Earnings Call: H2 2020

Mar 16, 2021

Ladies and gentlemen, welcome to the Tecan Group Full Year Results 2020 Conference Call and Live Webcast. I am Moira, the Chorus Call operator. I would like to remind you that all participants will be in listen only mode and the conference is being recorded. The presentation will be followed by a Q and A session. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Martin Brandl, Senior Vice President, Corporate Communication and Investor Relations. Please go ahead, sir. Thank you very much, and good morning, ladies and gentlemen. Thank you for joining us for our conference call this morning. We are very pleased to discuss with you the strong set of results for fiscal year 2020. With me on the call are our Chief Executive Officer, Achim von Leo Brechting and our Chief Financial Officer, Tanya Micky. Before we start, as always, some formalities. The corresponding press release announcing our financial results Was issued this morning at 6:30 a. M. Central European Time. Both this press release as well as the full 2020 Annual Report Are available on the company website, teakan.com, under the Investor Relations tab. The call is being webcast over the Internet And we have also posted the presentation slides we will use for download. With that, let me now turn the call over to Achim von Leopresting. Achim? Thank you very much, Martin. Good morning and welcome to the TCAM 2020 full year results Before Tanja will discuss the financial results of 2020 in detail, I will give you an overview of financial and operational highlights. When we presented our financial results 1 year ago, the WHO had just announced that the new coronavirus outbreak had officially become a pandemic. At that time, we were anxiously following the dynamics, trying to understand what it means for our business. We were well aware that our business could face headwinds, But we were also optimistic that opportunities to support the global research and clinical communities with test solutions could arise and provide some positive momentum for us. Therefore, I am pleased to tell you today that Tecan closed this exceptional and demanding year 2020 with significant growth in sales and profits. We're even prouder of the important role Tecan has played and continues to play in the global response to manage COVID-nineteen. Looking at some of the financial highlights first. We recorded orders growth of 38.5% in local currencies 33.9% in Swiss francs resulting in a record order backlog at year end. From a revenue perspective, we ended the year with 18.7 Growth in local currencies and 14.8% growth in Swiss francs. Especially pleasing is the fact That both of our business segments and almost all regions finished the year with double digit growth in local currencies. With the strong growth of the pipette tips, our total recurring revenues, which includes sales of services, spare parts, reagents and consumables, Increased to 43.6 percent of total sales. We are also pleased that the reported EBITDA margin increased to 21.8 percent with the reported EBITCR up by 29.6%. Our reported net profit grew by 42% and the earnings per share reached CHF 8.69. Our operating cash flows more than doubled as we generated CHF208 million, which corresponds to 28.5 percent of sales. Now let me comment on some of the operational and product highlights of the year. Our first priority was to Maintaining business continuity to support our customers in these challenging times. Through the implementation of these measures, we continue to be fully operational at all production And provided undisrupted support to our customers in the field. With substantially increased COVID-nineteen clinical testing high demand for related products, we took a number of steps to secure supplies of materials and expand capacity and supply for specific product lines, including certain instrument platforms and disposable pipette tips. Throughout the year 2020, we were supporting our customers in a variety of areas. Through existing as well as new customers and partners, we were leveraging our laboratory automation technologies To scale up COVID-nineteen diagnostic testing. One new partnership we signed was with Thermo Fisher Scientific to enable PCR based COVID-nineteen testing. The Thermo Fisher Scientific Amplitude solution is a molecular diagnostic testing system designed to analyze up to 8,000 samples in a single day And it incorporates 2 of our Fluent platforms plus introspect, our analysis and reporting software. The Amplitude also relies on our high quality Hi, Pat Tibbs. You might also recall that on the call 1 year ago, I talked about the launch of the DreamTrep NAP that has just happened, An integrated fully automated solution simplifying nucleate acid extraction workflows for many genomic applications. Now turned out to be perfect timing. The Dream Prep NAP had lapsed quickly and efficiently to scale up both COVID-nineteen testing to accommodate larger test volumes as well as other genomic workflows. We also continue to invest in research and development To position the business for sustained and accelerated growth and we made good progress in these projects despite lockdowns and restricted access to labs. One of the key elements that kept projects internally and with external partners on track was the development of new digital tools such as Since the beginning of the COVID-nineteen pandemic, Tecan has been at the forefront of the global efforts to contain this outbreak. Our ability to rapidly and efficiently step up to the challenge Is deeply rooted in Tecan's core competencies and strategy. Scaling PCR and NGS workflows from nucleate acid extraction To the readout has long been a basis of our wider genomics and molecular diagnostics competencies. Doing this with a strong experience in regulated environments gives our partners the assurance of quality and compliance even when timelines are tight. Through innovative solutions, which include novel digital tools, Our customers are able to manage large numbers of instruments and complex laboratory settings with confidence and all needed operational data at hand. Also, as we spend the entire spectrum from basic research to pharma and in vitro diagnostics, we are in a strong position to leverage learnings and innovation across the Spectrum. More concretely, this means in the context of COVID-nineteen that we support virus research like sequencing for the analysis Virus origins and mutations mRNA and classical vaccine development PCR as well as serology testing. Clearly, a significant and wide range of important workflows, which are not at all limited to address infectious disease challenges like COVID-nineteen. Here you see several TCAM employees of our life sciences division installing and adapting solutions in customer labs around the world. Similarly, in our partnering division, we work closely with partners where we supply full systems like TIFIC, Dansure, Zai Bio, Mobidiag and several more. On the components side, we have to scale the manufacturing of other instruments, For example, for DARM Gene, Codex DNA or AUS Diagnostics. And of course, we supplied literally billions of pipette tips What we achieved together with our customers and partners would not have been possible without the passion, experience and Exceptional commitment of our employees. I would like therefore to thank our great teams that they have made this Maybe one of the most underappreciated elements of a COVID-nineteen PCR test are the pipette tips, a seemingly simple product. However, in reality, manufacturing equipment used in producing these pipel tips is highly specialized, requiring a fully automated production line capable of precise molding and in line visual quality testing. Therefore, it can typically take up to 18 to 24 months to create Additional manufacturing capacity. We quickly recognized the importance of expanding capacity and supply Disposable pipette tips to support crucial testing for COVID-nineteen. In anticipation of a dramatically increased testing demand, we launched an expedited process for creating new production lines early in 2020. These measures have already resulted in the tripling of Tecan's worldwide pipette tip production capacity. In October last year, we were delighted to announce that the U. S. Department of Defense And the U. S. Department of Health and Human Services awarded Tecan a $32,900,000 grant to support equipping a U. S. Pipette chip manufacturing facility. These new U. S.-based manufacturing lines are expected to start producing pipette tips in fall 2021, augmenting the steps we have already taken elsewhere. With this, I hand over to Tanja Miki, our CFO, for a more detailed discussion of the 2020 financial results. Thank you, Achim, and good morning, ladies and gentlemen, from my side as well. As most of you know, this is the first time I'm presenting to you results for a full year. I have to say 2020 was an Extraordinary year by all means, which led for Tekken to an extraordinary strong set of results as our products were instrumental in the fight against COVID. Let's see for yourself. Let's start with order entry and sales. In 2020, we recorded the surge in orders. As Achim has mentioned, this was predominantly for product lines supporting the global fight against the coronavirus pandemic. Full year order entry increased by 33.9 percent to CHF855.2 million. That's an increase of 38.5 percent in local currency. This translates to a book to bill ratio of 117. After orders already grew by 24.3% in local currencies In the first half of the year, order entry accelerated further in the second half. In the last 6 months, Orders increased by 51.8 percent in local currencies. Order even grew at a significantly higher rate than full year order entry to reach a record high as of December 31, 2020. Sales for fiscal year 2020 climbed by 14.8 percent to CHF730,900,000, corresponding to a growth of 18.7% in local currencies. Also here, the growth trend Accelerated in the second half of the year with sales increasing by 23.5% in Swiss francs And 27.8 percent in local currencies. Let's now look at the sales performance of our 2 business segments. Sales in the Life Science business segment grew by 13.2% to CHF 408.8 CHF 1,000,000 for the year. This equates to a rise of 18.7% in local currencies. The Life Sciences business experienced strong demand for products supporting the COVID-nineteen response, mainly liquid handling and automation workstation as well as the associated disposable pipettes. Despite the strong increase in sales, we should not forget that parts of the Life Science business also experienced significant disruption as customer facilities were closed Our access was restricted to slow the spread of COVID-nineteen. Product groups that were adversely impacted included detection instruments, Research reagents for next generation sequencing and consumables for mass spectrometry sample preparation. Sales growth accelerated further in the second half of the year with sales increasing by 26.2% in local currencies. Looking at order entry in the Life Sciences business. As mentioned before for the group, orders in Life Sciences also outpaced the recognized revenues significantly in 2020 with order backlog increasing at a high double digit rate. The partnering business segment generated sales of CHF 322,100,000, which corresponds to a strong increase of 18.8% in local currencies and 16.8% in Swiss francs. We observed similar patterns to those in the Life Sciences business in this segment as well, with automation platforms, OEM components And disposable pipette seeks to support COVID-nineteen testing being in high demand. By contrast, sales to customers exposed to other areas of in vitro diagnostics were adversely impacted. Segment sales in the second half year increased by 30% in local currencies and 27.9% in Swiss francs. Also in the partnering business, order entry increased at a substantially higher rate than sales. Now looking at sales development in the different regions on Slide 12. You're no surprise The regional performance was also significantly impacted by the COVID-nineteen demand. As Ahim has already mentioned, Almost all regions delivered double digit growth in local currencies for the year. In Europe, Sales increased by 9.6% in local currencies and by 7.6% in Swiss francs. The increase in sales was driven by the Life Sciences business with instrument installations supporting PCR based testing as part of the European COVID-nineteen However, sales of the partnering business declined in Europe as several customers saw lower demand based on the decrease in doctor visits And related lower volumes in routine diagnostic testing as well as restricted access to labs. As you are aware, regional sales in partnering business is defined by the location of our customers. That means the in vitro diagnostic companies, not the So this can distort the effect to that extent. Sales growth in local currencies accelerated in the second half of the year to 12.9%. In North America, sales grew by 24.9% in local currency and 19.5% in Swiss francs for the full year With both business segments delivering double digit growth rate in local currency. You might recall that sales in the Life Sciences Business were still down in the first half of the year. However, in the last August call, I mentioned that demand for higher throughput automation systems accelerated substantially in the course of the Q2 in North America. In this context, I mentioned that the Life Sciences business recorded a double digit increase in order entry in the 1st 6 months. These orders translated into sales into the second half, with Life Sciences growing by 25% in local currency. The partnering business even reached 70.7% growth in local currencies in the second half of the year. Therefore, for the whole group, sales in local currencies increased even by 43.3% in the second half of the year, reflecting the surge in demand for COVID-nineteen related products. In Asia, We recorded an increase in sales of 22.7% in local currencies and 17.5% in Swiss francs. Also in this region, this increase was driven by double digit growth rate in both business segments. Growth in China outpaced that of the Asia region as a whole, and I'm delighted to share with you that the total business in China exceeded the CHF 80,000,000 mark for the year. In the second half, sales in Asia increased by 20.8% In local currency and 16.8 percent in Swiss francs. Our next slide addresses our gross profit. Gross profit increased to CHF354,900,000, which was 57,600,000 or 19.4% above the prior year figure. The reported gross profit margin increased to 48.6 Margi, I want to highlight the main factors that led to the higher gross margin. The largest contribution to the gross margin improvement Kim from Product Link and the overhead cost absorption. This was despite the fact that the share of consumables has increased, which usually come with lower margin on the GP level. I also mentioned that in the call in August last year when that was still a negative factor. However, with the growth we saw, Also consumables have a higher contribution once non standard costs are covered. As a second positive factor, we were again able to increase prices. The first negative effect came from an under absorption of our service organization due to closed facilities and the restricted access to labs. In the second half of the year, this under absorption turned into an overtime situation, which obviously isn't sufficient from a cost As already reported for the first half year, the second negative effect Came from higher freight and logistic costs. As mentioned back then, this is due to less capacity Available due to the pandemic as there is obviously less cargo space with the much lower number of flights. And lastly, FX rates were affecting our margins negative. I'll come back to that point when discussing the development of our operating margin. On the next slide, some comments regarding our cost structure. Overall, our operating expenses Grew less than sales and totaled CHF234,000,000 or 32.9 percent of sales. Sales and marketing increased slightly less than sales to CHF105,400,000 despite continued investments in the market unit, with a focus on further expanding our sales force. We also continue to invest in research and development position the business for sustained accelerated growth. In absolute terms, R and D expenses were up by more than CHF2 1,000,000. The ratio showed a relative decrease compared to sales, or in other words, sales increased even more than absolute R and D spend. As you will recall, we started the year with a more moderate sales outlook for the year and have increased our expectation in the course of the year. R and D programs, however, can't be scaled or started at the same pace. However, we used our momentum to accelerate some programs, also with a bit more outside support, which bodes well for 2021 2022. So our financial strength and ability to commit to these investments could prove to be a competitive advantage in the longer term. Overall, R and D activities and gross expenses were also higher compared to the prior year. This includes the capitalized cost as well as the customer funding of OEM projects. Gross R and D was at CHF 78,500,000 For 10.7 percent of sales. General and administration expenses increased to CHF 66,000,000, mainly due to more costs on the corporate level that were mostly related to performance based personnel costs. And we also took the opportunity to invest more in process improvements and digitalization projects to accelerate our future growth opportunities. Looking now at the EBIT and EBITDA development in more detail. We see that in the full year 2020, our reported EBITDA, the earnings before interest tax, depreciation and amortization, rose by 29.6 percent to CHF 159.1 million. The increase in reported EBITDA was mainly driven by benefits of scale due to the significantly higher volume. In addition to common economies of scale, the reported EBITDA benefited from an even more positive impact as the overall cost base was not yet fully adjusted to support the business on a sustainable basis. The results development was also held by a one time positive effect from an adjustment of the Swiss pension plan as well As increased capitalization of development costs as projects neared market launch, I mentioned that on the previous slide. On the other hand, exchange rate movements in major currencies versus the Swiss francs had a negative impact on the reported EBITDA, Comparable to the effects from the capitalized R and D and the reduction of past service costs in the pension plan. The reported EBITDA margin grew correspondingly by 250 basis points to 21.8 percent of sales. Assuming exchange rate in line with 2019, the reported EBITDA margin would have stood at 22.5 percent of sales. With plus 36.9 percent, the profit before interest and taxes, EBIT, grew even faster than EBITDA and came in at CHF 121.4 million or 16.6 percent of sales, up by 2 70 basis points Compared to the prior year. Now looking at the operating profitability on a segment level. Reported EBIT in the Life Science business rose to CHF 78,200,000 And the operating profit margin increased to 17.4% of sales. This positive performance It's primarily a result of sales growth as well as a strong margin contribution from the consumables business and As discussed, the lower net R and D. Reported EBIT in the partnering business Increased to CHF59,100,000 while the operating profit margin grew to 18.3% of sales. The drivers here were the volume effect as well as the favorable product mix. We move on to the next slide on net profit. Reported net profit for the year 2020 rose by 41.7 percent to CHF103.7 million. Thanks amounted to 14.2 percent of sales. Only a brief discussion on the next slide. Earnings per share increased to a new high, reaching CHF8.69. On the basis of the further increase of net profit in 2020 and the ongoing positive business perspective, the Board of Directors We'll propose at the company's Annual General Meeting an increase in the dividend from CHF2.20 to CHF2.30 per share. Half of the dividend, that is CHF1.15 will again be paid out from the available capital contribution reserve and is therefore not subject to withholding tax. Let's now continue with the cash flow on Slide 21. Cash flow from operating activities more than doubled and reached CHF208,300,000 for the year. This corresponds to 28.5 percent of sales. As I mentioned in August, we had a special focus on cash collection And cash management. Additionally, although we do have a well established credit control system And also in normal times, work with prepayments. During the pandemic, which caused potential financial issue on the customer side, We got more strict and asked for full prepayment from distributors and up to 70% prepayment before delivery with first time customers. Our DSO, the day's sales outstanding, went down from 45 days The operating cash flow includes €37,700,000 for amortization and depreciation, €10,900,000 from IFRS 16 another €4,700,000 for the amortization of the purchase price allocation From past acquisitions and $11,100,000 from development costs we capitalized in the past. On the other hand, we invested a total of CHF 288,700,000. So please bear in mind that this figure includes an investment of CHF270,000,000 in time deposits. Also included in these figures Our €15,300,000 for newly capitalized development costs, which compares to €12,400,000 in the prior year period. The cash flow from investments also include an inflow of CHF17.9 million From the contract award or grant from the U. S. Department of Defense and the U. S. Department of Health and Human Services The support equipment equipping a U. S. Pipette tip manufacturing facility for COVID-nineteen testing. I also want to point out that this payment had no impact on the statement of profit or loss. Also, our investments in PPE Property, Plant and Equipment increased by about CHF 13,000,000. The majority of this increase is related to the grant from the U. S. Government I have just mentioned and the respective orders for the equipment we issued to our suppliers. Moving on to the cash flow from financing activities. This includes the dividend payments we made in April this year in the total of CHF 26,200,000 Cash and cash equivalents were at CHF148,400,000 at the end of the period. Our net liquidity position, Adding the cash and cash equivalents and also the short term time deposits and then deducting all bank liabilities and loans reached CHF467,700,000 as of December 31, 2020. This compares with €354,000,000 on June 30, 2019 €312,400,000 at the end of 2019. The next slide shows the key figures. As always, this is just for your reference. As I have already presented most of the figures on this slide. And with this, I now hand Back over to Achim for your question again. Achim? Thank you very much, Tanja. We now turn to the outlook and I would like to start with Some new important product launches that happened already in 2021. The key part of our growth strategy is to drive and scale innovation To solve key challenges in research, drug development and diagnostic workflows. 2 exciting product launches happened already this year: The Fluent Mix and Piers workstation and the Frieder reader module. While initially both new products will be commercialized through our life science business, They are of course also available for OEM partners going forward. The FluentMix and Piers workstation now offers end to end automation For whole blood pipetting in clinical environments. For many labs, the handling of whole blood in, for example, high throughput sampling for latent tuberculosis testing Is now possible without tedious manual intervention. The new Frieda reader on the other hand adds to our cutting edge portfolio of workflows for genomic applications. Specifically, the Friedelow reader enables the precise quantification And purity measurements of nucleate acids in a hanging drop. This means no sample is lost, which makes this module ideal for high value samples. And we expect the launch of further new products during 2021. In our partnering business, we focus on production ramp up of existing systems as we expect a rebound and recovery of routine diagnostics Testing during 2021. We believe this will affect both our Synergen systems business as well as our carbo components franchise Where various recently launched instruments incorporate our Carver modules. This now increasingly extends to smaller near patient testing systems. As we have made significant progress with the developments of key partnering development programs, we also expect new launches in The 2021 2022 timeframe, including the already communicated system solution for our partner, the binding site. We continue the development of several new platforms with global partners, especially in the areas of molecular diagnostics and protein analysis. Given the range of these different programs, we expect that new individual solutions to each generate revenues from single digit To double digit million amounts per year in Swiss francs at full launch. As we have come out of an Extremely turbulent 2020 where Tecan has shown both reaction speed and resilience, we expect that 2021 continues to still be significantly impacted by COVID-nineteen. One example data point of this ongoing dynamic are the total PCR based Testing volumes reported for the U. S. In the Q1 of this year, estimates indicate that in this time frame Already 60% of the 2020 test volumes will be performed despite the increasing numbers of vaccinations. Interestingly, In the U. K. And Israel, 2 other countries with a relatively high vaccination rate to date, daily tests 100,000 people have gone up significantly in recent weeks. So it appears that testing continues to be a key element of managing the pandemic. While we believe that there will be normalization of testing somewhere during 2021, the impact of such dynamic for TCAM is still dependent on a The duration and magnitude, for example, of elevated levels of PCR testing for acute SARS CoV-two infections, Both leveraging already installed systems as well as newly ordered systems with the associated consumption of pipette tips. The shift from acute to broader community testing and the mix of testing solutions used for those efforts The role of PCR tests for confirmation of positive antigen tests and symptomatic negative cases. The deployment of surveillance testing solutions and the role of sequencing. The magnitude of serology testing and T cell assays to assess immunity status and duration after vaccination or infection. And last but not least, The role of low plex and multiplex testing for flu and SARS CoV-two variants in the post vaccination world. Although we can't predict those dynamics, we feel very well prepared to again respond and contribute to those before mentioned requirements. Now turning to the financial outlook for the year 2021. As discussed, we ended the year 2020 with a record order backlog. Based on this high backlog as well as the elevated demand we continue to see for instruments and consumables, we expect a very strong business performance in the first half of twenty twenty As all of you are aware, demand trends for COVID-nineteen related products are subject to greater uncertainty in the second half of twenty twenty one. Therefore, we can't rule out a decline in sales in the second half compared with a very high base of the prior year period. On the other hand, affected by the pandemic, such as life sciences research, pharma drug discovery and development and non COVID-nineteen diagnostic testing. We therefore forecast sales growth for the full year 2021 to be in the mid single digit to mid teens percentage range in local currencies. These projections are based on the assumptions that supply chains remain undisrupted and all production sites stay fully operational. Despite a more negative currency environment and the absence of some extraordinary effects from 2020, we expect a reported EBITDA margin for the full year 20 21 at least at the 2020 level of 21.8 percent of sales. The expectations regarding profitability are based On an average exchange rate forecast for the full year 2021 that you see at the bottom of the slide. They are lower than the actual rates in 2020, which means that the margin guidance is already taking into account a negative impact from FX. And as always, the outlook of 2021 does not take account of potential acquisitions during the course of the year. Now let me conclude this presentation by saying that Teikan is well positioned for this year and beyond. Our position is stronger And the Teachem brand more visible than ever before. It is our core business to empower our customers and partners By automating complex laboratory processes and scaling innovation from fundamental research to disease diagnostics. When the pandemic started to spread around the world, we were well prepared to quickly refocus our capabilities on the fight against COVID-nineteen. In this respect, 2020 also illustrated our resilience and that we had set the right priorities in the execution of our strategy. Going forward, there's a huge opportunity to build on what we have learned from the global response to SARS CoV-two and apply to other health challenges Like cancer, metabolic diseases and of course other infectious diseases. With a broad portfolio of existing products And new important launches we expect in 2021 2022, we are confident and excited continue to scale innovation to the benefit of health care and the lives of people. We will continue to increase our modular systems offering For complete solutions with complementary reagents, consumables and software. And we continue to have a strong focus on our employees, On their talent and leadership development, where diversity and inclusion are at the core of our beliefs and the Tecan culture. We understand our company culture as a dynamic journey that comes to life through participation and communication. The fact That this that we were officially certified as a great place to work in January this year indicates that we are on a good path. However, we take this as an encouragement to drive further improvements. In this context, we are committed to continue to deliver above market average growth, while at the same time applying the principles of sustainability. Sustainability is deeply embedded in our corporate culture and strategy since many years. I invite you to read our sustainability report that was also published today as part of our annual report. In there, you can read about various topics that are of particular relevance to us. For example, that we gained the climate neutral certification for our Manitow site and also for our leading Fluent Automation platform. With that, I would like to open up the line for Q and A. The first question is from Maja Pataki from Kepler. Please go ahead. Good morning. Thanks for taking my question. I would like to start with a question with regards to 2020 sales and trying to understand a bit the break Dan, of the tailwinds and the headwinds COVID-nineteen presented for you in 2020, are you able to give us a rough Swiss franc estimate of how much is COVID related revenues and how much do you think you've lost on your base Business due to COVID-nineteen. That will be my first question. My second question is you've had very strong EBITDA The margin improvement in 2020, also well above your guidance stated in December. To understand how much of this EBITDA margin is sustainable going Forward and not looking at 2021, which is obviously going to be another strong year with regards to COVID. But how much is really structural and should be Sustainable going into 2022 and forward? And maybe related to that, what was the positive impact from the pension plan in Switzerland? And then lastly, just for my understanding, with regards to your sales split that you provide in your annual report, We've seen quite a strong uptake with a classification for leases. I would be very helpful if you could just remind me or tell me what that refers to. Thank you very much. Excellent. Thank you very much, Majer, for your questions. I will start us off and then I'm sure Tanja will Going to add some more details on the second and the third question. So, yes, as you know Majer, I mean, when Talking about the headwinds and tailwinds, it's always not so entirely easy for us to earmark what is truly In demand for the COVID testing environment. However, I think when we talked about H1 2020, I said That we estimate the ballpark around the headwind to have been €30,000,000 It's probably When we look at it, a good estimate to think about the headwind effect having been somewhere between €60,000,000 to €80,000,000 And then therefore, the tailwind being somewhere between €150,000,000 €170,000,000 obviously. So I think As we think about this, we feel pretty good about now the participation in COVID obviously. And I think also the fact that What we are shipping out both from an instrumentation and also from a consumable standpoint is obviously not The COVID single trick pony solution. So that's why I mean typically we try our best To understand where they're going, but many of the systems are of course multipurpose and they can be used for different purposes. But maybe what I said the kind of figures A good kind of proxy for calculating the headwinds and tailwinds. But it was as you see, it was a significant Swing in demand and I think we came through with pretty good resilience and Dynamic from particularly our operational and to logistics standpoint. Maybe with this, I hand over to Tanja to answer the question on Thank you, Achim, and Maja. For the EBITDA margin improvement, I mean, you have seen that I mentioned that there were various factors and some positives will stay and some others not. The largest contribution in 2020 through the improvement came from the product mix as well as the overhead absorption. And here, obviously, the pandemic caused a huge shift in the mix, which at the end proved to be quite positive for the margin. And in 2021, the mix will be different, but we still have said in our outlook that we would expect At least a similar level to 2020 coming from different parts. We know that we will Expect or we continue to expect freight and logistic costs to be on the high side again. But then there is still the volume effect that will always help. So on one hand, you have seen we were hit by higher freight costs, which we believe will stay by some service under absorption and then Over time, this will actually still have to stay in the sense that we will have to add more capacity from our service perspective In order to be able to sustainably service our installations and our customers. On the other hand, the volume effect as well as our production efficiencies and the processes improvement we started to work on In 2020, as well as I've mentioned some of the digitalization investments we were making this year last year as well. So All of this should bring us to continue to improve our margins as we actually always said we will be doing. I hope that answers to your second question. I think you mentioned positive impact from the pension fund. That was a €1,000,000 effect? How much? €2,200,000 effect. Okay. And this, of course, is a one off. Having said that, I mean 2020 was such a year that we had some one offs that were positive and some one offs that were negative. And All in all, they should balance each other. From the leases perspective, I'm not Sure. That I understand the question because our leases were actually similar to last year. There was no significant Change to it. And I don't know if you referred to the IFRS 16, but there we were about €10,900,000 so that was very much in line with 2019. Okay. I'll take that up offline. But just two clarification questions. Thank you very much, Talking for the breakdown of headwinds and tailwinds. It will be correct to say that the tailwinds were very much skewed Towards the second half of the year and with the majority actually would be the tailwinds in the second half of the year. Is that correct? I mean relatively, yes. I think we saw some acceleration in the second half, which also probably you can see from the H2 To overall performance and the backlog build that we had. So yes, I think it's fair to assume that that was a H2 dominant effect in H2, yes. Thank you. And I know you're not guiding for 2022, but obviously, as you're indicating that it cannot be Excluded that your revenues will decline in the second half of twenty twenty one and we're going to have another very strong H1 2021. Shall we also then not exclude that your revenues decline due to the base effect in the first half of twenty twenty two Until you return to normalized growth rates in the second half? I would not draw that conclusion necessarily. And clearly, I mean, we are still Kind of in early days of 2021. So let's see how the dynamic and the phasing then really falls and where things will end at the end. But What you also heard me say is, we're very confident and personally very positive about the so The rebound of the non COVID business and the new product that we're launching and that's why I try to emphasize it in my presentation that mean, you will continue to see a cadence of new products coming to market with admittedly a variety of Top line and bottom line contribution potential. However, I think that is making us very confident that however COVID will fall and the dynamic will And we do look positively at 2022. So Yes. I think probably that's where I would probably leave it at this moment. And as I said, I mean the dynamics will be what they are. But The biggest effect that we already, I mean tangibly see is what I also mentioned before that I think Tecan has come out of The is going through the pandemic with a significantly elevated visibility and brand recognition. We can see that in both divisions right now. So we see also in combination a very Has the at least commitment and credible projection of increased investments into Life Sciences, Into pharma, vaccine development and in vitro diagnostics in the midterm. So without going into kind of midterm guidance then, I believe we are in a Very good position as a company and that's why with all the, I would say, operational efficiency and resilience that we've shown, I believe we're in a very good position to also mitigate any potential shorter term effects in the second half twenty twenty And maybe the first half of twenty twenty two. But I think we have a lot of steam under the hood right now to also be positive for 2022. Perfect. Thank you very much for that. The next question is from Daniel Buchta from ZKB. Please go ahead. Yes. Thank you very much and congratulations to the obviously very good results. A few questions from my side. And the first one maybe a bit on the order mix And where the growth in the I would say next one maybe a bit more than 1 year is going to come from. I mean the COVID-nineteen related demand is That now going forward still instruments? So are the governments still building up installed base? Or is that done? Or is that now going forward only more Reagents and consumables, because now the installed base is there. So you're running more tests and you need more of these products. So where is the growth here expected to come from? And then the second one, maybe a little bit related to what Majra was asking. I mean, if you assume whenever it is exactly COVID-nineteen is gone, The governments have ramped up massive testing capacity with testing demand at some stage probably not being that pronounced anymore for What is going to happen with this much bigger installed base? I mean, are there more standard tests run on it? Or is there actually the risk That older installed instruments will basically yes, will be scrapped or and with that then 2, 3, 4 years out from now, demand for new instruments and also maybe reagents and consumables is much lower from that time on. That's the second. And then the third one maybe on your top line guidance. I mean, you guide from mid single digit to mid teens local currency growth. But as you highlighted, it's quite impressive how your order book has grown now also in the second half with almost 52%. If I assume that simply nothing happens This 52% growth turns into revenue growth. Then I'm already at mid teens local currency sales growth. Well, basically, am I wrong with this view? Or because usually you say translating the order book into sales Takes 6 to 12 months. So that means in my view, especially the lower end of the guidance, I have difficulties to understand it. But even the upper end of the guidance could turn out Too cautious given the order book growth you have seen. Thank you very much. Super. Thank you, Daniel. And again, I will kick us off and then I would invite Tanja to jump in and complement what I'm saying. I mean your first question on the mix of what we're seeing in terms of Instrument dynamics and consumables dynamics. Actually, we still continue to see very good and solid order intake for both For instruments and consumables, however, I come back to what I said earlier. For us, we don't discriminate, I mean, if an instrument is shipped to a lab for COVID testing or for another level of testing that is done in that lab or any other workflow. So Again, as we are not earmarking it and we're not selling single trick solutions, this makes it a little bit again difficult To say how much really is now COVID related, but what I can say that it is a mix of still COVID related infrastructure build out. And clearly, The answer there would be it depends on the region and sometimes even depends on the country, how governments and also labs are Thinking about the continuation of build out and beat of build out in respect To the maturity maybe of their testing systems overall and where they want to go. And there is a I mean, as you know, there is quite heterogeneous picture globally Where the dynamics are cannot be just summarized in one headline. It is also of course fair to assume that Consumables in our prediction will be very strong throughout the year and hence why we're very Pleased with the fact that we are now getting these new production lines online and including the one Co invested by the U. S. Government in the second half twenty twenty one in the U. S. So I think it's a very healthy mix. This is probably also fair to assume that we see some level of non COVID related business now coming back, Particularly in the powertrain side. So I think in the long and short answer is we see still a very good Mix of instruments and consumables and I think the dynamic particularly as it relates to the normalization of COVID tailwind will I mean, of course, maybe then trail off earlier for the instrument pent up demand as it will be then for the consumables for More and more in the midterm. So when we think about the testing demand and I think your more macro question What was the second one around the future of the equipment that is now being placed? I mean, of course, we are in very close, as you can imagine communication with all the labs that we are working with and the OEM partners on our Parthen division To exactly try to see where their thinking is. But I think again the one thing that makes me feel very Confident about the midterm outlook is that the systems that we are putting out in many geographies are I mean, I wouldn't call it falling into a dry pond, but in many geographies, the scale of Multipurpose testing infrastructure is still significantly below what I would say a sustainable healthcare Environment would demand and there I deliberately abstract from COVID-nineteen. So I think what we We'll see as relates to the kind of COVID based increase of installed base, some of it And maybe the smallest portion will be used by labs to earlier replace aged equipment. But everything that we're hearing at the moment, there's a lot of effort already ongoing to repurpose and modulate the systems, which we can do very elegantly with our modular to cater for different and more, I would say wider range of applications and testing menus Then just to COVID-nineteen. But the other element again, I just wanted To mention is that, of course, this now relates to very specific area of our end market, which is the clinical testing laboratories. I mean, there's again Quite significant market for us in pharma, biotech and research that have been You're quite subdued in their capacity and ability to buy and install solutions like the Fluent platform EVO Or some of our other products. So I think there will be these kind of counter movements, maybe some kind of modulation as you said. But I think in aggregate, I come back to what I said before. I feel very good about the, I would say, notion of increased levels of investments overall in Life Sciences And pharma and diagnostics, which again bring us into a very good position because this is the broader market we are serving. So I must say on the midterm, I think it will be having a net positive effect. And I mean the modulation in between will be what it will be, but I think we are well prepared to respond and react to this. And yes, I think your point on the guidance, I mean, we As you know, there's quite some uncertainty still around. I mean, how normalization will happen and that's why we decided for the full year to guide on a wider range. And I mean our order book as we look at it typically spends a 12 month Shipping horizons, so timing and dynamics and phasing sometimes is clear, sometimes it's not entirely clear. And this is why I think the conversion will have a certain dynamic between H1 and H2. However, For the year, as you said, we feel good about the entry point for the year. And of course, now H1, we will closely monitor the situation in geographies in our end markets. And then we absolutely continue to believe that the range that we're offering Between mid single digit and mid teens is absolutely is the range that also incorporates The backlog that we have built up and still requires significant order conversion throughout the calendar year 2021. I don't know if There's any more additional comments you want to make, Tanja, but I think that's how we think and this is how we calculate. And I don't believe it's overly conservative, but just a reflection on the Still the turbulence and the uncertainty of the end markets and of course our relative exposure to COVID and non COVID markets. No, absolutely, Irene. I mean, the lower range factors in a steeper normalization for the second half of the year. And we know that we have quite some uncertainty still at this stage for how it will look like. And Of course, backlog is quite strong and we started it much higher. But as actually mentioned, it's sufficient to have a strong head start in the year. It's not yet for the full year the clarity of where we will be ending. Okay. Thank you very much. That's very helpful. The next question is from Chris Greitler from Credit Suisse. Please go ahead. Thank you, operator. Good morning, Achim and Tania. Thanks for taking the questions. Actually have maybe 2 or 3. First on the amplitude, could you comment how much that was an effect On your order entry in the second half and how that demand is going? Probably I'll take it 1 by 1. Okay. Yes. And thank you and good morning, Chris. And As always, as you know in our partnerships and relationships, we are bound to quite strict confidentiality. So your question probably would be better addressed to Mark Kasper and the Thermo Fisher But I come back to also what I said. I think when we announced the collaboration, it is a meaningful, I would say contribution to the COVID testing landscape for sure. I mean otherwise I think both companies would have not decided To go and publish and communicate this prominently. So again, without going into Areas that would be uncomfortable, Amplitude and Thermo Fisher, as you've also heard from their financial reports, have been Quite successful system in the market with a very, I would say, specific value proposition around high throughput And a quite good integration of extraction and the PCR processing. And clearly, I mean, the Dynamic of the system to market was all in the second half. When I look at 2020, all in the second half because the system was literally Brought to market within a couple of weeks from early start of the discussions and then this scale up and ramp up in our hands was fairly Easy because we were, of course, utilizing more or less standard modular fluid systems and 2 per amplitude To go into an installation that we then also supported with our software and the consumable tips as well as we supported our partner with Installations and service in, I would say, quite agile fashion. So it was quite meaningful. Please Except my apologies for not being more specific, exactly for that reason that I mentioned in the beginning. Okay. It was worth a Try. Thanks for that. No comment. And then the second question relates to your gross margin. I mean, first of all, kind of on the product Mix, could you be a bit specific what actually kind of you mean by product mix? Because the business mix now kind of has been fairly stable, Life Science Partnering, that would be kind of the Part A. And then Part B is basically on the Pricing environment, could you also comment on how that's basically going And kind of what you see or observe on that front because apparently it must be quite positive, I guess, given kind of the it's a sellers market. Yes. Maybe again, Tanja can start off with the product mix question, then I will talk a little bit more about pricing and what we've seen. I mean, basically, the product mix is the strong demand for instruments, automating different steps in the PCR workflow In both segments, Life Science and PB, these are systems with a high value and well defined configuration. So therefore, we had a little bit higher margins on them. And in addition, we also have Seeing strong growth for Cover Components in the partnering business, and this is also a business with good margins. So from that perspective, I think that was the main mix impact. Also, as I mentioned, the consumables, Which usually are lower gross margin, but in this case, because we had an uplift and because we had a higher absorption of the Non standard cost, they also delivered with a positive mix impact. Yes. And then maybe just a kind of An additional comment on the product mix and what we've seen, actually in both divisions Fluent, Our newer and flagship platform has seen a quite significant boost in demand Because of its capabilities and I mean the abilities of the system to be extremely user friendly And be used in an environment where the automation experience is probably lower than in some The core facilities or expert automation there. So fluid has been a big, big part of the kind of mixed swing in the product range Overall, so that was very pleasing to see alongside the effects that Tanja mentioned on the other product. And I mean from a pricing perspective, you're right. I mean, I think as you know us, we take a quite prudent view on Asking for market relevant value pricing for our innovative solutions And 2020 was no exception there. But as always, I mean, it depends on the environment. If those were New customers, it is probably safe to assume that 2020 was not a year to give huge discounts on solutions because Demand was so high and that was good for us. On the other side, of course, many of the other interactions Particularly with key accounts and on the partnering side, as you know, we typically have more longer ranging frame contracts. And again, there we of course honor these contracts and then when these would be up for renewal, we would then renegotiate and Try to push up pricing. But in aggregate, I think we feel very good about our ability to continuously increase prices even outside of a Specific environment like COVID. Okay. That's very helpful. Impressive. Thank you. The next question is from Katherine Kennison from Bank of America. Please go ahead. Thank you. I have three questions, if I may. The first one is just following up on Mr. Gretna's question on the order book. And apologies if I've missed this, but H2 was very strong, but can you help me understand roughly what was the composition of that order book if we were to break it down into hardware And consumables and possibly in terms of regions where you saw the most strength there. And if we just think about how that materializes Into the rest of this year, is it fair to assume that the majority of this falls in H1 versus H2? My second question would be on your product pipeline into 2022. There obviously needs to be 20 in the works there going on. Is it fair then to assume that we see a step up in R and D as a portion of sales to adjust or compensate for this? And finally, picking up on something you mentioned earlier, you talked about customers being early talked about remodelating Can you help us understand what buckets or what types of customers are having these conversations with you? Is it the large reference lab or is it more tailored for the smaller customers and perhaps the hospital or more point of care setting? Thank you. Very good. So maybe Tanja, you can start with the order book. And as always, Catherine, thank you very much for your And yes, we will try to be as specific as we can in answering the audible question and maybe also helping out Chris Even more in understanding where things are and why we're guiding the way we're guiding. So on the Order backlog, maybe if you remember, I mentioned that the book to bill ratio was at 1.17. And in absolute terms, that means that We had about €125,000,000 more orders and revenues. And this is how much we further build the backlog. But keeping in mind that at the beginning of 20 We already had quite a high backlog. You're correct. The vast majority of the backlog will be revenue recognized in 20 However, not necessarily in the 1st 6 months. That can go over the next 12 months actually. And in terms of the Fleets between the instruments and consumables, we are probably something around twothree, onethree, again over the next 12 months. So yes, from that perspective, we feel pretty confident, as I mentioned before, in our guidance for the year. Having said that, again, the H2 is quite uncertain at this stage for us. And that is where The backlog helps, but at the same time, not really being able to predict yet the second half, We are ending at the outlook that we are at the moment. Yes. And then maybe just to add one more sentence there on your Question on regional differences. I mean, we see actually all regions being quite strong. But as I said in the beginning, with quite different dynamics, I mean, Clearly, as you can imagine, China follows a very different dynamic for us as Europe and the U. S. One element, of course, it also plays into, I think, the current situation, the backlog that we built in 2020, but also the ongoing dynamic I think that we have been quite successful in strengthening our position Also in areas like what we call distribution countries, so in Russia, in India, In the Middle East and Israel, where we've seen, of course, a boost through the COVID pandemic, but we're already now engaging with Quite a variety of new and existing labs that then think about the midterm build out of the infrastructure having seen us as a very reliable and competent partner for many disease areas that they would Partner for many disease areas that they would like to capture going forward. So I think that's another element that again Makes us feel quite positive about this year, but also the periods beyond. And then, Catherine, on your question on the product pipeline, I mean, your specific question on R and D, I think We have been driving quite a significant, I would say, shift in mindset and execution in our R and D organizations In a sense that we put a lot of effort also over the last few years already in modularizing Our platforms. And that gives us now the ability and you can see that clearly when you go back to last year when we announced The next Fluent Dream Prep variant, now this year with the Fluent mix and peers and I said already at the beginning of last year that you can More of these system modulations coming to market in a faster cadence. And this is all made possible because we had already Pre invested in modularization of both hardware modules and particularly important software that give us now the ability to bring our product In shorter time frames with the same aspect of reliability and performance. So I think that underlying And the focus and maybe a bit of a sharpening of our strategic areas of interest. R and D, You can expect, we'll continue to be very efficient for us. And of course, last year from a percentage standpoint It was a bit skewed because of course we can't kind of scale up R and D just by pouring money into the system. We take a very substantially ambitious view on this, but you should not expect that the R and D percentages Deviate massively from what you've seen from us in 2019. Again, always keeping in mind that when we think about R and D, It's the net and the gross figures. And as we get paid by our OEM partners for significant portions, if not all, of the development I mean our teams overall are quite well sized and capable in that aggregate of what we invest in R and D ourselves This is what we can then pour in and use for infrastructure and personnel build out from our OEM position. So I think I feel very good about where we are. For us, it's more about focus and efficiency. However, I mean, if there would be kind of new innovation programs that we get very excited about, I think we have shown that we can efficiently turn our R and D programs into revenues and profit. And this is also what we're looking at in the midterm to see How can we strengthen that rather than tone it down? So but that shouldn't mean for the percent contribution of R and D that there is a A step up or something planned or expected, but I think all I wanted to say is that we feel very proud about our organic ability to innovate and grow the company. And then your last question on reconfigurations of platforms. Again, this is, I would say, a very heterogeneous picture and Where I think what you mentioned, reference labs versus smaller labs, all are affected to some extent, but the discussions ongoing right now more what I tried to mention in the presentation around now how can we Migrate, for example, a fluent solution from PCR testing to next generation sequencing, which becomes another element of the Surveillance mix going forward. So I think these are more the discussion we're having right now rather than saying can you turn the Fluent system into A proteomics workstation. So I think it's more in that context of the technology mix and application mix around COVID and infectious diseases. However, of course, these labs are aware that these systems could also eventually be even converted to do serology testing or T cell If that would become a bigger requirement for the testing of vaccination efficacy. So I think that Again, the picture is quite heterogeneous, but we are in very close dialogue with our partners. And probably The ability to modulate the system is clearly a strength, while companies believe this is a very future proof investment and they rely on our platforms also in the midterm. Thank you so much. That's really helpful. The next question is from Scott Bardo from Berenberg. Please go ahead. Yes. Good morning, guys, and congratulations for the results. A few questions for me, please. Firstly, Just wonder if you could have a broader discussion on the Amplitude system, which sounds like it's been a significant part of your H2 growth and I'm struggling to understand what the sustainable market for such a product is given the very high throughput nature of these systems Outside of the pressing requirements for COVID, I wonder if you could share thoughts on sustainability. And second question, please, And just related to your order book, can you highlight how stable your order book is? Is there any risk of cancellation? And maybe could you highlight how the order trends have unfolded in the 1st months of this year? That would be helpful. 3rd question please on pipette tips. Just squaring your comments on tripling of capacity for pipette tips This is what I calculate to be around a 50% year over year revenue growth from Perpet Tips. What is encapsulated for Perpet growth, please, within your low mid single digit to mid teens revenue guidance range. And last question for me, please. Clearly, an abnormal year and an abnormal performance from Tecan, both In 2020 and arguably encapsulated within your 2021 guidance. In many ways, it feels like you're performing A diagnostic company, benefiting from COVID-nineteen tailwinds. And I just want to understand then with the prevailing school of thought that diagnostic Companies will correct both in terms of revenue and profit in 2022. Why that would be any different from Tecan? Thank you. Very good and thanks for your creative turnaround 2 questions into 4. So great to have you, Scott. And again, as you can probably anticipate, I will Must be as specific as you and Chris was hoping for around the amplitude system. But what of course I can say is That when you look at the system and the way it is configured, it is an very elegant, I would say, array of highly modular Underlying systems. And I think as I said, I mean what we are contributing to the Amplitude system is a fluent for extraction and a fluent for PCR Preparation, it's probably without imagination that there are conceivable use cases where These systems are used independent for different other workflows or even converted in aggregate to do Other applications than PCR. So again, I would prefer you maybe back to Thermo Fisher Scientific for their Strategic view on the amplitude, but I mean what I said about the modularity is probably the most important element To consider with, of course, also the ability to spend more PCR in products over the platform For maybe different molecular tests going forward. But again, I will need to leave that With Thermo Fisher and their communication around their strategic views. But from our side, we are very ready and happy to Support any modulation adaptation of the system exactly in the line that earlier in response to the questions of cash. Well, on the order book, I mean, your question on cancellations and deferrals, I mean, As you know, our offer spends 12 months shippable commitments from our clients. And that's why We also illustrated that for many orders we do have of course your shipment and commitment date for others like Frame orders for plastic consumables or some instrumentation that is earmarked to be delivered and thought in the second half, And there is some flexibility in that order book. But I think for us important to note that from a lead time perspective I'll back to kind of more and more lead times for instrumentation and equipment, which is around 4 to 8 weeks depending on the configuration. We don't feel like there will be forbid any Disruption from the supply chain, but from our normal behavior, we would be able to turn that out in the demanded time frames. But it is quite flexible in the order book. And as Tanja said, it's a significant portion of 12 month frame orders for plastic consumables Where of course, we know what the end revenue will look like, but the month by month consumption can be to some extent modulated by Yes. On your question on the tips capacity, again, you probably We will not be surprised that we're not guiding on individual product lines or where things are falling Within the forecast, but clearly, I mean, as you highlighted, we foresee not just for the COVID But also beyond very healthy growth perspective for our plastic consumable tips that's why the Facility that we are building as we speak will add to the mix. We of course have also contractual Ability to modulate the incoming production as the markets would change. So I think Possibility gives me everything in confidence that we would need to deliver against our existing order commitments Other future modulation of the demand that could be at least in the current climate of the COVID So I think the growth of hypertipsoil has been significant in 2020 And it will continue to be a significant contribution in 2021 in everything that we said and The order to revenue conversion. And then maybe quick on the on your comments on Abnormal year, abnormal performance. I would say an abnormal year, but hopefully not too surprising performance from an execution standpoint. And What I said, the resilience we tried to build into our operational systems, which clearly helped us to Deliver, I would say, robust numbers for 2020. Now, your question will we follow Dynamics that are foreseen for pure play diagnostic players. I would again maybe offer a couple of thoughts for consideration. One is What I said also earlier, our platforms are quite flexible. And I mean even if there would be Diagnostic environments typically we of course have participation on instrumentation service of car parts And now the plastic consumables, which again are not COVID specific, but they are broad based in their utilization. So I would say and maybe it's a good data point to know that we are not selling PCR kits for COVID testing are significant amount of specific reagents in that segment. And that gives us I think a bit more modulation space when things normalize. The other element of course is that we are very active in other These areas like I mentioned before, metabolic disorders and cancer probably being the biggest one where we've seen quite significant Tune down of demand in 2020 and we already now see that there is some level of rebound happening In these markets that are outside of COVID. So I think we have a pretty broad exposure in the diagnostic field itself, Which is good for us. And then lastly, of course, we have a significant franchise also in pharma and academia. As you know, probably not Biggest portion of what we do, but again that gives us and we see that already happening in China, again areas of growth outside of the core clinical diagnostic And specifically the COVID related markets. So I think I feel very good about the breadth of our portfolio and the diverse Very good. Thank you. The last The standard question every year not yet asked about M and A. According to my calculation with 3 times EBITDA leverage, you could probably spend €1,000,000,000 With firepower for an acquisition, not even included EBITDA of the target itself. So It would be very nice to see that TechCon can also improve the M and A picture. I mean, it's clear that last year it was difficult With traveling and proper due diligence, but can you elaborate a bit on that? It's the first question. No, absolutely. And thank you very much, Daniel, for the question. I was already getting nervous if no one would ask the cash deployment Elephant in the room. No, but clearly as you said and again I don't want to sound like a broken record, but we are fully committed to deploy Our capital into M and A and I think a sign of reassurance there And should also have seen Tanja's comment on the dividend increase, which we I think is meaningful, But we want to of course also signal with this that we are driving the M and A environment through our corporate development team. And effectively The entire management team of Tecan very focused and as fast and hard as possible. Now as you said 2020 was probably not a Very accommodating year, especially for us in general because of the market dynamics and ability to Move and initiate M and A projects, particularly when in the absence of pre COVID touch Points or due diligence. So I think we are now seeing that maybe some level of Again, reassurance that I can share a very high level of activity going into 2021. It's probably fair to say that we've been Probably never been that busy at that period of time with M and A discussions as we are now already in the first Quarter and this again, I don't want to project it out. I mean, I'm not also saying that we're immune to some of the, I would say dynamics of very high prices and also some I would say other momentum from investments Through Sparks or PE, they'd also take an interest in some of the markets we're interested in. But I believe our again pipeline is quite broad. And I think we will continue to be disciplined in discriminating targeted fit to TCAN and our Strategic growth aspirations and I think that's what you continue to expect from us. But as you said, I mean, The numbers that you called out, we absolutely have the same in mind. And I think we have targets in our pipeline That would, yes, need that level of cash and overall investment. So This is where I think now I will probably leave it, but 2021 has already started very, I would say, active for us As I'm sure you're hearing from other companies, but it seems like the dynamics have a little bit been broken from the some of the more subdued M and A environment From last year. So I believe we are already running out of time here. So I would like therefore to conclude the call. And As always, if you have any further questions, where to find us through Martin or our Investor Relations communications channels. And With this, I would like to thank you very much for your attention and look forward to talk to you and hopefully see some of you during 2021 So thank you very much and goodbye and stay safe. Ladies and gentlemen, the conference is now over. Thank you for choosing Chorus Call and thank you for participating in the conference. You may now disconnect your lines. Goodbye.