DENTSPLY SIRONA ((XRAY)) has held its Q1 earnings call. Read on for the main highlights of the call.
Dentsply Sirona’s latest earnings call presented a balanced outlook, highlighting significant achievements in European growth, innovation, and operational efficiency. However, the company faces challenges in the U.S. market, particularly in orthodontic and implant solutions, alongside potential impacts from tariffs.
Organic Growth and Operational Efficiency
In the first quarter, Dentsply Sirona achieved organic growth in two of its three global regions, surpassing expectations. The company improved its operational efficiency, leading to an expansion in EBITDA margin. This was attributed to transformational savings and enhanced operational processes.
European Market Success
Europe emerged as a strong performer, marking growth for the second consecutive quarter. Germany, in particular, achieved growth for the third consecutive quarter, driven by the CTS segment, especially in imaging and instruments.
Innovation and Product Development
Dentsply Sirona continues to push the boundaries of innovation with its DS Core ecosystem and Primescan 2. These advancements have improved functionality and connectivity, with DS Core amassing over 42,000 unique users and 50,000 connected devices.
Wellspect Healthcare Growth
Wellspect Healthcare reported an 8% growth across all geographies, propelled by new product launches and effective execution strategies.
Improved Customer Engagement
The company has revamped its corporate and SureSmile websites, enhancing customer interactions. Additionally, a new e-commerce platform is in development, aiming to further improve the customer experience.
Decline in U.S. Organic Sales
The U.S. market saw a decline in organic sales by 14.9%, mainly due to negative impacts from Byte and declines in CAD/CAM and IPS segments.
Orthodontic and Implant Solutions Segment Decline
This segment experienced a 17.7% decline in organic sales, significantly impacted by Byte and mid-single-digit declines in implants and prosthetics.
Challenges in CAD/CAM Sales
CAD/CAM sales faced challenges, particularly in the U.S., due to changes in distributor inventory levels.
Potential Tariff Impact
Current tariffs pose risks and headwinds, with an estimated $50 million annualized impact, affecting the company’s profitability.
Forward-Looking Guidance
For fiscal year 2025, Dentsply Sirona maintained its outlook for organic sales and adjusted EPS, adjusting reported sales for foreign currency changes. Organic sales are expected to decline by 2% to 4%, with a 2% impact from Byte. Despite challenges, including tariffs, the company anticipates adjusted EBITDA margins to exceed 19%, driven by strong operational efficiency. The guidance reflects a focus on innovation, customer experience, and disciplined execution, with significant metrics like over 42,000 DS Core users and 50,000 connected devices.
In summary, Dentsply Sirona’s earnings call highlighted a balanced view of achievements and challenges. While the company is making strides in European markets and innovation, it faces hurdles in the U.S. market and potential tariff impacts. The forward-looking guidance remains cautiously optimistic, focusing on operational efficiency and strategic planning to navigate the challenges ahead.