Envista Holdings Corporation · NYSE:NVST
Envista — Q2 2024 Earnings Presentation
34 slides from Envista's earnings presentation, Aug 7, 2024
Slide 1: Second Quarter 2024 – Earnings Presentation
Envista Second Quarter 2024 – Earnings Presentation August 7, 2024
Slide 2: Forward Looking Statements
Forward Looking Statements Certain statements included or incorporated by reference in this presentation are “forward-looking statements” within the meaning of the U.S. federal securities laws. All statements other than historical factual information are forward-looking statements, including without
Slide 3: Agenda
• Opening Thoughts Paul Keel • Financial Results – Q2 2024 Stephen Keller Agenda • Strategic Update & 2024 Outlook Paul Keel • Q&A 3
Slide 4: Opening Thoughts
Opening Thoughts Paul Keel Chief Executive Officer 4
Slide 5: Opening Thoughts: Fundamentally good business; taking steps to improve performance
Opening Thoughts Fundamentally good business; taking steps to improve performance • Envista is a fundamentally good business with leading positions in attractive market segments, a well-balanced portfolio, strong operations, and talented people • Our recent performance does not reflect our full capa
Slide 6: My First 90 Days
Envista | My First 90 Days… • Met with dozens of customers, KOLs, and partners • Quality of portfolio is recognized, trusted, and valued • Customer connectivity is strong; >60% of business sold direct • Stakeholders want and expect even more from us Customers • Connected with ~150 of our top leaders
Slide 7: Q2 2024 Dental Market Performance
Q2 2024 | Dental Market Performance % of Envista Est. Market Envista Segment Market Commentary Sales* Growth** Performance Implants Specialty Products + Resilient demand for single tooth replacements Flat / LSD & Technologies ~40% LSD decline - Demand for full arch solutions remains soft - Europe ma
Slide 8: Q2 2024 – Financial Results
Q2 2024 – Financial Results Stephen Keller (Interim) Principal Financial Officer 8
Slide 9: Q2 2024 Financial Metrics
Q2 2024 | Financial Metrics Q2 Q2 Key Metric vPY Summary 2024 2023 • Core Sales -3.2% Revenue $633.1M $662.4 M -$29.3M − Realignment of North American channel inventory − Increase in deferred revenue for Spark Core Sales Growth(%)* -3.2% 2.1% -530 bps − Continued weakness in demand for higher-end sp
Slide 10: Q2 2024 Revenue Bridge (vPY)
Q2 2024 | Revenue Bridge (vPY)* $662.5 -$8.4 -$11.0 -$17.5 $633.1 $8.4 -$0.9 Q2 FX Increased Spark Dealer Inventory Volume Price Q2 2023 Revenue Deferral Reduction 2024 10 *Bridge based on management's best estimate of year over year impact.
Slide 11: Q2 2024 Adjusted EBITDA Margin Bridge (vPY)
Q2 2024 | Adjusted EBITDA Margin Bridge (vPY)* 19.1% $19.5 -340 bps -300 bps -130 bps 100 bps -150 bps 10.0% -190 bps 100 bps 1x Increased Spark Investments Unfavorable Price Net Other Q2 Q2 Revenue Deferral & Costs Mix Productivity 2023 Dealer Inventory 2024 Reduction *Adjusted EBITDA & adjusted EB
Slide 12: Q2 2024 Specialty Products & Technologies
Q2 2024 | Specialty Products & Technologies Challenging Quarter – Continuing to Invest for Long-term Growth & Profitability Revenue Adjusted Operating • Orthodontics grew LSD+ Core Sales* +0.9% Profit Margin* − Spark sales grew modestly; Impacted by increase in revenue deferral $417.0 $415.1 − Numbe
Slide 13: Q2 2024 Equipment & Consumables
Q2 2024 | Equipment & Consumables Diagnostics market remains challenged; Solid Sell-Out in consumables • Diagnostics declined HSD Revenue Adjusted Operating − Diagnostics market demand remains soft Core Sales* -10.1% Profit Margin* − Modest growth in North America; offset by declines in Emerging Mar
Slide 14: Q2 2024 Cash Flow and Balance Sheet
Q2 2024 | Cash Flow and Balance Sheet Strong Balance Sheet; Strong Free Cash Flow Performance Q2 Q2 • Balance Sheet vPY 2024 2023 − Net Debt to Adj. EBITDA @ 1.6x Operating Cash Flow $93.1M $75.1 M +24% • Free Cash Flow − Strong free cash flow driven by improved working capital performance Capital E
Slide 15: Strategic Update & 2024 Outlook
Strategic Update & 2024 Outlook Paul Keel Chief Executive Officer 15
Slide 16: Leadership Appointments: Chief Financial Officer
Leadership Appointments | Chief Financial Officer Eric Hammes Appointed Chief Financial Officer Key Qualifications − 25+ Years of Financial & Operational Leadership − Former Chief Accounting Officer of 3M − Experience in both Medical and Specialty Dental; CFO 3M Healthcare Business; Director of Fina
Slide 17: Leadership Appointments: President – Nobel Biocare
Leadership Appointments | President – Nobel Biocare Stefan Nilsson Appointed President Nobel Biocare Key Qualifications − CEO of Europe’s largest Dental Service Organization (DSO) − Strong background in Sales & Marketing and Operations − Global business leader with experience in both Medical and Den
Slide 18: Leadership Appointments: President – Orthodontics
Leadership Appointments | President – Orthodontics Veronica Acurio Appointed President Orthodontics Key Qualifications − Led 3M’s ~$5 Billion Medical Solutions Business − Extensive experience in both Medical and Dental; Led 3M’s global restorative business − Global business leader – lived and worked
Slide 19: 2024 Key Focus Areas for 2H
2024 | Key Focus Areas for 2H Position Envista for improving performance; Return to growth in Q4 • Accelerate Growth − Continue to drive Spark growth − Translate investments in Nobel Biocare into topline growth − Return to growth in consumables sell-in, with less inventory in the channel • Further s
Slide 20: 2024 Full Year Guidance
2024 | Full Year Guidance Focus on repositioning Envista for Long-Term Growth Guidance Key Metric 2024 Revenue – Core Growth* -1% to -4% Adj. EBITDA Margin* 10% – 12% • Expect Q3 core growth and adjusted EBITDA margins to be below Q2 • Expect Q4 to return to growth Note: These forward-looking estima
Slide 21: Closing Thoughts
Envista | Closing Thoughts Dental is an attractive market with proven long-term growth drivers Envista is well positioned in the highest value segments of the dental market We are taking swift action to accelerate both our top and bottom line growth Significant opportunity to create value for patien
Slide 22: Q&A
Q&A 22
Slide 23: Appendix
Appendix 23
Slide 24: Reconciliation of Adjusted Gross Profit
Envista Holdings | Reconciliation of Adjusted Gross Profit ($ in millions) Adjusted Gross Profit and Adjusted Gross Margin Three Months Ended Six Months Ended ($ in Millions) June 28, 2024 June 30, 2023 June 28, 2024 June 30, 2023 Gross Profit $ 326.6 $ 378.6 $ 682.9 $ 741.3 Restructuring costs and
Slide 25: Reconciliation of Adjusted Operating Profit
Envista Holdings | Reconciliation of Adjusted Operating Profit ($ in millions) Adjusted Operating Profit Three Months Ended Six Months Ended ($ in millions) June 28, 2024 June 30, 2023 June 28, 2024 June 30, 2023 Consolidated Operating (Loss) Profit $ (1,153.3) $ 78.9 $ (1,105.2) $ 151.0 Amortizatio
Slide 26: Reconciliation of Adjusted Net Income
Envista Holdings | Reconciliation of Adjusted Net Income ($ in millions) Adjusted Net Income Three Months Ended Six Months Ended ($ in millions) June 28, 2024 June 30, 2023 June 28, 2024 June 30, 2023 Net (Loss) Income $ (1,151.6) $ 51.9 $ (1,128.0) $ 95.7 Amortization of acquisition-related and oth
Slide 27: Reconciliation of Adjusted Diluted EPS
Envista Holdings | Reconciliation of Adjusted Diluted EPS Adjusted Diluted Earnings Per Share Three Months Ended Six Months Ended June 28, 2024 June 30, 2023 June 28, 2024 June 30, 2023 Diluted (Loss) Earnings $ (6.69) $ 0.29 $ (6.56) $ 0.54 Amortization of acquisition-related and other intangible 0
Slide 28: Reconciliation of Adjusted Diluted Shares Outstanding
Reconciliation of Adjusted Diluted Shares Envista Holdings | Outstanding (in Millions) Adjusted Diluted Shares Outstanding (in millions) Three Months Ended Six Months Ended June 28, 2024 June 30, 2023 June 28, 2024 June 30, 2023 Average common stock shares outstanding - basic 172.1 164.0 172.0 163.8
Slide 29: Reconciliation of Adjusted EBITDA
Envista Holdings | Reconciliation of Adjusted EBITDA ($ in millions) Adjusted EBITDA ($ in millions) Three Months Ended Six Months Ended June 28, 2024 June 30, 2023 June 28, 2024 June 30, 2023 Net (Loss) Income $ (1,151.6) $ 51.9 $ (1,128.0) $ 95.7 Interest expense, net 11.7 17.4 24.6 34.1 Income ta
Slide 30: Reconciliation of Core Sales Growth
Envista Holdings | Reconciliation of Core Sales Growth1 Core Sales Growth 1 % Change Three Month Period % Change Six Month Period Ended Ended June 28, 2024 vs. Comparable June 28, 2024 vs. Comparable Consolidated 2023 Period 2023 Period Total sales growth (4.4)% (2.6)% Plus the impact of: Currency e
Slide 31: Reconciliation of Operating Cash Flows to Free Cash Flow
Reconciliation of Operating Cash Flows to Free Envista Holdings | Cash Flow ($ in Millions) Reconciliation of Operating Cash Flows to Free Cash Flow ($ in millions) Three Months Ended Six Months Ended June 28, 2024 June 30, 2023 June 28, 2024 June 30, 2023 Net Operating Cash Provided by Operating $
Slide 32: Non-GAAP Financial Measures: Notes to Reconciliation
Envista Holdings | Non-GAAP Financial Measures Notes to reconciliation of GAAP to non-GAAP financial measures (unaudited) A Represents impairment charge related to goodwill and certain intangible assets. B We exclude impairment of certain long-lived assets, executive transition costs, and cost incur
Slide 33: Statement Regarding Non-GAAP Measures
Envista Holdings | Non-GAAP Financial Measures Statement Regarding Non-GAAP Measures Each of the non-GAAP measures set forth above should be considered in addition to, and not as a replacement for or superior to, the comparable GAAP measure, and may not be comparable to similarly titled measures rep
Slide 34: Statement Regarding Non-GAAP Measures (Continued)
Envista Holdings | Non-GAAP Financial Measures Statement Regarding Non-GAAP Measures (Continued) The items excluded from the non-GAAP measures set forth above have been excluded for the following reasons: • With respect to Adjusted Gross Profit, Adjusted Operating Profit, Adjusted Net Income, Adjust