Danaher Corporation (DHR) CEO Rainer Blair Presents at Bank of America Securities Health Care Conference (Transcript)

Danaher Corporation (NYSE:DHR) Healthcare Conference Summary Company Overview - Company: Danaher Corporation - Event: Bank of America Securities Health Care Conference - Date: May 11, 2022 - CEO: Rainer Blair Key Points Financial Performance - Danaher reported a 12% core growth and 8% growth on the base business for the year - 10% EPS growth and $1.7 billion** in free cash flow were also highlighted as strong indicators of performance [3][4] Portfolio Repositioning - The company has undergone significant portfolio transformation, focusing on attractive end markets with strong secular growth drivers - **40%** of the portfolio is in biopharma or molecular diagnostics, with over **80%** in Life Sciences and Diagnostics - The company has **75% recurring revenues**, which is particularly strong in the current economic environment [6][4] Resilience During Economic Downturns - Danaher has demonstrated resilience during economic downturns, including the pandemic, with **25% core growth** in 2020 and **12% core growth** at the start of 2022 [7][4] M&A Activity - The company remains active in M&A, with a full pipeline of opportunities, although recent market volatility has led to a cautious approach - Danaher has previously taken advantage of market turbulence for acquisitions and is monitoring the situation closely [12][13] Bioprocessing Outlook - The bioprocessing business is expected to grow at **high single to low double-digit growth** for 2022, with a potential decline in COVID-related revenue of **$ 500 million to $600 million already factored into guidance [15][17] - The development pipeline for monoclonal antibodies has increased by 50% over the last five years, and cell and gene therapies have seen a 10x increase [19][20] Diagnostics Segment - Beckman Coulter Diagnostics is on track for mid-single-digit growth, with some headwinds from COVID-related hospital restrictions in China [24] - Cepheid has doubled its installed base to over 40,000 instruments, with a strong test menu and expected growth in non-COVID diagnostics [26][28] Market Dynamics - The transition to single-use technologies in bioprocessing is expected to drive growth, with Danaher holding the largest single-use technology business, growing over 20% [21] - The company views home testing as complementary to point-of-care testing, enhancing overall diagnostic responsiveness [33][34] Long-term Growth Potential - Danaher anticipates mid-single-digit plus organic revenue growth, driven by a robust portfolio and attractive end markets [36] - The company has a target EBITDA margin of 35% to 40%, with opportunities for margin expansion within the portfolio [40][42] Biotech Funding Environment - The CEO expressed confidence in the biotech funding environment, noting that the average cash runway for biotech companies is between 12 to 18 months, which supports ongoing innovation [47] Underappreciated Aspects - Danaher has grown 50% larger in revenue since 2019, with a significant shift in portfolio mix and an increase in recurring revenue from 45% in 2015 to 75% [50] Conclusion Danaher Corporation is well-positioned for continued growth, leveraging its strong portfolio in Life Sciences and Diagnostics, while navigating the challenges posed by the current economic environment and the ongoing evolution of the healthcare landscape. The company's focus on recurring revenue, M&A opportunities, and innovative technologies positions it favorably for the future.