dentalcorp (DNTL) Stifel Jaws & Paws Conference 2025 summary

Business overview and growth strategy

• Operates nearly 600 dental practices, the only national platform in Canada, with double-digit growth in locations, revenue, and EBITDA since 2011.

• Focuses on acquiring entrepreneurial dentists, with 93% of partners remaining since 2011 and a compensation model aligning interests through equity and performance incentives.

• Delivers 4%+ organic growth annually, supported by CAD 25 million+ in acquisitions each year.

• General practice dentistry makes up 95%+ of the business, with a shift away from standalone specialty practices to insourcing specialty services into GP locations.

• Plans to double the business in five years, with Canadian market growth as the primary driver and potential long-term U.S. expansion.

Operational performance and patient growth

• Achieved 4.6% organic growth in Q1, with 2.5% from price, and the remainder from volume and insourcing new services like orthodontics and implants.

• Patient visits per year increased from 2.1x to 2.4x post-acquisition due to marketing optimization and clinical training.

• Active patient growth is driven by both M&A and improved marketing and recall systems.

• Insourcing of orthodontics is present in 330 practices, with plans to expand to 40-50 more by end of 2025.

• Some softness in discretionary services like Invisalign due to macroeconomic factors, but category remains additive.

M&A environment and financial outlook

• M&A activity slowed in 2023-2024 for integration focus, but 2025 is on track for CAD 25 million+ in acquisitions, with strong pipeline and stable valuations at 7x-7.5x EBITDA.

• Canadian dental market is only 7% consolidated, offering significant runway for future acquisitions.

• Margin expansion is driven by operating leverage from recent investments in HRIS and ERP systems, targeting 20% margins on an IFRS basis within five years.

• Free cash flow conversion exceeds 65% of EBITDA, with most reinvested in M&A; 10% allocated to dividends, and leverage expected to decrease to 3.5x by year-end.