Core Insights - Avantor Inc. reported third-quarter 2025 adjusted earnings of 22 cents, below the consensus estimate of 23 cents [1] - The company’s sales were $1.62 billion, slightly missing the consensus of $1.65 billion, with a year-over-year decline of 5.3% [1] - Organic sales declined by 4.7%, impacted by a positive foreign currency translation of 2.2% and a negative M&A impact of 2.8% [1] Segment Performance - Laboratory Solutions sales were $1.09 billion, reflecting a 6.4% decrease, with an organic decline of 4.9% [2] - Bioscience Production sales totaled $527.3 million, down 2.9% reported and 4.3% organically, with operational headwinds affecting throughput [3] Strategic Initiatives - The company announced a $500 million share repurchase authorization, indicating confidence in cash generation and a commitment to long-term shareholder value [4] - CEO Emmanuel Ligner emphasized the need for decisive changes to improve execution, accountability, and financial performance [4] Guidance and Analyst Commentary - Avantor revised its fiscal 2025 adjusted earnings per share guidance from 94-98 cents to 88-92 cents, compared to the consensus of 95 cents [5] - The company expects organic revenue to decline between 3.5% and 2.5%, with an adjusted EBITDA margin in the mid-16% range [5] - Analysts suggest that while there is potential for outperformance, the company's current growth and margin profile justify a discount compared to peers [6]

Core Insights - Avantor, Inc. reported a revenue of $1.62 billion for the quarter ended September 2025, reflecting a decline of 5.3% year-over-year and a surprise of -1.56% compared to the Zacks Consensus Estimate of $1.65 billion [1] - The earnings per share (EPS) for the quarter was $0.22, down from $0.26 in the same quarter last year, with an EPS surprise of -4.35% against the consensus estimate of $0.23 [1] Revenue Performance - Bioscience Production revenue was $527.3 million, slightly below the average estimate of $536.7 million, representing a year-over-year decline of 2.9% [4] - Laboratory Solutions revenue totaled $1.1 billion, compared to the average estimate of $1.11 billion, marking a year-over-year decrease of 6.4% [4] Operating Income - Adjusted Operating Income for Laboratory Solutions was reported at $123.6 million, below the average estimate of $134.01 million [4] - Adjusted Operating Income for Corporate was -$14 million, better than the average estimate of -$19.3 million [4] - Adjusted Operating Income for Bioscience Production was $127.7 million, compared to the average estimate of $134.34 million [4] Stock Performance - Avantor's shares have returned +20.8% over the past month, significantly outperforming the Zacks S&P 500 composite's +3.8% change [3] - The stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance relative to the broader market in the near term [3]

Financial Data and Key Metrics Changes - Reported revenue for Q3 2025 was $1.62 billion, down 5% year-over-year on an organic basis, primarily due to weaker performance in the Lab segment [12][21] - Adjusted EBITDA margin was 16.5%, with adjusted EPS for the quarter at $0.22, reflecting a $0.04 decline year-over-year [12][13] - Free cash flow was $172 million, with an adjusted conversion rate of 124% [13][15] - Adjusted gross profit was $527 million, representing a 32.4% adjusted gross margin, a decline of 100 basis points year-over-year [12][13] Business Line Data and Key Metrics Changes - Laboratory Solutions revenue was $1.1 billion, down 5% organically year-over-year, below expectations [16][21] - Bioscience production revenue was $527 million, down 4% organically year-over-year, at the low end of expectations [18][21] - Adjusted operating income for Laboratory Solutions was $124 million, with an 11.3% margin, impacted by lower volumes and related absorption [18][21] - Adjusted operating income for bioscience production was $128 million, representing a 24.2% margin, also down year-over-year due to lower volumes [20][21] Market Data and Key Metrics Changes - The market backdrop in the Lab segment is largely stable, but customer activity remains lower than expected due to ongoing end market uncertainty related to basic research funding [16][17] - The company faced competitive pressures, particularly in the Lab services business, leading to share losses [18][44] - The U.S. Federal government shutdown is expected to exacerbate challenges in the academic and government sectors, impacting revenue guidance [93] Company Strategy and Development Direction - The company is initiating a turnaround strategy called "Avantor Revival," focusing on five key pillars: go-to-market strategy, manufacturing and supply chain investment, portfolio scrutiny, cost savings, and talent improvement [27][28][30][33] - A $500 million share repurchase program has been authorized to demonstrate confidence in the company's long-term value [11][26] - The company aims to simplify operations and empower frontline staff to better meet customer needs [10][27] Management's Comments on Operating Environment and Future Outlook - Management expressed disappointment with current results but emphasized confidence in the fixability of the issues faced [27][39] - The company expects full-year organic revenue growth to be negative 3.5% to negative 2.5%, with reported revenue growth anticipated to be negative 4% to negative 3% [21][22] - Management is committed to improving both top-line and bottom-line performance through operational efficiency and strategic investments [90] Other Important Information - The company took a $785 million impairment charge related to goodwill associated with its Lab distribution business, reflecting ongoing margin headwinds [14][15] - Adjusted net leverage ended the quarter at 3.1 times adjusted EBITDA, down from Q2, as strong cash generation allowed for net debt reduction [15][26] Q&A Session Summary Question: What is the confidence level in fixing the current declines? - Management expressed confidence that the issues are fixable, emphasizing the need for better communication and execution [37][39] Question: Can the business grow in 2026? - Management is taking a fresh look at the numbers for 2026 and will provide updates once a clearer understanding is achieved [40] Question: How to address share losses and competitive dynamics? - Management acknowledged share losses but noted that no key customer accounts have been lost recently, indicating potential for growth in existing accounts [44][46] Question: What are the steps to simplify operations? - Management plans to decentralize decision-making and empower local teams to improve customer engagement and service levels [49][50] Question: Why is now the right time for a stock buyback? - Management believes the current share price does not reflect the company's long-term value and aims to demonstrate commitment to its turnaround strategy [76][78] Question: What are the expectations for the academic and government market? - Management anticipates continued challenges in this sector due to the government shutdown and other market pressures [92][93]

Financial Data and Key Metrics Changes - Reported revenue for Q3 was $1.62 billion, down 5% year-over-year on an organic basis, primarily due to weaker performance in the Lab segment [13][22] - Adjusted EBITDA margin was 16.5%, with adjusted EPS for the quarter at $0.22, reflecting a $0.04 year-over-year decline [14][22] - Free cash flow was $172 million, with an adjusted conversion rate of 124% [14][22] - Adjusted gross profit was $527 million, representing a 32.4% adjusted gross margin, a decline of 100 basis points year-over-year [14][22] - A $785 million impairment to goodwill associated with the Lab distribution business was recorded, driven by share price weakness and margin headwinds [15] Business Line Data and Key Metrics Changes - Laboratory Solutions revenue was $1.1 billion, down 5% organically year-over-year, below expectations [16][22] - Bioscience production revenue was $527 million, down 4% organically, at the low end of expectations [18][22] - The services business within Laboratory Solutions faced greater than expected headwinds, while proprietary lab chemicals grew mid-single digits [17][22] - Adjusted operating income for Laboratory Solutions was $124 million, with an 11.3% margin, pressured by lower volumes [18][22] - Adjusted operating income for bioscience production was $128 million, representing a 24.2% margin, down year-over-year due to lower volumes [20][22] Market Data and Key Metrics Changes - The market backdrop in the Lab segment is largely stable, but customer activity remains lower than expected due to ongoing end market uncertainty [16][22] - The company expects full-year organic revenue growth of negative 3.5% to negative 2.5%, with reported revenue growth anticipated at negative 4% to negative 3% [22][23] - The U.S. Federal government shutdown is expected to impact the Lab Solutions segment, contributing to reduced guidance [23][84] Company Strategy and Development Direction - The company is initiating a revival plan focusing on five key pillars: go-to-market strategy, strategic investments in manufacturing and supply chain, portfolio scrutiny, cost savings, and talent improvement [27][30] - A $500 million share repurchase program has been authorized to demonstrate confidence in the company's long-term value [12][72] - The management aims to simplify operations and empower frontline staff to better meet customer needs [11][30] Management's Comments on Operating Environment and Future Outlook - Management expressed disappointment with current results but emphasized confidence in the fixability of the issues faced [27][38] - The company is committed to improving operational execution and addressing competitive pressures [18][22] - Future performance is expected to improve as the revival plan is implemented, although it will take time to see significant results [33][72] Other Important Information - The company is focused on enhancing its e-commerce platform and improving service levels to regain market share [45][48] - A new Chief Operating Officer and other key leadership positions are being recruited to drive operational excellence [32][65] Q&A Session Summary Question: What is the confidence that the current declines are fixable? - Management expressed confidence that the issues are fixable, emphasizing the need for better communication and execution [36][38] Question: Can the business grow in 2026? - Management is taking a fresh look at the numbers and will provide clarity on growth expectations for 2026 after further analysis [39][40] Question: How to stem the tide of share loss? - Management acknowledged share losses but noted improvements in retaining key accounts and plans to enhance e-commerce capabilities [42][44] Question: What are the steps to address operational complexity? - Management plans to decentralize decision-making and empower local teams to improve customer engagement [46][47] Question: What is the rationale for the share buyback program? - The buyback program is intended to demonstrate confidence in the company's long-term value and commitment to turnaround efforts [71][72] Question: What are the expectations for the academic and government market? - The academic and government market is expected to remain challenged due to the government shutdown and other factors impacting consumables [84]

Financial Performance - Net sales for the three months ended September 30, 2025, were $1,623.8 million, a decline of $90.6 million or 5.3% compared to the same period in 2024[119]. - The net loss for the same period was $711.8 million, compared to a net income of $57.8 million in 2024, reflecting a margin decline of 43.8%[133]. - Adjusted EBITDA for the third quarter was $267.9 million, down from $302.5 million in 2024, resulting in an Adjusted EBITDA margin of 16.5%[133]. - Gross margin for the three months ended September 30, 2025, decreased by 50 basis points to 32.4% compared to 32.9% in 2024, and for the nine months, it contracted by 70 basis points to 33.0% from 33.7%[140][141]. - Operating (loss) income for the three months ended September 30, 2025, was $(648.8) million, a decrease of $773.4 million compared to $124.6 million in 2024, and for the nine months, it was $(372.6) million, down $819.3 million from $446.7 million[142][145]. - Net (loss) income for the three months ended September 30, 2025, was $(711.8) million, a decrease of $769.6 million compared to $57.8 million in 2024, and for the nine months, it was $(582.6) million, down $793.7 million from $211.1 million[145][147]. - Adjusted EBITDA for the three months ended September 30, 2025, decreased by $34.6 million or 11.4% to $267.9 million, and for the nine months, it decreased by $73.8 million or 8.3% to $817.3 million[148][150]. - Adjusted Operating Income for the three months ended September 30, 2025, decreased by $37.5 million or 13.6% to $237.3 million, and for the nine months, it decreased by $78.2 million or 9.6% to $732.3 million[151][156]. - For the three months ended September 30, 2025, the net loss was $711.8 million, representing a margin of (43.8)%[160]. - Adjusted EBITDA for the same period was $267.9 million, with a margin of 16.5%[160]. Segment Performance - The Laboratory Solutions segment experienced a net sales decrease of $75.0 million or 6.4%, impacted by a divestiture and reduced customer demand[135]. - Organic net sales decreased by $80.9 million or 4.7%, with the Clinical Services divestiture accounting for a $48.4 million impact[134]. - In the Laboratory Solutions segment, Adjusted Operating Income declined by $27.9 million or 18.4% for the three months, primarily due to the divestiture of the Clinical Services business and lower sales volume[153]. - In the Bioscience Production segment, Adjusted Operating Income decreased by $10.4 million or 7.5% for the three months, driven by lower sales volume[154]. Cost and Savings Initiatives - The company expects to generate approximately $400 million in run rate gross savings by the end of 2027 from its global cost transformation initiative[125]. - Inflationary pressures have adversely affected all cost categories, despite implemented pricing and productivity measures[122]. - The reduction in SG&A expenses was driven by lower restructuring and severance charges, savings from the cost transformation initiative, and the divestiture of the Clinical Services business[143][144]. - The company faced inflationary pressures and unfavorable manufacturing variances impacting gross margin and operating income[141][144]. Cash Flow and Liquidity - Cash generated from operating activities for the nine months ended September 30, 2025, was $471.1 million[167]. - As of September 30, 2025, the company had $251.9 million in cash and cash equivalents, with total liquidity of $1,261.3 million[172]. - The company amended its revolving credit facility to increase available funding by $425.0 million, raising total availability to $1,400.0 million[168]. - The company authorized a stock repurchase program of up to $500.0 million, which may be funded through available cash or borrowings[171]. - Cash flows from operating activities provided $196.4 million less cash in 2025, primarily due to a reduction in net income and higher working capital requirements[177]. - Free cash flow decreased by $167.0 million in 2025, totaling $379.2 million, driven by lower cash flow from operating activities[179]. - Capital expenditures for the nine months ended September 30, 2025, were $93.3 million, a decrease of $28.0 million compared to $121.3 million in 2024[179]. - Total cash provided by operating activities was $471.1 million in 2025, down from $667.5 million in 2024[176]. Impairment and Debt - Impairment charges for the three months ended September 30, 2025, amounted to $785.0 million, representing 48.3% of net sales[164]. - The company ended the quarter with no debt repayments due in the next twelve months, aside from required term loan payments of $20.8 million[169]. - The leverage-based financial covenant in the credit facility agreement became a full-time financial maintenance covenant following recent refinancing[174]. - As of September 30, 2025, 89.0% of cash and cash equivalents were held by non-U.S. subsidiaries, potentially subject to foreign taxes upon repatriation[175]. Market and Economic Conditions - Foreign currency fluctuations, particularly against the Euro, have caused significant variability in consolidated results[126]. - The company has faced challenges due to changes in trade policy, including tariffs and trade restrictions that could impact global operations[127]. - The company reported no material changes in market risk disclosures during the quarter ended September 30, 2025[180].

Financial Data and Key Metrics Changes - Reported revenue for Q3 2025 was $1.62 billion, down 5% year-over-year on an organic basis, primarily due to weaker performance in the Lab segment [11] - Adjusted EBITDA margin was 16.5%, with adjusted EPS for the quarter at $0.22, reflecting a $0.04 decline year-over-year [11][12] - Free cash flow was strong at $172 million, with an adjusted conversion rate of 124% [12] - A $785 million impairment to goodwill associated with the Lab distribution business was recorded, driven by share price weakness and margin headwinds [13] Business Line Data and Key Metrics Changes - In Laboratory Solutions, revenue was $1.1 billion, down 5% organically, below expectations of a 2% to 4% decline [14] - Bioscience production revenue was $527 million, down 4% organically, at the low end of expectations [17] - Adjusted operating income for Laboratory Solutions was $124 million, representing an 11.3% margin, impacted by lower volumes and related absorption [17][20] - Adjusted operating income for bioscience production was $128 million, with a 24.2% margin, also affected by operational challenges [19][20] Market Data and Key Metrics Changes - The market backdrop in the Lab segment is stable, but customer activity remains lower than expected due to ongoing end market uncertainty related to basic research funding [15] - The distribution channel, accounting for two-thirds of segment revenue, faced weakness in consumables and equipment, while chemicals and reagents were flat [16] - The company anticipates continued softness in consumables and lab services due to the U.S. Federal government shutdown [21][85] Company Strategy and Development Direction - The company is initiating a turnaround strategy called "Avantor Revival," focusing on five key pillars: go-to-market strategy, strategic investments in manufacturing and supply chain, portfolio scrutiny, cost savings, and talent improvement [26][28][31] - A $500 million share repurchase program has been authorized to demonstrate confidence in the company's long-term value [10] - The company aims to simplify operations and empower frontline staff to better meet customer needs [8][29] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence that current challenges are fixable and emphasized the need for better communication, visibility, and accountability [36] - The company expects full-year organic revenue growth to be negative 3.5% to negative 2.5%, with reported revenue growth anticipated to be negative 4% to negative 3% [20] - Management acknowledged the need for strategic investments in manufacturing and supply chain to meet demand effectively [27][31] Other Important Information - The company is focused on improving leadership accountability and establishing new operating norms to align priorities across the organization [29][30] - A new Chief Operating Officer and other key leadership positions are being recruited to enhance operational excellence [31] Q&A Session Summary Question: What is the confidence that the current issues are fixable? - Management expressed confidence that the issues are fixable, emphasizing the passion of the team and the need for leadership and better execution [36] Question: Can the business grow in 2026? - Management is taking a fresh look at the numbers and will provide an understanding of growth potential in 2026 after further analysis [39] Question: How to stem share losses in the Laboratory Solutions segment? - Management acknowledged share losses but noted that no key customer accounts have been lost recently and emphasized the importance of improving e-commerce capabilities [42][44] Question: What are the expectations for pricing and volume in Q4? - Management indicated that pricing is expected to stabilize, with modest increases anticipated in Q4 [52] Question: Why is the company buying back stock now? - The company believes its current share price does not reflect its long-term value and aims to demonstrate commitment to turning around performance [71]

分组1 - Avantor, Inc. reported quarterly earnings of $0.22 per share, missing the Zacks Consensus Estimate of $0.23 per share, and down from $0.26 per share a year ago, representing an earnings surprise of -4.35% [1] - The company posted revenues of $1.62 billion for the quarter ended September 2025, missing the Zacks Consensus Estimate by 1.56%, and down from $1.71 billion year-over-year [2] - Avantor has surpassed consensus EPS estimates only once over the last four quarters, indicating a trend of underperformance [2] 分组2 - The stock has lost approximately 28.4% since the beginning of the year, contrasting with the S&P 500's gain of 17.2% [3] - The current consensus EPS estimate for the coming quarter is $0.25 on revenues of $1.71 billion, and for the current fiscal year, it is $0.95 on revenues of $6.63 billion [7] - The Zacks Industry Rank for Medical Services is in the top 39% of over 250 Zacks industries, suggesting that the industry outlook can significantly impact stock performance [8]

Q3 2025 Earnings Earnings Presentation October 29, 2025 Disclaimer Forward-looking statements This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, and are subject to the safe harbor created thereby under the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact included in this presentation are forward-looking statements. Forward-looking ...

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Financial Performance - Net sales for Q3 2025 were $1,623.8 million, a decrease of 5.3% compared to Q3 2024, with a 4.7% organic sales decline [4]. - Net loss was $711.8 million, compared to a net gain of $57.8 million in Q3 2024, resulting in a diluted GAAP loss per share of $1.04 [5]. - Adjusted net income for the quarter was $151.1 million, down from $175.2 million in the prior year [5]. - For the three months ended September 30, 2025, Avantor reported a net loss of $711.8 million, representing a 43.8% decline compared to a net income of $57.8 million in the same period of 2024 [25]. - Operating loss for the three months ended September 30, 2025, was $648.8 million, compared to an operating income of $124.6 million in 2024 [25]. - Adjusted Operating Income for the three months ended September 30, 2025, was $237.3 million, with an Adjusted Operating Income Margin of 14.6%, compared to $274.8 million and 16.0% in 2024 [35]. Cash Flow and Liquidity - Operating cash flow was $207.4 million, while free cash flow was $171.7 million, indicating strong cash generation capabilities [8]. - The company reported a net cash provided by operating activities of $207.4 million for Q3 2025, compared to $244.8 million in Q3 2024 [21]. - Free cash flow for the three months ended September 30, 2025, was $171.7 million, down from $204.0 million in the same period of 2024 [29]. - Cash and cash equivalents at the end of Q3 2025 were $254.7 million, down from $310.3 million at the end of Q3 2024 [21]. Debt and Leverage - Adjusted net leverage was 3.1x as of September 30, 2025, indicating the company's financial position [8]. - The company’s gross debt as of September 30, 2025, was $3,874.2 million, resulting in an adjusted net leverage ratio of 3.1x [30]. - Debt repayments in Q3 2025 totaled $439.2 million, compared to $214.3 million in Q3 2024 [21]. Impairment and Charges - The company recorded a non-cash goodwill impairment charge of $785 million related to its Distribution reporting unit [6]. - The company experienced impairment charges of $785.0 million in Q3 2025, significantly impacting overall financial performance [22]. - The company incurred impairment charges of $785.0 million for the three months ended September 30, 2025, representing 48.3% of total operating income [35]. Sales and Segment Performance - Total net sales for the three months ended September 30, 2025, were $1,623.8 million, a decline of 5.3% from $1,714.4 million in 2024 [31]. - The Laboratory Solutions segment reported net sales of $1,096.5 million for the three months ended September 30, 2025, down 6.4% from $1,171.5 million in 2024 [34]. - The Bioscience Production segment experienced a net sales decline of 2.9% for the three months ended September 30, 2025, with sales of $527.3 million compared to $542.9 million in 2024 [34]. Shareholder Actions - The Board authorized a new $500 million share repurchase program, reflecting confidence in the company's cash generation and commitment to shareholder value [3]. Asset and Equity Changes - Total current assets increased to $2,257.2 million as of September 30, 2025, up from $2,146.6 million at the end of 2024 [20]. - Total liabilities decreased slightly to $6,105.7 million from $6,157.8 million at the end of 2024 [20]. - Stockholders' equity decreased to $5,570.2 million as of September 30, 2025, down from $5,956.7 million at the end of 2024 [20]. - Inventory levels increased to $795.5 million as of September 30, 2025, from $731.5 million at the end of 2024 [20]. Other Financial Metrics - Adjusted EBITDA for the quarter was $267.9 million, with an adjusted EBITDA margin of 16.5% [5]. - Adjusted EBITDA for Q3 2025 was $267.9 million, representing a margin of 16.5%, down from 17.6% in Q3 2024 [22]. - Adjusted EPS (non-GAAP) for the three months ended September 30, 2025, was $0.22, compared to $0.26 in the same period of 2024 [28]. - Foreign currency translation positively impacted sales by 2.2%, while M&A negatively impacted sales by 2.8% [4].