Specialist
Executive at Align Technology Inc
Agenda
- Key players in French dental clinic market and trends including aesthetic dentistry and clear aligners
- Upcoming sale of Dentego, including likely multiples and possible buyers
- Potential acquisition strategy and targets for Dentego
- 3-5-year market outlook including likely growth drivers and consolidation expectations
Questions
1.
Could you outline the key trends we’re seeing within the French dental clinics market?
2.
How consolidated is the French dental clinic market? How do you see that consolidation trending over the next 3-5 years?
3.
How might the 15.2% of France’s dental clinic market performed by organisations and private practices trend over the next 3-5 years?
4.
You mentioned a 2.5% growth from 2019 to Q4 2021. How much can we read into those numbers? We’ve had obviously coronavirus in between. Do you think the pandemic slowed down the consolidation?
5.
What sort of YoY percentage growth can we think about over the next 3-5 years?
6.
What does the competitive landscape look like within the consolidated segment? We’ve discussed the consolidation, which is still quite low, and the growth around that. How are the market shares of players such as Dentego or Denteka shifting with the consolidation?
7.
How would you compare each of the key players in terms of the rate at which they’re acquiring new clinics? You’ve obviously highlighted Dentego. Which players are acquiring or consolidating the fastest?
8.
You mentioned the 100% Santé legislation has helped lead to the market consolidation we’re seeing. How have covered dental services in France expanded following the implementation of this legislation? Is that fully implemented now?
9.
Is it correct that the 100% Santé will cover the basic materials to be used in the prosthetic, but if a patient wants to have more premium materials used, they can pay a premium on top of that?
10.
Are we seeing any sort of erosion for dentist pricing, or is all the pricing fixed across France?
11.
How can we think about the revenue streams for dental services in terms of what percentage of treatments might be reimbursed vs out-of-pocket? We’ve obviously discussed the basic dental treatments that are covered by France and the implementation of the 100% Santé legislation.
12.
Do we see any difference in margins between the patients covered by reimbursement vs those paying out of pocket?
13.
I think your point on demand was interesting and obviously coronavirus led to a demand increase due to more disposable income and so on. How might we see demand impacted by an economic downturn such as a recession, if at all?
14.
You’ve spoken about some risks and other regulatory shifts. Are there any other features of upcoming regulatory shifts that could impact the wider French dental market?
15.
Could you elaborate on what the availability of dentists and nurses will look like in the French market over the next 3-5 years?
16.
How might the introduction of hygienists impact the profitability and productivity of a typical clinic?
17.
You mentioned the average salary is getting higher. How can we think about wage inflation for dentists trending in the short-to-medium term?
18.
Might we see any inflation on the nurses’ salaries?
19.
As we see the increase in wages we’ve mentioned, how do you think clinics can offset these additional costs to maintain margins?
20.
Are we seeing dentist clinics running at 100% capacity or with waiting lists?
21.
Do you think the expected 2,000 dentists graduating per year is enough to meet the demand we’re currently seeing in the dental market, or does it need to be larger?
22.
Could you do a SWOT analysis of Dentego, focusing on its key strengths and weaknesses? I believe the company is currently up for a potential sale.
23.
To your point on Dentego’s organisation, how well has the company integrated its clinics so far, once they’ve been acquired?
24.
How would you say the key players compare in their ability to retain dentists? What do they require as clinics? Dentist retention is a common problem with acquisitions.
25.
How would say Dentego is geographically represented across France? How are its clinics located?
26.
What is your M&A outlook for Dentego over the next 3-5 years? The company is expected to go on an M&A spree, which aligns with our conversation, meaning growth expectations are high. What do you think might be attractive assets for Dentego to acquire, in terms of size or particular regions?
27.
What do multiples around clinics being acquired look like on the market currently? As we see an increase in consolidation and M&A activity, how might those multiples trend over the next 3-5 years?
28.
How successfully has Denteka integrated newly acquired assets? The company is a smaller player than Dentego but has also grown quickly through acquisitions. How might you compare it to Dentego?
29.
What do you think are the potential assets that could come up for sale soon, or any attractive assets that could be a good acquisition target on the French dental market?
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