Slides
Page 1
Second Quarter 2025 Earnings Conference Call August 7, 2025
Page 2
Forward-Looking Statements and Associated Risks 2 Non-GAAP Financial Measures All statements in this Presentation that do not directly and exclusively relate to historical facts constitute "forward-looking statements." Such statements are subject to numerous assumptions, risks, uncertainties and other factors that could cause actual results to differ materially from those described in such statements, many of which are outside of our control, including those described in Part I, Item 1A, "Risk Factors" of the Company's most recent Annual Report on Form 10-K, Part II, Item 1A, "Risk Factors" of the Company’s Quarterly Reports on Form 10-Q for any subsequent fiscal quarters, and any updating information or other factors which may be described in the Company’s other filings with the Securities and Exchange Commission (the "SEC"). No assurance can be given that any expectation, belief, goal or plan set forth in any forward-looking statement can or will be achieved, and readers are cautioned not to place undue reliance on such statements which speak only as of the date they are made. We do not undertake any obligation to update or release any revisions to any forward-looking statement or to report any events or circumstances after the date of this Presentation or to reflect the occurrence of unanticipated events. Investors should understand it is not possible to predict or identify all such factors or risks. As such, you should not consider the risks identified in the Company’s SEC filings to be a complete discussion of all potential risks or uncertainties associated with an investment in the Company. In addition to results determined in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”), the Company provides certain measures in this Presentation, which are not calculated in accordance with U.S. GAAP and therefore represent Non-GAAP measures. These Non-GAAP measures are used by the Company to measure its performance and may differ from those used by other companies and these Non-GAAP measures should not be considered in isolation from, or as a substitute for, measures of financial performance prepared in accordance with U.S. GAAP. Management believes that these Non-GAAP measures are helpful as they provide a measure of the results of operations and are frequently used by investors and analysts to evaluate the Company’s performance exclusive of certain items that impact the comparability of results from period to period, and which may not be indicative of past or future performance of the Company. The Company does not provide forward-looking estimates on a GAAP basis as certain information, which may include, but is not limited to, restructuring charges, transformation-related costs, impairment charges, certain tax adjustments, and other significant items, is not available without unreasonable effort and cannot be reasonably estimated. The exact amounts of these charges or credits are not currently determinable but may be significant. Percentages are based on actual values and may not reconcile due to rounding.
Page 3
Near-Term Priorities 3 Drive commercial execution Engage with stakeholders – observe, listen, and learn Stabilize organization through change Accelerate results through focused investment
Page 4
Summary of Q2 Results 4 Net Sales Adj. EBITDA Margin Adj. EPS $936M 21.1% $0.52 (6.7%) Constant Currency YoY with a (3.2%) Byte Impact 360 bps Expansion YoY 6.6% Expansion YoY Prioritizing U.S. commercial health; virtual sales tracking to expectations Germany with a fourth consecutive quarter of growth Increased DS Core adoption; now 50k unique DS Core users Deployed additional ERP phases in the U.S. Key Highlights Constant Currency (18.3%) (7.7%) Byte impact U.S. Net Sales $293M (18.3%) Constant Currency YoY with a (7.7%) Byte Impact Europe Net Sales $404M (0.4%) Constant Currency YoY Rest of World Net Sales $239M 0.5% Constant Currency YoY Constant currency, adjusted EBITDA margin, and adjusted EPS are Non-GAAP measures as defined on slide 13
Page 5
Second Quarter 2025 Financial Summary Q2 2025 Q2 2024 YoY Net Sales $936M $984M (4.9%) Constant Currency (6.7%) (2.3%) (440) bps Adj. EBITDA $197M $173M 14.6% Adj. EBITDA % 21.1% 17.5% +360 bps Adj. EPS $0.52 $0.49 6.6% Operating Cash Flow $48M $208M (77%) Commentary ▪ Net sales in constant currency (6.7%) YoY • Declines in CTS, OIS, and Wellspect Healthcare, partially offset by EDS • Byte sales impact (3.2%) ▪ Adj. EBITDA margin 21.1%, +360 bps YoY • Favorable impact from suspension of Byte sales (lower OpEx) • Benefits from transformational savings and continued operational efficiencies • Gross margin expansion ▪ Adj. EPS $0.52, +6.6% YoY • Growth attributed to higher adj. EBITDA margin, FX, and lower share count, partially offset by higher tax rate ▪ Operating Cash Flow of $48M • $359M cash and cash equivalents • Net debt to EBITDA ratio of 3.1x Constant currency, adjusted EBITDA margin, and adjusted EPS are Non-GAAP measures as defined on slide 13 5
Page 6
Second Quarter 2025 Segment Results 6 CommentarySales Essential Dental Solutions (EDS) Orthodontic and Implant Solutions (OIS) Connected Technology Solutions (CTS) Wellspect Healthcare $387M Reported: +2.9% Constant Currency: +1.1% $226M Reported: (18.1%) Constant Currency: (19.4%) $243M Reported: (3.8%) Constant Currency: (5.9%) $80M Reported: +1.2% Constant Currency: (2.5%) ▪ Growth in Rest of World, partially offset by lower volumes in Europe and the U.S. ▪ Orthodontics (DD): Decline due to a ~($35M) Byte YoY impact ▪ Implants & Prosthetics (DD): Lower volumes in the U.S. and Europe ▪ CAD/CAM (DD): Lower retail demand ▪ Equipment & Instruments (MSD): Lower imaging sales in U.S., partially offset by growth in Europe ▪ Decline due to prior year U.S. distributor initial stocking order with an approximate (4.5%) impact, partially offset by new product launches Sales dollars represent reported sales. Growth commentary and trends are based on constant currency vs. Q2 2024 LSD = low-single digits, MSD = mid-single digits, HSD = high-single digits, DD = double digits Constant currency, adjusted EBITDA margin, adjusted EPS, and adjusted free cash flow conversion are Non-GAAP measures as defined on slide 13
Page 7
2025 Outlook* 7 Prior Outlook Current Outlook Comments Constant Currency (4.0%) to (2.0%) (4.0%) to (2.0%) Includes a (2.0%) Byte impact Reported Sales $3.60B - $3.70B $3.60B - $3.70B - Adjusted EBITDA Margin >19% >19% - Adjusted EPS $1.80 - $2.00 $1.80 - $2.00 - Constant currency, adjusted EBITDA margin, and adjusted EPS are Non-GAAP measures as defined on slide 13 *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 Reaffirmed FY2025 Outlook
Page 8
Summary 8 1 2 3 Q2 net sales on a constant currency basis (6.7%), including (3.2%) Byte impact; adj. EPS up 6.6% Driving margin expansion through operational improvements and financial discipline Prioritizing customer experience, stakeholder engagement, organizational stability, and focused investment Maintaining FY25 outlook
Page 9
Appendix
Page 10
10 Matt Garth, Chief Financial Officer; Joined May 30th, 2025 • Most recently served as Executive Vice President, Chief Financial Officer & Chief Administrative Officer of The Scotts Miracle-Gro Company; has previously held leadership roles at Minerals Technologies Inc. and Alcoa Corporation • Nearly 30 years of proven financial management expertise • Proven leadership experience driving organizational transformation and advancing financial, operational and strategic goals to deliver long-term profitable growth and value creation Leadership Transition Dan Scavilla, Chief Executive Officer; Joined August 1st, 2025 • Most recently served as President and CEO of Globus Medical, Inc.; has previously held a variety of financial and operational leadership roles at Globus Medical and Johnson & Johnson • Over 30 years of executive leadership experience in healthcare • Has served on Dentsply Sirona Board of Directors since February 2025 • Disciplined focus on commercial growth, product innovation and financial and operational excellence
Page 11
Growth Accelerators Foundational Initiatives 11 ▪ Innovation ▪ Clinical Education ▪ Commercial Excellence Our Strategy Transform oral health and continence care by driving product and service innovation and delivering an exceptional customer and patient experience through an engaged and inclusive workforce ▪ ERP Modernization ▪ Supply Chain Transformation ▪ SKU Optimization Strategic Initiatives Enhance & Sustain Profitability Accelerate Enterprise Digitalization Win in High Growth Categories Drive High Performance Culture Achieve Annual Growth & Margin Commitments
Page 12
Trailing Nine Quarters 12 (1) Adjusted EBITDA from Q2 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 In millions (except percentages) Q2 23 Q3 23 Q4 23 Q1 24 Q2 24 Q3 24 Q4 24 Q1 25 Q2 25 Net Sales $1,028 $947 $1,012 $953 $984 $951 $905 $879 $936 Adjusted EBITDA(1) $185 $171 $173 $160 $173 $170 $128 $168 $197 Adj. EBITDA Margin %(1) 17.8% 18.3% 17.1% 16.8% 17.5% 17.9% 14.2% 19.0% 21.1% Cash Flow Operating Cash Flow $104 $134 $160 $25 $208 $141 $87 $7 $48 Less: Capital Expenditures $33 $37 $40 $34 $52 $43 $51 $19 $32 Adjusted Free Cash Flow $71 $97 $120 ($9) $156 $98 $36 ($12) $16
Page 13
Non-GAAP Financial Measures Definitions 13 Constant Currency The Company defines "constant currency" as the reported net sales adjusted for 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 U.S. GAAP: (1) Business combination-related costs. 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. (2) (2) 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. (3) Goodwill and intangible asset impairments. These adjustments include charges related to goodwill and intangible asset impairments. (4) Amortization of purchased intangible assets. This adjustment includes 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. (5) 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, contingent consideration from past acquisitions, 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 U.S. 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.
Page 14
14 Reconciliation of Non-GAAP Financial Measures Net Sales to Constant Currency Basis by Segment (unaudited)
Page 15
15 Reconciliation of Non-GAAP Financial Measures Net Sales to Constant Currency Basis by Geographic Region (unaudited)
Page 16
16 Reconciliation of Non-GAAP Financial Measures Segment Adjusted Operating Income (unaudited)
Page 17
17 Reconciliation of Non-GAAP Financial Measures Condensed Consolidated Statements of Operations Q2 2025 (unaudited)
Page 18
18 Reconciliation of Non-GAAP Financial Measures Condensed Consolidated Statements of Operations Q2 2024 (unaudited)
Page 19
19 Reconciliation of Non-GAAP Financial Measures Adjusted EBITDA Q2 2025 and Q2 2024 (unaudited)
Page 20
20 Reconciliation of Non-GAAP Financial Measures Adjusted Free Cash Flow and Calculation of Adjusted Free Cash Flow Conversion (unaudited)