Bio-Rad Laboratories (BIO) 4 May 232023 Q1 Earnings call transcript

Good afternoon. Thank you for attending the Bio-Rad First Quarter 2023 Earnings Conference Call. My name is Matt, and I'll be your moderator for today's call. All lines have been muted during the presentation portion of the call open for opportunities for question-and-answer session at the end. [Operator Instructions]

to Head conference of like host, to now Chung, Ed Investor would pass over the our I Relations. Ed, please go ahead.

afternoon, will quarter Thanks, us. key business from Good everyone, Bio-Rad. you on thank Matt. for for an Today, update we financial review XXXX first trends the results and and joining

Officer; call of are Vice Schwartz, Vice Officer; Life Last, Executive our Chief me and President President, Executive Officer; With Dara Financial President today Diagnostics of on Chief and Simon Chief Science Group; the Operating President the the Group. Executive Norman May, Ilan Daskal, Wright, Andy Clinical

Before These we forward-looking and everyone statements I are and assumptions statements performance expectations, future like making that goals, management's to financial plans and based that risks on begin caution to our of are review, subject about our uncertainties. expectations be matters. we events other will future would and

expectations. Our actual goal plans, results and these may materially from differ

undue you Company detail statements statements, factors the You intend discuss during forward-looking in our should the these our place any update to SEC, not we call made the The business. review reliance with in to today. not where on encourage does risk I forward-looking and filings

GAAP earnings financials, that reconciliation will of including are which Investors our contained the review under non-GAAP our Principles. to results should not Finally, in and Generally diluted these remarks to defined include measures references per are net today earnings non-GAAP comparable the share, income financial release. Accepted measures Accounting

over Vice and President turn that, With Executive I CFO. now to Ilan our call Daskal, will

thank you Thank all you, for and Ed. us. Good afternoon, joining

an on ask Andy quarter discussion, Officer, Bio-Rad's first global would Last, to the to Operating begin like I detailed Before operations. our Chief update provide I

Andy?

Good everybody. afternoon, Thank Ilan. you,

sales. core XXXX solid The reduction was business COVID-related of characterized our by first with a quarter significant coupled for growth of

number performance a market also and resulted the we a experienced for which challenges, lower-than-expected overall However, operational quarter. of in

companies smaller constraints with some seen where our there science to generally correlates across started line with expectations, demand industry our first the for in in demand in softness funding historically While strong the was biopharma was life we This experience quarter. the portfolio products. have

for We products, of the our process lower timing softness also orders. saw to due reflecting the a primarily quarter chromatography

tightening our Russia In negative the which quarter. addition, Life year of in in on business we sanctions, for lower our in further sales Science with impact overall impacted the a saw And a now especially expect Russia, we business. performance in

result, expected elevated our the On we address $X from the quarters our pace of we Of recognize a achieved chain reduction a estimated to first expected we $XX the the reduction XXXX expect quarter, backorder the in and the for remaining million within a modest. supply approximately amount not operational backorders, front, progress order similar to we three year. million did make was as And of backlog. of

part This ramp-up to driven inventory in This slower-than-expected goods facility. was by transfer. a as also contributed of higher-than-typical made the in production we Singapore our new finished

the clinical also impacted of expected at margins. systems shift by sales low than backlog placement by was and mix Our more in the

than higher in price our that net the experienced also We was quarter. cost inflation realization

All quarter. margins of factors gross the affected for these

saw for demand impact the globally We an COVID finally of increase our clinical in business receded. as

uptake newly oncology. from for demand research and addition, launched platform, and in strong we robust our line translational our growing, pipeline a continued are and and biopharma, ddPCR In XXXX. QXXXX, trend is QX strong And seeing

early part Tempo status new access assay later of more across enables our next this assess We remains automated digital clinical for and launch oncology Continuum, our researchers we'll package affordable analysis kit weeks kit instability ago and completed to instability menu generation be is for and PCR of launched includes PCR. Droplet microsatellite Digital product of launching thermal on of expanding quarter. development microsatellite ddPCR This the And multiple our PTC we market assay an a PCR our line QX few cycles. track year-end. The cancers product and

for X% and we pleased sales. long-term quarter reagent the particular, foundation first in Overall, core growth Diagnostics our base, the decline Clinical our encouraged as we we COVID the for a despite business sales demand were the year-over-year with growth. In over by continued are installed currency-neutral very in expand solid increased high providing pull-through

and forward we this demand chromatography business, our to business. now expect be see lower is strong We continued our double-digit although systems to year, to of we demand the for than Life also our growth remainder this Looking Science for clinical forecasted slightly process expect strong estimations. for continue, initial

we front, extended quarter the expecting of clear by second year. backlog end chain and clinical our of Science supply the by the end to Life our On the are backlog the

addition, to initial ability of as exceeded demand well Singapore QX in as we to in as ddPCR through In the of year, to our the expect for fulfill. capacity production progress QRXXXX the remainder up ramp system we continue expansion as

And with and you pass back to say Ilan. that, will you I thank

Thank Great. Andy. you,

the a sales like XXXX. on XXXX Now to quarter. basis versus reported QX a first X.X% the results million of decline I would were million, in review $XXX.X $XXX.X of for quarter first of the Net which is

On decline currency-neutral the X.X%. basis, year-over-year a was revenue

lower last on decline quarter COVID-related approximately sales, excludes Core revenue in million of the of mainly X.X% million currency-neutral The year. first a result $XX which sales revenue, $X.X significantly basis. quarter COVID-related year-over-year versus increased first the was of year-over-year

QX backlog, mainly up results contributed continued Russia, Andy sanctions and elevated to pressures by and lines alluded a impacted with chain companies increased in our transfer group. Asia. certain supply challenges, our the Diagnostics ramp transition order were including in production those within associated increased continuing earlier, The to biotech manufacturing early-stage As

chromatography the period. demand process geographic franchise the large revenue growth due to currency-neutral very and compare in ago the we In Europe to the while in QXXXX-ddPCR On for in revenue capacity Americas related experienced declined ramp continue core to accommodate growing tough the year addition, we a Asia, year-over-year core modestly new a to order system. a basis, customer for primarily

the which of by decrease biopharma the in products, decline Life was a biotech sales the as Russia Science quarter primarily of headwind X.X% result well a and $XXX.X projected Western effective reported X.X% funding QX $XXX.X PCR. to driven underlying than as and on were our digital environment basis. first a million a a due Science to was XXXX increased products loading was for qPCR compared growth Life currency-neutral sanctions X.X% is revenue companies. to as growth year-over-year This from companies of growing of we early-stage lower Group basis of currency-neutral core on and million in revenue Sales The XXXX, of certain of

XXXX we a As Process ramp new a to to a chromatography well year-over-year capacity expect as due -- some to for the double-digit accommodate can expect demand growth basis, in posted for mentioned continue revenue we which to will earlier, the a quarterly compare tough projection decline mid-single-digit on the softness I bioprocessing as revenue fluctuate we growing QXXXX-ddPCR system. forecast. relative our still With low said, market. being despite that prior

decline grew Life excluding process underlying of was process chromatography revenue on on in year-over-year tough the a a previously chromatography, Science COVID-related Science experienced QX sales in QX due Americas Group a compare currency-neutral core revenue, XXXX for sales. and sales, basis, currency-neutral COVID-related mentioned versus Excluding Life the the basis. On Asia growth result XX.X% geographic Life currency-neutral The chromatography. Science posted process core while of business lower X.X% Europe, to a basis and and declined a revenue

Core on Clinical flat $XXX.X QX million reported X.X% sales a the of largely a increase Diagnostics the Clinical of which $XXX.X and increased in Sales million Diagnostics revenue, currency-neutral Group XXXX basis. quarter on X.X% excludes on or currency-neutral a first year-over-year were basis. in compared a to COVID-related basis

instruments, demand within which a blood due primarily was typing Growth constraints. and entirely driven to diagnostic our of group the primarily for Diagnostics Clinical not was manufacturing fulfilled by robust diabetes,

which ago rebound continue posted the instruments placements in double-digit contribute reagent were coming see We currency-neutral Group in revenue geographic volumes Diagnostics core a largely pull-through the China, and for year On growth basis, Asia in strong Americas the the to versus period. a Europe quarters. and to should of flat in year-over-year in

to reported lower unfavorable from decline was sales, the as product gross materials. margin gross higher-than-anticipated COVID-related year the to year-over-year in of gross on The for basis by margin XXXX. impacted GAAP The well The was versus in of and quarter revenue cost further mix due mainly margin was as XX.X% XXXX XX.X% Life percentage compares raw first higher a of lower-than-forecasted Science this reagents and the QX instrument sales Group.

million $X.X year recover recorded higher QX costs goods were the to this raw costs certain in XXXX. the fully $X.X inflationary compared elevated prices. million In sold prior Amortization of logistics materials addition, related increases was selling of as recovered to in and were in fully to not not acquisitions cost we able in

The versus sales of SG&A discretionary compared Total or quarter of higher in were the was in SG&A or million QX in $X.X and $XXX.X XXXX of driven amortization charge restructuring million of to $X.X for million acquisitions by expenses, $XXX.X expenses related a XXXX. expense higher SG&A increase recorded spend. XX.X% expenses to employee-related XXXX. QX for XX.X% QX in was million

of XXXX. The or and employee-related of in Research and third to development higher spend quarter QX following $XX.X quarter X.X% increased sales expenses, acquisition project-related of was the due million compared costs. Curiosity or year-over-year the was $XX sales first million XX.X% expense of in restructuring in to the increase XXXX,

of X.X% compared to in QX million operating QX million was or XX.X% $XXX.X sales sales XXXX. of income $XX.X or of

negatively $XX.X in the value AG ownership equity shares, related by which of by securities million. impacted of below fair holdings the Looking line, reported the results its operating substantially market change Sartorius are

tax dividend a same by interest QX in XX.X% XXXX tax income versus XXXX of to compared compared other million effective the The quarter quarter, the rate and in other dividend for to of net million first reported effective in XXXX included $XX.X year. the was in geographical the income affected million $XX.X Sartorius first of The was last mix primarily quarter $XX.X QX net During income XXXX. rate resulted $XX.X of for million XXXX. XX.X% earnings. of of from of period other

of valuation an largely billion QX change primarily by of affected in Holdings. tax rate the reported $XX in quarter The securities. loss compared or loss Reported XXXX. loss from net diluted to diluted a million was per the QX per changes first income $XXX.XX effective share $X.XXX unrealized or in of share Sartorius for equity earnings was is of to in the $X.XX last year related This XXXX

the Moving results. non-GAAP on to

unique results income. have and excluded the the on basis, margins operating a other as in table both release. we certain the items in as These at Looking are detailed atypical press items that reconciliation well impacted the non-GAAP and gross

of amortization a for $X.X intangibles excluded have first non-GAAP we sold, of small results Looking at and the restructuring million expense. the purchased goods in quarter, cost of

for a the to XX.X% a XX.X% quarter XX.X%, basis, amortization XX.X% of in from These of XXXX of versus products on and first the an we $XXX,XXX in margin moved first $X.X of of exclusions restructuring-related margin QX of in $X.X for XX.X% Europe In have million acquisition-related of SG&A, registration the non-GAAP XXXX. approved intangibles of gross QX excluded and quarter non-GAAP was fee of million, gross XXXX. XXXX in costs SG&A $X Non-GAAP versus of million in previously vitro diagnostic expenses. purchased

R&D of operating in a the The XX.X% operating excluded first on non-GAAP non-GAAP In sum XXXX. adjustments restructuring on margin have of from non-GAAP of these XXXX of X.X% Non-GAAP in in XXXX. compares expense of result quarterly to a margin the expenses. a operating QX quarter in a non-GAAP $X.X basis, million non-GAAP R&D, XX.X% margin XX.X% of QX X.X% basis cumulative GAAP basis. This moving we to versus on was

the lower non-GAAP was driven the The first which and of value excluded are XX.X% with in compensation-related XXXX. for We by natural compared the period XX.X% items loan securities geographical decrease tax equity rate holdings about XXXX of of to have operating a XXXX million in earnings and deductions. the for in loss rate also $XX.X effective same The investments. million and receivable $X line, below certain of was Sartorius associated the higher mix quarter

of income compared $XXX.X share net earnings million per XXXX diluted of first non-GAAP for in QX finally, per $X.XX or $X.XX share the or diluted And was XXXX. quarter $XX.X of earnings million to

the and cash was Total the sheet. XXXX. billion the short-term change of end quarter fourth change end $X.XXX billion capital. at was of investments to compared primarily QX The in balance the working of to to at cash and on XXXX the investments short-term from in $X.XXX due Moving

for Inventory reached million in was certain at finished from million $XXX.X The higher mainly instruments. the by safety prior stock $XXX.X the end of goods inventory quarter. rebuilding QX of driven level

blackout complete we during not rebalancing our But addition, believe recent stock a shares the transition our are manufacturing. inventory any periods, quarter. out as years have first of In opportunistic will our in continue share coming to in did with there valuation we we the We particularly of of done as is levels we of dislocation we the when stock. some buybacks, be of purchase significant

that to current To available million deploy end, have under we program. over Board $XXX authorized the

$XX.X net activities for for first was $XX.X were in to sales million. and XXXX. $XXX.X of mainly $XXX.X For and amortization the and quarter was EBITDA the first was XXXX, sales, in dividend, XXXX first was million million, million XX.X%. generated for first XX.X% capital the of was increase expenditures adjusted $XX.X of XX.X%. quarter excluding from quarter The of adjusted or the dividend, of XX.X% QX and capital. QX The working quarter million EBITDA or XXXX Sartorius of the XXXX which Sartorius in compares was This changes reflects depreciation operating cash million Net of the excluding $XX.X

the to currency-neutral account guidance. to outlook We on factors guiding in as now to well growth as X% X.X% we XXXX revenue Moving continued XXXX non-GAAP operational initiatives, our be as about follows: transformation Taking revising financial the are our macroeconomic are previously. X% versus into

the For prior XX% X.X% to about we growth, currency-neutral excluding be COVID-related estimate our sales year, in versus guidance. XX% revenue to full

year-over-year of core in half the and between half half of and We expect year growth of the X% about core over XX% to half the growth over XXXX. the of XX% second second XXXX to sales, first The be first XX% Science is the XXXX X.X% about excluding guidance. versus about X% COVID-related growth our to revenue Group be X%, versus Science X% in Life Group to growth is currency-neutral Life and to expected prior the XX% be projected

half Life of the XXXX growth the Science about core of year and over XXXX, over of core second half the the about X.X% for of first first growth expect for the XX.X% half XXXX. For we half Group the second

For estimate improved seeing the Group, X% are X% revenue demand in previously dynamics currency-neutral Diagnostics versus we we of growth as XXXX. about

Excluding Group prior is and COVID-related the X.X% X% projected X.X% Diagnostics in guidance. between sales, to versus growth our X%

of margin is Diagnostics non-GAAP the to the over be expect the the the and Full group year X% the over the XXXX, second first between of half and X.X% we of improve half full growth For second for and about throughout core XX.X% for year about first core gradually XXXX of growth projected half XXXX. XXXX XX% half gross now for year.

we and the For XX%. XX.X% and the between anticipate first margin now between half XX.X% gross be of for and second the the be XX% of year, half to to year

prior the We of in project non-GAAP the to year guidance XX.X% plan focus full as on XX.X% margin management of expense remainder approximately now operating our year. versus for we

XX% be of XX% and versus of expected the margin margin XXXX. half for operating For we about reaching be half And first prior guidance. about is year the to second EBITDA our adjusted the year, expect XX% to full XX% in

be margin about year For the XX% half half of the year, XX%. EBITDA to adjusted the and the about of be second to in expect we first

growth compounded core We XXXX X.X%. our be revising target versus are to to also currency-neutral rate targeted our annual XXXX previous X% of revenue

the For XXXX Science approximately between our are targeting business, we about XXXX now of versus Life prior XX.X%. XX.X% expectations and

business, Diagnostics we Clinical previously. now X.X% versus expect X.X% For

about previous target XX%. to XXXX be versus for of about XX% XX% is our of adjusted be our and EBITDA to Our margin in versus targeted XXXX target gross targeted our XX% previous is

your That line remarks, we open questions. prepared to concludes the now Operator? and take our will

first Couillard question from Jefferies. Brandon is the [Operator The with Instructions] of line

Your line is open. now

demand? rest components and 'XX you've I'll just of you between gives confidence of you guidance in just Can what like separation weakness line. all the lower the walked there puts line? bridge unpack. top top the biopharma the the an us media early-stage help secondarily, detail and with the start the on appreciate on I'll Russia you terms takes And process

actually. Andy, it's Brandon,

kind have impact, through capture in QX, broad to Biopharma walk products. call that. big out emerging through [Technical Russia, levers in particularly maybe the you financial which which flowed the had So And demand, and kind let's of in which has for our demand impact. just of a to biopharma did once answer the access in slowdown Science some I'll softness, Life Difficulty] capital companies to meaningful the of, did broader it,

been of of points bridge two I'd previously. The process much on not much on had an highlight not a business, seeing has pace think reduction, the rebalancing the we be I been to we're or story that we seeing expression that against chrome story -- related experienced our that estimated. base which s previously the as put a as to just order we've that of the the capture so gene year back inventory being revenue I softer emerging say there and effect the industry, significant the years. two and think generally out biopharma now very last would over to that And able some just demand in everything don't three had slower seen going finally last overall installed we initially we're is this

that CAGR three Number two, in can my on terms is Maybe would get in just in especially variables dollars mean, of why organic of kind and conceptually, share based I years, operational terms generally, if 'XX of challenges revenue now, the macro targets what given to be all the what next math in quarter the 'XX? And update the the be those X% the implied in call? there? that targets, you just you to seems discussed Okay. would right,

the Brandon, Yes, for thanks question.

the and Andy the funding and the experiencing. headwind are the growth now, that sector latest and called kind updating of Obviously, changing we biotechnology see of environment entire the based Day, out was mentioned are in the we there. view on during So that Investor we light one of as first we drivers XXXX all, that just and of our

The account to kind when we cost that not overall stay. that of it into sure presented inflationary taken was today and Investor transitory, is is here that believe during mean I we I'm the Day. not

believe layering target order to update does we the this, the expectation. next in And So we set mean two that for an years. do to to XXXX the model on three are what that

that kind working it said, the are that the in overall achieve we pipeline our that of instruments new and With are the to that in everything thinking the all doesn't of still change terms and plan on transformation development. we and

that more It's our so and And macro-driven, we doesn't communicate thinking. change have to kind argue, accordingly. of, kind would I of

In I mean, update. -- about yes, the it's correct, terms is it's on of the basis, X%. your a core about so that's growth, math And

currency about neutral basis, billion basis. is you If currency-neutral about XXXX $X.X think on a the for it's

Got for Last it. Simon. one

years Your your assess range. in the closest growth competitor next the a XX% talked I your market the PCR in terms how would of on market the if outlook opportunity earlier three see want and the business? differently digital you if that's consistent for to in today to about CAGR with view you XX% view

the trajectory There's in in that opportunity helping definitely the before, emerging growth ddPCR. And our competition in also said closely, own the as when observed expand it we take and very to very the competitors our and we we commentary see and that kind from with really significantly market business. overlay of And digital disclosures hear PCR is seriously. without I doubt. think And it that we we we

think acceptance pretty the the the talked we out and platform for overall, really our overall it's we how we And about position would. it customer fantastic. today, about is think demand that and thought think when then we QXXXX it's consistent We playing way

So we're feeling that. good about

formidable there. moat at got segment, softness seeing that position think present nice biopharma business. think very notwithstanding market very of assays. we've the the I a ultimately side, And the that we've a of got we're high-performance got in got legs. We've some market's We And a the strong really long quite around

mentioned platform segment and platform we've is earlier, QX And know as this One I already performance the and best-in-class in you that's was program And really can in that is matters. nicely. of quite then throughput that terms development, really, Continuum we got And running QX really in our tell automation.

So fundamentally dynamics don't I when we we anything has at since this think changed about think discussed Investor here, Day. the overall

is Citi. The from next Patrick the with of Donnelly line question

Your open. is line now

Maybe a similar main questions.

it obviously, called much the timing slowdown think chrome in the side, think quarter. the like a impact, On you the Andy, good for process but down sounds pretty as you saw I to How there. versus an you significantly out us if guidance change it in timing coming year. do issue? the you seeing kind in market? is ability demand? color just a just holding execution up? the Is the What demand of, of more the backdrop in execute And little again, are what's give an pretty Maybe

for a business, in always Yes. to and in compare year guys mean, -- prior I particular, and you know challenge I'm for you well. -- the timing is that QX, But that sure tough us.

So view. a we wasn't from point great -- that of really that surprise

starting I and of inventory forward, go or from as kind think market the we end conservative calling to are we rebalancing forward. of experience approach more prudent it -- a Looking we're just just some the

prudent chrome products solid received, And to we've business. well year. and still we this that way for we're is on Underlying introduced those. The demand have feel thinking to consistent that, and our the uptake process new starting and in traction guidance see we're though, of about exceedingly extremely the been all reflect it's

others process that calling been the our through to think business is Difficulty] have on that a flow for So some bit thesis go-forward while. now. effect [Technical little seeing We're of a I of seeing chrome out finally our we're finally

Ilan, helpful. I margin on maybe you side, maybe more That's think out called the expense And some aggressive management. Okay.

second? got the first ramp numbers those half pretty into to levers and pulling visibility from a As up the just you think you step margins, the half talk on about what second are first guys good about can half you to hitting

Yes. Thank you, Patrick. I the appreciate question.

And to able will and will are in second to and the anticipate of it's So also roll confident half, part we able we achieve have of are we its initiatives next into pretty will We be it that over flight, realize obviously kind the line guidance. I guided And we it's as as obviously, mitigate goal some mainly margin. a of there baked softness this half well good and the in. for gross think we plan of the to it, several that year. that on to plan in be on it's that these part the already. the have that Obviously, initiatives are that multiple the focused And it is very our top year. we aspect second of achieve

then step of Life I chrome? blocks. all? help the maybe build the long-term ton algorithm I XXX a mean on down, guess, And think just the can behind you were the is a I digital guide, think Was can I change Okay. the gave about If what that When guide, it biggest guys softened what you algorithm changed bps. Science in the there. think, scenes building came of we What about PCR when -- in process segments growth that you to get have you down? us at guys think terms

all just to out maybe areas would of be if them, help you us was just what there, trying helpful. So but it figure out it could

Yes, at shot a this take Patrick, me question. let

little strong bit very in and to is the we've had smaller kind life determined And growth. slower is growth we companies, what the of meaningful on with emerging where a It's shake about that's that business gone way the simplest kind of science contributing biotech think it. at the softness biopharma I a to think up pace.

than just couple it's wouldn't flowing And of over I point at think in more of next years. And effect that anything that it as time. through the this

related Droplet chromatography pillars process Science the on Just very Life the to that solid. reiterate in then PCR Digital and business and fundamental products

prudently I think, we as putting So that forward result. a slower growth a we're, see

well, of as initial think I Russia the wasn't part calculus.

a is. So to does well. as flows impact, now and that it It's dense through it make projection but a the massive not

line The Dan Leonard from Credit with next the Suisse. of question is

now Your line is open.

assumes I sales The think in is XH. still acceleration caught sure fourth question, quarter tough, macro I'm answer. revised is but this getting guidance asked not The I meaningful comp the not better. a Brandon

support you second that ramp? are So what looking to at half

Yes.

Science do in the second growth the from demand that robust clinical think half. commentary, we which for projection seeing just slightly our some expect in to see the I So, continue. is systems and which in improved reflected business, we We're a the by partially lower business offset performance actually Life fairly we clinical

of a because across bit will mix further business between on little the a impact which got a out also second the the shift there two help playing mix half two the on groups. groups, -- reflecting business you've margin, differential has So of which support small performance we're

there, that add Yes, to will flows also P&L. it I the Dan. from that obviously, throughout

some On the expect we as and the gross in have scheduled the half. are well year start of progresses of will as that as margin, we second flight it improve list to to a initiatives that benefit the

half. second final down backlog the of factor, burn in which one the We've got is

so Science better very second that that in of second side and line the half, have also Life will growth contribute the the to phasing on half is and QXXXX a the sight we much And of it's robust pipeline. to

Yes.

second volume the higher we that plan in above volume And much I it's manufacturing kind yes, the QXXXX, obviously flows than exactly, mean, through. the the that's a but that to average have of a nice contribution, half top it's margin half. not first line, on So the about only Andy. in about

on gene Why multiyear base. you a commented my problem? demand And installed a that expression for softer question, Andy, isn't follow-up Okay. significant against then

move Well, it is think we as I an element. forward,

factored Science on that you're an there, trajectory, and element it's point into a it's the think good Life the I forward-looking 'XX right? view making is

all And over the it is years, a these you factor last two-plus that is hard after to the really instruments quantify market three years. placed in

a it's good Life in considered reguide for and fair out, our call is a but 'XX it's So point, Science. it

Nephron Your is line Meehan next the of Jack question Research. from with

Your line open. is now

the that's when on And forecast? more us is Can the annualize. start? And impact now question sanctions. for just First I embedded did it your one in when quantify Russian just you -- guess

the sanctions sanctions year, Yes. of shipping projection and had the -- our by Historically, projected Russia called would of our nice we X/X about incremental are when projection more kept impacted or Thank us out the revenue Obviously, it accumulating. an say that from more the X% are year that this we between And a for incremental was this was we prior basis. appreciate year. that still had that These than prior started And for not sanctions. Jack. pipeline. the I on we than of X/X I sanctions prevent of you, X% quarter. this question. annual projection X/X to These revise

did it I Got it. And here so was could you're curious business, on you if like the regionally, just well then you Diagnostics in U.S. and sounded what seeing in in Europe. in the comment Asia

I been from flat. hearing volumes I better providers. of largely the heard think about We've services lot a

that just just in how playing So U.S. Europe business? through your -- and is

we I Dara, believe she remotely. Yes. have

not So able Dara, hear the you sure I'm question. to were

Ilan is Dara Yes. hear This here. can you okay? me

you. Thank Yes.

Great.

China backlog is historically bias biased in is sales Asia Asia elevated COVID in so similarly QX, sort towards So but a sort there, back up were the bit in than and revenue Pacific actual regions, all of Americas. a the higher of strong lifted was demand in of Pacific opening in QX, EMEA consequence the demand as with restrictions and

instruments we placing globally, backlog, increases as well down which bodes installed So our base. burn in that

in We're bit. Great. little Norman. Then a which is for one one environment, final macro this evolving

Your business defensive all it's and done. should more when be, I said think,

to all, seeing landscape if it philosophy, M&A of kind what evolving when was Just curious the and your might funnel? in comes change how the at you're

Yes.

little valuations about think same. on of kind Obviously, when you about coming the the in, remains funnel down. a way it's stickier the So

viable as to of and it we've continue add as that we're that's again, couple deployment to things I go think a aware in option we of. to got the hopper, see So dynamic a business. the for But forward cash we a

follow-up is a question next Couillard. The from Brandon

is line Your now open.

push to question, your XX%. to the back I Just I on answer Patrick's exposure have is biopharma think only you -- mean

about overall market. talking You're sliver a that of

from stage market? you sure earlier First kind you're of then customer that of your I for want also Could right. of what terms growth that that outlook sizing, in And what's biotech embedded but it quantify understand to make in expecting I terms base? in

and a segmented development especially but sales -- well emerging or impact. biopharma our don't that's because within I and gene mean, more biotech, segment in I the therapy-based We've so Brandon, companies, of science cell the quantified we've overall. life Yes, broader those there done the think therapeutic product particularly

more companies. show the much we're been not seen and there, biopharma us this going subject bit just to the started we across to year. literally macros large And had for is sites up and it process a think obviously chrome The I for industry, mid that have which before, the on

side growth we've business. year, of healthy So moderated they're the the growth double-digit for this still although bioprocessing our expectations good,

portfolio, biologic contracts. just in chromatography, than this that play the more And in emerging really so also locked effects halo emerging our in big in these the talking but of which about generally, how add biopharma, revenue therapeutics. tend process really companies, Life resins see large to about pharma, Science we're contributed we Science and we've up our biotechs, the X/X I'll be is Life pretty biotech talked whether you're maybe about from our emerging smaller overweight in previously,

for margin Sartorius ones different? dividend, size includes I can sure correctly, that is much or year one that this EBITDA Day, target, Is how million $XX it I the make the you just the last year understand the dividend at which sure Analyst Last is and of the the the in just contemplated? much want to definitions, your make Okay. XX% to Ilan,

Yes.

kind we to what we about of compare to apples. So that to be million the of included assume And that's And said back $XX try in it now Investor it dividend. Day, consistent. apples we

additional at There waiting this time. are no questions

to So for I'll pass the closing team remarks. management any the conference back

call. joining Thank for you today's

Markets at York Jefferies in Capital We and Healthcare be June. Conference Global New the in also York, will the in New month Conference later Healthcare this RBC

soon. appreciate your look and we Thanks. to interest, forward connecting always, As we

That conference concludes the participation. for call. Thank your you

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