Company Interview / SDI drilling into global growth

Key Points:

Decline in amalgam product sales, with manufacturing to cease by 2028Strong growth in European and Brazilian markets, led by the UKSignificant focus on aesthetic and tooth whitening products such as Stella and polarOngoing investment in automation drives efficiency and reduces bottlenecks

SDI (ASX:SDI) has reported a modest sales decline of 0.7% to $110.4 million, according to Samantha Jane Cheetham. While regions like the Middle East and Asia have weakened due to political conflicts and logistical issues, the company sees robust gains across Europe and Brazil, with the UK remaining the largest and most dynamic market. Operational efficiencies and favourable product mix have propelled gross margins up by 63%, despite EBITDA dipping by nearly 3% to $21.3 million. The final fully franked dividend holds steady at 1.9 cents a share, and EPS increases by 17% to $0.03.

Cheetham points to the successful launch of SDI’s Stella product, which is quickly filling the gap left by declining dental amalgam sales—especially notable with the approaching ban on amalgam in Europe. The company intends to discontinue amalgam manufacturing by 2028, focusing instead on higher margin offerings such as aesthetics and tooth whitening. The polar brand in tooth whitening stands out as a particularly strong performer.

Strategic investments in automation are credited for significant workforce efficiencies and manufacturing speed. In North America, Cheetham notes that existing US tariffs have not significantly impacted margins, as price adjustments and reshoring initiatives help offset increased costs.