Earnings call transcript Q4 2022

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Operator

Good day, everyone. My name is Todd, and I will be your conference facilitator this morning. At this time, I would like to welcome everyone to Danaher Corporation's Fourth Quarter 2022 Earnings Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker’s remarks, there’ll be a question-and-answer session. Instructions]. [Operator

turn Investor to may Relations. conference. now Vice John begin call of President Mr. the will Mr. over Bedford, your I Bedford, you

John Bedford

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

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

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

like call to I'd that, Rainer. to With turn the over

Rainer Blair

We today. Thank the and you. appreciate you, on all John, morning joining good call to us of you

or Broad-based digits across quarter single digits our growth of Our for the last quarters. now each cash which XX% strength terrific out core with pleased nearly rounded the grew high high has fourth business, growth, base drove the We're great strong portfolio XX results grown flow performance Danaher. for earnings and the of year another free particularly year generation. single and better

COVID-driven Our global well-rounded than investments growth work the logistics our proactive to hard gains contributed coupled challenges, share meaningful the and possible delays, several to dedication reliably of over market chain customers. We many DBS-driven overcame the businesses. results team with supply support execution, more year this would inflationary believe pressures our our associates. without last our The not years XX,XXX lockdowns been of and have in

we beyond, to looking for Now Danaher. ahead and bright XXXX see a future

that pursue to of M&A cash capacity, drivers. free strong Our actively financially with business We're attractive allowing benefit growth made outstanding positioned durable models franchises generation and well leading of secular and portfolio strategic markets us opportunities. long-term up balance from is flow end sheet our

differentiates So sustainable and us combination long-term this and Danaher businesses the Business advantage. our of competitive by financial unique leading powered all System reinforces strength

take at results. financial full let's that, our closer look XXXX with So a year

our in growth, share year, core adjusted and revenue revenue nearly including delivered full per the growth earnings business. XX% base X% we For core

our expanded flow. operating points margins core free of $X.X XX cash by also generated We and billion basis

conversion cash free consecutive the for XXX% year. flow XXst income ratio exceeded to net Our

results throughout financial allowed investments strong high continue us Our to impact our cadence year. the of growth

and in innovation in across our XXXX more of research to fact, $X.X accelerate us billion development enabled than Danaher. investments In

Microsystems, New Biosystems Hach's platform, products such automated growth enhancing series human as and meters the Beacon, helping staining Headquarter the Prime; environment, improve while both Leica our Bond Leica advanced portable and are trajectory. health

progressing years. critical our bioprocessing of several included demand they're and current customer therapies expenditures here billion size opportunities production through and and to of in investments to genomics the over With expand have security markets. $X growth process, capacity businesses. the support these bioprocessing customers' capital approval in important anticipate but substantial our equally been to increase coming investments businesses to These genomics long-term the supply regulatory Our biologic the we our of in of meaningfully support

Now let's our X.X% results delivered and we growth. in core more $X.X to billion, Sales turn fourth quarter detail. were revenue

contribution from revenue across markets COVID-XX core largely America with Geographically, Our with was levels approximately both neutral markets the core was funding major our customer We revenue up base revenue demand as business Europe growth consistent healthy end core testing growth saw also core quarter. growth our North and was revenue Western High-growth year-over-year. third and slightly. was X.X% in XX%. activity

instruments by diagnostic driven our China care grew in low acute demand businesses. sciences single and robust digits, life

and before volumes diagnostics in the subsequent COVID-XX testing increase the quarter policies reduced resulted first ending year. lower in XXXX of of reopening We volumes associated recovering to the business. through of patients continue through with in zero anticipate the our and testing gradually the However, efforts balance infections COVID clinical

expansion. of enabled by productivity measures basis our XXX of Our margin business. XX.X% inflationary across gross including core profit operating our management, points actions performance to was help teams price the margin was This impact pressures the disciplined XXX our for up was and strong margin the cost margin fourth offset and of implemented quarter XX%, points, basis operating

this year chain this continue there modest supply component pressures, disruptions and saw and While quarter. a be to availability cost in improvement again we

up of free the also billion $X.X in share earnings flow and net cash per X.X% was diluted we last quarter. Adjusted of generated $X.XX year, common versus

in before we financial growth our quarter, segment get Sciences our the I'd changes several of Due separated our Pall we've of medical into Cytiva significant Life Now to we our Life Sciences, new point resulting are now which past updates reporting. the the include into as to businesses organization made out Life and like biotechnology from details in segment reporting have the segments. and over discovery years, two former the and Science bioprocessing reported segment. our some

sciences segments segment are comprised Applied segment. former life remainder the Solutions unchanged. businesses in Environmental of sciences of new & Our Diagnostics and life the our is The

discussion changes. reflects today's these Importantly,

customer fourth portfolio seeing the Biotechnology color markets some So on give revenue and X% now our growth across bioprocessing, in In let's and therapies core in antibodies, was and and revenue. we're X%. quarter take of activity what gene across more a antibody drug look you declined non-COVID conjugates, than our revenue our quarter end in cell another up monoclonal drove results XX% Reported or robust ADCs, segment at today.

was Total the core to and growth continue COVID-XX mid-single bioprocessing customers quarter scale vaccine their digits as for therapeutic back fourth in programs.

than included was core revenue For more the XXXX, bioprocessing full of which growth growth high non-COVID single digits, year XX%. revenue in

significantly expect programs. lower Vaccination alternative reduced Looking customers light COVID-XX-related the to been booster their for reduce have therapeutics of rates and antibody-based to availability and down further $XXX treatment. need has and vaccine the year monoclonal will than we initially anticipated In expectation be in million approximately XXXX, million anticipate for we now therapeutic dynamics, these million. than our of revenue the full of and approximately previous $XXX $XXX lower from COVID-XX-related of XXXX XXXX,

more Our the growth years. past over two averaged non-COVID XX% business than has

for growth first for includes the as XXXX. spent these vaccine several projects. repurpose quarter better we rates, past non-COVID high the our for core digits the growth inventory COVID-XX elevated year we will core growth single-digit based these And Given on to customers therapeutic in XXXX. and be speaking planning with to single their purchased discussions, This programs assumptions anticipate weeks bioprocessing customers understand non-COVID full low

research, production Now we a continues and is into leading bright development production in investments ahead development future. genomic-based well and therapies our for significant there and bioprocessing in number biologic rise, and the to industry-wide biologics capacity The see market to and expect of business. the future

differentiated global life-changing services and best-in-class across support the undertake our well to they positioned With industry in our upstream the extensive exceptionally applications, work. as scientific deepest this complex which we're is customers broadest portfolio, reach, our and and downstream

up our Now moving Reported Strength all with Life was was to consumables across revenue and Sciences better single-digit XX%. broad-based segment. instruments delivering revenue or growth. and high X%, revenue core businesses core grew major

year. by geographies our and begin Coulter led Sciences opportunity core end the double-digit our across momentum growth, and Demand Beckman good funnels seeing remains major markets, Life collectively base Leica solid and new revenue instrument Our we're Microsystems in we Life businesses delivered as business Sciences.

demand strong quarter Our of genomics revenue RNA editing and core for gene plasmas, growth, by consumables lighting and had solutions. double-digit our another driven businesses

sequencing DX are next-generation of quarter, bring enhanced with its NGS the During researching new expand fusions cancer foundational solutions. in portfolio IDT's to and novel bioinformatics the IDT suite an acquisition capabilities, assays. including sequencing of platform assays strengthened These Archer

clinical growth China. Now double revenue increasingly and testing digital operational best-in-class core led customers gas double scanner, Radiometer digits digitization. the lines. with revenue benefits record was digital major Reported up X% growth digits, pathology Leica was slide placements grew all Diagnostics we pathology business, are In also our up Leica's by GT for Biosystems across Cepheid. product led demand of the moving to blood at our segment. primarily X.X%, in mid-teens XXX, saw grew of by and as realizing

than core nearly In doubled Cepheid's part acceleration adoption our XXXX. sexual menu menu instruments to health infectious non-respiratory disease infections. base, due this across across and more revenue was XX% in chest hospital-acquired has quarter Cepheid's grew installed The testing, by non-respiratory in test which growth Molecular since Diagnostics, led XX,XXX increased of

targeted vaginitis their rapidly expanded to addition conditions single infection sexual health a the Express that quickly patient's treatment with three quarter, enables competitively using for Express MVP. multiple the diagnose diagnoses launch women test of in Xpert visits. and portfolio cause need The symptoms MVP sample. a During the reducing advantaged physicians overlapping menu distinct Cepheid the health office to prescribe the This regimen, our

how closer easy-to-use testing molecular is is a great at Now health patients care outcomes Cepheid. of growth and this to example driving improving accurate, long-term bringing

significantly earlier-than-anticipated $XXX PCR both preference moderate. testing respiratory test revenue remained respiratory X-in-X off of for viruses, $X.X notably a approximately start higher respiratory in circulating quarter million. our and Flu for COVID-XX, point-of-care COVID-XX, a RSV leading testing A&B robust. respiratory fourth the RSV. expectation global volume testing, prevalence to high of testing In Cepheid's volumes flu with PCR The for Cepheid's The an got continued billion to of season exceeded and our approximately to demand and

for revenue believe with to a tests as full million Now and our on generate XXXX, in $X.X state billion enter COVID-XX discussions of respiratory result, disease customers, we XX endemic the will based expect an ship year. and

and health hospitals their consolidate planning As for we're testing point-of-care testing increasingly on to needs, customers Cepheid's platforms seeing their endemic systems begin PCR GeneXpert.

non-respiratory preference ahead the quality for test value for of customers' molecular unique fast, significant both these result Our clinicians. installed accurate our GeneXpert base menu a and Cepheid's advantages, the best-in-class provide the solutions. on and the combination testing of a leading global combination workflow is respiratory lab market of creates of for opportunities The the diagnostic point-of-care results broadest and significant

in single Moving was Solutions Videojet was double identification, was QX at while was low comparison revenue Core digits product coding revenue to up to year. Reported marking and identification color our core X% a product & X.X%. business At in part and flat. Environmental revenue down difficult Water digits grew the up management quality high was slightly low and packaging single segment. up due year-over-year last revenue core slightly grew was as Applied growth digits. and

the of full it single-digit was the Viva the of announced X-Rite the Color [ph] year growth color year revenue XXXX. media drivers in as of the generates and Magenta solidifies iconic Pantone of one brand color business core in December, impressions Year. Pantone's XXXX standards of In The billions and high

a their to improvement. testament In capping of double in commitment remarkable consecutive its continuous ChemTreat best-in-class consecutive a quarter, digits water year third also quality, to Hach XXth and their accomplishment the quarter delivered execution fourth team's was growth, up the of and growth. double-digit

moderation the municipal chemistries industrial and end slight During activity analytical larger quarter, a strong for and consumables project markets, at demand but Trojan. remained we across see of did

team components. production deployed Also, leveraging XX reliance XXXX, work project to by expand supply part inflationary to also their availability. helped operating constraints Throughout Business They the reengineer while electronic pressures. more of great like visual Danaher challenges and quickly management daily with to of manage cadence rapidly DBS strong points They chain job year, continuing the products forefront identifying a at performance suppliers EAS growth our use profit investments. to the were System than teams hard-to-source price ensure overcome reduce on and and basis in tools potential and did and the our margins management

outstanding We our paired drove identification gains water and proactive long-term growth execution in advantage believe market competitive our investments quality. share and this product with both enhanced

with quarter our exclude XXXX, markets, So Beginning therapeutic the in first and seeing businesses updating that year. of revenue. first on and are we color our COVID-XX with look of impact quarter what ahead and COVID-XX-related and definition the let's base core business we're now the expectations growth full of for to testing the our to impact revenue vaccine the end

to be digits. revenue quarter, up first mid-single we the In expect core in base our growth business

result a therapeutics. We of demand also decline total COVID-XX to lower and vaccines for as digits core revenue expect testing, growth mid-single

the margin approximately quarter we operating profit of Additionally, XX%. first expect adjusted

the year full XXXX. for Now

core also digits a expect We core growth And expect COVID-XX mid-single business. for as for high base revenue we demand lower our therapeutics. decline the testing, result single-digit year of growth vaccines total and to in

we profit margin approximately the year operating adjusted Additionally, XX%. of expect full

Danaher. to terrific So year XXXX up, was wrap another for

challenging results, all through outstanding and environment while investing for support successfully executed team future. our a reliably customers Our the financial to deliver

combination As Danaher the by Danaher we believe outperform of balance strong talented the look Business into future. to position businesses the well ahead, and System, differentiated all sheet, team, portfolio powered of we our

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

John Bedford

line open comments. Rainer. for now Thanks, formal up we're concludes our ready That questions. Todd, the to

Operator

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

Derik De Bruin

And thank morning. taking you good my question. for Hey,

one through the sort and of So, couple working inventory the on of guess be situation to bioprocessing. expectations just how would bioprocessing on and non-COVID questions like your start. first a we should the of the front about I on sort just that think

of there. phenomenon? sense a timing. general thoughts some XQ XQ, this Just Is Just

Rainer Blair

think it about relates our that. let's context of the here guide sort to the as for Derik, starting as and inventory a situation, QX point

overall business to now guide have therapeutics digits We including we expect single-digit mid-single our low quarter. headwind, of a and digits, for of decline double-digit in giving that growth and mid-single testing, the us base first to expect COVID high have vaccine and

revenues comparable resides. because, the business the of come me have right? where once because And of our and that XXXX. the we are from we want clear to excluded let ended. business, business therapeutic policies is saw zero in So most but a due little have Now more, as that's mainly core and back base base mid-single-digit COVID be expecting bioprocessing, that here question we that's course, and to low in growth now from your double-digit to vaccine And QX base down also lower patient I ex-COVID, we're volumes into to dig China bit,

in So QX. that's in base what's there business happening that

off low reasons. pockets about XX% we that of in Now through was if inflection into dig that be do will we COVID a But we coming we business also majority and spoke we that, to then bioprocessing inventory deeper little we're QX and and of QX work an to programs. to of for related be we're in we look, anticipate the XXXX. expect that bioprocessing, primarily that the And bit after in single QX there two One, point really improvement. through see continue non-COVID our working that that's digits, growth

Derik De Bruin

Got it.

half demand, the I off you sort What instrumentation SCIEX see year. year expect embedded expectations some in analytical obligatory strong of of the growth your back of And really this the ask to is would some have instruments? your I would And numbers. Okay. demand slowdown on in coming are

Rainer Blair

low new we the the certainly to low and that perspective. to believe frankly took year, year. And instrument of of that digit definitely into businesses there. core that double-digit look the here double-digit in year. are we We total moderate normal share end more plus here But XXXX the plus towards the as growth think growth back we our would strong to expect mid-single our in very plus our I still funnels saw reflects going

Derik De Bruin

pricing your embedded And get of sense sort an in what's of... to expectation like overall just

Rainer Blair

pricing, fourth were really that all we of roughly came well. on the points, for the XXXX. very you over in XXX represents Derik, And quarter basis we teams as know, executing with So in where

we to look cost expect there, we'll As to continue of then we probably some XXX pressures basis forward to look XXX closer to pricing XXXX, and into have points, points. basis XXX

Matthew McGrew

for that's total just Derik, Danaher, instruments. not

Derik De Bruin

Yes.

Okay. Got Got it. it. Like that.

Okay.

other I'll but you. ones digest where need to get think I stuff, got some some queue. in the Thanks. I've the get I'll back thank back queue. in I

Rainer Blair

Thanks, Derik.

Operator

Rachel Our next comes from with JPMorgan. question Vatnsdal

Rainer Blair

Rachel. morning, Good

Rachel Vatnsdal

morning. Good

just up, China. first So on

a Can pressured you're that what little is there. how well? bit as So softness you expect you going the for dig much softness then XQ on year you there? mentioned the be in just that some total for expecting to do Thanks. deeper, China of And

Rainer Blair

be digits sort infection population to waves as and the knows have around low should first mentioned, down improve COVID full in China, we patient we in first zero everybody that -- the volumes expect indicator we that and for the China. that as then expect affecting particular, in quarter, December, single and how the saw lockdowns patient coming is I digits are taken And expecting moderating high Chinese then are in that's through that single So as year about the here. China in various we volumes which quarter gets throughout an of And expected. the course, out think for of year but of here the and

Rachel Vatnsdal

Great. That's a helpful. follow-up. And then just

to any Thanks. Europe just conversations core seen there? Can customers this Have budget your with you with your year? for constraints Europe any on related XQ. during that was mentioned XX% talk expectations You about you softness Western

Rainer Blair

Europe. see think continue non-COVID, we about to Western demand in tell would if good I we you,

time have deals. of the cycle We seen

capture in capturing order of lead, and quarter, continue. to we and So time between extending the the that period expect fourth would here that

expect about first As here flat single some digits. in including quarter the Western headwinds. you Europe, and to think headwinds, But we would includes again, be up that COVID low once COVID that then

Rachel Vatnsdal

on through walk final within single puts and given the me, around in of rounding side? And to takes trended at for high that Can digits just order the getting and year just us us quarter digits kind question and bioprocessing book you non-COVID some there Helpful. has book-to-bill low then the first the single bioprocessing. the how out of

Rainer Blair

Sure.

as So I the about well this past it as as to in relates book-to-bill. orders, and talked

at may don't given and the fact, the of times the had here business lead extended look is that be bioprocessing we prior book-to-bill for really the particularly really business, In the period. we the best to best it because underlying way, way health understand the it don't in not think we

both at orders a take well horizon two years, last looking the to mid-single really, grown been and the extended out over as teens rate. average as revenues three we've So the times. three-year orders really to And a at have lead lumpiness on

Now perspective, quarter, from as adjust for current order times. but customers points our sequentially expected basis over a to was fourth mid-teens, XXX rate still continue trend improved as was which our in down by the shorter lead

repurposed. customers to Now bioprocessing core those clear, low might being our with to repurpose of at point to are for with program also now XXXX our COVID any that account non-COVID the We're be that year growth. And full inventory. digits single guide the which anticipates working being customers, QX inventories some that takes be low

forward full quarter bioprocessing, non-COVID or growth So off are the low single then the of we expect point to high burn what inventory first digits, the to in revenue and year. be whatever single-digit off for non-COVID that bioprocessing is these work move for forecast low core order dynamics

Rachel Vatnsdal

you. Thank Helpful.

Operator

with Evercore Our from ISI. comes next question Kumar Vijay

Vijay Kumar

my morning, Rainer. question. taking Thanks Good for

these some question on here bioprocessing I clarify about first my So just numbers had here. of

of high range, was couple I of Rainer, think expectation single, end did when I What anything risk somewhere half And think is you teens. ago, singles I about a high from at to it's imply the base bioprocessing, back the Is digits When [ph] gives at think in for the change? the think the that in out there half? the months back the any low and throughout the cadence if anywhere you the first activation half there year, half double-digit second I bioprocessing? visibility in range. mid-single look

Rainer Blair

Vijay. Thanks,

And and the the And high the underlying for So as mentioned we as I'll our have several message range did their JPMorgan the robust now, demand early from to talk is the single weeks confirm range. bioprocessing growth talking we digits customers unchanged. planning assumptions being spent as about mid-teens to last clear year. and conference, remains to I then, understand the

activity with of see to even to seeing on continue be strong, more and COVID its monoclonal cell we back gene therapy antibodies, on continue and mRNA therapy vaccine. success we're So the work

customers So in activity. demand remaining is solid, a not while the are anticipating actually step-up

seen quarters, in So prior activity and of step-up the remains a we've strong they're but what last here in versus as not we've years. seen anticipating couple

two, so three, you And as four year stacks even non-COVID. look growth CAGRs the at mid-teens seen bioprocessing for here, we've

XX% back single-digit you of comp in a range, two right it's a both and approximately on the take then, our the three-year if XXXX, mid-teens coming high on basis. guide bioprocessing from full So an non-COVID back year

we of that's to expect XX% will think of in especially would a the on implied just have the range two-year And And part in demand customer by in the discussions. higher if to and we mid-teens frankly, that light of low to do had an some fact for that actually supported inventory stack. off assumed QX, digits. strong not 'XX, single that's the our fact, burn start over acceleration we So

have, continued think the has as periods. that we the and see you activity the over improved about the and asked that year, that on confidence customers, we order the prior based with is of that backlog our these about inventories, So discussions part burning later we confidence in off

digits bioprocessing about And high non-COVID growth the XXXX. good so for we feel single very

Matthew McGrew

maybe, a sorry, -- just Vijay, give you yes. to And bit

this of a of talked kind give lot you because that repeated we to kind we've recently, so Just to about here. numbers it know just I

years, then growth, 'XX ex-COVID COVID the at those and we have from doing of in type in bioprocessing core ex-COVID, And XX% XXXX in X% of the XXXX away our look as are right, you work. you X%, years. four guide, over into growth we bioprocessing, two of XXXX, grew, moving each sort inclusive plus and last If more

of in the in middle just sort now inverse lead the said don't 'XX, in 'XX, everything that the XX% one the I and high and so and But because you get that's look single-digit kind And to single happening what you barbell, and it's given period extended 'XX single 'XX and will. the happened an period if start kind 'XX in look you this over digits with was last if quarter, through think times we with COVID 'XX high with in guide, of year of 'XX, can of sort back digits in high as at XX% any of Rainer looking COVID. that we're at or growth

you look, the back in last Hey, end with order look on different, so just have the numbers the the pattern My historically at to my sort customers how growth is same. be all on three, years, about demand discussion my over arrived demand of that that the on about is same. we is we're sort our rate but of four page if slightly going say, same So mid-teens who

Vijay Kumar

any that's XX% number. That's been nearly That's question last The strong up order high Danaher perspective. guide concerns revenues. this of is singles. the And helpful trends. Again, non-bioprocessing here a capital for confidence you. around Matt, here? perhaps, single-digit me, one color high bioprocessing implies some for then I there's think and also like That's

up from So what's order here, shaping for And instruments? QX. XX% the stepped book down margins that's

be will leverage single the Given high your pricing strong. pricing volume contribution and should commentary, digits and that resume pretty

just if assumptions? on the you margin single-digit maybe comment could high and non-bioprocessing assumptions So

Matthew McGrew

margins. digits I kind maybe but wrap me Let it And bit, the sort take bioprocessing. Rainer think covered up of can we on of high-single

Vijay Kumar

I'm sorry, non-bioprocessing, non-bioprocessing.

Matthew McGrew

I'm Non-bioprocessing. sorry.

COVID? So

Vijay Kumar

mean... the no. No, I Ex-bioprocessing, diagnostics. other EAS

Matthew McGrew

sorry. sorry. I'm I'm

of Okay. Got Everything outside bioprocessing. you.

let question with too. one first So margin here, think that's start me because topical the that's I

little going at $XXX full over talking as of then million 'XX about QX to alluded you $X.X year, going kind million. testing. and on $XXX to margins we're therapeutics margin, We're of you well. bit or of about COVID And you from have to or the leverage, I were So a we of think the we're year, with in billion to going factor of if kind call Cepheid the million you call million to it, go $XXX lower that's margin. from, endemic XX% we look And adjusted and than value if be as there. the a can for When will, touch 'XX margins, be a on vaccines headwinds to like the in the it, to get we $XXX billion little $X.X a as on state we under follow-up more going testing think then lose, biggest

through at basically the I'd say falls So XX%. that the margin headwinds fleet profile on that the probably is average. stuff on

of fall volume is meaningful $X.X but So normal at through, as you talked billion pretty our with in line kind that about.

fully call be So billion some is COVID single-digit our going what's it, compensate XX% happening to that. to of let's in but not we offset headwinds here. core High with $X.X business and to XX%, will enough base through falling just change,

we'll that the how Vijay, unknown combine these to sort do the backdrop, an I want goes bit year that the of like head some how obviously And cost of I I'm year. thinking China with perspective on, bounces in structure how that's that's of start planning of still see but you year. still the think sort of play for kind margin things with year. better, back. I the of of kind I out. an overall volume So right the is the we on to about macro here that the of inflation how And the kind let's see year the progresses chain of of kind I into want sort from place, a through be supply to as try as prudent to and a

quarter. That's headwind the I'm really, the for in it. a and from FX QX, FX first We'll QX sorry, full year $XXX only difference QX QX. million have is And in the between -- XX% in

for And you year the that so, would drivers, for same the are say if will, I full QX.

Vijay Kumar

That’s helpful.

Rainer Blair

here as we And without XXXX. talked double the Biotechnology year. during coming businesses, double then businesses, course back also the regarding here We digits. your question the the the mid-single-digit growth for expect growing But genomics of about digits base we Science to at have Vijay, to just low in or Sciences to are moderate Life plus instruments business our which our going from that Life

business, you the Life genomics look the when so we year. expect instrument for businesses, under be So would that at single-digit businesses our Sciences new the and high definition, growth

it testing, Diagnostics As growth also testing high Beckman COVID Biosystems, single volumes normalize, we our and Leica also to once expect high if COVID business, think solid growth the growth without diagnostics, there, again supported you as about by without digits. Radiometer at single-digit patient relates in

And expect then would the low we years digits to after last having had in mid-single-digit mid-single normalize the EAS, here growth, that just the be to year. to more as it for more relates skewed now of growth banner probably to couple to

Vijay Kumar

extremely helpful, you, That’s guys. Rainer. Thank

Operator

comes question Melius Davis Research. Scott from with next Our

Scott Davis

is years, labor the guys a assumptions on I'll already Hey, using I had bigger little here, curious back you've a the of inflation there? good XXXX? material try for What your picture. couple of discussed and this are morning, inflation guys. from little Lots but so last view kind for to assume to you labor of detail go bit high mitigated

Matthew McGrew

Scott. Yes,

been about little basis guess, XXX price, points have think year to cost, of we bit I the on I of that when think price/cost last, probably price a here and XXX positive more. kind to back I

basis guide at price that would I cost. XXX us So -- of think to keep we points positive XXX

that the some things one biggest be seeing costs say cost come we can better down not but perspective. probably are supply seeing chain down. tell would from -- from seeing that availability would chain, a a pressure you seeing of come Freight one are the of is parts lanes think the necessarily I yet. we're other I supply I probably that We

what of in of still of there, XXX be may sort basis we're XXX think are early I signs So but offset to price turning. points help things that still there is to out

Scott Davis

the system? in that out already Or much pretty still that is be... is Matt, price, to that Is

Matthew McGrew

-- to already Scott, saw No. we No, year If built it's here, out. as out as through go more for if you we've the we to we done this can need Yes, year. that there. we and need it's

Scott Davis

EAS done the need steps what kind than can for of upside remaining there guys us remind the to getting Is earlier that separation? And any you planned? you the are on

Matthew McGrew

I'd work, I we're love a quite bit the -- on And and in easy do early obviously, there's do, got it, still of to that stream to the say a mean people audits of it's done. days get work it. through we've org after the Scott. but we've a audits, got of to are of lot who working work getting whole that, to

to for I earlier, on much the between we think time tax very work Anything and ability here these. just still think the are QX, audits, just the takes QX. track I remains the in something do for ruling, that it

way still to QX think think I don't that's is for Scott. it. us the I now, case think about right So base probably a scenario

Scott Davis

on. you, Thank Okay. it luck 'XX. guys of in best pass and I’ll

Operator

Our comes question from Dan Cowen. Brennan with next

Dan Brennan

questions peers Maybe good a for earlier, Great. Good have here. there be a could as actually just than anticipating, the plays benefits rates be just China turned were COVID now my peers that than me, commented that given but some maybe stronger to out one the would have right morning, wondering, taking on see China. first -- know the excuse but Matt. the was economy. on asked obviously, were you there's as year headwind morning, Rainer, I spiked question out, you Thanks

assuming -- you do playing do you how change out the need contemplate for in of of some policy? just you there? that you low So think cushion the year what given Is single? China in that kind Or are

Rainer Blair

expect I -- we to would Diagnostics business, spread or to Dan, being to near Lunar so infections the next reducing. hospitals fact, the the that recap lower the that here in start patients. mean, currently volumes continue to patient where so. term, It's just overwhelmed with that, time, we over the we in here holiday, then that And related waning, COVID-infected China our New And XX days expect in saw, in particularly in QX. Year is,

to kind relates during we do With waves the many patient cities in years. of after previous follow again again especially our this as severe But believe that. to and volumes unknown other how as the We've large lockdowns of it -- the seen that recovering. year, of course it's business, start

And so we up why end resilient. we full a expect that's And year China that to digits. pretty be then low with guide of single

Potentially. back now markets normalcy work people how demand general. be in on depends some can and the Now upside? get pent-up could returns quickly in just some to And to the there Chinese clearly There's it economy.

the course, full from update for to where there fact in demand go a should of point, But is in today, it's and here as some be pent-up So it. year we about we good the continue released through way think we And starting XXXX. upside single good year may here. a low think sit that digits we'll to be

Dan Brennan

then be kind just some rates. macro and commentary willing seller on a more weeks M&A interest of Great. of environment. a heard that just reflection And to the recent in there maybe We've seems environment,

Thank levels EAS folks to seems but characterize there would public are or it you impossible business? targets characterize be and color just it's you M&A, I'm obviously, How you. current of table. EAS all outlook, and post kind from would me, So you sure to maybe the in of the remaining whether any obviously, be just excuse M&A, the for how private the candidates businesses by your And but characterize spin, more interest coming targets how would environment? time to terms the the

Rainer Blair

our perspective remains So M&A unchanged on here.

First our be of continue very all, funnels to active.

at some improve. starting some the seen in sheet, is early X.X that good say even say days, environment period we for shape. the our see for continues know, of I now And levels is to is I'll valuation great We're lower acceptance balance in now you recognition a would it M&A but the have turns marketplace As to and time. which of

the a here deploy in that to And do as has capital Danaher as been when the able intention kind in it's past, of have course, these in situations, there of been you our well. know, really future value-creating to And way.

Dan Brennan

Great. thanks, Thanks, Rainer, Matt.

Operator

Citi. -- with will sorry, next last come Donnelly question our from Patrick Our question I'm

Rainer Blair

Patrick. morning, Good

Patrick Donnelly

COVID? customers particularly Good one the usage, in to Cepheid, just Would what expectations Obviously, you On down installed my those down can saw of there the the the a years business. Diagnostics Thanks in on instruments here base seeing COVID of bit, love hearing taking you piece, shortly, comes back Maybe terms double just talk perspective you're some question. bought over non-COVID what are? Rainer. a who during for terms comes utilization, respiratory morning, of as there. couple about what -- you're

Rainer Blair

I very seeing. encouraged mean, we're by we're Patrick, what

the we've double you more As well mentioned, the had; placed, over into number mid-XXs of tests. than XX,XXX in instruments than

of of question sort as we we're quarter, in beginning indicative even at the fact testing busy But you customers think non-COVID I can about the of that encouraged here of saw the been XX%. have the imagine by our with testing. very that quarter, Now and first that. couple things. quarter fourth that's a the fourth respiratory growing in No And over

offer, thought leverage subsequent larger the of be sense do the GeneXpert very GeneXpert about also strategic to we testing to we that placing standardize would the see point-of-care the to the driver continue we another molecular us non-respiratory in care all, the continue how see see at continued that likely instrument of broad in were that, consolidation and of for able platform, Not testing their IDNs menu. the that. architecture continued as menu only the of is adoption as we point we around really seeing customers we which First with stayed to well pandemic, we that but our onto

outlook and We're days. still here. its So very kind encouraged early positive of

Patrick Donnelly

Can us of at just ratios current and there. you on guys leverage about think Okay. look then your at? if terms kind refresh just the follow-up That's all a Dan's on deal you environment in what maybe helpful. how And of changes capital you rate perspective deployment would size one

Matthew McGrew

I Yes, couple to I Patrick. perspective, Yes, been, from a history, over times our four. got we've a think, mean a in little of bit we leverage

So appetite be I always mean, than we we've any have rated think said an to we for I of much don't are, -- sure. lower

to of kind of time we we the have all But place We So of boundaries activity, outer the over or I the it. of of and think really what about. we've two of three. deal just sort historically. It sort around sort moves our think target of -- that's kind a with don't been take

us. And as I environment, as it the think far current rate don't for it changes

before. the a XX given returns doing did. We've Last think but rate time, a been the about of very close been worse. still we or we in are long I think changes we're rate We've way environments at. this this been time. We've think had like environments obviously, different where at was in sort I in years, fundamentally same we here that don't have zero any XX to that

Patrick Donnelly

Alright. Thanks, thanks, Matt, Rainer.

Operator

any or At this would to call like for back the time, I closing John Thank Bedford you. remarks. to additional turn over

Rainer Blair

again, of thanks all, first Well, everybody.

maybe with we a the all we just with ahead are XXXX XXXX, way and We out the numbers, closed thrilled see a strong quick recap.

that biotech the at For inventories working at digits. the off digits. mid-single business that and we we're single in we despite And business first growing see base high XXXX, our see quarter, base some fact bioprocessing

those about in acquisitions pandemic. headwinds, But headwinds real. and think Now therapeutic testing those and COVID-related the our mind, lasting that flows great innovation feel important breakthrough are while we've vaccine, Keep reinvested strengthening annuities we to we balance we talked at about further role length the I with COVID played and have despite cash create sheet. in

stronger and base in our growth we entered so, business. exit And margins the pandemic than with we much higher higher

you the we Wish best for all with thank the you XXXX. that, So call. for

John Bedford

Thanks. for Thanks, day. everybody. We're around follow-ups all

Operator

you today's for participation. concludes Thank call. your This

time. any at disconnect may You

Danaher (DHR) 24 Jan 232022 Q4 Earnings call transcript