Envista Holdings Corporation

• Envista Holdings Corporation
• Health-Care

NVST

Envista is one of the largest global dental products companies with significant market positions in some of the most attractive segments of the dental products industry, including implants, orthodontics and digital imaging technologies. We develop, manufacture and market one of the most comprehensive portfolios of dental consumables, equipment and services to dental professionals covering an estimated 90% of dentists’ clinical needs for diagnosing, treating and preventing dental conditions as well as improving the aesthetics of the human smile. Our operating companies, Nobel Biocare Systems, Ormco and KaVo Kerr, serve more than 1 million dentists in over 150 countries through one of the largest commercial organizations in the dental products industry and through our dealer partners.

Innovation is a core part of our strategy and we believe that in 2018, our research and development expenditure of $172 million was one of the highest R&D spends in the dental products industry. Our business is deeply rooted in the Danaher operating culture, with an executive officer team that has over 50 collective years of service with Danaher leading a team of over 12,000 employees. In 2018, we generated total sales of $2,845 million, of which approximately 70% were derived from sales of consumables, services and spare parts.

As a platform of Danaher Corporation, Envista was built through the acquisition and integration of over 25 leading dental businesses and brands over the course of more than 15 years. Since 2016, we have leveraged the Danaher Business System (“DBS”) to consolidate our operating companies into three operating companies and significantly transformed our business. DBS is a set of growth, lean and leadership-focused tools and processes that differentiates us and underpins our competitive advantage. The application of DBS has reduced costs and business complexity, freeing up resources that we have invested in research and development for new product development focusing on implants, digital imaging and workflow solutions, and aligners as well as growing our direct sales infrastructure, especially in high-growth markets.

We estimate that the global dental products industry generated approximately $23 billion in sales in 2018. It is estimated that implant systems, orthodontics and digital imaging accounted for more than $10 billion of this amount and ranked among the fastest growing segments in the industry. The digitization of dental practices globally is transforming the way dentists diagnose and treat patients, leading to better clinical outcomes. In addition, we believe future growth in the dental industry will be driven by an aging population, the current underpenetration of dental procedures, especially in high-growth markets, improving access to complex procedures due to increasing technological innovation, and an increasing demand for cosmetic dentistry.

We are a leading dental provider in high-growth markets. In 2018, we generated 23% of our sales from high-growth markets, which have grown from $542 million in 2016 to $655 million in 2018. Our growing scale in these markets has been driven by strategic investments in underpenetrated markets, such as the Greater China region, where we had sales of $213 million in 2018 and currently have a commercial organization of more than 400 employees. We are also replicating key elements of our Greater China region strategy in other high-growth markets to benefit from the future growth potential associated with expanding access to dental care in these regions.

Our commercial organization includes over 3,000 employees with deep clinical, product and workflow expertise who interact with customers on a daily basis. We are also a leading global provider of clinical training to enhance patient access to high-quality dental care, reaching over 100,000 dental professionals annually through more than 4,000 training and education events we directly organize. Through our trusted brands, innovative product offerings and comprehensive customer service, we have established strong relationships globally with key constituencies, including DSOs, dental specialists, general dentists, and dental laboratories.

We believe the continuing expansion of our global commercial organization will provide us with significant opportunities for future growth as we increase our penetration in various geographic markets. Envista’s operating companies have a long history of innovation in their respective product categories. We have cumulatively spent $487 million on R&D in the three years ended December 31, 2018. With over 800 R&D employees, we believe we have one of the largest R&D organizations in the dental products industry. We target our R&D efforts to address our customers’ unmet needs and our commercial scale gives us deep insight into all fields of dentistry. Through our increased investments in R&D, we have accelerated multiple new product development initiatives, such as the DTX software suite, the N1 implant system, and Spark Aligners, each of which is discussed in more detail below.
 

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