Good day, and welcome to the bioMérieux First Quarter Sales Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Aymeric Fichet. Please go ahead.
Thanks. Good afternoon, everyone, and thank you for joining us to review the Q1 2025 bioMérieux Sales Performance. I'm online with Pierre Boulud , CEO, together with Guillaume Bouhours , CFO. Please note that this conference call will include forward-looking statements that may change or be modified due to uncertainties and risks related to the company's environment. Accordingly, we cannot give any assurance as to whether we will achieve these objectives. I also remind you that today's call is being recorded and that a replay will be available on our website, www.bioMérieux-finance.com. I will now hand the call over to Pierre and Guillaume, and then we will open the call to discussion and questions. Pierre?
Thank you, Aymeric. Good morning, good afternoon, everyone. I'm going to start before handing over to Guillaume. I'm going to start with three main topics, a quick overview of commercial traction for Q1, a word on a GO-28 plan deployments, and then I'll say a few words on tariffs before handing over to Guillaume. As you could see Q1 2025, we achieved close to EUR 1.1 billion, 13% organic growth, so a very positive Q1 performance, a little bit contrasted by franchise. Let me go a little bit more in detail through this. First piece of good news that we had in Q1, very strong ERP sales, up 21%, definitely supported by, unfortunately, a strong flu season, strong epidemiology, illustrating very well the medical value of the solution.
We are seeing more than ever that the adoption of syndromic testing for respiratory testing is definitely taking traction. A lso illustrating the competitiveness of a BIOFIRE solution. When there is demand, we're seeing the use of the BIOFIRE system very systematic in the systems in the market. That's the first element: strong performance on RP. The second element is SPOTFIRE, with record installations, actually, since launch. We have over 1,400 instruments installed in one quarter, very much reflecting the fact that we believe we have the most comprehensive respiratory panel on the market, fastest time to results, probably the best solution in the market for Point of Care testing in respiratory, and a very strong partnership with McKesson. Good dynamics in the U.S., especially for what we call the true Point of Care testing, and also very significant acceleration in Japan, thanks to government subsidies.
We are seeing the solution being more and more adopted in Japan, so excellent news for the months to come. The third element with regards to sales is BIOFIRE non-respiratory, which is growing a little bit above our target, 11%, very solid traction, again, in the spirit of implementing a cross-selling strategy. Final highlight on strong sales performance is industrial applications, growing 9% in Q1, very solid demand, very solid performance, especially in Pharma with our cell and gene therapy clients. We are seeing some clients moving from R&D products that are being actually marketed. Obviously, as their product gets approved, the number of batches and the importance of manufacturing gets higher. We also increase our sales. Very strong and sustainable performance in the Pharma segment. That is the highlight of the, again, very strong performance for Q1. A word on GO-28 deployment.
First, a word on what we call an innovation powerhouse. In Q1, we have launched three innovations out of four growth drivers from the GO-28 plan. First of all, non-RP. We got the approval of what we call a Gastrointestinal Mid-plex Panel that allows us to address a new segment in the U.S. of patients that are covered between 5- 11 targets . With this mid-plex panel that is aimed at maximizing the diagnostic yield for the highest level of reimbursement, we expect to grow the patient population that will benefit from syndromic testing. The second innovation is in microbiology. We've launched a new VITEK COMPACT PRO system that is very much targeted for emerging countries, so lower throughput expectations, where actually the Antimicrobial Stewardship challenge is the highest.
We're excited with this launch, together with the approval of a LUMED solution that was CE marked in Europe. Third innovation that we launched for industrial application for food testing, we launched a GENE-UP TYPER. It's a molecular solution that allows us to do genomics analysis, very powerful for the food client when they are exposed to Listeria contaminations, to help them identify the source of the contamination and manage the challenge. We're excited also with this launch in one of the GO-28 growth drivers. With regards to GOSimple, as you know, and as we communicated last month, we had a very strong profitability improvement, organic, by 20% in 2024. We continued in Q1 2025 to work on the simplification and the efficiency of bioMérieux at the same pace in 2024. Numerous actions ongoing.
We keep talking about BIOFIRE automation, but also working diligently on headcounts, purchasing efforts, supply chain optimization, sorry. We're also working together with the R&D team following the integration of SpinChip to arbitrate R&D projects to make sure that the SpinChip R&D costs are fully embedded into a 12% of sales. Very good progress in the first quarter, very much in line with the GO-28 ambition that we have to GOSimple. The third element I wanted to share with you in this call is obviously an update on tariffs, the hottest topic across all industries, but also obviously within IVD. Of course, we acknowledge it's a super volatile environment. Tariffs, foreign exchange rate, Guillaume will come back to that. It's a very fast-moving situation with changes almost every day. We have a specific task force that is continuously working on monitoring the situation first, and building mitigation plans.
Of course, we're looking at optimizing our stock management in this context, negotiating with our suppliers. We're starting to look into price increases to mitigate the cost of tariffs. Having said all of that, tariffs are not going to break good quality business. We have now a new geopolitical environment, and we need to be able to adapt with agility to deal with this new geopolitical environment. What we wanted to say during this call, and as we're communicating our Q1 sales, is given what we know, we are very confident on the 2025 guidance with at least 7% sales growth in 2025 and at least plus 10% sales growth at constant exchange rate. With this, I hand over to Guillaume, who will give you a little bit more details on those different elements.
Thank you, Pierre. Let me provide you a bit more color and details on Q1. Again, sales of $1.1 billion, organic growth of 13% on the top line. Of note, as you've seen, a positive currency effect on the sales, $11 million, mainly driven that the US dollar was pretty strong, was pretty strong in January and February. That has completely reversed since then, and we'll come back to that on full-year FX impact. Second element, as you've seen, a very strong BIOFIRE Respiratory Panel sales, up 21% on an organic basis, driven mainly by the very strong respiratory season, even qualified by some as historic high season, especially in North America and EMEA. Our GO-28 four growth drivers are up 12% organic overall.
If we start with BIOFIRE non-respiratory, super robust performance at 11% organic, in line or as Pierre said, very slightly above our 2025 full year guidance. We mentioned that in EMEA, despite the competition that is not new in this region, we have a very strong dynamic with a double-digit growth for non-RP in EMEA in the quarter. Overall, globally, the pricing for the non-RP has been flat, so stable pricing in Q1 2025 versus last year, Q1. Non-RP represents 35% of the reagent sales during the quarter. We said it, the IB expansion has been very positive in Q1 with plus 600 net units. I remind you, it is net installed with our customers. I take this opportunity about the IB of BIOFIRE to let you know that we will stop communicating this BIOFIRE install base number on a quarterly basis. There are several reasons for that.
First, on such a large install base, we believe the quarterly numbers are not so material. We are on more than 27,000 instruments on our install base. We also, I must say, received a number of feedback from investors to stop giving these figures, knowing that last year, we also, for those who follow bioMérieux, that it created unjustified volatility on a quarter-on-quarter. Last point, when you look at comparables on syndromic, actually, nobody of our comparable players reports IB of syndromic on a quarterly basis. Again, this is due also to the maturity of this product. I remind you, we don't report on every quarter our VITEK or BACT/ALERT or VIDAS IB. Now turning to SPOTFIRE, EUR 54 million sales in Q1, up more than 160%, 160% organic growth. As Pierre said already, a very strong acceleration of our instruments installation, plus 1,400.
This performance on the IB, up 45% in only one quarter. This performance is driven by the continued expansion in the U.S. Pierre mentioned a very good partnership, a very efficient partnership with McKesson, and also a strong acceleration. We qualified a one-off in Japan, thanks to a very specific government subsidy that ended at the end of March, that was pushing for the customers to get equipped. In detail, by the way, the U.S. installations were themselves similar in Q1 2025 as they were in Q4 2024. We believe we are very much in line to reach our target for this year, which we said is doubling sales for SPOTFIRE at EUR 190 million for 2025. Turning to microbiology, 4% organic growth, which is slightly lower than expectations.
The performance is impacted by China, with a pretty strong pressure on the overall healthcare spend in hospitals in the country, and a pretty high comparable effect last year. We have another effect on blood culture, specifically inside microbiology, which is linked to our competitor supply issue last year. You might remember it was broadly discussed. These supply issues from competition last year have had the effect that customers have adapted their use of blood culture bottles with less consumptions in the past few months. We see that as a market effect also impacting us. Excluding China still, overall, the VITEK and BACT/ALERT sales are up 7% with about two percentage points price increase. Finally, industrial applications, very good performance, 9% organic, fully in line with our guidance for the year. Reagent sales are up double digits.
As Pierre already highlighted, the pharma segment, which is about half of the overall industrial applications, is particularly dynamic. It is nice to mention that after softness in instrument sales last year, we see instrument sales back into positive growth territory. In immunoassay, the negative performance continues to be driven by the global acceleration in procalcitonin sales decline, more than 20% decline. That still represents about 20% of our immunoassay sales. We also see a strong effect of China on VIDAS and on Hybiome. It is still pretty small for bioMérieux, but this specific segment is under significant pressure on the price and competition. Overall, a very dynamic quarter that makes us very confident in achieving our 2025 top-line guidance of at least 7% growth. Before moving to the Q&A, some details on the very volatile environment that Pierre mentioned.
China, I mentioned already, there is the impact on immunoassay linked to volume-based pricing extension. There is also this impact on microbiology, which is not volume-based pricing, but more a global policy in China to pressure the hospitals on their spend, which we definitely see on healthcare spend broadly, not specific to bioMérieux. Tariffs, it's probably worth explaining the exposure of bioMérieux on tariffs. It's basically threefold exposure. As we already mentioned, the sales of bioMérieux in the U.S. come from products that are about 85% produced in the U.S., which is a pretty good footprint in the current environment. Yes, the first exposure is that 15% of the products we sell in the U.S. are coming from outside of the U.S., especially from France and a bit from Italy. So 15% of U.S. sales.
Second exposure, I would say like any U.S. player, and we are very much a U.S. player in the U.S., we import some raw materials for our manufacturing in the U.S. We import raw materials and components from China, from Europe mainly. This is, of course, a second exposure to tariffs. Third exposure is our exposure to the China, I would say, counter tariff, if I may. China represents 5% of bioMérieux sales. A vast majority of what we sell in China is actually imports from the U.S., mainly on microbiology products. We are monitoring very closely the situation, as you can expect. Not easy, as the rules are changing every day in the past seven, eight days. While the growth impact could be significant for bioMérieux, there are a number of short-term actions that we are investigating or for some already taking to mitigate impacts.
I can mention that, for example, the shipping of instruments into China before the tariff escalation days. We start to negotiate with our suppliers as well. We have built and, let's say, started in China a plant for BACT/ALERT bottles, blood culture bottles that we are ramping up, accelerating in terms of ramp-up. We are trying to maximize the use of raw materials that are already in the U.S. These are more short-term actions, and we will work on medium-term actions in case the tariffs will have to be maintained at those levels. I would like also to explain the foreign exchange, even though the US dollar, as you saw, was pretty strong in January-February. Weakened very much in the past few weeks. Euro has a very strong appreciation against many currencies, not just US dollar, but most currencies over the last few weeks.
The good news is that we have, as you know, we have a policy to hedge most of our currency, a significant part of our currency exposure for the year. This is pretty effective. We still have an impact, but that is not so material. We review our currency effect on Contributive EBIT for the year to be around minus $35 million to minus $40 million from around minus $30 million a month and a half ago. Overall, we will monitor the situation on tariffs and FX notably, but we are confident at this stage to reach the 2025 annual guidance for at least 10% organic growth of CEBIT. With that, I propose we move to the Q&A session.
Thank you. If you are dialed in via the telephone and would like to ask a question, please signal by pressing star one on your telephone keypad. If you are using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. Again, press star one to ask a question. If you are in the event via the web interface and would like to ask a question, simply type your question in the ask a question box and click send. We'll pause for just a moment to assemble the queue. We'll take our first question from Odysseas Manesiotis with BNP Paribas.
Hi, thanks for taking my question. Firstly, on the U.S. raw materials that you're importing from China, could we get an approximation of how much of the COGS this accounts for, and then I have a follow-up, thanks?
Thank you for the question. At this stage, we try to give the, I would say, the broad exposure with the three levels that I've explained. Again, as things have not stabilized yet, we will avoid to give super detailed on the exposure. Again, the tariffs themselves are changing every day. Our own actions on how we can mitigate the tariffs are also in the build, and some are being triggered. Again, I think our exposure, the most important is our exposure as a U.S. manufacturer is probably quite likely similar to other U.S. players as we try to find a supply where we find the best ratio, or the best ratio of quality and cost on our different supplies, which sometimes comes from Europe also.
Got it. And then on the production ramp-up in China for the BACT/ALERT bottles, could you give us a sense of where that would take you in terms of imports from the U.S.? Would it say that it could move you to essentially producing the majority locally of what you're making in China?
The target is definitely, and that was already the target. We are glad to have this plan that we have built over the past three years. The target is to produce in China BACT/ALERT bottles for China. When I say that, it means 1 00% of the China market bottles coming from our Suzhou plants. Of course, we are in a ramp-up. This is the second year. In the current environment, we intend to accelerate the ramp-up and also to accelerate potential localization of raw materials in China as well.
Got it. Thank you.
We will take our next question from Kavya Deshpande with UBS.
Afternoon. Thank you for taking my questions. I've got two, please. My first was just on the BIOFIRE non-RP sales. Could you clarify for us whether all regions are growing, at least in line with the GO-28 guidance for 10% growth for this franchise, please? And then the second was on SPOTFIRE, obviously a very strong quarter for installations. Could you just give us a bit more color on whether installations are still largely competitive displacements and whether that's a similar dynamic both in the U.S. and Japan? Thank you.
Yeah, thank you. Maybe I can take it. Non-RP sales growth, it's growing in every region. I'm not sure I can confirm that every region is growing above 10%. There is a bit of a mix. Maybe to give a little bit of color within the, because you can grow at the level of granularity by type of panel, what we've seen in every region is BCID sales. The sales that are actually related to positive microbiology blood culture results are growing a little bit less in this first quarter. We see it as a very direct impact of the microbiology market that is slowing down a little bit in developed countries. In the U.S. and in Europe, BCID was a little bit lower.
Overall, very much in line with our plan, Kavya, and very confident with the 10% sales growth that we communicated for 2025 guidance. Your second question on SPOTFIRE competitiveness displacement, totally confirming what we said until now, that is in the U.S., it's 100% of replacements. In Japan, there is a significant point-of-care market, maybe not exactly the same competitors, but we are very happy to see that the Japanese authorities see SPOTFIRE as a very competitive and an opportunity, actually to strengthen point-of-care testing for respiratory syndromes. It is installed into GP offices or pediatric offices where there is a need for and already point-of-care testing.
Understood. Thank you very much.
We will take our next question from Maja Pataki with Kepler.
Yeah. Hi. Thanks for taking my question. I have actually a few, so I'll just go through them. Pierre, if we look at the GO-28 plan and we look at microbiology, particularly in Q1 due to softness in China, you're a bit off from the target that you set for yourself over the plan. How are you thinking about China for the rest of the year in microbiology? Do you believe that there is going to be an acceleration in growth, or do you expect the softness in China to persist throughout the year? The second question is on the immunoassay franchise, down 9% in Q1, quite far away from flattish revenues. How shall we think about the franchise going forward, and does that pose a risk to, you know, more than 7% growth target or the 7% growth target for the period?
Just a housekeeping question, could you tell us how much the special one-off effect was of instrument placements in Japan in the quarter? And how shall we think about the SPOTFIRE phasing Q2, Q3? I recall last year in Q2, we were all a bit disappointed about soft SPOTFIRE revenues and placements. Just to avoid that, how shall we think about that? My last question for now is, there has been the announcement about a partnership between Oxford Nanopore and Cepheid. I was wondering what your views are on this partnership, given the fact that you are competing with Cepheid in the point-of-care market and you have a stake in Oxford Nanopore. How do we square that circle? Thank you.
Thank you, Maja . I'll go in order from the first one. Microbiology and especially evolution in China. To be transparent with you, we are a little bit surprised by the decline in microbiology because there is no price reduction in microbiology. There is no volume-based pricing in microbiology. What we're seeing is a general environment in the Chinese hospitals market, a huge level of cost constraints that is spreading beyond the kind of obvious target that were immunoassays, immunochemistry. It's a little bit of a lateral impact that we are experiencing in microbiology. It's complicated to tell you what's going to happen in China, but we see it as a bit of a one-off and short-term impact. It may last for a few more months, but we don't see it as a long-term impact for microbiology.
As you know, microbiology has been developing a lot in China in the last few years. We are by far the market leader. We are a little bit less exposed to China competition in microbiology than in immunoassays. We still see it as an opportunity for growth. Hence, the manufacturing plan that Guillaume was talking about, that is aiming at manufacturing in China 100% first supply for BACT/ALERT bottles. It is complicated to give you a full estimate on what is going to happen for microbiology in China, but there is a little bit of an impact, principally an impact of the overall cost constraints on the healthcare system in China.
On your second question on immunoassays, or maybe just a word on microbiology because you mentioned the gap in Q1 versus GO-28 guidance, just to remind you, we had actually very strong performance in 2024 ahead of the target, and we guide for 6%-8% over the period of the plan. It may be that this year is a little bit below, a little bit higher, but we're still very confident in our capacity to achieve the GO-28 target for the years to come. Immunoassays, yes, lower number, very much impacted by China, by the way. Again, this strong Q1, I would tend to say, I mean, even though there is a more kind of structural element for us in immunoassays with procalcitonin, we are actually very close to what we were expecting in terms of expectations from a budget perspective for immunoassays.
Too early to say that. You're right to say it's a slow start, like RP, which is a big start, but too early to say that we want to change our target or our guidance. We're still aiming at stabilizing the sales for immunoassays. We still have some elements to believe that we can recover. Lower start at the end of Q1. If and when we see that we have been used to integrate, we integrate, but we confirm the overall guidance at 7% growth for 2025. One-off in Japan. Guillaume said a word about, actually, I mean, the two big countries that generate most of the intelligence are the U.S. and Japan. We're seeing very continued traction in the U.S. It's only good news, actually, to have the acceleration in Japan.
You're right to point out that Q4 and Q1 are stronger quarters in terms of installation. We expect Q2 to be lower. In the spirit of managing expectations, to your point, and we had a little bit of volatility last year when we communicated Q2 numbers, we expect Q2 to be lower because at the end of the respiratory season, there is significantly less clients that want to equip themselves with a point-of-care system for respiratory. We are seeing Q2 much lower. To be transparent with you, the biggest part of Q3 is also lower. We're really seeing August and actually September getting better. Then two big quarters that are Q4 and Q1. That's a pattern that we've seen that we expect to see again in 2025. Finally, partnership with Oxford Nanopore. First of all, it's also a question for Oxford Nanopore.
We don't have an exclusivity partnership with Oxford Nanopore. They have the right to select different partners. In a way, Cepheid selecting long-read sequencing solution for infectious disease is a confirmation that it is a good technology to deal with infectious disease. Our plan is to still launch the AmPORE-TB solution that was, by the way, displayed at the ESCMID Congress in the next few weeks, and that will be a very innovative sequencing solution in partnership with Oxford for diagnosing multi-resistant tuberculosis.
Okay. Thank you.
Thank you.
We will take our next question from Aisyah Noor with Morgan Stanley.
Hi. Good afternoon. Thanks for taking my question. My first one is on the tariff for Guillaume, I guess. What are you assuming happens for now? If you could kind of elaborate, you mentioned that the gross impact could be significant. By your assessment, how big is this gross impact before any mitigating efforts? Would it be in the double or triple-digit million magnitude here? Can you clarify whether you could qualify for any exemptions like the Nairobi Protocol that some of the other companies are talking about? My second question was a quick follow-up for SPOTFIRE. Do you still intend to report the quarterly install base for SPOTFIRE, if not BIOFIRE, given the largest player in low-plex testing is still reporting this KPI? Thank you.
Yeah, maybe to thank you very much, Aisyah. Yes, install base of SPOTFIRE we intend to continue to report on a quarterly basis. The difference is that it's a product that is still recent and that therefore the quarterly figures help everyone understand the, I would say, the ramp-up of the product itself. Whereas again, it's not the same argument on BIOFIRE, which is a very mature product launched more than a decade ago. Yes, we will report quarterly IB of SPOTFIRE. Coming back to tariffs, we do not qualify for the exemption. Thank you for the question. It's good to mention because, of course, all this is moving all the time. We understand there is a temporary exemption for some pharma companies, but medtech are not part of this temporary exemption. Not today. Again, the rules change every day.
No exemption, no specific exemption. The growth impact, and sorry, I repeated gross. I think you understood, but for everyone, I'm not talking growth of the sales. I'm talking growth impact on the CEBIT, and the cost would be, yes, very significant, probably triple-digit if we were to do nothing and have no impact, and on a full-year basis. Again, it is very difficult at this stage to assess. We took assumptions in our guidance that the U.S. and China tariffs will stay exactly the same for the next nine months, which probably is not quite likely, again, as they change all the time, but this is what we assumed.
We'll see how they stabilize. We also took into account that, again, we will not be impacted by the gross amount because we have a number of levers. I mentioned some of them that we are already working on. The net impact will be much more limited, especially in 2025, which makes us, at the end, confident to be able to confirm our guidance of at least 10% organic growth. Of course, this very strong Q1 helps us also to be confident on this full year.
Okay. Understood. Thank you very much.
We will take our next question from Dylan van Haaften with Stifel.
Hey, guys. Thanks for taking my question. Just firstly, just on SPOTFIRE, if we kind of compare to the prior year, which is obviously early, but the installed base is roughly three times higher, and revenues are two times higher, roughly. Should we kind of think that with the high installed base additions that the per unit installed base, sorry, the per unit reagent consumption is a bit lower? How should we be thinking about the 2Q and 3Q here before sort of the respiratory season kind of kicks in again? Just on a modeling basis, any color would be super helpful. And then I have a follow-up.
Okay. I start answering, Dylan. Thank you for the question. You're right to say as we grow the install base and we grow into this point-of-care setting, there is less patient traffic. Sorry for it's a bad word, but we have less tests per machine. We also have, as you know, on SPOTFIRE, we sell 15 targets and five targets at a different price. In the point-of-care setting, we're also selling more five targets than 15 targets. There is a volume thing. There is also a mixed impact that plays against the burn rate. That's one element. Having said that, what we're seeing is a significant increase when we compare Q1 2025 with Q1 2024. When you compare from one year to another, we have more than doubled the sales.
As you know or remember, our guidance for 2025 is to double our sales performance in 2025 versus 2024. We see, and by the way, we've increased by 1,400. We increased the install base by 45% in just one quarter in Q1 2025. We are seeing both an acceleration and an improvement in terms of new instruments. You're right to say a level of burn rate, which is a little bit lower. The combination of the two makes us very comfortable to achieve this doubling of sales in 2025. I hope that helps.
Excellent. Thanks. Oh, that helps a lot. Maybe just to kind of understand, if we go back and maybe think about the first 12 months of, let's say, the first adopters of SPOTFIRE, could you give us sort of an indication of what kind of ramp they are, sort of what kind of level we should kind of envisage that the new vintage should be running at on a relative basis? Obviously, it's not like- for- like, but in broad terms.
I think it's difficult to, sorry, it's difficult to provide such level of details. Yes, there is ramp-up, but I think the most important impact is this mixed effect that Pierre mentioned, that as we grow more on the pure point-of-care or traditional point-of-care outside of the hospitals, we see the average consumption per unit lower on that segment than the hospital segment. Again, please remember that we, we bioMérieux, have been in this specific segment only 18 months. I am not sure we are yet super experts of the ramp-up and on the consumption of the different types of settings. Sorry.
Understood. Maybe just one final one. Also on SPOTFIRE, we obviously had McKesson kicking in in the third quarter, and then we had this one-off in Japan. Maybe just on Japan, could you quantify that for us a little bit? Also just on McKesson, should we kind of envisage that it's going to keep rolling, or should there be sort of a slowdown, let's say, when the McKesson distribution sort of gets recomped in the third quarter?
Sorry, you said third quarter, but McKesson really started last year, April 1st. It was the start of their fiscal year. Of course, they started at a time where the market itself is not the most active in terms of new installations, but they were in the market with us. You probably mentioned third quarter because, again, that's where the market was more on the buy cycle, and we were together successful. No, as Pierre said, the partnership is ongoing for a year now. We are very pleased, and we understand they are as well. We take market share, which is our ambition with SPOTFIRE.
As you understand, Dylan, we are far from saturating the market. We do not see good reasons, to be honest, to see a slowdown with McKesson. As we said, Japan is a huge point-of-care market. We benefited from this specific subsidies program for a few months, which was great news because it allows to accelerate the installations. We still aim at installing SPOTFIRE in Japan. We are very far. We are a very small market share, actually, from an install base perspective. We are very far from having saturated the market opportunity.
Understood. We should not be thinking that this is sort of a flash in the pan, let's say, this 1,400 number, that you know, this is a pretty good starting point, obviously, and installs are going to be weaker in the second quarter sequentially, but it is not going to be sort of in the low hundreds.
Yeah, we don't give forecasts per quarter, but we wanted to highlight the fact that, I mean, we're extremely happy with the Q1 number. And there is an element of bids. You know, Q1 is a high month for installations bid that we benefited from this Japan-specific subsidies program. It's probably on the high side. We expect Q2 to be lower, yes.
Understood. Thanks, guys.
Thank you.
We will take our next question from Marianne Bulot with Bank of America.
Thank you for taking my questions on SPOTFIRE as well. Could you maybe further explain a little bit the Japan government subsidies and how it worked? Will the hospitals also receive some subsidies for the test and consumables, or was it just for the equipment part? The second question on SPOTFIRE as well. The install base has grown quite significantly this quarter, and based on your comments from the previous questions as well, could the $190 million guidance be a bit conservative for this year, or do you feel that there is a risk, maybe that these Japan installations are a bit less utilized as the government funding boosted some of the placements? Thank you.
Yeah, thank you, Marianne. The subsidies plan in Japan, what I understand, is the plan from the Japanese authorities is to actually help the point-of-care setting to get equipped with the instruments. In Japan, you cannot place. You need to remember that in the U.S., we place an instrument. There is absolutely no cost in the point-of-care setting for having a SPOTFIRE instrument, and then they have the rolling use of the reagents. In Japan, by law, you cannot place. You have to sell. To help in the point-of-care settings, the doctors who have access to respiratory testing, they have decided, and kudos to them, to help the point-of-care settings to equip themselves with instruments. It is great news for us because it accelerates the installation of SPOTFIRE instruments. It does not come together, as far as I know, with a subsidy to diagnose more.
It helps them to have the most updated, most recent instruments into their offices to be able to diagnose better Japanese patients. That is the rationale for the test for the subsidy in Japan. There was a deadline, which was the end of March. It may happen again, by the way. We do not know, and obviously, our teams are looking into it. For now, we know it will not happen after the respiratory season. With regards to your question on the target, I mean, we have just communicated a month and a half ago target, which was to double the sales. We are very, very happy with strong performance in Q1, which is more than doubling the sales. Right, we are early to say we are going to be above the target. At this stage, we confirm the target, which is EUR 190 million for 2025.
Okay. Thank you very much.
Thank you, Marianne.
We will take our next question from Shubhangi Gupta with HSBC.
Hi. Thanks for taking my question. My first question is, you had a very strong performance in America. Do you think, especially on the respiratory, I understand it is due to strong flu season, but do you also think there is a pull forward of revenues ahead of the tariff uncertainty in Q1? And second, I understand there has been a pause on tariffs ex-China, 90-day pause. Ahead of that, some companies might want to build up their inventory. Could you comment where your inventory level sits, quarter-on-quarter or year-on-year level? Some color there.
Maybe on the first one, which was, if I understand your question, was about a potential pull-forward effect into Q1. We have not, it's difficult to measure for us, but we have no specific signal of any of that. No, we have not seen anything that would be a pull forward. Second part, I was not sure.
Your question was on China, right? Your second question?
Second question is on your inventory levels. Can you give some color on your inventory levels?
Inventory levels, so we report on a half-year basis. As we said earlier, we intend to continue to manage it in a good way. I mean, the seasonality effect is usually that we have increasing inventory up to end of Q3 to prepare for the winter season, especially on the respiratory. We kind of decrease, especially with a strong Q1. You can be sure that our inventories are lower at the end of Q1. It's probably the lowest point of the year, but that's normal seasonal effect.
Maybe to complement, because we talked about stock management in the context of tariffs, we have a bit of a higher stock in China from an instrument perspective because the teams have managed to import in China before the tariffs were raised, I think between six months and one year of instrument consumption. That kind of reduces significantly the impact on instruments coming from the US in the Chinese market. We are kind of managing the stock in this geopolitical environment in an agile way, as I said earlier. Building stock where we believe it will actually allow us to minimize potential additional costs for bioMérieux.
Just a quick follow-up. Related to your-
Go ahead. Go on.
Yeah, yeah. You mentioned you have higher stock in China. Similarly, do you also have higher stock in the U.S.? Because I understand right now there is no additional tariff, ex-China from U.S. At least from U.S. if you have to import from other countries, ex-China, some companies might want to stock up there. Could you also give some color on your U.S. stocks?
We have significant levels of inventory in the U.S., for U.S. plants and for the U.S. market as well. I'm thinking raw material and some finished goods, which we, again, mentioned earlier also for the, let's say, normal safety stock, and then the cycle stock coverage for our products. It will definitely help us in this period to mitigate some of the, at least for a temporary part, mitigate some of the effects of the tariffs, definitely.
Okay. Thank you.
We can maybe take some questions that are by writing. Pierre, there's a question on an update on Specific Diagnostics, meaning the performance of REVEAL, Specific REVEAL.
Yes. What we shared, I do not know if we shared it in a call, but we share on a regular basis. We are just launching in the U.S., so in very first few weeks and months of commercialization. I think it will take a few months of commercialization in the U.S. to be able to come back to the market and give you an update on where we stand with regards to VITEK REVEAL ramp-up in the U.S., acknowledging that this is a new category in the market, fast AST, very, very limited offering until now. Very much growing, as we did successfully with syndromic testing in molecular. We are aiming at growing the category. In the U.S., it's definitely a market of interest in that regard. I suppose that based on 2025 performance, we'll be able to give you a little bit more color on VITEK REVEAL launch.
There's also a written question on the update on the development and commercialization of latent TB test, which we call the TB-IGRA, for the U.S. market.
Yeah. In the U.S., we are in the process of doing the clinical trials. In active discussions with the FDA, it's even possible that we've started the trial, or we are on the verge of starting. We have a plan to get a TB-IGRA test, latent TB test, available in the U.S. as soon as we have completed the trials and it's been reviewed by the FDA. No change to the plan. Not this year. I know. Not this year. It takes a bit of time to do the trial, unfortunately.
That's it for the written questions. Maybe we can take questions from the call.
We will take our next question from Natalia Webster with RBC.
Hi there. Thanks for taking my questions. Firstly, following up on a previous question on microbiology, you seem to be comfortable with the GO-28 guidance of 6%-8%, but I wanted to confirm if you're now expecting to come in a bit below the 7% segmental guidance that was provided in March for this full year, 2025. You commented on China, but are you able to quantify how much of microbiology is being impacted by the weakness in blood culture that you mentioned? Next, I just wanted to ask a more broader question on microbiology since your growth was still quite strong in North America.
Are you able to comment on the progression of your market share here, given your midterm strategy to become number one across all segments? Finally, on BIOFIRE, given the very strong performance in Q1, do you see the prior full-year guidance for respiratory sales to be flat this year as conservative, or was this largely baked into your guidance provided in March? Thank you.
Thank you. I really actually put together your question one and your question four because you're right, we're starting a little bit low year in microbiology, and we're starting a little bit higher year with regards to respiratory panel. I mean, it's only one quarter, it's 25% of the year. There are a number of actions that are being taken by the teams to maximize the growth perspective, the sales perspective for the remaining of the year. Honestly, too early to revise any sub-target. If we see a very strong evolution one way or another, obviously, we would. What we see very clearly is that between potential risks and opportunities on the guidance, we are very confident to confirm the 7% increase, at least 7% increase in sales for 2025. That answers your microbiology question and your RP questions.
More specifically, China microbiology, we have a—I tried to answer it a little bit earlier. We are seeing a bit of a slowdown in the first quarter, which is mostly related to macroeconomic environment in the healthcare system in China. Complicated to say when and how fast we will recover. Medium-term perspective, there is a need for more microbiology in China, very strongly. There is a strong level of recognition for microbiology solutions. We have a strong market share in China. It is more a matter of when than a matter of if it will recover. We keep monitoring the situation on a daily basis. The teams are super active. The very fact that we have local manufacturing in China should help also to navigate those challenges. I cannot give you an exact answer on when the market will recover.
The third question on market share in the U.S., we are seeing actually good traction in the U.S., v ery happy with the evolution. Again, in microbiology, we benefit from different elements. The first one is we have a very comprehensive offering, be it identification with VITEK MS PRIME, with VIRTUO, be it antibiogram with VITEK, or now fast AST with VITEK REVEAL. We have a very comprehensive offering. The second element is versus the competition, we have the most updated systems, the most recent systems launch. It's true in every category. It's true for MALDI-TOF with VITEK MS PRIME.
It's true for HemoCulture with VIRTUO. It's true for AST with VITEK REVEAL. We believe we are very well positioned to capture share. The third element is we have capacity to link and to cross-sell between the different solutions, as we successfully did with BIOFIRE for the different clients. Yeah, very confident with our capacity to grow share in microbiology in the years to come and most importantly in the US market. I hope that answers your question.
Yeah, just a quick follow-up on the microbiology in terms of the change in customer behavior following the supply chain issues on the blood culture side. How much are you seeing that impact yourselves, and how much do you expect that to continue?
That's a very good question. I'd love to have a precise answer. What we are seeing is a very—I mean, you have to remember that our clients, especially with HemoCulture, they are usually mono suppliers. When they see a challenge in terms of supply chain, they start to be very cautious with the use of the bottles. As you know, we've managed to protect all our clients. We are not in a backorder situation, but we are also in a very stretched situation in terms of supply. The whole market, I think, is a little bit cautious. Our clients are a little bit cautious with the use of blood culture, reviewing, making sure that they're using it only if and when it's absolutely necessary for critical care patients, which is very healthy.
As the supply to the market will normalize, we expect the situation to get back to normal. Unfortunately, we're getting over the respiratory season now, but we expect the situation to recover in the next few months as we're capable to—all the players in the market are capable to reassure the customers that we're capable to secure supply.
Great. Thank you.
Thank you.
We will take our next question from Jan Koch with Deutsche Bank.
Good afternoon. Thanks for taking my questions. I have two. The first one is on the expected currency impact on earnings. Which currencies are responsible for the high expected headwind? In relation to this, have you made further progress in reducing future negative impacts coming from currency fluctuations? Secondly, on tariffs again, how confident are you in passing on those additional costs to your Chinese customers, given that you mentioned that there is a huge level of cost constraint in that market at the moment?
Yes. Thank you very much. On FX, the main currencies where we see impacts—first, the high inflation, hyperinflation, and hyperdevaluation countries such as Argentina and Turkey. We have others like Mexico, Colombia, India, as you can see, where the exposure could seem less, but actually the variation in the currency is very significant. Fortunately, on some of those, for example, India, the rupee, we were hedged. We actually offset some of the 2025 impact with our hedging in place. That gives you, I would say, some color on where we see the major impacts.
I should mention, of course, the USD, just to remember again to everyone that our global exposure on the USD currency is not major, as we have, of course, a very high base of sales and profits, but also gross profits, and also a high base of manufacturing and R&D and functions in the U.S. Net currency-wise, the USD exposure is not huge. It's not zero either. The USD, of course, I mean, the projection that we had at the end of February was actually with a stronger dollar, so positive effect. Today, it's a much weaker dollar, so more slightly negative effect in the new projection.
Impact on pricing. I can say one if you wish. Impact on tariffs, tariffs' impact on pricing. A little bit too early to say. As you know, the measures that have been taken have 90 days, kind of. We are not going to increase prices for 90 days. We have usually longer-term contracts. We need to see where it goes. The second element I would mention is, you're right that our customers have a limit to what they can take in terms of price increase.
We also want to make sure that we manage this in a careful manner. The third element is, I think we've demonstrated during the hyperinflation years that we are capable actually to increase prices. This is a muscle, if you wish, that we have exercised in the last few years. If we come back to a permanent inflation evolution, those discussions, we'll need to have them together with our clients, of course.
Understood. Thank you.
Sure.
We will take a follow-up question from Maja Pataki with Kepler.
Yes. Thank you for taking my follow-up question. Apologies for that. By now, I think I'm totally confused about what is included in your tariff calculation. When you indicate on the gross impact of a triple-digit amount on profits, are you taking into account that there is this $145 tariff from China and that we have Europe at 10% now, but then it's going to go to 20%? What is included in this triple-digit gross amount that you're going to balance out? That would be very helpful to understand. Thank you.
Yes, of course, Maja. No problem. Sorry if it was not so clear. Today, in all our simulations, we take the current U.S. tariff on China, U.S. tariff on Europe at 10%, and China tariffs on U.S. at 125%, as if they were to stay medium term. When I say gross, I mean, again, the very basic impact on the full-year flows. Of course, this is not the reality as, again, first, this year is not full year. Second, the flows of a normal year are not the flows that we will manage in the future because, as you heard, we are already triggering actions on the flows themselves. Localizing more in China for China, maybe localizing more in the U.S. for U.S., negotiating with our suppliers, etc.
The most important is not so much the gross, but when we have visibility, will be the net. At this stage, we took our own assumptions on what could be the net. With those assumptions, meaning our actions and the impact of our actions in front of the tariffs, we are, let's say, pleased to be able to confirm the 10% growth of CEBIT for 2025.
May I just ask why you didn't assume that there might be a tariff on Europe of 20% after the 90 days?
Because, honestly, we changed our simulation and calculation, I think, seven times in the last seven days. Not because our calculation was wrong, but because, as you all read, every day, every morning, every evening, the rules are changing every day, even on Saturday and Sunday. We had to take an assumption. I do not think any one of us knows what is going to happen. It changes all the time. Maybe the 10%, you are right, might become 20. Maybe they are going to negotiate, it is going to be 5%. Maybe it is going to be 40% . We do not know.
I just share with you, I would say, in the most transparent manner, what we took. We will be very pleased to update that when things stabilize, I would say, which we believe is the most important. First, when tariffs stabilize, which is probably not yet the case, and when we have also, let's say, good clarity on our side on our own actions and the effects they have.
Great. Thanks a lot. Very helpful.
We have a follow-up question from Marianne Bulot with Bank of America.
Thank you very much for taking my quick follow-up. Just on the BIOFIRE and the respiratory sales into Q1, could you just comment on the growth you saw in the U.S. and if it was 10% or more? Thank you.
Your question is on respiratory, non-respiratory?
Non-respiratory. Non-respiratory in the U.S.
Yeah. I mean, sorry, Marianne, we don't give because otherwise, we need to give it by regions. We have four regions, actually: NOAM, LATAM, EMEA, Asia Pacific, with significant sales growth. What we said, I think Guillaume said, for us, the growth that we saw in EMEA is a good illustration of because it's a question on a capacity to grow significantly in a market where we have significant competition. In this case, it's QIAGEN's with QIAstat that is very present in Europe. We don't disclose specific numbers for all regions because otherwise, it would generate a level of complexity in reporting and, honestly, monitoring of the performance that will be a little bit complicated. We are growing very nicely in the U.S. and very much in line with the plan. Very consistently together to deploy another role, 10% sales growth by the end of the year.
Okay. No problem. I understand. Thank you very much.
Yeah.
There are no further questions at this time. I will turn the conference back over to today's speakers for any additional or closing remarks.
I think we're good.
Yeah. So.
Aymeric, you're closing the call?
Yes. Thanks a lot. Talk to you soon during conferences that we will attend over the next few weeks.
Thank you, everyone. Thanks. Bye-bye.
Bye-bye.
Bye.
This concludes today's call. Thank you for your participation, and you may now disconnect.