Waters(WAT)2023-06-08 20:30Summary of Waters Corporation Conference Call Company Overview - Company: Waters Corporation (NYSE: WAT) - Event: Jefferies 2023 Global Healthcare Conference - Date: June 8, 2023 - Participants: Udit Batra (CEO), Brandon Couillard (Jefferies) Key Points Industry and Market Demand - Instrument growth rate for Waters is expected to be around 5% over the long term, driven by prescription volume and Phase III starts in the pharmaceutical sector [3][4][11] - The company emphasizes the importance of looking at long-term trends rather than short-term fluctuations, which can be misleading [3][11] - Historical fluctuations in instrument growth have been correlated with macroeconomic events, with notable declines observed during 2008-09, 2011-12, and 2019-20 [7][8][10] Factors Influencing Growth - Key drivers for growth include: 1. Increasing prescription rates and Phase III starts, particularly for novel modalities and large molecules [14] 2. Execution in instrument replacement and innovation [5][6] 3. Pricing strategies [5] - Current indicators suggest that these factors are more favorable than in the past [6][11] Regional Insights - China is projected to experience flat to low single-digit growth, with specific segments like CDMOs under pressure and pre-commercial biotech halted [49][51][52] - The academic and government sectors in China saw significant growth in Q1 but are expected to slow down in subsequent quarters [50] Recent Acquisition - Waters recently acquired Wyatt Technology, which focuses on large molecules and bioanalytical characterization [21][22] - The acquisition aims to enhance Waters' capabilities in faster-growing markets, particularly in the characterization of large molecules [22][27] Product Innovations - Waters has introduced several new products, including: - Alliance iS: A new platform aimed at reducing human errors in data submission by 40% [39][42] - Xevo TQ Absolute: The most sensitive instrument for detecting PFAS at part per quadrillion levels [43][44] - The company is focused on expanding its portfolio in bioanalytical characterization, particularly for large molecules [32][33] Future Outlook and M&A Strategy - Waters is prioritizing organic growth and successful integration of Wyatt before pursuing additional M&A opportunities [30][31] - The company remains committed to capital allocation focused on growth, innovation, and potential future share buybacks [31][33] Use of Technology - Waters is leveraging generative AI tools to enhance internal data analysis and improve customer service through predictive analytics [55][56] Conclusion - Waters Corporation is positioned for steady long-term growth driven by strong demand in the pharmaceutical sector, successful integration of recent acquisitions, and ongoing product innovation. The company is cautious about short-term fluctuations and is focused on maintaining operational excellence and strategic growth initiatives.