Earnings Call: Q4 2020

Mar 1, 2021

Welcome to the Urofins Scientific Full Year twenty twenty Results Publication. During this call, Eurofence management may make forward looking statements, including, but not limited to, statements with respect to outlook and the related assumptions. Management will also discuss alternative performance measures such as organic growth, which are defined in the footnotes of our press release. Actual results may differ materially from objectives discussed. Risks, uncertainties and that may affect Eurofence's future results include, but are not limited to, those described in the Risk Factors section of Eurofence's annual report. Please also read the disclaimer on Page two of this presentation, which is subject to this call and Q and A sessions that are made. I will now hand over to Eurofin's CEO, Ghosse Gene Martin. Please go ahead with your meeting. Hello, everybody, and thank you for joining our annual results call. I will start with slide five. Actually, while we go to slide five, we we we actually have two announcement today. The the first announcement is actually maybe more important than our annual results is that we received the OTC clearance for our at home test for COVID nineteen by the FDA on Friday night. It is an important breakthrough because there are very few such tests available. I think maybe one I heard of mainly, and it will enable us to distribute this test very widely. Patients do not need a prescription to to buy it. They can just go to a shop or a pharmacy and buy a test and have it at home. And whenever needed, they don't have to go and stand in line or take risk to a testing station. They can just get tested themselves, the sample themselves, and and then send it back by FedEx, and and the next day, get the results. It's a major breakthrough, and it could be a very important use also in Europe for mass testing because mass testing is in one proven way to really almost eradicate the virus in one city or one region. The biggest bottleneck to testing has always been something, getting people to go to a station where they are sampled and with the possibility of having self testing, that gives almost limitless capacity for testing. In the meantime, our labs and and other labs have created more than sufficient capacity, and there are modalities to pull samples to even multiply by five or 10 the capacity. And those PCR tests are very sensitive. Our PCR test was actually ranked with the FDA comparator method as the most sensitive of 117 tests that were cleared by the FDA. So this is a this is a very useful tool. Of course, I wish it would have been available earlier in the pandemic. It could have helped many countries to significantly reduce the spread of the pandemic, but there are still regions of the world where where the virus is spreading spreading fast and number of cases increasing, especially due to the new variants, which are more infective. And, therefore, this tool, while it comes late, is is a very, very significant breakthrough in our opinion. And and we're working to get it approved in as many European countries as possible where it really would be of of significant help. So going back to page five. Yes. Eurofence is really a a purpose led company. We we have been very successful over the last thirty years, and and many of us here in the company could have retired long ago if we're not motivated by by the contribution we can make by our working lives to to the positively influencing the life, the health of everybody, and and protecting our environment. And we have shown we're very proud to have shown in 2020 how much our teams could contribute in in the context of of a pandemic that was severely affecting the lives of of so many of us. On page six, we describe the the key aspects of of the year for us. And the first thing is, once again, Eurofence has shown that our choice of markets and our policy of investing for the long term makes our business extremely resilient. As you may recall, in 02/2009, during the the last big global economic crisis, our sales continued to grow. Well, that was the case again last year for our core business. Not, I'm not talking of, of COVID test. Outside all the COVID reagents and test, we still have positive organic growth in 2020. Of course, our core business did not grow the 5% that we would have hoped. Some of its parts were affected, but still other parts performed so well that overall, we had positive organic growth last year of our core business outside of COVID testing and reagents. And this shows how resilient the markets we are serving and and the activities of urethanes are. What we also showed is that the way we set up our company with a network of independent companies rather than a centralistic group made us extremely agile, and this is this agility, this level of entrepreneurship throughout our organization that enabled us to develop a range of response to COVID that is equal to none. I don't know any company, and some are much bigger than Eurofence, that has developed the same range of solutions to fight COVID nineteen, be it on a range of tests for patients or testing the environment, offering solution to help people return to their factories and to their offices safely. This has been the work of our team in that sector has been truly outstanding last year. So you've you've heard of all our our different product introductions last year. The most recent ones with self testing, also self testing mobile modalities that can be done in some regions where they are authorized in saliva, on gargling fluids, which are very good for children. It's very difficult to put a swab in a child's nose. It can be stressful. It can be painful. We have now testing modalities that are well validated on gargling solutions that that people can also do themselves as I discussed. We have a range of antibodies testing kits, and and the latest one are quantitative, so they can be used to verify the effectiveness of vaccine. They can be used to verify if somebody has had the disease before. So we don't maybe they have they are not given the vaccine right now, or they could have even bigger adverse effects. Over time, they'll be able to to tell what's the level of, of antibodies and and help maybe in the timing of re booster shots, etcetera. We, of course, have the rapid antigen test. We don't think so much of the rapid antigen test because they miss between one third and fifty percent of the positive. But still, we have developed that. We have that in our portfolio. And, of course, we also have a whole range of tests that are that will prove very useful when we all start to come back to our offices and our factories and start to travel and go to events in our safer at work program where we have almost 3,000 contracts signed or or about to be signed to to help make sure events are safe, travel is safe, and that's by testing people, but testing also the environment. And we have our Europeans COVID nineteen Sentinel program that can be used, for example, on wastewater, to detect recurrence of the virus or new viruses, emergence of new viruses without testing people. So a really broad range of capabilities, and each of them will be used in in the various phases of the of the recovery that that is going to follow COVID. But, you know, it's not only about COVID. We also continue to work very hard throughout 2020 to build out of net our network, to finalize our five year plan, to build those large hub and spoke laboratory networks in each country to be extremely effective, fast, and cost effective. We continued our investment to be a fully digital company, which, of course, helped us to to go through this crisis. It helped us to be some of the first to have apps where patients can order their test and get their results in real time, etcetera. And we've done a little bit of m and a last year. Of course, m and a was not the priority, and it was difficult to to know what you are buying if you cannot visit the companies, one-site audit, multiple meetings with people. So that's why it was not a priority in 2020, and it will not be this year. And and maybe in 2022, we'll return to our normal target of adding about 200,000,000 from m and a per year. On page seven, you have an overview of of our financial indicators. And I think the main one to note is that, of course, we've had outstanding growth and very good margins, very good cash flow. The fact that we are vertically integrated, we produce our own reagents, we produce our own kits. It has helped us to to, of course, improve our margins, but more importantly, we have brought back our leverage to a very modest level, actually, to the lower lower point of the range we like to be. We like to be in the range 1.5 to 2.5 debt to EBITDA, and and we're at 1.6, two years ahead of schedule, which gives us all our our strategic freedom. And, you know, we've been listening to critics, and there were a lot of bad faith critics by by short sellers over the last two or three years about Eurofins. There was one point where some of our investors, legitimate investors, thought maybe we could take less risk. It was on leverage. We thought our leverage was always in the normal range, but and sometime, of course, it can go slightly higher around 3.5. But our intention was always to go back to that range 1.5 to 2.5, and and we're now already at the bottom of the range. So I hope this will remove the last worry regarding regarding Eurofin's balance sheet that that some people might have happened. I will not say more about the numbers, but Laurent Leroy Laurent Leroy, CFO, will will comment on on the figures on the next few slides. Thank you, Jim, and good afternoon. It's my pleasure to present you our 2020 financial results. Starting on page nine, as you can see, we have posted a very strong set of results across most indicators. We had a very strong revenue growth over 19%, both organically and in reported scope, which enabled us to achieve €5,400,000,000 of revenues. This strong growth in revenues translated in a very strong improvement of our EBITDA. We we reached an EBITDA margin of 26% on adjusted level, basically equivalent to €1,400,000,000 of adjusted EBITDA. And this also translated down to the net profit level where for the first time, we posted more than €500,000,000 of net profit in reported scope and €700,000,000 of net profit in adjusted scope. All in all, enabling us to post an adjusted basic earning per share of €3.63, more than double of what it was last year. Moving to page 10, you can see from our revenue bridge that we we did have a negative FX impact of about €60,000,000 last year and a small contribution from m and a of about €46,000,000, meaning that our growth last year was exclusively organic. We estimate the net impact of the COVID pandemic to be of about €550,000,000. And what is more important to note is that our organic growth, excluding COVID activities, was positive for the year and back to 5% of organic growth rhythm in the last quarter of the year. So overall, we posted revenues of €5,400,000,000 way above our initial objective of 4,000,000,000 set in 2015 or even the one upgraded in 2018 to €5,000,000,000. If we move to page 11, this strong revenue growth also converted into strong cash flow generation. We posted a record of free cash flow to the firm of €873,000,000 above our last objective of €700,000,000, thanks to well controlled net working capital, well controlled CapEx, and also a strong contribution from our operations. Overall, we finished the year with a very firm liquidity position with about €900,000,000 of cash on our balance sheet. Moving to page 12, if we zoom on net working capital, the net working capital intensity was significantly improved. It decreased to 4.5% of revenues in line with our latest objectives. Thanks to better DSOs, which were improved at fifty two days. And despite the fact that we had to increase inventory and we had a slight deterioration of our DPOs in relation to our COVID activities, which require the buildup of safety stocks and the advanced payment terms for critical supply at some times. Moving to page 13, if we zoom on the net CapEx spend, we we spent about 350,000,000 last year, slightly above our objective in relation with basically the rapid COVID capacity buildup. And if we look at the ratio to revenues, it was only of 6.4%, a great improvement versus the year before, also in line with the last completion phase of our infrastructure program. If we look at the breakdown of this CapEx spend by nature, we spend about 40% of it on lab buildings and leasehold improvements, about 35% on lab equipment, and 20% on IT spend. All this translated in a very much improved road shape. On slide 14, despite this very long infrastructure program that we have started about five years ago, we were able to bring the road shape back in the mid tenth level. In 2020, we posted a ROCE of 15.9%. We have over internal hurdle rate of 12%. And if you look at ROCE excluding goodwill, we are also back in a 50% plus territory level, which should increase and continue to increase in the future years. Moving to slide 15, we have basically been able to deleverage significantly from 3.2 to 1.6 terms of net debt to EBITDA. This is thanks to the record EBITDA, the record cash flow, but also to the equity rate that we did last summer. Overall, we were able to pay back all our credit lines to re to pay all our short term borrowings and also to anticipate the refinancing on some senior debt instruments, giving us now a very reasonable maturity profile for debt as we don't have any reimbursement scheduled before 2022. And to conclude on page 16, we intend to propose at the next AGM next month a dividend payment of 60¢ per share, which would be equivalent to 25% of distribution of our net profit. Thank you for your attention, and I will pass back to Mike Tougier for the operational review on the outlook section. Thank you. So I will go to page 18. And, of course, you might wonder how can neurofins manage to grow an average 30% per annum for twenty years and more than twenty years. Actually, we did that also before we were public and and to create 29% value every year for thirty years or twenty years. I think the main reason is innovation, and our company has always been focused on innovation. We are seen or compared to other testing companies or CROs. With reality, we are a very innovative life science company, and, that applies to all the testing methods that we develop, but also how we work to improve our processes every year to make them fully digital, to use automation, to use artificial intelligence, and and always striving to combine those tools to offer new solutions. If you were to come in one of our COVID testing centers, you'd see how how smooth and and sleek and digital it is. Patients register online. They come to the test center. It takes them one minute to be tested maximum. Next day, they get their result on their app. And this was also done in record time, and all our labs were interconnected worldwide. We can switch the samples and then to many other labs. We have, like, 15 labs in The United States. We can load balance. We can do all this because of all our investment we did in in digitalization, for example. If I move to page 19, we've we've already talked a lot about our COVID response. I think I'll I'll go back to that of the questions. But our our investments over the year in digitalization and innovation as well as our entrepreneurial model is what enabled us to to develop so far this response. And on page 20, you will see more examples. I think the the breakthrough we had tried to get OTC clearance for our test in The US is is a major breakthrough to to get people to test themselves. And the COVID sentinel will will also, I think, in the years to come, prove very useful in in developing solutions together with many governments and and partners around the world to prevent recurrence of of either this epidemic with new variants or to prevent new epidemics or see them coming earlier. The variants actually are still a concern, and there are discussions in many country. Nobody really knows how vaccines will behave or or people who are vaccinated when they are confronted with the new variants, how they will react. So, we were also the first to develop a solution in Europe to detect very fast those variants by a dedicated real time PCR solution, as opposed to sequencing. We, of course, are the one of the largest suppliers of sequencing services in Europe, that are used to identify the variants, but they are too slow. And and we developed also a very fast method for that. And we as part of our safer at work program on day 21, we we described some of the strategies we've been offering to clients to make it cost effective and and efficient to to make sure their sites are are free of COVID. And on page 22, something maybe of more interest for analysts, we're to to compare with other other players in the clinical diagnostic services industry how much test did we do? And you might remember that Urofence is a small clinical diagnostics company. Our our revenues in clinical diagnostic services in 2019 were about $1,000,000,000 compared to something like $7,000,000,000 for LabCorp and Quest, three or plus more for Sonic, 2 and a half for for Synlabs, maybe one or one and a half for Unilabs. So we're we're a tiny clinical diagnostic players, and we try to find out how much test we all did. It's not easy because it's not exactly published by our companies exactly in the same way, but we we try to find and we found some numbers, like Quest and LabCorp probably did something like 13,000,000 tests last year, PCR test, and and Synlab about 50,000,000. And so you you see that on the graph on the x axis of this page 22, all the volumes. So we we did about as many tests as as, for example, SONIC and and SYNLAB, which are two or three times bigger than we are in clinical diagnostics. And so it shows that, actually, our contribution to this is is way more than proportional to our revenues in clinical diagnostics. And and I think it it it's a bit of an example of our positioning. Some of the decisions we took to to not focus on routine testing, but to focus on advanced testing, on esoteric testing. It helped us to develop test faster. Also, our decision to to develop our own test internally to to vertically integrate, which, of course, was very dilutive to our profits over the last few years because it cost us a lot of money to build our infrastructure and have the RNA spend to to have the RNA teams that can develop new tests. It enabled us to respond extremely quickly to the pandemic, and we have vertically integrated the production of plastics and reagents, RNA extraction reagents, which enabled us to never have shortages for our laboratories when when some of our competitors couldn't provide. So I'm I'm happy to to see and and that we were able to validate it with numbers, but it's just not we were at the right place at the right time. Of course, we we had been prepared. Nobody saw it coming, this crisis, but we knew that molecular testing would be a very valuable tool to to contribute to to the health of everybody. And we had been focused on the even more complex test, the genetic test where we are a market leader in noninvasive parental testing. But, of course, if we can do over genome testing, we we can, of course, do a smaller molecular or smaller sequence testing for for COVID. And so that has shown that that we could contribute way more than proportionally to our revenues to this to this site. On page 23, of course, the more important thing is what happens beyond COVID. And we're happy to to see that in in 2020, after a dip in q two for for some of our activities, a lot of our activities recovered. And in q four, we we were already back at 5% organic growth. Although still in q four, we had many of our activities that were stopped or severely severely reduced in in their volume due to lockdowns. That means some of our other core activities were growing much faster than 5%. And so that's a second crisis in a row that that we see our resilient, our core activities are, and and it makes us very bullish for the future. We we still hope that in 2022, COVID will be behind us, and there will be no COVID revenues, but no COVID disruptions either. And when we see how much investment is going in the biopharma sector, and biopharma is about a third of our revenues, there will be massive there will be massive opportunities for providers like us. I may not have mentioned it before, but Nurofen's worked for six of the seven producers of vaccines that are either registered or about to be registered. We were materially supportive in helping them to get their registration very fast in in carrying out all the testing, developing the tests that were required either for product development or for the clinical trials or now for release. We are working we have a release partner of one of the very large a global release partner, one one of the very large vaccine producers. We worked for three of the companies developing therapeutics, like, antibodies, for example, to to fight COVID. So and this will go on. This type of activity will go on. The m iRNA vaccines are approved that this technology can be applied safely. There are millions of lots of application in oncology and other sectors. The fundraising by the biotech industry last year was was a record. It probably continues. And so being the leader in in that industry of biopharma product testing positions us very well going forward to long term growth. And while while we work on some of our teams worked on COVID, if I go on page 24, obviously, all the teams were were very active in their core business. We continued to innovate in all of our business lines in in biopharma, testing services, in our early development sector. We have a we are the leader globally in early development. And with the acquisition of Beacon, we're getting stronger in in integrated drug discovery. A lot of money will go in in the early phases of development because of the funding of that went to biotech. We continue to invest in in develop a whole range of testing kits. Our food testing business line is not really dependent on external suppliers. For the key tests that we carry out in our in our labs, we can now produce most of them ourselves at at much lower cost and and doing it in an appropriate way, which which is offering the afferent further differentiation. And I won't bore you with every single development, but, on page 25, you can see a few more very interesting developments that, that should fuel growth as as the world become a bit more normal beyond the pandemic. On page 26, a little bit of an update of our investment program. You know, we have this five year investment plan to build our our global laboratories network commensurate with our leadership positions in our market. We're almost done at the 2020. Of course, between the cyber attack in 2019 and COVID in 2020, I think we we took a year delay for for completion of some programs, but we should be done at the end of this year. And that will set us with very a completely incomparable laboratory network, fully digital, that that others have have not even started to to think about or to or to work towards To to integrate electronically with the same software, hundreds of laboratories around the world is is a massive undertaking. For whatever how much money you wanna spend, it takes decades or it takes ten years to to get there, and and we're very close to doing that. And if you saw in our CapEx too, it costs money. Last year, again, we I mean, for years, we spent maybe more than 100,000,000 a year just to buy those building, buy the land, build those buildings, and we concentrated in five or ten years investments that we lost for thirty or forty years to come. It's not not a small investment, and and we're quite happy actually to be close to the end. We finished our site in in Madison for our largest food testing lab in in North America to move the the Covance business we acquired. After three years, we've completed the full integration of the Covance food safety solutions business into Eurofence network. It was a lot of cost, a lot of moving people from state to state, etcetera. But now we have a very, very well set up network of labs to to serve the food industry and the feed industry in North America, And we'll be adding a few micro local microbiology labs in the years to come to to serve a few geographies where we are underrepresented, but the more expensive investments are all behind us. ESG on page twenty twenty eight. You know, Eurofence was more or less a baby company or a teenager company so far. And, we were doing a lot of good things, but maybe we were not putting the right emphasis in describing or explaining what we're doing. And this year, for the first time, we've we've produced a real ESG report that describes a bit more what we are doing. It's a first first version. The reports we will do in the following years will be much better. But when we started looking at it systematically, we could see that Eurofence is in line and contributing positively to 16 of the 17 United Nations sustainable development goals. And it's not a surprise. As a purpose led company, we wanna do the right thing, and and we we feel proud that all of our actions have have a positive contribution to the lives of everybody and and to the health of the planet. And so you will you can read it in our ESG report, all the things we are contributing on, but definitely our environmental testing is helping keep the planet in in a good state, helping fight pollution that will that will basically destroy natural habitats, helping our clients mitigate their impact on the environment. Our certification help them measure their impact. And, of course, all the things we do in food testings can promote the replacement of of, for example, red meat with protein from vegetable sources, from insects, from other sources that are that have a much lower impact on the on the c o two contribution. I think on page one thirty, you you can see Eurofence as as a true enabler of of ESG actions for our clients, and we are looking forward to to support them as they also put more emphasis on their ESG impact. And we have our own internal road map. Of course, we we don't work for big polluters. We are not a big polluter ourselves. We don't generate a lot of c o two, something like, I think, eight to 10 tons per employee per year, but we still can improve it. So we'll work on measuring it better, improving it, reducing it, and compensating more of it. We've come last year, we compensated 20% of our emissions, and we're looking forward to, by 2025, reduce our emissions significantly and and compensate 100% of the remainder to be CO two neutral. We have set up resources to do that, and we're also contributing more meaningfully through Eurofins Foundation. Since we had a successful year last year, we were able to triple our contribution We're supporting 75 different projects that are aligned with the United Nations goals for sustainability and and also supporting more challenged population. On the government side, we'd be recommending two more board directors where also one of our directors will be retiring. We will have five independents, eight members, and and four women, which we think now is is in line with the what the agencies consider as as a good target. We're also on page 32, expanded in 2020 our global equality driving excellence initiative that is staffed by senior leaders of Eurofence to increase the participation of women in top leadership, to develop many actions, to to fight any racial bias or other bias in the organization. We are introducing rules to that as we do for environment in, in the goals of all of our leaders, and and we're looking forward to be an exemplary company in this sector, and I think we're doing well, but to also develop the tools to quantify it and and document it in our annual publications. So if we move on page 34 for the conclusions. Well, you know, for many years, I've been meeting some of you or others who said, yeah, they are the three big ticks company, and there is a small urethanes, And that has been pretty much, over my lifetime, the the the tone of the discussion, the three big and stable ticks companies and Eurofence. Well, as you can see, last year, of course, because of the COVID crisis, but not only, you see the trend of the curve. Eurofence became the largest tech company, and not only in terms of revenues, but also profitability. And, of course, co COVID will fade away, and we'll we'll recover the lost revenues we've had in last year because of COVID. And and we Europeans might not do so much COVID revenues, but the trends are so strong in the markets we're active in that I'm I'm pretty sure the Europeans curve is is gonna trend, continue to trend upwards. On page 35, we are summarizing our objectives, for this year. It's it's very hard to know what exactly will will happen. The variants of concern are spreading very fast. We are helping many governments with our real time PCR test to identify variants. Some governments are doing it, like, for example, France and and Germany, some some regions in Germany, and they are starting to have a good view of where the variants really are. Not all countries are doing it. A lot of countries are still doing only sequencing, which is only sequencing part of the positive and and is is also a bit delayed in its response. So we will we will see over the next couple of months how the how the virus continues to spread and and what the need for testing is. We still hope that by this summer, there will be a very strong reduction of the COVID cases and and hence the COVID testing, but we don't know. And so we have a range of scenario as to how much testing could be required this year, next year, and the following years. But for simplicity, we decided just as well at this stage to not change our objective for 2021 until we know better, and, to stick to to a plan for '22 and 2023 with zero COVID testing. This is for simplification, obviously. Also, we gave you rounded numbers to to give you an indication of of where we think think things are and and could land. We we try to be conservative in what we do. We'd rather surprise you with good news than with bad news. So we're we're trying to to set objectives that are achievable, that are not crazy, and, yes, it could well be that that we exceed those we have set for 2021. We we still continue in in January and February to do a lot of COVID testing, and it looks like this will continue at least at some level through through q two. We are still optimistic that after q two, the level will drop significantly, but it's it's not certain either. And, also, there could be a lot of mass testing as as the economy start to restart to to avoid further spread. So and the safer at work impact is also not not clear. It's also not clear how the travel sector will restart, what level of testing or events would be required. But the those objectives we we think are realistic, and and maybe we'll do we'll do better. On page 36, to conclude, well, it's obvious that we've had a very strong year in 2020. It has shown that we have a very resilient business. We have a high growth business. We can very confidently set 5% organic growth targets, and those 5% organic growth targets should not be too much subject to to cycles or variations of the economy. There are there are not so many sectors and companies that that can show this this long term growth pattern. This crisis has shown how fast, innovative, and agile our our companies are, and I think there would be many more opportunities in the years to come where where we can show what we can do and and that can boost our growth. We we have recovered a a very strong balance sheet at the 2020. We might not use this balance sheet. We we don't have the intention to do any major m and a over the next couple of years. We have so many organic opportunities. For example, our development in Asia is presents many opportunities, and and a lot of them we can do organically within the CapEx objectives we have given that most likely will continue to deleverage over the next couple of years, and and then we'll see we'll see what we do if we return the cash to our shareholders or or or maybe at some point find some some invest proper investment for it. So the m and a also and the few m and a targets we've seen and that's an interesting thing, by the way. Were lucky in in being the first to consolidate our industry. The remaining assets are are very poor quality. They've been often assembled by assembled by private equity and then underinvested and and on a great asset. Nonetheless, they are traded. They are sold for 16 to 18 times EBITDA. And when I see that Eurofence is trading at 12 time EBITDA for 2022 on a fairly conservative EBITDA, I think I'd rather keep Eurofence stock than than buy those many of those assets that that are coming around. So, yes, so I think we will come out of the of the pandemic whenever it stops, hopefully, this summer or or later as a very strong company. We will have finished the integration of all the large acquisitions we did in in '17 and '18. We would have finalized our hub and spoke lab network. We will be a fully digital company. And going forward, the the focus will be on r and d, of course, making sure we continue to invest in our teams and and give them the opportunities to learn, to develop, to to get further education. We're investing in our internal training programs significantly, and we're invest massively in r and d. And, of course, ESG is a key. We we want to be also an exemplary company in this area, not only for growth and and profitability. So we're we're very bullish for the for the midterm and and long term future of of the company. We hope to continue to contribute meaningfully to the fight against COVID nineteen in in 2021 and and help everybody put it behind us. And, yes, the the future looks very, very exciting also in terms of technologies. There are many new technologies we we developed and we tested and we deployed in our labs this year that that we can put to use for for many other things that we are we have ideas on and and research programs ongoing on. Sorry for this long introduction, but we we can run over a bit at the hour if needed if there are many questions. So now I'd like to turn the microphone to you for for questions. Thank you. If you wish to ask an audio question, you. Our first question comes from Patrick Wood from Bank of America. Go ahead. Your line is now open. Perfect. Thank you very much for taking my questions. I have two, please. The first would be on the vaccine work within biopharma product testing. Are any of those agreements volume related? Or have you already essentially been paid for the work on the trials upfront? How should we think about the revenue development of those as vaccine volumes ramps? That's the first question. And then on the second side of things, interesting on Beacon and the movement into the CRO space and building up there. What's the thought process? And how large would you want to be within the CRO landscape? Is that more about winning development contracts later down the line and supporting the biopharma drug testing business? Or is this something that, in and of itself you would want to see get to getting to a decent size? Thanks. Thank you very much. Yes. We we did all kinds of work for vaccines. We worked in the very early r and d stages, also on those oligonucleotides. We have also oligod one of the largest in the world in producing oligos. We work in the product development cycle with BPT, biopharma product testing, and we are involved in the release testing of the some of those vaccines. And indeed, release testing is proportional to volume. So we've been ramping up as fast as we could capacity, and and the real testing is starting this year, it wasn't last year, to help companies produce as many doses as possible while we continue to work with the vaccine company to to measure the post for the surveillance of of post registration and also for the the work around the booster shots and the work around potentially altering the the targeting to to cover mutants or variants. BEACON, yeah, in in discovery, it's a tiny market, very fragmented, many small players, all highly scientific. And, I think from what we can see, we are the leader in this early discovery work. We are not doing, however, animal testing. So we are not like Charles River. Charles River is very big because they do a lot of animal testing in in early development. So we don't do that, but we do even before that, all the testing on cells and testing of of thousands of compounds against different different tools and and testing platforms to detect how they're gonna work, how they're gonna be toxic. And, indeed, we the future for those companies is to be faster. Everybody wants to be faster in market, and that's why we are putting emphasis on this integrated discovery because we have all the capabilities. We have the chemistry capabilities to produce, generate new new molecules. We have the CDMO capabilities that can produce also the the clinical trial batches, And we have the BPT capabilities to test all those clinical trial batches and and and then, the ability to to have product management project management to cycle very fast based on the on the effect of the first first assays, first screening assays, to tweak the molecule a bit. And and if we can do it all in one organization, it is much faster for clients. So we'll be investing significantly on that. We don't want to become a CMO. We don't wanna do commercial production. That's a different market. But, all those, those work around integrated discovery is an area where where we want to strengthen our leadership. Very clear. Thank you. Thank you. Our next question comes from Andy Grobler from Credit Suisse. Please go ahead. And now the line is now open. Your target for organic growth in the longer term is still 5%. I just wondered if you could talk through some of what has been kind of lost and gained for your end markets through the pandemic? And you sort of mentioned earlier that those targets might prove conservative given what you were saying. Do you feel that they may be overly conservative at this stage? And then secondly, just from a different angle, the hybrid first calls are are next year. Do you think longer term that is still gonna be the right financing structure for you given where your leverage now is? Thank you very much. Thank you very much, Andy. Yes. You know, it's it's very hard to make predictions, especially about the future. So the 5% organic growth is a target we set maybe five or ten years ago, and, we haven't we haven't revised since, and and we tend to exceed it every year. And I think there are good reason to believe that in the world post COVID, we could grow faster than that based on our positioning because we still have an embark routine clinical diagnostic that is gonna drag the growth a little bit, but it's not all that much, and and and our clinical diagnostic labs are becoming more and more innovative so that could counterbalance that. And they are still part of the world where this can grow organically. So, yes, I hope you are right, and I hope that in '22, 2324, we can we can deliver significantly more than 5%. But, you know, it's it's very hard to know. So we'd we'd prefer to stick with our secular objective. But, you know, if you put in your DCF 5%, and I think that could last for a very long time, I think the you'll get pretty explosive results. And, yeah, hybrid. Yeah. It's a good point. We we might not need hybrid anymore because it's a matter of cost. And at every given time, whenever we have a refinancing, we'll we'll consider the the different opportunity cost opportunities of of the various instruments. I know I mean, sometime we are criticized for having instruments like and hybrid and so on, but they're all mixed. Hybrid is a very low risk financing. We still could be hit with further economic crisis. The the Western world is gonna be challenged with the emergence of Asia. There might be sociopolitical challenges in in in many parts of the world. So adding an instrument like the hybrid is not necessarily bad. We've we've, of course, no no obligation to repay anything anytime if if if the situation were very, very serious, which we're very far from, and it's it's hard to conceive how we could be in a situation where we would benefit from the hybrid. But we'll we'll review that fairly soon. I think 2022 is the first time we'll we'll have to to really decide what we do on that. Okay. Great. Thank you very much. Thank you. Our next question comes from Edward Stanley from Morgan Stanley. I've got three, please. The first one, I'm curious about the other press release you put out this morning. What is your production capacity for those at home EmpowerDX kits in The U. S? And when do you envisage that, that might be available as a product in any kind of European countries? The second question, perhaps relating to that maybe for Laurent, I see your inventory is up, which is obvious, but your inventory allowance is substantially up. Does that relate to mainly rapid antigen testing where they'll be more disappointing or or something else where you're foreseeing worsening trends perhaps? And then and then finally, on the 26 deals you did, you disclosed GeneTex, Sundream. And I know M and A is not a focus this year or last year or even next year, but which verticals were you targeting or are you targeting? Because as you've shown in that chart that you've overtaken all the other tech companies in terms of revenue, but those competitors are finding it obviously evidently more challenging to find bolt ons that move the needle for them. So how do you have such high confidence that the medium term pipeline for for m and a is as attractive as as they evidently don't? Yeah. Thanks a lot, Edward. Production capacity is pretty big. Also, we got clearance by the FDA to use any of our US labs, and and we can deploy this test in in each of our 15 labs in in the country. We will be we are working with partners right now on the launch at at various large chains in The US and the associated marketing. So based on that, we we can adapt capacity, but we our capacity in The US is more than 100,000 tests a day if need be, and and it can be ramped up significantly should there be demand. But, of course, we will see how the markets react, how the you know, those products are not only good for direct to consumer, but they would be extremely good for employers. If, let's say, big banks in New York want to bring everybody back to the office, what would be really easy is to have boxes of those tests at the entrance, get everybody to to sit in a tube or or do a very shallow nasal swab, and then put the two bags in a box. And then during the night, we can test the result, and everybody would know by the next morning before they decide if they go to work or not if they are positive or negative or if the floor is to be isolated. That could be really easy to do. It can be it can apply to events. You can ship those kits to people who want to go to a to a show, for example, when they register for a festival, they order their tickets. Three or four days before the festival, they get a kit at home, then they return it. The day before the festival, they get their results. We can all make it very fast, and, and that's much more reliable than the antigen kits. So we're we're gonna have to see how how it is, used and, you know, reason has not always prevailed in the fight against the pandemic, unfortunately. And, actually, we've been lobbying to to launch this test for almost a year now. It was ready in our in our labs in many countries, and it's still not allowed in some European countries for for at least six months. We think this is the thing to do because they really bottleneck all the sampling stations. So if if people could test themselves, we we could have a much higher throughput of testing in many European countries too. On the inventory, I think I can answer that question. Of course, we bought we we built a lot of inventory to not be dependent from suppliers, and that's also why we could produce way more tests as a proportion of our revenues than others because we never had had shortages of of reagents. But at the end of the year, in view of our prudence about the outlook and the visibility of how much we would be testing in 2021, we we will talk some of that inventory. I think that explains the the second part of the question on the allowance. We'll see if we if we end up using it in the end or you know, the risk is that there is an ad abrupt stop. And if there is an adrop abrupt stop of testing in one country, we move the inventory to another quest another country, but we might be left at the last country with some stock, which is that's why we were prudent. And M and A, you know, we don't do a lot of M and A. We only added 100,000,000 last year. 200,000,000 is very modest. It's a lot of small companies, and we are present in 50 countries. So we look at many things. We are often also the acquirer of choice. Many entrepreneurial led companies that are focused on high quality, on science, not only on financial metrics will prefer to be acquired by Eurofence. They also know that our model will leave a lot of independence to to their teams and to themselves if they continue to for a fairly modest objective of maybe in '22 or '23, adding 200,000,000, I I don't find a challenge. Of course, we will do very few deals because the prices are crazy at the moment. You know, the loss was BBA last week, I think, was sold for something like four times revenues and and and 20 or 18 times EBITDA when European is trading at twelve, and GBBA is a bunch of underinvested labs of fairly poor quality. Sorry. I I hope I won't be sued for saying that. And and the same for what SGS bought. They bought they paid a very high price for a bunch of assets that that definitely are underperforming compared to to all ads in the same region. So and they also paid wherever on the really big day, maybe 16 or 18 times. And so, obviously, we will not be fighting for every deal, and and we in many situations, it's even worse. And if you look at the evaluation on on the market in in The US of companies like Natera, Invitae, CareDx, which are trading at, like, 10 times revenues, for companies that are making zero profits and sometimes substantial losses when we have similar assets within Eurofence. It's clear that acquisitions is not always the way to go now. It's much better to build things organically, hire the right scientists, and and and go forward and and wait for the nonsense to stop because, you know, eventually, the nonsense always stop. We never know when, but I've been long enough in in this testing world to to see many bubble burst. And at some point, this will also probably happen when when interest rates start to pick up maybe or but that we will see. Fair enough. Can I can I ask one more, please? On the tax, you you've had substantially lower cash tax than p and l tax for a couple of years, but it was particularly acute in 2020. Will that continue that divergence of cash and P and L tax? Can you can you give some guidance on on both sides of the equation, please? Laurent, do you want to answer this one, please? Yes. I will. Yes. Indeed. I mean, you know that in the past, we have accumulated a lot of tax loss carry forward, and you have to effect I mean, you need to first recognize them when your profitability is in line. That's what's happening today, and this enables us to lower our tax rate on on a booked perspective if you want. And, also, to use them when we have a profit, this is when you have your tax paid, which is lower. We we do have still stock a significant stock of tax loss carry forward. So as long as we are generating high profits like we did this year, we will be able to enjoy them. This year was a special year, but we should see a bit more usage of the tax loss carry forwards on both fronts, the booking and the payment. Thank you very much. Thank you. Our next question comes from Jean Francois from ZES. Please go ahead. Your line is now open for question. Jean, please go ahead. You might be on mute. Okay. We'll move on to the next question. Our next question comes from Neil Tyler from Redburn. Please go ahead. Your question line is now open. Yes, thank you. Good afternoon. Can you hear me okay? Yes, Neel. Yes, good. So a couple of questions, please. Firstly, on the SafeWork offering generally, could you provide a little bit of detail around the cadence of those contracts and those revenues that have already been booked so that we can understand whether the majority were sort of booked in that business that came in as lockdowns were eased? Or has that been building into the end of the year? Then the second question is more sort of longer term and around your the services you provide supporting gene therapy products. Are they providing any are you driving any meaningful revenues from those services currently? And I wonder if you could talk a little bit about your sort of your medium to longer term expectations around that. And then finally, similarly, on the I suppose, the topic of that's relevant today, the direct to consumer revenues. I know that's something that hasn't been a material part of the business, but potentially could become one. And can you talk a little bit about you know, the ambitions and and expectations there more broadly, please? Yes. Thank you very much, Neil. SafeRetwork, we've we've signed a lot of contracts, but we have not booked a lot of revenues yet Because as you inferred or maybe indirectly pointed, a lot of those contract will start when people go back to their offices or to their factories or to their workplaces or they will start traveling again or they will start going to events again. We've been supporting the Formula One events in in many, many countries. We've been supporting the the the the golf tournaments, the women golf tournaments. We've been supporting many other high profile organization in soccer and so on, but it's still very few people because we're testing mostly the athletes and and the support staff. We're not testing massive spectators or or public because they are the they are closed doors even so far. So the the real volume will come when those events restart, when cruises restart, when flights restart, and and we're gearing up for that. We won a contract in Spain to to cover pretty much all of the airports or nine 80% of Spanish airports with with testing and in anticipation of the restart of travel this summer. So we we, of course, will see how how that pans out, but it's the bulk of those the realization of those contract would start when the lockdown stopped. And, of course, also the clinical testing finally, during lockdown, there is less testing because the lockdowns work and and people get fewer contaminations. When the countries reopen, that's that's usually when the the clinical testing picks up. AT and T, generally, so gene therapy, antibodies, etcetera, it is still a smaller part of a biopharma product testing business, but we've been investing significantly both in our CDMO and our BioBPT labs to, to cater for for ATMP and and gene therapy. And, we're gonna be continuing to make significant investments. This, we feel will grow because gene therapy, there are ups and downs in in the clinical outcomes, but, the whole area of of biologics and and and AT and T is is very promising, we find. And DTC, yeah, we we haven't talked much about DTC because I'd rather talk about things when we have already had some successes and significant volume. We we were working on some DTC startups for for clinical. We have DTC already for some paternity testing and and other areas or radon testing or environment testing, and and water testing in some countries are still very disparate and and not built as a as a as a significant business, but we feel long term, the many things will become more patient centric. We believe in prevention, and we believe in patient centricity. And while the reimbursement system is not geared towards that at the moment, longer term, people are taking more and more of their health in their hand, both in terms of what they eat, the prevention, the advice in what they eat, and and in terms of of finding out if they are sick, what they have. Our there are countries like Italy where half of the of the health care is self pay, and we do a lot of, for example, the noninvasive prenatal testing we are selling is is very much direct to consumer. Of course, it has to be prescribed by a doctor, so it's, there are three parties involved, but it's very often patient driven. So we believe this could, maybe not in a one or two years horizon, but on a five to ten years horizon, this this could present a very significant opportunity for urethanes as a as a direct to consumer arm and and branch, and and and it could be not only clinical. And there again, you know, we benefited a lot during the pandemic of not being only a clinical company. The fact that we had food testing companies, environmental testing companies, kits producers, helped us to be the first with solutions to have much broader depth of of product range, etcetera. And I think, again, in the DTC sector, the fact that we are very good at testing food, very good at testing the environment, very, very much we we do everything that matter for consumer. As as we get rich enough and we have enough food, we we want to live longer and healthier. And and if we are sick, we go to our doctors. But, as the world become more aware of the impact of food to the environment, people will wanna know where do their food come do their food come from. Is it a long chain, short chain? So we can provide the information. In the long term, with blockchain and all those things, Almost in every thing you buy at a supermarket, you'd be able to find out where it comes from, what are the ingredients, what are they organic, not organic, and and and consumers will have many questions. And and we are we are gearing up as a as a ten year plan. It's a bit like your Asia investment. It it will it took us ten years to be or eight years to become market leader in North America in all of our markets, you know, core three core markets, of food, biopharma, and environmental testing. In biopharma product testing, same thing. It's gonna take us ten years to make a substantial mark in in Asia, maybe not in every Asian country, but in most, I hope. And and this this gearing towards prevention and and patient centric care also might take ten years, but but it could be quite powerful in the end. Okay. Thank you very much. Just to put perhaps just pick up on one of the comments you made around food testing. Do you think the alternative protein market is a significant incremental opportunity or more likely to simply replace the testing that takes place of, you know, for those protein proteins that are being replaced. Yeah. That's an interesting one. You know, the more complex the product, the more testing is required generally. We see it for biopharma. The level of testing for for biologics is five to 10 times higher than for small molecules. We test a lot of ingredients. Nutraceuticals is also another interesting, interesting aspect. Herbs and plants and botanicals as they are called in North America. We're the leader in that segment. It's it requires much more testing because of the diversity of products. And, you know, people have been eating potatoes forever, so nobody's too worried about potatoes. If you start to make proteins out of mushroom, out of insects, out of, let's say, fermentation and biological processes, there are more unknowns, more questions in the product development, it requires much more testing, and then probably the quality assurance of those more complex products will will be set higher. And and, again, we're we're very early days. The regulators haven't necessarily faulted through as to what requirements there will be on on some of those products for for quality control. It's, it's just early days. So we we will see. But general rule has been, in my experience, the more complex the product and the more the way it is from from what we are used to, the more testing is required. Thank you. Very interesting. Thank you. Our next question comes from Will Kirkness from Jefferies. Please go ahead with your question. Thanks. I've got three, please. Firstly, on the organic growth, we add back what you say was lost this year from lockdowns, then I think we probably had an organic number of closer to six to 7%. So I wonder if you could perhaps just give a bit more color on the outlook in that context, which markets might be of extreme very good growth or perhaps weaker growth? Secondly, I was just interested in the comments on leverage, capital allocation, M and A, I guess. So I think before you said emerging markets don't have so many big assets. You've done a lot of the bigger stuff in your established regions. Should we really be penciling in some kind of shareholder returns given where leverage sits? And then lastly, just a numbers one. Accrued income looks like it went up quite a lot. I just wondered if that's related to the to the very high levels of growth seen in the fourth quarter and what particularly that relates to. Thanks. Thank you very much. Yes. What have we lost to lockdown? Well, we still have although we returned to organic growth last year in fourth quarter and overall throughout last year, we've had a positive organic growth of our core business, We still suffer in many areas. Our environmental testing businesses, which require sampling, are still not back to to where they were in 02/2019. They're still down in in many markets. Our clinical trials business, for for our central lab and for cosmetics are down. All the work we do for food service, our restaurants is down significantly. The little work we do for the travel industry is is almost at zero, and and some of the work we do in consumer testing and and textiles, for example, is is also severely hurt. So that's why we have a missing bunch of of growth. It's not like we have negative organic growth last year. It is positive, but it would have been much higher. But we don't see why those revenues wouldn't come back, after COVID, because people really wanna go back eat in restaurants, and restaurant food will have to be tested again, And, cosmetic clinical trials will restart, and the patients will go back to hospitals, and the clinical trials of normal drugs can restart. But still in q one, we had a we had a strong q one, at least January, February in in 2020. So I think this this impact will still see in 2021. Of course, in 2021, we're still doing a lot of COVID testing. So in the end, we'll still come up come up way ahead. But, yes, at some point, this will normalize. So I'm not sure it was exactly your question, but that's how I understood it. Okay. And I I think it's just more whether, you know, going back to this five percent number that is, you know, we see peers talking about high single digit in some of these areas. So I just wonder whether, you know, looking on a more medium term view, the drivers are there to support that kind of 7% path. Ah, yes. I understand. Yeah. I mean, we're not looking there yet, but if you look at 2023, yes, potentially. Of course, all those objectives are are simplifications, and I also have questions that the lost growth I mean, those lost revenues were still missing now, our environment clinical, etcetera, and and the restaurant testing. They might start coming back in the 2021. So we might not see it all in 2022 from January 1 all of a sudden. But we think that by 2022, if the pandemic is brought under control, we should see all of it. And then we we start again from a normal base, and from a normal base, yes, it's it's true because if those things start growing again and we have parts that are definitely growing double digits in our core business, maybe the mix could could land above 5%. But, you know, we we first should deliver what we what we have in our objectives, and once we have delivered what's in our objective, we can we can think of over delivering. And and when it is certain enough, we we will, point it out to the market. Yeah. You you're right. I mean, we if if this year, if we end up doing a lot of COVID testing again in 2021, our leverage will go down quite drastically again or significantly, and then we we really should question if we have too much cash, which would be an interesting position to be in. We still have some some buildings that are not owned by Eurofins that maybe Eurofins should repurchase to to put to bed the last last objection on the on the governance, which I don't think is a real worry that can be perceived as one by some. And, yeah, I don't I don't think massive M and A and large M and A are in the program. First, there are very few quality companies around I'd like to buy, and and second, most of the one that are to buy or large scope are too expensive. So I'd rather wait for the interest rates to normalize, inflations to kick in a bit, and and come to a much better world to maybe '24, '25, or whatever to to look at that. So we might do more distribution potentially, and and that we might distribute more than 25% of our of our net profit if if we don't see very many other ways to distribute, but let's do step by step. I'd I'd rather first deliver and then then talk about what we do with the cash if we have too much cash. And, yeah, accrued income, I think it's about yeah. We had a lot of unbilled revenues probably at the end of the year with all the all the COVID testing we're doing. I think that's that's probably the the main thing, but Laurent can comment if on that one. Yeah. There is a bit of accrued income related to COVID testing, but overall, it remains quite small compared to the size of the group. One thing related to the last last oh, sorry. Last question about new market. There are not only I 10 I t 14. Right? There is also a huge market that's gonna come with the legalization of of certain, certain what was considered drug, marijuana, CBD. It's becoming normalized in many countries. We are not active in The United States in that area because it's it's not it's still not it's still considered a federal criminal activity, although it's still out in some states that could become a major market. Silosudine and and others are gonna be probably also legalized in many markets. So they are around food, cosmetics, health care, generally, a lot of innovative areas that that will require very significant testing. So there there are many ancillary markets that we open with from innovation that at our clients and and changing regulation. Thank you. Our next question comes from Nicholas Tabor from Stifel. Please go ahead. Please proceed your question. The line is now open. Good afternoon. Thank you very much for taking my questions. Can you hear me very well? Yes. Great. The first question would be on the the risk of decreasing reimbursement prices for COVID testing. I mean, could you share some of the insights you have from your discussions with government with whom you are close at the moment? I mean, is there a real risk that in July, certainly the cost the price house as people get vaccinated and so on. And how should we think about that? And then still on the profitability of the COVID testing, I mean, we understand it's very high. And as you are slowing OpEx and CapEx investment in that field, as maybe we have reached the peak, do you see the profitability improving, even though I understand it's difficult to separate it from the rest of the clinical diagnostic? And then on the tax rate, so you answered the question on the deferred tax, the loss carryforward and so on. But can you give us some indication of the effective tax rate we should expect for 2021 for this year given what you said before? Thank you. Yes. We haven't seen very massive COVID PCR reimbursement drops, although I would wish it to happen. Frankly, I would wish for a fully liberalized market. I mean, we are testing or we're testing wherever, anywhere between 100 around 100,000 a day, let's put it. But we could test a million a day. We are vertically integrated. We the reimbursements are are probably fairly high in The US still at $100. I think that should come down. And and in Europe, they're a bit more modest between 30 and and 60 maybe. We we have very large contract at at lower prices already for some time. But for population testing, I've had an interview in the the biggest newspaper in Germany where I said we could be doing millions of tests today at $10.10 euro per test and and still be having sufficient margin, and that would really help in fighting the pandemic. So I think the we should move to a place where this test is seen as a medical test, to a test that's seen as an industrial test that can be highly industrialized, and and we have a way to do it. We could multiply our capacity by by 10 or 50 relatively quickly and and and provide those tests at much lower prices. And and I think that would be a much healthier situation, and and it would contribute to to a much faster eradication of the disease as as it's done in in China. But that's not for me to decide. Yes. And going forward, you know, yes, we have also, one thing is, initially, we still are buying some reagents because we didn't have although we had our own reagents, we didn't have the government's approval for our own reagents everywhere. And little by little, we're getting the government approval to use our own reagents everywhere, so the the proportion of things we buy outside is decreasing. So, and and the CapEx is pretty much gone unless we see a shift to massive population testing. We don't need more equipment, and and we have taken, as usual, very conservative policies for depreciation. I mean, very fast depreciation of of our equipment. So, yeah, we're we're not worried about the evolution of of margin. And, anyway, COVID, you know, we we do that to contribute, and we're really happy to have have had this level of contribution last year and and to have this huge toolkit to help companies and airlines and and other sectors of the economy restart. Whatever governments decide will be the proper testing measures, we have the tools. And and we have, for example, a new PCR kit that can be industrialized in in thousands of sample per day in a container next to a stadium, next to an airport, and we can do the test in thirty minutes. So it's and it is a a very sensitive test. So we really have all the tools to help, and, you know, if we make money with it, that's good. If we don't, it really wouldn't matter because the main thing we want is to to help the world return to a more normal situation so we can focus on things that are much more exciting, like helping the world develop and have better food, safer environment, and and develop even better drugs. And tax effective, I don't know if Laurent can can tell us. I don't know that we know, frankly, because it will again depend where the profits are falling and which countries and so on. And and, frankly, we could do better in in this planning. I I know some companies invest much more in in forward planning of their tax rates, and we focused on team our teams on on maybe more urgent priorities. And, obviously, we pay our taxes when we have to, where we have to. And as Laurent said, we have we still have quite a lot of tax rate forward we we should be able to utilize as as our startups, which we're losing money, starts to make money. I mean, that's gonna be the main determinants because we still have many areas where we have profits and others where we have losses, but we can't always offset the losses against the profits of other parts of the group. So where we when we will make money everywhere, then we will use everywhere the tax carry forward. Yeah. And maybe just one small precision. I mean, our ETR was 22% this year. It was 28% the year before, and it was 23% the year before. Again, it's very dependent on the geography where we make the profit and also on tax reforms. I mean, two years ago, there was a a Trump tax reform, which enabled us to recognize the loss of deferred tax assets. There might be a different tax reform under the Biden administration, so it's very hard to predict. I mean, we are dependent not only on our own profitability, but also on the tax reform in this geography. Great. Thank you very much. Okay. Alright. I guess we we're gonna have to take the last question or or or close here. Okay. So we'll take the last question, and then we will close. Our next question comes from Shusani Varahi from Goldman Sachs. Please go ahead with your question. Hi, good afternoon. Thank you for taking my question. Just two for me, please. Can you comment on the January from February trends on COVID testing and on the underlying organic revenues, especially on the COVID testing? Would you say that it's similar to the Q4 levels or maybe higher? And the second one is on your pharma, biopharma business. Have you seen any early signs that the clinical trials and the drug research that was suspended during the COVID crisis have been or will be restarted anytime soon in 2021? Thank you. Yeah. Thank you very much. Yeah. The, the level in Jan, February is a bit lower than q four, although q four was different from month to month. December was lower, than than November and and, October. It's you know, it can vary. It depends on country to country, lockdown to no lockdown, government programs. So I wouldn't I wouldn't extrapolate anything. We we will see what happens, but we still test substantially. And, yes, we've seen some clinical trials restart, but but not all of them. So, depending on the country, again, and even in the of the state, where the the level of the pandemic is improving in many areas, but it's getting worse in other areas. Hospitals are still very busy in some, some countries, and so they they can't accommodate trials. But, again, we're we hope that, from the summer, things will, will normalize a bit. Thank you. Alright. Well, thank you very much everybody for joining our call. And, for those of you who have been patient investors, I think we are coming in a phase where you will see a real, potential of a company like Eurofence. The way we responded to the crisis bodes well for our ability to innovate on on more traditional areas and and create a lot of growth for the for the foreseeable future for many years and and many decades. We are fortunate to be in extremely exciting areas where our clients carry out a lot of innovation, which calls for a lot of testing, and, we are working on many r and d programs. We haven't talked about transplant testing programs. We haven't talked of many other exciting things that we have been continuing to work on during the pandemic, that that should show their real potential in in 2022 and and beyond. So a lot of exciting stuff ahead. In 2021, we will do our best to to contribute to pandemic. We've launched those direct to consumer tests even in Europe. In London, we can get our kits and and get tested. We're gonna work on on improving the improving the logistics of returning it to the labs so we get faster results. We we are we are working on on many other things, and I'm looking forward to meeting you in person in in the second half of the year. I hope the in person meetings can resume in the fall, and we can we can discuss all those exciting things that with more time and and and no be focused by the COVID pandemic soon. Thank you very much, and best wishes.