Thermo Fisher Scientific Inc. (TMO) CEO Marc Casper presents at 41st Annual J.P. Morgan Healthcare Conference (Transcript)

Summary of Thermo Fisher Scientific Inc. Conference Call Company Overview - Company: Thermo Fisher Scientific Inc. (NYSE:TMO) - Event: 41st Annual J.P. Morgan Healthcare Conference - Date: January 10, 2023 - CEO: Marc Casper Key Points and Arguments 1. Company Performance and Strategy - 2022 was a strong year for Thermo Fisher, with a focus on value creation for stakeholders and a sustainable long-term strategy [3][6] - The company achieved a long-term financial growth outlook of high single digits, with a 12% core growth guidance for 2022 [6][12] - The acquisition of PPD in December 2021 has been successful, contributing significantly to revenue and synergies [6][15] 2. Market Position and Growth - Thermo Fisher serves a $225 billion market with a long-term growth rate of 4% to 6%, while the company aims for 7% to 9% growth [8][9] - The pharmaceutical and biotech sector represents about 60% of revenue, with strong fundamentals and growth potential [8][12] - The company has a proven growth strategy, leveraging high-impact innovation and a disciplined capital deployment strategy [9][11] 3. Financial Performance - Over the last decade, Thermo Fisher has delivered 13% revenue growth, 17% adjusted EPS growth, and 15% free cash flow growth [12] - The company returned over$ 3 billion in share buybacks and $0.5 billion in dividends in the previous year [11] 4. ESG Commitment - ESG initiatives are integral to the company's strategy, focusing on environmental sustainability, social responsibility, and governance [13][17] - The company aims for a 50% reduction in carbon emissions by 2030 and has committed to using renewable energy sources [17] 5. Future Goals and Acquisitions - Goals for 2023 include gaining market share, executing capital deployment strategies, and integrating the Binding Site acquisition [18][19] - The Binding Site acquisition, focused on specialty diagnostics for blood cancers, is expected to contribute positively to adjusted EPS [19][41] 6. Market Dynamics and Resilience - The company has shown resilience in the face of macroeconomic challenges, including inflation and supply chain issues, due to its PPI Business system [16][10] - Strong performance in the biopharma sector has been attributed to the company's trusted partner status and effective customer relationships [22][26] 7. Regional Insights - China is expected to remain a fast-growing market despite recent COVID-related disruptions, with a positive long-term outlook [28] - European markets have shown strong performance, particularly in pharmaceutical and biotech sectors, despite geopolitical and economic challenges [29] 8. Instrument Market and Pricing Strategy - The analytical instruments market has seen robust growth, with strong order backlogs entering 2023 [30][32] - Pricing strategies are expected to normalize but remain elevated compared to historical averages due to inflationary pressures [32] 9. Diagnostics and Testing - The company anticipates$ 400 million in COVID testing revenue for 2023, with a 40% margin flow-through expected [38] 10. Integration and Future Outlook - The integration of PPD and the Binding Site is on track, with expectations for continued strong performance and synergies [15][41] - Overall, Thermo Fisher is well-positioned for continued growth and success in 2023, with a strong financial track record and market leadership [20][18] Additional Important Insights - The company emphasizes the importance of maintaining high-quality standards in manufacturing and diagnostics, especially in light of industry challenges [36] - There is a focus on expanding capabilities in real-world evidence and technology within the CRO space, indicating potential future growth areas [35]