Eurofins Scientific Sa

Ladies and gentlemen, welcome and thank you for joining Eurofins nine month 2023 trading update. Please note that this call is being recorded and will later be available for replay on the Eurofins investor relations website. Throughout today's presentation, all participants will be in a listen only mode. The presentation will be followed by a question and answer session. If you would like to ask questions, you may press star followed by one on your touch tone telephone to register for questions. For operator assistance, please press the star key followed by zero. During this call, Eurofin's management may make forward-looking statements, including but not limited to statements with respect to outlook and the related assumptions. Management will also discuss alternative performance measures such as organic growth and EBITDA, which are defined in the footnotes of our press releases. Actual results may differ materially from objectives discussed. Risks and uncertainties that may affect Eurofin's future results include but are not limited to those described in the risk factor section of the most recent Eurofins annual and half-year reports. Please also read the disclaimer on page two of this presentation, subject to which this call and Q&A session are made. I would now like to turn the conference over to Dr. Gilles Martin, Eurofins CEO. Please go ahead.

Thank you, Bernard, and hello, everybody.

So I'm pleased to report on a good quarter three results for Eurofins. Eurofins has been handicapped by the impact of the disappearance of COVID revenues that we had in a large amount in 2020-21 and lesser amount in 2022. What we see in this quarter, this is behind us. We have very little base effect from COVID and the following quarters will be the same. So now we're moving to a situation where we compare Apple to Apple on our overall reported figures, which is a good thing. Our business is doing well, considering the economic situation, which is still very subdued in Europe. We see some recovery in food testing in Europe. We have an overall continued good growth in America. We've heard comments about biopharma, a lot of misunderstandings about biopharma. We did already answer those questions, but a lot of people apparently haven't. We're not there on the call or forgot. Our biopharma is and to the very early research where biotech is very present, the bulk of our biopharma testing business is biopharma product testing, which occurs either in the later phases or for products that are already in the market. And in the later phases, the products already have high value for the pharma industry, and they are usually no longer Biotech have been sold at this time, or they have licensing agreements with Big Pharma. Big Pharma is very well funded, and when products get, say, beyond phase two, the likelihood of failing is much less. So the interest of Biopharma is not to cut spending on that. If there is a spending cut, it's more in the much earlier riskier phases. And we do see some softness in discovery, the earlier phase, which is about 150 million for us, which we have flagged previously. What we have seen in biopharma, of course, we had also a lot of COVID-related work on vaccines and so on, and that has gone. And we haven't counted that as COVID revenues, so that has a bit handicapped our overall growth over the last, I would say, four quarters since mid of 2022. But that is anyway in our numbers, and nothing changed on that. So we continue to see a good trend in biopharma, a good outlook, maybe not the – The explosive growth that we had in some of our segment discovery, the explosive growth in 2021 and 2022, there's not the same explosive growth in that small segment of our biopharma business. So that's just for reference. So the falling off of the COVID work at Eurofins in biopharma is many quarters back. We've already had that impact for a while. Just to clarify some misunderstanding on all. biopharma business. The biopharma industry is very well funded. They need to get more products to the market. Research is leading to fantastic products, as you have seen with the weight loss products. There are many, many products in the pipeline in oncology. The biopharmaceutical presents a lot of potential, so we don't see the biopharma stopping developing or reducing significantly the development. There may be a bit less money wasted on many, many candidates in the earlier phases by small biotech, But that doesn't change anything to the big trend in biopharma that there are exciting opportunities to make our lives better through very powerful products that are either now in development or will come in the next few years. So that's for biopharma. So good outlook there, except, of course, discovery since five or four or five quarter has been much softer. On the global organic growth, As we discussed, so the situation remains better in North America than Europe. Europe has been facing headwinds from the consumer impact, the impact on consumers of inflation, and it might be getting a little better. We're going to get to a better base effect anyway in Europe in food testing because now the following quarters are going to be compared to quarters which were already affected by that last year. On geographically, we've had questions on what happened in the rest of the world. Well, I think this is like a very small effect. It's a small perimeter, but we had somewhat misclassified some clinical revenues in Asia, probably in Japan into non-COVID that were COVID related. So we've had a few COVID related revenues in Japan and potentially also clinical revenues in Brazil that were less this year than last year that had an impact. We had an impact in discovery in Taiwan, as I just mentioned. We don't think any of those things are trends. It's just more corrections. And we're not talking of a lot of money, but there's a percentage it can show on a small scope. So that explains the slightly softer organic growth in Asia. There are countries doing very well, our biopharma business in India is doing very well. China is doing well for us. Our consumer product is maybe growing a bit less than the other activities at Eurofins, but overall, things are good. So we have a slideshow. I'm not going to go through every page of the slideshow, but that was where my comments on page three. On page four, you see the breakdown. So of course, we're missing a lot of COVID revenues that we had last year, but that's the first time we have that. You see a good chunk of organic growth this year. That question, what is price? What is volume? I would say price is playing now a bigger role. We're mainly at 50-50, although we can't really quantify it. We can start to quantify it in our sample-based business, but our project-based business like Biopharma, it's quite hard to find the proper metrics of organic volume growth and price growth, because each project is different. They're not comparable between each other. But we're working on something, and we do hope to have that through our systems in a way that is reliable and auditable in the future. On M&A, contribution is less than we potentially thought we would consolidate. For the full year, we have a target of 250 million. pro forma revenues that might not be consolidated in the full year. We haven't given up on that. It could be that we do hit the pro forma. It depends on timing of certain deals we're working on. Anyway, you know, when we gave our objectives for organic growth 6.5 and M&A 250 million per annum, it's on average over five years. And our view is that the price of acquisition is going to become more attractive going forward. We see many deals that were supposed to close with competitors that didn't close, that come back to the market. So people, but the prices overall have not yet come back to where they should be. So we prefer to stay disciplined and on the sideline. And we know those opportunities are going to come back because very few companies have the right IT digital infrastructure and the tools to really extract synergies from lab networks. So a tougher economic environment is going to be very attractive for us on the M&A side over the next two or three years, we believe, especially if the subdued growth continues in Europe. And so we are very well placed to take advantage of that. But we're not rushing into that. We're disciplined. Our focus is return on capital employed. So we will see. But over the next five years, we still think we can on average, acquire 250 million revenues from acquisition per annum. And the timing of that for external things like acquisitions, of course, is slightly difficult to know. But we'll see what we can close or sign in Q4. On page five, we just give a few examples of innovation. We continue to invest a lot in R&D to launch new technologies, new tests. and deploy new tools, automation, digitalization, artificial intelligence. We have more and more areas where we can deploy artificial intelligence. We talked about our environment business with asbestos testing previously on page six. You see also what we do in discovery for developing or identifying which molecules is likely to be successful in the later phase. And we have a vast database of data of early stage discovery data that we start to apply AI models to for clients to reduce time to market and help them choose better, faster, the candidates they work on. So Eurofins has amassed over the years a huge amount of data in all our verticals and all our activities. And now we start to be able on various areas to apply AI models to make the work faster or faster. give better predictive information to our clients. On page seven, we're basically, we just, we confirm our objectives where we think we'll achieve the, what we had planned for this year. Of course, one bigger and biggest unknown is what currencies will do. And I think I'm not the only one to not know what currencies will do in the future. It was debatable after H2, we adjusted the, the objectives for the currency. Maybe we should not have adjusted objectives for currency after H2. I think potentially it's something we should not have done. So it surprised some people because anyway, we don't know what currencies will be in H2 until the end of the year. So that's why we give a range for revenues just so you have a number. In terms of organic growth, we continue to believe in this objective and also in terms of profitability and margin. And going forward, we think this objective of 6.5% organic growth is achievable and for a number of years as a secular objective already commented on M&A. And we have a lot of assets that will come online. We have a lot of investments in either being built or waiting for validation. We have a lot of startups that are underutilized and costing us money, and some of them also are in our mature, very mature, but they have not yet hit the level of 20% or 25% EBITDA. So we're confident to be able to increase our margins over the next four years or five years until 2027. So there's no change to our outlook. And, of course, with the uncertainties in Europe, et cetera, we've been more frugal within the When we're doing our budgets for next year, we are, of course, asking our leaders to focus more on cost. We can always add cost and people and capacity later. So we are confident that even in more troubled economic environments, we can continue to deliver very well, to deliver significant organic growth. Even in economies that don't grow, we think we can continue to deliver good growth and gradually improve our margins and our cash flow. All those investments we do, once they are done, they are done. We have very little investment in maintenance capex. Our maintenance capex is 2% to 3% of revenues. So all the things we invest, they are there because they have capacity or they make us leaner or more efficient. So that's it for my introduction. I think I've addressed the questions that I had received. I had a question of one public working day. What does it mean in terms of correction? Well, I think most of you will know that in a quarter we have anywhere between 62 and 65 working days. So one day of that is about 1.5%. I think you probably got that. And for the nine months, 0.5%. That's it for that question. I think I've addressed most of the questions I've received so far, I've heard about, but I'd be happy to answer any other question. Thank you.

Thank you. Ladies and gentlemen, at this time, we will begin the question and answer session. Anyone who wishes to ask a question may press star followed by one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star followed by two. If you were using speaker equipment today, please lift the handset before making your selection. Once again, anyone who has a question may press star followed by one at this time. And the first question today is coming from Suhasini Varanasi from Goldman Sachs. Your line is live.

Hi. Thank you. Thank you for taking my question, and good afternoon. Two for me, please. It's one on GLPs and its implications for food in the medium term. I appreciate it's very early days still, but it would be helpful to get your views on this. Do you see GLPs having a negative effect on food testing volumes medium term, potentially also in clinical diagnostics, maybe offset by maybe more growth in biopharma. It would be lovely to get some color there. The second question is on the objectives for the year. I appreciate you've reiterated the objectives. I think there is still a little bit of concern in the market around the risks to the objectives, especially on margins and cash. Can you maybe elaborate on the degree of confidence that you have there and the risks that you see? Thank you.

Thank you very much. We don't think that the GLPs or the, what is it called, the drugs to address diabetes, obesity and so on will have a major impact. I think they are an example of the huge potential that biopharmaceutical products have to make our lives better and enable people to prevent or manage chronic diseases. And I think it's an example that all the biopharma companies, of course, are looking at when they are working on other products in the different areas, oncology being one and CNS, et cetera. So I don't see really an impact on food. I mean, of course, it could affect one food category compared to another food categories. But in the end, people need to eat, and they will eat something else. There is the move towards more health. I shouldn't say healthier because that's a very personal choice, but food that are less processed, more bio-tested to not contain various contaminants that are tested also for their nutritional qualities, especially there is a big increase towards the supplements and then the nutraceuticals, etc. All those products require more testing. All natural products require more testing. And they might be produced in smaller batches also than the very very standard packaged goods. So, if anything, that could lead to more diversity, more natural products, and maybe more testing. But, you know, it's an educated guess. That's all I can say about that. I think risk to objective. You know, nobody can predict the future, but we think things are good for our objective. There is also upside risk, as well as, you know, things could happen with the war. Anything could happen very unexpectedly. I think there are always, it remains an objective. It's not in the bank until it's in the bank. But we are confident that we should be able to achieve that.

Thank you.

Thank you. The next question is coming from Alan Wells from Jefferies. Your line is live.

Hey, good afternoon, Gilles. Just a couple from me, please. Could you maybe just talk a little bit about, or if you can, kind of, provide some insight into the magnitude and just levels of the food recovery that you saw in Europe in the third quarter. That's my first question. And then secondly, I know you don't talk openly about kind of margins at this point, but just maybe talk a little bit about kind of the price and cost inflation dynamics that you're seeing in the third quarter and how that trended during that period as well. Thank you.

Thank you. Well, it's not really a full recovery in food. It's getting a little bit better, especially towards the end of the quarter, I think. And so it's difficult to extrapolate. But in spite of that, we did have good growth. So that means, of course, if food recovers more, things should look better. We still have the same more or less trend as in the other quarter. And the faster growth is on biopharma or slightly faster growth. Then we do relatively well in environment. in terms of organic growth, both in Europe and North America. Clinical is more challenged because we have a significant routine clinical diagnostic business in France, which is price controlled. So that's, I think, what, you know, in the mix, we get what we get, which I think is above our objective. It's quite, I think, pleasing to see that even in a tough year like this, with a lot of headwinds in many areas, we still are at 7.5% growth. So 100 base point above our objective. I think it's in spite of that. And margin, well, margin in and out, we margin are such that we think we should hit our annual objectives. We're doing much better this year in compensating inflation. And it depends, of course, on each country, each market, We have a number of areas that are work in progress. When you look at the overall margin, they are the average of many things. And that's also one of the things that makes us very optimistic for the mid-term margin improvement is the margins you see include a number of businesses where we are doing integration, where we have had maybe some management change that are severely underperforming and loss-making and that we are in the process of really turning around. You know, when you, we talked a lot about the big transformations in North America, where we merge our food testing network with that of Covance Food Solutions, where we merge Test America with our own environmental testing market. And that cost us tens of millions of operating losses and disruption and lost revenues when we move business from lab to labs. We are doing that in a number of countries. We're doing that in the UK. We're doing that in Ireland. Smaller countries, the overall impact on the group is not massive. But we do have those impacts, and when you add them all together, they are material, and they are a material impact to our margin. And those things are one-off, in essence. Once we have the labs in the right place, now, for example, in Ireland, we had a number of labs that consolidated into Cork. We have a brand-new lab now for food, environment. Also, we've done a consolidation. And those things cost us millions. We moved, there was some food-testing business in Ireland that we were carrying out for, companies in Ireland, both in the UK and North America that now we have set up in Ireland. That was a transfer that took two years to get all the accreditation because it's highly sensitive testing. And now it's done. It's moved to Ireland. So we have a lot of those things that have impacted our margin in the past and that do still impact our margin, but that are finite in the time it takes to do it. Once the labs are moved, are working, have their accreditation, the clients are satisfied, then we have a much more stable situation and better utilizations of the labs and those things that are still ongoing. And that's why our margins this year are significantly lower than where we think they could be and they will be and they should be.

Great. And can I just have a very quick follow-up? You just touched on diagnostics. Could you just maybe give us a little bit of update sequentially how the French diagnostics business is looking? Obviously, you talked a little bit about early in the year. investment in bud collection points, are you seeing sequentially an improvement in that French diagnostics business in the third quarter? And then maybe any update you can provide on the latest round of kind of budget discussions, which I think start again going into the end of the year, early next year as well. Thank you.

Yeah, actually, we have much more visibility on that business now than the beginning of the year. There were some cuts this year, which I think started in February, mid-February, and maybe second round early April. which brings down, I think, cuts like 3% or 4% on the reimbursement price. Of course, this each year is compensated by volume growth. Volume was very subdued in second quarter. It just started to pick up in the third quarter. So doctors had also instructions to prescribe less testing. So that business did not well at all in the first half of the year and is starting to do better in the third quarter, although it's not really where it should be. And for next year, apparently in the next couple of years, there has been a frame agreement signed which limits the cuts quite significantly. I think the cuts would be more like they want to have a flat budget or a budget that doesn't increase more than half a percent or in that range, around flat minus half a percent, plus half a percent. So we're not looking at the same significant cuts that we've incurred this year for next year and the following year. Of course, things can always change, but that's the latest I've heard about that. and lots of potential for rationalization we're investing actually because M&A is very expensive in some countries and so in that case that's why we open block collection points in many geographies which are better alternatives to buying companies at prices that are not justified and where their networks of BCPs might be too old or in the wrong place and there are There are some countries where we really now have learned this alternative between organic growth and M&A, and we balance it. And, you know, I've been running labs for 35 years. I've seen enough cycles, enough phases where valuations of acquisitions were excessive. Do your own thing. Improve your operations. And then there's always a time where acquisitions become more attractive and provide over two or three years a very good return. So we're doing that globally. We have the experience now of doing startups and when we can expect the payback. And so we can arbitrage between acquisitions, startups on all of our verticals.

Great, thank you.

Thank you. The next question is coming from Dominic Endridge from Deutsche Bank. Dominic, your line is live.

Hi there, thanks for taking the question. Just two quickly from me. I know you gave some numbers on the size of the discovery business. Would you mind just giving us an idea of the breakdown, sort of as a generality of the biopharma business between the key parts? Secondly, I know you have the PESS business with Inside Biopharma. Do you regard that as sort of a leading indicator on industry activity there? And if so, what are you seeing in that regard? And the last question is just the visibility on revenues and activity levels in the product testing business going into 2024. Can you just say where your utilization is currently and maybe what you're seeing in terms of business negotiations and contract negotiations going into next year? Thank you very much.

Thank you very much. Well, our discovery is, as I said, something of the order of 150 million. The biggest part of our biopharma is biopharma product testing. That's probably 60% or 60% plus. Then we have a segment on CDMO biopharma, which is also of the order, I think, of 150 million. We have medical device testing, which is small. We have But PSS, professional scientific services, as you mentioned, is also mostly in that biopharma product testing. So it's not, we're not doing so much discovery there. We're doing some, we have some bioanalysis. We have one central lab, biopharma central lab, which is also about 100 million business. And then we have agro science, which we put in our, you know, biopharma area, which is also 150 million business, which is fairly flat at the moment. We have a genomics business, which has been suffering post-COVID. We did a lot of COVID work there. We have forensics testing, which is DNA testing in a large part, and drugs testing, but mostly for the government. So those are the various parts. So I would say, overall, it's very much late stage. That's why we're not so affected by maybe the slowdown in biotech funding that affects discovery. And discovery, of course, we've had 30% growth in discovery, I think, in 2021 or 2022, 2021 probably. And it has been this year either flat or slightly negative for part of our business. As to PSS, well, our PSS business is doing fine. And as I say, it could be that it's because our focus on this PSS business is also late stage rather than early stage. Or it could more be actually more likely that the clients are big pharma. And big pharma is not, okay, Pfizer has announced a layoff because they were very exposed to COVID vaccine, but big pharma has a broad range of products, and biopharma is doing well, is well funded. And if we work on products that are in the later stages, they want to get those products to market as soon as possible. And therefore, we don't see softness there. The overall biopharma might not be as explosive in terms of growth as it was two years ago, the segment we work for are doing well. As to the outlook for next year, you know, we will have our budget meetings in the next few weeks and I will know more. If you're going to one of our investors day, either tomorrow in Milan or in California in two weeks, then, or three weeks, I would invite you to talk directly to our leaders of that business line. They will be present, maybe mostly in America because America is where The largest part of the farmer market is. You can talk to them directly. I haven't heard anything negative. The first drafts of the budgets are actually looking quite good in terms of growth, so I don't think they're pessimistic. But that's all I can say today for 2024.

Thanks very much.

Thank you. The next question is coming from Delphine Lelouet from Societe Generale. Delphine, your line is live.

Yeah. Hi. Good afternoon, everyone. Bonjour, Gilles. Question on my side. Just to follow up on what we discussed regarding the startups and the BCP, Gilles, can you get through us to the business model underlying of these two startups in terms of size, revenue, objective, just for us to get a better understanding of the future growth coming out organically, I would say like that? And can you also confirm the fact that, you know, 34 startups so far, you had 50 last year. Is it probably 50 is the right number for integration and launching so far at your fields? And on the BCPs, can you tell us exactly where the 30s has been open? Is it widely spread around the world, or do you have a region which is more open? let's say, sensitive to the opening. Secondly, I was willing to have an update on your side with what regards in Israel and in the region and mostly to Egypt. And so I was wondering if you have any slowdown in business and food testing for any food that could go into the region, firstly, and if you can also make an update about the Russia and Ukraine situation and if you have a sort of a normalization there or a where we are. So that would be okay on my side.

Thank you.

Startups are pretty much everywhere. It's a mix of different things. We have, of course, a lot of regions in the world where we cannot do acquisition because there's not such a big biopharma or food testing industry or environment. So we have a lot of startups in Asia. We're opening, China is a big market, so we are not, of course, in every city, especially Tier 1 and Tier 2. We're trying to cover more geographically. India, we're also adding labs. We're adding a lot of labs still in North America. We don't cover the whole of the U.S. and Canada. We're also adding labs in Europe where we are missing our presentation. In clinical, there are some countries... Spain, Portugal, more southern Europe, France, UK, Belgium, where we are adding BCPs and we're adding labs. So that's about the footprint. We added also, I think, in the U.S. some, not really BCPs, but geographic coverage in bio, in clinical diagnostics in some areas. We're also, you know, not all the startups are successful. Some startups we decide, okay, after 24 months or 36 months, that's a minority or a very small number. But we also have had to stop some startups if they don't work out. So we're not, like, stubborn in that. But if we see an opportunity and there's no M&A in the right place or the M&A is too expensive, we do a startup. That's irrational. That's why we're planning about $100 million to – of separately discussed items that's about the level of the loss investment the bulk of it is on startups that we incur we also have startups like TGI where the bulk of the spend is expensive for clinical trials so we have probably a cost of 6 to 10 million to carry out further clinical trials to get a much more solid reimbursement for our tests with broader indications there have been changes unfortunately of how reimbursement worked for that And so we are addressing that with a three-year clinical trial. That costs quite a bit of money, but of course that market, if we get the right reimbursement, can be extremely worthwhile. And the situation in Israel, Egypt, is very, very horrible and sad. We don't have material presence in Israel or Egypt, nor did we have in Ukraine or Russia. We have a small biopharma activity in Israel, very small, not material at all, I think smaller than 5 million. Food going there, no, we haven't, I mean, it's not really material what we're doing for those frozen. We're not really testing commodities. We're testing more foods for consumptions in Western markets. We do very little testing in Africa or developing markets anyway.

If we move on to that, so Pekin specifically to the bio, there is a massive collapse of the bio demand in Western countries due to inflation prices. Have you seen any slowdown on this one on your side?

Oh, yes. I think it was part of the overall softness we've seen in food testing. The softness was more pronounced in Eastern Europe and Germany. especially Germany, has been going through tough times. Overall, the consumers, from the cost of energy, I mean, northern Western Europe has been affected by massive inflation on food prices, but also on energy, and when people spend more money for energy, for eating their house, then they might have less money to buy food, and that is what we've been seeing for a number of quarters. But now I think we're more in a situation where we have hit bottom in terms of of shifting to cheaper products. People have to eat something. And overall, volumes are not down. People are consuming. They just maybe consume different things.

Okay. Okay. And the last one on my side, and thank you very much, Gilles, just changing completely on scope and regarding the new peekaboo testing gender testing as soon as six weeks of March. of pregnancy, how big is the market, and how would you qualify the demand, and can you give us an idea about the pricing, and just for us to get a better understanding there?

Yes, well, this is mostly North America, and I think it's $100 million market, maybe, of which we have a significant part, maybe between 20 and 40%, something like that, although we don't have the full statistics. And, I mean, it shows what can be done and more could be done in terms of early diagnostic. This is diagnostic we do with finger prick blood so people don't have to go necessarily to a blood collection point. We're also using a shoulder blood sampling device. And I think the price is around $50, between $20 and $50. And we have partnership with Amazon and other distributors. And that's not a medical test. And this is a test, you could say convenience test, when people want to know the sex of the baby at five or six weeks. And, yeah, there is demand, and there is growing demand. But we do other things. We do non-invasive paternity testing. So we have a range of direct-to-consumer tests. On the medical side, direct-to-consumer testing is picking up very slowly. because it's usually not reimbursed by insurance, and people who have coverage, they are reluctant to spend extra money for that. But there are some segments of clinical testing where direct-to-consumer is working. We see some examples. We have to balance that with the cost of customer acquisition. So we develop those activities on whether it is for convenience. It can also be for testing your well water, testing the air in your house. There are a number of things where consumers are are interested and prepared to pay. But it's a small market, so it's really niche markets, and we have to address each niche market with a specific strategy.

Great.

Thank you. Thank you. We will take our last question from Arthur Trostov from Citi. Arthur, your line is live.

Thanks, everyone. Just one for me. I just obviously We touched a little bit on margins earlier, and I just wondered whether there have been any change to your expectations around the quantum of exceptional items or separately disclosed items that we're likely to see in the course of this year relative to what you said at the half year. So I just wondered if you could provide some clarity on that. Thank you.

Thank you, Arthur. No, we still think it to be of the order of magnitude of 100 million. And as I say, this is an arbitrage that we do. There is part of it which is reorganization and restructuring to get our right network, hub and spoke network to a big lab, efficient labs. And the other part is for startups. So we think it's a good investment. Startups provide about 0.7% to organic growth. That gives you also an idea of the payback. We have in the slideshow, in the regular slideshow, some information on that and the return on capital employed of startups. And we intend to continue to provide that going forward.

So, yes, that's for SDI and why we do it. Brilliant. Thank you very much.

Thank you. And this is all the time that we have for today's question and answer session. We would like to turn the conference back to Dr. Gilles Martin for closing remarks.

Well, thank you, everybody, for joining the call. I think we are starting to get in a better situation with better comparable, better base situation. The COVID is behind us. Of course, during COVID, we were all very focused on COVID. We generated massive revenues, significant profitability, and we made collectively a very positive contribution to the societies and the countries where we are operating through our ability to develop new tests. That caused a certain defocus on some of our core activities, and we have now since two, three, four quarters refocused, depending on the lab and country, refocused fully on our core business, on doing what we have to do. So we are really looking forward to 2024, where those effects, those extraordinary effects will be behind us, where we will start to see more and more the impact of all our work in building our network, streamlining, And we think we'll be very well positioned to do well in the market, even in a market that might become more difficult, because we do have, in a very large part of our market, much better competitive positions than our competitors. And we'll go strategically and on a macro level, and that may be more on a two- to five-year level, would benefit even more if there were significant economic problems. So our focus is, as usual, to... create significant value over time, over three to five years' horizons. That's how we run the company. We run the company for significant value creation over time. And there could be some very significant opportunities over the next three to five years. And on the organic side, we think every year should get a bit better thanks to all the focus and the effort we've put in making our network more centralized in hub and spoke, more digital, more streamlined, more automated. So thank you for your support, and I'm looking forward to meeting many of you in person tomorrow in Milan or in North America and California in three weeks. Thank you very much.

Ladies and gentlemen, the call is now concluded, and you may disconnect your telephone. Thank you for joining, and have a pleasant day.