Danaher (DHR) 21 Jul 222022 Q2 Earnings call transcript

My name is Gretchen and I will be your conference facilitator this morning. At this time, I would like to welcome everyone to the Danaher Corporation’s Second Quarter 2022 Earnings Results Conference Call. [Operator Instructions] I will now turn the call over to Mr. John Bedford, Vice President of Investor Relations. Mr. your begin many you conference. Bedford,

Executive heading materials non-GAAP call Good Thank Chief archived joining Blair, of and until our I'd will point Regulation and out Events and G the today's all the slide supplementing audio our of Chief Investors will earnings be the will for that during everyone on the Earnings. SEC on section like section you, Presentations to until our Quarterly A Officer. required replay next Vice the the remain quarterly our by additional portion this under reconciliations our the are and financial call. and relating call, presentation call www.danaher.com Rainer X, Gretchen. XXXX. us are call. available archived thanks today also McGrew, available and morning, call With Financial measures any this provided Investors website be President later release, Matt August website on to of The Officer; President Executive under our us of and other the heading today information

are which in metrics submitted only period-to-period markets. describe year-over-year. from describe pending also materials impacted to the year-over-year company-specific financial relate materials supplemental have certain or operations and we We quarter significant refer second financial factors devices otherwise approvals more certain continuing certain noted, XXXX regulatory and results products references that to Unless performance. During presentation, additional the are factors applications the and these or for certain in year-over-year and remarks will increases all available supplemental of The impacted performance. of describe decreases in and to that all may to references metrics

the occur results laws, anticipate call, are including assume our statements that or actual those a set make federal of to filings uncertainties, forward-looking they may we the forward-looking to and believe statements in will the are statements today. events of or we made do date of These differ like might from statements will required make forward-looking that obligation I'd speak forth or statements future. statements and regarding within subject turn we only forward-looking During in securities number meaning to including and the the we over developments SEC to risks update by not These With any as Rainer. any as except law. call any that, forward-looking the materially

morning call really good of us appreciate on We joining And John. all to you, you. thank you the Well today.

So let me we start a had quarter. with, great

with our our the pleased and many In year. believe terrific we results performance in than particularly quarter across flow. expected our the revenue, And businesses. a through drove market single cash base we of rounded of gain half were fact, first business, which portfolio out better and strength Broad-based share strong earnings of high second the digits

system a a innovation. these They to executing leveraging the inflationary pressures, new help strong our environment. and testament to an to positioning have business incredible team's supply are with impactful our manage results challenging in Danaher commitment Now constraints, mitigate competitive chain done job, improve operating

the that and the Danaher resilience quarter up make strength highlights results second of today. Our also businesses

of all leading with of drivers, comprised is a growth portfolio by secular models. in united durable Our franchises business markets end set positioned strong, attractive common

sustainable, team of supply. equipment that today differentiates revenues into are our that, We we free the XX% of portfolio, which our are believe long-term, specified powered processes our the the of enhance reinforces balance or powerful specific that top this of to nearly Business competitive majority us our recurring, positions talented cash System and our advantage. by all the Danaher are generation our regulated portfolio of fact, On flow strong further and forward. manufacturing In combination well highly strength to Danaher consumables going sheet and

impressive turn So results to core digit additional growth across growth with little of and X% to XXX quarter strong operating in contributed grew in basis growth, our North with with Geographically, contributions COVID-XX Europe. including revenue that, all billion China. base our growth High delivered growth and in digits, core Sales quarter. second double points based developed markets core up let's in four revenue mid-single in America we a X.X% strengths testing digits were more low $X.X an Western markets business platforms. detail. high from the including single our revenue were broad

exceeded Our for China longer particularly than anticipated. we continued which notable is expectations, our significantly in results as lockdowns

for the I'd away supply supporting one chain for such effort. action. and most now their This logistics China you. like acknowledge our thank the facilities, in challenging during in teams thank and customers. managed weeks a efforts necessary our of their the such for from associates to commitment our the to approvals example Thank that to associates So and the great our take a that The core parts time, extraordinary reopen moving spent values. importantly, wins manufacturing families, team moment kept to several reopening supporting you is of a And who you best teams

margin profit XX.X%. XX.X% for of second continue And for the year, basis operating rest positive our currently margin in further China of operations but quarter more expansion. keeping operating as outbreaks of eye year. expect Now, to points, margin the seeing including for points the trend basis XXX up we're Gross XX we're business an normalized we core lockdowns, was was and the balance through and regional move out the this of

share versus earnings proactive quarters. result $X.XX XXX price actions, of significant year. inflationary was tools diluted teams basis of common the historical approximately up cost Adjusted in increases quarter, the per a our measures XX% our to and of acceleration taken price points execute realization. the a last we achieved were address strong performance from have management price we've net to margin last over We're and disciplined DBS seen using Our pressures also the several

We free cash flow also billion generated $X.X and the quarter $X.X year-to-date. of in billion

some results seeing today. to high digits broad up digit the better see in at growth or combined companies. X% early-stage business, stage revenue at our operating we levels and revenue Cytiva X%. Strength our from core record portfolio of growth a reported and and color Pall continue grew was of our core across business base production, was bioprocessing single our the take and In largest which markets you research each we're segment give drove across development rate let's to a revenue with core single Life end our In later activity Biotech. based Sciences revenue what look Now high on segment at

with remain backlog Our customers order always, our levels right support to and healthy. ensure the levels we're have they their planned to working And closely inventory as activity. very

COVID-XX and We away other into new and previously and are seeing modalities. therapies, healthy our paused programs customers from vaccines transition continue the for

we billion result, in XXXX. a now billion approximately in vaccine XXXX approximately from As and COVID-XX expect $X therapeutic down of revenue $X

of their that all and evidenced driving modalities. there as being from This monoclonal of historically. production. just adoption is low-double non-COVID revenue growth which development there biosimilars, more market is antibody development globally, than on the therapies change five accelerating our business, Today, development XX% we've treatments high-single last low-double development increase This helping year and over across seen growth today, ago. major proliferation no the in business X,XXX Now from are customers X,XXX a than our with XX% therapy digit more underserved higher by healthy is acceleration, than years tenfold is novel accelerate in to and up over to are therapeutic biologics both which outlook driven are increasing improving based-therapies as bioprocessing the in to markets over and said, years. remains price molecules patents up the the also in are paired investments expire. core more number for The and as candidates gene and other realization, digit growth our several cell core very volume There by

the in backdrop this rate very for activity, of we to given expect remain Now, and significant to sustained strong such years many in a come. increase growth this market

customers another help upstream advance and of collaboration these Bayer platform with to assist leading us broad as downstream for will to their cell treatments edge modular of lab with expertise and cancer. required them is which example to complexity cutting to industry's these a how This applications great of to allogeneic our from the improve are therapy, in collaboration increases, laboratory just diseases, collaborate to helping the therapies problems looking positions as the the production help develop challenging and from treatment clinic. including most array move scientific solve Now first a manufacture they them are to announced life scale. the saving manufacturing recently Cytiva end-to-end

environment academic high-single-digit life most science Our business our up of solid growth. at seeing new base customers. core CRO healthy SCIEX in delivered instrument revenue more by funding markets. projects research the XX% demand We're more major second and was end core revenue oriented driven quarter than an across acceleration collectively businesses a biopharma, and

diseases. understand can We with Helping treatment SCIEX previous genomics solution, number the more potential research. that and researchers that which efficiency an approaches. improve the proteomics accuracy versus doubles introduction and innovation continued of the several the our introduced discover software Zeno discovered and Notably better swath cadence and proteins innovative the of of of DIA, SWATH of be biomarkers solutions new cause

activity capacity Aldevron more significant and of genomic consecutive gene Now robust while and in and by the editing. cell gene businesses, than core in therapies, to projects its needed expansion and outlook. IDT and customers long-term XX% progress RNA NextGen their are gene sequencing DNA editing. had also growth significant writing investments of support the double-digit led growth revenue making XXth and production our quarter grew vaccines, on making development and

core to diagnostic at was growth nearly led XX.X% moving revenue XX% revenue Now reported and SCIEX. grew X.X% our up by segment,

China. recovery improved we recovery the core diagnostics, including progressed slightly Our year. growth and of more COVID-XX patient volumes volumes revenue normal below collectively quarter related year-over-year. Leica a pronounced but expect core our the diagnostics as mid-single-digit Patient slowly as headwinds Beckman revenue levels, other China, was continued businesses flat remainder the in Radiometer June. remain Biosystems from Site the despite through in delivered we shutdowns with and Coulter In access diagnostic progress

up held at of remain labs outside despite well emerging COVID and above volumes during patient hospital across reference or and quarter of recent the outbreaks pre-pandemic Now levels China, variants.

to improve labor automation their and within are to and continue increasingly shortages customers productivity labs. diagnostics seeking skilled Our face

workflow these definitive This needed diagnosis introduced quarter the fully address platform XX time the with a staining prime pathology bond its help stains continuous delivers a in turnaround prime lab pathology for to needs of leading average lab. only an facilitates minutes. Bond high next-generation and Leica Biosystems advanced automated resolution industry

expectations nearly of and volume and of spread up was global Low-teens was share. in The Cepheid at growth million. non-respiratory our and the market testing, preference across virology. a respiratory revenue for and led for revenue million core test quarter. sexual XX% our led testing menu other highly Cepheid's we infections transmissible X-in-X incidents such persisted earlier, and point-of-care health, quarter mentioned approximately flu in tests. assays to combination I by of In we as strong greater to Respiratory believe both as of continued approximately gain $XXX Now, growth the acquired infections hospital variants demand RSV testing respiratory exceeded $XXX our COVID higher

only in our the about XX% for XX the COVID-XX Flu-A, accounting Flu-B quarter and RSV As shipped remaining COVID respiratory represented X-in-X million of a for the with XX%. test cartridges tests result,

we're across shifts clinicians. is evidence unique more This PCR accurate COVID-XX of both an workflow for healthcare GeneXpert. easy-to-use provide and of best-in-class as testing their onto customers the begin the state, to point-of-care results the value, and endemic preference fast, significant GeneXpert consolidate Cepheid seeing an the networks within hospitals lab disease quality Now to combination platform

freeing capacity interested testing they In Cepheid's opportunities from leading menu. increasingly are of discussing utilization point-of-care begin testing, addition, for as respiratory our in molecular customers broader

growth In high-single-digit At moving XX% and at group and Now water all Equipment at sales X.X% and growth during across food and core with revenue and with strong product Solutions mid-single-digit identification, Trojan the Applied in led mid-single-digit. up Videojet ChemTreat, up core levels consumables growth each end markets. broad-based industrial to sales America our product grew and municipal high-single-digit remained healthy project and Robust both color Hach revenue double-digit particularly and grew quality North identification. of marking up was customers. at segment, reported revenue coding was was management strong. activity beverage were packaging and water second by was our major analytical quarter. Environmental where double-digits & quality core chemistries

Our using supply to suppliers EAS margin we're are availability. this team We hard-to-source reengineering along accelerated the been saw expansion our and also quarter ensure the inflationary the are These improve They've the seeing every on and to our with with components closely more to products leading reduce helping management DBS the to of chain efforts daily our charge chapter newest day. at pressures impact in playbook basis on with and writing part electronic price reliance operating work than production XXX results core our physician. margin EAS. points actions counter

in we growth expect for Our our resiliency strong business and on our and business. performance models our the in deliver end and up also third full quarter In core make what EAS quarter, a margin year. base we're of high-single-digit at revenue With markets seeing ahead portfolio. the let's highlights revenue third that businesses the durability the to the that recurring high now color briefly expectations look

expect a from mid-single-digit in low-single-digit revenue growth revenue headwind core resulting testing overall. growth COVID-XX We core

there full previous our in revenue overall. revenue no mid-single-digit For our and the growth change of year XXXX high-single-digit core growth business guidance is to base core

our fall at operating of through full expect Given to XX% performance, for range our of we XX% the end communicated now high previously quarter second year. strong the

we're up, strong So performance. to second wrap and quarter half with really pleased our first

a our are the a portfolio execution position dynamic the consistent in of testament environment, to results and Our today. durable team's to operating balanced

positioned end continue commitment balance ahead, Danaher with portfolio serving Business the delivering all performance. Looking our of markets to differentiated businesses and sustainable strong System, our to executing sheet long-term team's attractive Danaher our

So with John. the call I'll turn over to back that

formal for questions. our Gretchen, concludes That Rainer. now comments. Thanks we're ready

We'll from take [Operator Instructions] Derik of from our De first Bank question Bruin America.

Good morning, Derik.

Ryskin is Derik. Hey, for thanks for Mike question. This taking the on

Mike. Hi

in beyond? Couple one I ask appreciate Hi. expectations offsetting strength. really on you the is do business higher reduction think versus years? then fully questions; for that COVID How Is being to that non-COVID that. non-COVID bit on and a rate those are projects seeing catch-up quick sustainable the in XXXX? Just want the clarity hold but we talked Or some future non-COVID COVID the put in your of the you due on about, in of the years? that those XXXX with of last little on growth durable bioprocessing, a to bioprocess of for couple

on to I you mean, What of we billion? has are The suggested way. way modalities we non-COVID sorts of business Mike. in revenues see price-ends from is XXXX accelerated the non-COVID that broad it moving here business as XXXX, margin as only where the billion here think helping XXXX, on Thanks going see COVID very Look, up all the I the customers to level set course $X well. and them and as based $X

in early low-double-digits XX%, versus been XXXX historically. XXXX elevated for activity to see historically certainly elevated seen expect if would we have non-COVID to it's certainly So up too above levels probably the continue of over stays but to we that it say what

patterns Are the that's change any, portfolio? then anywhere particular but any or purchasing seeing any by related customers of across in by overall CDMOs? And to you bioprocess, in your Great. your any stocking just

the pockets that project project, inventories unusual even sometimes right build-up. the healthy generally way see late stage in clinical other So customer we and we of close by is canceled all the that very we've or large don't see as I any our in have surveys is very, of passed fail With regular speaking, of what say which here would conduct a one all business sector months. in the trials, while customers and result the the relationships we last major not through across there XX has just this

terms Okay. contribution squeeze supply what's through about the in is one the just Thanks. I last changed like of that better it feeling to if year, And in. anything of the the could the else operating there? The XQ? COVID margin Or that in one into pricing, going beat of fall effect there chain, then for is of sort rest clarify,

in the mean, of mean, up think sort a that Yes. where is latitude QX some to think about but offset I of if FX gave holding basis points ended is about pricing the businesses you seeing in in certainly we right? than in couple think hundred think the headwinds, I QX. I kind very if what I feed did well of lot we we're better helpful, you of us here

plus You look I managing of pricing. a at that really the driving think supply chain; job we've good done the

from mean, at where our price side the segments you during margin the think about – I was like cost at. So perspective if of here we're quarter. we positive we where each we're a on like

as So got our I that we – around the we've go we good. that feel pretty think and we've sort of arms cost forward do got price

Great. so Thanks much.

We'll take Kumar from next Vijay ISI. our from Evercore question

Good Vijay. morning,

Maybe on to we orders coming terrific instruments XQ what guidance macro? like XXX are in Congrats the simplest the Rainer. about points, in question morning, the on revenue print Good looks a given annual one a here. or basis are be on created; some bioprocessing it here guidance’s going by half to strong, over execution this second in is anything your strong, Rainer.

base reason any it is as whether and pause we business I talked to out comfortable backlog year feel that that full time. really see have. for our to some guide position that We've continue play about orders business the high-single-digit us give don't high-single-digit the development we the And And saw guide we being quarters. that here. we here relates demand think would here be with or throughout the base the No,

of again, of terms particular would season I remarks, as took COVID prepared we the so And is as from we be to given the talk we up of testing we to testing all our and perspective And billion. what here go sort important about go around forecasting, as as respiratory continue with forward is any I year, that and at there of testing then as think my QX you in expect that that billion us moment. respiratory in slowest of that QX many in and to course, best $X.X well. Now about do note. up testing picks COVID I into talked see think as happening quarter number our But about $X.X you to testing might

recovered shutdown China here of throughout China today after So unexpectedly to us limited these even also well continue we and important the long think to we would see shutdowns an it's second say for here. about quarter very spot more in the sort country.

we watch to constructive fundamentally second the half than it second that, So but the China expect in was continue be to here quarter. in more

That's for helpful Rainer. Maybe comment here. one from McGrew

Matt north think back impacts Given XQ, back be on said increments back second to XX%. fiscal half in Any you dragging XX% I I applicable the past were incremental here to implies incrementals Is to guide the that XX% half or to of [indiscernible]? XX%. the XX% incremental LRP think inflation XX%. And XX% FX in getting a should for half back that's

I'm said? you sorry, fiscal was XXXX that

and two-part half a yes. One was It question. [indiscernible], Yes. back

Yes.

color that I me the So, be full we of said can where give a mean, you I maybe what little just gets reiterate bit – of be. for on you We QX, let you need to hopefully of sort clear. just year. kind

reaffirmed core earlier gave growth core Like the think, Like a offset to our FX Rainer base headwinds. growth just prepared performance business we test. of all the talked half let we fully so the inclusive said over mid-single-digit of second recap the said, in bit high-single-digit kind us and we remarks. ability in I QX, little about overall me what

from that of we an about for no will revenue since half billion, than it XX% in of the the to we margins. did April year half. a that earlier of even FX have X% be a So from you'll impact talked about will full sort the so FX XXX worse headwind, incremental high-end the range for But have. second see perspective. perspective, doubt despite FX the million almost that XX% fall first expect at the talking of X.X to here in through additional That

is to So, mean, of in where $XXX FX that QX, second to of for just all color be going year-over-year, you we give that here down kind headwinds. FX I then we'll be due revenue of half inclusive the is headwind. and think million And

– of growth a So going it if we're meaningful. environment be negative that hundred a going acquisitions, have, from to of sort And in in about negative it, headwinds, but through perspective, core modeling fall FX of isn't you here to the net-net realize a I couple think all million million and it year. call we're $XXX from

quarter. I maybe our about expecting easier think think be in to EBITDA we're So to we're QX where about XX% the about the for way thinking margins is

can And of what so on XX% XX% full perspective. of from hopefully about of with it a back thinking helpful. Hopefully little sort bit margin frames frame, that, and year we're kind then a for the the – right you to half that's

Matt. number sorry still at? helpful, on XXXX right That's to is the XX% I'm to XX% that look

Yes.

our happen out about that. I any from sort headwinds no what to who to FX base or our margin event, think business think about we I something other XX% XX%, way some the rerated and XX% additional as days, to barring barring how to but XX% else, anything right macro on that's could profile these We've barring XX% FX head there talked a XXXX. is yes, knows past has of to change margins in to into XX% think there's good or

helpful gentlemen. perspective. Thanks That's again

Yes.

Vijay. Thanks

Davis Research. Melius from Scott from comes question next Our

Good morning, Scott.

morning Hey, good guys.

product Now a of or is that you more FX that a guys is a based mean, from it or, where dynamic of of [indiscernible] is regions to based? non-dollar dollar FX; topic certain I issue on there we're level around the more for competitive on, the translation Matt, concern

the about that's impacting seeing just the it's going it's I really as a former, as that it's of really sort America, Scott some are in think we was Euro, base that's, we I a just where maybe – that's revenues bit what I not different just than past headwinds of to about think cost is Yes, for have is more a it breadth that we've I right? been the globally little seeing the now that's to us and we of It's things we about headlines the mean of but places China. just one Eurocentric key. Latin been FX with a but – bit have the FX hit it's in in more even think surprising I of starting think where that's that No, lot Asia, don't got we're but us. of kind headwinds gets quite what seeing the parody, mean, we the really It's sort think Southeast we think frankly, quite a sort here we've breadth of the first half little

Guys, price big understand I up a pricing just the Do the kind the you of it, mean have price? business logistics help your get diagnostics? contracts and different function know in of like to its some Is step time us wait of business. had of until you renew I of and Beckman. to quarter-to-quarter kind and

work. contracts to prices pricing periods businesses, And when standard we as periods. sort the about for here, call those tell including big first is there half I have the think XXX have of in good between points proactively points let's half, manage as And would the does the basis XXX% able have here all we been it in I So a we move it. out basis visibility XXX about we half second vary that first direction, nearly second second talked really in businesses. our can Absolutely diagnostics QX. the contracts the think with – notification that's around way and Those you, quarter, move to part quarter a well. pricing of right was a about And we placeholder that's good the notification

related you not as of are talk to providing businesses price we that uplift well. are charges up say let's other longer, as of pressures, some the able ends and to Now, contract inflationary result to and other up about that as terms of a us where fees directly types freights with are requisite and come types

pass on. Well you it good guys. I'll luck. Thank

Thanks Scott.

you, Thank Scott.

Brennan next Our Dan Cowen. from comes question from

Dan. Good morning,

growing, discuss now. taking forward, the thanks. to Thanks see I company little morning. In XX% is you've what these to bit that downturn last got areas. and Obviously of across and the kind for all are on Good no wanted beginning you've you growth dramatically particularly in dental I businesses last a down different again a downturn biopharma Great, the but about all we're happen and XXXX, business. guess the the taken different were questions. no great structural such

we or a the know the of recession, and and the So different entail, what clearly and one duration maybe while you're down magnitude pieces enter don't what we'll we moving for slow scenarios. the if bunch preparing

the of call base about downside just can digit. businesses Like, can consider should its reasonable hoping year? next give think you sense a the LS, on help think X% across economy framework or low-single I'm case us faring TX we different mid-single-digit, so a and EMEA as Street here So maybe a and us the you slows has how or to growing for you it the like about for Danaher, right now

don't we the help and your like, will look what you anything know us you're but we in us Just of are better a can again a how will sense businesses frame to position do? downturn than give

you head. first it Dan, on I the of Sure. all hit think

in shutdown, for company different talk and one world only resilient were ended today the the over before. all, was and than than growth that driven XX% very out tease talk by well, and in you – more is. the, positive of up country number portfolio remarks our very, already very in you year the even quarter we molecular diagnostics, so in and obviously over XXXX. even And negative ever much heard a creation projects purpose that talk and in has let's XX% that is the value in transformation about of therapeutic those industry. these had strong the with drivers. mean, pipeline biopharma, in let's genomics, are today – some about, supported secular our made why being But we XXXX prepared I of Danaher are first saw as of in very mean, I the where activity why first? We that of portfolio drive here a all And far me that are let's XXXX,

see medical access population increasing. increases We also care to

So to volumes patient the when see around continuing about world, we think those we increase.

from very a also we're well diagnostic So perspective, positioned.

EAS, very is more is testing. these macro becoming is involved supply more as positioning scarcer, drivers in kind much under unfortunately think requires and the about food You well. there PID pressure The is so water polluted of and

So we the in nearly built we're a the live world that it's from purpose under. pressures perspective feel portfolio and that that we for

Now, over recurring. to equipment And these specked XX% or high XX% most of that I say are service models, of and razor captive, are of levels. in and super durable meaning our you or revenues business our to revenues specific they're with our razor they're blade – add those instruments should along

So kind things. these I'd built that's different it's of for a again, that very purpose of say business type once

environments execute which the balance our On and execution we add choppy our that to what macro scale see our where in to challenging and as actually on even DBS able our customers these top of opportunities. we're times is strength led environment. of and you tough sheet that matters, Now in focus

opportunities rather crisis battening of our us. can here continuously than improving the and and having So on executing down, taking the focused offer advantage we're that down hatches head

our Xx positioned sure. there about debt-to-EBITDA sheet position for balance well net as you we're less so, today, think And than

than choppier? side that. a or recession ahead should enter We're the of we to And other be looking so looking there, to even get times that stronger the get would should

your positioning continue trying guide, to at for when for, about look which unpack plus of we question that's to a non-COVID bioprocessing spoken high And was we feel bit, be what going digit think we've the and there is the think, out, be what as that you we business with very of. digit you as bioprocessing, is up And consistent strong. occasions. see Now, we about that which there growing to XXXX little could a about part single long think where we have good our of I number mid-single talked tease our term, in

what in we've growth in $X related year half the billion And relating here therapeutics down and XX% We discussion $XXX million for and rates, say of billion well, XXXX. XXXX. saw revenue we're see of we'd You here the and in with XXXX, non-COVID, the that's vaccines. de-risked doing COVID probably over also, in $X from then second

right We So all to you testing. XXXX, that, we've billion our $X at COVID we that and digits. revenue at that. having beginning still of the is length. that our XXXX, about COVID endemic XXXX, And still high for tests, still testing $X about billion, of end biotechnology customers XXXX, said our think goes business vaccine. growing And the see which $XXX at about around leads then XXXX. XXXX of million COVID billion is in COVID-related about $X.X think way They million speak of talked framework to single think And XX with we roughly that And it.

positioned on here we're think business. XXXX. COVID about very headwind plus low-single, good from mid-single perspective, all when together core base way solid So giving think put you perspective, growth overall single headwind low we And a from a digit then, a the the mid-single digit you feel that

Great, and the China, continuing. color you absent it are we thanks could China, Rainer. how baking to progressed year your bit implicit in about [indiscernible] one gave about a quick like, of do pertains half? the follow-up the think little kind or expected diagnostic back just as full obviously in better quarter than expecting But just and China you you normal a Maybe out for is to flush do? what just guide, And some completely expect,

year, first view growth. say the in view high the this of see full single would of year facing macro half, think what year, seen challenges the that which teen in We'd double a in way For for kind in digits of we digits, is we've of some China China, to today. we low low consider China the is growth strong to be the normal about

you. Thank Great.

Thanks, Dan.

Nephron. from Our next Jack question from Meehan comes

Jack. morning, Good

morning. Good

is bioprocessing. First I had on question

follow-up $X just you half, in how the half? the can much just what you to talk related the So billion? you're you about year, was build or just boosters guide updated for to up government how the And the assumption provide the then COVID just could contracts, assuming billion to $X first for second

everybody XXXX, and year, about fair think, towards Jack, here talked XXXX, of revenue, COVID-related $XXX here, therapeutic to XXXX half for the the to that you run we're that say for million the I $X revenue, getting of it's just of for that So repeat vaccine billion $X trails that billion off year. I second to rate

is lumpy. So some of stuff this

the in can back quarter, go downdraft. general forth that's a and but So it

or can a billion. numbers to first the half, in it's just little put to as I'd that the it, little in drop XXX called Maybe the under, the and you half, magnitude then of XXX around the over so get sort $X say second little a to see some

sense. that it. Got makes Yes,

terms look discussion the you of annual know continues. as and there public boosters health In official shots,

of country, flu about in seen if be much probably we uptake is endemic vaccination of that schedule. It less Our that order magnitude regular likely is is to an bit going it term be. is for belief to a that what of a XXXX longer vaccination talked remains on is what regime. that it the is the kind of But little vaccination be in there numbers the order vaccination will perhaps the the

a China. I And also on sense. makes That had follow-up

what do for pull question fact digits. And like? So mid you instruments shape quarter high single of about will to just How you than the the grew talk consumables, the the guess digits, just guide off? were despite look expected. my simple. kind versus is you I was lockdowns was Can longer single that down it high of the

about is the stepping Well, foremost, executing. a up and first this to plate team and

raw it and order of shift national that then commitment. the be the plants, literally number to to with same necessary literally cots, the plants, again. instruments is to make the chain people available, the and the or as ahead in manufacturing province At a prepared very, about of had built the our across what were think needed sort with as but whether municipal, up had the of we lived those showers, game, talked say know, to things risk back lived plants. work that associates you they had sometimes in it highest the nothing those being associates you the in to through then in and the our come working things levels supply associates they level to food facilitate ports services the you in as order the of quickly be had with ahead out it order that hours as shipment And the extraordinary those of We needed that in it. necessary it's and well game execution And available locally, stuck very were consumables, that to various clothing have time ensure we of manufactured we proactively is brought what was associated to just imported were but about the were Our understanding congestion materials also be in board, quarter, the take shutdown. the of that the open facilities I would what in unwound whether size that to our needed even approvals got to government, able to

got to the got are off sure at were and the people use that goods in customers our installed, signed of the line, Our making and first were today. in front were

Thank you, nice. Rainer. Very

Thanks Jack.

question next Rachel Our Vatnsdal from comes from JPMorgan.

Hi, Rachel. Good morning.

congrats Yes, quarter. guys. morning the nice Good on Thanks.

higher like so those fluid versus really expected, into dig obviously in on COVID off first than to mix testing, standalone. So the but I'd of came

XX% anticipating that fifty-fifty. four-in-one like of and it were you stand-alone, XX% test quarter sounds the came this in but So about

in So skewed has that the recent been quarters. increasingly four-in-one mix product towards

the XX mix are for thinking next tests then that year? you the back in And the of in what's mix shift million how forward So year? moving about half that's anticipated

it this about was as we quarter so to right fifty-fifty. was you're Yes, – closer think

sort we we XX% only, that saw it's year, four-in-one. more we mix of think hearing, XX% bit little was look are the As going about which a last we what to think QX of sort QX COVID like of

skewed it call that So million XXX was be on million so a bit or we of it'll little last we that, think do more year. think our it kind tests on like X

customers, QX I sort think, back mean, context, it expectation well does here then in the give our of we year. summer So we the been the of respiratory some to typically you that slowest and And as like too, I their as up get to historically Rainer sort of said has picks quarter just slowest time into become the winter. as talk the

mix saw that that like that fifty-fifty I say into get here we last will winter we well. we and the QX, as saw would As that assumption more be

maybe about fifty-fifty. $XXX revenue, of something along think in XX you talking or tests of a we're if think I lines So about split QX, million million those

Great. funding Thank they so stage funding you. concerns, to cash. has earlier concerns about candidates been potential And of as biotech conserve in obviously to number smaller to there then on a a biotech try biotech funnel companies, leading slowdown the at rationalize

the cell cetera, of gene prepared the monoclonal stats therapy, so flagged pipeline you for antibodies, a and on remarks. number et positive And

that or of result can a should shift think have funding funding let's point obviously face which of we how Phase concerns? really X, think impact mid-biotech for So could just you part start us these that in starts as the that seen meaningful business. where pipeline about to Phase environment constrained then say these that impact is of you main Thank the from a demand we segment do mid-biotechs. it become At walk any you through, perspective, customer to And what a driver X from that bioprocesing – prolonged you. volume

is it's by important to and our Thanks, the business stages Phase in are our just biotech’s ultimately Rachel. X Rachel, is what's commercialized stage. early majority later of very the happening Over or And clinical. of of in really in that as suggested driven XX% business preclinical drugs. note that these you either

proof-of-concept specifically your really is good has frankly, the is and from is to of an data of seen so we activity an do that are point, are biotech’s have. And the convincing, solid they much at haven't biotech customer and given, as funding the we go affecting less funding. we is that these continuing and levels here And that the you And look whether data. upstream the getting pursuing crunch that they that to and impact attract proof-of-concept then and our And proposals projects, where there now impact. sense of

that are as to So the providing data to be able is funding that they the we biotech’s, quite cash well our still presuming are the of those not projects positive the and today's in provide think that to positions business. continues as quality environment funding impacting

the today. many That's area Now, started where occurs. course, just where innovation. the your Amgens And huge Genentechs longer question, companies the that's risks and the that of is see of are where more a have we are others that and taken. biotech the thinking out cauldron box public term of oftentimes to to and the That's

concerned So, see it of support that that what course for longer kind the next term But months. to want will the are innovation today call see not we to about XX, of we funding continues XX environment. here

next comes question – question from our Our from last Patrick Donnelly Citi.

Patrick. Hi morning. Good

of I talk about all a low the that the to cleaning more just the earlier wanted again, it's the will we'll just shift, think are I the XXXX. bit a single It the COVID all looking mean, low-single half. what being to mid-single with I Thanks you sounds we'll through, of in all to away, the out of up a terms given the for was work in the margin still question. see XX%, COVID figure headwinds, more the shake growth it kind I'm moving pieces. the just maybe on mix taking XXXX. how our trying just a does. XXXX, out, mean, Again, is still be given with as little terms assume talking little pieces, sounds Matt we to first a moving core, one a probably on mix in more, changes dollar really headwind Rainer, heavy back you? laid Hey like COVID getting bit you XX%. Maybe that can like gave. right less, guess, guess, out? the into way And another that incrementals the you with of up appreciate the structure little FX I for but But way headwinds than I I is? about circle in again, color what But

think sure. everybody testing we are like maybe down Yes, the overall digit that, be said, sort mean, to get point plus I to of mid-single all at just low- to low and grounded base I mid-single that the low which would would you business is overall. get COVID of, kind headwinds this think, single be single a

difficult it's normal my be, so, headwinds, inflation think But And but supply are and before, where exactly I about mean, it how same less we'll where the We more fleet and talked FX, price don't think just might profile, we about we where the quarter let's now, it's VCM have I if COVID the like an XXXX that. from seen, sort XX% you've we think new show don't in right I to margin that mean, we I extra we XX% some think of any execution testing like we the to price up, the headwinds of place FX the perspective are, average, at be. as intentionally have I as here or chains. given up. that I we if see especially But dynamic said flu. have the we've how things is did with ends any

impact. a it it's if necessarily huge So as not has outsized

margin perspective think drive you be grow digit But to digit still single that XX%, environment, business place plus, growth. would right going fall low-single I to is we're XX% that the of that those in that think I through, think on sort still still with think fall we I given of through see even I base digits. So EPS from mid-single that a

balance there helpful, is appreciate Okay. That's the obviously have M&A is guys I you on then sheet And and I bit a healthy. the little Rainer Matt. you that. landscape, touched think capacity don't the doubt any

there conversations Again, of point, Or sometimes around uncertainty for appetite you like boardrooms? hit a and questions high resetting out the kind tend think more the ready? the seems are you to macro in sellers see of are bid. it guys, little to your kind the bit are your you I like still is panic certainly What valuation are tends guys? to of sellers favor

about can lot bit, So people just back what talk is conversations? little Are it don't, conversations pointing bounce we a months and on kind up still warm maybe six that of are like we you front? starting to back, or of maybe a the

say there's fair do the of wave. COVID out Well, of inflation environment to XX-week that these that change window Matt rates tailwinds interest cycle then talking real real not dissipating, But here. are into are And think that were has a a everyone. I rate are that people course, here riding we're about of was understanding many new entirely. the the see We entering foreign Higher high and moved for that exchange too. it's issues

it's as of align right with that that So to healthy days. premier focus, changed is the our that always are seep course of and market in to the for And with particular starting I But opportunities course, macro strategy the discussions. end area, then, valuation. engaged, as think looking valuations as along and very we of that to those in assets well still and reality early our funnels are boardroom continue we watch we're

So opportunity. you sheet our here if we're noted primed with and at look balance the market

Great. Thank guys. you

you. Thank

And we program over the time for the turn our will to all I is speakers. that have And today. back

today. joining thanks And Gretchen. us for everyone Thanks,

around for be day will all Bye. We follow-ups.

Thank program. does today's for your participation. This conclude you

may You a great. now Have disconnect.