Good morning. My name is Ruel, and I will be your conference operator today. At this time, I would like to welcome everyone to Avantor's Q4 and full year 2021 earnings results conference call. All lines have been placed on mute to prevent any background noise. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star one on your telephone keypad. Now I would like to hand over the call to Mr. Tommy Thomas, Vice President of Investor Relations. Mr. Thomas, you may begin the conference.
Good morning. Thank you for joining us today. Our speakers today are Michael Stubblefield, President and Chief Executive Officer, and Thomas Szlosek, Executive Vice President and Chief Financial Officer. The press release and a presentation accompanying this call are available on our investor relations website at ir.avantorsciences.com. A replay of this webcast will also be made available on our website after the call. Following our prepared remarks, we will open the line for questions. During this call, we will be making some forward-looking statements within the meaning of the Federal Securities laws, including statements regarding events or developments that we believe or anticipate may occur in the future. These forward-looking statements are subject to a number of risks and uncertainties, including those set forth in our SEC filings. Actual results might differ materially from any forward-looking statements that we make today.
These forward-looking statements speak only as of the date that they are made. We do not assume any obligation to update these forward-looking statements, whether as a result of new information, future events and developments or otherwise. This call will include a discussion of non-GAAP measures. A reconciliation of these non-GAAP measures can be found in the appendix to the presentation. With that, I will now turn the call over to Michael. Michael.
Thanks, Tommy, and good morning, everyone. I appreciate you joining us today. I'm starting on slide 3. As you saw in our press release, we delivered another strong quarter with above plan performance on all key financial metrics, concluding an outstanding year that reflects strong momentum across our end markets, disciplined execution of our operating plan, and the value of our long-term growth strategy. In the Q4 , we achieved mid-single-digit core revenue growth, driven by continued strength in our two largest end markets, biopharma and applied technologies and advanced materials. COVID-19 revenues were in line with guidance as vaccine-related demand continues to be strong and revenue associated with diagnostic testing improved sequentially, reflecting increased testing associated with the Omicron variant. Despite continued inflationary pressures, we expanded margins by more than 150 basis points, including the favorable impact of our acquisitions in 2021.
Free cash flow grew double digits and adjusted EPS increased more than 20%. In addition to generating solid financial results in the quarter, we also made significant progress in executing our long-term growth strategy. Most notably, we closed the Masterflex acquisition in November and are making good progress with the integration. Similarly, integration of Ritter and RIM Bio remain on track, and we are starting to realize the anticipated commercial synergies from both of these transactions. Representing more than 50% of our revenue, Biopharma remains a key growth driver for our company, and we continue to drive innovation and growth with investments in manufacturing capacity, people, and capabilities. In the Q4 we advanced our expansion initiatives for key process ingredients used in upstream and downstream applications in the bioproduction workflow, inaugurated our second European single-use facility in the Netherlands, and opened a new single-use logistics hub in Massachusetts.
Located near our single-use manufacturing site in the Boston area, the new logistics hub serves as a center for raw material storage, quality control, and finished good distribution, and is a critical enabler to the continued double-digit growth of our single-use platform. An important element of our growth strategy is helping scientists realize the potential of breakthroughs with the ongoing introduction of new products to keep pace with their research and development advances. We recently announced a commercial agreement with Agilent to provide customers with sample preparation content that can be paired with our extensive line of kits and consumables to enhance our liquid chromatography and mass spectrometry workflow solution. The agreement supports our strong customer relationships across all of our end markets and will provide scientists broader access to Agilent's content in these fast-growing applications. Looking ahead to 2022, we are poised for another great year at Avantor.
We have good momentum in our end markets, and the order book for our proprietary materials remains strong. Consistent with our long-term growth algorithm, we expect mid-single-digit organic growth, more than 125 basis points of Adjusted EBITDA margin expansion, more than $1 billion in free cash flow, and mid-teen adjusted earnings per share growth. As you would expect, we are hard at work in integrating our recent acquisitions while continuing to consider future M&A opportunities. Moving on to slide four, I'd like to summarize our Q4 financial results. Core revenue increased nearly 5% on an organic basis and 6.5% on a reported basis, including revenue contributions from Masterflex, Ritter, and RIM Bio, offsetting the impact of foreign currency exchange headwinds.
As anticipated, core growth was partially offset by COVID-19 headwinds of approximately 2%, reflecting strong growth in COVID-19 vaccine-related revenue and year-over-year declines in diagnostic testing and PPE-related revenue. From an end market perspective, our performance was driven by mid-single-digit organic revenue growth in advanced technologies and applied materials and biopharma, including more than 20% growth in bioproduction. Reflecting the impact of lower year-over-year COVID-19 testing and PPE revenues, we experienced mid-single-digit declines in both healthcare and education and government. Adjusted EBITDA in the quarter was up 16%, reflecting volume growth, favorable mix, including low double-digit growth in sales of proprietary materials and consumables, productivity and outstanding execution enabled by our Avantor Business System.
Similar to the Q3 we were able to absorb inflation in our materials, third-party products, transportation, and wages, and still expand Adjusted EBITDA margin by more than 150 basis points, which included an approximate 90 basis point benefit from M&A. The strong operating results, coupled with continued traction on borrowing costs and income taxes, resulted in adjusted earnings per share growth of more than 21%. We generated free cash flow of $314 million in the quarter, over 137% of adjusted net income, as strong working capital performance partially offset higher capital investments to support our growth initiatives. Our adjusted net leverage ended at 4.2 x Adjusted EBITDA, essentially flat from the same point in 2020, despite deploying more than $4 billion in M&A capital during the year.
Slide five provides an overview of our full year results for 2021. Compared to our initial guidance, we essentially doubled organic growth, nearly quadrupled EBITDA margin expansion, and just about doubled adjusted EPS growth. For the full year, our 11.3% organic sales growth included 2.1% in COVID-19 tailwinds, yielding core growth of 9.2%. On adjusted EBITDA, we were able to expand margins by approximately 190 basis points, including 30 basis points from M&A. The operating results, combined with continued progress on interest and income tax expense, resulted in approximately 58% growth in adjusted EPS. Lastly, free cash flow grew to $920 million in 2021, reflecting more than 100% conversion of adjusted net income.
Our continued strong free cash flow supports rapid deleveraging and is an important enabler of our M&A strategy. In summary, 2021 was another outstanding year, and our financial results reflect the value of our business model, our significant exposure to the high-growth biopharma space, and our team's relentless focus on execution enabled by the Avantor Business System. I'm extremely proud of our team of more than 13,500 global associates, and I remain confident in our outlook for 2022 and beyond. With that, let me turn it over to Tom to walk you through our financial results in more detail.
Thank you, Michael, and good morning, everyone. I'm starting on slide 6. Organic growth in the Q4 was 2.5% or 4.6%, excluding COVID-19 related headwinds. For the full year, organic growth was 11.3%, which exceeded the high end of our final 2021 guidance. Our two-year average Q4 core organic growth rate, meaning organic growth excluding the impact of COVID-19 related revenue, was approximately 5.5% and approximately 5.1% for the full year, with both measures ahead of 2020 comparison. From a regional perspective, Americas, which represents approximately 60% of annual global sales, achieved 3% organic revenue growth in the Q4 .
Excluding COVID-19 related headwinds, America's core revenues increased nearly 6%, driven by high single-digit sales growth in both biopharma and applied technologies and advanced materials end markets. Within biopharma, strength continued in our bioproduction business with high teens growth powered by sales for our single-use offerings and process ingredients. Strength in research materials, consumables, and services led to high single-digit growth in biopharma R&D as funding remains robust and customers continue their emphasis on discovery work. Within advanced technology and applied materials, we continue to experience strong demand for proprietary content, particularly for aerospace and semiconductor customers. Europe, which represents approximately 35% of annual global sales, achieved 0.5% total organic revenue growth in the Q4 or 2.5% excluding COVID-19 related headwinds. Europe experienced strong double-digit growth in bioproduction, driven by single-use offerings and process ingredients and excipients.
Within Europe healthcare, our medical implant platform grew more than 40% in the Q4 , partially offsetting the year-over-year decline in revenue from COVID-19 testing. EMEA, representing approximately 5% of annual global sales, achieved 9.3% organic revenue growth in the Q4 , driven by strong demand for our proprietary offerings in bioproduction and electronic materials. COVID-19 related sales delivered a modest tailwind, net of which core revenue increased approximately 8%. Slide seven shows our organic revenue growth for the quarter by end market and product group. Biopharma, representing more than 50% of our annual revenue, experienced mid-single digit organic growth in the Q4 , including more than 20% organic growth in bioproduction. Driven by continued strength in our single-use platform, as well as double-digit growth in process ingredients and excipients.
Bioproduction demand continued to be strong with year-end open orders up more than 70% from December 2020. Healthcare, which represents approximately 10% of our annual revenue, experienced mid-single-digit organic decline in the Q4 , driven by lower COVID-19 diagnostic testing sales, offset by continued double-digit growth in our medical-grade silicone offering. Education and government, representing approximately 15% of our annual revenue, experienced mid-single-digit organic revenue decline in the Q4 , driven by mid-teens decline in our government customer base as COVID-19 related demand, particularly for diagnostic testing and PPE offerings, moderated as expected. In the education market, sales were down modestly as recovery in university research labs and K-12 continued, albeit slowly, with a modest negative impact from lower COVID-19 related sales.
Advanced Technologies and Applied Materials, representing approximately 25% of our annual revenue, achieved mid-single-digit organic revenue growth in the Q4 , driven by growth in lab products sold for research and QA/QC, particularly in the Americas and EMEA, and in proprietary materials used in aerospace and semiconductor manufacturing. By product group, proprietary materials and consumables offerings achieved double-digit organic revenue growth, driven by strong demand for our process ingredients, chromatography resins, excipients, and single-use solutions. Sales of third-party materials and consumables declined mid-single digits, reflecting year-over-year declines in the COVID-19 related testing and PPE offerings previously mentioned. Let me turn to slide 8 to offer some perspective regarding our key financial performance metrics. In the Q4 , we achieved approximately 16% growth in Adjusted EBITDA and over 150 basis points of margin expansion to 19.4%.
Our strong margin rate expansion was again driven almost entirely by gross margins, reflecting commercial excellence and the impacts from M&A. Adjusted earnings per share in the Q4 were $0.36, up 21%, reflecting the 16% Adjusted EBITDA growth and lower interest expense resulting from the series of repricing and refinancing activities over the last year. Our approximate 20% tax rate for the quarter was flat to 2020, but for the full year, our rate improved from 23% in 2020 to roughly 21.5% in 2021. For the full year, adjusted earnings per share of $1.41 grew approximately 58%. Free cash flow in the Q4 was $314 million compared to $286 million in the prior period.
The increase was driven by stronger EBITDA growth and lower working capital requirements, offset by higher capital investments to support our ongoing growth as highlighted throughout the year. We finished the year with free cash flow of $920 million, with free cash flow conversion well over 100% of adjusted net income. The $52 million in free cash flow growth for the year, or 6%, was closer to 15% normalizing for the CARES Act and other non-recurring benefits we received in 2020. Turning to slide 9, I wanted to touch briefly on our expected share count for 2022. I'll start with a non-GAAP adjusted share count of 642.7 million that we've used for calculating our adjusted earnings per share since the IPO.
This is the shares outstanding at the time of the May 2019 IPO, plus the pro forma conversion of the mandatory convertible preferred shares as if the conversion occurred at the time of the IPO. Since conversion will not actually occur until May 2022, the 642.7 million adjusted share count has historically been higher than the U.S. GAAP share count, making our adjusted EPS conservative relative to the U.S. GAAP EPS. As we have previously communicated, we are changing the adjusted share count to 685 million shares in 2022 to reflect two changes. First, an increase of 23.8 million shares to reflect the shares we issued on September 13, 2021 to partially fund the Masterflex acquisition.
Second, an increase of 18.5 million shares to reflect the stock option exercises and restricted stock vesting under our stock-based employee compensation program. This amount covers the period since the IPO and includes an estimate of activity for 2022 based upon historical exercise patterns and known vesting dates. Adjusted share count will equate with the share count for reporting U.S. GAAP earnings per share by the end of the year. Beginning in 2023, we no longer expect to utilize adjusted share count. Moving to slide 10, we are reaffirming the 2022 guidance that was issued in January at the JP Morgan Healthcare Conference. We expect organic sales growth of 4%-6%, which includes an approximate 2% headwind from reductions in COVID-19 related revenues from diagnostic testing and PPE.
Assumed in this guidance is biopharma growth of high single digits, applied technologies and advanced materials growth of mid-single digits, education and government growth of low single digits, and healthcare growth of mid-single digits. We expect M&A to add approximately 5% and FX to be an approximate 2% headwind, resulting in reported revenue growth of 7%-9%. We expect to achieve more than 125 basis points of margin expansion, resulting in a nearly 21% Adjusted EBITDA margin rate. This reflects strong commercial excellence, continued favorable mix of higher margin content, ongoing productivity, and integration benefits from M&A, offsetting the inflation pressures impacting most of our cost categories.
For adjusted earnings per share, we are forecasting a range of $1.45-$1.53, representing approximately 13% growth at the midpoint, using a share count of 685 million in both 2021 and 2022. We model approximately $260 million in annual interest expense, reflecting the current forward yield curve for the portion of our debt that carries a variable interest rate. Our tax rate is expected to be approximately 22%. Finally, free cash flow is expected to be more than $1 billion, once again, representing nearly 100% conversion of adjusted net income. Incorporated in this guidance is CapEx of approximately $150 million for ongoing capacity expansions and higher working capital to support our growth. One final comment regarding leverage.
We are confident in the attractive cash generation capability of our business model and are committed to approaching the midpoint of our targeted 2x-4x Adjusted EBITDA leverage range by the end of 2022. This concludes my prepared remarks. I'll now hand the call back over to Michael.
Thanks, Tom. I'm now on slide 11. Despite the challenging operating environment, 2021 was clearly another outstanding year at Avantor due to the relevance of our business model, the importance of our mission, and our team's ability to execute. I am encouraged by the growth momentum we have in our end markets and by our traction with commercial excellence and productivity initiatives that will enable continued margin expansion despite expected high levels of inflation. We remain committed to our long-term growth strategy and will continue to make investments in manufacturing capacity and innovation to ensure we have the capabilities to support our global customers. We continue to integrate the three acquisitions we closed in 2021 and are encouraged by the progress thus far. Our strong free cash flow and rapid deleveraging position us to consider additional capital deployment opportunities, and our pipeline of potential M&A is robust.
We recognize our immense responsibility to our Avantor associates, customers, supplier partners, lenders, investors, and the communities we serve and are committed to advancing sustainability through our Science for Goodness platform. As we look ahead, Avantor is well positioned to deliver another outstanding year in 2022. The role of our products and services in enabling scientific breakthroughs has never been more important, and we're helping scientists every step of the way. We remain focused on meeting the evolving needs of our customers and relentlessly advancing life-changing science, and we are committed to achieving our 2022 and longer-term financial objectives. I want to thank you for your interest in Avantor and for your ongoing support. I will now turn it over to the operator to begin the question and answer portion of our call.
Thank you, sir. We will now begin the question and answer session. As a reminder, if you wish to ask the question, simply press star, then the number one on your telephone keypad. Please limit yourselves to one question and one follow-up question only. Your first question is from the line of Tycho Peterson from JP Morgan. Your line is now open.
Good morning, this is Rachel Vatnsdal on for Tycho Peterson. Thanks for taking the questions. First off, can you just walk us through your COVID expectations for 2022? I know you were previously expecting the 200 basis points of headwind, just given the testing dynamics. Can you just give us an update on the testing side of things and then also vaccine and therapies for what you're expecting heading into the year?
Yeah. Thanks, Rachel. It's Tom. I'll take that. By the way, your aunt Lori says hello. I used to work with Rachel's aunt. When you look at 2021, it pretty much came in line with what we had expected, roughly $400 million or so of COVID-related tailwinds. You know, it was probably half VAX and, you know, the rest of it was split between testing, you know, and PPE. The mix has, you know, kind of varied a little bit, you know, over the course of the year. You know, for the Q4 , we came in, you know, about where we expected, in aggregate.
For 2022, as we've said, we've got roughly 2% headwind from COVID. We're expecting, you know, well, relative to the $400 for the full year, it'll be somewhere around $250 in terms of COVID revenue. You know, the mix continues to shift, as I said, half- and- half between testing and vaccination in 2021 in 2022.
Great. Thank you. Yeah, so I'll make sure to say hi to Lori. Next up, could you just talk about Masterflex, RIM Bio, and Ritter performance in the quarter? M&A contributed about $90 million during Q4, which was a little lighter than we were modeling. Is there anything to look into there? You mentioned integration is going well for all three, so can you just give us some additional color on early integration progress?
Yeah. Good morning, Rachel. This is Michael. I'm happy to take that question. As I indicated in my prepared remarks, we continue to be excited about the progress we're making on integrating really all three acquisitions. You know, in the quarter, I think they came in, you know, essentially in line with our expectations. We're obviously in the early days with Masterflex. The contribution in the quarter reflects two months of having them in our portfolio. You know, their strong performance out of the gate in line with expectations. Got a great order book, similar to our own, you know, bioproduction order book, and you know, we're off to a great start there. On the other two acquisitions, obviously more modest in size.
Again, we're also starting to realize some of the commercial synergies that we had anticipated. There's some great technology there in the RIM Bio acquisition that we're now starting to leverage, particularly, you know, some of the bag technology that we're now you know, moving into you know, our European business, for example. In the case of Ritter, we've got some really great progress there, not only with the pipeline and the specification work that we're driving, but, you know, we mentioned early on that one of the things we were you know, planning to do was obviously to embed our quality and regulatory capabilities in that business.
You know, we're able to launch our sterile product line as well as you know earn IVD certification in Europe, for example. You know, we're making good progress on expanding the production or the product capabilities in that business to increase not only you know the scope of tips, for example, that we provide, but also in introducing a number of other new product categories, PCR plates, for example. We have a pretty clear line of sight for 2022 to a number of investments that we're making to continue to progress the capabilities of that platform, which you know we remain extremely excited about.
Great. Then last one for me. You ended the quarter at net leverage of 4.2x . I think you were targeting to hit roughly 4.7 post Masterflex. That was just a bit softer than we expected. You previously said you were targeting to reach the 2x-4 x leverage range by the end of 2022. First up, is there a possibility to bring that forward? Then how should we think about that with your capacity on M&A? One follow-up on M&A. Given valuations that we're seeing in the markets right now, can you just talk about how you're thinking about the pipeline? Just given, you know, I'm sure management teams would prefer to sell at a higher range. Can you talk about how that pipeline's progressing?
Yeah. Yeah, sure. Thanks. The leverage rate came in, as Michael said, pretty close to where we were at the beginning of the year. You know, that's despite having you know, deployed the $3 billion worth of capital that was funded by you know, borrowings. You know, it came in at 4.2x at the end of the year, pretty much in line with our expectations. We should probably you know, connect offline on the 4.7x. That was probably the leverage as of the acquisition date, when we had initially funded. We can talk more about that. The expectation going forward is you know, really strong free cash flow as you've seen.
You know, probably $1 billion or so of free cash flow that's available. The other nice thing that we've got going for us is, you know, in the H2 of 2022, we'll no longer be paying the dividend on the mandatory convertible. So that's probably another $65 million or $70 million affected debt levels. We expect to be, you know, somewhere in the middle of our targeted 2-4 leverage range by the end of the year. That does not anticipate any utilization or deployment towards M&A. I know Michael wants to touch on the second part of your question.
Yeah. You mentioned, you know, the valuations and expectations from sellers. Clearly, there's been you know, a higher level of volatility in the capital markets as we get into 2022. I think my perspective is it's probably a bit early you know, to see expectations change meaningfully you know, one way or another at this stage. I you know, it's been you know, only a few weeks probably at these levels. I would anticipate it needing a bit more time to season before you might see you know, things settle out in terms of you know, seller and buyer expectations you know, coming together here. Probably a bit early to make a call on how we see valuations changing in the M&A space. Thanks for the question, Rachel.
Your next question is from the line of Derik de Bruin from Bank of America. Your line's now open.
Hey. Just wanna ask some of the obligatory questions on supply chains and what are you sort of seeing. I think, you know, some of your peers have seen some headwinds, and just was sort of wondering what's that given your, you know, such a broad network. Just any sort of issues with suppliers, any issues or disruptions? Thank you.
Morning, Derik. Thanks for the question. We've mentioned, I think, probably since the beginning of the pandemic that the supply chains have been certainly strained. The hotspots, if you will, have probably moved around a bit, you know, over the course of the last couple of years. Certainly, transportation has been strained. Labor availability, particularly in the U.S., has been an issue. More recently, you know, things like just workforce availability due to, you know, COVID, for example, and then, you know, various raw material and product, you know, constraints that have, you know, ebbed and flowed across the period. I think, you know, in the Q4 , probably in aggregate, no really different impact on the business than what we had seen, you know, maybe in previous quarters.
Like I said, the hotspots probably have moved around a bit. You know, I think we said at the last call, you know, some of the single-use components, for example, are probably a bit more constrained at this stage than maybe they were earlier in the year and, you know, on the heels of really strong growth throughout the year. But in aggregate, I don't think we're seeing, you know, any more strain on the business than what we have been seeing. Certainly we look at our global manufacturing network, the global supply chain that we have certainly favors our current footprint in providing flexibility and optionality to our customers to keep supplies moving.
I think net-net, we're in pretty good shape here. The team does a lot of work, you know, to overcome a lot of the inefficiencies that are out there right now.
Great. Just one follow-up. What are you assuming for inflationary pressures into your margins in 2022? What are your pricing expectations? How are you helping to offset that? Are you able to pass price on to your customers?
Yeah. As Tom, I think, mentioned in his remarks, we're seeing inflation across most, you know, cost categories, whether that be, you know, wage and labor inflation for sure. Transportation costs are up pretty significantly. Product raw material costs are also up meaningfully. We do think, though, that our long-term margin expansion algorithm continues to hold even in this environment. Just for context, you know, our base business, as we've indicated before, should expand margins or should expect us to expand margins 50 basis points-100 basis points a year, by doing things like, you know, driving price to offset, you know, cost of goods sold, ongoing productivity initiatives. We certainly benefit from, you know, the mix impact in our business.
We saw that again in the Q4 with proprietary content, you know, significantly outgrowing our third-party content and, you know, the corresponding margin benefit that comes from that. We see 2022 shaping up no differently. We'll get the requisite 50 basis points- 100 basis points expansion on our base business, and then we will add to that the benefit from the three acquisitions that we closed last year. Between the two of them, you get a, you know, the guide that we have out of the gate here of more than 125 basis points. Pricing, as you mentioned, is going to be an important enabler for the expansion this year. Historically, about 1/3 of our revenue growth will come from pricing.
We're probably looking at, you know, something on the order of, I think 2x that this year, to account for the inflationary environment that we're seeing. You know, I don't think anybody's surprised by that, you know, given the macro environment and we've got good traction out of the gates on delivering that.
Thank you.
Once again, as a reminder, please limit yourselves to one question and one follow-up question only. Your next question is from the line of Vijay Kumar from Evercore ISI. Your line is now open.
Good morning, Michael and Tom. Thanks for taking my question. One maybe Tom for you, or perhaps Michael on the guidance here. Just to clarify your organic 4%-6%, that includes 200 basis points of FX headwinds. So ex that number is 6%-8% on an underlying basis. And if that's right, you know, your revenue guidance range, you know, that's a 200 basis points range, right? Your earnings, there's a 6-point delta. So maybe just walk us through on why your earnings range is what-
Yeah, I think your math is right. You know, our long-term growth model is 4%-6%. When you consider the impacts of, you know, COVID, we're still committing to that 4%-6% and covering, you know, those COVID headwinds that I mentioned in the call earlier. In terms of the flow through to EBITDA and to earnings per share, there's a number of dimensions that you need to give consideration to, including the environment that we're living with in the context of inflation, and getting the right assumptions on that, and also managing the supply chain aspects of the top line. I think both of those, we just wanna be ultra conservative in terms of the commitments that we're making.
When you look at what we've done in the last, you know, two or three years, you know, we've been, you know, pretty prudent at the outset, you know. As the years has gone on, we've, you know, shared the impacts of both the current quarter and expectations. I would expect that, you know, over the course of the year, you'll see, you know, ongoing improvement in the, EPS and, margin expectation.
Understood. One follow-up. Your margin expectations for the year, 125 basis points of expansion. Tom, can you talk what is base margin expansion versus M&A contribution? The reason I ask is, once these deals annualize, their LRP implies 100 basis points.
Yeah.
Fiscal targets. What's the visibility in the trip-related margin expansion?
Yeah. It's a great question. Just to remind you, in 2021, we had roughly 30 basis points impact from the M&A on the margin expansion. It's having its intended effect. When you look in the Q4 in particular, it was really strong in terms of the impact on the margin rate. As we go forward in planning, this is probably a factor for you to consider, the roughly 125 basis points. I think we consider that to be a floor. I would consider that a composition of our normal 50 basis points-100 basis points on the organic business. Call that 75.
You know, with the difference made up by M&A. I do think that, you know, we'll execute well and, you know, probably deliver higher than, you know, the floor there. As we go forward, you know, the business has more scale to it and has a higher proportion of, you know, proprietary content. That bodes well for our margins and our margin expansion. As we get into you know proprietary areas whether it's in you know biopharma production biomaterials some of the advanced technologies applied materials you know parts of the business with the growth that we expect and the investments that we're making both in capacity and we feel very confident in you know that long-term you know projection of margin rate expansion that you mentioned.
That's helpful, Tom. Thank you, guys.
Your next question is from the line of Dan Brennan from Cowen. Your line is now open.
Guys, good morning. Congrats on the quarter. I wanted to ask first question is on bioproduction. Assume like Q4 math implies like your base business in bioproduction could have grown like north of 20%. I'm just wondering, can you comment on like the base business, how it did in the Q4 ? I know you gave the order trend, I think on a year-over-year annual basis. Could you tell us what the order trend was in Q4? Related to that, you mentioned, you know, the single-use technology expansion overseas and in the U.S.. Just comment how that's gonna impact the growth rate of that subsegment.
A great place to start, Dan. Bioproduction is quite important obviously to our business model. It's the fastest growing part of our portfolio. The majority of that solution set is comprised of proprietary content, so it carries an important contribution to margin expansion as well. Just to perhaps put it in context, as you all know, biopharma is in aggregate a little bit more than 50% of our total revenue. Of that, you know, we have Masterflex on the books. You know, you're talking bioproduction being about 40% of our biopharma revenue overall. It's growing in importance to the business.
In the quarter, you know, we delivered another very strong, you know, performance from that platform. Well, more than 20% growth as you suggest. That really is comprised of vaccines continuing to run at a high level and kind of in line with expectations. We've had you know, an order book there that's been pretty robust and we've had great visibility too. But I do think it is important to recognize that the core business bioproduction platform, our order book also reflects that. You know, we're sitting with you know, approximately a year's worth of orders on the books for bioproduction. As we now you know, get a chance to see the Masterflex you know, order book, it's also similarly impressive.
The composition of that order book would reflect, you know, probably 80% of that being our core business. Whether that's in, you know, the historically strong, you know, monoclonal antibody modalities or, you know, more recently some of the traction we're getting in cell and gene therapy, the core business continues to be an exciting growth opportunity. I think, you know, long term, as we've indicated in some of our recent comments, you know, that part of the business should continue to grow, you know, mid-teens plus over the long term. We've probably been doing better than that more recently. Within bioproduction, single-use has been leading the way over the last couple of years, growing well more than 20% on a core basis.
We've invested significantly with expansions at virtually every one of our facilities. We've been, you know, pretty transparent about that. I think we, you know, more than doubled our footprint last year, our capacity to fuel the growth that we see in that part of the business. We're very well positioned. We'll continue to drive expansions in our, you know, excipient process ingredients capacities as well as single use. The core business is in great shape and performed, you know, again, quite strongly in the quarter.
Great. Thanks, Michael. Just as a related follow-up, which maybe you kind of answered it. Looking at the proprietary materials and consumables business, I know that's a really important driver of the gross margin. I know you guys talked about growth of double digits in the quarter. We were calculating north of 20%. Is that in the right zip code? How do we think about, like, that segment growing within your 2022 context, for-
An algorithm on the base business which yields a year of expansion. You know, there's a number of things that go into that, including mix. Historically, our proprietary content, our proprietary materials and consumables specifically, have grown at a rate of kind of 2x-3 x the third-party materials and consumables, which tend to be more oriented into the lab products area or the lab R&D space. So we're you know, benefiting from our exposure to the production space with our proprietary content. That you know, certainly held true in the quarter. We expanded proprietary content in the quarter double digits. Certainly you know, probably outperformed even our total to third party. You know, strong margin expansion in the quarter and certainly mix was an important driver.
Great. Thank you.
Your next question is from the line of Jack Meehan from Nephron Research. Your line is now open.
Thank you, and good morning. Wanted to just go back to M&A in the quarter. Is it possible to get a breakdown of the $92 million between the three deals you did last year? On Masterflex, is that still on track for $300 million of sales in 2022?
Yeah, Jack, I think when you look at the second part of your question there around the $300 million that we, you know, provided visibility to at the time that we did the deal, we're still very confident and probably more confident now that we've had the opportunity to have the business, you know, in our hands now for at least 90 days or so. Great order book, you know, great innovation pipeline and, you know, pretty good visibility to how that business is going to perform. You know, given the single-use focus in that business, it'll continue to perform in line, I think, with the growth that we've been seeing in our own single-use business.
Very confident in the outlook for that and certainly in line with our expectations. When you then kind of translate that backwards into the 2-month contribution we got from that business, it certainly came in line with our expectations in the quarter. You know, Ritter, you know, specifically, we saw some nice sequential Q3 to Q4 step up in that business. You know, RIM Bio obviously much came in line with our expectations, but you know, contributing at a much more modest level.
Got it. One more on bioprocessing, specifically related to the COVID vaccines. Could you call out just how the order book trends compared to the revenue growth in the quarter? I guess just it would be great to get your latest thoughts on the handoff to, you know, non-COVID, you know, over time and just kind of confidence in that.
If you look at the contribution that we had to the roughly $400 million of COVID tailwinds in the year, you know, approximately half of that came from COVID vaccines. Given the lead times for those products that go into those vaccines, you know, many of them, and not all of them, but you know, some of them are approaching a year's lead time just given some of the constraints that I highlighted in the supply chain. When we look ahead, we obviously have pretty clear line of sight to 2022 and the contributions that we anticipate getting from vaccines in this year. You know, I think as we look at it, we're expecting, you know, similar contributions this year as compared to last year from the vaccines.
I'd say on the, you know, your question on the comparison of the sales to the, you know, the order book. It, you know, the order book has continued to, you know, to grow significantly as we mentioned before. I mean, it's more. Just on biopharma production, it's nearly doubled since the beginning of the year. You know, as Michael mentioned, the proportion of those open orders related to COVID, you know, continues to be at, you know, less than 20% or so of it. So the, you know, the shift or the migration that you've referenced, Jack, I think Stands out, you know, pretty well, you know, in those dynamics.
Thank you, guys.
Your next question is from the line of Tejas Savant from Morgan Stanley. Your line's now open.
Hey, guys. Good morning, and thanks for the time here. Michael, one for you on China. Can you just talk a little bit about any sort of customer access issues and impacts you're seeing from the zero-tolerance COVID policy? And then thoughts on how long this stays in place given sort of, you know, the low level of natural immunity in a vaccine that hasn't worked as well as the mRNA modalities. And if and when, I mean, China decides to relax that policy, are you concerned at all that there might be a sort of disruption from a case surge or some such?
Yeah, thanks for the question. Good morning. I think it's probably first important to put China in context for our business. The entire region is you know just a bit over 5% of our revenue, and obviously China would be a subset of that. We're working off of a relatively small base, but we you know continue to generate some pretty impressive you know growth numbers off of that small base. The Masterflex acquisition will only help accelerate that, given the footprint of you know capabilities that business brings us in the region and the you know solution set that gives us for our customers. We're certainly excited about our positioning there.
You know, I think we have you know pretty optimistic outlook for that. In terms of, like, you know, just how we're interacting with our customers, you know, I don't know that China is any different for us than you know other regions other than, you know, we're obviously not able to you know send a lot of our you know experts from Europe or the U.S. into the region, at least to be there physically. You can kind of work around that with you know some of the video conferencing technologies. It was you know certainly timely that we had opened up a innovation center there just prior to the onset of the pandemic.
You know, as we do reviews on the utilization of that facility and the program, you know, pipeline that they're working on, a pretty impressive contribution coming from the work that our teams are doing there. Despite some of the restrictions that we face in China as well as around the world, you know, our teams will continue to find ways to interact and engage with our customers in meaningful ways and progress our pipelines and continue to support their efforts to bring critical therapies to the market.
Got it. That's helpful. A quick follow-up on education and government. I think, Tom, you mentioned expecting sort of low single-digit growth there in 2022. I was just curious as to what you're baking in into that assumption in terms of you know the NIH funding outlook, et cetera, being pretty robust. Obviously, there's the testing and PPE sort of COVID-related decline that you have to factor in as well. Curious as to get your take on that.
Yeah. Thanks, Tejas. No doubt the you know, the environment you know, is pretty strong in some of these new potential offshoots as NIH also look promising if they can ever get funded. The environment is definitely improving you know, for us, you know, from an education and government perspective. I don't think we consider it to be you know, all the way back, but we've seen gradual improvement. The way we're looking at 2022 is roughly mid-single-digit you know, kind of growth in the group in its entirety.
Very helpful. Thank you.
Your next question is from the line of Patrick Donnelly from Citi. Your line's now open.
Hey. Good morning, guys. Thanks for taking the questions. Maybe just one on the advanced tech and materials segment. You know, that continues to put up pretty strong results. Can you just talk about the outlook into 2022, your visibility? I know that tends to be a little shorter cycle than areas like bioproduction, where you talked about a year-long order book. But maybe just talk about the strength of the underlying market, where you're seeing pockets of growth there. Again, confidence and visibility into 2022 would be helpful.
Yeah. Thanks for the question, Patrick. Obviously, that part of our business is highly fragmented across patient areas, but it certainly, you know, we address a lot of the same workflows that we have in our life science businesses around, you know, testing, particularly around QA/QC work, as well as providing proprietary content and formulations to production environments and things like semiconductors, aerospace and defense, for example. As you suggest, you know, pretty strong finish to the year. You know, I think reflecting, you know, pretty strong PMI indices around the world. You know, pretty strong production backdrop that we're supporting there.
You know, I think pretty well noted, you know, some of the, you know, frothiness in markets like semiconductors, for example, with you know the demand that's you know driving is meaningful. I'd say, you know, pretty strong. You know, macro backdrop that's supporting pretty strong output across most, if not all of the application areas that we support. Visibility at least on you know the testing side of that business, the QA/QC work you know looks a lot like the rest of our business. Which is to say, you know, a lot of that is kind of book and ship type revenue, and so you could be talking days to a few weeks.
Certainly the production platforms in semi, for example, you know, we would have a much longer view into those trends. That, I think, you know, continues to support a pretty bullish outlook for the platform overall. When we look at it from a year-over-year perspective, you know, I think something in the mid-single digits, you know, feels right out of the gate here.
Okay, that's helpful. Just a housekeeping one for Tom. Some of the adjustments from the EBITDA side, it looked like corporate expense kind of jumped a little bit, which pushed EBITDA down. Can you just talk through, you know, what that was and I just wanted to clarify what was said there.
When we look at, you know, overall expense, you know, for the quarter in aggregate, you know, it actually came in a little bit better than in our expectations. I mean, the environment is, you know, not an easy one when it comes to, you know, inflation, you know, on both our, you know, salaries and but also when you look at, you know, some of the indirect spend that we would have in corporate. I don't think there's anything, you know, unusual or any trends or one-offs or anything in there. I think it's well managed and I think we've got a good view on it for next year as well.
Okay, thanks guys.
Your next question is from the line of Matt Sykes from Goldman Sachs. Your line's now open.
You're seeing. Just wondering, in terms of customer behavior, what you're seeing. Is there some additional stocking going on, or has the demand been pretty steady, you know, throughout last year and the beginning part of this year?
Thanks for the question. Demand, you know, continues to obviously be very, very strong. You know, supply chains continue to be, you know, relatively tight to keep up with all of the demand. There's really not a lot of excess capacity in the system to support, you know, incremental buying or inventory. You know, it's a little bit unique in that, you know, there's, you know, shelf life considerations and storage considerations for the sensitive and regulated materials that we're providing. Demand patterns have been, you know, strong and lead times for our materials, you know, have been extended as we've moved through the year.
You know, kind of transitory or incremental buying, you know, within a relatively tight timeline, it really isn't, you know, something that can be accommodated easily. You know, I think the demand that we're servicing is pretty well in line with, you know, production levels of our customers.
Great. Thanks for that. Just one more on just China, EMEA. You know, obviously, you've mentioned before you want to increase exposure there. You've made an acquisition in RIM Bio. But you also mentioned that Masterflex gives you some exposure there. As you kind of look at building out your exposure there inorganically, in terms of your pipeline, is it sort of more of a local company that you'd be looking at? Or do you think you can get exposure inorganically?
Yeah, thanks for giving me the opportunity to talk about our strategy. When we look at the way we approach, you know, serving these markets, we take a workflow-driven approach to this and looking at what content and solutions that we need to provide. You know, we then go to work to build a compelling offering to serve our customers. When we look at the core workflows in bioproduction, for example, that we're looking to take hold in or participate in, particularly in a place like China, you know, you look at cell and gene therapy as an area that they're moving aggressively in.
You know, some of the tech transfers on monoclonals, for example, we're pretty well positioned. You know, up until now, with demand levels where they have been for production in China, we've been able to, you know, satisfy the requirements by, you know, importing product from, you know, our sites in Europe or the Americas. I think over time, the strategy has always been to localize to help shorten supply chain, the supply for our customers and make it a bit more agile.
Certainly RIM Bio gives us a, you know, an initial footprint, you know, in that direction, and we'll continue to look for opportunities to, whether it's inorganically or organically, you know, continue to add capacity in the region in line with, you know, kind of the ramp of demand in the region. It'll be a combination. You know, a lot of these capabilities don't exist locally, so, you know, if you can find, you know, things that will, you know, allow us to execute our strategy, we'd certainly be interested. But, we're also, you know, cognizant that some of these things might have to be built, you know, greenfield, you know, by our own investments, organically. It'll be a mix.
Great. Thank you.
Your next question is from the line of Dan Leonard from Wells Fargo. Your line is now open.
Thank you and good morning. A quick clarification on bioproduction and then a follow-up on that. In the 70% growth in your backlog, I'm curious if that includes Masterflex or is that an organic number? On medical-grade silicone, you called out the growth there. Just wondering, how big is that business now and what's the growth outlook going forward? Thank you.
I'll take them in reverse order for you. If you look at our biomaterials platform, which is an area of innovation that is in that part of our business, we've got a very rich and deep pipeline of opportunities that we continue to progress with our customers. The growth outlook there is significant. When I look at the contribution of you know that business on a full year basis, it was a very nice year for that part of our business. You know, rebounding strongly from you know well into the double digits you know against a relatively you know weak comparison in 2020, given some of the COVID-related restrictions.
You know, strong contribution both from a top line as well as you know, margin impact on our business. The revenue from that platform gets reported in our healthcare segment. As we've talked you know before, that's about overall about 10% of our revenue. Roughly you know, 50% of that platform would be materials platform. Your second question around the growth of the order book. As we have been you know anchoring numbers you know throughout the year here, what Tom shared with you would reflect just our organic order book. We'll start to add in the other order books into those numbers as they become part of our organic story at the 12-month milestone. As of now, as when we've quoted here, would just be on an organic basis. The order book for Masterflex is indeed significant.
Thanks, Michael.
This concludes our question and answer session. I will hand it back to Mr. Michael Stubblefield for closing remarks.
Yeah. Thank you. Certainly thank you all for participating in the call today. You know, I think I would like to end here by just reiterating my confidence in where we're at here, you know, heading into 2022. We're extremely well positioned to deliver another very strong year with strong growth, margin expansions and cash flows. Our end markets are strong and we start the year with significant momentum. I'm quite excited about the jumping off point. I also wanna express my continued gratitude for the ongoing efforts of our associates around the world who are living our values every day and setting science in motion to create a better world. It's gonna be another great year. I'm excited about what lies ahead for Avantor and look forward to updating you when we meet next. Until then, take care and be safe everyone.
With that, this concludes today's conference call. Thank you for attending. You may now disconnect.