CHARLOTTE, N.C., Feb. 16, 2023 (GLOBE NEWSWIRE) — DENTSPLY SIRONA Inc. (Nasdaq: XRAY) today announced that its Board of Directors approved an organizational restructuring plan intended to improve operational performance and drive shareholder value creation.
The plan is anticipated to achieve at least $200 million in annual cost savings over the next 18 months through a new operating model that will streamline the organization, enhance operational efficiency, and position Dentsply Sirona to drive future sustainable growth. This model was developed through the Company’s ongoing review of its business and operations.
“The actions we are planning follow our comprehensive review of the business and will enable Dentsply Sirona to improve its execution, build a winning portfolio, return to growth, and generate consistent returns,” said Simon Campion, Chief Executive Officer. “We are acting with urgency to implement this operating model, which we believe will drive overdue organizational integration and improve organizational accountability and efficiency. While actions that impact our team are difficult, I am confident that this plan, along with anticipated outcomes from other workstreams, will set Dentsply Sirona on a trajectory to achieve stronger, more predictable results and add significant value for all stakeholders.”
The new operating model will enable the Company to leverage its strong position in the dental industry and better deliver on its core value creation drivers and strategic objectives. The restructuring plan consists of the following planned measures:
- A reduction in the global workforce of approximately 8% – 10%.
- Implementation of five global business units – designed to drive enterprise integration and align the product portfolio with the Company’s growth strategy. This global business unit structure is closely aligned to the Company’s regional commercial structures, facilitating improved transparency and communication.
- Commencement of central functions and infrastructure optimization to support efficiency of the overall organization.
- Creation of a Senior Vice President of Quality and Regulatory role, designed to elevate the quality and regulatory affairs function within the management team. The Senior Vice President of Quality and Regulatory will be responsible for overseeing these functions across the entire organization.
- Simplification of management structure to bring the Company in-line with industry best practices.
- Delivering cost savings to fund critical investments in 2023 and beyond to position the Company for sustainable future growth.
- The proposed changes are subject to co-determination processes with employee representative groups in countries where required.
In connection with this plan, the Company expects to incur up to $165 million in non-recurring charges, the majority of which will be expensed in 2023. The realization of cost savings is expected to accelerate in the second quarter of 2023 and achieve the full run rate within 18 months. As noted, these cost savings will fund critical growth investments in 2023 and beyond, across areas such as the global commercial organization, information technology, and compliance enabling the Company to enhance and sustain profitability, accelerate enterprise digitalization, and win in aligners and implants.
In addition to evolving Dentsply Sirona’s operating model, the Company is undertaking a review of the Company’s product offerings on a SKU-level basis to inform decisive actions that can be taken to streamline the portfolio and deliver higher returns. Expected benefits of portfolio simplification include improvement in plant and network efficiencies to unlock further long-term margin expansion opportunities. These efforts are anticipated to yield additional benefits including reducing operational complexity, optimizing inventory, increasing service levels and salesforce effectiveness, reducing risk, and improving quality. The Company will balance these anticipated benefits with a goal of preserving the associated revenue through effective customer partnership and disciplined execution.
The Company is acting decisively to execute on these transformation plans, which are key to achieving the Company’s strategic objectives and delivering the meaningful earnings improvement expected by the end of 2025, with adjusted earnings per share of $3.00 targeted for 2026. Management expects 2023 to be a transition year as the plan is put into action against a challenging external environment.
The Company intends to further discuss these plans on its upcoming fourth quarter and full year 2022 earnings call on February 28, 2023.
About Dentsply Sirona
Dentsply Sirona is the world’s largest manufacturer of professional dental products and technologies, with over a century of innovation and service to the dental industry and patients worldwide. Dentsply Sirona develops, manufactures, and markets a comprehensive solutions offering including dental and oral health products as well as other consumable medical devices under a strong portfolio of world class brands. Dentsply Sirona’s products provide innovative, high-quality and effective solutions to advance patient care and deliver better and safer dental care. Dentsply Sirona’s headquarters is located in Charlotte, North Carolina. The Company’s shares are listed in the United States on Nasdaq under the symbol XRAY. Visit www.dentsplysirona.com for more information about Dentsply Sirona and its products.
