Eurofins Scientific SE (ERF) Earnings Call Transcript & Summary

Welcome to the Eurofins Scientific Full Year 2022 Results Publication. [Operator Instructions] During this call, Eurofins' management may make forward-looking statements, including, but not limited to, statements with respect to outlook and the related assumptions. Management will also discuss alternative performance measures such as organic growth, which are defined in the footnotes of our press release. Actual results may differ materially from objectives discussed. Risks, uncertainties and -- that may affect European's future results include, but are not limited to, those described in the Risk Factors section of Eurofins' annual reports. Please also read the disclaimer on Page 2 of this presentation, which is subject to this call and Q&A sessions that are made. I will now hand over to Eurofins' European's CEO, Gilles Martin. Please go ahead with your meeting.

Hello, everybody, and thank you for joining our annual results call. I will start with Slide 5. Actually, while we go to Slide 5, we actually have 2 announcements today. The first announcement is actually maybe more important than our annual results is that we received the OTC clearance for our At Home test for COVID-19 by the FDA on Friday night. It is an important breakthrough because there are very few such tests available, I think maybe one I heard of mainly, and it will enable us to distribute these tests very widely. Patients do not need a prescription to buy it. They can just go to a shop or a pharmacy and biotest and have it at home. And whenever needed, they don't have to go and stand in line or take risk to a testing station. They can just get tested themselves, sample themselves and then send it back by FedEx, and the next day get the result. It's a major breakthrough, and it could be a very important use also in Europe for mass testing because mass testing is one proven way to really almost eradicate the virus in one city or one region. The biggest bottleneck to testing has always been something, getting people to go to a station where they are sampled and with the possibility of having self-testing that gives almost limitless capacity for testing. In the meantime, our labs and other labs have created more than sufficient capacity, and there are modalities to pull samples to even multiply by 5 or 10 capacity. And those PCR tests are very sensitive. Our PCR test was actually ranked with the FDA comparator method as the most sensitive of 117 tests that were cleared by the FDA. So this is a very useful tool. Of course, I wish it would have been available earlier in the pandemic. It could have helped many countries to significantly reduce the spread of the pandemic. But there are still regions of the world where the virus is spreading, spreading fast and number of cases increasing, especially due to the new variants, which are more infective. And therefore, this tool, while it comes late, is a very, very significant breakthrough in our opinion. And we're working to get it approved in as many European countries as possible where it really would be of significant help. So going back to Page 5. Yes, Eurofins is really a purpose-led company. We have been very successful over the last 30 years. And many of us here in the company could have retired long ago, if we're not motivated by the contribution we can make by our work in life to the positively influencing the life, the health of everybody and protecting our environment. And we have shown we're very proud to have shown in 2020 how much our teams could contribute in the context of a pandemic that was severely affecting the lives of so many others. On Page 6, we described the key aspects of the year for us. And the first thing is, once again, Eurofins has shown that our choice of markets and our policy of investing for the long-term makes our business extremely resilient. As you may recall, in 2009 during the last big global economic crisis, our sales continued to grow. Well, that was the case again last year for our core business. I'm not talking of COVID test. Outside all the COVID reagents and tests, we still have positive organic growth in 2020. And of course, our core business did not grow the 5% that we would have hoped. Some of its parts were affected, but still other parts performed so well that, overall, we had positive organic growth last year of our core business outside of COVID testing and reagents. And this shows our resilience in the markets we are serving and the activities of Eurofins are. What we also showed is that the way we set up our company with a network of independent companies rather than a centralistic group made us extremely agile, and this agility, this level of entrepreneurship throughout our organization that enabled us to develop a range of response to COVID that is equal to none. I don't know any company, and some are much bigger than Eurofins that has developed the same range of solutions to fight COVID-19, albeit on the range of tests for patients or testing the environment, offering solution to help people return to their factories and to their offices safely. This has been the work of our team, and that sector has been truly outstanding last year. So you've heard of all our different product introductions last year. The most recent ones with self-testing, also self-testing modalities that can be done in some regions where they are authorized in saliva, on gargling fluids, which are very good for children. It's very difficult to put a swab in a child's nose. It can be stressful. It can be painful. We have now testing modalities that are well-validated on gargling solutions that people can also do themselves, as I discussed. We have a range of antibodies testing kits, and the latest one are quantitative. So they can be used to verify the effectiveness of vaccine. They can be used to verify if somebody has had the disease before. So we don't -- maybe they are not given the vaccine right now or they could have even bigger adverse effects. Over time, they'll be able to tell what's the level of antibodies and help maybe in the timing of booster shots, et cetera. We, of course, have the rapid antigen test. We don't think so much of the rapid antigen test because they miss between 1/3 and 50% of the positives. But still, we have developed that. We have that in our portfolio. And of course, we also have a whole range of tests that are -- that will prove very useful when we all start to come back to our offices and our factories and start to travel and go to events. In our SAFER@WORK program, where we have almost 3,000 contracts signed or about to be signed, to help make sure events are safe, travel is safe and that's by testing people, but testing also the environment. We have our Eurofins' COVID-19 Sentinel program that can be used, for example, on wastewater to detect recurrence of the virus or new viruses, emergence of new viruses without testing people. So a really broad range of capabilities, and each of them will be used in the various phases of the recovery that is going to follow COVID. But it's not only about COVID, we also continue to work very hard throughout 2020 to build out our network, to finalize our 5-year plan, to build those large hub-and-spoke laboratory networks in each country, to be extremely effective, fast and cost-effective. We continued our investment to be a fully digital company, which, of course, helped us to go through this crisis. It helped us to be some of the first to have apps where patients can order their test and get their results in real time, et cetera. And we've done a little bit of M&A last year. Of course, M&A was not the priority. And it's always difficult to know what you are buying, if you cannot visit the companies, do on-site audit, multiple meetings with people. So that's why it was not a priority in 2020, and it will not be this year. And maybe in 2022, we have returned to our normal target of adding about EUR 200 million from M&A per year. On Page 7, you have an overview of our financial indicators. And I think the main one to note is that, of course, we've had outstanding growth and very good margins, very good cash flow. The fact that we are vertically integrated, we produce our own reagents, produce our own markets. It has helped us to, of course, improve our margins. But more importantly, we have brought back our leverage to a very modest level, actually to the lower point of the range we like to be. We like to be in the range 1.5 to 2.5 debt-to-EBITDA, and we're at 1.6, 3 years ahead of schedule, which gives us all our strategic freedom. And we've been listening to critics, and there were a lot of bad face critics by short sellers for the last 2 or 3 years about Eurofins. There was one point where some of our investors -- legitimate investors thought maybe we could take less risk that was on leverage. We thought our leverage was always in the normal range. But at some time, of course, it can go slightly higher, around 3.5. But our intention was always to go back to that range, 1.5 to 2.5, and we're now already at the bottom of the range. So I hope this will remove the last worry regarding Eurofins' balance sheet that some people might have happened. I will not say more about the numbers, but Laurent Lebras, our CFO, will comment on the figures over the next few slides.

Thank you, Gilles, and good afternoon. It's my pleasure to present to you our 2020 financial results. Starting on Page 9. As you can see, we have posted a very strong set of results across most indicators. We had a very strong revenue growth over 19%, both organically and in reported scope, which enabled us to achieve EUR 5.4 billion of revenues. This strong growth in revenues translated in a very strong improvement of our EBITDA. We reached an EBITDA margin of 26% on adjusted level, basically equivalent to EUR 1.4 billion of adjusted EBITDA. And it also translated down to the net profit level where, for the first time, we posted more than EUR 500 million of net profit in reported scope and EUR 700 million of net profit in adjusted scope. All in all, enabling us to post an adjusted basic earnings per share of EUR 3.63, more than double of what it was last year. Moving to Page 10. You can see from our revenue bridge that we did have a negative FX impact of about EUR 60 million last year and a small contribution from M&A of about EUR 46 million, meaning that our growth last year was exclusively organic. We estimate the net impact of the COVID pandemic to be of about EUR 550 million. And what is more important to note is that our organic growth, excluding COVID activities, was positive for the year and back to 5% of organic growth reason in the last quarter of the year. So overall, we posted revenues of EUR 5.4 billion, way above our initial objective of EUR 4 billion start in 2015 or even the one upgraded in 2018 to EUR 5 billion. If we move to Page 11, this strong revenue growth also converted into strong cash flow generation. We posted a record free cash flow to the firm of EUR 873 million, above our last objective of EUR 700 million, thanks to well-controlled net working capital, well-controlled CapEx and also a strong contribution from our operations. Overall, we finished the year with a very firm liquidity position with about EUR 900 million of cash on our balance sheet. Moving to Page 12. If we zoom on net working capital, the net working capital intensity was significantly improved. It decreased to 4.5% of revenue, in line with our latest objectives. Thanks to better DSOs, which were improved at 52 days. And despite the fact that we had to increase inventory and we had a slight deterioration of our DPOs in relation to our COVID activities, which require the buildup of safety stocks and the advanced payment terms for critical supply at some times. Moving to Page 13, if we zoom on net CapEx spend. We spent about EUR 350 million last year, slightly above our objective in relation with basically the rapid COVID capacity buildup. And if we look at the ratio to revenues, it was only up 6.4%, a great improvement versus the year before, also in line with the last completion phase of our infrastructure program. If we look at the breakdown of this CapEx spend by nature, we spend about 40% of it on lab buildings and leasehold improvements, about 35% on lab equipment and 20% on IT spend. All this translated in a very much improved ROCE on Slide 14. Despite this very long infrastructure program that we have started about 5 years ago, we were able to bring the ROCE back in the mid-term level. In 2020, we posted a ROCE of 15.9%, well above our internal hurdle rate of 12%. And if you look at ROCE, excluding goodwill, we are also back in the 50%-plus territory levels, which should increase and continue to increase in the future years. Moving to Slide 15. We have basically been able to deleverage significantly from 3.2 to 1.6 turns of net debt-to-EBITDA. This is thanks to the record EBITDA, the record cash flow, but also to the equity raise that we did last summer. Overall, we were able to pay back all our credit lines to pay all our short-term borrowings and also to anticipate the refinancing of some senior debt instruments, giving us now a very reasonable maturity profile for that as we don't have any reimbursement scheduled before 2022. And to conclude, on Page 16, we intend to propose at the next AGM next month a dividend payment of EUR 0.60 (sic) [ EUR 0.68 ] per share, which would be equivalent to 25% of distribution of our net profit. Thank you for your attention. And now I'll pass back the mic to Gilles for the operational review and the outlook section.

Thank you. So I will go to Page 18. And of course, you might wonder how can Eurofins managed to grow on average 30% per annum for 20 years and -- more than 20 years, actually, we did that also before we were public, and to create a 29% value every year for 30 years or 20 years. I think the main reason is innovation, and our company has always been focused on innovation. We are seen or compared to other testing companies or CROs. But reality, we are a very innovative life science company. And that applies to all the testing methods that we developed and also how we work to improve our processes every year to make them fully digital to use automation, to use artificial intelligence and always striving to combine those tools to offer new solutions. If you were to come in one of our COVID testing centers, you'd see how smooth and slick and digital it is. Patient register online, they come to the test center, it takes them 1 minute to be tested maximum. Next day, they get their results on their app. And this was also done in record time. And all our labs were interconnected worldwide. We can switch samples, send them to many other labs. We have like 15 labs in the United States. We can load balance. We can do all this because of all our investments we did in digitalization, for example. If I move to Page 19, we've already talked a lot about our COVID response. I think I'll go back to that on the questions. But our investments over the year in digitalization and innovation as well as our entrepreneurial model is what enabled us to develop so far in this response. And on Page 20, you will see more examples. I think the breakthrough we had Friday to get OTC clearance for our test in the U.S. is a major breakthrough to get people to test themselves. And the COVID Sentinel will also, I think, in the years to come, prove very useful in developing solutions together with many governments and partners around the world to prevent recurrence of either this epidemic with new variants or to prevent new epidemics or see them coming earlier. The variance actually are still a concern, and there are discussions in many countries. Nobody really knows our vaccines will behave or people who have vaccinated where they are confronted with the new variants, how they will react. So we were also the first to develop a solution in Europe to detect very fast, those variants, by a dedicated real-time PCR solution. As opposed to sequencing, we, of course, are one of the largest suppliers of sequencing services in Europe that are used to identify the variants, but they are too slow. And we developed also a very fast method for that. And we -- as part of our SAFER@WORK program on Page 21, we described some of the strategies we've been offering to clients to make it cost-effective and efficient, to make sure their sites are free of COVID. On Page 22, something maybe of more interest for analysts. We try to compare with other players in the clinical diagnostic services industry how much test did we do. And you might remember that Eurofins is a small clinical diagnostics company. Our revenues in clinical diagnostic services in 2019 were about $1 billion compared to something like $7 billion for LabCorp and Quest, 3 or plus more for Sonic, 2.5 for SYNLAB, maybe 1 or 1.5 for Unilabs. So we're a tiny clinical diagnostic player. So we try to find out how much test we all did. It's not easy because it's not exactly published by all companies exactly in the same way. But we try to find, and we found some numbers, like Quest and LabCorp probably did something like 30 million tests last year, PCR test, and SYNLAB about 50 million. And so you see that on the graph on the X-axis of this Page 22, all the volumes. So we did about as many tests as, for example, Sonic and SYNLAB, which are 2 or 3x bigger than we are in clinical diagnostics. And so it shows that, actually, our contribution to this is way more than proportional to our revenues in clinical diagnostics. And I think it's a bit of an example of our positioning. Some of the decisions we took do not focus on routine testing, but to focus on advanced testing on esoteric testing. It helped us to develop test faster. Also, our decision to develop our own test internally to vertically integrate, which, of course, was very dilutive to our profits over the last few years because it costs us a lot of money to build that infrastructure and have the R&D spend throughout the R&D teams that can develop new test. It enabled us to respond extremely quickly to the pandemic. We have vertically integrated the production of plastics and reagents or in the extraction reagents, which enabled us to never have shortages for our laboratories when some of our competitors couldn't provide. So I'm happy to see that we were able to validate it with numbers, but it's just not we were at the right place at the right time. Of course, we have been prepared. Nobody saw it coming, this crisis, but we knew that molecular testing would be a very valuable tool to contribute to the health of everybody. And we have been focused on even more complex test, the genetic test where we are a market leader in noninvasive parental testing. But of course, if we can do a whole genome testing, we can, of course, do a smaller molecular -- a smaller sequence testing for COVID. And so that assumed that we could contribute way more than proportionally to our revenues to the slides. On Page 23, of course, the more important thing is what happens beyond COVID. And we're happy to see that, in 2020, after a dip in Q2 for some of our activities, a lot of our activities recovered. And in Q4, we were already back at 5% organic growth. Although still in Q4, we had many of our activities that were stopped or severely reduced in their volume due to lockdowns. That means some of our other core activities were growing much faster than 5%. And so that's a second crisis in a row that we see how resilient our core activities are, and it makes us very bullish for the future. We still hope that in 2022, COVID will be behind us and there will be no COVID revenues, but no COVID disruptions either. And when we see how much investment is going in the biopharma sector, and biopharma is about 1/3 of our revenues, there will be massive opportunities for providers like us. I may not have mentioned it before, but Eurofins worked for 6 of the 7 producers of vaccines that are either registered or about to be registered. We were materially supportive in helping them to get the registration very fast in carrying out all the testing, developing the test that were required either for product development or for the clinical trials or alpha release. We are working rather release partner of one of the very large -- global release partner on one of the very large vaccine producers. We worked for 3 of the companies developing therapeutics like antibodies, for example, to fight COVID. So -- and this will go on. If this type of activity will go on, the miRNA vaccines are approved that this technology can be applied safely. There are millions of -- lots of application in oncology in other sectors. The fundraising by the biotech industry last year was a record. It probably continues. And so being the leader in that industry of biopharma product testing positions us very well going forward to long-term growth. And while we work, some of our teams worked on COVID, if I go on Page 24. Obviously, all the teams were very active in their core business. We continue to innovate in all of our business lines, in biopharma testing services, in our early development sector. We are the leader globally in early development. And with the acquisition of Beacon, we're getting stronger in integrated drug discovery. A lot of money will go in the early phases of development because of the funding of -- that went to biotech and continue to invest and develop a whole range of testing kits. Our food testing business line is not really dependent on external suppliers. For the key tests that we carry out in our labs, we can now produce most of them ourselves at much lower cost and now leading a proprietary way, which is offering further differentiation. And I won't bore you with every single development. But on Page 25, you can see a few more very interesting developments that should fuel growth as the world become a bit more normal beyond the pandemic. On Page 26, a little bit of an update of our investment program. We have this 5-year investment plan to build our global laboratories network, commensurate with our leadership position in our market. We're almost done at the end of 2020. Of course, between the cyber attack in 2019 and COVID in 2020, we took a year delay for completion of some programs, but we should be done at the end of this year. And that will set us with very -- a completely uncomparable laboratory network, fully digital that others have not even started to think about or to work towards. To integrate electronically with the same software, hundreds of laboratories around the world is a massive undertaking. For whatever -- how much money you want to spend, it takes decades or it takes 10 years to get there, and we're very close to doing that. And if you saw in our CapEx, too, it costs money. Last year, again, in 4 years, we spent maybe more than EUR 100 million a year just to buy those buildings, buy the land, build those building and we concentrated in 5 or 10 years, investments that will last for 30 or 40 years to come. It's not a small investment, and we're quite happy actually to be close to the end. We finished our site in medicine for our largest food testing lab in North America to move the Covance business we acquired. After 3 years, we've completed the full integration of the Covance Food Safety Solutions business into Eurofins network. It was a lot of cost, a lot of moving people from state to state, et cetera. But now we have a very, very well set-up network of labs to serve the food industry and the feed industry in North America. And we'll be adding a few local microbiology labs in the years to come to serve a few geographies where we are underrepresented, but the more expensive investments are all behind us. ESG on Page 28. Eurofins was, more or less, a baby company or a teenager company so far. And we were doing a lot of good things, but maybe we were not putting the right emphasis in describing or explaining what we're doing. And this year, for the first time, we've produced a real ESG report that describes a bit more what we are doing. It's a first version. Reports we will do in the following years will be much better. But when we started looking at it systematically, we could see that Eurofins is in line and contributing positively to 16 of the 17 United Nations' sustainable development goals. And it's not a surprise. As a purpose-led company, we want to do the right thing, and we feel proud that all of our actions have a positive contribution to the lives of everybody and to the health of the planet. So you will -- you can read it in our ESG report all the things we are contributing on, but definitely, our environmental testing is helping keep the planet in a good state helping our fight to pollution that will basically destroy our natural habits, helping our clients mitigate their impact on the environment. Our certification help them measure their impact. And of course, all the things we do in food testings can promote the replacement of, for example, red meat with protein from vegetal resources, from insects, from other sources that are -- that have a much lower impact on the CO2 contribution. I think on Page 30, you can see Eurofins as a true enabler of ESG actions for our clients. And we are looking forward to support them as they also put more emphasis on their ESG impact. And we have our own internal road map. Of course, we don't work for big polluters. We are not a big polluter ourselves. We don't generate a lot of CO2, something like, I think, 8 to 10 tonnes per employee per year, but we still can improve it. So we'll work on measuring it better, improving it, reducing it and compensating more of it. We've come -- last year, we compensated 20% of our emissions. And we're looking forward to, by 2025, reduce our emissions significantly and compensate 100% of the remainder to be CO2-neutral. We have set up resources to do that, and we're also contributing more meaningfully through Eurofins Foundation. Since we had a successful year last year, we were able to treble our contribution. We're supporting 75 different projects that are aligned with the United Nations' goals for sustainability and also supporting more channels population. On the government side, we'll be recommending 2 more our directors, where also one of our directors will be retiring. We will have 5 independents, 8 members and 4 women, which we think now is in line with what the agencies consider as a good target. We also, on Page 32, expanded in 2020 our Global Equality Driving Excellence Initiative that is staffed by senior leaders of Eurofins to increase the participation of women in top leadership, to develop many actions, to fight any racial bias or other bias in the organization. We are introducing growth to that as we do for environment in the goals of all of our leaders. And we're looking forward to be an exemplary company in this sector, and I think we're doing well, but to also develop the tools to quantify it and document it in our annual publications. So if we move on Page 34 for the conclusion. Well, for many years, I've been meeting some of you or others who said, yes, they are the 3 big TIC company, and there is a small Eurofins. And that has been pretty much all my lifetime. The tone of the discussion, the 3 big and stable TIC companies and Eurofins. Well, as you can see, last year, of course, because of the COVID crisis, but not only you see the trend of the curve, Eurofins became the largest TIC company and not only in terms of revenues, but also profitability. And of course, COVID will fade away and we will all recover the lost revenues we've had in last year because of COVID, and Eurofins might not do so much COVID revenues, but the trends are so strong in the markets we're active in. But I'm pretty sure the Eurofins curve is going to trend -- continue to trend upwards. On Page 35, we are summarizing our objectives for this year. It's very hard to know what exactly will happen. The variants of concerned are spreading very fast. We are helping many governments with our real-time PCR test to identify variants. Some governments are doing it like, for example, France and Germany, some regions in Germany. And they are starting to have a good view of where the variants really are. Not all countries are doing it. A lot of countries are still doing only sequencing, which is only sequencing part of the positive and is also a bit delayed in its response. So we will see, over the next couple of months, how the COVID virus continues to spread and what the need for testing is. We still hope that by this summer, there will be a very strong reduction of the COVID cases and hence, the COVID testing, but we don't know. Until we have a range of scenario as to how much testing could be required this year, next year and the following years. But for simplicity, we decided just as well at this stage to not change our objective for 2021 until we know better and to stick to a plan for 2022 and 2023 with 0 COVID testing. This is for simplification obviously. Also, we gave you rounded numbers to give you an indication of where we think things are and could land. We try to be conservative in what we do. We'd rather surprise you with good news and with bad news. So we're trying to set objectives that are achievable, that are not crazy. And yes, it could well be that we exceed those we have set for 2021. We still continue in January and February to do a lot of COVID testing, and it looks like this will continue at least at some level through Q2. We are still optimistic that after Q2, the level will drop significantly, but it's not certain either. And also, there could be a lot of mass testing as the economies start to restart to avoid further spreads. So -- and the SAFER@WORK impact is also not clear. It's also not clear how the travel sector will restart, what level of testing or events will be required. But those objectives, we think are realistic, and maybe we'll do better. On Page 36, to conclude, well, it's obvious that we had a very strong year in 2020. We've assumed that we have a very resilient business. We have a high-growth business. We can very confidently set 5% organic growth target, and those 5% organic growth target should not be too much subject to cycles, the variations of the economy. There are not so many sectors and companies that can show this long-term growth pattern. This crisis has shown how fast, innovative and agile our companies are. And I think there will be many more opportunities in the years to come where we can show what we can do, and that can boost our growth. We have recovered a very strong balance sheet at the end of 2020. We might not use this balance sheet. We don't have the intention to do any major M&A over the next couple of years. We have so many organic opportunities. For example, our development in Asia is -- presents many opportunities, and a lot of them, we can do organically. Within the CapEx objectives we have given, that most likely will continue to deleverage over the next couple of years. And then we'll see what we do if we return the cash to our shareholders or maybe, at some point, find some proper investment for it. So the M&A also in the few M&A targets we've seen -- and that's an interesting thing, by the way. We were lucky in being the first to consolidate our industry. The remaining assets are very poor quality. They have been often assembled by private equity and then underinvested and -- on a great asset. Nonetheless, they are traded, they are sold for 16 to 18x EBITDA. And when I see that Eurofins is trading at 12x EBITDA for 2022 on a fairly conservative EBITDA, I think I'd rather keep Eurofins' stock than buy those -- many of those assets that are coming around. So yes. So I think we will come out of the pandemic whenever it stops, hopefully, this summer or later, as a very strong company. We will have finished the integration of all the large acquisitions we did in '17 and '18. We will have finalized our hub-and-spoke lab network. We will be a fully digital company. And going forward, the focus will be on R&D, of course, making sure we continue to invest in our teams and give them the opportunities to learn, to develop, to get further education. We're investing in our internal training program significantly. We invest massively in R&D. Of course, ESG is the key. We want to be also an exemplary company in this area, not only for growth and profitability. So we're very bullish for the mid-term and long-term future of the company. We hope to continue to contribute meaningfully to the fight against COVID-19 in 2021 and help everybody put it behind us. And yes, the future looks very, very exciting. Also in terms of technologies, there are many new technologies we developed and we tested and we deployed in our labs this year that we can put to use for many other things that we are -- we have ideas on and research programs on going on. Sorry for this long introduction, but we can run over a bit of the hour, if needed, if there are many questions. So now I'd like to turn the microphone to you for questions.

[Operator Instructions] Our first question comes from Patrick Wood from Bank of America.

Perfect. I have 2, please. The first would be on the vaccine work within biopharma product testing. Are any of those agreements volume-related? Or have you already essentially been paid for the work on the trials upfront? How should we think about the revenue development of those as vaccine volumes ramp? So that's the first question. And then on the second side of things, interesting on Beacon and the movement into the CRO space and building up there. What's the thought process? And how large would you want to be within the CRO landscape? Is that more about winning development contracts later down the line and supporting the biopharma product testing business? Or is this something that, in and of itself, you would want to see getting to a decent size?

Thank you very much. Yes, we did all kinds of work for vaccines. We worked in the very early R&D stages, also on those oligonucleotides. We have also oligo -- one of the largest in the world in producing oligos. We work in the product development cycle with BPT, biopharma product testing, and we are involved in the release testing of some of those vaccines. And indeed, release testing is proportional to volume. So we've been ramping up as fast as we could capacity. And the real testing starting this year, it wasn't last year, to help companies produce as many doses as possible while we continue to work with the vaccine company to measure the post for the surveillance, post registration and also for the workaround booster shots and the workaround, potentially altering the targeting to cover mutants or variants. Beacon, yes. In discovery, it's a tiny market, very fragmented, many small players, all highly scientific. And I think from what we can see, we are the leader in this early discovery work. We are not doing, however, animal testing. We are not like Charles River. Charles River is very big because they do a lot of animal testing in early development. So we don't do that, but we do, even before that, all the testing on cells and testing of thousands of compounds against different tools and testing platforms to detect are they going to work, are they going to be toxic. And indeed, we -- the future for those companies to be faster. Everybody wants to be faster in market, and that's why we are putting emphasis on this integrated discovery because we have all the capabilities. We have the chemistry capabilities to produce, generate new molecules. We have the CDMO capabilities that can produce also the clinical trial batches. And we have the BPT capabilities to test all those clinical trial batches. And then the ability to have product management, project management to cycle very fast based on the effect of the first assays -- first creating assays to tweak the molecule a bit. And if we can do it all in one organization, it is much faster for clients. So we'll be investing significantly on that. We don't want to become a CMO. We don't want to do commercial production, that's a different market. But all those work around integrated discovery is an area where we want to strengthen our leadership.

Our next question comes from Andy Grobler from Crédit Suisse.

Your target for organic growth in the longer term is still 5%. I just wondered if you could talk through some of what has been kind of lost and gained for your end markets through the pandemic. And you sort of mentioned earlier that those targets might prove conservative. Given what you were saying, do you feel that they may be overly conservative at this stage? And then secondly, just from a different angle. The hybrid first calls are next year. Do you think, longer term, that is still going to be the right financing structure for you given where your leverage now is?

Thank you very much, Andy. Yes, it's very hard to make predictions, especially about the future. So the 5% organic growth is a target we set maybe 5 or 10 years ago. And we haven't revised since, and we tend to exceed it every year. And I think there are good reason to believe that in the world post-COVID, we could grow faster than that based on our positioning. Of course, we still have an embarked routine clinical diagnostics that is going to drive the growth a little bit, but it's not all that much. And our clinical diagnostic labs are becoming more and more innovative, so that could counterbalance that. And they are still part of the world where this can grow organically. So yes, I hope you are right and I hope that in '22, '23, '24, we can deliver significantly more than 5%, but it's very hard to know. So we'd prefer to stick with our secular objective. But you should put in your DCF, 5%, and I think that could last for a very long time. I think the -- you'll get pretty explosive results. And yes, hybrid, yes, it's a good point. We might not need hybrid anymore because it's a matter of cost. And at every given time, whenever we have a refinancing, we'll consider the different opportunities -- cost opportunities of the various instruments. I know -- I mean sometimes we are criticized for having instruments like Schuldschein and hybrid and so on, but they're all a mix hybrid in a very low-risk financing. We still could be hit with further economic crisis. The western world is going to be challenged with the emergence of Asia. There might be sociopolitical challenges in many parts of the world. So having an instrument like the hybrid is not necessarily bad. We've, of course, no obligation to repay anything anytime if the situation were very, very serious, which we're very far from, and it's hard to conceive how we could be in a situation where we would benefit from the hybrid, but we'll review that fairly soon. I think 2022 is the first time we'll have to redecide what we do on that.

[Operator Instructions] Our next question comes from Edward Stanley from Morgan Stanley.

I've got 3, please. The first one, I'm curious about the other press release you put out this morning. What is your production capacity for those at-home empowerDX kits in the U.S.? And when do you envisage that, that might be available as a product in any kind of European countries? The second question perhaps relating to that, maybe for Laurent. I see your inventory is up, which is obvious, but your inventory allowance is substantially up. Does that relate to mainly rapid antigen testing where sales will be more disappointing or something else where you're foreseeing worsening trends perhaps? And then finally, on the 26 deals you did, you disclosed Genetec, SunDream. And I know M&A is not a focus this year or last year or even next year, but which verticals were you targeting or are you targeting? Because as you've shown in that chart that you've overtaken all the other TIC companies in terms of revenue, but those competitors are finding it obviously evidently more challenging to find bolt-ons that move the needle for. How do you have such high confidence that the medium-term pipeline for M&A as attractive as they evidently don't?

Yes. Thanks a lot, Edward. Production capacity is pretty big. Also, we got clearance by the FDA to use any of our U.S. labs, and we can deploy this test in each of our 15 labs in the country. We will be -- we are working with partners right now on the loans at various large chains in the U.S. and the associated marketing. So based on that, we can adapt capacity, but we -- our capacity in the U.S. is more than 100,000 tests a day, if need be. And it can be ramped up significantly should there be demand. But of course, we will see how the market reacts, how the -- those products are not only good for direct-to-consumer, but they would be extremely good for employers. If let's say, big banks in New York wants to bring everybody back to the office, what would be really easy is to have boxes of those tests at the entrance, get everybody to spit in a tube or do a very shallow nasal swab and then put the tube back in the box. And then during the night, we can test the results and everybody would know by the next morning before they decide if they go to work or not, if they're positive or negative or if a flu has to be isolated. That could be really easy to do. It can be -- it can apply to events. You can ship those kits to people who want to go to a show, for example, when they register for a festival, they order that ticket. Three or 4 days before the festival, they get a kit at home, then they return it the day before the festival, they get their results. We can all make it very fast, and that's much more reliable than the antigen kits. So we're going to have to see how it is used. And reason has not always prevailed in the fight against the pandemic, unfortunately. And actually, we've been lobbying to launch this test for almost a year now. It was ready in our labs in many countries, and it's still not allowed in some European countries for at least 6 months. We think this is the thing to do because the real bottleneck are the sampling stations. So if people could test themselves, we could have a much higher throughput of testing in many European countries, too. On the inventory, I think I can answer the question. Of course, we built a lot of inventory to not be dependent from suppliers. And that's also why we could produce way more test as a proportion of our revenues than others because we never had shortages of reagents. But at the end of the year, in view of our prudence about the outlook and the visibility of how much we would be testing in 2021, we will talk some of that inventory. I think that explains the second part of the question on the loans. We'll see if we end up using it in the end or -- the risk is that there is an abrupt stop. And if there is an abrupt stop of testing in one country, we'll move the inventory to another country, which we might be left at the last country with some stock, that's why we were prudent. And M&A, we don't do a lot of M&A. We only added EUR 100 million last year, EUR 200 million is very modest. It's a lot of small companies, and we are present in 50 countries. So we look at many things. We are often also the acquirer of choice, many entrepreneurial-led companies that are focused on high quality, on science, not only on financial metrics, will prefer to be acquired by Eurofins. They also know that our model will leave a lot of independence to their teams and to themselves if they continue. So for a fairly modest objective of maybe in '22 or '23, I think, EUR 200 million, I don't find a challenge. Of course, we will do very few deals because the prices are crazy at the moment. The last was -- GBA last week, I think, was sold for something like 4x revenues and 20 or 18x EBITDA when Eurofins is trading at 12, and GBA is a bunch of underinvested labs of fairly poor quality. Sorry, I hope I won't be sued for saying that. And the same for what SGS bought, they bought -- they paid a very high price for a bunch of assets that definitely are underperforming compared to all assets in the same region. So -- and they also paid wherever on the real EBITDA, maybe 16 or 18 times. So obviously, we will not be fighting for every deal. And we -- in many situations, it's even worse. And if you look at the valuation on the market in the U.S. of companies like Natera, INVITEK, CareDx, which are trading at like 10x revenues for companies that are making 0 profit and sometimes substantial losses, while we have similar assets within Eurofins, it's clear that acquisitions is not always the way to go now. It's much better to build things organically, hire the right scientists and go forward and wait for the nonsense to stop because, eventually, the nonsense always stop. We never know when, but I've been long enough in this testing world to see many bubbles burst, and at some point, this will also probably happen when interest rates start to pick up maybe. That we will see.

Fair enough. Could I ask one more, please? On the tax, you've had substantially lower cash tax than P&L tax for a couple of years, but it was particularly acute in 2020. Will that continue that divergence of cash and P&L tax? Can you give some guidance on both sides of the equation, please?

Laurent, do you want to answer this one, please?

Yes, I will. Yes, indeed. I mean, you know that in the past, we have accumulated a lot of tax loss carryforward. And you have 2 effects. I mean, you need to first recognize them when your profitability is in line. That's what's happening today, and this enables us to lower our tax rate on a booked perspective, if you want. And also to use them when we have profit. This is when you have your tax paid, which is lower. We do have still stock, a significant stock of tax loss carryforward. So as long as we are generating high profits like we did this year, we will be able to enjoy them. This year was a special year, but we should see a bit more usage of this tax loss carryforwards on both fronts, the booking and the payment.

Our next question comes from [ Jean Francois ] from [ ZES ]. We'll move on to the next question. Our next question comes from Neil Tyler from Redburn.

Can you hear me okay?

Yes, Neil.

Yes. Good. So a couple of questions, please. Firstly, on the SAFER@WORK offering generally, could you provide a little bit of detail around the cadence of those contracts and those revenues that have already been booked, so that we can understand whether the majority were sort of booked in that business that came in as lockdowns were eased? Or has that been building into the end of the year? And then the second question, it's more sort of longer term and around the services that you provide supporting gene therapy products. Are they providing any -- are you driving any meaningful revenues from those services currently? And I wonder if you could talk a little bit about your medium to longer-term expectations around that? And then finally, similarly, on the -- I suppose, on the topic of -- that's relevant today, the direct consumer revenues. I know that's something that hasn't been a material part of the business, but potentially could become one. Can you talk a little bit about the ambitions and expectations there more broadly, please?

Yes. Thank you very much, Neil. SAFER@WORK, we've signed a lot of contracts but we have not booked a lot of revenues yet because as you inferred or maybe indirectly pointed, a lot of those contracts will start when people go back to their offices or to their factories or to their workplaces or they will start traveling again or they will start going to events again. We've been supporting the Formula 1 events in many, many countries. We've been supporting the golf tournaments, the women golf tournament. We've been supporting many other high-profile organization and soccer and so on. But there's still very few people because we're testing mostly the athletes and the support staff. We're not testing massive speculators or public because they are closed-doors event so far. So the real volume will come when those events restart, when cruises restart or flights restart and we're gearing up for that. We won a contract in Spain to cover pretty much all of the airports or 80% of Spanish airports with testing in anticipation of the risk out of travel this summer. So we, of course, will see how that pans out, but it's the bulk of those, the realization of those contracts would start when the lockdown stop. And of course, also the clinical testing family during lockdown, there is less testing because the lockdowns work and people get fewer contaminations. When the country is reopened, that's usually when the clinical testing picks up. ATMP, generally, or gene therapy, antibodies, et cetera, it is still a smaller part of the biopharma product testing business, but we've been investing significantly both in our CDMO and our bio BPT labs to cater for ATMP and gene therapy, and we're going to be continuing to make significant investments. This we feel will grow because gene therapy, there are ups and downs in the clinical outcomes, but the whole area of biologics and ATMP is very promising, we find. And DTC, we haven't talked much about DTC because I'd rather talk about things when we have already had some successes and significant volume. We were working on some DTC start-ups for clinical. We have DTC already for some paternity testing and other areas, our radon testing or environment testing and water testing in some countries, still very disparate and not built as a significant business. But we feel long term, the many things will become more patient-centric. We believe in prevention, and we believe in patient centricity. And while the reimbursement system is not geared towards that at the moment, longer term, people are taking more and more their health in their hand, both in terms of what they eat, the prevention, the advice and what they eat. And in terms of finding out if they are sick, what they have, there are countries like Italy, where half of the health care is self-pay. And we do a lot of, for example, the noninvasive prenatal testing. We are selling is very much direct-to-consumer. Of course, it has to be prescribed by a doctor. So it's -- there are 3 parties involved, but it's very often patient-driven. So we believe this could -- maybe not in 1 or 2 years' horizon, but on a 5- to 10-year horizon, this could present a very significant opportunity for Eurofins as a direct-to-consumer arm and branch, and it could be not only clinical. And there again, we benefited a lot during the pandemic of not being only a clinical company. The fact that we had food testing companies, environmental testing companies, kits producers helped us to be the first with solutions to have much broader depth of product range, et cetera. And I think, again, in the DTC sector, the fact that we are very good at testing food, very good at testing the environment, very much we do everything that matter for consumer. As we get rich enough and we have enough food, we want to leave longer and healthier. And if we are sick, we go to our doctors. But as the world become more aware of the impact of food to the environment, people will want to know where do their food come from, is it a long change or chain? So we can provide the information. Long term, with blockchain and all those things, almost in every thing you buy at a supermarket, you'd be able to find out where it comes from, what are the ingredients, what -- are they organic, not organic, and consumers will have many questions. And we are gearing up as a 10-year plan, it's a bit like your Asia investment. We took us 10 years to be -- or 8 years to become market leader in North America in all of our markets, core -- 3-core markets, food, biopharma and environmental testing and biopharma product testing. Same thing, it's going to take us 10 years to make a substantial mark in Asia, maybe not in every Asian country, but in most I hope. And this is gearing towards prevention and patient-centric care. Also might take 10 years, but it could be quite powerful in the end.

Okay. Just perhaps just pick up one of the comments you made around food testing. Do you think the alternative protein market is a significant incremental opportunity or more likely to simply replace the testing that takes place for those proteins that are being replaced?

That's an interesting one. The more complex the product, the more testing is required generally. We see it for biopharma, the level of testing for biologics is 5 to 10x higher than for small molecules. We test a lot of ingredients. Nutraceuticals is also another interesting aspect. Herbs and plants and botanicals, as they are called in North America. We're the leader in that segment. It requires much more testing because of the diversity of products. And people have been eating potatoes forever, so nobody is too worried about potatoes. If you start to make proteins out of mushroom, out of insects, out of -- let's say, even fermentation and biological processes, there are more unknowns, more questions. So in the product development, that requires much more testing. And then probably the quality assurance of those more complex products will be set higher. And again, we're very early days. The regulators haven't necessarily forted through as to what requirements there will be on some of those products for quite easy control. It's just early days. So we will see. But general rule has been, in my experience, a more complex product. And the more -- the way it is from what we are used to, the more testing is required.

Our next question comes from Will Kirkness from Jefferies.

I've got 3, please. Just firstly, on the organic growth. We add back what you say was lost this year from lockdowns, then I think we're probably at an organic number of closer to 6% to 7%. I just wonder if you could perhaps just give a bit more color on the outlook in that context and particularly which markets might be extreme, very good growth or perhaps little growth. Secondly, just interested in the comments on leverage, capital allocation, M&A, I guess. So I think before you said emerging markets don't have so many big assets. You've done a lot of the bigger stuff in your established region. So should we really be enhancing in some kind of shareholder returns given where that would sit? And then lastly, just numbers on accrued income. It looks like it end up quite a lot. I just wondered if that's related to the sort of very high levels of growth in the fourth quarter. And what particularly that relates to?

Thank you very much. Yes, what have we lost to lockdown? Well, we still have -- although we returned to organic growth last year in fourth quarter and overall throughout last year, we had a positive organic growth of our core business. We still suffer in many areas. Our environmental testing businesses, which requires sampling, are still not back to where they were in 2019. They're still down in many markets. Our clinical trials business, both for our central lab and for cosmetics are down. All the work we do for food service, restaurants is down significantly. The laser work we do for the travel industry is almost at 0. And some of the work we do in consumer testing and textile, for example, is also severely hurt. So that's why we have a missing bunch of growth. It's not like we have negative organic growth last year, it is positive, but it would have been much higher. But we don't see why those revenues wouldn't come back after COVID because people really want to go back eat in restaurants, and restaurant food will have to be tested again. And cosmetics clinical trials will restart, and the patients will go back to hospitals and the clinical trials of normal drugs can restart. But still in Q1, we had a strong Q1 or at least January, February in 2020. So I think this impact will still see in Q1 of 2021. Of course, in Q1 of 2021, we're still doing a lot of COVID testing. So in the end, we'll still come up way ahead. But yes, at some point, this will normalize. So I'm not sure that was exactly your question, but that's how I understood it.

Okay. I think it's just more whether going back to this 5% number that is recent peer talking about high single digit in some of these areas. So I just wonder whether, looking on a more medium-term, the drivers are there to support that kind of 6%, 7%.

Yes, I understand. Yes. I mean, we're not looking there yet. But if you look at 2023, yes, potentially. Of course, all those objectives are simplifications. Also a question that the lost growth in those lost revenues, we're still missing now on environment, clinical, et cetera, and restaurant testing. They might start coming back in the second half of 2021. So we might not see it all in 2022 from January 1, all of a sudden. But we think that by 2022, if the pandemic is brought under control, we should see all of it. And then we start again from a normal base. And from a normal base, yes, it's true because if those things start growing again and we have parts that are definitely growing double digits in our core business, maybe the mix could land above 5%. But we first should deliver what we have in our objectives. And once we have delivered, what's in our objective, we can think of over-delivering. And when it is certain enough, we will point it out to the market. Yes. You're right. I mean, we -- this year, if we end up doing a lot of COVID testing again in 2021, our leverage will go down quite drastically again or significantly. And then we really should question if we have too much cash, which will be an interesting position to be in. We still have some buildings that are not owned by Eurofins that maybe Eurofins should repurchase to put to bed the last objection on the governance, which I don't think is a real worry, but can be perceived as one by some. And yes, I don't think massive M&A and large M&A are on the program. First, there are very few quality companies around I'd like to buy. And second, most of the ones that are to buy a large scope are too expensive. So I'd rather wait for the interest rates to normalize, inflations to kick in a bit and come to a much better world to maybe '24, '25 or whatever to look at that. So we might do more distribution potentially, and that we might distribute more than 25% of our net profit if we don't see very many other ways to distribute. But let's do step by step. I'd rather first deliver and then talk about what we do with the cash if we have too much cash. And yes, accrued income, I think it's about -- we had a lot of unbilled revenues probably at the end of the year with all the COVID testing we're doing. I think that's probably the main thing. But Laurent can comment on that one.

Yes. There is a bit of accrued income related to COVID testing, but overall, it remains quite small compared to the size of the group.

One thing related to the last -- sorry, last question about new markets. They are not only alternative proteins. There is also a huge market that's going to come with the legalization of certain -- what was considered drug, Marijuana, CBD, it's becoming normalized in many countries. We are not active in the United States in that area because it's still not -- it's still considered a federal criminal activity, although it's allowed in some states. That could become a major market. [indiscernible] and others are going to be probably also legalized in many markets. So they are around food, cosmetics, health care, generally, a lot of innovative areas that will require very significant testing. There are many ancillary markets that will open with -- from innovation at our clients and changing regulation.

Our next question comes from Nicolas Tabor from Stifel.

Can you hear me very well?

Yes.

Great. The first question would be on the risk of decreasing reimbursement prices for COVID testing. I mean, could you share some of the insights you have from your discussions with government, with whom you are closed at the moment? I mean, is there a real risk that in July, so the need -- the cost -- the price reimbursement price have as people get vaccinated and so on? And how should we think about that? And then still on the profitability of the COVID testing. I mean, we understand it's very high. And as you are slowing OpEx and CapEx investment in that field as maybe we have reached the peak, do you see the profitability improving, even though I understand it's difficult to separate it from the rest of the clinical diagnostic? And then on the tax rate. So you answered the question on the deferred tax loss carried forward and so on. But can you give us an indication of the effective tax rate we should expect for 2021 for this year, given what you said before?

Thank you. Yes. We haven't seen very massive COVID PCR reimbursement drops, although I would wish it to happen. Frankly, I would wish for a fully liberalized market. I mean, we are testing or we're testing wherever, anywhere between 100 -- around 100,000 a day, let's put it. But we could test 1 million a day. We are vertically integrated. We -- the reimbursements are probably clearly high. The U.S. still at $100. I think that should come down. And in Europe, they're a bit more modest, between 30 and 60 maybe. We have very large contracts at lower prices already for some time. But for population testing, I had an interview in the biggest newspaper in Germany, where I said we could be doing millions of tests a day at EUR 10 per test and still be having sufficient margin. And that would really help in fighting the pandemic. So I think the -- we should move to a place where this test is still as a medical test to a test that's seen as an industrial test that can be highly industrialized, and we have a way to do it. We could multiply our capacity by 10 or 50 relatively quickly and provide those tests at much lower prices. And I think that would be a much healthier situation, and it would contribute to a much faster eradication of the disease as is done in China, but that's not for me to decide. Yes. And going forward, yes, we have also one thing, initially, we still are buying some reagents because we didn't have -- although we had our own reagents, we didn't have the government's approval for our own reagents everywhere. And little by little, we're getting the government approval to use our own reagents everywhere. So the proportion of things we buy outside is decreasing. So -- and the CapEx is pretty much gone. Unless we see a shift to massive population testing, we don't need more equipment. And we have taken, as usual, very conservative policies for depreciation, I mean very fast depreciation of our equipment. So yes, we're not worried about the evolution of margin. And anyway, COVID, we do that to contribute, and we're really happy to have had this level of contribution last year. And to have this huge toolkit to help companies and airlines and other sectors of the economy restart, whatever governments decide will be the proper testing measures, we have the tools. And we have, for example, a new PCR kit that can be industrialized in thousands of samples per day in a container next to a stadium, next to an airport, and we can do the test in 30 minutes. So it's -- and it is a very sensitive test. So we really have all the tools to help. And if we make money with it, it's good. If we don't, it really wouldn't matter because the main thing we want is to help the world return to a more normal situation so we can focus on things that are much more exciting, like helping the world develop and have better food, safer environment and develop even better drugs. And tax effective, I don't know if Laurent can tell us. I don't know that we know, frankly, because it will again depend on where the profits are falling in which countries and so on. And frankly, we could do better in this planning. I know some companies invest much more in forward planning of the tax rate, and we focused on our teams on maybe more urgent priorities. And obviously, we pay our taxes when we have to, where we have to. And as Laurent said, we have -- we still have quite a lot of tax carryforward we should be able to utilize as our start-ups, which we're losing one, it starts to make money. I mean that's going to be the main determinant because we still have many areas where we have profits and others where we have losses, but we can't always offset the losses against the profit of other parts of the group. Where -- when we will make money everywhere, then we will use everywhere the tax carryforward.

Yes. And maybe just one small precision. I mean, our ETR was 22% this year. It was 28% the year before, and it was 23% the year before. Again, it's very dependent on the geography where we make the profit and also on tax reform. I mean 2 years ago, there was a Trump tax reform, which enabled us to recognize a loss of deferred tax assets. There might be a different tax reform, and there's Biden administration. So it's very hard to predict. I mean we are dependent not only on our own profitability, but also on the tax reform in this geography.

All right. I guess we're going to have to take the last question or close here.

Okay. So we'll take the last question and then we will close. Our next question comes from Suhasini Varanasi from Goldman Sachs.

Just 2 from me, please. Can you comment on the January, February trends on COVID testing and on the underlying organic revenues, especially on the COVID testing. Would you say that it's similar to the Q4 levels or maybe higher? And the second one is on your pharma -- biopharma business. Have you seen any early signs that the clinical trials and the drug research that were suspended during the COVID crisis have been or will be restarted anytime soon in 2021?

Thank you very much. Yes, the level in Jan, February is a bit lower than Q4, although Q4 was different from month-to-month. December was lower than November and October. It's -- it can vary. It depends on country to country, lockdown to no lockdown, government programs. So I wouldn't extrapolate anything. We will see what happens, but we still test substantially. Yes, we've seen some clinical trials restart, but not all of them. So it depends on the country, again, and even in -- of the state, where the level of the pandemic is improving in many areas, but it's getting worse in other areas. Hospitals are still very busy in some countries, and so they can't accommodate trials. But again, we hope that from the summer, things will normalize a bit. All right. Well, thank you very much, everybody, for joining our call. And for those of you who have been patient investors, I think we are coming in a phase where you will see a real potential of a company like Eurofins, the way we responded to the crisis bodes well for our ability to innovate on more traditional areas and create a lot of growth for the foreseeable future for many years and many decades. We are fortunate to be in extremely exciting areas where our clients carry out a lot of innovation, which calls for a lot of testing. And we are working on many R&D programs. We haven't talked about transplant testing programs. We haven't talked of many other exciting things that we have been continuing to work on during the pandemic that should show their real potential in 2022 and beyond. So a lot of exciting stuff ahead. In 2021, we will do our best to contribute to pandemic. We've launched those direct-to-consumer tests. Even in Europe, in London, we can get our kits and get tested. We're going to work on improving the logistics of returning it to the lab. So we get faster results. We are working on many other things. And I'm looking forward to meeting you in person in the second half of the year. I hope the in-person meetings can resume in the fall, and we can discuss all those exciting things that -- with more time and no defocus by the COVID pandemic soon. Thank you very much, and best wishes.

Thank you. This now concludes our conference call. Thank you all for attending. You may now disconnect your lines.