Tecan Group AG (TECN) Earnings Call Transcript & Summary

Good morning, everybody, and many thanks for joining us today at the presentation of Tecan. My name is Sebastian Vogel of the UBS Swiss small and midcap research team. As usual, we'll start off with a presentation by Tecan. And afterwards, depending on the time left, there will be, of course, hopefully, quite some time left also for the Q&A. [Operator Instructions] And without further ado, I warmly welcome Mr. Achim von Leoprechting, CEO of Tecan. And with that, I'll hand over the word directly over to you.

Thank you very much, Sebastian, and thank you very much also for the invitation and the opportunity to speak to such a distinguished audience this morning. As Sebastian, you described, we will go through a self-service presentation. So I will reference the slides that I'm speaking to. So maybe before I go into content, I would like to draw your attention to our safe harbor statement, which I'm sure you can read at your leisure, but I'm obviously obliged to make that point and comment at this moment of the presentation. So maybe for those who are less familiar with Tecan, a quick introduction, who we are, where we're coming from and which markets we are serving. So as a company, we were founded 4 decades ago and have emerged as a leader in laboratory automation. And our solutions serve the academic and clinical research market. They serve the pharmaceutical drug discovery and vaccine development markets as well as the clinical diagnostic markets. We have added to our portfolio over the years, very innovative automation in liquid handling platforms but also detection systems. And most recently, over a cadence of 6 acquisitions over the last 7 years, also added content to the workflows that we are particularly interested in. And they would include immunoassays for specialty diagnostics; they include reagents and consumables for mass spectrometry workflows; and then lastly, also, we added content on next-generation sequencing workflows by adding library preparation reagents that are very complementary to our lab automation platforms. So in aggregate, we are driving the efficiency of labs and laboratory services with our direct field service organization, sales organization, but also through an OEM channel that I will describe to you in a few moments. We are headquartered in Switzerland. We have by now 4 active R&D and operation sites in North America, 4 in Europe and 1 in Vietnam, Asia. So we also -- in that framework of development and operation sites, we have a larger software development center based out of Mainz in Germany. The company size is around 2,000 employees with a global direct sales and service network. Our business is organized in 2 principal divisions, one of which is called Life Sciences, making up in 2020, around 56% of group sales. Our Life Sciences division is the entity that commercializes our products, our lab automation products that you see on this slide here, our Fluent platform, our detection range of products, reagents, consumables and software through our direct Tecan-branded franchises. And in contrast to this, we also have a division that we call Partnering business, and this division interacts with the leading in vitro diagnostic companies, where we either supply building blocks to analyzers that these companies develop through their own R&D organizations or we do a full-service concepting, industrialization, development and manufacturing program for such global in vitro diagnostic companies. So global group sales in 2020 reached around CHF 730 million. And the majority of this business is around clinical diagnostics, and then smaller portions would be allocated to pharma and academic and clinical research. Moving on to Slide #5. So our purpose and the way we interact with clients is to scale up innovation. And we scale up innovation in 3 distinct areas. One is our facilitation of innovation in the academic and clinical research, where we help our clients to understand disease mechanisms. And ultimately, of course, then migrate these learnings into the pharmaceutical environment where disease mechanisms are used to develop bespoke drugs or medical treatments against these diseases. So our impact in this translation is typically driven to this stage through our Life Sciences division. And then we would use similar learnings on workflows that are used for disease mechanism uncovering and pharma drug discovery and development in the in vitro diagnostic space where again, we are scaling up workflows for use in, for example, cancer diagnostics, metabolic disorders, infectious disease and many, many more. So in aggregate, what we do as a company, we empower laboratories in research, we empower laboratories in the pharma environment, and we empower diagnostic labs and partners on our OEM side to scale up innovation for the benefit of health care. Obviously, and now I switch over to Slide #6. We are also driven by larger trends and global trends that we tried to summarize on this slide, and they include factors like the aging population and population growth worldwide, which means that more people enter the health care systems, demanding more better and more scaled modalities for diagnosis. And of course, with the aging population, we see more chronic disorders, also manifesting themselves in the health care environment, which again require more and more bespoke testing solutions and systems. We as an organization see a very solid level of investment in health care and life sciences and pharma markets in the western geographies. But we're also, of course, observing an elevated investment pattern in what we would call emerging territories in the same segments that we are serving. We -- and the third environment, see the demand and requirements to develop companion diagnostic tests. So this is another modality where Tecan has a very strong interest in scaling up. For example, the detection of cancer biomarkers for the therapy, theranostics of cancer treatments that require quite high levels of investments as patients undergo their treatment regime. So that's another very important area, again, driven also by regulatory requirements that drives a lot of our growth and development as a company. We're not only serving the life sciences and diagnostic markets, but we're also seeing the explosion of biological knowledge entering more applied markets. So one example that I can call out here is the deployment of what is called next-generation sequencing workflows in areas like food or veterinary markets, again, requiring very similar workflows, very similar solutions compared to those that we're already able to offer to the life sciences, pharma and diagnostics segments. And then lastly, on this slide, we are seeing, of course, the migration of technology also for the use of consumers. So for example, in population sequencing programs, but also more specific in genetic testing programs that are marketed directly to consumers to basically own the biological data for their well-being and their addressing of, for example, hereditary disorders. So all of the before-mentioned trends and environments fuel what we cater to lab automation needs. So we see greater increased test volumes catering to many of the disease states that I just referred to, the need for productivity, but also for reproducibility and standardization, which in many of the workflows is still a bigger problem that needs to be addressed. Precision plays a big role in terms of the precise characterization of biological markers for clinical relevance and the actual ability of clinical outcomes, but also then the processes that largely speak to the economics of scale up, which are, of course, very important factors to consider when thinking about scaled up laboratory automation. And then last but not least, we are, of course, dealing with very highly regulated end markets, and this is a particularly strength of Tecan, having been in the FDA environment for many, many years, and in many environments, even driving the discussions around regulatory regimes in many geographies, including Europe and Asia. So the before-mentioned trends and our positioning in the end markets have indeed resulted in a significant growth profile of Tecan over the last couple of years. Shown on Slide #7, you'll see the sales development over the last year, spanning back to 2013, with a CAGR of around 9.6% over that time frame, with the underlying also expansion of operational profit and profitability of the company as outlined here with EBITDA, similar trajectory in earnings per share and net profit. Certainly, and I go to Slide #8 right now. We, as a company, have been in the center of the characterization and development around the COVID thematic over the last 15 to 18 months. And we have been clearly at the forefront to address the testing needs globally and both through our Life Sciences and our Partnering division. So our ability to very rapidly respond to the increased demand and the scale-up of testing is, of course, a very clear outcome of our strategic orientation to scale molecular testing and to scale particular workflows around infectious diseases. So this is where we've seen a focus, of course, on PCR testing worldwide. We had a lot of experience in extraction of nucleic acids and the preparation of PCR workflows. But what we also, of course, know -- facilitated very early on in the crisis was the characterization and identification of the virus through what is called next-generation sequencing methodologies, which are, again, leveraging quite significantly our capabilities in workflow and automation. We do have also, at our disposal, digital tools that made it very easy for newer labs to adopt high-scale testing platforms that are, in many cases, delivering thousands of results per day, but we're very, very early on trying for the deployment of digital tools that kept these labs, I would say, afloat of these vast influx of test results and allowed lab managers to completely organize their labs and control the outcome of these labs with -- in a much more elegant and coordinated fashion, which, of course, became a very important factor in the ability of governments and labs to scale globally. We are, of course, not only identifying viruses through PCR, but we're also, as I said, sequencing for variants and are already very active now in the process to cater for the surveillance regimes that are rolled out worldwide but also we are very active in the development, for example, of vaccines, facilitating, particularly mRNA research that led to the development in vaccines against COVID in that record period of time. We believe that 2021 will still be significantly impacted by COVID-19. And here, I'm switching over to Slide #9. We see -- continue to see very robust levels of testing. And you see on Slide #9, on the left-hand side, the numbers that are called out by the UBS. Actually, already illustrating that by the end of April, we have seen in the U.S. alone, approximately 80% of the test volumes being performed compared to the entire year of 2020. And we see now, maybe in May, the start of the wind down of testing capacity or testing volumes as it relates to PCR testing. However, they are still on fairly robust levels. And we see, compared to the U.S., even some other geographies where testing is more on the rise than on the decline given the state of the pandemic. But we believe the duration, the PCR testing will be impacted by a variety of factors there. They will be also impacted, of course, by a shift from some of the acute testing to broader community testing for reopening of schools, businesses, restaurants and so on. And we believe that the PCR requirements will still be very robust as a confirmatory or secondary test to the rapid antigen test that, of course, are now available in very high quantities. Of course, there's also the role of sequencing, as I mentioned before, that is now increasingly deployed for surveillance of virus mutations in many geographies worldwide. Another element that we are engaged in is serology testing, which is now maybe becoming a bit more of a kind of interesting topic as the vaccinations are progressing to significant levels in populations. And now serology testing of the analytics around the immunogenicity status of patients becomes more, I would say, clinically and politically relevant parameter to be observed. We also believe that going into the next flu season in the back end of this year, there will be another kind of higher level of testing being performed, particularly to differentiate between normal flu or the normal influenza virus as it compares to COVID variants and then the -- of course, different clinical realities of these 2 infectious diseases. Then maybe moving on to our role in the broader spectrum of our engagement in the industry, on Slide #10. Clearly, what I've tried to illustrate before, our role as a company is to help the transition of innovation from research to diagnostics. And we are, as a company, very elegantly organized and are able to leverage quite a few synergies between the 2 divisions that I introduced to you before. So normally, what we would see is that innovation originates in our Life Sciences division interactions, where we work with pharmaceutical or clinical and academic research entities. We bring in lab automation at a point where innovation is required to scale up to reach wider populations and to cross into the areas of economic liabilities. And then what we do, as an organization, we then transition some of these innovations into the regulated IVD space with the support of our IVD partners through our Partnering OEM franchise. And this is very relevant for many innovations and technologies and workflows that address the most pressing needs in areas like cancer, infectious and metabolic disorders. And they are listed on this slide as examples. They include technologies like next-generation sequencing; like mass spectrometry, particularly for protein characterization; for also front-end workflows like liquid biopsies, as they are observed in, for example, noninvasive prenatal testing, but also increasingly in oncology workflows and procedures; tissue pathology is a very important area for future automation and scalability; and the environment of very sensitive biomarker detection methodologies and many, many more. But they all speak to the characteristics of Tecan being able to scale innovation from research all the way into highly regulated in vitro diagnostic markets. So we are a very broad-based interested and are catering to a very wide range of health care use cases. I mentioned them now for a couple of reasons. And I will just reiterate them here again on Slide #11. So cancer, infectious diseases, metabolic disorders, but also hereditary disorders, rare disorders and many more. And what we do there is we're really helping to unmystify the underlying biology and then scale up into the clinical utility. We focus on applications like genomics, protein analytics and cell and tissue analytics, and then try to offer differentiated and innovative workflow solutions for the underlying technologies like sequencing, mass spectrometry and so on. And this is all possible because we have accumulated over the past 4 decades and with a series of acquisitions, quite a nice range of capabilities, addressing workflows and the applications that I just mentioned, but also the expertise in robotics and automation. Increasingly, software and digitalization play a major role for our innovation regimes and the R&D outputs that we're bringing to market. We have, of course, a lot of capabilities in detection and photonics as it comes to the back end of readouts. And they include increasingly reagents and consumables, all of which are wrapped up in that environment of a deep expertise of regulated environments and our ability to also cross platforms and entire solutions from research very elegantly into the FDA-regulated spaces. On Slide #12, just to illustrate a little bit more on where we're focusing on. So this is addressing, again, the kind of the markets we offer, genomics, protein analytics and cell and tissue, where we have called out specific subsegments in this case of genomics like next-generation sequencing that is growing mid-single digit to double digit as we speak. But also, we're doing the same in trying to identify fast-paced growth environments in protein analytics, and here, calling out mass spectrometry and sample preparation, in particularly, that is growing very robust and above underlying market rates. And the same is true for cell and tissue analytics where we're, again, addressing the faster pace area of the cell and tissue markets with dedicated solutions around workflows in automation, detection, consumables and reagents, and wherever possible, also increasingly new software products. Now just quickly on financials and the outlook. So as I mentioned before, Tecan has demonstrated a very robust growth profile over the past couple of years. Sales have been up 88%, and I'm on Slide 14 now, since 2013. And just to kind of couple this, so 2/3 or 3/3 -- 3/4 of the growth was actually derived by organic growth and 1/4 came from inorganic or M&A-driven growth. And we have seen quite -- a series of major new instrument platform launches in both business segments, both in our Life Sciences and our Partnering division. We've seen a very robust and strong growth in China, where China ended up in 2020 at around CHF 80 million for our total revenue, and then just comparing that to 2013, where it was just above CHF 25 million in total contribution. We are addressing, and we continue to look at M&A as a very substantial ability to boost our strategic ambitions by deploying capital in inorganic growth. And we have accomplished 6 transactions over the last 7 years, and both have been more or less divided between our Life Sciences and our OEM Partnering division. Another area we're focusing on is the expansion of what we call recurring revenue, which includes service, spare parts, reagents and consumables. In 2013, this reached 34%. And last year, we increased this to 44% of total sales, which again is for us a very good accomplishment, speaking to our ability to capture more of the complete workflows on our automation systems. The underlying EBITDA growth is significantly faster than sales. So CAGR around 13.6% over the period since 2013. And net profit, again, also grew at 127% with a CAGR of 12.4%, just illustrating the leverage on top line that Tecan enjoys typically when we think about our profitability profile. And maybe sliding then over to Page 15. The outlook for '21, we've given for the revenue base, is in the mid-teens range or mid-single-digit range to mid-teens, so pretty wide range as we, of course, have to work through the reality of the impact of COVID, but also the underlying rebound of our non-COVID markets that have been substantially suppressed in 2020 and that we are seeing now to come back in various shapes and forms. So this is the revenue projection, which, of course, is heavily still driven, particularly, in the first half by COVID, and we expect a normalization of the COVID contribution and the rebound of the non-COVID business in the second half of 2021. This, of course, all assumes that global supply chains remain undisrupted, which I think we have very good confidence right now that this is the case. And on the profitability side, we have said that the EBITDA margin, we expect to be at least 21.8%, illustrating the -- again, the spectrum of potential revenue outcomes. But also indicating that this is already incorporating the revised forecast on FX rates, which have negatively impacted our profitability -- or will negatively impact our profitability. And -- but on the other side, very, I think, a good illustration also on our ability to continue to work in a profitable environment with the range of revenue outcomes that I mentioned before. So in summary, I wanted to illustrate the picture that Tecan is well positioned in '21 and beyond. We certainly illustrated our resilience and preparedness by being able to capture significant business opportunities through COVID in 2020. But we feel this is just an illustration of our capabilities in infectious disease and the genomic workflows on a broader basis. And we, of course, continue to also invest very heavily in other case areas like cancer, metabolic disorders, neurodegeneration and other infectious diseases that we believe have a very high potential for Tecan. We see and we have already launched 2 new very important modalities in '21 in the first half. We expect to see a very significant cadence of new and very important product launches throughout the rest of '21 and 2022, again, just giving us the ability to constantly expand our market reach and access on the applications that we're interested in and also expanding our global reach. We have a very strong focus on -- in R&D on modularity, and this is a very important theme for us, as I illustrated before, we are aiming to cross all the capabilities from research into the regulated space. We've met very good progress there to modularize not only our instrumentation and our hardware but also our software, which typically is the more complicated area of modularization. And we've made very good progress there. We're already bringing to market first variants of these new modular capabilities in total instrumentation that we, for example, call DreamPrep on our Life Sciences side, but you'll see the same modularity being deployed in our OEM environment, for example, with new partnerships that we already communicated with companies like the binding site for advanced cancer diagnostics. And you can expect continuation of that theme going forward. Another important theme for us, of course, is focus on our employees. And we are very proud to look back at 2020, where not only from a morale and contribution standpoint, we had an exceptional contribution from our teams around the world to very rapidly and passionately respond to the COVID challenges and customer needs worldwide. But also, we are paying a lot of attention to the development of our employees globally. And we are very proud that we have been certified as a Great Place to Work in Switzerland, and we take that as an encouragement to continue to invest and focus on employee development and our general themes around diversity and inclusion, which, of course, for us, as a global company, are very important topics in addition to what I've just said. And then lastly, sustainability is clearly very deeply rooted in our strategy and our corporate culture. We continue to drive a variety of activities in all 3 categories of ESG. And again, on the right-hand side of Slide #16, you'll see a couple of certificates and awards that we received for our efforts in these environments. But again, similar to what I've said with our culture and focus on employees, we see that as an encouragement to continuously improve how we are impacting the environment and how we are also interacting with the external world outside of Tecan. So with this, I'll probably stop here. And I think we can probably open up for Q&A, Sebastian, if you would be so kind to kind of refer us back to the questions that have come in, that will be great.

That's perfect. Yes, as a quick reminder, just if you have any questions and additional ones to what we have already received, please just submit them through the required field, and I'm happy to read them out loudly later on. And we got already one first question in that regard. Since we have seen in a couple of countries, the whole vaccination process has been, of course, been more well advanced, like Israel, of course, is one of the poster choices, I assume, in that regard. How has that impacted the installed base of your machines? Has that been already repurposed? Or has that been -- these machines been put aside? Is that already sort of way of doing that we can afterwards translate to other countries when they got ahead or when they advance with the vaccination like we have seen in Israel, for example?

Yes. It's, I think, of course, something we are observing very closely and have a very close communication with the labs in all these geographies. And we're trying to deduct what the model could or what the scenarios could look like for other geographies. I think the first learning today is that the -- it doesn't really translate from one region to another because the requirements, also the maturity of health care systems are widely different. And in Israel, maybe just to stay on that country for a little while, we continue to see actually quite robust PCR testing continuing. And that's one factor. The other element is that we also see some level of redeployment actually or reconfigurations into sequencing, as I mentioned before. Of course, now there is the ability, particularly as we are supplying open and very flexible workstations to reconfigure them, not only, for example, sequencing but also for subsequent workflow requirements, for example, like serology testing. And this is happening as we speak. Some other labs actually in the same geography are adding content to the COVID test or PCR environment. And again, that's very easily doable because our workflows cater to extraction and PCR, and they can also cater other than to COVID or infectious disorders also to other environments like, for example, sexually transmitted diseases and many more. So I think labs just use that as an opportunity as we see it right now to upgrade their capabilities in either COVID-related topics or even lateral topics like other infectious disorders that require molecular testing. But we are not, at the moment, seeing mothballing or systems being decommissioned. But that's also probably due to the fact that we, of course, have supplied a very substantial amount of highly innovative workflows and workstations. And I mean, what we're hearing more is maybe an interest of labs to retire older fleet instruments which, of course, are not always Tecan machines. So we see that as a very good opportunity to also, from a market share perspective, make some inroads into labs that have probably not been Tecan strongholds in the past. But again, this is something we are discussing lab by lab and country by country. And you will probably be surprised to hear that some countries that are also quite advanced in sequencing, in vaccinations already are investing still quite significantly in new hardware as they aim to prepare for the next flu season in the fall to then maybe use more multiplexing approaches for differentiation of influenza against the COVID variant. So it's a very heterogeneous picture. And I'm not sure how well Israel will translate into other regions, but it's a very dynamic environment still.

Understood. There was another question with regard to the size of the backlog you went into the year. The question in that regard is like how much of that backlog is likely supporting your first half this year, your second half, or actually, also, reaching into 2022?

Yes. And I may have made a couple of comments as we entered into this year. So typically, our backlog is a 12-month shippable backlog. So what we ended last year with is very likely turning into revenues during 2021. Now normally, I would have said the majority or a big portion of this would convert typically in 6 months. But of course, COVID was unusual. And both on an instrumentation and consumables environment, we received also longer standing orders throughout the calendar year. But in aggregate, it's fair to assume that the vast majority of the backlog we ended last year with will ship in 2021. And of course, in the meantime, we are also taking on new orders as we went through the first couple of months. So -- but typically, it's a 12-month shipping horizon. We would not record in our order backlog anything that is beyond a 12-month shipping date.

Understood. There is a follow-up question in that regard. Since the first half of 2021 has been already well advanced in that regard, can you give us a little bit more feel how the order intake has evolved year-to-date?

Yes. It's probably -- again, it's -- I mean, we'll come to it when we talk about the H1 results, obviously. But what I can say, and I may be referring back to what I said earlier on the test volumes. And clearly, when we thought about 2021 and we've given the range of possible outcomes on the revenue side, one scenario was that with the vaccinations, PCR testing would more rapidly decline. And again, what we're seeing in the U.S. right now is already, by the end of April, 80% of the total annual test volumes of 2020 being performed. So with what I said the normalization maybe looking a little bit more modulated than rapid, it's fair to assume that we continue to see solid demand, particularly on the consumables side as it relates to COVID. But I think for us, also very encouraging to see that some of our non-COVID markets, both on our Life Sciences side with research but also pharma, in particularly, and also on our Partnering side, the non-COVID affected partnerships like in transfusion medicine or cancer diagnostics and so on are now coming back. So we see this kind of countermovement, if you want, with the normalization of COVID slowly starting, but also the non-COVID markets now coming back and the resilience of the end buckets clearly is starting to show.

Perfect. It was just directly actually a follow-up question to your last point. As you said, things on the routine side seem to be coming back. And the question in that regard is, how does it compare to your expectation when you went into the year? Is that going quicker than what you initially expected? Or is that happening just exactly the way like you did expect before? Can you shed a little bit more light there?

I mean it would be for some reason, I would have said, oh, this is exactly how we expected it to turn out. I mean, no, but I think I mean -- and honestly, I mean, that's why we've given a pretty wide range of possible outcomes for the year. And we said mid-single-digit to mid-teens. So I mean, you'll probably hear me with a confident voice illustrating that maybe some of the kind of scenarios leading to the lower end of that guidance are getting less likely. But it's still very early days. And I mean, when I look at the non-COVID markets, they're coming back in, I think, good, good pace, but we're not surprised by this. It's maybe one set of scenarios that we incorporated in our thinking. But again, for us, it's also very, I would say, easy to be actioned because we have very flexible and very modular production lines that don't discriminate between COVID business and non-COVID business and even some of our bespoke partnerships follow the same production lines. So that's why for us, we can follow the dynamic very, very short term, I would say, or on a shorter term. And we get now, I think, good line of sight from our particularly OEM partners, how they see the work. But it's probably no mystery to say that markets or applications like blood transfusions or cancer diagnostics are not procedures that are elective or kind of will be deferred for long periods of time, they typically have a clinical demand and -- as markets open up. And then this is, again, heterogeneous worldwide. These regimes will, of course, come back and rebound as patients go back to their normal clinical routine. So we see that now maybe, of course, China being most pronounced. It is not a big surprise. Europe maybe for the non-COVID markets being most, I would say, subdued in most geographies and the U.S. starting to come back with a bit more speed right now. But it's not outside of what we thought that the year could look like.

Understood. There is a question regarding M&A. Since you also mentioned it on the slide deck on -- in your presentation. Has your thinking changed in terms of what's the sort of ideal candidate would be for you? In the past, you have talked a lot about reagents business you're focusing on. Has now, with all that, what has changed in the world and also any impact on these sort of thinking on your side?

It's not really changed. But of course, we are living the reality of maybe different views on valuations and attractiveness of certain targets. But what you said is certainly true. I mean we continue to be very interested in adding what again, I called earlier, recurring revenue type of profiles like reagents, like consumables and others. And there, we are again, pretty broadly interested. So we're not only looking after genomic-related reagents or workflows, but we also have a wide interest in other education areas. So we see a lot of opportunities still there. We, again, also see outside of reagents and consumables, some very nice opportunities in Life Sciences' tools and capabilities that we still don't own. I mean we are very -- I think, very solidly organized around lab automation products and have a good business in detection, but there's a lot more in terms of technology that we could credibly bring into our Life Sciences framework. And then on the other side, we also have an OEM division where we've made 3 acquisitions in the past by adding modules or capabilities that we wanted to own in our OEM space, and this continues to be the case. So I think we are very, very broadly interested in -- when it comes to strategic acceleration of our profile. And yes, we don't see that changed through COVID. I mean maybe the focus shifted a little bit from what I would call COVID-type assets to maybe assets where we still see a very, I would say, profitable outcome for an acquisition from our side. And that's where we are focusing on at the moment. But the pipeline is very well filled, and our teams are very active as we speak, which is a big difference to last year, where most of the processes and discussions we had were more or less put on hold or frozen. And then it's very good and refreshing to see now that in the first quarter of 2021 already, there's a lot more dynamic again in M&A, which is, of course, also what I think you read in here around us in the health care space.

Understood. There's a follow-up question actually on the M&A side. I mean on the one side, if we look at the track record of Tecan, the M&A targets that you have acquired in the past were certainly not that sizable. However, at the same time, you have quite some firepower on your balance sheet. You potentially even can leverage that up, if you want. How do you see Tecan being prepared as a company, as an organization from a process perspective, so to say, to possibly also digest a larger target?

No, no, I think that's exactly the right discussion. And it's not like we didn't have kind of larger targets in front of us in the past. But also collectively, we felt the organization may have not been ready to take on something larger and maybe more transformational. And I think when I look back at the 6 acquisitions that we've done, it was very good learnings and showcases, and they followed very different integration profiles, some of which were kind of very intimately integrated and sites being shut down that we acquired. Other businesses are kind of more operating like an entrepreneur or like a kind of still very innovative, like start-up environment that we wanted to preserve. So I think also from kind of process standpoint, you mentioned kind of maybe also ERP or operational learnings, I think it was very helpful for us to go through these kind of 6 acquisitions. But I would absolutely say there is a lot of confidence in the company right now and also the Board to discuss and advance also larger, maybe more transformational targets. And then I can say they are definitely part of our active M&A list as we speak.

Perfect. That was actually the last question we got in. Do you have any closing remarks you would like to address the audience with?

Well, probably -- I will go back to the comment that I made about the performance last year and our ability to be resilient in whatever market environment we are prepared with. And clearly, what last year has shown was not just from an operational and product standpoint, but predominantly, the progress we made with our cultural journey that we called out for the company. And last year's results, for sure, would have not been possible without the absolute passion and dedication of our employees in all functions, if it's in operations or R&D or service where our teams went in with full protective gear to have accounts -- across weekends to get the testing machines up and running and then scale up testing. And this is something you cannot pay for with incentives. And this clearly, I think, was for me a very reassuring testament to where Tecan is right now in terms of the appetite and the passion that we have for growth and supporting our clients, maybe, and hopefully, a little bit in advance to what our competition is doing. And we certainly feel like we've received quite a nice wave of recognition for this also for our contribution to what you said in the beginning, our scale-up regimes from China all the way into North America and also some emerging territories that pre-COVID, we probably didn't have a lot of business interactions with, but now with Israel, Middle East, Africa and in India and Russia, we have now a lot of more crystallization and catalytic points that we want to explore going forward with the teams and the capabilities that we have.

Perfect. Many thanks. Many thanks to you, Mr. Achim von Leoprechting, and everyone, of course, viewing this online chat for joining us today, and have a great rest of the day. Bye-bye.

Thank you, very much.