Envista Holdings Corp (NVST) 2023 Q4 法說會逐字稿

My name is David, and I will be your conference call facilitator this afternoon. At this time, I'd like to welcome everyone to Envista Holdings Corporation's Fourth Quarter 2023 Earnings Results Conference Call. (Operator Instructions)

我叫大衛，今天下午我將擔任你們的電話會議主持人。現在，我歡迎大家參加 Envista Holdings Corporation 2023 年第四季獲利結果電話會議。 （操作員說明）

I will now turn the call over to Mr. Stephen Keller, Principal Financial Officer of Envista Holdings. Mr. Keller, you may begin your conference call.

我現在將電話轉給 Envista Holdings 財務長 Stephen Keller 先生。凱勒先生，您可以開始電話會議了。

Good afternoon, and thanks for joining the call. With me today is Amir Aghdaei, our President and Chief Executive Officer.

下午好，感謝您加入通話。今天與我在一起的是我們的總裁兼執行長 Amir Aghdaei。

I want to point out that our earnings release, the slide presentation supplementing today's call and the reconciliations and other information required by SEC Regulation G relating to any non-GAAP financial measures provided during the call are all available on the Investors section of our website, www.envistaco.com. The audio portion of this call will be archived on the Investors section of our website later today under the heading Events & Presentations. It will remain archived until our next quarterly call.

我想指出的是，我們的收益發布、補充今天電話會議的幻燈片演示以及SEC G 條例要求的與電話會議期間提供的任何非GAAP 財務措施相關的調節表和其他信息都可以在我們網站的投資者部分找到， www.envistaco.com。本次電話會議的音訊部分將於今天稍後存檔在我們網站的投資者部分，標題為「活動和演示」。它將一直存檔，直到我們下一次季度電話會議為止。

During the presentation, we will describe some of the more significant factors that impacted year-over-year performance. The supplemental materials describe additional factors that impacted year-over-year performance. Unless otherwise noted, references in these remarks to company-specific financial metrics relate to the fourth quarter of 2023. And references to period-to-period increases or decreases in financial metrics are year-over-year.

在演示過程中，我們將描述影響同比業績的一些更重要的因素。補充資料描述了影響同比業績的其他因素。除非另有說明，否則這些評論中提及的公司特定財務指標涉及 2023 年第四季。提及的財務指標的同期增減是指同比。

During the call, we may describe certain products and devices that have applications submitted and pending certain regulatory approvals or are available only in certain markets. We will also make forward-looking statements within the meaning of the federal securities laws, including statements regarding events or developments that we believe, anticipate or may occur in the future.

在通話期間，我們可能會描述某些已提交申請並等待某些監管部門批准或僅在某些市場提供的產品和設備。我們也將做出聯邦證券法意義內的前瞻性聲明，包括有關我們認為、預期或未來可能發生的事件或發展的聲明。

These forward-looking statements are subject to a number of risks and uncertainties, including those set forth in our SEC filings. Actual results might differ materially from any forward-looking statements that we make today. These forward-looking statements speak only as of the date that they are made, and we do not assume any obligation to update any forward-looking statements except where as required by law.

這些前瞻性陳述受到許多風險和不確定性的影響，包括我們向美國證券交易委員會提交的文件中列出的風險和不確定性。實際結果可能與我們今天所做的任何前瞻性陳述有重大差異。這些前瞻性陳述僅代表截至其作出之日的情況，除非法律要求，否則我們不承擔更新任何前瞻性陳述的義務。

With that, I'd like to turn the call over to Amir.

說到這裡，我想把電話轉給阿米爾。

Thank you, Stephen. Good afternoon, and welcome to Envista's fourth quarter 2023 earnings call. We appreciate you taking the time to join us today.

謝謝你，史蒂芬。下午好，歡迎參加 Envista 2023 年第四季財報電話會議。我們感謝您今天抽出時間加入我們。

Despite a volatile macro backdrop, we are making progress against our long-term strategic priorities. In line with our expectations, we finished 2023 with a modest sales decline for the full year and delivered an adjusted EBITDA margin of 18.1%. We improved our free cash flow generation in 2023 and delivered greater than $220 million while continuing to invest in our strategic priorities to accelerate our long-term growth and enhance our margin.

儘管宏觀背景不穩定，我們仍在長期策略重點方面取得進展。與我們的預期一致，我們在 2023 年結束時全年銷售額略有下降，調整後 EBITDA 利潤率為 18.1%。 2023 年，我們改善了自由現金流的產生，交付了超過 2.2 億美元，同時繼續投資於我們的策略重點，以加速我們的長期成長並提高我們的利潤率。

Before we reflect on our performance in 2023 as well as our future outlook, I think it's important to provide some context about the current operating environment as well as the underlying demand for dental solutions. Globally, the market remains dynamic, with macro uncertainty and geopolitical risks continuing to create a challenging operating environment. Conflicts in the Middle East and the Ukraine as well as cybersecurity attacks impacting the North America distribution channel created volatility in 2023. While our team has navigated each of these challenges well collectively, they have moderated our near-term performance.

在我們反思 2023 年的業績以及未來展望之前，我認為有必要提供一些有關當前營運環境以及牙科解決方案的潛在需求的背景資訊。在全球範圍內，市場依然充滿活力，宏觀不確定性和地緣政治風險持續創造充滿挑戰的經營環境。中東和烏克蘭的衝突以及影響北美分銷管道的網路安全攻擊在 2023 年造成了波動。雖然我們的團隊集體很好地應對了這些挑戰，但它們影響了我們的近期表現。

As we move into 2024, we believe we are well positioned to navigate potential short-term uncertainties while executing our long-term value creation model. While we continue to see resilient patient traffic throughout 2023, we did see a weakening of demand for higher-end dental better procedures, including both adult orthodontic cases and full-arch implant restorations.

進入 2024 年，我們相信我們已做好準備，能夠在執行長期價值創造模式的同時應對潛在的短期不確定性。雖然我們在 2023 年繼續看到患者流量有彈性，但我們確實看到對高端牙科更好手術的需求減弱，包括成人矯正病例和全牙弓植牙修復。

Private practice clinicians and DSOs remain thoughtful about near-term investments in both equipment and clinic-level inventories. While this has created pressure in the short term, longer term, we are confident that patients will prioritize dental care and that clinicians will proactively invest in areas that help them digitize their practice, making them more productive and ensuring they can provide the high-quality personalized care. Despite the volatility seen throughout 2023, the Envista team has focused on driving our key initiatives and we continued our progress to drive long-term growth, accelerate margins and transform our portfolio.

私人執業臨床醫生和 DSO 仍然對設備和診所庫存的近期投資深思熟慮。雖然這在短期和長期內造成了壓力，但我們相信患者會優先考慮牙科護理，臨床醫生也會積極投資於幫助他們數位化實踐的領域，提高他們的工作效率並確保他們能夠提供高品質的服務個性化護理。儘管 2023 年會出現波動，但 Envista 團隊仍專注於推動我們的關鍵舉措，我們繼續取得進展，以推動長期成長、提高利潤率並轉變我們的投資組合。

Our orthodontic business is performing well, growing double digits for the full year. This performance significantly outpaced a global market where orthodontic case starts declined for the year. All cost-comprehensive portfolio, including brackets and wires and aligners and our clear focus on the orthodontic specialists create a sustained competitive advantage and a more stable business with ample opportunity for long-term share gains.

我們的正畸業務表現良好，全年實現兩位數成長。這一業績顯著超過了今年正畸病例開工量下降的全球市場。所有成本綜合的產品組合，包括托架、鋼絲和矯正器，以及我們對矯正專家的明確關注，創造了持續的競爭優勢和更穩定的業務，並為長期份額收益提供了充足的機會。

During the year, we leveraged the Envista Business System, EBS, to drive our Spark growth formula and consistently added new doctors, increased case volumes with existing doctors and grew revenue per case. The Spark business delivered over 50% year-over-year growth, and we are positioned to double this business by 2026.

在這一年中，我們利用 Envista 業務系統 (EBS) 來推動 Spark 成長公式，並不斷增加新醫生、增加現有醫生的病例量以及增加每個病例的收入。 Spark 業務年增超過 50%，我們的目標是到 2026 年將業務翻倍。

In 2023, our implant business declined low single digits as challenges in North America offset at or above market growth in other geographies. Excluding North America, our implant business collectively grew mid-single digits for 2023. We have a strong brand, a leading product portfolio, a passionate and capable team and a dedicated community of implant specialists around the world. Leveraging our strong foundation, we have taken aggressive steps to address our performance issues in North America.

2023 年，我們的植入物業務出現低個位數下降，因為北美的挑戰抵消了或高於其他地區的市場成長。除北美外，到 2023 年，我們的植體業務整體實現中個位數成長。我們擁有強大的品牌、領先的產品組合、充滿熱情和能力的團隊以及全球植體專家的敬業社群。憑藉我們強大的基礎，我們已採取積極措施來解決北美地區的績效問題。

We're making thoughtful investments in sales and marketing, training and education and community development and are leveraging our successful European leadership model and playbook, which has resulted in over 300 basis point share gains in the past 3 years to reinvigorate growth in North America. The North America business is expected to return to market level growth by the end of 2024.

我們在銷售和行銷、培訓和教育以及社區發展方面進行了深思熟慮的投資，並利用我們成功的歐洲領導力模型和行動手冊，在過去3 年中實現了超過300 個基點的份額增長，從而重振了北美的成長。北美業務預計到2024年底將恢復市場水準成長。

Turning to our Equipment & Consumables segment, we declined mid-single digits for the full year 2023. Much of the decline can be attributed to the deemphasis of nonstrategic markets and products in our diagnostics business and the cybersecurity issues that disrupted the North American distribution channel for our consumables products. Despite these isolated changes, we made progress in both businesses.

談到我們的設備和消耗品部門，我們 2023 年全年業績出現中個位數下降。下降的主要原因是診斷業務中不再重視非戰略市場和產品，以及擾亂北美分銷管道的網路安全問題對於我們的消耗品。儘管發生了這些孤立的變化，我們在這兩項業務上都取得了進展。

In our Diagnostics business, DEXIS IOS delivered core growth of over 30% for the year. We saw a strong volume growth and a stabilizing price environment as we exited the year. Our traditional imaging solutions performed at or above the market in our focused geographies, and we successfully launched 2 innovative media products. The OP 3D LX, our next-generation CBCT scanner in the OP 3D platform, features a larger field of view and expanded 3D diagnostic capabilities through seamless integration with our DTX Studio Clinic software.

在我們的診斷業務中，DEXIS IOS 今年的核心成長超過 30%。年底時，我們看到了強勁的銷售成長和穩定的價格環境。我們的傳統影像解決方案在我們重點地區的市場表現達到或高於市場水平，我們成功推出了 2 種創新媒體產品。 OP 3D LX 是 OP 3D 平台中的新一代 CBCT 掃描儀，透過與我們的 DTX Studio Clinic 軟體無縫集成，具有更大的視野和擴展的 3D 診斷功能。

The OP 3D LX provides more flexibility and improved workflow, allowing doctors to augment their diagnostics planning and treatment of patients. On the software side, we also released the DEXassist solution to integrate AI features into the DEXIS 10 imaging software suite. The DEXassist solution helps practitioners to detect 6 pathological findings in 2D deficiency -- in 2D intraoral x-rays including carries, calculus, bone loss, periapical radiolucency, root canal filing deficiency and discrepancies at the margin of an existing restoration.

OP 3D LX 提供了更大的靈活性和改進的工作流程，使醫生能夠增強患者的診斷計劃和治療。在軟體方面，我們也發布了DEXassist解決方案，將AI功能整合到DEXIS 10成像軟體套件中。 DEXassist 解決方案可協助醫師在2D 口腔內X 光中檢測2D 缺陷的6 種病理結果，包括攜帶、牙結石、骨質流失、根尖周圍射線可透性、根管銼缺陷和現有修復體邊緣的差異。

We now have over 50,000 computers running the DTX software globally and have processed over 200 million images on our platform. Sellout in the consumable business remained a highlight during 2023 as we perform at or above the market in most product categories and geographies. With the North American distribution channel stabilizing, we expect this business to grow at or above the long-term market growth rate of low single digits globally.

目前，我們在全球有超過 50,000 台電腦運行 DTX 軟體，並在我們的平台上處理了超過 2 億張影像。 2023 年，消費品業務的銷售仍然是一大亮點，因為我們在大多數產品類別和地區的表現都達到或高於市場水平。隨著北美分銷管道的穩定，我們預計該業務的成長將達到或高於全球低個位數的長期市場成長率。

As expected, in 2023, our adjusted EBITDA margins declined due to lower sales as a result of the volatile macro conditions, our strategic investments in our Specialty and Technologies segment and our rapid growth of Spark. As we have discussed, Spark margins, while improving, are still below fleet average. Our 2023 performance is consistent with our intention of balancing investments for both growth and margin improvements. We believe that the focused investments we are making in both Spark and North American implants will support our margin expansion over the long term.

正如預期的那樣，2023 年，我們調整後的 EBITDA 利潤率下降，原因是宏觀環境波動、我們對專業和技術領域的策略性投資以及 Spark 的快速成長導致銷售額下降。正如我們所討論的，Spark 利潤率雖然有所改善，但仍低於機隊平均水準。我們 2023 年的表現符合我們平衡投資以實現成長和提高利潤率的意圖。我們相信，我們在 Spark 和北美植入物方面的重點投資將支持我們的長期利潤擴張。

We continue to leverage EBS to systematically drive operational improvements, footprint rationalization, price optimization, expense controls and structural cost reductions. Spark margins are improving sequentially as we drive down the production cost of aligners and improve our process automation. Further, we are proactively managing price across the portfolio and deliver 50 basis points of positive price, excluding the impact of volume-based pricing.

我們繼續利用 EBS 系統地推動營運改善、佔地面積合理化、價格優化、費用控制和結構性成本降低。隨著我們降低對準器的生產成本並提高流程自動化，火花利潤率不斷提高。此外，我們正在積極管理整個投資組合的價格，並提供 50 個基點的正價格，不包括基於數量的定價的影響。

Across our emerging markets, we streamlined our organization, reduced our expenses and concentrated our efforts in areas where we have the most sustainable competitive advantage. One of our primary priorities is to build a better, stronger and more growth-oriented portfolio. By providing comprehensive solutions for orthodontics and implant specialists, we continue to shift our portfolio to the most attractive segments of dental.

在我們的新興市場中，我們精簡了組織，減少了開支，並將精力集中在我們擁有最永續競爭優勢的領域。我們的首要任務之一是建立一個更好、更強、更具成長導向的投資組合。透過為矯正和植牙專家提供全面的解決方案，我們繼續將我們的產品組合轉向最具吸引力的牙科領域。

Our Diagnostic Solutions business has been optimized and creates competitive advantage as we help clinicians digitize their workflows. Our 2 most recent acquisitions, DEXIS IOS and Osteogenics complement our strategy and are key to our ongoing transformation. Both acquisitions saw growth accelerated throughout 2023 and are positioned well for future growth.

我們的診斷解決方案業務得到了優化，並在幫助臨床醫生實現工作流程數位化時創造了競爭優勢。我們最近的兩項收購，DEXIS IOS 和 Osteogenics 補充了我們的策略，也是我們持續轉型的關鍵。兩項收購均在 2023 年實現了加速成長，並為未來的成長做好了準備。

We are committed to pursuing a disciplined approach to capital deployment. We utilize our EBS-driven M&A approach to manage a robust pipeline of inorganic partnerships and investments and are constantly cultivating new opportunities.

我們致力於採取嚴格的資本配置方法。我們利用 EBS 驅動的併購方法來管理強大的無機合作夥伴關係和投資管道，並不斷培養新的機會。

I will now turn the call over to Stephen to go through our fourth quarter financials and provide more details on our segment performance.

我現在將把電話轉給史蒂芬，讓他查看我們第四季度的財務狀況，並提供有關我們部門業績的更多詳細資訊。

Thanks, Amir. Before reviewing our fourth quarter results in detail, I would like to quickly comment on the $258.3 million noncash impairment charge related to goodwill and intangible assets that we recorded in Q4. This impairment was primarily the result of an increase in the discount rate, driven by sustained higher interest rates and the impact of a more volatile macro environment.

謝謝，阿米爾。在詳細回顧我們第四季度的業績之前，我想快速評論一下我們在第四季度記錄的與商譽和無形資產相關的 2.583 億美元非現金減損費用。此減損主要是由於利率持續走高以及宏觀環境更加波動的影響導致折現率上升。

On a reported basis, fourth quarter sales declined 2.3% to $645.6 million. Sales in the quarter declined by 0.3% due to the impact of foreign currency exchange rates. And our core sales were down 2% compared to the fourth quarter of 2022. While our year-over-year growth was supported by solid mid-single-digit growth in our Specialty Products & Technologies segment, this is more than offset by a double-digit decline in our Equipment & Consumables segment. Geographically, our developed markets declined by 4.8%, with strong growth in Western Europe, offset by double-digit decline in North America. Our emerging markets grew greater than 9% in the fourth quarter.

根據報告，第四季銷售額下降 2.3% 至 6.456 億美元。受外幣匯率影響，該季銷售額下降0.3%。與2022 年第四季相比，我們的核心銷售額下降了2%。雖然我們的同比成長得到了專業產品和技術部門穩定的中個位數成長的支持，但這被兩倍的銷售額所抵銷。我們的設備和消耗品部門出現了數字下降。從地理上看，我們的已開發市場下降了 4.8%，其中西歐成長強勁，被北美兩位數的下降所抵消。我們的新興市場第四季成長超過 9%。

Our fourth quarter adjusted gross margin was 52.4%, a decrease of 380 basis points compared to the prior year. The decrease in gross margin was the result of lower volumes and unfavorable product mix, VBP-driven price reductions and currency headwinds. Our adjusted EBITDA margin for the quarter was 15.6%, which is 530 basis points lower than Q4 2022. The lower adjusted EBITDA margins were anticipated and driven by lower gross margins, unfavorable geographic mix and investments in both Spark and the turnaround in North American implants.

第四季調整後毛利率為 52.4%，較前一年下降 380 個基點。毛利率下降是由於銷量下降、產品組合不利、VBP 驅動的降價以及貨幣不利因素造成的。我們本季調整後的EBITDA 利潤率較低是預期的，也是由毛利率較低、不利的地理組合以及Spark 投資和北美植入業務的好轉所推動的。 。

Our fourth quarter adjusted diluted EPS was $0.29 compared to $0.52 in the comparable period of the prior year. Core revenue in our Specialty Products & Technologies segments increased by 4.8% compared to the fourth quarter of 2022. Strong growth in Western Europe and emerging markets was offset by declines in North America. Within the segment, our orthodontics business grew nearly 15%, with Spark continuing to outperform.

我們在第四季度調整後攤薄每股收益為 0.29 美元，而去年同期為 0.52 美元。與 2022 年第四季相比，我們特種產品和技術部門的核心收入成長了 4.8%。西歐和新興市場的強勁成長被北美的下滑所抵銷。在該細分市場中，我們的正畸業務成長了近 15%，其中 Spark 繼續表現出色。

Our Brackets & Wires business delivered mid-single-digit growth, with emerging markets performing especially well. Overall, we are confident that our orthodontics business is outperforming the market, with commissions continuing to value our comprehensive portfolio and our focus on the orthodontic specialist.

我們的支架和電線業務實現了中個位數成長，其中新興市場表現尤其出色。總體而言，我們相信我們的矯正業務表現優於市場，委員會繼續重視我們全面的產品組合以及我們對矯正專家的關注。

Our implant business declined modestly in the fourth quarter as strong growth in China was offset by underperformance in North America. Overall, we see signs of our implant business is stabilizing with our Q4 performance improving relative to the first 3 quarters of the year. As we have discussed, we are making significant investments in North America and leveraging our commercial EPS capabilities as standard work to get this business to return to market level growth as we exit 2024.

我們的植體業務在第四季度略有下降，因為中國的強勁成長被北美的表現不佳所抵消。總體而言，我們看到我們的植入物業務正在穩定的跡象，第四季度的業績相對於今年前三個季度有所改善。正如我們所討論的，我們正在北美進行重大投資，並利用我們的商業 EPS 能力作為標準工作，以使該業務在 2024 年退出時恢復到市場水平增長。

For the fourth quarter, our Specialty Products & Technologies segment had an adjusted operating profit of 15.4%. This was down 460 basis points versus the same period in the prior year, with the decline largely due to unfavorable mix, the pricing impact of the China VBP program, continued investment in Spark and targeted investments in North American implants.

第四季度，我們的特種產品和技術部門調整後營業利潤為 15.4%。與去年同期相比下降了 460 個基點，下降的主要原因是不利的組合、中國 VBP 計劃的定價影響、對 Spark 的持續投資以及對北美植入的有針對性的投資。

Turning to our Equipment & Consumables segment. Core sales in the fourth quarter decreased by 12.4% compared to Q4 2022. Our consumables business declined in Q4, primarily due to the timing of orders in North American distribution channel. As we have discussed, the cyberattack experienced by our largest distribution partner reduced visibility of channel inventory levels and slowed stocking orders throughout much of Q4. It is important to note that while sales into the distribution channel were down, sell out to end customers in Q4 performed well.

轉向我們的設備和消耗品部分。與 2022 年第四季相比，第四季的核心銷售額下降了 12.4%。第四季我們的耗材業務有所下降，主要是由於北美分銷管道的訂單時間表。正如我們所討論的，我們最大的分銷合作夥伴經歷的網路攻擊降低了通路庫存水準的可見性，並減緩了第四季度大部分時間的庫存訂單。值得注意的是，儘管第四季度分銷管道的銷售額下降，但最終客戶的銷售表現良好。

Moving forward, we expect inventory levels to stabilize throughout 2024 and our sales to normalize as we move through the year. Outside of North America, we saw solid growth in our consumables business and we continue to drive sell-out that is at or above market growth in most geographies. Our equipment business also declined in the fourth quarter relative to the prior year as higher interest rates and concerns around the macroeconomic environment reduced global demand for large imaging equipment.

展望未來，我們預計 2024 年庫存水準將穩定，我們的銷售也將在這一年中趨於正常化。在北美以外，我們的消耗品業務實現了穩健成長，我們繼續推動銷售量達到或高於大多數地區的市場成長。由於利率上升和對宏觀經濟環境的擔憂減少了全球對大型影像設備的需求，我們的設備業務在第四季度也較上年下降。

Despite this dynamic, our performance in North America has stabilized, showing a more modest decline in the quarter. Emerging markets saw a large decline in the quarter, driven by the combined effect of challenging macro conditions and the deemphasized in nonstrategic geographies and solutions. Our intention is to refine our focus and concentrate our efforts in those markets where we can build and maintain a sustainable competitive advantage. While this will create a modest headwind to core growth in the short term, long term, it will allow us to improve both the growth and margin profile of this business.

儘管有這種動態，我們在北美的業績已趨於穩定，本季的下滑幅度更為溫和。由於宏觀環境充滿挑戰以及非戰略地區和解決方案不再受到重視，新興市場本季大幅下滑。我們的目的是完善我們的重點，並將我們的精力集中在那些我們能夠建立和維持永續競爭優勢的市場上。雖然這將在短期內對核心成長造成適度的阻力，但從長期來看，它將使我們能夠改善該業務的成長和利潤狀況。

Our IOS business grew greater than 30% in the fourth quarter, driven by strong unit demand and a stabilizing price environment. We continue to see DEXIS IOS as a long-term growth driver for Envista and are focused on expanding our global reach, our partnering with our distributors and system integrators to help clinicians digitize their office. In addition to driving growth for Envista, the DEXIS IOS solutions enhances our end-to-end orthodontic and implant solutions.

在強勁的單位需求和穩定的價格環境的推動下，我們的 IOS 業務在第四季度增長了 30% 以上。我們繼續將 DEXIS IOS 視為 Envista 的長期成長動力，並致力於擴大我們的全球影響力，與經銷商和系統整合商合作，幫助臨床醫生實現辦公室數位化。除了推動 Envista 的成長之外，DEXIS IOS 解決方案還增強了我們的端到端矯正和種植解決方案。

Equipment & Consumables adjusted operating profit margin was 19.5% in the fourth quarter of 2023 versus 27.2% in Q4 of 2022. The decline in margins was primarily driven by the lower sales of consumables in the quarter. This decline was anticipated and is expected to be temporary. As we have discussed throughout 2023, we have took significant actions to reduce our costs, streamline our operations and improve our focus in this segment.

2023 年第四季設備和消耗品調整後營業利潤率為 19.5%，而 2022 年第四季為 27.2%。利潤率下降的主要原因是該季度消耗品銷售額下降。這種下降是預料之中的，並且預計是暫時的。正如我們在 2023 年所討論的那樣，我們採取了重大行動來降低成本、簡化營運並加強對這一領域的關注。

Long term, this segment is positioned to accelerate growth and improve operating margins. In the fourth quarter, we generated free cash flow of $99.9 million and delivered $223.6 million of free cash flow for the full year. This represents a greater than $100 million improvement in free cash flow over the full year of 2022. Overall, we were pleased with our progress in improving our free cash flow management and are committed to our long-term goal of delivering annual free cash flow in excess of net income.

從長遠來看，該部門的定位是加速成長並提高營運利潤率。第四季度，我們產生了 9,990 萬美元的自由現金流，全年交付了 2.236 億美元的自由現金流。這意味著2022 年全年自由現金流改善超過1 億美元。總體而言，我們對改善自由現金流管理方面取得的進展感到滿意，並致力於實現我們的長期目標，即在2022 年實現年度自由現金流。超過淨利。

I'll now turn the call over to Amir to provide an update on our outlook for 2024 as well as some closing comments.

現在我將把電話轉給 Amir，提供 2024 年展望的最新資訊以及一些總結評論。

Thanks, Stephen. We remain confident in our strategy and long-term outlook. The dental market is attractive, underpenetrated and has solid growth trends. Our business is strategically differentiated and we have a proven track record of executing in a dynamic environment. We have conviction in our ability to create meaningful value over the long term.

謝謝，史蒂芬。我們對我們的策略和長期前景仍然充滿信心。牙科市場很有吸引力，但滲透率較低，並且具有穩健的成長趨勢。我們的業務具有策略差異化，並且在動態環境中擁有良好的執行記錄。我們堅信我們有能力長期創造有意義的價值。

While we remain confident in the future of the dental industry, the current backdrop causes us to be more cautious in the near term. For 2024, we expect demand for higher-end dental procedures, including full-arch restorations and adult orthodontic cases to remain somewhat restrained. We further expect private practices and DSOs to remain cautious before making large investments in new clinics. For the full year 2024, we expect core sales to grow low single digits and deliver adjusted EBITDA margins of between 16% to 17%.

雖然我們對牙科行業的未來仍然充滿信心，但目前的背景使我們在短期內更加謹慎。到 2024 年，我們預計對高端牙科手術（包括全牙弓修復和成人矯正病例）的需求仍將受到一定程度的限制。我們進一步預計私人診所和 DSO 在對新診所進行大規模投資之前將保持謹慎。對於 2024 年全年，我們預計核心銷售額將實現低個位數成長，調整後 EBITDA 利潤率將在 16% 至 17% 之間。

We further anticipate that our margins will accelerate as we move through 2024. Our guidance takes into consideration both our investments for the long term and the continued uncertainty in the macro environment. In 2024, we are focused on 3 main priorities to improve our short-term execution and build a foundation for long-term value creation. First, we will further accelerate our orthodontic business by providing orthodontic specialists with a differentiated and integrated suite of treatment options, including brackets and wires and clear aligners. We anticipate doubling our Spark business by 2026 while simultaneously driving sequential margin improvements.

我們進一步預計，隨著 2024 年的到來，我們的利潤率將會加速。我們的指導不僅考慮了我們的長期投資，也考慮了宏觀環境的持續不確定性。 2024 年，我們將重點關注 3 個主要優先事項，以提高短期執行力並為長期價值創造奠定基礎。首先，我們將透過為矯正專家提供差異化的綜合治療方案（包括托架、鋼絲和透明矯正器）來進一步加速我們的矯正業務。我們預計到 2026 年，我們的 Spark 業務將翻一番，同時推動利潤率持續提高。

Our second area of focus is on reaccelerating the growth of our implant business. Globally, we will leverage both our premium and value implant franchises to provide full solutions across the implant workflow including regenerative and prosthetic offerings. We will continue to utilize our premier diagnostics and digital capabilities to create differentiation and win customers.

我們的第二個重點領域是重新加速植入物業務的成長。在全球範圍內，我們將利用我們的優質和超值植體特許經營權，提供整個植體工作流程的完整解決方案，包括再生和義肢產品。我們將繼續利用我們一流的診斷和數位能力來創造差異化並贏得客戶。

In North America, we are making targeted investments to improve our commercial execution, refresh approach to marketing, improve our training and education and further support our clinical community. We see a clear path through invigorating growth and aim to be growing with the market as we exit 2024.

在北美，我們正在進行有針對性的投資，以改善我們的商業執行、更新行銷方法、改善我們的培訓和教育並進一步支持我們的臨床社群。我們看到了一條清晰的振興成長之路，並計劃在 2024 年退出時與市場一起成長。

As we move forward this year, we will further utilize EBS to optimize our cost structure. We expect to reduce structural costs by an additional $30 million annually for the full year impact being realized in 2025. Our continuous improvement culture will allow us to further consolidate operations, streamline our corporate functions and drive our G&A spending across the organization. We believe 2024 will be a transformational year for Envista as we continue to balance investments in growth with our goal of expanding margins.

今年，我們將進一步利用EBS來優化我們的成本結構。我們預計每年將結構成本額外減少 3000 萬美元，以實現 2025 年全年的影響。我們的持續改進文化將使我們能夠進一步整合營運、簡化公司職能並推動整個組織的一般管理支出。我們相信 2024 年將是 Envista 轉型的一年，因為我們將繼續平衡成長投資與擴大利潤率的目標。

Given our desire to drive improved execution of this transformation in 2024, we believe it's prudent to revisit our long-range targets. Further, because of this focus, recent leadership changes and our process to name a permanent CFO, we have decided to postpone our Investor Day and will reschedule. Postponing would allow us to provide a more comprehensive update with our full leadership team. I want to stress that this change of the timing of Investor Day does not diminish our excitement about the future of the dental industry and the future of Envista.

鑑於我們希望在 2024 年推動改善這項轉型的執行，我們認為重新審視我們的長期目標是謹慎的做法。此外，由於這一重點、最近的領導層變動以及我們任命永久財務長的流程，我們決定推遲投資者日並將重新安排時間。延期將使我們能夠向我們的整個領導團隊提供更全面的最新資訊。我想強調的是，投資者日時間的改變並沒有減弱我們對牙科行業的未來和 Envista 的未來的興奮。

Our purpose is to partner with dental professionals to improve patient lives by digitizing, personalizing and democratizing dental care. We remain focused on delivering long-term value for patients, our customers, our employees and our shareholders.

我們的目標是與牙科專業人士合作，透過數位化、個人化和民主化牙科護理來改善患者的生活。我們仍然專注於為患者、客戶、員工和股東提供長期價值。

Thanks, Amir. That concludes our formal comments. We are now ready for questions.

謝謝，阿米爾。我們的正式評論到此結束。我們現在準備好提問了。

(Operator Instructions) We'll take our first question from Elizabeth Anderson with Evercore ISI.

（操作員說明）我們將接受 Evercore ISI 的 Elizabeth Anderson 提出的第一個問題。

Maybe to start off with the operating margin guidance for 2024. I mean that came in pretty disappointing in our view. And if we look at this recently as 3Q, you guys were talking about operating margin expansion. So can you talk a bit more about what happened between that point where you're sort of thinking about expansion and then what the current guidance that you guys are giving us tonight?

也許可以從 2024 年的營業利潤率指導開始。我的意思是，我們認為這非常令人失望。如果我們將其視為最近的第三季度，你們正在談論營業利潤率擴張。那麼，您能多談談從您考慮擴張到今晚你們給我們提供的當前指導之間發生的事情嗎？

Of course. Thank you, Elizabeth. Thanks for asking the question. As we move through Q4 and as we closed the quarter, it became really apparent to us several key factors. To be specific, one is around the macro in one. We do not expect 2024 to be any different than what we have seen in the past several quarters. On certain economic environment, interest rate, inflation, consumer sentiment, we think that demand for our high-end dental procedures is going to be below long-run growth expectation, and we are cautioned about capital spending, specifically on DSOs and some clinicians and inventory management. On top of the geopolitical uncertainties, we do not think that, that would change over time. So with that backdrop, that has impact in our mix.

當然。謝謝你，伊麗莎白。感謝您提出問題。當我們進入第四季度並結束本季時，我們發現幾個關鍵因素變得非常明顯。具體來說，一是圍繞著宏觀合一。我們預計 2024 年不會與過去幾季的情況有任何不同。在某些經濟環境、利率、通貨膨脹、消費者信心下，我們認為對我們高端牙科手術的需求將低於長期增長預期，我們對資本支出持謹慎態度，特別是在 DSO 和一些臨床醫生和庫存管理。除了地緣政治的不確定性之外，我們認為這種情況不會隨著時間的推移而改變。因此，在這種背景下，這對我們的組合產生了影響。

So if you take a look at it, that backdrop of macro really impact some of our highest, most profitable businesses in different geographies. In addition, the growth that we are seeing today in our Spark, that accelerates that mix change over time. As the outcome of that, we did a series of scenario planning. We looked at the opportunities and risks.

因此，如果你仔細觀察一下，你會發現宏觀背景確實影響了我們在不同地區的一些最高、利潤最高的業務。此外，我們今天在 Spark 中看到的成長，隨著時間的推移加速了這種組合的變化。結果，我們做了一系列的情境規劃。我們研究了機會和風險。

We also take a look at what we need to do to put the organization in the format that we can create long-term value; realign investment between margin expansion on the Spark and growth; go back to the North America implant now that we have a really good feel for what it takes to invigorate the growth in there as well as the G&A spending. And we thought we need to be more cautious here, to provide the guidance that considers all that background. Of course, if the environment improves as we go forward, we have an opportunity to perform better. And we think throughout the year, we will see acceleration of our margin as well as our growth throughout the year, every quarter. That's basically are assessment and assumption on how we put that guidance in place.

我們也研究了需要做什麼才能使組織成為能夠創造長期價值的組織；重新調整 Spark 利潤擴張和成長之間的投資；現在回到北美植入物，我們對如何刺激那裡的成長以及一般管理支出有了很好的感覺。我們認為我們需要更加謹慎，提供考慮所有背景的指導。當然，如果環境隨著我們的前進而改善，我們就有機會表現得更好。我們認為，在這一年中，我們將看到利潤率的加速成長以及全年每季的成長。這基本上是對我們如何落實該指導的評估和假設。

Got it. That's helpful. So how do we think about the long-term guide? I know you -- and sort of the longer-term margin expansion possibility with this new step down in 24?

知道了。這很有幫助。那我們該如何看待長期指導呢？我了解您，以及 24 年新的降息是否有可能實現長期利潤率擴張？

Yes. And we have been pretty consistent, as you know, about creating long-term value by expanding growth, by expanding margin, but shift in our portfolio. We don't think that really has radically changed. That framework that we have created in the past 4, 4.5 years has a steady impact.

是的。如您所知，我們一直非常一致地致力於透過擴大成長、擴大利潤率來創造長期價值，但我們的投資組合發生了轉變。我們認為這並沒有真正發生根本改變。我們在過去 4、4.5 年創建的框架產生了穩定的影響。

The realities of what we're dealing with in here is, one, we have a new leadership information. Our CFO, hopefully soon to be named. We are placing the Nobel, our implant president over time. And we wanted to make sure that we have a solid leadership team in place.

我們在這裡處理的現實是，第一，我們有一個新的領導訊息。我們的財務官，希望很快就能被任命。隨著時間的推移，我們將植入我們的植入物總統諾貝爾獎。我們希望確保我們擁有一支堅實的領導團隊。

We also wanted to show progression on those 3 key priorities that we talked about; the Spark growth and margin; Nobel back to growth; as well as resizing our infrastructure. We wanted to show tangible results and show the progression there and then come back and have the discussion about long-term guidance that we have provided. We think that over time, our view around growth, margin and portfolio is still valid.

我們也想展示我們討論的這 3 個關鍵優先事項的進展； Spark 成長和利潤率；諾貝爾恢復成長；以及調整我們的基礎設施規模。我們希望展示切實的成果並展示進展情況，然後回來討論我們提供的長期指導。我們認為，隨著時間的推移，我們對成長、利潤率和投資組合的看法仍然有效。

And we need to talk about the capital structure as well. That's why we decided to postpone that conversation until we are in a better place to provide better insight. We're not canceling it, we are postponing it. We should be ready when the team in place when we have momentum to come back and have that conversation.

我們還需要討論資本結構。這就是為什麼我們決定推遲這次談話，直到我們能夠更好地提供更好的見解。我們不是取消它，而是推遲它。當團隊就位時，當我們有動力回來進行對話時，我們應該做好準備。

Got it. And one last one for me. You just said you have a potential CFO announcement shortly. Would you like to put any time parameters around that?

知道了。最後一張是給我的。您剛才說您很快就會宣布一位潛在的財務長。您想為此添加任何時間參數嗎？

We're working on it. We have been working on it, as I mentioned. We continue to see some very strong candidates. Our goal is to have that name as quickly as possible in the near future.

我們正在努力。正如我所提到的，我們一直在努力。我們繼續看到一些非常強大的候選人。我們的目標是在不久的將來盡快擁有這個名字。

We will take our next question from Jeff Johnson with Baird.

我們將回答傑夫·約翰遜和貝爾德提出的下一個問題。

Amir, I wanted to follow up on the margin question, Elizabeth answered -- Elizabeth asked, primarily around your answer kind of included some things that you've really been dealing with for the last few quarters now. None of the stuff you talked about founded overly new relative, at least for the past couple of few quarters. But this quarter really dragged down those gross margins that flowed through to both specialty and the E&C operating margin.

阿米爾，我想跟進保證金問題，伊麗莎白回答道——伊麗莎白問道，主要圍繞著你的回答，包括一些你在過去幾個季度一直在處理的事情。你談到的這些東西都沒有建立過於新的親戚，至少在過去幾季是這樣。但本季確實拖累了特種業務和工程與建築業務營運利潤率的毛利率。

With that drop-through on the gross margin, and you've mentioned targeted investments in the North American dental implant business several times in your prepared remarks, it all sounds to me like there could be some pricing rethought going on here, some change in maybe your pricing strategy on the premium implant side. Is any of that going on? And how do we think about the flow-through of the gross versus operating margin for that if it is happening over the next few quarters?

隨著毛利率的下降，而且您在準備好的發言中多次提到了對北美植牙業務的有針對性的投資，在我看來，這裡可能會進行一些定價重新考慮，一些變化也許您在優質植入物方面的定價策略。有這樣的事情發生嗎？如果在接下來的幾個季度發生這種情況，我們如何看待毛利率與營業利潤率的變化？

Thanks, Jeff. Very good question. Let me answer that margin first, then we will talk about the pricing specifically. So mix, as I mentioned, plays such an important role in here. When we put the plan together in 2022 and also the long-term plan that we put in place, there is a sort of assumption about the mix that we were putting in place. As you correctly pointed out, mix has shifted over time. The China challenges, the Russia challenges, these are the businesses that have the most impact in our margin. If you take a look at it, in our Brackets & Wires, which is one of the most profitable business that we have, 1/3 of that business is outside the United States. And where it has been impacted the most are those geographies that they are in the middle of these geopolitical challenges.

謝謝，傑夫。非常好的問題。我先回答利潤率，然後我們再具體談談定價。因此，正如我所提到的，混合在這裡扮演著如此重要的角色。當我們在 2022 年制定計劃以及我們制定的長期計劃時，我們對我們正在製定的組合有一種假設。正如您正確指出的那樣，混合隨著時間的推移而發生了變化。中國的挑戰、俄羅斯的挑戰，這些都是對我們利潤影響最大的業務。如果你看一下，我們的支架和電線業務是我們最賺錢的業務之一，其中 1/3 的業務位於美國境外。受影響最大的是那些處於地緣政治挑戰之中的地區。

So you take a look at that, and we consider that would not change not in near term going forward. We have considered the impact of volume-based purchase in China. 35% to 40% price reduction in our implant business despite the fact that we have responded to that, and we have seen significant growth. It has direct impact on our margin structure.

所以你看看這一點，我們認為這在短期內不會改變。我們考慮了中國批量採購的影響。儘管我們已經對此做出了回應，但我們的植入物業務還是降價了 35% 至 40%，並且我們看到了顯著的成長。它對我們的利潤結構有直接影響。

And last but not least: the shift in Spark. The higher, the faster that this grows, it is below average, and it has a significant impact in our margin structure. If I take the VBP out, we actually got price. We were able to get good momentum on various pieces of our business. I should have mentioned one more thing, and that's the IOS. Despite the fact that, that grew almost 30% last year, the prices were declining very quickly until about Q4 that it stabilized. But now we have a stable execution. We know what that'll look like.

最後但並非最不重要的一點是：Spark 的轉變。越高，成長越快，低於平均水平，並且對我們的利潤結構產生重大影響。如果我把 VBP 拿出來，我們實際上得到了價格。我們在各個業務領域都取得了良好的勢頭。我應該再提一件事，那就是IOS。儘管去年增長了近 30%，但價格下降很快，直到第四季左右才趨於穩定。但現在我們有穩定的執行力。我們知道那會是什麼樣子。

With that, we made an assumption that let's assume nothing radically changes. And let's not hope that macro would change radically. Let's not assume the geopolitical will get a lot better going forward. But coming back to your question about impact. We have not seen a degradation or price reduction on our premium impact. That has not been the case. It is a discussion in here specifically around North America has not been about price. It has been around customer experience. It has been around training and education. It has been around the community and clinical community.

有了這個，我們做了一個假設：假設沒有根本性的改變。我們不要指望宏觀經濟會發生根本性的改變。我們不要假設地緣政治未來會變得更好。但回到你關於影響的問題。我們沒有看到我們的保費影響下降或降價。但事實並非如此。這裡專門針對北美進行的討論與價格無關。它一直圍繞著客戶體驗。它一直圍繞著培訓和教育。它已經遍布社區和臨床社區。

And in comparison, this is exactly what we saw in 2019. We corrected it in Europe. We saw 14 quarters of growth. We took 300 basis points a share to replicating that model in North America. Price was not a factor in New York, and we do not think it's going to be a major factor on the premium side of our business.

相比之下，這正是我們在 2019 年看到的情況。我們在歐洲糾正了它。我們看到了 14 個季度的成長。我們以每股 300 個基點的價格在北美複製了這個模式。在紐約，價格不是一個因素，我們認為這也不會成為我們業務高端的主要因素。

All right. That's fair. I guess, if I take your comments there about when you did go back above market several years ago, that was right when [KaVo Kerr] deal had come out, you were getting some mix benefits there. N1 hasn't scaled here at this point. You're really, I think, relying primarily on Nobel Active, which is an older product in the market. So how do you reengage these doctors with an older product?

好的。這還算公平。我想，如果我聽聽你的評論，幾年前你什麼時候回到了市場之上，那就是[KaVo Kerr]交易出來的時候，你在那裡得到了一些混合利益。 N1 此時尚未擴展。我認為，您確實主要依賴 Nobel Active，這是市場上較舊的產品。那麼如何讓這些醫生重新使用舊產品呢？

Should we about getting back to market growth because there's a newer product coming out, there's new feature sets coming out that will help drive that? Is this just purely going to be heavy lifting of going out and reengaging the doctors and trying to get them to come back and use Nobel Active? Just what's the path to that back to market growth by the end of '24 in the North American market?

我們是否應該因為有新產品問世、有新功能集出現而有助於推動市場成長，從而恢復市場成長？這是否純粹是外出與醫生重新接觸並試圖讓他們回來使用 Nobel Active 的繁重工作？到 24 世紀末，北美市場恢復市場成長的途徑是什麼？

I will answer that, but I want to just define one specific. About 50% of our business is North America, 50% outside North America. That 50% is outside North America has been growing mid-single digits with the same product. In the past, probably 5 months specifically, we have done a detailed analysis interviewing hundreds of doctors that have done a comparative study of our product, our pricing, our coverage. And what we have seen, product is not the most important thing in how we have really not performed as well as we should have performed in here.

我會回答這個問題，但我只想定義一個具體的問題。我們大約 50% 的業務在北美，50% 在北美以外。同一產品的 50% 位於北美以外地區，這一比例一直以中個位數成長。在過去，具體來說大概是 5 個月，我們對數百名醫生進行了詳細的分析，他們對我們的產品、我們的定價、我們的承保範圍進行了比較研究。我們所看到的，產品並不是我們在這方面表現不佳的最重要因素。

If I may, I'll give you a little bit of more detail in here, which I think would be helpful. There are 200,000 dentists in North America, 70% of our implants are placed by less than 5% of those dentists. There are 2 groups in that category of 10,000. Let's say 50% of them are specialists. These specialists depend on a referral network.

如果可以的話，我會在這裡為您提供更多詳細信息，我認為這會有所幫助。北美有 20 萬名牙醫，我們 70% 的植體是由其中不到 5% 的牙醫植入的。該 10,000 個類別中有 2 個組別。假設其中 50% 是專家。這些專家都依賴推薦網絡。

The other 50% are GPs that they provide one-stop solution. They diagnose, they plan, they're placing plan, and they work with labs or they have in-house labs to provide that prosthetics. Both big groups, which is a target for our premium impact, have 3 major requirements, okay? Customer experience. And customer experience has a very wide definition about coverage, about order management, about return.

另外50%是全科醫生，他們提供一站式解決方案。他們進行診斷、制定計劃、制定計劃，並與實驗室合作或擁有內部實驗室來提供義肢。這兩個大群體，也就是我們優質影響力的目標，都有 3 個主要要求，好嗎？客戶體驗。客戶體驗對於覆蓋範圍、訂單管理和退貨有著非常廣泛的定義。

Clinical training, training that is really hit the mark, and the model has changed over time. You've got to provide a wide range of training, online through social media, through clinical advisory team at the local level. And last but not least, a lot of these are advocates. If you have individuals that they advocate and show results and teach it to other people, and that will have an impact. And that's the definition of what we call community: customer experience, coverage go-to-market, training and education, advocacy or clinical support.

臨床培訓，真正切中要害的培訓，而且模式隨著時間的推移而改變。你必須透過社群媒體、當地的臨床諮詢團隊提供廣泛的線上培訓。最後但並非最不重要的一點是，其中許多人都是倡導者。如果有人提倡並展示成果並將其傳授給其他人，那將會產生影響。這就是我們所謂的社區的定義：客戶體驗、涵蓋市場、培訓和教育、宣傳或臨床支援。

If you take a look at those, and you figure out that what has really been a challenge for us, we haven't done a good job building this referral network. A lot of those have been acquired by. DSOs, we need to work with these specialists to provide support and training to them, study clubs, launch and learn. So they kind of rebuilt that referral network at the local level. We need to make sure the training and education that we provide is relevant. This is exactly what we did in Europe. We took the decision to go at the local level. And then I mentioned local level, I don't even mean countries. We went to Madrid. We went to Barcelona. We went to Paris. We've replicated this model and we have seen growth. We have seen growth continuously. We're doing exactly the same thing in North America.

如果你看一下這些，你會發現這對我們來說確實是一個挑戰，我們在建立這個推薦網絡方面做得還不夠好。其中很多都被收購了。 DSO，我們需要與這些專家合作，為他們提供支援和培訓、學習俱樂部、啟動和學習。因此，他們在當地重建了推薦網絡。我們需要確保我們提供的培訓和教育是相關的。這正是我們在歐洲所做的。我們決定進入地方層級。然後我提到了地方層面，我甚至不是指國家。我們去了馬德里。我們去了巴塞隆納。我們去了巴黎。我們複製了這個模式，並且看到了成長。我們看到了持續的成長。我們在北美正在做同樣的事情。

I'm not suggesting, Jeff, that the product is not an issue. I'm not saying that it's irrelevant. What -- I responded to your question that we are in a good place from brand, from recognition, from product, on pricing, on quality, what we do from our operations, we need to change our commercial execution marketing and training education. That's what we are after. That's what we are doing as we speak.

傑夫，我並不是說該產品不是問題。我並不是說這無關緊要。什麼——我回答了你的問題，我們在品牌、認知度、產品、定價、品質、我們的營運方面處於一個良好的位置，我們需要改變我們的商業執行行銷和培訓教育。這就是我們所追求的。這就是我們現在正在做的事情。

We'll take our next question from Erin Wright with Morgan Stanley.

我們將回答摩根士丹利艾琳·賴特 (Erin Wright) 提出的下一個問題。

And you said you remain cautious on the underlying demand environment, which is obvious. But what did you see on a monthly basis throughout the quarter or year-to-date? And how are -- are there any signs of stabilization in certain pockets of the market that you're looking at or anything to call out on that front in terms of areas where there's disproportion either deterioration or stabilization?

您說您對潛在的需求環境保持謹慎，這是顯而易見的。但是，您在整個季度或今年迄今為止的每月數據中看到了什麼？您正在關注的市場某些領域是否有任何穩定的跡象，或者在這方面有什麼值得指出的領域，無論是惡化還是穩定？

Yes. Thank you, Erin. So it's worth mentioning a couple of things that in China, as you know, Q4 2022 as well as Q1 of 2023, we really didn't have a whole lot of business. First, it was COVID and then VBP and then we have this, for lack of a better word, we have this Zoom Boom that we saw in the U.S. We saw it in Q2 of 2023 in China, and we have seen more of a stabilization of the patient volume, and that's what we are counting on. And that assumption that what we saw in Q3, Q4 is carrying itself forward throughout at least the first months of this year.

是的。謝謝你，艾琳。因此值得一提的是，如您所知，在中國，2022 年第四季和 2023 年第一季度，我們確實沒有很多業務。首先是新冠疫情，然後是VBP，然後我們看到了這個，因為沒有更好的詞了，我們在美國看到了Zoom 的繁榮。我們在2023 年第二季度在中國看到了它，我們看到了更多的穩定患者數量，這就是我們所指望的。我們在第三季和第四季看到的假設至少在今年的前幾個月都會繼續下去。

Outside of that, what we are seeing is the stabilization of a patient volume. We have a really good relationship with a large number of DSOs. That's what they tell us, that's what we see. Spending per patient has been challenging for a lot of these DSOs in the past several months. And that's what we see. And how is that impacted is because of this high-end procedures, adult orthodontic cases, full-arch restoration, $25,000 to $30,000 that can get postponed. So far, during the year, what we have seen is consistent with what we saw in Q4, not a radical change one way or another.

除此之外，我們看到的是患者數量的穩定。我們與大量 DSO 有著非常良好的關係。這就是他們告訴我們的，這就是我們所看到的。在過去的幾個月裡，對於許多 DSO 來說，每位患者的支出一直是一項挑戰。這就是我們所看到的。高端手術、成人矯正病例、全牙弓修復、25,000 至 30,000 美元的費用可能會被推遲，這會受到怎樣的影響。到目前為止，這一年我們所看到的情況與第四季的情況是一致的，而不是某種根本性的改變。

We'll take our next question from Jon Block with Stifel.

我們將回答 Jon Block 和 Stifel 提出的下一個問題。

I guess the first one will be the longer one. It sort of follows up a little bit where Elizabeth and Jeff were going. But Amir, in February '23, so at the Analyst Day, right, 12 months ago, I think we all had about 21% EBITDA margins for 2024. And now we're all going to be about 500 basis points lower as of tomorrow morning. And I know dental has softened, but everyone is dealing with that. And I know you've got VBP and IOS pricing, but again, everyone is dealing with that. It doesn't sound like the trajectory of Spark gross margin ramp has really changed, or at least I haven't picked up on that.

我猜第一個會是更長的。它有點追蹤伊麗莎白和傑夫要去的地方。但是阿米爾，在23 年2 月，所以在12 個月前的分析師日，我認為我們2024 年的EBITDA 利潤率約為21%。而現在，從明天開始，我們的息稅折舊攤銷前利潤率將降低約500 個基點早晨。我知道牙科已經軟化，但每個人都在處理這個問題。我知道你們有 VBP 和 IOS 定價，但同樣，每個人都在處理這個問題。聽起來 Spark 毛利率成長的軌跡並沒有真正改變，或者至少我還沒有註意到這一點。

And none of the other dental companies have 2024 EBITDA margins that are coming anywhere close to compressing, like yours are being revised down to that magnitude. So what I'm just getting jammed up on and maybe you could help is, what is -- this is specific too in regards to Envista. Is it all about implants? Is it the consumables that's being worked down arguably because the decrementals seem so extreme specific to Envista when a lot of those challenges are more dental industry?

其他牙科公司的 2024 年 EBITDA 利潤率都沒有像你們的那樣被下調到如此程度。所以我正在忙著，也許你可以幫忙的是，這也是針對 Envista 的具體情況。一切都與植入有關嗎？是否是消耗品正在減少，因為這些減少似乎對 Envista 來說是如此極端，而其中許多挑戰更多來自牙科行業？

Yes, of course, definitely, I understand where you're coming from. And this is a challenge that we are trying to make sure that we are thoughtful about it, and we put a guidance in place that considers the realities of what we see in place. We are well aware of where we started in '21, '22, where we have ended up in '23. So I want to take us back to by Q4. Stephen talked about that, where we ended up in Q4. The dynamics that you talked about, Jon, is exactly what we have faced. Spark is rapidly growing. It's growing and becoming such a bigger part of our equation. And if you go back really a year ahead of what we have considered where we're not needed to be. That one year ahead has significant impact in that mix equation, one.

是的，當然，當然，我明白你來自哪裡。這是一個挑戰，我們正在努力確保我們深思熟慮，並且我們制定了一個指導方針，考慮到我們所看到的現實。我們很清楚我們從 21 年、22 年開始，到 23 年結束。所以我想在第四季讓我們回到過去。史蒂芬談到了這一點，我們最終進入了第四季度。喬恩，你談到的動態正是我們所面臨的。 Spark 正在快速成長。它正在成長並成為我們方程式中更重要的一部分。如果你真的提前一年回到我們所考慮的不需要我們的地方。未來的一年會對混合方程式產生重大影響，一。

Two, I mentioned that -- I'll repeat it because it's worth mentioning it again, is the Brackets & Wires business is not a business that is growing rapidly, but we have been taking share. And the reason we have been taking share because 1/3 of our business is sitting outside developed market. This business has been growing high single digit, double digit with the high margin. That is not in the picture. It wasn't in the picture. It is not coming back as rapidly as we expect. And not only that, we were faced with the VBP in China, which is really uncertain when it's going to happen. We are assuming second half of this year, we want to be thoughtful again not to be surprised.

第二，我提到過——我會重複一遍，因為值得再次提及的是，支架和電線業務並不是一個快速成長的業務，但我們一直在佔據份額。我們之所以一直佔據份額，是因為我們 1/3 的業務位於已開發市場之外。該業務一直以高個位數、兩位數的高利潤率成長。那不是圖片中的。照片中沒有它。它的恢復速度沒有我們預期的那麼快。不僅如此，我們在中國還面臨 VBP，這真的不確定它何時會發生。我們假設今年下半年，我們希望再次深思熟慮，不要感到驚訝。

This volume that is impacting us on the high-margin areas like Russia and China, it is really radically changing that mix. The North America Nobel, we know we're going to turn this around. There is absolutely no question in my mind because we know exactly where the path and the challenges are, but it's going to take some time. We have to layer some investments here in order to be able to get to that market growth over time. You combine all of that, you put in place, you say I'm not going to make any assumption on macro.

這本書對我們在俄羅斯和中國等高利潤地區產生了影響，它確實從根本上改變了這個結構。北美諾貝爾獎，我們知道我們將扭轉局面。我心中絕對沒有任何疑問，因為我們確切地知道道路和挑戰在哪裡，但這需要一些時間。我們必須在這裡進行一些投資，以便能夠隨著時間的推移實現市場成長。你把所有這些結合起來，你把它們放在適當的位置，你說我不會對宏觀做出任何假設。

The reality is what the realities are. If it changes, absolutely, we'll be the first one to come back and communicate that. But what we see today, what we saw in the past several months is the realities that we are dealing, and then we wanted to make sure that we are thoughtful about this. We put a guidance in place that we can deliver on it. We put the right set of measures and growth and margin in place to be able to deliver on what we promise.

現實就是現實。如果情況發生變化，我們絕對會是第一個回來傳達這種情況的人。但我們今天看到的、過去幾個月看到的都是我們正在處理的現實，然後我們想確保我們對此深思熟慮。我們制定了可以交付的指南。我們採取了一套正確的措施、成長和利潤，以兌現我們的承諾。

Okay. That's very helpful. And maybe just a quick follow-up. Stephen, this one might be for you, but just a lot of moving parts with the 4Q GM compressing notably. So if we say EBITDA margins are down 160 basis points year-over-year sort of going from the [18] to the midpoint of next year. Any way to think about that, just like sort of the breakdown between GM and OpEx because obviously, you're still going to be sort of investing in the business. So any color between those would be helpful.

好的。這非常有幫助。也許只是快速跟進。史蒂芬，這個可能適合你，但是有很多移動部件，4Q GM 壓縮顯著。因此，如果我們說 EBITDA 利潤率年減 160 個基點，相當於從 [18] 到明年的中點。不管怎樣思考這個問題，就像通用汽車和營運支出之間的分類一樣，因為顯然，你仍然會對該業務進行某種投資。因此，介於兩者之間的任何顏色都會有所幫助。

Yes. So I think you can assume -- given where our guidance, I think you can assume that our gross margins for the year, year-over-year will be down a little bit. That would be our expectation. Obviously, Q4 with margin -- gross margins were quite a bit lower. That's a little bit more related to some specific issues that we had in Q4. So I think for the year, it's a better comparison for the full year, with margins down a little bit due to mix.

是的。因此，我認為您可以假設 - 考慮到我們的指導，我認為您可以假設我們今年的毛利率將同比略有下降。這將是我們的期望。顯然，第四季的利潤率——毛利率要低得多。這與我們在第四季度遇到的一些具體問題有更多關係。所以我認為，就今年而言，這是對全年更好的比較，由於混合，利潤率略有下降。

We'll take our next question from Nathan Rich with Goldman Sachs.

我們將回答高盛內森·里奇 (Nathan Rich) 提出的下一個問題。

I guess, first, as we think about the margin progression over the year. You talked about seeing improvement through the year and by 4Q. I guess if you can maybe help us think about the magnitude or range that we should think about where the company is targeting to end the year relative to where you're starting.

我想，首先，當我們考慮這一年的利潤率進展時。您談到了今年和第四季的情況有所改善。我想你是否可以幫助我們思考我們應該考慮公司年底目標相對於你的開始目標的幅度或範圍。

Yes. Thank you, Nate. So let's just work through that a little bit and see if we can build a kind of a bridge in here. So every quarter, the spot margin has improved, every quarter. It's coming up every quarter, and we expect that trend to continue. As it ramps up to double the business over 3 years, our goal is to get it to the fleet average. So for that to take place, we got to see this progression every quarter.

是的。謝謝你，內特。因此，讓我們稍微解決一下這個問題，看看我們是否可以在這裡建立一座橋樑。因此，每個季度，現貨利潤率都在提高。每個季度都會出現這種情況，我們預計這種趨勢將持續下去。隨著業務量在三年內翻倍，我們的目標是使其達到機隊平均水準。因此，為了實現這一目標，我們每個季度都必須看到這一進展。

And the other part of that equation is Nobel. Nobel is one of our most profitable businesses. We expect that to get to a market proxies by end of the year. So we start where we were for the whole year in Q4 and start making progress every quarter we're going to see this margin progression throughout the year. We think Q1 is going to be nominally better than Q4. And we expect, as we go through the year, we want to see that progression every quarter. We see better performance on margin as we get to enter Q4. And that's why we put that guidance in place to take a look at a range that we can manage with the opportunity if macro improves, to respond to it as necessary.

該等式的另一部分是諾貝爾。諾貝爾是我們最賺錢的業務之一。我們預計在今年年底前獲得市場代理。因此，我們從第四季度全年的情況開始，每個季度都開始取得進展，我們將在全年看到利潤率的進展。我們認為第一季名義上會好於第四季。我們預計，在這一年中，我們希望每個季度都能看到這種進展。進入第四季度，我們看到利潤率表現更好。這就是為什麼我們制定了這項指導意見，以研究我們可以在宏觀經濟改善的情況下管理的範圍，並在必要時做出反應。

Okay. Great. And if I could just ask a quick follow-up. I wanted to just get a bit more details on your outlook for China. You had good performance in the quarter. I kind of -- I understand it was against an easier comp. It sounds like you have one more quarter like that in the first quarter of the year.

好的。偉大的。如果我能快速跟進一下就好了。我想了解更多關於您對中國的展望的細節。您在本季的表現不錯。我有點——我知道這是針對更簡單的比賽。聽起來今年第一季還有一個這樣的季度。

But I guess beyond that, could you maybe just talk about how you feel about the demand environment in China overall and what type of growth you'd expect as the comparisons normalize? And I just wanted to also clarify, I think you said you may be expecting a VBP related to wires and brackets in the second half of the year. I just wanted to make sure I caught that right.

但我想除此之外，您能否談談您對中國整體需求環境的看法，以及隨著比較正常化，您預計會出現什麼樣的成長？我只是想澄清一下，我想你說過你可能會在下半年期待與電線和支架相關的 VBP。我只是想確保我聽對了。

So what we saw in Q4, China sales increased by almost 15%. And that's -- as you mentioned, that's a good indication that proxies play a really important role in it. But if I take a look at the entire year, China was flat. And normally, about 10% of our business has been growing double digits for years. And so in 2024, what we see in here, Q1, because of easier comp, we expect a strong growth. As we go through Q2 to Q4, we're going to have a more difficult comp in here. VBP of implant comes in place, so we know exactly what that will look like, but it's more of a moderate thing.

所以我們在第四季看到，中國銷售額成長了近 15%。正如您所提到的，這很好地表明代理在其中發揮著非常重要的作用。但如果我看一下全年，中國的表現持平。通常情況下，我們大約 10% 的業務多年來一直以兩位數成長。因此，到 2024 年，我們在這裡看到的第一季度，由於比較容易，我們預計會出現強勁成長。當我們經歷第二季到第四季時，我們將在這裡進行更困難的比賽。植入物的 VBP 已經就位，所以我們確切地知道它會是什麼樣子，但它更像是一個溫和的事情。

Our assumption is that the ortho VBP is going to be in place in the second half. And that's how we are planning for it. If it doesn't happen, then, okay, we will have a different model to discuss. We expect some volatility in China. And the reason for it is purely because of a consumer spending and sentiment. What we hear from our team, what you hear, I'm sure, the housing crisis, the slower growth and government intervention in some of the areas, we are considering all of that to be an issuance that we need to deal with. But we have not taken our eyes of China.

我們的假設是正交 VBP 將在下半年到位。這就是我們的計劃。如果沒有發生，那麼，好吧，我們將討論不同的模型。我們預計中國會出現一些波動。原因純粹是因為消費者的支出和情緒。我們從我們的團隊那裡聽到的，我相信你聽到的，住房危機、成長放緩以及政府對某些領域的干預，我們正在考慮所有這些都是我們需要處理的問題。但我們並沒有把目光轉向中國。

We think China is going to be a growth driver for Envista. It's underpenetrated. We've got a great reputation and ramp. Our specialty business is really well positioned. We just need to deal with these short-term issues and find a new model to transform our business, as we did with our implant, did that on ortho, get ourselves in a better place on equipment and consumable, and we expect this to stabilize as we go forward.

我們認為中國將成為恩威斯塔的成長動力。它的滲透不足。我們擁有良好的聲譽和發展勢頭。我們的專業業務定位非常有利。我們只需要處理這些短期問題，找到一種新的模式來改變我們的業務，就像我們在植入體上所做的那樣，在正交設備上做的那樣，讓我們在設備和消耗品方面處於較好的位置，我們希望這種情況能夠穩定下來當我們前進時。

The patient demand in China, based on the latest information that we have, seems to be resilient, has stabilized. We're not getting any major feedback that we have seen a major change. As you can imagine, February 9, Chinese New Year, through 16, we're going to have a little bit of a break in here. Our hope is that after they come back, we're going to see that momentum to continue.

根據我們掌握的最新消息，中國的患者需求似乎具有彈性，而且已經穩定。我們沒有收到任何重大回饋表明我們看到了重大變化。你可以想像，2 月 9 日，農曆新年，到 16 日，我們將在這裡稍微休息一下。我們希望他們回來後，我們會看到這種勢頭繼續下去。

And I'll now turn the call back to our speakers for any closing comments.

現在我將把電話轉回給我們的發言人，以徵求結束語。

Thank you very much for spending time with us today. We really appreciate it. We look forward to talking -- look forward to delivering on our 2024 key priorities, and we'll talk to you next quarter. Thank you very much.

非常感謝您今天抽出時間與我們在一起。我們真的很感激。我們期待對話—期待實現 2024 年的關鍵優先事項，我們將在下個季度與您對話。非常感謝。

This does conclude today's program. Thank you for your participation, and you may now disconnect.

今天的節目到此結束。感謝您的參與，您現在可以斷開連接。