DENTSPLY SIRONA Inc. (XRAY) Earnings Call Transcript & Summary

Hi, everybody. Thanks so much for joining us. Good morning, and good afternoon. I'm Elizabeth Anderson. I am the health care technology and distribution and dental analyst here at Evercore. I am delighted to be joined by CEO, Don Casey, and I -- we are super excited to see you guys. I know that you guys have been on the road out and exciting this week. So I appreciate the time in your busy schedule today. And on a quick administrative note, I have a bunch of questions. There's always lots to talk about with XRAY. But if people listening online, have questions, feel free to put them in the chat box, and I can use them in spec. So welcome.

Thank you.

Awesome. Well, I know earlier this week, you were up in New York City at Greater New York. And I was just curious, maybe to kick it off, what your biggest takeaways from there were?

Actually, was that I did not go to Greater New York. So Jorge was up. Jorge and Andrea were up, but...

Andrea, I assumed you were there too. You weren't there.

No, no. I was doing [indiscernible] the end of this week, but did not go.

All right. So you have no takeaways. Andrea, do you have takeaway? Did you -- what were your takeaways?

Yes, I think it was good. It was great. It was my first time at Greater New York Dental meeting. I think we had really good engagement opportunity to showcase some of our workflows and digital products. We had a KOL with us. She was able to talk about some of the clinical aspects and new parts of her practice that she's been able to extend into in recent past and some of our digital adoption. So, all in all, a really good turnout and a good opportunity for us to showcase some of our new innovations as well in endo and implants. SureSmile gotten upgrade, we're able to showcase some of that too. So all in all, it was good.

Awesome. That's helpful. So maybe turning to other exciting or unexciting things that have happened in the past week. We obviously have a new COVID variant. And that is not well understood at this point, which I think many of us appreciate. But just in terms of your early thoughts on any potential impact or how you're even kind of framing the potential impact in the business at this point on. I know it's kind of an unfair question, but it's probably one of the questions you get most frequently. So I'd be curious to hear your early thoughts there.

Elizabeth, then you cover dental. And I think that's one of the things that we learned about dental when the original COVID pandemic broke out. In the United States, for instance, we have 190,000 dentists who are individual entrepreneurs. And they have found a way to manage through Delta and now Omicron, and they do it in such a way that, hey, let's start with the premise of let's keep everybody safe, dentistry because they started with the HIV crisis has managed blood-borne pathogens with far more lethality associated with it than what we're seeing with this potential variance. So they're used to dealing with that. And then I think a COVID learning across the board, and so we're seeing manifested in how our sales are tracking. They basically learned, look, if there's going to be a patient flow restriction, I've got to make every hour of office time more productive. And that means digitization. And if you were to give me one of the surprises of 2021, it's really been the strength of our imaging business of anything where, look, clear aligners and implants have been kind of pillars of growth for us and other people in the category. But if you look at the much sharper move into CBCT and more advanced scanning, I think that's emblematic of the fact that dentists are really looking to digitize their practice, to allow them to get into higher dollar value procedures as a way of mitigating risk associated with potential restrictions in patient volume.

Yes. No, I agree. I think that's been one of the surprises for all of us throughout this pandemic is that kind of the investment that sort of shut down late investment cycle as opposed to a pullback or something else that we might see there. As we -- just in terms of maybe talking through a few other shorter-term issues before -- look talking about some bigger picture stuff. Can you provide an update on what you're seeing in terms of any supply chain issues at this point or freight costs? Are you having trouble getting a hold of anything? Are you seeing any kind of shipping delays or anything at this point?

Yes. So the supply chain, I break it out into 2 things, Elizabeth, distribution and logistics. We're not seeing huge delays. We're seeing increased costs associated with that. And that's obviously a headwind as we go forward. The second issue is are we having problems getting anything, we're basically -- what we're learning is we can get stuff. It just takes a lot more effort because it might not be as easy to get. And look, as we go forward, and obviously, we're not counting -- we're not commenting on the fourth quarter. But as we go forward, our expectation is we'll be able to get everything we need, whether it happens exactly when we think that's going to happen. Look, long lead time stuff like chips, screens and other stuff. I feel very good that we're going to be able to get what we need to get, whether it comes on -- if you think it's coming on the first and it comes on the 15th, I think we're going to have to work through some of that. But to date, labor perspective, we've been able to keep everything running, logistics and distribution, we've got things moving. We haven't had a problem getting things say out of Europe into the U.S. or other things. It's just more expensive. And then look, shortage in or as a potential delay than a not get. So ultimately, that's how we're kind of thinking about it.

Yes. And obviously, you talked about how you pass through the price increase at the end of the third quarter. Have you sort of seen any pushback to the price increases or sort of product swapping on the back of that as we think about sort of potential impacts or people have been broadly like, yes, we get it, like move on.

It's been more the latter, Elizabeth. It's -- look, at the -- what we did differently about price this year, we took price globally at the core as opposed to regionally by SBU. So a lot of that would have been mitigated. Our thought -- and we communicated with our partners and whatnot. And obviously, in our direct business, which represents 30% of the business and stuff like SureSmile, stuff like Implants, and endo. We don't necessarily have to worry about that on the more commodity-oriented areas, which is we call preventive resto, endo and lab. We've seen the price increase go through. I think people are given that we're not in a transitory inflationary period, they've been pretty open to taking price increases. And look, we're very happy with how it worked. We're also relatively comfortable saying that, look, if inflation becomes a consistent or persistent problem, we would have the ability to take price earlier than we've done typically.

Yes. No, that makes sense. The most often way I hear it is continued transitory inflation. So you can add that to your book [ gallery ]. So in that sense, do you think -- is that kind of -- obviously, before you said you had done price increases by SBU or by region and things like that. Is that sort of like centralized price taking that you did this year, some of emblematic of sort of the bringing together of other SBU elements like parts of sales and parts and other things. And so that would be kind of like a go-forward basis? Or was this kind of just like a one-off thing because of the degree of inflation, and we wouldn't necessarily think that, that would repeat going forward.

No, I think it's much more emblematic of the company. If you go back 3 years when we set out kind of the restructuring goals. One of the discussion points with simplifying the organization. And by simplifying, we mean anything that's not customer-based facing where there's an opportunity to create scale we're creating scale. So stuff like what we call our enterprise modernization program and sales force effectiveness programs are done at the core now and price is one of those. So we actually now consolidate, we created the capability, and that's how we want to go forward. But that would be one of probably 20 examples where we really said, "Hey, look, if it's customer-facing and about customer intimacy will let the small business unit continue to be the front-facing side, but in back of that, there's now going to be Dentsply Sirona.

Yes. No, that's good. And I don't know how much you warned their salesperson, the booth. But he -- one of your prime mill salespeople was like repeated almost for beta on what you just said. So the message is getting -- it's good. Okay. So maybe switching over to orthodontics. I think one of the concerns people had coming out of the third quarter where maybe the results on the bright side and just kind of some of the dynamics going on there? And sort of like what you sort of see as the puts and takes that might be drivers as we think about that business on a go-forward basis?

Yes. And listen, you might get a slightly longer answer on this one, but I appreciate the question. When we bought Byte coming up on a year ago, we made the announcement. One of the things we did is we moved our growth aspirations from 3 to 4 to 4 to 5. And people absolutely associated that with, okay, well, Byte, when it becomes part of your organic growth rate in 2022 is going to be the principal way of generating that 1% growth. In retrospect, it's probably unfortunate we did that because what we were effectively seeing across the business, we're pretty optimistic about what's going on with implants with iOS, and we thought that Primemill was coming out. And by lumping those 2 together, now the growth rate is intrinsically associated with short-term Byte results. So I just don't think that that's accurate. So that's on us, and we've got to do a better job of communicating that. Second point about Byte. If you -- and I know you follow the category and are one of the most knowledgeable people. I mean one of the things that's gone on in the last couple of years is that the digitization of the office around intraoral scanners has become a real driving force across the board. And some of that is being driven by a line basically saying, "Hey, we're not going to take physical models anymore. Therefore, you have to go buy an iTero. Obviously, we think Primescan and the new generation of technology is leading to a real revolution in basically iOS becoming a de facto standard across dentistry. Our concern was that if we didn't have -- and the reason for all this digitization is that lets you do more complex procedures and it lets you link directly with the lab. Well, if you go back to 2018, we didn't have a clear aligner. And so we went out and bought our metrics, which had in this little teeny clear aligner, which we've now grown to as we talk about $100 million-plus business. And -- but we still didn't feel we were at scale. One of the ways that we could go get scale is get to Bytes. So look, we had said there was a run rate of $300 million, we say we're going to be slightly below that. So you can get to kind of the size of Byte. And all of a sudden, if you've got that business, whether it's $250, $300 million somewhere in between there, you've more than doubled the size of the business, which gives you immediate scale in things like treatment planning in things like R&D, you can take something like a hyperByte and move it over to SureSmile. You can take SureSmile, whiter move it to fight creating scale. We're creating scale. We built an absolutely outstanding world-class facility down in Mexicali that can produce clear aligners for the world. It was all about scale. And SureSmile by itself is we think it's a great business. We're very excited about it. The Dentsply Sirona Clear aligner franchise now has considerable bulk, which allows us, in my opinion, to operate at scale in critical areas that are not necessarily customer-facing. So in essence, we really believe that protect -- to protect and expand our digital leadership footprint we have to have scaled assets, so we believe that Byte was an important part of scale. Now if you go specifically into Byte a couple of points. The first is Byte is performing ahead of what the business plan that we put together to do the acquisition internally. And we did the acquisition with the idea that, look, whether it's this quarter or next quarter, there are a couple of growth levers that are important for us to get done around Byte. The first is BytePro, how do we basically take the potential patient traffic from Byte and move it into a curated network of Dentsply Sirona dentists all with Primescan and SureSmile. We think that's important. We think globalizing this business look clear aligners, DTC clear aligners is really important in China. We think that we want to have the ability to go both ways. And as of such, right now, we have Byte in Australia. But we really haven't globalized that. We're in the process long term of how do we push that business well beyond. The last issue and some of the stuff we're working on internally that we think is going to benefit not just Byte, but SureSmile as well as other things that we're doing in the dentist office. They're building out patient experience apps that are going to be really relevant as the dentist looks to interact with patients and that one of the things I think, aligned us extremely well. They drive traffic to dentist office. So as we begin to look at some of the patient-facing capabilities that we bought with Byte. Again, we thought it was just -- we thought it was and believe even more firmly a year later that this was an important strategic acquisition for us.

Got it. And maybe just to touch on each one of those points in a little bit more. As we think about BytePro and sort of the development of that portion of it, where would you say we are in that? And sort of how do you expect that to enroll out over the next maybe 12 plus months?

I think you almost need to look at the big levers we're going to pull. So BytePro, globalization and kind of patient activation levers. They're all going to roll out over the next 18 months. I mean, look, on BytePro, there's obviously precedent in the category of DTC brands trying to work with dentists with mixed results. Our -- we think because we actually have a very significant dental sales force. We have close to 1,000 people in the field that can bring this message to dentists. We think we -- first, there's some changes that we want to make and how dentists perceived DTC as opposed to this is an enemy. Now this is a potential way for you to take Class I patients and interact with them, build them as a permanent patient what led us run kind of the day in and day out monitoring and customer questions that come in. So we think there's a different way to do that. We're in the process of testing it and expect to expand that out over the next 12, 18 months. Same with globalization. We've identified the countries where we have to -- it's different rules in different countries about what kind of permission you need to do, what kind of relationship you have to have with the dentist or an orthodontist network, how you practice medicine remotely. But we feel that we've got line of sight into big, important countries to get that done, and that kind of happened at the same time.

Okay. That all makes sense to me. So I guess maybe just in summary, like it seems like there was some transitory issues in that business in the third quarter. We might -- we sort of see that coming through maybe a little bit in the fourth quarter, but showing the improvement. And then over the next 18 months, we have all of these drivers that you just mentioned. Is that like a fair summary?

Yes.

Got it. Okay. So maybe moving to other product categories unless there's something that you want to touch upon on SureSmile. I was going to ask about the sort of Astra feedback, how that's going and sort of how we should think about the path back to sort of that industry level for plus percent growth.

Yes. And Elizabeth with you were nice enough to forward the questions, and it was the Astra. I was going to help Andrea help you. It's really -- we're moving away from the idea that there's an Astra, ANKYLOS, XiVE business. It's really Dentsply Sirona implants. So well, PrimeTaper is actually -- was developed in combination with the -- our team in Israel and our team in Mölndal. So actually -- and we're moving to a new prosthetic that's that goes beyond. But it has some flavor of an after procedure that people understand. But we think our overall restage of our implant business is going pretty well. First, a little bit evidence because we were out really working with KOLs, creating a lot of news around the restage coming. We had a pretty darn good third quarter on implants. And as a matter of fact, since I've been here, it's the best quarter we've had. And I attribute a lot of that to the fact that we now have our sales forces in for training. We're now focusing them on. The biggest news we've had in implants in a long period of time. So we feel that the product, the workflows that we put together, the fact that there's now a dental scanning on Primescan 5.2, the fact that we really simplified our treatment planning around the SIMPLANT treatment planning methodology, we feel very, very good. The reaction -- it's principal in the U.S. right now. It's in -- it's kind of lead market into Europe. Feedback has been really good, tracking along as we hoped. And I think Elizabeth's one of the opportunities we have is to do a better job of also talking about different parts of our implant franchise. So our Atlantis business, which is a custom abutment business that's global doing very, very well. If you look at our MIS business, which is our value entry. Again, we've owned that for close to 5 years, but we've seen really good momentum and it really gives us a viable play in both the premium and now the value segment. And we actually announced a fair amount of innovation on the MIS business simultaneous to the Dentsply Sirona launch. So we feel very good about that. And then we purchased Datum, which is a bone region company out of Israel and One of the reasons we did that, if you're going to go heavier to an immediate load screw, packing that in some bone growth factor we think is very, very important. Well, that business is doing very, very well. So I think a lot of the attention on our attention has been, hey, look, we have a very comprehensive offering with implants by not prior to this marketing it together as a solution and building off the digital base, we are suboptimizing the effectiveness of those assets. Now we really feel like we've got an excellent umbrella. We've got an excellent message. And really, if you talk about single tooth, multitude or even in dental kind of full tooth replacement, our combination of products, things like custom abutments, bone growth factors, we feel extremely competitive. And what we have been focusing on internally is, look, let's actually post growth on implants, which we, again, not talking about the fourth quarter, but we feel pretty good about we will grow our implant business this year. Part 1, Part 2 is we look at as missing rolls around. And if you think the implant business, the base implant business 5, 6, 7, 8, somewhere in there, depending on how you look at it. We expect to be competing at category levels as we exit 2022. So it's not going to happen tomorrow morning, but we feel 2022 gets us not only growing our implant business versus prior, it gets us much more competitive with the category.

Got it. And are there any holes that you would point out at this point as you think about your implant portfolio?

Not really. I think the areas that we're going to work on are actually not product related, Elizabeth, is much more training related if -- and we tend to focus a little bit more on the GP, the general dentist. Look, we have a terrific specialty business and training is not as important there. But as you talk to kind of large group practices, kind of smaller DSOs, the number one thing they'll tell you is they want hands-on training. And we do a ton of CE. I would say that's the area that we're working on globally to make sure that we've got enough training, physical training facilities to accommodate what we think is going to be a pretty high level of interest.

Okay. That makes sense. And maybe from like from a broad perspective, obviously, with new project launches and accelerating that has been one of your hallmark programs of your tenure at Dentsply. And so I was thinking as we go into 2022, is this kind of like a sort of catch-up here to make up maybe for sort of COVID and things like that? And then maybe sort of see some small product launches or something like that and then really see like the real next step in innovation coming as sort of we -- I don't know, go into 2023 and get IDS back and things like that. Do you see this kind of like as a relatively lower level from that new product launching? Or is it just kind of a continued cycle and we should continue to expect like the same sort of cadence that we've seen over the last few years.

Yes. Well, obviously, look, you mentioned 10 years so we're coming up on 4 years, gosh.

Crazy.

I know. It is crazy. But -- look, 2018, not a whole lot going on. 2019 pretty good. COVID 2020. Obviously, we didn't launch anything. But -- We've been trying to do 2 things with the R&D program is one, repair some of the consumable business. So -- And while implants shows up in technology and equipment, it tends to behave a lot more like a consumable. If you look at what we've done on Endo Resto implants, we feel good. Now we are continuing I think we've got in the next 18 months, a pretty good cadence of innovation, both of what we've now launched, but then globalizing it. On the T&E side, Elizabeth, the challenges and you mentioned IDS. IDS was in 2018 -- actually 2019, right? 2019 was one of the great learnings. We roll out Primescan, and we're shocked that we stopped selling Omnicam in Asia. So one of the learnings we have is we tend to keep our technology and equipment. Launch is pretty close to the best, which would be different than what you would do if you were working at Medtronic or J&J or something like that, where you can show the technology platform. I'll tell you that 2022, we feel that we've got a very strong technology and equipment pipeline without going into a whole bunch of detail, you'll see it as we roll through the cadence. But our -- we really kind of focus on what's the next 18 months. I -- obviously, a 3- to 5-year pipeline. But next 18 months, I think we're going to have pretty much as aggressive a launch schedule in T&E as we've had since I've been here. So I don't view it as a catch-up. But I think on the T&E side, the cadence of physical products will be about the same. I think the cadence around software will accelerate.

Okay. That's helpful perspective. So if we think about intraoral scanners, which obviously is one of your flagship products, that penetration has obviously come up in many markets in the U.S. into the sort of 20%-ish type of range. Like where are we in terms of that adoption curve, right? Because if you hear different things in terms of you have to do, I don't know, 15 crowns a month to make it worthwhile, like are different perspectives. And obviously, it's different for Primescan versus prime scan plus Primemill. But how do you think of where we are in terms as for lapping almost year 2 of COVID?

I tend to think that -- Let's take a little bit of a step back, Elizabeth and let's talk about digital penetration. So I think there's 2 trends that are going on that have accelerated because of COVID, and I think it's hitting important threshold. So particularly around CBCT and very more aggressive imaging diagnostics. I mean we're seeing that -- the interest level in that area really outpaced what you've seen over the last couple of years, driven by the fact that they want to get into more advanced aesthetic or more complicated procedures. The same thing is kind of going on with iOS. And you threw the 20% penetration out. I think the 20% penetration is always what we talk about on full chair side. I think we made an important distinction, and we will continue to make that distinction coming out of 2019. When we kind of went with -- there's a prime scan that comes obviously with Primemill and its full chairside, and you're right. I mean, if you do -- well, it's not 15 crowns. If you do 5 to 6 crowns a month, which, by the way, some of our advanced dentists doing a day you can actually pay for full chairside. But an important distinction for us is iOS is going to become the de facto standard of care in every dental office. If for no other reason that labs are starting to say, "I don't want to take physical models anymore. The -- and the labs are absolutely an incredibly important partner to the dentists. And also if you're going from, I'm going to do physical models and it's going to be a 3-week process to -- you can get stuffed on overnight now or if the lab wants to offshore something to Vietnam, China, some other place, having that digitized becomes an important piece of the dental practice. So I think intraoral scanning, penetration in the U.S., I think it's gone -- we use the phrase -- It's gone from push, i.e., we have to sell you on digitizing your office and then why to buy a Primescan. Now it's no longer an issue, Hey, Andrea, you -- are you thinking about digitizing your office? The answer is yes. And now it becomes which scanner. And in our mind, the physical attributes of the scanner, but more importantly, what is associated with that in terms of what procedures does that facilitate become the driver. So I would say U.S. as far as out front. I think Europe is 18 months behind that. Pockets in Asia are tied with the U.S., if not ahead of the U.S., you look at Australia. You look at the interest now that's going on in China and Japan, it's really -- it's kind of entering that tatoring point where then if you as a dentist do not have an iOS and you're still relying on "Hey, I'm going to put a little goop in your mouth and 4 days later, you're still picking it out of your teeth versus bank, it's an internal scan. I think we're kind of hitting that important inflection point in this market. And I would go iOS in our mind when we made that bifurcation chairside it versus iOS we're now competing aggressively and just plain iOS DI, digital imaging. And it's a short -- what we're learning is it's a very short walk from there to get them involved in chairside because once they get comfortable with the digitization and I'm going to develop a scan, I mean with Primescan 5.2, I mean, this thing is pretty, pretty straightforward. We would be in great shape to get them to move into full chairside in the not-too-distant future. So I think we're early stages. I think 20% might be generous. If you look at all the dental offices around the world, where they are in digitization. But I tell you what, I think that number is -- it's going to start moving in 2s and 3s and 4s versus 1% going forward.

Yes. No, that makes sense. Two questions there. Is there a feeling there has to be something that has to change in order to continue to drive that? Or is this just kind of like increased awareness, people working through COVID and that kind of thing and doing that. So it's just more of an execution of the current plan versus something new. Is that -- What would you say there?

I think it's more executing. I mean, the argument -- The biggest barrier to a dentist right now going to digitizing their office is actually taking the time to redo their workflows. If you're a busy dentist, she's going to have to spend 3 or 4 days training the staff and doing this. And I get the sense coming out of COVID people are running flat out. So when you're talking to her and you're saying, "Hey, you need to digitize. She's like, done. I need to catch up after COVID, but we're seeing -- again, the interest in CBCT and the interest in roll scanning. I mean at DS World, people are literally walking out with them and the commitment to actually spending the time and training. I don't think it's a big price barrier. I don't think it's an ease-of-use barrier. I don't think it's -- we're not connected with lab barrier. I think it's realistically the dentist commitment to spending the time to rework their office workflows.

Makes sense. I didn't see any next to anyone at the slot machine. So ...

There you go.

There you go. Why is Australia like the test market for everything?

Why is it or isn't it?

I feel like everybody you tell me like, is it just like small English-speaking kind of thing? Or is there something that makes Australia a great, like dental test market?

It's a great market. I mean, for us, it's a really, really good market. And it does stuff that's just different than every place else. I mean that is the most advanced place in the world for us where you sell to your technology base, you don't try and create the consumable business and then bring in the digital business. It's the opposite. And it's got some other features. But Australia is small, it's English-speaking. Stuff like DTC aligners works there. So you can -- it is a low risk in terms of size, place to do stuff that you might not want to roll out to your largest market first.

Got it. No, that makes sense.

Elizabeth, I think you clearly should be looking for a trip to Australia to explore the wonders of the dental world there.

I heard that's where you're holding your Investor Day. [indiscernible]

Yes, -- We'll be coming to you live from Australia. That's anyone's joining us.

I don't know if they're letting people in. So maybe it's a moot point right now. So -- okay. So as we think about -- I mean, one of the things you said about dental offices running flat out. Is -- Where are we in terms of labor shortages, I guess it's like a 2-part question. One is, internally, are you seeing any changes there that you would highlight, obviously, a more difficult hiring environment, et cetera. But then on the second side, are you seeing on the client -- on the doctor side, are they having issue in terms of getting more staff. Some of the things I've heard recently include like just meeting more hygienists to like work in office just because of general staffing issues and turnover and things like that. So I just wanted to just sort of hear what you're thinking on those 2 points.

Our ability to hire has -- I think you said it well, it's more challenging. But look, bulk of our manufacturing is ex U.S., which kind of came out of the pandemic differently than we did with stimulus and whatnot. So it's not the easiest environment, but we're not as reliant on U.S. manufacturing as others. And what we have here, we've been -- so far, we've been -- and again, our supply chain, Dan Key, who leads our supply chain does a great job. And we're working harder to get the same results, but we're getting the results. I would tell you, universally, Elizabeth, if you were to go out and survey 1,000 dentists, I bet you 50% of them would tell you that they're having a problem getting adequate staffing, particularly at the hygienes level. I think the pandemic kind of knocked the people off their game. And it's coming back. Everyone would -- I don't know if everyone -- most people would tell you it's getting better but it's still not where it needs to be. And look, the kind of the dip when hygiene went away, Hygiene did not come back, obviously, as fast because of to concern about air board pathogens. So they might have been down instead of 1 or 2 quarters for dental, they were down for a longer period of time. It's been slower coming back. Any dentist office and I've been doing a fair amount of field work in the last kind of month. They'll tell you if we need more agents. But -- and I will tell you, it's getting better, but they need more -- But it's a constraint.

Yes. You also think about sort of from a demographic perspective, that's like broadly speaking, not that all high same demographic, but like, broadly speaking, what are the labor force groups that's been hit most with sort of school closures and current things like that, too. So...

Exactly right. I mean when schools go out and moms at home, that's a problem. And Hygienists are overwhelmingly younger. They tend to be a younger female demographic.

Yes, absolutely. So maybe as we think about the 2022 on sort of a high-level perspective, what do you see as the biggest margin opportunities as we move through that year?

In '22, 3 kind of disparate points, but I'll answer the question. I mean, first, we're locked on to '22 and '22. I mean that's the last commitment we want to make. Beyond that, Elizabeth, then it really becomes a discussion internally about how much margin do we want to do versus invest for accelerated growth. And obviously, 4% to 5%, we think, is a good growth rate. But I'd rather be 5% to 6%, 6% to 7%. And what's the trade in terms of margin expansion versus growth? And that's a pretty active set of dialogues that's going on internally here. We think we're going to be able to do both. But we might not be coming out with the '22 to -- '23 and '23, '24 and '24, '25 and '25 plan as much as to sit there and say, we may be a little bit more focused on accelerating aggregate revenue growth with improvements in margin, but probably not at the -- where we were pretty much knocking off 100 bps a year. I would say there are opportunities. They come from mix. What is the mix of what we're selling. And we think we've been pretty aggressive around portfolio management, managing assets out, buying what we think are profitable, faster-growing assets, Part 1, Part 2, how do we make sure that we're looking at country mix and let's focus on growing where we're going to benefit there. So that's Part 1, Part 2, we're still -- I think we did the low-hanging fruit organizational simplification work. over the last 3 years. I mean it didn't feel simple when we were doing it. But kind of as we think about our next-generation E&P and shared services around customer service and automation in that area. We still think we've got pretty significant runway there. And then supply chain, we had worked so hard to go from 42 down to 29 that we go by a few things. I still think we're probably going to be in a position where we can streamline our supply chain more aggressively as we go forward. So -- and again, Elizabeth, some of it is how much is that going to offset inflation? How much of that is to allow us to invest more aggressively in R&D and revenue appreciation versus how much is that margin. But I would tell you our internal goal is to deliver 4 to 5 and push that, continue to deliver margin improvement, albeit probably at a little bit of a lower pace to allow for a little bit more revenue than margin expansion.

Got it. And I think just because you sort of mentioned it tangentially, are there any geographies where you feel like you have outsized sort of bang for your kind of opportunities as you see things now?

Yes. I mean, because we're coming up at the end of the year and writing end of the year evaluation type stuff. I pulled out 2018. And at the time, our business was about 15% in what we would call rest of world, Asia Pacific and Latin America. That number is pushed 20% right now. And I think the -- we've made investments and they're starting to pay off. But if you look at particularly like clear aligners in Asia and Latin America, very early stage. And obviously, we think that's a profitable business for us. DI is like not even in the first inning. It's like the batter is walking up, while the picture is still warming up. So very early stage there. So 2 of our relatively profitable businesses have disproportionate growth in areas that are growing very, very quickly. And look, our implant business, particularly our MIS value business has done well in more rapidly growing countries that we just talked about. So I would tell you that we're excited about the Asia Pacific. And we -- I think our Latin America team has done a really, really nice job in focusing on profitable growth.

Got it. Okay. And then maybe one other area in terms of how are you thinking about capital deployment right now? As you sort of -- yes, let's just go -- Let's take it.

Yes. [indiscernible] It hasn't changed in the time I've been here. It's we want to invest in growth. We're going to invest more in R&D. There's some capital that comes along with that. We're not going to accumulate a huge amount of cash. So there is obviously opportunities for repo. Obviously, Elizabeth, if you look at us from 2018 to 2021, we've become a much more efficient cash generator. We don't talk about it a lot. But -- so if we can get into that $750 billion EBITDA range, that also allows us to do some tuck-in acquisitions that should allow us to accelerate growth. So again, our priority has been how do we grow the business internally investment opportunities. Will we look at acquisitions? Absolutely. Is there -- are we going to buy something as big as us? That's not the plan right now. It's focused on tuck-ins that will accelerate growth in key areas. And then we're not going to accumulate cash to accumulate cash. And we've got a pretty consistent track record of returning cash to shareholders.

No, for sure. How are you thinking -- I mean, how are you finding valuations in the dental space in sort of smaller assets more broadly? I mean we've had just a better operating environment for the past couple of years and all sorts of things going on. So I'd just be curious how you're seeing that from your perspective now.

Unfortunately, Elizabeth I'm as old as Derek, and I remember valuations being frothy for the last 25 years. So obviously, as a buyer and a seller, there's rarely is the mine meeting. But look, in critical areas, like if you want to augment places like an implant, you can find stuff. I mean, if you want to talk about like buying regional distributors that are critical for a specialty product, you can find that. I think some of the super big like scanners, 3D printers, monitoring, stuff like that, that tends to -- the valuations might be a little frothy. So we'll see.

So okay. That probably makes sense. Okay. I think we have about 2 more minutes. I just didn't know is there any other -- what do you think is most misunderstood about Dentsply right now?

I'll make 2 points in 2 areas, Elizabeth. I mean one of the frustrating things for us in November of '18, we went out and said, we're going to do a couple of things. We said we're going to grow. We're going to get margin expansion. We're going to do organizational simplification. We're going to deliver double-digit EPS. That COVID kind of screwed around with that. But non-COVID years. 2019, we grew at 6% plus. This year, depending on -- clearly, you're going to do better than 6-plus against 2020. And we're going to post some pretty heavy growth versus 2019. So you sit there and say, "Go check, we're operating the company today if you take out the acquisitions. We actually drove as an example of simplification headcount efficiencies because I came in, we were operating at 16.5%. We're effectively operating the company non-Byte related at [ 14.6, 14.7. ] delivered that. We said $250 million in savings. We're going to hit that in early 2022. We're delivering the double-digit EPS. And I think the consistency of, hey, we said we're going to do something, we're doing something over the last 3 years, I think we've been relatively consistent, and that's not reflected in what I think has been some relatively volatile movement around the stock. So that would be Part 1. Part 2, on Byte, Byte to us, it's a strategic acquisition that we always said was going to be a 5- to 10-year journey as we look to strengthen our overall participation in the clear aligner business. And I think people trying to draw a straight line between a relatively minor miss in 1 quarter to -- which is as a percentage of the company is well under 5%, even if wildest aspirations were achieved, to really see a whole bunch of margin -- excuse me, multiple compression associated with a small part of the company missing a small number, as I think is probably overdone. But in my mind, if you look at the future, I think Dental is a nice place to be. We weathered the pandemic. We've got entrepreneurs who will continue weathering the pandemic. In our case, I love the fact that our technology base is in the best shape it's ever been, love where our pipeline is going to be and feel like we're really hitting on good implants, good clear aligners. Our endo business, we're super excited about, and Resto has always been a key area for us. So as we look forward the next 3 to 5 years, I'm pretty optimistic.

Makes sense. Well, that sounds like a good place to end. So thank you very much, Don. Thank you, Andrea. It's a pleasure as always. Look forward to catching up with you guys again soon.

Sure. Midwinter, right?

We're going to be there. [indiscernible] right?

Yes. Hopefully, just bring your coat because you still have the best winter coat.