uploads///NEW SEGMENT STRUCTUR

Understanding Dentsply Sirona’s New Organizational Structure

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Mar. 19 2018, Updated 7:31 a.m. ET

Dentsply Sirona has reorganized its reporting segments

In 4Q17, Dentsply Sirona (XRAY) started reporting its operations under two segments, after a shift to three segments in fiscal 3Q17. The company reported its 3Q17 results under three segments:

  • Chairside Consumable and Endodontics
  • Implants, CAD-CAM, Prosthetics, and Healthcare
  • Imaging, Treatment Centers, and Orthodontics.

However, in fiscal 4Q17, the new management decided to report its operations under two segments:

  • Consumables
  • Technologies & Equipment

The company had a two segment operational structure prior to 3Q17, but the new two-segment structure has some differences, which we’ll discuss below.

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Two new segments in structure

Dentsply Sirona has recently undergone a leadership transition and management changes. The company aims to drive strategic growth going forward and has started implementing a new strategic plan that focuses on growth and operational excellence. The company reported its 4Q17 results under two segments. The new reporting structure advances the company’s strategy to implement a simplified business structure with strategically aligned businesses.

The new structure is also different in that the implants business is now part of the Technology & Equipment segment, whereas the Instruments business is now part of the Consumables segment. Dentsply Sirona plans to manage its healthcare business independently.

With this new restructuring, the company will be accelerating its aim to provide integrated solutions to its customers and compete more effectively with peers Danaher (DHR), 3M (MMM), and Align Technology (ALGN). These peers reported sales growth of 10.9%, 9%, and 43.7%, respectively, in their recently reported quarters.

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