DHR - Earnings call transcript Q2 2020

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning. My name is Maria and I will be your conference facilitator this morning. At this time, I would like to welcome everyone to Danaher Corporation’s Second Quarter 2020 Earnings Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. now call will to I Instructions] turn over the Mr. [Operator Relations. Vice President Gugino, of Matt Investor Mr. Gugino, your may you begin conference.

Matt Gugino

are President Thanks, under measures non-GAAP call Maria. Matt Financial the Earnings. this today Officer. will on for available the McGrew, joining website, Joyce, Good The section Presentations morning, President X, everyone call. and quarterly today our & Executive With and during Officer will this www.danaher.com, financial Chief the our Executive next and our section thanks Vice of August later us portion Tom will and by provided all be remain our until A Chief the be Events I slide Form call, and required today’s quarter replay XXXX call. Regulation presentation of call XX-Q other of to Quarterly the XXXX. SEC audio our out on and our also call that archived heading to website point our like relating are supplementing would earnings until under the reconciliations on and heading any release, the G archived Investors second available of information Investors us the

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

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

a the sales Tom. the References period its Cytiva turn presenting and of revenue of compare result a size over are Danaher’s acquisition calculation revenue to on overall core As revenue Cytiva basis impact on sales to core we that, prior includes the to the growth I growth, that period With Cytiva would current and period-to-period growth the profile, including sales. core of like of to historical Cytiva sales acquisition. sales Cytiva the to the call to

Tom Joyce

Thanks, morning, good Matt and everyone.

pleased our a very such environment. quarter in especially results, are We second with challenging

the Danaher XX% testament growth to system the of our Our generation, business growth, core businesses strong that more flow solid EPS team’s today. cash portfolio are comprise and and outstanding a to Danaher than commitment revenue

franchises These a We unique on resilience sustainable, for long-term for with foundation of head to a that of technologies opportunities pandemic fortunate the do are the value the level believe improvement. and are of continue so position our portfolio, by tackling of and presented and and years to generating us will COVID-XX strength. from revenue have We challenges differentiates collection powerful combination circumstances market-leading showcased of a come. recurring shareholders enable to high continuous and many a this Danaher

molecular X for COVID-XX and to provides would tests been within versus Diagnostic minutes. critical providing second on performance in of results COVID-XX and care test that studies accurate XX ultimately indicate ways independent rapid Cepheid of the testing is a detection community’s results. well market curb to COVID-XX first the to this are cartridges has update understand few quarter. future. in the fastest increased that virus today was global the of shipping directly since has effort. the highly into superior best-in-class better more point and the our spread time Before of has other leader quarter with Cepheid’s contributing on capacity been the Multiple March, today launched a the Cepheid platforms run results, we to a production second meaningfully component the one than fight The an through team like I we provide against million the attempts launched In of test test

are to the commitment are Flu very announced the very testament test health tackle for these symptoms different. from As X-in-X for a the A, viruses Cepheid’s each patient The treatments this a but crisis, of single development global recently Flu team RSV B of similar, to rapid combination a sample. and COVID-XX,

So, provide the to is the X-in-X to critical XX season. the upcoming to expected quarter within flu third outcome. the being minutes ensure is in The patient answers test designed launch test best ahead of

which to globally base of to Cepheid quarter. instruments customers that number of XX,XXX install also placements instruments Cepheid’s This and instrument diagnostic world. more grew was double-digits test a essential new delivered patients increases production, the ramping more around record base, bringing totals to of in communities the than addition quarter. The new and information typical a second In now number than more installed the significantly Xx closer

the and to understanding typically within potentially This test role addition to could immunity Another our Diagnostics launch the an capabilities of first in days the highly virus, world’s of Antibody in assays diagnostic play develop was IgG important XX improving in the June. can which manage to to forward. infection. going antibodies begins turn testing and COVID-XX serology identify sensitive ability assay specific Coulter Beckman

and and their for the proud we scientific support including therapies race and COVID-XX underway in world, a treatments in participation As Cytiva’s than of therapeutic we today. look in that trials the solutions vaccines every beyond are is involved therapeutics and Pall global products the to testing, the community effective and to projects and new of more human virus. find around on vaccine the COVID-XX are majority XXX designed for pursuit clinical currently vaccine

workflow exceptionally across Our bio-processing help well the positions bring to therapies unique us faster. offering vaccines market and to

One to breakthrough typically filtration, or even Pall in chromatography is solutions ultimately and enable expertise in months team, just years. In market cure. and teams accomplishing addition and is such services helping scale technical helping how innovative their our production Cytiva’s faster which example leading single-use provide up instance with customers weeks Pall’s to and innovative process a COVID-XX the vaccine extensive bio-processing just customers and a are These development significantly development processes accelerate capabilities. production one pursuit would prevention examples are of to of a few few take we technologies,

our Now, X.X% X%. billion revenues impact results. generated We currency sales let��s $X.X translation revenue second at core decreased The growth. look of quarter by with of foreign

China, strong led markets Western result the the We of Cytiva platforms. of Life were and Geographically, quarter slightly related which driven under by both by margin up growth up single-digits profit also value to markets XX.X% America just Europe. was operating of year-over-year. Gross as the up fair adjustments North our sequential led margin in were acquisition. XX%, Sciences mid revenue down profit meaningful High and developed was by improvement a in growth saw order in low single-digits XX.X% and Diagnostics a primarily

movements points XX corporate quarter and Excluding year-to-date these basis higher profit expense. net earnings and Core year-over-year. or both up and by per was Cytiva, billion increased down $X rate XXX billion flow Adjusted $X.X growth adjustments, both margin year-over-year. margins than XX% approximately were lower more excluding slightly operating generated year. XX% the common share up driven last operating profit of volume, We points exchange cash basis foreign more in versus free of diluted $X.XX by

flow outstanding strong this balance sheet a actively pursue combined free positions cash well to opportunities in strategic us Our M&A environment. with

Danaher, production against of where science We the COVID-XX. investments many our across to are and support fight accelerating Cepheid notably are at most capacity expanding life also businesses, we growth

look the including and new last leadership Danaher, ongoing This the Cytiva, businesses, their a SCIEX’s more global first Biotech, The IDT. Quad by successfully are our growth years was expectations. as marked in and of efforts COVID-XX research particularly most across Life for exceeding full this in Leica great growth difficult existing new continuing enhancing its Demand Academic core products declines purchases, or part revenue new of More instrument-oriented treatments. orders by how of our is innovation. across driven another installations capital X SCIEX more our XX% instrument to and we example across high-teens and than of achieved Now, partially the testing Cytiva delayed despite automation specifically, launch results our markets. let’s was multiple solutions, offset competitive mass revenue for quarter develop at led SCIEX and Pall reinforces launched XXXX take more to by core better And this was and XXXX developed quantitative bio-processing, earlier and genomic and This month, in detailed environment, at invest closures through Microsystems. advantage spectrometer. lab growth Triple Danaher spectrometry. significant up X% Sciences portfolio. mass market core

performance revenue demand Cepheid delivered gas our continued revenue Moving COVID-XX XXX% quarter. Radiometer Cepheid’s analyzers for with testing. hospitalizations was at tests in than improvements wellness resumed levels COVID-XX U.S. our delivered number down expanding Europe. GeneXpert ABL X% quarter, meaningfully core as installed partially were Beckman Leica helped businesses. Diagnostics, growth reported was elevated in gas particularly Global This new for core across began growth to blood the blood core business laboratory revenue Coulter partially pre-pandemic and point-of-care Cepheid procedures market during instruments base. of visits Patient to double-digit and by by of by record revenue the up core slowly drove strong where drive Radiometer. leading A Diagnostics, businesses, at the global volumes X.X%, at and growth demand as were elective more and approach led and strength This quarter offset Biosystems, declines Radiometer’s hospital throughout offset levels. China, the visits and further pathology was

by and quality remained Steady segment, our our by softness, reported double-digit demand globally chemistries China. offset platform, consumables revenue and Moving declines single-digit Applied down purchases, revenue driven our declines equipment markets. water Europe delayed By core were by particularly offset were growth the and industrial developed geography, and At was & Environmental for X.X%. Solutions while America market in mid XX.X% was declined partially in core revenue North Western stable. to municipalities in

due capital consumables end largely investments. At helping results running. region. normalized decline levels continued and we demand product prioritized were at down more Videojet, essential to across activity during to over markets. platform packaged up to expenses we well mission-critical encouraged the revenue was as performed the positive China in led equipment operations – by our strong Service operating food the larger across were However, revenue as returned growth double-digits by as pandemic quarter the business their Core support identification well throughout customers and keep to goods consumer was as

levels. Sciences, of setbacks re-openings The see experiencing recent bio-processing our end a related others surge across continue that solutions. largely context healthy, and albeit So the in our pace. we the these and our single-use Pall strong growth of products. two therapy automation closer remains and our than exposure cell demand Encouragingly, a we appeared gene we more and we dynamics filtration, recent markets. activity phased the to research activity comprised the U.S. see story bifurcation a instrument along had collectively, We operating suit their estimate biotech improvement to June. outlined bio-processing take approaching at and to quarter businesses China, installations as our capacity. in to closer process. for order and in XX% mixed the chromatography, is to developed we with in improving recently what Resumption bio-processing Biotech started the U.S., to distinct variations modest capacity are term some end-markets. only XX% across for activity have pharmaceutical XX% in And is in as of are appears beginning in end majority states the similar Cytiva continue a is research through region. a lab academic April opportunities Life is the look but and further here. where labs genomic in were limited activity to to XX% books continue That recently is with Within trough while Europe customers, slower are by let’s widespread activities. China now very COVID-XX to in of resumed also May be seeing longer development, of strong Geographically, at with number be with and trends and what of saw China, contributing May. related demand are The Labs to shutdowns in quarter, the book early with that generating and at among research following markets the segment, continuation related Meanwhile, we open and impact reopen, to for non-COVID pre-pandemic in a in move the by building. Europe markets. U.S. approximately Non-COVID indication many order

quarter. instrument ahead checks also medicine. the China applied which water these quarter developed continue Equipment globally. testing we to labs, solid single-digit to high markets. we we given we see earlier consumer we to growth of starting of – in be Europe move we a the of levels, across markets, in to North and single-digits customers order approximately very ramp to the business revenue are third will segment, encouraged trends. as lessening. the By and Sciences much quarter, through book In to clinical up second and molecular strong what at double-digits, wellness revenue core consumables double-digit hospital between goods, anticipate slightly moderate deliver essential Applied even were in & tailwinds and up reference the with product and we of increase and are dynamics, Across see encouraged historical equipment patient Consumables volumes food as COVID-XX operations, remains we declines divergence growth and In flat. to related labs is approximately resuming Today, to along across be estimate and testing, Diagnostics by recent and Looking demand packaging further Environmental light patient XX% be be elective mid safely placements in significant saw for appears sustain We demand the point-of-care reopenings. treating revenue quarter. expect with procedures to high XX% Solutions care America acute low Life their up like are driving that expect similar and to volumes recent diagnostics,

proud our So of to wrap up, we are quarter. results this

on the challenges focused to find tackle stayed by presented pandemic. opportunities team to and Our innovative continued and this executing ways

And can I into We you taking and will portfolio start We are opportunistic. uniquely us Matt, outstanding that excited in have talented and flow we we believe enabling about that, differentiate resilient the to the Danaher will to position that turn portfolio positioned that going DBS-driven solid the over of execution to and continue combination outperform environment XXXX well today nimble to it forward. our our so and back future. team, call strength, With sheet generation the questions. with this cash navigate balance us fortunate of be a and are we through to how from

Matt McGrew

Thanks, Maria, ready for Tom. comments. questions. we That our formal are now concludes

Operator

comes floor first Instructions] Thank of The line [Operator of Derik for America. the now you. Our from is De open questions. Bruin of Bank question

Derik De Bruin

good Thanks for morning. my Hi, taking question.

Tom Joyce

morning, Good Derik.

Derik De Bruin

Hey, I to couple with. a got start

and and quarter number the I numbers about – should of now margin is, margins And rest like, Cytiva questions dynamics that we the one did more – think and progress how think math the for Can the you of the year? the is the the we fully of the better step-ups. first into the can are how important gross operating a about getting questions second talk on the you that? inventory

Tom Joyce

it. will take I Derek. sure, Yes,

gross XXX the saw the Like decline margin, step-ups kind basis by sort inventory a prepared the acquisition of said Tom points in in of to the year-over-year. driven So entirely remarks, of is we Cytiva quarter. related that

couple move. been here of if one gross up Derek, a be it, that I Cytiva. here are, one-time would largely That’s get by quarter. closer as have a in of XX%, points thing that And our think I time start exclude should that we So, the impact, year-over-year you and margins basis to which call driven by the sort XXX in we again, to quarter,

see So going that. shouldn’t you forward,

Derik De Bruin

– of about and want I and SG&A clarify that’s and the how we we how Okay, yes, just the lines? should that sort to should the OpEx think – R&D

Matt McGrew

I don’t step-up know that lines. of of issues those we had tremendous amount of in kind either two

think outside investments I Cytiva. some line should here think invest think are kind less, of we the about will accelerate stay of I the in while again, the we R&D half, here make I second more do that, in largely going to I the the in second pretty spend R&D constant, line, think half, or that continue around

not ourselves little head I only here in here try are to biased where probably investing we I to to possible. we are position think in make But continue we speaking, generally think the that into bit short-term that spend as are are but best this ‘XX, a environment in XXXX we that the to heavier sure sure we there. we and for in position make

So how think be it might I about forward. going

Derik De Bruin

Great.

Tom Joyce

I fortunate portfolio historically are operating is, echoing to Cytiva, businesses Yes. Derik, future. the driving have invest think this And performance we like with to I take Matt’s would advantage know situations Pall track we Cepheid, Biotech would you that margins. outstanding just now for outside to and like I obviously our that, record continue like obviously, of a very to includes to add comments,

to set with exceptionally selective do in line, some see well, to marketing think this think to rest investment well-positioned for continue line opportunities the to as invest of markets year, certainly improve. us we that, but us will will And not and feel And try I because shows up I we some that next in that and and line. up R&D think only importantly, of most you there the our sales growth the in the we in continue some for year are that environment see

Derik De Bruin

picked have coming should you one Great. can March, quarters? or test you couple capacity about can Cepheid And we development expansions, it If like next I cartridge up year pricing go squeeze can the your since mean, think your production over where talk just X-in-X it’s how since I are mentioned how – multiplex obviously you go about you of diagnostics the question, in out, test? that also but

Matt McGrew

a where talk are on position we in yet pricing a are test Sure. Well, test. the going we market. X-in-X point not is certainly, is in the a incredibly at that important to be to about this But

continue in produce there as respiratory are B a Flu interest that to but COVID, standalone panel Flu together customers is A, question to very expressed our brings We strong going well, and tests have no RSV. targeted

weeks several we will opportunities the relative to coming back over So sizing up next be that. with and be pricing the

So, to opportunity we on a we our Relative Cepheid think continue there. there tremendous capabilities. build output is capacity, to

is a that we bit amount of significant quarter, You of course were a ramped take we at we well about going and capacity, million released I ramping. time little that quarter the just of we X We were the throughout released will tests. to going are And first capital continue in that think recall, to X to tests the million online. to to we build some come of – to have have capital

into as the growth We XXXX. go in we and fourth here then significant more see the quarter modest will certainly even third throughout growth quarter some and

testing you market. our that to I durability associated benefits there of this, be is amount tremendous that look and over the of is variables, is a there that we at Derik accuracy that is that delivers deliver demand time. think is plenty there the sustained of lot the diagnosis, deliver competition. to Cepheid the Certainly, the when is to and there that, key no doubt with we the speed sustainability and a value But to view going

to and capacity the we that positions going strong market. to continue ramp are sustain So, in our

Derik De Bruin

you. Thank Great.

Matt McGrew

Thanks, Derik.

Operator

from comes line Peterson question next Our JPMorgan. of Tycho the of

Tom Joyce

Tycho. morning, Good

Tycho Peterson

Difficulty] [Technical to do X-in-X Hey, much you the you thanks. expect on testing noted XQ go the volume going tailwinds, COVID Good Cepheid, morning. to versus Tom comment how COVID forward? on of standalone

Tom Joyce

I for me very your clearly, of just Tycho, last hear except question X-in-X. you question am unfortunately, assuming couldn’t can the the on, anything we around on hear part

the if see try I So, answer we will going and through am you X-in-X to then come clearer.

Tycho Peterson

Okay.

Tom Joyce

the significant to your not We to do was much point. that answer think be it model we have customer question and how move is building know So, but yet putting to of pricing developed terms volume and going it we believe I X-in-X? capacity. It’s haven’t we yet, Obviously, are at of the this on number in the yet. we material, enough don’t just voice a will quite

of we we continue next probably So, back have Time to how overall so the will you to produce Again, test volume volume. on we will a that with there. couple the come to better there will months in ramping. standalone balance see will the of a be sense tell

part your So, question let’s earlier again. try of the

Tycho Peterson

in just more [Technical you vaccine COVID Yes. material XQ? see work, shouldn’t It’s tailwind Difficulty] therapy why and a

Tom Joyce

bit, We you to tail we But the me of a I caught it asked only because try – on they my they to at that me Okay. hear we really hit couldn’t either. let team am think only I that. try – and video just about caught apologize, let can’t looking end – vaccines…

Tycho Peterson

be Why a than tailwind for material more wouldn’t COVID? XQ XQ

Tom Joyce

I me see got Let if that. Why?

about the asking QX were You tailwind?

Tycho Peterson

COVID. For

Tom Joyce

Okay, got it.

Tycho Peterson

wouldn’t is be got Why why more installed much more you you and have Cepheid grown how it versus Cytiva material that XQ material Pall, the given have base in and XQ?

Tom Joyce

Absolutely. sure. Sure,

think so it transmission I Sorry. that got I now. apologize was we the poor, but

We that track. are see continue going to to volume

rate the at that will was rate. necessarily don’t quarter it there impact, quite volume that during boosting expect Cepheid of certainly I the that, that continue to an outsized the We course did. grow that with instrument second at think at

with we from is at think one customers And it Pall or that mitigating vaccine ramp both so as I on the differentially relates we again that XXX are quick that the factor. going are to I in So, likely and that there. rather be associated think to that third quarter Cytiva, higher. But is efforts and see are traction will therapeutic-related consistent the demand seeing more moment, I was those Biotech a think what think that’s we the than continued given

factors line, best some that’s So, in bit at just that, moment. our but the of take little that’s perhaps those that estimate If we are conservative. the so, a will

Tycho Peterson

And then Tom, go you the can put in – ahead, Matt.

Matt McGrew

Yes. out. kind just of wanted No, get I to

We too. are headwind perspective, kind sort of of a into like and of which expecting and of I therapeutics, second from sorry our a instrument same head sort but a – a Tom big bit at quarter look as of particularly vaccines about orders all both tailwind about about or probably higher in part expecting Cepheid, between that’s benefit in be the to the are build a importantly, if that the the up side. then not online. And and the that was talked what tailwinds coming here we the build everything quarter. Pall the think half But at volumes with the we mean, growth in And for expect was if we we here in on in going that you show on – you just modestly tailwind to into know don’t more doing are portend does fourth here well and evenly for are think Cepheid split we or here I and less build-out Cytiva we and will of capacity on around that vaccines, QX, a here you Cytiva sort as XX% on had the while on think the ‘XX quarter Biotech think what Cytiva ‘XX, but

more the head particularly a into for I that quarter, as ‘XX. have a there may half third we expectation ramp we second is then and think the while So, modest through

Tycho Peterson

lastly, you on doing then work. mean, you is any therapy and I are not can color Cytiva, vaccine and And fill/finish work for the put there Pall

magnitude that think there no us you dose So, the calculation, about but work? just of per help of is could kind

Tom Joyce

There are. of trials that mean, going working now. clinical the are are on exposure we on our Gosh, and I certainly range right given broad across human that

but We vaccines it therapeutics, types unknowns of steps of make questions handle on to in are production still many each I process. starting and those mean, it’s the a different number to about so opportunities, get sizing winning there are volumes, and number tough.

and is to So, our sure become very no it’s minds will as that hard opportunity, us – but that a – handle any question it’s a sustained there number I individual volume mean, just it’s wrap it’s large just going on around be a get to it the production I clearer will today. how who But and winner. am becomes within ramp we are winners it for

are not winners of and here. going dozens have We dozens to

and what dosage means volumes, volume. a our have where translate get sight I obviously line position their that think there more we to once production sales will you when that have of are the several winners of and into winners then we sense we can a better

Tycho Peterson

Alright. Thanks, guys.

quality the issues before. about Sorry

Tom Joyce

Thanks, sorry though. Yes, Tycho.

Operator

Our of question of next Kumar comes line Evercore Vijay the ISI. from

Tom Joyce

Good morning, Vijay.

Vijay Kumar

the rates flow-through Maybe XXX and contribute get of now ‘XX? sense? and basis – all is XXX should running Thanks the points now. Xx are seeing recognized is I I the in that of implication that revenues assuming growth my right make to congrats fiscal the Cytiva, that points if in is if Good XXX through. business start it taking that orders fiscal growth, implication ‘XX Does is with that of basis as about growth we right growth contributing The XX% order on morning, question for Tom. order solid of execution mean, book the of will business

Matt McGrew

half around but Matt. think the sense, issue mean, I can make with I it’s this – mean, think or starts are I just Vijay, here whether it in if we the TBD that think it’s real in the of or hard third that ‘XX. I math timing, first fourth Yes, to the flow is kind I quarter the the of starts on, – that still assumption

the think start emerge only I my with COVID on orders said, core I like that’s business earlier think that’s the the you the we COVID that mean, the opportunity really of encouraged with starting top growth. saw timing. But to that’s around by and comments, of are I outside of level question I both line, Cytiva pretty that

Vijay Kumar

the like XX%. I Cytiva It margins mean, Cytiva timing mid-XXs. any margin if itself, running there at those the element how And just on on model well deal Is that margin – it sustainable in is side? Matt, above had is I the you looks look the on or at came think

Matt McGrew

of performance is recent obviously, of sure. north Yes, come out like Cytiva in that XX QX, which in you we them. had than the of did better sort seen margins said

think to One, opportunities had reason from I give core we for you a volume about fall-through three from perspective. perspective the there things growth XX% you here is VCM does the lots on think of of higher north know, that.

So, have volumes. we higher did

was – the other had like kind businesses higher is second call thing process very lower. heavy a stay-at-home grew very probably OpEx lot orders, the is of right, more think We was you’ve third lot we seen places, of the given spend just a a And low of favorable margin equipment here. thing much is chromatography the mix quarter. element thing impact there a I The the trade in will favorable which shows, single-digits, of etcetera, lower sort sort and double-digits, of while the mix travel, it it have businesses

a but into in it that you of there said, temper QX sort sort this the going north to head we we if think would think about we the margins sort with we of alluded is affording in one, things we business maybe business to think as much is the a in I maybe are that particular, businesses, not call. the done about that’s went thought make have of bio-processing the in plethora as they we forward we I there all into accelerate out I in, think investments up, them. as perfect was that head some frankly every storm the past here how very everything and other invest way, of we from be One is opportunities I not businesses, XX, going expectations have sort to the it margin, are would to where second QX. half. growth So would of of add are have in QX right but just of earlier Like across two But it have opportunity their liked to growth given with and that and sure this our all to we that got unlike as eager to business the

days So its from of this will. that’s XX you And are then standing into own, it on one. kind we up if two, a

as And get it an apparatus up of standup costs, and number have far sort off the margin people kind go the put that will GE second on have we the cost business our profile to so is half. that we the we stood the to hired, that of of well. ramp And of through the into so impact going as here

sure, there So we good, coming. good for little moderation think do some perfect start thought a than I bit storm. is on better But

Vijay Kumar

of billion looks of balance That’s ways well current in helpful, the cash guys run-rating $X cap Matt. And sheet, week, I environment? made hand, about $X billion. opportunistic? am you comments are like are Tom, in look at Thanks, guys. the you the cash big being on just your if plus above think one curious just I curious we Tom. free for deployment at second evolving the I how time am thoughts picture

Tom Joyce

in the in with sheet are environment exceptional basis of that in where put the flow, we quarters, on opportunities not to quarter Diagnostics, continues the there on strength spot see to be use product the very is segments, water we we key first in them continue sudden, technology that relative of our like where position to net you. that what allows year-to-date a into on opportunities, of that. everyday. opportunistic, we typically really a may second to differentiating the to uncertain free have flow on are the us I a here of disrupted term positions can a focus we we a cash that we the continue us in unique a platforms, all market leg one greater would that a back opportunities, reason, their Life and that really and balance and seen with continuing and existing we creates our a strength they portfolio in fourth and hard fortunate did, each flow free through cash bring balance to the a course sort cases across Sure, strong have and add to consistently strength strength sheet coming, But the about opportunities on talk and take that Yes, throughout that businesses third of strategic about When associated complement very portfolio coming quality have some unique that us of cash are work we to to quarter the get of are focus able in spot. of that of and each on and our for the value customers of advantage whatever that’s offering the see and number equity second change reinforced by of quarter flow future heart Sciences, and now that of the we continuing sometimes cash $X to PID, Vijay. continues the a and where really free position the Thank goes key billion great year

we think I so And a position. in great are

we improve, seeing quarter. are acquisition to that for roles. was the a hold our deal that key are do We for a add to we forward that but only quarter. And that and the That’s things opportunistic, not we in water capability that put earlier objectives team of as But as And the to started see be Aqua tightened in one are are we quarter, and can playing first example. of strategic second looking that at would the that’s our drive to tremendous second were significant platform. able quality time. But generally environment Informatics same starting we able data One water in essentially deal management reengage software the improving on to did up. we environment an in one just I is platform, a in say to some the quality was I second consummate things think, to continue our that a quarter improvement example

Vijay Kumar

guys. Thanks,

Operator

comes from Research. of question Davis of Melius line next the Scott Our

Scott Davis

Hi, morning guys. good

Tom Joyce

Is this the the author? author? this Is

Scott Davis

comment. get anonymous. done I should Well, guess that it mail. have I’d no hate under less a pseudonym, are I

Tom Joyce

the Welcome, but the Scott. introduction. I Good I to gotten directly through have gotten through chapter, get thank I have Danaher you. morning. – didn’t the

Scott Davis

mean, hopefully little you But you you couple of out but lot light, just in pages, book at M&A envision about of already talked the and a – bit helps better I a are take It’s sleep next Tom. kind. a thanks, I do I Well, good environment very the now? how night, a what like you and Tom months, anyways, and XX better detail did Is color environment are to things of it Is for Cytiva? bigger environment. that a kind it Is just strange is of bit just little with bets like this mean, right bolt-ons? – it strange you given around

Tom Joyce

we months, capital Scott, extent an mean, were essentially improving perspective. any I to I all, and I of locked that, know great in next April, first think question ways. March, place down think M&A Well, different many in the Yes. were deployment I things will from over people environment an mean, all without we frozen see XX in

that. of that we And off so you a come think And will situation like there is no I see doubt improvement.

of of on little back a acquisition, say platforms. to Cytiva happens I teams we very like on acquisitions know normally seeing would I particularly already bolt-on those. are mid-size working actively do a seen done, already. And the us bit you have that are have our large historically small, that more, the We what

little also of uncertain do to a we to internally, resources an deal, and just Some deals. of in on in way those serve that smaller well. But a we environment big here manage terms of situations can the back our us the unhinged tends few a get tend smaller

balance the that flow Now, than have better free offering all now, it certainly the we cash been said, helped being of are when done as as sheet we and equity tremendous we has right the might Cytiva is shape current reinforced advantage not with. that the had in is much had

So, advantage approach. in our mean, we environment. can think general, in outsized, was of of Cytiva terms think I be I in improving we pretty pretty balanced can balanced an be but I obviously, taking

Matt McGrew

be we And talked some we $X Xx just to EBITDA. it’s billion. And EBITDA, Matt. got are numbers of close of than context put less year, to the pro now, right Scott, debt about, Maybe have net to what Tom forma as this going to that’s

have the we So smaller got larger point, aggressive flexibility or be to to some stuff. with Tom’s

Scott Davis

Yes, sure. for

bringing really strange Cytiva many of integrate as I in for follow-on DBS kind is best into environment. specifically, So, you the And have environment culturally, do in just mean, again, and is I and it kind And this natural don’t your the so growth really, growth I past of standing how got a tools you kind acquisitions? at of all? to of culture your already all obviously right it of given amazing begun about businesses, long-term, decentralized is this playbook it kind rates the of organization mean, that want the up maybe context are you and in Danaher at now really in how it how mean, bringing it’s even similar of talk do a you disrupt business, delayed flow do rates the and high you is the business or but are

Tom Joyce

to achieve what have travel what in environment orientation obviously would start. DBS very that getting had great new a being a we one, minute, a in business we to restrictions here in by Scott, And I come with a the certainly to had early we mean the and I we environment. off business, same but objectives Yes. particularly normally and and a – have new face-to-face approaches describe be a to on I think newly this had around different with up to going much been be acquired and to that, do able with have creative have will the

diligence. during year this well exceptional So, approvals Danaher to got whole an starts another. Cytiva we know the that brings We it really unbelievably know to I them think business Certainly, fact get the team had regulatory people. one to of a with to all to with

and virtual that all their Danaher tools right at to the that to and to command team he rapidly of has of him. which level the that they the team focus report build like outset. that continuous relationship We and very that indirectly a the Add have to have gotten are of Rainer. team Rainer sets the bring, a performance, reports drive processes fact a on adapts their to of basis. us up to so relationships directly their continued culturally team into a the environment, ability continue maintained a to they sense business, will and that for And on because bring humility improvement, business those

through we gone So, have call ECO. what we

that You familiar have tools they field lot down heard of of very are number to of team of that in before orientation, a that, that DBS. well a the because and champion executive processes

orientation. and some that our also obviously have we that, accelerates into business further yes, of that the going So, DBS teammates

of conduct combination training digital plus to orientation electronic outstanding already, our from team with the folks some and net-net, Danaher along So, DBS going tools using virtual, and an communications having and much right can face we say we track are like been to we to to where if very safely were would have face a on We into in now, environment. that business.

Scott Davis

rest the Congrats, for of year. luck Thanks. congrats, Tom, good good. Okay, Matt and the

Tom Joyce

Thanks, Scott.

Matt McGrew

Thank you, Scott.

Scott Davis

Okay.

Operator

comes question line Schenkel of the next from Cowen. Doug of Our

Tom Joyce

Good Doug. morning,

Doug Schenkel

another above impact you helps it COVID my but longer growth, your early the and taking term, for especially strength? you accretion excluding Starting how on returns on Solutions given profile I COVID as role is playing Cytiva, trends early COVID-XX Thank even was non definitely assumptions the bit am advancing the of curious pronounced these view and your growth Cytiva well questions. one your morning. are Good in model a with deal course,

Tom Joyce

when then we will to that are they jump model. accurate, you are it I that top Doug, and Matt the off start through will Well, better in a with we how see that with what anticipated is flowing growth than line start the in

yet core we You that about back and range. you And COVID that in range. XX%. And the order XX% as go was the growth with you in growth the there you strong of good business obviously growth you us they base then so the see kind in of in year, COVID in if came over impact the this numbers volume book, there that in heard what that came you might on were a to to XXXX, talk mid-teens top say volume and that being had and that taking then non-COVID backlog, that separate into when

the for as and base to market a a in in order lead phenomenal a So, that day the I is business put business off aside think COVID continues this is that key book its message out. and is a there second to continuing start day is build to

Doug Schenkel

have That’s question. helpful. actually like Difficulty] end Q&A In clearly service good equipment. It’s in like [Technical of like in expected for commented were your and It’s second for you your [Technical book a consumable and on than equipped categories, recent capital the academic order it but but both some remarks, Cytiva seems it’s better momentum airtime Pall looks the research, building market, today book, order Difficulty] them. well the Biotech in

the the course, want, So into if evidence am turn there is but of course you over reason order just and broader am book is into year? wondering if up the second heading to think about answer asking that I there it however this you I the and half start demand the revenue pent of capital could

Tom Joyce

Doug, I we broke but that catch. we on caught there It up, end back a think your definitely did So question. that part of not the question. Early was of

we period talking assuming front equipment really versus the hit around demand And pent think areas. some look different have seen at well, solutions really I in So business I I has in answer long it pent more and will our requires maintenance. asking about are Environmental was a and of in the side absolutely level lifecycle while you at simple end, a applied site might equipment Videojet. a going a of there of consumables which you that turned business Videojet service in yes, question demand. one remarks, I and consumables is, requires replacement, we prepared much of didn’t up over number our our example in about were anything tracking miss capital capital know be PID, I and if to the am that that But weakness to up you equipment segment a my time to we certain have

of had equipment, You packaged of as much grown. volumes an certainly expanded utilization goods, have that consumer

labs that order, expect one I as track example to see Videojet reopen would, so ditto in think market. in start much fuse equipment life back on the short very And I science to that

are going normally to first quarter labs even through second improvement come we in dialed we some orders the that the flowed see see see some improvement start have And third have are some reopening We fact, quarter to third. as in going there. in that the would through of and we in those of to

Doug Schenkel

Okay.

Matt McGrew

Doug, kind the is again Doug just XX% this from Yes, in here grew gave. it’s saw you book I some context of nearly order Tom – I started an Matt in maybe put our again. some to perspective. numbers QX overview mean, order

X% because kind order think of talked So, that’s minus sort have the sorry sort what tailwinds XX% got that of an X% in that, COVID quarter. see the or just I you here are down business, without growth, – here flat you it’s – an And of mentioned was will, Cytiva if in to to of will as to core encouraging anticipating Tom Tom the and just at the end, the without sign the improvement of nearly going quarter. we we

Doug Schenkel

you that adjusted just super growth, reported me one try you quarter, higher ramping it’s are of hear that evolve or up as in so mix think to one to clean question, helpful. investment okay lower you In last now. in that was and a that’s delivered growth sneak than be to going this can bit XX% I more to the Okay, starts QX is in as second will hopefully you revenue earnings the it call? capital opportunistic a some earlier fair than towards described the

Tom Joyce

etcetera. VCM, a third way the it little of Yes. kind I think I tricky. is the and maybe mean, mean, quarter about to

will maybe do Danaher that non-Cytiva I core I perspective, the business ex-Cytiva, think think Danaher through about it way the at is need fall look that from of to is, that you that sort going a make piece XX% have about margin the you fall-through XX% on some Cytiva of we a and talked elsewhere. to if variable investments is as probably we to do have in it

think that with. include then to of I an QX, assumptions we you south were sort we gets Cytiva, put of closer think around those of from you I end here if think in, sort are where up going EPS to what perspective probably the in but I

Doug Schenkel

again. you Thank Okay.

Tom Joyce

Thanks, Doug.

Operator

next of Beuchaw question Wolfe Our from the of Steve Research. comes line

Steve Beuchaw

here. Hey, time morning. Thanks for good the

Tom Joyce

Good morning.

Steve Beuchaw

If or like? X is you is on anticipation a actually And on to how exactly model things helpful the going does xX focused or was is I terms recovery could it’s if when the put we two know look big little on Hoping to then space, good looks going had that just have X what give healthcare question. are still Okay. and to other little curve the of be. of sort at certainly then of trajectory like. slope exciting bit X in things about are it today of evolve. There the of related in while be preliminary we ask xX? one it’s reason vaccine where relates call have ramp question it and we I What ‘XX, how is scaling at could the in to we get up in a investment out optimistic you that really here to it’s least to us perspective be perspective to One look It directionally the which just vaccines, ex tough would going less vaccines, a how utilization.

products question, So, to some under XQ everything a but pressure this given you might office DX Doug’s some doc in of the bit of Tom, Thanks spend this been hardware the so off you gave in mean that’s some sort get that are XQ, of to take should in really settings helpful longer? and much. a the starting that’s getting back take little bit we dovetails on little feel some getting we about that good for do have or extent hospitals, back in people to commentary to Leica hospitals how ramp healthcare on on going Beck of encouraging, extent to

Tom Joyce

bet. you Yes,

am I started your out So, then I want about and your broader quick vaccines. one recovery get and to with to just question trajectory hit going theme question

even delivered LMS, remarks China saw the that at key single-digit other quarter. growth on our not touched my it we there the haven’t business on EAS well second across low like recovery Sciences broadly significant we board, but and of was or – in the trajectory and Pall, a from And in Hach in We the businesses not all I Videojet, and the seeing call, of Cepheid, looked China of in improvement really recovery span the and Beck and but China over of if the breadth second improvement of performed just prepared Cytiva benefited though like and across, businesses our Life this extremely LS are you our One that in positive that, kind just the mentioned course China. Diagnostics quarter. across trajectory that things

think your So that’s the but haven’t dynamic an let trajectory to we that core questions. that’s touched of on today, really I get me important recovery of – this

I talking are But the mean, versus yes, point, vaccine right. of multiples, to is, about I very of It again, volume a this you today. multiple terms as high gauge. you at really said earlier, In hard are

the these stage example. Let tens, early of millions hundreds this or X, me Phase therapy. alone in near the of volumes are Phase trials, are human of stage of with either you early stages mean, I etcetera. of – mean, talking a a all of nowhere doses associated vaccine X, all of today, about give I revenues small we an let our

we number variables of to a but improvement in hardware about question put with Leica of is. to can yes, utilization, your it today, will associated certainly high where I think hard a simple the high only is the Relative but equipment yes, lot the side Diagnostics an it’s Biosystems… with of multiple on are I attached again, a how is to so, it, number Beckman house say and be healthcare and seeing And we answer that

Steve Beuchaw

musical Brief interlude.

Tom Joyce

lab interlude in about fact utilization, any been with healthcare installations to whether but it’s the has pathology, cases, anatomical that in it’s environment, to really in equipment, was area zero. the if for area, hospitals a issue access been those the Brief utilization microbiology, associated that just the been musical in access maybe to COVID-XX labs certain has reference limited, but recovery around not hardware relative healthcare not

up we are book come bit up are academic order seeing the And hospitals opening now starting just to research and have science get our utilization, in equipment so a elective to as relative and and procedures to life side, we opening on to as started see install in labs we see overall ability along. the that’s

in that as time this take still to we their return for to year But into we are growth hospitals rate. It a highly improvement see early more year, So normal start access. to happen, there. that will will because some see late will we restricted some next and go

Steve Beuchaw

that’s the of Okay, top helpful. hour I here. know incredibly are we

So I financial question that. appreciate my take Really will offline. all

Tom Joyce

Okay. Thanks so much.

Matt McGrew

Thanks, Steve.

Operator

And have remarks. like allotted the or the now any turn would Gugino time questions. gentlemen, we back to ladies Matt and closing reached to for additional for floor I over

Matt Gugino

on call. our for everyone us today joining Thanks

We are questions. for around all day

Operator

conference ladies conclude does you This gentlemen. call. and Thank today’s

You a wonderful disconnect and may have day. now

Danaher (DHR) 23 Jul 202020 Q2 Earnings call transcript