Earnings call transcript Q2 2023

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Operator

My name is Ashley, and I'll be your facilitator this morning. At this time, I would like to welcome everyone to the Danaher Corporation Second Quarter 2023 Earnings Conference Call. [Operator Instructions]

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

John Bedford

Matt and Good Officer. the and joining Vice and on for With morning, Chief and us Financial Officer; President everyone, call. our today us Blair, Executive thanks are Chief our McGrew, Executive President Rainer

www.danaher.com, measures SEC to any that and our Presentations, archived during audio on also other release, on provided quarter, earnings The will for second X, Form our reconciliations non-GAAP until point and under out the call. like website and portion be slide section August XXXX. the Investors presentation XX-Q of call under of remain our are replay will Regulation information the our archived will call to Quarterly call all supplementing Investors I'd the the quarterly of G the this heading next be later financial our by & relating the of A required until Events Earnings. the available website, today's call available section today this heading

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

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

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

Rainer Blair

John, you Well, thank morning, the us today. you, We good and everyone. appreciate call joining on

resilience well executed demand and and delivered team the through cash more quarterly with a in showed softer core revenue portfolio single-digit and testing earnings in business quarter. and despite second helped Our Life The Sciences respiratory Diagnostics, flow base base revenue, of our dynamic growth operating offset paired business expectations our environment. High revenue, bioprocessing. better-than-expected

a Business to chain actions Our team's supply we're throughput, operating to Their of proactively and addressing executing their investments. enhance constraints, with commitment and System. conditions testament leading navigate mitigate costs to the a cadence these healthy challenging growth Danaher while and maintaining helping are productivity ability is manufacturing structural improve

our second durable results our also positioning the Now portfolio. highlight balanced of quarter

through our markets combination sheet with differentiates the all exceptional long-term Danaher optionality growth positions DBS, our that powerful to favorable of This an powered attractive end balance and have We and talented operating well by of secular businesses, portfolio more of group us drivers. serve strength dynamic environment. operate team, today's

$X.X with declined low approximately XX%. single revenues of High-growth our core Geographically, X%. second a down in growth COVID-XX let's We core delivered revenue single quarter billion results revenues. detail. lower developed with X%. approximately in quarter in COVID-XX business, So declined which declined to revenue more and the headwind our turn markets were was China in primarily driven by that, second high digits, base digits, Sales more X% offset than by markets

while and stimulus a delays an drive deterioration to cancellations. decline business, volumes, businesses Diagnostics a increase the benefited This strength more our offset Life in Sciences. in In Biotechnology China, initiatives environment continued led where our was in funding by project quarter hospital order helped patient in the from significant in than recovery during

margin XX.X%. gross was the second Our for quarter profit

basis to margin and to of was incurred operating the and Biotechnology our in adjust cost lower to Our XX% transitioning structure and volume down of Diagnostics points in XXX due our segments, impact actions costs our capacity response that state. to best we're an innovation year These to this of intended on and ensure position objectives, accelerated to cadence while margin investments. in maintaining long-term transition endemic the are growth COVID in an deliver

$X.X year-to-date. We conversion This flow income flow ratio free per and XXX%. than earnings in results the generated more net common were diluted cash a quarter share to net in of of Adjusted year-to-date cash billion billion $X.XX. $X.X free

Our in and free generation team's illustrates the of and our cash quality business notable strength Danaher portfolio, differentiates consistent flow our execution. models,

our further look our and a you we're Now segment in closer and results across some Biotechnology revenue business weakened single-digit end bioprocessing, as down at our a in decline. Reported today. market declined high XX.X%. we the let's move markets base through in what underlying take revenue resulting seeing the was color on XX% conditions core portfolio give In quarter,

Larger customers define pandemic, inventory to without efforts commercialized their customers they capital. therapy, are conserve during still and we biotech built as emerging customers, continued through working the a which

the the biopharma saw intensify China market progressed. in as quarter ongoing we second addition, correction In

down we've started them where levels. help can, Given quickly inventory actively their more dynamics, working these larger with to our to normalized manage we customers

bioprocessing for have And is the Duchenne Alzheimer's development notable are for near-term the impacting gene number our monoclonal in approvals during our The the market at we only in and long-term any while saw tremendous dystrophy regulatory therapy our Now developments growth, therapeutic. strengthened leading history. than the a biologic market for point opportunity novel higher ahead in meaningfully conviction and quarter, positive franchise. recent dislocations of muscular in biologics and medicines antibody-based genomic

as potential drugs also of in emerging therapies groundbreaking the and the they're of improve quality pipeline. therapeutic These not these the development serving only validation are around currently patients of classes for world, to poised life reinforcing

the will May, pursue positions innovation in portfolio and industry the completed to go combination and modalities bioprocessing a us Pall these the business, life-changing geared as to all The and Life of the towards helping market creating Cytiva Sciences, market across engine more an customers they broadest offering major bring support name, we uniquely in Cytiva therapies which therapeutic combined premier under end-to-end with global has franchise. faster efficiently. breakthroughs. Cytiva's to solutions customers Now life-saving

the Xcellerex Bioreactor A launched in quarter. the great Cytiva is example second X-Platform

from new production including across The production. time also predictively therapies, design reduce monoclonal helping and X-Platform's optimized cell Now lab all culture manufacturing productivity is and yields. drug to enhance enables the cell antibodies improve to this cost in modalities, biologic increase modular to more bioreactor scale intensity to process and and gene customers

our business. Sciences our revenue Life Turning also grew segment. and high revenue X.X% was base core up X.X%, to Reported growth in single-digit including

Sciences by biopharma academic mid-single-digit at life helped growth, across particularly Microsystems led revenue delivered and applied single-digit for SCIEX. XX% high Healthy and Life businesses collectively customers. our at science, demand core growth Our softness pharma and offset nearly more Leica instrumentation, research, markets, our instrument growth at advanced

or next-generation stages low was sequencing declines primarily drug This are later based and gene-writing which quarter. single partially offset consumables basic proteins in used Our editing are was the of commercialized genomics and pipeline, strength solutions, the in development and in digits plasmids, by in projects remained business research. up in Growth that robust.

quickly innovative continue Sciences more SCIEX leveraging medicines. And to to solutions validate Insight, yields. securely discovery researchers discovery, Life IDBS data intelligence and development more help biopharma businesses drug to development a drug candidates, helping are and development recently the is management technology and ZenoTOF ZT, and Polar regulatory Our to that platform enables more and accelerate of artificial analyze the filings the improving the transfer workflows process. deliver end accelerate released that biologic launched a that researchers to therapeutic front XXXX identify pipeline Intabio in quickly datasets

Reported moving COVID-related XX% business, and our declined testing by Diagnostics at single-digit volumes respiratory lower high segment. core revenue Now with than XX.X%, our base growth declined offset to in Cepheid. more revenue

single-digit mid-single with Biosystems strength performance both growth strength way immunoassay. businesses mid-single-digit staining. and again revenue in Beckman core quarter, diagnostics clinical up instruments digits Coulter advanced histology consumables by notable solid Leica driven core delivered was across in Our growth. the with and and collectively led this Diagnostics high core

analyzer best-in-class throughput. delivering Beckman DxI the their May, launched to while XXXX, Coulter up automates XX% routines immunoassay that next-generation In daily maintenance standard of

drive test breadth further improving In is team full significantly a and competitive DxI improving of is clinical our just positioning innovation, which the addition growth menu of to how and the over of consistent example through time, one provide value workflows mid-single-digit assays enhancing menu. XXXX That laboratory efficiency, the and Beckman important will their gap to rate. helping is menu Beckman virus closing an blood enable

assays benefited testing. testing, menu, recently increasingly GeneXpert Strep, drove menu test from MVP, growth Cepheid And panel, to across mid-teens contributed advantages, more the our from strength hospital-acquired XX% for most multiplex leading notably Group in Cepheid's Xpert our growth health workflow non-respiratory are additional test infection quarter broad-based introduced Diagnostics, who core the and Xpress momentum strong assays. COVID-related for vaginitis in than sexual Molecular In another A testing. of Customers adding delivered

Cepheid's for in This flu for million. by flu respiratory higher and A, driven our testing testing, exceeded and test RSV. was a the our of X-in-X approximately million $XXX preference revenue $XXX expectation In volumes of COVID-related both COVID-XX, quarter B

year. approximately expect to respiratory testing $X.X of full continue for the revenue We billion

is to now we take best-in-class believe accurate to the to endemic results respiratory testing their within and state, networks the GeneXpert quality to point-of-care, on the provides share for clinicians. workflow and of health for preference expert platforms in Cepheid both non-respiratory COVID combination testament across testing. PCR, the significant consolidate a many continuing With gene their lab care their as look Their customers is and value, labs the fast, unique

quality applied mid-single grew Now digits Strong year balanced markets. identification X% and product to prior was Reported our & quality, of water In at revenue solid Hach revenue DBS-led Environmental and top on industrial revenue ChemTreat drove and segment. grew Solutions Water digits. a comparison. performance was X.X%. down and core was execution across growth double-digit Applied moving up end core mid-single

are Videojet new sales and system. product team year remained seeing end-use projects. cadence the single-digit and at their The Videojet with their the strong our XXXX as identification, single innovation customers continued of equipment strong goods consumer the with against digits high of larger lower also release We're levels to schedules customers prior continuing aligning this invest laser product demand. comparison. Trojan, declined At municipal activity order industrial quarter At are in who rates production marking packaged low

identification impressive users products that several platform of for one different uptime product to the product adjusting the and their part sized multiple and journey year the in of without they addition This planned resulting to as introductions Veralto. laser, mark levels is helping as product success begin portfolio increased of This same throughput. Videojet's enables position higher are the for

of So fourth speaking will for is some Veralto, separation. attractive be the water of we well of will comprised quarter track XXXX product on Their most quality identification. and areas positioned a portfolio remain in be Veralto business team leading Analyst hosting of X, with operations. mission-critical on companies looking attend. we customers' in Veralto high-margin of forward models, Chicago will September to durable you and hope The supporting many Day an

ahead expectations briefly year. quarter single So the in low our to and core the down look at In now expect year-over-year. the we full base digits third third business revenue for be quarter, let's

therapeutics. decline total and a of result percent primarily revenue lower to in demand We as to also range core the for testing, COVID-XX low mid-teens vaccines expect

margin expect in and Diagnostics impact structure a to we approximately transitioning the our cost response particularly third to within capacity adjust XX%, our COVID operating and profit an to businesses. state, Additionally, Biotechnology endemic efforts adjusted which quarter of of includes

to growth near-term Now turning to the we core base now single-digit revenue Due bioprocessing, our anticipate within XXXX. business. the challenges low full year in

for core total of revenue the double result expect therapeutics. testing, year for high decline to demand vaccines as single and COVID-XX also We digits a low to lower

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

on about macroeconomic team confident So the for to up, future a wrap dynamic environment. We're challenging our Danaher. bright focused more in execution of consistent ahead remains and the face

of accelerating helping and some work and committed we're development challenges, customers are portfolio, continuous Our our manufacture including more passionate faster, biggest health our care of solve culture diagnosis the innovative talented and to world's and their improvement. discovery, the associates of therapies. accurate Across about disease

Our the care. patients patient are improving have ensuring to the world forefront more quality and solutions of outcomes access around at

for and us going lineup Danaher great optionality, by positions forward. improve shareholder Business attractive end creating System, the cash strong to durable, our in and a The meaningfully human leading got talented differentiated powered provide unique a well further combination our recurring health. portfolio team, we've franchises foundation with flow business portfolio balance helping value, Financially, of to sheet all while models, markets high free of enhance strong revenue our generation

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

John Bedford

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

Operator

with we our And America. will ahead. from first question Instructions] take Bank go [Operator Mike of Please Ryskin

Rainer Blair

Good morning, Mike.

Michael Ryskin

Thanks for I'll start bioprocessing, Rainer. morning, taking Good questions. on the the one. obvious

during you customers if lot of prepared the remarks. anything continue. a But you order from about little talk to bit could just You a provided of sense give comments when seeing could a wondering you're that I'm that destocking trends,

your on As the part through Could total percent the rest through of you talked thoughts go playing actively exactly? of you but the you And with as number, year? You larger of managing about the also what see means the little bit qualitatively, that are how a customers. bioprocess gave us sort just out? you that, walk year what inventory

Rainer Blair

Sure.

the So as we CDMOs, forward the we factors. being orders. second a let's to In continue half inventories. be down the the orders year, will that customers, XX%. with here And orders look our half large our year, through of One down work various think of essentially that first That's our combination start modestly. of to were

see that saw what half we from to continuing. we the second saw first see and the quarter deterioration quarter, the in second that here in deteriorate China and certainly of We also continues that

And we are down. managing inventories then actively

in in While of efforts much there us is as we've that to XXXX. new, intensified stocking possible our get topic behind not really here the as order

Matt McGrew

some you numbers Mike, too. - on a color give me just let here, little maybe

that the if is But think by I XX% be we'll And about to this I said, you in the got. driven it's down sort think first remember, like half, largely of from think like said, comps an we Rainer order second I you too, perspective. were important the also down half. think we've modestly

had like XX%. comp, year, kind think low you a second first if of last we the the So half, in double-digit was more half

here up, step little half. in get easier So a second the

down call important the as order a a some I we're we said think that I very the see we just in thing inflection the half. will not of to is in an that up would more market comp second really to inflection not here the enough number Rainer But I seeing. seen but have market, sort step modestly much that characterize in think driven, book

Michael Ryskin

follow-up Great. squeeze I And if China Thanks. on Appreciate could that. a in specifically.

like one you China out difference market and in significant correction. deteriorated, the You seems biopharma it it that contains expand bioprocess, business? on talked just really believe you And actually will it's so is mostly of specific on you particularly in a lot as just Why about there? and part it called China your Could that XQ pretty be? touched how how protracted well. to that instrumentation What's the holding do

Rainer Blair

second that the that saw in related two in And factors. in see deteriorate. sense, June. the but has we One, getting environment better three of really quarter, you quarter. to and And half. we funded. it capacity here The the XX% to in in second the half a projects XX% has are So foreign fewer there continued frankly, There first continued not that's give To funding don't returned. projects or being second China are the deterioration that investment dissipated, were the XX% down orders quarter, second really in

a but been capacity years, smaller also great three two, has last there. the particularly the over biopharmas CDMO built, capacity, Also, deal with of some

by that than of there's the we not that in are saw that are half, are hardware being consumables term here the that also of the many worked short year. the the molecules lot here capacity first nor requirements CDMOs, so meaning additional half lower a And required on the in of second there in

related customers there And aggressively our number and inventories, fair of them to then of a part this to get cancellations order lastly, is to our there. managing target with are their

half of in as than you you to once together the behind biopharma So global that here, the again, aggregate And get when in XXXX. that for possible half. we're much this second working China, picture put us here different business, a the to all total this in is as we first if saw here

here, in slightly over give a our to business billion, was sense just And about XXXX that. China you $X.X

be business to which of would total Danaher. be XXXX, business that about the the about $XXX expect end at XX% of We an million by bioprocessing

Michael Ryskin

much. Thanks Appreciate the Great. so color.

Rainer Blair

Thanks Mike.

Operator

And we Vijay will Please question take from our Evercore next go Kumar ahead. ISI. with

Rainer Blair

Good morning, Vijay.

Vijay Kumar

was China is what the for the - mentioned you Hi mean? moving customer bioprocessing? implication if I morning in issues bioprocessing commentary, I just down what actively the you stage does changed mentioned to Rainer. second taking Good also for fiscal lower you, large correct, is if into China guess was that levels, June, was incrementally XX% pharma managing inventory Should I was thanks on in-line-ish that simplify in that XQ in my down It think is various 'XX? you parts. seems these early China? line-ish. any like Danaher's questions. for of What assuming XX% Rainer, be think And half And And 'XX? and the

Matt McGrew

it's Vijay, Matt.

- Let want kind just so for set I me to we've we're looking the give what for got of numbers China. at everybody,

first XX%, of a half, May June As And in you and XX% it, down, see the from we we get did down. sort said, into down call XX%. were more like perspective, revenue the

on color you both to about So the as call are Rainer, of if it, May of to down. the maybe, you will, and that, sort for QX June, plus QX XX% for about With look what we going forward for of we those commentary. quarters give kind China second half, and think and we're like some thinking contemplating, want

Rainer Blair

through talked and XXXX. think, as about an of I industry that pharma destocking 'XX, and puts we lot think correctly it a takes biotech. Sure. second in the half to Vijay, here emerging relates with We you I various the of work have still, as the summarized to

that here. actively possible course, of XXXX. in us we're You see order managing then, to behind as get those And China here in inventories as the piece much flagging our customers with

it all probably get of think the the XXXX. be continue we half bottom. said second XXXX as we to we'll end about that, is we as here And year, to closer as update And through Having early is the always, work to the little a here. talking

Vijay Kumar

Understood, Rainer. you margin Matt, maybe on And one for share.

in sequential on came drove us bridge slightly think of your the XXX that's sequentially? basis Danaher I XXX actions basis I second QX, what some can think quarter above down you point points, But guidance. from cost undertook? if that this step is step-down

again, drives I bioprocessing What exiting implied when Thank a your QX And step-up? drives is step to guidance, up? look the assuming inventory trends? you the I What orders Bioprocessing that is QX, QX does at annual -- that XX-ish. levels XX%-ish. perhaps assume think you. normalized that And like

Matt McGrew

Yes. I that's right. No, think

right. that got You

were we XX% of a call XX.X% step QX, down QX. kind So margin, in to

like going think, step in up to and more be I we're QX to QX. a XX% XX% in then

last a remember, pretty taking but ramp about being as not you sort only of Summit volumes down about. there we remember, are capacity proactive of that at Biotech, you adjustment, about at quarter, bunch significantly talked talked capacity we we if measures, will, down, as If Cepheid, the

QX QX, QX, they QX, get volumes; kind QX, That has are primarily on one, So XX%. to combined to et bioproduction no down but in here largely really, or the due remember, how do sort cetera. in to: is of impact and the this inventory, of higher volume really bearing go then lower QX with we anything costs. big we away Those with reduction had capacity two, step is in

kind it down bioproduction COVID of mean, XX%. of guide I ex incorporates just our

the the QX. about on and higher we're volume stuff heading that of and kind QX working So reduction really P&L out in the capacity of all

Vijay Kumar

Understood. Thanks guys.

Operator

go question Please Thank you. Davis We'll the next from with ahead. take Scott Melius Research.

Scott Davis

tailwinds Thanks. a a tougher if you're bit labor Good what what's out can detail world, into Matt But might willing more comp if the times versus us little give this, more go perfect 'XX John. see when to that even maybe guys for the like but are little in at be down teeth put I'd and path, was little you, is? your understand will color, benefit morning I know help what Yes, you not more to this love Rainer, a actual maybe and us - a you hoping I are mean what the could cost just rooftop versus perhaps or down, be - least accruals I helpful? bit

Matt McGrew

Yes.

quarter of effort, that the last at meet $XXX Scott, was So through about had the is probably we added going was come Cepheid, right? We in some that and talked be cost $XXX to QX said to capacity kind going pandemic, that rooftop to QX. about demand. During reduction, we we of and that a million rooftops

scaling that back. Now, we're kind of

million around a concept, bit is given people lower characterize of actions levels, $XXX a we kind scale of the well I demand that there. we to if more About the over demand million as dynamic as some at that but dynamic same rooftops where will, down are. a other as of and So at little of as that $XXX rooftop would BTG. you BTG, less sort of is

about sort So talked of we $XXX that's quarter. last the million

have Some hundred the range you be And P&L of probably couple of the if in we and moving to of us something bit of a a come to sort $XXX here well, probably a one-time going year then million hitting that in forward. savings will, next of is this be cost that it should year will are we that right? that million as back taking as one-time, of

haven't savings, really the about Scott. talked We

in QX That's done QX, going much on what can gets well. we a be how here as bit and QX dependent get or to in QX then QX done - little

it annualized be. savings we the And much the how as on dependent can will done bit get what a will to little be so, savings,

of towards quarter sort So, kind last we of get bake update the savings of of as number. to we guide kind for year the in we that that people told next some

of I have idea, of end coming. see quarter an benefit about dollars. a really much we've do kind up hundred to everything that got can we done about before talk we think I - is and haven't sort do one-time it, I but sense of call where yet. I've I gotten if get a we So, But couple how of, want talked last or million that

Scott Davis

why it wasn't All unit it were because down. to of cost, maybe with Is margins me it clear right. negative That's I'm kind core is costs helpful, X.X%? there volumes [AIS] but Matt. some But anything - And had price Is would I price just actual up assuming help that cost? the well, there's spin mix into too? probably prep know color there near-term may add as Thanks. some some

Matt McGrew

would I probably Yes, Yes. say of to Scott. above, yes all the

think was of cost. a little price a It bit I you're right.

to environment able chain see I think and really price good with supplies starting to of of kind price. are issues actions supply issues, cover and logistics the they had as where were some they they an

But starting probably I bit terribly think you're little to that right, unusual. down, not come we're of a see

with offset to measures. But able were right. you're they it, other of Some

quarter, you look side little did it on the price think of margin of a but down, the sort us at was I bit were hold kind there the happened what in Volumes up. it. of

coming was as had here But in kind where you like of ramping the And was, probably little up but impact quarter. that an bit price is it spin what the also into well. said, happened that from a down

Scott Davis

Yes, color. luck of to that Thanks the guys. rest for And of makes best you sense.

Rainer Blair

Scott. Thanks

Matt McGrew

Scott. Thanks

Operator

with Dan Brennan from go Cowen. Thank Please next ahead. you. question And TD we'll our take

Rainer Blair

Good morning, Dan.

Daniel Brennan

for obviously one Maybe you Yes, superior the executor, just doing? first questions thanks. a how the at Rainer, on Thanks here. morning core. the is DBS company your Good is are -

guide has So peers. down the uncharacteristic, string bioprocess is it's plagued also many pretty situation but that of a

terms - you're incorporates future you latest surprised latest forensic So the guide you've sure bioprocess you sense the just factors a so confidence what you your doing here and and improves of will can to that reviews, in I'm won't guide cuts us So led cushion. enough learned? go you again, and always provide forecasting now surprise what give of the that the

the the bottom reached? can of investors been has have at So bioprocess that confidence guidance

Rainer Blair

are planning And dynamic improving the Thanks, get the Dan. imagine circumstances. to. situation, they we our the suggested, their demand one own processes exposed think the the customers you production I that patterns the and as when is of that these as here question. And that with demand in we unusual aspects continuously into even appreciate plans as sense our you forecasting customers short-term can constantly, is that world being in they're inventories changed as the our are around of deal very production manage I

is. to We aggressively what order our there. inventories target taking manage had, demand think our we what customers of on that a their that with that out in what's learned customers that the that we've levels have we to more order our we that in point of signal pulse ensure their discussions And on is pattern the have have approach to touch frequent helping finger the keep of in to find the going true

well factors as as conservatism, a new positions about some of thinking a very dynamic influencing degree well here, with been number half of in second As environment has the demand. with what

we're the remainder well terms of guide. positioned think So, for we the bioprocessing of year in here the

Matt McGrew

my thoughts on just maybe bit, a just topic. Dan that Maybe,

QX, place of sort we Rainer China think think we a perspective given I in we've got I in from we what like like think given saw. said, saw what I a pretty feel good guidance

in of that here pretty that that earnest if in began back in and half behind with to everything, XXXX. kind QX of us active are that fact the we possible, to get going can Given the aggressive management we be

pretty the the for in good guide of this think rest us a puts year. place I

Daniel Brennan

'XX. Great. be just it'd just really Rainer, official commented, know rates But you And exit thinking mean as maybe XX/XX get consensus I some reference helpful and 'XX of little about guidance already of guidance. know the inputs. will I in this that this year $XXX below maybe coming out $XX, then still of about come $XXX on maybe we're for I million frame a are implied the morning. key in earnings, later. somewhere to is

low any point either And in in year, base single-digit given trajectory earnings an and how basis. into that this think could So we the translate from think about a also comp 'XX? starting about base that what about the organic growth we 'XX, for how help just guide even for

Rainer Blair

China, think Dan, the what early talk well ultimately, XXXX, efforts to as And our behind destocking year and of in probably of get situation seeing, here So dynamic. a is We the to still in XXXX, in factors we the as number about with actively dynamic bottom the we're through. us in we think that here front I work an XXXX. to here because entire talked stocking about us it's that bioprocessing the destocking do half have of

here also about prepared talked of industry. the are just and July course, business comments, it's always, - and promise a think we positive long-term as to back to and provide about putting do XXXX, here this this the we to later of come our growth in down about the how on XXXX. guide year January in be update this then, early for too And in in and marker I But

Operator

ahead. next of Please go Partners. question Leerink take We'll Puneet our Souda from

Rainer Blair

morning, Puneet. Good

Puneet Souda

Yes, and hi. morning, Matt, Rainer questions. for thanks the Good taking

talk about is there year, in is market? of portfolio? that We heard happening of Wondering bioprocess any one, your orders any terms also for on one if XX% rest expectation down peers on in the the the the less products. that beyond anything the product seeing wondering the comments shift shift of and share being this you're China, technology-heavy competition the down. I'm on of you if there first So made and fundamental

Rainer Blair

has see demand that of where competition No continued and Puneet, as competition, funding there. more China to question on about competition. the always far products for is local about the we deterioration be is The our do therapeutics China China is local than it applications. view during And point competition been for lead find local than local times that for relevant it tends local pandemic more extended. became global that more

for really a is the topic So us, margin. this at

in here and story as mediation get of doing the the environment as in requires real half, to the much we're XXXX. And China situation that in the here stocking in that's order exactly as as well possible behind funding further this is second us what

Puneet Souda

wondering of if end the term? may. with spend deployment, you I And backdrop How then in in a assets helpful. and thinking EAS services super are has I rather leading capital any and you That's more near know deployment somewhat that you. Thank for of if your accretive, capital if has gross framework capital on about pursued Okay. usually the gained market deployment margin of historically, now? that significance changed think one weak now are you've

Rainer Blair

Sure.

perspective with us, capital see adjacency And that for to when the do Puneet, that relevant primary we model and market continues aligns our a end end the market, thinking the requirements. M&A and deployment. model, consistent we any that So asset of maintain about, form there. the require or for is the we might And be be financial - we

market will, having that if green, M&A are and lights a market model. continue, always as said we the opportunity, likely find those you flip great you've we business to as three where sheet in in work noted that, that our all as shape provides to Now balance funnels our company do, is well we opportunities to and

Puneet Souda

it. Got

Thank Okay. guys. you

Rainer Blair

you. Thank

Operator

We'll question Please from Vatnsdal with take ahead. our go JPMorgan. Rachel next

Rainer Blair

Good morning, Rachel.

Rachel Vatnsdal

the for questions. Good thank morning, you taking

high quarter? through in have peers comes just just a of drove growth the off, you instruments that of gears was some could with to some in it Leica? your notably, the to strength strong, expected better us pretty So And business, customer this at Sciences what shifting called when Life over slowdown then that instrumentation. segments And much SCIEX and walk at of meaningful out CapEx XX% really instrument quarter. spending for kind strength was single-digit than growth first So this

any instrument are you growth seeing for you thinking year? And those how about the same are full of dynamics? So,

Rainer Blair

for Thanks question, Rachel. the

QX Sciences And come we've suggested, expected, time business some digits. back So minute. finished, talking for mid-single And up a normalization process a now, that about we're you Life our also in forward. expecting been as going I'll that's to as and what

that's strength I on the the sort relevant. of here place. if in had exclude loan solid. biotech where program we EU, Europe U.S. mid-single saw and look we China of okay. activity pharma But remainder there that was level China good of geographically, at And subsidized a the the digits, The also of would the was stimulus small in large for

environmental softer. well. and testing, we see see pharma academic market the Now holding markets, testing, perspective, applied biotech up an market we of some the think end food strength. from if We I you see as mentioned, end with But

from equipment, and perspective, and type Microsystems up, even SCIEX versus perhaps saw and If of than see you as with about think think capital this that well. less-expensive, product category you cost the Leica more still we severely we a expenditure lower operating is impacted end, holding higher which

the here, There's subsidies about on So for have China come continues. going to We the end of half front while first strong, of sunset that and that reasons. second market, mentioned forward. we'll continue news no be as that to see we there quarter. a the think we at couple cautious have how the

think the we over you at has instrumentation, really from ends continues. being now, normalization years the so the flat process, second growth what putting if low digits for will, full half as rate Life up Science several year been very And elevated single

Matt McGrew

sort the I here. Rachel, in book-to-bill less think was mean in quarter. one bit businesses if than the Life little Instruments that's And Sciences of on back, our about you a too, in the bookings the

to stimulus. it here see not up in stimulus don't going the that of to be in we half. we're flat as So as our China the we sort rolls in Life just was that the that in first think play year stimulus impact a largely And those had for instruments, and the backlog I half think head we real a half, in And backlog assumption Rainer's from businesses look of first Sciences second kind into half. have China I is the point, at step off second

Rachel Vatnsdal

us all was a And of follow-up, for walk the on And in as you you the color impact how just through Maybe on a Thank year? you the pricing. are just bioprocessing. assuming the what pricing follow-up then and for there. pricing Great. pricing in half back much quarter? instruments instruments Can on for

it the 'XX? right this dynamic half And contribution XQ? heading points pricing year What within in and points industry the price is XXX XQ. basis back year, was also Obviously, of pretty that bioprocessing, you bioprocessing evolving took XXX pricing now. thinking in pricing bioprocessing. about sounds For in just took of you into basis like then Last how you in are guys of

color So be any there would Thank appreciated. you.

Rainer Blair

so with Instruments, quarter, overall the all for up Life historical we was talking price. basis pricing our banner, of remaining average. XXX points four the overall, And there segments quarter in Science points above basis the Rachel, XXX specifically, saw you were about

somewhat. back do to I of get look to think we above year. we'll to our remainder the that Now on you year. it remainder expect come that forward closer as of to But here XXXX, the expect be and And the see here we as we we end do as to averages that the moderate the XXXX, for for historical of relates

Operator

Okay. from Luke We'll Sergott with question our final take Please ahead. Barclays. go

Rainer Blair

Luke. morning, Good

Luke Sergott

sets follow off. right? everything Good be This here. Danny But rolling in is easy the shouldn't - know morning. going 'XX think comp. kind Brennan. on That 'XX, that it given squeezing for aren't me That's is, up is I but is destocking give that guys you Thanks just of to to up I an dynamic. how what

overall demand is type trying industry I was so the industry right now figure to support to growth. of And what the out just

the high that's and market bioprocessing in the growth typically, So a mid-teens, market. market to is like double - normalized

you And do to COVID biotech of headwinds And back over given a do lack there are period demand the there? capacity take Or you several on There of China, are get subdued and can comps, in of other the that, going so which have would off, you - think that how we level? then rolling the perspective, from that have to think top contraction be funding. quickly you that. you a

guys normalized a right now. So market looks that give what sense us you like for

Matt McGrew

to them in keep some are get get the through back I get 'XX mentioned dynamics there's managing within number, be normally - to it's guide looks we which too of a as really so situation. there's mean, that, in into to think think - We're give unfortunately, trying like what of China, through sense just need like. through just second to and that I number just market, second coming think play inventory you out, that parts it's I why just are July. where the pretty we we know sense half. get what many a lot need dynamic a And I the that a half We'll of this year later We in need how will dynamics destocking, just but sort actively we through. early. We to said, the I now to of and better us get a industry. fact that those I we people we're do the right here. do better still Luke, worked

Luke Sergott

can I how you you was much guess, Yes, the I for of understand. And then, like destocking year-to-date? kind guys quantify and quarter in

Matt McGrew

could but probably I some imprecise. it mean I come numbers, would up with be

don't to much really out to going that be as mean spend dependent. going much I dependent. It's manufacturing we it's drug how think reality be very figure customer trying was depending. It's a is to going to destocking of real site I to on that be site time the lot by the days, they site that by with a hand, site to in down these can level we help spending time way need as are customers proactive what's an with. the you've inventory understand got pretty manage what's comfortable them so

getting were with down and above actually. comfortable trying are are they where pre-pandemic, that trying some be get are some below Some that, to to

we was So active we answer managing but know actively doing we are number, we're of for it's a probably than have more really a number that manage way and great I got not one don't it on neutral I've that a that kind been. that basis. a

Luke Sergott

right. All Fair you. Thank Got enough. you.

Operator

will Thank you. now back John turn for to call Mr. And Bedford remarks. the over closing I

John Bedford

the the and week Thanks, rest today. We'll Thanks. everyone, day around of for be us follow-up questions. for joining

Operator

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

You may time. any at disconnect

Danaher (DHR) 25 Jul 232023 Q2 Earnings call transcript