Biomerieux S A Unsp/Adr

Good day and welcome to the BioMario fourth quarter sales and full year 2024 results conference call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Emeric Fichet. Please go ahead.

Thanks. Good afternoon, everyone, and thank you for joining us to review the BioMario 2024 financial performance. I'm online with Pierre Boulu, CEO, together with Guillaume Bouhour, CFO. Before ending the call over to Pierre and Guillaume, please note that this conference call will include forward-looking statements that may change or be modified due to uncertainties and risks related to the company's environment. Accordingly, we cannot give any assurance as to whether we will achieve this objective. I also remind you that today's call is being recorded and that a replay will be available on our website. I will now hand the call over to Pierre, and then we will open the call to discussion and questions. Pierre, it's to you.

Thank you, Aymeric. Good day, everyone. Good morning. So let me start with a review of our 2024 business. So first of all, as you know, this is the first year of delivery of the Go28 plan that we disclosed to the market almost a year ago. Also, first full year for me as a CEO for the company. And I'm very glad to report back that on all four dimensions of our Go28 plan, we are either at target or above the target. So in terms of sales growth, we have a 7% sales growth compounded growth rate over the next five years. We've achieved 10.3%. In terms of profitability improvements, we've increased our profits by 20% at concentration rates. In terms of engagement for our teams, we have actually reached our target, which is to be in the top quarter in terms of engagement of our employees. And finally, the responsibility dimension of the Go28 plan. We've managed to reduce greenhouse gas emissions by 13% in absolute terms versus 2019. So if we go into the numbers, again, a very strong sales performance, a little bit above the revised guidance, 10.3%. Driven, I'll come back to that, by the four growth engines of Go28. Profitability improvement is above the revised target, that was between 12 and 17%. 20% improvement in 2024, very much supported by the GoSimple improvement that we've initiated in 2024. And finally, I'd like to highlight strong performance in terms of free cash flow, 330 million euros, almost tripling the free cash flow generation that we had in 2023. So all three components point towards a very strong financial performance in 2024. Now if I move into more specifically our sales growth drivers, So the first growth driver, as you know, is biofire non-respiratory panels. I won't read through all the elements that show in the slide, but I will highlight three of them. First of all, Our cross-selling strategy that we've implemented in the last few years has been working very well in 2024, actually at the same pace than in 2023, improving by four percentage points, for instance, the percentage of customers using at least three panels. So we're seeing a very strong, continuous execution of that cross-selling strategy. The second element I would like to highlight is in terms of new units, I mean, as you all know, we are by far the market leader in syndromic testing, be it in sales, be it in install base. I think the good news of 2024 is that in terms of new clients or new capacity for existing clients, nobody has installed more units than us in 2024. So still by far the market leader in terms of customer expansion. And finally, continuous innovation. Very glad to report that we have two new panels that were approved end of 24, very beginning of 25, tropical fever panel and a new GI midplex panel that allows to address an additional segment of GI patients. The second growth driver is Spotfire. So for Spotfire, we have actually exceeded our sales guidance. It was 80 million euros for 2024, reaching 95 million euros. Very glad we've already shared in January the instrument installations in Q4. So after 250 in Q2, 600 in Q3, reaching 900 in Q4, we're seeing a very strong adoption and very exciting action with regards to Spotfire. And that number allows us to confirm a 450 million euro target for 2028. The third growth driver, microbiology, we are at the top end of the guidance range that we gave, 6% to 8% in the context of Go28, slightly above 8.3%. This year, very much driven by reagent growth, because as we've had the opportunity to share in 2024, the new instruments, sales institutions have been a little bit slower across all our product ranges for BioMérieux, BioFire, microbiology, VIDAS, and industrial applications. So, 13% sales growth demonstrating the value of the use of BioMario reagents on our instruments. We are very happy with that, together with a good price increase. The second element I would like to highlight is we keep innovating into this market, sustaining market growth. And probably the highlight of 2024 for us has been the FDA approval of ViTechReveal that allows to launch end of 24, beginning of 25, ViTechReveal solution in the US. Finally, the fourth growth driver relates to industrial applications. Again, on the high side of the range, 7 to 9, we're at 9% growth. Again, very much driven by reagent sales, 12%, and price increase, very positive, allowing and demonstrating the value of the solution. The other element I would like to highlight for this growth driver is that innovation is also supporting the growth in this segment. GINOP is a molecular solution that allows for the food market to grow. improve our diagnostic capabilities. And in pharma, 40% of our sales are coming from recent product launches. So very reassuring factor for me, showing that our capacity to generate sales growth for the future. And then there are obviously two important segments, even though they are not growth drivers, where what we want to do is maximize the value of the install base that we have. So on biofire, obviously respiratory panels are a big chunk of our sales. We are planning to have flat sales. That's one of the very good surprises we had in 2024. Very strong sales performance. In the context of competition, that you all know is... is growing and showing very limited price erosion, so really demonstrating the value and capacity to be competitive in this syndromic market. The other area where we want to maximize the value of the installer base is VIDAS. It's probably one of the weaker points for 2024, together with new instruments. We want it to be flat. We are low single-digit declining, minus 5%. We're actually flat excluding PCT, but we keep declining on PCT by 20-ish percent. So it translates into an overall decline of 5% in 2024. During this period in 2024, we've launched two new panels. One is traumatic brain injury, the other one is B12. Moving on to profitability improvements. So Guillaume will come back to the detailed numbers and the P&L, but I wanted to give you a little bit more qualitative perspective on Go Simple initiative. even though not every action that we've identified, of course, has been completed in 2024. It's a five-year plan. But I'm very glad to report back that 80% of the 50-plus initiatives to improve profitability have already been initiated. We are working on them, and they are already starting to deliver tangible outcomes. So I'll give you three elements. The first one is, as you know, we've been working in the last few years on biofire automation. We have fully validated respiratory panel automation, and we are now in the process of expanding our manufacturing capacity, installing the new lines so that the panels are fully manufactured in a fully automated model. And it's already, at the end of 2024, 10 percent of biofire pouches that are fully automated. And of course, it will increase in the next few years, supporting a profitability improvement target. The second element, we're also working on managing in a better way our G&A cost, and very glad to report that we have generated significant savings with regards to highest near-shoring. It's very general, and of course there are ups and downs, but talking about the headcount of BioMérieux, the number of employees that we have, and of course it depends by department, but if we look at the overall headcount of BioMérieux, R&D, manufacturing, commercial teams, G&A, we have flat headcount at the end of 2024 when we compare with 2023, which means that we've been able to generate 10% sales growth without increasing the number of employees, which obviously has a financial impact in 2024, but has also an impact moving forward in terms of career impact for 2025. So very positive report on this Go Simple dimension. It's been also a busy year, as you know, in terms of product launches. As you know, we invest 12% of ourselves in research and development. It's a critical component for us. And for me, as the CEO for the company, it's critical that we maximize the return of that 12% investment. So BioFire, I've just mentioned two new panels announced in the last 12 months. Spotfire, I remind you that last summer, actually, we were capable to launch Not only respiratory, but source route panel that allows to complement our offering for respiratory disease. Microbiology, I've already mentioned the launch of Vitec Reveal, FDA approval over summer. Immunoassays, two new panel, traumatic brain injury and vitamin B12. For industrial applications, I wanted to give you two examples for the food market. One is Genoptyper that allows to better identify the root cause for listeria contamination for food manufacturers, and Trusted Third Party that is also an additional opportunity to work with food manufacturing companies. Finally, before handing over to Guillaume, a word on the fourth dimension, corporate social responsibility, we've made significant progress over 2024 it's it's a critical component of our go 28 ambition i've mentioned on the positive side the minus 13 percent of greenhouse gas absolute emission very much in line with a target to reach minus 50 percent in 2030 we are making some good progress on different dimensions maybe on the less positive side it's fair to say that the last day incident rate, so the safety indicator that we are looking at, is not where we want it to be. So it's definitely an opportunity for us to improve and to work on in the next few months. And with this, I'll hand over with Guillaume, who will give you more granularity on the financial numbers.