Envista Holdings Corporation (NYSE:NVST) Q4 2022 Earnings Call Transcript

In the implant side, outside those two geographies, we have performed well and continue to perform well and it is getting operational and our commercial execution is getting better. As you recall, if you go back a couple of years later ago, we decided that we have to make some improvement and changes in our go to market activities around commercial execution in Europe. The outcome of that has been a continuous improvement. We’re doing the same thing in North America and in U.S. And we think with those changes, we’re going to see a continued progress as we move forward toward 2023. A consumable business at a high-single-digit growth in Q4 and really outperformed the market. Howard talked about the IPS and that business now we have a lot better visibility and a sell-in and sell-out and we think that’s going to be a positive approach as we move forward.

And last part of our business, we haven’t yet seen any change in the imaging side of our business as we walk into the Q1, but I want to highlight a couple of things about imaging. About one-third of that business is services and is annuity business and continuation of what we have been doing in the past several years. And iOS, as Howard mentioned, we have seen a step-up quarter-after-quarter and that step-up continues throughout Q1. Putting all of that together, what we expect, a slower ramp throughout the year, specifically the front part of the year, and as certainty come into our focus in China, we expect to see higher growth, higher margin as we walk throughout the year.

Elizabeth Anderson: That’s very helpful. Thank you. I guess as a follow-up, I would also be curious about your comments and maybe this is more for Howard. About the sensitivity of the operating margin guidance that you just gave us to the, sort of macro growth. Obviously, with the low-single-digit core guide, if we were to get to the, sort of that, sort of how do you see that potential flexibility there?

Howard Yu: Yes. So, Elizabeth, we are always looking for continuous improvement. Even when we have softer top line, we’re going to continue to EBS and look to improve our efficiencies, productivity as well. As Amir indicated in the prepared comments, we did some pretty substantial actions even on the structural side in the second half and continue to fine tune that in the fourth quarter as well. And so, you can see and expect us to do what we need to operationally still protecting obviously the long-term growth drivers for us. We mentioned that in the context of Spark certainly, but in other areas where we have innovation that will drive growth further in the future. We’re going to continue and invest there, but as it relates to operations and ensuring that we get the productivity gains certainly that will be a focus, a fundamental tenant of EBS and one that we continue to deploy year-over-year.

Elizabeth Anderson: Got it. Thanks so much guys.

Howard Yu: Thank you.

Operator: Thank you. Our next question will come from Jeff Johnson with Baird. Your line is open.