Q4 2019 Earnings Call
Good morning, My name is Crystal and I would be a conference facilitator today I.
At this time I would like to welcome everyone to the Hertz Corporation fourth quarter 2019 earnings results Conference call.
All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be question and answer session. If he would like to ask a question during that time simply press Star then the number one when you were telephone keypad.
If he would like to withdraw your question. Please press the pound key on your telephone keypad I will now turn the call over to Mr., Matt Good deals Vice President of Investor Relations Mr. could you know please go ahead.
Thanks, Chris Good morning, everyone and thanks for joining us on the call. It was today are telling Joyce, our president and Chief Executive Officer, and outgrew, our executive Vice President and Chief Financial Officer.
I'd like to point out that our earnings release, a slide presentation. So many today's call and the reconciliations and other information required by FCC regulation G.
Need any non-GAAP financial measures provided during the call all available on the Investor section for website Www Dot Danaher dotcom part of the Hattie quarterly earnings.
The audio portion of this call will be archived on the Investor section or website later today or that events <unk> presentation I want to meet archive until our next.
A replay of this call will also be available until February 13 2012.
During the presentation, we will describe certainly more significant factors that impacted year over year before.
The supplemental materials describe additional factors that impacted year over year.
Unless otherwise noted all references in these remarks and supplemental materials to company specific financial metrics referred to results from continuing operation in relate to the fourth quarter of accounting team and all references to period to period increases or decreases in financial metrics our year over year.
All references to individual operating company operating margins exclude the impact of intangible amortization.
We also refer you to our form 8-K filing dated December 18th 2019 for pro forma information reflected universe historical performance on a basis exclude investors results of operations.
They also describes certain products in devices, which have application submitted and pending for certain regulatory approvals are only available in certain markets markets.
During the call will make forward looking statements within the meaning of the federal securities laws, including statements regarding events or developments that we believe it or anticipate floor will or may occur in future.
These forward looking statements are subject to a number of risks and uncertainties equally no set forth in or FCC filings and actual results may differ materially from any forward looking statements we make today.
These forward looking statements speak only as of the date. They are made we do not assume any obligation to update any forward looking statements, except as required by law.
With that I'd like to turn the call over time.
Thanks, Matt.
Good morning, everyone.
Our fourth quarter results wrapped up a tremendous 2019 for Dan or.
The full year, we delivered 6% core revenue growth.
As we continued to capture market share and many of our businesses through new product innovation and enhance commercial execution.
We also delivered 100 basis points of core operating margin expansion.
$3 billion, a free cash flow.
But the numbers only tell part of Danahers transformative story in 2019.
We continue to evolve into a higher growth company as we announced the GE bio pharma acquisition and completed the IPO and subsequent split off of our dental segment into an independent publicly traded company called in Vista.
GE bio pharma, which will be called site t., but after we close at a very good 2019 as core revenue growth of approximately 10% accelerated relative to the business is performance over the past couple of years.
We continue to be very impressed with this talented team an extraordinary group of passionate and highly engaged associates provide customers with innovative solutions used in the development and production a bio pharmaceutical drugs.
During the fourth quarter, we achieved several important milestones related to the acquisition, which we continue to expect to close in the first quarter of this year.
First as part of the regulatory approval process.
We announced that we signed an agreement to sell certain of our businesses just sartorius.
The annual revenue to be divested is approximately $170 million and consists of businesses that are currently part of our life science platform.
Secondly, we received conditional clearance for the acquisition from the European Commission in December .
While the timing around meeting certain closing conditions can be uncertain. We continue to work constructively with the regulators and remain encouraged by the progress we're making.
And lastly, we raised approximately $4 billion of U.S. denominated debt in October , which essentially completes the financing needed to fund the acquisition.
Overall financing costs have come in materially better than expected as we were able to take advantage of favorable credit market conditions, particularly in Europe .
When we announced the transaction last year, we anticipated financing $18 billion of debt and cash at a blended interest rate of approximately 2.75%.
Resulting in a toll annual interest costs of $500 million.
Actual blended interest rate on this 18 billion will be less than 1% for a total annual interest costs of $150 million.
As a result, we now believe GE biopharma will be approximately 60 cents accretive to non-GAAP adjusted diluted net earnings per share in 2020.
This assumes an end of first quarter close and includes the impact of the lower financing cost and the business is better than 2019 core revenue growth.
Partially offset by the lost earnings related to the pending divestitures.
Well not included in our formal 2020 guidance. We wanted to provide you an update given these recent developments.
Now turning to our fourth quarter results.
Sales grew 5.5% to 4.9 billion as the impact of foreign currency translation decreased revenues by approximately 1% well acquisitions increased revenues by 50 basis points.
Core revenue increased 6%.
Geographically high growth markets increased at a high single digit rate led by China and India.
In the developed markets. The U.S. remained strong delivering high single digit growth, while western Europe was up mid single digits.
Gross margin for the fourth quarter was 55.5%.
Operating profit margin was 19.8%.
Core operating margin increased 175 basis points in the quarter, bringing full year core operating margin expansion to 100 basis points, a testament to the teams terrific execution across the portfolio.
The Danaher business system continues to be the primary driver of our strong core operating margin performance.
2019 marked the fifth consecutive year that we expanded core operating margin by 70 basis points or more.
Fourth quarter adjusted diluted net earnings per share of one dollar and 28 cents were up double digits year on year, bringing full year adjusted diluted net earnings per share to $4.42.
All in all a strong finish to a very important year.
Now, let's take a more detailed look at our fourth quarter results across the portfolio.
In life Sciences reported revenue increased 7% and core revenue increased 6.5% for the quarter.
Operating profit margin of 21.2% was up 150 basis points with 190 basis point of core margin expansion.
For the full year life Sciences achieved 7% core revenue growth and delivered operating margin expansion of 145 basis points.
Core growth at Beckman Life Sciences was up mid single digits with strength across most major geographies and product lines.
I just finished off another great year for Beckman the business grew high single digit and surpassed $1 billion in annual revenue for the first time.
New product introductions had been a key driver in Beckman success and contributed more than 250 basis points to core growth each of the last two years.
SCIEX core revenue was up low single digits versus the high single digit prior year comparison.
Performance improved sequentially with particular strength in the pharmaceutical food and environmental end markets.
Graphically core growth in the quarter was led by North America, and Asia, which was particularly offset which was partially offset by softness in China.
And Paul the team achieved its second straight year of high single digit core revenue growth with nearly 10% core growth in the fourth quarter.
Strong momentum in our biotech and aerospace businesses was partially offset by expected weakness in micro electronics.
I did see achieved double digit core revenue growth led by synthetic biology, and next generation sequencing product lines were newly launched products are gaining market share.
Since joining danaher in 2018, the I'd team has embraced the danaher business system and made excellent progress both operationally and commercially.
Using DBS growth tools. They have enabled cross functional teams to collaborate more effectively during the product development process to improve quality and reduce time to market.
With this more focused approach to innovation I didn't see has increased their cadence of new product launches and expanded their best in class offering to further customers research across a number of genomic application.
Moving now to diagnostics reported revenue increased 7% in the quarter with core revenue growth of 8%.
Reported operating profit margin was 19.5% with reported and core operating margins up 70 basis points.
Over the last few years, we've made significant strategic investments, both organically and inorganically to better position, our diagnostics platform and oriented towards higher growth opportunities.
We're seeing the impact of these initiatives has died as the diagnostics team delivered 7% core revenue growth in 2019, a continuation of the market share gains we've achieved over the last few years.
Turning to Beckman diagnostics.
Core revenue was up.
Only low single digits in the quarter on a difficult prior year comparison 2019 with a great year for Beckman as the team achieved mid single digit core revenue growth their best annual core growth rate since we acquired the business in 2011.
China continued to perform well and positive results across all major product lines were led by double digit growth in automation.
We've improved segments growth trajectory over the last few years by focusing on impactful new product development and improved commercial execution.
Our launch of the Dx H series of New Hematology analyzers has been a key contributor to improvement in core revenue growth.
And on the commercial side, our North American sales teams effective implementation of DBS growth rooms has helped drive double digit gains in our customer retention rate.
Radiometer achieved double digit core revenue growth in order to close out there 15th consecutive year of mid single digit for better core growth a remarkable achievement.
Results were strong across both the developed in high growth markets. As we believe radiometer continued to gain share relative to the market.
At like a biosystems double digit core revenue growth was driven by positive results across all major geographies and product lines.
In addition to continued strength in core histology and advanced staining.
At the algae imaging also had a strong quarter driven by demand for new products like the Appirio GT for 50.
The GT for 50 does a new automated high capacity digital pathology slide scanner that enables extensive biopsy databases to be digitized, making them more accessible for researchers around the world.
Core revenue, except it was up more than 20% for the quarter with broad based strength across all major geographies led by North America and Western Europe .
The business surpassed $1 billion in annual revenue in December and we couldn't be happier for the team to hit this major growth milestone.
Since the 2016 acquisition core revenue has compounded annually at a rate of approximately 20%.
The teams done a terrific job incorporating DBS commercial tools and processes to enhance their go to market strategy as well.
Within installed base of more than 20000 instruments and the largest molecular test menu available on the market today.
It is poised to continue taking share in this highly attractive fast growing space.
Moving now to our environmental and applied solutions segment reported revenue increased 2% with 2.5% core revenue growth.
Reported operating margin increased to 25.3% with 265 basis points of core margin expansion.
In product applications core revenue grew at a low single digit rate.
At Videojet core revenue was up low single digits improved performance accelerated sequentially.
Strength in North America, and Western Europe was partially offset by softness in the high growth markets.
End market consumer products, and food and beverage led the way.
Our packaging businesses, which include ESCO and X right was up mid single digits, we had a particularly good quarter at ASCO, where growth rate with led by demand for our brand owner software, including Blue a business, we acquired 18 months ago.
We'll provide label and artwork management software that enhances escos offering in the packaging development and production workflow.
As a result, yesco team is helping customers reduce the time it takes to bring new products to market, while improving cost and quality across their packaging value chain.
Finally, turning to our quality.
Core revenue for the quarter increased at a low single digit rate.
Core revenue at Hock increased low single digits.
However, the fourth quarter represented the last period of tough prior year comparisons driven by China's surface water monitoring regulation policy 61.
Excluding the policy 61 impact Hotch core revenue increased mid single digits for the quarter and full year.
Hi has been a consistent mid single digit growth business throughout its 20 year tenure as the Danaher operating company and this success has been largely driven by the team's commitment to solving challenging customer problems through innovative applications and workflow solutions.
One example is the recently launched CL 17 FC Hox, New online Korean analyzer, which is easy to use and is equipped with clearone.
Pocs water intelligent software this combination of innovative hardware and software solutions helps customers more effectively manage their connected instruments their processes and data.
Ultimately lowering their operating costs, increasing compliance and reducing risk.
At Trojan core revenue declined in the quarter due to the timing of certain large projects, but the team delivered impressive double digit core growth for the full year.
Trojans growth acceleration in 2019 was driven by a combination of recent new product launches and commercial initiatives focused on expanding field service capabilities.
And lastly core revenue a chemistry was up mid single digits with particular strength in the chemical and food and beverage end markets.
So to wrap up.
2019 was an outstanding year for Danaher and marked our thirtyth anniversary as a company.
Over the course of that time through a combination of organic and inorganic initiatives, we've transformed into a higher growth higher margin and higher recurring revenue company.
With a resilient portfolio, it's built for the future and the Danaher business system as our consistent driving force, we feel well positioned to continue to deliver long term shareholder value.
We are initiating first quarter adjusted diluted net earnings per share guidance of one dollar and six cents to one dollar and nine cents. This.
This assumes core revenue growth of 6% to 6.5% and reflects the impact of three additional selling days versus the first quarter last year.
We're also initiating full year 2020, adjusted diluted net earnings per share guidance in the range of $4, an 80 cents to $4.90, which implies double digit growth year over year at the midpoint and as mentioned earlier does not include.
Correct from the pending acquisition of GE Biopharma.
Thanks, Tom that concludes our formal comments.
For sale, we're now ready to take questions.
Thank you at this time, if you would like to ask an audio questions. Please press star one on your Touchtone phone.
Once again that is starting to ask and audio question.
Yes.
Your first question comes from the line of Tyco Peterson with JP Morgan.
Good morning Tyco.
Good morning.
With Paul for for Life Sciences, you had previously big going to slow down for the fourth quarter, obviously that didnt happen. So just curious if you could talk little bit about why you thought things might slow why they did not and I guess, what's embedded in the guide for for Paul Life Sciences going forward and as we think about kind of capacity supply demand dynamics and adding about formatted the portfolio, how you're feeling about the sustainable.
In Biopharma business.
Thanks takeout.
We're really really very pleased with how Paul perform in the quarter.
You know double digit double digit core growth in the quarter that has mentioned was led by biotech and aerospace and if you sort of break that down and going specifically into the life science side a Paul.
Double digit core growth in life Sciences.
We've talked in the past about single use technologies.
That's certainly was up a portion of that growth single use continues to grow at better than 20% and so I think the combination of just looking at life Sciences overall, breaking it down into biotech and then looking specifically at that high growth area of SGT, all combined to give us a tremendous amount of cash.
Confidence both in terms of a pause positioning in that market, but also the end market strength and so.
I think we feel very good about about about that now.
We tried to be prudent here early in the year in terms of how we embed different segments of the business into our overall guidance. So.
I think we sort of look into 2020 and think about the overall biopharma market and our position there is perhaps a little bit more normalized at high single digits in 2020, but.
Overall, that's not to suggest that we think this is about a market slowdown or there is any overcapacity issues. It's really about just saying that hey. This 29 team has a great year, we're probably a little prudent going into the into 2020, but this is absolutely fantastic market to be a part of.
We don't really see any issues relative to what as we've been asked about in terms of overcapacity in the market.
We continue to track the volumes of individual drugs that are being produced and that really is the the indicator and we continue to see.
Just tremendous progress both in terms of the drug development pipeline and the volume ramps.
Of individual Biopharmaceuticals, where at where essentially we are integrated into the process.
Relative to GE biopharma that obviously improves our position in the overall market.
It gives us broader exposure specifically to the bio pharmaceutical market.
Large molecules and those more advanced technologies.
Given GE is exceptional position in chromatography and so.
We're looking forward to closing that transaction here in the first quarter and we think it will be a just a tremendous addition to the overall portfolio, albeit as a separate standalone operating company distinct from Paul.
Hey, Tyco. This is Matt just to kind of clarify for from a planning assumption perspective for bio pharma for this year, we're kind of thinking low double digits versus the mid teens that we saw sort of last year, just kind of clarify where we think that will be here.
Okay. That's helpful. And then one follow up on China up high single digits can you maybe just talk about what's what's embedded in guidance for the chart for China, and then obviously with krona virus, just curious how you're thinking about that as it relates particularly for your diagnostics business over there.
Sure.
Overall, a very good very good quarter in China tie go.
Up high single digits in the fourth quarter and that was across all four of of the platforms and we saw high single digits in in Dx and that was it was broad based in terms of is the strength that we saw.
Within life Science.
No as well as we do there's some policy and regulatory noise around the food and to some extent the pharma market.
Around four by seven that had some impact on side effects, but generally.
We expect continued good performance from from both of those platforms and both of those markets.
Even p. I'd was up high single digits and that was largely ESCO and videojet.
And it water quality I think I commented on X policy 61.
Terrific. So I think as we look forward in China, we we see continued good growth opportunities there.
Specific to the Corona virus situation, obviously, it's it's a very challenging situation to get a clear handle on in terms of what its overall impact is.
We have not seen any specific impact to this point on our business, but that was before everyone left for the new year and as you know.
Certain provinces are extending the Chinese new year at this point and that's.
We see a little bit of a wildcard here in the first quarter.
So moving potentially an extra week.
Could have an impact on both sales and the supply chain, but given that it's early in the quarter.
We'll be working to offset that.
Certainly here in the first quarter and see some impact moving its second that we continue to worked offset so.
We have in incorporate any that into any guidance, but.
It's just too early to tell we're hoping for the best we have businesses by the way Tyco that are actively involved in taking on this challenge boztepe It and I'd T R.
Our engaged in with outside parties on a global basis, both public and private.
Including the CDC.
To support their efforts, particularly at CDC supporting this the CDC efforts around.
Releasing judgment in the last couple of days.
Handling GPCR probes and primers that are designed specifically to detect the virus. So.
We are we're in the fight here, but the impact of this both in terms of the overall Chinese market our business in any of our specific businesses. It's just as far too early to tell.
Okay. Thank you.
No.
Your next question comes from the line of Derik de Bruin with Bank of America.
Hey, good morning.
Hey.
Could you sort of talk about the embedded margin assumptions for.
The stand the business ex GE right now is what's embedded in the guide just want to walk through now to dental about what you're thinking about the op margin expansion in gross margin expansion would be in 2020.
Yeah, so kind of embedded Derrick, it's Matt kind of embedded in our guide here is sort of a 5% core growth, which we talked about.
And kind of the.
Typically 50 to 75 basis points with margin expansion on that sort of how we get to the range Frida So for now.
Great and.
And the.
Yes.
The at the did when it comes into that I mean, it's obviously the margins are higher than that would you would you expect in incremental boosted that immediately.
I'm, just sort of thinking about through how roll through.
Well it is going to roll through we talked about the initial accretion and kind of we updated here today. So that would have obviously included the factor that is a higher margin business than than what we have so I think the way to think about that rolling through is it is in that 60 cents.
And then as we go forward, we sort of talked about that business being even those high margin business.
I don't think it's gonna have much of an impact on our 50 to 75 basis points a core margin expansion every year higher margin businesses tend to kind of not necessarily have the best margin expansion at the highest highest end given the given the VCM fall through they already have so I still think going forward using 50 to 75 basis.
Points of margin expansion, even post GE is the right right right way to think about it and you'll capture the uplift in the margin in that 60 cents. If you will.
In 2020.
Great and just a quick follow up to Tyco's question on.
China situation have you embedded anything into your organic core growth guide for any sort of slowdown in the market at all.
At this point, we have not we kind of as Tom said.
It's.
We know as much as you guys know and we've sort of kind of if everything gets back to normal very quickly here. It's still early enough that we think we'd probably be able to offset that largely so too early to tell we have we have not put anything into either Q1 or the full year at this point.
Great. Thanks, I'll get back thank you.
Your next question comes from the line of Vijay Kumar with Evercore ISI.
Hey, guys Congrats on a nice springs here.
Thanks for taking my question I Com, maybe one not big picture question on the bio pharma I think the commentary on up the assumptions from 2020 growth low double digits that was helpful and the key that business has been running double digits in 19, So just curious.
Your thoughts around.
The growth of the key biopharm assets and not why six to seven is still the right way to think about the outcome for that business.
Hey, Thanks, BJ I appreciate the question.
You're right, we had initial planning assumption of 6% to 7% for that business.
As I mentioned in my remarks, they performed better than that here in in 2019.
We just need to get into business closed and we need to getting underneath the covers and really understand.
At a deeper level kind of the order rate trajectory, the backlog and those kind of things too.
To make sure that we're comfortable as we go through 2020.
Add at rates higher than our original projection. So we're excited about getting inside and and getting with the team and trying to understand those opportunities.
Obviously, if we.
If we were at closed in the business a year ago and had at this visibility that we would normally get 2019 would have had a higher view, but we'll need a little time to get inside and not and see what 2020 ultimately might look like.
That's helpful. Common Mac one quick on the guidance margin excuse me here in Q4, I really strong was this out because unico revenues came in better was this volume related leverage or I'm, just curious on what drove margin execution and when you think about the context of three extra days in Q1.
Any any assumptions on not what the contribution this through the topline in Q1 from extra days. Thank you.
Sure. It maybe start with the second question first so from I think the three extra days in Q1's, probably worth sort of hard to tell its inexact science, but I think it's probably 50 to 100 basis points in Q1 would be probably whats worth.
And then kind of talking to the Q4 fall through I mean, no gross margins were up 50, bips year over year, which was helpful. Price was was okay here in the quarter.
On the rest was was good.
Just kind of running the Danaher playbook SJ was down gross margins are up.
No in the volume coming through at 6% was a little bit better than we thought that led to a pretty good finish here to the year with.
100 basis points margin expansion.
I think thats, probably the way to think about.
Thanks, guys.
Thanks BJ.
Your next question comes from the line of Doug Schenkel with Cowen.
Yes, Hey.
Hey, guys good morning Arnie.
How does the favorable financing outcome.
New about but you describe very well in your prepared remarks, how do how does that impact your flexibility on.
Capital deployment specifically.
Really thinking about M&A, maybe more near term than we might have thought a quarter or two ago and related to that based on your forecast for free cash flow. This year. It appears you can de lever to about three and a half times EBITDA by the end of 2020.
Hi, My and Am I doing math, the right way there.
Obviously, I mean, it's going to close to that I suppose haven't yeah, I think that's probably a pretty good pretty good spot as far.
The second question the free cash flow.
As far as any impact I think.
Your first question on does that change in a material way the interest.
Change the material waiting in the near term I don't think it's going to have a big difference on what we how we think about M&A here in the near term I think we've talked about we're still going to be active in the market for sure we will probably be focusing more on some of the bolt on activity in smaller deals.
But also like we've said something was.
Of interest and strategically.
Out there for US we also have talked to in the past that we had to issue equity we would so.
I think I don't think the financing necessarily changes anything in the near term here.
Okay.
Thank you for for that.
In your prepared remarks as well as in the press release, you called out in market share gains as a driver revenue growth I'm wondering if you'd be willing to elaborate a little bit more on that and maybe be a bit more specific on where this most this is most evident based on what you're seeing recently and how we should think about the sustainability of the share gains moving forward.
Sure absolutely I'd be happy to Doug.
I'll pick a couple of examples looking across the portfolio.
I mentioned in my prepared remarks about some terrific performance at Beckman life Science.
So to give you an example of what's driving the share gains there.
If you if you look about our the cadence of new products. We've introduced over 20, new products in the last three years at BEC LSW.
In the three years pre acquisition.
That business launched three new products. So we're we've sevenx the cadence of new product introductions, and specifically those are going into higher growth applications like biologics in genomics obviously.
Our cytoflex product line and flow cytometry in the reagents associated with that the new automation products and the Biomet series that I've talked about the buy sell products in particle counting all those things.
Our really contributing from a product new product innovation standpoint to share gains effect last and that's why we're seeing that meaningful step up in in growth it back outlets, which by the way was virtually flat growth business when we when we acquired it.
If I look over it.
In the diagnostics you know a couple of businesses that again are clearly gaining share you had I look at Sep yet as one really good example, and menu expansion continues to be a part of that certainly the menu expansion influence dropped, but but really good commercial execution expansion into.
The ends are integrated delivery networks.
Has made a big difference.
I think if you look at that installed base that we've now grown from 13000 systems that acquisition to 23000.
In the installed base.
Over 40 major health systems that have been converted.
11, new assets and three point of care system. I mean, these are the things that I think underpin our confidence in our belief in the share gains at a place like SAP, yet if I look at a business that has been with US certainly a lot longer but where the performance continues to be terrific I talked about the 15th consecutive year good performance at radio.
Amateur in their share gains.
We've seen a 50% increase in in blood gas competitive takeaways in 2019 alone. So we track.
Every competitive situation and and we can be clear about where we have in fact displayed to competitive instrument. So I think good examples there.
One last one maybe I'll turn over to water quality, where hock has really improved their their new product cadence.
A lot of terrific products beyond the CL 17 that I talked about in my prepared remarks.
But part of what's driven there cadence is they have cut their new product.
Development time by 50% on in the last two years and at the same time, they've driven ideation.
And improve the nature of what's in the bundle I think substantially and so.
Again, we track our install base as we track competitive win rates and I think those those trackers clearly give us confidence in the areas, where we're gaining share.
That's great. Thanks for taking the questions guys.
Your next question comes from the line of Steve Michelle.
Research.
All right Steve.
Good morning, and thanks for the time, just a couple of easy ones here from me. One is as we go into 2020 and you've laid out the 5% core objective for that for the broader company pre GE can you just speak to expectations for growth within the different businesses around that five.
Sure, Steve I think maybe the simple kind of at a high level. The way to think about it is that we're expecting life sciences and diagnostics both to be kind of in the 5% to 6% range sort of versus the high single digits that they were last year and that he asked is kind of continues in called the 3% to 4% range.
Okay, great much appreciate it and then over the course of the year I Wonder if you can speak to it to a couple of points just within the non up.
So we've got our models with many moving parts subsequent to the changes in the last several months and those still coming tied as we can I wonder if you can speak too.
How you would imagine corporate expense plays out over the course the year relative to that once you starting point, maybe relative to 2019.
And then I wonder if over the course of the year, how you would imagine share count playing out of course, there had been a lot of moving parts, but yes. It is where we are for one to just a good benchmark for the full year. Thanks, a bunch, yes, yes, you're in a lot lot of moving parts. We we appreciate that.
Corporate expense, Steve I would probably think about $60 million to $65 million per quarter as a good place to start from a modeling perspective and from share count perspective in Q1, it's going to be call. It 718 719 million shares.
I would model in sort of kind of our typical share creep up maybe one to 2 million shares a year and maybe for a full year that 70 team good call. It 727 21 at the end.
I think that ramp it that way.
Got it just where we needed. Thank you so much.
Thanks, Steve.
Your next question comes from the line of Dan Brennan with you yes.
Great. Thanks, Dan has good morning, good morning, Thanks for the questions.
I wanted to dig into little bit on the diagnostic front back when obviously a nice year in 2019, what do you what do you see for 2020, there can you comment on some of the competitive launches and in particular, you mentioned a lot of the new product introductions down hematology for Beckman kind of what's on the horizon.
Beckman diagnostics.
Sure Dan Thanks.
You know as I mentioned in my remarks that we're really pleased with tout pub Beckman perform best Dx performed in 2019 at mid single digit core growth than.
Well, that's that's 100 basis points higher than where we were two years ago.
And a number of things have combined here on the new product launches that we talked about in the last year or so.
Automation being one Dx eightfive thousand we've always had.
Competitive advantage, we believe in the.
In higher volume environments, and the Dx, a 5000 and our automation capabilities tickets I think to an even more.
Important level.
You mentioned hematology hematology, the DNA page 900.
The early sepsis indicator as well as the 500 series, both big upgrades to that product line and.
And those are making a difference without a doubt and they will continue to because it's still early days in terms of the penetration of those new products into the market. So we're we're expecting as we go forward that we'll continue to see solid mid single digit growth.
From a from that business.
And I think that have come from some of the things I just mentioned, but also I think some some important product launches that are in the final.
Closing the menu gaps around infectious disease, and blood virus and and ensuring that we are architecting. The hardware side of the house in a way that positions us well add at lower volumes relative to competitive launches. Obviously this is a business where every competitor cycles through.
A new product launches over a five 710 year period.
They are been there certainly is our one or two out there right now at this point, we haven't really seen any material impact to us on our retention or our win rates.
But it's always a competitive market and will be will be keeping pace in terms of the competitiveness of our product line and I think some of things I've talked about already are or what underpin that.
Great. Thanks for that Tom and then maybe switching gears over to Paul Bioprocess, obviously terrific growth there and you've commented earlier.
Some of the outlook earlier Tychos question I'm, just wondering with regard to gene therapy. Obviously, you have nice exposure there as well, but are there any opportunities to maybe expand the portfolio, whether internally or externally to kind of capture the expected growth rate gene therapy. Thank you.
Sure well, it's it's certainly early days as you know in.
Gene and cell therapy, and there's a lot going on.
And Paul is that is working very closely with a number of customers in that area, but given the nascent nature of those the development of those therapies right now.
It'll be a while we measured in years before the impact of that may very well become sort of material.
To to Paul in the aggregate so a very exciting space for US one that we think we're really well positioned.
To support, but one that will take a while to evolve.
Excellent Thanks, a lot.
Your next question. Your last question comes from the line of Patrick Donnelly with Citi.
Hey, Patrick.
Great. Thanks, maybe just one on Steffi did you know that's been as you kind of noted a 20% grower since the deal margins, obviously move significantly higher as well how should we think about that asset going forward. I mean seems like there's still significant opportunities you talked about the menu expansion areas like China, obviously still Underpenetrated you guys are still talked about kind of that low double digit growth now that.
Weve been three years here, 20% plus what's the right way to think about that one.
Thanks, Patrick.
When we first acquired feed we were very confident in it died sustaining a double digit core growth rate and obviously since that acquisition and 20% or better.
It's been higher than we've expected in its theres a number of factors there a lot of which I think.
A couple of which you might say are somewhat a function of the.
Nature of that business being impacted by by flu.
Just come through I think at least two years in a row here with.
Equally strong flu season.
We don't we don't bank on that obviously.
Thats something that we could have us.
Strong season, which is unfortunate for patients and.
But debt, but obviously good for that business and you can have businesses where are season, where that's not the case and so we tend to be.
You know some a prudent in terms of how we anticipate those seasonal factors to play out that said the growth that business has been certainly sustained by more than just flew the.
The work they've done an expanding the menu and driving that installed base. The numbers that I quoted earlier have been a big part of that so I think you put all that together and you say hey plan prudently relative to an uplift from something like a flu season, but have confidence we can sustain that died that at least a low double digit growth rate for sure if not better.
And based on the fact that they continue to innovate effectively and have really stepped up their commercial execution.
That's helpful and maybe just a quick follow up on Europe pretty solid mid single digit growth. There. Obviously can can you get some mixed data points around that region. You guys always have a pretty good handle given your diverse exposure can you just talk through the trends you've seen their expectations into 2020 visibility to be really helpful.
Yeah, Let me ask where we're not a great sort of macro proxy, but relative to our end markets.
Europe in some respects has been a.
A pleasant surprise in terms of.
Being relatively solid.
In the in the last couple of quarters, So I'm not sure that gives me.
A lot of optimism in terms of anything that might improve substantially in Europe right now, but I think it's certainly been.
It's solid market for us if you look across each of our four platforms are performing their each of them are doing quite well, but it's.
It's obviously a little bit weaker than.
The other parts of the World Yeah, Patrick maybe just put some numbers that has been a pretty solid 3% to 4% grower for us for probably six eight quarters now and looking forward I think thats about where we still think it will be as Tom said, it's probably not as good as some of our other markets like China.
You asked which are more mid to high single, but I think that three to four is a pretty good place too. So it's been I think it's sort of where we'll be.
Great. Thanks, Matt I appreciate it.
And presenters that does conclude the allotted time for questions to have any closing remarks.
Thanks, everyone for joining us were around all day for questions.
This concludes today's conference call you may now disconnect.
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