Envista Holdings Corporation · NYSE:NVST
Envista — Investor Day (April 2022)
69 slides from Envista's investor day presentation, Apr 1, 2022
Slide 1: Envista Summit – Investor Day
Envista Summit – Investor Day April 1, 2022
Slide 2: Forward Looking Statements
Forward Looking Statements Certain statements in this presentation are “forward-looking” statements within the meaning of the federal securities laws. There are a number of important factors that could cause actual results, developments and business decisions to differ materially from those suggeste
Slide 3: Agenda
Time Topic Presenter 08:00 – 08:30 Envista – Overview & Strategy Amir Aghdaei AGENDA 08:30 – 08:50 Orthodontic Solutions Eric Conley 08:50 – 09:05 Break 09:05 – 09:25 Implant-based Tooth Replacement Patrik Eriksson 09:25 – 09:45 Imaging & Diagnostic Solutions JC Kyrillos 09:45 – 10:00 Envista – Outl
Slide 4: Envista – Overview & Strategy
Envista – Overview & Strategy Amir Aghdaei, President & CEO 2022 Investor Day @ Envista Summit 4
Slide 5: What you will hear today….
What you will hear today…. Dental is an attractive market with strong secular growth trends Envista is strategically differentiated with a proven track record of execution Significant opportunity to accelerate growth, improve margins, & create value for patients, customers, employees, and shareholde
Slide 6: Envista – At A Glance
Envista – At A Glance Partnering with professionals to improve lives by expanding oral care access worldwide Envista Profile Annual Revenue – FY 2021 $2.5 Billion* 12,000+ Employees 1,600+ Issued Patents 140+ Countries HQ Brea, California Revenue Revenue by Segment by Geography 125+ Years of Innovat
Slide 7: We partner with professionals to improve lives
Our Purpose We partner with professionals to improve lives Our Core Values Customer Innovation Respect Continuous Leadership Centricity Improvement 7
Slide 8: Envista Scorecard – IPO to 2021
Envista Scorecard – IPO to 2021 Exceptional Execution; Exceeded Expectations 2019 IPO Analyst Day - Commitments Results 2019E 2021F 2021 Actual Core Sales Growth* Flat LSD MSD (vs. Pre-Pandemic) Adjusted EBITDA* 14% 15.2% 19.7% Free Cash Flow* $262 Million $296 Million $348 Million** Leverage
Slide 9: Envista Transformation
Envista Transformation Pre-IPO 2019 – 2020 2021 2022** Core Growth* Flat to Decline LSD MSD MSD+ (Pandemic Adjusted) (vs. Pre-Pandemic) EBITDA%* Mid-Teens Mid-Teens 19.7% >20% Segment Share Trend % Direct <50% ~50% >60% >60% Foundational Focused / Executing Acceleration / Leadership • Ops co
Slide 10: The Envista Business System (EBS) Playbook
The Envista Business System (EBS) Playbook EBS based execution drives long-term returns Core sales growth Improve cost Gross structure margin G&A + Margin expansion + Reinvest for Strong free cash flow R&D S&M growth + Acquisitions Accelerate Core = margins EBITDA Strong EPS growth & growth & core g
Slide 11: Leveraging EBS to Create Long-Term Value
Leveraging EBS to Create Long-Term Value Reducing structural costs while funding long-term growth Cost Reduction Program Workforce Consolidation & Redeployment Real Estate & Indirect Spend >15% >50% >$125M Reduction Increase annualized Workforce # Non-ortho employees # Ortho employees savings Consol
Slide 12: Dental Market Landscape
Dental Market Landscape Patients Clinicians / Providers Suppliers Imaging Annual Spend # of Clinicians Implant Ortho Solutions >$350 Billion >2 Million Consumables >$75 • Specialists Billion TU/Ins Growth • General Practitioners Non-Implant Tooth Other MSD • DSO’s Replacement Services # of Dentists
Slide 13: Envista is Focused on High Value Segments (>$25B)
Envista is Focused on High Value Segments (>$25B) Segment Segment Envista Envista Category Key Brands Size* Growth** Position 2D/3D ~$2B LSD+ #1 Imaging & Diagnostics Equipment & IOS ~$1B >10% New Focus (Carestream IOS acquisition) Consumables Consumables & ~$7B LSD #3/4 Infection Prevention Implant
Slide 14: Dental Market Evolution
Dental Market Evolution Yesterday Today Tomorrow • Analog imaging • Digital dentistry is here • Integrated workflow: diagnostics, • Impressions, stone models • Multiple systems not working together planning, delivery in one place • Inefficient, skill-dependent • Complex, confusing • Better treatment
Slide 15: Digitize Personalize Democratize
Our integrated workflows improve the Our broad portfolio of diagnostic efficiency of care and accelerate the equipment and clinical software Our digitized workflows enable the productivity of clinicians, solutions empowers dental development and allowing them to treat more patients professionals to
Slide 16: Envista's Unique Diagnostics and Treatment Offerings
Envista’s Unique Diagnostics and Treatment Offerings DIGITIZE PERSONALIZE DEMOCRATIZE Every patient - for all indications Tailored plan / specialty consumables Access / solutions / workflows PROSTHETICS SINGLE SOURCE OF TRUTH DTX Smartly Studio™ Augmented In-Office / In-Lab / Platform Centralized Pr
Slide 17: Democratize: Driving Growth with DSO's
Democratize: Driving Growth with DSO’s Est. DSO Share of US Dental Market* The Envista Advantage >40% Attractive solution offering; tailored to the needs of the DSO Focus on high-value treatments that >20% support profitable DSO growth 15% Effective training & education platform; scalable to DSO nee
Slide 18: Driving Growth in Underpenetrated Markets
Driving Growth in Underpenetrated Markets Focus on China Track Record of Success 15% CAGR How We Differentiate in China • Strong commercial coverage • Localized investment • Differentiated Specialty portfolio • Focus on training & education # of cities in # of years # of patients China with sales op
Slide 19: Envista's Environmental, Social, & Governance (ESG) Pillars
Envista’s Environmental, Social, & Governance (ESG) Pillars Leading in an environmentally and socially responsible manner Quality & Access We are committed to doing our part to deliver high quality, safe products and solutions, and expand access to our products and solutions across the world. People
Slide 20: Key Takeaways
Key Takeaways Dental is an attractive market with strong secular growth trends Envista is strategically differentiated with a proven track record of execution Significant opportunity to accelerate growth, improve margins, & create value for patients, customers, employees, and shareholders 20
Slide 21: Orthodontic Solutions
Orthodontic Solutions Eric Conley, Senior Vice President 2022 Investor Day @ Envista Summit 21
Slide 22: What you will hear today….
What you will hear today…. Orthodontics is an attractive market segment where Envista is highly competitive Our focus on providing full orthodontic solutions to dental professionals will allow us to sustain DD+ growth EBS driven execution is key to sustainable growth 22
Slide 23: Orthodontic Business: Overview
Orthodontic Business: Overview Revenue 2021 Snapshot by Geography Sales >$500 Million ROW 5% North Core Growth* >30% Emerging America Markets 30% Market Position #2 35% Western Europe 30% Key Brands: Revenue by Solution Key Products / Solutions: Aligners & Digital Bracket & Wires 23 *Core sales grow
Slide 24: Orthodontics (Professional) Market
Orthodontics (Professional) Market Solutions* Key players Customers Orthodontists ~$4B Aligners >20% growth Total Solution Providers ~$2B Bracket & Wires DSO’s LSD growth *Represents estimated industry size & estimated outlook Source: Management estimates, public reports 24
Slide 25: Orthodontics – Significant Growth Opportunity
Orthodontics – Significant Growth Opportunity LSD Growth HSD Growth Key Drivers: ~5 Billion people • Complex Cases • Affordability with malocclusions • Emerging Markets • Compliance ~5 Million Annual Case Starts >20 Million Annual Case Starts >500 Million people ~15 Million DD+ Growth who could bene
Slide 26: Envista Transformation – Orthodontics
Envista Transformation Orthodontics Pre-IPO 2019 – 2020 2021 2022 & Beyond** Core Growth* MSD MSD DD+ DD+ (Pandemic Adjusted) (vs. Pre-Pandemic) Segment Share Trend Vitality Index 12% ~20% 18% >25% # of Patients Impacted <1.8 Million ~1.8 Million ~1.9 Million >2.2 Million (per year) Bra
Slide 27: How We Differentiate in Orthodontics
How We Differentiate in Orthodontics Focus on orthodontics will allow us to be the partner of choice and sustain DD+ growth* Patient impact Go to Market Training & Education Innovation Patient Impact Deliver superior support & Provide “best in class” Driving clinical efficacy & service, globally pro
Slide 28: The Ormco Difference
The Ormco Difference Delivering features that give doctors more control and flexibility over treatment plans Material Science CBCT Image Integration TruGEN and TruGEN XR • Expands diagnostics and • Delivers more force over time planning information • More clear, more comfortable, • Doctors now see t
Slide 29: Aligner Workflow from Scanning to Retention
Aligner Workflow from Scanning to Retention Clinical IOS Scan, Digital Tx Plan Attachment Treatment Treatment Examination & Patient Photos & Development & Surgery Doctor & Tx Plan Aligner Bonding & Monitoring & Complete & Acceptance Approval Provisional Manufacturing Tx Goals CBCT/x-rays Edits Align
Slide 30: Spark Continues to Accelerate
Spark Continues to Accelerate Triple Spark sales by 2024 — with significant long-term growth potential* Ormco brand highly trusted • Spark built on backbone of Ormco business • Doctors have confidence in effectiveness of solutions 3X Growth Global access to customers • Unified global sales teams, di
Slide 31: Key Takeaways
Key Takeaways Orthodontics is an attractive market segment where Envista is highly competitive Our focus on providing full orthodontic solutions will allow us to sustain DD+ growth EBS driven execution is key to sustainable growth 31
Slide 32: Break
Break 32
Slide 33: Implant-based Tooth Replacement
Implant-based Tooth Replacement Patrik Eriksson, Senior Vice President 2022 Investor Day @ Envista Summit 33
Slide 34: What you will hear today….
What you will hear today…. Implant-based tooth replacement is a large, attractive market that is underpenetrated and provides significant growth opportunities Envista is well positioned to accelerate growth Envista will lead the industry by providing differentiated solutions across the implant workf
Slide 35: Implant-based Tooth Replacement: Overview
Implant-based Tooth Replacement: Overview Revenue 2021 Snapshot By Geography Sales $1 Billion ROW 6% Emerging Core Growth* >30% Markets North 20% America Market Position #2 Western 52% Europe 22% Key Brands: Revenue Revenue By Solution By Segment Regeneratives Value Key Products / Solutions: Prosthe
Slide 36: Implant-based Tooth Replacement Market
Implant-based Tooth Replacement Market Solutions* Key players Customers >$11B Premium Oral Surgeons / ~$6B Prosthetics Implant Specialists MSD growth Stock & CAD/CAM abutments, crowns, bridges, etc. Value (mainly regional) General Dentists ~$4B Implants MSD+ growth Implants, fixtures, components, et
Slide 37: Implant Treatments are Significantly Underpenetrated
Implant Treatments are Significantly Underpenetrated ~4 Billion people <10% of people seeking treatment with missing teeth for tooth loss choose Implants >2 Billion people >200 with access to care Million Reasons for not People choosing implants • Awareness • Doctor Training • Fear / Pain >200 Milli
Slide 38: Envista Transformation – Implants
Envista Transformation Implants Pre-IPO 2019 – 2020 2021 2022 & Beyond** Core Growth* Flat LSD MSD HSD (Pandemic Adjusted) (vs. Pre-Pandemic) Segment Share Trend Vitality Index <15% ~20% 22% >25% # of Patients Impacted <1.5 Million <1.5 Million >1.5 Million >1.75 Million (per year) Restruc
Slide 39: How We Differentiate in Implants
How We Differentiate in Implants Innovation and commercial execution to accelerate growth to HSD* Commercial Execution Training & Education Innovation Patient Impact Est. >1.5 million Partnering with professionals Training the dental leaders of Leader in clinical and digital patients in 2021 to perf
Slide 40: Implant-based Tooth Replacement: Differentiated Solutions Across the Workflow
Implant-based Tooth Replacement: Differentiated Solutions Across the Workflow DIGITIZE PERSONALIZE DEMOCRATIZE Every patient - for all indications Tailored plan / specialty consumables Access / solutions / workflows Implants Implant designed for predictable results Non-guided Guided / Navigated befo
Slide 41: Innovation Driven Growth
Innovation Driven Growth Leader in clinical workflows – Biologically driven innovation Units (%) TiUltraTM & XealTM – Innovative Surface Treatments • Designed to improve Implant stability and healing • Surface chemistry and topography promotes cell attachment and soft tissue healing 1 • Improved sof
Slide 42: Key Takeaways
Key Takeaways Implant-based tooth replacement is a large, attractive market that is underpenetrated and provides significant growth opportunities Envista is well positioned to accelerate growth Envista will lead the industry by providing differentiated solutions across the implant workflow 42
Slide 43: Imaging & Diagnostic Solutions
Imaging & Diagnostic Solutions JC Kyrillos, Senior Vice President 2022 Investor Day @ Envista Summit 43
Slide 44: What you will hear today….
What you will hear today…. Imaging & diagnostics are the first step in high value dental treatments Envista is well positioned to enhance the clinician's diagnostic capabilities and increase patient acceptance Significant opportunity to drive imaging and diagnostics sales and unlock growth in specia
Slide 45: Imaging & Diagnostic Solutions: Overview
Imaging & Diagnostic Solutions: Overview Revenue by Geography 2021 Snapshot Sales >$425 Million Emerging Markets 15% Core Growth* ~30% Western North Europe - 12% America Market Position #1 (Imaging) 67% Key Brands: Revenue Revenue by Solution by Channel Direct Key Products / Solutions: Service/ Othe
Slide 46: Imaging and Diagnostic Solutions
Imaging and Diagnostic Solutions Solutions* Key players Customers General Dentists ~$2B 2D/3D Imaging LSD+ growth Intra-Oral Scanners Specialists ~$1B (Rebrand of Carestream IOS) DD+ growth Clinical Software Transformational Opportunity DSOs (Drives revenue of imaging & specialty solutions) 46 *Repr
Slide 47: Envista Transformation – Imaging & Diagnostics
Envista Transformation Imaging & Diagnostics Pre-IPO 2019 – 2020 2021 2022 & Beyond** Core Growth* Declining LSD MSD HSD (Pandemic Adjusted) (vs. Pre-Pandemic) Segment Share Trend Vitality Index 25% 39% 28% >30% Installed Base ~150K 155K 165K >175K Foundational Resetting & Accelerating Lea
Slide 48: How We Differentiate in Imaging & Diagnostics
How We Differentiate in Imaging & Diagnostics GTM, Installed Base, and Digital Ecosystem to accelerate growth to HSD* Go to Market Installed Base Digital Ecosystem Patient Broad global reach with superior One of the largest installed base Connected workflows from impact support & service of imaging
Slide 49: Imaging & Diagnostics Platform
Imaging & Diagnostics Platform DIGITIZE PERSONALIZE DEMOCRATIZE Every patient - for all indications Tailored plan / Specialty consumables Access / solutions / workflows SINGLE SOURCE OF TRUTH CONTINUITY OF DENTAL CARE DTX Studio™ Platform DTX Studio™ Platform Diagnostics Value Proposition • Unified
Slide 50: AI Assistance - Deeply Integrated into DTX Studio
AI Assistance - Deeply Integrated into DTX Studio™ 3D X-Ray + IOS 2D X-Ray 3D X-Ray and IOS: SmartFusion / SmartSetup Available SmartFusion SmartSetup Tooth position MagicSort 2D X-Ray: tooth position detection & MagicSort* (CBCT & IOS) (IOS) detection (2D) (2D FMX) 3D X-Ray + IOS 3D X-Ray 2D X-Ray
Slide 51: Acquisition of Carestream Dental's Intra-Oral Scanner Business
Acquisition of Carestream Dental’s Intra-Oral Scanner Business IOS segment is highly attractive and a key focus area for Envista* $57M • Large (>$1B) and fast-growing (DD) area of dentistry 2021 Revenues • Strong industry-average EBITDA** margins (>30%) • IOS scan is the first step in high value den
Slide 52: Rebranding KaVo Imaging to DEXIS
Rebranding KaVo Imaging to DEXIS 52
Slide 53: Key Takeaways
Key Takeaways Imaging & diagnostics are the first step in many high value dental treatments Envista is well positioned to enhance the clinician's diagnostic capabilities and increase patient acceptance Significant opportunity to drive imaging and diagnostics sales and unlock growth in specialty cons
Slide 54: Envista – Outlook
Envista – Outlook Amir Aghdaei, President & CEO 2022 Investor Day @ Envista Summit 54
Slide 55: Driving Long-Term Leadership
Driving Long-Term Leadership Attractive Segments • Orthodontics • Implant Tooth Replacement • Imaging & Diagnostics DSO • DSOs Market leadership = Connected Digital Workflows • DTX Studio™ digital ecosystem Accelerated • Large imaging installed base growth & margins • Strong workflow solutions Compo
Slide 56: Envista: Long-term Outlook
Envista: Long-term Outlook Value Creation Driven By: Accelerating Growth and Margins 2022 – 2026** Comments Core Sales Growth* MSD+ HSD • Accelerating growth in out years Adjusted EBITDA%* >22.5% • Balanced growth and margin expansion (in 2026) Adj. EPS Growth* >10% • Compounding returns *Core sal
Slide 57: Long-Term Growth Outlook
Long-Term Growth Outlook Attractive Market Segments + Share Gain + Innovation = HSD Growth** ~$4 Billion 2-3% 1-2% 4-5% Core Growth Nobel Biocare N1™ HSD $2.5 Implant System Billion 2021 Market Commercial Innovation Acquisition 2026 Growth Execution 57 *Core sales growth is a non-GAAP financial meas
Slide 58: Key Takeaways
Key Takeaways Dental is an attractive market with positive secular growth trends Envista is strategically differentiated with a proven track record of execution Significant opportunity to accelerate growth, improve margins, & create long-term value for patients, customers, and shareholders 58
Slide 59: Digitize Personalize Democratize
Our integrated workflows improve the Our broad portfolio of diagnostic efficiency of care and accelerate the equipment and clinical software Our digitized workflows enable the productivity of clinicians, solutions empowers dental development and allowing them to treat more patients professionals to
Slide 60: Q&A – Panel Discussion
Q&A – Panel Discussion
Slide 61: Envista Leadership Panel
Amir 61 Aghdaei Howard Yu Eric Conley Patrik Eriksson JC Kyrillos
Slide 62: Appendix
Appendix ® Envista
Slide 63: Reconciliation of Core Sales Growth
Reconciliation of Core Sales Growth1 1 We use the term “core sales” to refer to GAAP revenue excluding (1) sales from acquired businesses recorded prior to the first anniversary of the acquisition (“acquisitions”), (2) sales from discontinued products and (3) the impact of currency translation. Sale
Slide 64: Reconciliation of Adjusted EBITDA
Reconciliation of Adjusted EBITDA ($ in Millions) See the accompanying Notes to Reconciliation of GAAP to Non-GAAP Financial Measures 64
Slide 65: Reconciliation of Operating Cash Flows to Free Cash Flow
Reconciliation of Operating Cash Flows to Free Cash Flow ($ in Millions) See the accompanying Notes to Reconciliation of GAAP to Non-GAAP Financial Measures 65
Slide 66: Notes to Reconciliation of GAAP to Non-GAAP Financial Measures
ENVISTA HOLDINGS CORPORATION NOTES TO RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (UNAUDITED) A We exclude costs incurred pursuant to discrete restructuring plans that are fundamentally different (in terms of the size, strategic nature and planning requirements, as well as the inconsistent
Slide 67: Statement Regarding Non-GAAP 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 reported by other companies. Management believes t
Slide 68: Statement Regarding Non-GAAP Measures (Continued)
Statement Regarding Non-GAAP Measures (Continued) Management uses these non-GAAP measures to measure the Company’s operating and financial performance. The items excluded from the non-GAAP measures set forth above have been excluded for the following reasons: • With respect to Adjusted EBITDA: • We
Slide 69: Envista
©) Envista