Thanks, everyone, for joining us this morning. I'm Vijay Kumar, the Life Science Tools and Med Tech Analyst at Evercore. A pleasure to have with us, Avantor. From the company, we have Michael Stubblefield, the CEO. Michael, thanks for taking the time this morning. Yeah. Happy to be here. Nice location. Kudos to the team for picking a warm weather location this time of year. I feel like we had enough cold weather with the stock market, so, we're trying to compensate. But, you know, on the topic, I mean, fiscal 2023, it was, I mean, I think for tools, we haven't seen this level of underperformance versus the S&P, gosh, in the last 15-20 years. I can't remember a time. When I look at your peers, I think most of them were contemplating maybe, like, flattish, sort of organic for fiscal 2023 for the base business. Avantor, you know, the base business, I think, is contemplating mid-single-digit declines, Michael. Like, why is Avantor sort of the, you know, down mid-singles for the base versus, like, flattish for peers? Is this, like, a business mix difference for Avantor? I'd certainly agree with your observation, that it's been a pretty dynamic time to be operating a business and certainly the most challenging period that I've steered the business through over the last decade or so. And I think your point about portfolio is important. You know, I think each of the players in the tool space have a different mix of products, certainly a different exposure from an end-market perspective. And you know, given some of the headwinds and some of the geographies around the world, you know, that certainly plays into this as well. When I look at our portfolio and some of the things that we've encountered, being a consumables-oriented business like we are, which traditionally, you know, adds a lot of resilience, coming out of the supply chain, you know, constraints and challenges associated with the pandemic, you know, we've obviously encountered a significant amount of inventory destocking, both on the lab side of our business as well as on the production side of our business, that has created, you know, certain challenges for our business that were, you know, maybe overweighted relative to others in this space. But we remain incredibly optimistic about the end markets that we serve, with more than 55% of our revenues in biopharma. You know, we think we're incredibly well-positioned. The fundamentals there are unchanged. The supply chain constraints will unwind. The fundamental growth drivers are fully intact. Patient demand is high. The innovation pipelines are robust. New molecules are being approved at record levels. New modalities are emerging, and, you know, we have exposure to all of that. So, despite the headwinds, I think we've weathered the storm well. And, you know, I think if you look at the phasing of how our revenues have performed over the last, you know, 12-18 months, we probably started to see some of these headwinds a little earlier than others. And I think if you look at the space here over the last quarter or 2, you know, our business has stabilized. We haven't had any, you know, incremental bad news to bring to the street here for a bit of time, and I see us, you know, coming out the other side of this perhaps a little bit earlier than others. So, you know, it is hard to you know, compare across portfolios here. I think some of the headwinds are certainly unique, but would agree it's been a pretty challenging time to for the business. Yeah, I think part of that was your exposure to semi, which is different from some of your peers. How much was this headwind from semis in fiscal 2023, and have you started to see a turn in semis? So wouldn't wanna overweight, you know, the impact of our exposure to semiconductors. It's only a couple of percent of our overall revenues, but it has had an outsized impact on our performance this year. Very similar to our life sciences platform, the semiconductor market had, you know, significant supply chain dislocations, a significant amount of excess inventory. And maybe unlike the life sciences space, our customers in the semi space, you know, elected to do an inventory reset on a pretty accelerated basis, meaning over a couple of quarters as opposed to maybe over a few years. Which meant that, you know, for the better part of the year, we've been down 70%-80%. We're encouraged as we saw, you know, our, the collaborations with our customers on a real-time basis in that space. You know, looking ahead from a forecasting perspective, you know, we definitely caught the bottom in the third quarter. We're starting to see some incremental improvements in the fourth quarter. We're certainly working closely with them to increase the production out of our facilities to support, you know, a ramp as we move into 2024. So would anticipate most of this being behind us as we end the year, which is, you know, one of the bright spots in our business. But it's been down, you know, pretty significantly this year, as our customers have reset their inventory levels. Gotcha. But again, similar to life sciences, the fundamental demand drivers are there. If you look at, you know, just the emergence of AI and the proliferation of that, you know, the digitization across, you know, virtually every supply chain, you know, what's going on in the electric vehicle market, you know, the long-term growth drivers for the semiconductor space are strong. Gotcha. And you know, you did mention you know, you caught the bottom in semis in third quarter, some improvements in Q4. When I look at the guidance for Q4, I think down mid-singles for Q4. And to your point, Avantor started seeing these headwinds in Q4 of last year, right? So should we be, at this point in time, analyzing some of those comps and seeing some improvement trends? Maybe just talk about the macro and what went behind the Q4 guidance assumptions. Yeah, so coming out of the second quarter, as we, you know, kind of recast the balance of the year, you know, the approach that we took, given a short order cycle business like we run, we don't have the benefit of having, you know, a substantial order book to back, you know, our forecast or our guidance over a multi-period basis. So the approach that we took was to essentially take the exit rates coming out of the second quarter and extend those through the back half of the year on a daily run rate basis for our laboratory business. And then we basically took the production volumes that we achieved in the second quarter and we cut and paste those into the third and the fourth quarter. As evidenced by our third quarter results, that approach in a static environment, you know, seemed to serve us pretty well. You know, we're a couple of months now into the fourth quarter, and you know, that also seems to be holding up well for the fourth quarter. Which is just another way of saying, you know, we expect the business to be relatively stable in the back half of the year. We're anxious to see an uptick in the order rates, which would, you know, inform the inflection point and see us coming out of the trough here. I would say the sentiment, you know, with our customers seems to be improving, and I think there's a number of things to be optimistic about, but we've not yet seen a change in that order rate, which would inform, you know, kind of a full-fledged recovery. But it feels like it's around the corner. Gotcha. And I'm gonna switch my questions a little bit here, Michael. I think in the past you've spoken about engineering drawing activities as being a leading indicator for customer activity or future sort of orders. And that's been gone on for a while, right? I think why are we—why are these engineering drawing activities not translating to orders? Yeah. So under the heading I mentioned earlier around just a number of things to be optimistic about, you know, customer sentiment being one of those, the reported inventory health from our customers being another. The engagement with our customers has been super strong. Certainly our commercial intensity is as high as it's ever been. And one of the leading indicators that we do look for in our bioprocessing business, particularly around our single-use portfolio, is the engagement with our customers on, you know, specific opportunities. And the first thing that comes from those engagements is, you know, the translation of the requirements to an actual drawing and ultimately to a prototype that we would, you know, that we would share with them. So we like to see, you know, high engagement in that part of the business. You know, that's where the activity starts, and ultimately, before you can get an order on a new program, you know, you need to agree on what the specifications and the design will look like. So that's something that we've been, you know, tracking historically. It is one of the leading indicators in our business. But similar to what we see across the rest of our portfolio, the procurement cycles appear to be more elongated. And, you know, I don't know if that's just more of a cautionary, you know, posture by our customers, but, you know, things are certainly taking longer. Would have, you know, based on historical data, you know, would have expected, based on the level of activity we see, to have that already translated into, you know, an uptick in the order book. That cycle, for whatever reason, you know, appears to be kind of bucking the historical trend and, you know, hasn't translated into a significant increase in orders yet. But we're encouraged by the engagement and the level of activity that we have with our customers. Gotcha. Maybe related to that, one of your peers recently mentioned book-to-bill for instrumentation was, you know, north of 1x, and I think the Street, you know, perceived that, took that, for the most part, to be a positive data point on a bottom for instrumentation. I'm curious, when you look at your instrumentation business, any change in order trends or have customers signaled anything? Yeah, you know, similar to what I said earlier, we haven't really seen a substantial change in order rates across our business. We have a relatively short order cycle business. You know, probably more than 50-60% of my business is gonna operate on a book and ship type basis. A substantial portion of our revenues, you know, come in and go out the next day. And so we don't really have, you know, a lot of forward visibility. But, you know, whether it's in our bioprocessing business or in our instrument and equipment portfolio to servicing our lab customers, we really haven't seen a significant change in orders here over the last couple of quarters. Understood. You did mention you recently visited Asia. You know, relative to some of the macro noise we keep hearing about, maybe any learnings, insights for you, Michael, coming out of this Asia trip? Yeah. So what Vijay is referring to is... You know, before we started the discussion this morning, I mentioned to him that I just got back from a trip to Asia. For us, you know, Asia is roughly 5% of our overall revenues, which probably doesn't tell the full picture. You know, when I look at the two parts of my business, the lab side of the business or the production side of the business, we're relatively underrepresented in Asia on the lab side of the business compared to our positioning in the rest of the world, and that's really what drives this kind of 5% exposure. On the production side of our business, though, we are incredibly well positioned. When I look at our positioning in bioprocessing, for example, you know, the work that we've done historically to get ourselves positioned with the Western OEMs who have, you know, set up production hubs in Singapore, for example, you know, we have a very significant, you know, presence there. Maybe you've seen some of the headlines this year. You know, we've opened up a manufacturing center there. We have a GMP distribution center there to support those customers. You know, similarly in Korea, you know, where there's a substantial, you know, base of business there, we're incredibly well positioned and have historically, you know, had, you know, strong exposure to the key customers in that region. We've got a pretty, you know, compelling... footprint in India, multiple manufacturing sites, you know, hundreds of sales reps on the ground, pretty well-positioned there, and I think we're excited by some of the trends we see in India around things like biosimilars. And then you get to China, which is where I spent most of my time here on this recent trip. You know, prior to the pandemic, you know, we'd opened up an R&D center there specific to support the collaboration with our customers in China. The RIM Bio acquisition that we did in 2021 was, you know, specifically meant to give us a manufacturing footprint in China for China. You know, although China today is a you know relatively you know small you know base for us, we do think long term it's a it you know has a lot of growth prospects. China generally has missed the monoclonals wave, but when I look at their level of activity on cell and gene therapy, certainly it's something to be excited about. There is a tremendous amount of activity there. You know, there's a lot of technology being developed there, a lot of collaborations that we're involved in. You know, I think our strategy for China is you know playing out well in that we're investing with local capabilities to be able to serve China on a China-for-China basis. You know, kind of quietly here, we'll continue to develop that, and you know, at some point, that'll be a more meaningful part of our business. But I like our positioning in the region overall within bioprocessing. You mentioned semiconductors earlier. We have a pretty, you know, significant footprint in Taiwan to support the strong end markets around semiconductors in that part of the world as well. So from a production standpoint, well over a quarter of my revenue comes from the Asia region. Just sticking on with the region, China, I think for some of your peers, you know, China, -30%, -40%, some pretty dramatic numbers. Curious, when you met with customers, whether it's the macro funding challenges, et cetera, are we at a close, you know, bottom to these macro pressures in China? Yeah, I probably wouldn't be naive enough to think that I could call the bottom in China. There is considerable headwinds there. I think, you know, if you start with the macroeconomy in China, it's clear the consumers are nervous, and the spend levels, you know, certainly are being constrained. You know, I think the government's tried various stimulus efforts over the last year or two that have had maybe less success or impact than expected, because I don't think the consumers have the confidence to return to the market. So, it is a tough macro environment, and it's not clear what it's going to take to push them out of that. When I look at the life sciences end market, you know, there's still a lot of activity around the biopharma space, particularly around cell and gene therapy, and a number of things that, you know, to be excited about. So, you know, we've probably done a bit better than the, you know, than our peers, broadly speaking, in China, but it's a, you know, obviously, it's a relatively small part of our business, with only a couple% of our revenues coming out of China. Understood. You know, maybe switching gears to biopharma, that's the largest end market. You know, more than 55% of their revenue is down, high singles in fiscal 2023. Is, is fiscal 2023 the bottom, Michael, for biopharma? And, how should we think about sort of, that customer base? You know, different companies have given different reasons for why that market has been so challenged, but from an Avantor perspective, what have you heard from your customers, and why that market has been so challenging? Yeah, so, you know, mentioned a couple of times already the, you know, reasons to be optimistic. Certainly biopharma is one of those. The fundamental growth drivers are fully intact. There's an incredibly healthy pipeline. You know, we're excited by all the new modalities, and it's important to understand, you know, we're agnostic around the modalities. Our portfolio and our offering is gonna be relevant in monoclonals, cell and gene therapy, GLP-1s, mRNA. You know, our ubiquitous presence here really, you know, gives us a pretty strong position in a really exciting, growth-oriented end market that has, you know, had some headwinds in it this year. We play on both the early phase research and discovery part of the business, as well as, you know, with, you know, specified materials into their, you know, their production activities. Both parts of those activities have been down in that mid- to high single-digit level, as you suggest. Certainly, one element of that has been the inventory destocking, given the heavy consumables portfolio that we have, both in the lab as well as in production. There was, you know, a significant excess inventory coming out of the COVID period that is impacting the business. On the research side of the business, we definitely see... We started to see it probably in the second quarter, a more cautious approach to spending, reprioritization of early-stage pipelines. You know, certainly the level of inflation that our customers have taken on over the last couple of years, the pullback of COVID revenues has, you know, challenged their profitability a bit, and so you see them, you know, going through a little bit of a reprioritization there. There's a lot of discussion around IRA. I'm not sure, you know, we could, you know, pinpoint direct impact on the business from that. A lot of folks still trying to, you know, wrestle with what it means to their business, but I think it just adds to, you know, the little bit of the cloud over the business through the year. Biotech funding, you know, was a concern that crept into the business in the latter parts of 2022. We saw that, you know, pretty well bottom out by the time we got to the first quarter into the second quarter. So for us, you know, these various headwinds and, you know, maybe the reset of, you know, kind of positioning within our customer base has, you know, been stable over the last couple of quarters. And that's, you know, one of the things that gives us some confidence here that we have caught the bottom. When we talk to our customers about expectations around 2024, I think generally they're all very positive about, you know, the trajectory. And, you know, one unique factor to think about for Avantor is, you know, related to this inventory destocking phenomenon that that I've mentioned, because I think it is a little bit unique for us, just given how much of our portfolio is consumable driven. There's been $hundreds of millions of inventory that our customers have been working down over the last, you know, year or two that is actually masking, you know, stronger underlying demand for our products than what's showing up in my P&L. We recognize that during the COVID times, obviously, when we booked the revenue, a bit of a dry spell here as they're working it through, but I don't actually need a fundamental change in underlying demand for me to start to see a recovery once our customers work through that inventory. So, you know, that's certainly one of the dynamics on the, particularly on the, on the research side of the business and in our single-use side of the business. There is still, you know, I think some inventory normalization that our customers are doing of their own inventories, which I think is a reflection of, you know, just their interest in, you know, cash generation, as well as the restoration of just confidence in the value chain. For all intents and purposes, the supply chains, you know, mine, my suppliers, you know, through to our customers, are essentially operating normally at this stage. You may have the odd, you know, friction point here or there, but generally speaking, lead times have been restored to pre-pandemic levels. And so the confidence in the supply chains, I think, is intact and I think emboldening, you know, CFOs and our customers to look at, you know, resetting their inventory levels as well, which, you know, I think generally is impacting the bioprocessing space, at least temporarily. Understood. Some helpful commentary there. You know, you mentioned customers are positive about fiscal 2024. I I think you guys have done a pretty good job about conducting pretty large swath of your biopharma customers. What did the latest survey and any learnings out there, which is giving you, you know, perhaps some signs that customers feel good about 2024? Yeah. So we spent a lot of time talking to them just about, you know, sentiment around demand and spend levels going into next year, and, you know, that feels pretty green across the board. Given our unique exposure to this destocking issue, a lot of discussions and surveying data gathering around just inventory levels. On the third quarter call, I think I mentioned for the first time, we didn't have any customers signaling that they had, you know, inventory in excess of a year of target. And the overwhelming majority put themselves in kind of a 0- to 3-month bucket of excess inventory, which, you know, that's great. At least, you know, it feels good and it, you know, maybe signals that the bottom is here. But, you know, we need to see that translate ultimately into, into orders for that to be real meaningful. But the... You know, I'd say that just the, the activity levels at our customers is strong. You know, we have been really, really deliberate about, intensifying our engagement with our, our customers, and you see that showing up in a number of places. Certainly, we've, we've talked a little bit about the engineering activity to support our single-use business, but things like, the work we've done in our academic, you know, end market. We're clearly taking share there over the last number of quarters and the investments that we're making in those, you know, that commercial intensity, the digital infrastructure that we've built to be able to, you know, make our platform more searchable, to be able to do more targeted, you know, customized marketing campaigns to our customers, certainly driving significantly higher levels of traffic across our sites compared to our peers, you know, leading to higher click-throughs and conversions and ultimately, you know, more customer wins. So the commercial intensity that we've applied here has been intentional, and I think that's also part of the picture that we see, you know, playing out in our business. I mean, I think the setup here is positive and, you know, it's a little bit like a wound spring here. I think when the market recovers, I think we're well positioned to take advantage of that. Understood. In bioproduction, and I think there's been a little bit of a debate with, you know, some companies saying book-to-bill turned positive in third quarter- Mm. Other companies saying book-to-bill was still sub 1x. Does book-to-bill matter for your bioproduction business, and where are we on book-to-bill trends? Yeah. It's not a metric that we've, you know, typically cited because it's, it's pretty volatile, just given the breadth of our portfolio and the distribution of lead times across that portfolio. So we found that it doesn't actually, you know, give us, you know, probably too much to work from there. We focus more on just the order book itself. And, you know, when I look at the order book trends over the last, you know, several months or several quarters, it's been, you know, relatively stable. We do have a relatively short order cycle, you know, business, and so, you know, once we see that, you know, order book start to turn, it'll translate into revenue, you know, pretty real time. So we're, you know, following that, you know, more closely, and, you know, as we, as we sit here today, we've not seen a meaningful, you know, step up in order books to... Just to be clear. Understood. You did bring up destocking, you know, a few times. What gives us the confidence that what we're seeing in biopharma is all about destocking, Michael, when you look at that order book? Is this something about daily run rate business which is giving you the visibility? Look, what we're seeing right now is all destocking. Sorry, go ahead with that. So, a couple of things. You know, first, you know, when I look at just biopharma at a macro level, super exciting time to be part of that ecosystem. When I look at, you know, the science that's being developed, the innovation that's in play here, the emergence of new modalities, you know, GLP-1 as a maybe a topical example, maybe less relevant for the space at large, but as a you know, specialty chemicals, process ingredients, you know, manufacturer, this is actually very relevant for us. And I think one of the differentiated, you know, opportunities to play the GLP-1 space through a company like Avantor, who, you know, is gonna have content both on the synthetic route as well as, you know, the more biologic, you know, fermentation route. And so the pipelines are robust. We follow things like new molecule approvals, you know, very closely. That's an important growth driver for our business. Approvals in 2023 are trending above historical levels. The mAbs pipeline, which has driven the bulk of our revenues historically, continues to be very robust. Cell and gene therapies, you know, I think I mentioned on the third quarter call, we'll, you know, have more approvals on, on, on that this year than the last five years combined. So you see some momentum picking up there, and it's been a strong growth driver for us. We've been growing our gene therapy platform well into the double digits throughout the year. And so the fundamentals in this space are fully intact, and I really like our positioning. We've doubled down on investments in the footprint. Our innovation engine is running, you know, extremely well. We're excited at our Investor Day next week to highlight for you some of the things that we're working on and, you know, the impact that innovation is having on our business. And so we're, you know, continuing to extend our positioning across the space. And in, you know, bioprocessing, this is an end market that we have historically outgrown by, call it, 300-400 basis points. And I think you see that even in the numbers this year. You talked about, you know, biopharma being off high single digits. Our bioprocessing part of that is off mid to high single digits. And, you know, I get we don't have maybe the same level of exposure to China as maybe some of my peers, but I think when you even adjust for that, you know, our, you know, performance this year is gonna be, you know, best in class and, you know, continuing a nice string of, you know, continuing to outperform the market. When I look at the current dynamics, you mentioned, you know, the destocking. You know, we can, you know, work with our customers on trying to get, you know, better visibility into that, and, you know, the surveying is one way to gauge, you know, where they're at in that cycle. And, you know, the majority of customers are saying they're within kind of 0-3 months of their target inventory. And so that's, you know, certainly one thing that we look at. The patient demand, though, on the other end of this, has been, you know, extremely strong. And so, you know, where a customer might be in their inventory journey is probably, you know, unique on a customer-to-customer basis, but no doubt it must be coming out because the, you know, the doses are being produced. Customers are certainly, you know, taking advantage of the therapies that are out there. So the end patient demand is extremely strong, the pipelines are robust, and our positioning is secure. And you mentioned GLP-1s abroad. Is there any way to quantify what it means for Avantor? You know, it's a little bit early innings. I think everyone's trying to figure out, you know, what this is gonna mean, what label extensions are gonna come with, you know, the therapies, you know, where they'll be able to take these, what the dosing, you know, levels are gonna be, and those obviously all have impacts on, you know, how much material is ultimately consumed. It is important to recognize, though, that whether it's a synthetic route or a fermentation route, our materials are relevant. You know, it's obviously a fairly concentrated, you know, customer base at the moment that we have good access to. So, it's an exciting area. You know, and just another data point of, you know, we've referenced, you know, recently this idea of, you know, we're in the golden age of science, and this is just one of those examples of, you know, why it's so exciting to be, you know, positioned in this space with a portfolio that's as broad and relevant as ours is. Gotcha. And from a revenue perspective, is looking at prescription volumes the right way to look at it, or perhaps production volumes? What's the revenue model? Yeah. So I mean, production, we're gonna be more linked to the, you know, the production volumes that come out of our customers on this is probably not a bad way to think about it. Sure. And then switching, moving away from biopharma, you know, you did bring up, share gains within government, education. I think there's been some sort of concerns, maybe, you know, pricing was a tool that enabled share gains. Like, is there any basis for those statements, Michael? You know, we love the positioning that we have. We have an extremely broad portfolio. I have a supply chain that gives me the ability to meet the agile requirements of our customers. And particularly in the academic environment, the digital capabilities that we have built over the last several years has really strongly positioned us there. And then you overlay that with just a very focused, you know, commercial intensity that we've brought to bear there that has resulted in the share gains that you've talked about. When I think about, you know, price in our business, this is certainly one of the drivers for our margin algorithm. And you know, the academic market is probably one of the more price-sensitive end markets. They, they tend to be a little less brand loyal than you know for example a customer in biopharma. Their budgets tend to be a bit more fixed, and so they, they tend to be a little bit more aggressive and willing to you know shift if they can you know satisfy the requirements you know somewhere else. So, you know, I think the propensity to make a change, to find value elsewhere, combined with you know the intensity that I'm applying has kinda you know come together at the right time. But we watch price over COGS extremely closely in our business as it is one of the important drivers of margin in our business. And I would say the price over COGS differential that we would normally expect in our business, you know, pre-COVID, during COVID, and even now, has been very, very steady. And so that's. It's a, you know, something that we think that we're, that we're quite good at. We bring to bear, you know, some pretty sophisticated AI-driven algorithms to help us monitor these things and help, you know, guide the price actions that we take in the market. We think we're, you know, disciplined in that regard. And, you know, I think we've done a nice job managing, you know, kind of volume and price and margins in that regard. Since you brought up pricing, what is fiscal 2023 contemplating from a price contribution? I think some of your peers have made comments about pricing still remaining positive in 2024. Is that a reasonable expectations for Avantor? Yeah. So in 2023, you know, we're probably getting 300-400 basis points contribution from price across the portfolio, which is probably close to 2x what we would get in a normal year. Which, you know, again, is just, you know, a reflection of the hyperinflationary environment that we're in. It, obviously, hasn't led to, you know, outsized margin expansion opportunities for me, but it certainly has enabled, I would say, a normal contribution to margin, you know, based on that dynamic. Pricing has been relatively constant throughout the year, which has been, I think, a welcome dynamic for our customers. The pace of price increases, you know, say, in 2021, 2022, was a little bit untenable and led to a lot of, say, transactional inefficiencies with our customers. And so I think our customers have been satisfied that we've been able to keep things, you know, relatively stable throughout the year. Now, as I think ahead to 2024, you know, obviously, we you know kinda sidestep the question on the Q3 call around guidance for 2024. You know, we're not planning to give guidance until you know we follow our normal cadence, which would be on the fourth quarter call. But one of the variables when I think about revenue guidance that we'll certainly have to take into account is you know where do we see price landing? Is it gonna be closer to what we've experienced over the last couple of years, which is that, you know, kinda 3%-4% level? Or does it start to move back towards a more normalized pricing environment of, say, 1%-2%? And I think the driver for that will ultimately be, you know, the call that we take on inflation. We're right in that process, actually, as we speak here, of working with our suppliers to get their price nominations and to understand their aspirations on price. We're pushing hard, you know, to try to, you know, contain inflation best we can. And we'll see where that lands here over the next couple of months, and then we'll take pricing, you know, to our customers to make sure that we protect our margins accordingly. It does feel that just, you know, from where we sit today, that you know, there's still gonna be a reasonable level of inflation in the business again in 2024, that we're gonna have to protect through price. Sure. Should... You know, when we look at broad inflation indices, right, like PPI or CPI, is that, like, a good barometer for judging what inflation within your end market should be? It's not an index that we necessarily look at all that closely. For us, it's you know what are our raw material suppliers and our third-party partners, what are they you know looking to do? And then, what's the labor inflation? When I look at the heavy you know SG&A model that I run with you know hundreds of facilities around the world, you know running distribution centers to position inventory close to our customers, or the 30-plus manufacturing centers we run, or the you know 13 R&D centers that we run, you know 5,000 customer-facing associates, labor inflation is important to us. You know, heavy exposure to Asia, even though we may only have 5% of our revenue there, we probably have a third or more of our associates in the Asia region. Significant presence in India, with a lot of back-office functions, as well as our footprint, heavy exposure into Europe. So labor inflation, which has been, you know, running at elevated levels over the last couple of years, is an important variable. And then, you know, what's the input costs to our business is something we're looking at pretty closely. And then, the model historically has been, whether it was high or low inflation, doesn't matter, you know, we do have a culture of continuous improvement and productivity, all underpinned by the Avantor Business System. Strong, strong DNA-... within the company at offsetting inflation with productivity. And, you know, we've had to, you know, kind of overplay that card in 2023, and you should expect that, you know, we'll do that again in 2024. You know, Brent will share some details with you about our thinking around productivity next week when we get together for our Investor Day. But that's another tool in the toolbox here that, you know, I think plays well to our culture and our DNA and our capabilities. And I think we've got a very, very strong track record of driving value by also keeping a close eye on costs, and particularly in this environment, I think that's especially important. Understood. And then, on your, advanced tech and materials, which is about a quarter of revenues- Mm. The semi is low single digits of total company; it's probably bottomed out. What's the remaining, you know, exposure, cyclical exposure within the advanced tech end materials? If there is a recession, how should we think about sensitivities? Yeah, so the, the applied part of our business is about 25% of our revenue, as you suggest. Broad strokes, the way I think about it, about half of that is gonna be in more, acyclical or defensive-oriented type, you know, end markets. And then the other half, you know, so maybe 10, 12% of our overall revenues would be in more cyclical applications like, you know, oil and gas, petchem, you know, mining, these kinds of, you know, end markets, which tend to follow GDP relatively closely. The offering that I take into those end markets is really, you know, the, the broad lab portfolio of chemicals, reagents, you know, equipment, instruments, consumables, that go into their QA/QC function associated with their, you know, testing of their finished goods. And so it's gonna mimic the output in their in those end markets pretty closely, which lends itself to kind of a GDP-type view. And so, you know, I think you know, where we're at now, you see kind of flattish to low single-digit performance for most of those end markets. The reason that the applied markets for us overall are off as much as they are is the 70-80% headwinds that we've been experiencing in semiconductors, which fortunately, you know, we've found the bottom. We're turning our units up again, and, you know, the outlook from our customers there is pretty promising. Got you. And my understanding is within semis, like, customers give you a six-month lead time. What have conversations with the customers evolved on the order book? So it is a very concentrated space. You know, we have more than a handful of customers, but there's probably only a handful that really drive the significant volumes. And so we're able to have kind of weekly supply chain connectivity with those customers, where they're openly sharing, you know, their demand expectations. And particularly in a time that's dynamic like we're in, they're particularly concerned about, you know, how quickly I can start to, you know, turn my units back up to support their their outlook. And so we're, you know, very well coordinated with them. They are working hard with us to make sure we can secure all the raw materials that they need to support the the ramp that they have in in mind here. You know, we started to turn the units up in Q3. We'll ramp those fully by the time we exit Q4 here, and, you know, we should be back to relatively normal, you know, demand environment moving into 2024. Understood. I think, you know, moving on to more near term, your most recent earnings call, I think the cadence for Q4 and the gross margin commentary, I think, was something which has caught people by surprise. Because, the simplistic way I'm looking at, you know, your dollar revenues for Q4 are in line with Q3, right? So your production volumes should be at similar levels. So why would Q4 gross margin step down? And I think some people would point out perhaps it's pricing. Maybe just talk to us about the gross margin dynamics. Yeah. So I think we highlighted maybe just two or three, you know, factors driving the step down in margins moving from Q3 to Q4. Probably half of which are, I'd say, one-time in nature. You know, with Brent coming in, you know, certainly looking to, you know, end the year from a working capital perspective, you know, in a pretty strong position. So some of this is just under- absorption associated with us, you know, taking some, you know, some pretty deliberate, you know, working capital actions on, you know, turning back our units to manage our inventories of our products. A little bit of inventory cleanup that Brent is working on. And then, not really a price dynamic so much, but, you know, the strong growth we are seeing in our academic sector, traditionally speaking, you know, that is an end market. As I referenced earlier, it's a bit more competitive, where the margins relative to other end markets are a little bit, a little bit lighter, and you certainly see the influence of that. So that's probably the two or three key drivers that we see, you know, impacting Q4 relative to Q3, and probably half of those, I would say, are one-time in nature. Understood. You know, talking about the bright spots, I think free cash has been a bright spot. You guys are at, I think you guys are the highest in life science tools, 95% free cash conversion so far. Is that sustainable when you wanna think about fiscal 2024? It is. I mean, this is a, this is a cash flow generation machine for sure. This business throws off a tremendous amount of cash, it delevers quickly in a normal environment where you're also growing EBITDA. And the conversion that you mentioned, 90%-95%, should be the norm for this business. You know, we were a bit over 100%, 110%+ in Q3, but I think, you know, over the cycle, it's probably more 90%-95% is the right way to think about it. It is a very capital-light model. We can support all of the maintenance, growth aspirations, productivity, and investments in our business by investing, say, 1%-2% of revenues. And, you know, we've probably been investing at the higher end of that 1-2% over the last, you know, couple of years to, you know, strengthen our supply chain. But that algorithm has, you know, been pretty fixed over a pretty long period of time, and it does lend itself to significant, you know, free cash flow generation, particularly when you can, you know, manage your working capital. You know, we were in a phase there where inventory levels were quite low. Service levels to our customers were quite low, you know, as we worked through the pandemic. And as you look to restore inventory levels to better support the, you know, service commitments to our customers, we had a period there where we were overinvesting in inventories. We've been able to arrest that trend, you know, for the most part of this year, and now start to operate more normally. So you should see, you know, I would say from this point forward, you know, pretty consistent free cash flow generation from the business. Maybe my last question here: Should we expect any margin expansion for fiscal 2024? So the margin algorithm for Avantor is fairly straightforward. It's price over COGS, which, you know, that part of the algorithm has been fully intact throughout the pandemic. See no reason why that won't contribute at normal levels next year. Mix is important, and mix for us is the ratio of proprietary to third party, and that proprietary is primarily bioprocessing, our biomaterials platform, and semiconductors. Biomaterials has been not running well. Semis is turning the corner. As soon as bioprocessing comes back, you know, we should get a normal contribution from mix. And then the third component is operational leverage. I need volume growth to cover the fixed costs of the platform, and when that happens, you should see an outsized rebound in our margins. And then, you know, we'll take some self-help measures here around productivity that should also be a contributor in 2024. Fantastic. With that, I think we're out of time. Michael, thanks so much for spending the time with us. All right. Thank you, Vijay. Hope to see you all next Friday at our Investor Day. Thank you.