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Key Highlights of Dentsply Sirona's 1Q17 Earnings Release

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Part 4
Key Highlights of Dentsply Sirona's 1Q17 Earnings Release PART 4 OF 7

Dentsply Sirona’s New Growth Strategy to Accelerate Digital Dentistry Penetration

Overview

Dentsply Sirona (XRAY) is the largest dental equipment and solutions manufacturer in the United States. Digital dentistry is a megatrend in the market with a significant amount of untapped potential.

In order to tap into this trend and increase the adoption of digital dentistry in the United States while accelerating growth, Dentsply Sirona has announced a new go-to-market strategy. Its US retail sales were weak in 1Q17. Let’s take a look its recent revenue trend by segment.

Dentsply Sirona’s New Growth Strategy to Accelerate Digital Dentistry Penetration

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Partnership with Henry Schein and Patterson

As part of its US go-to-market strategy, Dentsply Sirona has entered into a new three-year distribution agreement with Henry Schein in North America. According to the agreement, the distributor will have access to Dentsply Sirona’s full distribution product line in September 2017. It will start selling its leading brands in the United States.

Henry Schein and Patterson are Dentsply Sirona’s long-term distributors. These are the two largest distributors in the United States. By September, both will likely have access to the company’s full distribution product line.

Both Henry Schein and Patterson have a huge sales and distribution infrastructures in the United States. According to Dentsply Sirona, “We’re excited to expand our relationship with Henry Schein and are confident that adding our equipment lines to their sales and service infrastructure should be complementary, as they already know us and our products well.”

The company continued, “Schein can leverage the knowledge and success they’ve had selling our technology in Europe. With both distributors carrying our full distributed product line, we will expand our reach into the U. S. market. Awareness about the digital and single-visit dentistry will increase and expand the market.”

Toward the same strategy, the company is accelerating its cross-selling initiatives by integrating its products. Dentsply Sirona has integrated its treatment centers with endodontic and implantology systems.

Danaher (DHR), Integra Lifesciences (IART), and Zimmer Biomet Holdings (ZBH) are some of Dentsply Sirona’s competitors in the dental equipment market, with Dentsply Sirona holding the majority of the market share. Investors who want exposure to XRAY can invest in the iShares Russell Mid-Cap Value ETF (IWS), which has ~0.41% of its total holdings in XRAY.

Next, let’s take a look at the company’s profit margins in 1Q17.

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