Danaher(US:DHR)2022-10-20 15:39Financial Data and Key Metrics Changes - Danaher Corporation reported sales of $7.7 billion for Q3 2022, achieving a 10% core revenue growth, with an 8.5% core growth in the base business [14][9] - Adjusted diluted net earnings per common share increased by 7% year-over-year to $2.50 [18] - Free cash flow generated in the quarter was $1.7 billion, totaling $5.2 billion year-to-date [18] Business Line Data and Key Metrics Changes - Life Sciences segment reported revenue growth of 4% and core revenue growth of 8%, with Bioprocessing seeing over 20% growth in non-COVID business [19][20] - Diagnostics segment experienced a 9.5% increase in reported revenue and a 13.5% increase in core revenue, driven by nearly 30% core revenue growth at Cepheid [29][30] - Environmental & Applied Solutions segment reported a 5% increase in revenue and a 10.5% increase in core revenue, with water quality growing mid-teens [34] Market Data and Key Metrics Changes - North America's core revenue grew in the high teens, while Western Europe's core revenue increased in the high single digits [15] - In China, Danaher managed to achieve high single-digit growth despite ongoing COVID-19 challenges [16][88] Company Strategy and Development Direction - Danaher announced plans to separate its Environmental & Applied Solutions segment into a publicly-traded company, aiming to focus on life sciences and diagnostics [11][13] - The company is committed to innovation and aims to leverage its Danaher Business System to enhance operational efficiency and market share [10][41] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong demand across developed markets despite macroeconomic challenges [15] - For Q4 2022, Danaher expects high single-digit core revenue growth in its base business, with a potential headwind from COVID-19 testing [39] - The company anticipates a full-year core revenue growth of high single digits, up from previous expectations of mid-single digits due to strong COVID-19 testing performance [40] Other Important Information - The company experienced fewer supply chain disruptions in Q3, with improvements in logistics and material availability [17] - Approximately 75% of Danaher's revenue is recurring, indicating a resilient business model [41] Q&A Session Summary Question: Insights on Bioprocessing market and inventory - Management noted strong customer demand in Bioprocessing, with non-COVID growth exceeding 20%, while COVID-related revenues were adjusted to $800 million from $1 billion [49][46] Question: Order book growth in Bioprocessing - Orders were down over 20% in Q3, but this was contextualized by previous high growth rates and improved lead times [52][54] Question: Cost management in Cepheid - Management confirmed that capacity adjustments and cost management remain flexible to support both COVID and non-COVID testing growth [62] Question: M&A opportunities - The company maintains a broad M&A funnel, focusing on impactful investments across various health sectors [64] Question: Trends in China - High single-digit growth was reported in China, with diagnostics impacted by COVID-related shutdowns, but overall demand remains strong [88][90] Question: European market outlook - Western Europe showed high single-digit growth, with management monitoring macroeconomic conditions closely [103][104]