A Brief Look at Dentsply Sirona’s Business Model

Dentsply Sirona (XRAY) offers a broad portfolio of dental equipment and consumables that have urological and surgical applications. It manufactures an extensive range of products and distributes them under some of the well-established brands around the world.

The company manufactures and distributes its products under four principal product categories, including dental consumable products, dental laboratory products, dental specialty products, and consumable medical device products. The company reports its results under two operating segments:

• dental and healthcare consumables
• technology

The company realigned its reporting structure after the merger of Dentsply and Sirona in February 2016, prior to which the company’s results were reported under three operating segments:

• dental consumables, endodontic, and dental laboratory businesses
• healthcare, orthodontic and implant businesses
• select developed and emerging markets businesses.

These operating segments generally have overlapping products, geographies, customer bases, and distribution channels.

The dental consumable products segment consists of small dental equipment and value-added dental supplies and devices. This segment represented ~29% of XRAY’s total sales in 2015. Some of the key products in this segment include dental sealants, tooth whiteners, dental anesthetics, restorative materials, and small dental equipment such as dental handpieces, ultrasonic scalers, intraoral curing light systems, and polishers.

Dental laboratory products are used by dental laboratories in the preparation of dental appliances. The product segment represented approximately 9% of XRAY’s total sales in 2015. Some of the key products in this segment include dental ceramics and artificial teeth. This segment also includes porcelain furnaces and computer aided design and machining ceramic systems.

Dental specialty products are the specialized treatment products used in the dental laboratories and offices. This product segment represented approximately 50% of XRAY’s total sales in 2015. Some of the key products in this segment include implants and related products, dental and orthodontic appliances and accessories, 3D digital scanning, and endodontic instruments and materials.

Some of Dentsply Sirona’s major competitors include Zimmer Biomet Holdings (ZBH), Align Technology (ALGN), and Integra Lifesciences Holdings (IART). Investors can invest in the iShares Russell Mid-Cap Growth ETF (IWP) for diversified exposure to Dentsply Sirona. XRAY accounts for ~0.29% of the total holdings of IWP.