Good day, and thank you for standing by. Welcome to the Fourth Quarter 2022 Dentsply Sirona Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. [Operator Instructions] Also be advised that today's conference is being recorded. I would now like to hand the conference over to Andrea Daley, Vice President, Investor Relations. Please go ahead.

Thank you, Carmen, and good morning, everyone. Welcome to our Fourth Quarter 2022 Earnings Call. Joining me for today's call is Simon Campion, Dentsply Sirona, Chief Executive Officer; and Glenn Coleman, Chief Financial Officer. I'd like to remind you that an earnings press release and slide presentation related to the call are available in the Investors section of our website at www.dentsplysirona.com. Before we begin, please take a moment to read the forward-looking statements in our earnings press release. During today's call, we may make certain predictive statements that reflect our current views about future performance and financial results. We base these statements and certain assumptions and expectations on future events that are subject to risks and uncertainties. Our most recently filed Form 10-K and any updating information in subsequent SEC filings, lists some of the most important risk factors that could cause actual results to differ from our predictions. Additionally, on today's call, our remarks will be based on non-GAAP financial results. We believe that non-GAAP financial measures provide investors with useful supplemental information, about financial performance of our business, enable the comparison of financial results between periods where certain items may vary independently of business performance and allow for greater transparency with respect to key metrics used by management in operating our business. Please refer to our press release for the reconciliation between GAAP and non-GAAP results. And with that, I would now like to turn the call over to Simon.

Thank you, Andrea, and thank you all for joining us this morning for our Q4 2022 earnings call. Today, I'll start by providing an overview of our recent performance and the transformation work we have underway. Glenn will cover Q4 and 2022 financial results and also share our 2023 outlook, and then I will finish by providing a strategic operating update. Starting on slide 5. We were pleased to close out 2022 with results much better than expected, exceeding the high end of our prior outlook across key financial metrics. Having led this organization for five months now, I'm energized by the momentum we have and confident that while the macro environment remains challenging, the difficult work we are doing now will aid our ability to navigate it successfully. We are already seeing the fruits of our efforts with early quick wins such as renewed interest from and with DSOs. While we can't get into the details, it gives us confidence in the progress that we are already making. You may have heard that, we recently announced our organizational restructuring plan to improve operational performance to increase alignment, to drive process and discipline, and to begin to position Dentsply Sirona for improved future performance. We committed to act with urgency, and I feel we are doing just that. We are moving deliberately from discovery to action, and we are confident that this plan and other initiatives will collectively improve performance to deliver long-term shareholder value. Moving to slide 6. Let me take a few minutes to explain the changes we are making. We are putting into place a new operating model, which will enable the company to better deliver on our strategic objectives while also focusing on our tone at the top that focuses on inclusivity, transparency and importantly, ethics…

Thank you, Simon. Good morning and thank you all for joining us. Today, I'll cover several topics, including our fourth quarter and full year 2022 results as well as our outlook for 2023. Overall, we exceeded the high end of our revenue, operating margin and adjusted EPS outlook ranges that we provided in November and believe this is an important early milestone as we move forward. So let's begin on Slide 9. Our fourth quarter revenue was $983 million, which represented a decline of 10.9% on a reported basis versus the prior year, largely impacted by foreign currency and a stronger US dollar. Organic sales decreased by 2.6%, but if exclude China, sales grew 0.4%. Sequentially, organic revenue grew 5.8% versus Q3. Operating income was $154 million with operating margin of 15.7%. On a year-over-year basis, operating margin contracted due to continued FX and inflation headwinds, partially offset by price. On a sequential basis versus the third quarter, operating margin improved by 100 basis points, which was much better than expected. Adjusted EPS in the fourth quarter was $0.46 and exceeded the high end of our outlook range by $0.09, largely due to better-than-expected organic revenues and operating margin performance. On a year-over-year basis, adjusted EPS declined by $0.37. We attribute about $0.10 of the EPS decline to foreign currency, with the remainder coming from lower year-over-year organic revenues, inflationary pressures and below-the-line FX expenses. We also delivered strong operating cash flow in the fourth quarter, which came in at $142 million, translating to adjusted free cash flow conversion of 110%, up from 100% conversion in the prior year. In the quarter, we returned $26 million to shareholders through dividends. Let me now turn to our segment performance in the quarter on Slide 10. Organic sales in Technologies & Equipment,…

Thank you, Glenn. Moving on to our strategic update, starting on Slide 20. We are putting our plans into motion as we move the organization forward to address the internal challenges we have faced and lay the right foundation that will enable long-term sustainable performance. The fundamentals of our industry remain attractive, and we are well placed to capitalize on growth opportunities supported by a solid organizational foundation. Our path forward starts with confirmation that our strategy to transform the industry by digitalizing dental workflows, by driving product and service innovation and delivering an exceptional customer and patient experience through an engaged and diverse workforce is the right one. We are now intensely focused on how we will improve on the delivery of the tactical elements of this strategy in a predictable, repeatable, reliable manner to customers, shareholders and employees. Changing to Slide 21, we have initiated much of this transformational work with heavy lifting is ahead of us. As we embark on this New Year, we are focused on five core tactical and strategic objectives. These objectives are to: number one, deliver on our annual growth and margin commitments that Glenn has just shared. Number two, enhance and sustain our profitability. Number three, accelerate enterprise digitalization. Number four, wind in aligners and implants. And number five, create a high-performance culture. As we make progress on these objectives, we do so with an eye on fulfilling our commitment to return to industry growth and increase profitability. Turning to Slide 22. I would like to reiterate the key actions we are taking to achieve these objectives. Today, we have provided our 2023 growth and margin outlook, and we are committed to achieving that plan. We will do so by making meaningful progress on the other four objectives that we have laid…

Thank you. And I will now begin the Q&A. [Operator Instructions] And the first question comes from the line of Kevin Caliendo with UBS. Please proceed.

Thank you very much. This is actually Dylan Finley on for Kevin Caliendo. Congrats on a great quarter, guys. Question for you kind of on the revenue side, so, you put out that $3 EPS target for 2026. Based on some math that we did assuming some moderate amount of buybacks and assuming you hit a 20% operating margin, by that time frame, we landed on an average growth rate of around 2.5%. So based on the growth that you're expecting this year, it will definitely accelerate a little bit. I'm wondering if this is consistent with your own internal assumptions and if you have any visibility yet exiting 2023, where you expect to grow? Thanks.

Yeah. No, I think first and foremost, we haven't laid out our revenue expectations long term. We'll do that at an Investor Day coming up in November. But clearly, we would expect to get back to market growth rates over the coming years as part of our plan. And I would say, our expectations are to do above the 2.5% to 3%, when you look out two to three years from now. So that would be part of our expectations on how we get to the $3.

Great. Thank you.

Thank you.

Next question, please.

Thank you. One moment please. All right. And it comes from line of Elizabeth Anderson with Evercore ISI. Please proceed. Elizabeth, check if you're muted.

Good morning, Elizabeth.

Sorry. I'm on mute, talking to myself, apologize. Thanks so much for the question, guys. I guess, one longer-term question and one shorter-term question. As this is really helpful for the details about some of the strategic investments and initiatives and I was wondering, how you think about the sort of like cadence and time line of how some of these new investments translate into sort of maybe new product launches, et cetera? I know you talked, Simon, about reducing the SKU count, but I imagine you also have sort of continued innovation, as you pointed out with the R&D spend, et cetera, maintain. So I guess that would be my first question. And my second question is just sort of on the shorter-term cadence. We're sort of two-thirds of the way through the first quarter. And I was just wondering, if you could talk through sort of what you're seeing currently in the market across your major geographies? Thank you.

Yes, good morning, Elizabeth, thank you for the questions. So let me start with the R&D piece. One of the benefits, I think, to the reorganization that we're going through has been we're now getting more and more visibility to where and how we've invested our R&D dollars and the returns that we have obtained on those historically. The benefit of moving to one massive global business unit as we will be able to decide seamlessly where we want to spend our R&D dollars and bring more discipline to that process as to how we evaluate the value and monitor progress during the R&D cycle and even into the commercial cycle. So, you should expect to hear more from us certainly at Analyst Day or Investor Day on that. And then with respect to investments and I’ll use the US commercial team as an example. As I noted in the prepared remarks, we are well underway. In fact, we're almost complete with that investment on the Implant team and on the DSO team. We've already experienced traction, as I noted, with the DSOs. In relation to the Implants, it's a very clinical sell. And so we would expect a tail on their training before they begin to deliver meaningful performance in the implant arena in the US. But clearly, it's an area where we have control of our own destiny, we were direct sales force. It's profitable and it's growing. And we think we have a portfolio that we can win with in that space. So we would expect increasing performance over the year and into next year from the Implant team.

And Elizabeth, on your question around Q1. Obviously, we're two months now into the quarter. I would say, first and foremost, we're much more positive around Q1 than where we were just a few months ago. So the fact that we're talking about putting up organic growth in Q1, I think, is a positive. We do expect to see really strong growth coming out of the Ortho portfolio. January was a record month for SureSmile, which was a pleasant surprise for us. So that momentum is continuing. CAD/CAM should also have a very strong quarter given where we are with the dealer inventory levels in the US, along with the success we're seeing with Primeprint. So on the whole, we're looking at Q1 more positively than we were, say, a few months ago with growth coming from Ortho and CAD/CAM. Obviously, we're still seeing headwinds in China. So we are modeling a pretty sizable decline in China in Q1, but that should improve after we get past Q1. So that's the Q1 story. FX will be a pretty large headwind still in Q1. We modeled out right now $40 million based upon where rates are currently. On a full year basis, we expect organic growth to be down 1% to up 2% organically, again, about a full point on the top line relative to the FX headwind and EPS of $1.82. I would just say, the way we've modeled our full year outlook is expecting a stable environment, patient volumes to be stable. Regionally, we've made a number of comments in our prepared remarks around improvements we're expecting in both China and the US, which have been big challenges for us in 2022. So US should be up on a full year basis, slightly China flat, coming off of a…

Thanks so much.

Thank you. One moment for our next question. And tt comes from the line of Brandon Couillard with Jefferies. Please proceed.

Hey, thanks. Good morning. Simon, on the 2025, 2026 target of $3 EPS. Just help us understand how you got comfortable putting that target out there today, especially right in front of a pretty major restructuring program.

Yes. So, I would say, Brandon, good morning. I would say that, again, we alluded to it in our prepared remarks, between the restructuring and a lot of other activities that we have underway including the SKU rationalization and driving plans and network efficiency. We got comfortable with that projection pretty quickly. In fact, we -- I think we put that out at the JPMorgan meeting in January. And we have confidence that we're going to achieve it with all the levers that quite frankly, we do have our disposal to get to it. Glenn, I don't know if you have any further comments, I think.

No, I think the cost side of the equation, you've already seen the actions that we're putting in place to drive us towards that $3 EPS number. We'll give more color around the SKU work and the impact of that when we get to November, but we have a good quantification of what we think that looks like, including the facility optimization piece. I think a key part of this, though, is getting back to market growth. So we're going to need see a more normalized macro environment, coupled with new product launches and innovation. And again, we feel confident over the next three to four years, we'll get back to market growth, coupled with the cost actions that we're taking will drive to a number that's north of $3 by 2026.

Excellent. And Glenn, in terms of the full year organic growth guide, can you give us any more color between the sub-segments, T&E versus consumables and what does that intend for net pricing capture for the year? Thank you.

Yes. So I think in terms of pricing, the way we laid it out is low single-digit increases. I think it's important to note, though, that we're being very surgical around where we're increasing pricing. So we're not just doing it across the board. We're doing it in certain regions and certain parts of the portfolio. And that's a net number. So obviously, we're discounting and actually reducing prices in some cases, China being one as an example and also other parts of the portfolio. So on the whole, we're counting on low single-digit price tailwinds as we go into 2023. Keep in mind, we rolled out two price increases in 2022, so we'll get the full year benefit of that. And we have one plan for 2023 at the moment. So that's how we see pricing. I'm not going to give you the specifics between T&E and consumables, but obviously, we've been very thoughtful in terms of how we thought about price increases. Thanks for the question.

Thank you. One moment for our next question, please. And it comes from the line of Nathan Rich with Goldman Sachs. Please proceed.

Great. Good morning. Thanks for the questions. I had a few on the CAD/CAM segment. Can you give a little bit more detail on what drove the growth in CAD/CAM in Q4, given the kind of relative size of the US and the tough comps there, kind of surprised that it was up, so definitely good performance. Just be curious what drove that in the quarter. On the inventory changes, could you maybe talk about what you're hearing from the distributors on why there's the volatility in inventory levels? And you said you expect CAD/CAM to return to growth in 2023. Is that growth excluding the dealer restocking that you expect to benefit Q1. Thank you.

Yes. So, our performance for CAD/CAM in Q4 is almost all driven by Asia Pac. We saw really strong performance in Japan and Korea as an example. So, regionally, that's where the growth came from. Obviously, we continue to see some progress in other parts of the world, but that's the primary driver of growth here in the fourth quarter. On the inventory changes, I think, first and foremost, we did a really nice job to take down the inventory levels throughout 2022. So I mentioned in my prepared remarks, we were down $30 million sequentially from Q3 to Q4. On a full year basis, we were down over $60 million. So we're actually below the levels we started the year, which is very good, which means for every retail dollar of sales, we should see a wholesale dollar sale, which we didn't see in 2022. So, as we move forward now, obviously, we should see better performance in CAD/CAM in the US. And we're still cautious around the US equipment market and speaking with our dealers and seeing what's happening in the marketplace, we're still cautious. So I think the fact we've got our dealer inventory levels where they are, being a bit cautious is how we've laid out our guidance for 2023. But keep in mind, we do have some new products that we've launched in the space. We are expecting to see growth overall. And so that's how we've laid out 2023. Simon, did you want to add anything?

I think you covered that well. We had a strong quarter. We've got global execution and with our renewed focus on the US, we're comfortable where we're at.

Great. Thank you.

Thank you. One moment for our next question please. And it comes from the line of Jeff Johnson with R. W. Baird.

Good morning.

All right. We have technical issues with his line. Can I move to the next question, please?

Do we have the next question?

Yes, ma'am. It comes from Erin Wright with Morgan Stanley. Please proceed.

Great. Thanks for taking the question. So on the restructuring initiative, I think you alluded to SKU count rationalization. Does that have a meaningful impact on sales? And is this something that is embedded in your guidance, both in the near-term and longer-term perspective? And will this be something you're breaking out for us, how should we be thinking about the timing and magnitude of that. And then just on divestitures, other areas of potential divestitures outside of medical, I understand that you're kind of limited on what you can say on that front. But also any details you can give us on the margin profile of the Wellspect business, that would be great. Thanks.

Thank you for the question. So, on the SKUs, we don't expect to execute any meaningful work on the SKU rationalization in 2023. The organization ran a SKU program a few years ago. And I think, we offset some customers and we offset some of our distribution partners. So we're going through this in a very thoughtful manner. And so we don't expect any changes this year, but the plans will be laid out this year, and you should expect to hear some more granularity at the Investor Day in November about that. We provided some color in the prepared remarks about the scale of some of the SKU offerings we have and their contribution to revenue. So hopefully, that provided you some additional color around there. With regard to the divestitures, we obviously considered other parts of our business, too. But they are more consistent with our thoughts around being a dental developer and manufacturer and commercial team. So while we looked at a number of different opportunities to rationalize our portfolio, the one that we have received several inbounds about and that we're taking along close look at right now is the Wellspect HealthCare portfolio, and there are no plans to do any further ones at. And then, Glenn?

Okay.

Yeah, yeah, I would just add just to answer your question on the profitability of the Wellspect business, it is accretive to our overall corporate average. Thanks.

Okay. Thanks.

All right. We move along for the next question. Please one moment. And it comes from the line of Jeff Johnson with RW Baird. Please proceed.

Thank you. Good morning, guys. Glenn, maybe I can follow up just on that margin accretive comment on Wellspect. We get the EPS contribution annually maybe around $0.20 or so or at least in the ballpark there. And I just want to confirm that Wellspect is in guidance in keeping that for the full year as part of the current guidance. And I guess one other question tied to that is, if you were to get a big cash infusion, whether it was for this reason or any other reason, does that go to pay down debt? Does it go as a share buyback, or do you pump that right back into maybe potentially other acquisitions to drive that top line and kind of the dental portfolio going forward? Thank you.

Jeff, thanks for the questions. First and foremost, I would say yes, Wellspect is included full year in our numbers. And again, we're just at this point, evaluating our options around that business. So that business is included in our full year expectations. Obviously, if the business were to be divested, we'd have to think about what to do with those cash proceeds. We're already very low levered. So that's good news relative to what we could potentially do. But at this point in time, we're not going to lay out any specific plans other than we would make the most appropriate decisions around how to offset any EPS dilution relative to the transaction. Thank you.

Thank you. And then maybe one follow-up question, if I can. Just you talked about adding to the sales force here in a few different areas and trying to increase the commercial hub there. I could pick on, I guess, or pick out a couple of different areas, whether it's within equipment or orthodontics or implants, but I'll try to narrow it down just the implants here. You're a number five player in implants, probably under-indexed, although you could push back on that kind of under-indexed in value implants are under-indexed and fully tapered implants, which those are the two kind of bigger growth areas recently. So if you add sales reps, I get it, but what are you doing on the product side to really if Implants is one of keys to the turnaround here. How do you end up winning in Implants, Simon, as you kind of talked about here recently? Thanks.

Yes. Thanks, Jeff. So, just a couple of points on that. I think historically, our focus on paying for growth hasn't been what we would have liked, so our commission plan changes -- our commission plans have changed to more reflect that we want to drive growth from our commercial teams. So, we're certainly getting a lot more visibility from them to different parts of our portfolio. And the feedback we've received thus far on those commission plan changes have been very positive. People want to get paid when they perform. So we do expect that. In relation to our portfolio, as I noted, I think in my response to Elizabeth's question, we are now getting visibility. We now have visibility to where we spend our dollars and what returns we get from them. So to your point about Implants, it's a fast-growing segment, an opportunity to differentiate ourselves where we have a sales force that is direct, then we would more likely invest in spaces like that than elsewhere. What we need to make sure is that we get the -- develop products that are meaningful for our customers. I think we've just launched some of our taper products as well, which have resonated with customers up there. So I think we're already doing some of the work that you've alluded to. And we will absolutely be reinforcing our commitment to appropriate R&D in the appropriate spaces moving forward.

Thank you.

Thank you. One moment for our next question please. And it comes from the line of Jon Block with Stifel. Please proceed.

Hi guys. This is Tom stepping on for Jon. Thanks for the questions. I'll start with 2023 guidance. Glenn, maybe this is for you. But how should we be thinking about T&E and consumables organic growth, I guess, relative to the total company guidance of down 1% to up 2% between Implants Ortho, it sounds like T&E will be the growth engine. But, I think it would be helpful if we could put a finer point on where that may shake out in rough terms, I guess, is each segment within the total company range, or how should we maybe think about them maybe reaching the high end and low end of it potentially?

Tom thanks for the question. We're not going to give too much specifics on our segment guidance. I would just say we are expecting T&E to grow faster than consumables as part of our guidance range. But that's all we're going to comment on at this point in time.

Got it. And then my follow-up is just on the restructuring. Simon, you gave some very helpful color throughout the call. But can you maybe talk a bit more about the current restructuring and how it may be different from the prior ones for the company. I guess, what were the learnings from those that you're trying to apply this time around? And maybe what gives you confidence this won't potentially be more disruptive than expected, and maybe ultimately have some sort of impact on growth. Thanks.

Yeah. Thanks for the question. So, we've been very thoughtful about this restructuring. You will have hopefully noted that we are not impacting our sales teams at all. In fact, we're net positive on investments in our sales team globally including Europe and the US. I think the difference is, we're here, we're being extremely thoughtful about it. We are driving alignment between our RCOs, between the regions and the global business units. And we are giving the global business units a single voice. So communications is going to be better between the business units and the regions and decision-making and agility is going to be improved because we have -- we now have more visibility to all of the financial aspects of it and we can move money around as appropriate to fund different investments either commercially or R&D or in other spaces like plan, quality and so on and so forth. So I think it's meaningfully different to what was done before. We -- as we noted in the prepared remarks as well, I think the tone at the top is a very material change here as well. And again, in the prepared remarks, we commented on some of the feedback that we've received from the US commercial team, in particular, where some of those metrics have doubled in the past six months. So we are changing the tone here at the company, and we're being transparent. We're being inclusive. We're driving discipline and improving process and making investments to make this company a better place to work and a better place to deliver results that you expect and that we expect.

Very helpful. Thanks.

Thank you. One moment for our next question, please. And it comes from the line of Michael Cherny with Bank of America. Please go ahead.

Thank you for taking the question. I'm going to wrap a bunch of topics, I think, into one here. But as you think about the trajectory and particularly the build into that $3.26 number, I'm not looking for how you think about the revenue dynamics, but how do you think about the mix in terms of your focus on going direct versus not going direct. We heard from one of your key distribution partners yesterday about their desire to build out their own specialty business. And so how does that impact view of X-rays go-to-market strategy and what you can do to take control of more of your own destiny versus rely on your distribution partners as you think about this multi-year build?

Yes. Thanks for the question, Michael. We value the partnership that we have with our distributors. They have different degrees of meaningfulness to our organization in different regions, certainly in the US they're very meaningful, and we have begun to build, I think, constructive relationships with them. But there are certain areas, of course, where we have a direct presence, such as implants and aligners. And we do tend to see great growth from those areas. So while we have constructive and developing relationships with our distributors, it is a unique environment within that -- within dental, where your partners and competitors at the same time. So we are driving transparency with respect to our thought process with our -- with those distributors in the US in particular.

Got it. That's good for me. Thank you.

Thank you. One moment for our next question. And it comes from the line of Justin Lin with William Blair. Please proceed.

Hi. Good morning. You mentioned you had a record quarter for SureSmile. I guess, in your view, what's driving the success beyond improving macro? And are you more so taking share or expanding the market?

Yes. So it was a record month in January, not quarter. So I just want to be clear, January was a really strong month. But obviously, the momentum around SureSmile continues. We still think it's a very much underpenetrated market. Aesthetics are here to stay. So those are positive dynamics. But for us, SureSmile has fewer revisions from a clinical perspective, we're seeing high customer engagement and geographic expansion, and all of that is leading to market share gains for us. So, we had a really robust 2022 year, and we expect that will continue to see good growth, both in SureSmile and Byte in 2023.

Got you. And I guess that kind of leads me to my next follow-up question, if you may. I guess more longer-term question around your Clear Aligner strategy. How do you make a more meaningful push into the Ortho channel, if that's part of your plan at all with sort of the other portion of the business being sort of direct-to-consumer.

Yes. So Byte has performed very well for us over the past two quarters. We've had a lot of questions on Byte and the acquisition since we joined here last September. I think, it is synergistic with our SureSmile business. It has performed very well since we've arrived here. We have had great customer satisfaction scores through the My Byte app, which is really resonating with them, and it's performing well. So, we see it as a as a meaningful part of our portfolio, one that we're being diligent around expenses on and investing appropriately and driving customer acquisition, customer conversion and trying to increase customer satisfaction scores and drive the web traffic in that manner.

Yes, I would just add, I mentioned this in some previous discussions. Obviously, with Ortho doing much better on a top line, a big part of our margin expansion and improvement story is around the bottom line as well. And our Ortho businesses are becoming more profitable, both in SureSmile and in Byte. So that's also very encouraging relative to how we think about 2024, 2025, getting to higher operating margins, the EBITDA margins, our Ortho business should be a contributor to that and should be a nice tailwind when we go into 2024 for sure. Thanks for the question.

Thank you.

And our last question, one moment please. And it comes from the line of Rachel Vatnsdal with JPMorgan Chase. Please go ahead.

Hi guys. Thanks for fitting me in. So I wanted to follow up on some of the earlier questions around margin and the P&L guidance for the year. So there's a fair amount of moving pieces throughout that P&L given the restructuring. So, I appreciate your comments on EPS being 40:60 between first half and second half. Can you give us some color on margin cadence throughout the year? Going from that greater than 15% EBITDA margins in 1Q to 18 [ph] for the year, what should we really expect from a 4Q exit rate and then I have a follow-up as well. Thanks.

Yes, I don't think we want to provide too much more color on margin performance. I would just say, Q1 is expected to be the lowest quarter of the year. We said greater than 15% EBITDA margins. Obviously, that would imply the back half of the year doing north of 20% EBITDA margins with Q4 exiting at the highest rate. So, I think that's how we've laid it out overall. And again, for our full year, we expect to be greater than 18% for EBITDA margins. So I think that's all the color we're going to provide at this point. Thanks, Rachel.

Got it. And then just a quick follow-up just on supply chain and you're off you guys play that those constraints continue. So can you just talk about what is assumed from supply chain constraints heading forward throughout 2023?

Yeah. I think first and foremost, the supply chain constraints really surround electronics and electronic components. It hasn't gotten any worse. It is moving in the right direction, but we still have challenges. What we assumed is things get a little bit better throughout 2023. I did mention in my prepared remarks, one of the upside possibilities we have in 2023 is seeing a better improvement than what we're modeling. So I think I have modeled a pretty conservative view on supply chain and some of the constraints we're dealing with. If it actually is better than our assumptions, it would lead us to a chance to overachieve. So, I think we've been pretty conservative in how we've laid that out. Thank you.

Great. Thank you.

Thank you. And with that, I will conclude the Q&A session, and turn the call back to Simon Campion for final remarks.

Thank you, Carmen. So in closing today, I would like to reiterate my thanks to the entire Dentsply Sirona team, including those employees who've left recently for their valuable contributions to the organization and their unwavering commitment to our customers. The past year was challenging and the transformational work we have ahead of us will not be easy. However, I am confident that Dentsply Sirona has a bright future ahead. We are already making significant progress, which will benefit all stakeholders over the long term from customers to employees to investors. Thank you for your time today.

Thank you all.

Thank you. And with that, we thank you for your participation, and you may now disconnect.