Envista Holdings Corporation (NYSE:NVST) Q4 2022 Earnings Call Transcript

That is going to continue. And that iOS is going to become part of our core growth in Q2. We’re seeing momentum. That’s another add to this business that we think the market is under penetrated. We have a really good product. We have a great distribution relationship, brand. And I think that’s going to be an add-on that we can count on in order to be able to bring this business back up in a different format that we have had it in the past.

Jon Block: Got it, got it. Very helpful. And then just the second question, admittedly some annoying modeling questions, but when you guys say greater than 20% adjusted EBITDA margin for 2023, I mean I think you did 20.1% in 2022. And so, are you saying flat? Are you saying modestly up? Are you saying up, but less than the 50 bps to 75 bps that you maybe usually target on an annual basis? And then the last one would just be the accelerating revenue growth to throw a dart at a starting point. Clearly, it’s got to be pretty modest 1Q, but is it still in the green to start the year? Thanks guys.

Howard Yu: Maybe I’ll answer the margin expansion question first. And first of all, Jon, as you know, I mean when we spun and became a public company, we had committed to 50 basis, 50 basis points to 75 basis points of margin expansion. I think over the three plus years that we’ve been a public company, we’ve delivered over 450 basis points. And so, certainly, margin expansion is one of the things that we look at and remain very focused in on. That said, I mean, there’s quite a bit here as it relates to unpacking a lot of the macros and the uncertainties going into the year. And so, we want to be prudent as it relates to what we lay out for the EBITDA margin. And so, we did 20%, just north of 20% in 2022. We’re committing to do that at a minimum here in 2023 as well.

And then maybe at your second question as it relates to core, look, we’re going to €“ we see that our growth is going to accelerate through the year. Q1 is challenging. I mean with all that’s going on in China and Russia and the macros, I think that we want to be prudent and say that it will build throughout the year. We expect Q4 to be very strong. It’s not going to impact our normal seasonality. We see Q2 and Q4 as being the largest revenue quarters of the year, but certainly Q1 is going to be challenging.

Jon Block: Yes. Just wanted to get that out there. Okay. Thanks very much guys. Appreciate it.

Howard Yu: Thanks, Jon.

Operator: Thank you. Our next question will come from Nathan Rich with Goldman Sachs. Your line is open.

Nathan Rich: Hi, good afternoon. Thanks for the questions. Maybe just building on Jon’s question, just in terms of, Amir, how you’re thinking about the long-term targets? Is your thinking around timeline change at all for both realizing the accelerated growth, as well as margin improvement just given the near-term uncertainty in the market? And I wanted to get a better sense of, kind of what you’re looking for to drive improvement over the course of 2023? I’d imagine China is probably a major factor in that, but some of the pressures that we’re seeing on equipment, the VBP impact, those take a little bit longer to, kind of annualize. So, if there’s any other, kind of specifics that you think you want to highlight in terms of cadence over the course of the year that would be helpful.