Thermo Fisher Scientific Inc. (TMO) Earnings Call Transcript & Summary

Welcome to the Thermo Fisher Scientific's Investor Day meeting, and now Vice President of Investor Relations, Rafael Tejada.

Good morning. I'm Rafael Tejada, Vice President of Investor Relations at Thermo Fisher Scientific and I want to welcome you to our 2023 Investor Day. It's great to be back in my hometown of New York City and to see so many familiar faces. We have an amazing program for you today. So let me start by briefly covering our agenda. Marc Casper, our Chairman, President and CEO, will start off with a strategic view of how we consistently create value for all of our stakeholders. Next, Michel Lagarde, Executive Vice President and Chief Operating Officer; and Gianluca Pettiti, Executive Vice President, will provide an overview of the leading businesses within our 4 segments. After a short break, Michel Lagarde will share a view from a customer lens and demonstrate how our trusted partner status really comes to life. Stephen Williamson, our CFO, will then discuss our incredible financial track record and attractive long-term outlook. After the formal presentations conclude, we will open it up for Q&A, and we expect to wrap up a little bit after 11 a.m. So before we begin the presentations, let me cover our safe harbor statement. Various remarks that we may make in these presentations about the company's future expectations, plans and prospects constitute forward-looking statements for purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those discussed in the company's most recent annual and quarterly reports under the caption Risk Factors, which are on file with the Securities and Exchange Commission and available in the Investors section of our website under the heading SEC filings. While we may like to update forward-looking statements at some point in the future, we specifically disclaim any obligation to do so, even if our estimates change, and therefore, you should not rely on these forward-looking statements as representing our views as of any date subsequent to today. Also during the presentations today, we'll be referring to certain financial measures not prepared in accordance with generally accepted accounting principles or GAAP, including adjusted EPS, adjusted operating income, adjusted operating margin, adjusted ROIC, free cash flow, organic revenue growth, core revenue and core organic revenue growth. The non-GAAP financial measures of our results of operations and cash flows, including in today's presentations are not meant to be considered superior to or a substitute for Thermo Fisher's results of operations prepared in accordance with GAAP. Definitions of these non-GAAP financial measures and for historical purposes, a reconciliation of the non-GAAP financial measures to the most directly comparable GAAP measures is available in the appendix of today's presentations. So with that, let's get started. [Presentation]

Please welcome Chairman, President and CEO, Marc Casper.

Good morning, and welcome. It is great to see everybody here in New York City for our Investor Day. I think you'll get a sense of our enthusiasm this morning for the progress we've made over the past year as a company and why we're so excited for the future. I'd like to start by thanking our Board of Directors for being here today with us as in years [indiscernible] for their guidance and ensuring the long-term success of Thermo Fisher Scientific. So the takeaways for the day, right, as you go through in the materials and the dialogue, these are the key messages that we want you to take away. The first of which is we're an incredibly well-positioned industry leader. And our businesses are also industry-leading businesses. The reason for that is they enable and we enable our customer success, they choose to work with us and have built those positions over time. Our markets are excellent. Science continues to evolve and advance at a rapid pace. And the life sciences industry is both resilient as well as having strong long-term growth prospects. Third, our growth strategy has proven. It drives share gain. And we have a capital deployment approach that creates tremendous value for our shareholders and both of which are powered by our PPI businesses. Our experienced leadership team delivers differentiated value creation for all of our stakeholders. And we have an ESG strategy that drives competitive advantage. And finally, you know us for outstanding track record of delivering financial performance as well as the excellent outlook that we have for value creation and performance going forward. In my presentation this morning, I'm going to focus on 2 topics. I'm going to update you on the company and orient you to Thermo Fisher Scientific is today. And then I'm going to talk about how incredibly well positioned we are for a terrific future. So Thermo Fisher Scientific, it all starts with our mission. It's our purpose. We enable our customers to make the world healthier, cleaner and safer. But if you pause on that and you think about the impact of that statement and you think about healthier, our diagnostic products give the information to the medical community to make incredibly important decisions in patient care. In this past week, you saw the FDA clear our preeclampsia assay, which really gives information to allow a doctor to decide whether a pregnant woman or mother is going to have to stay in the hospital for the remainder of her pregnancy or be able to safely go home. It makes a huge difference in the safety for both her and the baby. When you think about the role we play in a healthier world from the pharmaceutical industry, we help our customers go all the way from a scientific idea through an approved medicine. And in every step along the way the customer can choose to work with us. From a cleaner perspective, you hear about the work we're doing to enable a transition from a carbon-based to a less carbon-based world through the role we play in advancing battery technology. From a safer perspective, we enable law enforcement to ensure that our communities and we are safe. And every day, that mission inspires all of us to bring our best to Thermo Fisher and our customers. Looking at the company on a snapshot, a single slide. This is Thermo Fisher Scientific today. We're the world leader in serving science. Our customers know us for our industry-leading brands. With $44 billion in revenue, 125,000 truly amazing colleagues and $1.5 billion that we invest every year in research and development and a couple billion dollars that we invest every year in capital to ensure a bright future. That translates for our customers to see us as having both industry-leading scale and unmatched depth of capabilities and for all of our stakeholders, a deep understanding of how we do this in a sustainable way. We're powered by our PPI business system. It enables our success and it certainly has delivered incredible competitive advantage for Thermo Fisher Scientific. When you look at our revenue profile, it's incredibly attractive. I'm just going to focus on our end markets, and Steve will talk more about this in his presentation a little bit later. When you think about our end markets, incredibly strong and growing end markets. When you look at pharmaceutical, biotech, and the academic and government, the role that we play is we're powering the golden age of biology. When you think about diagnostics and health care, we're enabling precision medicine. When you look at industrial and applied, we're helping to move advanced materials to power the digital economy as well as ensure that the clean energy transition happens. All of the major societal themes that are critical to society of which Thermo Fisher is right there, making that a reality. And you'll hear more about that through the morning. When you look at our business segments, each of them have industry-leading businesses. Our 4 segments are incredibly strong, starting with Life Sciences Solutions, where we have a leading portfolio serving the life sciences research, bioproduction and clinical markets. In Specialty Diagnostics, we have leadership positions in Specialty Diagnostics to help cost-effectively deliver patient care. In analytical technologies or analytical instruments, we have the leading analytical technologies to enable scientific breakthroughs on some of the toughest challenges as well as solve those challenges. And the Laboratory Products and Biopharma Services, we enable the biopharma industry with our leading laboratory products as well as our clinical research, development and manufacturing services. Those businesses are benefited by the total company's scale and capabilities. Our growth strategy underpins those businesses, the benefits of high impact innovation, being the trusted partner, the unparalleled commercial engine complemented with our proven M&A approach, creates an ecosystem with these businesses that really creates strength going forward in terms of our growth and share prospects. And of course, PPI plays a key role in our success. When you think about how we've been able to consistently create value and differentiated value for all of our stakeholders, it's a key characteristic of the company, right? Our stakeholders know this. They understand what we're focused on and it starts with our customers. Our customers know that we exist to enable their success. We are a trusted partner that accelerates our customers' innovation and enhance their productivity. Our colleagues are inspired by that actually in terms of the role that we all play in the success of our customers and Thermo Fisher is truly an amazing place to have a mission-driven career and being at an industry leader, success breeds success, the opportunities of a growing vibrant company just makes an incredible place for our colleagues to work. We care about the communities that we live and work in. We give back to those communities. We make sure that the world is on path to be a better place, and we take that as a serious responsibility. And then finally, from a shareholder perspective, you know of our track record of delivering excellent results and our outlook for value creation is incredibly bright. And while we do that, we reinvest for the future to keep that flywheel going and keep the sustainable value creation going for all of our stakeholders. The financial results are impressive. We're consistently delivering very strong financial performance. When you look at our revenue, adjusted EPS and free cash flow growth, we've been able to compound those results year in and year out to deliver incredible value creation. And when you think about it, that 10-year period, the world was incredibly different, right? It wasn't one monolithic environment, but so many different environments of coming out of a recession, a period of slow growth, fast growth, a pandemic, the post pandemic and throughout it, outstanding financial performance. In fact, that track record is all about looking to the future as well. We are exceptionally positioned to succeed in whatever the environment throws at us and shape the world to our advantage. The reason that we've been able to deliver that track record is we have a very clear set of guiding principles about how we manage the company. And it starts with customer success that we operate in whatever the environment is to enable our customer success because if our customers are winning, we know that we're going to win over time. We hold ourselves to an incredibly high standard of performance. Success for us is about delivering differentiated performance in the short term. And at the same point in time, every minute we wake up and we're trying to enhance our long-term position. That very clear sense of what we're trying to accomplish no matter what the environment is, has allowed us to deliver superior results over long periods of time. When I think about the environment today, I'm very excited about what's ahead. Our end markets are resilient. They've got great growth characteristics. You'll hear about that today. I think it's worthwhile just reminding you about as science advances, the funding follows. And the science right now is spectacular. And when you think about large pharma, you think about the venture capital industry. There's an incredible amount of funding available to fuel the pharmaceutical and biotech industry over the long term. So very exciting about the end markets. And then our view is our track record is unparalleled. Whatever it is, we'll navigate it well. And at the most basic level, we're essential to the success of our customers and with their trusted partner. Our PPI business system allows us to deliver operational excellence, and we benefit from the deep and experienced management team, of which you get to see, you will hear from a few of us this morning. So let me now turn to the future with that being the orientation to who Thermo Fisher Scientific is today. Wow, I'm excited for what's ahead. The future has got 5 great drivers for us and why we're so well positioned to succeed. It starts with our industry leadership, serving very attractive and resilient end markets. I'll then talk about how our growth strategy continues to drive meaningful share gain, update you on capital deployment and the approach that we've been taking to create tremendous value, update you on our PPI business system and how it enables outstanding execution and then wrap up with ESG in terms of how our strategy here drives competitive advantage. So let's turn to our leadership in the very attractive and resilient end markets that we serve. So the best way to start is, first, it's an active sport. We've actively shaped the end markets that we participated in. If you look back over the past 10 years, we've been able to triple the size of the served market that we have all serving the same customer base, right? We're focused on a certain set of customers. We've been able to significantly expand that. And the market has got incredibly good growth prospects for the long term. The investments that we've made has increased our relevance to our customers, both through the products and services that we've launched as well as the new capacity and capabilities that we brought online and we've been able to further expand our capabilities to our customers through M&A to continue to build our strength and have an incredibly attractive end market that we play in. And when you look at that end market, $240 billion, 4% to 6% long-term organic growth or to market growth for that business or that end market. It's strong and it's durable. And you look at some of the drivers that actually starts with unmet health care needs, right? If you think about an aging population, right, the consumption of health care, the need for new medicines, it's incredible. And that creates just in a very strong long-term tailwind. When you think about the scientific advances that complement that, the potential of what can be brought to bear is impressive and those 2 factors drives very strong long-term growth. As you see complex therapeutic modalities come to the market and become a reality, customers are looking to partner, right? And they're actually looking to partner with us because of the depth of the expertise that we have. And that creates an ecosystem that really ensures both strong growth for the end market, but puts us in a very advantaged position. When you turn to the material science side of our business, the breakthroughs that are happening there is enabling rapid growth in the long term for semiconductors, advanced materials as well as enabling the clean energy transition. And then finally, the learnings of the pandemic. Governments are investing in infrastructure and supporting it as well as supporting scientific investments. And when I look at that, the tailwinds here will be very strong over the long term. Our position historically in serving these end markets is impressive. We have decades of success in enabling the key scientific advances. And if you think about it, the genomics revolution, we played a huge role in unleashing it, right? We enabled the human genome project with the first DNA sequencer, right? We've been democratizing gene editing. When you think about the understanding of biological molecules, do you need to hear anything more than Orbitrap and Cryo-EM to understand the role that we play. And taking those scientific breakthroughs and transforming them into affordable medicines, we pioneered single-use technologies for the production of biologics. These historical drivers are incredibly relevant today, but there's new ones that add to the future as well. And when you think about the areas that we're enabling today and the future success, the golden age of biology, we're enabling cutting-edge research as well as focused on reducing the time and cost of commercializing advanced therapeutics. In precision medicine, bringing out highly relevant diagnostics to be able to cost-effectively improve patient care. And from Advanced Materials, supporting the next node of semiconductors or the next generation of batteries all rely on our capabilities going forward. So the world is incredibly bright, and we're going to be there. There'll be other trends. In Thermo Fisher Scientific, we will be behind the scenes making them a reality. The second reason we're so excited for the future is our growth strategy. It's a proven strategy that drives share gain. It's really based on 3 elements, and you're aware of them and you're also aware of what the growth that we're able to deliver in that period of time. And the normal 4% to 6% market growth, our expectations, our aspirations is consistently to deliver 7% to 9% long-term core organic revenue growth. When you think about the elements of the strategy, I'm going to update you on the progress on all 3 high impact innovation, the trusted partner status with industry-leading products, services and expertise. For the last 10-plus years, you've heard us talk about our unique customer value proposition, doing things differently, bringing a different set of capabilities to our customers. That same theme has morphed into what it is today, which is our customer see us as their trusted partner. You've heard us talk about the unparalleled commercial engine. For many years, we talked about how that applied in the high-growth and emerging markets. It's still relevant today there, but it's relevant in every geography around the world, and you'll get a sense of the strength of our commercial engine to driving long-term growth. So starting with innovation, terrific track record here, right? And when you look at it, I'll highlight some of the products on the next slide. But 1 of the things that may be less apparent is in our businesses, we have the scientific thought leaders. Our customers come to our team in mass spectrometry, electron microscopy, molecular biology because they want to interact with our scientists. Those dialogues, those collaborations give us unique insights about where the world is going and allows us to inform what are our R&D priorities. And ultimately, because of the unique scale and depth of capabilities we have, we can apply those capabilities in unique ways to bring our solutions that is much easier for us to do than for anybody else to do. We do it at scale with $1.5 billion of investment, over 7,000 phenomenal R&D scientists and engineers and a very deep and robust intellectual property base to support our efforts. That positions us to deliver very strong returns on investment for our R&D dollars. Our track record here is very strong. If you look at some of the recent launches in the last 12 months, just a few examples about how we're enabling the golden age of biology, whether it's the advancements in our Orbitrap technology, the new chromatographs that we launch to understand biopharma drug analysis or even helping our customers do research in a more sustainable way through our Invitrogen DynaGreen Magnetic Beads, all examples of how we're powering the golden age of biology. On precision medicine, it's helping oncologists be able to match the right therapy for their patient. And in terms of enabling Advanced Materials, examples of how our electron microscopes are being used to push the art of what's possible. The second element of our growth strategy is being the trusted partner with industry-leading products, services and expertise. We have a unique scale and depth of capabilities. We have an accumulated experience and deep applications expertise for our customers and a track record of impact. Unparalleled customer access within those customers, and ultimately, we're continuing to offer new capabilities that are relevant to our customers' success. And when you look at it in the biopharma industry, you take it as an example and you kind of boil it down to its essence. We're highly relevant. We have a track record of helping the customer be successful. We have strong senior executive relationships, and we're continuously bringing new capabilities to enable their success. And that has resulted in very strong growth over an extended period of time. Over the last 10 years, and the first part of that period, 9% organic growth. In the latter part of that 10-year period, 16% organic growth in serving the pharmaceutical and biotech industry. Incredible share gain, we have great momentum going forward. Our expectations is not at the 16% level going forward, but it's continuing to be long term, very strong growth. That's a key part of our 7% to 9% growth for the company going forward. So very well positioned. And it's complemented by the third element of our growth strategy, which is our unparalleled commercial engine. You'll get examples of that in the next presentation. But when you look at it, we have unmatched commercial reach in terms of the scale of our commercial team. We have industry-leading websites and e-commerce capabilities. We have customer experience centers strategically placed around the world, and you get a sense of that. And then you complement it with a deep technical support team and ultimately, thousands of colleagues that are working with our customers every day either in their R&D labs or at clinical trial sites actually enabling their success day in and day out. And that creates a huge cycle of commercial advantage for Thermo Fisher Scientific. So that's our growth strategy in essence. You'll get some of the examples of it as we dive into our businesses. Turning to the third aspect of why we're so exceptionally positioned for a terrific future. Capital deployment, we have an approach that creates tremendous value. This slide is oldie, but goodie. Nothing's changed. You know how to read through the details, literally even the graphics are the same. The point here is that the application of how we're going to apply our capital going forward, roughly 60% to 75% on M&A and 25% to 40% return of capital, right? And when you look at the M&A portion of that strategy, it's a proven approach that delivers value. And when you look at that, we see every transaction, right? We have the ability to pick and choose where we want to play. We have a very rigorous selection of methodology, right? It's around will our customers appreciate the acquisition? Will they see the benefit of it? Will the company be stronger for the acquisition? And can we create meaningful shareholder value through deploying capital on a transaction? We have very disciplined decision-making. You know that what we do is we manage risk. We look at the different scenarios of how an acquisition can work out so that we ensure we don't do bad deals. In our track record here, and I'll highlight that in a minute, is really unparalleled. And then we have a proven integration process to make sure that what we create in the combination is a meaningfully better business. We're able to enhance the financial and operational performance of the acquired company as well as deliver on the cost and revenue synergies to create value and make the businesses better by helping with the strategic decision making. I'm often asked about is the market fragmented enough? Is there opportunities? There's a huge number of opportunities going ahead. The $240 billion market, the top 3 players have well below 50% of the market and great hundreds of smaller companies that we can continue to add to the company over time. When you look at the track record, you know that we do scale deals. We do bolt-on deals. We even do some strategic investments, minority investments to get a look into the future. And I thought it would be good to just highlight some of the progress over that same 10-year period just on the scale transactions today. You'll get an update on a couple of the transactions on scale in terms of PPD and one bolt-on in terms of the binding site in the next presentation. But when you look at the track record here, Life Technologies, what was the strategic rationale in the essence to establish a leadership position in enabling life sciences research. And the result was, we totally revitalized the growth of the company, right? And we were able to scale this business to 2x -- 2.6x the size of what it was then, and that's not even counting the many billions of dollars of COVID-related testing revenue that are generated during the pandemic. When you look at FEI, we acquired a leading electron microscopy company. Our goal here was to really penetrate the life sciences and material sciences applications outside of semiconductor. And we've made huge progress there. The business is 2.3x the size of what it was that acquisition. Patheon to expand our CDMO capabilities. We accelerated our path and we are the leading CDMO today. And the business is also 2.3x the size of what it was when we acquired it. At PPD, it's off to an awesome start. Adding leading CRO capabilities, customers are incredibly excited by what we have brought to the company. And when you look at the performance about the ability to accelerate growth and achieve the synergies, an incredible track record there, right? And those are the large deals and the track record on the small deals are also incredibly relevant. Looking to the fourth element of the future. The PPI business system actually makes most of what we do happen, right? And when you look at it, right, it just enables outstanding execution, right? It's the culture of the company. It's the mindset of the company. We come to work every day with the expectation that we're going to make the company better. We're going to find a better way every day. That's what all of us do. And that's incredible because what it prevents is complacency, right? We're expected to make the company better and be better for our customers, to be better for in the quality we have, the productivity that we have. Those things create a virtuous cycle for the company. And ultimately, what PPI has allowed us to do is have competitive advantage, way to successfully integrate acquisitions and it enables differentiated financial performance. Steve will give you some more of the details on this. And then finally, our ESG strategy, it delivers competitive advantage. The focus areas, right, safeguarding the planet from an environmental perspective, enabling our customer sustainability goals as well in the products and services that they work with us on. From a social perspective, just a great place for our colleagues, empowering them and supporting our communities. And from a governance perspective, ensuring good governance as well as reporting with transparency. When you look at the progress in the last year, it's impressive. I'll just highlight a few of the points, right? On the environmental front, we're making great progress in our reduction goals of 50% carbon reduction in Scope 1 and 2 during the course of this decade as well as progress towards net zero. And in fact, through this decade, we've reduced our emissions by 25% at this point. We'll keep on driving that further down. From the social perspective and our team, as you know, during the earlier parts of the inflationary process that we all were experiencing, we're able to do incremental compensation for our colleagues. We also really have created an incredibly vibrant culture and inclusive culture, and we get recognized for our -- over and over in terms of what it's like to work at Thermo Fisher Scientific. We're active in our community. And from a governance perspective, we have an awesome board. Thank you to all of our Board members. And we report with transparency. I encourage you to read our corporate social responsibility report that we just launched for last year just a couple of weeks ago and take a look at it. It gives you a sense of the data with incredible transparency on the progress that we're making and the work that we're doing. So I think you got a sense from me about why we're so excited, so well positioned for the future. And the 5 themes that will ensure that Thermo Fisher Scientific has a bright decade or more ahead. I'm very excited to introduce our next topic, which is our leading businesses where Gianluca Pettiti, our Executive Vice President; Michel Lagarde, our Executive Vice President and Chief Operating Officer, will dive deeper into our businesses. Gianluca, have you come on up?

Thank you, Marc, and it is great to be back in New York also because I have to admit that we thought for a second to do this event via Twitter. It seems to be pretty popular these days. But I'm glad that we get to meet face-to-face and share the work that our 125,000 colleagues at Thermo Fisher are doing for our customers every day. Let me start with a few key takeaways. As you think at what we've done over the last few years, we've built an industry-leading businesses in very attractive end markets. And that through our best-in-class products that are serving our customers every day, they're enabling the work they do, they're enabling their success. And that through accelerating their innovation with cutting-edge technology as well as enhancing the productivity with choice and convenience. Due to that, our businesses had a very strong track record of success and value creation over the years, and the company is positioned for an excellent long-term outlook. In his opening, Marc shared with you the company strategy. And in this section, Michel and I will drive you through how that same strategy is delivered across our segments. In this page, you have our 4 business segments: our Life Sciences Solutions, Specialty Diagnostic, our Analytical Instruments and our Laboratory Products and Biopharma Services. As you can tell from the scale and reach of these segments and their businesses, they're all leading in their markets. And the combination of the 4 is creating unique differentiation for our customers every day. We also get the benefit from terrific brand equity in our markets. These are incredibly well-established and recognized brands. There are synonymous of reliability, quality, innovation, brands that our customers have used throughout their career. We have a lot to share today, so let's dig right in and start with our Life Sciences Solutions segment. It is a great business, not only because it is a leader in the Life Sciences space, but more importantly, because it is something unique. In fact, we start to work with our customers very early on when they have a scientific idea. We stay with them as they develop that idea through R&D. We hold their hand, supporting them in product development and likely work with them as they scale up manufacturing. It's a very unique trade to have as we serve our customers across the continuum of what they do and across their journey to success. So with that, we built a leading portfolio serving life science, research, bioproduction and the clinical markets. Our Life Sciences Solutions segment is comprised of 3 businesses: Biosciences business, our BioProduction business and our Genetic Sciences business. It is $11.9 billion in revenue. As you can tell from the right side of the slide, it has fairly attractive revenue profile with most of the revenue coming from Services & Consumables of highly recurring in nature and the rest coming from high innovation, Instrumentation and Platform. Now we'll get confused from the mix on the pie chart. Over the years, our scale allow us to build the largest instruments installed base in the space. It's pulling through a lot of consumables day in and day out. And that generates a very attractive profitability for the segment with 36% adjusted operating margin. So really a great business. Now allow me to do a click down and share with you some more specifics of the businesses that are within the Life Sciences Solutions segment, starting from the Biosciences business. A leading portfolio of reagents, instruments and consumables. It's really ubiquitous. It has presence in almost every lab. And when you think of the brands within that business, Invitrogen for molecular biology and synthetic biology or Gibco, really the gold standard in cell biology and cell analysis, brands that our customers are incredibly familiar with. And it's a strong track record of innovation that keeps the vitality of the product within the Bioscience business incredibly high. Moving to the middle of the page, our BioProduction business. The way that we think of that business is when our customers are in need of scaling up their manufacturing, they rely on our expertise and not only because we have best-in-class bioprocessed products with a global footprint, but also because of that familiarity with the product that they developed over years using our research products. We have a leadership position in single-use technology, large bioreactors, the consumables that go with them, as well as the reagents that are used to manufacture biologic and drugs at scale. And over the years, we also built a rapidly growing purification business that today is serving our customers in their downstream needs as well. And then on the right of the slide, you have our Genetic Sciences business, thinking a gold standard in genetic analysis, well, you have to think it apply by our systems whether it's sequencing technologies, whether it's real-time PCR, microarray, you name it. All of these platforms have been developed and introduced over decades to our customers. And these platforms are used both in the Life Sciences space as well as in many applied markets like food and animal health and more. Over the years, within our Genetic Sciences business, we also had the opportunity to develop a world-leading franchise in next-generation sequencing, targeting the clinical oncology market. I'll talk a little bit more about that and how that is democratizing NGS in the clinical space. During his opening, Marc shared with you the company's strategy. And what we thought would be helpful is to handpick a few selected areas of the company strategy that are particularly relevant for our Life Sciences Solutions segment. And here, they are 4. We serve very attractive end markets, and we're enabling cutting-edge advances in those markets. We do that with an unparalleled commercial engine. This is really industry-leading. It helps us to actually give access to our customers to the high-impact innovation that we develop based on their insights as we talk to them every day, and we do that with an eye to the environment with our design for sustainability that I'll talk about in a second. But let me start from the attractive end markets and share with you where we're so excited about that. We're living an unparalleled time in our end markets. We like to refer to it as the golden age of biology that is fueled from innovation in areas like synthetic biology and advanced next-generation cell analysis that are powering solutions like advanced therapeutic modalities and the development of those as well as the scale up. We're seeing our customers being very active in scaling up manufacturing in advanced therapeutics and biologics. And when it's time to deliver those novel therapies and drugs to patients, it's so critical that the quality and the processes are in check. And our customers are really relying on our genetic analysis solutions. So another relevant driver of growth. Now when it's time to deliver those medicines to individuals, precision medicine comes into play as being targeted in the way that drugs are prescribed using highly relevant diagnostics that are more personalized and based on the genetic profiles of patients. It's becoming very relevant to identify the right drug at the right time. And obviously, this comes after detection of a potential challenge from a health standpoint. So we're very active in enabling early disease detection with many of our technologies. So it's incredibly exciting time for our end markets. Now if you combine the scale of our business with the many applications that we serve, it takes a village to support our customers, and we have thousands of colleagues incredibly talented. They're serving our customers every day with an unparalleled commercial engine whether you think at the way that we support them to design their experiments, design their processes with our technical team, or how we enable them to procure and buy our products through market-leading e-business capability, e-commerce capability or whether you think at our team being at our customer site, helping them managing their stock room, their supply or the fleet of instruments. This creates literally thousands of touch points with our customers every day, millions every month if you consider our digital reach that delivered to us incredible insight on how our customers operate. And that's so informative as we get to know them very intimately in many areas of the work they do and what we do with all of this insight, well, actually, we create great products. And on this page, you do have a few examples, not much about the product, but on the processes that we use to translate those insights into relevant innovation for our customers, high-impact innovation. Starting on the left from our cell therapy workflow, we heard our customers. They want modular solution, fit-for-purpose cutting-edge innovation that they can use in their customized workflow and we delivered just that in the cell therapy space or as Marc highlighted, we pioneered single-use technology for commercial scale with our DynaDrive Single-Use Bioreactors, now available in large-scale capacity. And finally, as you think of precision medicine is about getting those solutions to community hospitals, to hospitals across the globe that don't benefit from what we have, as an example here in the U.S., large reference center with a lot of technical capability. And to do that, we actually developed the first of its kind walkaway next-generation sequencing that can be used in remote settings to actually deliver relevant information to oncologists to define, which is the best therapy for a specific cancer patient. And that's really transformative in the way that many doctors are able to diagnose and treat patients. And finally, as you think at the way we innovate, we clearly want to do right by our customers. We also wanted to do right by the environment. Marc alluded to the fact that we just published our corporate social responsibility annual report. I encourage all of you to go and have a peek at it. Our team is doing an excellent job on that front. And here, you have an example on how we bring sustainability into the design of our products, making it a competitive advantage whether you think at the way that we drive reduction in hazard and waste or whether you think how we continue to reduce the energy consumption, increase energy efficiency of our instrumentation or the effort that we do in making our product more recyclable with better and innovative packaging over time. So you get a sense of our effort from a sustainability standpoint. So that's $11.9 billion of highly attractive business in 5 minutes. Hopefully, you are as excited as we are on the prospect that our end markets represent. We're operating in very attractive end markets with an unparalleled commercial reach. We have high-impact innovation that is essential to our customer success. We do that with an eye to sustainability. So that's our Life Sciences Solutions segment. Now let me move to our next segment. It is the Specialty Diagnostics segment. Over the years, we built a very differentiated portfolio, serving Specialty Diagnostics segment across the globe. And we complement that with a channel that serves clinical customers here in the U.S., large reference labs and hospitals, creating a really strong combination. That created a leadership in Specialty Diagnostics with a focus of improved patient care, enabling our customers to do that and do it in cost-effective way, in a cost-effective way. Our Specialty Diagnostics segment is made of 4 product businesses, our clinical diagnostic, immunodiagnostic, microbiology and transplant diagnostic and our health care market channel. It is $4.4 billion in revenue and it has an equally appealing revenue profile with the majority of the revenue coming from services and consumables, so highly recurring in nature and then very specialized instrument. Both our product businesses as well as our channel have very attractive profitability in their own segment and blended 22% adjusted operating margin. When you think of the 6 businesses within our Specialty Diagnostics segment, I have to say that we added here protein diagnostic with the acquisition of The Binding Site. The way that I would think at these businesses, they're all very specialized, whether you think at our clinical diagnostic, serving doctors to do detection of infection and management of infection as well as a leading portfolio in toxicology. The acquisition of The Binding Site, I'll talk a little bit about that, allowing us to create leadership in multiple myeloma diagnostic, our well-established immunodiagnostic business with very unique solutions for allergy and autoimmune disorder detection or on the bottom of the slide, with our microbiology business, is a world-leading portfolio for pathogen detection, or transplant diagnostic business, helping doctors to match donor and recipient of transplant organs as an example, our health care market channel. So let me share with you as we did for the Life Science Solutions segment, how our strategy is actually executed and delivered through our specialty diagnostic. First, we benefit from very resilient and attractive markets. And because of the relevance of our products, we get to benefit from those market condition. We continue to innovate. Innovation in diagnostic is very resilient. We have great platform and we are adding more and more content for our customers. And when we decide not to build organically, then we put our capital at work. And the acquisition of The Binding Site is a great example. Let me start with the end markets. Allergy is an area of focus that has been for many years for us. And if you sneezed in the last couple of weeks, we're in high pollen season, so I encourage all of you to go and get tested for allergy. And if you do so, ask to your doctor, the ImmunoCAP test, is a simple blood test and you can test for hundreds of allergens at one. It's noninvasive, is nothing like skin prick testing, low sensitivity, is really, really neat. And when you think at the market potential, there's 1 billion people across the globe suffering from allergy. So great opportunity. Second, as you think at the transplant diagnostic market with an increasing incidence of chronic disease, we're seeing more and more demand for transplantation and more and more demand for typing. You look at the different dynamic in that market, there's going to be need of continuous support for doctors, both from a diagnostic standpoint as well as monitoring standpoint. And when you think, in areas like sepsis with more than 30 million individuals across the globe, suffering from sepsis every year, being effective in manage that dynamic that is one of the leading cause of death across the globe will make a true difference in managing the economic of health systems, something that been so much under pressure over the last few years. We're very active in all of these areas with our portfolio. Again, targeting improved patient care, enabling our customer to improve patient care in a cost-effective way. As you think of the way that we do that, is through high-impact innovation. And you do have 3 examples in this page. I alluded the challenge with sepsis. We continue to add to that portfolio and now we have markers that can help doctors do a much better job in managing organ dysfunction with early detection. Again, a very critical driver of cost for the health system. In the middle of the page, you have example now, within our transplant business, our team is innovating and starting to support patients throughout their patient journey with post-transplant monitoring capability. And on the right of the page, as you think of the autoimmune disorder detection, we introduced high-throughput solutions in the U.S. market to allow doctors to actually detect autoimmune disorders at a cost-effective rate. So it's -- these are all market trends that we're serving throughout innovation and a few selected example. And finally, let me close with a great example on how we put our capital work with our capital deployment strategy that Marc has discussed with the bolt-on acquisition in the Specialty Diagnostics segment that we closed in the first quarter with the acquisition of The Binding Site, is an excellent business. It's a world-leading franchise for multiple myeloma testing. Multiple myeloma is the second most common form of blood cancer. It also -- the portfolio is also used to detect monoclonal gammopathies that are known to be correlated with multiple myeloma and millions of people are suffering from that across the globe. So really a great business off a great start and a good example on how we put capital at work towards leadership within specialty, where we had limited participation. And is incredibly exciting what we can do by adding to this portfolio with additional technologies like mass spectrometry and next-generation sequencing over time. So that's the Specialty Diagnostics segment. And again, I hope that you are as excited as we are on our capability to make a difference for our customers in the way that they improve patient care, the many doctors out there with our high-impact innovation and our capability to add to our portfolio over time, allowing them to do that in a cost-effective way. Without further ado, let me now introduce Michel Lagarde, our Executive Vice President and COO, to cover the Analytical Instruments segment and the Laboratory Products and Biopharma Services. Michel?

[indiscernible] So the next accent we will be introducing is my Dutch accent to all of you at the United Nations of Thermo Fisher. And I'm excited to take you through the final 2 segments of our awesome company. Starting with Analytical Instruments, where we provide leading analytical technologies that enable scientific breakthroughs and solve analytical challenges. We have 3 market-leading businesses in this segment, our Chromatography and Mass Spec business, our Electron Microscopy business and our Chemical Analysis, together generating about $7 billion of revenue with a revenue mix towards instruments. But we're very excited about the growth rates we're seeing in our services, software and consumables part of the business. Let me introduce the businesses in a little bit more detail on this slide. First, our Chromatography and Mass Spec business. You know that we're the leader in Mass Spec, really an awesome business for us. And we have a very strong position in Chromatography that's growing very fast. And these businesses are further accelerated by our focus on providing consumables, services and software. It's really an important enabler of the growth strategy for these businesses. In the middle are electron microscopes. Don't be fooled by the picture. These things are 10 feet tall, right? These are not microscopes you used in your science class in high school, really amazing tools that provide revolutionary insights for scientists in life sciences and advanced materials. And here as well, the focus on providing software, consumables and services, another critical part of the fast growth in that business. And then on the right, our Chemical Analysis business, really a leading portfolio of everyday tools scientists use to make the world healthier, cleaner and safer. So just like Gianluca did, I also picked a couple of highlights that I think demonstrate well why the prospects for our businesses in this segment are so incredibly bright. First, I'll take you through the attractive end markets they serve in life sciences and advanced material. Then I'll talk about one of the superpowers of this segment, which is our ability to continuously have high-impact innovation. And then I'll describe a bit how we go to market and how we have unrivaled commercial presence that further accelerates our business and enables this consistent performance of above-market growth, revenue growth. So first on the attractive end markets. So as mentioned, we are supporting here the golden age of biology. Our tools are used by scientists for the most important work that they do, really providing the foundation for the scientific breakthroughs that they enable. And in life sciences, for instance, that's all around understanding the structure and function of molecules better or cutting-edge research in areas such as proteomics. In pharmaceutical manufacturing, it's all about making sure that the products that are being produced meet the very highest of standards when it comes to quality and our tools are used in the QA and QC. And so very important end markets that have incredible growth profiles on the Life Sciences side. And then on the Advanced Materials side, similarly, we are enabling this accelerated growth around the application and the broad application of semiconductors as well as the transition into clean energy. For instance, the whole battery workflow is enabled by our tools for making sure that the natural resources that are at the very start of that workflow are of high purity, our products are used in QA/QC, where you make batteries and then our tools are again used in the recycling of that workflow. So incredibly strong end markets, really driven by secular fundamental growth trends. If you go to the next slide, battery must be dead. So here are the examples on innovation. This is a mass spec example, right, a leading business for us, where we have a multi-decade long track record of really step change in innovation, constantly resetting the bar. And we did that back in '05 when we launched Orbitrap, which was a revolution in mass spec. And as you can see, we've consistently updated and upgraded our instrumentation ever since. And now in a couple of weeks' time, at ASMS, we will once again completely revolutionize the field. And we have a breakthrough platform instrument that will again reset the bar. And I had the opportunity a couple of weeks ago to quietly sit in the back of the room when we previewed this instrument at a sort of a elite gathering, 30 or 40 of the sort of most sophisticated mass spec users in the world. And it was amazing to see once our team demonstrated the instrument, the reaction from these top scientists and their eyes lit up thinking about a whole new paradigm in which they can conduct their research. And to just give you a sense, we will be launching this on Sunday morning at 7:30 in Houston in a room about this size. There will be 1,000 people there, standing room only, is waiting to hear from our team what innovation is all about. It's a really excellent testament to the rock star R&D people we have in our business here. Another example of our high-impact innovation is in our Cryo-EM business, where in Life Sciences, our customers are constantly looking for better insights, really understanding the structure and functioning of proteins better so that they can design therapeutics that work better or design therapeutics that previously could not have been invented. That's really what they need and that's really what our tool delivers, unprecedented atomic level insights. And we constantly make it easier for our scientists, customers to use these by automation of the sample process, for instance. And this is one of the businesses where we have the most advanced application of AI in our company that the AI helps the scientists to do the work, enhances the resolutions, fixing errors that might have occurred in the process and really targeting the areas of focus. And so this really has become the go-to instrument in early pharma research because it enables these cutting-edge breakthroughs in structural biology. Similarly, on the material sciences side, the advanced materials side, where we obviously are in this revolution when it comes to the application of semiconductors and as consumers, we benefit from that in the cars we drive and the phones we use. But for the makers of these chips, it's actually quite a challenge because they need to pack in more and more into these chips. And so they need very advanced tools to make sure that they can verify that the chips they design actually work. And once they produce them, are they actually meeting their quality standards? And in the past, you take a simple picture from the top of the wafer and you would see that the design works and when you produce it, you'd be able to understand whether it meets the requirements. Now these are 3D structures. And so you need to have a complete 3D view of the wafer to determine whether what you developed work and what you made in fact meets the specifications. And so you can imagine how critical our tools are in the workflows here. The last highlight for analytical instruments is about our unparalleled commercial engine. We really have thousands and thousands of customer-facing people, whether that's in service, whether that's in sales, whether that's in technical applications. These are passionate people. They're there to enable our customer success. And we continue to think about the best ways for them to engage our customers. And here is an example of the investments we've made in state-of-the-art customer experience centers. In fact, last Friday, I had the opportunity to open our newest experience center in Singapore, really an amazing place to see all of the awesomeness of Thermo Fisher in one spot. All of our instruments, all of the workflows we support. And so we engage customers here in these environments to really get them hands-on experience with our instruments. They often bring their own precious samples to see how by applying these instruments, they can get better insights and they get to see the entire portfolio, which obviously often inspires really attractive cross-sell. And they come there to learn and continuously learn where we host workshops and engage with key opinion leaders so that they continue to allow to get smart and smarter and use our tools even more effectively. This creates incredible customer intimacy, right, where our folks really are able to develop these really strong relationships, which is the basis of why we're able to continue to grow these businesses faster than the market growth. So that's our Analytical Instruments segment, really an awesome set of businesses. Then on to the final segment here, our Laboratory Products and Biopharma Services segment, where we enable our biopharma customers with our leading laboratory products and our clinical research development and manufacturing services. We have 4 really awesome businesses here, our clinical research business, our CRO, our pharma services business, which is our CDMO, our research and safety channel business and our laboratory products business. Together, they generate about $23 billion of revenue, about half of the company's overall revenue and a revenue mix very much towards the recurring services piece. So here, the businesses in a little bit more detail. In clinical research, we have a global-scaled CRO with all of the relevant capabilities for people to organize and run Phase I to IV clinical trials. And then in addition, we have all of the capabilities to analyze the data and results that come out of those clinical trials so that we can help our customers prepare the right data package that they use to get their products approved. Then we have our Pharma Services business where we build out what is now the leading CDMO both in breadth and in scale, where we offer drug substance, drug product for large molecules, small molecules and importantly, starting with development services all the way to commercial scale up offered through a global network of best-in-class quality sites. Then our Research and Safety Market channel, which is really the industry-leading marketplace where scientists go to procure anything they need to conduct their work. right? We have really built out the largest assortment here. This has all of our own products but we also represent 10,000 other suppliers to make for a complete assortment, one place, people will go and get all of their supplies. And it's enabled by world-class e-commerce and a purposely built supply chain. This is critical. Many of these products here require very specific handling. Then on the right, our leading Laboratory Products portfolio, where we offer lab products, chemicals and consumables to our customers there. So here, I also picked 3 of the highlights that, again, I think, represent really well why we're so excited about growth and continued growth here in this segment. I'll give you 2 examples of what trusted partner really looks like for our Fisher Scientific channel as well as our pharma services business. I'll give you an example of how we apply PPI in our CDMO and others that has created real differentiation on quality, reliability and productivity in that business. And then finally, I'll talk about capital deployment and use the PPD example to showcase how we create tremendous value from the way we deploy M&A capital. So trusted partnership. Here's our Fisher Scientific channel, really an amazing business because it allows us to engage our customers every day, in every lab. We do that by offering the broadest portfolio of products that they need and a long list of value-added services. That's then all supported by an incredible group of customer and technical support people. This is not a customer help desk, you call to ask whether it also comes in green. This is a help desk you engage scientifically to help you solve your problems, design your workflow, make sure you have sort of the very best components to run your experiments. And so it's really an amazing group of colleagues that hangs out with these customers every day with thousands of Fisher Scientific colleagues that are located permanently at our customer sites. So they live, they're Thermo Fisher colleagues but they live in the R&D centers of our customers. And our customers love their Fisher Scientific reps because they are the ones that keep science moving, keep the lab going and the stock rooms filled. That creates an incredible level of intimacy with our customers and it gives us incredible data on what they are procuring. And so through that purchasing data, we can anticipate what they need next. We now see that you've run these experiments that tells us you're ready for a clinical trial. Let me introduce you to my colleague who can tell you all about our clinical trial services. So the integration of the capabilities here are really quite spectacular. This is another example of trusted partnership in our pharma services business, where we've build out an end-to-end sort of molecule-to-medicine CDMO, where we help customers with the development of their drug substance and their drug product. We then manufacture their clinical trial material. We ship that all around the globe to effectuate the clinical trial and then scale up drug substance in their product manufacturing when they go commercial. And we do that, as I mentioned earlier, across all of the modalities that our customers work in. And then the numbers on the page give you a sense of scale, that's really very relevant because our customers are trying to do something here that's complicated. And so scale represents aggregated experience and so when they engage us, they access that aggregated experience, that really allows them to be successful here. And so that has made us the preferred partner, either as a sort of complement to people's in-house production or in many cases as their primary manufacturing partner. The most important thing they look for, is the experience set and our quality record, right? Our best-in-class quality record is the reason why people continue to choose us over other solutions. Then PPI, you've talked to us -- for years talked a lot about PPI. I really think it's part of the secret sauce of Thermo Fisher. And we've applied this business system consistently and for a very long period of time. That has now resulted in 125,000 people thinking about how they find a better way every day. It really is our culture, right? And that really has allowed us to create such value to the engagement of that PPI business system for our customers. And here is an example of how this works in Pharma Services. That business has a strong record of using PPI for process improvement, cost reduction, capacity debottlenecking. And the teams now are aggressively focused here on manufacturing automation, digitization and connectivity. And this really creates competitive differentiation because it allows us to be better at quality, to be better at productivity and be better at reliability. And that really is the source of why we are able to continue to gain share in these businesses by applying the PPI businesses there. And the final example in this segment is around capital deployment. And you heard Marc talk about how important capital deployment is in our overall strategy to create value. And the 3 main filters we apply at the very top on when we start to think about M&A. Does it enhance the strategic position of the company? Does it strengthen the relationships we have with customers? And does it drive a whole lot of shareholder value? Those are the things we talk about. And those are the things we firmly checked the box on when we acquired PPD. It made a company strategically unique, by having this capability added to the set of capabilities we have already in Thermo Fisher. It significantly strengthened our customer relationships because a decision on who to use as your CRO is a very critical one for our customers. There's lot of dollars associated with that decision. But more importantly, you need to get good clinical results because that ultimately allows you to launch your products. So strategically, it really strengthened our customer relationship. And as I'll demonstrate through our results, we've created incredible shareholder value. So a little bit more detail on our performance here. We obviously were very compelled when we acquired PPD that adding the CRO capabilities would be compelling. And at close, I was completely prepared with my pitch to convince our customers that this will be compelling to them. And frankly, most of the meetings were sort of boring because they ended up a little bit like, "Yes, Michel, we get it. You are our trusted partner. You now add these capabilities, let's go expand our relationship." And so as a result of that, we've seen very quickly, much faster than we anticipated, customers choosing us for their clinical research activities. And as a result, we have won very significant new work from existing customers where we increased the share of wallet but also from lots of new customers. So that's, I think, a real testament to our customers seeing the value in us being their trusted partner. And then this is a people business. So when we designed the integration plan, we were very focused on the new colleagues coming over to Thermo Fisher and making sure that for them, it was a really exciting moment. And in the 18 months that we've owned it, retention has gone up in every month. And so we're really very excited about that prospect. And recently, some industry data was published, all of us in CRO land contribute our data and somebody sort of packages it and puts it out. And what the data tells us very clearly is that we have retention at the very top of the industry and there's a very big gap in retention rates with the other market participants. Why is that important? Because it's one of the most critical selection criteria for our customers. These clinical trials take 3, 4, 5 years to run, you want stability in your CRO team. And so if we can demonstrate that retention is so much higher with us, it's one of the sources of real continued business growth. So when you do well for your customers and you treat your colleagues well, you're going to have outstanding financial results. And that's we have realized. You hear Marc and Stephen, on our quarterly results call, talk about revenue growth in this business and it's very clear that we've gained very significant share. So it's going really well from a top line perspective. And then we continuously get more excited about the synergy opportunity. And so again, today, we're raising our outlook for synergies to $200 million now by year 3 of the acquisition, which is next year. So really very exciting results and a great example of how we deploy capital. And then here, I'm going to try to answer a question that all of you have on your minds. I'm a bit of a mind reader. But one of the questions you all have is, how is it possible that Thermo Fisher continues to buy these good businesses and then they join the Thermo Fisher family and they accelerate because that's exactly what has happened at Life Technologies, at FEI, at Patheon and now at PPD. And I experienced that firsthand. I joined Thermo Fisher through the acquisition of Patheon. And how does that happen? Well, it happens because we do run the businesses better. The PPI Business System applied access to the world's best talent, does make these businesses better, post acquisition. But most importantly, we get to connect it to the rest of the company's capabilities. It's really the way to harness the power that's embedded in the total company capabilities. And that's obviously all of the customer access and the trusted partner relationship that the new business that is acquired gets the benefit from. But it's also by making these unique connections with capabilities from across the company, and therefore, we can come up with unique products, solutions and services that ultimately drive this sort of accelerated revenue growth and allows us to take these good businesses and make them even better. The example here is on PPD and we have countless of in-flight examples. This is one that happens to be somewhat easy to explain. So in clinical research, our customers are solely focused on speed. It's all about how you can get to your answer as quick as you can because they need to collect the data that tells them the drug is safe and it works and the speed at which you get that, those answers, is most important. And historically, the people that designed clinical trials in random were completely disconnected from the supply chain people that make clinical trial material. In large pharma, they don't know each other's name and in biotech companies, these activities are outsourced to different service providers. So completely disconnected. So when we bought PPD, the first thing we did is, we connected those 2 worlds. And we took the people from PPD that design and run these clinical trials and we connected them with the folks in Patheon that create all the clinical trial material. And as a result, we now are able to make sure that there's never a patient visit without the relevant material being at the right side. And retention part from patient recruitment, retention in clinical trial is the most important value driver. And then we avoided incredible waste because historically, we would send clinical trial material all over the globe but not necessarily to the places that saw the most patient recruitment, right? And so by combining these capabilities, we uniquely, because we're the only market participant that has these capabilities in-house, we uniquely provide better patient retention and incredible waste reduction. This is an example on why good businesses come to Thermo Fisher and accelerate and PPD is a great example of that. So that's the Laboratory Products and Biopharma Services segment. With that, you have earned a break. I'll end with the key takeaways, the ones that Gianluca started with. We have 4 segments with amazing market-leading businesses. They really provide critical products and services to our customers. And really, we've been able to build an outstanding track record of performance. And our customers continue to come to us for more because we accelerate their innovation and drive productivity. That gives us really an incredible insight into being able to continue to grow these businesses faster than the attractive market growth in which they participate. So we'll give you 15 minutes to caffeinate and then we'll see you back. Thanks. [Break]

And now please welcome back Executive Vice President and Chief Operating Officer, Michel Lagarde.

Okay. Good break. Next up is trusted partnership. And before the break, Gianluca and I previewed with you our 4 segments. And hopefully, you've got a good sense that we operate really businesses in attractive end markets. We run them really well, applying our PPI Business System and then we supercharge them with our growth strategy. That really has been the recipe on why we've been able to consistently deliver above-market growth. And then I thought in this next presentation, I'll take a few minutes to try to give you a sense on what this feels like if you're a customer of Thermo Fisher, right? We talk about trusted partnership and we're excited about that. But what does it really look like from a customer standpoint? And why is it that they rationally conclude that expanding their relationships with Thermo Fisher is so valuable for them. So this is the slide that Marc showed that sort of defines trusted partnership and shows that we really uniquely occupy this position because we're the only market participant with this type of scale and this type of depth. And both things are important. The scale piece means that from a dollar standpoint for most of our customers, we are their single largest supplier. So that makes us relevant. But the depth is really, I think, what even more important differentiator because take your typical pharma company, if you are the head of R&D at a pharmaceutical company, you care deeply about the relationship with Thermo Fisher because we provide your teams with the very best tools to deliver the scientific breakthroughs. Our channel business make sure that your scientists are actually productive. And so you want to make sure that you have an excellent relationship with Thermo Fisher. If you're a head of manufacturing at that same company, you care deeply about your relationship with Thermo Fisher because if you sit on a large internal network, you need all of our equipment, you need all of our materials to do production. And additionally, you might want to benefit from the CDMO activities that we have and outsource some of the manufacturing to us. If you're a head of clinical ops, you care deeply because you need to get clinical results. And for that you need the very best CRO. If you are the CFO of this place, you care deeply because; one, we're your largest supplier but we're also the source of productivity for you. And so you hang out with us a lot. And then ultimately, the CEOs care deeply because we enable to accelerate their innovation that's really core to these companies' strategies. And so the scale and the depth really make it such that we're so relevant to these customers. But then we have to back it up with performance. And we have a unprecedented track record of performance with them. We're not some start-up with some fancy pitch. They have seen us perform. They have seen our customer-centric culture show up in the daily engagements our colleagues have with their teams. They have us seen solve the problems that they encounter and they have seen us consistently perform in a wide variety of market conditions, right? That really has built that track record. And that's how we think of it. We need to earn it every day. We might have great capabilities but it needs to be delivered to our customer satisfaction every day. Depth gives us then incredible customer access, right? Because now it's logical for all of these people at this company to spend time with us. It makes their jobs better and allows them to be successful. And then this moat that we've created around the business, we keep digging it deeper and making it wider because we keep investing in additional capabilities and do that organically and inorganically. That is why our business is so incredibly resilient. That's why our business is so incredibly powerful because we have this unique position of trusted partnership. That is the case in all of the end markets we serve, particularly evident in biopharma where we have highly relevant capabilities, an incredible track record of delivering customer success, very strong senior customer relationships. And this is clearly an area where we continuously invest so that we have the most relevant, the best capabilities available for our customers. That's why this has been such a successful environment for us to continuously gain share and you saw some of the growth rates in biopharma that Marc presented. And the growth accelerates because of the access of flywheel, right? The more we do, the more successful we are, the more capabilities we have, that's how this becomes a sort of never-ending story of success. So the example I'll take you through is with one of our top 10 pharma companies, very scaled company, one of the world's largest pharmaceutical makers. And because of their scale, as you would imagine, we have a very large, long-standing relationship with them. They call us up and they say, "Hey, we have this advanced therapeutic that we want to bring to market." And that's already an important differentiator in the way we engage them. They don't call us for something very narrow and specific. They tell us strategically what they're trying to achieve and then they include us as partners in that conversation. And so that provides us the ability to support them in early research, support them in development and clinical trials and then ultimately, we scaled up this specific therapeutic commercially for them. That really is a great example of trusted partnership. And through this engagement, again, we did -- we earned it through performance, we now are in an even better situation with them. And the relationship has been strengthened multiple times through multiple projects. I was with this customer yesterday for 3 hours where their most senior manufacturing people and our most senior CDMO folks sat together in a workshop that was called Bold Ideas, to enhance our manufacturing partnership. These are the type of discussions we're uniquely having with our customer base. So let me walk you through what support looks like. So in early research, we made our most advanced equipment available to give them the relevant critical insights to design their therapy around and they standardized on some of our biosciences products that Gianluca previewed earlier. And they did that because they knew that these were the types of reagents and consumables that ultimately would scale into the commercial grade. And then our channel business made sure that all of the R&D centers that were involved, and there were various around the globe, were well stocked and the scientists could be productive. And so making sure that we have available all of the right tools. This is how we supported them on this project in the early phases. Then it moved to development and we helped with process characterization. We came out with a customized resin, which is a great example. Had they called us just and said, "Hey, we need some resin. " We would have said, okay, here's some resin. But the fact that we were involved in the project on a holistic basis, we knew that they needed yield to bring the cost of this product down. And so our team developed a custom resin that developed -- that provided them significant benefits in terms of yield. That was not a big commercial opportunity for us but it enhanced the customer relationship significantly because they see us show up as their true partner rather than just the supplier. Then we helped them in clinical trials, in this case, particularly with making sure that there was very diverse participation in the clinical trial. So that the data package ultimately would be very representative and ultimately resulted in a very successful set of clinical trials. Because of the good clinical results, they then moved it into commercial production. They're launching this product and again, we're helping them with our launch expertise. This was both a product that was made in-house and so we provided all of the equipment needed to scale up. Again, remember, they standardized on our Biosciences portfolio. So those we could now scale up into GMP-quality commercial scale and they accessed our CDMO network. And we provided them drug substance capacity, drug product capacity around the globe, which allowed them to accelerate their launch much quicker than they would have, had they just relied on their internal capacity. And so a great example on how trusted partnership shows up and delivers value because it accelerates our customers' innovation and gives them better economics. So this is really, I think, the summary of what a trusted partnership look like and really a position we uniquely possess here. And as I mentioned, continuously think about earning it, increasingly with these customers but also enhancing it by the investments we make in both organic and inorganic. And having the relevant capabilities to them so that this position that we've created for ourselves continuously get enhanced and really widens our position away from the other market positions. So hopefully, that was a helpful overview of how the customer experiences at Thermo Fisher. And with that, I'll hand it over to our brilliant CFO, Stephen.

Thanks, Michel and good morning, everybody. It's a pleasure to be here today to give you an update on the company. You heard from Marc a very compelling strategy. The strategy that's consistently delivered in the past and has a long runway to go in the future. Gianluca and Michel gave you just a taste of how awesome our individual businesses are. And then how when they bring them -- we bring those together with the company's strategy makes a huge difference. And then Michel then branded that out with what does that mean from a huge difference standpoint for our customers, the trusted partner. So let me now run all that out with the financial prospects, of the company, it's a really bright financial future once again. Take you through the key things you're going to hear from my presentation today. An incredible record of executing in many different types of macroeconomic environments and providing differentiated outcomes for all of our stakeholders. We have a proven growth strategy focused on the customer that enables us to drive compounding share gains and differentiated long-term organic revenue growth. It's powered by the PPI businesses and that's how we execute day in, day out at the company. That enables really strong organic execution and it also enables very significant execution and value creation through M&A. All of this coming together is a really attractive financial outlook for the company. Over into my presentation, I'm going to quickly go through the track record of the company. I'm going to give you a couple of examples on PPI to bring that to life a little bit for you. Quick recap on the guidance that I gave just last month on the earnings call for Q1 and then give you some training thoughts on the long-term financial outlook for the company as well. So starting with a track record and it continues to speak for itself across multiple dimensions, incredibly strong performance over extended periods of time. And as Marc said, under the different macroeconomic situations. Organic growth, share gain, compounding organic growth, really strong. Couple that with M&A that generates very significant increase in revenue over the years. PPI Business System enables us to execute at a high level and generate really strong profitability and cash flow at the same time, all while investing in the business for a really bright future going forward. So at the bottom it says about different macroeconomic environments. And I think a good example of that is the past 4 years. So our outsized performance during pandemic, I think, is well documented. At a time of societal need, when others were hunkered down, we stepped up to the societal challenge and we were there helping the world through the pandemic and we ran our core business incredibly well as well. So the outsized performance within those 4 years is well documented. Now this slide is different. This is the pre-pandemic 2019 and coming out and then endemic phase in 2023, how much we've scaled the company. So this isn't the pandemic benefit. This is how much the company scaled during that period of time. And we've significantly invested in the company over these 4 years. You see the scale increase in R&D and the increase we've put in place in terms of CapEx that really helps drive a really bright future for long-term organic growth. And the final bullet on the page is critically important. We were really well positioned back in 2019 with strong outlook for a long-term organic growth of 5% to 7%. And right now, we've got a very differentiated outcome to the 7% to 9% long-term core organic growth outlook. We did exactly what we said we would do, which is exit the pandemic an even stronger industry leader. One last slide in terms of the history, and this is where we are now in terms of the very attractive revenue profile. Marc showed you the slide earlier on. He talked about the end markets. So really strong long-term end market growth, driven by the advances in science. And we are there being very relevant for our customers to help them tap into those advances in science. And science is advancing at a rapid pace, and we will continue to be, therefore, that we tap into that great market growth across these 4 served end markets. The middle pie is a really attractive profile from a type of revenue as well, with over 80% of our revenue is recurring in nature from services and consumables. Let's not dismiss the instrument side of the business. You saw from Michel the excitement around the Analytical Instruments business and how relevant the instrumentation we have is for those scientific advances that are going on. So a great combination of instrumentation and services and consumables in terms of our product mix. And then the unparalleled commercial reach. This is about -- this is not just that geography and being there in different geographies. This is about being there at any time for any customer in a way that suits them best to enable their success. That's the unparalleled commercial engine in terms of the breadth that we have as a company. So super attractive revenue profile is a great jumping off point taking forward in terms of strong growth going forward. So PPI Business System. It's one thing to have a great strategy, actually have to be able to execute. And this is how we execute as a company. It's PPI Business System. And Marc showed you this slide earlier on. I'm going to give you some thoughts on PPI and a little bit more depth. I'm going to start with culture. So he's the CFO, starting with culture. I will get to the financial elements of it as well. But culture it's super important because it's ingrained in the 125,000 people in the company. The expectation is set that you can be better today than you were yesterday. It's not just an expectation, it's then scaffold it with the right training, tools, techniques and reinforcing management mechanisms means that you can go very quickly from an expectation to an idea to be better to an impact to be better. On speed in which you do that and you have all 125,000 colleagues doing that, that's super powerful execution. Let me give you 2 examples to bring that to life. So I'll start at the factory floor in Greenville, one of our pharma services side. Operator, making a medicine for a customer, she's doing her job. She's doing the job and she's thinking, she has an expectation that she has to think about how can I be doing this better. How can we do this more cost-effectively? How can we be doing this at a higher level of quality? She then takes that idea that she has and posted to the daily tier board. That idea is quickly escalated up to a team that can assess or similar ideas across that site and assess what's the set of priorities? Because PPI it's also about prioritization. There's lots of things we can be doing, are we actually doing the right things. And then very quickly then turning that if it's a good idea, turning it into specific actions. And maybe that operator needs to do something differently or she needs somebody else in that business to be doing something differently. Well, they need to learn something from somewhere else in the company but the concept here is you quickly go from expectations set up an individual to an idea to impact superfast. And when the operator sees that change, that's really empowering. That's one example of culture and why it's so important to drive execution this way. The other example of culture is really kind of management interaction. Sounds really boring, but how we interact with each other at the company is super important to reinforce the concepts around PPI. It's about setting the right culture of continuous improvement. An example here is we recently had a business review at our sites in biosciences site in Carlsbad. The team started the review with a very quick recap of what didn't go well since the last review, what didn't go well. Then they go into what did go well, not a long list, but a very short list of what did go well. And then very quickly, gets into what's the key set of priorities that I have and whether I need help. So that in a microcosm is the PPI businesses. This is being humble and knowing that you can be better today than what you were yesterday. So reflecting and saying, "I can be doing things differently." Then it's about what strengths do I have that I can supersize for me to be better or something that you -- I suppose I'm interacting with, you could be better kind of use that more across the rest of the company. There's not a long list of here's everything I've done well. Expectation is executing really well, it's about happy to be better going forward. And then a clear prioritization of action and that vulnerability that is okay to ask for help. You don't expect it to have all of the answers, you should know what you should know. We have a high bar expectation on that one, but where can I tap into the rest of the company to make myself better and my team better. So I think that one really encapsulates again, the essence of PPI and a reinforcing mechanism that goes behind it allows us to drive outstanding execution. So I'm the CFO as well. So the numbers matter. So organic growth, the share gain, that's PPI. That's being better today than we were yesterday for our customers, from marketing teams, our sales teams, our operations teams, we've got our R&D leaders having the right product at the right time to enable our customer success. And it's about operating at the right level of quality consistently for our customers. PPI is growth in profitability and cash flow. Help us set the right set of priorities that we can then spend our dollars in the best place possible. Invest heavily where we should, prioritization is key in that. And then be incredibly frugal with everything else, lean out, everything else that shouldn't be spent, enabling the organization to constantly do that, so we're spending our money in the best possible place to get the right set of returns, both profit and cash flow. And the PPI enables M&A. We're better today on the deal that we're working on because of all the other deals that we've done, we've been constantly learning in terms of target selection, deal execution, integration and ultimately synergy realization, PPIs ingrained in how we execute on all of that, that's how you go from strategy to execution to create sets of financials going forward. So financials going forward. Let me just quickly recap on 2023 guidance, as I mentioned, this is the '23 guidance that we gave on the call just last month. Really strong outlook for the year, $45.3 billion of revenue, that includes 7% core organic revenue growth. A 7% core is a really strong growth because it includes over $1 billion less vaccines and therapies revenue year-over-year. We're managing through the economic situation well. We are dealing with the runoff of the pandemic revenue, and we're managing our costs appropriately and a combination between that plus the top line growth is going to get us to $23.70 for adjusted EPS for the year. I'm going to go through this slide in detail as that for reference. This is some of the key assumptions that underpin that guidance that we gave back in April. So think about the long-term financial outlook for the company. At this meeting last year, I gave you very detailed numbers for 2025 as a long-term outlook, and we're tracking well to that long-term outlook. Revenue, adjusted operating income, adjusted EPS are all within the range of the outcomes that we provided in the meeting last year. I want to think about where we'll actually end up in 2025 in terms of the numbers. The 2 key swing factors when I think about that, the macroeconomic environment and how that plays out, do major geographies go into recession? What's the impact of federal policy, interest rates, FX rates, that will need to be played out. We know that we will provide you with differentiated outcomes no matter what the economic situation is. Our job is to be differentiated in front of the customers and be differentiated to our shareholders as well. And then scale and timing of capital deployment. We have substantial capital to deploy. We don't deploy capital to make a short-term number. We're deploying capital, as Marc said, to make the business stronger to enable our customer success and drive spectacular long-term returns. So the exact timing of that will play out. We know that we're going to be deploying very effectively substantial amounts of capital going forward. So you heard the strategy today in terms of that incredible well positioned in terms of industry leader in resilience and really excellent growth long-term end markets. With that proven growth strategy, proven capital deployment executed through PPI but experienced team with great depth of talent that knows what to do at the right time. And all of that from a financial perspective means it's a really bright financial future with substantial share gains and long-term organic growth, it's very differentiated and really excellent long-term returns in terms of organic and inorganic investments. Putting that into a formula for success, assuming 4% to 6% market growth, that means relatively normal market conditions and a relatively stable macro environment, we'll be delivering 7% to 9% core organic revenue growth. So the ability to take long-term share gain from the great strategy that we've got. Using PPI Business System would expect to deliver about 10% growth in adjusted operating income dollars from that 7% to 9%. That's roughly 40 to 50 basis points of margin expansion. We don't need new M&A to do that. That's the -- what we have as a company today, the strategy we have, the capabilities we have, the position we have as the industry leader, we can drive that level of returns. But we will be delivering substantial returns in terms of capital deployment going forward as well. And the combination of those 2 things drives mid-teens adjusted EPS growth for the long term for the company. As you think about your modeling for the next 5 years, give us some thoughts here in terms of things that factors to consider. Our current vaccine and therapy revenue, should that not be needed for an endemic use by our customers. We'll very quickly switch that to other core revenue over time. And a reminder, majority of that revenue is pharma services sterile-fill finished revenue, which is very valued by our customers. Mentioned the capital deployment capacity. This is a 5-year view. I think a good place to start is at least $75 billion of capital to be deployed over that period of time. And as Marc said, over an extended period of time, roughly 2/3 going to M&A and 1/3 going to return of capital. And in that return of capital, dividends growing in the mid-teens, in line with adjusted EPS and in line, as you see on the bottom of the page in terms of free cash flow growth. We expect the tax rate to increase modestly over time. And then from a debt perspective, the assumption is that we will flex up the balance sheet where we need it. We're not managing to a specific ratio, but we will be making sure that we're maintaining investment grade going forward. So I hope that helps in terms of modeling as you think about the long-term future for the company. So let me finish where I started, a really attractive long-term financial profile. We have an awesome track record. We have a great strategy execution capability through PPI, coupled with substantial capital deployment means we'll be consistently delivering exceptional financial returns going forward. So with that, I'm now going to call back Marc up to the stage. We'll do some final thoughts, and then we'll get into detailed Q&A. So thanks for your time today.

So we're looking forward to the Q&A session. Raf, Ilene are in the back and -- when you raise your hands, they'll bring the mic to you. And then we'll do that first, and then I'll make some summary comments at the end.

Perfect. Thank you for putting on this Analyst Day today. Great as always. So first off, just a question on trusted partner status. You spoke a lot about today how Thermo has been a provider from molecule to medicine and highlighted connecting PPD and Patheon really early on in the process. So can you talk about how owning and integrating those services assets has impacted your visibility into the pipeline for pharma biotech? And then as a follow-up on PPD, it's continued to perform well beyond expectations. You raised the synergies today to $200 million on that asset. So you initially expected high single-digit growth for PPD. So can you give us an update just given the performance of the last 18 months on what's assumed within the 7% to 9% top line guide for PPD growth as well?

Yes. So Rachel, in terms of -- one of the benefits from being a trusted partner, one of the benefits from interacting with clients, small and large, is you get a sense of their sentiment, what are their priorities, what's the environment? And that allows us to also do the planning. So we have pretty solid visibility into what our individual customers are thinking and how they're navigating and therefore, that gives us a pretty good view, right, in terms of the world. In terms of the growth rates for our clinical research business. I'd say the industry over the full long cycle is probably a mid- to high single-digit growth industry. When we acquired the business, we expected it to be high single-digit growth business. So in line with the 7% to 9% outlook for the business, and it's likely to actually be slightly accretive to that in the long term, meaning, that it's probably a high single-digit, low double-digit grower firm. So it should be a tailwind. And it's performing better than we expect that the adoption rate has been faster, as Michel said. So it is really a very positive contributor to our success.

Great. And then within pharma biotech, those large pharma customers are typically viewed as more stable [indiscernible] in today's environment with emerging biotech funding being pressured. But we've also had some negative updates from peers in recent weeks around pharma spending. So one peer said delayed decision-making pharma around analytical instruments could be 12 to 18 month cycle before spending returns. So 2 questions really around this dynamic. First, can you walk us through your visibility and pharma spending, and your confidence that some of the delays that we're hearing from peers around delayed decision-making. It's truly just administrative timing issues, needing more signatures on things versus the risk of budgets actually getting caught later this year within pharma. And then my second question is just around your instrumentation portfolio. You've noted some of the invasion today, looking forward to the product release at ASMS in a few weeks. As you mentioned, through the Pioneer and Orbitrap really became a stable at biopharma. But can you walk us through which markets do you really play in within LC-MS? And how does that differ from peers? And why does that really lead to the robust strength that you've seen that you talked about on your 1Q call?

Yes. So in terms of the performance in terms of large pharma and or visibility and sort of how the instruments are, when I think about what's going on in the industry, a lot about the messaging is really about what is versus one company's expectations, right? So when I think about the dynamic in our instruments business in large pharma, it's been good, right? So I don't know if it's that folks have different expectations than what's playing out. But we've seen good robust growth. I mean, 17% growth in the quarter, a very strong momentum on orders and that was broad-based. I think that plays well. In terms of -- I think our instrument business broadly, including our position LC-MS, our business is skewed towards cutting-edge research, right, and cutting-edge enablement, right? That's the bulk of what we do, right? If you want to understand the latest in protein research, the most insights into biology, you actually have to buy the next generation or literally your work is wasted, right? And that's whether it's a biotech company or a pharma company or an academic lab, we drive innovation. It's also true in semiconductor. It's true material science, which is literally, if you want to be at the cutting edge, we provide the cutting-edge tool. So that cycle has been very strong for us, and I feel very well positioned there.

So I wanted to ask about the factors driving some of the differentiated performance we've seen. So for Marc, just -- is it possible to frame out some of this elevated investment that's taken place the last few years? How much of that might be contributing to new product mentality and market share. And for Stephen, if the macro does get choppier, some of this elevated investment, how much leeway does that give you to manage costs and preserve EPS?

Yes. So Jeff, when I think about the pandemic, right? And when we said differentiated performance, right, we did delivered incredible impact to society, right? We enabled molecular diagnostic testing across the world, right? And we enabled the therapies and the vaccines, right? And part of that impact of just focusing on what our customers need and what our society need, is we wound up with a much bigger business during the middle of the pandemic that we've already worked our way through, right? But that gave us a lot more financial power. And some of that we put to the bottom line. And some of that, we actually reinvested in the business. We reinvested in colleagues, right? And that allowed us to have lower turnover, more engaged team that actually performing better. We also invested very heavily in accelerating R&D and new capabilities, and that is sustained. We're not continuing to accelerate our investment rate off of that, but actually just kind of growing it with revenue, right? So from that perspective, we're getting a huge advantage. You'll see it in some of the products that we've launched, and you'll see in the products coming up is the ability to actually spend more during a downturn really has set us up for an incredibly bright future.

Stephen, do you want to...

Yes, Michel, sounds great. So in terms of the cost management, when I think about what we did at the beginning of the pandemic and how we very quickly looked at that businesses and understood what level of spending should we have. We've got a good line of sight as to how to operate in different challenging environments. So to be a challenging environment come up, we will appropriately do the same thing again. And we're very actively managing the cost base with the runoff of the pandemic revenue and properly dealing with that. And as part of the benefit of the PPI businesses enables you to do that. Now we'll also have an understanding of where do you want to not stop in some of those cost actions to make sure you can still preserve the great exciting outlook that we have. So investing appropriately in the right place. Making sure we're managing the P&L approval given whatever environment they're operating in.

Great. And then one more analytical instruments question. Just talk about the growth at FEI. I think it's eye-opening how that's grown since you acquired the business. Is there any color you can share now in the mix of life sciences, material sciences versus semiconductor and just what the outlook looks like for each of these customer classes?

Yes. If you think about the growth that we've been able to drive in the electron microscopy business, right? We've got a great business, right? And the business was historically fairly cyclical and mid-single-digit growth business, right? And it's been much less cyclical through actually a 7-year period, and it's been a high single to low double-digit growth. And what we've been able to do through the investments and the strategy that we've been put together, is it used to have a very small material science business, a fairly large semiconductor business and a growing but relatively small life sciences business. Today, it has a much larger life science and material science business than it did back then and still an incredibly strong semiconductor business in terms of the tool. And the reason you have all 3 is the engine, if you will, that is the same effect across the 3 end markets. It's been our lots business has great growth prospects, and it is an absolutely essential tool and it's becoming actually an essential tool in drug discovery as Michel highlighted as well. So thank you for the question.

Marc, Derik De Bruin from Bank of America. So Marc, the last couple of years, the tools -- life science tools market has been little frothy, we've had a lot of people spending and a 70% in animal instrumentation growth is not -- it's not normal for this market. So your guide is predicated on 4% to 6% market growth. How do you sort of think about the market in 2024? I mean is there going to be a hangover effect that's going to linger from the spending patterns in COVID? I mean that market growth lower next year? Right? Just sort of thinking about that looking about your guide to 7% to 9% in the context of the market like a follow-up.

Yes. So Derik, when I think about the market growth, right? If you take a long-term historical perspective and you exclude the pandemic period, right? Just kind of say, what was it like for the previous 8, 10 years coming out of the financial crisis in that range of 4% to 6% is pretty consistent, right? If you think about the last couple of years, clearly, quite elevated across the rates of growth and we grew much faster than the 7%, right? If I think to the next 5 to 10 years, I think just given where the drivers are, I think the 4% to 6% is a reasonable assumption in terms of what it is. In terms of what the specifics are in a given year, whether it's '23 or '24, our default starting point, is it before 6%, that's the sort of -- it's normal. So what are the factors that could make it better or worse, right? It's really right now, I don't think it's a life science tools thing or a pharma services thing. I think it really is what's the macro, right? The macro of what inflation is going to look like? Are we going to see recession those factors. If you do, rates of growth will be a little bit lower. This industry is incredibly resilient. So it's not -- usually doesn't change wildly off of that, but because you see a couple of points lower, sure. And can you make a bull case in our industry, if you see some of the funding improved and some of the biotech that actually is the higher end day, you can make that case as well. So we'll keep sharing our views on it as we get more insight. But I'd say I start with the default that it's going to be in that 4% to 6% range, and we'll adjust it based on whatever the realities are in the short-term.

Got it. And I guess some questions this morning, I mean, historically, Thermo gave very specific numbers on their 3-year outlooks. I guess, why the change in methodology now versus what you've historically done.

Sure,Stephen, I mean, why don't you share your thoughts on why we took the approach we did to it.

Yes, Derik, you're down there, I can't see you so -- so you know the company well, we give guidance and we give long-term reviews like this. We give a lot of transparency and a lot of detail and we give you the facts that we think they are most relevant to consider and assess the company. And that's exactly what we did today. I gave you a detailed formula for success and some modeling factors. And I think that level of transparency is higher than pretty much most other companies, and we'll consistently do that going forward and give you lots of information and look forward to giving you the updates on that progress as we go against over the next couple of years, but now we got transparency and clarity as what we're trying to do here.

Marc, over here. Dan from Stifel. Wanted to ask about bioprocess, which has obviously been a pretty heavy source of debate this year. One of the questions that we get is just the outlook on this industry going forward. When you think about the puts and takes that are in place today, some of which feel like they're kind of temporary destocking, et cetera, but then others which feel like they might last a little longer in terms of their impact, fewer small biotech companies, China just on the growth journey that it's on. Do you think that it's appropriate to model or to think about bioprocess market growth in line with historical levels, pre-COVID obviously?

Yes. So when you think about the bioprocess segment, right, and that part of it. It is a phenomenal segment, right? And I think sometimes with all of the noise that goes on in any particular time, one gets lost was sort of the trend towards large molecule is incredibly intensive on the life science tools industry in terms of the techniques and capabilities there. So the demographics of the industry, in this case, is a hugely positive business. And if I think about the last decade, it has its slumps, right? It typically is the fastest-growing business, but sometimes it's grows faster, sometimes it grows slower, but it typically does incredibly well. So when I think to the long term, I don't think that trend changes, right, at all in terms of being super attractive. I think when you think about the short term, and it's this incredible level of discussion on the topic. I think a lot of it is each company had a different percentage of the COVID exposure. And different assumptions about what COVID demand was going to be going forward, right? You have this sort of pandemic unwind has created an incredible level of noise. I think for us to is to frame it, the total revenue in bioproduction is a little bit less than 10% of our revenue, and we had a spectacular 2022. We were the fastest-growing of the companies in the field. And we're excited about the business. We expect the first half to be weak, and that will start to improve in the second half. And at some point, not that distant future, gets back to an incredibly bright long-term trajectory, I hope that's helpful.

Yes, definitely makes sense. And I just maybe sneak one more in from a strategic perspective. Just curious about your thoughts on participation in the genomics industry. You highlighted the genomics revolution that's going on. Are you more interested in that field just given where the technologies have gone and where some of the assets are or you may be less interested just given the maturity of some of these businesses and what it means to take them on at this point in their own journeys.