Good day, everyone, and welcome to all of you. It's always a great pleasure to be here in Paris to present our annual results and perspective for the year. Before leaving the floor to Guillaume Bouhours and Alexandre Mérieux, I will just make a very short introduction to provide you a couple of information. First of all, I wanted to inform you that bioMérieux issued this press release this morning at 7:00 A.M. It is available on www.biomerieux-finance.com. If you have not received our news release or if you would like to be added to the company's distribution list, do not hesitate to catch me at the end of the meeting. In addition, please note that the slides of this meeting are also available on the home page of our website, and can be downloaded on the website itself or on the webcast.
Going to the presentation contents. After reviewing our 2018 performance and 2019 objectives, we will hold a Q&A session. Questions can come from the room, from the call, or from the webcast. We will rotate the questions from those three different sources. A very last word before starting, if you can jump to the next slide, I think you have the I have it, sorry. That's the usual disclaimer about the forward-looking statements. I will not read it, but please take note of it, as it's an important part of information. Now I'll leave the floor to Alexandre Mérieux.
Thank you, Sylvain. Welcome. Thank you for attending this conference around our 2018 results. I will start directly giving a snapshot or mainly the key takeaway messages regarding the performance of bioMérieux in 2018. We'll qualify this year of being a year of solid performance for the group, since we had sales growing up to almost 10%, 9.9%, which is a nice commercial dynamic. Also we have been able to improve, I would say, the operating income of the company, moving from 14.6%-14.9% this year. The sales dynamic will be detailed further, but I think basically, key growth driver is remaining also FilmArray, BioFire, which has displayed a very nice growth of 30% worldwide, reaching now EUR 483 million, and representing today still almost 60% of the company growth.
Industrial application grew quite well also, around 9%, while also APAC region was also a key driver of growth. I would say a healthy growth in the region. As you can see also, we were able to generate a stronger cash, this year. Around EUR 220 million, which enable us also to invest in business development and strategic opportunities, because this year was marked by the acquisition of Astute Medical and also a majority stake investment in Hybiome, a Chinese immunoassay company. In February this year, we acquired Invisible Sentinel, dedicated to food safety and quality. Important to say also that when you look at the past few years, we have been able to improve steadily the performance of bioMérieux, growing in term of operating income.
Doing so, keeping investing in R&D, sales and marketing, and for the long term, which was in line, I would say, with our strategy. Looking at bioMérieux, I would say the anchor message around bioMérieux is around the threat around AMR, for antimicrobial resistance, which is becoming a public health priority in most of our countries. Most Ministry of Health have announced that AMR is becoming a key issue. These numbers are mainly only for the U.S., but you will see it's becoming an increasing threat for public health. We believe that bioMérieux, through the diagnostics, fighting AMR is not only diagnostics, it's patient care, it's medical education, it's hygiene, but we believe that diagnostics has a stronger role to play on that space. Today, AMR represent, I would say 80% of the sales we do in clinical applications are linked closely to AMR.
It's the flagship. If I look now by strategic ranges, microbiology, where bioMérieux we have a leading position on that space. We have been able to increase, we believe higher than the market growth, because we were around 6%. This was thanks, I would say, to the broad portfolio solution that we have on our recent investment also. Worth noticing, I would say, the success of the VIRTUO, our range for hémoculture, the range around the lab automation also. VITEK solutions, our flagship for ID, AST, also had a good success in 2018. Molecular biology, real fuel driver of growth for the company. Impressive growth again this year. Worth noticing also that now more and more we are doing international sales. International for BioFire means outside of the U.S., where the sales have grown from 13%-17% outside of the U.S.
We have increased install base. Now we are above 8,000 units on a worldwide basis. I would say it keeps remaining a growth driver. We are leading the race since the beginning on the syndromic approach. The goal for us is to keep on leading this race through innovation, investment in the instrument, but also in new panels. We have been pleased to launch a very important panel in 2018, receiving CE marking on the FDA clearance around the Pneumonia Panel, which is really tackling a very important unmet need in term of clinical applications. It has been a very complex, sophisticated, I would say, test to develop. I would say addressing main causes of infection for pneumonia on this test, I would say, has clear benefits in term of number of samples it can address, faster on times.
We are up to 33 targets in the Pneumonia Panel. I would say, this one will have an important clinical benefit for the patients and for the hospital. Immunoassays, which have been contrasted this year. I think the VIDAS range has grown around 2% on a worldwide basis. We suffered in 2018 from the announced competition on PCT, mainly with price pressure, while we have been able to increase in volume and also improvement coming volume, coming from Asia-Pacific, India, Middle East, and Africa. This year, through two major, I would say, investment, Astute Medical for the fight against acute kidney injury, which is a promising biomarker with high medical value, and also with Hybiome, Chinese company. It's very important for us, but we believe also for our Chinese customers that bioMérieux can be more present in term of R&D and manufacturing to serve first the Chinese market.
Hybiome delivered EUR 24 million sales in 2018. This is a fast-growing company. Industrial microbiology, which represents 18% of bioMérieux revenue in 2018, we displayed a 9% growth. Our intent was to grow this business with high single-digit. This is what we did this year with a 9% growth, with good performance coming from food, a very good performance coming from pharmaceutical applications. We have been able, post 2018, in February, to acquire a company called Invisible Sentinel, active in the field of food safety and quality control, targeting, I would say, food control, but mainly also the beer and wine segments for spoilage control, which we believe is a very nice addition to the range of solutions for bioMérieux in industry. I would say it's a smart, agile solution, well suited for applied monitoring and also for improving the workflow of testing in this lab.
It has been quite an active year for bioMérieux in terms of activation of the strategy, and a very good year in terms of financial results that I will let Guillaume detail now.
Thank you. Let's review together our financial and operating performance. We'll start with the total sales growth coming. Overall, our total reported growth is 5.8%, which includes a pretty negative foreign exchange impact of minus EUR 95 million. As you can see, majority of this is coming from the dollar and the rest of it from a mix of emerging exposure that we have. We will come back at the end of the financial section on the FX exposure of bioMérieux. Minimal perimeter effects on the revenues, and as you can see, 9.9% organic growth. As mentioned, the majority, a bit more than half of the organic growth is coming from the bioMérieux range in the U.S. and globally.
Just remind you that among the EUR 2.4 billion of revenues, 83% is made of sales of reagents, 10% of our equipment, and 7% of services that are linked to our activity. Let's now review the organic growth split by geography. The first region for us, Americas. By Americas, we mean North America and Latin America. As you can see, it's now 44% of group sales, with 12.5% organic growth last year. In this 12.5%, we have some, let's say, less positive elements. The less positive are especially the price pressure that we have on the PCT VIDAS in the U.S. that Alexandre already mentioned, with a number of competitors entering in the last two years. We are still growing on volume for this parameter in the U.S., but clearly, we had to decrease prices in 2018. Second less positive in the region was Brazil last year.
Pretty difficult year in Brazil. Strike in the transport sector in Q2, you might remember. Also a global economic environment that was really tough in Brazil in 2018 for everyone, including for bioMérieux. These are the less positive, and some of the very positive growth driver in the region last year were, first, bioMérieux FilmArray, which of course has its domestic market, I should say, for bioMérieux in the U.S. and grew strongly over 30% in the U.S. Second element, microbiology, especially with blood culture, strong growth in North America. Third driver, Latin America, except Brazil, but the rest of Latin America was really on a very dynamic sales growth. Second region, Europe, Middle East, Africa, 5.9% organic growth, which if you think about it with a lot of major markets in Europe, is actually a very good performance at 5.9% organic growth.
The drivers for this growth are, first again, molecular biology, so bioMérieux FilmArray, very strong growth in Europe. Second, the industrial microbiology for industrial customers that had a very good year at 7% growth in Europe, Middle East, Africa. Third growth driver for this region is actually the geographic, let's say, extension or growth. We grew strongly in Middle East and in Africa, where we invest quite strongly in the past two years. Third region, the smallest but still almost the fastest-growing, Asia Pacific, 12.4% organic growth. The growth driver there were China, where we have a really strong position. It becomes now the second market overall for the group after the U.S., obviously. India, very good dynamics as well, and Southeast Asia. We can also mention, you might remember that in Japan was a very special year in 2018.
We took over back the distribution fully of bioMérieux product in Japan. Previously, it was a JV with Sysmex. This takeover went well. We had to, let's say, rebuild the sales force, and we saw an acceleration of the sales, especially in Q4. Nice to mention. Now, a wrap-up on what Alexandre already presented on the organic growth by platform. First comment, you see a pretty good balance of our portfolio between technologies, 40% microbiology, three pillars, around 20% immuno, molecular, and industry. Microbiology at plus 6% organic. Alexandre mentioned that one of the driver was really blood culture, fueled by the success of our automated instrument VIRTUO. Second element, immuno, as you can see, stable sales at 0%. Actually, the major range inside immuno is our VIDAS range, which grew by 2% organic.
The 2% worldwide being contrasted between the price pressure in the U.S., again, some volume growth in the U.S., but clearly price pressure, and on the other side, a pretty nice volume growth, fueled by China, Middle East, and Africa. All this together, plus 2% organic for the VIDAS immunoassay range. Molecular plus 30%, obviously fueled by FilmArray success in the U.S. and outside the U.S., especially in Europe and in Asia. Industry, Alexandre mentioned plus 9%, pretty well-balanced between our two major customer segments, food customers and pharma customers. Our P&L now. Below sales, first element is our gross margin, which you can see improved from 53.0% last year to 53.8%. This is despite negative foreign exchange impact inside the gross margin of minus 90 basis points. How did we increase?
We had a, I remind you, an accounting effect that we decided we align the depreciation of our installed base with their real use. That was a longer depreciation period that had EUR 11 million impact in the year, about 40 basis points on the basis points on the gross margin. That's not enough. On top of that, we improved the, let's say, operational gross margin by almost 130 basis points. This is really mainly a positive product mix effect. You can think of the fact that FilmArray, BioFire FilmArray, is growing faster than the rest of the group with pretty nice gross margin overall, so improving the product mix. Below gross margin, SG&A, sales general and administrative costs, were up 9% on a like-for-like basis.
This is really reflecting our investment in our sales force and especially the investment to reinforce dedicated FilmArray sales force worldwide, in the U.S., in Europe, and in Asia, especially. It also reflects the rebuild of our sales force in Japan. As I mentioned earlier, we regained control of our distribution network in Japan. R&D up 7% on a like-for-like basis. We continue as a policy to invest slightly more in R&D with a significant amount of 13.5% of our sales dedicated to R&D efforts, so internal innovation. This was dedicated in 2018, I would say for the major drivers, again, to BioFire new panels. We talk about that. As well, the instrument, always improving the instrument itself, as well as our microbiology range. Overall, our contributive operating income improved in terms of rate from 14.6% to 14.9%.
As you can see, overall, we have 8% all included increase of our contributive operating income, despite a number of effects that I want to explain. In this 8%, you have first a negative foreign exchange headwinds or impact of EUR 40 million. It was in line with our guidance, still it's pretty negative. Again, we come back to the exposure in a few minutes. We have the effects of some acquisitions that, let's say to start with, are slightly dilutive, minus EUR 17 million included in this element. It is somehow offsetting, you might have seen in our press release, we have a positive effect year on year of special, let's say, bonus plans for our U.S. teams, that are based on the share price of bioMérieux. It's called the phantom shares, that were an expense of minus EUR 29 million in 2017.
Because our share price decreased in 2018 was a positive, let's say, release of provision of plus EUR 7 in 2018. We can come back to that if you have any question. Year on year, minus EUR 29 to plus EUR 7, it's a change year on year of plus EUR 36. That's it for this part of the P&L. Below contributive operating income, we have stable amortization of the BioFire acquisition price, about EUR 18 per year. Net financial expense was pretty stable this year, around EUR 22 million-EUR 23 million as an expense. Income tax, pretty low at 20% effective tax rate. I'll come back to that in a minute. All in, a net income of EUR 256 million, up 8%, despite the foreign exchange headwinds and negative effects. Just a quick explanation on the tax rate. We are heavily exposed to the U.S.
tax rate, having a lot of our base in the U.S. Actually, on the positive side, the U.S. tax reform that you all know of was actually very positive on bioMérieux tax rate. You see that in the second green line, bringing our recurring effective tax rate to about 23%. In 2018, we had two non-recurring effects that we highlight. The first one, that we made exceptional contribution to our U.S. pension fund of EUR 56 million. The idea that U.S. administration had given a window of opportunity to do this kind of contributions with a tax deduction at the old tax rate. It was a pretty interesting opportunity. That's one element for 1.5% in terms of tax rate. Second element, we won a longstanding tax litigation in Sweden, that was for EUR 3.5 million, so 1.1% of tax rate.
These are the two non-recurring. Coming now to our cash flow. Let's review that together. EBITDA improved to EUR 519 million, in line with the EBIT improvement. Working capital was actually increased by EUR 3 million, so minus EUR 3 million in the cash flow. You can see the different elements. The operating ones, inventory, receivables, and payables, really basically moved with the activity, so pretty stable in terms of days for the three lines along the activity. They were offset by, in other working capital, a number of decrease actually of tax payables and social payables. Income tax decreased with U.S. tax reform. CapEx. CapEx was strong, in 2018, but I would say in line with our guidance as well, 9.4% of sales. We are investing in our industrial setup and footprint. We are also investing in the placement of our instruments to our customers.
It's about EUR 45 million to EUR 50 million per year, which is in our CapEx. When we take all these elements into account, our free cash flow before the exceptional contribution to the U.S. pension fund that I mentioned earlier actually improved significantly from EUR 165 million to EUR 222 million. A 34% increase in cash flow generation. We use this cash flow for acquisitions, almost EUR 200 million, Hybiome majority stake, and Astute acquisition. Share buyback. It's a share buyback that you see here for EUR 23 million, which is purely to actually cover the performance shares awards to management and management teams as a whole that we have in the pipeline. Dividends, EUR 40 million in 2018. Overall, our net debt increased slightly to EUR 267 million, but remains at a very reasonable leverage ratio of 0.5x EBITDA.
We have quite some headroom if we wish to for additional investment or additional acquisitions. To finish the financial section, a snapshot. If you remember well, we did that six months ago as well, but we want to give you a better visibility. It's not easy to understand on the FX exposure of bioMérieux. You have on one column the FX exposure on sales and on the second column on EBIT. On sales, you can see that we have a big exposure on the U.S. dollar, of course, our first country. It's not the case on the EBIT, because in front of this U.S. dollar sales exposure, we have a lot of costs denominated in U.S. dollar. We have strong R&D base in the U.S., strong manufacturing, three big sites of manufacturing in the U.S., and of course, sales and marketing exposure in the U.S.
Actually on the EBIT, we are a bit more exposed to some emerging or non-U.S., non-European currencies. You see that the Chinese yuan is obviously the first potential exposure to our EBIT. As a whole, just to wrap up on FX. In 2018, you remember we had minus EUR 95 million impact from FX on the top line, minus EUR 40 on the EBIT. In 2019, with the current view as of today, we forecast to have a potentially neutral impact on sales and about minus EUR 5 million estimated on EBIT for 2019. With that, I hand it over back to Alexandre.
Okay. All in all for 2019, the idea is to continue the dynamic. First in terms of sales, because we issued a guidance that revenue should grow between 7%-8.5% at constant exchange rates and scope of consolidation. You have to also compare with last year, where we had an important flu season, and while this year we come to have a mild flu season, and this is quite impactful on our growth. In terms of contributive operating income, the plan is to increase, to reach a target between EUR 380 million-EUR 400 million, including dilutive impact of Astute, Hybiome and Invisible Sentinel acquisitions for around EUR 10 million. The tax rate should remain close to what happened in 2018, and we'll have CapEx around 10%, mainly to support the growth of the activity, and importantly also to support the growth of BioFire.
The message that we believe we are still well positioned for growth, that we are addressing the right public health topics with clear unmet needs today, such as fighting against sepsis, against AMR, improving conditions for respiratory infection, also without forgetting protecting consumer health through our food and pharma quality control activity. Keeping again, I would say, the fact that we are a well-balanced company in terms of portfolio of technology, well-balanced in terms of geographies also. Working, as we have done this last year, to improve the agility and the performance of the company. Always keeping a long-term view. Thank you very much, I think we can open the floor to questions. Is that possible?
Yes. Okay. We'll start with questions from the room, just.
Hello, thanks for taking my questions. If we compare the 2018 top line guidance to the 2019 one, could you help us understand the split in between the milder flu season that we have this year, and also what you've integrated into the guidance for the potential risk of other Medicare contractors issuing similar decision to that of Palmetto?
You mean by it?
Flu season, I think everyone understood that 2018 was a really high flu season, very strong flu season in 2018 last year. This year, so far as we speak, it looks like a medium flu season, which is actually what we took into account into our guidance. It can still move a bit, because it's not over, February, March. It can still move in terms of flu. We took this difference of high flu season last year, medium this year, into the guidance. It's difficult to evaluate really precisely, but we can say between EUR 15 million-EUR 20 million of revenues is our, let's say, rough estimate between a high flu season and a medium flu season. You have to take into account that this will be visible, obviously, in our Q1 sales mainly.
The Q1 sales with a high comp basis will be slightly lower than the full year. Do you want to say something?
I'm sorry, second question was on the growth of FilmArray globally in 2019, the impact of.
No, on the potential risk of that is backed into your guidance for the risk of Medicare contractors issuing similar decisions as Palmetto.
In fact, we look at FilmArray on a worldwide basis now. We have 17% or so of the sales outside of the U.S., so we look at FilmArray as a whole. To be frank, in Q4, we have not seen a clear impact coming from Palmetto decision. We believe FilmArray is still on the way to grow and defending the medical and the economical value. All in all, also, the Palmetto is only concerning, I would say, ambulatory patients, which are covered by Medicare, so it's a limited fraction today of the population which are being tested with FilmArray.
Okay, thank you. One last on immunoassay, if I may. What visibility do you have on the competitive environment, and when are you expecting PCT sales to bottom out eventually, or be diluted enough so that they do not offset the growth of other lines?
We still need a few months, I would say, to understand the dynamic. Now, I think that the U.S. market is quite served in terms of players in the field of PCT. What we said, I think, a few months ago, we need a few months to assess if we start to see a plateau in terms of price. We still need a few months to see that, I think, but we expect a plateau this year. With volume, we are still growing in volume in PCT in the U.S. Important.
Okay. We'll continue with a question from the phone, please.
We will now take our first question from Maja Pataki of Kepler Cheuvreux. Please go ahead.
Yes, hi. Good afternoon. Alexandre, I have two questions, please. I was wondering, you stated that you haven't seen any impact from Palmetto, and we all understand that it's targeting the outpatient setting. I was just wondering, since it has only been introduced in December, how great do you think is the risk that the information hasn't really trickled down from the labs to the physicians, as there is a bit of a margin squeeze from the labs if the reimbursement is being cut? Is there a delay? Or how certain can you be that there is not a delay, just to get a better understanding? To my understanding, we've actually also seen a change for the reimbursement of BioFire from Anthem late last year. What do you think is the time frame that we will see the other commercial insurers follow suit on that point? Thank you.
Okay. I think, to be fair, we are still assessing what could be the potential impact of Palmetto. We have not seen it so much so far in our growth, I think because Q4 has been quite strong with FilmArray. For me, still under assessment on any way regarding RP panel, it's a lower reimbursement, but only for people under Medicare, ambulatory, so above 65 years old. I would say, using the microbial target that we have in FilmArray, we still believe that the reimbursement could be up to $300 for the RP panel, which is still quite acceptable. Second question?
Private insurers.
Private insurers. It's not in my hand. We believe that some will follow. We expect that's not exactly under our control. Now we are seeing for Anthem. I think maybe other could join, it's not has a direct impact, I would say. We believe it doesn't have a direct impact today at this stage on the global growth of FilmArray. Worldwide growth is also becoming more and more important. We have just launched also the Pneumonia Panel, which should be a good leverage of growth for next year.
Thank you very much for that. Maybe if I can just quickly follow up, since you mentioned the Pneumonia Panel. Can you give us some initial feedback on what the uptake was and how fast that is growing compared to the rest of the panels?
I think it's too early to talk about the dynamic. It's mainly, I would say today, more the input and the feedback from the physicians, which is very good. Now it has been very recently launched.
Thank you very much.
Thank you.
Okay, thank you. We will continue with the question from the webcast that I'm going to read to you. Given that the share price is back to where it was end of 2017, is it fair to assume that the EUR 36 million gain on phantom shares will revert in 2019? Is it included in the guidance?
I'll take that. Yes, you understood that these phantom shares, it's a formula, has this effect that when our share price increases, the provision on these phantom shares actually increases and has a, therefore, an opposite negative impact on EBIT. We included in our guidance an assumption, it's very difficult to do, on the share price so that we could assume an expense on these phantom shares. Our assumption, including your guidance, is an increase of the share price from December 31, 2018 to increase in 2019, in line with the increase, the organic increase of our EBIT, which as you have seen in our guidance, is 10%-15% increase. We assume the same for our share price. There's no good assumption on this. Above or below this assumption, we have an impact to make it simple.
The formula is not as simple, the formula to keep in mind is EUR 1 of share price above or below has an impact of EUR 1.5 million on the EBIT from these phantom shares, U.S. bonus plans.
Okay, let's continue with the question from the room. If there are no questions, no, we have still a question.
Thanks. Igor Soloviev, Berenberg again. On industrial applications, could you give us an update on the GENE-UP and ENDOZYME? You've been doing several acquisitions in this business. Will they enable you to maintain high single-digit growth rates going forward? Or should we think about the industrial application business as one that you will need some bolt-ons every year or two?
The first question. GENE-UP, for the ones who don't know, it's a molecular solution for pathogen testing, which is really embedded, I would say, in the pathogen view with VIDAS plus GENE-UP. Now it's VIDAS plus GENE-UP plus Invisible Sentinel. It's important to note also that some tests which were developed on Invisible Sentinel can be transferred and developed to GENE-UP. Basically, we will increase our portfolio with that. On ENDOZYME, this year, we launched, I would say, a semi-automated version of the ENDOZYME test, which is progressing, I would say. On the goal, I think my plan, or maybe it's too much pressure for the teams, but to keep high single-digit growth on the industry division would be good. I think there are a lot of needs when you look at, I would say, protecting consumer health.
When you look at the crisis which happened sometimes in dairy, you had 200 people who died last year in South Africa because of listeriosis. Knowing also that more and more we are discussing working with care accounts, international care accounts, both in food and pharma. The plan is to keep our industry as a faster-growing segment for us. If there are some interesting bolt-on acquisitions, that's something we look at strategically.
Okay, thank you. We will continue with the question from the phone, please.
We will now take our next question from Peter Welford of Jefferies. Please go ahead.
Hello. I think that's me. Sorry, it's Peter Welford, Jefferies. Couple of questions left. Firstly, on the BioFire, I wonder if you could possibly give us an indication of what the sales for BioFire Defense in the U.S. were. I think you've talked about that in the past. Also, perhaps an indication of what the placement of the 8,200 instrument is ex-U.S. versus U.S. would be useful. Approximately how many instruments, of the 600 this year, were placed ex-U.S.? Then, two financial questions. Just on the debt maturity, obviously debt's ticked up a little bit. Can you possibly give us some sort of help with regards to the maturity of that debt and what sort of is the average rate you're paying at the moment on your outstanding debt obligations? Also, if possible, the number of treasury shares you hold at year-end.
I know you did a bit of share buyback there, you hold some treasury shares at the moment. Any sort of visibility on what that is, that would be great. Thank you.
Okay. Guillaume, you will start by taking the debt question. Placement.
Okay.
On the debt, I understand your question is about our cost of debt. Overall, blended, our cost of debt is slightly above 2%. We have a big part, which is actually a bond, that was issued for the acquisition of BioFire, to finance the acquisition of BioFire. This bond is coming to maturity in October 2020. About 2% for the gross cost of debt. Treasury shares, I don't have the exact figure on top of my mind, but you will find that in our documents to be released soon. It's roughly 500,000 shares that we have outstanding as treasury. Units, you want me to do the placement of BioFire?
The question of Defense, BioFire Defense also.
Sales U.S.
Peter, your question was on the sales of BioFire Defense, that's right?
The two questions. One is Defense, BioFire Defense. I think you talked about what the sales of Defense were. I think last year, they were roughly about EUR 19.7 million, I think you said, in 2017. The instruments, you placed instruments, I think during the year of, roughly speaking, about 2,100, something like that, during 2018. I guess if you'd split that possibly between U.S. and ex-U.S., that would be very useful. Thank you.
Defense, I believe the sales in all 2018 were around $20 million. It's really contract-based. That's recurring sales. It's the contract we have with DoD or other departments. Installed base, we increased to 8,200 instruments worldwide last year. Big part of the growth has come also from the international expansion, where the consumption is still an introduction phase, so the consumption is not the same, I would say, in regions that we see in routine markets such as in the U.S. All in all, I would say there is more placement outside of the U.S. No, not at all.
One third.
One third.
One third. Okay.
33% of the 2018 new installations were outside of the U.S., 33%. If you look at the picture at the end of 2018, 26% of the installed units are outside of the U.S.
Okay. We will continue with a question from the room.
Good afternoon. Two questions. First one, can you elaborate a little bit more on your acquisition policy, and especially is your priority to enforce your expertise or is it to enforce your geographical footprint? Second question also, can you elaborate a little bit more on the competitive environment evolution? Who is winning market share? Is there a player more aggressive than another on the specific region? Can you elaborate a little bit more on that, please? Thank you.
On competition, I would say on the field of microbiology, I would say we are in a leadership position. BD, since the 50 years, we are competing with BD. We have new players are coming also in that space with promising technology, but I would say not yet is a mature stage of sales. Immuno, you can imagine all the competition you want between low throughput, mid throughput. I would say, but that is specialized in niche testing on high biomarkers. In the field of syndromic testing with FilmArray, yes, there are many people who are interested to enter the space, which are companies that you might know such as GenMark, such as QIAGEN also has made an investment on that space last year. I would say syndromics is becoming a standard of diagnostic, I would say almost a standard of care.
We are expecting to see more and more players on that space, knowing that we are leading the race since the beginning and we want to keep on leading the race through our investment in new panels. Your first question was around China? Not at all?
Acquisition priorities.
Acquisition priority for us, it will be technology. Always important for us, because if we find smart technologies which mainly have an impact in term of reducing time to result of testing, that's something we look at. We'll keep on looking at everything which brings good medical content, such as we did with Astute last year. Also we did this year, China. I think we believe being more present in China, in Asia through R&D and manufacturing, it's important also to be present there to serve the market where there is almost in the region, 60% of the worldwide population. Okay.
Thank you. We will continue with a question from the phone, please.
We will now take our next question from Scott Bardo of Berenberg. Please go ahead.
Hi, thanks for taking my questions. Scott Bardo from Berenberg. First question, please, just relates to BioFire in North America. I think you mentioned that you haven't seen any related impacts from Palmetto or some commercial payers coming on board, which is encouraging. But just to understand a little bit the dynamic of placements in the U.S. in the Q4, can you give us a sense of has there been any change in acceptance of instruments or modules from the outpatient sector at all? Are your placements still very heavily in the hospitals? Or maybe some feeling for placements as a leading indicator for demand in that category, please. Also, just on pneumonia, I appreciate it's still too early. You had a good approval there with lots of different indication, but can you give us some sense, Alexandre, as to your expectations for uptake here?
Would this be as quick in your mind as the flu panel, or would it take some time to establish in the market? They're the two BioFire-related questions, please. Also, just on this phantom shares issue, which is obviously creating some variability in your contributive EBIT. Thank you very much for the clarification. But I just wanted to understand a bit more full, because I think you mentioned that within your guidance is a 10%-16% rise in the share price from December. My calculation is your share price is up, say, 33% since December. I just wanted to understand, is my math correct? Your guidance provided today, we should be haircutting by around EUR 10 million-EUR 15 million as a result of the stronger share price, which is at, what, EUR 73 today? That's a technical question, and I have a follow-up. Thanks.
Okay, I'll take the first one, which was around the demand around the FilmArray and the hospital market in the U.S., which is still strong. You've seen the good results in Q4. I would say the trend on FilmArray is good everywhere, because I know also we have a platform called Torch, which is modular. We can have up to 12 testing units. It's increasing because of the beauty that more and more customers are now using more panels. Now we have four respiratory panels, one for GI, one for meningitis, one for BCID. I would say the beauty that the customers who start using FilmArray with one panel, they keep on adding some others. The demand is quite strong, and it's quite diverse also. When you look at the growth of revenue of FilmArray last year, I would say it was not only RP.
GI did very well, the others did very well also. The second question on the uptake of pneumonia, I think it's still early, as I mentioned, we believe the potential is quite great. It's a sophisticated test, clearly answering to medical needs. We believe it will also be a good entry door sometimes in market in Europe, where it will be a good way also to boost FilmArray. It's difficult to say what will be the final level of pneumonia, I would say it will be a significant one, I would say, in the portfolio. I cannot say more at this stage early.
phantom shares. Yes, your comment is valid. Obviously, the share price, if we look at it today, is above the 10%, 15% that I mentioned as our assumption. For every euro above, as I mentioned, you have to take into account a EUR 1.5 million EBIT. If it's above, a negative impact, if it's below, a positive impact. That's a fact. Just to mention it, I didn't mention it, this phantom shares plan were actually awarded in three tranches in 2015, 2016, 2017. They are awarded for four years for these U.S. teams that are beneficiaries, have four-year vesting. A part will be actually paid in 2019, second part in 2020, and third part in 2021. This effect is pretty strong in the last two years and this year.
It will also decrease over time as we pay out these plans, we are not expecting to, let's say, renew the same type of phantom shares plan.
We will continue with a question from the webcast. Could you outline, sorry, plans R&D pipeline for FilmArray post-pneumonia, where you will be directed spend, what areas of opportunity remains? What else can you do with the science? Do you expect to have more leverage on R&D expense given recent more important spend?
Where do we invest in BioFire?
Thank you. Okay. I think molecular, we'll keep on investing in molecular because we're building a FilmArray. I don't think we communicate a lot about the new panels coming. We have many ideas, many plans, but we have many competitors now, so we have to make sure we don't give them the portfolio. I think molecular is still an important area of growth for us. First, we believe that the FilmArray is a solution that can be improved continuously, either the system or the time to result. Of course, when we also invest, bioMérieux this year was 13.5% of investment in R&D. I think it's the way to go for us. We are present in microbiology, in immuno, in molecular. We have a, most of the cases, leadership position that we have to defend, and the way to go in our space is around innovation.
Internal innovation, and sometimes, of course, now we are open to external innovation through business development.
Okay, thank you. Let's continue with a question from the room.
Societe Generale. Three question. First one on China. Can we get an idea of, do you have any surprise with Hybiome in China regarding inventory levels or any strange stuff that may happen in China we are used to? Second question, specifically on Hybiome, what would be the plan in term of growth? I know you won't share anything, but compared to the rest of the region, can we get a flavor of the rhythm of the growth for Hybiome that you expect versus Asian region? If I move on Japan and specifically to BioFire, can we get an idea of what percentage of sales of these 17% international sales being made for BioFire? How much was that for Japan? Is it still microscopic or does it start to make a bit of sense since the end of the Sysmex JV?
Thirdly, more broadly, a general question on the CapEx. You had a very high level of CapEx. Not, I mean, we are here to discuss about that. Just wondering, what would be the ideal maintenance CapEx and the sort of additional up you had? We understand Pneumonia was a big investment for you in the past years, 18 months. We have new on the table. Is the 10% something that we should now rely on top of the 13.5% of R&D, or is it something where we might see some breeze in or not? Thank you.
Okay. I'll take question China first on Hybiome. We are a majority stakeholder in Hybiome since November? Since November. We have done some due diligence before, we are okay. The growth of Hybiome, it was a EUR 24 million sales in 2018. The immunoassay market in China is growing quite fast. Really quite fast. I think that's the fastest-growing market in China. We believe that Hybiome is a very good fit for us in term of technology, in term also of menu. They already have 80 reagents which are being approved by the Chinese FDA. It will be a story of growth for us, an accelerator of growth on the Chinese market. Plus also, it's not official like this, but it's important to be Chinese in China, to be R&D-driven and having your base in China to also have access to some tenders.
Regarding Japan, FilmArray is just starting in Japan, I would say, right away. There was no impact in 2018. We are just working on the registration and the reimbursement, the sales will start in 2019. CapEx or R&D, your question was on CapEx first?
CapEx. The 10% level.
10% level.
CapEx.
The CapEx are suited today for pretty strong growth. We have to invest heavily in our capacity. You see the graphs for the last four years, where at least the last three, we were close to 10% organic growth, which in our field, forces us to, of course, in advance, invest for the capacity needed in two, three years down the line, which is what we do today in several of our product lines. I would say it's difficult to extract from that a kind of maintenance CapEx, which would only make sense if growth were to slow down at, I don't know, three, which is not at all what we are working on. 10% is still, to come to your question, we believe, quite a high level, but will be clearly the case next year.
Especially next year, we will invest in the capacity increase for BioFire, not only, but especially for BioFire. It will be a big CapEx of 2019, a new plant in Salt Lake City that will be part of this 10% sales. Beyond that, probably between eight and 10 would be a good range. Right? Nine?
We will see.
Around nine.
We will see in the beginning.
Okay, thank you. Now we will continue with a question from the phone.
We will now take our next question from Bill Quirk of Piper Jaffray. Please go ahead.
Great. Thank you and good afternoon, everyone. Couple of, I guess, follow-up questions at this point. Could you please expand on the PCT dynamic in the U.S.? I believe that we're into year two of competition, I'm just trying to, I guess, balance that against typical contract duration, which I understand to be about three to five years. You mentioned that you expect to see price stability in 2019. I'm just trying to, again, think about that with respect to typical contracts.
PCT, yes. We have entry of competition since one year and a half, I would say, but there are still newcomers who have just arrived in 2018. I think it was more newcomers arrived in 2018. We believe now the competition is there. We have seen an impact on the ASP decrease. We are still growing in volume, and also in some cases, PCT went to higher throughput platform. We're also targeting, I would say other segments of the clinical market, which are also maybe more adapted to the VIDAS. The market will grow. We are waiting, a few times to see when the market will stabilize in terms of ASP. We believe PCT is and will remain a growing market in the U.S. because I think the acceptance can still be improved and averaged.
Okay. Very good. Thank you. Secondly, I certainly appreciate your comment around BioFire in Japan. Can you help us think about what additional countries are currently reimbursing for this and some perhaps assumptions around countries that might start reimbursing in 2019? Thank you.
To be frank, we believe that for FilmArray, reimbursement is not always the key question. Sometimes it's helping, of course, but the way to go is what we call through DRG. It's a diagnosis-related group. All the work we are doing on FilmArray is around the medical value, but also we say the economical value. The benefit of syndromic for the patient, but also for the healthcare cost. This is the approach that we are promoting through our HEOR, which are health economic and outcome studies. That's the way to go for us in most of the countries, even in some countries where we are working on reimbursement such as Switzerland or Japan, for example.
In fact, you have the three main countries where we have a reimbursement, U.S., Switzerland, and Japan. All the other countries, there is no specific reimbursement. Any other questions?
No, that's all. Thank you very much.
Okay, thanks. We welcome you with a question from the room or maybe from the phone.
We will now take our next question from Maja Pataki of Kepler Cheuvreux. Please go ahead. Ms. Pataki does not seem to be on the line. We will now take our next question from Scott Bardo of Berenberg. Please go ahead, sir.
Thanks. Yeah, can you hear me okay?
Yes, that's okay.
Perfect. Thank you. Just one broader question, please, Alexandre. I think historically, or certainly in the last three or four years, BioFire has been tremendous success and driving, if you like, 60% of group growth or 500 basis points or so of your top line annually. I just wanted to get a feeling for this year where you're guiding for slightly more cautious growth. Is there an expectation of a similar sort of mix that BioFire is driving half of the growth or so? Or is it that the business outside of BioFire more normalizes and has slower growth rates than we've seen in the past? Perhaps just a little bit of a flavor for what makes up your guidance on the top line this year.
Just more generally speaking, you're clearly guiding for a slightly softer top line than we've seen in recent past from a growth perspective. How do you view this? Is this now, in a sense, a level that you're comfortable with going forward for the company? Or would you characterize guidance this year as being a temporary dip, and that you can accelerate growth thereafter? I'd just like a little bit more thought actually over the midterm outlook that you believe possible from bioMérieux.
Thank you. It's pushing me. I think 7 to 8.5%, I would say, is a nice dynamic growth for bioMérieux when you look at the estimated growth of the IVD sector. There will be a comparative impact coming from the flu last year, which is explaining a few things. Otherwise, I would say yes, we still count on FilmArray to deliver, because there's still a strong potential outside of the U.S. but also in the U.S. There are still many labs where our target to many physicians who want to use the FilmArray. All in all, when you look at microbiology, we grew by 6%, which is above market growth. Industry at 9%, and we don't have only one level of growth for the company.
On the topics you address, which are food safety, sepsis, AMR, and also respiratory infections, I would say you also have to look at bioMérieux, as I would say the portfolio. I would say the solution offering that we have makes sense. It's not always one We communicate with product. I would say also, we are selling solutions to the physicians and to the labs.
Are there any other questions from the room? No. There are no more questions from the phone as well. Thank you very much to all of you for your attendance, we are looking forward to further discuss all that in the coming days or weeks.
Thank you.