Good morning, ladies and gentlemen, and welcome to the 43rd Annual JP Morgan Healthcare Conference. My name is James Curtis, and this morning we have the pleasure of hearing from the CEO of Tecan Group. Over to you, Dr. Achim.
Thank you very much for the kind introduction, and good morning from my side as well, and thank you very much for inviting us to give an update on Tecan, where we stand, and where we're going. Now, just a quick reminder on who Tecan is and what we do. We are a trusted partner to the life sciences, pharma, clinical diagnostics, and medical device industry. We are in business for more than 44 years as an industry innovation leader, and we continue to be highly motivated to play a leading role in our industry. We're operating two synergistically combined business units, and I will explain in a minute how they work together and why they are so important for Tecan's success story over the years.
We have a very strong global presence with a strong sales and service setup, but we also do have a very distributed operating model where now one third of our operational footprint is based in the U.S., in California, one third is based in Europe, and one third is now based in Asia, specifically in Penang, Malaysia, and Vietnam. Now, clearly coming out of 2024, which was a challenging year, I would like maybe to lead you through a couple of things that I would like you to remember and use as a key takeaway from my presentation today.
We are operating in an environment of very high dynamics, and we believe that a few trends, and I will come to them in a minute, are the source of fuel and the tailwind that we have to fuel our growth, to drive demand and scalable healthcare solutions, which is what we provide to the industries. And we are very ready to leverage a market recovery as soon as it arises. We are running a business model very differentiated between what we call the Tecan's Life Sciences Business and Partnering Business, and why they are so synergistically empowering the journey from scaling healthcare innovation, I will illustrate in just a couple of slides. We are highly innovative, and we continue to use our capital to both facilitate organic and inorganic growth.
But very important for us, we are a very innovative R&D-driven company, and we continue to put out new products and new partnerships in both our divisions as we speak. And that is the ammunition, if you want, that we have in a very challenging environment to continue to drive market expansion in both our business divisions. We do have shown consistently over many years strong financial performance, and that is also in times like this a very important feature of Tecan that allows us to continuously invest in the business despite the challenges, both on an inorganic and organic basis. And clearly, this kind of plays back into our ambition, and I'll come to this later to reconfirm our midterm guidance in just a few moments.
Now, Tecan's purpose is to accelerate innovation and to improve people's lives and health by scaling healthcare innovation from research all the way into the clinic, and we do that by, first of all, accelerating discovery. In both medicine and life sciences, we help to develop novel therapeutics, new testing and treatment modalities. We then take what we created and translate them into the clinical FDA environment, where we translate research into compliant clinical solutions, and we do that on a global scale in all relevant areas and markets we're interested in. Now, maybe just a couple of reflections on trends that we do see that are more fundamental and driving the growth in our industry.
It all started, if you allow me that analogy, with the Human Genome Project many, many years ago that really helped to uncover a lot of novel mechanisms and modalities that help scientists and clinicians to understand disease patterns better, but also to design more bespoke and more specific drugs along the years, as we've seen in the recent past. Now, the second element I wanted to draw your attention to is demographics. So clearly, what we are looking at and the challenges that we are helping to solve is healthcare economics. So there's increasingly aging populations, more people go into the healthcare system, stay longer, and as they grow older, develop typically more chronic disease patterns, which require higher care, higher cost burdens on the payers.
So what we're doing as a combination of partnerships and innovation with our kind of research partners as well as our clinical partners is to drive the adoption of an increasingly personalized or precision medicine approach to many of these disease areas. So on the right-hand side of this slide, you see kind of some statistics on personalized medicine and the advances in creating more bespoke, precise drugs, which on the one hand side come from the pharmaceutical industry that we empower to do so, but on the other side, it also requires an increasingly amount of diagnostics being applied to make sure that the right match-up of drug versus patient at the right moment of their disease progression is achieved. And then lastly, what I wanted to point as is the advances in the AI world and data world.
With the announcements of AlphaFold and the uncoupling of nearly now 200 million model approaches for proteins, contrast that to kind of 150,000 in the time before. It's just an unprecedented new platform. I would compare it as a supercharged Human Genome Project. Now, in the proteomics world, that offers a variety of never-seen approaches and options to develop drugs and develop new treatment modalities as we speak. Now, having said that, just a couple of other trends that are important in our industry that fuel growth as we go. One of it is the advances in multi-omics, so where we're integrating different biological data layers to understand disease mechanisms and treatment options.
So in reality, this is a combination of genomic and proteomic data, and I'm very proud to also refer back to an announcement by Illumina just two days ago where we are an automation partner to a very groundbreaking new study in the UK leveraging biobank data to combine both genomic and proteomic data to fundamentally systematically understand disease progression and biomarker progression in diseases better.
We're seeing at the second point I wanted to make here, AI-powered drug discovery arising, and this is part of the reasons why right now we see a bit of a strategic reset in some of our pharmaceutical partner accounts. So AI is taking a foothold in drug discovery. AI in return means there's a requirement for more precise data generation, which we believe is very helpful in terms of automating labs even to higher degrees going forward.
In the same context, we see on the back end of the drug discovery process, the advances moving from biochemistry to more close to the human testing models with the aim to filter out bad drug candidates before they reach the very expensive phase three clinical trials. So what we are empowering as an automation company is the adoption in drug discovery and development of more human-like models using organoids and spheroids in many different disease areas. So in general, we see, and we are clearly one of the proponents of this trend, lab automation becoming more accessible, and we'll come to examples and why we're excited about this kind of momentum in just a few moments. So we're creating better usability, better serviceability, and better accessibility in automation solutions that have not been available before.
That means there's more precision in everything that is done along the research to clinical continuum. We see cell and gene therapies requiring going forward in containing the cost of these developments, increasing amounts of robotics and automation. That's another market we're concentrating on right now. We see, and I will come to this in a moment, diagnostic modalities not just being used in acute diagnosis of disease progression, but also increasingly in prevention and prognosis of patients, again with the aim to treat and then intervene when things become still for the patient and for the clinician interventions more progressively positive as an outcome and prediction.
Lastly, the point I wanted to make, we are very strongly engaged in areas like robotic surgery, where again, there's highly innovative advances being applied to make sure that patients receive better treatment and better treatment options to release them from the hospital with less time and better outcomes for many of these diseases that are treated now increasingly also robotically. Now, what we are doing as a company, we are aiming to outgrow the underlying markets, and we do this by focusing on applications that are in itself anchored in very strong growth application ranges.
I listed here the four elements that are most on our strategic roadmaps: genomic applications, including next-generation sequencing, proteomic, including mass spectrometry, and other applications, cell and tissue workflows, as well as an increased range of applications in the medtech CDMO space that we're catering to since our acquisition of a company called Paramit in 2021. As you can see, the market in itself is very large, but we are really trying to focus on the addressable portion that is prone to adopt automation as a preferred modality to scale up and industrialize these workflows and approaches. You can see here the next-gen sequencing being a big part. Another very large area of expansion is in the space of liquid biopsies for acute diagnosis and therapy monitoring of cancer patients, for example.
I mentioned already mass spectrometry before in the proteomics world, but also we are engaged in spatial proteomics and single-cell proteomics, which are one of these more modern modalities, and largely on the medtech CDMO space, our kind of biggest areas of engagement are robotic surgery and cardiological applications. Now, this all allows us to work in a very close continuum of the healthcare if you want value cycle. As I mentioned, we are focusing on the more higher growth application areas on the core application side. We are then also engaging with a variety of different end customer groups that are spanning from academic and biotech all the way into large pharma diagnostic partners as well as medical device providers, and we have a quite significant franchise also into the direct clinical space with our solutions in various geographies.
Technically, what I tried to illustrate with these graphics is that we are spanning the entire spectrum from early disease discovery, helping to understand diseases on a better, more granular level, and then we take these workflow solutions into the pharmaceutical industry to advance the development and progression of drug design and development for both small, large molecules and antibodies, as well as mRNA and cell and gene therapies. And then we cross over with our applications into the FDA-regulated space, where we're applying workflow applications for increasingly personalized medicine in oncology, in metabolic disorders, cardio, as well as neurodegeneration and anything that is kind of benefiting from these types of progressive diagnostic systems. We move further on into the treatment regimen with our medical device exposure.
And then, as I said earlier, we see increasingly some of these modalities that have been traditionally used in acute diagnosis moving upstream into prevention and early disease management of the patterns that I mentioned before. Now, we are organized, as I said, into highly synergistic business units. One is called life sciences business, which is where you find Tecan products under the Tecan brand name. And this covers an entire range and growing range of instrumentation for lab automation, lab robotics. We complement this with a range of consumables and reagents for the applications that I mentioned before. We have an increasingly growing range of digital solutions that are spanning everything from fleet management to serviceability and lab orchestration. And lastly, on the life science side, we have a comprehensive service offering that spans all geographic regions of interest.
And then on the other side, we are running what we call the Partnering Business division, which is an OEM division that develops and designs in the Synergence product offering systems typically from scratch, and where we conceptually design, manufacture, and life cycle management these solutions over many, many years. And then in contrast, we have an offering called Cavro Components, which allows companies to use their own R&D resources if they desire to do so. In other words, using Tecan's Lego bricks to build their diagnostic or life sciences solutions in their own regimes. And then lastly, we acquired in 2021 a company called Paramit that now brings us into the CDMO or contract manufacturing space.
Now, maybe just a moment on the synergies between these three partnering offerings and why we believe competitively we are very strongly positioned now and probably uniquely positioned to take advantage of the insourcing and outsourcing trends of life science, diagnostic, and medical device developments. Cavro, as I said, is a component offering, but now what we are seeing and leveraging is, of course, the reality that every Cavro Component customer at one point needs a production company, which is why Paramit comes in very handy, and with Paramit, we can approach now the production of instruments that Tecan has never touched before, then subsequently approaching our clients and partners for next-generation developments either on the Synergence system side or the Cavro side.
Naturally, also every Synergence systems customer is a prospective customer for Cavro or Paramit offerings as we go along the value chain and partnership that typically spans over many, many years. Now, I mentioned also several times now the synergy between the two divisions and why it is so important for us to run a life science and partnering division in that continuum to span healthcare solutions from research to the clinic. Here's an example from the next-generation sequencing world, where we just tried to illustrate what we have done over many, many years to facilitate the adoption of next-generation sequencing workflows, which are very, very complicated workflows through our Tecan branded Fluent offering, which is a flagship automation system that is commercialized now for quite some years.
We have the ability to take the Fluent system now to transfer that into the LDT space or lab developed test space, which is one of the very strongly growing markets for us, particularly in North America. And typically, these LDT customers showcase industrialization, clinical adoption, and reimbursement potential of technologies like next-generation sequencing. And what we then do along the value chain, then we cross over into our partnering world, where as soon as it goes through the FDA door, we typically prefer these partnerships. Now we're working with leading in vitro diagnostic companies, again on the same platform. And you can see on this picture here the clinical solution that we launched just a few years ago with a leading diagnostic company resembles very much what Fluent is and Fluent was before in our own Tecan environment.
So this is just an illustration of how that synergy works between the research side and the clinical diagnostic side and why time to market and proven applications are so relevant for our partnerships rather than just being a great engineering company. Now, what makes us also quite special in our market environment is, as I said, the use of platforms, so over many, many years, we have now created and developed a very comprehensive modular portfolio of hardware and software options that we can leverage and deploy into both our life science division and our partnering division.
What I mean by this is we have created a particular software platform, MAPlinx, that is capable of hosting applications from the genomic, proteomic, cell and tissue space, but also versatilely can work with literally every and any hardware platform from a point-of-care deployment all the way into full-scale laboratory automation infrastructures that are typically room-spanning devices or installations. This software and modular hardware range allows us to be very quick, very nimble, very efficient in R&D, and therefore creating a very strong offering, also competitive offering in the OEM space and in the life sciences space. Now, I talked a little bit about our digital offering, and right now I would say digital competence is increasingly what really makes us different from the rest of the competitors in our space.
So we are running a very comprehensive digital suite around service, serviceability, remote service, and the ability to diagnose and sometimes fix systems both in our life sciences and our partnering divisions through remote digital applications. We have a rollout over quite a few years now, a comprehensive fleet management solution that allows, again, life sciences and OEM customers to understand what their fleets are doing worldwide, how productive they are, what the breaking points are in training needs. We have launched our first software as a service offering called Lab Navigator just a couple of quarters ago.
So this is a very comprehensive offering that helps entire labs to orchestrate their work from manual all the way into automated processes. We are, I think, a leading provider to human-machine interface software programs for all the applications that we're interested in.
Lastly, what I said earlier, we leverage all of this on an increasingly modular platform range of software solutions that we can deploy in all the areas from research all the way into clinical applications. Now, maybe just one example of innovation that is based on a very comprehensive and fundamental observation in our end markets and combining some of the mega trends that I mentioned before. You heard also some of my colleagues speak about this at this very conference. What I mean by this is we see in the labor market increased challenges of labs, particularly clinical labs and lab service providers, getting access to trained personnel and combined with typically quite high staff turnover that is really putting an operational and productivity challenge onto these labs.
Now, at the same time, and this is kind of additive as a problem, these labs are facing challenges with increased complexity of workflows and the applications that they are supposed to cater to. And what I tried to illustrate here on the application side is the difference between a pretty straightforward immunodiagnostic assay called ELISA, where you're typically having kind of in front of you 10 to 20 work steps to automate. And contrast that with a kind of modern next-generation sequencing RNA-seq library prep application that typically covers around 100 to 150 distinct steps of manipulation. So this becomes a human challenge in itself, but also when you scale up industrialized, this becomes more or less mission impossible.
So what we set out to do for many years, and I think are now kind of entering the next phase of this development, is to create solutions that are scalable, robust, and very importantly, regulatory compliant right from the get-go to cater to these workflows. The other element that we are taking care of is to make these solutions extremely easy to use. So typically, everyone in this room, I would guarantee, could run a sequencing workflow on some of these modern platforms within 30 minutes of training.
So that allows us to not just work with the existing environment of clients, but then continuously expand our reach into markets and labs that have never used automation before. Now, having said that, very excited again also to kind of talk about this in this context and audience right now. We mentioned it at the Capital Markets in October.
We are just two weeks ahead of a major launch of a platform addition that we call Veya, and Veya in our world is the most transformative experience of user and machine interface on lab automation workflows. It covers all the applications that I mentioned before with preloaded, configured, and downloadable protocols and scripts. It optimizes productivity and access, as you can see, with a very modern feature on front of the system that we call OneView.
It allows personalized and digitally empowered services that I mentioned before and then continuation of upgrade of applications fueled through cloud connectivity as we go through the lifecycle of the system, so this is going to be launching in just two weeks, and we're very excited because it really adds to our options that we have to expand and grow in the markets that we're in right now.
Now, having said the markets we're in right now, clearly we are exiting a quite challenging year of 2024. However, I wanted to point you to the fact that over the last decade, we have shown a very significant growth track record. And just contrasting here, 2019 to 2023, and you see the preliminary revenue numbers that we just published 10 days ago. And clearly, what I wanted to also point out as a growth-driven company, we have very strong financials, and we are able to generate cash quite solidly that allows us to reinvest into the company. But the point I also wanted to make on the FTE or employee side, we are a very flexible company. So we can scale demand and productivity upwards and downwards as market conditions change.
Like I said, we are very ready now to recapture the market rebound as soon as it arises. Now, maybe just a few words and reflections on 2024 and the outcome and the results that we published just on the revenue side. We came in at CHF 934 million in revenues, which represents a decline at around minus 11.5% for the full year and 11.3% decline for the second half. Now, the dynamic in the two divisions was slightly different, as you can see. The life sciences continued, I would say, sequentially improved in the second half, where on the partnering side, it stayed more or less on the same trajectory for a variety of reasons.
What we also said, and we are confirming then the financials with our regular and normal reporting cycle in March, that we will hit the updated margin frame between 16% and 80% of sales with this revenue outcome of 2024. Now, what happened in 2024? I just wanted to give you a couple of backdrops on the market dynamics. Clearly, when I look in combination between the Life Sciences and Partnering Division, China was a big element of that slowdown and challenge.
And not only did the economy slow down quite significantly in contrast to 2023, but also the stimulus program that everyone talked about in 2024 did not come true in our world. So I think in contrast, even we saw quite a number of customers deferring orders into 2025 by applying originally planned orders into now the stimulus programs.
Now, the second element of challenge in 2024 was clearly biopharma or the large pharma segment, where we've seen continuously very strong interest in our services and solutions, but a very poor decision-making pattern and release of CapEx as we went through 2024, as others have reported as well, and we also saw a very, I would say, significant headwind in both divisions related to the governmental and academic research markets, particularly here in the U.S., where both on the life sciences side, we saw kind of CapEx releases being affected and on the partnering side, the same pattern held true on partners that were exposed more to the research side of things. Now, having said that, there were also some positive moments in 2024 and some green shoots of business progress, and maybe just a few to mention here.
Like I said, we've seen sequential improvement, particularly in our life science division. And a lot of this kind of improvement came from the U.S. markets. And particularly there, we've seen a strong gap pickup on the LDT and specialist lab environment, particularly on the advanced genomics space. And other elements we've seen, for example, consumables recovering and service and spare parts coming back to, I would say, a more normal business pattern.
I would say the other part that we continue to see very pleasing outside of China was progress on our partnerships ex-China, particularly in areas like advanced genomics, cancer, blood cancer diagnostic workflows, and many other applications. You, of course, get a probably better flavor when you look at the examples that we could share on our capital markets here, and I will share with you the link just in a moment.
There's very good progress on partnerships in all these areas. Now, what have we done? Clearly, we have initiated a series of cost-saving measures in 2024. Quite a significant portion of that were structural changes that we made to the business, which are carrying over into 2025 and then help us to kind of lower the jumping-off point for profitability as we go into the outer periods. Very important to mention that we did not slow down our investments in sales and marketing and R&D.
I think the other parts I just wanted to cover here is the reconfirmation of our midterm outlook. Clearly, I mean, as we look at the markets normalizing in the periods to come, we believe we are in an extremely strong position both from our life sciences business, but also on our partnering side to take advantage of that rebound.
That's why we confirm the mid- to high single-digit outlook of organic growth in the years to come, in addition to the adjusted EBITDA margin outlook that we see improving on a 30-50 basis points progression over the years. Obviously, not linear, but in aggregate over this period of time. What is very important for me to also reiterate is that the jumping-off point for that margin improvement are the 20% EBITDA that we generated with the CHF 1 billion threshold that we communicated in 2023.
With this, I just wanted to wrap it up and summarize also our activities that we are very proud of in the sustainability category. I think we are making very good advances in the containment of our particularly carbon emissions that were kind of centered on the Science Based Targets initiative and our goals and targets were revalidated there.
We are investing quite significantly in our eco-footprint and, for example, product design, both on our instrumentation, but also on our consumable product ranges. We're making very good progress on our kind of social responsibility, but both internally taking good care of our employees and making sure that they have in all geographies we're serving the right access to training, to development, and to progress of their careers within the company, and lastly, we, I think, are a very robustly governed company where also sustainability has now become part of our strategy and I would say normal business practice execution as we go through the business planning years to come. Now, with this, I just wanted to bring you back to the key takeaways and reiterate what I said before.
Clearly, 2024 was a challenging year, but we believe with the capabilities that we do have in our life sciences and partnering division and the combination, we are very strongly positioned to take advantage of a market recovery. We have a very comprehensively differentiated, competitively strong business model between the two business entities, life science and partnering. And we continue to be very innovative. And this is maybe the one element that we do have at our disposal to react to any market environments, to bring out new product solutions that are competitively differentiated, come on the back end of very strong growth applications that I mentioned before. And we continue to bring out new solutions in both our life science division and our partnering division as we speak.
We do have a very strong financial background, and we are able to grow and reinvest into the company both organically and, of course, also very importantly, inorganically. So with this, I probably stop here and thank you very much for your attention. I believe we have a couple of minutes for Q&A.
Thank you very much. If anyone in the audience has any questions, just raise your hand, but we've got one or two that have come in online. So you touched on digital as a point of differentiation in your presentation, and with several life sciences companies presenting at this conference, it'd be great to hear a bit more about Tecan's position within the industry and how it differentiates from its peers.
Yeah, clear. I mean, what I tried to say, I mean, in our world, digital means we need to competitively, but also accessibility kind of differentiate our product. So first of all, our first line of attention is user-machine interface and making sure that regardless of the complexity, regardless of the compliance and regulatory environment, we are able to cater to an increasingly, I would say, untrained user base that allows us to move upstream also from core facilities, expanding our market reach into labs that have never used automation before, but also following the trend of decentral deployment of applications and modalities, particularly in the clinical field. So that's one area. The other area is service and serviceability. So our business, as well as our partner's business, is uptime.
So what we are obsessed with is creating tools that drive uptime and make sure that the breaking points are understood very early in the life cycle of systems, that fleet management can happen in real time. And we, as well as our partners, have full-time access to also fix and repair options that we increasingly build into our systems as we design them. So these are probably two very important elements to the kind of instrumentation and the rollout of system programs. And the other element that we see as an option and opportunity for us to grow into is software as a service.
We just launched the software suite that is called Lab Navigator, and that allows lab managers to plan their entire workflows from A to Z and then train in a very efficient way and set up their labs with automation models and manual processes with the increasingly naive user base that is then kind of exposed to these kinds of environments. These are maybe the elements that we are very focused on right now. As I said, all on the back end of an increasingly modular software architecture that allows us to create these new tools in a much faster environment, also using, of course, AI tools for the sake of that kind of argument.
Thank you. In the presentation, you mentioned two business models, the end user and the OEM model. It'd be great to hear a bit more about the advantages of operating across both and if there are any synergies between the two.
Yeah, that's what I tried to illustrate with the next-generation sequencing sample, but also some of the other modalities. When you look at many of our partnerships, they are in the OEM partnering world, increasingly based on our platforms that we also use on our life sciences side. So that gives our partners an incredible time-to-market advantage, and they can base their clinical developments on a platform that has industrialized these workflows before, typically in the lab-developed test space or what I mentioned, the LDT space before. So using these platforms is a key element of how we drive the value chain between the two divisions, also acknowledging that both divisions use the same R&D source and organization and the same operational production footprint.
So that gives us a lot of flexibility when kind of volumes modulate to move into one or the other directions. But mostly, it's around R&D efficiency, time-to-market, and compliant pre-tested clinical class one device systems that we commercialize on our life sciences side that can be used very elegantly on the FDA regulated side. And that's what I think makes us quite special in this kind of ability to scale innovation from, as I said, the research side to the FDA side.
Thank you. And 2024 has seen some challenges from an end market perspective. It would be great to get a bit of a sense of how you've seen these end markets develop over the year and the position that you had when you exited the year.
No, as I said, and clearly, I mean, China continues to be quite challenging for us, and we did not see stimulus funds coming through on a meaningful level. I think we recorded less than a handful of China stimulus-related orders. We've seen probably even more negative effects where originally committed orders were deferred to the stimulus programs. But this is something we are observing very closely. We have been very active to quote in these environments.
So we're very, I would say, exposed to the tendering processes, but it's just been very difficult to predict when they will be released because every local province runs their own tender allocation and release processes, which is very different from the 2023 stimulus rounds where it was all centrally sponsored and released on a very, very short timeframe. So China continues to be, I think, from that visibility standpoint, quite challenging.
We continue to find good, I would say, pockets of growth. We've been very successful in China historically in applied and advanced application areas like sequencing, gene editing, and gene manipulation of cells on industrial levels, as well as what we're seeing right now is a strong investment appetite in China along advanced proteomics and mass spectrometry, which is something you also hear now in the industry that quite a few of my colleagues are seeing mass spectrometry being adopted at a very significant pace in China, and that, of course, speaks also to workflow solutions that I tried to illustrate before that we focus on the advanced genomics and proteomic mass spectrometry side that I think is a growth opportunity for us going forward.
In other areas, I mean, I mentioned biopharma as well. In biopharma, we have seen globally more or less a concerted reset of how drugs are designed and developed, and that created some, I would say, hesitancy to release new lab infrastructure in the 2024 horizon. We are very actively engaged with these pharmaceutical companies to factor in AI-driven early drug discovery, but as I said, also organoid and spheroid and more kind of cell-based testing on the back end of the drug discovery process.
But we've seen probably not a fundamental shift in the sentiment right now, but we continue to be very, very engaged with these very complex planning cycles on lab infrastructure and lab equipment as we go through the years. So the pipeline has absolutely kind of stayed strong throughout the year. But as I said, the release of CapEx was very unpredictable to 2024.
It's too early to say how it then shapes up in 2025. The other element that is hopefully a bit more predictable to be kind of cleared up is the U.S. academic and government research market, which is both irrelevant for our life sciences exposure, but also many of our partnering clients on the life sciences side. Hopefully now with the inauguration of the new administration, we will see some, I would say, yeah, release and progress on making sure that labs feel comfortable around the budgets and are able to release CapEx orders to us as well as others in this space. But again, something to be watched, but nothing I can stand here and say it's already changed or cleared out.
Thank you. We've got just one more, which is that your historical growth has been largely organic, complemented by M&A. Are you able to share anything on your plans to deploy capital going forward?
I mean, our preferred route continues to be M&A to deploy capital. I think the markets, as we see them today, offer a very rich pipeline of opportunities for Tecan to continue that M&A journey, both on our life sciences side, which is probably the strategic focus area right now to continue our journey, I would say, into content additions. Right now in life sciences, we do have a portfolio of 50% instrumentation and already 50% recurring revenues, which I think is very strong and very helpful in environments like this. But there's a whole range of things we would like to add to the life sciences portfolio in content, in consumables, along the kind of application axis that I explained in my presentation.
And on the partnering side, there are also a few, I would say, particularly capabilities on the medical devices side that we would like to own. I mean, I illustrated the comprehensive portfolio we have, particularly on the diagnostic side with components, engineering services, life cycle manufacturing, and the contract manufacturing side. On the medical side, there are quite a few options that we would like to add to that portfolio because we see medical as a very strong market growth opportunity for us right now. And we are very strongly positioned with the Paramit acquisition, but there's more that we could think of to add inorganically. And probably the last comment I would make on the geographic expansion right now and where we stand.
As I said, we are with our operational footprint, one-third in the U.S., one-third in Europe, and one-third in Asia, which makes me feel pretty good about where we are right now, also geopolitically right now, but we also now, for the first time, looking at M&A options in Asia, and this technically had not been possible without the acquisition of a very, I would say, strong and strongly managed site in Penang, Malaysia.
Perfect. Thank you very much. Thank you for speaking to us today.
Thank you.