Straumann Group, a global leader in implant, restorative, and orthodontic dentistry, has reported a robust first quarter in 2024, with a revenue of CHF 644 million and a global organic revenue growth of 15.1%. The company's strong performance, particularly in China with exceptional organic growth, and the successful launch of the new iEXCEL premium implant line in North America, have contributed to this outcome. Despite facing macroeconomic uncertainties, Straumann Group remains confident in its outlook for the year, underpinned by its strategic focus on innovation, education, and clinical evidence to access underpenetrated markets and drive growth.
Key Takeaways
- Straumann Group's Q1 2024 revenue reached CHF 644 million, with a 15.1% global organic growth rate.
- China experienced remarkable organic growth, contributing significantly to the company's performance.
- The launch of the iEXCEL premium implant line in North America and the strengthening of the ClearCorrect orthodontic brand have been strategic highlights.
- Straumann Access digital platform achieved ISO 27001 certification, reinforcing its commitment to information security.
- The company has confirmed its 2024 outlook, anticipating high single-digit revenue growth and profitability around 26%.
- ClearCorrect brand saw double-digit growth and introduced ClearPilot 8.0 software.
- Investments in capacity, technology, and people are set to support future growth.
Company Outlook
- Straumann Group expects high single-digit revenue growth for the full year of 2024.
- Profitability is projected to be around 26%, despite challenges in different markets.
- The company plans to further invest in infrastructure for Straumann Access and its people.
- Full-year guidance includes a 1-2% FX headwind, with no guidance upgrade despite favorable recent FX rate movements.
Bearish Highlights
- North America experienced a slowdown in the single-tooth replacement market due to high interest rates affecting patient spending.
- Europe may see stabilized growth following the annualization of the decision to stop promoting DrSmile, the company's direct-to-consumer business.
- The clear aligner segment has been adversely affected by macroeconomic conditions but is showing signs of improvement.
Bullish Highlights
- The company has maintained stable implant sales in North America over the past 36 months.
- Both premium and challenger segments of the implant business have seen double-digit growth globally.
- The Asia Pacific region has the potential to achieve a 15-20% compound annual growth rate in the next 24 months.
Misses
- Specific revenue numbers for China and the impact of DrSmile on growth in the EMEA region were not disclosed.
- The company did not specify the exact contribution of the clear aligner segment to the 2030 goal.
Q&A Highlights
- CEO Guillaume Daniellot addressed the impact of interest rates on consumer sentiment, noting that implant sales in North America have remained stable.
- A significant portion of dental treatments are credit financed, which could explain sensitivity to high interest rates.
- The company is shifting its European strategy from paid marketing to organic traffic generation for DrSmile.
- Straumann Group is focusing on profitability over top-line growth.
- Expectations for growth in China include a volume-based procurement process and support for domestic manufacturing.
- The company is aiming for a EUR 5 billion target by 2030 through organic growth and potential acquisitions.
- Education, patient awareness, and innovation are seen as key drivers for the implant market's future growth.
Straumann Group (SIX: STMN) has demonstrated resilience and strategic savvy in the face of global economic challenges. With a clear focus on innovation and market expansion, the company is well-positioned to continue its growth trajectory and strengthen its market presence across the globe. Investors and stakeholders can look forward to upcoming conferences and roadshows for further insights into the company's strategies and performance.
Full transcript - None (SAUHF) Q1 2024:
Guillaume Daniellot: Thank you for joining this conference call about Straumann Group's first quarter results for 2024. Please take note of the disclaimer in our media release and on Slide 2. During this conference, we are going to refer to the presentation slides that were published on our website this morning. As usual, the presentation and discussion will include some forward-looking statements. The conference will follow the usual format. As shown on the agenda on Slide 3, I will first give you an overview of our strong performance in the first quarter. And then Yang, our CFO, will share details about the financials. After that, I'll provide you with an update on strategic initiatives and our outlook. As always, we will answer your questions at the end of the presentation. Let's start with our highlights and move directly to Slide 5. We had a solid start into 2024, with revenue of CHF 644 million based on a dynamic demand in most of our business segments. We achieved a strong organic revenue growth of 15.1% globally or 8.1% in Swiss francs, taking into account the significant currency headwinds we again faced in the first quarter. Regional growth dynamics vary, with China being the highlight of this quarter, thanks to an exceptional organic growth, but versus a low comparison base. As a reminder, in early 2023, China still suffered from a lot of COVID-19 cases, and many treatments were postponed also due to the anticipated implementation of the volume-based procurement process. The second highlight of this quarter was the official launch of our new iEXCEL premium implant line in North America in March, which I will come back to later. On the orthodontic side, we are continuing to strengthen our ClearCorrect value proposition with the launch of the new ClearPilot 8.0 software, which now provides clinicians with advanced [editing] tools. With these achievements and despite the fact that the following comparison quarters this year will be more demanding, together with remaining macroeconomical challenges, we are confident to confirm our 2024 outlook. Moving on to Slide 6. You can see the regional organic revenue growth rate as well as the percentage of the regional contribution to the overall revenue of the group. EMEA, our largest revenue contributor, showed a solid 5.2% growth, which builds on a strong comparison quarter. Firstly, the Implantology business continued to drive good results, gaining market share in both the Premium and Challenger brands segments. Secondly, we are also very pleased with the performance of our business-to-business orthodontic brand, ClearCorrect, which grew double digit in the region. On the challenging side, we still see headwinds in the doctor-led direct-to-consumer business, namely DrSmile. This is due to a macroeconomic environment that continues to slow down demand and our strategy shift from paid marketing to organic demand generation to prioritize profitability over revenue growth. In North America, we achieved positive growth of 3.7% despite a softening market and against last year's solid result. The patient flow has been slowing down versus the past quarters due to the continuing effect of the high interest rate, which impacted spending. We have seen that the consumer weakness that affected the pool of treatments in the last quarters, started to show in a broader range of implantology indications. While we are facing those increased headwinds from a demand standpoint, we are very pleased that we were able to grow through market share gains in both the Premium and Challenger brands segments. In orthodontics, the improvement of the value proposition of our ClearCorrect brand is generating further traction in the North American market, which is a positive signal for further future growth. Looking at Asia Pacific, China significantly drove the exceptional overall growth of the region for the reasons we mentioned before. Looking at the Asia Pacific region outside of China, we are very pleased that we also achieved double-digit growth in already well-established markets such as Australia and Japan. In addition, new markets like Vietnam and India are picking up fast, and the orthodontics business also contributed with a strong performance in the region, although on a lower scale. Finally, the region Latin America once again showed double-digit organic growth, building on a strong comparison base. As usual, the implant business with the local challenger brand, Neodent, was the main revenue driver. I'm very pleased that we maintained our positive momentum in Brazil, the largest country in the region, and we're able to continue gaining market share in this market. We also increased our market share in other Latin American countries, especially in Argentina and Peru. In orthodontics, the ClearCorrect brand delivered an impressive performance, continuing its good momentum in Brazil and growing strongly in most of the Latin American countries. And with this, I hand over to Yang to provide additional details on the financials.
Yang Xu: Thank you, Guillaume. Good morning and good afternoon, everyone. Let's move directly to Slide 8, where we can see the breakdown of the revenue development. We delivered a solid quarter with 15.1% organic growth. Revenue in Swiss francs was impacted by negative currency development mainly related to euro, U.S. dollar, Japanese yen, Chinese renminbi and other emerging market currencies, which amounted to CHF 43 million. The M&A effect, which comes from acquisition of distributors in the Baltics and in Poland, as well as the AlliedStar, added CHF 7 million, bringing the adjusted revenue base to CHF 559 million. In the center of the chart, you can see how the regions contributed to the overall growth. EMEA showed solid growth in the first quarter, with our B2B business continuing to perform and gain market share. The overall performance was partially offset by our doctor-led direct-to-consumer business in the region. As already mentioned, we were able to grow and increase our shares in North America despite a softening market. Our overall growth was boosted by performance in Asia Pacific. The region contributed to 70% of overall group growth in this quarter. The Latin American region kept growing double digits, building upon a very high growth base in the prior year. Slide 9 leads us to our performance by business overview. In all B2B areas, the good momentum continued. In premium implantology, we achieved double-digit growth, driven partially by the strong performance in China. The challenger brands continue to expand with the strong growth across all regions and all brands, with Neodent standing out as the largest contributor, followed by good performance of both Anthogyr and Medentika in their respective markets. In orthodontics, the two dynamics continued. Our B2B brand, ClearCorrect, once again grew double digits, thanks to its enhanced value proposition as well as training and educational efforts across various markets. Our doctor-led direct-to-consumer business, DrSmile, continued to face headwinds. We have changed our strategy from paid marketing to organic demand generation to prioritize profitability over revenue growth. Our other direct-to-consumer business, Anshin, a Japanese concierge service which helps to raise awareness of implant treatments and connect patients with clinicians, is performing very well. Our digital business also contributed to the group's overall performance and grew double digit, supported by our broadened products and services offerings and enhanced by our latest acquisition, AlliedStar. And with this, I give back to Guillaume.
Guillaume Daniellot: Thank you, Yang. Let's talk about our achievements and strategy and move directly to Slide 11. As a reminder, our existing addressable market grew to more than CHF 19 billion in 2023. And our strategic compass, together with our key focus on innovation, education and clinical evidence will help us to unlock those opportunities. A critical aspect of the Implantology segment is the fact that it is still significantly underpenetrated. This is visualized on Slide 12, where you can see the penetration rates of selected countries in different regions. With many surgically trained dentists and a high DSO presence, Spain is a good benchmark to evaluate the average penetration of implant treatments. Looking at Europe, Germany, France, and Italy are seen as the major markets and still have low penetration rates compared to Spain, while the U.K. is even significantly lower, highlighting the important growth opportunity that remains in this region. In the U.S., the critical market, the penetration rate is only about half of the Spanish market, which confirms also its huge yet untapped potential. And finally, looking into APAC, China still remains heavily underpenetrated, even though the patient flow significantly increased following the recent introduction of the volume-based procurement process. While we see penetration increasing in many geographies, we keep on improving education and access to care, as this is an important way to transform those underpenetrated market opportunities into real growth. Now let's move on to Slide 13 to elaborate on the focus area of innovation. During the Academy of Osseointegration Congress in March, we introduced iEXCEL, our new high-performance premium implant system in North America. This launch underpins our consistent innovation dynamic, which has been in the DNA of the Straumann brand for the past 70 years. iEXCEL combines 4 implant lines in 1 system with a unified prosthetic platform and a single connection supported by 1 instrument set. This increases the clinical performance of our customers, and in the meantime, simplify processes and inventories in dental practices. We received very positive first feedback from clinicians who have already started to use our new iEXCEL implant system. I am confident that this innovation will continue to expand our leading position in the premium segment and help size opportunities in the field of apically and fully tapered implants. On Slide 14, I would like to speak about our challenger brands, which continue to expand in existing markets and also entered new countries. Anthogyr grew strongly in China, benefiting from the VBP effect and also entered new markets like Turkey and Vietnam. On the other hand, Neodent, as the leading global challenger brand, grew strongly across all regions and continued to tap the huge market potential in Asia Pacific. The new education center which we recently opened in Malaysia will be an important support to increase market penetration in those geographies. Looking at the growth potential, Asia Pacific goes far beyond China. We believe there is plenty of growth opportunity in major markets like Australia as well as in underpenetrated markets such as India and Southeast Asia, where challenger brands like Neodent grew strongly. Let's move to Slide 15. In the first quarter, our intra-oral scanner AlliedStar, was launched in China in a phased approach. To boost our commercial execution, we built a dedicated digital sales team and added several distributors to the existing channels. With this launch, we are now able to offer our customers in China a competitive oral scanner solution. As a reminder, intra-oral scanners have strategic importance for our customer journey, as they are the entry point of the digital workflow. In the near future, all our scanners are going to be seamlessly connected to our cloud-based digital platform, Straumann Access, which I would like to talk about on Slide 16. Digital transformation is changing the dental industry, which is why we are continuing to invest heavily in building the global customer platform, Straumann Access. In the first quarter, we made significant progress on the infrastructure side. I'm pleased to report that we achieved the ISO 27001 certification for our Straumann Access platform, the world's best-known standard for information security management. Our platform adheres to many security and privacy standards, including the General Data Protection Regulation in the EU and the Health Insurance Portability and Accountability Act called HIPAA in the U.S. Those certifications underscore our commitment to maintaining the highest quality standards and entering the protection of sensitive information. The Straumann Access platform is now technically set up for all regions except China, fulfilling a broad spectrum of digital regional requirements to support customer needs. With this, Straumann solutions and services are being added to the platform in a phased approach to prepare for the launches in the different regions. Now let's have a closer look at our orthodontics business to business on Slide 17. As mentioned, we strengthened our presence in existing markets and achieved double-digit growth with our ClearCorrect brand. I am delighted that more and more specialists are trusting our improved treatment platform expertise and our upgraded software capabilities. To drive future growth, we further invested in the following 3 dimensions to be successful in the clear aligner segments: technology, services and commercialization. Firstly, ClearCorrect further improved its aligner value proposition by launching the ClearPilot 8.0 software, which provides clinicians globally with new advanced editing tools that allow them to better visualize potential treatment outcomes. Secondly, we invested in services and expertise. The new shared services center in Costa Rica, which reflects the rapid growth of ClearCorrect, ramped up and offers treatment planning for customers in both Latin America and North America. Thirdly, we invested in commercialization. We strengthened our distribution team and launched a global ortho sales academy, introducing an agile learning framework for all our ClearCorrect [indiscernible] managers. With this, let's move to Slide 18. In early 2024, we continue to make considerable investments in future growth. Firstly, we invested in additional capacity at our various sites, from Andover in the U.S. to Villeret in Switzerland. We are also making good progress at our China campus in Shanghai, which will host manufacturing, education and innovation teams. The construction work was completed in only 18 months, and we have already started preparations and test runs on registration purposes to match the production start scheduled for early 2026. Secondly, we also made important investments in technology. We continued building the infrastructure of Straumann Access, as mentioned earlier, and continue to improve the customer experience workflow by seamlessly connecting our new intra-oral scanner, AlliedStar, to the platform. Thirdly, we continue to invest in people, as they are the key to success and the ultimate lever to deliver performance. We strengthened our distribution channel in all regions and hired people in manufacturing. In addition, we are convinced that investing in internal training and developing new skill sets for our team members worldwide lays a solid foundation for the future. This is why we continued the series of culture programs and our Edge Up initiatives, with the objective to foster digital milestone in our organization globally that will help us to become the digital power oral care company we aspire to be. And that brings me to our 2024 outlook on Slide 20. On the one hand, we expect macroeconomic uncertainties to continue to impact consumer demand in different geographies, which will lead to different regional dynamics in upcoming quarters. Nevertheless, thanks to our differentiated value proposition, combined with the strong execution power from all teams worldwide, we are confident that we will continue to gain market share within our global addressable market of more than CHF 19 billion. Geographically, we are more diverse than ever. We cater to all price points, and thanks to our continued education efforts, more and more clinicians are able to perform implants and orthodontic procedures. Last but not least, we continue to invest in growth and transformation to maintain our competitive edge in the future. As a result, we confirm our outlook for 2024, which is organic revenue growth in the high single-digit percentage range and profitability at around 26% at constant 2023 currency rates of between 24% and 25%, including expected FX headwinds. And with this, I would like to open the question-and-answer session. [Operator Instructions] Chorus call, can we have the first question, please?
Operator: Of course. The first question from the phone comes from Daniel Jelovcan with Stifel.
Daniel Jelovcan: Yes, one from my side. Obviously, the burning question today is the market reaction on your U.S. slowdown. I mean, in the past, you always argued that as long as unemployment rate is low, doesn't really have an effect. You mentioned the higher interest rates today. And also, when I look at other indexes like all the consumer indexes like the Michigan, they're all quite high, I would say, quite good. So I'm really a little bit puzzled about the slowdown in the implants market in general, just trying to figure out more granularity. I mean, I guess, you mentioned that for yourself, that the digital offering was very strong in Q1 '23, and now weak so that this combination also played a role. So I wonder if your implant business was probably a bit better than the [3 bps 7] constant currencies you published today, so that I think you get my point?
Guillaume Daniellot: Yes. Thanks, Daniel. Yes, indeed, actually, you get the answer because the NAM proceeds slowdown is coming from two major factors. The first one is related to implant demand. I think we have said that the North American market has been pretty resilient until now to inflation and high interest rates when we see all the past quarters' performances. Now I'd express also in the past quarter's communication, those high interest rates have impacted patient spending, and as a consequence, have reduced patient demand. First, for large full -- reconstruction, as also, I think we have been commenting on a regular basis since the second quarter last year. But we have now also seen through our customers with whom we have a lot of, of course, communication and exchanges, that it has reduced some patient demand for smaller indications. And this is where we have seen then that the market overall dynamic has been then slowing down. This is in what we are seeing, not a dramatic shift. And the slowdown is mainly seen versus previous year because this has been the impact sequentially quarter-by-quarter. But when we look at Q4, we don't see a major change. The second quarter -- the second factor is the Digital Business segment, as you expressed. The first quarter is not the quarter for strong equipment sales. And therefore, it did not boost net sales as we have had in the fourth quarter last year, for example. Now that's why we believe that with our future AlliedStar iOS, which will be launched in the third quarter, we are confident that the Digital segment will continue to support our North America top line growth. But those are the 2 major impact that is explaining the current Q1 performance in North America.
Operator: The next question from the phone comes from Hassan Al-Wakeel with Barclays.
Hassan Al-Wakeel: A couple for me, please. Firstly, following up on North America, do you think the softness on the single two side will be prolonged, similar to what we've seen with full arch nearly approaching a year now? And to that end, I mean, do you expect the benefit from lapping the weakness on the full arch in Q2? And ultimately, do you expect a recovery in the growth rate in North America over the course of the year? And is that assumed in guidance? And then secondly, to what extent is a softer North America and a stronger APAC, particularly post-VBP, a headwind to your margin in the first half? And over the course of the year? And what offsets do you have here?
Guillaume Daniellot: Yes. If we look at, again, the North American perspective, we are talking about those high interest rates that are impacting demand, and especially we were talking the full launch. Then I -- we don't expect patient flow to deteriorate further because it has been slowly step by step. Then we don't think it will deteriorate more sequentially in the coming quarters, therefore, staying rather stable. To see an improvement on full arch or, let's say, increased market growth overall, I think we will need to have some better high interest rate situation or interest rate situation for people to feel that they are confident to spend some -- like larger ticket when it comes to total care. Which means that we believe that we will continue to gain share, meaning that even if the market is less supportive than it was previous year, then we will continue to deliver growth higher than the total market, which is indeed included in our guidance. We believe also that our digital equipment business will support the overall regional growth on a quarter-by-quarter basis because that's where more in the second half that the equipment sales is coming into place. And that's a little bit of perspective that we have. And then that's why we are seeing that North America will still be a growth provider for the quarter to come. When it comes to margin, yes, I think we have indeed been a faster growth in China and lower than planned in North America. But this was also somewhat included in our guidance, and we don't see any major impact with regard to what we have already then planned for full year 2024.
Hassan Al-Wakeel: Very helpful. I appreciate the comments. If I could just follow up, just on the first question with regards to the improvement in North America. I mean, could iEXCEL support that improvement in growth from here?
Guillaume Daniellot: Yes. Of course, then that’s why we are saying that we are going to grow faster than the market. And I think that’s a very good point. While the iEXCEL specific sales will be step-by-step increasing because we know that dental professional are still conservative and they take time to adopt new technology, this is opening doors also of competitor accounts, as we are seeing, again, as we speak, allowing us to grow faster than the total market. And while I believe that the iEXCEL per se will have only a limited impact in the P&L and in the top line growth of North America directly, it will have indirectly, thanks to opening additional doors, for our entire portfolio help us to get to a solid growth in North America again in 2024.
Operator: Next question from the phone comes from Maya [Stefani] Pataki with Kepler Cheuvreux.
Maja Pataki: And I will start with a follow-up on North America as well. I'm really sorry, Guillaume, that we're going to give you a hard time, but I'm still a bit puzzled about your explanation on the interest rate environment. Of course, this is -- it has a negative impact on consumer sentiment. Nevertheless, as Dani pointed out rightly so, you look at the different kind of consumer indices within the U.S., and they have been fairly stable over the last 12 months. So how do you explain that we're now starting to see the slowdown in the patient flow for the single two's replacement? And maybe can you share with us what percentage of treatments you think are credit financed? We're -- just to get a feeling for how much of an impact that could have. That's my first question. My second question would be on Europe. I mean we are soon starting to see an annualization of your active decision to stop the active promotion of the direct-to-consumer business, DrSmile. Do you anticipate that growth will stabilize once we've seen the annualization or do you still anticipate DrSmile sales to decline throughout the year?
Guillaume Daniellot: Thanks, Maja. No worries to comment, North America, as this is an important point. But once again, I think it’s interesting because you are mentioning consumer confidence. And I said, I think in many, many quarters that our top line in growth is not linked to consumer confidence when it comes to the implant side in North America. If it would have been the case, we would have decreased very significantly in 2022 when we have a big drop. And actually, it has not been the case. Then yes, I think the relation to consumer confidence that there is no – no change versus the past quarters. I think it’s actually having no correlation with our direct demand. And this is what we can look at in our total net implant sales in North America for the past 36 months. The second thing is that we can also express is that we have hard data on the market side, as we are expressing very often. And we have seen that market decline or market deterioration in volume on the quarter-by-quarter sequentially during 2023. This is why we were able to comment that we were seeing first dose larger construction and afterwards moving further some of the smaller indications. And it’s really based on market data that we’re explaining this factor much more than first, our own performance. Thirdly, when it comes to financing, I think there is a lot of our implant than procedure or finance. Of course, all of them, when it comes to full auto construction, a large part of them when it comes to smaller indications that to a lesser extent, but still, I think as it’s entirely then copayments – entirely payment by the patients, then you have this category of – large category of the population that are going through then the financing. Then this is explaining also a little bit the fact that there is less resilience as we speak with regard to the high interest rate that we had at the beginning of 2022. That’s what we have seen on the marketplace and that’s, I think, it’s correlated with what our customers are also expressing from a patient flow standpoint. When it comes to direct-to-consumer in Europe, which is our second pain point besides all the positive points that we are in our Q1 performance – and I want to reiterate that I think Asia Pacific and still Europe and Latin America has quite performed very strongly, then our direct-to-consumer is facing this kind of then lesser demand from the Young Urban segment that we are attracting with DrSmile for the time being. We are also then significantly changed our strategy from paid marketing to organic traffic generation, as Yang also explained in the presentation, which is, of course, driving less marketing efficiency at the end. Then while we are looking for improving our current top line performances, we will not change our strategy over 2024, and we’ll continue to pursue a profitability strategy, meaning at the cost of the top line situation.
Operator: The next question comes from Graham Doyle with UBS.
Graham Doyle: Would you just -- would you be able to just give us a better sense in terms of growth between the value and premium side of the portfolio just to get -- and if you could just give us a sense as to what that splits out geographically, maybe in Europe and the U.S.? Just to understand if there's some sort of trading down or if value is growing particularly fast relative to premium. And then the second question, just on China. We've seen in other categories such as in orthopedic implants that after sort of 3 years, there's been another sort of tender process starting up for VBP, sort of 2.0. Is that something you're expecting here? And would you expect the government to focus on something other than price?
Guillaume Daniellot: Yes, good question. Also then the -- well, when you look on the global Straumann implant business, we have double-digit growth on both premium and challengers. And we are really pretty pleased to still see that both of our critical segments for this business are then getting the traction that we need for pushing our overall growth. Now of course, it's different, regional -- from region to region, where we see this -- a lot of also premium development in Asia Pacific, thanks to China. But we see positive growth also in -- then our key critical developed regions like North America and EMEA. And for us, it's very positive from that standpoint because we actually don't see trading between then the premium going to a challenger for the time being. We are, on the other side, seeing that, for example, this slower trend that we have seen in North America is applicable and has been applied to both segments, challenger and premium, meaning that we don't see that as a result of a premium sales going to the Challenger segment. When it comes to the China situation, indeed, there will be then an over volume-based procurement process potentially in end of 2026, beginning of -- yes, 2027, it's not sure yet because it has not been announced, but it's indeed a kind of a 3-year period. And we are expecting the Chinese authorities to look at, as always, then pricing, but much more especially trying to support domestic manufacturing. That's why we are pretty pleased to have taken already years ago the decision to manufacture our different part of our portfolio in China, which was at the moment of our decision to cope with potential supply chain disruption as we have seen with the COVID-19, but which finally then come out as being very beneficial for potential future regulation of the Chinese market. And we believe we will be ready for still being in a good position to answer the different requirements from the Chinese authorities when the new VBP will be put in place.
Operator: The next question comes from Richard Felton with Goldman Sachs.
Richard Felton: Two questions for me, please. First of all, in China, have you seen any competitive shifts in the competitive environment in that market? It looks like since the implementation of VBP, that Straumann's gained a lot of share. So interested to hear if competitors are now adjusting their behavior in response? And then secondly, a follow-up on DrSmile in EMEA. Is it possible to quantify how much of a headwind DrSmile was to growth in that region in Q1, please?
Guillaume Daniellot: Yes, China is obviously, a really -- success, let's say, for the group for the time being with -- on the 1 side -- I want to highlight 2 side, I think, one, the agility of adapting to the new situation very quickly, which is linked to the, I would say, the agility and high-performance player learner culture that we are creating in order not to fight against the things you cannot control, but being able to adapt quickly to a new kind of regulation and especially focusing on the customer need that have been seeing a lot of patients coming in and giving them the means for them to be able to absorb this growth opportunity and help them actually to recreate some profitability at their clinical side because they had also to decrease their pricing by 50% and they need to have a strong partner helping them to face also for them this kind of very strong changes. And we have been seen as a very strong partner to help them quickly to support then this patient flow and getting back to a better financial situation at the end of 2023. The second factor of this success has been the flexibility in operation. We have shipped twice as much implant in 2023 in China that we have done in 2022. And we are going to also deliver a very significant volume growth, then it means that the operation had to really adapt very quickly to the situation and making sure that we can deliver on expectations. And this is, again, a lot of work, as we speak, in order to be seen as a very strong partner moving forward. Then on the competition side, I think we have seen competitors trying to react. But on the one side, decreasing prices is not so easy because you are facing the challenge of having much less gross margin already through the VBP approach. And you can try to differentiate by lower price to a customer, but it will keep deteriorating your P&L for all the different competitors. And the second side also is that the clinicians are looking at trying to sell or to upsell customers and patients. Because when you are coming in a practice, the highest potential sales price that you can do will also allow you to have the biggest potential high gross margin in absolute terms, which is help you to cover all your structural costs. Then the price lever that was a strong one in China in the past, it's a little bit less the case with regard to the situation clinical practice are facing as we speak. Then we have seen some movement of the competitors, but nothing so far that has been limiting our capability to gain share and to keep growing number of customers to help them also then driving their success on the clinical and on the business side. When it comes to DrSmile, could you reach -- tell me the question again?
Richard Felton: Yes. I was just wondering if you could quantify how much of a headwind DrSmile was for EMEA growth in Q1, please?
Guillaume Daniellot: We don’t disclose this detail from all our different business segments. But I would say, as we have expressed in the fourth quarter, we said that EMEA would have been in high single-digit growth if you remove the DrSmile impact.
Operator: Next question comes from Julien Dormois with Jefferies.
Julien Dormois: I have two. The first one is coming back to Europe, which remains your main region. I think we're also pretty surprised to see that the discrepancy between the slowdown in the U.S. and Europe holding up pretty nicely. And as you just said, that would have been high single-digit growth without DrSmile. So any reason you could flag for Europe to remain that steady at the moment? And also because this is the only region where the comps are getting easier as we progress in 2024, could we see an acceleration of growth in the region, also considering that DrSmile will probably anniversary -- or the weakness of DrSmile will anniversary going forward? So a quick focus on Europe would be good? And the second question is on APAC. You have now sales on an absolute basis that have been hovering around, let's say, CHF 130 million in the past 3 quarters. So what should we expect going forward? Could we see meaningful growth compared to that what seems like a new normal? Or would you expect some sort of phase of absorption of the extraordinary growth you've been delivering, particularly in China?
Guillaume Daniellot: Yes. Julien, I would say when it comes to EMEA, yes, we are very pleased with growth that has been posted by the team. If you are looking at, yes, those rather mature market, and they are able to leverage the entire portfolio, be it then the premium, challenger, orthodontics and digital. The difference with North America is also linked to the culture in between the 2 continents. When you are in the U.S., consumers are a lot leaving to credit, and high interest rates had much more impact on North America than it has on Europe and EMEA. And we have also flagged that last year. I think why we started to see some slowdown in terms of larger constructions or in terms of patients seeking treatment, it was always related to a spending capacity being impacted by higher interest rate with regard to the fact that a lot of American households are really living through credit, which is not at all the same in EMEA, and this is why those interest rates are actually not so much impacting our own business but much more much larger, much larger purchase. Like if you look at real estate, and you see really the impact on high interest rate in Europe also linked to the lower capacity of taking then credit. That's the major difference that you see in between the 2 different regions. It's from a consumer spending patterns. One is impacting, the other one is much less. How do we see the growth in EMEA moving forward? I think, again, looking at them delivering in line with what they have done. I think the impact of DrSmile will continue to be there to a lower extent, potentially. But still, I think we are really definitely considering then pushing this business model to profitability. Therefore, for us, the top line is not the most important, and there will still be in effect during the rest of the year. Coming to Asia Pacific. Yes, I think Asia Pacific, as we expressed, we believe that if you take everything equal, which is not at all the case for the time being because of the comparison period, which is very different from quarter-to-quarter because of those past years' COVID-19 effect and also a VBP effect, we believe that it has the potential to be at a CAGR of 15% to 20% in the next 24 months. This is what we have said then the mid last year. We still consider that Asia Pacific has that possibility to be a strong growth provider in the quarter to come.
Julien Dormois: And maybe just as a follow-up, because the comps are getting easier in Europe, do you think we could see acceleration from what you delivered in Q1?
Guillaume Daniellot: In Europe – I will not comment quarter-by-quarter, Julien, on this one. We are still really thinking that we are able to deliver the same level of growth at what we have done in the past quarters, and we see very solid EMEA. I think we are not going to start planning on a quarterly basis.
Operator: Next question from the phone comes from Veronika Dubajova with Citi.
Veronika Dubajova: Please. Can I circle back first to the U.S. commentary that you've made. If you can just talk through the progression that you saw through the quarter? So is this a market that started off [indiscernible] in January and then improved in February or March? Or was it the other way around? If you can just talk through sort of some of that consumer softness that you're flagging, how did that progress and evolve through Q1? And then I have a bigger-term question. On the 2030 markets, obviously, you have expressed desire to have a substantially larger clear aligner business than you have at the moment. If I remember correctly, you were sort of talking about something potentially to the tune of CHF 1.5 billion out of the 5. Just kind of curious, given what happened with DrSmile and where you are with ClearCorrect and just the overall macroeconomic environment, your degree of confidence in that ambition as it stands today? And I guess, as we think about not just the next quarter or the 2 quarters after that, but really kind of fast forward through '25 to '30, what do you think you need to do to get within reach of that clear aligner ambition that you articulated that forms that long-term plan?
Guillaume Daniellot: Yes, when it comes to North America, we have not seen a very significant change quarter-by-quarter. And that's why we think that we will see a pretty stable still demand, that's the difference is mainly versus than previous year, then that's why we believe that the stability of this market is still there versus where we are right now. When it comes to clear aligner, then yes, we are still very -- we are still very I would say, excited and especially then expecting very high growth moving forward for the future. Of course, it will come less from the direct-to-consumer business model that we were thinking 2 years ago than from the B2B side. We are seeing significant acceleration on the B2B side now for quite some quarters. And then, we really think that we're on the right track to be able to generate a very meaningful business of clear aligner in the years to come. Then we still invest significantly in all the 3 dimensions, as we expressed. We have the technology side, where I think we are getting really close to what we need. And we have started then having now ortho specialists working with us, which is what we were really intending to do in order to unlock this biggest part of the clear aligner market for us. Then we are investing significantly in expertise and treatment planning, and I expressed our new Costa Rica treatment center, which is completing the other ones that we are doing. And we are also then investing in commercialization, that was where we were refraining us to do too much before adding the right value proposition. And when we look at the long-term perspective, we are still then seeing clear aligner as a very significant provider of growth in both percentage and absolute value in order to reach our 2030 goal.
Veronika Dubajova: If I can just follow up on that. I guess, if I look at the business, I mean it's probably CHF 300 million at the moment. To get to CHF 1.5 billion, you need to start growing the business at a sort of 30% CAGR starting this year. I guess I'm curious, are you still comfortable in that 1.5%, but you're saying that growth really picks up at '25 or '26? And given that you've seen the softness in the direct-to-consumer business, I mean, is the 1.5% still the right number? Or do we need to start thinking about that figure differently?
Guillaume Daniellot: Veronika, when we are saying 1, we are not guiding in absolute number for 2030. Then it was a directional number, then we'll still -- if it's not 1.4%, it might be a little bit lower. It might be a little bit higher, depending on what kind of global strategy we are taking for clear aligner. Then I think this is the way you have to look into this. We still are confident from the 2030 guidance that we have given overall. And we have never guided very precisely on what will be the contribution of every different business segments. Then that's why we are saying that we are very confident in our clear aligner business, even though it might be not at exactly the same level we are having on our planning, but there are a lot of different ways to grow this business, and we are really looking at delivering in line with our expectations. Also on our global guidance for 2030, but especially on the clear aligner side.
Veronika Dubajova: Understood. I had to try. Have a good one.
Guillaume Daniellot: No worries, Veronika. That’s part of the game.
Operator: The next question from the phone comes from Anchal Verma with JPMorgan.
Anchal Verma: This is Anchal Verma from JPMorgan on behalf of David Adlington. I have one question, please. Within -- for the group, how much did pricing contribute to growth overall? And then more specifically, could you also highlight the dynamics for EMEA? And are we able to share how much did pricing in Turkey contribute to the EMEA organic growth?
Guillaume Daniellot: Yes. I think we are not disclosing those details about the pricing, especially in Turkey, in a specific region. But obviously, it has an impact based on the FX rate. But as you can see, it is not preventing us from presenting strong performance for the EMEA region. When it comes to the global then performance on pricing, we are low single digit. That's what we have always said. We have done a price increase of 2% that we have announced then at the end of last year. And we do look at realizing those 2% by the end of the year.
Anchal Verma: And obviously, this had a China impact year-over-year as well. So this 2% is excluding China?
Guillaume Daniellot: Yes.
Operator: Next question comes from Hugo Solvet with BNP Paribas (OTC:BNPQY).
Hugo Solvet: I have two. First, on China, please. Can you maybe give us some details on current trading as you analyze VBP in Q2? And just to clarify, Guillaume, you mentioned the 15% to 20%, is that on a full year basis or quarter after quarter for growth? And second, I'd like to come back on profitability. Your commentary around the premium and plans being the main driver for growth, yet most of those sales coming from China. So can you elaborate for us on the implication for margin and the remainders of the phasing that you expect for 2024?
Guillaume Daniellot: Yes, China, we are saying as soon as we will have -- we express the 15% to 20% growth as soon as you can compare quarter-to-quarter. That means it's going to start by the end of the -- by the beginning of the third quarter, the second half then this year, where we will not have any effect of VBP, of pent-up demand on COVID crisis. And that's the way you have to look into this. We have also then add this kind of perspective, if you can really measure apple with apple. And we know that the quarter of 2023 has been significantly impacted when it comes to growth rate because we started with minus 23% in Q1, and we ended up in -- with plus 40%, if I remember well, Asia Pacific Q4. Then we still have a big swing to compare with, with an easy comparison period at the beginning of the year and, of course, a much tougher at the end. But still, I think if we look at absolute value, we believe that the second half in China is representing more or less a little bit more the kind of regular business activities, and this is where we think we can be compared with. The second question was...
Yang Xu: On the margin...
Guillaume Daniellot: Yes. Do you want to comment that? Go ahead.
Yang Xu: Okay. Yes, sure. No, Hugo, of course, there's actually a gross margin headwind if you look at specifically in 2024 because of China versus other markets mix. However, as you know, as we continue to grow our top line, we do expect that we continue to expand our bottom line mainly due to operational leverage. We also believe that because of our global portfolio and also the overall low industry penetration, that will support our geographically balanced growth. So all those is fully embedded in our full year guidance. So operationally, we continue to look to expand our EBIT percentage as well. Just a reminder, Hugo, as you know that in the second half of the year, the China pricing was stabilized versus a year ago.
Hugo Solvet: Okay. That’s very helpful.
Operator: The next question comes from Julien Ouaddour with Bank of America.
Julien Ouaddour: Thank you very much for squeezing me in. So I just want to jump back on the U.S. quickly. So I understand the argument about the financing. What I don't understand is just the difference in momentum between the improvement we've seen for the clear aligners based on like your comments and also like the PS comments recently and the softer demand for like Implantology. So just if you can help me to understand at least like the difference here? The second question is, I think when you issued the guidance for the year to the high single-digit organic growth, you said that EMEA and North America should also be within the guidance as well. So could you confirm also that like the 2 regions, despite a sort of slightly weaker quarter than expected, could also be within the guidance? And the last point is on EBIT margin. So it's -- I mean, the 24% to 25% margin includes 1% to 2% FX headwind. FX rates have moved like quite a lot recently and it seems that it's a bit more favorable for you. So you've decided not to upgrade the guidance, but could we say that at the -- the current spot should have like a bit more -- better margin than what is in the guidance?
Guillaume Daniellot: Yes. I think a good point. Also happy to comment the clear aligner versus implant trend in North America. Then as you may remind, I think this is something which is important, we are not at all then starting from the same place. Clear aligner has been not resilient at all with this inflation and those interest rate situation then they declined significantly. Or at least they are very adverse macroeconomical situation, which is impacting significantly the market. And you should go then to the same competitor you are talking about to the previous quarter performance to see that it has been nothing close to what has been the implant numbers reported in the past quarter as well. Then demand has been really then behaving very differently. The clear aligner market has been significantly impacted. And as it comes back from a much lower level, then we see a sequential improvement because people are getting back on then a better consumer confidence, and I think consumer confidence is a good proxy or better proxy for clear aligner, where we have seen that it has been pretty close to what we have seen on the global market standpoint. On the implant side, it has been then very different because the implant demand has been really resilient on that past period of inflation and high interest rates. Then as then at the moment, we have seen step by step that the increasing -- the interest rate are not decreasing, giving a little bit more relief to U.S. then households. We see also that the impact of the subsidies that have been given by the Biden government to support consumption during all half year then in 2023 has been really helping people to continue consuming. But we still see now that it has a different then trend. That's where, I would say, you can compare then the 2 segments. And that's why we see also an improvement on our clear aligner business sequentially in North America versus the demand that we see on the implant side. Do you want to comment on the margin side, Yang?
Yang Xu: Yes. So on the FX area, as you have seen that it is indeed sequentially easing a little bit versus quarter 4 for some of the currencies. However, year-over-year, we're still staying at a quite highly early rated level. So for quarter 1, the revenue side alone, we are seeing more than 700 basis points of impact. So if the FX were to -- to stay as it is today, we could see that the impact could ease towards the second half of the year, but it's really hard to tell until we get to that. So I would say we're -- right now, our margin guidance is still the same. We see constant 2023 rates. So if the FX were to stay at last year's level, we target to deliver 26% of EBITDA margin, and that is margin expansion, almost 100 basis points. And for now, I would say the margin is still within the range that we guided for. That is between 100 to 200 basis points of FX hit on the bottom line.
Julien Ouaddour: Like -- just on the question -- on the second question, EMEA and North America, let's say, being in line with the high single-digit guidance. Do you also confirm it for the year?
Guillaume Daniellot: We don’t guide per region. Then we are just making sure that we will deliver our high single-digit growth for the overall then organization. And we do believe that both regions will contribute positively to achieving this goal.
Operator: The next question comes from Robert Davies with Morgan Stanley.
Robert Davies: My first one was on the 2030 target of EUR 5 billion. I just wonder if you could walk us through your thoughts in terms of contributions to that number from acquisitions versus the sort of organic targets? That was my first question. The second one was just, could you give us the APAC growth excluding China in the quarter? And then finally, just in terms of timing of the roll-off of the headwind from DrSmile, maybe I missed that on the call earlier. If you could just clarify that?
Guillaume Daniellot: Yes. So when it comes to then our 2030 guidance, we said that we have the objective to get there also potentially from our organic growth then directly, which was then just reaching low double-digit top line growth in order to get there. Then we have not included any M&A, but obviously, some M&A will be also helping in case we are considering going there. When it comes to APAC, then APAC, excluding China, is also having a really significant growth. We are high single digits, very close to double, and we are really pleased with especially then our more mature markets like Japan and Australia, which are representing the most, which have been able to deliver then double digit as we expressed then in the presentation. When it comes to DrSmile, I think we expressed the fact that DrSmile is facing – well, there are 2 factors for explaining the current DrSmile performance. It’s the one side then the market demand, which is lower for those kind of aesthetic treatment for the online business model. And the second one is then the fact that we are really pushing the model to profitability and not to net sales growth. And for this then, there is more investment on our side to organic traffic, which is taking more time to establish than paid marketing that have immediate results. And then we are looking at being able to drive performance and profitability over time. And this accepting some lower top line related to that strategic decision.
Operator: The next question comes from Oliver Metzger with Oddo BHF.
Oliver Metzger: The first one is about weakness of dental implant demand. So historically, the dental implant industry has struggled to find a real explanation which link exists between the economic environment and the dental implant market. So your comment on the interest rates could also be fit more in this old explanation scheme. Have you evaluated some scenarios that the dental implant market might become more late cycle and the weakness might last longer, similar to the time of, let's say, 2011, 2012 when the economy already picked up but the demand for dental implants remained low? And second, basically, is also linked to my first question. In this context, you mentioned that the penetration rate, which has improved a lot over last years, but still low in absolute terms, how do you think about the fundamental drivers for the market are like the education of dentists or awareness of patients? Do these reasons make you confident that the recovery of the market will come earlier than later, also in contrast to the start of the last decade?
Guillaume Daniellot: Yes. I think coming to the overall explanation of market demand recovery or at least a slowdown in recovery. Then I still believe that what happened in 10 years ago, I think your comment is referring much more to our own situation, where the demand took time to come back. But the market has been much more dynamic. And I think the market really quickly come back. But in regions where we were not strong enough and especially in market segments where we were not represented. Ten years ago, we were only premium, mainly Europe. And we were adding a much lower presence in North America and well, almost just at the beginning of our story in Asia Pacific. Then the Straumann business premium took a lot of time to get back on track because of its low representation is the fastest-growing geographies that have been North America and that has been then Asia Pacific. And also more on the challenger brands, especially coming from Asia Pacific and Latin America, where we were having very limited business. I think the situation for this year, it's very different. That's also one of the reasons why we are able to post 15% growth. When you look at our challenger brands, we are growing also double digit, which is mainly coming from all the different regions then added altogether. Then we have that dynamic coming from our geographical split. And we believe that North America will also being able to respond and to rebound quite quickly when the interest rate will deliver a better outcome for the available discretionary income that households can use. This is what we have seen also post-COVID, where the market rebounded the fastest in North America and Asia Pacific. And this is what really, I believe, will happen also for North America this year, especially to the fact that we are also catering to all different price segments also in this region. And I think, as you know, one of the big driver of growth in North America or the DSOs, many of them are also using our challenger brands. And we believe that the DSO will also then being able to boost significantly volume as soon as they will see an easier capacity to get patient conversion. Sorry, the second question was -- sorry, could you ask me again?
Oliver Metzger: Yes, it was just about the fundamental drivers in...
Guillaume Daniellot: Yes. That’s one. Yes, fundamental driver then for our implant business is threefold. I think the first one is obviously education. We still have a lot of general practitioners that are not placing implants. It has increased very significantly. We are, generally speaking, using those numbers saying that 10 to 15 years ago, it was only 15% of GP that were placing implants. We believe that we are reaching almost half of them, in between 40% to 50%, depending on the geographies. But you see that 50% of general practitioners that are not placing implants and that are often sometimes not offering that alternative. And this is one of the largest options for growing demand. A lot also in not mature market, we have a lot of education to be done. Southeast Asia, as an example. China also, as an example, but also a lot of practitioners in North America are now placing and are currently then being trained by us as companies. The second is, of course, patient awareness and price level. I think the price level in many geographies are then a [limitator] of volume than growth. We have seen that elasticity actually in the Chinese market as an excellent example. We know that implant are completely paid by the patients with some private insurance reimbursement to, I would say, 2 different percentage, different depending on the countries and the insurance companies, but there is still a large copayment to be done by the patient. Then the price level is also something that would help increasing significantly penetration if we would have then some lower price options that are delivered by clinicians. And again, I want to highlight the fact that the price of the implant or the price of all the componentry, it’s only between 10% to 15% of the total price of the implant, then that price reduction has also to come significantly from lower fee from a surgical standpoint, which sometimes are driven directly by government when they have the capability to do this, and this is the Chinese example. The last also then lever [indiscernible] innovation Is still a very critical way to support easier implant placement and then open up the possibility for GP to place more. And the digital transformation is actually going into that direction. We believe that with that digital transformation, you are as a GP, very significantly guided in how to do an implant treatment with really much higher then the chance to be successful. And that this is decreasing also quite a lot of the risk of not doing that properly. And as digitalization is progressing very significantly with AI very soon being able to provide treatment planning that are going to be completely automated. We believe that step by step, the young generation will use those tool and will also see then the implant treatment as easier to perform, less risk to take and will also drive much more this standard of care when it comes to replacing 2 slots.
Operator: The next question comes from Falko Friedrichs with Deutsche Bank.
Falko Friedrichs: Firstly, I'm interested to hear a little bit more about your level of visibility. I mean, it's clear just listening to this call. So for everyone is a little bit nervous about the trends in North America. Can you speak a little bit about sort of how many weeks of proper visibility you have? And sort of what gives you confidence in -- in some improvement again over the next few quarters? And maybe also where the lead times are now? And then secondly, can you tell us whether this first quarter was in line with your expectations or whether it was, in fact, a little bit slower than you had hoped? When I'm looking at your full year guidance, Guillaume, I think you've built yourself a great track record of guiding rather conservatively and then beating guidance. Is it that given this certain weakness in the U.S., we should now look at the full year guidance as being a little bit more realistic and a little bit less conservative than in previous years?
Guillaume Daniellot: Thanks, Falko. Three things, then 3 answer to your different questions. Visibility, then visibility we have, then visibility on, as we said, kind of 6 to 8 weeks. And when we are talking about our then customers and looking at their booking, I think this is pretty stable, as I said. That’s why I expressed the fact that I see that it’s going to be a stable demand in North America with regard to where we are. We’ve then increased potentially digital performance that would help us then to have some growth still coming significantly for North America. When it comes to the guidance, I think it’s – I understand that there is also potentially not so much me personally, but a lot as a company wanting to be then conservative. But if you look at 2022, we guided high single-digit growth and we delivered high single-digit growth, just because the current environment is not so easy to plan and the macroeconomical effect has quite some impact on demand and performance. Then when we have guided also for 2023, this is exactly in the same vein then we have not really looking at willing to guide in a conservative manner. We do believe that our guidance of high single digit, when we look at our peers, especially when we look at our performance versus peers in 2022, it has been very significant market share gain, and we want to reiterate those very significant market share gain on our own field. I think it’s really interesting to see that also from a relative basis. Then we believe that 2022 guidance is in line, and we have confirmed it. But when we started the year, we did believe that, yes, it’s not a walk in the park still with regard to the overall uncertainty that we are having on the macroeconomical conditions. If I want to express what we have heard during the first quarter, the fact that maybe the interest rate will decrease maybe earlier than planned in March or April and then suddenly, it was I don’t know, maybe June, and now it’s maybe fourth quarter in North America only. And this is exactly the environment in which we are acting in. And that’s why we want to be really responsible in the guidance we are giving to really look at this with realistic eyes. And I think this is the way we have done in 2023 as we did in 2022.
Operator: The last question comes from [Matehusta Doneski] with Thomson Reuters (NYSE:TRI).
Unidentified Analyst: Maybe I skipped that, but I would like to ask, maybe I did not get it. So in APAC region, revenue jumped to CHF 130.8 million. And I would like to ask if -- and then the group reported 15.1% organic revenue growth. Could we know -- could we hear some of the exact number for China?
Guillaume Daniellot: We don't share the number for China in detail per quarter. We are doing that on a full year basis because China is part of our top 10 market, for which we are releasing then our numbers openly. But just -- you can do a quick math saying -- looking at how much we were in -- at the end of 2023. And as we express the fact that we have high single-digit growth for the rest of Asia Pacific, there is some way to try to have a potential look at where we are here, but we are not giving entirely or detailed number for China on a quarterly basis.
Unidentified Analyst: I understand. And maybe you could repeat maybe. Because you mentioned 15% to 20% earlier in regards to China. Could you repeat what you were referring to?
Guillaume Daniellot: Yes. We said that when you look at comparable then quarters, which will start by the second half. We said that we should be and we were planning for having the potential to achieve 15% to 20% growth rate for -- actually, it was China -- the China market, and we hope that we can develop as such in China. And as this is starting from, yes, I would say, August or even July, then we said that the similar model could be taken as a good starting point for this growth rate.
Unidentified Analyst: Thank you very much.
Guillaume Daniellot: Okay. With that, then we conclude our conference. Thank you for being with us today, and we look forward to meeting you at one of the upcoming conferences or during one of our roadshows, which are outlined on Slide 22. And thanks again for joining, and have a great day.
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