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Dentistry ends 2021 with strong sales despite Omicron, supply chain troubles

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Dentistry was not given a free ride in 2021, but sales were strong and some major dental manufacturers ended the year by beating pre-pandemic results. (Image: bbernard/Shutterstock)

LEIPZIG, Germany: The performance of the companies that supply dentists can be described as a thermometer in the mouth of dentistry at large. And whereas some major dental manufacturers ended 2021 by beating pre-pandemic sales, for others, the Omicron variant of SARS-CoV-2 and ongoing supply chain disruptions cast a shadow over their fourth quarter performance which is expected to continue into 2022.

In 2021, the SARS-CoV-2 pandemic left many consumers in the Global North with excess disposable income and a desire to prioritise health spending over other expenses. This helped dental manufacturers to return to, and even exceed, pre-pandemic sales, despite supply chain issues and a particularly contagious though less virulent variant of SARS-CoV-2. Leading dental laser manufacturer BIOLASE was a good example: its fourth-quarter revenues increased by 44% over the fourth-quarter 2020 results and by as much as 23% compared with pre-pandemic fourth-quarter results from 2019. Most companies acknowledged in their fourth-quarter results that difficulties related to Omicron and the supply chain have persisted into the new year and that dentistry will not be given a free ride. Global distributor Henry Schein also warned that prices were increasing and that these higher costs would need to be passed on to end users.

During the three-month period, Henry Schein’s sales of global dental consumables displayed 6.6% year-over-year internal growth to reach US$1.5 billion (€1.32 billion), driven by strong recovery in dental markets. Dental equipment sales at the major player showed 5.6% internal growth and reached US$510 million.

CEO Stanley M. Bergman commented that equipment sales had benefited from dental office owners continuing to invest in their clinics. However, he cautioned about price increases: “We expect additional price increases from suppliers to be made by the end of the first quarter, which, unfortunately, we’re having to pass on to our customers, and there may be more throughout the year.” Bergman noted that patient traffic had declined in January owing to higher rates of patient cancellations and staff shortages at clinics.

Ongoing supply chain disruptions had affected the company. “During the fourth quarter, we continued to experience some delivery and installation delays in the US,” Bergman explained, adding that he expected the difficulties to extend into the second half of 2022.

Straumann full-year sales show global recovery

Straumann Group earned CHF 2.022 billion (€1.950 billion) from core sales last year—41.8% more than it did in 2020, when the pandemic had a heavy impact on the company’s sales. In terms of revenue, the fourth quarter accounted for the company’s strongest ever performance, and sales reached CHF 540 million, an increase of 21.1%.

Last year, sales in all regions in which Straumann operated showed at least 40% organic growth, boosted by sales of dental implants. (Image: Straumann Group)

Full-year sales in all regions in which Straumann operated showed at least 40% organic growth.

The company’s organic sales growth in the Europe, Middle East and Africa (EMEA) region was 41.3%, with leading contributions from markets Germany, France and Spain. The company launched its BLX implant in Russia in the fourth quarter, and those sales contributed strongly to the end result. Full year EMEA sales topped CHF 891 million.

In the North America region, Straumann posted revenues of more than CHF 590 million, which represented organic growth of 40%, and the company said that growth in the region had been driven by sales of challenger implant brands, such as Neodent, and sales of digital scanners and other digital equipment.

The Asia Pacific region accounted for one-fifth of the group’s total revenue in 2021 with sales of CHF 408 million—an organic increase of 40.6% . In Latin America, sales reached CHF 130 million which represented organic growth of 56.8%, and Brazil remained the largest market for Straumann in the region.

Dentsply Sirona channels revenue into research and development

Net sales of Dentsply Sirona’s dental consumables and technology and equipment increased by 25.0% and 28.7% respectively during the full year and the company posted total net sales of US$4.251 billion—on an organic basis, this was an increase of 24.6%.

Consumable sales of US$412 million for the fourth quarter were down by 8.3%, owing to a difficult comparison with the final quarter of 2020, when pent-up demand distorted sales figures. The company’s technology and equipment portfolio performed strongly during the three-month period, and sales of CAD/CAM, dental implants and orthodontic products helped the company to reach US$676 million in sales, up 6.8%.

The company’s continued investment in digital dentistry remained relentless, and its research and development expenses for 2021 totalled 4% of full-year revenue. In the weeks prior to publishing, the company announced major new developments in the digital space, including a partnership with Google Cloud and its new Primeprint 3D-printing system designed for dental settings.

Global supply chain problems, however, have affected the company. Chief Financial Officer Jorge Gomez told analysts: “In the fourth quarter, we started to face significant component shortages impacting the production of imaging equipment and treatment centres.” CEO Donald Casey added that the supply chain constraints had slowed the company’s ability to meet customer demand in late 2021 “and we are seeing those challenges continuing in 2022”.

Envista sales exceed pre-pandemic benchmark

Envista CEO Amir Aghdaei said that in 2021 the company had experienced a transformative year and had surpassed its pre-pandemic performance. He told analysts: “We took significant steps to reorient our portfolio to higher growth, higher margin segments of the dental industry where we can create competitive, sustainable advantage.” A key step in this process was the divestiture of the multinational’s KaVo treatment unit and instrument business to Planmeca, the proceeds from which were not included in continuing operations for the fourth quarter.

“Geographically, Western Europe grew 15.0%, while North America grew 1.8%” – Howard Yu, CFO, Envista

Howard Yu, Envista’s chief financial officer, explained to analysts that fourth-quarter core sales had increased by 6.6%. The company posted US$651.8 million in revenue for the period and sales for the full year reached US$2.50 billion, up from US$1.92 billion in 2020. Yu said that the figures reflected solid growth in the company’s orthodontic, implant and imaging businesses. “Geographically, Western Europe grew 15.0%, while North America grew 1.8%, dragged down by its greater exposure to infection prevention. Overall, emerging markets continue to expand from pandemic lows, growing 12.8% despite relative weakness in China driven by localised pandemic lockdown,” Yu explained.

Envista’s orthodontic business grew by 20% during the fourth quarter and sales of its Spark clear aligner system surpassed US$100 million in sales during 2021 and reached its one hundred thousandth patient.

Align Technology continues record run

Invisalign maker Align Technology had a good year—continuing its record-breaking sales announcements. Total revenues for 2021 reached a staggering US$4 billion, which represented an equally jaw-dropping increase of close to 60%. This figure is a comparison with pandemic-stricken 2020, but the Invisalign maker performed notably well in 2020, even as dental offices turned away all but emergency cases.

“COVID-19 may never fully go away and may be a virus that persists in one variant form or another for the foreseeable future” – Joseph Hogan, CEO, Align Technology

Align’s revenues for the fourth quarter were US$1.03 billion, an increase of 23.6%. Clear aligner sales for the full year were worth US$3.2 billion, up 54.5%, and Align earned a record US$705.5 million in sales from its imaging systems and CAD/CAM services portfolio—90.4% more than what it banked from the digital solutions in 2020. However, the US$815.3 million in clear aligner sales that the company posted for the fourth quarter represented a rare sequential decline for the company, being 2.7% lower than in the previous quarter, and those in the key Americas region also recorded a sequential dip of 7.9%. CEO Joseph Hogan attributed these negative figures to the spread of the Omicron variant of SARS-CoV-2 in December, which he said had caused staff shortages at laboratories, dental clinic closures and lower patient volumes. Hogan added that these difficulties were expected to spill over into its results for 2022.

Invisalign case shipments totalled 631,145 for the fourth quarter and 2,547,685 for the twelve-month period.

Dental companies upbeat on 2022

Despite the challenging business environment, major dental companies remain optimistic about their performance this year. Straumann CEO Guillaume Daniellot said that consumer trends in the US had been promising so far in 2022. “[We] have not seen a major inflection point on patient traffic or patient demand which has been really positive so far,” he stated. He added that the company expected that the worst of the supply chain crisis was behind it.

Commenting on the prevalence of SARS-CoV-2 infections in late 2021 and in the first quarter of this year, Aghdaei said: “What we are seeing now [is] a ramp back up to normal demand and patient volumes. And we think that as infections move past the peak, we believe patient volumes would come back with limited loss of demand.” He said that the company was “really optimistic about underlying demand [but remained] mindful of continued risk [posed by COVID-19]”.

Hogan commented: “While there is still uncertainty, it has become increasingly clear over the last year, with the first spread of the Delta variant and now Omicron, that COVID-19 may never fully go away and may be a virus that persists in one variant form or another for the foreseeable future.” He said that governments and communities were beginning to acknowledge and prepare for the reality of living with the SARS-CoV-2, and that Align was doing the same.

Editorial note:

Currency exchange rates for 2021 are equivalent to the exchange rates on 31 December 2021. All sales and earnings comparisons are year over year, unless otherwise noted.

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