Dylan Finley

Dylan Finley inquired about the strong outperformance in Solventum's Dental Solutions segment, which grew nearly 6% organically in Q4 2025. He asked about the split between volume expansion and price capture, and what a normalized growth rate for Dental would look like. He also asked about the phasing of the $500 million Transform for the Future program, specifically the timing of costs and benefits for 2026 versus 2027 and beyond.

Answer

CEO Bryan Hanson attributed Dental's strong performance primarily to new product launches and, in Q4, to back order recovery, which is a one-time boost. He noted the market is stable to slightly improving. CFO Wayde McMillan stated that the Transform for the Future program is a multi-year initiative (2026-2030) targeting $500 million in cost savings, with initial benefits in 2026 but the majority expected in 2027 and beyond.

Dylan Finley asked about the strong outperformance in the Dental Solutions segment, specifically the drivers behind the nearly 6% organic growth, the split between volume and price, and what a normalized growth rate for Dental looks like. He also inquired about the phasing of costs and benefits for the $500 million Transform for the Future program.

Answer

CEO Bryan Hanson attributed Dental's strong performance to new product launches and back order recovery, noting the market is stable to slightly improving. CFO Wayde McMillan and Bryan Hanson explained the Transform for the Future program is a multi-year initiative (2026-2029/2030) targeting $500 million in cost savings for margin expansion and growth investment, with benefits starting in 2026 but primarily realized in 2027 and beyond. Bryan Hanson also described it as a cultural shift towards continuous improvement.

Dylan Finley asked about the NoAA (no additional aligners) product, how it's factored into the 1-2% ASP decline forecast for the year, its rollout plans, and whether any additional aligners would be incremental to current guidance.

Answer

CFO John Morici explained that the company expects successful rollout of the NoAA product, with good uptake on comprehensive cases, and it will be mostly fully rolled out by Q2. He clarified that the guidance reflects this, and there's no initial ASP impact because revenue for NoAA products is recognized upfront, without deferrals. Refinements, if needed, would be recognized over time.

Dylan Finley asked how the NoAA (no additional aligners) product is contemplated in the 1-2% ASP decline forecast for the year, its rollout significance, and assumptions regarding additional aligners.

Answer

CFO John Morici explained that NoAA products are seeing good uptake and are expected to be fully rolled out by Q2. He clarified that NoAA does not have an initial ASP impact because revenue is recognized upfront, and refinements are recognized over time as needed. This approach is already contemplated in the company's volume and ASP guidance.

Dylan Finley of UBS Group, on behalf of Kevin Caliendo, asked for an update on tariff cost assumptions and mitigation efforts. He also inquired about any financial adjustments related to BiTE and the performance of SureSmile in the U.S. market.

Answer

CFO Matt Garth clarified that the annualized tariff impact estimate has increased from $50 million to approximately $80 million, though the 2025 impact remains around $25 million. He noted a $4 million adjustment for BiTE in Q2 but anticipates no further changes. Regarding SureSmile, he reported 3.3% overall growth but acknowledged some softness in the U.S., which is being addressed through new education programs.

Dylan Finley, on for Kevin Caliendo, questioned the sustainability of the Orthodontic and Implant Solutions (OIS) segment's EBIT margin and asked for context on the second-quarter EPS guidance, which seems to imply a softer back half of the year.

Answer

CEO Simon Campion indicated that the Q1 adjusted EBITDA margin performance is a reasonable indicator for the rest of the year, driven by disciplined SG&A management. He attributed the Q2 EPS outlook to normal seasonality and noted that a larger portion of the tariff impact is expected in the second half of the year.

Dylan Finley of B. Riley Securities inquired about the drivers behind the April uptick in implant unit sales and the current pricing dynamics within the dental portfolio, including the capacity to offset tariff impacts with price increases.

Answer

Vafa Jamali, an executive, explained that the sales improvement was primarily driven by better same-store sales and strong initial performance from the new immediate molar implant system. Regarding pricing, Jamali noted that the premium implant market is less competitive on price. He stated that ZimVie would be highly selective about price increases to offset tariffs, using market segmentation to raise prices on certain products while avoiding competitive disadvantages on others.