Envista Holdings Corp (NVST) 2024 Q1 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 First Quarter 2024 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 2024 年第一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 current President and Chief Executive Officer; and Paul Keel, who will assume the position of President and CEO later this afternoon.

下午好，感謝您加入通話。今天與我在一起的是我們現任總裁兼執行長 Amir Aghdaei；保羅·基爾 (Paul Keel) 將在今天下午晚些時候就任總裁兼首席執行官。

Given that today's Paul's first day with Envista, Amir and I will be leading the call and will handle the Q&A at the end of the prepared remarks. Before we begin, 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.

鑑於今天是保羅與 Envista 的第一天，我和阿米爾將主持電話會議，並在準備好的演講結束時處理問答。在我們開始之前，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均可在「投資者」部分取得我們的網站 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.

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 our year-over-year performance. Unless otherwise noted, references in these remarks to company-specific financial metrics relate to the first quarter of 2024 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我們同比業績的其他因素。除非另有說明，否則這些評論中提到的公司特定財務指標涉及 2024 年第一季度，而提到的財務指標的同期增減則指的是同比。

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. These forward-looking statements are subject to a matter -- a number of risks and uncertainties and including those set forth in our SEC filings, and 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 whereas required by law.

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。這些前瞻性陳述受到一些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，我們不承擔更新任何前瞻性陳述的義務，除非法律要求。

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 First Quarter 2024 Earnings Call. We appreciate you taking the time to join us today. Before we discuss our first quarter earnings, I would like to take this time to quickly discuss our leadership transition.

謝謝你，史蒂芬。下午好，歡迎參加 Envista 2024 年第一季財報電話會議。我們感謝您今天抽出時間加入我們。在我們討論第一季收益之前，我想利用這個時間快速討論我們的領導過渡。

In late February, the Board announced that they were launching a process to find my successor to lead Envista through the next phase of our development. At the time, our Board indicated that they were looking for an accomplished public company CEO who had successfully ran complex multinational and multidivisional businesses. Ideally, the Board wanted to find someone who had experience in dental or medtech, with a strong commitment to continuous improvement and lean operating principles.

2 月底，董事會宣布他們正在啟動尋找我的繼任者的流程，以領導 Envista 進入下一階段的發展。當時，我們的董事會表示，他們正在尋找一位成功經營複雜的跨國和多部門業務的成功上市公司執行長。理想情況下，董事會希望找到具有牙科或醫療技術經驗、堅定致力於持續改進和精益運營原則的人。

They were looking for a unique candidate who could build on our legacy and further accelerate our vision of digitizing, personalizing, and democratizing dental care. We're excited to formally introduce you to Paul Keel, who will be appointed President and Chief Executive Officer later this afternoon.

他們正在尋找一位獨特的候選人，能夠繼承我們的傳統，進一步加速我們實現牙科護理數位化、個人化和民主化的願景。我們很高興向您正式介紹 Paul Keel，他將於今天下午晚些時候被任命為總裁兼首席執行官。

Paul joins Envista from Smiths Group, a U.K.-based engineering and technology company with annual revenue of around $4 billion. During his time, the Smiths power transformed the portfolio through disciplined M&A and organic growth investments. Prior to Smiths, Paul had spent 16 years at 3M, where he had a variety of roles, leading -- including leading both medical and dental businesses. Prior to 3M, Paul has spent time at GE, General Mills and McKinsey. Paul's background, experience and track record make him uniquely qualified to lead Envista as we move forward.

Paul 在加入 Envista 之前任職於 Smiths Group，這是一家英國工程技術公司，年收入約 40 億美元。在他任職期間，史密斯家族透過嚴格的併購和有機成長投資改變了投資組合。在加入 Smiths 之前，Paul 在 3M 工作了 16 年，擔任過多種職務，其中包括領導醫療和牙科業務。在加入 3M 之前，Paul 曾在 GE、General Mills 和麥肯錫工作。 Paul 的背景、經驗和業績記錄使他具備領導 Envista 前進的獨特資格。

Paul, welcome to Envista.

保羅，歡迎來到恩維斯塔。

Thanks, Amir. I want to start by thanking you for all you have done for Envista and the dental community. I have known and admired Envista and it's predecessor companies for many years, and have been impressed with everything that you and the team have accomplished over the past decade.

謝謝，阿米爾。首先，我要感謝您為 Envista 和牙科界所做的一切。我認識並欽佩 Envista 及其前身公司很多年，並且對您和團隊在過去十年中所取得的一切印象深刻。

In addition to standing up Envista as a publicly traded company, you've advanced the portfolio, strengthened operations and articulated a clear and compelling vision for the company's future. It is an honor and a privilege for me to now take over the leadership of Envista as we move into our next phase of growth.

除了使 Envista 成為上市公司之外，您還推進了產品組合、加強了運營，並為公司的未來制定了清晰且令人信服的願景。我很榮幸現在能夠接手 Envista 的領導權，幫助我們進入下一階段的發展。

Before I turn the call back over to Amir and Stephen, I'll take this opportunity to let you know why I chose to leave a high-performing company in Smiths to join an equally wonderful company here at Envista?

在我把電話轉回給阿米爾和史蒂芬之前，我會藉此機會讓你們知道為什麼我選擇離開史密斯一家表現出色的公司而加入恩維斯塔一家同樣出色的公司？

First and foremost, I am passionate about the powerful mission of improving patients' lives that is shared by all, who participate in the dental industry. My colleagues, our customers, our peers and our partners. Innovation has been a constant pillar across my career and Envista is a company where technology clearly matters. And above all, Oral Care is a patient-centric business. where a relentless focus on customers, a clear strength of Envista serves all stakeholders. My focus over the coming weeks will be threefold: customers, colleagues and operations.

首先，我對改善患者生活這項強大使命充滿熱情，這是所有牙科行業參與者共同承擔的使命。我的同事、我們的客戶、我們的同行和我們的合作夥伴。創新一直是我職涯中不變的支柱，而 Envista 是一家科技顯然很重要的公司。最重要的是，口腔護理是一項以患者為中心的業務。 Envista 對客戶的不懈關注，為所有利害關係人提供了明顯的優勢。未來幾週我的重點將放在三個方面：客戶、同事和營運。

With respect to the first, I'll hop on a plane next week for the Envista Summit in Barcelona, where I'll connect and reconnect with customers and partners. I have heard from a great many already and I'm grateful to the warm welcome. In terms of colleagues, I couldn't be more impressed with the leaders that I have met this far, and I'm looking forward to engaging with the entire organization. We are focused on recruiting a new leader for Nobel Biocare as well as a permanent CFO, and we're encouraged by the prospects.

關於第一個問題，我將在下週搭乘飛機參加巴塞隆納的 Envista 峰會，在那裡我將與客戶和合作夥伴建立並重新建立聯繫。我已經收到了很多人的來信，我很感謝大家的熱烈歡迎。就同​​事而言，到目前為止我所見過的領導者給我留下了深刻的印象，我期待與整個組織接觸。我們專注於為 Nobel Biocare 招募一位新領導者以及一位常任財務官，我們對前景感到鼓舞。

And as it pertains to operations, I'm a lifelong believer in the compounding power of continuous improvement. I learned this firsthand at GE and 3M, and we implemented it to good effect at Smiths. No one does this better than the Danaher family of companies. And I will start my own EBS immersion shortly after this call, building on my own experiences over the previous 3-plus decades.

就營運而言，我終生相信持續改善的複合力量。我在 GE 和 3M 親身了解了這一點，並且我們在 Smiths 實施了該方法並取得了良好效果。沒有人比丹納赫家族公司做得更好。在這次電話會議後不久，我將根據自己過去 3 多年的經驗開始自己的 EBS 沉浸式體驗。

Envista is an amazing company with leading positions in all key oral care segments, deep and distinctive global capabilities, enviable gross margins and cash characteristics and a world-class team. I believe there is significant opportunity to create value for all stakeholders. I understand the work we have ahead and I am energized by the opportunity. I believe in this company, and I have voted with my feet. Much more to come in the weeks and months ahead as I begin to meet and engage with as many of you as possible.

Envista 是一家了不起的公司，在所有關鍵口腔護理領域都處於領先地位，擁有深厚而獨特的全球能力、令人羨慕的毛利率和現金特徵以及世界一流的團隊。我相信有很大的機會為所有利害關係人創造價值。我了解我們未來的工作，並且我對這個機會感到充滿活力。我相信這家公司，我已經用腳投票了。在接下來的幾週和幾個月裡，當我開始與盡可能多的人見面並互動時，還會有更多的事情發生。

And with that, I'll turn it back over to Amir.

有了這個，我會把它轉回給阿米爾。

Thanks, Paul. Turning to our results. The first quarter proved challenging as we delivered modest growth while continuing to prioritize investments to drive long-term growth and profitability. In the quarter, we saw core sales growth of 0.4% and achieved an adjusted EBITDA margin of 14%. The lower margin was driven by unfavorable mix, coupled with the strategic investments intended to reignite growth in our North American implant business and drive margin improvements in Spark.

謝謝，保羅。轉向我們的結果。事實證明，第一季充滿挑戰，因為我們實現了適度成長，同時繼續優先考慮投資以推動長期成長和獲利能力。本季度，我們的核心銷售額成長了 0.4%，調整後 EBITDA 利潤率為 14%。利潤率下降的原因是不利的組合，加上旨在重新激發北美植體業務成長並推動 Spark 利潤率提高的策略投資。

While we haven't hit the inflection point, we are confident that our investments will drive long-term value creation.

雖然我們尚未達到轉折點，但我們相信我們的投資將推動長期價值創造。

Before I turn it over to Stephen to discuss our first quarter results in more detail, I want to take this opportunity to provide more color in the current operating environment and then offer a quick update on our progress towards our strategic priorities.

在我將其交給史蒂芬更詳細地討論我們的第一季業績之前，我想藉此機會為當前的營運環境提供更多信息，然後快速介紹我們在實現戰略重點方面的進展。

Globally, while the macroeconomic environment remains large and stable, we continue to see mixed trends across the dental market. Overall, patient traffic remains resilient. However, demand appears to be assumed more towards basic hygiene and restorative treatments. Demand for higher-end specialty procedures including adult orthodontic cases and full arch implant restorations remain more muted.

在全球範圍內，雖然宏觀經濟環境仍然龐大且穩定，但我們仍然看到整個牙科市場的趨勢好壞參半。整體而言，患者流量仍保持彈性。然而，需求似乎更集中在基本衛生和恢復性治療。對成人矯正病例和全牙弓植牙修復等高端專業手術的需求仍然較為疲軟。

Further, private practice clinicians and DSOs remain cautious about near-term investments in both equipment and clinical level inventories. Despite some of the near-term challenges, we remain cautiously optimistic about demand trends in 2024. Long term, we are confident that patients will prioritize dental care and the clinicians will proactively invest in areas that help them digitize their practice, making them more productive and ensuring that they can provide high-quality, personalized care.

此外，私人執業臨床醫生和 DSO 對設備和臨床庫存的近期投資仍持謹慎態度。儘管存在一些近期挑戰，我們對 2024 年的需求趨勢仍然持謹慎樂觀態度。並確保他們能夠提供高品質、個人化的護理。

Focusing on Envista's progress in Q1. Overall, our orthodontic business continues to outperform the market driven by sustained performance in Spark clear aligners. During the quarter, we saw over 15% growth in Spark with double-digit sequential growth in the number of active doctors.

重點關注Envista第一季的進展。總體而言，在 Spark 透明矯正器的持續表現的推動下，我們的矯正業務持續跑贏市場。在本季度，我們看到 Spark 成長了 15% 以上，活躍醫生數量實現了兩位數的環比增長。

Our growth remains widespread with robust progress both in North America and Europe as well as rapid growth in our emerging markets. We believe that Ormco's comprehensive portfolio, including brackets and wires and aligners and our focus under orthodontic specialists creates a sustained competitive advantage and a more stable business with ample opportunity for long-term share gains.

我們的成長仍然廣泛，在北美和歐洲均取得強勁進展，在新興市場也快速成長。我們相信，Ormco 的全面產品組合（包括托架、鋼絲和矯正器）以及我們對矯正專家的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。

Our implant business declined modestly in the first quarter as very strong growth in China was offset by modestly weaker market demand in Western Europe and continued underperformance in North America.

我們的植體業務在第一季小幅下滑，因為中國的強勁成長被西歐市場需求的小幅疲軟和北美的持續表現不佳所抵消。

As we have discussed, we are taking aggressive steps to address our commercial performance issues in North America. We have overhauled our commercial leadership team, are upgrading our training and education capabilities, improving our marketing and adding significant commercial resources to help accelerate our growth.

正如我們所討論的，我們正在採取積極措施來解決北美的商業績效問題。我們對商業領導團隊進行了全面改革，正在提升我們的培訓和教育能力，改善我們的行銷並增加重要的商業資源，以幫助加速我們的成長。

Utilizing our European playbook, we have refocused the sales team, refined our priorities, enhance our standard work, and rolled out proven sales tools to drive growth.

利用我們的歐洲策略，我們重新調整了銷售團隊的重點，完善了我們的優先事項，增強了我們的標準工作，並推出了經過驗證的銷售工具來推動成長。

In the first quarter, in North America alone, we provided training to over 3,000 clinicians and clinical staff members. We further increased the number of [infill] smart courses aimed at developing and supporting the referral networks of our specialist customers.

第一季度，僅在北美，我們就為 3,000 多名臨床醫生和臨床工作人員提供了培訓。我們進一步增加了[填充]的智慧課程數量，旨在開發和支援我們的專業客戶的推薦網絡。

While it's obviously too early to declare victory, we are confident that we are taking the right steps to address our performance issues and believe that our strong brands, leading product portfolio, and dedicated community of implant specialists position us to return to market level growth as we exit 2024.

雖然現在宣布勝利顯然還為時過早，但我們相信我們正在採取正確的步驟來解決我們的績效問題，並相信我們強大的品牌、領先的產品組合和專注的植體專家社群使我們能夠恢復市場水平增長我們將退出 2024 年。

While our adjusted EBITDA margins were below historical level in the quarter, we are steadily making progress against our long-term goals. The Spark team continues to drive improvements in long-term profitability by focusing on pricing, portfolio management and manufacturing cost reductions. In the first quarter, we successfully held 6 President Kaizen events in 4 countries targeted at driving automation, digitation and productivity across order entry, design and manufacturing. We further redesigned our packaging to improve the customer experience while reducing both material and shipping costs.

儘管本季調整後的 EBITDA 利潤率低於歷史水平，但我們正在朝著長期目標穩步取得進展。 Spark 團隊透過專注於定價、產品組合管理和降低製造成本，持續推動長期獲利能力的提高。第一季度，我們在 4 個國家成功舉辦了 6 場總裁改善活動，旨在推動訂單輸入、設計和製造的自動化、數位化和生產力。我們進一步重新設計了包裝，以改善客戶體驗，同時降低材料和運輸成本。

Our continuous improvement actions have resulted in significant reductions in our production cost per aligner. The team remains focused on driving operational improvement to bring Spark's margin to our fleet average.

我們的持續改善行動顯著降低了每個矯正器的生產成本。該團隊仍然專注於推動營運改進，使 Spark 的利潤率達到我們機隊的平均水平。

Outside of Spark, we further took action to streamline our business and reduce costs across the portfolio. We expect to see the impact of these cost savings as we move through 2024. One of our priorities remains building a better, stronger and more growth-oriented portfolio. A primary component of this goal is continuing the transformation of our traditional equipment business into a comprehensive diagnostic solution business, combining best-in-class imaging solutions with industry-leading AI and diagnostic capabilities.

在 Spark 之外，我們進一步採取了行動來簡化我們的業務並降低整個產品組合的成本。我們預計到 2024 年將看到這些成本節省的影響。這一目標的主要組成部分是繼續將我們的傳統設備業務轉型為全面的診斷解決方案業務，將一流的成像解決方案與業界領先的人工智慧和診斷能力相結合。

In Q1, DEXIS launched it's dental implant ecosystem, giving clinicians the ability to manage the entire implant workflow from diagnosis to delivery with one integrated tool set. Additionally, the recently released updates to our DEXIS IS ScanFlow software, further expanding our AI capabilities to boost clinicians productivity by automating precise data capture and simplifying [key] steps in case planning.

第一季度，DEXIS 推出了植牙生態系統，使臨床醫生能夠使用一套整合工具來管理從診斷到交付的整個植體工作流程。此外，最近發布的 DEXIS IS ScanFlow 軟體更新進一步擴展了我們的 AI 功能，透過自動化精確資料收集和簡化病例規劃中的[關鍵]步驟來提高臨床醫生的工作效率。

With these tools, clinicians now efficiently, digitize the soft and hard tissues after oral cavity for fixed, removable or implant cases. As DEXIS evolves into a more differentiated solutions focused business, we have made the decision to concentrate our focus on geographies and product categories with the most competitive advantage. While this has created some short-term headwinds, it should position us for faster growth as we move forward.

借助這些工具，臨床醫生現在可以有效地將固定、可移動或植入病例口腔後的軟組織和硬組織數位化。隨著 DEXIS 發展成為更差異化的專注於解決方案的業務，我們決定將重點放在最具競爭優勢的地區和產品類別上。雖然這造成了一些短期阻力，但它應該使我們在前進過程中能夠實現更快的成長。

We believe our improved focus is already starting to pay off as we saw our North America business delivered solid growth in Q1. Despite continued softness in demand for large equipment, we expect our North American diagnosis business to deliver mid-single-digit growth for the full year 2024.

我們相信，我們改進的重點已經開始得到回報，因為我們看到我們的北美業務在第一季實現了穩健成長。儘管大型設備的需求持續疲軟，但我們預計我們的北美診斷業務將在 2024 年全年實現中個位數成長。

Returning to full year growth in North America signals an important turning point in the evolution of our Equipment & Consumables segment. I will now turn the call over to Stephen to go through our first quarter financials and provide more details on our segment performance.

北美地區恢復全年成長標誌著我們的設備和消耗品部門發展的重要轉折點。我現在將把電話轉給史蒂芬，讓他查看我們第一季的財務狀況，並提供有關我們部門業績的更多詳細資訊。

Thanks, Amir. In the first quarter, we delivered sales of $623.6 million, on a reported basis, this represents a slight decrease over the first quarter of 2023. Adjusting for the impact of currency exchange rates, core sales for the quarter grew 0.4%. This reflects growth in our Specialty Products and Technologies segment, offset by a slight decline in our Equipment & Consumables segment.

謝謝，阿米爾。根據報告，第一季我們的銷售額為 6.236 億美元，比 2023 年第一季略有下降。這反映了我們的特種產品和技術部門的成長，但被我們的設備和消耗品部門的小幅下降所抵消。

From a geographic perspective, our developed markets declined 1.7% with North America and Western Europe declining by a similar amount. Our emerging markets grew 10.2% in the quarter with very strong growth in China, offset by continued volatility in Russia as well as weaker demand in Latin America.

從地理角度來看，我們的已開發市場下降了 1.7%，其中北美和西歐下降了類似的幅度。我們的新興市場本季成長了 10.2%，其中中國成長非常強勁，但被俄羅斯持續波動以及拉丁美洲需求疲軟所抵消。

Our first quarter result -- our first quarter adjusted gross margin was 57.4%, a decrease of 70 basis points compared to the prior year. The decrease in gross margin was driven by unfavorable product mix and VBP driven price reductions. While our gross margin declined year-over-year, we did see a sequential improvement driven by higher sales of consumables, reduction in Spark manufacturing costs and our other productivity initiatives.

我們第一季的業績－第一季調整後毛利率為 57.4%，較上年下降 70 個基點。毛利率下降是由於不利的產品結構和 VBP 推動的降價所致。雖然我們的毛利率年減，但我們確實看到了由於消耗品銷量增加、Spark 製造成本降低以及其他生產力舉措推動的環比改善。

Our adjusted EBITDA margin for the quarter was 14%, which is 420 basis points lower than in Q1 of 2023. The lower adjusted EBITDA margins were partially anticipated and primarily driven by lower gross margins, unfavorable geographic mix and significant investments in both Spark and the turnaround in North America implants.

我們本季調整後的EBITDA 利潤率為14%，比2023 年第一季低420 個基點。 Spark 和北美植體的扭虧為盈。

Our first quarter adjusted diluted EPS was $0.26 compared to $0.38 in the comparable period of the prior year.

我們第一季調整後攤薄每股收益為 0.26 美元，而去年同期為 0.38 美元。

Core revenue in our Specialty Products & Technologies segment increased by 0.8% compared to the first quarter of 2023. Solid growth in Western Europe and very strong growth in emerging markets was offset by declines in North America.

與 2023 年第一季相比，我們的特種產品和技術部門的核心收入成長了 0.8%。

Within this segment, our orthodontic business grew low single digits with Spark continuing to outperform. Our Brackets & Wire business declined mid-single digits as solid growth in emerging markets could not offset weaker demand in developed markets. Despite slower growth in the quarter, we remain confident that our orthodontic business is outperforming the market with clinicians continuing to value our comprehensive portfolio and our focus on the orthodontic specialist.

在這一細分市場中，我們的矯正業務以低個位數成長，而 Spark 繼續表現出色。我們的支架和電線業務下降了中個位數，因為新興市場的穩健成長無法抵消已開發市場需求的疲軟。儘管本季度成長放緩，但我們仍然相信我們的正畸業務表現優於市場，臨床醫生繼續重視我們全面的產品組合以及我們對正畸專家的關注。

Our Implant business declined modestly in the first quarter as strong growth in China was offset by underperformance in North America. Encouragingly, our Value Implant business grew in the quarter, driven by strong growth in both Western Europe and China.

我們的植體業務在第一季小幅下滑，因為中國的強勁成長被北美的表現不佳所抵消。令人鼓舞的是，在西歐和中國強勁成長的推動下，我們的價值植入業務在本季實現了成長。

For the first quarter, our Specialty Products & Technologies segment had an adjusted operating profit of 15.1%. This is down 650 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 and significant investments in our North American Implant and Spark businesses. As discussed, we are continuing to make substantial investments in our Implant business to set us up for long-term growth.

第一季度，我們的特種產品和技術部門調整後營業利潤為 15.1%。與去年同期相比下降了 650 個基點，下降的主要原因是不利的組合、中國 VBP 計劃的定價影響以及我們對北美植入和 Spark 業務的重大投資。正如所討論的，我們將繼續對植體業務進行大量投資，為我們的長期成長奠定基礎。

Investments in the quarter included adding over 60 sales and marketing resources, significantly increasing our training education activities and making onetime investments in a deep analysis of our market and our customer segmentation.

本季的投資包括增加 60 多個銷售和行銷資源、顯著增加我們的培訓教育活動以及對市場和客戶細分進行深入分析的一次性投資。

Turning to our Equipment & Consumables segment. Core sales in the first quarter decreased by 0.2% compared to the first quarter of 2023. Our Diagnostic business declined mid-single digits in the first quarter versus the prior year. The decline was primarily driven by weakness outside North America. Encouragingly, our North American business grew as demand stabilized. Emerging markets saw a large decline in the quarter, driven by the combined effect of the muted macro conditions and our deemphasizing of nonstrategic geographies and solutions. With these efforts, we continue to refine our focus and concentrate our energy in markets where we can build and maintain a sustainable competitive advantage.

轉向我們的設備和消耗品部分。與 2023 年第一季相比，第一季的核心銷售額下降了 0.2%。下降的主要原因是北美以外地區的疲軟。令人鼓舞的是，我們的北美業務隨著需求的穩定而成長。由於宏觀環境疲軟以及我們不再強調非戰略地區和解決方案的綜合影響，新興市場本季大幅下滑。透過這些努力，我們繼續完善我們的重點，將精力集中在我們能夠建立和維持永續競爭優勢的市場。

Our consumable business grew low single digits in the quarter, driven by the stabilization of the North American distribution channel. Patient demand in North America remains resilient, and we continue to strengthen our partnerships with our distributors to drive sell-out. Outside of North America, weaker patient demand led to some softness in sell-out. As we move through 2024, our focus remains on partnering with our distributors to drive sell-out of our solutions. We will continue to actively manage price, and we believe that we are well positioned to gain share in our focus markets.

在北美分銷通路穩定的推動下，我們的消費品業務本季實現低個位數成長。北美的患者需求仍然強勁，我們將繼續加強與經銷商的合作夥伴關係以推動銷售。在北美以外，患者需求疲軟導致銷售疲軟。進入 2024 年，我們的重點仍然是與經銷商合作，以推動我們解決方案的銷售。我們將繼續積極管理價格，我們相信我們有能力在我們的重點市場中獲得份額。

Equipment & Consumables adjusted operating profit margin was 21.7% in the first quarter of 2024 versus 21.8% in Q1 of 2023. As anticipated, we saw a greater than 200 basis point sequential improvement in operating margins as our consumables business stabilized, and we improved our overall sales mix.

設備和消耗品調整後營業利潤率2024 年第一季為21.7%，而2023 年第一季為21.8%。個基點以上，我們改善了整體銷售組合。

As we move through 2024, we continue to streamline our operations and sharpen our focus in this segment, and we believe that we are well positioned to accelerate growth and improve operating margins.

進入 2024 年，我們將繼續精簡營運並加強對這一領域的關注，我們相信我們已做好充分準備，可以加速成長並提高營運利潤率。

In the first quarter, we generated free cash flow of $29.3 million, which was a significant improvement versus the first quarter of the prior year. Our increased cash flow was driven primarily by improved vendor management, lower incentive compensation payments and lower CapEx. We continue to focus on improving our free cash flow and remain committed to our longer-term goal of delivering annual free cash flow in excess of net income.

第一季度，我們產生了 2,930 萬美元的自由現金流，與去年第一季相比有了顯著改善。我們現金流的增加主要是因為供應商管理的改善、激勵薪酬的降低和資本支出的降低。我們繼續專注於改善我們的自由現金流，並繼續致力於實現年度自由現金流超過淨利潤的長期目標。

I'll now turn the call over to Amir to provide some closing comments.

我現在將把電話轉給阿米爾，以提供一些結束語。

Thanks, Stephen. We remain confident in our strategy and long-term outlook. The dental market is attractive, underpenetrated and is supported by solid growth trends. Our businesses are 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。牙科市場極具吸引力，但滲透率較低，並受到穩健成長趨勢的支持。我們的業務具有策略差異化，並且我們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。

The Envista team remains focused on 3 key priorities to improve our short-term execution and build the foundation for long-term value creation. First, we plan to further accelerate our Orthodontic business by providing orthodontic specialists with a differentiated and integrated suite of treatment options, including Brackets & Wires and Clear Aligners. We will continue to drive sequential margin improvements in our Spark business.

Envista 團隊仍然專注於 3 個關鍵優先事項，以提高我們的短期執行力並為長期價值創造奠定基礎。首先，我們計劃透過為矯正專家提供差異化和綜合的治療方案（包括托架和鋼絲以及透明對準器）來進一步加速我們的矯正業務。我們將繼續推動 Spark 業務的利潤率持續改善。

Our second area of focus is driving growth of our Implant business. Globally, we plan to position our Premium and Value implant franchises to provide full solutions across the implant workflow, including regenerative and prosthetic offerings. We will utilize our premier diagnostics and digital capabilities to create differentiation and win customers. Our top priority in this effort is to improve our commercial execution in North America. We have made targeted investments and now see a path to reinvigorating growth. Our goal is to be growing at or above the market as we exit 2024.

我們的第二個重點領域是推動植體業務的成長。在全球範圍內，我們計劃定位我們的優質和超值植體特許經營權，以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。我們這項工作的首要任務是改善我們在北美的商業執行力。我們已經進行了有針對性的投資，現在看到了一條重振成長的道路。我們的目標是在 2024 年退出時實現成長至市場水平或高於市場水平。

Finally, as we move through 2024, we will further utilize Envista Business System, EBS, to optimize our cost structure. We intend to reduce the structural cost by an additional $30 million annually with the full year impact being realized in 2025. Our continuous improvement culture will allow us to further consolidate our operations, streamline our corporate functions and drive out G&A spending across the organization.

最後，隨著 2024 年的到來，我們將進一步利用 Envista 業務系統 (EBS) 來優化我們的成本結構。我們打算每年額外減少 3000 萬美元的結構成本，並在 2025 年實現全年影響。

Our purpose is to partner with dental professionals to improve patients' 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。

On a personal note, I would like to take this opportunity to thank the Envista team, our customers, our partners and our shareholders for allowing me to lead this business over the past 9 years. I'm proud of what we have accomplished, and I'm committed to the long-term success of Envista.

就我個人而言，我想藉此機會感謝 Envista 團隊、我們的客戶、合作夥伴和股東讓​​我在過去 9 年裡領導這項業務。我為我們所取得的成就感到自豪，並致力於 Envista 的長期成功。

I will remain both a senior adviser and shareholder and remain excited for the future of Envista.

我將繼續擔任高級顧問和股東，並對 Envista 的未來保持興奮。

Thanks, Amir. That concludes our formal comments. Amir and I will now be available to take your questions.

謝謝，阿米爾。我們的正式評論到此結束。阿米爾和我現在可以回答你們的問題。

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

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

Congrats on your next endeavors, and it's really exciting to (inaudible) going forward. If we can talk about one thing that stood out to me in the press release -- in the call, is there were some scattered comments about the forward demand environment for the rest of 2024. And -- but there was no guidance reiteration or guidance update. So I was wondering if you could comment specifically on the guidance for 2024 and for the second quarter.

恭喜您接下來的努力，（聽不清楚）繼續前進真的很令人興奮。如果我們能談談新聞稿中令我印象深刻的一件事——在電話會議中，是否有一些關於 2024 年剩餘時間的遠期需求環境的零散評論。 。所以我想知道您是否可以具體評論 2024 年和第二季的指導。

Thank you, Elizabeth. Given the leadership transition, I think we need to give Paul a little bit of opportunity to assess the current situation and build a viable plan that balance of the year and long-term outlook. In the meantime, Envista remains focused on our key priorities, which is further accelerate orthodontic business, continue to expand Spark margins to bring it to fleet average, drive Spark growth.

謝謝你，伊麗莎白。鑑於領導階層的換屆，我認為我們需要給保羅一點機會來評估當前局勢，並制定一個平衡年度和長期前景的可行計劃。同時，Envista 仍然專注於我們的關鍵優先事項，即進一步加速正畸業務，繼續擴大 Spark 利潤率，使其達到機隊平均水平，推動 Spark 成長。

Secondly, continue to accelerate our implant business by [turning] around the North American implant. We would like to get back to the market growth by end of 2024 and at or above market growth in rest of the world as we have proven that we are able to do that.

其次，透過[扭轉]北美植體的局面，繼續加速我們的植體業務。我們希望在 2024 年底前恢復市場成長，並達到或高於世界其他地區的市場成長，因為我們已經證明我們有能力做到這一點。

And I think further optimizing our cost structure is going to give us that freedom that we need in order to improve our structural cost by over $30 million. We're going to see the full impact of that in 2025 and continue to drive EBS, improve our execution going forward. Thank you, Elizabeth.

我認為，進一步優化我們的成本結構將為我們提供所需的自由，以便將我們的結構成本降低超過 3000 萬美元。我們將在 2025 年看到其全面影響，並繼續推動 EBS，提高我們未來的執行力。謝謝你，伊麗莎白。

Got it. And maybe just as a follow-up. Obviously, you guys talked specifically on some details about the investments made in the first quarter. I hear what you're saying about the 60 head counts in implant. Can you talk about sort of the level of spending that entailed and any other sort of like revenue driver investments you made in the quarter? And then how to think about the cadence of that for the second quarter? And maybe and if you can speak further along, that would also be helpful.

知道了。也許只是作為後續行動。顯然，你們具體談到了第一季投資的一些細節。我聽到你所說的關於植入物中 60 人的說法。您能否談談您在本季度進行的支出水平以及任何其他類型的收入驅動投資？那麼如何思考第二季的節奏呢？如果你能繼續講下去，也許也會有幫助。

Sure, Elizabeth. Yes, we obviously did make some significant investments in the quarter, some of which are onetime and then some of which will continue on. So we probably made around about $10 million worth of investments in the quarter, across the areas that we talked about. So, commercial resources, a little bit more on the upfront for training and education some partnership programs, some of our distributors as well as some of the activities that we're doing on Spark side to drive margin improvement.

當然，伊麗莎白。是的，我們顯然在本季確實進行了一些重大投資，其中一些是一次性的，有些將繼續進行。因此，我們在本季可能在我們討論的領域進行了價值約 1000 萬美元的投資。因此，商業資源、更多的前期培訓和教育、一些合作夥伴計劃、我們的一些分銷商以及我們在 Spark 方面為推動利潤率提高而開展的一些活動。

Then we also did some onetime expenses around just kind of verifying our customer segmentation using some third-party resources. So I think most of the costs will repeat. But if a couple of -- maybe 20% of it was -- 20%, 30% of it is onetime in nature, and the rest of it will -- or kind of will be invested and continuous in our going-forward run rate.

然後，我們也做了一些一次性費用，只是使用一些第三方資源來驗證我們的客戶細分。所以我認為大部分成本都會重複。但是，如果其中有幾個——也許是 20%——20%、30% 本質上是一次性的，而其餘的將——或者說將在我們未來的運行率中進行投資和持續。

Obviously, the goal here of these investments is to get our Implant business, specifically in North America is to grow at or above the market. It's a highly profitable business as soon as that performance turns, those investments pay for themselves very quickly.

顯然，這些投資的目標是讓我們的植入業務（特別是在北美）成長，達到或高於市場水準。一旦業績好轉，這就是一項高利潤業務，這些投資很快就能收回成本。

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。

Maybe I'll just jump right into Spark. Amir, I thought I heard a number of up 15% year-over-year, which is clearly taking share to your point. But just trying to back into numbers, I think it was down a bit quarter-over-quarter, 4Q '23 to 1Q '24. Angel has been out there. They're predominantly in the orthodontic channel, which is where you reside. They've been pushing harder into EMEA and U.S., where you have been taking share.

也許我會直接跳進 Spark。阿米爾，我想我聽到一些數字同比增長了 15%，這顯然是在分享你的觀點。但只要回到數字上，我認為從 2023 年第 4 季到 24 年第 1 季度，季度環比略有下降。天使已經出來了。它們主要位於矯正通道，也就是您居住的地方。他們一直在加強進軍歐洲、中東和非洲和美國市場，而您在這些市場上已經佔據了份額。

So maybe if you could first just talk to my numbers or maybe verify them or where they may be wrong? And number two, what you're seeing from that particular player which sort of seems to be the new kid on the block within U.S. and EMEA?

那麼，也許您可以先與我的號碼交談，或者驗證它們，或者它們可能在哪裡出錯？第二，您從那個似乎是美國和歐洲、中東和非洲地區的新人的特定玩家身上看到了什麼？

Yes. Thank you, Jon. So just to reiterate, the year-over-year, Spark grew over 14 -- over 15%. So revenue was up 15%. But it did not grow sequentially. And a good reason for that normally, Q1 is slower, it ramps up pretty quickly over time. The sequential double-digit growth in the number of active doctors that gives us the confidence that this business is going to continue to grow over time.

是的。謝謝你，喬恩。重申一下，Spark 年比成長超過 14%，超過 15%。因此收入增長了 15%。但它並沒有連續成長。通常情況下，第一季速度較慢，但隨著時間的推移，它會很快上升。活躍醫生數量的連續兩位數增長讓我們有信心這項業務將隨著時間的推移繼續增長。

We further see -- kind of sequential strong growth in the number of primary submission. The way we look at this business is by geography and -- it is what we call a Spark growth model is where we enter how many people we train, how many people that start signing up and 30 days, 60 days, 90 days, the number of cases that they place. And this continues to be the model that we have followed. And now we are beginning to see a widespread expansion, not only on a developed market but also in emerging market. places that we have really entered, we are beginning to see a growth, notable strength in the first quarter.

我們進一步看到－初次提交的數量連續強勁成長。我們看待這個業務的方式是按地理位置——這就是我們所說的 Spark 成長模型，我們輸入我們培訓了多少人，有多少人開始註冊，以及 30 天、60 天、90 天、他們提出的案件數量。這仍然是我們遵循的模式。現在我們開始看到廣泛的擴張，不僅在已開發市場，而且在新興市場。在我們真正進入的領域，我們開始看到第一季的成長和顯著的實力。

We're confident in the approach that we have taken. We think we're going to continue to grow this business. Product is proven to be superior. The level of support and capabilities that we do. We got to make sure that we balance that growth with the margin expansion as we go throughout the year.

我們對我們所採取的方法充滿信心。我們認為我們將繼續發展這項業務。產品被證明是優越的。我們提供的支援和能力水準。我們必須確保全年的成長與利潤率擴張之間取得平衡。

The team is pretty excited about possibilities ahead, and we feel really confident about the work that we have done in the past 5 years or so. I'm not sure exactly who you're referring to a new kid in the block in various geographies. But I think -- from our point of view, we have been really focused on orthodontist and that's where our focus has been, and we still have plenty of room to grow. To just give it to you Jon, a little bit of an insight, only less than 50% of the traditional Ormco, bracket and wires specialists today are active Spark customers. So there is plenty of opportunity in that space, and there are a whole lot of other opportunities to go after the other portion that we haven't yet entered or we haven't yet -- haven't been engaged to it.

團隊對未來的可能性感到非常興奮，我們對過去 5 年左右所做的工作充滿信心。我不確定你所說的不同地區的新來的孩子到底是誰。但我認為，從我們的角度來看，我們一直非常關注正畸醫生，這就是我們的重點所在，而且我們仍然有很大的成長空間。 Jon 為您提供一點見解，如今只有不到 50% 的傳統 Ormco、支架和電線專家是 Spark 的活躍客戶。因此，這個領域有很多機會，而且還有很多其他機會可以去追求我們尚未進入或尚未參與的其他部分。

Amir, and maybe just a second question. Elizabeth asked about the SG&A, Stephen, quite honestly, I'm in a little bit confused on what component was onetime? I'll follow up off-line there. But let me maybe just focus on the gross margins. I thought that was the highlight for the quarter. It was up solid Q-over-Q. You do have that higher cost base as you reinvest in the business. So can you give us a little bit more color on the trajectory of gross margins from here?

阿米爾，也許只是第二個問題。伊莉莎白詢問了 SG&A，史蒂芬，老實說，我有點困惑曾經的組件是什麼？我會線下跟進。但讓我也許只關注毛利率。我認為這是本季的亮點。季度環比成長強勁。當您對業務進行再投資時，您確實擁有更高的成本基礎。那麼您能給我們更多關於毛利率軌跡的資訊嗎？

Do we use that 1Q '24 sort of the new starting point? And do you think those move higher throughout the year? I'm just trying to balance faster Spark growth in lower-margin division, but also improving those particular margin. So yes -- I guess if you can help us out with the trajectory from here on GMs for the balance of the year.

我們是否使用 24 年第一季的新起點？您認為全年這些數字會上升嗎？我只是試圖平衡利潤率較低的部門中 Spark 的更快成長，同時也提高這些特定的利潤率。所以是的——我想你是否可以幫助我們了解今年剩餘時間內總經理的發展軌跡。

Yes, sure. And obviously, there's a little bit of seasonality in the gross margins. But generally speaking, you would expect it to continue -- our margins to improve, our gross margins to improve as we go through the rest of the year, again, with some normal seasonality patterns.

是的，當然。顯然，毛利率存在一些季節性。但一般來說，你會期望這種情況會持續下去——我們的利潤率會提高，我們的毛利率會隨著今年剩餘時間的推移而提高，再次出現一些正常的季節性模式。

Fundamentally, what you're going to see is continued improvement in Spark margins being a big driver of this. And then to the extent that we start growing our North -- getting North American implants back to kind of market level growth, that will also be an improvement in the margins.

從根本上講，您將看到 Spark 利潤率的持續改善是這一趨勢的重要推動因素。然後，如果我們開始發展北方地區——讓北美植入物恢復到市場水平成長，這也將是利潤率的提高。

Obviously, Q4 margins were very depressed. That was a lot significantly related to the lower sales of consumables [such as] in that quarter. again, partly because of the cyber security issue that had hit in the North American distribution channel. So you should see positive margin progression throughout the year.

顯然，第四季的利潤率非常低迷。這與該季度消耗品銷量的下降有很大關係。再一次，部分原因是北美通路遭遇網路安全問題。因此，您應該會看到全年利潤率呈正增長。

And sorry if I was a little bit confused -- sorry about on the SG&A piece, just to be clear about $10 million of investments that we made, and you could say, about 70% of those are kind of investments that will be ongoing and about 30% of that was kind of onetime in nature. Hopefully, that clarifies it a little bit more.

抱歉，如果我有點困惑——抱歉，關於 SG&A 部分，只是為了澄清我們所做的 1000 萬美元的投資，你可以說，其中大約 70% 是持續進行的投資，其中大約 30% 是一次性的。希望這能更澄清一點。

We'll 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。

Paul, welcome, Amir, thanks for the conversations over the years. I've appreciated all your insights in the dental space. That's for sure. Stephen, let me just ask a question on that $10 million SG&A investment. I think last quarter, we heard from you or the team that there were some added investments that could -- wouldn't be leveraged necessarily in 1Q but then you would leverage them going forward. So it sounds like there were added investments on top of the 4Q investment.

保羅，歡迎，阿米爾，感謝這些年來的談話。我很欣賞您在牙科領域的所有見解。這是肯定的。史蒂芬，讓我問一個關於 1000 萬美元 SG&A 投資的問題。我認為上個季度，我們從您或團隊那裡聽說，有一些額外的投資可能在第一季不一定會被利用，但您會在未來利用它們。所以聽起來除了第四季的投資之外還有額外的投資。

So the $10 million base you're talking about in 1Q, I guess, maybe even -- could you give us kind of a 6 months, how much has it been invested maybe over the last 6 months or something? And how much of that continues. Again, without guidance here, I think we're all just trying to figure out plus or minus of this 14% EBITDA number in the first quarter. Where we're to go over the next few quarters?

因此，您在第一季度談論的 1000 萬美元基礎，我想，甚至可能 - 您能給我們 6 個月的時間，在過去 6 個月或其他時間可能投資了多少？以及其中有多少仍在繼續。再說一遍，如果沒有指導，我認為我們都只是想算出第一季 14% 的 EBITDA 數字的正負。未來幾季我們將走向何方？

Yes, sure. So look, some of the investments that we made in the fourth quarter were people who were added throughout the quarter. And then in this quarter, we had the full year impact of -- or the full quarter impact of those people. So I think we probably made a little bit less than $10 million in the first -- in Q4 investments, but probably between $5 million to $10 million in Q4. So cumulatively, we probably made around $15 million to $20 million in investments. And again, at that level, same thing about -- about 70% of it should be in the run rate going forward and about 30% of it was probably onetime in nature.

是的，當然。所以看，我們在第四季進行的一些投資是整個季度新增的人員。然後在本季度，我們得到了這些人的全年影響或整個季度的影響。因此，我認為我們在第一季第四季的投資中可能賺到了不到 1000 萬美元，但第四季可能在 500 萬美元到 1000 萬美元之間。因此，累計起來，我們可能進行了大約 1500 萬至 2000 萬美元的投資。再說一次，在這個水平上，同樣的事情——大約 70% 應該在未來的運行率中，大約 30% 可能是一次性的。

Yes. Fair enough. And then, Amir, I'm going to push an issue that I've pushed the last couple of quarters, and you and I tend to butt heads on that or at least disagree on it. I know what I'm hearing in my checks and those checks, at least in the North American implant market, would suggest some pretty sizable price concessions on some mobile active implants. Maybe it only select accounts, primarily in the full arch multicase multi-implant bundling in that. But I have started hearing that especially just over the last 3 or 4 weeks. Your 1Q gross margin did hold in. I agree with Jon, better than I thought, especially in the context of what I've been hearing on the pricing side.

是的。很公平。然後，阿米爾，我將提出一個我在過去幾個季度提出的問題，而你和我往往會在這個問題上發生衝突，或者至少在這個問題上存在分歧。我知道我在支票中聽到的內容，這些支票，至少在北美植入物市場，會建議對某些移動有源植入物進行相當大的價格優惠。也許它只選擇帳戶，主要是在全拱形多病例多植體捆綁中。但我已經開始聽到這種說法，尤其是在過去的三、四個星期內。你們第一季的毛利率確實保持不變。

So Stephen's comment was that maybe gross margins could improve a little bit from here? My fear is 2Q would take a step down given some of the pricing things I'm hearing. So just kind of maybe put all that together, tell me why I'm dead wrong on that or kind of set me straight again, if you will. But again, I know what I'm hearing. So I'm just trying to figure out kind of the gross margin progression and pricing in the North American implant business.

所以史蒂芬的評論是，也許毛利率可以從現在開始稍微提高一點？我擔心的是，鑑於我聽到的一些定價情況，第二季會有所下降。所以，也許把所有這些放在一起，告訴我為什麼我在這一點上完全錯了，或者如果你願意的話，可以再次糾正我的錯誤。但我再次知道我聽到的是什麼。所以我只是想弄清楚北美植體業務的毛利率進展和定價。

Yes. Of course, I'm not going to say you're dead wrong. Your very knowledgeable and you do your homework, your homework all the time. What we saw in Q1 was about 20 basis points of a price erosion. This is primarily in China as VBP. If you look at what happened to China in Q1 of last year, we had a very limited business and a lot of growth in Q1 of this year. So that has had an impact in our overall EBITDA and impact in our margin.

是的。當然，我不會說你完全錯了。你知識淵博，而且你一直在做你的作業。我們在第一季看到價格下跌約 20 個基點。這主要在中國稱為 VBP。如果你看看去年第一季中國發生的情況，我們的業務非常有限，但今年第一季成長很大。因此，這對我們的整體 EBITDA 和利潤率產生了影響。

And we saw some -- also some price erosion in our Equipment business, but your question is primarily around North America and implant. We're not seeing it yet. We have not seen that. We haven't seen it in Q1. We didn't see it in Q4, we have some performance issue, we're trying to improve our trajectory on growth, but it -- the price has not been an issue for us in here. Specifically on the Nobel side and the price, we have a very disciplined approach to pricing, and we continue to see erosion, not necessarily because of the price, because of this full arch, because of that specialized type of procedure that costs $25,000 to $30,000. That the market has been a little bit muted.

我們看到我們的設備業務也出現了一些價格下跌，但您的問題主要是圍繞北美和植入物。我們還沒有看到它。我們還沒有看到這一點。我們在第一季還沒有看到它。我們在第四季度沒有看到這一點，我們遇到了一些性能問題，我們正在努力改善我們的成長軌跡，但價格對我們來說並不是問題。特別是在諾貝爾獎方面和價格方面，我們有非常嚴格的定價方法，我們繼續看到侵蝕，不一定是因為價格，因為這個完整的拱門，因為那種花費 25,000 到 30,000 美元的特殊類型的程序。市場有點平靜。

And this is -- I don't think this is only us. We are underperforming, but the market has been challenged as well. But to answer your question, we haven't seen it. We have not seen a price erosion on the premium implant. I'd love to hear where you have -- who you're getting that information. But across the board, we have a large constituencies, there's a specialist with referral network, and we have visibility to it constantly monitoring it. We have not seen a price erosion.

我認為這不僅僅是我們。我們表現不佳，但市場也受到挑戰。但要回答你的問題，我們還沒看到。我們還沒有看到優質植入物的價格下降。我很想聽聽您從哪裡、從誰那裡獲得了這些資訊。但總的來說，我們有一個很大的支持者，有一個擁有推薦網路的專家，我們可以持續監控它。我們沒有看到價格侵蝕。

We'll take our next question from Kevin Caliendo with UBS.

我們將回答瑞銀集團的 Kevin Caliendo 提出的下一個問題。

I want to talk about implants a little bit, too, but maybe in a different context. When you talk about getting back to market growth, what is market growth? Like what do you think the market is growing now? And it seems if we canvas the publicly traded dental providers. They're all talking about increasing their share in implants and growing faster in implants in the second half of the year and into next year.

我也想談談植入物，但也許是在不同的背景下。當你談到回到市場成長時，什麼是市場成長？您認為現在市場的成長情況如何？如果我們調查公開交易的牙科提供者，情況似乎會如此。他們都在談論增加植入物的份額，並在今年下半年和明年加快植入物的成長。

And I guess just what I'm trying to understand is where are we now? What do we expect the growth rate in that industry to be? Again, I know it's depressed currently, but when you talk about getting back to industry growth, what exactly are you aiming for targeting? And is it simply a matter of -- I guess, the second half of that is once we understand what those numbers are, is it simply a matter of better education, more people in the field. Do you think that your portfolio is what it needs to be to get there as it's currently constructed?

我想我想了解的是我們現在在哪裡？我們預期該產業的成長率是多少？再說一遍，我知道目前情況不景氣，但是當您談到恢復行業成長時，您的具體目標是什麼？這是否只是一個問題——我想，後半部分是一旦我們了解了這些數字是什麼，這是否只是一個更好的教育、更多的人進入該領域的問題。您認為您的投資組合目前的建置符合實現這一目標所需的條件嗎？

Kevin. A really good question. But let's just look back a little bit, and then I'll answer the question. So the transition, if you go back, we've got a 5- to 7-year horizon, what you will find is -- and we're talking volume. Volume of impact. The premium implant only 4 companies constitute a major part of that has been growing mid-single digit, low single digit, 3% to 5%. So that has been the volume growth.

凱文.一個非常好的問題。但讓我們回顧一下，然後我會回答這個問題。所以，如果你回顧過去，我們有一個 5 到 7 年的視野，你會發現——我們正在談論數量。影響量。優質植入物僅由4家公司構成主要部分，其中一直在中個位數、低個位數成長，3%到5%。這就是銷量的成長。

And the other side of that equation, which is more about what we call value or newcomers in that space. That has been growing 7% to 8% volume, but the prices have been coming down significantly. So the size of the premium and the value from a dollar perspective is almost the same. So that's traditionally. Take a look at the traditionally.

等式的另一邊，更多的是我們所說的價值或該領域的新來者。銷量成長了 7% 至 8%，但價格卻大幅下降。因此，從美元角度來看，溢價的大小和價值幾乎是相同的。傳統上就是這樣。看看傳統的。

Now let me tell you what's going in the last 12 months, and I answer your question. At the end of each quarter, there are publications that shows a number of implant plays in each geography. So we know in 2023, 4.4 million implants were placed in North America. We know the first half of the year -- we are talking premium implants. We know the first half of the year, it was low single digit, 2% to 3% growth. Second half of the year, flat. The number of implants that were placed in second half of the year compared to 2022 was almost flat. We don't yet have the Q1 information, but what we are seeing is more of a muted market from a number of the volume of implants, And you think about a single implant, interior versus exterior a full arch of multi-implants. A large number of implant goes to the multi-unit as well as full arch. So when the full arch of a $25,000, $30,000 is not happening, driven by interest rate, driven by uncertainties in the market, that's what you're going to see. The number is not growing as fast as what we have seen in the past.

現在讓我告訴你過去12個月發生了什麼，然後我回答你的問題。每個季度末，都會有出版物顯示每個地區的一些植入遊戲。我們知道，到 2023 年，北美將植入 440 萬顆植入物。我們知道今年上半年——我們正在談論優質植體。我們知道今年上半年是低個位數成長，2% 到 3% 的成長。下半年，持平。與 2022 年相比，今年下半年植入的植體數量幾乎持平。我們還沒有第一季的信息，但我們看到的是，從植入物的數量來看，市場更加平靜，你會想到單一植入物，內部與外部的多植入物的完整拱門。大量植體用於多單元和全牙弓。因此，當在利率和市場不確定性的推動下，25,000 美元、30,000 美元的完整價格沒有發生時，這就是你將會看到的情況。這個數字的成長速度沒有我們過去看到的那麼快。

So what do we expect? What we expect -- when we say we want to be at the market growth, we expect that gap that we have seen in the past 4 to 6 quarter in North America to close by end of this year. We know that we have either performing at market or above it outside North America. We also know that we have been performing below market growth in North America and our goal to close that gap by end of this year. Did I answer your question?

那我們期待什麼呢？我們的期望是什麼——當我們說我們希望保持市場成長時，我們預計北美過去四到六個季度所看到的差距將在今年年底前縮小。我們知道我們的表現要么在市場上，要么在北美以外的市場上表現出色。我們也知道，我們在北美的表現一直低於市場成長，我們的目標是在今年年底前縮小這一差距。我回答你的問題了嗎？

Yes. I think that's been super helpful. I guess the incremental question is, do you think that the trend of value versus premium continues? Like how much of that do you think is purely economic, consumer-driven? Or is that here to stay for a longer period of time? It felt like there was an inflection point there. Like as you said, in the second half of the year, does that recover -- do you think that can recover?

是的。我認為這非常有幫助。我想增量問題是，您認為價值與溢價的趨勢會持續嗎？例如你認為其中有多少是純粹由經濟、消費者驅動的？或者它會在這裡停留更長的時間？感覺那裡有個拐點。就像你說的，下半年會恢復嗎，你覺得能恢復嗎？

Kevin, we got into the value implant a lot earlier than premium. We bought Implant Direct, 2012, if I'm not mistaken.

凱文，我們比溢價更早進入價值植入。如果我沒記錯的話，我們在 2012 年購買了 Implant Direct。

2010.

2010年。

2010. And our hypothesis at the time was that value implant is going to take a significant amount of share out of the premium. 5 years through that process, we recognize that is not the case. Both segments are growing. And we have been at it since 2010. So if you look at 14 years, that gives us plenty of opportunity to take a look. The value implant is growing because the segment, the group that they're using that are very different, than the group that use in this premium. People who are charging $5,000 to $6,000 for single implant. People are charging $25,000 to $30,000 for full arch, is a different segment that uses and values that premium bond. We think this market has significant opportunity for growth. Less than 10% of people who can use implant today are using it. Over 100 million 3-unit bridges are being placed every year, over 30 million dentures. These are all targeted really good candidates for impact. The more people that they can use it and see the value of it, we think the market has plenty of opportunities both on the premium side as well as the value side. But we haven't seen an erosion of the premium because of the value. That we have not seen. We've seen both of them growing, value is growing a lot faster, prices are dropping, premium is growing not as fast, but prices are hanging in there.

2010 年。經過五年的過程，我們意識到事實並非如此。這兩個細分市場都在成長。我們從 2010 年就開始這麼做了。 所以如果你看看這 14 年，你會發現我們有足夠的機會來看看。價值植入正在成長，因為他們使用的細分市場和群體與此溢價中使用的群體非常不同。單次植入收費 5,000 至 6,000 美元的人。人們對全拱的收費為 25,000 至 30,000 美元，這是使用和評估溢價債券的不同部分。我們認為這個市場有巨大的成長機會。如今，只有不到 10% 可以使用植入物的人正在使用它。每年安裝超過 1 億個三單元牙橋，超過 3,000 萬顆假牙。這些都是有針對性的真正具有影響力的候選人。越多的人可以使用它並看到它的價值，我們認為市場在高端和價值方面都有很多機會。但我們並沒有看到保費因價值而侵蝕。我們還沒看到。我們看到它們都在成長，價值成長得更快，價格下降，溢價成長不那麼快，但價格堅如磐石。

We'll take our next question from Brandon Vazquez with William Blair.

我們將回答布蘭登·巴斯克斯和威廉·布萊爾提出的下一個問題。

I just wanted to ask kind of first like a high-level question. Over the past several years, you guys have done a great job of removing costs from the business to kind of deliver on some margin expansion. Now we're at a point where, arguably, we need to add a little bit of cost back, for example, in the implant side of the business. I guess, the question being, do you think in order to get back to market growth rates, you have to add back much of the cost that we took out of the business was under investment by taking some of these costs out part of the issue and what that kind of means for the margin potential as you reaccelerate the top line?

我只是想先問一個高級問題。在過去的幾年裡，你們在消除業務成本方面做得很好，從而實現了一定的利潤成長。現在，我們可以說，我們需要增加一點成本，例如在業務的植入方面。我想，問題是，您是否認為為了恢復市場增長率，您是否必須通過將其中一些成本從問題的一部分中剔除，將我們從投資業務中扣除的大部分成本加回去當您重新加速收入增長時，這對利潤潛力意味著什麼？

Brandon, thanks for the question. I think you have to separate this in 2 different things. I think from a -- we did -- we've talked about in the past calls when -- it's specific to Nobel and Nobel North America, we probably did -- coming out of COVID, we probably thought we were a little bit more efficient and we probably got some false signals around that. And we probably cut a little bit too deep on some of our commercial resources, and we are adding those back in, and that's what you're seeing now.

布蘭登，謝謝你的提問。我認為你必須將其分為兩件事。我認為，從——我們確實——我們在過去的電話會議中談到過——這是針對諾貝爾獎和諾貝爾北美獎的，我們可能確實——從新冠疫情中走出來，我們可能認為我們有點多了效率很高，我們可能會得到一些錯誤訊號。我們可能對一些商業資源的削減有點太深了，我們正在重新添加這些資源，這就是你現在看到的。

In terms of the overall cost level, I think we do see opportunities to continue to streamline over the long term. That's why one of our goals is to take out $30 million of incremental cost here -- structural costs here going forward. So it's a little bit of tale of two things. We need to make some short-term investments to reinvigorate growth in North American implants in particular. And then long term, we need to look at opportunities to reduce costs. And we do see opportunities to reduce costs and be more efficient.

就整體成本水平而言，我認為我們確實看到了長期繼續精簡的機會。這就是為什麼我們的目標之一是消除 3000 萬美元的增量成本——未來的結構性成本。所以這是兩件事的小故事。我們需要進行一些短期投資，以重振北美植入物的成長。從長遠來看，我們需要尋找降低成本的機會。我們確實看到了降低成本和提高效率的機會。

We just need to be careful about where we're being efficient. We are very efficient in SG&A -- or sorry, G&A and then be making sure, we're making the right sales and marketing investments.

我們只需要注意我們在哪些方面效率較高。我們在 SG&A 方面非常有效率——或者抱歉，G&A，然後確保我們正在進行正確的銷售和行銷投資。

Okay. And then maybe for my follow-up, switching gears a little bit to China. It looked like that was a nice growth area for you guys in implants. Can you just talk a little bit about where you're seeing growth there? How sustainable that is in implants? And then Conversely, I think we were talking last quarter about Ortho being -- going under VBP in China in the second half of '24. Is that still your expectation? And if so, can you talk about what the financial impact could be there?

好的。然後也許我的後續行動會稍微轉向中國。看起來這對你們植入物來說是一個很好的成長領域。能簡單談談您在哪些方面看到了成長嗎？植入物的可持續性如何？相反，我認為我們上個季度正在討論 Ortho 將在 24 年下半年在中國接受 VBP 管理。這還是你的期望嗎？如果是這樣，您能談談可能產生的財務影響嗎？

Yes, of course. In Q1, we saw our sales increase in China by over 50%. So of course, as we mentioned earlier, Q1 was really muted because of COVID and because of the VBP piece. But what is really, what we're looking at is the number of implant placed. What we are seeing is -- it was an easier comp in Q1, but what we're seeing is a ramp-up of implant throughout China. And the reason for it are threefold.

是的當然。第一季度，我們在中國的銷售額成長了 50% 以上。當然，正如我們之前提到的，由於新冠疫情和 VBP 的影響，第一季確實陷入了沉默。但實際上，我們關注的是植入的植體數量。我們看到的是──第一季的競爭比較容易，但我們看到的是整個中國的植入量正在增加。其原因有三個。

One, the price gap between the premium and that value part has been closed. Because of VBP. So it's not that huge of a difference between the price.

第一，溢價和價值部分之間的價格差距已經縮小。因為VBP。所以價格上的差異就不是那麼大。

Second part is about the price of a placement implant now versus a 3-unit bridge, it's almost the same. So a lot of people now that see the value of doing a lifetime permanent solution versus a 5- to 7-year.

第二部分是關於現在植入式植體與 3 單元牙橋的價格，幾乎相同。因此，現在很多人都看到了終身永久解決方案相對於 5 到 7 年的解決方案的價值。

And last but not least, more and more people are beginning to see the value of placing an implant as well as clinicians being able to do that.

最後但並非最不重要的一點是，越來越多的人開始看到植入植入物的價值，臨床醫生也能夠做到這一點。

So we're really bullish about the China potential impact in the long run. Not only on the premium side, but for the first time, our value brand, ABT is now accepted as part of VBP and 5 of the major universities and institutions, and that is growing as well. It's an underpenetrated market with tremendous amount of potential. So it gives us a little bit of a feel for what we expect to see on the implant business in China.

因此，從長遠來看，我們非常看好中國的潛在影響。不僅在高端方面，我們的價值品牌 ABT 現在首次被 VBP 和 5 所主要大學和機構接受，而且這一數字還在不斷增長。這是一個尚未滲透的市場，但潛力巨大。因此，這讓我們對中國植體業務的預期有了一些了解。

Our expectation right now -- we don't have any detail that we can share with you, but we were in China not long ago. We talked to a lot of customers. Their expectation is that the VBP for Ortho is going to be sometimes during the second half but the approach that they took on the implant side really gave a tremendous amount of insight on how to manage this in a structured format. We expect to see that in second half. We have contemplated. It is in our plan. And -- but we think in the long term, China continues to be a growth driver for Envista because of that under penetration, because of the capabilities and brand recognition that we have in China.

我們現在的期望——我們沒有任何細節可以與你們分享，但我們不久前在中國。我們與很多客戶進行了交談。他們的期望是 Ortho 的 VBP 有時會在下半年進行，但他們在植入方面採取的方法確實提供了關於如何以結構化格式管理這一點的大量見解。我們預計下半年會看到這一點。我們曾經思考過。這是我們的計劃中的。但我們認為，從長遠來看，中國仍然是恩威斯塔的成長動力，因為滲透率較低，因為我們在中國擁有的能力和品牌認知度。

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。

Amir, thanks for all the help over the years. And Paul, welcome to you look forward to working with you. I wanted to ask on the consumables business. I think outside the U.S., you talked about a bit -- maybe some weaker demand that you're seeing. Could you maybe elaborate on what you saw in the quarter? Were there specific geographies that you would highlight? And then I think you also talked about kind of actively managing price in some of those markets. Could you maybe just expand there? Are you seeing dentistry down? Is that something where you feel like you have to adjust pricing? Any color you can share there would be great.

阿米爾，感謝您多年來的所有幫助。保羅，歡迎您期待與您合作。我想問一下耗材業務。我認為在美國之外，你談到了一些——也許你看到了一些較弱的需求。您能否詳細說明一下您在本季看到的情況？您會強調哪些特定地區嗎？然後我認為您還談到了在其中一些市場中積極管理價格。您可以在那裡擴展嗎？你看到牙科在下降嗎？您是否覺得必須調整定價？你能分享的任何顏色都會很棒。

Thank you, Nate. Let me start from the pricing perspective. It's normally because of the relationship and partnership that we have with our partners and distributors normally prices don't happen radically. We give them notice, 30 to 90 days in advance. So it's a little bit of a different lay of the land in here compared to like implant and Ortho.

謝謝你，內特。讓我從定價角度開始。這通常是因為我們與合作夥伴和分銷商的關係和夥伴關係，通常價格不會發生根本性的變化。我們提前 30 至 90 天通知他們。因此，與植入物和 Ortho 相比，這裡的情況有點不同。

So we continue to see good price position. We have a great relationship with our partners. We have -- as Stephen talked about, we have made some investment in the key supplier program. But what we saw in Q4 because of the cybersecurity issues, there was a little bit of a delay that we saw in Q1.

因此，我們繼續看到良好的價格定位。我們與合作夥伴有著良好的關係。正如史蒂芬所說，我們已經對關鍵供應商計劃進行了一些投資。但我們在第四季度看到，由於網路安全問題，我們在第一季看到了一些延遲。

Our infection prevention grew mid-single digit in Q1. And a lot of it was because of the medical channel. We saw a significant increase, not only on growth but also on the pricing part. Our restorative Endo business was more flat. And after a decline in double digit in Q4, we saw a flat approach. And given the fact that we are able to really perform and deliver well in here, inventories continue to be really well managed by our partners across the board. We continue to see really good sell-out information and our solution where we have that information, we are outperforming the market.

我們的感染預防在第一季實現了中個位數成長。這很大程度上是因為醫療頻道。我們看到了顯著的成長，不僅在成長方面，而且在定價方面。我們的恢復性遠藤業務更加平淡。在第四季度出現兩位數下降之後，我們看到了持平的情況。鑑於我們能夠在這裡真正表現出色並交付成果，我們的合作夥伴繼續全面有效地管理庫存。我們繼續看到非常好的銷售信息和我們的解決方案，只要我們掌握了這些信息，我們就能跑贏市場。

But on the geography side, we have been very focused. A good portion of our business comes in North America, and we continue to see momentum in there. In Europe, a couple of issues in Europe. We had a day and a half, two days less working day in Q1 because where Easter followed -- fall in Q1. So we had a little bit of a challenge in there, but not necessarily because of the sellout. It was because of the timing of it.

但在地理方面，我們一直都非常專注。我們的業務很大一部分來自北美，我們繼續看到那裡的勢頭。在歐洲，歐洲有幾個問題。我們在第一季減少了一天半、兩天的工作日，因為復活節緊隨其後——在第一季。所以我們在那裡遇到了一些挑戰，但不一定是因為售空。這是因為它的時機。

We'll continue to be pretty bullish about our Resto Endo business. We think that we've got good performance, great product, great relationships with our distributors. And we think this is going to bounce back up as we go throughout the world. And we think that outperformance that we have seen in most markets around the world is going to continue as we go through 2024.

我們將繼續非常看好我們的 Resto Endo 業務。我們認為我們擁有良好的業績、優質的產品以及與經銷商的良好關係。我們認為，隨著我們走向世界各地，這種情況將會反彈。我們認為，到 2024 年，全球大多數市場的優異表現將持續下去。

Great. That's helpful. Maybe just as a quick follow-up. Are you able to give us sort of a rough sense of the timeline we should expect for the searches that you have underway for CFO and the Nobel roles. Is that something that got us underway now that Paul has joined. Or have these kind of been in process. Just -- I know it's probably hard to say specifically, but anything you can add there would be great.

偉大的。這很有幫助。也許只是作為快速跟進。您能否讓我們大致了解您正在尋找的財務長和諾貝爾獎職位的時間表。既然保羅加入了，這就是讓我們開始前進的原因嗎？或者這些已經在進行中。只是——我知道這可能很難具體說，但是你可以添加的任何內容都會很棒。

Of course, Nate. We have a really active search underway. And given the transition of CEO, there was a little bit of a delay in here because as you can imagine, CFO is really like to know who they work with, who they partner with. But we have a number of strong candidates in CFO and the Board have been actively involved. Now that we have a permanent and CEO in place, I think we can accelerate that really quickly. Paul's appointment is going to really help with the top talent and candidate to come for both on the CFO search as well as on the Nobel side. We have an active search underway for the position in the Nobel. Nobel is an incredible brand. We're seeing a lot of people of top talent coming forward. And I'll leave it to Paul and the management team to communicate as they go forward to make sure that we are continuing to build on the momentum that we have in here and continue to build this legacy for years to come.

當然，內特。我們正在進行非常積極的搜索。鑑於執行長的過渡，這裡有一點延遲，因為正如你可以想像的，財務長真的很想知道他們與誰一起工作，與誰合作。但我們有一些強而有力的財務長候選人，董事會也積極參與其中。現在我們已經有了一位常任首席執行官，我認為我們可以很快地加速這一進程。保羅的任命將真正幫助尋找財務長和諾貝爾獎的頂尖人才和候選人。我們正在積極尋找諾貝爾獎的職位。諾貝爾是一個令人難以置信的品牌。我們看到許多頂尖人才挺身而出。我將讓保羅和管理團隊在前進時進行溝通，以確保我們繼續發揚現有的勢頭，並在未來幾年繼續建立這項傳統。

This does conclude our Q&A session. I'll turn the program back to Stephen Keller for any closing comments.

我們的問答環節到此結束。我會將節目轉回給史蒂芬凱勒（Stephen Keller）以徵求結束意見。

Thanks, everyone. I really appreciate the time today. Look, obviously, we will be setting up time for investors with Paul at a later date once he's had a chance to fully get involved in the business. We're looking forward to working with you all in the coming quarters and years. Thank you so much.

感謝大家。我真的很感激今天的時間。顯然，一旦保羅有機會完全參與這項業務，我們將在稍後為投資者安排時間。我們期待在未來幾季和幾年內與大家合作。太感謝了。

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。