TMO - Earnings call transcript Q3 2021 | Thermo Fisher Scientific Inc.

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Operator

Good morning, ladies and gentlemen and welcome to the Thermo Fisher Scientific 2021 Third Quarter Conference Call. At this time, all participants are in a listen-only mode. After the speakers presentation, there will be a question and answer session. To ask a question during the [Operator Instructions] Please be advised that today's conference is being recorded. I would like to introduce our moderator for the call, Mr. Investor President Vice Tejada, Relations. Rafael Mr. begin Tejada, call. you may the

Rafael Tejada

for morning, and us. you thank Good joining

with is earnings be Williamson, me Chairman, call webcast Please the On today is call the Chief and Financial being Officer, Investors note President this President, and Marc Executive and on Vice heading, of Stephen section of third will is A until copy Senior the live Chief November Officer. archived section website release and Events in our Casper, of quarter our website, Financials. under available XXXX News thermofisher.com Investors the the XXth, & under our press the of our XXXX. heading

plans me differ of Securities Various before we Actual the Litigation provisions may Safe begin, let Safe expectations, Forward-looking results XXXX. may our about Harbor those Private remarks prospects for statements from briefly and So statements the under website constitute purposes reports that of Reform statement. recent Annual a Harbor Forward-looking the are Financials: make section of indicated we future materially Act cover available most Form and XX-K in SEC by result on the filings. Form heading our Company's the factors, quarterly XX-Q, with subsequent various including discussed of on which the Report under these and as the on those in file SEC investor important Company's

available be if of today. heading reconciliation and investors the While call, to representing accordance on not we prepared with even may under GAAP change. our the should specifically during views earnings, GAAP. subsequent our our Principles any estimates we future, in any Forward-looking Accepted will section measures date in directly to comparable financial the also Financials. measures the at update disclaim certain to press is in these of Forward-looking point non-GAAP XXXX of elect as not Third or so, these we release our website this to Generally Therefore, to some statements Quarter, obligation referring measures of Accounting most in do financial A as Also, the statements rely you

the I'll So turn with now over that, to call Marc.

Marc Casper

morning achieving to joining us Quarter quarter, to performance thanks Good today while exceptional outstanding call. our Raf. Scientific for execute Third for financial delivered make We everyone, our growth another customers. an continuing Thanks, stronger our Fisher effectively Thermo even strategy partner for and

on year stand the As out far, reflect things I to three so me.

outstanding Our strategy driving by financial our System growth proven PPI powered Business is performance.

build Our in value we and customer very And leading is base products to trusted enhance further partner and a status innovative with playing COVID-XX. continue well on we're to performing unique business capabilities industry's our our response role our to expanded proposition. new

I as All these future for me on let recap get stakeholders, and the me great financials. sustainable my confidence in of this will we of a gives detail our bright continue to value all later. more into remarks create very first, But

Our $X.XX growing revenue in year-over-year. QX to billion, X% increased

adjusted XX.X% operating $X.XX adjusted quarter quarter. the billion was our income margin operating was and for Our third for the

$X.XX adjusted X% share. EPS we increased - Finally, by per

quarter. So another outstanding

quarter. areas a conditions another and role end in this performance vaccines Pharma COVID-XX market team with and role exciting by value QX, again leading were over deliver XX% Turning executed our therapeutic our our supporting and of driven including of in wide market in once strong significant range our dynamics, to our unique strong just growth across customer proposition, well market outstanding in Starting therapies. customers supporting we end Biotech, to fantastic have to markets our continue and with

the this in end a market, mid-single-digits spectrometry quarter In chromatography, channel. Our businesses, in market and grew with in good Research to services, Biosciences, and the very and academic Research broad-based trusted growth. Safety over pharma government in in status channel. the partner continues including bioproduction, saw as market and mass years strength, many the drive robust with Safety Biosciences, as earned these we our customers well we In growth and

Turning we particularly in our business market in mid-teens. the growth QX, to Research and had applied, grew electron microscopy we In strong in industrial the Safety channel. and and

Finally, QX declined Performance to very testing was by in team in business transplant versus this of clinical billion strong, our needs, diagnostics quarter customers base revenue and driven billion also we healthcare, COVID-XX $X.XX last executed immunodiagnostics, The year. and $X.X delivering diagnostics, in well XX%. diagnostics. support

quarter, in to comments our billion strategy, growth let on in revenue. a response. provide industry-leading our on we the me move I COVID-XX few $X.XX response-related Before generated pandemic In role the

around in surge a variant, saw QX. in we the the the With demand Delta world strong testing

demand played also over service therapies non-COVID of to $XXX and from million for activities. generating for offerings vaccines in our meaningful and just very vaccines The is quarter the revenue. We underlying COVID-XX to expect a the product we in this demand role production over robust transition these development time, in and and used very

our the growth enabled pandemic we to to strategy, recent accelerate as growth response our raise contributed industry-leading strengthen investments, our organic core ability communicated at our to has guidance accelerate X% and long-term to relationships, to customer Our to us Investor which Day. X%

Continuously proposition emerging on Let products, value leveraging the delivering growth on customers. markets three our scale you give to in and developing high-growth unique update me strategy, high-impact innovative which now consists our an our elements. of new

Biosystems and launched of This examples genetic fully integrated with of provide across Digital our further the Starting me to we PCR customers our sciences how enable first strengthen the mass Thermo TSQ And and we XX the Safety provide workflows breakthroughs leadership number faster industry accurate a increased system few efforts across for businesses innovation, Scientific toxicology gene minutes. spectrometers for to spectrometry, system. designed and we small the we're oncology only including In three molecules, Digital featuring a and events help our range environmental delivering customers chromatography Biopharma mass sensitivity analysis. Q innovation scientific and and and like new throughput highly need on applications our in science, simplified clinical new will and This plus quadruple strategy. cell to PCR system make a from our world large is products place. in a applied accelerate Absolute better results and of growing launched Applied Let in launched Quantz to Studio our research areas business, triple and therapy. address growth Fisher

columns NEO proteomics the and also translational use Scientific Tech Vanquish Thermo the in system We launched UHPLC precision for Neo, medicine, map research. Thermal and Scientific designed UHPLC

second in our pillar are of excellent the during delivered in experience growth This create contributed leverage an we to to continue to where the markets. the we to across scale Turning Asia-Pacific, has for the outstanding growth our delivering performance and high-growth double-digits quarter. emerging strategy, we low customers

capabilities presence our in the region. build to continue We and

During opened in their manufacturing work. than research support pharm XXX instruments center a center more customers we that help This bioprocess the Korea. facility features and processes. South and quarter, space laboratory pharmaceutical educational our advance will important design This biotech and and

the we're Our we've and made creating differentiated our demonstrates performance fueling a markets customers, for experience the in are growth. that across region these significant investments

partner to efficiently. goals capacity proposition. is to growth our be even for and pillar more their better of our continue faster achieve we And value our them our and customers help increase and The strategy capabilities customer an third

this As executing I we're Capex quarter, mentioned year. billion on last over $X.X in

pharma additional you Let brief we progress. Building update production. on QX, online therapy in brought services and to our on our capacity support capabilities a me give vaccine

large-scale site As the feature a in facility to biopharmaceutical provide part we the single-use facility single-use new steel as of highly largest in now growing SUT Nashville, assumed Tennessee we announced world. a evolve. strategic to sites with manufacturer like our technologies. stainless in partnership to will announced of The demand bioproduction from and responsibility limited, The needs industry, [Indiscernible] to state-of-the-art be in previously To plans site open bioproduction new production for will CSL including flexible development technologies, pathway operating customers one support our the biologics and

line us designed an partner neutrality Fisher commitment U.S. value be in facility These are a our located our co-invest and [indiscernible]. with tips. commitment addition to Scientific's we in to disease in goals. pipette The our Thermo Carolina research new as North proposition, testing, customers essential government and demonstrate In to on support rely the will with building facility announced manufacturer in to carbon state-of-the-art diagnostic investments who

me let update brief a you give capital Now, on deployment.

which We continue to a combination strategy capital deployment, strategic successfully of is to M&A execute returning and capital for our disciplined shareholders. our

we excited well. on In is terms super M&A, close process track, are to business by is expect The for of year-end. acquisition we and The of PPD. regulatory performing

looking forward very for is year. to As this a complementary and high-growth attractive welcoming a Integration PPD Thermo as planning largely our research highly going reminder, and Fisher Fisher is Thermo leader our industry in PPD Financing fastest-growing end we're market. yet and clinical complete, the well. services services colleagues establish to will later

on turning initiatives. ESG me our on update our let making you to Before guidance, progress our we're

[Indiscernible] the the we As continue to to leadership advance to our in our world position place. world make a end, and we industry sustainability have impact a better that responsibility leader we to science, know And social initiatives. use

clearly committed we empowering the for stewardship. sustainable the ACT them achieve our our environmental the cold own end customers storage helping impact details and by expand use quarter to of portfolio make their ACT labeling labeling product to the During year. include choices product, entire ultimately of our environmental to of goals

counsels can support make. the And Our number of a stem XX,XXX activities charitable colleagues action our are local education year. about throughout also community they and site-based passionate the difference

black will accurate ensure in deliver these and to With continue the take the We level, additional Stephen historically in-person staff, testing our investing deliver I'd in efforts then to to that, million and And COVID-XX colleges guidance have high you and for to our a helping -- amplified $XX our at through like universities students review learning. and to to confidently by campus details. we support ability the science. safety supporting foundation

strong strength result the response XXXX. raising our revenue our guidance which we're for on $X.X press saw This is QX you release, of in year. COVID-XX would revenue increase and result our $XX.X a the to our revenue We're And revenue. guidance over XX% growth performance in As billion, earnings billion base full our continued raising by of business. operational both our

billion, Day. core very EPS shared adjusted by increasing key in well QX, The deliver performance. to XXXX represents by earnings terms guidance to reflects the year-over-year. our increased our the guidance adjusted we growth strong continue Investor our and guidance our revenue per takeaways To summarize $XX.XX. which to our $XXX very XX% revenue We're XXXX for at $X.XX Outlook excellent by adds we're that to and raising million EPS, guidance to of In with executed growth raising XXXX full-year share, $XX.X a we momentum, and $XX.XX from Outlook you our the business raise $X.XX

in role leading performing is pandemic to the and business Our very a we well response. continue play

trusted capabilities We continue brighter and to our enhance quarter new our enabled exceptional our call our Williamson. further through third to and us an customer the expanding hand products our Stephen with to over for And the expand that, innovative partner raise now us Stephen. outlook year will even the for performance With I proposition. status CFO, future. sets to up value

Stephen Williamson

Thanks, good And everyone. morning Marc.

we and begin a the like will at our therapies Day. with and of the acquisition. also introduced of revenue, reminder a is quick core recent Core our course into This PPD core include and the to I'd includes Before business vaccines Investor get base details definition of quarter, the term we response the business. about

details QX, another on quarter. to moving the So it in was excellent

support our de-risk to $X.XX our response revenue additional delivering played high-level of the out at to the $XXX driven through total there do be July. so last testing a we in revenue, response testing that last view did broad-based million On quarter. our ready in higher our response we call versus in any $X.X favorable core-FX. needs, $XXX testing Revenue how earnings $XX in testing said of higher QX, customer's provide million benefits what flow by prior we'd were if revenue was call, P&L. and Yet the time quarter our the beat That's and earnings the billion billion guidance core and me versus opportunities higher, revenue, million of more business the Let expectations guide. exactly

guide. business quarter. response and base therapies the We was also $XX million or a in our than the strength and prior XX%, vaccines million had Also that the guide, great QX, the in which million than was $XXX prior is included core, core growth in $XXX in revenue higher business. higher organic X%, worth In for

So excellent the top-line. momentum on

as on Our a really on result, investments. well PPI Business a at us excellent that System the top-line enabled execute time, a performance. prior in on Overall, strong the generate $X.XX the from QX the that's same quarter. higher pull-through growth to from $X.XX another adjusted than included significant And core was And very achievement $X.XX the response in and excellent over revenue, the business. from And testing business, FX dollar or components base our guide. BPS

provide Let me quarter some last results, our our as on by X% with down the from adjusted the we GAAP with release, earnings press grew QX color to QX you QX $X.XX now in year. performance. saw Beginning EPS EPS on X%

reported On the top-line and The QX foreign growth, components from our exchange, revenue our reported X% X% X% revenue a acquisitions. from QX, grew contribution included X% of increased year-over-year. tailwind of organic

our the low grew high the the double-digits. XX%. North our well by organic growth. than the America impact quarter to year. operational I revenue productivity, are business XX.X%, enabled investments year. business by single-digits was long-term QX and quarter, all offset grew has these and deliver prior our by XX% PPI low growth more than our Change response Europe our Asia-Pacific in in As and pandemic strategic income XXX current of mentioned, The the that of was the the grew the basis flat. world made the to performance, investments businesses. mix, growth points being operating which Since adjusted the China the colleagues, across geography base was the decreased and System lower single-digits. Business scale in strong in by rate the margin of ongoing business in last during performance by quarters, quarter, as X% in the base geo on organic operating QX the In rest and Including us support adjusted of are decline prior skewed near unfavorable as over

margin in those our points the of to basis had representing increase margin drivers at innovation QX Adjusted in quarter. XX% XXXX. gross quarter similar ongoing P&L, points of details year. lower came Company the on an mentioned R&D versus XXX just than The operating revenue, was expense quarter XXXX. $XXX approximately decrease It XX.X%, the was for of adjusted high-impact to of adjusted last margin in fuel investments million to QX growth reflects Moving the total gross QX basis SG&A XX Total in of future the in XX.X% growth. versus in I've

option quarter benefits XXX net points due lower basis Average non-operating versus due by to million XX.X%. share X last rate in expense repurchases than net QX for planning average debt. our QX Down quarter the results mainly Looking at was tax the Adjusted line in dilution. the other our $XXX in But due to in year-over-year, a million the in of $X the below to million, million QX, the tax a XXX largely with last QX expense XXXX, lower pile $XX interest interest and year, the quarter of effect. were shares driven year changes million diluted net with income initiatives. million of our $X lower rate income on

Company we're strong the that's This balance to cash sheet, from System the the This was to comments basis And billion dividend dividends for up We the the as year. debt for points performance to EBITDA quarter QX was continue on same by of from returned And was last billion XX% billion, in billion end Year-to-date ended making times and in my $XXX net be same X.X quarter part the at generate our through debt we we continued quarter. cash period basis. prefinancing of operations $X.X with XX.X%, exceptional total Net Business enabled flow new short-term the We capital period long-term. billion shareholders returns with QX from reflects was gross flow expenditure. February. free XX% acquisition. ROIC year. the in announced XXX a $XX.X generating $X.X XX% the during cash the And adjusted some after Turning debt. as over investing the last returns. on $X.X Concluding in performance ratio strong. the reflects we're million investments from $X.X and last $XX in to debt PPD year, up on cash very continuing issued billion, flow increase cash adjusted flow to the leverage total up Year-to-date X.X and PPI times

in Now quarters, was performance on in life segments. thoughts provide was for the our last impact segments. revenue case recognized the solutions. start response some with of sciences quarter's, COVID-XX past on some a that COVID-XX business I'll the the response standpoint, revenue spring color full From Similar majority to that in of the as

recognizing standpoint, revenue, the COVID-XX differed of and services, and especially the products the the different of profitability the response based across impact segments on on margin public With a scale the diagnostics. revenue. remainder levels From the of that

the Besides, across investments in during the segments. reported our strategic make quarter, margin. some does addition, align revenue with the these That In those response COVID-XX does in not we segment continue necessarily investments skew all to of the of businesses.

margin to on analytical with quarter, we the revenue in In QX an instruments basis Growth quarter very biosciences and down operating QX QX, Sciences driven XX.X%, we chromatography the increased by growth adjusted operating in mass revenue and XX%, Solutions reported margin X%. volume and analytical this X% unfavorable strong the segment In Life leverage, X%. investments by this positive starting electromicroscopy XXX points segment, organic year-over-year. was was adjusted QX saw and up a increased income adjusted in delivered strategic business instruments operating Science was segment than growth organic decreased points businesses. spectrometry with XXX which reported bioproduction the the Moving in increased XX.X%, businesses. year-over-year. in offset and details, growth income in quarter, Life was basis and is adjusted segment Solutions, In and mix. X%, more our the XX%

we volume those quarter revenue revenue was drug very in was our from strong offset margin in by pull-through the was QX, transplant segment decreased In and in the Business positive In COVID-XX by versus income immunodiagnostics, strong strategic we're by volume the and investments mix growth decreased points QX, productivity, we which diagnostics respect operating to down quarter. diagnostic X%. prior unfavorable Adjusted organically the testing During quarter, lower by saw delivered enabled the by this and XXX offset reported quarter, diagnostics, and segments. across year. adjusted the quarter. our the a clinical offset In investments making basis productivity businesses, is operating partially which in the the declined in year-ago XX% System, PPI XX.X%, more strategic than and X% by

the XX%, growth segment, we XX QX products quarter, and pull-through, the points With services more increased XX%, was segment. revenue me than by businesses in let growth productivity to System, updated year. good strong XX%. in basis saw Adjusted income PPI drove increased operating of the by lower guidance. the turn [Indiscernible] Finally, volume that, Business offset reported than is X% margin investments. we operating our and all prior now adjusted very the In which and in was our this in quarter, our strategic In which organic was segment

guidance and As both Marc XXXX increasing XXXX. mentioned, for we're full-year

XXXX enabling beat beat starting vaccines provide now for with and and full-year therapies the business. 'XX detailed guidance and beat base we're QX. for into a raise I with QX the you XXXX, business years more our over will carrying of continued from and strength is QX assumptions prior for the excellent banking we're XXXX, the For reflecting both Then numbers. XXXX. strong This maintaining the

billion, testing for XX% response billion, $X.X billion outlook an of from vaccines our XX year by full-year revenue, and in of of growth $X.X to full-year revenue from our terms XX%. increase increasing the $XX.X to the and response COVID-XX in the billion increase from an organic we're revenue. guidance $X.X includes $X.X XX% organic In $X.X base full-year an and which therapies billion to the billion outlook represents revenue, X% to response growth d raising That business for

guidance, EPS performance 'XX the at close mentioned revenue guidance not where are our call of COVID-XX year. prior guidance now approach XX.X% reflect direct adjusted range assumptions those, I our the compared would QX the to the fourth guide support Then as over As will the end to an that XXXX, The rate the and few XX.X%, to testing-related are days PPD, of points continue in testing included for we've the that now, guidance very to by our benefits into QX continue revised prudent changes operating our Should of flow XXXX. slightly same in And income we XXXX. previously, approach year. $XX.XX, tax is which the full-year out the We're guidance. remains in of acquisition and the be in underlying continuing than reminder, of prior thought assumed to any to QX demand million full-year profitability. that XXXX was which rate seems There's a quarter the 'XX expect both same $X.XX included beat, in the basis QX, revised the And approximately guidance of for no to same guide, tax assume our did be de-risked for be as QX. than operational our of and to that could marginal revenue scenarios higher revised the the and And rest be adjusted we strong XXXX will the XX tapping for same. that P&L. there we Outlook. higher response margins through XXXX QX revenue, a the take on result are banking continue adjusted well-positioned customer in The than be $XXX selling of EPS, outcomes four a There adjusted assumptions in to we're benefit will we our testing increased higher a it XXXX. guidance. to needs. XX% Incorporating to to case, But the there period growth to raising last for by 'XX, in we fewer we in in

full-year billion cash to $X.X to million. of approximately $XXX free $X expect $X.X capital in costs net and XXXX. approximately We're interest flow assuming were We approximately be net billion expenditures

Our billion includes capital guidance is $X.X million per still buybacks, $X.X completed shareholders deployment, return billion which and $X a of to capital through dividends. share of the M&A, billion $XXX

me be Let estimate the XXX shares. full-year average diluted million will share count

on Now, moving to the guidance rates. XXXX

mentioned, base full-year I business XXXX and we're the over QX carrying 'XX from peak and vaccines As the therapies into numbers.

In revenue, to increase the million million and core testing $XX.X a see we're core positive year. organic $XX of for The offset terms That to continues of $XXX by year. revenue billion. our of the for raising $XXX for growth response less revenue, reflects in XXXX tailwind million million guidance guidance by FX full-year in XXXX $XXX X%

XXXX we're the of by full-year terms adjusted our raising EPS, $X.XX In $XX.XX. guidance to

the increase strength to guidance of Marc very XXXX. outlook the our strong XXXX As mentioned, the adding for reflects increased already business, core

recent you As Day. at shared with I Investor the

another to achieve both conclude, we're great XXXX that, call are position Raf. quarter delivering 'XX and back to another goals. over delivered I'll our So excellent -- turn the to ex in we With and

Rafael Tejada

to questions. Operator, Stephen. take we're ready you, Thank

Operator

Fisher team, one time management by stand the and to roster. limit one compile while your to everyone please the Please [Operator follow-up. Thermo Instructions] to opportunity allow in In the queue call question order Q& A address on an we

return please the queue. to questions, additional have you If

Our of first the question Citi. of Donnelly comes from line Patrick

Patrick Donnelly

again, business, keeping seems core guidance. Day. soon bit talk guidance Obviously, its But certainly from core Great. what providing XQ? of kept on through for at bit the Marc just to flowing one about well flow-through for just a guys beat bumping Obviously question, XQ seemed not into you strength end-market taking XQ, testing the the the the a so going you Thanks way. the to maybe maybe encouraging you on after the you that see number? in Analyst 'XX the on the just conservative. understand I stronger recovery Can guys. the raise

Marc Casper

Good Patrick, QX. the morning. enter Obviously, thanks strong for quarter, performance. question. in in When fourth we business I core about very the obviously the fourth momentum with outstanding think quarter really the the

As keep prudent QX, particularly deep the I There's at it last first, same it quarter. for felt outlook we to about did that. we that look at was the nothing

days. or -- have We less selling

implies at X% X% look business about It So for and similar. the about the very when X base day. growth, about results, it's reported, you points

You see here about X% growth.

to you QX. So which levels you similar in when and very therapy the the similar in you to QX what at revenue And look part of is saw what core, of numbers, other vaccine saw there.

felt we So that prudent was a view.

the the August, On of time demand creating variant July. the the for testing you and de-risk visibility short about into testing to going testing. we ed think the true is end had need our response, number. And by huge got whatever is at We're how we shift the obviously kept customers which if Delta for de-risk response, we

work. is So have obviously And we and we'll of customers that need feel that shift, the one achieving incredibly meaning could XXX we high it. number likelihood other that it

talked XXXX, revenue about level give of the end is the we into year for guidance our beat core assumptions how for And we right here as year. our we've about. and appropriate. adjustments the carried the we'll at forward January, as So And full sit what -- of that's at as when thought look year, the we we final make

Patrick Donnelly

little guys COVID region between what sense. Again, the lot a tender Makes comp headlines. bit Low you noise. single-digit are there? the growth it's in a got quick just Can China. seeing process, remove there you helpful. always maybe you on noise bit And just and to that of macro That's follow-up on general noise the hard a of then expand a

would So just go the and expecting your China forward. thoughts what you're on love on

Marc Casper

explains going period, the low had COVID us given by way response the year-ago what's on, think offset for their I an in which growth. In we strong China. is single-digit questions revenue your had over we incredibly

quarter. there. sense grew you in gives orders, new I that When look the of at bookings about drives which a that So XX%

activity good. was that So

have We and growth. industry continue drive going food with what's some Conditions to local Biotech Focus reviewing initiatives good the of long-term our backlog team. actually on government's strong No. a be focused that and will kinds strong on things. those of there and on the safety,

for think nice, Company be forward. strong to growth continues I China market going So ultimately the a

Patrick Donnelly

Great. Marc. you, Thank

Operator

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

Tycho Peterson

question can Marc, Hey, I supply-chain. guys. a morning. anybody good it's risk for on think first huge you don't --

on Are You do right resin costs? some ground, around curious these you us going Just but the what's there gives of the in maybe can down like component obviously well, on shortages color handle takes inventory? just to you in chain give on on higher supply to are for able and pass things have now. that's work some you

Marc Casper

question. Tycho, back for step as and level almost Fisher, above. supply chain, good Fisher. to Yes, and thanks a you start so then Thermo get Thermo morning the

and competitive Now than navigate I we're advantage. incredibly scale we the our the it all about impact world And And the think pandemic all is really chain right? and determined, our disruptions. supply is be clearly as duration System, to real Company, PPI that as the unwinding, seeing Business it's or experiencing the advantages we're execution right, companies. and that the still capabilities strong have better less well-positioned to of All the capable these of environments we smaller really it's and a have of because

So that's it. think how about I

them, on slower. little things logistics. that our The are a about results they're Delivery times think no there managed see I QX material you bit challenges. based being chain and impact like was supply As areas freight in with

to very have through you -- well And fashion you electronic team's our probably things confidence across have I effectively. And that components, high So and XXXX. that, in [Indiscernible] those I in about ability in be we're of manage strong sort. managing like this And the way. things navigate think through things have to that a diagnostics, some talking we in it will a world specifically across in very and into

Tycho Peterson

is process update cut PPD. on close how follow to developments. CMA quarter, talked year-end, view? request then know And helpful. you FTC, CMA Last that's every in us the from going can the your and about but was reiterated Okay, second and you the you by expected timelines you maybe the that up I a development on just then

Marc Casper

and largely process we the Yes. terms there's working the no couple on so filings, FTC going U.S. remaining UK surprises government. the PPD, of of -- with well Tycho, in on with we're complete track, including it's and

announced So we we anticipated when those the all transaction. are

opportunity So Scientific. we our and confident ability have to Thermo colleagues all progressing to feel the Fisher new that's our well, during the quarter to fourth welcome

Tycho Peterson

you. Thank Okay.

Marc Casper

You're welcome.

Operator

question comes Jack next Research. The Nephron of line the Meehan from of

Jack Meehan

quarter, around the durability Good Any that you for uptake about that in the you. the payment updates durability the feeling contingent Mesa. how was but stay I an can on you side? give M&A a in Marc, just just are COVID, been making of want update PCR at morning. on the the And us outlook Thank The conservative you've the for [Indiscernible] clarification. investments testing. to provide around Mesa?

Stephen Williamson

M&A quarter. Mesa. is the business well. That continued Certainly performing in That's from just revenue

Marc Casper

Yes.

will of COVID year other some durability, There's testing $XXX and as So is is increased original dollars expect year the respiratory prep instruments durability, areas COVID-XX, perspective to get the number on when The a like. developed obviously would will the that refine start be world [Indiscernible] million of for for you and looks base modest a of have we the but aspects obviously of which level we next well. PCR what to provided. obviously sample billions it's to see QPCR installed testing. of testing prep we'll in in compared of the that and sample We've our have repurpose of tests going panels terms relatively instruments, that we related side certain that the response started, our revenue, the our in from give de-risked embedded outlook,

an see flu the you're level likely to or going for some of with presenting doctors respiratory people want future and to COVID or upper know whether it's So infection RSV. will

head-to-head Biotech versus other menu well. on a are It's and some about some you'll customer, feedback of ago on technology. the a just positive. of to working broader So excited technologies days basically a they and the it and [Indiscernible]. It's that love developing customer And super have said did large users Mesa overtime turned couple as

phase. COVID, didn't So of those COVID that share will the that's some -pandemic. business we business have that increase more And or of our endemic are pre really things post

of the will So it relative billions I modest think pretty to cold, dollars but number. that's revenue of more be

Jack Meehan

Analytical the to my math numbers step-down maybe site, X% hate instruments my like small then growth the is on Great. in X.X%, nitpick second as by And compounded question from quarter.

Just curious the how on shaping the segment? the and order is up what that for fourth quarter implies there book can give color you guidance for any

Marc Casper

Yes.

the on nitpick you want. Kevin, Jack It's focus that good clear. anything to can areas aren't you So

spectrometer. solid are want I few call look electron of we a analytical really Actually on X us launches details strong [indiscernible] haven't instruments. you on them saw back actually and chemical expected and recovery of microscopy seen look to the product in our parts what's is of mass We're in say which super at the system. the you industrial about updated with just the a performance there. highlighted some So softness actually in When at analysis, the we and quarter, the all TSQ UHPLC well. end quadrupole that's on ASMS, you very very markets. When numbers, in very new excited upon look exciting full step And

historically our strength shows are materials, of through businesses. semiconductor great the some I'll in see that ladens that You industry. call financial But what things core across in

You the haven't years. over seen recovery full last couple a of

kind So numbers. that's what is of in embedded the

Jack Meehan

any Got for the on segment? color it. Stephen, XQ

Stephen Williamson

the outlook quarter business 'XX Nice and very we've look bookings positive. and and continued strong in at good QX growth for performance

Jack Meehan

you. Thank

Marc Casper

Jack. Thanks

Operator

of comes Bank Bruin question of from Your America. the of line next De Derik

Marc Casper

Hi Derik?

Derik De Bruin

quarter good on in Any just in Jack's things or installed into the couple issues a Hi, up logistics just is bit morning. labs analytical of shipping there. A question instruments wondering just and getting I'm around. little and if so questions, means XQ remain taken follow getting you quarter recognized anyway, just given some get terms current things a situations? of something because little ship revenues in not to door, squarely some was the with bit always compounded the of able being results seasonality. get just the some if wondering I out products, with

Marc Casper

Nothing some significant, and When bookings or about about a with discussion delays. topic this teams Derik. ready in stronger so, math that used two it is jumps maybe or out of shipping a nobody in business. at were No, not our nobody talked shipping lab me but think could day being longer took I is be the our deeper that none reviews --

being is but -- that that's jumped that's for So so few perspective. encouraging as I possibly, that from think material nothing upcoming out Bookings quarters. the were strong,

Derik De Bruin

And how think mean, you this particularly the or for clinical stem you -- I acquisitions between just to associate And create to, I'm dealing see Okay. as about of -- and PPD, with there's retention? obviously thinking war CRO's population, you Biopharma talent big and how you're of could about a research And segment, is you inflation tend thinking wage Marc, to relates are in some headwinds some in disruptions of the services and headcount. about your there? terms trying volatility off transitions potential

Marc Casper

think with So and our the team Scientific when a Fisher about team, let's I brief PPD. about start Thermo make comment

talked they we very about have the work. teams. taken. and We make have really for of that results have in compensation terrific including focused we've a really And rewarded year-in-year-out, our actions pandemic times additional last delivered to we've done -- this is team. They of the And spectacular best quarter we out, difference. the We on been a we've trying these some a ensuring place quarter-on-quarter

training. going invested it and come a to growth-oriented, as make has that'll that the getting we that's we positive is it is the it transition and for training, in on. have is while We're PPD just great running the and strong a continue performing business a team world-class literally the There is time, teams. no is really PPD great to focus are new as allowed And -- It's recognized that facilities, to Fourth excited forward looking us it customer-oriented, Company continue we're of retention And environment this over very a very, well. super is very patients-benefit some disruption navigating acquisition. customers, the the with to leadership very forward. well-run is Recognize difference for We team business going The our the solutions that's with lifting on in our up the that. but do super strong things our to development on that Quarter. performance. feedback we're We've to colleagues to their is integration.

Derik De Bruin

be China buy-local of the of part If -- manufactured like squeeze China. more the the your or How would much be in buy I to on that of there. not one portfolio sort would would can push is in subjected be sort of --

there, on consider we your footprint idea inside manufacturing and some as outside versus Just being China? what

Marc Casper

in our the regions a think there local manufacturing And is products, you see That's often is, about. the the If import Chinese alternatives, often that the that's but have that number the low scale It's there's you well-positioned support is at China and think a around a as competition products low strategy they sure into XXX% operations them [Indiscernible]. technologies. want things for degree scale also about into very level single-use way to shift imported some I'm facility areas world. market. to other accurate country, where very for have no the cost the almost that way our high really into We facilities of country. come China. assuredness, to or there We supply things chain in alternative either could if the built is Chinese those we from We're high a Suzhou customers. meet the able for be like it the needs. to can And customers in local of And Chinese

Derik De Bruin

you. Thank

Marc Casper

welcome. You're

Operator

next of of Arias the comes The from question Dan line Stifel.

Dan Arias

for the the of curious your BioPharma year X here. I spending flash if on for just at on you, the Morning, X Obviously, X and guys. what questions end nuances segment. in questions. of [indiscernible] Marc, BioPharma, expected can, On Thanks plenty for I'm that

years? of non-pandemic to sort So similar just do more to less be you it's seen or we've in feel what likely like

Marc Casper

Yes.So Dan, morning. good

pharma In really well. business biotech, of terms performed

holiday. we In after XX% than terms don't a quarter. XX% is assuming every -- the our of across What we the average assuming year-end customer year. We're the right until get with thanksgiving really visibility growth better an -- that the base spend and growth use delivering in this we convention are we're

that's and convention that use us served well. we So

average number. years year from average. that last about think over think or below X how I it. That's above we There's collection was our most has been it average the

Dan Arias

sight line on a got into. dynamic, usually then the decent which And maybe NIH you've funding of pretty

I next just we have the curious that way RPA if that component, are field is one that researchers. allocated head really you looks to into sounds age budget it of hearing given would year, you like academic about be if world, what I'm don't aren't a there. and that's feel that question I just that the you it sort the it don't and anything ask might RPA about out that mean, and come figured, I'd that -- just basic -- I'd but a it age out throw like accessible whether seems on funding like left it I with be want view in As so the of I budget many the want don't there to core have too people on and

Marc Casper

solving [Indiscernible] could is happen our defense technologies I the of the [Indiscernible] researchers (ph) equivalent. prepares -H defense you all things have The spending and defend what concept investments about the really think healthcare is to So, important to a concept anticipate way not Dan, that clearly and is known it now. spending, right? age for opposed country typically as future yet in the have it's you think It's ARFA clear U.S., to right? different for that challenges And invest challenges, to

the that prepare for next longer-term that funding or think I to so challenges. pandemic And future fact we're the going that other will

haven't I is spurt U.S. like I be exactly haven't this. seen that talking that's country that's seen the know done, that the out, not be using available I research. vehicles details think it's it's fantastic How I how only to about of going and to and going allocated, any but great the come will

what going to going like be to reasons So funding I Scientific think one industry this excited the about of we're is that. in and we're our well-positioned is serve forward the incredibly so that

Dan Arias

Okay, I appreciate that. Thanks, Marc.

Marc Casper

welcome. You're

Operator

Your line Kumar Evercore. Vijay comes the next from for question of

Vijay Kumar

from. looks by my the from [Indiscernible] congrats that's XXX. improvement? thanks Would XXX of curious million, by guidance is Marc, and rates up driving Or [Indiscernible] base on coming you guys, on base question. a that fiscal is I'm one the here nice for what a say coming like taking where BioPharma Hey maybe across-the-board? couple strength came

Marc Casper

Vijay, morning. for Thanks good So, question. the

across -- the As entirely our core strength in obviously And that Company into next year. and XXXX, about and saw in I we flowed QX thought strong the the obviously, we parts very and of it actually pharmabiotech, that, very is could driver our -- of obviously saw, the across a performance encouraging different perform that's in we large so still we could business. but

that So the don't you way activities core. reflects to have want of think the I say is we portfolio with about it the strength

Vijay Kumar

in that what guess And this then clarify I vaccine improvement, but think -- the to now vaccine is not I you're more, outlook across is This board. base just, just contribution, includes is saying correct? this the

Stephen Williamson

the next core 'XX. within from $XXX combination because of base $XX XXX the [Indiscernible] so slightly rate therapies. of into million, million The and the of forward less year, is guidance basically that plus being therapy more XXX the includes which carried for clarify, up decreased vaccine tailwind. base strength it's then The all and of back-end business FX, to for that's Just

Vijay Kumar

quick one How just changes then we one on should -- potential think and tax to any the Steve, reform on helpful, That's side. impact Thermo? about in tax

Marc Casper

continue being Company paid if that in potentially in we sure changing any doesn't across given to So forward have for the whatever advocate happen changes it competitive a change raise closely make and we changing with unintended to tax -- tax expect reform to well-run assume with the the the that way. for logical can done Revenue continued that's being companies we've happens reform U.S significant advantage other advantage competitive be a needs aggression. consequences And versus in but with through have tax but let's here, is the for right position guidance or happen. other and DC dynamics world. monitor

So the think best about way to tax that's Company. for the

Vijay Kumar

Thank guys. you,

Marc Casper

Vijay. Thanks,

Operator

of comes from Dan question [Indiscernible] of Brennan line Your next the

Dan Brennan

shout basis question, -- taking for for find Thanks to for anything out hard Thanks point. Great. to positive Marc. It's the the adjusted

is -- first the question on on bio bioproduction. is So just

the remarks. quarter. prepared in did what missed maybe So discuss growth this just I you base the it Can

and COVID So and implied and on color what's in kind XX XQ there. x trends any contribution the of

Marc Casper

Yeah.

for And thanks in the [Indiscernible] Dan, So question. sure. of the for painful is terms

bioproduction, extremely and are that of is In robust well. very opposite exactly doing terms the of that things which

the The to segment, be from about vaccine expecting Outlook, very capitalize it and you saw a in With We level good, Packaging very think a very growth, XX% the well. I Customer clinical revenue. quarter, we're expect this million I'll in and end-market while that you looks we don't in logistics the capabilities, we're and to strong -- good trials. when a of from are demand vaccines meaningful Especially, growth over as discoveries we contribution $XXX excluding little from is the the very that well. would obviously Biotech Biotech and robust. our by well-positioned that cycle strong. seeing interest is When bodes XXXX strong therapy give So we're and had strong well. level. very at to Scientific the bit on. and a pharmaceutical guide as that therapies and of continues coming look growth

attractive position we in as serving you when positions clinical production far. that, the serving have think well. But trials both market of, PPD, about a of revenue biotech. one you think Company pharmaceutical if serving maybe what understanding have obviously production. And is of about think the the and the about serving that things $XX investors upon research have I like don't actually we XXX% the activities and of largest looks billion of that's by half that And close very

into well-positioned deliver we're great to So growth the future.

Dan Brennan

a Great you conservative well thank the the Obviously, set bar markets support outlook. - And that executed discussed typically maybe regarding Thermo at I know has Analyst expected. that the on Day. the reasonably execution a question then X% to at and against certainly than and time feel just outlook for growth you We was in LPN stronger X% follow-up investors from that. high-level

help similarly any -- of should of Thanks guidance? or the can that and conservative Marc. so advice X%, any drivers details X that you us through maybe we having just - So think think is just wondering about

Marc Casper

good. is me smile, which made You

we growth do to is when when exact you number. your We think the the our now. sign yet, haven't appropriate was that in up number set But degree And even ability X look targets. the delivering But able to right growth. over the performance. in and gotten we're not high right? of at on gains as get at on ability do possible are to we we you're we're with into going in which around our time and and increase the X, had the confidence like when X% great X you to that there targets have is we'll and we we you for much end-markets you our X demonstrated to had Which We're appropriate to One period goal delivering an annual the XXXX to the as to the philosophy continued about philosophy can overtime. the ourselves same going the look the the we And great confidence cap to felt right terms, in ability to deliver working deliver I Company. So X that a and of we'll deliver it can X biggest that. X% work to have strength still in have share and at we focus to what's confidence

Dan Brennan

you. Thank

Marc Casper

Dan. Welcome,

Operator

Souda from comes Leerink. Puneet question line the of next Your of

Puneet Souda

Thanks, taking Marc. question. the Thanks for

the know First to - year one, just I voted positively a XX yesterday. by X clarification. olds vaccinations panel were

but know what wondering likely I that's bit just the is and guidance. day, XXXX. in also the if also just on I into fourth to a So wanted that confirm already was this that so And the wanted to not, for confirm. contemplated quarter if later in in little boosters increased I contemplated vaccines

Marc Casper

I customers how done our is Puneet, they it and have orders us. based on therapy, vaccine on our think and So, that dialogue outlook given we've really when with about

going are and the say the give on and to work it we in paperwork Some some the some to going you of on are is of orders. -- work, some XXX%

customer things shots what are about So that adds obviously vaccine and you they children are like the or those mandates it's booster and boosters and activity our saying, things actually children want. less But them get the to or vaccines of in new you with therapies. based volumes you pronouncements demand for We're swings short-term durability so the over largely the capacity don't and operating time. get our on

we thought how about that's So it.

Puneet Souda

biologics question point? further some this You vessels, the last provide Could view production, into capacity me, the onboard, expansions production the that pipette have a site in And Thanks. at Great. open as for is this well that's bioproduction for happened. for tube expansion. capacity larger need coming Switzerland you Keep expansion facility

just So wondering the at overall And your you're customers need point hearing there, demand expanded and the biotherapeutics the this terms from of what C-suites in in cycle of capacity further to from overall. the post-COVID.

Marc Casper

difference. A a But of have, we opportunities in-flight. to the complete have the makes XXXX. into of general, activities anticipated what of our these Obviously, longer-term lot it's If already. are a little XXXX. meet need to roadmap that started largely demand. course projects we we're that goes In going there part Puneet, we are that specific The bit during

our of us we've spot. that puts and position in them, there's to but very to the may meet needs. those. ourselves us list long gotten see You great customers aggressive not future a evaluate commitments been a And We've

about. that's thought So, how we

me let -- So

Puneet Souda

you. thank Great

Marc Casper

strong year. and a another here to thank participating I up with we're to achieve behind and want position excellent it in a great everybody nine months Wrap us, for

for you of everyone. in your we updating Thermo and thank to always, Thanks you As early Scientific Fisher look XXXX. support forward

Operator

This concludes call. conference today's

disconnect. now may You

Thermo Fisher Scientific (TMO) 27 Oct 212021 Q3 Earnings call transcript