bioMérieux S.A. ($BIM)

Welcome to the bioMérieux 2025 Third Quarter Sales Conference Call. The call will be structured in 2 parts. First, a presentation by bioMérieux Group management team, [Operator Instructions]. I will now hand over to Aymeric Fichet, VP, Investor Relations. Please go ahead.

Thank you. Good afternoon, good morning, and thank you for joining us to review the Q1 2026 bioMérieux sales performance. I'm on line with Pierre Boulud, CEO, together with Guillaume Bouhours, CFO. Please note that this conference call will include forward-looking statements that may change or be modified due to uncertain [indiscernible] and risks related to the company's environment. Accordingly, we cannot give any assurance as to whether we will achieve these objectives. I also remind you that today's call is being recorded and that a replay will be available on our website, www.biomerieux-finance.com. I will now hand the call over to Pierre and Guillaume, and then we will open the call to discussion and questions. Pierre?

Thank you, Aymeric. Good day to everyone. So let me start with a few general messages before I say a few words for the guidance. We have dealt with a pretty complicated environment in Q1 with a very weak Q1 respiratory epidemiology versus what we already knew was strong in Q1 2025 and challenging geopolitical environment that has driven softer customer demand, especially for investment decisions. So it has translated into a 3.9% overall sales decline in the quarter. That's in line with the environment that we're describing driven by which respiratory sales minus 23% in respiratory [ panel ] and a general softness in demand, especially for [ instrumentation ] that are posting minus 18% in Q1. Despite these challenging market conditions, we have actually continued to deliver in Q1 2026. If we look at our [ GO 28 ] growth driver, reagent sales, we've grown 6.5% I would like to highlight SPOTFIRE reagent sales growth, plus 41% in Q1 in spite of the very low [indiscernible] season and high single digits plus 8% for industrial application [indiscernible]. We've also continued to deliver from an innovation perspective with the [indiscernible] marking of SPOTFIRE, the [indiscernible] in March that will allow us to launch in Europe in the low plex molecular respiratory market. [ Microplasma ] or SPOTFIRE for the pharma quality control. We find [indiscernible] for SpinChip as forecasted in January. And we've also acquired Accelix that will further support and strengthen the portfolio of solutions that we offer to work [ pharma ] clients. Finally, we are progressing well with the [ vaginitis ] panel, we still expect to submit to the FDA by Q2 2026. So in light of this Q1 performance and the uncertain geopolitical environment and since the last time we talked, we had the Middle East event that [indiscernible] the 28th of February, we have decided to review [indiscernible] 2026 guidance which is now, as you could read, 3% to 5% growth of our sales at constant exchange rates and a profitability improvement on [indiscernible] to 10% at constant exchange rates again. Maybe 3 qualitative elements that I would like that you consider moving forward. First of all, we have a much lower day effect starting in Q2 and for instance, we had a growth last year of the respiratory panel that was 21% in Q1 and then it declined by 6% from Q2 to Q4. So we have a much easier basis for growth. The second element is we are seeing very consistent commercial dynamics, complicated to read the market share, but we are looking at [indiscernible] rates across our franchises. We have very strong and consistent with rate. And finally, we are obviously in this challenging sales environment context, we are looking at strengthening our cost control initiatives and we will continue to deploy and if possible, accelerate the ongoing implementation of the [indiscernible] initiatives. So with this, I turn to Guillaume that will give you more color on the Q1 performance.

Thank you, Pierre. Hello, everyone. So let's look at a bit more details on the Q1 sales. So overall, Q1 sales at EUR 984 million, organic evolution of minus [ EUR 4 million ] and the total decline of minus 10%, including a negative FX of EUR 73 million notably driven on the top line by the weaker U.S. dollar or stronger euro. Just remind you that last year, Q1 dollar was 1.04 against euro against 1.18 in Q1 this year, so quite a change. As said by Pierre, Q1 performance was mainly impacted by the weak respiratory and weak instrument sales on respiratory, so down 23% in Q1 '26 due to epidemiology, which was significantly lower compared to Q1 '25. Q1 '25 was exceptionally high. And when we say lower, there are 2 effects. There is the effect of lower in number of cases, which I think everyone can see in the public stats, and if you look at the CDC stats or others, but beyond the number, there is also lower epidemiology in terms of intensity. What we mean is that we saw from a medical point of view, more flu B circulating, notably which also means less acute cases and less hospitalization overall. Weak instrument sales, minus 18% overall on all [indiscernible] ranges together, again, that we believe is also linked to the geopolitical turmoil driving this, let's say, softness in demand, as Pierre mentioned. Overall, our [ GO 28 ] 4 growth drivers on reagents were up 6.5% on an organic basis. So if we look at them one by one, BIOFIRE non-ARP is up 4% and if we drill down in some of them, not to go through everything, but it's interesting to note that we have on pneumonia, negative evolution, minus 2% despite the fact that there is absolutely no competition. We are the only [ high flex ] player with this panel. So the evolution is, of course, driven by the epidemiology. On the other hand, for example, blood culture, which is also an important panel in our menu, had a strong dynamic, double digit, despite the fact that we have competition on [indiscernible] on the [ high plex ] segment. Also to note on the BIOFIRE that we continue to expand, so we don't give quarterly figure, but we can give a trend, continue to expand the installed base on a net basis over the quarter. And finally, just a note on nonrespiratory panels prices that we had a slight erosion, very similar to last year, about 1.5% in Q1. Now turning to SPOTFIRE. So as Pierre mentioned, I think the key figure, a 31% organic growth on the reagent despite a [ super icon ] base, of course, of epidemiology last year. Just to remind you, last year Q1 but fear was 156% growth. We had overall a solid -- we believe solid instrument installation in the quarter, plus [ 450 ]. And we said solid because actually, when we take one-offs away, it's pretty much in line with the high comp base of Q1 adjusted, I say adjusted for the one-off in Japan. You remember that last year, there was a government subsidy, especially at the early start of the year in Japan for acquisition of point of care or SPOTFIRE and also, we had one very significant strategic deal in the U.S. in Q1 last year. So fitting out those 2, we are pretty much aligned with Q1. Overall, the installed base is now close to 7,000 instruments and looking at a 12-month rolling basis, the installed base is up 55%. So overall SPOTFIRE performance remains driven by the continued expansion, notably in the U.S. and in Japan. Turning to microbiology, which is 1/3 of the GO 28. Overall, 2% growth, which for us is in line with our expectations, internal for Q1 for reagents. The range overall was still impacted by China. China microbiology was down 7%, but you remember from our previous discussions on China, it's approximately in line with our mid-single-digit decline expectations for China [indiscernible] in '26 and also instruments on microbiology instrument sales were down 12%. When we exclude instruments in China, microbiology is up 4% on regions with notably a strong dynamic on the blood culture bottles. Industry applications, the fourth growth driver of GO 28 at plus 5% organic for the quarter, also impacted by, again, the softness and decline on instruments but we believe a good performance on reagents, up 8%, as Pierre mentioned, on our pharma and food customers. Finally, not in the GO•28 drivers, but to mention [ Immunoassays ], as you could read, a negative performance, but I would say, in line with the guidance. Some elements on the new sales guidance that Pierre mentioned, if we think about it by range, it's interesting to, let's say, highlight for you that we see actually no change on microbiology, 3% to 5%. No change on our prospects for the year on industry applications, 7% to 9%. No change on [ immunos ], still in the range that we have given of minus 5% to 0%. Of course, we have a major adjustment and it's most on what is coming from respiratory that impacts BIOFIRE, which now we see more around minus 8% to minus 3%. Second, of course, respiratory impact is on SPOTFIRE, but now we see more around plus 40%, around plus 40%. And we have a slight change on the overall non-ARP growth which we would see around 8% instead of the previously mentioned around [ 10 ]. Before moving to the Q&A, just an update on 2 topics, Middle East events, of course, their impact on bioMérieux and foreign exchange impact. So on Middle East, bioMérieux has mainly 2 exposures, of course, one on transportation costs and the impact of the oil prices, be it our own transportation, of course, the supplier of transportation and the way they factor that in their prices. The impact on the transportation, we estimate is close to EUR 1 million per month at the current level. And if it is -- it were to be sustained. We have a second impact, which is, let's say, could be significant on plastics. A lot of our -- so plastics is impacted by oil prices, of course, it's derivatives. And -- but most of our instruments and reagents contain, let's say, plastic raw materials in one way or another. [ Resin ] prices are already up, but at this stage, their impact, if any, would be deferred thanks to the level of inventory that we hold. On FX, as you've seen, we have confirmed the guidance of about minus EUR 50 million to minus EUR 60 million negative impact. Unfortunately, the euro was, let's say, strong up to February, decrease in March, which was probably better for us but actually rebounded with a strong position exactly the same as early in the year in the last few weeks. And with this, I propose we move to the Q&A session.

[Operator Instructions] The next question comes from Odysseas Manesiotis from BNP Paribas.

Firstly, on reiterating the microbiology guide at 3% to 5% for the full year. Could you help us understand what will help you accelerate growth materially from Q1? I understand [ what ] there's a bunch of the competitive instrument for what's quite a material part of your franchise here. Could you also explain whether you have any concern on the back of that launch? And my second question on the FX. So the others as in the other currency portion in terms of the headwind seems higher than previous years, and you've had a few favorable moves on the dollar, for example, since the start of the year, as you noted. Could you explain to us what [ key currencies ] these others contained that have been particularly a headwind for you this year?

[indiscernible] I can start with the micro question, and Guillaume will follow up on the FX. So microbiology, we are actually very confident with the guidance. And as [indiscernible], we haven't changed it. To be transparent with you actually reagent sales performance in [indiscernible] is very aligned with what we plan to do in Q1. There was a little bit of impact in China last year. There is a little bit of [ phasing ] effect. So we are seeing very confident we can achieve it, and that's the reason why we didn't change. With regards to the launch of a new system by [indiscernible]. As you know, it was announced actually a long time ago. It was -- it was well embedded into our plan. And we -- no reason for us to change anything with regards to -- we believe still [ with to ] have very competitive solutions, sort of time to reserve auto automation for getting the bottle [indiscernible] -- yes, it's no change with regards to microbiology for us for the rest of the year.

Coming back to FX. So definitely worth looking at it together in more detail. So first on the currencies. First, on the U.S. dollar, it's important to remember, it was very volatile last year. that Q1 last year had a strong U.S. dollar before U.S. dollar weakened very significantly from, I think, end of March. So the first effect when we compare year-on-year in Q1 and for the year. Then the major impacts on our EBIT year-on-year on currencies like the yen -- the yen continues to be super weak compared to euro. The Indian rupee, which is a significant country for us, also a pretty significant change about 10% from last year. And then we have the high inflation countries, as usual, Turkey and Argentina, who are the next ones in terms of impact.

The next question comes from Kavya Deshpande from UBS.

Pierre I have 2, please, both on the guidance approach. I mean just to start with, not to state the obvious, but you gave us guidance at the end of February, and you've been speaking to the market through March. But just a few weeks later, the new guidance is obviously very, very different and actually much lower than Q1 performance alone would have implied. So my first question is -- and you've already sort of done this, but would you be able to describe please in more detail as to the key things that have changed in such a short amount of time that made you revisit your full year assumptions beyond just the Q1 performance? And then my second question is, if there has been such an extreme change, it might suggest that visibility isn't great right now. So how risk-adjusted is this new guidance in your view? Why is this now the right level?

Thank you, Katie. Let me start with this. So we have -- I mean when we share the guidance for the year, we have now 2 more months and we had 1 month of sales, and we have 2 more months of visibility. There are 2 elements that I -- that led us to review the guidance downwards. The first one is the respiratory season has been -- we were expecting a weak restoration. It's been very weak. And unfortunately, you only know it at the end of the respiratory season, right? So we kind of witnessed that March was better versus the beginning of the year. The second element is we've seen a very slow market in demand for instruments at the beginning of the year and the recent Middle East event that started on the 28th of February have actually further slowed down investment decisions that were made by our clients. So taking that into account and out of sake of transparency right for the market, we felt that achieving the guidance the top end of the guidance now at the end of the previous -- the low end of the previous guidance, and we feel it's a better recognition of what's happening. Very recently, in the U.S., the President announced that you wanted to increase the military spend by [ 50 % ] and reduce [ LCR ] costs. I mean these kind of things have an impact, of course, on sales, and we wanted to acknowledge that in the context, as you mentioned, of high volatility, right? So we believe that with this new guidance, we actually better integrate the uncertainty that is happening in the market that we [indiscernible].

And then on the risk adjusted and the visibility, definitely, the environment is not simple. That's why we highlighted the external factors. But we believe that we have the right, let's say, range or risk-adjusted risk adjustments on the upside or downside, but on the top line, 3% to 5%, albeit on the [indiscernible]. Knowing that, of course, on the operating margin, it's also up to us to trigger the different initiatives that Pierre mentioned, the ones that were existing on GO•28 as well as the additional one that we will launch.

Appreciate that. If I could squeeze one more actually, just on the factoring in of the respiratory season being worse than you expected, so the new BIOFIRE RP guidance, the bottom end is gone to minus 8%, if I heard right, from minus 3 previously. But obviously, Q1 alone wouldn't have justified that and the CDC data hasn't halved dramatically since you did the old guide. So is the right way to understand this is just that you're deciding to have more contingency when you think about the Q4 flu season, obviously, it's very hard to model, and we don't have any data. But is this basically a more prudent approach than what you've taken a few weeks ago? And then related to that, in terms of how you're looking at China, your China guidance for declining mid-single digits, that was a buffer guidance, as you said earlier, it was sort of a contingency guidance. Are you still happy with the prudence with which you've guided on that business?

Just on our Q2 rephrase, maybe I was not clear. inside our new guidance, it's a range of [ minus 8 to minus 3 million]. So it's around minus [ EUR 5 million ]. Of course, you should take the adjusted the downside. And of course, as usual, it's an uncertainty on -- especially in Q4. As usual, so that's important to restate on ARP. And just you mentioned, I just want to reexplain because you just referred to the stats. Of course, the starts are very key. The starts are on influenza like illness, so the different types of respiratory topics. What we see specifically this year on top of [indiscernible], is less acute cases. And you know that our products are really for hospital acute cases, mainly. And again, medically, we understand that it's less flu A, more full both kind of effects, but definitely less cases and less accurate cases in those cases.

And maybe to answer the China question. We actually have -- we haven't changed either a forecast for China. What we are seeing is actually consistent with what we expect mid-single-digit decline [indiscernible] that one is very consistent with that. So we don't -- I mean there is an element of volatility in China. But as we speak, what we're seeing is very consistent with our initial guidance for China. No specific buffer or no specific [indiscernible] time.

The next question comes from Aisyah Noor from Morgan Stanley.

My first one is on the instrument weakness where you called out 18% decline for the quarter. So by my math, your instrument sales is only about 10% of group sales, which means that, that $20 million or so shortfall should have been entirely driven by the SPOTFIRE instrument decline. Can you confirm if my math is right and actually ex SPOTFIRE, the instrument growth is more like flattish? Or are there other segments where you also saw a decline in instruments? The second question on the GI panel, which I noticed you didn't comment on in the press release for nonrespiratory. Can you confirm that GI panels were also growing double digits? Or is it the case you might have seen a slowdown post [ Cepheid's ] GI panel launch this quarter?

So on instrument weakness, just to recap. No, it's not just SPOTFIRE, especially spottier in our main market. Of course, the U.S., it's about placement. You're right, of course, there's the base effect of the government funding in Japan last year, which were sales of SPOTFIRE in Japan last year. But even when we exclude that, it's still a very significant double-digit decline in instrument sales. And this is what I mentioned on microbiology instrument sales as well as industrial applications, instrument sales that are both significantly down.

And with regards to [ GI ] banner, competition wise is a little bit different because it's a [ mid-plex ] panel. So it's more competing with lower kind of [indiscernible] panel. So a perfect example in terms of competition for us. That's the reason why we didn't take it. Yes, that's the safe impact at this stage is that [indiscernible].

Okay. Okay. And if I may just follow up, and then I wanted to push a little bit on the guidance approach. And this is more specifically on the midterm guidance approach. I think to say the market has been very volatile, and we've seen some challenges that are quite unprecedented for you and you've had to lower your guidance times now in the last 12 months. So I appreciate it's only the first quarter of the year. But I guess what triggers or deterioration would you need to see for you to think the GO•28 targets might need to be revisited, given that the lower end of your new guidance could make it a bit harder to achieve?

Yes. Thank you for the question. So first of all, what we are seeing, which is very unchanged is a good market share dynamics. We're seeing it in microbiology, be it with BIOFIRE, SPOTFIRE, win rates, capacity to take share or to protect share in the case of BIOFIRE is still very on it was confirmed in 2025 and indeed change overnight between the 31st of December and the first of January. So it's still there, and we're seeing that very positively. What we're seeing deteriorating is the market evolution, be it reparatory season, the slowdown of the IVD market. it was very fighting in 2025. And again, in 2026, it's very [indiscernible], -- so it's -- the challenge for us is in a context where we're seeing a commercial performance that is very strong to adjust to market evolution where cost of IVD and we're seeing it from other players are actually being challenged by the customers, and they are really looking hard at controlling better costs. So the third element is we are seeing to your point, the very -- the high range of the guidance, 5% sales growth, 10% EBIT profitability improvement, very much in line with our long-term good rate target. So we confirm the guidance for 2028, and this is where we are. Even though we acknowledge that 2026 is a tougher year, and we've seen a bit of a slowdown of the market evolution starting in 2025 to be honest, but continued in 2026.

The next question comes from Jan Koch from Deutsche Bank.

Firstly, I would like to better understand the impact of the Middle East conflict on your instrument business, especially for microbiology and industrial applications. How did instrument sales evolve throughout Q1, specifically, where January and February significantly better than March. And have you observed any changes or trends in instrument sales in April? And then secondly, on SPOTFIRE, one of your competitors has partnered with the same distributor. Does this have any implications for your future placement expectations?

So let me start with the second question, [indiscernible] -- the short answer to your question is no. [indiscernible] with a main distributor only distributor actually for SPOTFIRE in the U.S., it is also distributing every other diagnostic solutions from main competitor. So we don't see any change in terms of margins. And to be honest like microbiology or BIOFIRE, we have still a relatively low market share. So the competitive environment is and [indiscernible] already significant competitors in the market with different players. So we are not seeing a significant change in the competitive dynamics, and we've not seen that either in Q1 2026. With regards to -- in Middle East impact, maybe you can -- in terms of sales -- yes.

So again, it's around 2% of the total sales, it's our view that, again, -- just to recap, in our minus 18%, the [ array ] of instrument sales in Q1. There is a share that was expected actually within to the one-off of very high SPOTFIRE sales in Japan last year, et cetera. Excluding that, it's still double-digit instrument sales. So that's what we are talking about, that we see notably on the microbiology and industry applications. And again, it's across the board. We see -- and we get direct feedback so really a wait and see mode from customers on the -- in this new environment, is it the right time to launch a reorganization of the lab rethinking of their [indiscernible] base, which sometimes, by the way, can be positive for us because it means they actually continue with what they have, which, of course, with our high market share, it's always nice, but also the renewal are opportunities for equipment sales and sometimes, of course, competitive wins. So that's what we saw. And no, we have not seen any changes throughout April at this stage.

And then one follow-up, if I may. So did the instrument business also declined in double digits in January and February prior to the war starting?

But we don't give these details. But again, we see that linked to the war and overall the geopolitical environment, which -- because there is a war, but there is also -- I think Pierre alluded to it, the overall and that was before it started between Iran and there is also the global shift on the government's focus on defense spend versus health care and in different ways in different countries and [indiscernible] pressure on health care spend, which means for the hospitals, our key end customers additional pressure.

The next question comes from the Natalia Webster from RBC.

I have a couple, please. Firstly, just a follow-up on the instrument weakness across the various segments. Is this something you're assuming will continue for the remainder of the year within your guidance? And are you then assuming this will improve from 2027 to hit your GO•28 guidance? I appreciate the geopolitical situation and the one-offs with SPOTFIRE, but would appreciate your comments on that. Secondly, on BIOFIRE Respiratory, you commented on the non-ARP erosion. Is your pricing ratio on the RP side still fairly limited here? And then thirdly, on the CBIT guidance range of 0% to 10%. This is fairly wide and appreciate the different levels in revenues. But are you able to comment on the key levers of reaching the lower to high end of this range and where the main cost flexibility sits?

Well, maybe I'll start with a comment on the instrument phasing. Guillaume can take BIOFIRE pricing, and I take over for [indiscernible]. So no, we are seeing -- the slowdown that we're seeing for instruments, I mean we have -- in our guidance, we expect that it will not slow down for either [indiscernible] and which would not work. We -- a few elements that make us think that it will get better as we move forward. So we're seeing in the guidance, we are seeing an opportunity for really coming back to a better level of sales for instruments, which has an impact on the total sales that also an impact for future of the agencies, right? So we have -- we are comfortable with the guidance that we gave with regards to instruments, we've kind of included the hit that we saw for the first 2 months of the year.

On [indiscernible] pricing, Q1 was -- we are around minus 3%, slightly lower than that actually slightly less than that, 3% price [indiscernible] churn, which is a small acceleration compared to last year. We definitely adjust on -- yes, where we need -- we feel we need to in a clearer direction of customer retention. So nothing dramatic, but the same kind of low single-digit level.

And your final question was on [ CBIT ] new guidance that we gave between [ 0 and 10% ]. So of course, it's impacted by the developed sales, right, because we have volume of fixed costs. So when you lose sales when you get to 3%, it's -- we have significantly less on margins and we get to 5%. So that explains a significant share of EBIT. Having said that, as you know, with the good plan and [indiscernible], we have actually been able to deliver above targets, both in 2024 and in 2025. So in this more challenging context from a sales perspective, of course, working diligently on executing the good range at least for 2026 and even accelerating them in that complicated context, and move over, given the market softness that we are experiencing, we are launching new initiatives, additional initiatives, be it on spend, be it on headcount to be able to control the cost evolution and make sure that we are capable to generate profitable growth, even if the sales growth is a little bit slower than what we expected.

Just a quick follow-up on the BIOFIRE [ RP ] erosion. Are you assuming this to accelerate into '27 and 2028 within your GO•28 guidance given further competitive pressures?

No, it's a kind of level that we feel is a more, let's say, normal recurring level of pressure or said otherwise, of adjustments that we are ready to take -- it's been in the same range for the last 2 years. Actually, it's around 2%. So that's the kind of expectation that we have moving forward.

The next question comes from Charles Pitman from Barclays.

A couple from me, please, on your kind of regional impact. Just going back to this conversation around Middle East sensitivity, than kind of clarifying the exposure to transportation and oil costs. But just when we're trying to understand a bit of the sensitivity for plastic price movements. I'm just wondering if you can give us an idea of kind of how many months of inventory you hold like at what point could this start to become a problem for your underlying costs and are you able to give us any indication of the level of COGS that plastics going to represent so that we can try and run that sensitivity? Then the other kind of regional question I've got is on China. Just noting some of your peers highlighting the potential expansion of [ VBP ] programs. I'm wondering if you could just comment on your exposure there for endurance. And then just lastly, if you could just speak a little bit around your outlook for instruments this year. I'm just wondering if you are able to guide at all on whether or not you expect SPOTFIRE new installations to decline year-on-year as a result of this new hesitancy of customers.

So on Middle East sensitivities, thank you. So you've got to try definitely, we have a [indiscernible] plastic price impact. Again, we hold several months, actually several quarters of inventory and some -- sometimes our suppliers all the raw material of inventory of the resin price. So the impact would be delayed. And again, the -- I would say, when we say in the guidance, excluding [ progated ] Middle East impact, it's the fact that first, the level of the impact will be the oil price in 2 weeks or in 2 months, I mean, we don't know for down and also the duration. As we all know, nobody has a clue if it's going to last for 6 months or another 3 weeks, the war. So we kind of let's exclude kind of the second half. But just to still give you an idea of what it means if we were to have exactly the same level of oil price and plastic or up to the end of the year, impact of transportation and resin, it would be like EUR 5 million, EUR 10 million on top, which again doesn't mean much it will go up or down, it will stop at some point. But if you just draw the line, it would be EUR 5 million, EUR 10 million impact additional in H2, just to give an idea. China, so maybe I can share on China, there is indeed a new regulation that is organizing the billing of the hospitals to healthcare system for diagnostics which could translate into a potential revision of prices at least for some provinces. I think it's still a draft this stage. What we've seen on other side, as you know, in China, 90% of our sales in microbiology. This new draft pricing organization or billing organization for the hospitals is actually not unfavorable for microbiologic testing. As you know, microbes is still relatively not as developed in China as it is in other countries. The billing mechanism actually differentiate in microbiology, culture identification and AST antibiogram. So we see it as a pretty sophisticated, even favorable way to -- for the hospitals to build microbiolites. So it's definitely not a headwind for us. We obviously are watching the evolution. Again, it still [indiscernible]. But for China, not -- we don't see it as a negative for us. And the portfolio [indiscernible], we usually don't give guidance on installations. And on top of that, you have seasonality effects. As you know, usually, Q2 is lower and get bigger in Q3 and Q4. We have also the impact that Guillaume was describing. Sometimes even for [indiscernible] of care, we signed big deals like IDNs [indiscernible], their point of care testing and that's what we did in Q1 last year. So this kind of deal can happen. So it really makes a phasing of new instruments, installations very complicated to give to the market.

The next question comes from Anna Ractliffe from BofA.

I wanted to ask a follow-up on what [ ICER ] was kind of getting out on the GO•28 targets, but more specifically, on the SPOTFIRE EUR 450 million target. I guess what is underpinning your confidence there that, that's sufficiently risk adjusted? And if instrument placements remain a bit slower at this pace? How much of that is a risk to the target? And then on the 2026 0% to 10% [ CBIC ] growth guidance, can you just walk us through a little bit more details on what gets us to the high end versus the low end for this year?

So I can give it a start. So GO•28 targets, especially for SPOTFIRE, EUR 450 million. We are -- we are very comfortable with where we are, be it as Guillaume was saying, we already at 7,000 units installed now for SPOTFIRE. We are growing our reagents by in the context where with the weaker reservatory season has declined sales [indiscernible] at 20%. So there is a huge impact of the respiratory season that makes the extrapolation of Q1 really impossible for EUR 450 million. And as I said, we are working diligently and doing a lot of good progress on [indiscernible] the launch for new balances. So all of this together really makes us as confident as we were with the EUR 450 million target for 2028, no change in that regard. With regards to 0% to 10% EBIT, I tried to give a little bit of perspective before it's driven by sales in the gross margin and is -- that's the biggest impact. And what we're working on is to make sure that we are launching, as we speak, additional productivity measures to be able to compensate the sales decline and still be able to generate profitable sales growth in a market that has proven to be very slow in Q1. So -- and it goes across the bar. So I don't think there is not the right forum to discuss the details of the productivity we are taking, but we are definitely active to adjust the cost base to this new sales and top line.

Okay. So we have some online questions. The first one from Christophe Ganet from ODDO. So 3 questions. The first one is on BIOFIRE [indiscernible] a bit low compared to your guidance. Is there an issue of commercial execution or any loss of sales reps, an issue about competition, an issue about real commercial potential assessment, price for [ pondent ] in order were in the mix? Second question is on SPOTFIRE, which sold below expectations, I think, in terms of a -- can we have the level of consumption per machine for fire or any reason explaining those [ 450 ] systems? And the third question is the proportion of commodities and noncommodity set [indiscernible] your view on the evolution plus any update on [indiscernible].

I'll start with [indiscernible], the first question. So I mean, the short answer is we -- honestly, we don't see, especially in this market rate, which is not shifting that much. We are very strong commercial execution in Q4 2025, growing above 10% actually in Q4. As Guillaume highlighted, Pneumonia Panel, where we have no competition, we declined by 2%. It was one of the high growth drivers that we have. So yes, of course, we are very vigilant, and we are looking carefully by country on cross-selling, win rate and so on and so forth, honestly, we are not seeing any description with regards to the competition. So we are disappointed with the number, of course, and we see it as mostly explained by epidemiology and the very slow market conditions. The second question that relates to SPOTFIRE. So we don't give the level of consumption perimeter a variety of presents. It depends very much on the setting, if they're in point-of-care setting, in hospital, triage setting. It also depends on consumption, of course, with respiratory season. And just to explain that we are not disappointed. I understand the consensus was [ above ] the EUR 450 million. But actually, there might be kind of, I don't know, special perception effect because our Q1 '25 was very strong. Q1 '25 included, again, Japan, again, very strong additional SPOTFIRE based on government. It also included a one-off pretty significant U.S. deal, and there's not that kind of large size deals every quarter. When we look ourselves at Q1 '24, Q1 '25, adjusted and actually [indiscernible] is very much line. And Q1 is not a very strong quarter by itself. It could be if epitomology is strong, some customer actually had capacity during the quarter, which, of course, did not happen this year, obviously. So yes, I think that's analysis of view of the day -- for us, and I understand the read of the market, but for us, not a disappointment. It's -- we know Q4 is actually the highest month in terms of installations. It goes down in -- it goes on in Q1, it goes on in Q2. And what we're seeing is dynamics beyond those ones that are [indiscernible]. For [indiscernible], what I can share is we are still seeing a continued decline of PCT. And the other elements on TB test is we are finalizing actually the clinker trial for the U.S. on the latent TB, and we're expecting a filing very soon now. So to be able to launch somewhere in 2027.

Okay. One question from Philip on JPMorgan. You pulled out instrument sales down 18% in Q1. Can you remind us of how instrument sales were trending prior to the start of the Middle East conflict?

I think you may want [indiscernible] about it. But just coming back to the 2025 performance in instrument, the full year was plus 9%, excluding SPOTFIRE instruments. So we had a pretty strong dynamic in that we've not seen in Q1 '26 and especially since the start of the Middle East conflict.

So what do we have -- yes, question why the 5% decline in [indiscernible], I think mentioned it here. No, we are pretty -- we are done -- if we have covered most of the --

Yes, we have covered most of the questions was a live question -- thanks a lot. And the next communication on our side will be on July 28 for the H1 2026 performance it's a bit new. We used to report after the summer break. Now it's going to be before the summer break. Thank you, everyone. Bye-bye. Have a good day.

The host has ended this call. Goodbye.