Welcome. Day three of the TD Cowen Global Healthc are Conference. I'm Dan Brennan, Fellow, Tools and Diagnostics. Really pleased to be joining you with me on stage. Michael Stubblefield, President and CEO of Avantor. So, Michael, welcome. Yeah, thanks, Dan. Happy to be here. Good to see you all. Terrific. Yeah, I thought maybe it would be great just to have a kind of introductory comment from you. The quarter wasn't that long ago. Maybe just if you want to kind of put a bow on how the year ended up and just discuss a little bit about how you're kind of viewing the 2025 outlook. I think it's a good place to start, Dan. I think where I'd like to start is just reinforcing the strength of the fundamentals of our business. When I look at the Avantor platform, we have a number one or number two position in our Lab Solutions segment with really unique differentiating capabilities, really broad portfolio, a leading e-commerce platform, and a global supply chain that really allows us to serve our customers in a pretty meaningful way. If I look at our production platform, we have a leading franchise in bioprocessing, which is about two-thirds of that revenue. And we like the trajectory of how that business has trended over the last year, and we're off to a good start this year. We don't talk a lot about our NuSil platform, but within that production platform, we do have the world's leading medical-grade silicone formulations platform. Hopefully, we'll get a chance to talk about that a little bit today. That's a unique platform. When I look at the cost discipline that the Avantor Business System enables and our best-in-class free cash flow model, I always start with the foundation and the principles of the business, the super strong fundamentals. When I look at the outlook that we've provided for 2025, it's pretty close to our long-term algorithm of mid-single-digit organic growth, 50-100 basis points of margin expansion, free cash flow above 90%, and double-digit EPS growth. When I look at the long-term algorithm and I look at our guide, we're a little behind on the top line, but there's many parts of the organic growth algorithm that are working. Bioprocessing is close to being in line. Our Health care platform is definitely in line. There are some real positives and areas of strength that are getting closer, if not already back to normal, and then margin expansion at the midpoint, we're at the high end of our algorithm. We're at the midpoint of EPS, we're double digits, and if I look at our industry-leading free cash flow model out of the gates, we're forecasting 95% free cash flow conversion, so I think the outlook is pretty strong as well, and we're doing all the right things to drive growth. The last couple of years have been record levels of investments in our business. 2023 was the high watermark. We bested that in 2024 with significant investments in manufacturing capabilities, digitization, automation, robotics in our DCs. We doubled our flagship innovation footprint in New Jersey to support our bioprocessing platform, so a lot of really rich investments that set us up well for growth. If I look at the innovation and new product introduction side of things, we've been investing heavily over the last five years. If I look at the CAGR on our spend into that area, it's well into the double digits on a CAGR basis over an extended period of time, five years, for example. So I think we're doing all the right things to drive growth, and we're well positioned as the end markets fully normalize and recover. We'll certainly be there to capture that growth. Terrific. Starting out with this session and most of the sessions here, we have to address what's happening with the macro and the new administration and some of the policy initiatives, whether it be tariffs, whether it be relationships with China, and then obviously the uncertainty over NIH. Maybe just on NIH, it'd be helpful for you guys to frame your relative exposure to the U.S. and economic and government and market, what% of that is NIH, and then kind of how you thought about that when you set your guidance. Yeah, I think it's important to put some context around it. This whole discussion around NIH for us is a discussion around our lab business. Our bioprocessing, our production platforms obviously are not impacted by this, and on a direct basis, to NIH, we have relatively modest exposure. It's going to be well less than 1% at the enterprise level. And when you look at what has been announced or proposed for NIH, I think it's important to recognize that it's also not a proposal to cease all funding from the government for NIH funding. It's a cap on reimbursement of indirect spend levels, which at some level doesn't exactly impact our business. And I think we're hopeful that as this plays out, that even some of that could get reallocated to direct spending, but NIH is just one source of funding, of course. There are many grants that are already in play, and there's other sources of funding. And I think it's important to also make sure we're all aligned that there is still academic research that's going on. The labs are still open. Scientists are still doing work, and we still see transactions flowing. Now, the environment has turned more cautionary in that regard. There are some questions about what this will imply and how much an institution will have to spend going forward. And I think it's certainly causing most of our customers in that higher education space, which for Avantor is about 5% of our revenues, to take a look at how they're going to fund things and what activities they can continue and what activities they might need to pause. And I think this is another area where having a consumables-driven focus will certainly benefit us in this environment. Anytime we see a more cautionary spending behavior, CapEx is the first place that you can go. It's the easiest thing to try to constrain. And we have about 20%, 25% of our lab business is going to be exposed to those types of things, but the overwhelming majority is going to be consumables. So look, it's early. It's dynamic, and I don't think anybody really understands how it's going to play out. But hopefully, that helps put a little bit of context on it. And we'll just reiterate that we still see activity here. It's not gone to zero, of course. So just to think about that, if you don't mind for one more moment. So 5%-ish is kind of your higher education academic exposure, right? Kind of within that is maybe more direct NIH, but you're putting a broader umbrella around that, that people could be potentially impacted by what's been happening. Exactly. Is that fair? And kind of how did you think about that when you guided for 1%-3% organic growth this year? Did you do any math when you talked about, and we'll get to the lab business in a moment. We'll discuss the bioprocess business in a moment in more detail. But when you kind of talked about the guide, is there any reflection of an impact on that part of your customer base kind of in that guidance? Yeah, so maybe put some color around the approach we've taken to guidance this year. I think we've taken a prudent approach just given where we're at in the calendar, of course, and some of the things that are going on in the macro environment. We are excited that our guide contemplates both of our platforms returning to growth this year, both lab and production segments. When I look at the first quarter and what's implied by our guide there, we're calling for the business to be roughly flat in both segments. And if I look at lab, for example, the first quarter tends to be the lightest quarter of the year. We have fewer selling days, and that's certainly taken into account. And as we look at what we've baked in as the year progresses in our lab business, really just tried to reflect the impact of our pricing actions that we've taken here in the early parts of the year and not really contemplated in aggregate a volume recovery. Now, of course, as you double-click on that, you'll see large pharma returning to the table in preclinical activities, which is good to see. Our Health care exposure has returned to normal, of course. Still a little bit of friction in the biotech spending, and we'll see how things play out here in the academic environment just given the discussion here on NIH. But we've really not tried to factor in much in the way of volume recovery this year. And so we think we've taken a prudent approach here out of the gates, just given the environment that we're in. On the production side of the business, things are a little bit closer to being normal. We're talking mid to high single-digit growth for the platform driven by strong performances expected for bioprocessing in our NuSil platform. Back to Q1, part of the reason we've guided where we have for Q1, of course, is we'll see a meaningful year-over-year headwind from our semiconductor business, just given the strength of the business this time a year ago. But we are forecasting stability on that platform throughout the year. It was stable in the second half of last year, and the guide on a full-year basis contemplates things continuing in that vein. Okay. So maybe jumping over to the Lab Solutions business, you just talked about it a bit already. Call it two-thirds of your business roughly in 2024, where it declined low single digits. So your guidance this year, I believe it's like low single digit positive. So you are seeing a nice recovery, as you mentioned. Just the building blocks here, Michael, you've talked a little bit about already pharma and biotech and things like that. But what gets you from down low single, up low single? And just remind us back at your investor day, what's the normal growth rate for that lab business just so we can understand where we're fitting in 2025? Yeah, the long-term algorithm for our Lab Solutions segment implies low- to mid-single-digit growth over the long term and will be in that range this year with a full-year guide of low single digits. And so we are encouraged by the trajectory of what we're seeing here. But I think it is important to reflect on just the differentiated position that we have and the strength of that platform. When you look at the portfolio that we have, the strength of the supply chain and the leading digital platform combined then with the leading services platform in the industry, we have more than two times the number of on-site associates that are embedded with our customers as anybody out there. And so this really is a unique differentiated platform with very broad exposure. I've highlighted some of the areas that we've already seen return to normal or on their way back to normalizing. We continue to make the right investments in this business. We've launched a new e-commerce platform that will further enhance the experience with our customers. We continue to extend our services capabilities. That's an area of strong growth for us as customers are looking for more ways to bring efficiency and return time to scientists. That's an offering that's pretty compelling for our customers and embeds us more strongly there as well. When I look at the backdrop of the marketplace together with what we're doing to drive growth in that lab businesses, I love the positioning and the setup. As each of these end markets recover, we're well positioned to return that platform to the long-term algorithm. Can you just share trends in that lab and the distribution business? It's you and Fisher today are the two biggest players by far. Fisher is certainly bigger, but you're right there. Just kind of what's been happening there and how much share do you two collectively have, and just talk about what's happening beneath you two. Yep. I think it's an important point to make sure is clear. When we talk about our lab business, a lot of people will have different platforms or things that they call that, and for us, this is our portfolio of chemicals, reagents, equipment, instruments, glassware, plasticware, essentially everything a scientist would need to derive a precise analytical result, and so obviously it has application in biopharma research. It has application in a reference lab in the healthcare space. Of course, the academic research as we've been talking about, and then QA/QC labs across the applied end markets, so pretty broad exposure with really enviable reach. We're in over 300,000 labs through this channel in 180 countries around the world, so pretty extensive model that's built on agility and flexibility to our customers. We can take an order and get it to a customer anywhere in the world within 24 hours. So really sophisticated model. Now, it's a really fragmented space. You talk about us and our largest competitor collectively. We are the two kind of relevant national-level channels into this market. But even with the strength that we have, the two of us combined are still less than a third of the overall market. And so there's lots of room for consolidation and share gains underneath that. And when I look at the dynamics and the strength of our platform, together with the investments that we've been making in this business, there's a lot of momentum in these end markets. We've talked about the commercial intensity that we've applied, particularly in academia, for example, and the outperformance that we've driven there, together with some pretty notable wins and renewals in the biopharma and healthcare space in the second half of last year. So we're really pleased with the positioning and the strength of that platform. I think the market does really benefit from having two really strong national players that can help navigate some of the choppy conditions that we're in at the moment. When you think about things like tariffs or other challenges in a macro environment, having a global supply chain with multiple supply points, multiple options for where you would get your product from, the ability to take advantage of our really broad services offering, we can bring a tremendous amount, and we do bring a tremendous amount of value to our customers in a way that can address their cost challenges, that can address the bandwidth and the focus that they want their scientists to have, so pretty powerful platform overall, and when I look at how we exited the year with a really strong momentum around wins and renewals, we're extremely well positioned as, like I said earlier, as these end markets fully recover, we're well poised to capture our fair share of that. How is biopharma doing for your lab business? How big are they versus academia and lab? And have you seen? We've heard pretty consistently recovery, recovery. It depends on the pace for recovery. I'm just wondering what you're seeing in biopharma and kind of what's implied in that lab guide. So biopharma and healthcare for us is more than 60% of our revenue. So clearly a really important area of our business and one where we're well positioned in. There's a number of dynamics to probably call out on that end market. Clearly, we're going to be lined up behind virtually all of the science that's being developed in that area, whether it's large pharma or biotechs. And we're going to have a disproportionate exposure to preclinical activities. When you think about R&D spend, that's going to cover everything from early modeling and electronic modeling as well as late-stage clinical trials and everything in between. We really benefit from the stage of research where you're doing a lot of high-throughput screening and a lot of testing to identify specific targets. With some of the policies from the previous administration and some of the inflationary challenges and some of the patent cliff challenges, the large pharma customers started to take a little bit of a downturn in the beginning of the first half of 2023, and we lived through that for the better part of a year, and as we talked about on our third quarter call, we were pleased to see large pharma return to the table and start to grow again with us beginning in the third quarter of last year, and we saw that continue through the fourth quarter as well. On the other end, you have the biotechs, and we all know where funding has been there. It's been somewhat challenging. Although the headline for 2024 was more funding in 2024 than 2023, it was pretty well concentrated in the first quarter, though, and it deteriorated somewhat as we moved sequentially throughout the year. So there's still some friction there. They're definitely not back to normal levels there. But even within that, we do see some green shoots, as we've talked about the last quarter or two. The more established biotechs who might have a couple of programs already in flight and maybe better access to funding, we're growing with them. But the true new-to-the-world startup, we still see some friction in the system there. In our algorithm, we would anticipate this end market for us growing mid-single digits over the long term. And we'll likely be in that low single-digit area this year and would need to see the biotech piece fully recovered to get back on algorithm there. Okay. Maybe moving over to bioproduction, makes up 32% of sales. Two-thirds of that is bioprocessing. So that's kind of where we'll start, if you don't mind. Business grew high single in the fourth quarter. You said order intake was strong, growing meaningfully. And then the guide this year reflects, I believe, high single-digit growth, right? Which is kind of similar to what we're hearing from other leading players. So I guess, how would you characterize kind of the high single-digit growth given what the backlog you have? How much of that backlog could support that? Just kind of talk about the trends and the confidence towards that high single-digit growth. Yeah. So this is an important part of the business, clearly. You mentioned it's a third of the revenue, but importantly, it's roughly half of our profitability comes from this particular segment, so obviously, it's an important part of the model, and when I look at the path we followed here over the last year or two, we are encouraged by the trajectory. The order book started to pick up here, and particularly in bioprocessing as we ended 2023, and that played out each quarter getting stronger as we moved through 2024. We have a relatively short lead time in that business. It's kind of two to three months, and so we're able to see a pickup in order book get translated into revenues roughly real time, and so as that order book started to build, we started to see the momentum building in the business. We outperformed each of the four quarters last year, and you saw that sequential improvement as we moved from kind of down low teens in the early part of the year and exiting the year with high single digits, and so I think there's a lot to like about the trajectory, and a lot of the headwinds that we had been previously talking about have kind of flushed through the system. Destocking isn't really a relevant topic for us anymore, and we think the setup for 2025 is pretty constructive. We don't yet see our customers' production levels matching patient demand yet, so there's still a little bit of room to grow. We still firmly believe this is a double-digit growth end market for us rooted in some really strong fundamentals of the base monoclonal antibody business, which we see growing 10-ish% over the long term. And there's some really terrific science being developed in the emerging modalities of cell and gene therapy and a lot of discussion around bispecifics and antibody- drug conjugates that are bringing lots of investment and will help mix up the growth rate over time here that we think squarely puts this as a strong double-digit growth for us. So we think we've got a little bit more room there yet to get back to normal, but the trajectories are strong. And your questions around the order book, I think, are important. Our order book has improved each and every quarter really since the fourth quarter of 2023. And that underpins our confidence in the continued momentum in this space. There is a lot of, I think, upside here in the business. To see these headwinds kind of move out of the end market is encouraging. This will be a strong growth driver for us in 2025 and beyond. So maybe a question. I think your long-term guide here is high single digits. And there were periods before COVID that you were well north of 10% into the 20s at points. So I'm just wondering for the high single digit guide this year, could you just characterize? You made that comment that the production levels aren't meeting patient demand yet. So just what's the gap, do you think, today? And is there a chance when we get back to that full recovery, could you see this go well above high single digit for a period of time? Yeah, I don't think that we're necessarily calling for an overcorrection. The experience has been one of gradual improvement, which in the end is probably a bit more sustainable in any event. But we do see this end market working its way back to double-digit end market growth and an envelope there where we would leverage our broad portfolio and our broad global footprint to continue this theme of outperformance. Our platform would generally outperform the broader end market here by three to four hundred basis points. And we've done that over a period of a decade. And even when we saw the headwinds in the business, our business was generally not down as far as most others in the space. It really is a truly unique and differentiated platform. When I look at the things that we do in this space, we're going to have more specifications on an individual therapy than probably anybody out there. And our portfolio is broad enough that we're going to have specifications from upstream, downstream purification, and fill-finish across all modalities. So it's an incredibly rich portfolio that's truly differentiated. And where we've carved out this leading niche for ourselves is we don't produce some of the more meaningful spend areas like cell culture media or filtration, but there's a long tail of requirements that all these modalities required. And we have established ourselves as the clear leader across that space. And we've added to the portfolio through our own R&D investments, which I mentioned in bioprocessing, where the CAGR on those investments are probably north of 20% over the last five years. And we've also used capital to enrich the portfolio. We now have a really strong basis of process ingredients and buffers and excipients. About 40% of that revenue is in single- use, which given the applicability of our single- use portfolio, our experience has been that that even grows faster than the chemicals portfolio in a normal environment. So we really like the setup. We're one of the few players that can have GMP production on three continents and we are putting more content on every therapy as we execute this model. If I roll back the clock a decade or so, we were in probably 80% of the commercialized molecules. We've talked more recently that we're in about 85% of the commercial molecules. When I look out to 2030 based on the pipeline of what we're working on, we think we'll be in more than 90% of the commercialized therapies that are on the market at that time. Importantly, all five of the top five blockbusters that are expected at that time. Really, really broad exposure. Off of a strong fundamental base, we are, I think, quite encouraged and bullish about where this goes over the longer term. Okay. And just a quick one on GLP-1. You said you have exposure. Most of the tools companies haven't really called that a lot. Maybe it's given the underlying peptide formulation. But just wondering, is that a meaningful contributor or is it an important piece of the bigger puzzle? Yeah. So as a chemicals player, we do have exposure to both the synthetic as well as the biologic route to making the current generation of GLP-1s. The bill of material calls for a lot less consumption here than a traditional monoclonal antibody. So the impact to the business is somewhat modest. We are participating in the commercial platforms today, and that's kind of in the numbers. But it's early innings. As we look ahead, there's a rich pipeline of other technologies that are being developed that would look a lot more like monoclonal antibodies, which we're probably more excited about some of the things that are in the pipeline there, depending on what ultimately ends up prevailing here. So not just so much my earlier comments, our technology is applicable across all modalities. Given our reach and our scale, it's a good assumption that there's probably not too many platforms that we're not participating in, both commercially as well as in the pipeline. Maybe just a question on the Advanced Tech and Biomaterial segment. You mentioned NuSil. You mentioned semis. We have about three minutes left. So we'll hit this one and then we'll jump to margins and cash flow because it's important. But just semis were the one that really were a swing factor last year, right? They were a swing factor a couple of years ago. Where do we stand on semis today? Kind of what's assumed for 2025? Yeah. So within the production business, we talked about two-thirds of that being bioprocessing. The majority of the balance of that is our NuSil platform, which ended the year with double-digit growth and well-positioned for another strong year ahead. The laggard in that portfolio is the semis piece. It was actually performing pretty well in the first half of last year, and then we have exposure to the U.S. production base, and I think there's been a lot of headlines around the struggles and challenges that they're going on there, and our business is really going to be a function of the manufacturing output, and so things stabilized as we moved through the back half of the year and into the fourth quarter. What we've called for this year is continued stability. So we've not called any or baked in any recovery in the outlook of that business in 2025. Given the amount of revenue that we have there now, there's certainly more upside than there is downside at this level. But we haven't tried to call for a recovery there. Great. So maybe just one on margins. Basically, you have a 20% adjusted EBITDA margin target by 2026, but you also have the divestiture. So now I think that's been hit a little bit. Just talk about the margin progression through 2025. It starts on the lower side, low to mid-17s in 1Q, but really ramps up in the back half of the year. How confident are you in the ability to hit that? Yeah, this is an important part of the algorithm. One where I think we have a terrific track record on. I talked earlier about an algorithm of 50- 100 basis points. And at the midpoint this year, we're in for 80 or a bit more. And we would anticipate exiting above 19%. The target exit rate for the year would be 19.6% based on taking that target we'd set a few years ago of exiting at 20%, adjusting it for the divestiture of our clinical services business. And as we talked about on the fourth quarter call, with the self-help measures we're taking on the cost transformation together with the mixed effect of bioprocessing and NuSil growing where they're at and the pricing actions we've taken, we think we can get most of the way there without any help from the markets. To get to the 19.6%, we would need to be at the higher end of our growth targets. But whether we get there, we're just a bit short. It's going to be another really strong year of margin expansion, and that is an important part of the story. So, maybe just wrapping up, the stock, not the whole tools group, has been quite volatile given the macro. Your stock has been a big underperformer. Maybe it's because of this academic concern. I don't know. That's a thing I can chalk it up to. But just how would you finish up, Michael? Seeing where the stock is, knowing what you see about the business and the guidance and the underlying trajectory, which you mentioned earlier in the conversation about the improvements and the path you're on, how would you sum up your positioning and your outlook, particularly for where the stock's trading today? Yeah, I'd probably leave you with three comments. One, we are excited about the long-term growth prospects of the life sciences space. There's a lot of really good science here. And we think even the current administration is supportive of innovation. And it's been our experience that good science will get funding. And so we think that the space that we're in is attractive and will be a great growth space long term. Secondly, we think we have really differentiated franchises within our lab and our production business that are well positioned for growth. And the last thing I would tell you is as these end markets do normalize, and many of them have, as we've talked about today, that we are well poised to be on our long-term algorithm sooner rather than later. Great. Well, with that, we'll end it. Thank you, Michael Stubblefield. Thanks everyone in the audience. Thank you.