Transforming for the Future - Dentsply Sirona FY 2024 Financial Results
- Vagelis Yiaglissis
- Apr 17
- 9 min read
1. Executive Summary
Dentsply Sirona reported full-year 2024 net sales of $3.79 billion, representing a 4.3% decrease from 2023. Organic sales declined 3.5%, impacted by a 1.2% headwind from the BYTE aligner business. Despite revenue pressures and macroeconomic challenges, the company delivered adjusted EPS of $1.67 and increased operating cash flow by 22.3% year-over-year.
2024 was marked by headwinds in key product categories and geographies, particularly in Connected Technology Solutions (CTS) and the U.S. market. However, the company made substantial progress in its transformation initiatives, launched multiple new products, and reported continued growth in Wellspect Healthcare and SureSmile.
2. Key Financial Highlights
Net Sales: $3,793 million ↓ 4.3% vs. $3,965 million in 2023
Organic Sales: ↓ 3.5%, including a (1.2%) headwind from the BYTE aligner business
Gross Profit: $1,958 million ↓ 6.1% vs. $2,086 million in 2023 Gross Margin: 51.6% (down from 52.6%)
Adjusted EBITDA: $631 million ↓ 8.8% vs. $691 million in 2023 Adjusted EBITDA Margin: 16.6% (↓ 80 bps)
GAAP Net Loss: ($910 million) vs. ($132 million) in 2023 Includes $870 million in non-cash impairment charges (goodwill and intangible assets)
Adjusted EPS: $1.67 ↓ 8.4% vs. $1.83 in 2023
Operating Cash Flow: $461 million ↑ 22.3% vs. $377 million in 2023
Free Cash Flow Conversion: 83% ↑ Over 40% YoY
Capital Returned to Shareholders: $376 million, comprising:
Foreign Exchange Impact: FX negatively impacted revenue by $34 million (80 bps)
Dental-Only Revenue Estimates (Excluding Wellspect Healthcare)
Total Net Sales (2024): $3,793 million
Wellspect 2024: $304 million
→ Dental Revenue 2024: $3,793M − $304M = $3,489 million
Total Net Sales (2023): $3,965 million
Wellspect 2023: $288 million
→ Dental Revenue 2023: $3,965M − $288M = $3,677 million
Year-over-Year Change (Dental-Only)
Decline in Revenue: $3,489M − $3,677M = −$188 million
Percentage Decline: −5.1% YoY
3. Business Unit Performance
Essential Dental Solutions (EDS)
Organic sales declined slightly by 0.1% year-over-year. This segment was impacted by the timing of distributor orders in the U.S. due to ERP deployment, which shifted approximately $20 million in sales from Q4 to Q3. Excluding this, the segment benefited from stable patient traffic and increased volumes, particularly in China, where endodontic products such as the X-Smart Pro Plus motor contributed to growth.
2024 Net Sales: $1,454 million
2023 Net Sales: $1,468 million
Reported Decline: ↓ 0.9%
Organic Sales Decline: ↓ 0.1%
Orthodontic & Implant Solutions (OIS)
Organic sales declined 5.5% in 2024. The decline was largely driven by the BYTE aligner business, which had a significant negative impact of approximately 1.2% on total company sales. The company voluntarily suspended BYTE’s sales and wrote off the trademark, citing plans to phase out the brand from the operating model. However, the SureSmile aligner platform posted mid-single-digit organic growth, with double-digit growth in aligners and strong momentum in Europe, where sales rose over 20% for both the fourth quarter and the full year. BYTE had a total year-over-year revenue impact of $62 million in Q4 alone. SureSmile continues to be a key growth driver, supported by commercial investments and integration of digital workflows.
2024 Net Sales: $973 million
2023 Net Sales: $1,040 million
Reported Decline: ↓ 6.5%
Organic Sales Decline: ↓ 5.5%
Connected Technology Solutions (CTS)
This segment saw an organic sales decline of 8.2% year-over-year. The primary headwinds were weak retail demand in the U.S. for CAD/CAM equipment, competitive pressures, and macroeconomic factors such as elevated interest rates which resulted in Double-digit decline in CAD/CAM sales. Despite this, the company reported improving trends in the second half of the year, aided by the relaunch of the Orthophos SL imaging platform and the launch of PrimeScan II, which contributed to scanner volume growth.
2024 Net Sales: $1,062 million
2023 Net Sales: $1,169 million
Reported Decline: ↓ 9.2%
Organic Sales Decline: ↓ 8.2%
Wellspect Healthcare
Wellspect delivered strong performance with organic sales growth of 5.8% year-over-year. Growth was broad-based across all three regions, supported by continued product innovation and strategic investments in capacity expansion. The company is currently exploring strategic alternatives for this business, citing the potential to unlock additional stakeholder value.
2024 Net Sales: $304 million
2023 Net Sales: $288 million
Reported Growth: ↑ 5.9%
Organic Sales Growth: ↑ 5.8%
4. Regional Performance
United States
2024 Net Sales: $1,348 million
2023 Net Sales: $1,437 million
Reported Change: ↓ 6.2%
Organic Sales Change: ↓ 6.2%
The U.S. market experienced the steepest regional decline, primarily due to:
The suspension and refund liabilities associated with the BYTE aligner business.
Weaker demand in CAD/CAM retail channels.
ERP-related timing impacts on distributor orders within Essential Dental Solutions.
Partial offset from imaging and endodontic growth.
Europe
2024 Net Sales: $1,518 million
2023 Net Sales: $1,550 million
Reported Change: ↓ 2.1%
Organic Sales Change: ↓ 2.2%
Although Europe posted a modest annual decline, it showed positive trends in the second half, including:
Over 20% growth in SureSmile aligner sales in countries like Italy and Spain.
Recovery in Connected Technology Solutions, especially in imaging and equipment categories.
Germany recorded its highest quarterly sales in seven quarters.
Rest of World (ROW)
2024 Net Sales: $927 million
2023 Net Sales: $978 million
Reported Change: ↓ 5.1%
Organic Sales Change: ↓ 1.5%
Performance in ROW was mixed:
Strength in China and Latin America for endodontic products and aligners.
Headwinds in lab-related products and equipment purchases impacted the region’s overall results.
Foreign exchange headwinds were more pronounced in this region, with a 3.6% FX impact.
5. Market Insights
Macroeconomic & Industry Trends
Elective procedure softness continued across key markets, with survey data from over 1,300 dental professionals indicating slight improvements in patient utilization, but ongoing hesitation in capital equipment purchases due to economic uncertainty and high interest rates.
Digital workflow adoption remains a priority among dental practices. Dentsply Sirona’s customer research showed strong interest in efficiency gains through integrated digital platforms, reinforcing the relevance of its DS Core ecosystem.
Digital Dentistry Momentum
DS Core surpassed 37,000 unique users by Q4 2024, growing approximately 15% sequentially.
Launches like PrimeScan II (intraoral scanner) and integration with DS Core supported growth in imaging and CAD/CAM workflows.
These advancements align with the industry's shift toward connected, patient-centric care models and seamless data integration between clinical tools.
Aligners Market Dynamics
While the company is winding down the BYTE brand, the core SureSmile aligner business delivered mid-single-digit growth globally and double-digit growth in Europe.
Dentsply Sirona is redeploying BYTE resources (including direct-to-consumer marketing and software talent) into SureSmile, aiming to enhance e-commerce capabilities, user experience, and patient engagement in the aligner space by mid-2025.
Capital Equipment Headwinds
Connected Technology Solutions (CTS) faced high-single-digit organic sales declines, reflecting soft capital equipment demand and prolonged replacement cycles, especially in the U.S. and parts of Europe.
FX and competitive pricing further pressured sales in high-ticket items such as CAD/CAM and imaging systems, though the Orthophos SL relaunch helped partially offset these challenges in the second half of the year.
Geopolitical & Regulatory Landscape
Volume-based procurement policy in China continued to pressure pricing, particularly for implants, although the company still recorded strong first-half growth in that market.
Globally, regulatory execution improved, as evidenced by the company receiving eight FDA 510(k) clearances in 2024—six of which had been launched commercially by year-end.
6. Strategic Initiatives
Transformation Program Execution
Dentsply Sirona made meaningful progress in 2024 on its multi-phase transformation agenda, aimed at improving operational efficiency, cost structure, and organizational agility. Key achievements include:
Closure of 3 manufacturing sites and 4 distribution centers, as part of a broader footprint optimization strategy targeting a 10–15% reduction in manufacturing and distribution.
Completion of Phase 1 transformation actions, delivering $200 million in run-rate savings. Phase 2 actions were largely completed by year-end and remain on track to deliver full savings by the end of 2025.
Continued implementation of SKU optimization, with a focus on the Endodontic and Restorative portfolios. The company eliminated a majority of non-revenue-generating SKUs (approximately 11,000) and will begin migrating revenue-generating SKUs in 2025.
Product Development & Regulatory Achievements
Dentsply Sirona received eight FDA 510(k) clearances in 2024, with six products already launched by year-end.
Major launches included:
BYTE Integration & Portfolio Realignment
In response to continued underperformance, the company officially suspended BYTE sales and wrote off the trademark.
BYTE’s commercial and technical resources were redeployed to support SureSmile.
7. Key questions and topics discussed during the call
What is the long-term impact of the BYTE brand suspension on revenue and margin performance? → BYTE was fully written off in Q4; its suspension negatively impacted 2024 revenue by $62M in Q4 alone. The company expects margin improvement in 2025 due to the elimination of BYTE-related losses.
How is the company reallocating BYTE resources to other business units, particularly SureSmile? → BYTE’s marketing and software teams are now supporting SureSmile, focusing on e-commerce, patient engagement, and product simplification, with new platform features expected by mid-2025.
What factors are contributing to continued weakness in the U.S. implant and prosthetics business? → Lower lab volumes, macroeconomic headwinds, and competitive pricing continued to weigh on U.S. implant demand, though global volumes improved sequentially.
How does the company plan to address soft lab volumes and competitive pressures in the implant space? → The company is targeting growth through innovation (e.g., MIS LYNX implant), commercial execution improvements, and expanding digital workflow adoption.
What’s driving the underperformance in CAD/CAM, and how is demand evolving in the U.S. and Europe? → CAD/CAM faced double-digit declines in the U.S. due to soft retail demand. In contrast, Europe, especially Germany, saw CAD/CAM growth for the second straight quarter.
Can you quantify the ERP-related timing impact on CTS and EDS orders? → The U.S. ERP deployment led to a ~$20M shift in EDS distributor orders from Q4 to Q3, affecting reported Q4 results but not full-year revenue.
What are the key levers behind the expected EBITDA margin improvement in 2025? → Margin expansion is expected from transformation-driven OpEx savings, reduced BYTE drag, and improved volume absorption as the year progresses.
How much of the margin expansion is tied to cost savings vs. volume recovery? → Majority of gains in early 2025 will stem from cost savings; second-half improvements are expected from operational leverage as volume recovers.
What are the objectives and timeline for the strategic review of the Wellspect Healthcare business? → Management is exploring options to unlock stakeholder value; no formal timeline disclosed, but the business has strong fundamentals and a robust pipeline.
Is a sale or spin-off of Wellspect under consideration? → While no outcome has been confirmed, the company is evaluating “strategic alternatives,” which could include a sale, spin, or partnership.
Can you elaborate on the realized vs. expected savings from Phase 1 and Phase 2 initiatives? → Phase 1 has achieved $200M in run-rate savings; Phase 2 is on track to deliver full run-rate savings by the end of 2025.
How are savings being reinvested into growth areas like innovation and digital tools? → Savings are funding digital platform enhancements (DS Core), product innovation (PrimeScan II, SureSmile), and commercial team expansion (virtual sales team).
Were there any disruptions tied to the recent U.S. ERP deployment? → Minor short-term order timing issues were noted, but the rollout was otherwise successful and sets the stage for better system integration and customer experience.
How is the ERP rollout expected to improve operational and commercial efficiency in 2025 and beyond? → ERP enables automation, real-time data, and better customer service. U.S. deployment is complete; European rollouts will continue into 2026.
How should investors think about capital deployment priorities in 2025? → The company plans to return ≥75% of free cash flow to shareholders, while also investing in ERP, innovation, and potentially strategic M&A.
How sensitive is the 2025 outlook to macroeconomic conditions, especially around capital equipment purchases? → Management remains cautious, particularly around U.S. capital equipment. Forecasts assume stable-to-soft market conditions, especially in H1.
Are current forecast assumptions factoring in a flat or recovering market environment? → The guidance assumes no major recovery; organic sales are expected to decline 2–4%, with BYTE contributing a 2% headwind.
8. Focus Areas for 2025
Margin Expansion: Complete Phase 2 transformation; target >18% EBITDA margin
Growth in SureSmile & Wellspect: Mid-to-high single-digit growth expected
ERP Rollout: Finalize U.S., continue Europe deployment
Innovation Pipeline: 20+ new product launches across imaging, diagnostics, and restorative
Portfolio Optimization: Strategic review of Wellspect; ongoing asset assessment
Commercial Effectiveness: Expand virtual sales model and customer education
Cash Flow Discipline: Maintain FCF conversion >80%; disciplined capex and shareholder returns
9. Opportunities for 2025
Accelerate SureSmile via BYTE integration and UX upgrades
Expand DS Core adoption and digital workflow monetization
Capture growth in China and Europe, particularly Endo and Imaging
Capitalize on regulatory momentum with a strong product pipeline
Leverage ERP and SKU optimization for operational efficiency
Unlock value through a potential Wellspect divestiture or spin-off
Scale the virtual sales team model to increase reach at lower cost
10. Challenges in 2025
Macro Headwinds: Economic pressure on capital spending
CAD/CAM Demand: CTS segment exposed to prolonged weakness
Competitive Pressure: Especially in Implants and Lab
Transformation Execution: Risk of short-term disruption from ERP and site closures
BYTE Wind-Down: 2% revenue headwind in 2025; requires smooth SureSmile transition
FX Volatility: Ongoing exposure in ROW
Regulatory & Pricing Pressure: China procurement, EU reimbursement
Wellspect Review: Strategic uncertainty and execution risk
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