Good day and welcome to the bioMérieux full year 2021 financial results. Today's call is being recorded. At this time, I would like to turn the conference over to Franck Admant. Please go ahead.
Thank you. Good day, everyone, and thank you for joining us to review bioMérieux performance for 2021 and our objective for 2022. Before leaving the floor to Alexandre Mérieux, Chairman and CEO, and Guillaume Bouhours, CFO, I will just make a very short introduction to provide you with a couple of information. First of all, our press release was published this morning at 7 A.M. You can find it on the home page of our website. In addition, note that the slide of this meeting will be available also on the home page, and you can download it shortly after the webcast. Shortly after the end of the meeting, the webcast and the call will be available in replay on our website. Now going to the presentation contents. After reviewing our 2021 performance and 2022 objectives, we will hold the Q&A session.
Questions can come from the conference call and from the chat of the webcast. If you wish to ask a question, please make sure to identify yourself, your name and company. One very last word before starting the presentation, I will not read the slide which is currently projected, but I recommend you to take note of its contents that remind the usual disclaimer about the forward-looking statements. Now, I hand the call over to Alexandre Mérieux.
Thank you. Hello, everyone. Good morning or good afternoon for some of you. Let's start with the review of 2021 activity. We start by saying that 2021 has been for bioMérieux, after two years of COVID, again, a year of remarkable performance. I believe we delivered a sound performance, both in terms of sales growth. The organic growth was double digit at +10.5%. Strong financial performance also, as we reach EUR 801 million in terms of contributive EBIT, close to 24% of the sales. Also worth noting that we are a debt-free company, since we had a free cash flow generation of more than EUR 500 million.
I would say also that during this last year also, we have been able to improve and set up our also corporate social responsibility vision and roadmap. As you will see also a bit further, we have a solid pipeline of new solutions to be launched. As we hope that the world is going into an endemic phase of the COVID, we believe we are well positioned to address this endemicity and also all the needs related to the fight against AMR, standing for antimicrobial resistance. Maybe I will start with the performance of key range, which is BIOFIRE. As you can see, we displayed last year organic growth of +14%.
Important to note that during the COVID time period, we doubled the install base of instrument. Now we reach around 22,000 units being sold and placed. Worth noting also that we had a good growth on the respiratory panel at +14%. The non-respiratory, such as gastrointestinal panel, meningitis panel, pneumonia panel, and BCID panel also displayed a nice growth in terms of reagents at +35%. Solid growth this year. The fact that Omicron was hitting the U.S. and the rest of the world in Q4 also boosted. Well, in fact, we had strong demand signals in Q4 for RP panels. Maybe the next one. Microbiology, which is also core to us.
I believe we displayed also a nice, a solid performance, as we had both our plastic system, I would say, such as VITEK and BACT/ALERT, growing well in terms of growth, in terms of placement also. We have been able to leverage our offer across the portfolio. We launched in Europe, we got the CE marking for the VITEK MS PRIME, which is a promising system. We expect to have the VITEK MS PRIME to be FDA cleared in 2022. Regarding immunoassay, we had growth of 8% last year. I would say with two different aspects, some tailwind from the pandemic. Of course, we benefited from the good performance of our SARS-CoV-2 serology test.
We have a stronger demand for specific test linked to the infectious cases linked to COVID. We have also some headwind, and we could continue to have a competitive pressure on the PCT mainly in the U.S. We had a field corrective action in Q4, which is now solved, but which impacted us in Q4. Otherwise, we made good progress launching important new parameters on the VIDAS, such as the TB-IGRA for tuberculosis, NEPHROCHECK for acute kidney injury, and also dengue, the first one for arboviruses. Looking at the industrial application, which had a solid performance, double-digit growth for the industry business in 2021 after a more difficult 2020 owing to the different lockdown.
As you know, we are active in the field of healthcare and also in the field of food testing and quality control. I would say in both segments, we enjoyed a good growth pushed by our offering, of course, and the fact that the biopharma biomanufacturing market is moving fast and our QC solution are well adapted. In the field of food testing, we had a very strong momentum with our solutions and mainly our solutions linked to molecular technologies such as GENE-UP and Invisible Sentinel. With this short review of 2021, I will now leave the floor to Guillaume to guide us around the performance.
Thank you. Hello, everyone. Let's review our financial and operating performance. Here you have the summary of what Alexandre has already presented, how the split of the organic growth by the major range. You see actually that all of our major ranges performed extremely well in 2021. Molecular is the number one with 38% of sales. Overall molecular is +8%. Inside molecular, Alexandre presented BIOFIRE overall +14%. I have to mention that the non-syndromic molecular was actually down, and we had reported on that during the year. After an exceptional 2020, our R-GENE NucliSENS ranges were overall down 40% in 2021. Basically coming back to more pre-pandemic levels or closer to.
Microbiology +13%, immuno +8%, and industry +10% as presented by Alexandre. Really balanced growth between clinical applications +10.5% and industry +10.2%. Now looking at the same, organic growth by geography. America remains of course our first region with almost half of the group sales at EUR 1.7 billion. North America was up 8%, with a strong push from syndromic molecular as well as microbiology, slightly offset by PCT pressure, as Alexandre mentioned already. We can notice a remarkable growth of 19% in Latin America, well balanced overall inside the region in different countries. EMEA, of course, our second region, up 11%.
Europe was pushed by or driven by syndromic molecular, but also a good growth of microbiology, immunoassay recovery from a low 2020 and industry, as well. The Middle East and Africa region was up double digits, so overall, excellent performance there as well. In Asia Pacific, +16%. There I would like to mention our very strong success in Japan since the introduction of BIOFIRE at the end of 2019. The success that we had mentioned in 2020 was pursued and accelerated in 2021, so excellent there. Steady growth in India and Southeast Asia. Overall China suffered a bit in Q4 because we have a lot of immunoassay business there from the field corrective action.
Still, overall during the year is a bit more than the mid-single-digit growth. Quite good growth in China. Now moving to the P&L. Overall the 10% organic growth turns into an 8% reported growth with some negative foreign exchange, especially on the dollar, on the sales. As you can see, gross profit improved from 56% to 58%. That's a significant improvement linked first to volumes increase of course, and better absorption of fixed costs that go over gross profit, gross margin. And second to the mix, with a positive mix effect. You have seen that the reagents of BIOFIRE in terms of growth are +18% in terms of organic, so obviously higher than the rest.
Costs below gross profit. SG&A is overall a 5% like-for-like growth. We have to mention that this is on a low level of spend, as we have said for the last 2 years actually. 2020 and 2021, due to COVID, we are very low on congresses, marketing, travel, and a number of these, let's say commercial topics. R&D was overall on a like-for-like basis flat, after, you know, we have to remember in 2020 some COVID-related product development costs and performance shares, Phantom Shares costs, that were inflating the 2020 base, not only in R&D but in a number of lines.
Overall, contributive operating income, our main KPI at a record level of EUR 800 million, almost 24% of sales, and up 36% on a like-for-like basis. Just to mention that, on EBIT, on contributive operating income, the foreign exchange effect was also negative, -EUR 33 million in line with our, let's say expectations. I move on now to the P&L below, contributive EBIT. Still, let's say the flat recurring cost of acquisition or the PPA of the BIOFIRE acquisition over 15 years, that is flat at EUR 17 million. This year in 2021, we have no non-recurring expenses versus, 2020, where we had a lot of, exceptional, solidarity actions and, the first contribution to our corporate endowment, fund, of bioMérieux.
That all these made the EUR 42 million last year as a reminder. Something to note is a major improvement in the net financial expense, moving to -10. Of course, we will see in a minute that our net debt position moved to a net cash position. That helps. Also the refinancing that we did on our debt in June 2020 helps improve the situation and lower the cost. Income tax is slightly decreasing at 22.7% effective tax rate. We benefit from a lower French corporate income tax that moved from 32% to 28%, and also from a stronger U.S. profit base. Overall, net income group share EUR 600 million, up 49%, 5.06 EPS.
That will lead to a proposal at the AGM of a dividend of 0.85 EUR per share, which represents a payout ratio of 17%. If we look together at our cash flow statement, for the first time, our EBITDA was above EUR 1 billion. Of course, in line with the EBIT improvement. Working capital was actually a consumption of EUR 38 million of cash. Inventory increased by EUR 62 million. You remember that we were very low on inventory of BioFire, actually in backorder at the end of 2020. We actually especially increased raw material and finished products for the BioFire products. Payables and receivables, overall, very much in line with our activity, even some improvements of the days of receivables.
Important to note, the last part of the famous Phantom Shares plan for everyone. This is our U.S. team's retention plan. That was a bonus, long-term incentive plan based on the share price of bioMérieux. We paid it fully, the last part of it, in March, April. That's of course, a cash out in terms of working capital. CapEx, I will show you some details in a minute, but pretty solid at 9% of sales, EUR 290 million. Overall leading to a free cash flow that is a record for us at EUR 540 million. That leads, even after a few small acquisitions and the dividends, to a strong improvement of our net debt, actually becoming net cash position.
Now a net cash position of EUR 340 million, including IFRS 16, which is about EUR 96 million. Just a few pictures. I think it's nice to share with you where we invest. Some of the main CapEx of 2021. They are not the only ones, of course, but on the top left, you have the office, the new office building, in Salt Lake City, just right next to the new plant that we opened the year before. That is finished, and that actually our teams moved in in November. On the top right, you have a picture of all the, let's say, additional capacity and also progressive automation of BioFire manufacturing that we are investing in.
On the bottom, left and right, you have two buildings that are almost next to each other in Suzhou in China. One is for bioMérieux blood culture business, produced in China for China, and the other one is for Hybiome, our immunodiagnostic business that we took control of, remember, three years ago, which is building its new site, manufacturing and all functions. With that, I hand over back to Alexandre on 2022 priorities.
Thanks, Guillaume. Let's start. Let's switch to our 2022 priorities and outlook, and we'll focus a bit on two key focus for us, which is the fight against anti-microbial resistance, also syndromic testing. I will give you also some details around the innovation R&D roadmap and new product opportunities. We'll talk about CSR, and of course, we'll give the guidance for 2022. Let's start with the anti-microbial stewardship, which as you know is really core to bioMérieux. It's in our DNA to be present and to fight this important threat. You might have seen that The Lancet study has showed that in 2019, in fact, we had 1.3 million of deaths linked to AMR. Some call it the silent pandemic.
This is really where bioMérieux is active. We have seen during this last two years a strong recognition of value of diagnostic. Diagnostic also will be key to fight against AMR, knowing that we are lacking new antibiotics, but a diagnostic will be a key element of the fight against AMR. Of course, we have R&D. We have a commercial relationship or co-distribution of Specific Diagnostics that we keep on investing in that space. We will develop some priorities for 2022 linked to medical education first to train and inform all the different healthcare providers around the world. Investment also in medical and economic outcome studies to support the adoption and the access of diagnostic.
Also partnerships with selected centers of excellence as a means to share our AMS best practices around the world. The second topic, which is important for us, of course, you know the success we have and the leadership we have with syndromic testing. With BioFire, we'll keep on FILMARRAY, we'll keep on expanding the menu. We should be able to launch the new panel called the Joint Infection Panel in 2022. As mentioned, we also doubled installed base, so there is room to grow for the mid to long term. Also leveraging this installed base, which has doubled. Growing also the non-RP panels.
Again, going international, meaning outside of the U.S., remains a key priority for us. We're also very pleased to know that we will be launching a new BioFire platform, which has been starting to be submitted, I think in December to the FDA. As you know, so during these last two years, we have seen some movement in the field of diagnostics. Of course, the push for molecular solutions, but also the push for decentralized testing solutions targeting near patient or point of care. This new solution will be CLIA waived, will have its results in less than 20 minutes.
We are very pleased to be the first one to bring syndromic testing close to the patients with this new solution, which is under FDA filing at this stage. I guess more to come when we get closer to the launch pipeline. We know, you know that we invest in R&D for today, for tomorrow. We should also be able this year to deliver important new products and new solutions. We are planning to launch a new VIDAS platform at the end of 2022. We're bringing scalability, connectivity and traceability. In addition on the VIDAS platform, we'll be able to launch two important parameters. The first one being VIDAS TBI, which is a biomarker to detect traumatic brain injury.
Also we increase our range of solutions to detect arboviruses with the launch of VIDAS Chikungunya. Looking at the industry application, also both food and pharma, we have important launches. In the pharma space, we are launching the industry 3P range, bringing automation, software, traceability, integrity of the result also. We start working implementing these new solutions with the selected customers in 2022. In the field of food testing and quality control, we have good performance in 2021, mainly on the molecular ranges. We keep on, I would say, developing new assays, running on our GENE-UP equipment and also targeting new market niches for the food applications. Good pipeline of new solutions. Maybe the next one.
Also mentioned, I think last year we formalized our CSR ambition, which is really embedded into the bioMérieux strategy around five pillars, health, planet, healthcare ecosystem, employees and extended company. We have been able also to, I would say, deliver and agree on some key important KPIs that we will follow and that we'll deliver on both for 2025 and also for 2030. With that being said, regarding 2022, we are also planning for hopefully for a situation where COVID is becoming endemic. With this we should see a decrease regarding demand for RP panels. We are targeting sales to be between EUR 3.2 billion and EUR 3.3 billion, reflecting revenue growth, negative growth between -7% and -3%.
All of these are in a very volatile environment. Regarding the EBIT, also we'll be targeting to be in the range between EUR 530 million to EUR 610 million. Of course, that leads to the decrease foreseen in terms of sales, but also knowing that we'll be able to invest more in the future in customer-facing activities, so supporting our key launches, supporting the clinical studies, and also like everyone, we'll be facing inflation on salary but also on raw material. All of this will be done by keeping strong investments in R&D and also in CapEx, which should be around 11% of our consolidated sales. With this being said, I believe, Franck, we can open the floor to questions.
Yes. If you would like to ask a question, please signal by pressing star one on your telephone keypad. If you're using a speaker phone, please make sure your mute function is turned off to allow your signal to reach our equipment. Again, please press star one to ask a question. We will take our first question from Maja Pataki with Kepler Cheuvreux. Please go ahead.
Good afternoon. Thank you very much. I have three questions, please. First of all, Alex, on the new BioFire platform, can you tell us something about the panel? Is it going to be the full respiratory plus some sore throat pathogens on it, or is it like a slimmed-down version of the respiratory? And shall we expect that you're gonna put the full menu of BioFire over time on a new platform with less than 20 minutes turnaround time? That would be the first question. The second question with regards to the new VIDAS platform. You talk about scalability. Are you increasing the throughput or how shall we think about that? And then the last question is with regards to inflation. Can you please be a bit more specific?
How many EUR millions you're seeing as new headwinds in inflation that wasn't you know that you couldn't anticipate late last year? How much of that would be can you pass on, and which part do you think you won't be able to pass on? Thank you.
Okay. Thank you, Maja. I will start with the new BioFire platform, which is not launched yet. It's only at this stage of filing with the FDA. We are waiting for the review and there is some backlog. Yes, for us it's very important. It has been a key investment for us this past year. It's a way for us to enter into the decentralized testing space, bringing similar solution. Yes, to your first question, it will be addressing a respiratory and sore throat with less than 20 minutes turnaround time. Today, that's what we announced, and we'll see for after, but usually we don't launch a platform with only one panel.
I wouldn't say it's kind of teasing, but let's wait to have the official launch or when we'll be closer to the launch. Since FDA filings are starting and we felt it was important to share with you. Various platforms, yes, the scalability we'll be able to bring a higher throughput to the platform. VIDAS also, this will be able to transfer most of the VIDAS parameters existing today on VIDAS on this new platform. Question on inflation, Guillaume, I'll let you answer.
Yes. Yes, of course. Inflation, as every company in the world, I think we see an accelerated inflation since especially the last, let's say, four months. When I say accelerated, I mean on the raw material, but I also mean on the salary, on the tensions on some labor markets that clearly are stronger than they were five, six months ago. What we took into account, to try to summarize, let's say I'm talking about the midpoint of our guidance, is roughly EUR 50 million on the salaries and the salary increase, which would be higher than usual salary increase. About, let's say roughly EUR 20 million on the raw material.
Of course, the question you are very right is the pass-through. So we have taken and we are taking actions for some pass-through. But of course in our industry, there are some you know, tenders and multi-year contracts, et cetera. So even though we are quite confident on passing through, it's not a direct and immediate pass-through. So there can be some timeline between now and the full pass-through of inflation.
Thank you very much. Maybe just a quick follow-up, Alexandre, on the decentralized placements of the new BioFire platform. Shall we think about it more like emergency room settings and, you know, clinician clinics, like that? Really take it out of the lab, put it into clinic setting.
Yes, it could be the plan. Yes, because it could be CLIA waived, so it could be used by non-lab professionals.
Sorry for another follow-up on that. You did have the respiratory CLIA waived a couple of years ago. I don't know whether it was four years ago or something. It seemed like it never really made big inroads in the U.S. in the, you know, clinician offices. Am I wrong? Can you talk about that and maybe say what it was?
No, we said we're transparent. It was a way also for us to test the market as we see the adoption around this type of platform. I believe in COVID times, I think we have seen some good success also on this platform. Again, this new one will have a much shorter turnaround time. It should be more fitting the needs of decentralized testing.
Okay, thank you. I'll go back into the queue.
Thank you.
And once again, if you would like to ask a question, please press star one. There are no further questions at this time.
Maybe that's all. We can take questions from the chat. The first one is from Christophe-Raphael Ganet. Talking about asking for how much BioFire revenue comes from non-U.S. sales.
Non-U.S. BioFire is 27% in 2021. It was actually 23% in 2020. We are continuing to increase. Japan is, I think we mentioned, now the second country, of course, far from the U.S., but overtook all the other countries, Europe, et cetera. Definitely a great success in Japan.
What is your assumption on COVID test prices by 2022 compared to 2021?
I would say on the syndromic market where we are positioned, so far we might see a slight pressure, but nothing significant so far. For me, it will be more on the single plex. It had happened already. The plan is not to be too impacted.
Question from Louise Boyer. What is the chunk of your sales related to COVID?
That's a difficult one. As you know, of course, our competitors are very much communicating on COVID, non-COVID. The difficulty for us is that you understand that syndromic testing, respiratory panel is not a single COVID test. It's a test that tells you if you have a COVID, flu A, flu B, RSV, and I don't give you the list of the 28 or 27 pathogens in the panel. It's more, as it says, it's a respiratory syndromic panel. We cannot really classify it as a COVID-related sale, even though of course, COVID and COVID demand and the most severe cases of COVID was fueling the demand for this panel. That's something.
What is sure, we hope that we're moving into the endemic phase. For sure, the COVID-19 market will decrease, I would say drastically this year, hopefully. We believe that syndromic is the right technology to address an endemic bracket, knowing that COVID-19 will be part of for many years will be part of the different assets that we have to test. We have my question. You know? That being said, again, we don't classify the respiratory panel as COVID because again, it's broader. Yet, if you want to think about it, respiratory was 72% of our BioFire reagent sales in 2021.
On top of that, please remember that we had also, and Alexandre mentioned it, some COVID-related additional demand on immunoassay in 2021, that if COVID becomes endemic will slow down, of course.
The second question from Louise is about the future growth drivers for sales and margin.
The growth drivers we mentioned in terms of trends you might have seen in the outlook. If we take it by segment or technology, microbiology is a market where, you know, we have very strong positions. The market itself is probably 4%-5% market growth. We expect mid-single digit growth, probably slightly higher than the market. That's what we've been able to do in the last two years.
On immunoassays, we have, as you've seen, some positives and negatives. Negatives being especially the PCT pressure. Positives also are emerging positions, emerging market positions. Overall, stable to slightly above stable outlook. We expect a very strong growth from non-respiratory panels, as we have shown and been able to deliver last year and the past years actually. Industry expect mid to high single digit growth. That was again on strong fundamentals on top of our own, let's say, actions and portfolio as Alexandre Mérieux detailed.
Still the next one is coming. Yes. The next one is, you were seen as a COVID name. What are you now? What is your COVID story?
I will take this one calmly.
No, no, we are not a COVID company. We've been present for close to 60 years. We are a company focusing on infectious disease through the value of diagnostics, investing in R&D, investing in capacity and manufacturing. We existed way before COVID, and we have a long story after COVID, even if COVID will stay for some time. Our story is about bringing innovation, time to market, time to results in the field of infectious disease.
Question still from Louise Boyer about expectations on BioFire development outside of the U.S. and number of units that we are expecting to install.
We expect to continue to grow strongly outside of the U.S., as we've shown in the past year.
Actually, the growth in the U.S. has been good, but we was even higher outside of the U.S. We mentioned Japan, but we can mention Europe as well in 2021. They performed very well on syndromic testing. I mentioned Latin America as well. We expect to pursue the growth and of BioFire outside of the U.S.
Question from Christophe.
Maybe also question from Mike.
Is there somebody from the call? Still not?
Yes, we have Ms. Pataki again queued.
Okay.
Would you like to take the question?
Okay.
Ms. Pataki, with Kepler. Please go ahead.
Yeah, thank you. I keep asking if no one else wants to do. Just a quick question. Can you quantify the field corrective action? How much was it in Q4 and how much of that was in China? You know, thanks for the elaboration that VIDAS is going to be a higher throughput, but can you maybe compare it a bit to your competitors? Are you gonna be closer to the LIAISON XS platform, and therefore the latent TB competition starts to level out a bit? The third question would be, I mean, I do understand that it's difficult to pass on this amount of inflationary headwinds, but in which areas do you believe can you easiest increase prices? Would that be BioFire or would that be in the other, in your other businesses?
For now, lastly, do you believe that M&A is now more a topic for you to broaden your offering, or do you think you're well established to deliver attractive growth going forward?
I will start with the M&A question. I will leave you with the easy questions. We remain active in M&A. We are also lucky, but now we are a debt-free company, so we have room of maneuver. We remain active to look at technologies or companies which can bring which can complement our portfolio or what we like in bioMérieux M&A also is new emerging technologies which have the potential to improve patient care and also decision to time to results. We stay open. At the same time, I believe I showed the pipeline. We have a healthy pipeline coming from our years of investment in R&D.
We stay open and pragmatic. Sorry, Guillaume.
Yes, of course. Your question was about the field corrective action. The Viral-
Yes.
Field corrective action in Q4. The overall P&L impact is EUR 20 million in terms of EBIT in Q4. It's a mix of some credit notes that we had to make to some customers, some scrap. Also some replacement of VIDAS products by new ones. It's more difficult to assess on the sales part because you know, some not ordering is difficult to exactly catch, but I would say ballpark it's about EUR 20 million as well on the sales. I just reiterate that it's fully solved. I think we managed it well.
It was a difficult topic hitting all of the assays from this quality issue of a supplier, but we managed it well and quickly to replace. It's now fully resolved. Your other question about the price increases, I would say that it depends on our position in every country and every, let's say, product segment, which are very different actually from one country to another. I wouldn't say there's one rule of thumb that we can give. Our general managers are looking and pushing and acting, let's say, country per country and segment per segment.
Throughput of VIDAS.
The VIDAS throughput?
Yes. Throughput will be higher thanks to scalability. I should know, but to be frank, I didn't compare to the Access to this recent launch. We did it because we felt that there was a need or a demand for higher throughput, and by the way, both for clinical and industrial applications. We followed our path there. I didn't compare to Access.
Okay. Maybe just one more that came up. I mean, you have doubled your installed base in BioFire, but do you have any visibility or data that you could share with us, how many of the 10,000+ have gone to new customers and how many have gone to repeat customers?
On the U.S. additional installed base, that's why we can really follow. We have about 64% that was additional capacity with existing customers and 36% that were with new customers overall on the increase. We gained approximately 200 new customers in the U.S. These were U.S.
We can take-
The 36% new customers is U.S. as well?
Yes.
Okay. International is obviously mostly new customers.
Yes, mostly, yeah.
Thank you.
We don't have the precise measure, but yes, of course, mostly.
Thank you.
Yeah. Okay. Let's move to a question from the chat. Question from Mark Massaro. Will you use some excess cash for stock buyback?
We do stock buyback but only to cover our, let's say, free share programs, the usual free share programs. But it's not part of the company policy to do stock buybacks, you know, just for reduction of the shareholders. Only to cover management and employees and talents free share programs.
Question from Christophe-Raphael Ganet. How much of the OpEx were reduced due to the pandemic context by 2021?
Thank you for the question. I think we have communicated a number of times that it was a very significant reduction, several tens of millions EUR on the different lines. Overall, we always mention travel, congress, marketing, but it's also impacting other lines. For example, clinical trials, which is actually cost in the R&D line, were postponed due to COVID, you know, with difficulties to recruit patients for some clinical trials. That's also significant savings. There are savings in a number of lines.
What we have factored in our 2022 guidance is actually, with COVID becoming endemic, a progressive, comeback and ramp up of this cost, in a view that we want to invest, as Alexandre said, for the future of bioMérieux, be it in R&D and clinical trials I just mentioned, be it also in the commercial activities, more customer facing, pushing our new products and new launches, with our customers. That's all factored in this, higher cost, very visible higher cost base in 2022, guidance.
Next one, still from Christophe. What level of CapEx shall we expect from 2022 and 2023?
So we-
2022 we gave it.
2022 we gave it, so it's 11% of sales or around 11% of sales. It's not exact. Beyond that, I would say that the 10% is a good overall benchmark over time.
Last one from Christophe. Do you have issue on supply chain?
Supply chain, we have issues for the last two years with, you know, all the difficulties that you read everywhere with the, you know, the ports being blocked, much higher cost of transportation. Of course, the big topic today is about the Russia-Ukraine topic. But that's a very small part of our revenues.
We can say it is tense but managed.
The overall supply chain. Yeah. Yep.
The next question is about Russia from Thibault, Oddo BHF. So what is the percentage of sales by Russia?
Russia for us, internal sales is less than 1% of the revenue of bioMérieux. But we have a strong team over there. We are not present in Ukraine directly. We have a distributor. Another question from Thibault: Can you be more specific on your sales guidance? How would you justify the low and high range? I think I won't surprise you saying it's a very volatile environment at this stage. It was not even so easy, I would say, to give a range for this year.
It will depend a lot of hopefully moving into endemic. We'll see. We'll see what happens. I hope there won't be more variants. We'll see if we'll finally have a flu season next year, which was not the case this year. It's a bit of a volatile environment. This is, I would say, the projection that we are making at this stage with the visibility that we have. It's not so easy, I believe, for us and for the diagnostic industry to predict what will happen. I would say in our view, this is into the endemicity of COVID.
Question from Laurent Windhaus, Jefferies. Any reflections from the field corrective action?
Any learnings. That's part, I would say, of what we do in our industry. Sometimes we rely on some key components or small components or substrates that we have to deal with. Key learning, I would say, first, maybe internally, it was well managed internally, this crisis, because it was a crisis, but the idea was not to impact too much the customers or mainly the patients. I would say that's part of our life. It means we have a strong scrutiny on the different suppliers at different levels, but also a strong scrutiny on the quality of the raw materials that we use. No specific learnings. Maybe Guillaume. Yeah.
Just to add, on top of what Alexandre said, we also had good management internally, but also in a good partnership with the supplier. Really good work together. Beyond that, we have a number of raw material that are on a single source mode. Actually, we have launched this field corrective action. That's a decision we took more than a year and a half ago. A three-year plan to really manage the most critical single source topics that we can have in our portfolio and to find risk mitigation actions that can be sometimes with diverse sourcing.
Next one from Juan. Why involve with earnings guidance? Why do we make even an earnings guidance?
Again, as Alexandre said, it's a very volatile environment. It's true that I think one of our competitors did not make any guidance. We thought about it, but we thought that the best let's say approach, even though things are moving so fast, changing so fast, was to give you our best view as of today. Again, it's a very difficult exercise for us, but we share with you what we see today. Maybe we shouldn't have.
Question from Arsely Strassburger. The top line guidance looks quite conservative. To get there, we almost need to assume that molecular diagnostics come back to 20%. I'm guessing 20% of overall sales. Other line, 60%. It needs time.
Are these two divisions that benefited from COVID? What about immunoassay? Maybe if I can comment. Yes, of course, we assume BioFire syndromic respiratory to go down. I think it's not a surprise. It shouldn't be a surprise to anyone that it was boosted by COVID in the last two years, even though, again, it's syndromic. It's a product and a diagnostic product that goes beyond COVID for other viruses that will be used for respiratory pathogens beyond. In 2022, we factor a slowdown about 25%-30% of a decrease of demand, but linked to COVID, a decrease of demand on respiratory.
A question from Thibault. Regarding M&A, are you looking at new technologies, and would you be willing to use leverage like in the past as a BioFire acquisition? Which leverage?
I think you meant it. Meant it. I'm not sure. Yeah, we are. Sorry. Yeah, we are. We are pragmatic. We are also entrepreneurial. We know when to take bets. So yes, we will use the tools which are keeping bioMérieux, of course, secure. But we will look at different options. Yeah.
Immunoassay. So there's a question about immunoassay guidance and more details about the headwinds. So just to re-explain the situation in immunoassay, so VIDAS is a low mid-throughput platform. So we are not fighting on the higher throughput part.
On the negatives, we have first the lab consolidation. That is going on in Europe and in other parts of the world. That of course, when labs consolidate, they go to broader or bigger, let's say common platforms with higher throughput, and therefore VIDAS tends to be displaced because it's a low throughput platform. That's the first negative. The second big negative is procalcitonin in U.S. and China. We were, let's say, kind of alone in the U.S. until 2017. Competition entered progressively, so we have a volume and price pressure over time on this parameter. On the positive, we have first our innovation. As Alexandre explained, we launched and will continue to launch new assays to complement our portfolio and increase our sales.
One of the good examples recently was the latent TB with TB-IGRA launched in 2021. The second positive is that VIDAS has a strong position in emerging countries for labs where the broad menu on immunoassay and the low throughput is adapted, and of course that's a growing position. Between these, let's say two negatives and two positives, stability in 2022 and maybe a bit better than stability beyond that.
Okay. First, about the commercial ramp-up of activity to support future growth, are you able to quantify the incremental spend?
I can mention one element, which is, because we talk so much about, you know, travel, marketing, congress inside of the sales and marketing. If you take the midpoint of our guidance, it's, let's say, roughly, to give an idea, about EUR 30 million of additional spend on this kind of nature of costs that we expect. Again, we believe these are important spend to fuel growth for the future, and to push our new products.
Question, can you comment on M&A? Where do you see the future of diagnostics? What about Caregen?
How I see the future of diagnostics, I would say bright. I would say closer to the patient, and I would say also with a stronger impact on patient care. I believe this is what COVID has demonstrated. I would say the value of diagnostics, and we also our job, us and the others such as Careg en, Abbott, whatever, that will be our job to promote and defend the value of diagnostics. But no specific comment on Caregen to make.
Question from Hugo Solvet. PCT testing, when could we expect price pressure to stabilize or annualize?
PCT, I think there is still a trend to, at least in the U.S., on price pressure, but when it will stabilize, I don't know. Difficult to predict. There is less and less pressure, I would say, now that we have more competitors. We'll continue to see pressure, but I would say less impacting than it was the last two years.
Still a question from Hugo. The split of BioFire sales between U.S., Japan, and Europe.
We gave U.S., non-U.S., which is 73% U.S. and 27% non-U.S. We have not split the non-U.S. between Europe, Japan, Latin.
I believe we said that Japan has become number-
Number two.
Number two.
Number two market for us. By the way, also linked to the COVID-19 crisis at the end of last year, I believe it was number two country for us.
Any update on VBP in China?
VBP is volume-based procurement. Some of you know that this was a new way to buy in China that was tested in one province, Anhui Province, in China, that went through with pretty major price decreases, around 50%. It's a very small province. Hybiome, our local immunoassay company, participated. We don't see any, let's say, extension or yeah or actually rollout of this kind of policy to any other province yet. Immunoassay might be a, you know, compared to pharma, a very small market and complex to organize all this.
Coming back to price pressure, but this time on multiplexing. Are you seeing any moves on RP or non-RP panels containing price pressure?
To be frank, not so much in the recent context. We cannot say there was intensified pressure, both commercially, I would say, or on price.
Any update on Specific Diagnostics deployments?
Also, we started the co-distribution in September, I guess. We are still in a phase where we are, I would say, promoting and doing some pilots on this evaluation of technology, which looks quite interesting, seen from a customer perspective.
Coming back to Russia. The size of the business, you already answered with less than 1%, but how do you think the current crisis can impact the business?
Difficult to predict. It will depend on the embargo conditions. We are there to serve public health, so we will adapt, I would say. Then again, very difficult to have a visibility on this very tough situation.
Are there questions on the line?
Yes, we have one more question from Maja Pataki with Kepler. Okay.
Okay.
Yes, just a quick follow-up on that. I couldn't really understand. The VITEK MS PRIME, when are you expecting the U.S. launch? Is it 2022 or 2023?
Sorry, Maja, we had a short disconnection, so can you repeat your question?
Yeah, sure. The VITEK MS PRIME launch in the U.S., is it 2022 or 2023? I couldn't acoustically understand it.
We expect it to be in 2022. To be frank, the FDA is quite busy, so there's of course some backlog relating to COVID. Our expectations is for 2022. It's difficult to talk for them.
No, no, of course, but, you know, let's start with the expectation.
Yeah.
We'll see where it comes in.
Expectation for 2022.
Okay, perfect. Thank you. Perfect. Thank you.
Maybe a last question from the chat. Nicolas Jean?
Yeah. There was a question on the M&A and the rumor that we had last year. Again, we have said already that we don't comment on rumors. Always the same, let's say, rumors on the big usual suspects in our industry, as there are not many companies of five- and mid-cap, Cash N, Grifols, bioMérieux. No specific comment.
No more questions from the chat. Is there any questions from the call?
There are no further questions on the phone.
I think we can wrap up the call right now if there is no more question.
Okay.
Thank you very much for your.
Thank you very much.
Thank you for your participation and attention. I just want to remind you that the next release will be on April 27th concerning our Q1 sales performance.
Thank you very much indeed for your attention. Bye-bye.
Bye-bye. Thank you.
This concludes today's call. Thank you for your participation. You may now disconnect.