendo with UBS you May proceed.

Kevin Kelly: I guess I know you didn't mention it, but is there any timing update or any visibility on the German tax situation that you can provide to us at this point?

Kevin Caliendo: Great. Thanks for taking my question guys.

Kevin Caliendo: First I guess I know you didn't mention it but is there any timing update or any visibility on.

Kevin Kelleyan: Our next question comes from Kevin Kelleyan with UBS, you may proceed. One of your primary wholesalers. Great, thanks for taking my question, guys.

Kevin Caliendo: The German tax situation that you can provide.

Kevin Caliendo: To us at this point.

Kevin Caliendo: Second question I had was given one.

Speaker Change: Any disruption there? I know you haven't seen any. Is there an opportunity, is there an update or any visibility on the German situation that you can provide to us at this point could affect your outlook or your strategy going forward?

Kevin Caliendo: One of your primary wholesalers is being taken private is there.

Kevin Caliendo: Sure.

Kevin Caliendo: Any disruption there for you have you seen any is that an opportunity is that.

Kevin Caliendo: Take us through how that <unk>.

Kevin Caliendo: Transaction.

Andrea Daley: In relation to your question on the distributors in the US, we continue to have a really good working relationship with them. We continue to partner with them in the field. We continue to speak to them at management levels. They continue to order our product and be a very important partner for us in North America. We have not seen any reason to believe that anything is going to change. We're a meaningful component of their business. If I think to the feedback that many of you are aware of and is continually reinforced by our customers and a survey, customers are looking for opportunity to grow and to be more efficient. And the solutions that we provide, our digital solutions in particular, enable customers to be more efficient, to have increased patient treatment acceptance rates, and to grow their own practices.

Simon Campion: In relation to your question on the distributors in the US, we continue to have a really good working relationship with them. We continue to partner with them in the field. We continue to speak to them at management levels. They continue to order our product and be a very important partner for us in North America. We have not seen any reason to believe that anything is going to change. We're a meaningful component of their business. If I think to the feedback that many of you are aware of and is continually reinforced by our customers and a survey, customers are looking for opportunity to grow and to be more efficient. And the solutions that we provide, our digital solutions in particular, enable customers to be more efficient, to have increased patient treatment acceptance rates, and to grow their own practices.

Kevin Caliendo: In any way shape or form could affect your outlook or your business strategy going forward. Thanks.

Speaker Change: Good morning. Good morning. Is there any disruptions there for you? Have you any opportunity? Is this, like, take us through how that transaction, if in anyway, shape or form could effect the business strategy going forward. We continue with the Astrology choice program in Germany providing them with information and responding to their requests.

Kevin Caliendo: Good morning, good morning, Kevin.

Kevin Caliendo: So on the.

Kevin Caliendo: Two parts to your question, obviously on the on the German tax situation I know I would say no meaningful update at this at this time, we continue to we continue to work with.

Kevin Caliendo: With the authorities in Europe in Germany, providing them, providing them information and.

Kevin Caliendo: Responding to their to their requests we continue to believe in and our teams have recently.

Kevin Caliendo: Recently reinforced this that we believe that the issues that.

Kevin Caliendo: Germans think we have that we don't think they exist.

Kevin Caliendo: We've gone through them all again on the on the.

Kevin Caliendo: On multiple occasions.

Kevin Caliendo:

Kevin Caliendo: In relation to resolution of this it's rather difficult to say I wish I had a better answer than that but it's a it's likely out awhile.

Speaker Change: The issues that the Germans think we have, that we don't think they exist, and we've gone through them all again.

Kevin Caliendo: We are we can as I said, we continue to we continue to work with them.

Andrea Daley: So the technology we have enables customers to be successful, enables us to be successful, and significantly, in the context of your question, enables our distribution partners to be successful as well.

Simon Campion: So the technology we have enables customers to be successful, enables us to be successful, and significantly, in the context of your question, enables our distribution partners to be successful as well.

on multiple occasions.

I am

Speaker Change: in order to get to a resolution of this. In relation to the operation on the distribution of better answers than that in the U.S., we continue to have a really good working relationship with them. We continue to partner with them in the field, continue to speak to them at management levels, and continue to order our product.

Kevin Caliendo: And try and.

Kevin Caliendo: Partner with them to get to to get to a good a good spot in relation to your question on on the distributors are in the in the U S.

Kevin Caliendo: Great. Thank you, guys.

Simon Campion: Thank you. Our next question comes from Michael Cherney with Leerink Partners. You may proceed.

Operator: Thank you. Our next question comes from Michael Cherney with Leerink Partners. You may proceed.

Kevin Caliendo: We continue to have a really good working relationship with them, we continue to partner with them in the field, we continue to speak to them at a at the management levels. They continue to order our product.

Speaker Change: partner with them to get to a good very important partner. In relation to your question on the distributors in the U.S., we have not seen any reason to have a really good working relationship with them. We're a meaningful component of their business.

Michael Cherny: Good morning. Thanks, obviously, for a ton of detail so far. Maybe just asking a bigger picture question. You have the Byte wind down. You have the Wellspect evaluation being put in place. You have the G&A benchmarking work that you're doing. All of it seems very logical at this point in time. Given the broader nature of how many moving pieces you have going on, Simon, does it make sense to take even a further, broader look and make sure that you have the right pieces within the portfolio going forward long-term, the assets that you want to have, the other assets that may not fit going forward, but kind of do it from a broader basis?

And be a very important partner for us in in North America.

Kevin Caliendo: We have not seen any reason to believe that anything is going to change where we're a meaningful component of their of their business. If I, if I think too if I think to.

Speaker Change: If I think at management level, I think to continue to order our product that many of you are aware of. It's continually reinforced for us by our customers in North America.

Kevin Caliendo: The feedback that that many of you are aware of and is continually reinforced.

Speaker Change: We have not seen any need to do that. Anything is going to change, we are a meaningful component of their business, and the solutions that we provide, if I think, to enable customers to be more efficient, to have increased, continually reinforced efficiency rates by our customers and our practices.

Kevin Caliendo: By our by our customers and in a survey.

Kevin Caliendo: Customers are looking for opportunities to grow and to and to be more efficient and the solutions that we provide our digital solutions in particular.

Michael Cherny: How do you think about, as you get through some of the especially market-oriented weaknesses, that coming out the far side, Dentsply will be a better top-line business while obviously focusing on the leaner side that you've noted relative to the benchmarking work? Sorry if it's a weird question, but appreciate it.

Kevin Caliendo: <unk> enable customers to be more efficient too.

Kevin Caliendo: To have increased patient treatment acceptance rates and to grow their own practices. So the technology. We have enables customers to be successful enables us to be successful.

Speaker Change: The solutions that we provide, our digital solutions in particular, enable customers to be more efficient, to have increased patient treatment acceptance rates.

Andrea Daley: No, that's fine, Michael. It's a good question. I'll answer it in two parts. Number one is, as I've noted many times, including I think my first call with all of you folks, we regularly assess our portfolio for opportunities to streamline it. There are different ways we can streamline it, such as the SKU rationalization work that's underway. Then there are ways like the manner in which we are discussing Wellspect. If you reflect when you have a moment on some of my prepared remarks here, we are really in a unique position as an end-to-end dental company that's been hindered by some internal execution challenges that we've noted ad nauseam and also some macro challenges.

Simon Campion: No, that's fine, Michael. It's a good question. I'll answer it in two parts. Number one is, as I've noted many times, including I think my first call with all of you folks, we regularly assess our portfolio for opportunities to streamline it. There are different ways we can streamline it, such as the SKU rationalization work that's underway. Then there are ways like the manner in which we are discussing Wellspect. If you reflect when you have a moment on some of my prepared remarks here, we are really in a unique position as an end-to-end dental company that's been hindered by some internal execution challenges that we've noted ad nauseam and also some macro challenges.

Kevin Caliendo: Significantly in the context of your question enables our distribution partners to be successful as well.

Michael Czerny: Our next question comes from Michael Czerny with Learing Partners, you may proceed. Good morning and thanks for a ton of detail so far. Maybe just asking a bigger picture question.

Kevin Caliendo: Great. Thank you guys.

Kevin Caliendo: Thank you.

Speaker Change: Our next question comes from Michael Cherny with Leerink Partners you May proceed.

Speaker Change: Good morning, and thanks, obviously for a ton of detail.

You have the byte, you have the well-specced.

Speaker Change: So far maybe just asking a bigger picture question.

Speaker Change: Thank you. You have the GNA All right, the question goes to Michael J. All of this is very logical at this point in time.

Speaker Change: You have the wind down you have them well specced.

Speaker Change: To be put in place you have the G&A benchmarking work that Youre doing all of it seems very logical at this point in time, given the broader nature of how many moving pieces you have going on Simon.

Speaker Change: Given the broader nature of how many pieces you have going out, Simon, so far, does it make sense to take even a further, broader look and make sure that you have the right pieces? You have the portfolio going forward, long-term, the wealth that you want to have, the other half that's being put in place. You have the G&A, the kind of broader base that you're doing. All of this seems very logical at some point in time. Given the broader nature of how many pieces you have going out, Simon,

Speaker Change: Does it make sense to take even a further broader look and make sure that you have the right pieces within the portfolio going forward long term the assets that you want to have the other assets.

Speaker Change: You may now shape going forward and try to do it from a broader basis. How do you think about as you get through some of the especially market oriented weaknesses that coming out the far side dense pie will be better.

Andrea Daley: But if you step back and think about the workflow efficiency and digitalization of dentistry moving further into this century, into this decade, the scanners are the starting point for everything digital. They are the hub of all clinical workflows in the GP practice and, more importantly, in the specialist practices. And through our DS Core, where we're building out workflows across each of these major procedures in the dental community, we think we'll be in a great position to get after the digital workflow and then enable our customers to use our implants, our aligners, our endodontics, for example, moving forward. So there are certain parts of our portfolio that I think are absolutely essential to a broad-based dental business. But that being said, we do continue to evaluate them. But we do believe in the future of digital dentistry.

Simon Campion: But if you step back and think about the workflow efficiency and digitalization of dentistry moving further into this century, into this decade, the scanners are the starting point for everything digital. They are the hub of all clinical workflows in the GP practice and, more importantly, in the specialist practices. And through our DS Core, where we're building out workflows across each of these major procedures in the dental community, we think we'll be in a great position to get after the digital workflow and then enable our customers to use our implants, our aligners, our endodontics, for example, moving forward. So there are certain parts of our portfolio that I think are absolutely essential to a broad-based dental business. But that being said, we do continue to evaluate them. But we do believe in the future of digital dentistry.

all the other guys.

Speaker Change: Top line business.

Speaker Change: Obviously, focusing on the leaner side that you've noted relative to the benchmark to work.

Speaker Change: Sorry, it's a weird question, but I appreciate it.

Speaker Change: So that's that's why Michael it's it's a it's a good it's a good question. So I'll answer that in two parts number one is as I've noted many times, including I think my first call with all of you folks we regular regularly assess our our portfolio.

Speaker Change: folks, top line business, while obviously focusing on the leaner side that you've noted relative to the benchmark. For opportunities to streamline it, there's a few ways we can streamline it, just a few rationalization work that's underway, and then there are ways in which we are discussing many times, including my first call with all of you, if you reflect regularly on some of

Speaker Change: For for opportunities to streamline it and there are different ways. We can we can streamline that such as the SKU rationalization work. That's underway and then there are ways like the manner in which we are where we are discussing well specced up.

Speaker Change:

Speaker Change: If you if you if you reflect when you have a moment on on on some of.

Speaker Change: We are really in a unique position. Skew rationalization work that's underway, end-to-end dental, that's being hindered by some internal execution challenges that we've noted at Nordium, and also some macro challenges. If you step back and think about my prepared remarks here,

Speaker Change: My prepared remarks here.

Speaker Change: We are we are really in a unique position.

Speaker Change: As a as a end to end dental company that's.

Speaker Change: That's been that's been hindered by some internal execution challenges that we've noted ad nauseum.

Speaker Change: And also some some macro challenges, but if you step back and think about the.

Andrea Daley: We do believe it's underpenetrated across the world, even in the developed markets. I shared with you all before the data from Germany, where everyone has a picture of Germany's the most digitalized dental community in the world. Only 27% of practices in Germany have an intraoral scanner. So that sounds like a ton of opportunity moving forward as we convey the value of digital dentistry and the value of the ecosystem that only Dentsply Sirona can provide to customers.

Simon Campion: We do believe it's underpenetrated across the world, even in the developed markets. I shared with you all before the data from Germany, where everyone has a picture of Germany's the most digitalized dental community in the world. Only 27% of practices in Germany have an intraoral scanner. So that sounds like a ton of opportunity moving forward as we convey the value of digital dentistry and the value of the ecosystem that only Dentsply Sirona can provide to customers.

We are really in a unique position in dentistry.

Speaker Change: Moving further into this century and into the next decade, internal execution challenges, the scanners we've noted are the starting point for some macro challenges. If you step back and think about all clinical workflows in the GP practice, and more importantly in the digitalization of dentistry.

Speaker Change: Workflow efficiency and digitalization of dentistry, moving into moving and moving further into into this into the century into this into this decade.

Speaker Change: The scanners or the start the starting point for everything digital.

Speaker Change: They are they are the the hub of all clinical workflows in the GP practice and more importantly in the in the specialist practices.

Speaker Change: moving further into this century, into this decade. Each of these major procedures for everything digital, we think will be in a great position.

Speaker Change: And through our through our D. S Corps, where we're building out workflows across each of these major.

Michael Cherny: Appreciate the context, Simon. Thank you.

Simon Campion: Thank you. Our next question comes from John Block with Stifel. You may proceed.

Operator: Thank you. Our next question comes from John Block with Stifel. You may proceed.

Speaker Change: Major.

Speaker Change: to get after the digital workflow, and then more importantly in the specialist practice. And through our endodontics, for example, we're building our workflows across each of these major... There are certain parts of our portfolio that I think are absolutely essential to a great dental business. But that being said, we do continue to evaluate them.

Procedures in the Denver community, we think we'll be in a great position to get after the digital workflow and then enable our customers to use our implants are a liners or endodontics for example, moving forward. So there.

Jonathan Block: Thanks, guys, and good morning. Herman, just on slide 5, and I must be doing something wrong here, but it looks like Byte was a $29 million negative hit from the November guidance, and you lay out 24 cents in terms of the headwind. Even if I flow through the 29 million at 100%, just drop it to the bottom line, I get a lot closer to a 15-cent hit, not the 24. Maybe I'll just start there. Can you just help me out what I'm doing wrong there or what's off, and then I'll just ask the follow-up?

Jon Block: Thanks, guys, and good morning. Herman, just on slide 5, and I must be doing something wrong here, but it looks like Byte was a $29 million negative hit from the November guidance, and you lay out 24 cents in terms of the headwind. Even if I flow through the 29 million at 100%, just drop it to the bottom line, I get a lot closer to a 15-cent hit, not the 24. Maybe I'll just start there. Can you just help me out what I'm doing wrong there or what's off, and then I'll just ask the follow-up?

Speaker Change: There are certain parts of our portfolio that I think are are absolutely essential to a broad based dental business, but that being said, we do continue to evaluate them we but.

Speaker Change: but we do believe in the future of digital dentistry. We do believe it's under-penetrated across the world. There are certain parts of our portfolio in the developed markets that are absolutely essential to a broad data from Germany, where everyone has a picture of Germany as we continue to evaluate in the world. Only 27% of practices in Germany have an intraoral scanner.

Speaker Change: But we do believe in the in the future of digital digital Dentistry, we do believe it's underpenetrated.

Herman Cueto: Yeah, John. It's the tax rate. If you go back to the original guide in November, we were anticipating I want to say it was somewhere in the neighborhood of about 18%, 18, or 19%, and it ended up being close to 22%. So just the, I describe it as the jurisdictional income and how this all worked impacted the tax rate substantially. That's the arithmetic that you need to consider to make the math work. I hope that answers your question, John.

Speaker Change: Across the world.

Speaker Change: Even in the developed markets and I shared with you all before the data from Germany, where everyone has a picture of Germany as the most digitalized dental community and the world only 27% of practices in Germany have a intra oral scanner.

Speaker Change: and I shared with you all before that data from Germany where everyone has a picture of Germany as the most digitalized country in the world.

Speaker Change: So that that sounds like a ton of opportunity moving forward.

Speaker Change: As we as we convey the value of digital dentistry and the value of the ecosystem that only dense place where one can provide to customers.

Appreciate the contact, Simon. Thank you.

Only 27% of practices in Germany have an intraoral scanner.

Speaker Change: Our next question comes from John Block with People. You may proceed. Thanks, guys, and good morning. Herman, this is on slide 5. I must be doing something wrong here, but it looks like if I was a $29 million negative hit from the November guidance, can you lay out 24 cents in terms of the headwind? Thank you.

Simon Campion: I appreciate the context Simon thank you.

Speaker Change: Thank you.

Jonathan Block: It does. Certainly good enough for me. Maybe I'll just stay on the Byte theme, and I'll stick to the slides as well. The bridge on page 11 is really helpful, but if I'm reading it correctly, it shows Byte accretive to 2025 EPS off the adjusted 2024 figures of the $1.91. I've got Byte revenue you can let me know if I'm in the right zip code of about $140 million in 2024 once you factor in the refunds. You called out it's going to be a 200 basis points headwind to total company growth. So Byte should be down about $80 million year-over-year. Maybe it lands $60 million in 2025. Feel free to comment on all those assumptions. But this asset's going to be accretive to year-over-year EPS growth if revenues are down $80 million.

Jon Block: It does. Certainly good enough for me. Maybe I'll just stay on the Byte theme, and I'll stick to the slides as well. The bridge on page 11 is really helpful, but if I'm reading it correctly, it shows Byte accretive to 2025 EPS off the adjusted 2024 figures of the $1.91. I've got Byte revenue you can let me know if I'm in the right zip code of about $140 million in 2024 once you factor in the refunds. You called out it's going to be a 200 basis points headwind to total company growth. So Byte should be down about $80 million year-over-year. Maybe it lands $60 million in 2025. Feel free to comment on all those assumptions. But this asset's going to be accretive to year-over-year EPS growth if revenues are down $80 million.

Speaker Change: Our next question goes from Jon Block with Stifel. You May proceed.

Speaker Change: Thanks, guys and good morning.

Speaker Change: Just on slide five and I must be doing something wrong here, but it looks like.

Speaker Change: It was a $29 million negative hit from the November guidance and you lay out 20 <unk> in terms of the headwind.

Speaker Change: But even if I flow through the 29 million, at like 100%, just drop it to the bottom line, I get a lot closer to a 15 cent hit, not a 25. I must be doing something wrong here, but maybe I'll just start there. Can you tell me what I'm doing wrong there, or what's off?

Speaker Change: But even if I flow through the 29 million.

Speaker Change: Like a 100% just drop into the bottom line.

Speaker Change: Closer to a 15 hit not the 24 so.

Speaker Change: and you lay out 24 cents in terms of the tax rate.

Speaker Change: Maybe I'll just start there can you just help me out what I'm doing wrong, there or whats off and then I'll just ask a follow up.

But even if I blow through the 29 million...

Speaker Change: at like a hundred percent, just drop it to the bottom line.

Speaker Change: Yeah, John it's the tax rate if you go back to the original guide in November we were anticipating I want to say it was somewhere in the neighborhood of about 18% 18, or 19% and it ended up being close to 22%. So.

Speaker Change: You know, I get a lot closer to a 15% hit, not the 24. So maybe I'll just start there. If you need to tell me out what I'm doing wrong there or what's off, and so just ask the follow-up.

Jonathan Block: Maybe, as Simon just said, there's so many variable costs involved in this business. Any color or clarity around all those assumptions would be great. Thanks, guys.

Jon Block: Maybe, as Simon just said, there's so many variable costs involved in this business. Any color or clarity around all those assumptions would be great. Thanks, guys.

Speaker Change: Yeah, John, it's the tax rate. If you go back to the original guide and how this all worked, we were anticipating, I want to say, somewhere in the neighborhood of about 18% or 19%. And it ended up being close to 22%. It does, certainly good enough for me. And maybe I'll just stay on the BITE theme and stick to the...

Speaker Change: Just the that I describe it as the jurisdictional income.

Michael Cherny: Hey, John. We'll definitely get into maybe a little bit of a modeling question offline from this call, and I'm happy to walk you through it in a lot more detail. But I think at the highest level, John, the way to think about it is this was not. There was a lot of investment in the middle of the P&L in this business, particularly in marketing, as an example. So with this business really taking a different shape, we have an opportunity to take some of those costs out, and that's why you see the pickup in EPS. I'm happy to walk you through a little bit more detail so you can build your model. And I think the numbers that you're talking about in revenue, they are in the zip code. And we could, like I said, do a little bit more math around that later.

Herman Cueto: Hey, John. We'll definitely get into maybe a little bit of a modeling question offline from this call, and I'm happy to walk you through it in a lot more detail. But I think at the highest level, John, the way to think about it is this was not. There was a lot of investment in the middle of the P&L in this business, particularly in marketing, as an example. So with this business really taking a different shape, we have an opportunity to take some of those costs out, and that's why you see the pickup in EPS. I'm happy to walk you through a little bit more detail so you can build your model. And I think the numbers that you're talking about in revenue, they are in the zip code. And we could, like I said, do a little bit more math around that later.

Speaker Change: And how this all works impacted the tax rate substantially that's that's the arithmetic that.

Speaker Change: You need to consider to make the math work I hope that answers your question.

Speaker Change: The slides as well. The bridge on page 11 is really helpful, you know, but it shows an impact.

It does certainly good enough for me and maybe I'll just stay on the buying team and stick to the the slides as well.

Speaker Change: If I'm reading it correctly, it shows Bita Credo, the 2025 EPS, off the adjusted 24 figures of the $1.94. And you know, I've got Bita Revenue for me, and you can let me know. I've got $140 million, the slides as well. That's 2024, which is exactly what we want. You know, but if you know that, it's going to be a $200 bit. If I'm reading it correctly, it shows Bita Credo.

Speaker Change: On page 11 is really helpful, but it shows up.

Speaker Change: I'm reading it correctly, just bite accretive to 2025 EPS off the adjusted 24 figures of the $1 91.

Speaker Change: I've got by revenue you can let me know I'm in the right ZIP code of about $140 million in 2024 once you factor in the refunds.

Speaker Change: you know, bike should be down about $80 million year-over-year, maybe a fan is $20 million, $20 million, $25 million, they're pretty common on all those assumptions. And, you know, I've got bike revenue, you know, you can imagine that's going to be a creative year-over-year e-penguin growth that we're looking at for down $80 million and maybe, as it's signed, all that is going to be so many variable costs involved in total company growth.

Speaker Change: You called out it's going to be a 200 bps headwind to total company growth. So if I.

Jonathan Block: Okay. Thanks, guys. Appreciate it.

Jon Block: Okay. Thanks, guys. Appreciate it.

Speaker Change: It could be down about $80 million year over year, maybe Atlanta $60 million in 2025 feel free to comment on all those assumptions.

Simon Campion: Thank you. Our next question comes from Jason Bednar with Piper Sandler. You may proceed.

Speaker Change: This asset is going to be accretive to year over year EPS growth. If revenues are down $80 million and maybe is it Simon just there's so many variable costs involved in this in this business.

Jason Bednar: Hey. Good morning, and thanks for taking the questions here. I actually wanted to focus on some of the soft retail CAD/CAM commentary. Look, I could understand maybe some softness in the numbers. I actually had kind of anticipated some of that just given some of the Primescan 2 inventory load-in last quarter. Seems like that did impact the numbers here. But it was more the retail commentary that struck me, especially at a time when you've got your first scanner launch really in several years. So just a bit surprising, even in a challenge macro. So what do you think's going on, Simon? Why isn't PS2 resonating better in the US? And then how much of the pressure in CAD/CAM do you think can be traced at all to strained relations with Patterson?

Speaker Change: You know, by any color of clarity around all this stuff, maybe it lands $60 million, $20 million, $25 million. We'll definitely get it, maybe a little bit.

Speaker Change: Any color or clarity around all those assumptions would be great. Thanks, guys.

Speaker Change: This asset is going to be accretive to year-over-year EPS growth if the revenues are down $18 million, and maybe there's so many variable costs involved in this business.

Speaker Change: Hey, John.

Speaker Change: Definitely get into maybe a little bit of a modeling.

Speaker Change: <unk> question offline from this call and I'm happy to walk you through it in a lot more detail, but I think at the highest level John the way to think about it is this this was not there was a lot of investment in the middle of the P&L in this business, particularly in marketing as an example, so what.

Speaker Change: Any color or clarity around all this is great. Thanks, guys.

Speaker Change: and John Coleman. John, we'll definitely get into maybe a little bit with this business really taking a different shape this fall and I'm happy to walk you through it in a lot more detail but I think at the highest level, John, the way to think about it is this was not, there was a lot of investment in the middle of the P&L and in business particularly in revenue and in

Speaker Change: This business really taking a different shape, we have an opportunity to take some of those costs out and that's why you see the pickup in EPS I'm happy to walk you through a little bit more detail. So you can build your model.

Andrea Daley: Good morning, Jason. Let me start with the second part. I don't think any of it really is an issue with Patterson or anyone else, for that matter, to be quite honest. In relation to Primescan 2, as I noted in the call, we have seen three consecutive years of growth in scanner placements, which, again, as I noted on the call and in Q&A, is extraordinarily important for us as a full-line digital dental supplier. The macro environment in North America continues to be pressurized, as I think we've said, and I think some others have said too. When you think about the model for a dental practice where footprint on their most popular businesses, Preventative and Resto, is not demonstrating any growth, reimbursement is being compressed for patients. Patients have been funding to a rather high level, and around 40% fund elective procedures.

Simon Campion: Good morning, Jason. Let me start with the second part. I don't think any of it really is an issue with Patterson or anyone else, for that matter, to be quite honest. In relation to Primescan 2, as I noted in the call, we have seen three consecutive years of growth in scanner placements, which, again, as I noted on the call and in Q&A, is extraordinarily important for us as a full-line digital dental supplier. The macro environment in North America continues to be pressurized, as I think we've said, and I think some others have said too. When you think about the model for a dental practice where footprint on their most popular businesses, Preventative and Resto, is not demonstrating any growth, reimbursement is being compressed for patients. Patients have been funding to a rather high level, and around 40% fund elective procedures.

Speaker Change: And I think the numbers that you're talking about in revenue they are in the Zip code.

Speaker Change: And we could like I said do a little bit more math around that later.

Speaker Change: Thank you. I'm happy to walk you through a little bit more detail. Our next question goes to Jason Bednar with Piper Sandler. You may proceed. And I think the numbers that you're talking about... Good morning, and thanks for taking the questions here. I actually wanted to focus on some of the soft retail, cash-as commentary.

Speaker Change: Thanks, guys I appreciate it.

Speaker Change: Thank you.

Speaker Change: Our next question goes from Jason Bednar with Piper Sandler you May proceed.

Jason Bednar: Hey, good morning, and thanks for taking the questions here.

Jason Bednar: I actually wanted to focus on some of the softer retail cadcam commentary.

Speaker Change: Look, I can understand maybe some softness in the numbers. Actually, I'd like to get some of that into inventory load in last quarter.

Jason Bednar: Look I can understand maybe some softness in the numbers actually had kind of anticipated some of that just given some of the prime scan to inventory load in last quarter. It seems like that did impact the numbers here, but was that more of the retail commentary that struck me.

Speaker Change: It seems like, you know, that did impact the numbers here, but it was more the retail commentary that struck me. You know, especially at a time when you've got to use your software to re-annualize CAD-CAM for several years. So, just a bit of a variety, even in the count-off macro numbers. So, what do you think is going on, actually? And, you know, why is it anticipated to be red-naked in some of the U.S.? And then, you know, how much of the pressure of CAD-CAM seems like, you know, that did impact the numbers here, but it was more the retail commentary that struck me.

Jason Bednar: Especially at a time when you've got your first scanner launch really in several years. So just a.

Speaker Change: A bit surprising even in a challenged macro so what do you think's going on Simon when you why isn't PSU resonating better in the U S. And then how much of the pressure and Cadcam do you think can be traced it all too strained relations with Patterson.

Speaker Change: Especially at a time when you've got your first panel on for several years. It's a bit surprising, even in a challenging macro. So what do you think is going on, Simon? Why isn't PS2 resonating better in the U.S.? And then how much of the pressure in CAD-CAM do you think is going to be traced at all to string relations with Patterson?

Jason Bednar: Good morning, Jason I don't let me start with the second part.

Andrea Daley: So when you think about the macro environment and you think about footfall in the clinic, customers, i.e., dental practices, may continue to be reticent about investing in different pieces of capital. That being said, we saw solid performance in imaging in the US, but we were certainly disappointed with CAD/CAM. I don't think it's reflective of anything with Patterson. I think it's reflective of macro.

Simon Campion: So when you think about the macro environment and you think about footfall in the clinic, customers, i.e., dental practices, may continue to be reticent about investing in different pieces of capital. That being said, we saw solid performance in imaging in the US, but we were certainly disappointed with CAD/CAM. I don't think it's reflective of anything with Patterson. I think it's reflective of macro.

Jason Bednar: I don't think any of it really is an issue with patterson or anyone else for that matter.

Jason Bednar: To be quite honest in relation to two problems going to you know as I noted.

Speaker Change: in the call, we have seen three consecutive years of growth in scanner patients, which really, again, as I noted on the call, is an issue that in Q&A is extraordinarily important for us to be quite honest. In relation to PrimeScan2, as I noted,

Jason Bednar: And.

Jason Bednar: And Nicole we have we have seen three consecutive years of growth in our in scanner placements, which again as I noted on the call and in Q&A is is extraordinarily important.

Speaker Change: The macro environment in North America continues to be pressurized in scanner places, as we've said, which some others have said too, and with Q&A. When you think about the model for a dental practice where a footprint as a full-line digital dental supplier, their most popular businesses

Jason Bednar: For us as a as a full line digital dental supplier.

Jason Bednar: Okay. All right. That's helpful. And then maybe if I back up a little bit of a higher-level question and focusing on Germany, actually. But I wonder if Germany could actually prove to be a microcosm of what you're experiencing in your broader business. You had commercial challenges. You tried to push at the high end but really struggled in a tough macro with some low-priced competition. And then you pivot and reintroduce a lower-priced offering that helps turn the tide. It's a big contributor to growth returning in the market. Maybe talk about that experience in Germany and really how it informs how you think about your portfolio and positioning across the globe.

Jason Bednar:

Jason Bednar: The macro environment and in North America.

Jason Bednar: <unk> to be continues to be pressurize as I think as we said and I think some others have said too and with you know when you think about the the the model for a for a dental practice, where you'll footprint on on there their main mainly.

Jason Bednar: Our most profitable businesses.

Speaker Change: as we've said and I think it's being compressed for patients and when you think about the model for a dental practice where the footprints are around 40% on their elective procedures. So when you think about the macro environment preventing footfall in the clinic is not demonstrating any growth. Dental practices may continue to be reticent about being compressed for patients, investing

Jason Bednar: Preventive and resto.

Jason Bednar: There's not demonstrating any growth reimbursement is is.

Jason Bednar: Being compressed for for patients.

Jason Bednar: Patients are or have been they fund.

Andrea Daley: Again, thanks for the question, Jason. Listen, I think Germany is a tale of two cities, as it were. I think one was the reintroduction of Orthophos SL as a midpoint scanner. The other piece that I, again, referred to in the prepared remarks was a renewed focus on execution discipline within the imaging team in Germany. And so I think there are two factors to that.

Simon Campion: Again, thanks for the question, Jason. Listen, I think Germany is a tale of two cities, as it were. I think one was the reintroduction of Orthophos SL as a midpoint scanner. The other piece that I, again, referred to in the prepared remarks was a renewed focus on execution discipline within the imaging team in Germany. And so I think there are two factors to that.

Jason Bednar: Two two rather high level in or around 40% fund electric procedures and so when you think about the macro environment.

Jason Bednar: Think about footfall in the clinic customers.

Jason Bednar: A central practices.

Jason Bednar: They continue to be reticent about you investing and investing in different pieces of capital.

Speaker Change: They fund to a rather high level in around 40% fund elective proceedings.

Jason Bednar: That being said we saw we saw solid performance.

Speaker Change: And so when you think about the macro environment, you think about footfall in the clinic, customers, i.e. dental practices.

Jason Bednar: And and imaging.

Jason Bednar:

Thank you very much.

Jason Bednar: Indeed in the U S. But we were certainly disappointed with the CAD Cam I think it's.

Andrea Daley: What we have been doing over the past number of months in different parts of Europe and in the US is reigniting training for our commercial teams around such things as professional selling skills and also around equipping them to have clinical conversations, workflow conversations with their customers, and creating their own demand and then funneling it through the appropriate channel, whether it's our direct business in endo on the aligners, for example, or whether it's our distribution partners on our capital equipment business. So I think the lesson from Germany is it's not just about the product. It's also about the capabilities of the sales team that we can enhance. And that's why we're in the process of doing that here in the US as we speak.

Simon Campion: What we have been doing over the past number of months in different parts of Europe and in the US is reigniting training for our commercial teams around such things as professional selling skills and also around equipping them to have clinical conversations, workflow conversations with their customers, and creating their own demand and then funneling it through the appropriate channel, whether it's our direct business in endo on the aligners, for example, or whether it's our distribution partners on our capital equipment business. So I think the lesson from Germany is it's not just about the product. It's also about the capabilities of the sales team that we can enhance. And that's why we're in the process of doing that here in the US as we speak.

Jason Bednar: I don't think it's reflective of anything with Patterson I think that's reflective of macro.

Speaker Change: Maybe if I back up a little bit of a higher level question and focusing on Germany actually the imaging, but I wonder if

Jason Bednar: Okay, Alright, that's helpful and then.

Jason Bednar: Maybe if I, if I back up a little bit of a higher level question.

Speaker Change: Germany could actually prove to be a microcosm of what you're experiencing in your broader business. You had commercial challenges, you tried to push the high end, but really struggled in a tough macro and with some low-priced competition. And then you pivot, and really, if I do, back up a little bit of the higher-level question that helped turn the tide and make Germany actually turn it in the market. But I wonder if Germany could actually prove to be a microcosm of what you're experiencing in your broader business. You had commercial challenges, you tried to push the high end,

Jason Bednar: Focusing on Germany actually.

Jason Bednar: But I wonder if Germany could actually prove to be a microcosm of what you're experiencing in your broader business. You had commercial challenges you tried to push the high end, but really struggled in a tough macro and some with some low price competition, and then you pivot and reintroduce a lower priced offering that helps turn the tide <unk>.

Jason Bednar: Shifting to growth returning in the market, maybe talk about that experience in Germany, and that's really how it informs how you think about your portfolio and positioning across the globe.

Speaker Change: and thanks for the question, please. I think Germany is a...

Jason Bednar: Again, thanks for thanks for the question Jason.

Jason Bednar: I think I think.

Jason Bednar: Germany is a is a tale of a.

Speaker Change: Maybe talk about that experience in Germany and how it informs how you think about your portfolio and transitioning across the globe.

Jason Bednar: Two cities as it were I think one was the reintroduction of autos a S L. As a as a midpoint at the midpoint scanner. The other piece that I again referred to in the prepared remarks was.

Jason Bednar: Okay. Thank you.

Speaker Change: with a renewed focus on, I think, Germany is a tale of...

Simon Campion: Thank you. I would now like to turn the call back over to Simon Campion for closing remarks.

Operator: Thank you. I would now like to turn the call back over to Simon Campion for closing remarks.

Jason Bednar: A renewed focus on an execution discipline within the within the imaging team in Germany.

Speaker Change: So I think there are two factors to the reintroduction of what we have been doing over the past number of months. The other piece that I again refer to in Europe and in the U.S. remarks was a renewed focus on a training for our commercial teams, within the imaging team around first-party professional selling skills. I think there are two factors to that. Equipping them to have clinical conversations, workflow conversations.

Andrea Daley: Thank you, and thank you all for your thoughtful questions. In closing, I want to thank the entire Dentsply Sirona team for their dedication to our customers and our transformation. While there is still work ahead, we are making progress, bringing innovation to the market, instilling accountability, and a performance-oriented mindset in our culture, and positioning Dentsply Sirona for long-term success. Through disciplined decision-making and enhanced execution, we remain focused on driving value for all shareholders and stakeholders. Thank you.

Simon Campion: Thank you, and thank you all for your thoughtful questions. In closing, I want to thank the entire Dentsply Sirona team for their dedication to our customers and our transformation. While there is still work ahead, we are making progress, bringing innovation to the market, instilling accountability, and a performance-oriented mindset in our culture, and positioning Dentsply Sirona for long-term success. Through disciplined decision-making and enhanced execution, we remain focused on driving value for all shareholders and stakeholders. Thank you.

Jason Bednar: So I think it's I think it's there are two factors to that.

Jason Bednar: We have.

Jason Bednar: We have been doing over the past number of months in in different parts of Europe, and and then the U S.

Jason Bednar: Is is reigniting our training for our commercial teams.

Jason Bednar: Around such thing as you know professional selling skills.

Speaker Change: with their customer and creating their own demand and then funneling it through the appropriate channel. Whether it's our direct business and end-to-end for our commercial teams or whether it's our distribution, professional selling skill and our capital equipment. So I think equipping them to have clinical conversations, it's not just about the conversations, it's also about with their customer and creating their own demand and then funneling it through the appropriate channel.

Jason Bednar: And also around equipping them to have clinical conversations workflow conversations with their with their customers and creating their own demand.

Simon Campion: Thank you. This concludes the conference. Thank you for your participation. You may now disconnect.

Operator: Thank you. This concludes the conference. Thank you for your participation. You may now disconnect.

And then funneling through the appropriate channel.

Jason Bednar: Either it's our direct business in Endo in the lineup for example, or whether it's our are our distribution partners on our capital equipment business. So I think the lesson from Germany is it's not just about the product. It's also about the the capabilities of the sales team that we can that we can enhance.

Speaker Change: our direct business in Endo on the liners for example, or whether it's our Our distribution partners. Thank you on our capital equipment business

Jason Bednar: And that's why we're in the process of doing that here in the U S. As we speak.

Speaker Change: I would now like to turn the call back over to Simon Campion for closing remarks.

Speaker Change: Okay. Thank you.

Speaker Change: Thank you I would now like to turn the call back over to Simon Campion for closing remarks.

Simon Campion: Thank you and thank you all for for your thoughtful questions. In closing I want to thank the entire Dentspice Aroma team for their dedication to our customers and our transformation.

Speaker Change: Thank you and thank you all for your thoughtful questions in closing I want to thank the entire densify sirona team for their dedication to our customers and our transformation.

While there is still work ahead, we are making progress.

Speaker Change: Thank you, I would now like to turn the call back over to Simon Campion for closing remarks.

Speaker Change: While there is still work ahead, we are making progress, bringing innovation to the market and sitting accountability and performance oriented mindset, and a culture and positioning dense play sirona for for long term success.

Speaker Change: Thank you all for your thoughtful questions. In closing, I want to thank the entire Jet Flight Corona team for their dedication to our customers and our driving value for all of you. While there is still work ahead, we are making progress.

Speaker Change: Through disciplined decision, making and enhance execution, we remain focused on driving value for all shareholders and stakeholders. Thank you.

Speaker Change: Thank you. This concludes the conference. Thank you for your participation. You may now disconnect.

Speaker Change: Thank you. This concludes the conference. Thank you for your participation you may now disconnect.

Speaker Change: Through discipline, decision making, and enhanced execution, we remain focused on driving value for all shareholders. Thank you. Thank you. This concludes the conference. Thank you for your participation.

Q4 2024 Dentsply Sirona Inc Earnings Call

Request a DemoDemo

XRAY

Dentsply Sirona

Earnings