DENTSPLY SIRONA Inc. Q3 FY2025 earnings call

Dan Scavilla discussed his first 90 days as CEO, including assessing the organization through meetings. He outlined the Return-to-Growth action plan with 4 pillars:

• Putting customers at the center: Creating a global customer service and technical service organization to deliver high-quality support worldwide.
• Reigniting the U.S. business: Aligning commercial teams, pursuing a multichannel approach, investing in sales team and clinical education.
• Empowering people: Strengthening organizational foundation, appointing a Chief Transformation Officer and digital transformation leader.
• Evolving operations to fuel innovation: Increasing R&D investments, optimizing supply chain, and streamlining support department cost structures. Also mentioned Matt Garth's departure and transition plan for CFO.

For Q3 '25, global sales were $904 million, decreasing 5% as reported or negative 8% on a constant currency basis. Excluding the Byte impact, sales declined 5%. Adjusting for the onetime dealer prebuy in Q3 '24, Q3 '25 sales on a constant currency basis were down 2.5%. Adjusted EBITDA was 18.4%, up 50 basis points. U.S. sales were $291 million, down 22.2% versus prior year. European sales were $382 million, increasing 9.9% as reported or 2.6% on a constant currency basis. Rest of World sales were $231 million, down slightly. CTS sales on a constant currency basis decreased 7%, EDS sales on a constant currency basis decreased 6.2%, OIS sales in constant currency declined 17.1%. Wellspect sales grew 5.3% in Europe on a constant currency basis and 87.3% in Q3 off a small base.

The company revises its 2025 outlook with net sales in the range of $3.6 billion to $3.7 billion, constant currency sales expected to be down 5% to 4% year-over-year, adjusted EPS expected to be approximately $1.60.

Impairment of goodwill and intangible assets driven by tariffs and lower projected volumes of equipment, implants and prosthetic products, particularly in the U.S.

Q: Elizabeth Anderson asked about the U.S. market.

A: Daniel Scavilla said it's about structural approach and execution in the U.S. market.

Q: David Saxon asked about the cadence of returning to growth and capital allocation.

A: Daniel Scavilla said he wants to return to growth soon, and capital allocation is about growing the business first.

Q: Jordan Bernstein asked about R&D acceleration.

A: Daniel Scavilla said they are pulling forward R&D investment into Q4 to position better for '26 and beyond.

Q: Jeff Johnson asked about OpEx spend and EBIT margin.

A: Daniel Scavilla said he's pulling up investments now to jump start and expects efficiencies over time.

Q: Erin Wright asked about relationship with distributors.

A: Daniel Scavilla said a multichannel approach including direct and dealer engagement.

Q: Vik Chopra asked about milestones for Return-to-Growth plan and impact of Aldo Denti.

A: Daniel Scavilla mentioned metrics like sales stabilization and rep training, and Aldo's experience will help.

Q: Ahmed Muhammad asked about areas best positioned to stabilize growth.

A: Daniel Scavilla said all areas require different approaches addressed in the plan.

Q: Michael Sarcone asked about characteristics of new CFO and guidance philosophy.

A: Daniel Scavilla said looking for a data-driven and communicative CFO, and guidance is to put out conservative estimates to beat and raise.

Q: Allen Lutz asked about Q4 spending and 2026 expectations.

A: Daniel Scavilla said there's acceleration in R&D in Q4 and prep work in clinical side.

Q: Brandon Vazquez asked about incremental initiatives.

A: Daniel Scavilla said going deeper and pushing action over talk.

Q: Dylan Finley asked about Implants pain points.

A: Daniel Scavilla said issues with reps, training, branding, and leveraging infrastructure.