DENTSPLY SIRONA Inc at Morgan Stanley Global Healthcare Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Erin Wright - Morgan Stanley - Analyst : <_ALACRA_META_ABSTRACT>There was a press release out just a few minutes ago while I was presenting. So apologies for not knowing everything about it, but you're here to tell us everything about Primescan 2, your first cloud-native intraoral scanner and the launch of that product, what that means? I guess can you talk a little bit about the product the addition to this broader portfolio from a CAD-CAM perspective and the strategy and rationale behind it.

Question: Erin Wright - Morgan Stanley - Analyst : And how would you describe the price point and what type of customer this is geared towards in terms of it would be an upgrade cycle type of dynamic with the existing customers are expanding kind of the opportunity across your Primescan offering. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 05, 2024 / 1:15PM, XRAY.OQ - DENTSPLY SIRONA Inc at Morgan Stanley Global Healthcare Conference

Question: Erin Wright - Morgan Stanley - Analyst : Okay. So this fits in that sort of middle tier segment, I guess, how do you how has just the broader landscape or competitive landscape evolved in CAD-CAM, we've obviously seen some more competition at some of the lower end. But what's the appetite for that middle tier, what's the appetite for the higher-end Primescan ACE in sort of the backdrop that we're in.

Question: Erin Wright - Morgan Stanley - Analyst : And this is hardware independent, meaning you're agnostic to kind of what you're working with, whether it's a laptop or and it doesn't have to be full chairside offerings in terms of what you're pushing. But how much of the full chairside is still part of the strategy for you?

Question: Erin Wright - Morgan Stanley - Analyst : Yes, this sounds like an exciting launch head of DS World for you. I guess anything else from a DS World perspective to call out that we should be paying attention to and where the focus will be.

Question: Erin Wright - Morgan Stanley - Analyst : Okay. I'll get back to innovation and some of the dynamics around equipment as well. But I'll go back to what I was originally going to ask at the beginning was it's been almost exactly 2 years since you've joined DENTSPLY and it was a somewhat transitional time frame for the company. Can you speak to what surprised you since coming on board? And how have your thoughts evolved in terms of the longer-term trajectory and vision of the company?

Question: Erin Wright - Morgan Stanley - Analyst : And part of coming on board, you issued long-term target of $3 in EPS in 2026. That was assuming some sort of faster level of underlying growth of 4% to 6%. I guess, what are you how should we think about those assumptions and what can kind of bridge the gap to get you to that $3 if we don't see that sort of 4% to 6% underlying.

Question: Erin Wright - Morgan Stanley - Analyst : Okay. And just speaking a little bit more about that restructuring program that you announced in $80 million to $100 million, I guess, how much drops to the bottom line? How much is reinvested in the business as we think about some of these initiatives that you're taking on and the timing of the cost saves?

Question: Erin Wright - Morgan Stanley - Analyst : And then in terms of the near-term kind of guidance or 2024 guidance, you're assuming kind of negative 1% to flat kind of organic growth for the year. I guess can you break down some of those headwinds and tailwinds that you're seeing now, for instance, does it incorporate things like Primescan 2 in there? Will that be meaningful this year? Or that will be more of a ramp as we head into next year? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 05, 2024 / 1:15PM, XRAY.OQ - DENTSPLY SIRONA Inc at Morgan Stanley Global Healthcare Conference

Question: Erin Wright - Morgan Stanley - Analyst : Okay. Great. And then I think guidance of over, I guess, 18% adjusted EBITDA margin for 2024. Can you help us understand the cadence there as well as we head into the second half and long-term margin targets across the business.

Question: Erin Wright - Morgan Stanley - Analyst : Okay. Great. And then so let's talk about implants and move into the specialty segment. So, your implant business up low single digits in the second quarter. Can you parse out some of the key underlying drivers in the US market right now as well as international markets where is most of the growth been driven from? And then just kind of the underlying landscape and backdrop and demand trends for implants where we stand today.

Question: Erin Wright - Morgan Stanley - Analyst : Okay. And in terms of innovation across implants, I guess, can you give us an update there, the mix split also between kind of premium and value and where your focus lies now? You mentioned the ads for instance? .

Question: Erin Wright - Morgan Stanley - Analyst : And then can you talk a little bit about just getting back to mid-single-digit growth across that business and your time line to get there?

Question: Erin Wright - Morgan Stanley - Analyst : Yes. Okay. And then also within Specialty, the clear aligner efforts, can you give us an update on both the DTC platform with Byte and what's going on from a regulatory standpoint there as well as the strategy at this point behind Sure Smile and your goals from a market share perspective? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 05, 2024 / 1:15PM, XRAY.OQ - DENTSPLY SIRONA Inc at Morgan Stanley Global Healthcare Conference

Question: Erin Wright - Morgan Stanley - Analyst : And just overall clear aligners and thinking about the doctor-directed market, I guess, how do you think about just overall market growth over the longer term across clear aligners. We always get that kind of question. Because it's still a relatively underpenetrated market.

Question: Erin Wright - Morgan Stanley - Analyst : Your focus right now is more on the GP as opposed to necessarily the ortho. And does that change over time as you kind of delve into the ortho segment?

Question: Erin Wright - Morgan Stanley - Analyst : Yes, yes. Okay. And then shifting gears more so to general consumables, equipment and kind of just general demand trends across dental. So outside of kind of what's going on maybe from a specialty perspective. how would you characterize current dental demand trends across kind of the various geographies and from a basic kind of consumables perspective? And dental office visit trends for instance?

Question: Erin Wright - Morgan Stanley - Analyst : And Germany is significant for you. I guess what is going on there in terms of the underlying weakness we've seen? Do we start to lap that at some point? Or is it getting incrementally worse from here are starting to stabilize at some point?

Question: Erin Wright - Morgan Stanley - Analyst : And can you talk a little bit about kind of the equipment business, I guess, outside of CAD-CAM in terms of demand trends, willingness to spend and invest in practices from the practitioners? .

Question: Erin Wright - Morgan Stanley - Analyst : Okay. And then you recently disclosed in your latest filing that you are revisiting your Patterson relationship or rethinking that how should we interpret that sort of disclosure? And how do you characterize the value that distribution brings to you as a manufacturer in this sort of fragmented market?

Question: Erin Wright - Morgan Stanley - Analyst : And I guess some of that's part of the investments you're making just in kind of the commercial effort. And I think several years ago before you came on board, I think it was like 80% of sales force comp was basically fixed. I assume that that's changed since then dramatically and then, I guess, if you could touch on that, but also just what goes through distribution. I think it's like two-third of your business goes through distribution today, I guess, where does that mix go over time?

Question: Erin Wright - Morgan Stanley - Analyst : Okay. And then one area that was highlighted, for instance, at the Investor Day was potentially a step back into kind of M&A? And what is the strategy? Are there areas that either you would divest or look to build out in terms of the portfolio offering today? And is there a pipeline of opportunities, I guess, that you see in the market today?

Question: Erin Wright - Morgan Stanley - Analyst : And I do have to ask with the recent news of Glen Coleman's kind of departure from the company or upcoming departure from the company. I guess, how are we thinking about the CFO starts from here? And any changes to how you're thinking about kind of financial disclosure or any changes kind of in terms of long-term targets as we think about that departure just because.

Question: Erin Wright - Morgan Stanley - Analyst : Okay. And as we sit here today, and hopefully, you'll be here next year, I guess, how should we think about the vision of your vision of the mix of this business kind of longer term and you talked a little bit about kind of divestitures and M&A and kind of where you see things from that perspective. But any major changes across as you're thinking about kind of the mix of this business.

Question: Erin Wright - Morgan Stanley - Analyst : Okay. Great. Thanks so much. And we look forward to seeing you at DS World and what's to come and more on Primescan 2 as well. Thank you.