Earnings Call: H2 2020

Feb 24, 2021

Good day, and welcome to the BioMeru Yearly Business Review Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Frank Hedlund. Please go ahead. Thank you, Marie. Good day, everyone, and thank you for joining us to review Guillermo's performance for 2020 and our objective for 2021. Before leaving the floor to Alexandre Marieux, Chairman and CEO and Guillaume Bourse, our CFO, I will just make a very short introduction to provide you a couple of information. First of all, our press release will be published this morning at 7 a. M. This press release can be found on the homepage of our website. In addition, please note that the slides of this meeting will be available on the homepage of our website and can be downloaded directly from the webcast. From here after the call, the webcast and the call will be available in replay on our website. Now going to the presentation contents, after reviewing our 2020 performance and 2021 objectives, we will hold a Q and A session. Questions can come from the conference call and from the chat of the webcast. If you wish to ask a question, please make sure to identify yourself, name and company. A very last word before starting the presentation. I will not read the slide which is currently projected, but I recommend you to take note of its contents. But remind the usual disclaimer about the forward looking statements. I now hand the call over to Alexandre Merieux. Thank you, Frank. Thank you everyone for joining this webcast on our 2020 results and the outlook for 2021. So as you all know, 2020 has been a special year for all of us around the world and it has also been a special year for BioMarriott as a dedicated company to clinical diagnostic of infectious disease. We have been able to play a key role in the fight against COVID-nineteen, thanks to the portfolio of our solutions that we developed and also thanks to the engagement of our teams. So you can see, I believe, on the slide the performance of BioMarion in 2020, which has been remarkable. First looking maybe at the sales growth, we grew nearly by 20% organically. We are now a €3,000,000,000 company, more than that, €3,180,000,000 revenue for 2020. Our profitability has increased also. We are in 2020 at 19.6% of our contributive EBITDA versus 14 point 5% in 2019. You see also that this year was a good year in terms of cash generation and we have a free cash flow of €328,000,000 and we are a debt free company. So you see the growth this year. It has been contrasted, but I would say that the surge of molecular and biopharma was the key growth driver for us, BioFire being the key solution. And we see that the other ranges have been impacted like for other clinical IVD companies, mainly in Q2, and linked also to the slowdown of traffic in the hospitals, but we see some signals of recovery. So moving now to what happened in 2019. As you know, we have started early the early days of the crisis to really put the focus on the development of our COVID-nineteen test solution on our range. It has proven to be well adapted. So we were able first to have the extraction. We were able then to develop on the Argin range monoplex testing and now low plex testing. And of course, with the FINRA with the APPLE 2.1, we have been able to add COVID to the respiratory panel that was already existing and there's been a booster of growth. Also using the Vidas range, we have been able to develop 2 surgical tests, IgG and IGM on the Vidas platform. So we have been able to develop a comprehensive portfolio of solution using also the wide range of technology available in BioMario. Looking now at the specific ranges, as I said, BioPhyr has proven to be a key diagnostic solution in the fight against COVID with an impressive growth of around 80%. We're expecting that the installed base in terms of units has really increased now from around 10000 to now 1700,300 units worldwide. It's a major achievement. Of course, the key fact of the year has been the launch of IP2.1. We have also launched a solution called DC ID2 for blood culture identification. The pipeline is still very active and we should launch in 2021 the BioFire joint Infection Panel and also we'll upgrade the Premier Panel adding COVID-nineteen test in the panel. So the basis for us to grow is around the evolution of the biofuel instruments, the large installed base, which could be in the future an important potential for us. And also we keep on even if we had a nice growth in the U. S, we keep on growing internationally with now having sales outside of the U. S. For BioFire, representing 23% of the total revenue of BioFire. We have also a way to satisfy the demand, has been to work to increase the manufacturing capacity of BioFire, which is being produced in Salt Lake. And as you see now, we have been able this year, we were around 750 1,000 capacity production of kits per month. And we are able we should be able this year to be able to produce around 1,200,000 kits per month in our Fort Lake sites, knowing that we have invested in a new manufacturing building. We are making progress on the automation project that we have. And also we put the organization around 20 fourseven. Now looking at the other ranges, as we said, there were some impact this year because everything was at least at the hospital or the lab. A lot of focus was on COVID-nineteen and not so much on the other pathologies. But then again, so you see clinical macro at minus 5% and immunosat minus 7%. But what I told you and what we told you that there is signals of recovery in Q4 or in Q3 and Q4 on these ranges on the culture for microbiology and also on the immunoassay. We are recovering and we get for this also, we start to have an impact from the Surgi test SARS COVID that we developed on Vydas. Pipeline for 2021 also should be fueled by first on evolution, our mass spectrometry stem that we are working on. And also in the field of immunoassay, we have already launched NephroCheck, which is for acute skin injury every time acute skin injury. We're about to launch our solution for tuberculosis, TB IGRA and VITAS and also dengue. And we're also preparing launches of chikungunya test and also traumatic brain injury test for 2022. So now talking about the industry business. So the performance of industry was at 2% in 2020. Different type of growth depending we address 2 market segments, one is Healthcare, the other one is Food. On the Healthcare side, we had a good momentum, I showed quite good strong resilience, in line, I would say, with the pharmaceutical industry in 2020. Measure also on the fact that we serve the food service business, which has been impacted a longer year. But I would say that we still have solid fundamentals, a good recovery in Q4 on this industry business and the single demand should be important for this year. And we're seeing also that in the Healthcare business, Biomerieux is positioned to do the quality control of stability. And with the surge in the vaccine production, we should be part of the payer who are able to test for this increase of production in the vaccine world. So with this being said as introduction, I will now give the floor to Guillaume Beurre, who will introduce the financial results. Thank you, Alexandre. Hello, everyone. Let's start by reviewing our organic growth of 19.7% by application and this exceptional performance in 2020. So for the first time, Molecular is actually our first range of product, representing almost 40% of group sales. This plus 84% organic for Molecular is made of 79% organic growth for Biofryer, as Alexandre mentioned, and more than doubling actually for the other molecular ranges in this part. Microbiology at minus 5%, as Alexandre already commented. We have, let's say, a clear recovery for blood structure in the last quarter of the year, a bit softer recovery for the ID, AST at this stage. Even though I say minus 7%, but again with a really good trend of recovery in Q3 and even stronger in Q4, almost stable actually versus 2019 in Q4. And finally, industry at plus 2%, which includes the food segments being stable in the year and health care really solid resilient growth at plus 5%. Just to be noted in the others, you have this great part of BioFire Defense with a single plex, which was a significant growth this year. By geography now, of course, a momentum that reflects the exposure and in molecular in the different regions. So super strong in Americas, North America up 40% Latin America, excellent performance as well, plus 21%, and obviously, our region and first country with the U. S. EMEA, a bit more contrasted at the plus 8% of overall, strong performance in France, in Northern Europe, in Spain, in Italy, a slowdown in Middle East and Africa, which are usual growth driver. But this year in 2020, we're more impacted as they are more on routine parameters. And in Asia Pacific, overall, plus 1% organic growth, so much lower than the past years, very contrasted as well. China is very slightly negative. We have an exceptional performance in Japan, where I remind you that we entered with Filmorhea at the end of 2019, which will be a good timing, super performance and breakthrough in 2020. Good performances as well in Australia and India that we can mention here. Now moving to the overall view of 2020 sales. So major FX impact, especially accelerated in Q4. Of course, the U. S. Dollar at 1 was 1.19 actually versus euro in Q4 is having a significant impact on revenues. But we'll come back to FX sensitivity in a few minutes. And we can now turn to the P and L, profit and loss. So beyond the sales growth of 19.7%, I would like to highlight the gross margin improvement from 54.8 percent in 2019 to 56.2 percent in 2020, so a significant improvement. That's linked to the positive product mix as we often highlighted BioFire FilmArray as let's say above average margins and of course, it was growing above average this year. And also volume effect on the part of fixed costs that are above gross profit. SG and A grew 7.5% overall at a constant rate. That includes, I would say, a lot of exceptional positives and exceptional negatives. What I mean that we had exceptional savings this year on travel, on Congress and advertising due to again the situation. But we also had in these lines exceptional cost with a strong sales performance. We had additional sales bonus, additional profit sharing and viable compensation. And I would say all these are close to offset each other, the exceptional plus and exceptional minus in this line. Moving to R and D, 8% increase. We end the year at 12.8% of R and D over sales, which is below slightly below our usual percentage, but of course, into the volume. We accelerated our COVID developments this year. We also maintained our efforts and our investments in other programs as the launches and the pipeline that Alexandre mentioned highlight. So overall, a contributive EBIT of €613,000,000 a like for like increase, very impressive, of 66%, reflecting the strong operational leverage on the additional sales. We can look on the next slide at, let's say, a few elements of bridge on the contributive operating income. We highlighted here the COVID impact. So the COVID impact on operating income is estimated, of course, it's an estimate of €170,000,000 That's a result of a net additional revenues net that we estimate of at around 320 €1,000,000 And all the elements that I mentioned earlier of exceptional savings to our whole Congress and exceptional additional costs, especially profit sharing and variable comp. So all this ends into 174 €1,000,000 Apart from that, operational improvement of more than €100,000,000 EBIT. Some small, let's say, differences versus last year on the U. S. Pension settlement, where we had the freeze of the U. S. Pension in 2019 for plus €11,000,000 and the termination of these plans in 2020 for minus €4,000,000 And our famous, let's say, Quantum Shares plans, which you remember are bonus in the U. S. For U. S. Teams linked to the share price of BioMarieu that actually were an expense of €44,000,000 in 2020 and that's €9,000,000 more than the 2019 expense on this PhantomShares piece up. Last comment on this slide, €30,000,000 FX effect on the EBIT, which again reflects our exposure. I remind everyone, we are very much with expenses in euro and dollars and exporting worldwide in other currencies. Now looking at the P and L, below operating income, we have, as usual, the, let's say, amortization of BioFire acquisition price, stable, EUR 18,000,000 per year. The second line is, I would say, new element. This minus €42,000,000 reflects non current elements for the exceptional solidarity actions decided by BioMarriott with €42,000,000 of, let's say, philanthropy expenses, €22,000,000 that we announced in H1, where we added also €20,000,000 for a new corporate endowment fund, say fund the dotation of Baillieu Marieux. The initial, let's say, rotation was €20,000,000 in 2020 and the spend will be over 3 years for this philanthropy part. Net financial expense at €29,000,000 compared to €23,000,000 last year and income tax of 23%. I will come back to that in a minute, effective tax rate. So overall, net income group share, euros 404 €1,000,000 up 48%. And on this basis, the Board decided to propose a dividend of $0.62 per share, meaning a payout ratio of 18% of this net income for the dividend to shareholders. A quick snapshot on the tax rate. So that's the tax proof starting from the French tax rate of 32% in 2020. As usual, we have our country mix and tax credits. We would have a recurring effective tax rate of 22.2%. We have a few non recurring items that overall are negative on the tax rate and increase it to 23%. Among these non recurring items, we can mention the philanthropy actions, solidarity actions, where we actually are above the deductibility threshold for that kind of expenses in France. Coming to the cash flow statement. Now a very strong increase of EBITDA, in line with the income, as mentioned earlier. Working capital consumption was 86 €1,000,000 negative in 2020, with an increase of inventory of €83,000,000 especially linked to the very strong ramp up of activity in molecular, of course. Payables plus €5,000,000 and we accelerated to support our suppliers on these payments. Receivables, very stable in terms of days. And last element there, social debt that actually reflects an increase that reflects the higher profit sharing and variable compensation linked to this, let's say, exceptional financial performance. CapEx ended the year at 9% of sales, but still strong level of investments, especially in our manufacturing capacity for Molecular in Salt Lake, but not only. And overall, as Alexandre explained, a very strong free cash flow of €328,000,000 compared to €150,000,000 last year that is now leading our net debt overall at €92,000,000 which includes €97,000,000 for IFRS 16. Therefore, we mentioned that our net financial debt is actually debt free. A small point about the exposure to foreign currencies, especially important in this environment. So we wanted to update you on this. So on this table, you have in the first column now exposure based on 2020 on the revenues. Of course, a very strong U. S. Dollar sales exposure on dollar is, of course, offset by our strong cost base in the U. S. And therefore, it's a lower exposure on operating profit, always important to keep in mind. So you see the different levels. And actually, when we look at the current rates and these exposures for 2021, you will see that we have an impact of EUR30 to €35,000,000 at the current visibility on rate included in our EBIT guidance for this year 2021. And with this, I hand over back to Alexandre Mon. Thank you, Guillaume. I propose now I was able to talk with you a bit about our CSR ambition for Bioenergy because we have always done CSR, but I would say that we have formalized a new CSR ambition for BioMarriott supporting our long term vision, but also, I would say, very much included into our road map. So this ambition relies on 5 pillars that you see: health, planet, health care ecosystem, employees and extended company. So I won't spend giving too much details, just to give you a few KPIs. When we talk about health, it's of course about the public health mission of BioMarion to keep on as we do since the beginning of the company to lead the fight against infectious disease through innovation with the spec committee that said to investment in R and D and also be delivered in the fight against AMR, which is anti microbial resistance. Of course, today it's not about COVID, but we believe that short, mid, long term AMR is a key public health threat also in terms of infectious disease. Planet, we have also adopted some targets to reduce the greenhouse gas emissions. And another topic, which is important and will be important is also our commitment to do eco design for our system and work more, I would say, on the product life cycle optimization of our solution. Healthcare Ecosystem, it's the way how we interact ethically with key stakeholders such as patients, community and make sure that the different stakeholders are integrated into our consulting governance. Employees, key assets of BioMarriott. We also have a few objective. We say one of them is around the 50 of our employees and to make sure we can reduce by half the incident rate that we see on our sites so keeping progressing on this front even if we have made a lot of progress recently. Working also on the diversity and inclusion at all levels of the company, including diversity in terms of more position of women in corporate leadership team and also more position of international teams in our leadership teams also with some key KPIs to start with for 2025. Extended company, it's a bit how we interact also with our ecosystem and partners. One key topic will be around to increase the proximity we have with the suppliers, proximity both from a geographical standpoint, but also how we build partnership with our suppliers. And also, I was introduced by Guillaume Filanthropy, which is quite much into the BMA of the group. We have announced in addition of what we do in terms of supporting initiatives all over the world, we have announced the creation of an endowment fund for €20,000,000 Those as you know, we are living in a sanitary crisis, but it will have it's starting to have social and economical consequences. So we felt with Biomerie's leadership team and with the Board that creating this fund will be there to support solidarity initiatives outside of field of health and supporting topics such as education, training, NGOs also and to do it also on a worldwide basis, making sure that the 45 subsidiaries where BioMario is present, our teams will be able to support and follow interesting initiatives in the field of territorial solidarity. With this being said, I can now move to the outlook for 2021. So as you know, as you see, it's quite of an uncertain world right now linked to the evolution of the pandemic and also the positive impact of vaccines. But I would say in this environment where diagnostic is key. We project, we estimate that the growth of the company in terms of revenue should be between 5% to 8% in terms of organic growth. We have strong signals early this year, so we believe that the first half growth should be quite strong, maybe in line with the Q4 trend that we displayed. Regarding the financial performance of the company and the cumulative operating income, we target estimates to be aligned with the 2020 performance, Having in mind, negative FX impact of €30,000,000 to €35,000,000 will do also a nice share plan. I keep on having our employees being shareholders of the company. And we should see the end of the PSOP front of share by the end of April. Tax rate, we estimate to be around 23%. There is maybe some uncertainty on the U. S. Tax rate, what will happen. This is our estimate. And CapEx around 10%. I will keep on investing in capacity, production, R and D and everything, which we need to do to serve the market. So maybe with this being said, so 2020 was a special year. As I said, lots of engagements from Biomirio, lots of recognition, also the value of diagnostic. I believe the company and our people are engaged more and more than ever, feeling very, very useful. I believe also that having a comprehensive set of technologies and solution, it's microbiology, it's microbiology, it's immunoassay, it's service, it's data, it's a key strength and we continue to be at the forefront of fight against infectious disease. Of course, COVID is here. COVID is here also to stay, which will be part of for the long term of our of our respiratory panel and our portfolio of solution. But infectious disease go beyond and also many important topics that I mentioned, such as antimicrobial resistance, sepsis management, quality control for the food and pharma industry, which are key topics linked to infectious disease that we are addressing. So we are on the right topics. We are doing, I believe, the right investment with a long term view. And also linked to the good result that we had this year, we have a solid financial structure that allows us to support growth and investments to continue to develop the company in the right way. With this being said, I propose that we open the floor to the Q and A. Thank you. We can now take our first question from Alex Gibson of Morgan Stanley. Please go ahead. Great, thanks. Good afternoon. Thanks for taking my questions. I have 3. The first one is just on your guidance around the first half growth being on trend with Q4 2020. Can you provide some context around this, if this means you expect 20% growth in the first half? And if that's the case, how much is coming from BioFire where the comps start to get difficult? Second question is on the EBIT contribution from COVID. Thank you for providing the $174,000,000 contribution in 2020. How much of that are you incorporating into your EBIT guidance for 2021? And then my last question is just looking towards the end of 2021 and into 2022, balancing the slowdown probably that's going to happen in with the ramp up of utilization of bio fire placements. Do you actually see the molecular business growing in 2022? Or is it going to be a decline? Thank you. Thank you. I will answer some of your question and then Guillaume will do back and forth. 2022, it's very difficult to predict 2021 because a lot of things will depend on the pandemic if it continues or if it slows down. What I can tell you, maybe your question is into H2, so that today we still have a strong demand signal for testing for COVID. And we believe it will still be a key contributing factor for Q1 and H1. It's a projection we do. S2, I believe, we will see if we all expect COVID to go down. We all want COVID to go down. If it's the case, maybe it could have an impact. But as you know, BioFire, now we have a very strong installed base of 17,000 instruments. With FINRAIR, we don't do only respiratory. We do GI, we do meningitis, we do BCID, we'll do bone interinfections. So it's also a base to grow for the future by adding the new panels that we have in either already developed or that we have in development. And another maybe something which may be difficult to quantify at this stage, but less COVID will also mean for us a better, stronger recovery of the business such as microbiology, immunoSA and industry. So I'm sorry to say we'll see, but I will say that the first thing is the one we have today. The good thing to see that Filmer has grown, so it's a good base for growth for the future. And the recovery of the non COVID business also should impact positively the growth of Biomerie. I don't know if I answered all your questions or Guillaume if you want to add. So maybe on guidance H1 to I think your question was how close it is to the Q4. Again, we said similar to Q4 trend. So indeed, yes, we mean the percentage of growth to be precise. It doesn't mean exactly 20%, of course. It can be slightly below or maybe slightly above, difficult to know at this stage, but around this figure. And EBIT contribution for of COVID, I think your question was on what's to be, let's say, kept for 2021. So again, on sales, as you understand rightly, we are really looking at the current trends that we see. And again, as I just explained for H1 and I can explain the lack of visibility for H2. On the cost side, we I would say, as I explained the exceptional savings and the exceptional cost, we expect most of these to, let's say, not be recurring. Again, the exceptional variable compensation, exceptional profit sharing, exceptional, all these parts on additional costs should disappear. Not everything, for example, freight costs were much higher since March April. And of course, we have in our guidance still higher than normal, let's say, freight costs. And on the other side, the savings, a big part of the savings will disappear. But again, some will stay, for example, travel, obviously. Like today and like everyone, we have a lot of travel reduction. We've seen in H1, for sure, we'll see later in the year. Okay. That's Sorry? And all that I just said is factored in. Yes. Okay. That's great. Can I just get one clarification on the 174 then is, do you think that level could be sustained so you could see a 174 net impact again in 2021? It's not as if you're baking in that amount reducing? Again, I have difficulties to look at it this way because the revenues part, which is of course the biggest part of this $174,000,000 is part. I don't think we analyzed it this way. Again, in 2020, it was exceptional plus and some exceptional negative from Q2 and then to the next quarter. This year, we know that the start of the year is still on the same trend and we don't really know for H2. So difficult to measure in this way. That's why I tried to give you more insights on the cost side. Yes. Thank you. I'll get back in the queue. We can now take our next question from Kathryn Tennyson of Bank of America. Please go ahead. Hi, thanks for taking my questions. I have 3, if I may. I guess we're already starting to see testing numbers in the U. S. Start to drop off. So for you personally, how are you seeing the demand as you progress through Q1 and into Q2 in that region? And if we look at the full year guidance and we assume a relatively close run rate to Q4, we're looking at a negative 5% organic growth outlook for H2. Could you just give me an idea of the components of that? So what are your assumptions for H2 2021 for base business growth or recovery and also COVID testing volumes? And then finally on Q4, specifically your 1400 BioFire placements, Can you give us an update on the geographical mix of those? And also what portion of those were just adding capacity into existing accounts as opposed to making headwinds into sort of greenfield sites? Thanks. Thanks very much. Maybe I'll start with the 3rd question. So on the installed base, happy to share The increase of almost 7,000 during the year was, let's say, roughly half on existing customers and half on new customers on the number of units that were additionally installed. The split of additions is about 2 third U. S. And 1 third outside of the U. S. In Q4, which is quite similar to what we had throughout the year. Yes, so I think that answers your question on geography and type of customers. In terms of trends for H2, again, that's really difficult to say and to share. We I think the key message on our side is that we lack visibility. It's super uncertain for us for H2. Yes, so we I don't think we have a stronger assumptions to share in detail for H2. U. S. Testing, again, we don't give in this quarter the figure over the last few weeks. What we can tell you is, as we said, we see the trends that are overall quite similar to Q4 with both still a strong demand on molecular and recovery on some of the ranges that we mentioned had a good recovery in immunoassays, a big part of the microbiology in Q4. That's really helpful. Thanks. And we can now take our next question couple from my side. First on longer term competitive environment in immunoassays, 2 large competitors have announced that they are about or will launch low to mid throughput automated platforms. What are your expectations around pricing in this context? And second, on the contribution of serology COVID testing to the recovery of immunoassay, What does it mean for the base business and its trend? And lastly, with the 0.1x net debt to EBITDA ratio, should we think about reinvestments for BioMarriott's future growth? Is that more M and A, R and D? And on R and D, can you please share some of the progresses that you've made recently and give more details on the timing of launch for the TB test in Europe and in the U. S? Thank you. Immunotherapy. There's been a global trend in the IVD world. Vydas, we keep our strategy is to have a mix of strategy for developing countries and for mature countries. The push for high medical value markers is such easy that we have. And we mentioned that we just launched a nephrot check for acute knee injury. To your last question, we should launch sorry, soon this year, TB Agra in Europe. So we keep there will be competition, but we still believe that Vyadax is a platform which is well suited for high medical value markers. I believe you had another question. I cannot read myself, in fact, sorry, the debt level. On the debt level, no, yes, we'll use this money to keep on, I would say, investing in our pipeline. And in terms of M and A, it's sure that the things might happen. I would stay open to new technologies, which have the potential impact to either reduce time to result or be disruptive on the field of the field that we address, is there respiratory ASP or food and pharma type of quality control business. You had a question also on the serology and how it will work with vaccines, I guess, was the question, not at all? Now the contribution of serology COVID testing to the recovery of immunoassays that we've seen in Q4 and always the base business ex COVID trending? No, it helps to recover. I would have not shown we give the figures on serology, it helped also to recover on Q3 and Q4. It's not super clear yet how much serology will be used in line with the vaccination campaigns, which are happening. But we saw demand. On the double immunoSA, yes, we saw the demand being back in some countries, in some parts of the world, we were completely down. And to your question, it's not so much serology versus base. It's really more, as I explained, high medical value markers in our menu for immunoassay versus more routine markers. And whereas the routine was really severely impacted, again with lower hospital number of patients everywhere in the world. The high medical value markers performed well and recovered strongly at the end of the year. It's serology, but it's also PCT, it's parameters like D dimer that are used in the care for COVID patients, etcetera. So that's really the big difference in the 2020 trend. And we can now take our next question from Maya Pataki of Kepler. Please go ahead. Yes. Good afternoon. Two questions from my side. First on R and D spend, we've seen it go down as a percentage of revenues, obviously, since you've seen this strong growth in 2020. Now since we're expecting to see growth going forward, how shall we think about R and D that it's going to go back towards the levels we had before or that it will stay around the 13% going forward? And the question to that would really be that, could you tell us what are the key areas for your R and D projects, particularly if you expect to spend more again? And then the second question, with regards to the new customers that you've I'm sorry, that you've placed the BioFire instruments in 2020, Have you already started to talk to those customers about additional panels? Or is it still far too early because hospitals are just too busy with COVID-nineteen? Thank you. We have been very busy with COVID-nineteen, but we know we will keep year, but it was not, I would say, maybe adequately promoted because of the COVID pandemic. So we communicate around the pipeline. On the 2, on R and D, yes, it's for us, yes, this year it's because the sales increase very much and we increase R and D but not to the same level. In fact, it will depend a bit on the project. We'll stay we'll keep the company focusing on innovation. That's really the nature of the game in our space. But what we can communicate today, it's more around the menu, menu enrichment on all of our key platforms. And when we'll be closer to launching new platforms, there will be time to discuss. But at this stage, we may invest the menu improvement evolution of our systems. Perfect. Thank you. Just a follow-up question on that. Alexander, can you remind me please what the split was of the consumable sales in BioFire in 2019 when it comes to respiratory, GI, pneumonia? Just to have a feeling of what the mix would look like going into 2020? What we have said is in 2019, RT was above half of the reagent sales. And actually in 2020, it was more 3 quarters of the reagent sales. And thank you. But the remaining 45% or whatever it was, 40%, can you tell us what the split was for those just roughly? It was number 2 GI, number 3 pneumonia? Yes, number 2 GI. Number 2 GI and And we can now take our next question from Scott Bernal, Berenberg. Please go ahead. Yes. Thanks very much for taking my question. And the first question, just a clarification on guidance fees. Apologies, I joined the call a little bit late. So I just wanted to make sure I had in my mind your statements on EBIT development or expectation for 2021. First of all, appreciate you giving guidance in uncertain times. Am I to understand correctly that this similar levels of contributive EBIT around €613,000,000 or so, your statements are that we should deduct currency of around €30,000,000 €35,000,000 and also net off around €10,000,000 from share based compensation. So basically, the guidance is implicit at £570,000,000 Did I get that correct? If you could please clarify, I would be much appreciated. The second question to the Alexandre, please. Alexandre, I mean, obviously, a tremendous year for BioFire with and BioMerie with respect to placements and expanding the customer base. We have noted a similar very strong dynamic for other alternative technologies like low plex systems where some of the placement numbers have been even more impressive over the course of 2020. In your opinion, is there any friction or any competition that you're now starting to see in multi analyte testing? Of course, this was an environment where Bimeria is and was particularly strong, but now seems that other alternatives are in the market. I just wonder if you could share some thoughts there. And last question for me, please. Alexander, I appreciate again lots of moving parts here. But is it possible to help outline a little bit the BioMarriott story post COVID? We've been in a situation where the companies have very good growth and some modest but successive margin improvement. We're now sort of entering this year with a very high margin and maybe some abnormal revenues for COVID. So I just wonder if you could help us outline what the mid term story looks like for BioMarriott, both from a sort of growth and a margin perspective. That would be very helpful. Thank you. Okay. Question around syndromic and the competition, I guess, the doubleplex. If I look at syndromic, I really try not to be a regular arrogance, but I really believe that we led the race this year on the SYNDROIX approach. Of course, all the players grew, but it's now it's a €1,000,000,000 business SYNDROIX, of course, COVID has helped a lot. But I really believe that thanks to the menu, thanks to the international network, we have really pushed our advantage on the syndromic front. LUPELIX is there also, as you mentioned. And also we have a LUPELIX solution with Argina with a smaller RAG. It's also there. I believe there will be room for different type of testing approaches depending on the setting and depending on the criticality of care for the patient. It depends if you are at the hospital or if you are ambulatory. So I believe there will be room for the syndrome and also for the low plex approach. Today, our objective, our goal is to be to reinforce our leadership in syndromes. But there is room for others and COVID has proven that there was room for LOPLEX, for antigenic, for any type of solution. The space has changed. The IVD space has changed and many trends have pushed further. Your question around the long term profitability of BioMarion, it's true that COVID has been a booster of growth, of performance for us. I believe that we will stay to commitment that I took a few years ago to keep on working on a steady improvement of the performance of the company and to have a profitable growth. So this is what we will work on. In a post COVID world, if there is a post COVID world, we will update you on this, but we are committed to steadily improve the performance of the company. And I guess I forgot another question, which was part of BioMarriott story beyond COVID. But first, I believe COVID is here to stay. So COVID, not as a pandemic, hopefully. But COVID will be there in the menu of BioMarriott, both in immunoSA, in BioPhire and with Argin. I believe that the fight against infectious disease and the recognition of diagnostic has been great this year. Diagnostic is really part of the continuum of care. There is prevention, there is diagnostic, there is treatment. So I believe we are part of the solution. It was a strong recognition of the value we bring. So it will be up to us, up to the competitors also to become working on this recognition, bringing innovation and infectious disease or threat, again, it goes beyond COVID AMR, the link with zoonotic disease. I think we have to stay we have to learn from what happened and to be ready for other challenges, hopefully, not this critical. And back to your questions about more specifically the EBIT guidance for 2021. So to be precise, the guidance is to be aligned at current rate. So let's say around €600,000,000 at current rate. So when I say current, I mean that the negative €30,000,000 €35,000,000 of ForEx as well as the my share of plan are all included in this figure. Correct. Okay. Thank you. Thanks for the clarification. And maybe just the last very minor point, if I may. Again, the placement rates for Bofive have been phenomenal throughout the course of the year. It was a little bit surprising to me in Q4, given the escalation of this crisis and the very high levels of testing that your placement rates were the lowest of the year in the 4th quarter. Is there any reason for that? Was it capacity issue that you had? Or was there anything particularly else underpinning why your placement rates for modules were lower than in Q1 at the beginning of the year? Yes. One of the big reasons is that actually we have not discussed on this call yet, but we are still on back order on reagents despite our very strong increase of capacity as we explained and as we showed. We are still on a significant few weeks of back order on the regions. And that's a reason for us also to self limit the delivery of new instruments. So that then, of course, customers with instruments, we are able to provide them with reagents. Very clear. Thanks very much indeed. And we can now take our next question from Peter Welford of Jefferies. Please go ahead. Hi. Thanks for taking my questions. So I've got a few. I'll stick with BioFire, if you don't mind, please. Firstly, thanks for giving the breakdown of the placement stream, new and existing and the geographical. That's very helpful. Can we just understand a little bit more about the customers, if possible, in the sense that particularly in the U. S, what proportion of these customers is typically a hospital sort of emergency department versus on the other hand, perhaps a hospital lab or alternatively a physician office or that sort of environment. I guess you're just trying to sort of help us understand where you are within this typical COVID testing landscape. And then just a clarity as well on the ex U. S, I think you said 23%. Is that 23% was that the 4th quarter sales? Or was that of the 2020 sales overall with 23% ex U. S? And then just finally on again the ex U. S, I just wondered if you could talk a little bit about which countries you've managed to gain traction in so far, which countries are proving more challenging. I guess, just trying to understand, is it are there certain countries that represent the majority of that and there's still other countries that are largely untapped? Or is it more that it's a sort of steady growth across many of the developed world countries? Just trying to help us understand the dynamics there. Thank you. Okay. I think that the ex U. S. Numbers were on the year, on the 2020, 23% is for the full year. Traction around Filmorhea, it's a bit global also, but as stated by Guillaume, we also had to do choices sometimes between who we serve and who we don't serve. So we, of course, served our customers and we gained other customers. In terms of traction, there was a good traction in the U. S, of course, in Europe, I would say, also. Japan, mentioned by Guillaume, was we got the reimbursement and the deapproval or RP early on last year. So this is good success for us to be in the Japanese market. We are not in China yet. We are still not registered in China with Finuran. This is also why you saw that maybe in Asia Pacific, we had less exposure to Molecular and to Biopharma. And this is maybe where this is the region which contributed less, maybe except from Japan to the growth of Filmora. Your question around the split of customers in the U. S, I'm not sure we give it. I mean, to be frank, Filmorhea is used in many, many settings, hospitals, of course, but also a big lab change. So I'm not sure there is a big difference. I think in especially in COVID times, I think everybody needed a testing solution and Filmora was part of it. But I would say, again, it's a leveraging platform which can fit many needs. Thank you. And we can now take our next question from Christophe Gannett of ODDO. Please go ahead. Clear and clarified on the exceptional costs, can you just summarize the amounts of what you would consider that are the are exceptional costs, so non recurring for 2021 and exceptional savings on the other side? So that's first. Secondly, can you talk a little about the price projections you have for 2021? That'll be for the COVID family of tests. And third is about immunology. Is it possible to share the percentage of the routine test now on the 2020 figures, plus the perception you have of the rate of penetration of serological tests and Nathalie, on which market do you think there is a high potential for those tests? Thanks. I'll start with that. So actually, yes, so your question is about, let's say, what makes the exceptional COVID impact EUR 174,000,000 in terms of EUR1,000,000 of operating income impact in terms of savings and cost. To give you a bit more color, let's say, the savings and here we talk about travel, about Congress, marketing costs, is overall about magnitude of €60,000,000 and the additional cost, we have about €90,000,000 of additional costs, including the phantom shares part, so that's a big part. Phantom shares, variable compensation, sales bonus, etcetera. And another about roughly €30,000,000 of operational costs, one of which is, as I mentioned earlier, the freight costs, the transport costs of our products, which are much higher let's say, since COVID. As you know, airfreight is much more expensive specifically. So that's I think that gives you a bit more, let's say, color and precision. Price projections for 2021? No major difference actually. There's no basically stability of ASP and the prices. And I think your third question was on routine. On immuno, basically, roughly a third of our revenues is routine and about 2 third is high medical value in the broad sense. Again, it's about serology, Proximity, D dimer, etcetera. That kind of parameter. And routine was impacted. And routine was impacted. And routine was impacted whereas as I mentioned earlier, high medical value was especially well recovering in H2. And regarding the ramp up of the serological tests, which country should be concerned? It has been launched. Maybe the ramp up was maybe to find out the strategy that could be maybe it's more Europe, I believe, in the first days, because we have a strong base. Thanks. And we can now take our next question from Alex Gibson of Morgan Stanley. Please go ahead. Great. Thanks for taking the follow-up. I just had 3 healthy quick ones. On the placement of Biopharma Systems in 2021, what are you budgeting for here? And will you place systems with customers that just want to use it for COVID? Or do you now want to focus more on the customers that may want to use the broader menu? 2nd question on the panel capacity. You said you're moving to I think it's €1,200,000 per month. Will you have any plans to increase that further in 2021 if you see conversion rates improve? And then lastly, bigger picture longer term, the BioPharm multiplex reimbursement across Europe, it still seems to be pretty limited. Can you give us an update on when you expect to gain reimbursement codes for syndromic testing in European countries? And what that could mean in terms of accelerating growth and placements, utilizations of your systems? Thanks. Maybe the production, the 1,200,000 portion that we gave you are the target for the monthly target for production, average target for 2021. So these are the figures we communicate on. Of course, depending on the demand, I will adapt, but it's already a big work being done by the teams to increase the capacity. And it's capacity. It doesn't mean sales. Again, as I explained earlier, we are on back order at this stage. We expect and it's really we need to be out of back order so that we can deliver customers as they request. And potentially, we would expect to rebuild our inventory levels, which would be normal by the end of the year, especially for the next winter season. So again, it's capacity level, manufacturing capacity, it doesn't mean exactly sales. And your question on sales of funeral this year, we'll answer to the demand. COVID is COVID, but for us FIMURA rate, it's a new player. It's a large panel. I mentioned again respiratory, gastrointestinal, meningitis, BCID II, pneumonia, bone joint infection. So it's a menu player. We are it will depend on circumstances. It's a big push for COVID, but this platform is meant for syndromine testing of different type of pathologies. I forgot reimbursement in Europe. There are no major change on the reimbursement in Europe. But again, we are yes, we don't foresee major changes. We are able to do a business with it doesn't mean there is no reinvestment. It means that, of course, we are part of DRD, Diagnostics Related DRG, Diagnostics Related Group for inpatients and it's for the hospital to see how they allocate their resources and their spend for treatment and diagnostics. So that's the way we handle the business in Europe. And again, it really proved the success pool in 2020. Yes. Okay. It just seems that last point could be very helpful because speaking to some people, it seems like Filmer Ray is a cost minus type of reimbursement today. And if you could get a code, maybe it could be a cost plus and you would see better adoption than you currently are. I'm just trying to understand like is reimbursement changes likely to occur over the next 1 to 2 years in Europe? Or is there something that's just not going to be pushed through? We are promoting the value of FINURE. The value is, of course, the medical value, but also it's a benefit for the health care system. So reducing the length of stay for the patients. So that's the approach that we are developing. Then after things are moving faster in some countries than others, and it will be our job also to promote this value, but sometimes things are moving slower in some parts of Europe. Okay. Thank you. And we can now take our next question. Apologies, go ahead. I have some questions on the web chat, if you let me go through them. Okay. So we have a question from Louise Boillier, Societe Generale. No, Cytelle. She's asking for the G and A evolution. Shall we consider the 2 70 basis points improvement over the year as sustainable? Again, the percentage of sales on the SG and A, of course, is very much driven by the volume as we wrote and explained. What I think you need more to consider is that we will continue to especially invest in our sales and marketing, try to maintain, of course, G and A at a reasonable level, even though we invest also in transformation programs of the company, especially on the digital front and that's part of G and A. And in the basis of 2020, again, there are a lot of exceptional cost and exceptional savings that kind of offset each other. So we can expect, let's say, to rebuild on this basis for the coming year. Another one from Luis as well. So how much of the new 70,000 units of Gulf of France has been placed sold. So I think we answered already to this question. But what protection do you have against the blocking reagents volume on plate units? That kind of contract do you have? So the percentage is 75% sold and the rest more placements for the BioFire part, the new ones in 2020. In terms of protection, we don't have I wouldn't say we have specific protection. Again, it's about as I explained, it's about our menu, but about the value and the medical value of Filmorhea. There are no specific protection or specific guarantee, even though, of course, on some placements, we have volume commitment. But again, we should not consider that as a specific overall protection. A question from Delfin Lewis, €42,000,000 allocated to non recurring and philanthropic actions. How should we see that amount evolving in the future? It's a bit specific for this year. Of course, the dividend, but also the endowment fund, which is in the account this year, but for 2 3 to 4 years. It's a bit special, but as I mentioned, we had a good performance by Omer. I don't think we are lucky to be in the business because we work hard to deliver the solution. But we believe that it's also the duty sometimes of company who are performing well to take care of the local community. And as I stated, there will be consequences from the COVID beyond sanitary consequences. And we believe it's a good thing if we can afford it to support the Sverdrupi initiatives. And then again, it will be handled not only by the corporate, it will be handled by the different subs that we have in the world. So it's a bit specific to the situation. But when you have good performance, we believe it's good to give back. That's all. Harry, you can go ahead. Thank you. We can now take our next question from Maya Pataki of Kepler. Please go ahead. Yes, thank you. Three follow-up questions, if I may, please. The first one, Alexandra, I believe it was at the H1 call where you cost where you increased your guidance or you delivered a very strong EBIT performance for the first half. And you cautioned that we should not assume this going forward to be a sustainable level now. Your 2021 guidance is very confident. And I'm wondering if you could tell us what has changed in the environment, why you turned more positive or confident? And the second question is with regards to the BioFire CLIA panels. I believe a couple of years back you tried to place or to sell the respiratory panel, Clearwave panels in the U. S. To physician offices. Has that been part of your success in 2020 in the U. S? And the last question is with regards to China. BioFire hasn't been approved yet. But as I understand, for the 1st 2 years, once a diagnostic test is being approved, it is out of pocket payment. Do you believe that it will be a very slow ramp up in China once it is approved based on the fact that it will not be reimbursed in the beginning? Thank you. For China, first, we need to approve it, then we'll see. It takes a lot of time. We have a lot of constraints, regulatory hurdles, I would say, sometimes to go back and forth. So I don't know yet. We are first working on this. I believe syndromic is a solution that fits needs all over the healthcare setting. But first, I would like to get a better confidence about the risk ratio in China. Your sorry, I keep forgetting the question. The number 2 question, there was a question on Yes, we have the strategy to test a bit the market for Kia and it has proven yes to be stopped. In the numbers you see, it's not it doesn't make a big difference, but I think there is traction. There is traction with this solution. And that goes in line, I don't want to be too philosophical, but I believe COVID testing has changed many things. It has changed the push for molecular. It has also pushed maybe the need for more desaturation. So I believe these are trends that we have to monitor or to follow. But yes, there was a good traction on this year. On my level of confidence, I'm known to be quite cautious. But no, we feel engaged and we see the dynamics. So these are production. I insist on the uncertainty, but this is the production that we see today, the dynamic infectious disease therefore, for the long term. And then again, it can also go beyond COVID and the recovery of the other solutions could help. Thank you. We can now take our next question from Scott Bardo of Berenberg. Please go ahead. Thanks very much for the follow ups and the extended Q and A today. So I think certainly a lot of the discussions I've been having with investors in diagnostics, there's a lot of focus on the post COVID landscape. I appreciate, Alexander, you don't think COVID is going away, I accept that. But the landscape after this near term abnormal demand that we see for the pandemic. The question is, Alexandre, do you think the time has now come for BioMerie to provide some sort of mid term strategy and mid term financial targets, which a lot of your leading peers do. Is that now something in your thinking that we should come to expect for BioMarria? The second question, please. Again, BioMeria being a global leading upper respiratory disease company or certainly leading in that area of testing. Lots of debate, I think, about the influenza season and the respiratory seasons going forward. There's been negligible flu season this year and indeed lots of government vaccination programs, not just for COVID, but for flu as well. Have you considered or caught any feedback in the industry that indeed going forward there may actually be lower respiratory season even including COVID because of these aggressive actions for new vaccines and therapeutics. I guess, make sure the question is, has the market changed in this post COVID environment? Your thoughts around that would be greatly appreciated. And the last question, if I may, please help us understand where we are within the innovation journey for BioFire. Obviously, you've been first to the market with lots of new tests, I think 6 or 7 tests on the platform. Where are we in that journey? Is there still some significant unmet medical needs to come on this system? Or is the product portfolio now more full? Thank you. Okay. You have a you asked big questions. Maybe the second one on the flu season. I'm sorry, I love to say a lot. I don't know this year in general with COVID. And it's pretty fair, it's true. There was no flu. There was no real flu this winter because we all wear masks and clean our hands and we don't meet any more people. But I hope that we go back to normal life. So we'll see. I don't know. I don't know, flu is like a provider and can mutate. So we never know. It's very difficult to predict. What I know, again, is that syndromic is the right solution if flu comes back, depending on which level. Because we want to know, do I have a flu A? Do I have a flu B? Do I have neuro? Do I have a corona. I still believe that the low flu, high flu season syndrome will be a key solution to differentiate the type of infection. But it's very difficult to predict what will happen. I don't believe that the I believe that efficiency will remain a key topic. Also this crisis has proven all the things and it's not only about the human, it's also about one health approach and the link between veterinary and the human and ecosystem. So future. To your first question around long term guidance, of course, I mean, we have long term planning. We do decide our investment for the long term loan. I'm not used to give long term guidance, but sometimes it's a bit risky and the world is changing. And I'm not sure I will do it in a time of pandemic where the uncertainty is quite strong. Maybe one day we'll give more guidance around the strategy, the big long term road map. But on the figure side, I don't think that's something I will do at this stage at least. And again, the third question, innovation journey on BioFire. So it's a new play, but you can also see that since the acquisition of BioFire by Biomir, we already launched 2 different platforms. We launched the FIMO Red 2.0. We launched the Torch platform. Some tests have moved from 60 minute testing to 45 minute testing. So this is a negative platform, and that's how we see the things with this technology. So maybe more to come on the menu, on time to results, these are the things we are working on. Very good. And maybe just last quick one, if I may. You made the acquisition of NephroCheck a few years ago, which I thought was a very clever acquisition, a good product for unmet medical need. I now know that that product is now approved. Can you help us understand, I mean, will this be a big contributor to group growth in the immunoassay business? Or is this going to be a bit of a slow and steady burn? If you could help there, that would be appreciated. It's too early to say. It's a test result of medical value, but it will take time to ramp it up because we'll have to keep on investing in the clinical studies, in the real world evidence type of thing. So it's a good test. We are very, very pleased to own it. Now we have to build the market around it with the QOL and the real world evidence, but it's here to stay. Thank you. Marie, last question. We have no further questions over the phones. Okay. I have no question on the web chat as well. Thank you very much for this discussion or question with you. I think it was 1 hour and 20 minutes at this time. So I guess it's actually interesting. Thank you very much. We stay in touch. I guess there will be a communication with the Q1 results in April. In April. Thank you. Thank you very much. Bye bye. Ladies and gentlemen, this concludes today's call. Thank you for your participation. You may now disconnect.