Earnings Call: Q2 2020

Aug 6, 2020

Hello, and welcome to the Eurofence Scientific H1 twenty twenty Results Conference Call. During this call, Eurofence management may look forward to statements included, but not limited to, statements with respect to the outlook and related to assumptions. Management will also discuss alternative performance measures such as organic growth, which are defined by the footnotes of our press releases. Actual results may differ materially from objectives discussed. Risks and uncertainties 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 and the happier report. Please also read the disclaimer on Page two of this presentation subject to which this call and the Q and A session are made. Today, I'm pleased to present to Doctor. Jean Martin, Eurofence's CEO. Please begin. Hello, everybody, and thank you for joining our half year results call in the middle of the summer. We are living difficult times through very unprecedented times. We have done our best to present our results in as transparent way as possible so you can draw your own conclusions. I will mention the slides of the slide show. We have a short introduction of ten, fifteen minutes at the bottom of this call is, as usual, planned for question and answers. On Page four of the slide show, we have summarized the financial results of the group in the first half. Of course, the results would have been better should there not have been the COVID pandemic. We started a very strong January and February. And we already had some impact in China and Asia in March, And impact started in France. In the second quarter, the situation was very difficult in some European countries. France, especially, where we have a lot of revenues, was severely hit with some of our laboratories ordered to close. And some of the industries, even the clinical diagnostic testing being much slower because people are doing this for the doctor. Nonetheless, I will go to Page five. Nonetheless, our teams worked very, very hard to try to mitigate those impacts. And in the end, I think we can say things worked out fairly well. We mitigated, to a large extent, the impact of the pandemic on our revenues, on our profits and on our cash flow. What we have seen is that our end markets are very resilient. Food needs to be safe. It has to be tested. Of course, the part of our work that deals with testing food in restaurants was impacted as restaurants got closed. Our environmental testing was probably the most impacted of our activities. In those areas that were are still a little bit impacted, we had to do some cost reduction, unfortunately, to adjust our scope to what our clients will be doing. But overall, we have found our business to be very resilient, our core business. And some of our other activities were extremely dynamic. Our biopharma activities were very dynamic as the research for vaccine and pharmaceutical products to fight the COVID intensified. This is even picking up on momentum right now. So the first thing we did is to try to protect our staff. We instituted social distancing. And then we decided to work to develop solutions to fight the disease. We are not a big diagnostic company. It's probably the first time you heard about Ureference activity in IVD was when we reported our Q1 results. While the small teams have done wonders and they've developed now, which is an outstanding range of products to combat the COVID-nineteen pandemic and took a bit of time to get all the government's approval, and some are still pending. But we know, feel we have a very, very strong portfolio, and I'll talk about it a bit more. And what we also did is we decided to do something to help our clients, of course, first in the food industry, but also all the clients we serve in other industries and new clients to return safely to work. We had done that on a test basis in our own site and our own laboratories to make sure we do what we can to keep our employees safe. And we've developed, which is now an outstanding program to detect recurrence of the disease in one workplace or government building and basically be able to isolate the first patients who turn out positive before they can contaminate too many others. And one element of that is the European Sentinel, which is a unique solution I will talk to you about later. And even yesterday, we launched a lower cost pooled COVID-nineteen PCR test that could turn out to be very handy if government decide to test millions and millions of people almost on a twice a week basis. And of course, the modalities for sampling has to be improved and facilitated, but it could be that this type of test is required. In the end, it could be the pandemic doesn't go away. And if the vaccines do not work out as well or as fast as we want, that we will all have to do a lot of tests. I will go to Slide seven sorry. And for the next section, I will ask Laurent Lebar, who is our CFO, to comment on the financial figures. And then I'll comment more in detail on the operational aspect. Thank you, Gil, and good afternoon, everyone. I'm happy to present our twenty twenty first half financial results. Starting with organic growth on Page seven, which despite the COVID-nineteen disruption was strong, 5.1% in the first half and 6.1% organic growth in the second quarter, much better than our peers and in line with the top IVD players, showing again the strong resilience of our end markets and the agility of our teams in this first half. Associated to a strong growth of revenue, we also performed a series of cost saving measures, which resulted in a strong increase of our EBITDA that you can see on Slide eight. Our reported EBITDA was at 19.7% for the first half, a strong increase of two sixty basis points year on year. Our adjusted EBITDA at 21.2, again, a strong increase year on year. And even if you look at the EBITDA of our more mature companies, all the ones present in the book before 2017, their EBITDA reached 22%, which is a very strong increase of three fifty basis points year on year. And all this in the first semester, which is traditionally the weakest half of the year. In line with our objectives, the separately disclosed items decreased by 20% year on year. You can see the details on Page nine. They now account for about 7% of the adjusted EBITDA, which is in line with most of our peers and which is also confirming the near completion of our five year infrastructure program, which we started in 2015. Moving to Slide 11 about cash flow generation. Thanks to our strong growth of profit, we also had a strong growth of cash flow. Our net cash flow from operations increased by 92% year on year to €445,000,000 Our free cash flow increased by 185% to €315,000,000 Our net working capital was controlled. It decreased to 5.3% despite the inventory buildup for the COVID-nineteen testing activities. And you can also see that we had stable CapEx and a reduced M and A spend. Focusing on CapEx on Slide 12. They stood at 5.6% of revenues, flat year on year despite the COVID-nineteen ramp up of capacities. They are now well below our depreciation percentage in terms of revenues, and they contribute strongly to free cash flow generation and EBITDA to cash conversion. Moving to Slide 13. Our first half was also marked by a significant deleveraging. We were able to reduce our leverage by 0.7 turns, and we now are at 2.54 turns. Thanks to the free cash flow and the equity raise that we successfully performed in May, we were able to repay all our short term borrowings and to bring forward by one year our deleveraging objective of 2.5 turns maximum. Even before we issued our first half results, we got an investment grade rating from Moody's rating agency based on our Q1 results. So to conclude, moving to Slide 14. We had a very strong first half in 2020 on all fronts: revenues, profits, cash flow generation and deleveraging, which all resulted in a basic EPS increase of 57% year on year. Thank you for your attention. Now I'm giving back the mic to Gilles for the business review. Thank you, Laurent. We don't normally present organic growth of competitors in our slides. But since we've had some people who like us very much criticize us for a long time on organic growth, we thought we should show that. On the business review on Page 16, what we have seen in the first half is that overall, in spite of very, very troubled economic conditions and operational conditions, our end markets, the industries we serve and the clients we serve need our services even in times of crisis. And we were once in a deep crisis, in great recession, 02/2008, 02/2009, at the lowest part of this, we've still had positive organic growth of a couple of percent. And I think we're going to see the same this year, Even if we don't count the COVID-nineteen testing or reagents revenues, we will probably see that our core business is very resilient as a whole. Of course, we have a mix of businesses with various growth rates. Obviously, the clinical testing normally doesn't have a huge growth rate. Others grow faster. But on the other hand, clinical testing is also very resilient. On a full year basis, we've seen already in July some catch up of the doctor's visits that couldn't take place before. What we've also seen in the first half of this year is that our de central model, with more than 900 companies, make us very reactive, make us very agile. And it was amazing to see when we launched a call for our best scientists around the group to develop multiple testing solutions to fight COVID-nineteen and solutions to test personal protection equipment like mask, to test respirators and find solutions for our clients and basically any company to protect their employees in the workplace. We're extremely fast in developing a whole range of services. If you go on our website on COVID-nineteen response, you'll see a range of things that we've developed in very, very little time. And some of those tools are very, very good. So that was, for me, very impressive to see our teams mobilize to develop that. We as I said, we are not a big IVD company. We're a tiny IVD company. This is something we did mostly because for our internal needs and because we want to be very innovative in what we offer the clients of our laboratories. So I think our own IVD companies was more historically for R and D point of view to be fast in developing new solutions and standardize this. This is turning proving handy, and it was supported by small IVD companies to develop product in record times. So it's a nice complement to overall mix. I will go to Slide 17. So this gives you an overview of the things we've been developing. The Q1 results, we talked a bit about the development of PCR testing kits and development of some serologic antibody kits. What happened in the meantime is we put together what we call the Safer at Work program, which is a range of services to help companies bring their employees back to work. It's impossible to test everybody every day. I mean, you have gotten a little stick in your nose, you know that it's not terribly pleasant, so you cannot do that every day. So you have to use a mix of solutions that are risk based, but that can catch an outbreak before many employees get infected. And we've put together services that can start with the Sentinel program, which is a program that can detect early onset of the disease, for example, by testing wastewater or by testing warm masks or by testing simply the work environment. We published a couple of papers on this. It's working very well. So in areas with low virus prevalence, this is something that can be used. Then based on that and other artificial intelligence based tools, we can help companies set up fast testing. We'll set it up in the right facilities at the right place at the right time and the right frequency so that not everybody has to be tested every two days, which is very burdensome and probably not acceptable. So we think together, have really an outstanding program, and we're starting to get excellent response. This is something we launched about a month ago, and we already signed more than 500 programs, and we've got a very large numbers in discussion right now. What we also launched recently is also a point of care testing, a very sensitive antibody test. It's not for acute acute epidemic, but in many areas on a population that is historically infection free, it can also prove very useful. And also what we announced in the last couple of days, we launched, as I mentioned, the pooled PCR test that can reduce the cost significantly, not necessarily for clinical testing. It's not for all uses, but for uses of surveillance and detection of recurrence of virus, it can be very useful and cost effective. And we completed our portfolio for PCR testing with DNA extraction kit because one of the bottleneck of the testing is the extraction of RNA before the analysis. On Pages eighteen and nineteen, you will see a description of those programs. We can go back to that in the question and answer session. But there is a strong demand for our SafeRash work program. And overall, industry hasn't really decided how they should respond. It's more a matter of we are waiting to see what the governments will do. And we have to deal with many scenarios. Nobody knows how this whole thing will unfold. We can be very optimistic and say, okay, after the second wave, this will be over. The vaccines will work enough to completely suppress the virus so it doesn't infect other people when people catch it. But nobody knows. We could also be faced, as the WHO is saying, with a prolonged period where the virus is circulating and where, at some point, it will become a responsibility of companies to contribute to the fight of the against the virus and to put in place very reliable prevention measures. And as a company that focuses on serving industry, this is what we have been focusing on building. Very early days, this was a very positive response to our safe harbor program and our Eurofence COVID-nineteen centenary solutions. So on Page 20, you see, for example, one of our stands at the in Austria at the Formula One Grand Prix. We are the partner of Formula One to test everybody who is allowed on the circuit on a regular basis at frequent intervals during those races. And we're happy to contribute to help companies go back to business. And this is something also discussing with airlines. Have a lot of different groups of industries, which are extremely hard hit by the virus. And with proper prevention and adequate testing and especially risk based testing, a high level of security can be achieved. On Page 21, you see a couple of pictures of our team at Paris airports. France is starting to set up a testing program, required testing program for passengers who arrive from certain high risk destinations, high risk origins. And so this could be something that will be increasing in many countries. We already won mandates to do that at France's largest airport, also in Germany. We're setting up in Frankfurt Airport, but we already have set it there. It requires a lot of effort, a lot of staff, but this could be something that countries will have to do, especially this fall and this winter, if the virus continues to spread. On the next page, Page 22, you see some pictures at the Australia Red Bull Ring for the Grand Prix and at Silverstone in The U. K. On Page 23, we mentioned some of the product launches we did in the area of COVID testing. And you can go back to that in case of questions. On Page 24, we're giving a bit more comments on the COVID-nineteen pool PCR test. At the moment, the reimbursement for the PCR test varies between, I think, something like €50 in Europe, probably lower in some Asian countries, and $100 in The U. S. This is all right for clinical testing, where for medical reasons, somebody needs to know if the patient is positive or not. This probably will end up being too much if you have to test the whole population at regular intervals. And that's why we've been working on a number of solutions that could significantly reduce the cost of testing for monitoring and surveillance. This is the first one, and we just started pooling with five samples. So it could be, of course, more. And we are working on a number of other solutions that we hope to release over the next few weeks or months. The holy grail in this area is doing it immediately and doing it for $1 Whether that will be available anytime soon and doing it at home for $1 We don't know, but we definitely are working to reduce the cost from the current levels and increase the speed level. So that's on Page 25. I don't have any secrets to reveal now, but what I can say is after some initial time to get the R and D teams deciding on what were the right priorities because there are hundreds of things we could have been working on. We feel now they are working on a number of very potentially very good tools to fight the disease that will complement what we already have in our portfolio. On Page 27, I will briefly comment on how we see the future. Obviously, it's impossible to know. When we talked after Q1, we thought there would be a huge need for testing in the next two months. What happened is that actually there was a need for testing in April and May. But then in June, it started to be that labs in Germany and France were basically not using their capacity. So it's very hard to predict anything. For the second half of the year, we're all hoping that the virus had gone away and that life was slowly returning to normal. Well, what I saw today is with the virus coming back and at higher levels in Spain, France and Germany, we might not be there quite yet. So it's impossible to predict anything, both for our core business and for our COVID testing. What we do have, however, is a built in edge. So normally, we feel our business should be more or less back to normal, to a large extent, everywhere. And we believe that, hopefully, authorities will take measures that make full lockdowns not necessary if they do a proper prevention and testing. And if the virus continues to circulate, we probably will have to test a lot more than we are doing at the moment. So everything I'm going to say about the outlook, of course, has to be qualified because nobody really knows where this whole thing will go as a whole and in each geography, but we feel we are well positioned for most of the scenarios that could unfold. Therefore, we think our objective, which is a secular objective, we set our objective more or less ten years ago, to do about 5% organic growth this year, even corrected for the lower base last year due to the cyber attack, And we should be able to hit EUR 5,000,000,000 revenues or be less if we don't do EUR 100,000,000 of M and A contribution. We feel our EBITDA margin or EBITDA should be at the EUR 1,100,000,000.0 as we expected, and we should be able to generate about EUR 500,000,000 of free cash flow. What we've done also, as the pandemic started, is we decided that the world would enter a phase of very high uncertainty. So while we were comfortable with our leverage and the rate of reduction of the leverage in normal times. This was no longer the case in the situation we are finding ourselves, so we decided to accelerate the deleveraging to go back to 2.5 faster than the 2021. And that's why we stopped our dividend and we did a capital increase last month. So as a result, we are already almost at 2.5, and probably we will be able to improve on that in the second half of the year. We will continue to do that. It's our intention. We are comfortable in the range one point five to two point five billion But the closer we are to the bottom of the range, the more headroom we have if some interesting acquisition comes up. So we'd rather be at one close at €1.5 and have more strategic options. In terms of the broader outlook, we believe that for the year, the outlook is rather good considering we have this COVID testing and reagent hedge that probably will accelerate if the pandemic expands and if it fits a bit the rest of our business. And overall, midterm, I think it's pretty obvious for everybody that testing is very important, that testing can be used to prevent problems downstream, can be in food, can be in environment, can be anywhere. The range of pathogens we are confronted with and will be confronted with is increasing, will continue to increase. In the end, testing is the most cost effective way to prevent people from getting sick or of things getting out of control. So we feel probably even beyond this pandemic, there will be more and more need for testing, and our positioning is right. Now of course, there are a lot of challenges ahead. I think we're very well positioned. And the speed of reaction of our teams and the agility of our labs has demonstrated that we can navigate very difficult circumstances. So of course, we are all looking forward to difficult times, but we think we're in a good position. So that is it for introduction. I would like now to turn the microphone to you for questions and answers. Thank you. Operator? The first question comes from Patrick Wood, Bank of America. The floor is now open to you. Perfect. Thank you very much. It's Patrick at Bank of America. I have two, please. The first is on the COVID testing you've seen so far. Thank you for the CHF 55,000,000 number. Can you give us a sense, I'm guessing the vast majority of that is just straight down the line, single target molecular tests. But I'm just curious if you guys are seeing any pickup in demand or initial green shoots in multiplexing or NGS on that side of things. I'm just curious as to the rough mix you're seeing within that 55%. That's the first question. And on the second side, within the biopharma business, obviously, it's very minimal at this stage. But how should we think about the implication of delayed clinical trials and how that may affect our business over the next year or two? Thanks. Thank you very much. Yes, you're right. Most of the testing is real time PCR testing and single target. We have a test that is using NGS, and we have other tests actually in the pipeline. And we are working on well, we have a dietary multiplex test with multiple respiratory pathogens. In a state of emergency, people focus more on COVID. I do agree with you, though, that when the winter will be coming, our multiplex test can prove very handy for people to know if they have fever, if it's a flu or if it's COVID. I mean you have to know that the COVID testing is only seventy percent not accurate, but a lot of people do not have virus in their throat when you sample it. And therefore, it's not the test itself, which is a false negative, it's a sampling. And so there's still even if you test negative for with a TTR test, it doesn't mean you don't have COVID. Now if at the same time you test positive for the flu, it's very likely, it's not certain, but it's very likely that you have the flu and not COVID. So those tests will come, and we also have a range of things we're working on, on that matter. But you have to make them cost effective, and you have to make something easy for patients. It's, I think, one of the biggest bottlenecks. For biopharma, yes, biopharma has done well in the first half, but it's not all rosy. We do have a central lab, which has been, of course, like many others, hit by some delays in clinical trials. And it will probably continue to be the case over the next year or so if the situation doesn't return to normal. So while our biopharma as a whole does well, it's some components of it might do a bit less well as was the case already. Our next question comes from Gishini Varasli, Goldman Sachs. I have three, please. One, can you comment on how the exit rate of the business was in June, excluding COVID-nineteen? Or maybe some color on how the trends have been in July now that the lockdowns have been lifted in all the countries? And second one, on working capital, you have mentioned that you have advantage of some of the government schemes on deferrals. Is it possible to give a number on how much was the benefit on working capital and which will reverse in the second half of the year? And the last one is on Safer at Work. It's very interesting that you've already signed up 500 customers just in discussions with 700 more, and you've also mentioned that it can add materially to revenues. If you could put a number around it, if we had a few percentage points, 1%, 5%, be distant half in the culture there? Thank you very much. Yes, June was the strongest month of the three in terms of exit rate. June also had more working days. All the working days mean nothing at this time because it's all over the place with whether you have lockdown at that time in that country, how do you obviously that do a weighted average of the working days. But still June is June was stronger, especially the June. If we look at it, I think in our scope, France was hit the worst by the lockdowns. Lockdowns were very strict, very followed, and the whole building activity pretty much shut down for a year, for a month or one months. Point So that but June was much better, especially the second half. Other than COVID, we got the COVID numbers for you because we thought you'd ask a question for you July, but we're only on August 6, and I don't have the rest of the results for July. My impression is the judging from the mood of our leaders is that July should be good, but that's all I can say. Working capital, yes, I don't have the exact number. I think it's about the order of EUR 40,000,000 or EUR 50,000,000 as the government schemes. And this is, of course, mitigated by all the stops we have been doing for reagents for testing for COVID, partly mitigated. So I don't have the exact numbers. But I think in order of magnitude, it's something like that, between CHF 20,000,000 and CHF 50,000,000. Safer at work, it is just starting. And as I mentioned, companies are still not exactly sure what they need to do. I mean some companies, especially in the meat packing industry, know they have a problem because the work environment is one where the virus can spread easily. Shorter houses, etcetera, they've started to do something. The airlines are starting it's I think the world is still trying to find its place. There are no regulations really. Maybe it's just starting for travel, testing required around travel. We work proactively. We won a contract to The Emirates with the U. Government to set up one of the first passenger pretesting program in the world. So all those things are really early days. We talked about what we did with the Grand Prix. We're talking with some companies about very large global programs. We are in a good position because we have clinical labs pretty much all the countries. Our strategy in clinical was not to be like doing everything for everyone like LabCorp or Quest or other larger players, Sonic maybe, in one country or two countries or a certain geography, but to be highly specialized on advanced molecular tests in as many geographies as possible so we can distribute our advanced tests broadly. Like we do, we are the leaders in noninvasive clinical testing in Europe, for example, which is an NGS based test. We're strong in that area. We started in India, in Japan, and we're also strong in Brazil, in The U. S. But now the advantage of that is that we can easily set up COVID testing sites at this high complexity at those high complexity sites around the world, we're in a good position to respond to the need of truly global plants. We need testing a bit everywhere. It's hard to put a number on it. And it's some of it is included, of course, in the COVID testing. It's not only environmental testing. Some of it is simply human testing, like what we did at Silverstone or at the Austria Grand Prix for Formula one. So I think it's part of our view for the second half. And you could argue that 5% is conservative over the whole year, which would be a bit more than 5% on the second half, but nobody knows. So you know we've said this 5% objective ten years ago, and we figured out we might as well stick to 5%. We'll see in reality what it is. Our next question comes from Will Kirkland, Jefferies. Three questions, please. The first one, just from the margin, kind of a material move year on year. I wonder if you could think about the building blocks of that improvement, so proportion, maybe some cost savings from operational leverage. Secondly, on the COVID test, the 55,000,000 in revenues that you referenced in July, I just wondered what that represented as a utilization of your current capacity and whether the margin was in line with the 25% that I think you mentioned last time you spoke. And then just finally, on the guidance, in the FY 'twenty guidance back, I think previously there was an FY 'twenty one guidance as well, 5,400,000,000.0 of bridge. Euros 1,250,000,000.00 Stars, euros 600,000,000 of free cash flow. Yes, just the ingredient, I wonder if you have any kind of comment on that. Thank you very much. Yes, the margin is I think our margin is still low, and it's still low because we are just finishing our five year infrastructure building, where we are building those large hub and spoke labs. We're in the middle of it. We are finalizing the build out of our large site in Madison in The U. S. For food testing. We still have material reorganization costs in the first half and some of it dominating in the second half to basically put our business in order to really have the shape that we need to be really efficient everywhere. We still have massive IT spend, especially following the cyber attack or upgrading a lot of our IT system. We have massive software development costs to finalize our software. So we are definitely not where we should be on an ongoing basis. But little by little, some of the benefits of that start to cycle. We have some catch up, of course, for the cyberattack last year. The cyberattack, we did some estimate. The business we missed last year. Of course, it's only an estimate. What we would have done in June and the rest of the year is nobody will ever know. Since people ask the question, we said, okay, if we had done €62,000,000 more in June, organic growth last year would have been 5.5%, 6.3%, I believe, if we correct for the Boston Heart disaster. And then this year, it will be a bit less in the first half, and I think we'll catch up the EUR50 million that are missing in the second half. So that's all of that contribute those extra revenues, they contribute to the bottom line. But I think it's not it's still not satisfactory. The teams suffer from a lot of things that are not going as they should be. And that I hope on a more normalized situation, we won't suffer of. We're doing also management improvements and leadership improvements in several areas. On the COVID test, yes, our utilization is low. On serology, I think every clinical company will tell you that there's not a lot of serology testing being done. I think the world has still to figure out what and when they're going to use the serology. On serology, we are working on a range of other tests that might be even better when the vaccines will be introduced to monitor the vaccine effectiveness and so on. So I think there's a lot more to say about potential for serology testing. At the moment, serology testing is not happening in a great quantity. And PCR testing, yes, July, especially the earlier part of July, way below capacity. We're still ramping capacity. We might even have to ramp capacity beyond what we had talked about earlier, but it won't be used every single day and every single week and in every single country. There are still huge bottlenecks in sampling patients and bringing the samples to the labs and getting the IT in order to get reimbursement. The reimbursements for those tests is highly complex. The bureaucracy that has to be done to get paid by insurance and government is sometimes quite significant. So all those things take time. So I don't know. I mean it could well be that we have a capacity that is never utilized fully just because some labs will be overwhelmed and other labs won't get the samples. But we have to have extra capacity anyway, and that's why we probably will be building out we are building out the capacity beyond the 100,000 tonnes today that we mentioned earlier. And I still hope that the virus will get controlled, and we'll never have to use that, that it will go back to normal. So we don't as to 2021, we're sorry, we it's a good question. We should have thought about it. We didn't think about it. Frankly, it's so hard to see or even the next four months would come out that even if I had to do it, I wouldn't be sure. But we gave a very optimistic outlook. We think Europeans will be in a good place. So of course, you would have to do many scenarios for 2021 about the COVID prevalence, where the vaccines work, where the vaccines are used, what level of COVID surveillance is required, whether our normal business should be fully back to normal in all its components, it's very difficult. But on a broad brush point of view, I think we should do very well in 2021 in pretty much all of the scenarios I can think of, which nothing nobody knows. Okay. But if I could just comment on that, the margin point around the COVID testing. So I think you said you thought maybe twenty five percent before. Yes. I think it's the margin. Actually, our margins would improve because as we get our own reagents approved in most countries, the cost of our own reagents is lower than the cost of the reagents we are buying from third parties. So at the level of current reimbursements, yes, I believe that margin of 25% you mentioned is correct. But it depends. Some countries have different reimbursement price. Every situation is different. It depends if we have to do the sampling, which is very expensive. Each sampling station is costing a couple of thousand euro a day just to maintain a sampling station, and you never know how many patients will show up. So it's difficult to know. And that's why it's good that the reimbursement is high in The U. S. Because you also don't get paid a whole sample you test. And sometimes, for some obscure reason, an insurance will not reimburse. And so you have to take a mixed view on what you're going to get paid. Our next question comes from Patrick Stanley, Morgan Stanley. I've got three as well, please. The first one, on the £55,000,000 you talked about in July, sorry to maybe the point, but can you give any kind of idea of what proportion of that £55,000,000 came from say, put work really starting to ramp up? And following that, how long are these contracts typically being signed up for? Are they for a quarter or a year or longer? I'm just curious how sticky this safer at work revenue could be? The second one, on serology, you've already mentioned that utilization has been great so far. But of the 10,000,000 test kits per month that you said that you were producing or could produce per month, How many of those have you sold? And will you only really see meaningful upside when reimbursement starts? And I'm just curious how quickly you can dial back CapEx in this area until reimbursement starts? Is it quite flexible? And the final question, on the insurance claim, it looks like the insurance has gone through the EBITDA line. And given that it's a relatively material boost to the EBITDA margins, Is that something that we can expect more insurance claim in the second half, more than the €10,000,000 Or is it impossible to estimate at this point? Thank you very much. Yes. Well, I think in July, there's not so much in safer at work. Of course, the Formula one program is part of it. We gave you some numbers on it. A lot of it is clinical is simple clinical testing. I think the Safe Right Work programs will take time to ramp materially. We could see some significant amount in Q2. They are not long term programs. Nobody knows how the world would look like one year from now. Mean some companies may not even be in business. If the lockdown continues for a year or two, I don't know how many hotels and airlines will still be in operation. So it's still very difficult to predict. I wouldn't know what the average duration of the contract is, whether it is three months or I wouldn't know. I think we would all have to be very adaptative to the situation. But the good thing is we are not a COVID testing company. We are doing that to help, to help everybody get back to their normal lives. We are doing that to contribute. Our goal is to be doing our normal work of testing food, testing the environment, helping the pharma industry develop new products and doing innovation in clinical testing to fight cancer or detect genetic diseases and things like that. This is our bread and butter. This is our core business. This is what we want to go back to doing as soon as possible. And in fact, had we been able to do that undisturbed by COVID-nineteen, we would have had even significantly better results this first half, I believe. But on the other hand, if this pandemic doesn't get under control soon, yes, we might generate very material revenues from contributing to the fight against the disease. And we don't have to make more money there than we would have made in our normal business, but we think we should have sufficient margin to compensate at least. Yes. In serology, I'm not sure it's only a matter of reimbursement. I think it's more a matter of use case. People don't really know what they're going to do with the results. So public authorities are not pushing for it. They are rather pushing people to get a PCR test if it can be done. And I think the use cases have yet to be firmly established in the health care system. And people get tested to know, well, did I have the virus? And it can be beneficial if people still feel some tired or other symptoms to know if they have had the disease, sometimes used when there's not enough PCR kits. We introduced, by the way, recently a very nice point of care test for serology testing that's very sensitive. We've got good evaluation of that. And so this test could be deployed in areas where there's no PCR testing because it gives you results in ten minutes. And in a population which is virus naive, you get a pretty good view of the situation with this point of care test. Insurance, yes, I think we got CHF 10,000,000 reimbursements. I think it affects the reported EBITDA, not the adjusted. But Laurent, you may comment on that, please. Yes, Gilles. I mean we're in daily conversation with the insurer of the event today. And we got EUR 10,000,000 last year, 10,000,000 this year, and we hope to get very shortly some amount. But it's very hard to predict how much we will get and when we will get it. But normally, we should be able to announce something shortly. And it's booked in the between Yes. Other income and expenses, and we didn't exclude it in the adjusted EBITDA because we didn't exclude the cyber impact in our EBITDA either of the previous year. Can I follow-up with a quick one? Given that you quite rightly, you say you're not a COVID testing company, Can you tell us what through an environmental trough that and what the exit rates are to get a feel for how quickly those two end markets are recovering around the world for you? Well, I think the I don't have the exact numbers month by month or week by week. I think we've lost a little bit in Food and Environment, a few percent. If we looked at the business outside of COVID, we're probably in the second quarter down a few percent, but much less than other beer companies, if you look at it. And the June was very strong. So I think we probably are we're already in positive territory of in terms of organic growth on the rest of the group in the as we exited June. But of course, you don't know. If there are new lockdowns coming very strong lockdowns coming again in October, November, nobody knows what's going to happen. It's the things that were hit is mostly where we have to sample, where we have to send people in a restaurant or a hotel to take samples or in a supermarket. Those activities are, of course, difficult to do when there is a lockdown. But overall, I think those activities were very resilient. When I look at the what all the testing companies have published, it seems to me that we are much more resilient in those activities, which probably is because our activities are, to a large extent, 90% plus through testing. Our next question comes from Your line is now open to me. Yes. Good afternoon, Joe. Good afternoon, Laurent. I just wanted to just a couple more for me, please, just to follow-up on the comments around insurance reimbursements. I just wanted to clarify that your guidance for the full year, whether that is in any way dependent on you getting further insurance investments in the second half or whether we should think about that more as a sort of additional income. And then just another point actually on the July exit rate you gave for COVID testing, the monthly figure of £55,000,000 You also made the comment that that is currently increasing significantly week on week. So I appreciate it's early days in August. But is it credible and reasonable to actually think that, therefore, based on the demand you're seeing and the capacity ramp you're seeing, August and September should probably be we should be getting about a number above that £55,000,000 Thank you. Yes. Thanks a lot, Tom. Yes. No, I think Laurent could tell you exactly when we did the objective for 2020, whether any components included reimbursement by insurance, maybe the cash flow objective did. Laurent can comment on that later. Anyway, we're in a different situation now. And my guess would be that with or without insurance reimbursements, we should be able to meet our objectives. That's how we can see it. There's such a level of uncertainty, some of you noted, we could potentially overshoot significantly or not if things go really bad, but for reasons that I don't cannot think of right now, but that are always possible. So that's one aspect. Yes, the July was stronger than the first half, I believe. The question and the difficulty with COVID is to put the samples in front of the lab available capacity. And it's all a matter of having the right sampling people or working with people who can sample the patients and then getting the reimbursement for that in the right place. And I think that's more the challenge to know how the capacity will be utilized. But my feeling, unfortunately, from what I hear, is that the demand will probably increase in the next few months, unfortunately. And what I'm really worried about is a winter where a lot of people will get sick for other fall from other pathogens and colds. And it's very hard to know if you have a cold or it's the beginning of COVID. So I think the situation may become very, very difficult, and we're asking government to make sampling of patients easier so that people can maybe have a treatment home and just get tested when they feel they need to be tested without having to go anywhere. So we're working towards that also. And the legislation is different in each country. It will not be possible everywhere. So governments really have to find a way to make it easy for people to get tested and then find a way for labs that have capacity to get those samples and test them because they can change from one week to the next. In one region, the labs are completely swamped and the next region, the labs are empty. And that's going to be, I think, for everybody, a challenge going forward. Just one follow-up, if I could. Apologies if I missed it when you mentioned this earlier. Can you say sort of what benefit exactly you got or quantify any benefit you got from the government support schemes or use of further schemes or anything of that nature kind of when you had laboratories closed for any period of time in Q2, either to quantify the cost benefit or maybe the margin benefit in the first half? That would be helpful, please. Yes. Thank you very much. Well, not so much on the P and L point of view. I mean China has been finally one of the most generous countries in identifying governments. There was a CARES Act in The U. S. Also where we get, I think, we've got 1,000,000 or 2,000,000 of our labs that were shut down. But I think the P and L impact is fairly not material, as I kind of understand. What I was mentioning is more on a cash flow point of view that we got the ability to defer some social charges and some taxes from the first half to the second half. Maybe that will be pushed further out by the government. We don't know yet. Laurent, do you want to comment on that? No, that's correct. I mean we got mostly deferrals in terms of payments, so on social charges and tax from Q2 to Q3. But some governments are not extending this scheme anymore, so we might have a negative effect in the Q3. We might use some of the reagent supply we've put together. I think overall, I had a look at your notes. I think, Tom, I think it's the way you look at things is pretty good. I mean you estimated what impact our core business has had, and then you added the COVID testing. I think that's one of the best way to look at it. And then each of you can make their own model. Some of you, I think you guessed our core business was down 2% in Q2 or something like that. And the COVID made a certain amount and then you come to the total. I think since nobody knows the future, it's probably the proper way to look at it and to say, okay, we think the core business will be hit by this much or will grow or we think our core business will grow in the second half. And then on top of that, we'll come COVID. But if you are more pessimistic than us and you think our core business will be down in the second half, you can probably put a number on that and then add whichever COVID reagents and testing revenue you think is likely. I think that's probably the best way to model the future if you want to make scenarios. And 2021 will be the same. It depends how optimistic or pessimistic you want to be about the economy and the lockdowns. I think even with lockdowns, hit to our revenues and our core business is fairly moderate. And of course, we generate some more and more substantial COVID revenues. I mean if you look at it, 65,000,000 in July, that's annual run rate of €650,000,000 out of nowhere. That's pretty substantial. But I don't know. Nobody knows what exactly this virus will do anywhere in the world. I mean we have things we're working on that could be extremely powerful, that could generate very mature revenues, but it depends on whether they work, whether we can roll them out fast enough or whether there is demand for it, whether governments approve them or not. So it's very hard to know. We prefer our long term shareholders to just think of Eurofence as we are a resilient company. We think on a long term basis, ten years basis, 5% organic growth per annum is probably something we can achieve. We have a well balanced set of businesses with some that are a bit more fast growth in normal times than others. But all of them together should enable growth and stability. This is what we want for our employees, to be able to offer them stable jobs. We innovate a lot. So we think for innovation going forward, we could potentially see a boost. And if, unfortunately, the pandemic continues, yes, we might overshoot that a little bit for a while, but we don't hope for that. We hope for a situation to go back to normal. Our next question comes from Alan Dezells, Exane. The floor is now open to you. Hey. Good afternoon, Gil. Three, I guess, quick sort of follow-up to follow on some previous questions, if I can. The first one, obviously, was the strong margin improvement, two ten basis points year on year. Is there any way you can maybe quantify or help us with the building blocks to ask the question fairly differently? Like how much of that improvement is from the benefit from investment and efficiency? How much is from COVID? How much in cost controls? And it's kind of like the government support part of that might be limited. That's that's my first question. And secondly, just to quick ones, the 40,000,000 to £50,000,000 government support on the cash side, could I understand why you expect the majority to actually be paid back in the third quarter or the second half? Or will that actually come back to 2021? It's different message coming from different companies depending on where they're operating at the moment. And then finally, just following up on the steeper at work, how do you price these products? You've obviously been giving us some quite helpful numbers out there on PCR testing and serology tests. I mean how price do Safer at Work? If you can give us some detail there. Thank you very much. Thank you very much. Yes, I think the margin improvement overall is not all that huge. We're still finalizing our reorganization programs. I think, as you say, that little by little, we get an impact from efficiency. We got some improvement because we didn't have the cyber attack hit. That's a component, obviously. The margin on COVID is probably compensating the margin that we lost on the growth because actually, if I look at it, our core business, it's not that we're missing revenues, we're missing growth on our core business. So on that growth, the COVID revenues compensate that. We might have a bit of cost control indeed because we deferred some of the increases for the second quarter. And government support is not really material on the P and L indeed. It's a very small amount. Safer at work at the moment is mostly clinical testing for employees. The cost for the, what is it called, sentinel testing is a bit lower than the clinical testing per sample, but it's usually a lot of sample if you do it on the whole site. The cost for wastewater testing is a bit higher. I think it's more like €200 because it's more elaborate for sampling and for extracting the sample. So that's the orders of magnitude. But the bulk of it so far is mostly clinical testing. Sorry. I don't have the exact details on the breakdown on the margin. We we don't we didn't necessarily look at it this way. No problem. So another deferred tax repayment, is that is that mostly this year around wind or will it will sum back into '21? I think this year for the most part, but Laurent, I mean, I don't know what government will do because some of them are talking about continuing those programs. Laurent, do you know anything better? No. What we see today is that in the countries where we are the most active, like France or U. S, France has asked to pay back the Q2 social charges and taxes, which were deferred in July. So we paid them in July. But now they are talking about extending the measures in maybe the end of Q3 or Q4. So it's very uncertain. And in most countries, this is more or less what it does. I mean, it's visibility month by month or week by week. So we don't have better visibility at stage, unfortunately. Our next question comes from Steven from Societe Generale. I just got a few, if you don't mind. I just wanted to ask you about the just on your organic calculation. If I look at the acquired revenues for last year, it was, I think, pounds 134,000,000 on a pro form a basis. But obviously, if I look at the way that the organic growth is calculated for the first half, I think you stripped out about CHF 36,000,000. So that kind of implies a pretty drastic drop on the organic of the acquired businesses. And obviously, of that is skewed towards the second quarter. So I just wondered if that's the right calculation and whether or not there was anything else going on in that approach. The second question I have, just in terms of your outlook for the second half. I mean, obviously, within your biopharma division, it appears there was at least some delay to clinical studies. And clearly, clinical diagnostics, people were avoiding going for tests. Are you seeing catch up demand coming there? And if so, to what extent are you seeing that? And I guess, why then are you only sort of guiding to a few mid single digits for second half? And then on the COVID testing, are you actually able to tell us what the revenue contribution from COVID testing was in the second half or how many tests you've done? Then final one for me, sorry, just on the free cash flow definition. Obviously, in line with the new standards, as you said, you stripped out the lease capitalization from the CapEx number, which in this quarter in this half, I think, added about GBP 40,000,000. So on a full year basis, I guess, that adds about GBP 80,000,000 to free cash flow. Is the GBP 500,000,000 definition on the new standard? Or is that on the old standard? That's it. Thank you very much. Thank you very much, Till. I'm not sure your question on the organic growth I followed. I will ask Laurent to answer that. I don't know actually if we looked exactly at that detail. Laurent, do you want to answer the first question? Yes. I mean the €36,000,000 you're referring to is basically the consolidation of 2019 acquisition at 2019 FX rates for 36,000,000. Your question, Stephen, is that you imply that this is a severe cut versus a pro form a of last year. That's what I get from your question? Yes, that's correct. If I kind of do a half of what you had in your account last year. Okay. I'm checking with the team, and I will get back to you in one minute on the precise answer to this cut, if any. Great. I don't think anyway that 134,000,000 would correspond to 36,000,000 or half of twice. I think it's unrelated numbers, as I can see, because we haven't had like any massive erosion anywhere. Outlook for H2 and catch up demand. Yes, we might have a little bit of catch up demand in Clinical Diagnostics. I heard that for France, but it's hard to quantify on the full year. Biopharma, the central lab is a very small part of our biopharma. I think it's less than €100,000,000 out of over €1,000,000,000 So the clinical trial has been delayed. Some of your colleagues mentioned will that have hit our central lab, don't have a material impact on the overall biopharma, which is quite strong. Yes, since stripping out exactly the COVID, we haven't done it well enough in the first half to really be able to report anything officially about it. But as you saw, it's compensated more than compensated whatever revenues we lost due to the lockdown. But it was not that high. I mean July was definitely a high point compared to the month before. It's not on our average day before that in the first in the second quarter. And the free cash flow definition, again, I'll ask Laurent to answer that question, please. Yes. So coming back to the first question, the €36,000,000 is the increase versus what was already consolidated last year. So this is why you think that there is a discount, but there is no discount actually. These companies are basically in line with their pro form a. So what you show I mean, what you see in the organic growth table is just the part which was not consolidated last year. Going to the free cash flow definition. So indeed, I mean, under IFRS 16, there are two ways to present your free cash flows: one, which we opted for last year and which some of you told us was not the most readable way. And we also discussed with the regulatory body in Luxembourg and which recommended to basically opt for a simplification where basically only cash outflows, real cash outflows and not accounting entries are reflected in the cash flow statement. And this is why we changed the presentation in this first half and we put a note and we gave you the pro form a for last year to be able to compare. So the objectives that we made were under the old definition. Great. Thank you. If you see that we did something like 300,000,000 in the first half, which is normally the weaker half of the year, where we had a bigger hit of the lockdown and the COVID testing didn't pick up yet, I think we probably are comfortable with the EUR 100,000,000 for the full year. And again, when we go back to that objective, we haven't changed this 5% for ten years. And we're not and that's not a guidance, by the way. We're not guiding. We are just saying this is an objective that we think we should be able to achieve. And it could well be we do way better than that. It's but our objective is 5% and remains 5%, and we have no reason to believe that we should miss it, as we can see. Of course, that view can change if developments change. But so far, we believe we can meet our secular objective of 5% organic growth this year even if we don't if we correct for the missing revenues due to cyber last year. It could be we do way more than that in the second half. As a citizen, I don't hope for that because that would mean the COVID pandemic would be not going in the right direction. But yes, it could be we do much more than that. Okay. Thank you. Our next question comes from Joffe Dursi from Auto BHF Asset Management. So it's now open to you. Gentlemen, one more for me. I just wanted to know where are you on the Boston Heart Diagnostic side. Are you still restructuring it in a good way and will be probably breakeven this year? Thank you. Thank you. Yes. Well, that has been a nightmare for us the last three years. But in the end, as we said last year, it's very small now. But of course, the cardiovascular testing took a hit like any clinical testing in the second quarter. On the other hand, we've turned that lab into a COVID testing lab in the meantime. And in the meantime, the cardiovascular testing has been up again as things normalized in The U. S, and we start to generate substantial amount of COVID testing from that side. So I don't think and I don't hope this will be a drag anymore in the future on our earnings and revenues and growth, and that's why we didn't mention it. Thank you for asking. Thank you. Our next question comes from The floor is now open to you. Hi. Good afternoon. So I have got two questions. Firstly, can you please throw some light on the the diverse performance of two testing in the Europe and North America? Because I think that in the Europe, it was down, but in North America, it was up. So can you please talk about the demand dynamics there? And secondly, can you please provide volume and price breakup of the H1 organic growth? I'm just trying to understand if there is any competition or pricing pressure? And how has been that progressing over the years? Thank you very much. Yes, you're right. I think the difference between Food Test in Europe and North America is that in Europe, we have a bit more of work for the retailers and restaurants where we do something in their store and in and in their their restaurants. And that part was it. Whereas in North America, we do more secure testing where we our clients send us the samples, so they have to organize the same thing on their sites. And that's one of the reasons. And on top of that, the lockdowns in France were very hard, very strong. So a lot of the activity flows for pretty much a month. And so that, I think, explains the difference. Volume and price, I wish I would know. We have a very diverse business with 900 sites. They do also each of them a bit different things. Some use a price list. Some do like BioPharma is just a project based business, so it's not really comparable from year to year. For Food and Environment, we try to do reviews with our managers on a business by business on the volume and price evolution. And where we do it, we when I get the question, normally, when we do a 5% organic growth, it's probably 1.5% to 2% price growth and the rise volume or something like that. I don't have any indication that it'd be different in the first half of this year for the places where we have the data. But I don't think we'll ever have that data for the full year, unfortunately. You may do so by pressing 01, and the telephone keypad to register. Our next question comes from The floor is now open to you. Yes. It's Salkaszibir, MNG. Congratulations for good results despite the circumstances and for achieving your investment grade rating. I have three questions, if I may. One on the business, one on the hedging and one on capital structure. Starting with the business. And if I understand correctly, the EUR 65,000,000 revenue for July, the COVID-nineteen related revenue, they mainly come from proprietary diagnostic tests that you have have been able to develop. And that's what I would like to understand. That's correct. That's what I would like to understand better. To my understanding, you're predominantly in this business, you manage clinical diagnostic labs, which normally execute tests developed by other companies like, yeah, don't know, Abbott, but this sort of company. So I'd like to understand how you were able to seize this opportunity and develop this test. That would be interesting to understand. The second one on rating. The pro form rating came out a couple of weeks ago. I was expecting to be followed soon after by the ratings of the senior notes and the hybrids. I wonder whether you could give us an update on that. And on the capital structure, looking at the capital structure on with the long term view, now that you have achieved investment grade rating at the corporate family rating level and constrained that the heavy CapEx phase of your development is predominantly is behind, Do you still see a role for the hybrids going forward? Or do you think that they will be naturally phased, let's say, rolled into senior unsecured? That's it for me. Thank you very much. Yes, we haven't heard very much about our IVD products businesses. For a large number of years, we have been developing our own tests, our own molecular test. We have a range of molecular tests for GMO testing and food pathogen testing for a long, long time. And for a while, we have been deciding to invest to develop a broader range of molecular testing, not only for food testing but for also IVD testing. The main purpose of those businesses were to supply our own labs to make us independent from vendors on one side and on the other side, to be able to be faster in deploying in our labs worldwide new tests that we develop. Because if you do the other things, which is called laboratory developed tests, for which we have three EUAs in The U. S. For COVID, each lab has to do a lot of work to validate it and justify it, whereas if you buy a product that is either CE IVD or as an FDA five ten clearance, for example, you can use it with less validation. So that was the original idea when we started this very small business line five years ago or three years ago. In the meantime, of course, that has proven beneficial for COVID because we cannot have reliable supplies, especially we could not in March or April from IVD suppliers. And so we've been able to use the knowledge of our scientists in our lab to support the smaller IVD companies we had and to develop those products. And I agree with you. I'm amazed at how fast we were able to develop all those products. You have probably never heard of Eurocent as an IVD product supplier before COVID because our companies were fairly small. But in spite of that, by working together between the scientists our labs and the scientists in our IVD companies, we were able to put together a complete portfolio. And in the first half, we still got a lot of reagents from third parties because we didn't get approval for our own reagents everywhere as fast as we wanted. I think going forward, we should be able to have a higher percentage of the tests we use in our labs come from our own internal reagent producers. It won't be everywhere. There are all kinds of restrictions and limitations, but this should increase. I will let Laurent answer the rating of our various debt instruments. Laurent? Yes. Moody's indeed is raising our debt instruments, and they should announce it today or tomorrow. So I cannot release it now because it's under their control, but today or tomorrow, you should see it. Your last question on the capital structure, I mean, we will see how things develop. Indeed, it could be if we don't do a lot of acquisitions, we do mostly organic development that we won't need all that hybrid. And naturally, we will reimburse it, refund it, repay it. However, we like it. It's really a risk a very low risk type of instrument. And we now after two crises, the great recession of two thousand and eight, 2009 and this COVID crisis, we have seen that our business is very resilient, and we can withstand the crisis. But nonetheless, having instruments like hybrid, the last one, I think we're paying 3.5% that are not too expensive to that are not really causing any reimbursement risk in case of a very, very prolonged, very difficult economic situation has proven helpful. So I can't say we'll never reissue or replace some or all of those hybrids. It's increasingly unlikely we would need all of them, but time will tell. Our next question comes from Andy Graubler, Credit Suisse. The floor is now open to you. Hi, good afternoon. Just one from me, if I may. You mentioned earlier about changing one of the Boston Heart labs into a COVID testing. When you look forward, I'm taking, I guess, a more positive view that the need for testing disappears in one or two years or whenever it may be. How quickly can you change that capacity into other usage? And what are the costs and kind of effects of making that change at some point when it's no longer hopefully needed? Thank you very much. Yes. Actually, what we did since the HD had unfortunately shrunk over the last two or three years, we had a lot of empty space in the lab. So what we did is we reused some of that empty space to set up the COVID testing. And all the investments, they've already gone through our CapEx spend. So they are there. And the payback on those investments is relatively short at the current reimbursement rates you're talking of a few months. So that won't really be an issue. More importantly, what we're also doing through the COVID pandemic is developing our ability to serve consumers directly, developing our online systems, developing new approaches that are more patient and consumer centric. And that will also develop well, we believe, in the next six to twelve months. And we're working on our offer regarding ways to help people help themselves to not get sick because the whole of the clinical diagnostics, not the whole, but the bulk of it is focused on helping people who are sick, and this is, therefore, reimbursed by insurance. But we believe there is much more public health benefit to be had from helping people not get sick. And especially, as we know, a lot of the chronic diseases with suffer come from obesity, overeating and other problems. So clinical diagnostics can also have a use for that in prevention. This will be probably more self paid or employer paid than insurance reimbursed. This is a business we are developing out of Boston Heart. And of course, COVID is not helping to for people to focus on this aspect, but we're also using the time to get ready for that. So we think we're going to make something out of this platform, especially, as you mentioned, over the next two or three years. We have a bit of time to do that. And the investments we do in IT and online platform, etcetera, for COVID will lend themselves very well to that. Just more broadly than Boston Heart, I guess, the kit that you put in for the COVID testing, just to understand, that particular test is no longer needed, can that be repurposed for other usage relatively easily? Not going to be stuck with a lot of PIP that's no longer useful at some stage. Yes. Yes. It's, you know, anyway, compared to the size of the testing, it's not so much. And if you look at it, that even at the low utilization that we're having, we could generate €55,000,000 of revenue. That's annual run rate of €650,000,000 I think the CapEx related to that was probably less than $50,000,000 So it's not super CapEx intensive. So it's not so much. And yes, all of that can be reused for other molecular tests. Now of course, the market for all those other molecular tests won't be at the size of the COVID test immediately, which what we are doing in our labs is we are working on developing a range of tests. And actually, I'm very excited about that because, again, we went into clinical diagnostics because of our impression that the way clinical diagnostic is used today could be enhanced by more preventive actions and by more patient centric actions. That's called the both diaterex in The U. S, which has panels of detection of respiratory pathogens that cover 25 different pathogens in one run. So if somebody is coughing or somebody goes to the doctor instead of being prescribed an antibiotic just to see what's going to happen, we can know immediately if it's a virus or bacteria and if it's resistant to antibiotics and then which antibiotics could work. We feel this type of approach has a huge potential. We've talked about it for rare disease. We've talked about it around birth to help people conceive better. There are many, many other areas where molecular testing has a can have a very strong impact on patients and patients' lives and their health. And over time, we will develop assays that can be used on those instruments, both in terms of infectious disease, in terms of women's health. You have all a lot of things. You have all the STDs issues that are largely underdiagnosed. You have also testing like around HPV. You've got a range of things that will go molecular and for which we are working to develop our own testing solutions in addition to, of course, what our suppliers, our IVD suppliers will provide us. So we want if COVID starts tomorrow, of course, we will have a huge oversupply capacity, but it would have been 24 anyway already. And that capacity may take some time to be used, but eventually, we will use, I think, a large part of it. Thank you. That means we have no further questions. So I will now hand back to the speakers for any of our remarks. Well, thank you very much. Thank you very much to all of you to join our call. As you noticed, we are in the middle of a pandemic. A lot of people are suffering badly. And I hope none of you or your families were affected. That's why we don't want to be sound overoptimistic or overly satisfied with the developments. We are relieved that we're able to mitigate the impact of the crisis on our companies. We think our contribution in the second half of this year to the fight against COVID-nineteen can be very meaningful. We worked very hard to develop a very broad range of services. Our reach to clients is not as large as it should be so that enough clients can benefit from those services. Of course, our clinical diagnostics, develop the test, but they all have the sales force and the installed base and the Roche or an Abbott or the Dickinson have. So of course, we have a small share of reagent, a very small share of the reagent market, but it doesn't matter. What matters is we have a short supply for our labs. We can provide unique solutions to clients, especially business and industry, when they want to bring their staff back to work. I'm very optimistic and bullish as to what we can offer. And we really thought through what we're doing. What we have done is developed solutions that really make sense from a cost effectivity point of view for employers or for governments to help people go back to a normal working situation. The employees in our labs, it can be done. It's cost effective. It can have a very strong impact in detecting very early any cluster and mitigating the clusters. All those tools are can be implemented. We have trained our teams, hundreds of people around the world to implement them with clients. And this is something that can really have a positive impact for governments and companies. So really, we'll play our part in the fight against COVID. Maybe it's going to be a lot more revenues than the 5% organic growth that we mentioned. But in the end, it doesn't matter. That's not the objective. The objective is that we contribute to limiting the number of deaths, to contribute to helping everybody go back to work safely, that we contribute to everybody recovering their normal life, their social activities. Hopefully, one day, they're part of it. That has been our objective. And yes, it's good that we can compensate with that with business that we would have done otherwise. And if we do a little bit more and if our results this year are much better than our objective, so be it. This is money we will invest for R and D in the future and for developing new innovative solutions that can have a strong impact for everybody to eat safer food, to live in a safe environment and also to prevent diseases. So this is why our company is here to make a contribution and to the life of constant contribution to the life of everybody. And I'm very proud and thankful to our teams for all the work they did. And I think the result in the first half really demonstrate how fast we can mobilize and contribute. So I wish you all to be safe. I wish you all as good as possible summer in spite of all the restrictions that are slowly creeping back in. And I hope to be able to meet you in person in the not too distant future. It doesn't look too good for the second half of this year, but we'll see. Best wishes to all of you, and thank you very much.