DENTSPLY SIRONA : Q1 2025 Supplemental Material
XRAY
Published on 05/08/2025 at 06:14
May 8, 2025
First Quarter 2025 Earnings Conference Call
Key Points
Operational Updates
Innovation
Select Highlights
Customer Engagement & Experience
Enhanced Primescan 2 with new functionality and accessories:
50% reduction in internet speed requirements
90% faster SureSmile Simulations
Caries detection,1 cart, single-use sleeve
Surpassed 42,000 unique DS Core users; launched DS Core Diagnose2 for CBCT
Received three 510(k) clearances YTD with five additional filed and pending
Updated DentsplySirona.com and SureSmile.com websites to improve customer interactions
On track with new e-commerce capability build-out
Executing U.S. customer experience survey to create CX improvement roadmap
Appointed David Ferguson as Senior Vice President, Global Business Units, to manage the dental portfolio
Deployed two additional ERP phases in the U.S.
Closed 10 sites since beginning supply chain optimization work
Driving Progress through Innovation, Improved Customer Experience, and Efficiency
Available in Central Europe, CAN, and ANZ; 510(k) pending in the U.S.
First Quarter 2025 Financial Summary
$953
$879
Q1 2024 Q1 2025
19.0%
16.8%
Q1 2024 Q1 2025
$0.42 $0.43
Q1 2024 Q1 2025
$25
$7
Q1 2024 Q1 2025
(7.7%) Reported Sales,
(4.4%) Organic Sales
+ Wellspect +8%
+ Equipment and Instruments +DD
‐ Ortho (HDD), Byte ~($40M) YoY impact
‐ CAD/CAM (DD)
‐ IPS (MSD)
220 bps Adj. EBITDA Margin YoY
+ Lower OpEx from transformational savings, operational efficiencies, and Byte
+ Internal financial discipline
3.7% Adj. EPS YoY
+ Lower share count
‐ Higher tax rate
(72%) Op. Cash Flow YoY
‐ Timing of cash collections
‐ Increase in inventory
Bars and sales dollars represent reported sales. Growth commentary and trends are based on organic sales vs. Q1 2024
5 LSD = low-single digits, MSD = mid-single digits, HSD = high-single digits, DD = double digits, HDD = high-double digits
First Quarter 2025 Segment Results
Sales
Commentary
Essential Dental Solutions
(EDS)
Reported: (2.7%)
Organic: +0.4%
Orthodontic and Implant Solutions (OIS)
Reported: (20.0%)
Organic: (17.7%)
Connected Technology Solutions (CTS)
Reported: (4.7%)
Organic: (0.5%)
Growth in Europe and Rest of World, partially offset by lower volume in the U.S.
Orthodontics (HDD): Decline due to a ~($40M) Byte YoY impact; SureSmile down slightly due to prior year DSO customer loss in U.S., +DD growth in Europe/ROW
Implants & Prosthetics (MSD): Lower lab volumes globally and lower implant sales in the U.S. and Europe
CAD/CAM (DD): Soft retail demand and lower U.S. dealer inventory levels vs. prior year
Equipment & Instruments +DD: Imaging growth in all three regions, continued success of Orthophos SL in Europe, and higher U.S. dealer inventory levels vs. prior year
Growth in all three regions driven by product innovation and performance
Reported: +3.4%
Organic: +8.0%
Wellspect Healthcare
Sales dollars represent reported sales. Growth commentary and trends are based on organic sales vs. Q1 2024
6 LSD = low-single digits, MSD = mid-single digits, HSD = high-single digits, DD = double digits
First Quarter 2025 Regional Results
U.S. Europe Rest of World
Organic Sales
(14.9%)
(9.8%) Byte impact
Organic Sales
1.1%
Organic Sales
3.1%
$356M
$302M
Q1 2024 Q1 2025
Net Sales: 34% of total
+ Imaging
+ Wellspect
CAD/CAM
IPS
$376M $362M
Q1 2024 Q1 2025
Net Sales: 41% of total
+ Germany
+ Equipment and Instruments
+ SureSmile
+ Wellspect
CAD/CAM
IPS
$221M $215M
Q1 2024 Q1 2025
Net Sales: 25% of total
+ Equipment and Instruments
+ China implants
+ Wellspect
CAD/CAM
Bars and sales dollars represent reported sales. Growth commentary and trends are based on organic sales vs. Q1 2024
7 Organic sales, adjusted EBITDA margin, adjusted EPS, and adjusted free cash flow conversion are Non-GAAP measures as defined on slide 13 Byte had an approximately ($40M) YoY impact to U.S. sales
2025 Outlook*
Prior Outlook
Current Outlook
Comments
Organic Sales
(4.0%) to (2.0%)
(4.0%) to (2.0%)
Includes a (2.0%) Byte impact
Reported Sales
R&D Expenses
$3.50B - $3.60B
~4% of Sales
$3.60B - $3.70B
~4% of Sales
F/X changes
-
Adjusted EBITDA Margin
>18%
>19%
Reflects F/X changes and current tariffs
Interest Expense, Net
Other Expense (Income), Net Adjusted ETR
Diluted Share Count
~$70M
~($20M)
~25%
~200M
~$80M
~($25M)
~25%
~200M
Anticipated debt refinance expense
-
-
-
Adjusted EPS
$1.80 - $2.00
$1.80 - $2.00
Reflects F/X changes and current tariffs
Other Outlook Assumptions
Capital Expenditures
Cash Returned to Stockholders
$160M - $190M
≥75% of FCF
$160M - $190M
≥75% of FCF
-
-
Organic sales, adjusted EBITDA margin, adjusted EPS, and adjusted free cash flow conversion are Non-GAAP measures as defined on slide 13
8 *Outlook is based on expectations as of the date of this Presentation, including the current state of tariffs and trade policy. Actual results may differ materially due to a number of factors and risks, including those described in the Company's filings with the SEC, which may further impact F/X rates and the health of the global economy
Our Strategy
Achieve Annual Growth & Margin Commitments
Enhance & Sustain Profitability
Accelerate Enterprise Digitalization
Win in High Growth Categories
Drive High Performance Culture
Innovation
Clinical Education
Commercial Excellence
Growth Accelerators
ERP Modernization
Supply Chain Transformation
SKU Optimization
Foundational Initiatives
Summary
1
2
3
4
Q1 organic sales down (4.4%) including (4.0%) Byte impact; adjusted EPS up 3.7%
EBITDA margin expansion due to improved internal financial discipline and transformational initiatives
Maintaining FY25 outlook for organic sales and adj. EPS, increasing reported sales due to F/X changes
Prudent balance sheet management
10
Appendix
Trailing Nine Quarters
In millions (except percentages)
Q1 23
Q2 23
Q3 23
Q4 23
Q1 24
Q2 24
Q3 24
Q4 24
Q1 25
Net Sales
$978
$1,028
$947
$1,012
$953
$984
$951
$905
$879
Adjusted EBITDA(1)
$162
$185
$171
$173
$160
$173
$170
$128
$168
Adj. EBITDA Margin %(1)
16.5%
17.8%
18.3%
17.1%
16.8%
17.5%
17.9%
14.2%
19.0%
Cash Flow Operating Cash Flow
($21)
$104
$134
$160
$25
$208
$141
$87
$7
Less: Capital Expenditures
$39
$33
$37
$40
$34
$52
$43
$51
$19
Adjusted Free Cash Flow
($60)
$71
$97
$120
($9)
$156
$98
$36
($12)
(1) Adjusted EBITDA from Q1 2023 to Q3 2023 has been updated to reflect the reclassification of certain gains from hedging instruments from interest expense to other expense (income) in order to conform with current period presentation
Cash flow related quarterly results may be rounded to tie to year-to-date statement of cash flows Percentages are based on actual values and may not reconcile due to rounding
Non-GAAP Measures Definitions
Organic Sales
The Company defines "organic sales" as the reported net sales adjusted for: (1) net sales from acquired businesses recorded prior to the first anniversary of the acquisition; (2) net sales attributable to disposed businesses in both the current and prior year periods; and (3) the impact of foreign currency changes, which is calculated by translating current period net sales using the comparable prior period's foreign currency exchange rates.
Adjusted Operating Income and Margin
Adjusted operating income is computed by excluding the following items from operating income (loss) as reported in accordance with US GAAP:
Business combination-related costs and fair value adjustments. These adjustments include costs related to consummating and integrating acquired businesses, as well as net gains and losses related to disposed businesses. In addition, this category includes the post-acquisition roll-off of fair value adjustments recorded related to business combinations, except for amortization expense of purchased intangible assets noted below. Although the Company is regularly engaged in activities to find and act on opportunities for strategic growth and enhancement of product offerings, the costs associated with these activities may vary significantly between periods based on the timing, size and complexity of acquisitions and as such may not be indicative of past and future performance of the Company.
Restructuring-related charges and other costs. These adjustments include costs related to the implementation of restructuring initiatives, including but not limited to, severance costs, facility closure costs, and lease and contract termination costs, as well as related professional service costs associated with these restructuring initiatives and global transformation activity. The Company is continually seeking to take actions that could enhance its efficiency; consequently, restructuring charges may recur but are subject to significant fluctuations from period to period due to the varying levels of restructuring activity, and as such may not be indicative of past and future performance of the Company. Other costs include gains and losses on the sale of property, legal settlements, executive separation costs, write-offs of inventory as a result of product rationalization, and changes in accounting principles recorded within the period. This category also includes costs related to investigations and associated legal cases and remediation activities, which primarily include legal, accounting and other professional service fees, as well as turnover and other employee-related costs.
Goodwill and intangible asset impairments. These adjustments include charges related to goodwill and intangible asset impairments.
Amortization of purchased intangible assets. This adjustment excludes the periodic amortization expense related to purchased intangible assets, which are recorded at fair value. Although these costs contribute to revenue generation and will recur in future periods, their amounts are significantly impacted by the timing and size of acquisitions, and as such may not be indicative of the future performance of the Company.
Fair value and credit risk adjustments. These adjustments include the non-cash mark-to-market changes in fair value associated with pension assets and obligations, the credit risk component of hedging instruments, and equity-method investments. Although these adjustments are recurring in nature, they are subject to significant fluctuations from period to period due to changes in the underlying assumptions and market conditions. The non-service component of pension expense is a recurring item, however it is subject to significant fluctuations from period to period due to changes in actuarial assumptions, interest rates, plan changes, settlements, curtailments, and other changes in facts and circumstances. As such, these items may not be indicative of past and future performance of the Company.
Adjusted operating margin is calculated by dividing adjusted operating income by net sales.
Adjusted Gross Profit and Margin
Adjusted gross profit is computed by excluding from gross profit the impact of any of the above adjustments that affect either sales or cost of sales.
Adjusted gross margin is calculated by dividing adjusted gross profit by net sales. Adjusted Net Income (Loss)
Adjusted net income (loss) consists of net income (loss) as reported in accordance with US GAAP, adjusted to exclude the items identified above, as well as the related income tax impacts of those items. The income tax effect of each pre-tax adjustment was determined based on the tax rate of the jurisdiction in which the related pre-tax adjustment was recorded.
Additionally, net income is adjusted for other tax-related adjustments such as discrete or significant adjustments to valuation allowances and other uncertain tax positions, final settlement of income tax audits, discrete tax items resulting from the implementation of restructuring initiatives, the windfall or shortfall relating to exercise of employee stock-based compensation, any difference between the interim and annual effective tax rate, and adjustments relating to prior periods.
Management believes that these adjustments for certain tax-related matters are helpful to normalize the tax effects of certain discrete or significant items that are irregular or infrequent in timing and may not be indicative of past or future performance of the Company.
Adjusted EBITDA and Margin
In addition to the adjustments described above in arriving at adjusted net income, adjusted EBITDA is computed by further excluding any remaining interest expense, net, income tax expense, depreciation and amortization.
Adjusted EBITDA margin is calculated by dividing adjusted EBITDA by net sales.
Adjusted Earnings (Loss) Per Diluted Share
Adjusted earnings (loss) per diluted share (adjusted EPS) is computed by dividing adjusted earnings (loss) attributable to Dentsply Sirona stockholders by the diluted weighted average number of common shares outstanding.
Adjusted Free Cash Flow and Conversion
The Company defines adjusted free cash flow as net cash provided by operating activities minus capital expenditures during the same period, and adjusted free cash flow conversion is defined as adjusted free cash flow divided by adjusted net income (loss). Management believes this Non-GAAP measure is important for use in evaluating the Company's financial performance as it measures our ability to efficiently generate cash from our business operations relative to earnings. It should be considered in addition to, rather than as a substitute for, net income (loss) as a measure of our performance or net cash provided by operating activities as a measure of our liquidity.
Net Sales to Organic Sales by Geographic Region
(unaudited)
Net Sales to Organic Sales by Segment
(unaudited)
Segment Adjusted Operating Income
(unaudited)
Condensed Consolidated Statements of Operations Q1 25
(unaudited)
Condensed Consolidated Statements of Operations Q1 24
(unaudited)
Adjusted EBITDA Q1 25 and Q1 24
(unaudited)
Adjusted Free Cash Flow Conversion
(unaudited)
Disclaimer
Dentsply Sirona Inc. published this content on May 08, 2025, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on May 08, 2025 at 10:12 UTC.