Tecan Group AG (TECN) Earnings Call Transcript & Summary

Welcome to Tecan's Capital Markets Day. A special welcome to those attending in person, many of whom took the opportunity to visit our product demonstrations at our labs in Hombrechtikon this morning. I also warmly welcome everyone joining us through the live webcast. My name is Martin Brandle, I'm the Senior Vice President, Corporate Communications and Investor Relations here at Tecan. Please take note of the Capital Markets Day event page. On this side, we have posted additional information, including product videos. As this event is being recorded, a replay will be available shortly after the live webcast. After the live event as well, we will also post the PDF of today's presentation. For those here in the auditorium, photos and video recordings will be taken during this event. If you prefer not to be photographed or recorded, please notify a member of the Tecan team. Now let's take a look at the agenda. We have an exciting program lined up for the next about 3 hours. We will begin with our CEO, Achim von Leoprechting, who will discuss how Tecan is well positioned to scale health care innovation globally. Mukta Acharya will then talk about how we are accelerating research and scaling clinical impact in our Life Sciences business. We will then have a short break. After the break, Ralf Griebel will highlight how our Partnering business is uniquely positioned as a trusted health care OEM partner. Next, Hal Wehrenberg will provide an overview of how Tecan has established a leading open digital ecosystem for laboratories. Our CFO, Tania Micki, will then provide a detailed look at our financial track record and midterm outlook. Achim will then wrap up the presentation, and we will open up for the Q&A session. I will return with some comments on how we plan to conduct the Q&A at the time. With that, let me now turn it over to our CEO, Achim.

Thank you very much, Martin. And also from my side, again, a warm welcome to those who have been with us this morning already for our lab, tools and product demonstrations, and a warm welcome to everyone joining online. Before I go into a description of the markets we are serving and our strategy and midterm outlook, I would like to take a moment to just reflect on the situation we're in today. And as you've seen, of course, we have communicated an update to our guidance for the remainder of 2024 that was substantially different from what we believed in the communication in August, but also from the beginning of the year. Clearly, a couple of factors changed in between. And it's needless to say that we are navigating a quite challenging business environment at the moment. Now as we look at the sales outlook, as we communicated, to now reach between minus 12%, minus 14% in local currencies and an EBITDA margin at around 16% to 18%. Let me just spend a minute or two on the factors that drove us to this second adjustment of our profit and revenue outlook. First of all, we received substantial information from our OEM partners that reduced significant amounts of their demands for the second half and deferred revenues into '25 in 2 different categories. So one was a group of customers that had significant exposure in China that pushed out demand due to the market softness and some of the funding environment that they see in China today. And the second element also related to our Partnering business was a group of customers served by the Cavro and Paramit product ranges that continue to see significant softer environments in the government and academic and pharmaceutical market. So this was a big portion of why we had to adjust the outlook quite drastically, combined with the continued softness of the biopharma outlook for the year, where again, we saw very solid pipelines, but very slow mobility of the pipeline throughout the year. And we're now at a stage where orders are coming in, but it's just becoming too late to revenue recognize them for the remainder of the year. But this was another element that drove this adjustment. And then lastly, the China stimulus program, as discussed by many of my colleagues already, is anticipated to not have any meaningful implications in revenue recognition from the stimulus funds this year. I think we even saw some adverse effects in addition that led some customers to postpone already committed orders or anticipated orders into 2025, hoping for them -- for their participation in the stimulus programs. Now just to mention a couple of positive and silver linings that we've also seen in 2024 so far, and that continue to be also the basis of the dynamics that we will see between H1 and H2. In Life Sciences, for example, we are expecting only a moderate sales decline for the second half of '24. And the positive contributions, in particular, are coming from the recovering consumables business, a very solid contribution from service and spare parts and the continued strong demand for newly launched products, in particular, in the clinical lab services and diagnostic area of our Life Sciences business. Also in Partnering amidst quite a few challenges that I just outlined, we see some positive momentum actually in our Synergence instrumentation lines outside of China. So existing and new customers contributing meaningful to positive momentum in the second half. And also on the Paramit side, we anticipate now, and that is a confirmation to what we said earlier, a quite robust delivery of MedTech customers throughout the year, including the second half, which was anticipated earlier. And lastly, I would like to mention the very rich project pipeline that we continue to work on our Partnering side, which will yield products and partnerships that come to market till later this year or in 2025. So we're very active on the development programs and continue to be very successful to join new partners into our programs as we build out our commercial efforts. Now in response to the level of uncertainty in the markets that we're serving today, we have implemented strict cost control and a continuation of our already started structural footprint adaptations. We are very much focused on streamlining operations and our efficiency in driving a stronger supply of vertical integration on our own factories and consolidation of global supply chains as we now have a very good global footprint from our factories in North America, Europe and Asia. So clearly, in our Life Sciences side, we're focusing at the moment a bit more on the growing lab diagnostic and lab service side of the business. And the commercialization of new products, which, as I said earlier, started off on a very, very positive momentum in 2024. And lastly, we have already started to go direct in South Korea as 1 of our moves to expand our global reach with our direct presence in the region that we carved out is becoming very important for future growth. And in the Partnering business, as always, this is something we can less control tactically. This has more to do with what I said earlier, the very active development in the pipeline. But also the continuation of commercial efforts to continue to diversify our customer base in Cavro, Synergence and the Paramit business lines. Last point I would like to mention that is starting off to become quite relevant for what we do in our Partnering side is the continued expansion of our service offering, which helps also customers in the OEM side to commercialize and service and support their fleets on a global basis whenever they would not have such a global footprint. Now having said that, just to set the scene, I would like to shift now to the strategy and the outlook and the main reason for the Capital Markets Day today. Let me start off by just highlighting a couple of key takeaways that I would like you to take away from today, which are -- that we are -- from our focus perspective, in strategically well-positioned end markets and a very strong competitive environment, leveraging global megatrends that drive the demand for scalable healthcare solutions. I would like you to take away that we have at Tecan, a very differentiated, complementary and synergistic business model between our 2 divisions, Life Sciences and the Partnering business, which empower customers across the continuum from research, to pharma, to diagnostics and ultimately into the medical devices space to leverage technologies and drive progress. I would like you to remember that we are a very innovative and successful company that continuously delivers cutting-edge tools and highly competitive services that are essential and relevant for our customers and partners worldwide. We do have a very strong financial basis and foundation, which allows us to consistently deliver growth and has delivered growth over the last years, but is, of course, a very important basis for our continued investment in the company, both organically and inorganically. And all of this combined, we are in a very strong competitive position and our strategy and our end market support a midterm outlook that ensures continued above-market growth, which is complemented further by M&A activities while we continue to increase profitability. Now looking at Tecan's purpose. So what is it that justifies Tecan's existence in the first place? We are improving people's lives and health by empowering our customers to scale healthcare innovation from research into the clinic. So a lot of what we do is dedicated to 3 different sections. One is we accelerate with our products, the discovery and the insights that are needed to develop new therapeutics, new testing and treatment modalities. We speed clinical development by translating these insights into compliant solutions. And then lastly, we deliver solutions on a global scale, where we broaden the availability and adoption of innovative solutions while improving the patient outcomes across the world. So this is what we do. This is what we've done for many years, and this is what we will continue for the foreseeable future. This is simply the essence of Tecan. So when we look ourselves around us, what is happening, we continue to believe that we are in a century of biology that delivers unprecedented amount of new insights and data. And I just listed a couple of factors that drive our growth, but also make our presence very relevant and long-term viable. So 1 of which is, of course, the journey that started with the Human Genome Project, the unciphering of the genome -- of the human genome, which led to an excessive amount of genetic data being available in the range of exabytes. And of course, this project in itself and the progress since then would have not been possible without laboratory automation. Another element to consider is the demographic development worldwide, where we see growing but also mostly aging populations that press into the healthcare system. So although it is, of course, very desirable to that populations get older, they have their tendency or people have a tendency as they age to develop more chronic diseases like cancer, metabolic disorders and others and neurodegeneration regimes that need medical attention that put pressure on the healthcare ecosystem, in return demanding more bespoke, more effective treatment options and diagnostic options. So then on the other side, of course, we see some of these modalities developing for quite some time. So this notion of personalized or precision medicine is happening as we speak. However, there is a journey to be done in terms of matching up the novel treatments and medications that are available with an increased need of more fingerprinting of diseases and triaging and selecting and monitoring patients over time as they become eligible to this typically quite costly treatment regime. So companion diagnostics and precision medicine in our world view is happening and needs to be accelerated to counter the pressures that I just mentioned from the demographic development. And then lastly, AI. It is becoming the reality in our world. And the 1 example that I carved out here is, of course, the insights and generated -- data generated by AI in the prediction space of proteomics. So in previous times, researchers in the research and pharmaceutical environment, we're able to leverage insights into some probably less than 150,000 proteins as druggable targets. And now this work has just expanded with the work of DeepMind and AlphaFold and others to address more than 200 million protein structures that are computationally available to be modeled and assessed by a drug machine. So that in its own right will transform the way drugs are developed, designed and ultimately brought to market. So just to say there's a couple of factors that substantiate our claim that we are living in a truly dynamic environment that is called century of biology. Now there are a couple of underlying technology developments. And I just want to list a few of them that are relevant for our growth journey. First of all, multiomics. Again, it's a term that has been coined quite some years ago. It is reflecting the combination of genetic, genomic data, proteomic data, metabolomic data. In other words, the attempt to fingerprint a patient from all levels. And I think this morning, we talked about a 3-dimensional or even 4-dimensional puzzle, and this is becoming a reality, and it's happening to understand disease mechanisms but also treatment and therapy options. I already mentioned AI-powered drug discovery. This is happening as we speak, and it accelerates the identification of new drug candidates. It will derisk clinical trials and thereby reduce R&D costs while increasing, of course, automation needs, which is the basis of this closed loop systems that are now emerging with an AI-powered development and discovery process in early drug discovery. We see the availability of organoid and cell-based models. Again, a very important area for pharma to improve attrition in the clinical phases by capturing adverse effects or toxicologies earlier in the process, again, requiring tailored automation and lab solutions for phenotypic readout applications. In combination, we see lab automation and the need to become more accessible, flexible and cost-effective with better user interfaces, higher degree of modularity and the data-driven lab and fleet management approach to make them even more productive in the spaces that they are placed and leveraged. Another thing that is very important for us is cell and gene therapies are on the rise. It's another basis for us to consider automation and robotic solutions to scale up the development and production of these new treatment modalities. I said earlier, predictive and preventive diagnosis becoming a bigger theme to analyze vast data sets to identify earlier these signs of disease, as I think there's common understanding that the earlier diseases are captured and identified, the treatment typically becomes economically more viable and also more safe for the patient. And then lastly, another area from the medical device sector. We see a very strong demand and pull into robotic surgery and other applications that have the promise to improve surgical procedures in reduced recovery times and minimize human error and ultimately, cost of the treatment of patients in these modalities. So just to give you a kind of flavor of the spectrum that we're spending and the levels of interest and what drives our strategic expansion and growth considerations. Now looking at growth and market sizes. We are serving in aggregate, if you combine life science research, diagnostics and the medical space, a total market of around CHF 100 billion as a marketplace. But if we then trim that down to what is truly accessible for Tecan or addressable, it's probably around CHF 24 billion to CHF 25 billion as we calculated, and all of which come with a quite solid underlying robust CAGR at around the mid-single-digit range. So in itself, this is a very rich and, I would say, exciting space to be a key player. And -- but then when we take that 1 level further down, we are, of course, aiming as a company to identify those sub-applications or sub-technologies that have even higher growth potential. And when you then look at these columns, genomics, we identify areas like NGS, or next-generation sequencing. We will talk a lot about sequencing today, I suppose, but also pre-analytical sample procedures like liquid biopsy. Again, a very important feature to scale the implications and traction of NGS in various disease areas, including oncology. In cell and tissue, we see single cell analytics cell therapy, as I said earlier, but also 3D cell model is becoming very important and have a higher growth rate than mid-single digit. In proteomics, it's a lot around mass spectrometry, AI-driven protein design and spatial proteomics, which in our world have a higher growth rate around high single digits. And then lastly, in MedTech CDMO, again, as you know, we are concentrating on the faster pace subcategories of these markets in robotic surgery, neuromodulation and cardiac applications. Now having said that, again, 1 level deeper in the understanding what is truly accessible for us and how big is that accelerated portion. As you can see on this pie chart, out of the genomics segment, we carved out CHF 600 million addressable market that truly follow this double-digit growth rate applications. And they are including the expansion of NGS that is very rapidly moving from research environments to the clinical stages right now to ultimately treat and diagnose patients. Applications for these advanced genomics are noninvasive prenatal testing, transplantation matchup, but most importantly and probably most prevalent right now is the oncology space, where it spans cancer therapy selection, disease monitoring, determination of minimum residual disease and prevention screening. And I just have to say that this is maybe one of the fastest-growing areas in our world today and will be continued for the foreseeable future. And lastly, we combined both long and short-read technologies, not to be too technical here, but one of the specialties of Tecan is to be very broad and very agnostic to the underlying technologies and support both these trends. What Tecan's role in the scale and build out of these implications are, of course, workflow scale-ups and the scaling of, for example, liquid biopsy workflows in genetic testing labs with large volume extraction. We empower next generation, but also traditional genomic applications like NGS and PCR and digital PCR workloads on a variety on low-, mid- and high-throughput automation platforms, which is very important for the time being, but also for the mobility of these applications from central labs into decentral and potentially even hospital labs. And lastly, digital technologies has always play a big role in that accessibility. And we are using both our divisions to leverage our presence in regulated and nonregulated markets at the same time. A similar picture I want to draw for proteomics. And there, you can see the acceleration part of the pie chart is even slightly higher to CHF 900 million total addressable in high single-digit growth rates. And the market trends that we're seeing here are centered around the acceleration of adoption of mass spectrometry, away from small molecule toxicology testing, now into the area of biomarker and protein discovery, drug development and ultimately, personalized medicine, diagnostic applications. We are seeing the AI-based protein design that I now mentioned before in drug discovery and with the ability of prediction of protein structure is becoming a very strong, if you want, accelerate of the adoption of mass spec and other technologies in that space as well. And lastly, spatial proteomics, which improves the understanding of protein localization, interactions and tissue-specific protein expression in disease states. Again, a subcategory that we think has a very high growth potential going forward. And our role in this, similar to the genomic space, is to provide market-leading instruments for sample preparation that really span from semi-automated to fully automated, cover the entire compliance spectrum from GLP, GMP to the fully regulated IVD applications. And we are offering in this world, also not just the instrumentation and software, but also increasingly consumables, which are an integral part of these kind of total workflow solutions. And lastly, we are kind of partnering very actively also in the space of AI with leading companies to have combined offerings for particularly pharmaceutical companies that want to deploy software and the AI algorithms in combination with automation systems to optimize their development pipelines. Now the last area that I want to go a little bit deeper in is cell and tissue applications. Again, a similar picture here. There is a part of the -- an overall market that is seeing a kind of higher paced growth profile. And they are, of course, as I said earlier, cell therapy with a growing significance of CAR-T and stem cell-based treatments in cancer autoimmune diseases and regenerative medicine approaches. In pharmaceutical, the use of 3D single cell and organoid models. And lastly, tissue engineering is also becoming a bigger theme for us as we engage with quite a few companies in applications around wound healing -- wound healing orthopedics and the development of bioengineered tissues and organs for medical or research applications. And similar, our role is maybe a little bit deeper now than in the previous years where we're offering lab automation solutions, but also the imaging and the readout modalities on our detection reader ranges. So providing full packages for phenotypic screening of single cell and cell culture applications, including also the associated consumables and software. And we are also using our capabilities again in the space of OEM developments from a clinical applications where we have realized and continue to realize solutions in the space of cancer tissue companion diagnostics and single cell biology applications. Now just to give you an impression, where are we today. So this is not just a kind of futuristic dream where we want to be and where we want to engage. Tecan's position today is already very strong. So these are pie charts from 2023 revenue numbers. As you can see, a very strong distribution between genomics, proteomics, cellomics, and the MedTech application. So very solid starting foundation for us to go forward. And also by access to customer types, the distribution of life science research and biopharma, where we probably have the largest presence. And then diagnostic IVD and MedTech has the regulated parts of the pie where we have a significant presence. And the ones that are shaded in yellow are fundamentally applications in environmental, food or other application areas that we would not allocate to the previously mentioned ones. But just to say we have a very strong presence already in the revenue mix and the market access is already there, allowing us a very strong build on these existing, if you want, foundations. Now we are -- and this is what I tried to explain in this little kind of lead in at a heart of a very dynamic ecosystem as a company. We are indeed serving the continuation from research where we had to facilitate the understanding of diseases to then translating these insights into the pharmaceutical industry applications where novel medicines and therapies and approaches are developed on the basis of small molecules, large molecules, mRNA and cell and gene therapies. And then lastly, we support, to some extent, drug production on the front and back end to ensure quality and scale of these newly produced drugs. We then bridge over into the clinical diagnostic field with our presence in diagnostics, again, facilitating their journey into more personalized or precision diagnostics. We are very active in the field of medical technologies in achieving the more precise therapies or treatment from the medical device standpoint. And what I said earlier, quite a few of the diagnostically leveraged solutions are now finding their way into more prevention and prediction treatment regimes. We have the same technologies that are used just earlier in the screening or diagnosis processes to hopefully find diseases earlier before they become a material problem for the patient. Now all of this is based on our kind of presence that I just mentioned in the core applications that we're serving from genomics, all the way into MedTech and our availability of access into the customer segments from academic -- to academic research to governmental facilities, centers of disease control, biotech, pharma, but then very important for us, springboard to the clinical world are these genetic testing and reference labs that have a very high presence and scalability in the U.S. And then ultimately, what we're serving mostly through our OEM channels is the clinical and hospital space. Now having said that, we are organizing ourselves to take full advantage as a company with these 2 divisions that we have now operated for quite some time. One is called Life Sciences, and this is the part of Tecan that you would recognize from a branding perspective where the Tecan brand name is seen on the instruments, on the software and on the consumers and reagents that we're commercializing. We have a very comprehensive range of instruments where we are offering lab automation systems and detection devices, automating literally everything from simple manual actions to full, complex, integrated high-throughput workflows. We have an increasing range of consumables and reagents that support these workflows, and we would call them lab essentials and distinctive comprehensive reagent offerings for the application spaces. We are building out, I would say, the leading digital suite to maximize productivity and overall equipment and personnel efficiency with our digital efforts. And those who have been with us this morning have seen quite a few of the examples, how they materially change the way we serve and interact with clients and how clients interact with our solutions in their labs and environments. And then lastly, the service offering, a very component on how we support customers is transforming from, I would say, a field intense infrastructure to an increasingly digitally enabled workforce that keeps patient inflow as they go through the life cycle of the instruments. Now complemented is by the Partnering Business division, which clearly is a very different business in itself in the way we go to market with this franchise. The Partnering Business works with leading in vitro diagnostic, life science and medical device customers where we have 3 distinct product offerings, 1 of which is called Synergence, where we do the entire work from concept to industrialization, to long-term life cycle management of entire automation systems, predominantly in the space of in vitro diagnostics. In Cavro, we're actually respecting the fact that not every company wants to outsource entire programs. So we have an offering that supplies the building blocks and fluidics and robotics to every company that is in this field of diagnostics and life sciences that wishes to leverage their own R&D infrastructure and wants to use Tecan building blocks to accelerate time to market by using our high quality and proven platforms and modules. And then lastly, since 2021, we are in a position to offer a very comprehensive offering around contract development and contract manufacturing through Paramit. We're addressing the MedTech, life science and diagnostic market with an unparalleled production environment called vPoke that allows us to not just very rapidly industrialize, but also transfer production in literally every location that we operate worldwide in a very seamless fashion. So very, very amenable, particularly also to regulated market, as through this setup, we can deliver near to 0 defect productivity and product development. Now having said that, again, coming back to 1 of the key features of Tecan which makes us competitively, I would say, quite unique that we have that ability to seamlessly scale from research into the clinic. And 1 example, again, is shown here in the space of next-generation sequencing, where for many years, we have empowered life science research customers with our Fluent platform to facilitate the understanding of the genomic makeup of patients and populations. We then see in the middle, the same Fluent solution being used to industrialize these applications. So we are working with clinical service provider lab of specialist labs that take these solutions and deploy dozens of our instruments with our consumables to show on an industrial level, the clinical validity, patient relevance and reimbursement potential of such a technology. And all of this happens predominantly in our Life Science division. And then typically, what happens -- and this is in real time happening in next-generation sequencing. Now this attracts the leading diagnostic companies who want to then embed these technologies into their franchises, which is then our bridge over into the partnering world, where we're using similar or the same infrastructure, similar to the same platforms to realize a modified version that then goes under the brand name into the commercial channels and support channels of our OEM partners. And this is 1 of the reasons why this kind of connectivity between Life Sciences and our Partnering business is so important by sharing platforms and technologies. Now another area that we are very proud of, and I remember in 2019, when we had our last Capital Markets Day, it's truly that long ago. I started to talk about modularization and how important that is as a core competency of Tecan to be able to fast react to market trends and dynamics and to leverage competencies between both business segments at the same time. We have now arrived at a very mature state of modularity, both in hardware and software. And this allows us to share hardware and software between both divisions, Life Science and Partnering. We can use these infrastructures both for nonregulated and regulated environments. And the modularity per se, of course, allows us to be very fast to market with new solutions with very low financial effort, but also very low risk burden on these programs, which is very attractive for our own product development regimes, but also for our Partnering clients. As you can see in the middle, what we call the core is called MAPlinx. This is the software architecture that we've created, and this literally allows us to facilitate any of the workflows that I mentioned before in the genomics, proteomics and cell and tissue space, but it also allows us to work with literally every hardware configuration, from point-of-care devices all the way into more complex, fully integrated lab automation systems, all the way into bespoke and novel hardware configuration. So this is, for us, one of the competitive essences of Tecan, to be able to do this in a very comprehensive fashion across the continuum of research to highly regulated IVD applications. And we continue to apply that modularity as we go through the development processes. Another core theme for us -- and my colleagues will talk a lot more about this -- is Tecan's competency in digital solutions. And I mentioned service already, where we're moving more and more from fixed and repair to prevention, prediction and remote service and repair. We have a very comprehensive set of software solutions, allowing fleet management. Again, starting off in the Life Science division but attracting more and more clients also on the regulated diagnostic solutions side on Partnering. We have one of the unique platforms around lab orchestration, where we launched the entire new software platform that is capable of driving lab productivity for entire labs, including Tecan products, but also including third-party and even competitive products, a very novel approach in our world. And the other part, very important, as you've seen earlier this morning, those who are live with us today, user interface, ease of use is becoming a very essential feature in order to extend the adoption and make the utilization of the system safe and regulatory compliant and easy. And then last year, I mentioned before, the modular software architecture, why that is so important to our future build-out. Now having said all of this, so we are, of course, very active in developing new products all the time. And one of the key things that we are looking at is how are also our user base is changing and developing. How are our applications developing and changing. And one of the things I just wanted to highlight is on the labor market side, we're seeing an increased shortage of skilled and qualified labor, not just in academic and research lab, but increasingly and probably even more importantly, in regulated and clinical labs. And this is combined with very high staff turnover rates. On the application side, we see applications becoming more and more complex. So I listed here too. One is a kind of pretty known one in the proteomics space called ELISA, which is an immunodiagnostic technology using probably something between 10 and 20 individual steps of the protocol. But by contrast, now you look at the NGS library for an RNA seq protocol, which requires 100 to 150 steps. And then if you combine the labor shortage and the qualification need on the people side with the increased complexity of applications on the biology and application side, this clearly leans towards and demand solutions that are scalable, robust, regulatory-compliant, and quick to get started and quick to get trained on. And this is exactly what we are driving and what we are accelerating in our programs. And this ultimately leads me -- and for those who are with us, you know what is coming now. We are very proud to announce a redefinition of a product that will drive growth in lab automation for research to the clinic. And therefore, for the audience online, I think for the first time, we will unveil the name and the look of the system, and my colleague Mukta will speak a little bit more later on about what it does and why we're so excited about it. And without further ado, I launched it for the second time today, but the first time for the public online. So welcome, VEYA. So VEYA is a truly digitally empowered workstation that allows us to really redefine lab automation and drive growth in all applications from research to the clinic. So more about this later on. Now then finally coming to the financial outlook and growth drivers. And I'm absolutely aware that we are navigating more challenging times today, but we are confident that these are temporary. And the other part of our confidence, of course, is that we are currently observing no significant competitive changes or any changes in technology adaptations and all these things. So we are very confident we continue to be in a very strong position in space. And this means that we reconfirm our outlook to return to average growth rates -- organic growth rates in the mid- to high-single-digit percentage range. And then ultimately also driving profitability forward in the range of 30 to 50 basis points on the adjusted EBITDA, as we communicated in our previous communications. So we are very confident that the markets will rebound, that the temporary challenges that we're seeing are transient, and then we will recapture that market growth in the midterm outlook. Now looking back again at 2019. So what have we done? So what is our credibility. If you want to stand on what I just said about the future outlook, it's in the numbers since 2019. So these are, if you want, the revenue numbers, the adjusted EBITDA numbers, EPS and cash flow all improved around 70% to 63% in that time frame. So I would say, substantial scale up of the business. And then also the company with, of course, a double of the sales force, which gives us a lot more access, a lot more bandwidth worldwide to serve our customers in a much different way. And this is, of course, complemented over the years by acquisitions. So we've grown organically quite solidly, but we also added along the time access since 2014, quite a number of bolt-on, and to some extent, 1 transformative acquisition in this space of genomics, cell and tissue proteomics and MedTech CDMO, again, substantiating our strategically motivated acquisition pace covering companies from IBL in specialty diagnostics to specific modules for our Partnering business with SIAS and Pulssar and specific products in mass spectrometry consumables with SPEware and genomic content and reagents with the Nugen acquisition in 2019. And of course, logically, the largest acquisition in Paramit, 2021, gave us access not only to accelerated path to life science and diagnostics but also to the very broad MedTech and CDMO space. And lastly, this year, we acquired our distributor in South Korea to expand our reach there. But we, I think, are very well arrived now at a situation where our footprint is truly geographically differentiated. So when you look at our operational footprint, 1/3 of our factories are in the U.S., 1/3 are in Europe and 1/3 are in Vietnam and Malaysia. So in a very good Asia footprint as well. I think that's a very good basis for future growth both organically but also inorganically, we have a different framework right now to integrate into. We have a dedicated execution regime for our presence in China too where we are able to localize products for final assembly, but also starting kind of more kind of an R&D, if you want, footprint in China as well. We focus on high potential geographic regions, as you can see, also with the expansion of our commercial channels, ultimately with our decision to go direct in South Korea. That is not the last step, but it's of course, always a careful consideration is the distribution model of direct presence, more productive in Korea just across the line. And then lastly, very important for a company that is moving increasingly from an instrumentation company to a recurring revenue company profile in addition to instrumentation is the build-out of e-commerce and the ability to serve customers on the recurring revenue profile schemes more elegantly on a global scale with the right processes to enhance the customer experience. The other very important theme for all of us is, of course, sustainability and how we kind of embark on that journey. And this is not a novel theme for us. That is something we embedded in our strategies and operational build-out for many, many years, but maybe in '21 was a point where we took a more professional approach by installing a Sustainability Committee and ultimately running the first materiality analysis to make sure that we are focusing on the right things that matter for us and for the business continuation. In 2022, the one thing to highlight is the commitment to the Science-Based Targets Initiative, which was ultimately approved and acknowledged that we have valid targets and goals there. And lastly, on '23, I think we made very good progress again on data reporting and the achievement of double materiality assessment, which was completed alongside many other things in the ES&G ranges. And then lastly, in 2024, we, of course, had our shareholder approval for our first comprehensive sustainability report. And we continue to drive our climate scenarios, which is becoming more and more important, I think, for our business presence worldwide as we go in the next phase of our development. And lastly, we have, I think, a very good recognition for what we've done so far. I think we are very proud of the achievements. But most importantly, we are very proud of the recognition from our customers, for which our advancements are not just nice to have, but becoming also very essential in selecting who to work with. And we see that recognition both on our Life Sciences side in big pharma, but also lab service provider accounts, but more or less without any exception on the Partnering side, we get very good rates and acknowledgments for our journey in sustainability efforts. Now again, I just would like to summarize what I said so far. I believe we are continuing to see a very dynamic environment, a very solid and valued environment driven by the megatrends that I mentioned and a solid foundation of the underlying markets that are coming in at around 3% to 5% underlying growth. And we are able and we have been able for quite some time to outgrow them by focusing on high-growth applications that I mentioned to you. The ability to rapidly innovate, drive a meaningful strategic partnering programs, not just in our OEM side, but also on our Life Sciences side, the selective reference accounts with our commercial expansion, we're in a very good position to take advantage of these trends globally. And lastly, we are in a very good financial position to continue to drive strategic M&A complementing our organic growth profile. So this is what I wanted to share with you as a kind of lead in to the subsequent discussions, and I would now hand over back to Martin who will introduce the next speaker. So thank you very much, and I will be back at the end for a wrap-up.

Thank you, Achim. We will now continue with Mukta Acharya. She is the Executive Vice President and Head of our Life Sciences business.

So welcome from my side as well to everybody in the room as well as those watching the webcast online. Over the next 30 to 40 minutes, what I want to do is give you an overview of the Life Sciences business. And then I also want to share with you visibility into our key growth application areas as well as the innovation that we are driving in those areas, how we are differentiated and how we are positioned for success. So with that, I'm going to go through the slide pretty quick. Achim talked about this briefly. But again, so the Life Sciences business, it basically comprises of a wide area of instruments that enable automation. We also have a robust set of offerings from reagents and consumable standpoint that go hand-in-hand with the automation. We also have a suite of digital tools and offerings that really enable our customers to make the most of the lab. And then last but not the least, we have some excellent service offerings that are also being enhanced now by the digital tools that we have, really creating that best-in-class experience for our customer base. With that, I'm going to transition into. So what does the Life Sciences business do? So if I have to just boil it down to 3 key themes, right? The first one is leveraging the portfolio that I just shared, right from instruments to reagents, consumables, digital tools and service offerings. We leverage this entire comprehensive set of automation solutions to then enable our customers to scale their multi-omics workflows. Second, what we do is we also support our customers in helping them under complex disease states, and we're supporting them in their journey to identify these novel therapeutic solutions. So we play a key role all the way from research to clinic. And then the third one is, we also facilitate translational research so that our customers are able to bring treatments to patients faster and globally. Now very quickly, I want to point your attention to the right-hand side. So [ then right ], this is again, showing that the Life Sciences business has witnessed a very strong track record of financial performance over the last several years. You can see here, over the last 10 years, have a CAGR of about 7.5%. So again, I just want to say that have consistently demonstrated revenue expansion, and we've done that through various growth levers from geographic expansion to expansion in different customer segments, in different application markets. So again, what I want to say is while in the near term, we are navigating through some challenges. I think we are very well positioned to drive growth in the mid and long term. And I'll speak more to that in the coming slides. Now I just want to provide a quick snapshot into the revenue profile of the Life Sciences business. So how we are split by application segments, customer segments as well as recurring versus nonrecurring revenue. So you'll see here proteomics, genomics and cellomics, are the key core application growth segments for us. And then from a customer segment, we serve all the way from biopharma applied clinical government academia, but biopharma and clinical make up most of our revenue. Then when you look at the recurring revenue, I think this is very healthy. As you can see, recurring revenue is a big proportion of our total revenue. So again, this indicates for us stability. And I'll speak a little bit more about how we got here in the next slide. So when we look at recurring revenue, right, and when I look at this proportion, for me, it's very sustainable. It indicates sustainable growth as well. And this didn't happen just like that. I think this is because we have deliberately invested in nurturing this recurring revenue profile over the years. So for example, in our reagent portfolio, we have a robust set of reagents that can be used in the key application workflow. When we look at our service and spares, again, we have a global team that is able to support our customers in addition to the digital tools that just enhance that experience for our customers. On the consumable side, again, we have very high-performing validated consumles -- consumables on the Tecan platform. We also are working on several initiatives, like Achim mentioned before on really reducing that environmental impact, both for us as well as for our customers when it comes to sustainability. And there is a strong innovation pipeline here from a consumable standpoint. So again, I think the key takeaway here is recurring revenue is definitely very healthy part of the base business. And I think this is also a testament that our customers view us as that trusted partner that truly is enabling that stickiness and allowing us have that year-over-year growth in this recurring revenue profile. Okay. With that, I'm going to again, just very quickly talk about and introduce the core application segment, similar to what Achim mentioned, very much so the Life Sciences business is also in the front and center of this very dynamic health care ecosystem. So what we do is and I'll explain more as I talk about the key application segments, but we are able to drive value and engage with our customers along this entire journey at very meaningful touch points. And then we leverage our depth and breadth of that we have in genomics, in cell and tissue, in proteomics to truly unlock bottlenecks in the customers' workflow. So with that, I'll transition to exactly how are we adding value to our customers? Like how are we driving value for them? So in a nutshell, the way we drive value is we are enabling our customers to unlock key bottlenecks in their workflow. Again, this is a simplified version of what a lab workflow could look like, starts with the pre-analytical steps then they move on to sample prep, and then you have detection and analysis. Typical pain points in a lab workflow include, a, the limitations to scale, two, you require highly skilled labor and like Achim pointed out, there is a shortage of skilled labor that we continue to see in this industry. So that becomes an additional challenge. Then when it comes to -- there's also challenges with regards to reproducibility, repeatability, accuracy and speed. So this is where we come into play. And we're able to very nicely leverage this automation solution suite that we have to unlock these bottlenecks. So we are helping our customers to, a, accelerate research as well as scale from research to clinic by implementing innovative solutions and directly hitting on all of these value drivers. So I'm going to share with you a little bit more in terms of how we drive this innovation, how we drive value across each of the 3 core application segments. So I'll start with genomics and the framework I'm going to use for all the segments is I'll give you a quick high level on the trends that we are seeing. How is the Life Sciences business well positioned to capitalize on these trends, I'll highlight an innovation that we have in this space, and it's not just the only innovation, but it's one of many innovations just to showcase to you how we continue to drive differentiation through our innovative product. portfolio. So with that, I'll start with genomics and the key trends. So the first is we do see next in sequencing, including long-read applications to become more and more prevalent in biotech and in bio-pharma as well. Second, liquid biopsy. Liquid biopsy is gaining momentum. It's complementary to tissue biopsy but because it's noninvasive and it has proven to improve clinical outcomes, there's more of a momentum that's being seen in that space. And third, single-cell genomics is also gaining momentum, especially in the gene editing space. Now moving to at the high level the role that we play to capitalize on all these trends. For the next-gen sequencing, we have a wide area of solutions to really enable our customers to automate that end-to-end NGS sample prep workflow. On the liquid biopsy piece, we have a breakthrough innovation called the Phase Separator that some of you have seen earlier this morning in the lab tour that essentially allows us to not only automate, but really drive the throughput and reduce the error rate in a whole blood workflow. And then in terms of single cell genomics, we are able to offer not just high-throughput solutions, but also miniaturized workflow solutions that can truly help our customers to drive biomarker discovery and drug development. With that, at a high level, I just want to show you what an NGS workflow could look like. As you can see, you have the sample prep, the nucleic acid purification and then it goes to NGS PCR and you get the sample ready for downstream analysis. So essentially, what I want to show on this slide is how we're combining our excellence in instrumentation, in reagents, in consumables, in service offerings to truly drive value for our customers by providing end-to-end automation workflow solution. So we have several flagship products and solutions in our portfolio, right from the Spark Cyto, Phase Separator, DreamPrep NAP, DreamPrep NGS, reagents and consumables that enable us to be that one-stop shop solution for our customers in this space. And then with that right, I just want to highlight an innovation that we have in this space, which is the Phase Separator. So essentially, the Phase Separator, this comes into play in a liquid biopsy or whole blood workflows. It comes into play more in the upstream process, where it's a step that is super critical, where the lab operator is trying to separate plasma and/or buffy coat from the blood sample. In traditional methods or in alternative methods, usually, it's either done manually or they use a camera-based technology. Now these come with their own challenges. A, there's limitations on the throughput because, again, the tube has a lot of labels. So sometimes it makes it difficult to read. Second is also the -- it has a higher likelihood to do more reruns because of the way the technology and the workflow is organized. So when you think of the Phase Separator, the reason why I say it's breakthrough, it truly touches on those pain points. a, it's not a camera-based, it's a pressure sensing technology that we use. And we are able to successfully separate the plasma from the patient sample less than 1% error rate. And then in addition to that, we're able to also very much increase the throughput, and we have feedback from customers that using this technology, they have been able to increase the throughput by 2x. So again, very novel technology in order for us to show our commitment in this liquid biopsy space, we're also embedded in a lot of different global associations for liquid biopsy so that we cannot only collaborate we can also capitalize the evolution of this space. With that, I think for me, when I think about innovation and success, the true testament is when you have customers that not only use this, but they scale it, and this is one example that I wanted to share of a large reference lab in the U.S. that has not just implemented, but they have scaled this Phase Separator solution. So they've implemented over 10 systems. They processed over 200,000 blood samples with it. And they have given us feedback that they have close to 0% error rate or rerun rate, and it has significantly improved their throughput. Again, it boiled down to the value drivers of speed, accuracy, throughput and truly technological innovation that gives them the confidence that is -- this is truly differentiated and taking those key pain points that I described earlier. So now I just want to highlight very quickly one more example of how we play a role in the downstream part of this NGS workflow. So we have another flagship product called the DreamPrep NGS. And the DreamPrep NGS, when coupled with our Tecan multi-mode readers, we are able to offer qualified application solutions for cancer research with again, seamless automation. So again, I think for me here, the key takeaway is that when you think about the -- when you think about the genomics space, we are well positioned to offer differentiated walk away, fully automated end-to-end workflow solutions in key steps of the process. So with that, I'm going to now transition to cell and tissue. Similarly, I will start with some of the key trends that we're seeing in cell and tissue. I think Achim touched on some of this, so I'll go through it pretty quickly. One is that 3D cell models are becoming more prevalent in the area of drug discovery and disease modeling. This is also because 3D models are known to mimic human cells more closely. Second, we see that cell therapy is being used more and more to treat rare diseases, cancer, autoimmune diseases as well. And then single-cell analysis is playing a key role in precision medicine. Then in terms of you know -- so how does Tecan capitalizing on these trends, right? So I'll just highlight a few examples. On the 3D cell models, we are able to offer an end-to-end 3D cell automation workflow solution. So all the way from cell seeding to imaging and analysis. In the cell therapy, an example is we're able to provide QC testing automation for the cell therapy workflows. And when it comes to single-cell analysis, again, we are able to provide end-to-end workflow automation solutions for stem cell reprogramming, maintenance as well as differentiation. Again, this is at the high level, what a cell and tissue workflow could look like. As you can see, you have the cell seeding and isolation, then the cell culture maintenance, the growth and then you have the drug screening and the image analysis. And I think the key here when you look at the slide is, again, how we have a comprehensive suite of solutions ranging from our Uno Single-Cell Dispenser, our Fluent Automation Workstation, the D300e Digital Dispenser, Spark Cyto, the consumables cassettes and accessories that allows us to play very nicely in this space and be that again, that one strategic workflow provider for this kind of workflow. Now I would like to highlight an innovation, again, which some of you may have seen in the lab earlier today, it's called the Spark Cyto 3DAI. To me, this is very cool and very interesting for many reasons. So essentially, what does the Spark Cyto 3DAI do? So one is, it's basically automating the step wise imaging of 3D objects like organoid and spheroids. Second is the AIP. So basically what it's doing is it's using deep learning algorithms to do the segmentation. And you're also able to do the segmentation in brightfield. And what that means is you don't need to stain your sample. And that is actually a very big differentiator because when you are doing drug discovery, cancer research, you don't want your 3D models to be contaminated with anything artificial in it. And then a couple of other things is the software, it's super easy and intuitive to use. So a user can very quickly get up to speed on this and be able to generate useful data and information quickly. So really, again, as we think about the trend of 3D cells and 3D modeling becoming more and more prevalent, this positions us very nicely, especially in the areas of drug discovery and cancer research. So with that, I'm now going to transition to proteomics. So again, with proteomic, I'll start off with some of the key trends. So one is, again, you've heard Achim talk about cutting-edge mass spectroscopy. It's really becoming more and more prevalent because it enhances protein detection and quantification better precision and speed. Second is, we're seeing more and more integration with multi-omics. And third is that AI and machine learning is becoming more critical and being more prevalent when it comes to revolutionizing the protein structure prediction as well as driving insights in proteomics. So what role do we play when it comes to these trends? So one, I will say that when it comes to the LCMS space, we do we can offer an end-to-end sample prep solution for the LCMS workflow. Second is when it comes to multi-omics, I think we are uniquely positioned because we can leverage the depth and breadth of expertise that we have in proteomics, in cellomics, in genomics to really support customers in their journey of multi-omics. And third, again, we are actively exploring strategic partnerships that will allow us to further accelerate our AI-driven inside journey as well. So again, like I did with the other segments. This is just a quick example of where proteomics comes into play in different types of workflows. So you'll see here in bioprocessing with like for purification and quantification, proteomics is used. For the LCMS sample prep, it applies end-to-end. Same thing in an immunoassay workflow, it also comes into play. And a very similar theme here as well. Again, we have a wide array of products and solutions, ranging from the Resolvex Prep to the Resolvex i300 on Fluent that some of you have seen live this morning to our readers, washers, reagents, consumables that, again, positions us well to support in this proteomics space. Now for proteomics, I wanted to highlight an innovation that we have in this space. It's called the Resolvex i300, and this Resolvex i300 plays a key role we are enabling our customers to automate their end-to-end LCMS sample prep workflow. So this Resolvex i300 is basically a solid phase extraction manifold that integrates very nicely into the Fluent, and it can do many kinds of purification as well as extraction. And this i300 is used in conjunction with our Fluent Workstation that again, some of you have seen and our whole set of reagents and consumables and lab ware that really allows our customers to very easily automate their workflow. In addition to that, what I want to point out are two differentiators. One is have the capability to integrate an evaporator. So then the customer is able to do that evaporation step within the same workflow. And typically, this is done as an off-line step that takes up a lot more time. So this truly is also helping them to optimize that overall workflow. And then we also have a patented [ drip ] protector that driven cross contamination, and this also becomes critical because if you have your sample contaminated by anything, then you don't have an application anymore. So that's where it's truly differentiated. So again, this solution overall, when used in combination with the different -- our different offerings, we're really enabling our customers to drive deeper insights. Okay, so I talked a lot about innovation and how we use innovation as a key growth lever. I just also wanted to share an example of a strategic partnership that we have. And we also constantly thinking assess of strategic partners as we think about growth to help us expand our reach as well as expand our presence and share. This is an example of a partnership that we have with a company called PreOmics, it's a Bruker-backed company, and they are a global manufacturer of LCMS reagent kits. And we made this very specialized reagent kit for plasma proteomics. Essentially, what the kit does is it's able to identify biomarkers in plasma. So again, plasma proteomics is a new area for us. And by -- we are -- by doing the strategic partnership, we are able to play in this space, and we're also helping PreOmics customers to automate their workflow using the PreOmics plasma proteomics kit. So again, this is more to show as an example that not just innovation, but we're also constantly exploring, assessing and implementing strategic partnerships as well to accelerate our growth. So with that, I wrap up the key application growth segments, and I'm going to transition to talk about the exciting new launch that we have called VEYA. So I can touched on this briefly. So for me personally, this is super exciting because it truly democratizes access to automation for everyone in the lab. And we do it in many different ways. So I would say the first one is, VEYA is able to provide a very transformative user experience because it comes with these predefined preloaded scripting and workflows, it just makes it such a differentiated experience for that lab user. Second is VEYA is able to optimize productivity. And how it does it is again, it's very well digitally connected and we're able to use smart tools to drive actionable insights for the lab users. So they have metrics and information on usability and productivity at their fingertips, and they are able to make real-time decisions continually optimize their productivity. I would say, the other thing is it's robust and reliable. It's built on acclaimed platform that we have used in the partnering side of business. And I think what's super exciting about this is it also brings Tecan's modularity framework to life, and it's a way that we -- the way moving forward for us to leverage this kind of modularity to accelerate innovation. So this is an example of that. In addition to that, I will say that it's easy flexible to use. So a person even new to automation can get VEYA up and running in 30 minutes or less. And then it's a great fit in the clinical environment, and it also comes with high performing exclusive Tecan consumables. So overall, again, I'm just going to reinforce what Achim said, this truly redefines automation, and it's transforming that user experience in the lab. Now just double-clicking on some of those value drivers, right? Why we believe this is truly differentiated. This is truly breakthrough and is going to help us to address a new market. So I talked about the transformative user experience with the predefined application suites. But in addition to that, we also have AI-enhanced intelligent automation. What that means is we have some very robust process protocols in place that inherently reduce the risk of error. From an optimized productivity, I think what's key to highlight here is you -- there's a one view screen and that is able to display key parameters that are critical for your experiment to run as well as key insights that will help you keep on top of things and ensure that your lab is truly being productive, you're maximizing your uptime and you're reducing your downtime. In addition to that, the digital power that this -- that the VEYA has is also helping us to provide a better service experience for our customers. So essentially, we have a digital twin of the customers VEYA in the cloud, and we are able to remote monitor, remote diagnose. And if there is a problem, we can get our customers back up and running within minutes, within hours, having to always send someone out in the field to root cause, diagnose and solve the issue. And then again, it's a great fit for the clinical environment, from a regulatory and compliance standard, both in Europe as well as in U.S. And then the tips and the fact that it's based on an acclaimed platform that we have already seen proven success absolutely makes it super reliable and robust. With that, I also wanted to -- I'm going to wrap this by telling you why it's also commercially exciting, right? So there's two things here. One is if you just look at the blue line below right, a, this allows us to complete the platform portfolio; and two, it helps us to expand addressable market. So when you look here, we have the Fluent, which is our flagship automation solution that is used for high complexity and high throughput. And now we have VEYA that is truly addressing low to medium throughput and the low to medium complexity. So between VEYA and Fluent, what we like to say is we have that powerful duo of automation that is able to serve along that entire spectrum of low to high complexity and throughput. So for us, truly, it well positions us to expand our share, expand our reach and a combination of VEYA and Fluent truly enables our customers to do both that effortless automation as well as have that perspective of the solutions are limitless. So again, I'm truly excited for the launch of this product. I do think this newest addition to the Tecan automation family is very well going to position us to win and take share. With that, I'm going to wrap up with this slide and then the key takeaways. So I think from my perspective, we are super well positioned for market leadership and profitable growth. And when we think about driving growth, you know it's hinged upon some of these key levers. So first is we will -- we have won with innovation, we will continue to win with innovation. We are constantly investing in breakthrough innovation because we strongly believe that that's the way to differentiate drive value and win. And that, coupled with the digital road map and the digital suite of solutions that we have absolutely makes us well positioned to have a strong growth trajectory. The second lever is around commercial excellence and commercial expansion. Achim already mentioned from a commercial expansion standpoint, we invested in having a more of a direct presence in South Korea earlier this year. And again, we will continue to explore and assess new emerging markets to, again, keep growing and expanding our geographic reach and share. That, coupled with commercial excellence is going to be key for us. So it's the flawless execution, the best-in-class sales processes, solution selling, all of this is going to position us well. And then the third is we are a trusted partner to our customers. We are the experts and pioneers in lab automation. So for us, it's really building on that brand equity, that reputation that we have to further our growth. Coupled that with our applications know-how and expertise to well position us. And I will say this is also strongly reflected in a robust pipeline that we have. That also gives me confidence in the strong mid- and long-term outlook. And then moving on to profitability. I will say that digital tools are becoming more and more a part of that daily work. So we continue to explore digital tools not only to enable efficiencies for us as well as cost effectiveness but also to ensure that we are able to provide even more an improved experience for our customers. Second is driving that recurring revenue profile. So we will continue to nurture that recurring revenue profile, and that is going to position us well for sustainable growth. And lastly, we do -- we will improve our gross margins, especially with value-based pricing. And I think we are super well positioned to do that because of the innovative portfolio that we have. So with that, I'm going to leave you with these 4 takeaways. So the first one is, again, a reminder that we do serve very attractive end markets and we are well positioned to capitalize on those global mega trends to really grow above market as well as expand our margins. The second is fast paced innovation, fast-paced innovations in high-growth applications, coupled with digital solutions is going to position us really well. And then the third is, again, we're going to build on the globally leading position that we have in lab automation and leverage the R&D modularity to continue to accelerate innovation. And then last but not the least, we have a proven strong track record of financial performance like you saw. That, coupled with the growth levers that I just mentioned, I feel very confident that we are super well positioned for a strong and healthy mid- and long-term outlook. With that, I wrap my presentation, and I thank you for your time and attention.

Thank you, Mukta. We will now take a short break for all participants of the webcast. We will be back live at 3:35 CET, 3:35 p.m. CET. [Break]

Good. We're a Swiss company. We want to start on time. Welcome back, everyone. We will now continue our session with Ralf Griebel, our Executive Vice President for the Partnering Business.

All right. Thank you. All right. Thank you, Martin. Welcome to everyone here in the room, and welcome to everyone online. I have the pleasure today to present our partnering business, which is basically OEM and what we do in this business. So this is Tecan's partnering business. So we are the trusted health care OEM partner, scaling health care services worldwide. We are working in 3, let's say, businesses, we have 3 brands, which is Synergence, Cavro, and Paramit. Let me explain you. I mean, Synergence, this is basically our customized OEM systems. What we do here, we automate processes, health care automation for lab diagnostics and for Life Sciences. This can start from Tecan analyzers, which you have seen this morning and also here around, it can start with the platform. It can also be from scratch developments, it depends very much on the automation project on the customer, how we start here. We have entry-level platforms. We also have our flagship project -- product Fluent. And this is what we do here. So we basically partner with our customers very early. We discussed requirements, specifications and project plan, design plan. We do the development for them and during manufacturing, we take care for the life cycle management of the product which means spare part supply, obsolescence management, feature expansion and so on and so forth. This is why these programs are typically multiyear, 10 years plus. So we entertain very, very long-term relationships here. On the Cavro end, we have standard and customized OEM components. Cavro is maybe our best-known brand. It stands for very reliable and fluidic and robotic components. We have some of the components here in our lobby. So basically, this is when partners decide for in-house development. They do their development by themselves, and they select our components. And the components play an important role typically in these automation projects. As I said, it's liquid handling components, pumps valves and robotic components like XYZ stages. The third brand we have is our contract manufacturing brand, which we have approximately 3.5 years now since we have acquired Paramit. Here, we serve the Life Sciences market, lab diagnostics and also the medtech market. With our VPoke manufacturing execution system, we have basically unconstrained capacity and unparalleled reliability and traceability, what we can offer here. Maybe quickly the press of this portfolio, I mean, serving the markets from research, diagnostics and medtech plus starting with components, doing full developments or manufacturing only gives us quite a unique competitive positioning. This is our track record over the last decade. Through the last 10 years, we grew by 16% annually. What you can see here is we had also 4 acquisitions in the Partnering Business, Sias, Pulssar, DCPMI and the latest one Paramit. Paramit was quite transformative for the partnering business since we have acquired Paramit, You heard me saying we cover the medtech market also. We also have a very, very different, let's say, footprint. So we have 1/3 of our people and manufacturing in the U.S., 1/3 here in Europe and another 1/3 in Asia, which was quite transformative for us. Here, this is the different markets. On the left, the left pie chart or donut chart, what you can see here, lab diagnostics and medtech, the regulated markets the majority of customers we have in these markets. We also have an interesting Life Sciences business. So when talking about Life Sciences business, this is partners where we provide our long-term services to. Many of these partners have the, let's say, plan and sometimes from the very first day to start in Life Sciences and move at a later point in time into lab diagnostics. On the right, you see the application segment split. The application segments, you have heard us this morning in our presentations. You also heard Mukta and Achim talking about it. We have key focus area, cellomics, proteomics and genomics. This is where the partnering business is, of course, also very active in, as you can see here, plus medtech since we had acquired Paramit. I will come to these different segments later, and I will also show you a couple of examples what we do in these different segments. This is our global network where we benefit from in R&D and in operations. So we basically have 5 R&D locations, the largest and the core team residing here in Switzerland. We also have competent centers in Europe and in the U.S. This helps us quite a bit when doing programs with international companies and the majority of our business and the majority of our partners is in the U.S., so very helpful having this footprint. We also have 5 manufacturing sites, which is maybe even more important because if you think about how these analyzers after development are manufactured, it's very depending on the complexity. It depends on the end markets, also on supply chain and even simple things like size and weight of an analyzer, which is a variable to be discussed with our partners, what makes most sense. So basically, we can manufacture here in Switzerland, we can also manufacture in the U.S. and we also have access to a large manufacturing site in Malaysia. So a lot of options what we can offer here to our partners. Quite interesting also, we have a vertical integrated precision machining. We also do our own circuit boards. Think about a typical analyzer. They are very, very electronics heavy. That's very helpful, and we have our fluidic components in-house. The exceptional quality, I think it's needless to say the area we are serving here in the partnering business. It's very regulated. We have quite many FDA and customer audits going on, and we are capable of FDA Class III device manufacturing. That's what we can do. Here, the global reach of our commercial organization, though basically the green part, we have people on the ground. In the last 18 months, we expanded our U.S. commercial organization to strengthen our Paramit service offering. We have also put a lot of emphasis on our joint selling approach with our offering now, Synergence, Cavro and Paramit. We see a lot of synergies, and I will explain also later why this is the case and which benefits we have there. We are very targeted now in our -- in the customers we approach. Don't get me wrong. We are not arrogant, but we know that there is specific customers where we believe we can bring highest value to, and we have selected these customers, and we approach them in a quite holistic way. It's typically not the projects we are looking for. That's long term, it's relationship building. It's typically not relationship to 1 person. You have to kind of embrace that whole account, that whole company. And you really need to find out where can you bring best value to these customers. Another very unique thing for an OEM business. And this is what I have due to our end customer business is the global support and field service team. That's very helpful, especially in the early days, also when you partner with smaller companies, where we can support a lot with our own field service, which not every customer who engages with us has. Here, again, the 3 brands, Cavro, Paramit and Synergence. I mentioned that we see a lot of synergies here. Just to give you a couple of examples. A typical Cavro customer is a company who wants to do his in-house development and is selecting the components like fluidic components or XYZs or robotic components like XYZ stages. When we are at the table talking to them, that's in the very, very early phase of the instrument development. So there is another one, maybe 2 years ahead of them until they finish development. This is the point in time when we introduce our people from Paramit now and we can at this point in time, already discuss how to do the manufacturing, who is doing the manufacturing of the full instrument or maybe components. We do also leverage our Synergence relationships, as I mentioned earlier. Synergence, we do -- we entertain very, very long-term relationships, 10 years plus when we supply an analyzer to our customers. This is very deep relationships we have. This is, let's say, quarterly meetings, which we have with these customers. And there, we, of course, also introduce now our Paramit manufacturing. We have people from Paramit at the table. And these customers are typically large. They have much more instruments than the ones we provide to them and we can discuss and introduce the Paramit offering and take over maybe the one or the other manufacturing program they have. We are also leveraging the synergies across the portfolio internally. So when looking again into Synergence, Cavro and Paramit, we basically share the same R&D department. That's very helpful. You can imagine these programs when you win a new program of larger size that creates bottlenecks, though we are very flexible in shifting people from one to the other business. It also helps -- I mean, we have people which have in-depth knowledge and we do not have to duplicate these people in each and every of these business lines or brands. So we can share the resources and the know-how. Same is true for quality assurance and regulatory affairs. Think about an audit support, especially the smaller customers who need a lot of support from our regulatory people. We share these across the sites. If there is a larger audit going on in the U.S., we can always have people supporting it from the headquarter or we can even send people there. Operations, the same. We do basically manufacture the different instruments in a very flexible way. You heard me saying that we have 5 operations sites, and we can shift. We did that, for example, for our Cavro business. The Cavro business, if you followed the news, we relocated from I mean, historically, over decades, we had that business in San Jose. As we outgrew that site and we had the Paramit capabilities now, we moved that business the majority into Malaysia and a piece of it into Morgan Hill in California. So that's very attractive for us to share these resources also internally. So I'm often asked how a typical partnering business looks like. This is here our 3 brands, Synergence, Cavro and Paramit. So a typical Synergence project. And you see it on the right, a typical Synergence project takes 9 to 30 months until the first time where we create manufacturing revenue. In these 9 to 30 months, we have development revenues, but the real recurring manufacturing revenue to sell these instruments that's happening after 9 to 30 months. It depends very much on the, let's say, complexity of the project, lower customization is more in the 9 months, high customization or from scratch development is more maybe the 30 months until we create manufacturing revenues. On the left, you see the size, I mean, a typical and I say typical, many of you know, we also have larger programs. But a typical program of higher customization is in the range of CHF 5 million to CHF 20 million annual revenues 3 years after launch. The lower complexity projects are more in the up to CHF 5 million annual revenues. On the Cavro end, the time to first manufacturing is more in the 15 to 24 months. I just to remind this is the customer in-house projects where customers have decided to do their own development and select us as a component supplier. Here, a typical project, again, is somewhere between CHF 10,000 and maybe CHF 7 million, CHF 8 million. Here, we have to be a bit careful. We have much more customers in Cavro than in the other lines. So we have from small to what you see here, a typical customer, maybe CHF 7 million to CHF 8 million. I would say the majority is maybe between CHF 0.5 million and CHF 2 million, CHF 3 million annual revenues. On Paramit, when we engage on the Paramit end, it's 6 to 18 months until we create the first manufacturing revenues. This time is shorter here than on Synergence because of course, development is more or less done. It always depends, I mean, if you just transfer a product from 1 manufacturing to the other manufacturing -- or to Paramit manufacturing. That's more in the 6, maybe 9 months. If you have to finish development, this can be more with, let's say, in 18 months. Also here, the projects are typically between CHF 5 million and CHF 20 million, 3 years after we start manufacturing. And again, this is just a typical project. We also have projects which are much higher in revenues. This is a slide on our project pipeline. Just to give you an idea of how large and how these projects scale. So we do not sign hundreds of deals per year, even if I would like. But in Synergence, let's say, we do 3 projects or in 2023 we signed 3 large programs in the full year. On the Cavro end, we did 5 programs in 2023. Here it's -- we only count the projects which are above CHF 0.5 million. So we did more projects, but lower in size. And on Paramit, we also did 3 projects in 2023. You see our ambition for 2024 and also the ambition to -- that we want to double these projects until 2027. And the reason why we have that bold statement on that slide is we see a lot of cross-selling across the 3 service offerings, Cavro, Synergence and Paramit. I mentioned that earlier, and you will see that in also 1 of the future -- the coming slides and the strategic account management, our very, very focused approach, how we select and how we, let's say, engage with customers, makes us believe that we can reach that ambitious goal. Here, let me focus a bit on our core applications. You saw it this morning, you saw it in the life sciences presentation, genomics, proteomics, cell and tissue. This is where we are active in. The same is true for the partnering business. So we basically do applications on the genomics and in nucleic acid extraction, PCR or in next-gen sequencing. This is true for Cavro, Synergence and for Paramit. On the proteomics end, we do must spectrometry, for example, immunoassay automation and spatial biology. I will show you a couple of examples in the following slides. Cell and tissue, we have [ slight staining applications ] flow cytometry and also single cell handling applications. What's new since we have acquired Paramit 3.5 years ago is the med tech sector, which we have in addition and which is a bit special to the OEM business now, There, we do a lot of, let's say, surgical, we partner with customers in the surgical space and also cardiovascular. Then talking about cardiovascular, it's cardiac rhythm management or In Vitro -- I always have to remember, you will see an example of IVL on one of the following slides. Now in the coming slides, you will see a couple of company logos and customers we work with. I want to remind you, not each and every slide contains a logo. We have, of course, confidentiality agreements, which we, of course, respect. And for that reason, I cannot share every logo and every customer name, but at least some. Whatever you see, we have the permission to talk about it. So here on the [ cover ] end, we, as I mentioned earlier, with our components, we serve the genomics, proteomics and cell and tissue market. So we have a lot of players in academia in research, biotech, pharma and offering genetic testing reference labs and in clinical, the applications we serve is next-gen sequencing. That's one of our key applications. We also are active in cytometry in clinical chemistry and for example, in immunoassays, we have a strong existing portfolio, and we have a clear road map how to expand here and also a road map how we serve our existing customers, but also how we want to grow that business and with which customers we want to grow. So this is a project which is -- it automates a liquid biopsy workflow for a large player in In vitro diagnostics. We did that project together using our heart and software platform. The instrument you see on the right, the picture, this is for illustration purposes only. It does not show the real instrument I mean here, we really scale a liquid and tissue biopsy next-gen workflow for the clinical lab. If you think about such a workflow, it's super complex. It can contain 100 to 200 single steps. When I talk about steps, this is really moving liquid from A to B, shaking steps, heating steps, cooling steps, moving [ moving lab way around ]. This is super complicated and prone to [ error ], if you do that manually and very time-consuming, and this is basically automated here with the instrument. It's used in hospitals to identify primary tumors and to detect minimal residual disease, monitor reoccurrence of response to treatment. First logo now. So a system which we are developing now for Oxford Nanopore technologies. I'm very happy that we can show that here. It's the first fully end-to-end next-gen sequencing solution. If you look at the Oxford Nanopore website, they do from short to ultra-long sequencing methods. They have a range of Nanopore-based sequencing products that provide very rapid and scalable and affordable access to rich genomic insights. The sample-to-answer solution, which we have automated here called ElysION. It integrates workflows and is designed to streamline operations across a broad range of applications. And we are very, very happy to have this partnership. The partnership or the instruments started with our, let's say, entry-level platform called MagniFlex, and for any more information, I would ask you to look at the website of Oxford Nanopore, which you can find here on the slide. One more project we did together with the Binding Side. The Binding Side, they have an early detection of blood cancer technology, which we have automated together with them. It's a proteomics platform used in the clinic. The so-called EXENT solution. It's a fully integrated and automated mass spectrometry system and it's designed to transform diagnosis and assessment for patients, for example, with multiple myeloma, blood cancer. So it really enhances early detection of disease and it uses a technology, which is called MALDI-TOF mass spectrometry, very sensitive. And if you want to have more information again here, the Thermo Fisher website contains a lot more information. And also, if you look on the Tecan website, the Tecan Journal, the first Tecan Journal in 2023 also features a nice article about this system. And now for the first time, this is what we have not showed to anyone so far, and we have the permission from Illumina to present it today. So Illumina, I'm sure all of you know them, they are a leading player in next-gen sequencing. And this is an instrument here where we supported basically Illumina for a multiomics application. So basically, this solution will process a modified version of the high-plex SomaScan proteomics workflow to enable a readout on an Illumina sequencer. And yes, it's a sequencer used in proteomics here. So a very interesting application. It aims to accelerate effectiveness and efficiency in making biological connections from genetic sequences to cellular function to gain a much deeper understanding. This is an instrument we have also not showed so far Alamar Biosciences. So we are providing components to Alamar Biosciences. It's a very complex analyzer used in proteomics. It's used in academia research centers, also in genetic testing labs. So you see on the left of the instrument, the component we provide Again, it's a very complex instrument and the module we supply here. It's a pipetting pump. It's the core of the automation system. So we are very happy that we earn that trust of Alamar Biosciences for that multiplex automation system. Sysmex. This is an instrument which we have developed for Sysmex. We partnered with them quite some time ago. And it's a system which is automating flow cytometry. It's called the PS-10. It's a highly automated, flexible sample prep system for lab developed tests and for routine flow cytometry applications. It's a very complicated process. It has a lot of Tecan core competencies, core modules implemented, and we were very happy that this year at ADLM, ADLM for those who don't know, that's the new name of AACC. AACC is a trade show in the U.S., which is maybe for the partnering business in Tecan, the most important show. And we have been there this year, and we had the system on the booth together with people from Sysmex and it was quite interesting to see how much traction that system gained, and we had very interesting talks. And it was also great to see for us in the partnering business, it's always nice if we can talk about something or even if we can present ourselves together with our partner, which was possible this year. Now switching to Medtech. So Medtech, we said it -- I said it earlier for the last 3.5 years. That's also an important market to us. If you look at this year, we are talking here, the green piece of a CHF 14 billion addressable market for Tecan, just to put it into perspective, the research market. We expect around CHF 6 billion diagnostics market, about the same, also CHF 6 billion. So this CHF 14 billion of Medtech market, which is addressable to us that basically doubles the market size for us. We are mainly looking into the surgical and cardiovascular space because we believe that the medium to high complexity of these projects and also the volumes they fit best to what we do. What's also quite attractive. If you look at the growth rates, I mean, both sectors, surgical and cardiovascular are growing mid-single digit to high single digit. And that's our key focus. You will also see now a couple of projects which we do and which we entertain. So here, Tecan, we are part of the robotic surgery ecosystem now. So we basically focus on robotic-assisted surgery, and we provide modules and complete system manufacturing services here. Here, we again benefit from our vertical integrated circuit -- printed circuit board assembly. So these instruments are very heavy on the electronics side and with having our own circuit board manufacturing in-house that helps, of course, a lot. So we have solutions to optimize test and production yields and coupled with our vPoke and you heard -- many of you I think heard about vPoke, it's our digital manufacturing execution system. So together with vPoke, we have -- we achieved an industry-leading delivery performance and quality metrics. So if you look into our marketing process and this is not marketing only, we claim 0 defect manufacturing, which is an important, let's say, argument if you are in the Medtech space. And this is only possible because of our vPoke system. So what we do here on the , let's say, in surgery, we support clients in both tissue and in orthopedic robotics and when talking about orthopedic robotics. I switch to the next slide. Also something which we show for the first time now, a system we do for THINK Surgical. So the system you see here on the right, it's a surgical device for complete knee replacement. So Tecan has supporting THINK Surgical through the design transfer process. And we do now the manufacturing of this so-called TMINI miniature robotic system plus the card enter cell charging station, though it consists basically out of 3 pieces, and we do that manufacturing for things surgical. Though the collaboration, with Think Surgical started in the new product introduction phase and the NPI phase, how we call it, where we assisted Think Surgical in the design to manufacture and we also did the production scale-up for Think Surgical. Any more information you will find on Think Surgical website, which you can see here on the slide. This is a device, which I think is a very cool device, a device we do for a Avive. Avive is a company based in San Francisco. It's an automated external defibrillator, a device what you can see here at the wall. It's a bit smaller in size. It's maybe the size, what you can see here of 2 iPhones. That's quite small. And it has many, many features implemented with a typical AED or an automated external defibrillator as we know them as of today, do not have. So basically, it has implemented a -- if you own such a device, you are guided, you get an alarm that there is an emergency nearby, you are guided to this emergency, for example. That is doing a diagnosis. It supports you. There's an operator dialing in who supports you an expert in that difficult situation where you have someone in front of you in urgent need of help. And even when you provide the first shock the diagnostics data and the location is sent to the next emergency station. So a lot of really super cool features implemented for patients with sudden cardiac arrest. We partnered with Avive to optimize the product design. We -- for this, we use design for manufacturing principles and we launched that product with our vPoke assembly technology. We started production in California. And in September, of 2024. So just recently, we moved the product into Penang. It was a decision which we -- that was always the plan and agreed with Avive to do so. We had, of course, an FDA audit. It's a Class III device. So it's a very, very strict -- we have to entertain a very strict manufacturing setup here. And basically, we can do FDA Class III devices in any of our locations which makes us quite proud. What also makes us quite proud anytime such instrument is used or this device is used, it saves the potential life, of course. So, you heard me saying, I mean, the 2 most exciting field for us in Medtech is, of course, surgical but also cardiovascular applications. This is a automation and manufacturing program where we cannot mention the partner, but it's -- we have quite some experience in advanced power generators, which are needed for this kind of application. So we do that for PFA, pulse field ablation and IVL, intravascular lithotripsy applications and this specific device, it's basically a catheter like device with a power generator, and this catheter can break up calcification, which restricts the blood flow to the heart and also a very interesting device. We believe we are very well positioned for that area because the innovation in the end effect or product design and the end effector of a robotic device is basically the part which comes into contact with the patient. And there, we see a lot of innovation and the need for more electronics and know-how in delivering the radio frequency, for example, and there we have quite some experience and again, the vertically integrated printed circuit board assembly will help us here to win new business and to have an attractive offering. So let me summarize the key takeaways of today partnering business. We are the one trusted health care OEM partner, scaling globally, our offering. So we see a lot of [ synergies ] in -- post the Paramit acquisition. I mentioned it earlier, we have now a quite tailored offering for each and every customer. So we can provide components only. We can do the full instrument development including manufacturing and the following life cycle management services, but we can also provide the manufacturing service only. So quite flexible here on this end. When it comes to new customer acquisitions, we see a lot of lead sharing. I'm very happy to see that between the Paramit, Synergence and Cavro sales team, this is really working very nicely. Everybody sees the benefit and the dedicated team we have now, we grew from a very small team now to a sizable team in the U.S. for the contract development manufacturing services. That's also quite a quite a -- it was an investment, but that will also help us to grow that business. We have a very targeted approach with a very clearly and well-defined value proposition. Again, with our Synergence offering and the Paramit offering, we support outsourcing partners. With our Cavro offering, we support customers who want to do in-house R&D programs at least initially, there's always a way to maybe do more for them. And the strategic account management where we put a lot of emphasis in. The way we want to grow is really focusing on selected accounts where we see a great fit with our offering, and we do that with a very holistic sales approach across the growing team, the growing commercial team. How do we want to drive profitability? I mean, first of all, our footprint will help us a lot. You heard me saying we have 1/3 of our people now in the U.S., a third year in Europe, another 1/3 in Asia. So we can leverage our global operations network. Same is true for our shared services in R&D, quality and regulatory. And we have the infrastructure from a commercial point of view, where we have sales team now across the globe where we want to make use of. And again, I mentioned it earlier, the global field and service organization. This is very unique to our OEM business. Operationally, we want to leverage LSB in Synergence through our shared platforms. This is how we operated in the past. This is how we want to operate in the future. So basically, the platforms you have seen today, MagniFlex, Fluent and also all the software platforms we have. They are basically available for our partners in diagnostics where we can make use of the IP developed in Tecan. And last but not least, the long-term relationships, that's the nature of the partnering business. So we'll see a lot of efficiency gains. I mean, think about a partnership where you share monthly forecast, you have your quarterly business review meetings. There you get more efficient, the longer you work together. And the same is true also for supply chain. I mean, we entertain these manufacturing programs for many, many years, which helps us a lot to drive efficiency gains into supply. Last slide, the key takeaways for today the partnering businesses. We have a proven track record of 16% CAGR for the last 10 years. We have an exceptional quality, including the permission to manufacture as FDA Class III devices, and we have a, I believe, very attractive client portfolio and very attractive position in terms of growth and in terms of market size. With this, thank you very much. That's the partnering business, and I hand it over to Martin.

Thank you Ralf. We will now have a deeper look into our digital ecosystem with Hal Wehrenberg. Hal is the Vice President, Digital Transformation. Hal.

Thank you. All right. So those of you who are joining online, you did not have the benefit of seeing this stuff in person, but for everyone who's sitting here, thanks for doing the in-person demonstrations and for the volunteers who helped us with digital in the labs, thank you, especially to the volunteers, but now is a chance to maybe take a step back and look at the elements that drive our digital strategy in general and what that really means for us. These are the 5 elements of our digital strategy in general. Tecan has established the leading open digital ecosystem that can be deployed today in labs. It is a differentiator for Tecan. And it's something that truly delights our customers in many ways. The first thing is our excellent user interfaces. And of course, when we think about a user interface, we think about that go button that everyone presses, and that is exactly what we mean but we also mean the things that go with that, right? So it's not just about, hey, it's fun to press go, I understand what I'm doing. It also means that the lab technician, which is a position that's difficult to hire that has high turnover that this staff knows what they're doing every day when they're interacting with the instruments, and that has a direct impact to how fast they can do their job productively, but also the data quality over time. For the lab manager, it's often very important not just to know that your staff is working with the instruments effectively, but how can you know that, that is coming out in the end? How do we see the fleet of instrumentation, the resources that are deployed are being used effectively. And we'll take a closer look at fleet overviews and fleet management in general in just a moment. But also sometimes we're talking about the interfaces that other systems use. It's not always just a user that's pressing go. When we start looking at things like AI, drug development, you might have a larger system that's orchestrating the work across the lab. You might have lab orchestration software. These are the software interfaces that allow us literally to plug into the larger systems so that our instrumentation, our services, our consumables can be deployed across the lab. So user interface is where it all starts, pressing go and more. Lab orchestration is one of the things that was really fun to demonstrate. It's kind of hard to talk about just theoretically, but this is our lab navigator software. This is one of the first times that we're really taking a software approach that follows the operator workflow in the lab. Instead of saying, let's focus on the software that you need to just run a Tecan instrument, we're really saying, in the lab, from the sample starting its process all the way to the data going back to the clinician, feeding back into the AI model, whatever is happening with that endpoint analysis, we're going to have a software that can guide the operator through every single step of the process. We had one customer tell us that their operators have 14 different software interfaces that they use on a daily basis to process samples and it's really hard to imagine how an operator can ramp up and do that type of work robustly and continuously. So really trying to create one pane of glass for them to deal with reducing errors, increasing the reproducibility. A lot of times when we're talking about digital, it feels very vague. It feels very virtual. It doesn't have that real-world impact, but this is something that's super important is how do we use digital tools and connected instruments to make sure that we're having the efficiency gains meaningfully in real life. So the first screen we see here on the top left, this is the introspect view that's showing us the operational efficiency of our equipment. And one of the features that we brought in, in the last year is a natural language suggestion for how a lab can increase their productivity, their quality, their reproducibility, aggregating all the data across all of the instrumentation and then giving the lab managers something that they can understand at just literally reading a sentence that they can implement right away to improve. One of the other things that we really focus on is not just looking at the historical data to predict the future, but to also say what's going on right now. And so this automated fleet overview, where you can see all of your instruments at once, but also remote monitoring. We have software that runs on your phones. You can get the apps that will tell you literally what's happening on the robot right now. One of the big promises of automation in general is, of course, walkaway time. It's not just that the robot reduces human error and maybe has a higher throughput, but it also promises to allow the operator to walk away and do something else that's more productive, more valuable than just baby sit the robot. But to be able to do that, you have to know that it's actually working. You have to know when it's done, so you can go back and take it to the next step or if there's something during a run that really needs attention right now, it gives you that push notification, then you come back to the instrument. So these types of connectivity features are absolutely critical for fulfilling that promise. And these are features that are truly unique to Tecan, and it makes it wonderfully fun to talk about these things at a trade show in a sales environment because we're not just talking about. This is the robot, here's the specs, but we also talk about our market-leading hardware with this fully differentiated unique software suite that allows you to get the most out of the instrumentation which comes to my favorite bit, which is the delighting the customers. I'm a former service guy. I actually started with Tecan in 2005 in the field. And the digitalization of our service in the past 5 years has been really exciting, really tremendous. When you have these connected instruments giving these insights to the lab managers, we also have the ability to see the instrument configurations, the software that's running on it and provide that information to our service team so that before we're dispatching service engineers, they have a chance to see what is the instrument, what is the usage on this instrument? How do we resolve that as fast as possible? How do we make sure we're sending the right parts, and also, we have the ability to remotely connect to the systems and even do not just remote diagnostics, but also remote service interventions. There are times when we can solve something if it's a software parameter or usage setting. It's the kind of thing that we can solve remotely without having to send someone on site. And as a guy who used to sometimes be dispatched, flown across half of the U.S. to just go do a diagnostic call before we could ship the parts and then do the service call, this is really exciting for me to see how much better, faster and cheaper, more efficient Tecan is getting, but especially for our customers that we're getting them back up and running in that time of need as fast as possible. All of this is built on top of a modular software framework. We call it MAPlinx. We mentioned it earlier in the process. This is something that we are really focusing on as we're developing new tools, as we're developing new modules, we're making sure the software and the hardware are built in structures that can be reusable, that the user interface, the business logic, the instrument drivers are things that could snap together and can allow us to be much faster when we do an OEM project to build a new platform. We're not starting from scratch and building a new software monolith. We're taking these puzzle pieces and clicking them together and having a much faster time to market in terms of how we deliver these new projects and products, but it also allows us to bring innovation across the portfolio. The VEYA platform, which was mentioned earlier, is one of the examples where we have a fantastic platform being used in the partnering side of the business, but we were able to have a very fast development time to turn that into the life science business product because of the underlying software technology. So it's not just the high-level bits that you get to see and touch during a demo, but it's also our approach, this modularity. All of this together really allows us to not only be flexible with our creation of products and support of existing customers, but also with the markets that we can be involved in. When we see rapid innovation happening in the markets around us, things like the AI-driven drug design that's happening where in silico is becoming a priority or on the multiomic analysis that's happening on the clinical side, where we're seeing all of this new ways to take data and to use that for clinical interpretation or for new therapeutic development. Our platforms are able to, again, fit into these processes. It's a driver for our existing business as it is because we are able to literally plug into, again, the type of data that will be coming to the instruments and again, the type of data that's going from the instruments. Both of these drive the need for automation in the lab because you end up having higher throughput needs, higher data quality needs and all of these are trending towards compliant workspaces, which again is one of our strengths. But not only does it say, "Hey, you can take a fluent and you can use it in these environments, we're ready for it. We have customers working on the cutting edge successfully already," but it's also opening doors for us to explore new partnerships with other companies to say, "Hey, you're specializing in the dry lab and In silico portion of this. We have specialties in commercial connections in the wet lab real world where this hits the road, let's do the synthesis and binding and the validation -- thank you. but it gives us a chance to explore these partnerships and the ability to deliver a whole product offering with these companies and that, in turn, creates new possibilities for products and services that we offer beyond just our own instrumentation. So that's what I wanted to say today about digital. You're perfectly time to come back. Exactly.

Thank you, Hal for this introduction. Now next, Tania Micki, our CFO, will provide additional insights into our financials. Tania?

I'm not sure it's as exciting as digital, but -- so thank you, Martin, and a warm welcome as well from my side to all of you as well as those who join us on the webcast. In the next few slides, I would like to demonstrate and reinforce our conviction, based on our past record of strong financial performance that we can deliver a similar growth midterm. As you can see on this slide, and in line with what Achim had shown, over the past 5 years, our company has demonstrated impressive growth across key financial metrics. Whether we look 5 or 10 years back, we have grown significantly. In the last 5 years, our sales increased by 69%. And this helped us in turn to grow our adjusted EBITDA consistently, thanks to economies of scale, but also through improved operational efficiencies and disciplined cost management. Significant volume and EBITDA growth supported substantial earnings per share growth and the delivery of strong cash flows, all of that in the mid-'70s. These metrics overall reflect our ability to create value for shareholders and maintain a robust financial foundation. Our volume growth was particularly boosted in the last 5 years by the realization of the benefits of automation during the pandemic as well as the shortage in skilled labor and Mukta has alluded to that already before. On average, we grew 16.4% year-on-year in local currency. And yes, this year has shown a slowdown driven mainly by the economic situation in China, and lower consumer spending of our pharma customers, and these short-term challenges have affected our near-term performance, but our proven track record gives us confidence in our ability to navigate through this period. The commercial initiatives we started, implementing the strong funnels we have built in the last month and also that Mukta and Hal has mentioned before, as well as the stability of our recurring sales add to this confidence. And while demand has softened in the short term, we remain focused on our long-term goals and see significant recovery potential as global markets stabilize. One of our core strengths is consistent margin expansion achieved through many factors and one of them being increased sales volume and scalability. As we face temporary sales weaknesses, we have implemented rigorous cost discipline to protect profitability. This strategic focus on cost management ensures that we continue to deliver solid margins and remain well positioned for a return to growth as the market improves. As you recall, we leveraged the [indiscernible] acquisition already in 2022, and we decided to move our [indiscernible] facility in San Jose to the Penang and Morgan Hill facilities, delivering savings in rent and reduced labor costs. Earlier this year, we have initiated the move of our Genomics facility in the Bay Area to the Morgan Hill Campus, which will also enable us to have rent and some head count savings also as we are refocusing the business. And as we announced with our half year results, with the slowdown in sales, we have implemented strict personnel replacement discipline and resize our workforce by a bit more than 100 FTEs which means with the normal attrition, we have as of end of September, about 200 FTEs less comparing to the beginning of this year, which is about 5% of our workforce. Looking ahead, several midterm drivers are expected to support the improvement of profitability. First, we anticipate a recovery in demand including in key regions like China as economic conditions stabilize and the stimulus program starts to kick in. Additionally, our ongoing investments in innovation and new product development will enable us to capture high-value opportunities in new market and expand into new segments, and that is also what Mukta has shown you before. Our continued focus on digital transformation as well as operational efficiencies will further reduce costs and drive margin improvements. And I gave you already some examples of how we have driven those margin improvements in the previous slide, and we will continue looking at optimizing our footprint, driving efficiencies as we continue harmonizing our end-to-end processes and deliver on supply chain savings. And looking into 2025, we will benefit from the move of the manufacturing of our cable components I mentioned earlier, and also Hal mentioned it before, and as quantified in the past, this will result in cost synergies of CHF 5 million to CHF 6 million starting next year. In addition, the structural cost-down measures that we have implemented this year will have a lasting impact of around CHF 10 million in 2025. Of course, the margin is always a result of many factors and moving parts. So there will be other movements. And as always, we will provide our guidance for 2025 in March next year. But what makes us confident though, to continue to base our midterm margin improvement target on to 20% is the fact that all the mentioned measures have resulted in a lower breakeven point of around CHF 1 billion in revenues. Our strong financial performance and profitability over the past 5 years have allowed us to generate significant cash flows. On average, we delivered on a target of about 80% reported EBITDA conversion into operating cash flows. A little bit more, as you can see on this graph in 2020, thanks to the U.S. grant we received for building additional consumables manufacturing capacity and a little bit less in 2022, mainly due to the increase in inventory driven by the broker buys of electronic component. But this strong cash flow conversion has enabled us to execute a disciplined acquisition strategy, targeting companies that align with our long-term vision. These acquisitions have expanded our manufacturing capabilities and footprint, doubled our total addressable market and enhanced our competitive positioning in the market. Our ability to balance organic growth with strategic acquisitions is a key driver of our success as it allows us to strengthen our foundation for sustainable long-term growth. We are also benefiting from being a CapEx-light business. With minimal capital expenditure requirements, we can effectively deploy our cash for strategic purposes including acquisitions, as I mentioned in the slide before, but also dividends and reinvestment in innovation. This flexibility allows us to maximize shareholder value while maintaining a strong balance sheet. As you have seen, our CapEx spend have been quite stable in the last 5 years with 2020 and '21 showing a little bit more spend for the consumables facility that I mentioned before for which we received the grant. And midterm will most likely have an impact. It is not yet fully quantified because we are still working on how we will proceed with the capitalization of the [indiscernible] projects that we have started this year and also potential manufacturing capacity expansion. And this will on the principle coming to '26, '27 time periods. As I mentioned earlier, our cash deployment strategy remains focused on acquisitions. By carefully selecting companies that complement our core strengths, we are able to accelerate growth, expand into new markets and drive synergies. This disciplined acquisition strategy is central to our growth plan, ensuring that we not only sustain our competitive edge, but also create long-term value for our shareholders. And as I mentioned also before, we invest into innovation as well as consistently increased dividends. So what do I want you to take away with you in conclusion? Despite the current temporary challenges we are facing, our proven track record of above-market growth, margin expansion through cost discipline and strong cash flow generation position us well for future success. Our focus on strategic acquisitions, combined with minimal CapEx needs, provides us with the financial flexibility to continue executing our growth strategy. Our commercial initiatives and the strong pipeline gives us the confidence that we are able to deliver our midterm commitment. And last but not least, our strongest foundation is our people. And the winning team culture we built in the last few years, which I'm confident will enable us to implement these operational and commercial initiatives and drive a sustainable value creation for our shareholders.

Thank you, Tania. Achim, you have your -- before we open up the Q&A, you have some closing remarks.

I don't want to take too long, but clearly, when I think back to 2019, the world was a different place and Tecan was a very different place. And I remember at the time, we set out on the journey that was aiming at contributing as we said in our [indiscernible] to scale health innovation globally, but we set out on a journey to scale Tecan. And I believe when you listen to the comments of my colleagues today and the demonstration this morning, we arrived at a very different place in 2024. Acknowledging that it's a challenging environment temporarily. I come back to what I said earlier. I believe we are in a structurally good place. The company is in structurally very good shape. And you probably heard from the excitement from my colleagues that we are enjoying a very complementary dynamic as an organization that is very excited about the future of the company. So all I wanted to do is just take us back to the beginning and reiterate the messages that I wanted you to memorize and take home from this. So despite the current challenges, we believe that we are strategically and extremely well positioned to capitalize on the trends and the dynamics that we see in the markets and scaling health care solutions globally. I think we introduced in quite some detail, our competitiveness of the business model and defensive structure of the business model and the very high barriers of entry into what we do by operating the Life Sciences and [partnering] business division synergistically, side by side, working with an extreme broad base of customers in research and academia, in government, pharma, biotech, medical and diagnostic industries. We are driving a very well-oiled innovation machine. And there's probably one of the highlights, I hope of today, that you're taking home that we have a very comprehensive view of what to do, what not to do, how to do things, how to leverage modularity and how to use the history of Tecan's engineering background in automation and complementing that by modern digital tools and a more complete automation around solution approaches in the multiomic space that is extremely relevant for all the end markets that we touched upon today. Lastly, what Tania illustrated, clearly, we are in structurally good shape, and we are also looking at very strong financial background. We have consistently delivered financially robust results. We are able, even in this environment, to adapt to the challenging market environment to come out of it stronger. We invest in the company in innovation in the organization to then drive that midterm trajectory of growth going forward. And I think we have demonstrated that we are capable to flex the muscles if need be in both directions. And then lastly, just to say that I'm super excited to be here, to be the CEO of this very dynamic company that has a tremendous global impact on health care. So what we are calling out in our purpose statement is real. It is very tangible. And as you heard from my colleagues today, we're making very good progress. And our future is not a pipe dream. It's not something we are projecting long way out to deflect from the current challenges. I think most of what we tried to present today is real, is launching, has launched or will drive even near-term growth into '25 and beyond. And that's why I come back to say that we believe the challenges we've seen, particularly in China and biopharma are temporarily, and they will be, at one point going away or normalizing and then we will be back on the track record of sustained profitable growth for the midterm future. So with this, I thank you very much for your attention. It's been a long day for people here in the room. I think it's been a bit of a [indiscernible] for people online listening into the slides, but I hope we could provide you with some comprehensive background, what we're doing and why we're doing things, but also what we are not doing and why we're focusing on certain application areas. So thank you very much, and I think we can open now for Q&A.

Well, we now open the floor for the Q&A session. For those in the room, please raise your hand if you have a question. I will -- first hand goes up. I will then indicate who will be next. Please wait for our colleague, Nicole, will be here to hand you the microphone. Keep in mind that the Q&A is also being webcast live, so the mic is needed for the transmission. Please quickly state your name and your institution. I know it will be tempting for some of you, but please limit your questions to one or two at a time. For those listening via the webcast, you can submit your questions using the respective function on the event page. We will address any unanswered questions in the days following the event. With that, let's kick off the event. And I saw the hands already going up. Here Nicole?

Maja Pataki, Kepler Cheuvreux. I'm coming back before looking at the structural growth opportunities, can you please dive into the [miss] that you financed last week for this year? When we look at the cuts from August to October, we're missing roughly CHF 100 million. And it will be very helpful to get a bit more granularity on what is the split between Life Sciences and partnering? What is really China out of that? And then you've always indicated that China is around 7% of your direct sales, but roughly the same amount in your indirect sales. Somehow, this doesn't seem to add up anymore. So a bit more granularity on what is going on and what do you believe that by now, you have the visibility for the next couple of months or in 2 months' time you will be somewhere?

Yes, Maybe I take the proportion things and then you can -- so from the proportion, it's about 1/3 on the Life Science business and about 2/3 on the partnering business. And China overall is close to a good quarter. So close to a good quarter of the CHF 100 million.

And just coming back to the dynamics. And of course, the if you want surprise moments of the communication of the events since August, so a majority of this has been in the partnering business that was really customers that had very high China exposure, in particular, deferring significant amounts of revenues from '24 to the second half. Some of them basically telling us not to ship any instruments or any systems or any spare parts anymore until the new year. So that's been a very unexpected and also for us very difficult to, if you want to anticipate moment when in August, we still had conviction and information that this would be going on a reduced but normalized rate, but now these kind of changes were substantially higher than what we anticipated. The other part was on the -- I mean that was China customers in particular as they relate to the Synergence product line, so IVD systems. And there were actually a few but very large customers in there that have this kind of high degree of China exposure. There was another element in the partnering side, which was more related to life sciences exposure. So there were a few companies, and I have to be careful of what I say, in a specific application area that had a tremendous slowdown starting off in Q2. And then we learned in the Q3 communication that also their supply chain, which is an indirect production chain, they're typically going through Asia does not need any significant amounts of product anymore because they saw a significant slowdown of their presence in their respective life sciences end market. And that supply chain, if you want to clog-up is very difficult to, I think, to judge, and that was coming as a very significant surprise because literally all these sites producing for that company were full of inventory and we were told not to ship any more meaningful amounts into the second half. And the other one was on the Life Sciences side. As we said in August, we would anticipate kind of increased mobility of the funnel in bio-pharma and what is fair to say to this date that did not materialize. So the bio-pharma continues to push out. The projects are real. The way we look at them. The funnels are still solid and even building in some of the aspects but this is what we've seen also is a very big change from August. So the bio-pharma upswing is not happening. And I mean, we anticipated only on a small, small number, but also this normal outside of the bio-pharma segment, but more on the government and academic side, budget flush behavior towards the end of the year, we anticipate now is not happening anymore. So we have at least no sign that there is a hockey stick coming in from these -- If you kind of budget releases that typically happen in governmental and academic accounts. So this is the long and short of why -- of course, we were surprised as well, and then we had to go out with the communication last week. We did it as soon as we receive that information. The trigger point was, as I said, particularly the updated information from our partnering accounts, how severe that deferral of volume would be into the year '25 period.

Jan Koch, Deutsche Bank. I also have two. The first one is on 2025. I understand that it's a bit too early to speak about specific numbers. But how comfortable are you with current consensus estimates that point to high single-digit growth for next year? I wouldn't say it's impossible, but it might be a bit too aggressive as a starting point. So any color here would be helpful. And then secondly, you showed us on Slide 27 that your group sales increased by 69% since 2019. But just looking at your legacy OEM partnering business, assets are actually down by 25% compared to the prepandemic level based on my calculation. Could you confirm, A, that you haven't lost any customers? And B, what are your thoughts on a potential recovery here at some point in the future?

I'll probably start off with the second part and then we come to the first question. I mean you're absolutely right. I mean the growth of the partnering business was a combination of organic and inorganic profiles. There were two programs in partnering that came to an end of life that were not yet fully compensated by the rich pipeline that we drove in the recent years that as I think I've tried to illustrate, always take a bit of a longer term to really come to the 3-year, if you're on peak. So we basically retired a larger platform collaboration in the molecular diagnostics space that came with a significant amount of instrumentation, spare parts and consumers. So that was clearly one of the elements underlying that was the basis of this. The other part is also more short term in China right now. I mean we also, as you know, have been very successful up until, I would say, the end of '23 to gain access to China through our OEM partnering programs. And they are not lost, but they're seeing the same thing that everyone else sees in China, the placement of diagnostic and medical solutions in the China environment are very compromised at the moment or kind of slow down. And also the domestic companies who are not exemption from this. So I think we've seen a significant decline also from the China perspective in terms of the OEM presence, both from [indiscernible] components and synergence. But the -- of course, conviction that we have now and what we look in our planning is the remainder portfolio of existing large and midsized and smaller accounts in the partnering side. And that cadence of new programs coming to market now every year. And it's probably also fair to say that COVID up until, I would say, the end of '21 was not a very good time to engage in new projects. We were very successful to keep existing projects running and coming to market with them, as Ralf illustrated in a variety of forms since then, but probably since the beginning of '22, we are a lot more active to generate more business, more projects, more partnerships. So that means like in '24, '25, '26, many of these newer developed partnerships will come to market. I think Ralf did a very good job to illustrate what they are and where they are. And maybe to your question on '25, I mean, of course, we are refraining from guiding at this moment in time. So I think what we need is a bit more information on how this year ends, how much backlog we're also building. So how we're entering and exiting the year. And the other part is, of course, we are very engaged, as you can imagine, with particularly our OEM partners to get a much more granular view on how they view '25 as in life sciences, we have the privilege, of course, to look at our funnel on our own, if you want engagement metrics and see at least what the ammunition is what the funded pipeline is in life sciences going into '25. Now we've also been told in '24, this is a metric to watch very carefully. And this is why we're looking at segment-wise slightly differently. I said earlier, I mean, the funnel even in biopharma remains very strong. Yet the mobility is very, very difficult to predict. So we take a bit of a more sober approach into '25. This is probably not unlocking as of January 1 in my perspective. There are more things that play and there's probably a deeper discussion of what happens in pharma today. Clearly, there have been maybe some pent-up demand coming in '22 after the pandemic, but there's more also inherent things that we discussed today, technology changes and these kind of things that play reimbursement and these things. So I'm reckoning we will continue to see good traction there in funnel build. There will be select -- I mean it's not like it's stopping, but it's very slow in release. I think when I think about the China stimulus environment, we see it starting to move, it is very slow, and it's a lot different from the '23 stimulus funds that have been basically project announced product or product orders released have been maybe a 4-month cycle. We're now working on this stimulus package already with customers since a couple of months. And now the first tenders are actually being public -- made public. But we also know this is a very different program now. So we anticipate to really see the first orders rolling in into '25. But how steep and how fast I would not dare to predict right now, but it is really the way as we see it. But also coming back to maybe one of the things that I omitted in the '24 gap that we see in '24, is related to customers actually not placing originally planned orders this year and hoping for participation in the stimulus next year, which is another element why China LSB, for example, our Life Sciences business was slowing down in the second half quite a bit because quite a few number of customers pushed their programs into the stimulus and therefore, into next year to not leverage their CapEx investments that benefit from the program. So how fast we kind of rebound, I don't know, but this is probably the more tangible set of things that we see in motion right now. I believe elections in the U.S. will have some release mechanism for the governmental and academic accounts in North America, which for us directly are probably not so huge. And so meaningful, it's probably less than a 10% fraction of what we do in Life Sciences. But they are very important, as I said earlier, for some of our OEM partners that have a higher exposure to research and governmental labs. So I think that at least we'll get some clarity post election in the North America still being the largest market there. So I think that's technically how we look about the world. But the part that is probably more plannable from our side is the diagnostic and medical side of the business. And this is what I tried to illustrate also in my silver lining, if you want/highlight '24 part, we have seen not just in partnering outside of China, actually good growth and starting also new programs starting to meaningfully contribute, not able to compensate because of the shortfall of the big players in China was too large. But we see a very nice kind of road now of these kind of companies to incrementally add and contribute as Ralf illustrated over time to the top line and profitability line. The other part that we see in Life Sciences that clinical lab service providers and specialist labs, particularly in the genomic space, continue to be very strong. So the promise on, for example, liquid biopsy being executed for the variety of disease states. I mean, you as well as I know that areas like colorectal cancer screening are progressing very well. So I think there's a whole kind of area that we look at very positively and that's why I mentioned we are doubling down at the moment, maybe from our resourcing and selling standpoint to double down on the diagnostic and lab and the clinical accounts, both on the Life Sciences side. But then, of course, we continue the journey of diversification on the partnering side. That is our reality today. But like I said, this is giving us quite some good momentum into at least '25, but I'm not yet able to predict anything how bio-pharma, the [indiscernible] will open up or how material and how fast the China stimulus will come in. But they are the 2, in my mind, kind of decisive factors why clinical and medical will continue on a pretty solid and strong basis.

Aisyah Noor from Morgan Stanley. My first question is on [indiscernible]. My initial perception is that this is kind of an automation starter pack for the small to midsized lab. My question is a possibly naive one. But do you see any risk of cannibalization either to the entry-level liquid handling systems, you already sell with your OEM partners today or to your existing fluid customers who could see the [indiscernible] as a means of let's say, down trading. So instead of buying a second, third or fourth fluent, they buy a [indiscernible] instead. So you're potentially capping full potential of the fluid installed base going forward? My second question, I guess, is for Tania, on the midterm guidance. If you -- quickly, could you define what period the midterm targets covers? Is this '25 to '28 or just a broad kind of midterm outlook here. And I had a question on the wording used for the margin expansion guidance of 30 to 50 basis points based on a 20% margin. Does this mean that your expansion targets only kick in once you return to 20%? Or is it that you can deliver more than 50 basis points in 2025 given the much lower base or starting point of 17% in 2024 and then you see how '25 and '26. Just some thoughts around that wording used in the press release.

Sure, I'll start with maybe the second question around midterm and the margin midterm is we -- our midterm count goes to 2030. So that's how we look at it. From the margin perspective, and I have mentioned and I think Martin alluded that it was maybe not that clear what I was trying to say with my 20% base or breakeven point. What we have done now with those initiatives of lowering our cost base, basically, means that we have lowered also the breakeven point of being around 20% when we are close to CHF 1 billion in revenues. Now to get to the 20%, we have to get to that volume, but we are also having other initiatives. As I said before, we are looking at different elements. We are looking at still at vertical integrations at different businesses, how we can make us more efficient. So it's a combination of volume and operational efficiencies. Once we are at the 20%, which at this stage, we do not give, as I said, any guidance for '25 until March next year. That's where the 30 to 50 basis points that we originally talked about before will kick in, but it doesn't mean that there is nothing happening in between now and the 20%.

Maybe adding to that, I mean, the current range for this year is 16% to 18%. So we wanted to make sure that you understand it's not 30 basis points to 50 basis points base, for example, on the low end of this range.

Yes. And then maybe on the VEYA question. Probably I'll start off with your Part B, which was does it affect any partnering programs or kind of alienating partnering programs. I mean we have a very clear, I would say, dividing line between what we do in our Life Science division, what we do in our partnering group, which is typically the regulatory field of use. So I would say with very, very few exceptions, and probably I would count one in my head. All our OEM partners are in the diagnostic field of use. So they are actually becoming the legal manufacturer of the system. It's not just a label change. They actually qualify as a legal manufacturer. And the content differentiation is the key driver of what makes them work competitively. So as we are not a diagnostic company, not aiming to be one, we will never have that completion of portfolio of reagents, neither in the immunodiagnostic [indiscernible]. So that's very important to just make sure. On the product position, clearly, I mean, VEYA and Fluent are not like entirely separate products. As I said, modernization, availability of tools will gradually also be made available on Fluent maybe -- VEYA is, of course, the leading kind of platform right now to entry level and ease of use. But the way we look at it, I mean, both come in different configurations. There is a touch point between high-end VEYA and the touch point between low end Fluent, which we are very happy to discuss and sacrifice, if you want. But what we're doing, the overlap is so small that to the left and to the right of that kind of overlap, particularly to the left to the entry level, or even upstream left, I would say, [indiscernible] always sounds a little bit [indiscernible]. I mean when we talk about machines and instruments that are either stand-alone in the research environment, complement Fluent, which is then typically seen in a core facility or high throughput genomic center. So method development continuation is very important. But of course, also, you will find VEYA in more clinical settings than alone. Because now the reach of 48 samples, in some oncology settings is more amenable, for example, then running 96-plus infrastructure on flu, which is a bit of an over kill. As you remember, we even have one step to the lower, lower end, which is our magic prep box, which is -- I mean, we adopted the NGS Nespresso machine trademark not secured, to make sure that we're even capturing the lower entry level kind of that feeds then ultimately into the VEYA. So what I think Mukta very elegantly illustrated, we want to capture that entire space from early research, making sure that researchers don't concentrate on kind of [done] not making errors, but really value-added work and then work our entire way upwards from method development, [indiscernible] translation, industrialization and clinical utility. And this is where I think in our world view, the cannibalization potential between VEYA and Fluent is minimal, it's nonexistent. But I mean, you will see in future versions of Fluent, there will also be very exciting additions to the Fluent platform to keep it in the high end, super flexible, if you want [indiscernible] for industrial settings. And I think that's the way we look at it right now.

I think Sebastian [indiscernible].

Sebastian Vogel from UBS. I just have a quick question. In the past, you often mentioned that you're quite close to your customers, you're exchanging views. And now you have actually been surprised by the behavior of the customers. So in that sense, the first question is more pointing in the direction, do you think you need to change something in your communication or in your exchange approach going forward to be not again surprised by any sort of short change in behavior essentially? That's the first question. The second question is with regard to China. If I'm not mistaken, at the half year number, you mentioned that you are something like on CHF 20 million on tenders. That would potentially lead to a sort of result in CHF $20 million of revenues if they come all through. The question is, do you have some sort of number where you stand in the meantime, would it be something at CHF 30 million, CHF 40 million? Are there any sort of number that you can share how that sort of things have developed in the meantime? That would be great.

Yes. No, I think there will be fairly short answers on the China side. I mentioned the CHF 20 million number and counting, so we are comfortably above. I'm probably refraining getting too specific there because at the end, it will be determined by the tender process, the allocation and the win rates that we will be able to accomplish. But you can be safely assured that it's growing as even things have been transferred into the tendering processes that were originally earmarked as Q3 and Q4 orders. So that's why it's not even desirable to push that number up too much, but it's meaningful. And we have, I think, at least historically good track record of a fairly good percentage of that allocation as we look back in '23. Of course, the world has changed a bit from there. But also, as I said earlier, the mechanisms have changed tremendously. So the tender process themselves, we anticipate now are extensively longer than the ones that we've seen in '23. So let's get to it when we get to it. But I think we are very active. We are constantly and also issuing new proposals with our clients. But I think the recent history have shown to be quite careful what to put on the numbers in this regard because it's been a very different program compared to '23. And then back to your question, of course, I mean, things like this are a wake-up call, but some -- I mean, what I said earlier, this is more related to a few very high-volume China exposed customers. So this is not a fundamental disconnect that we have in our communication regimes with our OEM clients. I think in organization. We have very good interactions with clients, but maybe also in their regard, some of their read-through on their own regional organization, sometimes is not so great as we would like it to be. So it's a combination of things, but of course, we're moving as close as we can to everyone that we believe is more affected, but also to say that we believe in '24, we have seen the worst of that slowdown in China, hopefully. So -- but clearly, I mean, process wise, we do everything to get closer to all groups of customers, including biopharma, which is the other pocket of uncertainty, when will products be released when things move forward. And we have fairly good exchange. And again, the story that we're hearing from the biopharma was the same thing. Projects are selective. They are not abandoned and they will come at one point, just not now. And this is something also you hear from colleagues in our industry quite a bit. It is very annoying. It would be easier if the finance would not be there, then we would just clear the [feat], but that's not the reality. We have a very solid pipeline, a very good funnel a very open and active exchange with these clients, but the programs are just not moving at the pace that we would like them to see.

We have crossed the 5 p.m. mark. So probably, again, we take Sibylle and then try to...

Sibylle Bischofberger from [indiscernible]. I have a question to understand China, could you update us on your exposure on China direct sales and maybe also where you deliver somewhere else and customers then are sending it to China? And the second question is, will you have extra costs for the restructuring programs and efficiency programs which we will see reported, not in adjusted figures, which are now more than maybe earlier communicated?

Yes, I'll start off with the China question. And I can recalibrate on the numbers that we said before. On the direct exposure, so what Tecan products make up in China, it's around [ CHF 770 million ] as a basis. So this is 60% split into what we do in Life Sciences and 40% what we do in partnering OEM programs. So this is roughly the direct kind of shipments on Tecan branded products into China. The other bucket, it's I would say, qualified guesstimate of around another CHF 70 million to CHF 80 million. And we assume now it is probably more on the higher end of that exposure because we also have to count in a few [indiscernible] customers that are sizable in the diagnostics space that actually do have some exposure to China that we initially not calculated in that envelope. So originally, we looked at it at the Synergence -- particularly Synergence business going into China with that -- so in total, it's around CHF 150 million to CHF 160-million. So it's quite meaningful in the slowdown. And like I said, in some spaces for us has been very, very severe double digits.

And on the cost question, there will be restructuring costs, of course. They will be adjusted for in the adjusted EBITDA, and you will see them in the reported EBITDA. So there will be a certain difference that is allocated for that. The workforce reductions that we have seen, a lot of those happen actually in the U.S. So from that perspective, the costs related to this are not let's say, that high. The move of the facility from the Genomics part, that will be part also of the adjusted costs. That's a little bit of a chunkier amount simply because of the -- it includes the facility, the rent and all these things because we have a certain duplication. We need to ensure that we have the production in place and the continuity of the production to ensure that we have the revenues from the customers.

With that, no pressing additional questions -- there's one. Okay. We take the final question from Carla here. Keep in mind, there is a submit function also on the web page. So if you have still questions, we also will be happy to answer them after the event. But now Carla.

Carla Bänziger from Vontobel as well. And I have a follow-up for Sibylle's question on China. And Tania, you stated before that CHF 25 million of the CHF 100 million were from China. Did you mean direct sales? Or is that including also the OEM?

No, that's including the OEM as well. So it's for everything.

Okay so the bigger part of the mix is due to biopharma and not due to China. So the CHF 75 million of the 100...

No, no, no. It's -- so from the 100, you have 1/3 in Life Science, 2/3 in partnering business. Separately out of the 100, there's about the CHF 25 million for China for both divisions.

And the CHF 75 million missing, so the other CHF 75 million is mainly biopharma?

No, no, no, no. It's -- again, you have to look at the CHF 25 million, you will have a 1/3 and 2/3. And then in the CHF 75 million, you have another 1/3, 2/3. That's how you have to get it.

With that, Achim?

I think thank you very much for everyone online for your attention, for your interest in what we do and how we're progressing and thank you very much for those here in the room for coming, seeing us being with us this entire day. I know it's a long day. But thank you very much for the effort. Very much appreciate it and have a very safe travel back to your home destination. So thank you very much.