Avantor (AVTR) 7th Annual Evercore ISI HealthCONx Conference summary

Business performance and financial highlights

• Lab platform returned to growth, with strong cash flow conversion and progress on a $300M cost transformation initiative.

• Bioprocessing showed steady improvement, offsetting semiconductor headwinds; four consecutive quarters of order book growth.

• Advanced Tech segment faced semiconductor headwinds, but overall exposure is modest and largely offset by biomaterials and bioprocessing strength.

• Sequential improvement in bioprocessing throughout the year, with Q4 expected to deliver mid-to-high single-digit growth.

• Healthcare segment, driven by medical-grade silicone for implants, performed better than expected and is positioned for continued growth.

Market trends and customer dynamics

• Bioprocessing recovery is broad-based across geographies and customer segments, with strong pipelines and regulatory approvals.

• Lab business shows stability, with consumables and chemicals driving growth despite cautious capital spending.

• No significant change in customer sentiment post-elections; industry has digested recent macro and legislative changes.

• Academic segment achieved high single-digit growth, with continued share gains and strong commercial intensity.

• China exposure is minimal, with a long-term 'China for China' strategy and modest improvements seen in 2023.

Segment and product mix insights

• Bioscience production is about a third of revenues, with two-thirds from bioprocessing and the rest split between healthcare and Advanced Tech.

• Production segment is 95% consumables-driven, with proprietary products supporting margin expansion.

• Bioprocessing portfolio includes process ingredients, media supplements, chromatography resins, and single-use technologies.

• Lab segment is 80% consumables, 20% equipment; about half of lab revenues are biopharma/healthcare, with the rest split between academia/government and advanced tech.

• Lab market is highly fragmented, with significant headroom for share gains and a best-in-class platform.