Hello, everyone. This is Rachel Vatnsdal from the Life Science Tools and Diagnostics team here at JP Morgan. I'm joined on stage with the Avantor management team. As a reminder, this will be a 40-minute session. The first half will be slides and prepared remarks, followed by Q&A. With that, I will hand it off to Michael. Michael.
Excellent. Thank you, Rachel, and good morning, everyone. Really happy to be with you here in San Francisco to kick off 2025. As you can see, I'm joined on stage here by our CFO, Brent Jones. I also would recognize a couple of other members of my management team here in the audience. We have Ally Hosak, our head of communications, as well as Kitty Sahin, who leads our corporate development activities. Really appreciate you both being here. Before we get into our presentation, my GC ensures that I cover our disclaimer here quickly with you. I would just remind you that we are making some forward-looking statements today that are only accurate as of today, and we have no obligation to update those as we move forward. And the presentation will also include various non-GAAP financial measures and the reconciliation of these measures.
You can find that on our IR website. So with that, let's go ahead and get started. I've had the privilege of running this platform over the last decade plus, and the platform has evolved a lot. And as we sit here today, our ability to support our customers at every step of the scientific journey has positioned us as a leader in the life science tools space. We run our business in two segments that are very closely aligned with our customers' needs. Firstly, in our lab segment, which comprises about two-thirds of our revenue, we provide a comprehensive set of products and services to scientists and technicians in biopharma research, in the academic environment, in various diagnostic labs, as well as in QC activities associated with production activities across a whole host of end markets.
And of course, that product portfolio would include things like chemicals and reagents, various consumables, glassware, plasticware, a whole host of equipment and instruments. Essentially, everything a scientist would need to derive a precise analytical result. We deliver that through a very robust supply chain in more than 300,000 labs around the world in 180 countries. The other segment that we have at Avantor is aligned with our customers' needs in the production environment. And it's in this segment where we leverage our deep material science capabilities to customize ultra-high purity materials that ultimately get specced into our customers' highly regulated production platforms. And this would include things like bioprocessing. Of course, it would include the work that we do to support our customers' medical implant devices, as well as a whole host of applications in the advanced technology space, including aerospace and defense.
This part of our platform comprises roughly a third of our revenue, but importantly, it's roughly half of our profitability. Now, each of these two segments on their own is quite attractive businesses in their own right. But the real secret sauce and the real key to our business here is how we're able to leverage our unparalleled customer access in the lab and the access to this early-phase research and development and design activities to be able to seed our custom proprietary materials in early-phase discovery and development activities so we can ultimately earn those specifications to support our customers' needs throughout this workflow and ultimately in their production environment. There's a lot to like about our platform. I've tried to capture a few of my favorite attributes of the business here on this slide, starting at the top with really attractive end market exposure.
We serve industries that are characterized by robust organic growth, headlined by more than 60% of our revenues coming from the biopharma and healthcare space, and where we play, we win. We are a leader in virtually everything we do. If you look at what we do in the lab, we're the number one or number two player, depending on which market we're in. For example, in Europe, our channel into the lab there is by far and away the largest, and we deepen our position with our customers by deploying more than 2,500 on-site service associates that give us really privileged access to our customers and really important insights into the challenges that they're working on, and that presence that we have is more than 2x anybody else in the space.
If we look at bioprocessing, we're the leading supplier of materials into the monoclonal antibody workflows, as well as the other emerging modalities, and in the medical implant space, if silicone is on a device that's implanted in the body, very, very high chance that it's our material. We're by far and away the leader in that space. Now, if we kind of ignore the inventory dynamics that have plagued the industry over the last couple of years, perhaps one of the more important aspects of this business is the fact that more than 85% of our revenue is consumables and leads to a highly recurring revenue profile, and given the types of applications that we're supporting in a really heavily regulated environment, virtually all of the proprietary solutions that we provide into our production customers are specced into their process, covered by the regulatory filings.
And so when you put that all together, consumables and specification-driven creates a really sticky revenue profile. Now, one of the hallmarks of the business is our ability to generate cash. This platform generates a tremendous amount of cash. And in fact, we are the benchmark investing class in terms of free cash flow conversion. The chart that you see here covers free cash flow conversion for us on the left at well over 100%, as well as some of the other leading players in our space over the last couple of years. And when I look at our ability to convert cash, really two key drivers for that. One, it's a capital-light model. We require roughly 1%-2% of revenues in order to sustain the viability of our operations and to drive the growth profile of our business.
Leveraging the Avantor Business System, we have a really disciplined approach to how we manage working capital. If you look at our results there over the last couple of years, really terrific performance by the team. Of course, the generation of all this cash really supports our deleveraging strategy and will ultimately give us capital deployment flexibility as we move forward. We'll talk more about that as we get into the presentation. One of the other important aspects of our model is our strong leadership position in bioprocessing. When I look at our bioprocessing platform, this covers roughly two-thirds of the revenue that's reported in our Bioscience Production segment. It reflects the content that we're providing into commercialized therapies across monoclonal antibodies, of course, but as well as the emerging therapies in cell and gene therapy, mRNA, and others.
There's a lot to like about this end market. The fundamentals, despite the headwinds in the industry over the last couple of years, have been really strong. Patient demand, of course, is there. The pipelines have been really strong. The number of approvals coming out of the FDA process have been at or near record levels for many years now. And you have this next wave of technologies that are being developed. Lots of exciting advancements in the area of mAbs, which is kind of the workhorse of this end market. But when you look at what's going on from a biosimilar perspective, the antibody-drug conjugates, bispecific antibodies, these will unlock some really powerful treatments for patients that are so desperately in need of these new therapies. We have a really comprehensive portfolio here. We probably have more specifications on these workflows than virtually anybody out there.
We're going to have content that's specced into the upstream workflows, process ingredients that enable the functionality of the cell culture media, really robust downstream offering of chromatography resins, buffers. We do a lot of viral clearance activities with our ultra-high purity chemicals portfolio, and we have the leading portfolio of excipients that ultimately envelop the protein, protect it, and ultimately get injected into the patient. And we're going to connect all of these unit operations with the only end-to-end aseptic fluid management solution in the industry, starting with our peristaltic pumping technologies, but as well as a whole host of tubing and manifold and assembling capabilities, mixing bags, and other single-use solutions that allow our customers to move materials in and out of this process and through the process in an aseptic way.
Now, if you look at a couple of the statistics on this slide, we've got great penetration today. And you've maybe heard us historically talk about being specced into 85% of the commercialized biologics that are on the market today, which certainly does reflect a strong position. And that would include all of the key platforms and mAbs, as well as gene therapies. Now, we're, of course, excited about the position that we have, but I'm even more excited as we look into the future, really leveraging the investments that we've made in our innovation platforms, how we've expanded our portfolio, how we've improved our go-to-market to leverage our access into our customers in the lab.
And if we look at the projections for all the various therapies that are in the pipeline all the way out to 2030 and look at that through our filter that through the work that we're doing with our customers, we see that we are specced into more than 90% of the top 50 biologics out in 2030. And more importantly, we're in all five of the top five projected blockbusters in that time period. And so the business is strong today. The investments that we've made will make it even stronger going forward. And when I look at what that means ultimately from a growth standpoint, this will enable us to continue to drive outperformance on this platform on top of robust long-term market growth expectations of at least 10%.
Given that we're putting more content on every therapy than we ever have before, together you get a recipe for continued share gains in this space. In December of 2023, we held an investor day where we launched our new operating model. We outlined a number of benefits that we expected to get from that resegmentation that we've implemented. We're now a year plus into that implementation. Having all that now fully implemented, I'm happy to report as we stand here today that we are truly seeing the benefits that we had anticipated when we rolled out this new operating model. Certainly, we were looking to align this with our customers' needs in the lab and in the production environment to bring more focus to our business and to drive better alignment with our customers' activities in these areas.
You can look at some of the proof points, whether it be another year of best-in-class performance in our bioprocessing business, better aligned new product introduction roadmaps with our customers, particularly in the lab, that we announced the divestiture of our Clinical Services assets earlier in the year. That was a direct outcome of the work that we did in standing up these two segments and enhancing the focus and realizing that that particular asset didn't really fit either end of what we were trying to accomplish here. When we announced the new operating model, we also said in a very unique way, it unlocked significant cost savings. We outlined a program to take out over $300 million of cost and EBITDA run rate by the end of 2026. We set a target to achieve $75 million of that in 2024.
As you've heard, we've updated you on our earnings calls throughout the year. We did significantly better than that. We'll give you the final number when we do our 4Q call here in early February. We're well more than halfway through that program, great momentum for 2025 and 2026, and certainly well positioned to drive really strong incremental margins as you put that together with an improving market backdrop. Now, just quickly shifting focus a bit to 2025, I want to cover kind of three priorities that we're focused on at Avantor. Clearly, looking to drive and enhance our long-term growth strategy. We're going to continue to focus on driving our margins, and our capital deployment priorities will continue to take priority. Let me double-click on each of these for a minute.
Now, when I think about our growth strategy, we have very specific levers that we're driving in both our lab segment as well as in our production segment. And in the lab segment, it's all about the focus on the customer and helping them be more efficient and effective in driving their activities. And we've applied in a very deliberate way significant commercial intensity to help our customers be more successful. And so as I look into 2025 and the agenda that we have teed up here, there are two or three areas specifically that we're focused on to really enhance the customer experience in the laboratory environment. And it all begins with the portfolio and making sure that we have the right products and services that we can put in front of our customers to be able to help them solve the leading problems that they're working on.
And so a lot of work here around delivering innovation, and whether that be through tapping into the innovations from our third-party suppliers or developing in our own R&D centers, a lot of work on making sure that we have the right product content. One of the mantras within our customer base is this notion of returning time to the scientists and giving them back as much time as possible so they can focus on driving the breakthrough therapies that they're working on. And we do this at Avantor through a whole host of offerings. I mentioned earlier our 2,500-plus on-site associates that take a lot of work off the plate of our customers and into our workflows, and we can do that at scale and more efficiently and more effectively than our customers can in most cases.
The digital offerings that we have, whether it be making sure that the transaction that they do with us is as efficient as possible, being able to find what they need on our platform and to facilitate that checkout and delivery with as few clicks and as little time as possible is important. And how much of that can you automate through deployment of smart AI-driven digital technologies? And so that's been a big focus over the last years. We've made tremendous progress. We've rolled out a lot of new solutions. We're in the midst of rolling out a new, more personalized e-commerce platform that in the early days of that rollout has proven to be quite beneficial.
And then the last element of how we make that customer experience really streamlined for our customers is making sure that when they place an order with us, this is a same-day, next-day type model that they expect a lot of agility and flexibility with, having a supply chain that can back that. And so lots of investments in automation, robotics to build in resiliency and redundancy into our supply chain, but also offer our customers the flexibility that they need, as well as give us the credibility that when we give you a date, that we can actually hit that. And we think that with the investments that we're making in that regard and the focus we have in 2025, that this will be a real differentiator for us. Moving to our Bioscience Production platform, again, similarly, we're focused on driving growth in this space.
And with our production customers, whether that be in bioprocessing or whether that be in our medical implants business, it's all about innovation and making sure that we can deliver innovative technologies to our customers to help them solve their most pressing challenges. And what's interesting, when I think about how our portfolio has evolved in the bioprocessing space, it's gone from just being able to offer point solutions or standalone ingredients or excipients to now we have the breadth of a portfolio where we can now start to bring innovative integrated solutions and systems to our customers, which is really helping solve some really interesting challenges there. We're very well established with a really strong portfolio in the legacy monoclonal antibody portfolio or platforms and workflows.
There's a lot of work going on from an innovation standpoint to support our customers who are working on emerging therapies in these new modalities. And we've heavily invested in the infrastructure to be able to do that. And then the last area that I would point out here is really in the medical implant area. This is a really unique part of our business where we have a really differentiated platform with a really unique technology to be able to produce ultra-high purity formulations that end up in the patient's body for an extended period of time. And at any one time, we have 500, 600, 700 innovation projects underway with our customers to help drive that technology forward. So in this space, it's all about innovation.
We're continuing to invest in not only the infrastructure but in the scientific capability to be able to make sure that we can bring forward the right solutions for our customers. The second priority I had for 2025 was around driving margin expansion through the cost transformation initiative. I covered a lot of the numbers here earlier around the strong delivery and strong execution under Brent's leadership in 2024. We're well ahead of schedule. We're more than halfway through the program. And we have a really clear line of sight to what we need to do to finish this program off. We'll make another significant step forward in 2025, and we'll share details with you on that quantum when we release our full-year guidance here in another few weeks. But we've made significant progress across all four key pillars of the program.
As I said before, this will not only help us in the short run here with margin expansion, which you've seen in our 2024 numbers, but together with the market recovery, the return of the proprietary mix benefits we get from the production segments growing again, this should lead to really, really strong incremental margins. Lastly, focusing on our capital deployment priorities, we've been very clear and maniacally focused over the last few years on strengthening our balance sheet, deleveraging our position there, continuing to reduce interest expense. We've paid down well over $2 billion of debt over the last couple of years. At the end of the third quarter, we highlighted by applying the proceeds from our Clinical Services divestiture that we would be somewhere around 3.4 times levered. We'll see where we land.
Hopefully, we can do a little bit better than that there by the end of the year, which means then we're kind of knocking on the door of our long-term target of three times. And we get asked a bit about what does that target mean for us. And we just reiterate here in this forum that for us, that's the ceiling. And so it's not a bright line that once we get to three times that we'll switch the engine to now deploying capital towards M&A. We want to be comfortably below that to have the flexibility to just do M&A in the ordinary course, which will continue to be a priority.
But I think the way we think about this, particularly in this macro environment, we'll take a very shareholder value-driven approach to how we deploy capital once we have a bit more flexibility and whether that gives our shareholders more value by returning capital to them or driving bolt-ons and tuck-ins to bring more technology and proprietary content to the platform. We'll continue to keep that in front of us and balance that equation. But in the short term, we'll continue to pay down debt. And at some point in 2025, we'll probably have a bit more flexibility than what we've had over the last few years. Before we sit down and take the questions here, we'll just close out with a few thoughts on the year ahead.
Based on our experience in 2024, where we've seen just gradual improvements in our end markets, I think that we would expect that momentum and trajectory to continue. We're certainly encouraged by what we've seen as we've moved throughout 2024. We'll share with you our 4Q results here in a few weeks. But we highlighted on our third quarter call that we expected mid to high single-digits growth for our bioprocessing platform, and that would certainly provide a great jumping-off point for 2025. It's not lost on us that there are a number of macro variables that are swirling in the environment, whether that be tariffs or interest rates, various legislative agendas, none of which we can control and none of which the outcome is certain.
As you would expect, we do a tremendous amount of planning and focus on the things that we can control, continuing to improve our supply chain resiliency and flexibility. I think we have great confidence that with the extensive footprint and capabilities that we have, as always, we should be able to navigate through whatever comes our way. We'll continue to focus on driving our cost transformation. We've got another great year of activities here that will bring significant value. Strong free cash flow conversion will continue, which should allow us to pay down debt at an accelerated rate. As I look at our portfolio of debt, I would anticipate that our interest costs would be at least $30 million lower in 2025.
And then over the long term, as we outlined at our investor day, the financial targets we've set for the business, mid-single-digit growth, 50-100 basis points of ongoing margin expansion, double-digit EPS growth, and continued leadership on free cash flow conversion. So conviction remains super high about our business model. We're extremely well positioned. Market conditions are certainly improving and returning into our favor. I think we've got a lot of momentum coming out of 2024, and I'm really looking forward to another year of strong execution in the year ahead. So with that, I'll take a seat here and we'll let Rachel ask us some questions. Thank you.
Perfect. Thank you, Michael. So first, I just wanted to start off saying, obviously, the life science tools industry over the last few years has been very dynamic and volatile. So as you take a step back, can you just highlight for us why do you think the underlying market is still attractive that you play in over the long term? And then what reinforces your confidence in that long-term trajectory of the industry and Avantor's long-term targets of mid-single-digit growth?
Yeah. Thank you, Rachel, for the question and the setup there. Look, these end markets are characterized by resilient and robust organic growth. So just on their face, they're attractive places to be. But as a tools player, we do benefit from this picks and shovels model where we're going to be lined up behind every therapy. And so we certainly benefit from this diversified exposure to all discoveries. And innovation is important and ultimately rewarded in this space. And when I look at the science that our customers are working on, I think the promise of what they're doing is exciting, and it creates a great backdrop for all of us to operate in. Now, when I look at specifically Avantor's positioning within this, the space is extremely fragmented. And so a scale player like us certainly gets rewarded for what we're able to do.
As I highlighted in my presentation, there's a lot to like about our business model. I really like a consumables-driven portfolio, which I think the data has been pretty compelling. Over a long period of time, a consumables portfolio should outperform an equipment and instrument portfolio by multiple hundred basis points. We benefit from the specification-driven model in a highly, highly regulated end market. I like our exposure here with more than 60% of our revenue in biopharma and healthcare. As these markets recover, we're extremely well positioned. Ultimately, all that leads to a high confidence in being able to deliver on our long-term algorithm.
At our investor day, I think we tried to simplify the model a bit and say, "Listen, in the lab segment, you should think about that as low- to mid-single-digit growth complemented by high single-digit growth in the production environment," and put those together and you're well within this long-term target of mid-single-digit growth.
Perfect. Then I just wanted to ask about some of the recent news that we have regarding the new administration. Obviously, we had the election a few months ago. I think that's caused some concern for broader healthcare stocks, but really specifically life science tools as well, just given potential impacts from things like tariffs, but also exposure to vaccines, pharma biotech spending in general going forward. So can you unpack that for us? How are you viewing the new administration impacting Avantor's business?
Yeah. So as I said in my presentation, we're aware of all these factors. It's certainly front and center, and it's getting a lot of coverage. Unfortunately, the macro is light on any specificity in terms of what ultimately is going to happen here. And a lot of it just at the moment tends to be speculation, which we can't really control. So for us, it's doubling down on the things that we can control, including the investments we're making in our supply chain and working very, very closely with our customers to kind of work through the various scenarios and how we can best support them through whatever comes our way here. Stepping back from that, though, if you look at the sentiment from our customers, the conversations with our customers, it's very different. This isn't top of mind for most of our customers.
They continue to be quite positive about the science that they're working on, the innovations that are driving their business models. And that's tending to be where the focus is, how we can continue to support them in their efforts to bring these breakthrough therapies to market. So we're aware of it. I think we're well positioned to navigate through whatever comes our way. But at the moment, there's very little of that that's actionable.
For sure. Maybe sticking on the topic of geopolitical trends, we actually had some breaking news this morning. The U.S. Commerce noted that they are going to be imposing new export controls on biotech and lab equipment exports to China due to national security concerns. We even had some updates come on the article while we were on stage here stating that it's likely going to be towards flow cytometry and mass spec sales to China. So obviously, you guys have some unique exposure in regards to China there. So can you walk us through how are you thinking about that? Appreciate it. It's been on for like two hours at this point. But any idea on what is your actual exposure on U.S. equipment being sold into China?
Yeah. Thanks for the question. Obviously, it is breaking news this morning, and so we don't have a deep analysis on ultimately what they're trying to accomplish with this. But presuming that it is in line with those types of equipment going into China, we have very modest exposure in China. Our entire Asia exposure is only about 5% of our revenues, and China is a small subset of that. So certainly in this environment, this has been one of the benefits of our model. Then the other thing, of course, is more than 85% of our revenues are consumables-driven. We have modest exposure to equipment and instruments. And if it was limited to the types of instruments that you mentioned, those wouldn't be in our portfolio. So in that scenario, it would have minimal to no effect on our business.
But of course, we'll take the time here as we learn more about what they're trying to accomplish here and let you know what we see here. But just based on the preliminary analysis, it doesn't look like it would impact our business in any meaningful way.
Perfect. That's helpful. Maybe just capital allocation. You talked a little bit about your leverage targets during the presentation. Obviously, you're getting closer to those targets. So maybe Brent or Michael, could you guys walk us through what are you seeing in terms of Avantor being able to return to the table for capital deployment? And how are you thinking specifically about buybacks versus M&A? And if you choose to do M&A, any targets that you would be interested in building out?
I mean, look, the acceleration of free cash flow has really accelerated our deleveraging and getting us there. We noted on the Q3 call and Michael noted, we expect to end the year at 3.4 times. Or as he said there, maybe we'll be a little bit better on that side. I find in dialogues, people will say, "Thank you." People say, "Okay, you're at three times, something's going to happen." As Michael emphasized there, we need to be sustainably below three times there. So it's not we hit three times, we immediately go out there. And Michael used a slide that we'd had in the investor day talking. The whole panoply of capital deployment is really available here. I mean, certainly the ones that people find most attractive are M&A because you get compound earnings against that when you do that correctly.
The company, both Avantor Legacy and VWR, had a long history of really, really accretive, really valuable M&A that way. But at the end of the day, we want value maximization. We're going to look at the share price. We may return capital that way. I would say everything will be on the table, and we'll be very open with what our plans are when we get to that point.
Perfect. That's helpful. Appreciate that we're getting 2025 guidance in a few weeks here, but can you just walk investors through what are the puts and takes that we should be aware of as we think about 2025?
Yeah. I mean, look, as we come into guidance there, it's everything you'd expect. What is the state of the order rates and the order books coming into the end of the year, the business momentum broadly, execution on pricing? Again, not giving guidance and not talking about Q4, but through Q3, we had a lab business that's been very, very stable. We're kind of maybe not a snapback, but very nice grinding recovery in bioprocessing there. So kind of setting you up with the right kind of momentum you'd want. I think the other puts and takes are we will have the impact of the Clinical Services divestiture. We gave some guidance on that in Q3. We'll be more specific on what that means on the walks for full year 2025.
And then not unlike a lot of our other peers here, we do have exposure to the Euro /Dollar. That will be a modest headwind, nothing unusual versus anybody else, but we'll be more precise when we look at what the rates for the year intend to or seem to be.
Then just sticking on that topic of 2025, one of the targets that you laid out at your analyst day last year was exiting 2025 at a roughly 20% adjusted EBITDA margin. Obviously, you announced your Clinical Services divestment since then. So how should we be thinking about that exit rate for 2025? And has anything changed in terms of the range of scenarios there?
I mean, again, put out the big flashing sign, no guidance right now on that. A statement we've made or something we've said over time there is we can't just get there with transformation. You need cooperation on the commercial side in the business to get to 20%. But we've done really good self-help with the transformation. That's taken us a long way there. You've seen the impacts of that. We do need to account for Clinical Services on a full year basis. That's about 40 basis points. So when we get into the guidance, we'll give a sense of that. But as I think about what we've been doing, Michael talked about the term I love, commercial intensity. We're driving the commercial intensity. We've really good work on pricing execution. So we're doing what we can to control that piece of the commercial.
And then we've really doubled down on the self-help. So we're putting ourselves in the right position for that. And look, that's just that target also. Part of our algorithm is ongoing margin expansion. So as we like saying, margin improvement's a journey, not a destination.
For sure. Maybe shifting into some of the current trends that you guys are seeing across your customer groups. Obviously, pharma, biotech have been pretty dynamic the last few years. You've started to see some stability in a few of these pockets. So I was wondering if you could walk us through what are you seeing across both pharma and biotech at this point? Also, we had some of your CRO players yesterday sound a little bit negative in terms of preclinical dynamics. So anything you guys are seeing there as well?
Yeah. So maybe let me take that one and talk specifically about our exposure to biopharma and biotech in the lab environment specifically. We are a bit more over-indexed to preclinical activities than we are some of the later-stage activities. And so in our business, we actually started to see some of the pipeline reprioritization that has driven some of the trends in this space as early as the second quarter of 2023. And it was falling throughout the year and reached a point of stability as we headed into 2024. And we saw a gradual improvement as we moved through the year. And that improvement was driven by a number of the larger customers having already gotten through that reprioritization, starting to now plow back in a pretty meaningful way into their early-stage activities.
We see many examples of large customers that we've been growing with over the last few quarters, while there's still a few on the tail that are still in the middle of that reprioritization. The other piece of this, of course, is the biotech space. That's probably 10% of our biopharma exposure or so is in the biotech space. Funding has been a real concern. At a headline level, funding was stronger in 2024 than in 2023. There was still some sequential weakness as you moved quarter to quarter there. We'd like to see a more robust funding environment to spur the kind of activity that we've come to enjoy in that space over a longer period of time.
But as we highlighted in the third quarter, there are starting to be some green shoots here and some of that funding starting to materialize in new activities, particularly with the more established biotechs who have maybe multiple programs in flight. We're starting to see growth with that segment again. While the true startup, new to the world, biotech, we still see struggling to get the kind of funding that we have seen them enjoy historically. So still some work to do on that piece of it. But net-net, you put all that together, we see in that space, 2024 was a year of stability for us, and it started to improve as we moved through the year. So that'll be the backdrop of which we enter 2025 with.
Perfect. Then just maybe a question on bioprocessing. Obviously, you've been seeing some gradual improvement in 2024. And some investors are expecting more of a pronounced inflection when we look into 2025. So how are you thinking about the pacing and just the trajectory of what the rest of this recovery should look like in bioprocessing? And what data points or internal indicators do you have to support this view?
Yeah. So I think we all were at least hoping for a more pronounced step back in that end market. And it was our lived experience in 2024 that it was one of more gradual improvement, which I guess in the end may be more resilient and more robust, perhaps. So it's taken us longer to get there. But I think the trajectory has been really encouraging. We outperformed our expectations in every quarter in 2024. Order rates continued to improve as we moved through the year. And with our lead time in our portfolio, which is roughly two to three months, we were starting to see real-time that conversion of a growing order book into revenue.
And we saw that steady improvement each quarter in our bioprocessing growth rates and set the expectation that we should do mid to high single digits in the fourth quarter, which should provide a really meaningful jump-off point as we head into 2025. The end market fundamentals have been really strong there. We've talked a lot about destocking of the consumables in various categories, particularly some of the single-use components. We've seen virtually all of that kind of work through the system. So I don't think that's going to be a big headwind that we'll have to deal with in 2025. Our customers' production levels are better starting to match their demand levels with their patients, which is encouraging. And the rate of new therapies coming into the market is also encouraging.
So I think strong, favorable macro backdrop for this space should lead to, in our view, continued improvement in this space. We're getting close. For us, we view this as a double-digit platform. And if we can do mid to high single digits in Q4, we're getting close.
Perfect. Maybe the last 30 seconds or so, Michael, just what do you think is the most underappreciated aspect of the Avantor story?
Look, it's a really terrific platform. We're incredibly well-positioned in our markets. It's an innovation-driven model that will unlock significant growth over the long term, and there's a margin expansion story here and an EPS growth driven in part by best-in-class free cash flow conversion that I think make this a really attractive platform, not just today, but certainly over the long term, so thank you, Rachel.
And with that, we are out of time. Michael, Brent, thank you so much for joining us today.
Thank you.
Good to see you.