Dentistry has bounced back but remains shaky, first quarter results suggest
LEIPZIG, Germany: The global dental market has been described as “impressively resilient” and “a necessity” in the latest round of conference calls hosted by major dental companies. Dentists struggled in 2020 and so did the companies that keep their clinics stocked, but sales in the fifth financial quarter affected by the SARS-CoV-2 outbreak make it clear that practices around the world are open and offering most dental procedures.
Dental practice was slowly grinding to a halt around this time last year. A survey by Baird Equity Research in April 2020 found that patient volumes in the US had declined by more than 80%. By the end of May, elective dental treatment had resumed in many markets in the northern hemisphere—such as in the US, France, Denmark, Norway, Switzerland, Iceland, China, South Korea and Japan—and dental companies began to reveal the financial effects of lockdowns and radical public health measures.
One year later, things are looking brighter. In the first quarter of last year, revenue at leading dental manufacturer BIOLASE dropped by 54%, and sales of lasers dropped by 62% and 68% in the company’s US and international markets, respectively. BIOLASE posted net revenues of $8.1 million (€6.6 million) for the first quarter of this year, an increase of 70% compared with the $4.7 million posted for the first quarter that was affected by the pandemic. The company said in its results that 79% of all sales had come from new users, and 36% had come from dental specialists.
Envista advises caution despite jump in sales
Sales at Envista jumped by nearly 30% during the first quarter. The $709.2 million in sales that it posted for the first quarter represented a 29.6% increase compared with sales of $547.2 million for the same period of 2020.
Amir Aghdaei, president and CEO of Envista, a company that owns a number of dental brands, said in a call with investors that the company’s performance was largely the result of a robust recovery across dental markets. “Over the course of the pandemic, the dental industry has proven to be impressively resilient,” Aghdaei explained. He added: “We are seeing demand for dental services in our developed markets near pre-pandemic levels with the outlook from dental offices showing sequential improvement. Having adjusted to the new operating model, including a stronger focus and infection prevention protocols, dentists are now more confident in the long-term prospects of their business.”
“Having adjusted to the new operating model [...] dentists are now more confident in the long-term prospects of their business”
– Amir Aghdaei, CEO, Envista
Howard Yu, chief financial officer at Envista, said that sales in North America and Western Europe had grown by more than 30%, which he said reflected a strong recovery from the initial lockdowns in those areas in the first quarter of last year.
Yu said that sales in China had grown by 50% during the first three months of this year. He added, however, that a sustained market recovery was not guaranteed. “While patient volumes are generally improving relative to [the previous quarter] and nearing pre-pandemic levels, we have seen the impact of inconsistent rollout of vaccines and localised spikes in COVID-19 infections in several geographic areas, including Canada and parts of Western Europe,” Yu commented.
Aghdaei added that lockdowns in Europe had hindered in-person training and adoption rates of the N1 implant system, and he added that uncertainty remains in the dental market and that short-term disruptions from further lockdowns could not be ruled out. “[We] are mindful that inconsistent vaccine rollouts around the globe, new COVID-19 variants, and localised lockdowns will continue to impact the recovery in the near term,” Aghdaei said.
Dentsply Sirona praises underlying strength of dentistry
Dentsply Sirona’s revenue increased by 17.5% to just over $1 billion in the period—in the first quarter of last year, sales had dipped to $874 million. CEO Don Casey said that the company’s dental consumables business and its technology and equipment business had improved beyond expectations in the first three months of this year “owing to a stronger-than-anticipated recovery in global dental demand”.
“These results reinforce our view of dentistry as a necessity with resilient underlying growth trends” – Jorge Gomez, chief financial officer, Dentsply Sirona
Casey commented: “The dental market continues to show a gradual recovery, highlighting its underlying strength and attractiveness. Dentists have shown real resilience and a commitment to their patients during the pandemic and now in the recovery.”
Casey said that there had been strong growth in specific segments of the market, including in aesthetic areas such as clear aligner therapy and dental implants. “Many of these higher-growth areas have been enabled by digital dentistry, driving good growth there. Dentists and [dental support organisations] increasingly look to enhance their practices by participating in these higher-growth areas that involve more complex procedures,” Casey said.
Jorge Gomez, executive vice president and chief financial officer at the company, commented that the recovery of global dental demand had been faster than the company had anticipated; however, he emphasised that the macro environment was expected to remain uncertain.
“Sales across all product categories rebounded in the quarter. These results reinforce our view of dentistry as a necessity with resilient underlying growth trends,” Gomez said.
Sales strong in aesthetic dentistry
Earlier in May, Dental Tribune International reported that the global market for implant dentistry had contracted by as much as 15% in 2020. The CEO of the Straumann Group, Guillaume Daniellot, said during a call with analysts in April that demand had returned in both the premium and value implant segments and that the clear aligner market was “one of the most attractive areas in dentistry”.
Straumann’s sales were particularly strong during the first quarter—up by 72% in the Asia Pacific region, by 32% in the Europe, Middle East and Africa region, and by 19% in North America.
Align Technology’s sales in the first quarter increased by 62.4% year over year, and by 7.2% sequentially. Clear aligner volume also increased dramatically. The 595,800 clear aligner cases that the company shipped in the first quarter represented a 65.8% year-over-year increase, and a 4.9% increase compared with the fourth quarter of 2020. Notably, clear aligner cases for teenage patients increased by 58.9% compared with the first quarter of 2020, and the company treated its ten millionth Invisalign patient during the period—Gabriela Silva began her treatment with an Invisalign-trained orthodontist in São Paulo in Brazil.
Commenting on clear aligner shipments in the first quarter, CEO Joe Hogan said: “[Growth] was driven by strength in both adult and teen market segments, across products and customer channels especially in North America and the [Europe, Middle East and Africa] region, led by UK, Germany and France.”