Q3 2025 Avantor Inc Earnings Call

Speaker #1: A .

Speaker #2: Good morning . My name is Emily and I will be your conference operator today . At this time , I would like to welcome everyone to Avantor Inc third quarter 2025 Earnings Results conference call .

Operator: Good morning, my name is Emily and I will be your conference operator today. At this time, I would like to welcome everyone to Avantor's third quarter 2025 earnings results conference call. After the presentation, you will have the opportunity to ask any questions, and you can do so by pressing STAR followed by the number one on your telephone keypad. I will now turn the call over to Allison Hosak, Senior Vice President of Global Communications. Ms. Hosak, you may begin the conference.

Speaker #2: After the presentation , you will have the opportunity to ask any questions which you can do so by pressing star , followed by the number one on your telephone keypad .

Speaker #2: I'll now turn the call over to Allison Hosak Senior Vice President of Global Communications . Miss Hossack , you may begin the conference .

Speaker #3: Good morning and thank you for joining us . Our speakers today are Emmanuelle Leiner , president and chief executive Officer . And Brent Jones , executive vice president and chief financial officer .

Allison Hosak: Good morning and thank you for joining us. Our speakers today are Emmanuelle Ligner.

Emmanuelle Ligner: Thank you.

Allison Hosak: President and Chief Executive Officer and R. Brent Jones, 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 forward-looking statements within the meaning of the U.S. 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.

Speaker #3: The press release and a presentation accompanying this call are available on our Investor Relations website at R. Jones. A replay of this webcast will also be made available on our website.

Speaker #3: After the call . Following our prepared remarks , we will open the line for questions . During this call , we will be making forward looking statements within the meaning of the US Federal securities laws , including statements regarding events or developments that we believe or anticipate may occur in the future .

Speaker #3: These forward looking statements are subject to a number of risks and uncertainties , including those set forth in our SEC filings . Actual results may differ materially from any forward looking statements that we make today .

Speaker #3: 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 as a result of new information , future events or other developments .

Allison Hosak: We do not assume any obligation to update these forward-looking statements as a result of new information, future events, or other developments. This call will include a discussion of non-GAAP measures. A reconciliation of the non-GAAP measures can be found in the press release and in the supplemental disclosure package on our investor relations website. With that, I will now turn the call over to Emmanuelle.

Speaker #3: This call will include a discussion of non-GAAP measures . A reconciliation of the non-GAAP measures can be found in the press release and in the supplemental disclosure package on our Investor Relations website .

Speaker #3: With that , I will now turn the call over to Emanuel .

Speaker #4: Thank you , and good morning , everyone . I appreciate you joining us today . As you know , I joined Avantor a little more than two months ago .

Emmanuelle Ligner: Thank you, Elie, and good morning, everyone. I appreciate you joining us today. As you know, I joined Avantor a little more than two months ago. I came on board because I believe this company has tremendous potential. I have spent my entire career in pharma and lab science industries, spending meaningful time on three different continents. I was fortunate to spend two decades at GE Life Sciences and Danaher, where I built out the Cytiva business, significantly accelerated the growth trajectory of the platform, and led its integration with SPA Life Sciences. During that time, I had a front row seat to Avantor trajectories as a customer and supplier. I believe this experience enabled me to step into this role 10 weeks ago with a unique perspective on the company's strengths and areas for improvement.

Speaker #4: I came on board because I believe this company has a tremendous potential . I have spent my entire career in pharma and life science industries , spending meaningful time on three different continents .

Speaker #4: I was fortunate to spend two decades at GE Life Sciences and Danaher , where I built out the business significantly accelerated the growth trajectory of the platform and led its integration with life sciences .

Speaker #4: During that time, I had a front-row seat to Avantor trajectories as a customer and supplier. I believe this experience enabled me to step into this role.

Speaker #4: Ten weeks ago with a unique perspective on the company's strengths and areas for improvement . Throughout my career , the primary lessons I've learned is that there is no substitute for going to Gemba .

Emmanuelle Ligner: Throughout my career, the primary lesson I've learned is that there is no substitute for going to Gemba. This concept literally means visiting the place where work is done and value is created to learn and determine how to best improve our organization. For the past two months, this is exactly what I have been doing. I have dedicated my time toward visiting our sites, meeting our people, speaking with dozens of our customers and suppliers across Asia, Europe, and North America. This not only sharpened my initial instincts, but also provided invaluable insights as we map out our strategy moving forward. I want to personally thank all the stakeholders for the warm welcome, open dialogue, and trust they demonstrated from my first day in the role. Here are some of the important learnings. First, this is a great industry with strong secular tailwinds.

Speaker #4: This concept literally means visiting the place where work is done and value is created to learn and determine how to best improve our organization .

Speaker #4: And for the past two months , this is exactly what I have been doing . I have dedicated my time toward visiting our sites , meeting our people , speaking with dozens of our customers and suppliers across Asia , Europe and North America .

Speaker #4: This not only sharpened my initial instincts , but also provided invaluable insights as we map out our strategy , moving forward . I want to personally thank all the stakeholders for the warm welcome , open dialogue and trust the demonstrated for my first day in the role .

Speaker #4: Here are some of the important learnings . First , this is a great industry with strong secular tailwinds . Scientific collaboration is more ever .

Emmanuelle Ligner: Scientific collaboration is more important than ever. If you talk to any pharma or biotech company right now, you will hear about the multitude of ways in which they are harnessing the power of technology and AI to accelerate the next breakthrough discovery. That gives us a tremendous amount of confidence in the long term trajectory of the end markets we serve and reinforces the importance of our positioning within the industry. Our recent announcement with Blue Whale Bio is a perfect demonstration of how Avantor is advancing innovation through collaboration, and we are committed to continue to do our part to facilitate the research, development, manufacturing, and delivery of next generation therapies. Second, Avantor has a solid portfolio, a committed global team, and an incredible customer reach serving more than 300,000 customer locations across approximately 180 countries.

Speaker #4: If you talk to any pharma or biotech company right now , you will hear about the multitude of ways in which they are harnessing the power of technology and AI to accelerate the next breakthrough .

Speaker #4: Discovery . That gives us a tremendous amount of confidence in the long term trajectory of the hand markets important than And reinforces the importance of our positioning within the industry .

Speaker #4: Our recent announcement with Blue Whale Bio is a perfect demonstration of how Avantor is advancing innovation through collaboration , and we are committed to continue to do our part to facilitate the research , development , manufacturing and delivery of next generation therapies .

Speaker #4: Second , Avantor Inc has a solid portfolio , a committed global team , and an incredible customer reach , serving more than 300,000 customers .

Speaker #4: Locations across approximately 180 countries . As someone that has spent considerable time in recent years working to scale life science businesses , those attributes will be the envy of most companies .

Emmanuelle Ligner: As someone that has spent considerable time in recent years working to scale life science businesses, those attributes will be the envy of most companies. We have significant untapped potential and numerous opportunities in front of us, and we need to capitalize on those opportunities. Third, and most importantly, there are many things we can and should do better, and we are taking immediate action to turn the business around and hold ourselves accountable for rewarding the trust our investors place in Avantor. Starting from a commercial perspective, I believe our business is overly complex with unnecessary centralization, which inhibits frontline staff from most effectively meeting our customers' and supplier needs and expectations. Customers buy from Avantor because of the quality and service heritage of our incredible brands. VWR, J.T.

Speaker #4: We have significant untapped potential and numerous opportunities in front of us , and we need to capitalize on those opportunities . Third , and most importantly , there are many things we can and should do better , and we are taking immediate action to turn the business around and hold ourselves accountable for rewarding the trust our investors place in Avantor .

Speaker #4: Starting from a commercial perspective, I believe our business is overly complex with unnecessary centralization, which inhibits frontline staff from most effectively meeting our customers' and suppliers' needs and expectations.

Speaker #4: Customers buy from Avantor because of the quality and service heritage of our incredible brands . VW , JT , Baker , Masterflex , Nusil .

Emmanuelle Ligner: Baker, Masterflex, NuSil, those are some of the best-known names in the industry, and our commercial team are not being sufficiently empowered to leverage the equity of those brands. On the operations and supply chain side, I believe we need to make some investments and process enhancements to improve our ability to consistently serve our customers. Overall, I believe those challenges are generally self-inflicted, and the good news is that they are fixable with determination, focus, and time. At the conclusion of this call, I will share my preliminary thoughts on our plan for doing just that, which we are calling Avantor Revival. With those initial findings in mind, we strongly believe that our current share price does not reflect the long-term value of our platform.

Speaker #4: Those are some of the best-known names in the industry, and our commercial team is not being sufficiently empowered to leverage the equity of those brands.

Speaker #4: On the operations and supply chain side, I believe we need to make some investments and process enhancements to improve our ability to consistently serve our customers.

Speaker #4: Overall , I believe those challenges are generally self-inflicted and the good news is that they are fixable with determination , focus , and time at the conclusion of this call , I will share my primary thoughts on our plan for doing just that , which we are calling Avantor revival .

Speaker #4: With those initial findings in mind , we strongly believe that our current share price does not reflect the long term value of our platform .

Speaker #4: To demonstrate our long term conviction in the prospect of this business , our Board of Directors has authorized a $500 million share repurchase program with immediate effect , which we will pursue opportunistically moving forward .

Emmanuelle Ligner: To demonstrate our long-term conviction in the prospects of this business, our Board of Directors has authorized a $500 million share repurchase program with immediate effect, which we will pursue opportunistically moving forward while also delivering on our commitment to decrease net leverage. Now I would like to turn over to Brent for a more detailed overview of our third quarter financial results and our updated full year guidance.

Speaker #4: While also delivering on our commitment to decrease net leverage. Now, I would like to turn it over to Brent for a more detailed overview of our third-quarter financial results and our updated full-year guidance.

Speaker #4: Brent .

Speaker #5: Thank you , Emmanuelle , and good morning , everyone . I'm starting with slide four for the quarter reported revenue was $1.62 billion , which was down 5% year over year on an organic basis .

R. Brent Jones: Brent, thank you, Emmanuelle, and good morning, everyone. I'm starting with slide four for the quarter. Reported revenue was $1.62 billion, which was down 5% year over year on an organic basis. This reflects weaker than expected top line performance, primarily in lab. Adjusted EBITDA margin was 16.5%, and adjusted EPS for the quarter was $0.22. Free cash flow was $172 million, with adjusted conversion at 124%. Turning to slide five, adjusted gross profit for the quarter was $527 million, representing a 32.4% adjusted gross margin. This is a decline of 100 basis points year over year, driven mainly by price actions in lab to protect and grow market share. We had another quarter of solid cost control, with adjusted SG&A expense better than planned and prior year. Our results also benefit from reductions in incentive compensation accruals.

Speaker #5: This reflects weaker than expected top line performance , primarily in lab adjusted EBITDA margin was 16.5% and adjusted EPs for the quarter was $0.22 .

Speaker #5: Free cash flow was $172 million , with adjusted conversion at 124% . Turning to slide five . Adjusted gross profit for the quarter was $527 million , representing a 32.4% adjusted gross margin .

Speaker #5: This is a decline of 100 basis points year over year , driven mainly by price actions and lab to protect and grow market share .

Speaker #5: We had another quarter of solid cost control with adjusted SG&A expense better than plan and prior year . Our results also benefit from reductions in incentive compensation accruals .

Speaker #5: We remain on track with our cost transformation program and continue to expect $400 million in run rate savings by the end of 2027 , adjusted EBITDA was $268 million in the quarter , representing a 16.5% margin better than our expectations adjusted operating income was $237 million at a 14.6% margin .

R. Brent Jones: We remain on track with our cost transformation program and continue to expect $400 million in run rate savings by the end of 2027. Adjusted EBITDA was $268 million in the quarter, representing a 16.5% margin, better than our expectations. Adjusted operating income was $237 million at a 14.6% margin. Interest and tax expense were in line with our expectations. As a result, adjusted earnings per share were $0.22 for the quarter, a $0.04 year over year decline. Our adjusted EPS performance in the quarter reflects the flow through of our adjusted EBITDA results. Our cash generation was particularly strong, with $172 million in free cash flow in the quarter when adjusted for transformation related payments. Our free cash flow conversion was 124% of adjusted net income for the quarter.

Speaker #5: Interest and tax expense were in line with our expectations . As a result , adjusted earnings per share were $0.22 for the quarter of $0.04 year over year decline .

Speaker #5: Our adjusted EPs performance in the quarter reflects the flow through of our adjusted EBITDA results . Our cash generation was particularly strong , with $172 million in free cash flow in the quarter .

Speaker #5: When adjusted for transformation related payments , our free cash flow conversion was 124% of adjusted net income for the quarter . In terms of our GAAP results , we took a $785 million impairment to the goodwill associated with our lab distribution business .

R. Brent Jones: In terms of our GAAP results, we took a $785 million impairment to the goodwill associated with our lab distribution business. This noncash charge was necessitated in large part by the continued weakness in our share price as well as the margin headwinds this business is facing. Our adjusted net leverage ended the quarter at 3.1 times adjusted EBITDA, down 0.1 times from Q2, as our strong cash generation enabled us to reduce net debt. Finally, we recently effected a very attractive refinancing of our near term maturities and upsized our revolving credit facility to $1.4 billion and extended its maturity to 2030. Other than modest required term loan amortization, we now do not have any debt maturities before 2028, and all of our debt is either prepayable at par or at very modest call premia.

Speaker #5: This non-cash charge was necessitated in part by the continued weakness in our share price , as well as the margin headwinds . This business is facing .

Speaker #5: Our adjusted net leverage ended the quarter at 3.1 times adjusted EBITDA , down 0.1 times from large Q2 . As our strong cash generation enabled us to reduce net debt .

Speaker #5: Finally , we recently affected a very attractive refinancing of our near upsized our revolving credit facility to 1.4 billion and extended its maturity to 2030 .

Speaker #5: Other than modest required term loan amortization , we now do not have any debt maturities maturities and 2028 , and all of our debt is either pre payable at par or at very modest call premia .

Speaker #5: Our debt is approximately 75% fixed rate , and our current weighted average cost of debt is just over 4% . Let's now take a closer look at each of our segments on slide six .

R. Brent Jones: Our debt is approximately 75% fixed rate and our current weighted average cost of debt is just over 4%. Let's now take a closer look at each of our segments on slide 6. In Laboratory Solutions, revenue was $1.1 billion. On an organic basis we declined 5% versus prior year, below our expectations of negative 2% to negative 4%. The market backdrop in Lab is largely stable and Cory Walker and his team have done a great job defending and expanding business. At our largest accounts, the share losses we mentioned on our Q1 call have been phasing in over the past several quarters. The good news is that since Cory joined us in late March, we haven't lost any key customer accounts and in fact we have won about $100 million in business at two top 15 global pharma customers which will start phasing in in 2026.

Speaker #5: In laboratory Solutions , revenue was $1.1 billion on an organic basis . We declined 5% versus prior year below our expectations of -2% to negative 4% .

Speaker #5: The market backdrop in lab is largely stable , and Cory Walker and his team have done a great job defending and expanding business at our largest accounts .

Speaker #5: The share losses we mentioned on our Q1 call have been phasing in over the past several quarters . The good news is that since Cory joined us in late March , we haven't lost any key customer accounts .

Speaker #5: And in fact, we have won about $100 million in business at two top 15 global pharma customers, which will start phasing in in 2026.

Speaker #5: With that said, customer activity continues to be at lower levels than our original expectations for the year, driven by ongoing market uncertainty related to basic research funding.

R. Brent Jones: With that said, customer activity continues to be at lower levels than our original expectations for the year, driven by ongoing end market uncertainty related to basic research funding. Each of our Lab businesses faced similar mid single digit headwinds on a year over year basis. Our distribution channel, which accounts for approximately two thirds of segment revenue, was primarily impacted by weakness in consumables and equipment and instrumentation, while our chemicals and reagents were essentially flat. Our services business, approximately 20% of segment revenue, saw greater than expected headwinds due to the aforementioned share loss and our proprietary business, the balance of Lab's revenue, was significantly impacted by our science education business. However, our attractive proprietary lab chemicals grew mid single digits in the quarter and similarly year to date. The primary drivers of our MIS2 expectations were headwinds in services and higher education and K12.

Speaker #5: Each of our lab businesses face similar mid-single digit headwinds on a year over year basis . Our distribution channel , which accounts for approximately two thirds of segment revenue , was primarily impacted by weakness in consumables and equipment and instrumentation .

Speaker #5: While our chemicals and reagents were essentially flat, our services business, approximately 20% of segment revenue, saw greater than expected headwinds due to the aforementioned share loss and our proprietary business.

Speaker #5: The balance of labs revenue was significantly impacted by our science education business . However , our attractive proprietary lab chemicals grew mid-single digits in the quarter and similarly , year to date , the primary drivers of our Mr. expectations were headwinds in services and higher education .

Speaker #5: And K while market softness is a key factor in the quarters performance , we also continue to navigate competitive pressures . These need to be better mitigated by improved commercial and operational execution , which is a manual noted at the outset , is one of our key priorities as part of Avantor Inc revival .

R. Brent Jones: While market softness is a key factor in the quarter's performance, we also continue to navigate competitive pressures. These need to be better mitigated by improved commercial and operational execution, which, as Emmanuelle noted at the outset, is one of our key priorities as part of Avantor revival. Adjusted operating income for Lab Solutions was $124 million for the quarter with an 11.3% margin. The softer demand environment has pressured our ability to get price, which has meaningfully impacted margins year over year on a sequential basis. The primary driver of the margin decline was lower volumes and related absorption. Turning to bioscience production, revenue was $527 million in Q3, down 4% organically on a year over year basis and at the low end of expectations. Bioprocessing was down low single digits year over year versus our expectation of flat.

Speaker #5: Adjusted operating income for lab Solutions was $124 million for the quarter , with an 11.3% margin . The softer demand environment has pressured our ability to get price , which has meaningfully impacted margins year over year .

Speaker #5: On a sequential basis , the primary driver of the margin decline was lower volumes and related absorption . Turning to bioscience production , revenue was $527 million in Q3 , down 4% organically on a year over year basis , and at the low end of expectations .

Speaker #5: Bioprocessing was down low single digits year over year versus our expectation of flat within bioprocessing. Processed chemicals were up low single digits, which was lower than expectations.

R. Brent Jones: Within bioprocessing, bioprocessing chemicals was up low single digits but was lower than expectations. The planned maintenance downtime that impacted Q2 was remedied during the quarter, but as Emmanuelle mentioned, we continue to face other operational headwinds that are impacting our throughput, including raw material availability and equipment uptime. As an example, downtime at several of our plants prevented us from shipping several orders that were due for delivery in Q3. Absent these issues, we would have delivered our bioprocessing guide for the quarter. Single use largely performed as expected, and CEC was somewhat weaker than expected, down mid single digits due to commercial execution and competitive dynamics year to date and in Q3.

Speaker #5: The planned maintenance downtime that impacted Q2 was remedied during the quarter. However, as Emmanuel mentioned, we continue to face other operational headwinds that are impacting our throughput, including raw material availability and equipment uptime.

Speaker #5: As an example , downtime at several of our plants prevented us from shipping several orders that were due for delivery in Q3 . Absent these issues , we would have delivered our bioprocessing guide for the quarter .

Speaker #5: Single use largely performed as expected , and CEC was somewhat but than expected , down mid-single digits due to commercial execution and competitive dynamics .

Speaker #5: Year to date and in Q3 , our book to bill is 1.0 for bioprocessing with particularly strong performance in process chemicals where order rates were up high single digits in Q3 and year to date , while billings are only up low single digits , indicating a solid trend .

R. Brent Jones: Our book to bill is 1.0 for bioprocessing, with particularly strong performance in bioprocessing chemicals where order rates were up high single digits in Q3 and year to date, while billings are only up low single digits, indicating a solid trend. Our bioprocessing order backlog reduced modestly from Q2 to Q3 but still is too high. The team is working hard to reduce this as much as possible by the end of the year. For the balance of the segment, silicones performed as expected and Applied Solutions had a stronger than expected quarter, up low single digits on significant strength in electronic materials that we expect to continue in Q4. Adjusted operating income for bioscience production was $128 million for the quarter, representing a 24.2% margin.

Speaker #5: Our bioprocessing order backlog reduced modestly from Q2 to Q3 , but still is too high . The team is working hard to reduce this as much as possible .

Speaker #5: By the end of the year . For the balance of the segment , silicones performed as expected and applied Solutions had a stronger than expected quarter up low single digits on significant strength in electronic materials that we expect to continue in Q4 .

Speaker #5: Adjusted operating income for bioscience production was 128 million for the quarter , representing a 24.2% margin . Margin was down year over year , largely due to lower volumes and related under absorption , as well as higher expense related to our operational challenges .

R. Brent Jones: Margin was down year over year largely due to lower volumes and related under absorption as well as higher expense related to our operational challenges. On a sequential basis, volume was the primary headwind, only partially offset by price and lower operating expense. Slide 7 shows our full year 2025 guidance. This has been updated to reflect Q3 performance as well as our best assessment of the current environment. We now expect full year organic revenue growth of negative 3.5% to negative 2.5% based on current FX rates. We expect a modest tailwind from FX of approximately 1.5% along with the 2% headwind from the clinical services divestiture, and this leads to reported revenue growth of negative 4% to negative 3%.

Speaker #5: On a sequential basis, volume was the primary headwind, only partially offset by price and lower operating expense. Slide seven shows our full year 2025 guidance.

Speaker #5: This has been updated to reflect Q3 performance as well as our best assessment of the current environment . We now expect full year organic revenue growth of 3.5% to -2.5% , based on current FX rates , we expect a modest tailwind from FX of approximately 1.5% , along with the 2% headwind from the clinical services divestiture .

Speaker #5: This leads to reported revenue growth of 4% to negative 3% . On a segment basis , we expect laboratory solutions full year revenue growth to be minus mid-single digits to minus low single digits organically down modestly from previous expectations of minus low single digits .

R. Brent Jones: On a segment basis, we expect Laboratory Solutions full year revenue growth to be minus mid single digits to minus low single digits organically, down modestly from previous expectations of minus low single digits. This implies Q4 organic performance of down mid single digits. This change is due to the impact of Q3 performance as well as expectations for continued softness in consumables and in our lab services business. We also expect additional headwinds due to the impact of the U.S. Federal government shutdown. We expect bioscience production's full year revenue growth to be minus low single digits organically, down from previous expectations of approximately flat. This implies Q4 organic performance of down mid single digits to down high single digits. This change is largely due to reductions in our outlook for bioprocessing as well as customer pushouts.

Speaker #5: This implies Q4 organic performance of down mid-single digits . This change is due to the impact of Q3 performance as well as expectations for continued softness in consumables and in our lab services business .

Speaker #5: We also expect additional headwinds due to the impact of the US federal government shutdown . We expect Bioscience Productions full year revenue growth to be minus low single digits organically , down from previous expectations of approximately flat .

Speaker #5: This implies Q4 organic performance of down mid-single digits to down high single This change is largely due to reductions in our outlook for bioprocessing , as well as customer push outs in our silicones business .

R. Brent Jones: In our silicones business, bioprocessing is expected to be down low single digits for the year organically, down from previous expectations of flat to plus low single digits. This implies Q4 organic performance of down high single digits to low double digits. Recognizing this is a meaningful change, I want to break down our expectations across bioprocessing in a bit more detail. We believe processed chemicals in Q4 will be flat sequentially versus Q3 and down double digits year over year despite solid year to date order book performance. We previously expected a mid single digit contraction in Q4 for processed chemicals. This change is largely due to higher than expected backlogs as a result of the ongoing challenges previously discussed. Q4 is also a particularly tough comparable as processed chemicals grew meaningfully in the double digits in Q4 last year.

Speaker #5: Bioprocessing is expected to be down low single digits for the year organically , down from previous expectations of flat to low single digits .

Speaker #5: This implies Q4 organic performance is down high single digits to low double digits. Recognizing this is a meaningful change, I want to break down our expectations across bioprocessing in a bit more detail.

Speaker #5: We believe process chemicals and Q4 will be flat sequentially versus Q3 and down double digits year over year . Despite solid year to date order book performance .

Speaker #5: We previously expected digits . a mid-single digit contraction in Q4 for process chemicals . This change is largely due to higher than expected backlogs .

Speaker #5: As a result of the ongoing challenges previously discussed . Q4 is also a particularly tough comparable As process chemicals grew meaningfully in the double digits in Q4 last year .

Speaker #5: We anticipate single use to be up low , single digits , both sequentially and year over year . In the fourth quarter , we previously anticipated high single digit growth in Q4 for single use controlled environment .

R. Brent Jones: We anticipate single use to be up low single digits both sequentially and year over year in the fourth quarter. We previously anticipated a high single digit growth in Q4 for single use. Controlled environment consumables are expected to be flat sequentially and down low single digits year over year. We previously anticipated this business to grow modestly in Q4. This business is being impacted by the competitive pressures and the general demand weakness we are seeing in consumables. Moving to profitability, we expect our strong cost controls and favorable compensation accrual impact to continue into Q4. As such, we expect full year adjusted EBITDA margins in the mid 16s. We have reduced our adjusted EPS guidance range to between $0.88 and $0.92. We still expect free cash flow performance of $550 to $600 million before any one-time cash expenses associated with our cost savings initiative.

Speaker #5: Consumables are expected to be flat sequentially and down low single digits year over year. We previously anticipated this business to grow modestly in Q4.

Speaker #5: This business is being impacted by the competitive pressures and the general demand weakness . We are seeing in consumables . Moving to profitability , we expect our strong cost controls and favorable compensation accrual impact to continue into Q4 .

Speaker #5: As such , we expect full year adjusted EBITDA margins in the mid 16 . We have reduced our adjusted EPs guidance range to between 88 and $0.92 .

Speaker #5: We still expect free cash flow performance of 550 to $600 million before any one time cash expenses associated with our cost savings initiative .

Speaker #5: The reduction in earnings from our previous guidance should be offset with strong working capital performance , and we now expect about half of the Prebate payments anticipated for the fourth quarter to push into fiscal year 26 .

R. Brent Jones: The reduction in earnings from our previous guidance should be offset with strong working capital performance, and we now expect about half of the prebate payments anticipated for the fourth quarter to push into fiscal year 2026. I also want to address near-term capital allocation. Much of our debt complex is prepayable at par, and we will continue to reduce outstanding debt as we generate cash. At the same time, with our new share repurchase authorization, we intend to buy shares opportunistically without increasing leverage. We ended the quarter at 3.1x adjusted net leverage and will continue to move towards our leverage target of sustainably below 3x. With that, I will turn the call back to Emmanuelle.

Speaker #5: I also want to address near-term capital allocation . Much of our debt complex is payable at par , and we will continue to reduce outstanding debt as we generate cash at the same time , with our new share repurchase authorization , we intend to buy shares opportunistically without increasing leverage .

Speaker #5: We ended the quarter at 3.1 times adjusted net leverage and will continue to move towards our leverage target of sustainably below three times .

Speaker #5: With that , I will turn the call back to Emanuel .

Speaker #4: Thank you Brent . Clearly , we are disappointed with those results and I am not here to make excuses of our underperformance . My focus is on addressing the root cause of those persisting challenges and implementing appropriate course correction quickly .

Emmanuelle Ligner: Thank you, Brent. Clearly, we are disappointed with those results, and I am not here to make excuses of our underperformance. My focus is on addressing the root cause of those persisting challenges and implementing appropriate course correction quickly. At the beginning of this call, I introduced the concept of Avantor revival. Our board and management team are fully aligned with this effort, which will initially focus on five key pillars. First, our go-to-market strategy. We need to evolve our approach to ensure customers and suppliers clearly understand our value proposition and complete product and service offering. As I mentioned in my opening remarks, we have an incredible roster of brands. Embracing VWR heritage as a leading distributor and our company heritage as a leading provider of fine chemicals and specialty materials, for example, is essential to drive growth.

Speaker #4: At the beginning of this call , I introduced a concept of Avantor Inc revival . Our board and management team are fully aligned with this effort , which will initially focus on five key pillars .

Speaker #4: First , our go to market strategy . We need to evolve our approach to ensure customers and suppliers clearly understand our value proposition and complete product and servicing offering .

Speaker #4: As I mentioned in my opening remarks, we have an incredible roster of brands embracing VW, our heritage as a leading distributor, and a company heritage as a leading provider of fine chemicals and specialty materials.

Speaker #4: For example , is essential to drive growth . So we are carefully evaluating our brand architecture and we are going to give more prominence to t product and channel brands .

Emmanuelle Ligner: We are carefully evaluating our brand architecture, and we are going to give more prominence to key product and channel brands moving forward. We also intend to refocus attention to our distribution business and our value proposition to suppliers and customers. We also have work underway to analyze and evolve our customer service and commercial organization. This work is really focused on empowering our sales representatives to better serve our customers however and wherever they want to be served. This includes enhancing our e-commerce platform. Second, we need to invest strategically in our manufacturing and supply chain organization. Brent noted the operational issue we are having in bioprocessing chemicals. The demand is there, and we need to be better positioned to meet that demand at all times.

Speaker #4: Moving forward, we also intend to refocus attention on our distribution business and our value proposition to suppliers and customers. We have also worked on the way to analyze our end and evolved.

Speaker #4: Our customer service and commercial organization . This work is really focused on empowering our sales representatives to better serve our customers . However , and wherever they want to be served .

Speaker #4: This includes enhancing our e-commerce platform . Second , we need to invest a strategically in our manufacturing and supply chain organization , Brent noted .

Speaker #4: The operational issue we are having in bioprocessing , chemicals , the demand is there and we need to be better positioned to meet that demand .

Speaker #4: At all times, the current state of our manufacturing and supply chain organization varies, with some facilities that are world-class, while others are in need of investment.

Emmanuelle Ligner: The current state of our manufacturing and supply chain organization varies, with some facilities that are world class while others are in need of investment. Third, we will be carefully scrutinizing our portfolio to ensure our focus on our core business. We are going to hold each of our businesses accountable for delivering clear growth, profitability, and return on investment targets. We are approaching this process with an open mind, but if any of those businesses are not capable of delivering those targets in a reasonable time frame, we are going to scrutinize whether we are the right owner for them. Fourth, we need to drive net cost saving and simplify processes across the organization. We are committed to being a business that generates strong operating leverage even as we invest in accelerating growth, and our ongoing $400 million cost transformation program is an important step in that direction.

Speaker #4: Third , we will be carefully scrutinizing our portfolio to ensure our focus on our core business . We are going to hold each of our businesses accountable for delivering clear growth , profitability and return on investment targets .

Speaker #4: We are approaching this process with an open mind , but if any of those businesses are not capable of delivering those targets in a reasonable time frame , we are going to scrutinize whether we are the right owner for them .

Speaker #4: Fourth , we need to drive net cost savings and simplify processes across the organization . We are committed to being a business that generates strong operating leverage , even as we invest in accelerating growth and our ongoing 400 million cost transformation program is an important step in that direction .

Speaker #4: However, we recognize that those savings today are not adequately falling through to the bottom line. Part of this is because we are still operating with far too much complexity today.

Emmanuelle Ligner: However, we recognize that those savings today are not adequately falling through to the bottom line. Part of this is because we are still operating with far too much complexity today. We need to simplify our operating processes to remove barriers that prevent us from executing efficiently. Gaps in sales and operating processes are contributing to inventory and forecasting challenges, preventing us from serving our customers at the on-time rates they expect. To address this, we are focused on improving leadership accountability across the businesses. We are establishing new operating norms and cadence that will ensure the leaders across our organization are aligned and focused on top business priorities. Finally, to help to do this, we must strengthen our talent and improve accountability in a few key areas. Very encouragingly, most of the associates I've met are deeply engaged and passionate about the work they do each day.

Speaker #4: We need to simplify our operating processes to remove barriers that prevent us from executing efficiently . Gaps in sales and operating processes are contributing to inventory and forecasting challenges , preventing us from serving our customers at the on time rates they expect to address .

Speaker #4: This quarter, we are focused on improving leadership and accountability across the businesses we are establishing new operating norms and cadence that will ensure the leaders across our organization are aligned and focused on.

Speaker #4: Top business priorities . Finally , to help to do this , we must transcend our talent and improve accountability in a few key areas .

Speaker #4: Very encouraging . Most of the associates have met are deeply engaged and passionate about the work they do each day . They want the company to succeed .

Emmanuelle Ligner: They want the company to succeed. They are prepared to work hard and be part of the solution. They are looking for leadership and guidance on how to do that. To support those efforts and accelerate improvement, we will be bringing on new talent in a few key areas. A new Chief Operating Officer, a critical role that will report to me and help reinforce consistent manufacturing, supply chain excellence, and lean operations across the organization. A new executive leadership position dedicated to the quality and regulatory function, reporting directly to me, a strategic move reflecting the critical role quality and regulatory play in safeguarding patient safety, ensuring regulatory compliance, and driving operational integrity across our global business. We are also hiring a new Chief Digital Officer to help strengthen digital commerce capabilities with our Laboratory Solutions segments.

Speaker #4: They are prepared to work hard and be part of the solution . They are looking for leadership and guidance on how to do that , to support those efforts and accelerate improvement .

Speaker #4: We will be bringing on new talent in a few key areas a new chief Operating officer , a critical role that will report to me and help reinforce consistent manufacturing supply chain excellence and lean operations across the organization .

Speaker #4: A new executive leadership position dedicated to the quality and regulatory function , reporting directly to me , a strategic move reflecting the critical role , quality and regulatory play in safeguarding patient safety , ensuring regulatory compliance and driving operational integrity across our global business .

Speaker #4: We are also hiring a new Chief Digital Officer to help strengthen digital commerce capabilities with our laboratory solution segments . Avantor Inc will initially be targeted toward addressing each of those focused areas , so the important action will help us drive meaningful changes and improvements across our organization over the next several quarters .

Emmanuelle Ligner: Avantor Revival will initially be targeted toward addressing each of those focus areas. Those important actions will help us drive meaningful changes and improvement across our organization over the next several quarters. It is important to stress that those initial steps are based on my observation. Following about two months in the role, I'm committed to continue to meet with and learn from all our stakeholders, and as I do, rest reassured, those plans will continue to evolve with a renewed focus on getting our performance back on track and creating value for our shareholders. Clearly, turning business performance around will take some time, but we are confident the action we are taking will have an impact that will continue to grow over time. It's about driving simplification, process improvement, and accountability across the organization.

Speaker #4: But we are not stopping here . It is important to stress that those initial steps are based on my observation . Following about two months in the role , I am committed to continue to meet with and learn from all our stakeholders .

Speaker #4: And as I do , rest reassures those plans will continue to evolve with a renewed focus on getting our performance back on track and creating value for our shareholders .

Speaker #4: Clearly , turning business performance around will take some time , but we are confident the action we are taking will have an impact that will continue to grow over time .

Speaker #4: It's about driving simplification , process improvement and accountability across the organization . As I noted a moment ago , our board and management team are 100% behind this effort .

Emmanuelle Ligner: As I noted a moment ago, our Board and management team are 100% behind this effort. The recently announced addition of Greg Lucer to our Board and the elevation of Greg Sumi as our next Board Chairman are demonstrative of our Board's active oversight and engagement in this project. I know we must rebuild our credibility with the investment community, and accountability will be my North Star. You can expect regular updates on our progress against those objectives. With that, I will now turn the call over to the operator to begin the Q&A session.

Speaker #4: The recently announced addition of Greg Lussier to our board and the elevation of Greg Suomi as our next board chairman are demonstrating of our board active oversight and engagement in this project .

Speaker #4: I know we must rebuild our credibility with the investment community, and accountability will be my North Star. You can expect regular updates on our progress against those objectives.

Speaker #4: With that, I will now turn the call over to the operator to begin the Q&A session.

Speaker #2: Thank you . We will now begin the question and answer session as a reminder , if you would like to ask a question today , please do so now by pressing star followed by the number one on your telephone keypad .

Operator: Thank you. We will now begin the question and answer session. As a reminder, if you would like to ask a question today, please do so now by pressing star followed by the number one on your telephone keypad. If you change your mind or you feel like your question has already been answered, you can press star followed by two to remove yourself from the queue. To allow everyone a chance to ask a question during Q&A, we request that you please limit yourself to one question and one follow-up. Our first question today comes from Vijay Kumar with Evercore ISI. Vijay, please go ahead.

Speaker #2: If you change your mind or you feel like your question has already been answered , you can press star followed by two to remove yourself from the queue to allow everyone a chance to ask a question during Q&A , we request that you please limit yourself to one question and one follow up .

Speaker #2: Our first question today comes from Vijay Kumar with Evercore ISI . Vijay , please go ahead .

Speaker #6: Hi guys . Thank you for taking my question and Emmanuel , welcome to the to your inaugural earnings call . I maybe a high level as you've reviewed the business right .

R. Brent Jones: Hi guys, thank you for taking my question. Emmanuelle, welcome to your inaugural earnings call. Maybe high level as you've reviewed the business, right? You come with bioprocessing background. When you look at these declines, right? What is your confidence that these are fixable, solvable issues? I'm curious on how the quarter played out relative to prior expectations.

Speaker #6: And you come with bioprocessing background . You know , when you look at these declines right . What is your confidence that these are fixable solvable issues in in I'm curious on how the quarter played out .

Speaker #6: Right . We're we're relatively a prior expectations was the quarter did progress in line and did things worsen in September October ? I'm curious when did these issues crop up ?

Emmanuelle Ligner: Quarter.

R. Brent Jones: Did progress in line, and did things worsen in September, October? I'm curious when did these issues crop up?

Speaker #7: Thanks , Vijay . Thanks for for the kind , welcoming word . Look , first of all , I . I'm confident that it's fixable over the last two months , I really spent a lot of time on the field with the people , with our customers .

Emmanuelle Ligner: Thanks, Vijay. Thanks for the kind welcoming word. First of all, I'm confident that it's fixable. Over the last two months, I really spent a lot of time on the field with the people, with our customers, dozens of customers and supplier, and I think the first thing which I was really, really super pleased about is the conviction by the people that they have the passion about the brand, they have the passion about the product, they have the passion about the customers. What the team needs is really leadership, and I think on the quarter, it is very disappointing numbers. There's absolutely no doubt about this, and there's no excuses about the fact that, you know, we just dropped the ball on a couple of areas. Again, I think I share that around the S&OP. It's really about better communication.

Speaker #7: Dozens of customers and suppliers. And I think the first thing which I was really, really super pleased about is.

Speaker #4: The conviction by the people that , you know , they have the passion about the brand , they have the passion about the product , they have the passion about the customers .

Speaker #4: What what the team need is , is really leadership . And I think on the quarter , look , it is very disappointing numbers .

Speaker #4: There's absolutely no doubt about this . And there's no excuses about the fact that , you know , we we just dropped the ball on a couple of Aria .

Speaker #4: And again , I think I shared that around the SNP , it's really about a better communication . It's about visibility . It's about execution .

Emmanuelle Ligner: It's about visibility, it's about execution, it's about accountability, and that's why Brent and myself are putting new norms, new cadence to make sure that the team is really working together. I think again, it is fixable. Those are just the five pillars that I just identified in my first eight weeks. Of course, we'll continue to learn, we'll continue to speak with a key shareholder, and this plan will evolve without any doubt.

Speaker #4: It's about accountability . And that's why Brent and myself are putting new norms , new cadence , to make sure that the team is really working together .

Speaker #4: I think , again , it is fixable . Those are just the five pillars that adjusted identified in my first 88 weeks . Then of course , we'll continue to learn .

Speaker #4: We'll continue to speak with the key shareholder . And we this plan will will evolve without any doubt .

Speaker #6: Understood . And then , Brent , maybe one for you on on . You know , when you look at 26 , some of your peers have given outlooks right in the low single digit range is that can the business grow in 2026 ?

R. Brent Jones: Understood. Brent, maybe one for you on, you know, when you look at 2026, some of your peers have given outlooks right in the low single digit range. Can the business grow in 2026? You know you mentioned $100 million of lab contribution on paper. Looks like lab should grow in bioprocessing. It feels like some of these were unique customer situations that was largely tied to fiscal 2025 and it should grow. Can the business grow at a high level in 2026?

Speaker #6: You know , you mentioned 100 million of lab contribution on paper . Looks like lab should grow in bioprocessing . It feels like some of these were unique customer situations .

Speaker #6: There was largely tied to fiscal 25 . And it should grow . But can can the business grow at a high level in 26 ?

Speaker #4: Hey Vijay Manuel again . Look , I'm taking a fresh look at at all the numbers , right ? Because I want accuracy .

Emmanuelle Ligner: Hey, Vijay, Emmanuelle again. Look, I'm taking a fresh look at all the numbers because I want accuracy, and let me look at those numbers again, then we'll come back to you when we have a good understanding of 2026.

Speaker #4: And so let me look at those numbers again and then we'll come back to you when we have a good understanding of 2026 .

Speaker #6: Understood . Thanks , guys .

R. Brent Jones: Understood. Thanks, guys.

Speaker #2: Thank you . Our next question comes from Michael Riskin with Bank of America . Michael , please go ahead

Operator: Thank you. Our next question comes from Michael Ryskin with Bank of America. Michael, please go ahead.

Speaker #8: Great . Thanks for taking the question . And appreciate all the all the candid color during the prepared remarks . You touched on .

[Analyst]: Great. Thanks for taking the question and appreciate all the candid color during the prepared remarks. You touched on share losses and competitive dynamics briefly in the prepared remarks, just talking about Q1, Q2 dynamics. Can we talk about that a little bit deeper? I think it's pretty evident based on the results over the last couple of years, especially in the lab solutions segment, but also in bioscience, there's been pretty deep share losses to your competitors. Appreciate all your color on operational steps to fix that. Given the portfolio and given the markets you point, how do you plan to stem that tide of share loss? Could you just give us some confidence and visibility to correct that? That seems to be sort of the biggest structural challenge you're facing.

Speaker #8: Share losses and competitive dynamics briefly in the prepared remarks , but just talking about , you know , once you take dynamics , can we talk about that a little bit deeper ?

Speaker #8: I mean , I think it's pretty evident based on the results over the last couple of years , especially in the lab solution segment , but also in bioscience , there's been pretty deep share losses to your competitors .

Speaker #8: I appreciate all your color on operational steps to fix that . But given the portfolio and given the markets you play in , how do you plan to stem the tide of share loss and just could you just give us some confidence in in visibility to correct that ?

Speaker #8: Because that seems to be sort of the biggest structural challenge you're facing .

Speaker #4: Yes . Michael . Look , it's my understanding . I think we've lost some share without any doubt in the lab services business .

Emmanuelle Ligner: Yes, Michael, look, here's my understanding. I think we've lost some share without any doubt in the lab services business. Here's why I'm super encouraged: we have Corey that took the lead of this business six, seven months ago, and what he and the team is doing is really having, I will say, a fighting spirit back. What we have observed over the last six to seven months is that we have not lost any new renewal of any large key account contract. I think this is really important for us. On the contrary, we have the opportunity to grow our share of wallet in those accounts. Now, we have some barrier that we need to fix and some challenges. E-commerce is one of them.

Speaker #4: Here's why I'm super encouraged . Is , you know , we have Corey that took the lead of this business of 6 or 7 months ago .

Speaker #4: And what is what him and the team is doing is really having a I will say , a fighting spirit back . And and what we've observed over the last 6 to 7 months is that we have not lost any new renewal of any large key account contract .

Speaker #4: And I think this is really important for us . And on the contrary , we have the opportunity to grow our share of wallet in those , in those accounts .

Speaker #4: Now we have some area that we need to fix and some challenges . I mean , e-commerce is one of them , and this is why we're taking really a quick action to to recruit a digital officer to help us to really get this e-commerce platform to engage with our customers in a much more leaner way to provide not only product , but really workflow , which is so important for the customers .

Emmanuelle Ligner: This is why we're taking really quick action to recruit a digital officer to help us to really get this e-commerce platform to engage with our customers in a much more leaner way to provide not only product but really workflow, which is so important for the customers. On bioprocessing, my view is the following. Really, our key product line in the bioprocessing is our bioprocessing chemicals. When we look at our order intake year to date, our order intake is on a high single digit level. We're there. I met customers that clearly said to us, we want to work with you, we want to do better, we can give you more businesses. We need to fix a couple of things like our service level, in particular our on time delivery.

Speaker #4: On bioprocessing . Look , my view is the following . You know , really our key product line in the bioprocessing is our bioprocessing chemicals .

Speaker #4: And when we look at our order intake year to date , our order intake is on a high single digit level . So we we there .

Speaker #4: You know , I met customers that clearly said to us , we want to work with you . We want to do better .

Speaker #4: We can give you more , more businesses . We need to fix a couple of things , like our service level in particular on time delivery .

Speaker #4: And this is why it's so important to work on the snap , to look on the different plants that need upgrade . And that's what we're doing .

Emmanuelle Ligner: This is why it's so important to work on the S&OP to look on the different plants that need upgrade. That's what we're doing and we are doing as fast as possible on this.

Speaker #4: And we are doing as fast as possible on this .

Speaker #8: Okay , thanks . And if I can have a follow up on the advance or revival dynamic , I mean , I think that's really resonates .

[Analyst]: Okay, thanks. If I can have a follow up on the Avantor revival dynamic. I think that certainly resonates. You call it out a couple times that you believe the business is overly complex, unnecessary centralization. We've heard that from a number of our channel checks as well. What are the steps to fixing that? I mean it's a huge organization, there's a lot of levels. It seems like there's going to be some deep changes there. From an operational perspective that seems to be the easiest fix. Could you talk us through the process to get there and how long that could take?

Speaker #8: You called out a couple of times that you believe the business is overly complex , unnecessary centralization . We've heard that from a number of our channel checks as well .

Speaker #8: What what are the steps to fixing that ? Right ? I mean , it's a it's a huge organization . There's a lot of levels .

Speaker #8: Seems like there's going to be some deep changes there . But from an operational perspective , that seems to be the easiest fix .

Speaker #8: But could you talk us through the process to get there and how long that could take? Thanks.

Speaker #4: It's it's really early days for me . I remember . So look , we're going to start to really work on the go to market , really understand how we can decentralize more of the decision making closer to the customers .

Emmanuelle Ligner: It's really early days for me. I remember. Look, we are going to start to really work on the go-to-market. Really understand how we can decentralize more of the decision-making closer to the customers. As you know, there's different regions with different dynamics. We really need to empower the local team to really drive the decision. I think the other thing is, we have two really important businesses. One is our lab services, it's VWR. It's a distribution business. We have a very strong brand there. The other one is the bioscience business with brands like J.T. Baker. I think we need to make sure that those brands are more, I would say, front end at the customers' level to make sure that we engage with the customers with the brand they want to work with. The observation that I have, Michael, is many customers told me we love VWR.

Speaker #4: And as you know , there's different regions with different dynamics . And so we really need to empower the local team to really drive the decision .

Speaker #4: I think the other thing is , look , we have two really important business . One is our lab services . It's VW , it's a distribution business .

Speaker #4: We have a very strong brand there . And then the other one is about business with brands like JT Baker . I think we need to make sure that those brands are more , I would say front at the customers level to make sure that we , we , we engage with the customers , with the brand .

Speaker #4: They want to work with , the observation that I have , Michael , is many customers told me we love VW . We want to continue to work with VW .

Emmanuelle Ligner: We want to continue to work with VWR. Some even say, we didn't know that VWR was part of Avantor. That's why I'm talking about brand revival and really making sure that we are improving our engagement with the customers. Service level is very, very important. This is why we are looking at what do we need to do in the plants which are in need of investment to make sure that we raise our service level on the bioprocessing. Again, as we said earlier, the demand is there. It's for us to really make sure we operate better.

Speaker #4: Some even say , well , we didn't know that VW was part of Avantor and that's why I'm talking about brand revival and really making sure that we are improving our our engagement with the customers .

Speaker #4: Service level is very , very important . Okay . And this is why we are looking at what do we need to do in the plants , which are in need of investment to make sure that we raise our service level on the on the bioprocessing ?

Speaker #4: Again , as we said earlier , the demand is there . It's for us to really make sure we operate better .

Speaker #8: Great . Thank you .

[Analyst]: Great, thank you.

Speaker #2: Thank you . Our next question comes from Dan Brennan with TD Cohen . Dan , please go ahead .

Operator: Thank you. Our next question comes from Daniel Brennan with TD Cowen. Graham, please go ahead.

Speaker #9: Great . Thank you . Thanks for the questions . Maybe just to start on the lab side of the business , could you just describe I know you discussed pricing in the opening remarks .

R. Brent Jones: Great, thank you. Thanks for the questions. Maybe just to start on the lab side of the business, could you just describe, I know you discussed pricing in the opening remarks. Just give us a sense in Q3 and kind of Q4 how we think about that price, volume mix, if you will, and then kind of. Any thoughts? I know you're not ready to talk about 2026, but is the assumption that price gets better, just any visibility on that? Maybe the second part would just be more strategically as you've looked at, you know, since you've been on board, you've looked at the lab market. Obviously you've talked about share loss, but you studied that now recently, any way to characterize in that context, like how much share you think VWR has lost.

Speaker #9: Just give us a sense in three Q and four Q how we think about that price volume mix . If you will , and then any thoughts ?

Speaker #9: I know you're not ready to talk about 26 , but is the assumption that price gets better ? Does any visibility on that ?

Speaker #9: And then maybe the second part would just be more strategically , as you've looked at since you've been on board , you've looked at the lab market .

Speaker #9: Obviously , you've talked about share loss , but you've studied that now recently . Any way to characterize in that context , like how much share you think VW has lost over the last 2 or 3 years , just to give us a framework for if you're able to kind of regain that , to stabilize it , what the opportunity might be .

Emmanuelle Ligner: Over the last two or three years.

R. Brent Jones: Just to give us the framework for if you're able to kind of regain that or stabilize it, what the opportunity might be.

Speaker #5: Okay . Okay . On on the price volume dynamic , I mean , certainly in connection with the comments and share on that .

R. Brent Jones: Okay, on the price volume dynamic, certainly in connection with the comments and share on that, there is some down volume. We are getting price, not exactly the levels we'd like to see, but we're certainly seeing price coming through and we expect a similar dynamic in Q4 on that. When you look at Q3 performance sequentially to Q4, the main dynamic in lab is a modest increase really related to number of days and seasonality in Europe. What you're really hearing from us is stability through to Q4 and that dynamic will continue on the pricing side as well.

Speaker #5: There is some down volume we are getting price not not exactly the levels we'd like to see , but we're certainly seeing price coming through .

Speaker #5: And . You know , and we expect similar dynamic in Q4 on that .

Speaker #10: So .

Speaker #5: And when you look at Q3 Q3 performance sequentially to Q4 , you know , the main the main dynamic in lab is a modest increase , really related to number of days and seasonality in Europe there .

Speaker #5: So what you're really hearing from us is stability through Q4 and that dynamic will continue on the pricing side as well . Hit .

Speaker #4: On the market share . Look , I think we've lost a couple of large accounts , and we know them . And we that that's something which is tracking .

Emmanuelle Ligner: On the market share. Look, I think we've lost a couple of large accounts and we know them and that's something which is tracking. I think what is important to understand is when you lose a key account contract, the time that it takes to lose this account, as there are many, many different sites around the world, it takes time. The same way when you renew a contract and then you have an opportunity to grow your share of wallet, it also takes time to ramp up. This is where the commercial effectiveness is very important because you go at every single lab, convert the customers. Either from a loss standpoint or for a gain standpoint, the dynamic drags on several quarters and I think that's where we were. This is sometimes where it's difficult to really evaluate the amount of market share that we've lost.

Speaker #4: And I think what is important to understand is when you lose a key account contract , you know , the time that it takes to lose this account as there is many , many different sites around the world .

Speaker #4: It takes time . And the same way when you renew a contract and then you have an opportunity to grow your share of wallet , also takes time to ramp up .

Speaker #4: it's share that we've lost . But we know the contract that we've lost in the past .

Speaker #4: You know , this is where the commercial effectiveness is very important because you go at every single lab , convert the customers . So either from a loss standpoint or for gain standpoint , you know , the dynamic drag on several quarters .

Emmanuelle Ligner: We know the contract that we've lost in the past.

Speaker #9: Let me just on bioprocess manual , since you've got such significant domain experience there , just kind of how would you characterize the Avanto portfolio today ?

R. Brent Jones: Let me just on bioprocess manual, since you've got such significant domain experience there, just kind of how would you characterize the Avantor portfolio today? I mean when you think about this market recovering, consumables I think have been growing double digits, equipment still under pressure from a market basis. How do you think Avantor is positioned with their current portfolio? As we look ahead into say the next 12 to 24 months, can they get back to market growth above or below? Just what are the key variables there? Thank you.

Speaker #9: I mean , you know , when you think market recovering consumables , I think , have been growing double digits . Equipment still under pressure from a market basis .

Speaker #9: How do you think Avantor Inc position with their current portfolio ? As we look ahead into , you know , say the next 12 to 24 months , can they get back to market growth above or below ?

Speaker #9: Just what are the key variables there ? Thank you . Yeah .

Speaker #4: It's a great question . Look I'm super excited about the portfolio we have in particular around the chemicals . You know acid base .

Emmanuelle Ligner: It's a great question. Look, I'm super excited about the portfolio we have, in particular around the chemicals, acid-based. We have adjuvants, we have also viral inactivation products, which are preparatory. We have a really good portfolio, and I think we have a good commercial team. As I said, our order intake year to date is high single digit, so basically it gave me the confidence that the demand is there. It's for us to make sure that we serve the customers better, and all the customers that I've met are super satisfied with that part of the portfolio. I'm confident that the portfolio is good. Also, the recent announcement we've made, like Blue Whale, is very encouraging about the fact that we will continue to collaborate with strategic innovation that will give us a differentiated portfolio in the future. Quite exciting about the bioprocessing portfolio.

Speaker #4: We have adjuvants . We have also , you know , viral inactivation products which are proprietary . So we have really good portfolio .

Speaker #4: We have adjuvants . We have also , you know , viral inactivation products which are proprietary . So we have really good

Speaker #4: team . about this And again , as I said , our order intake year to date is high single digit . So basically it gave me the confidence that the demand is there .

Speaker #4: It's for us to make sure that we serve the customers better and all the customers that I've met are super satisfied with with that part of the portfolio .

Speaker #4: So I'm confident that the portfolio is , is is good and also the recent announcement we've made , like like Blue Whale is is very encouraging about the fact that we will continue to collaborate with , you know , strategic innovation that will give us a differentiated portfolio in the future .

Speaker #4: So quite exciting about the bioprocessing portfolio .

Speaker #9: Great . Thank you .

R. Brent Jones: Great, thank you.

Speaker #2: Thank you . Our next question comes from Luke Sergott with Barclays . Luke , please go ahead .

Operator: Thank you. Our next question comes from Luke Sergott with Barclays. Luke, please go ahead.

Speaker #10: Hey guys . Thanks for the question here . Appreciate like all the updates and everything you're thinking about . But as you think about , you know , when you're looking at 26 and the overall market rate , you know , and just relation to how you guys are going to grow , what's your outlook for the market I guess given that the , you know , the underlying demand that you've seen , especially across what your peers have said to .

[Analyst]: Thanks for the question here. Appreciate all the updates and everything you're thinking about. As you think about when you're looking at 2026 and the overall market rate, in relation to how you guys are going to grow, what's your outlook for the market? I guess given the underlying demand that you've seen, especially across what your peers have said too.

Speaker #4: I think I think on the on the peers comment , you know , we we need to look at apples to apples . And again , I think what is important for me is to make sure that I remind everybody that our portfolio on bioprocessing is really primarily around chemicals .

Emmanuelle Ligner: I think on the peers comment we need to look at apples to apples, and again, I think what is important for me is to make sure that I remind everybody that our portfolio on bioprocessing is really primarily around chemicals. It's a unique, differentiated portfolio, especially from the company that I'm coming from. I think it's very important that we think that it, as of today, year-to-date direction is order intake, high single digits. What I need to do is I really need to take a fresh look at the 2026 numbers, the market, what do we think we can do, what's going to be the impact of the five pillar of revival plan, how fast we can get some impact on this. Some will have an impact quickly, some will take more time. I'll come back to you as soon as I have a better view.

Speaker #4: Okay , so it's a unique , differentiated portfolio , especially with from the company that that I'm coming from . And so I think it's very important that we we think that it's as of today or today a directionally is order intake high single digit .

Speaker #4: What I need to do is I really need to take a fresh look at the 2026 numbers . The market , you know , what do we need ?

Speaker #4: We think we can do what's going to be the impact of the five pillars of revival plan ? How fast we can get some impact on this , some will have an impact quickly , some will take more time .

Speaker #4: And I'll come back to you as soon as I have a better view .

Speaker #10: Okay . I was just trying to figure out what your overall outlook for the for your particular market looked like . And then we can kind of make the assumption there on what you guys can do from a growth perspective .

[Analyst]: Okay. I was just trying to figure out what your overall outlook for your particular market looked like. We can kind of make the assumption there on what you guys can do from a growth perspective. That's fine. I guess just from a follow-up here, you talked about the bioprocessing plant. The downtime there, is this, what does this do to, is this just like a planned, you know, regular maintenance downtime?

Speaker #10: But that's fine . I guess just from a follow up here , you talked about the bioprocessing plant , the downtime there is this what does this do to is this just like a planned , you know , regular maintenance downtime that you guys had ?

Speaker #10: And , you know , do you need . You talked a little bit about kind of building in some redundancy is this is this what you're kind of referring to so that you don't you don't like miss out on , you know , the quality and the , the , the reliability that , that , that market completely relies on is number one .

Emmanuelle Ligner: That you guys had?

[Analyst]: Do you need, you talked a little bit about kind of building some redundancy. Is this what you're kind of referring to, so that you don't miss out on the quality and the reliability that that market completely relies on as number one?

Speaker #4: Okay . I visited several of our chemicals plants . We have really world class plant , super modern , very well run . You know , with with very I would say dedicated team .

Emmanuelle Ligner: Look, I visited several of our chemicals plants. We have really world-class plants, super modern, very well run, with very, I would say, dedicated team. Some are just in need of upgrade. Some of the tools are a bit old, and therefore they break down. They give us a bit of unreliability of on-time delivery. Service level for some plants are excellent; some are not where we should be. This is what I'm talking about, strategic investment. There is some investment that are needed. We need to be very surgical about this. That's just, I would say, on the plant themselves. The second thing is about the processes.

Speaker #4: Some are just in need of upgrade okay . And so some of the tools are a bit older and so therefore they break down .

Speaker #4: So they give us a bit of unreliability of on time delivery . So service level for some plants are excellent . Some are not where we should be .

Speaker #4: And this is what I'm talking about . Strategic investment . There is some investments that are needed . We need to be very surgical about this .

Speaker #4: And and that's that's just I will say on the plant , it's themselves . The second thing is about the processes , you know , it's about how do we give visibility to the plant , about what's going to be the demand .

Emmanuelle Ligner: It's about how do we give visibility to the plant, what's going to be the demand, having a good understanding that the plant are putting in place the planning to make sure that the product will be delivered as the customers requested, and then of course at the quality which is requested. It's really around the processes that today are not as simple as they should be, not as smooth as they should be, and with a bit also of lack of accountability. Strategic investment on one side. I think it's also about talent. One of my remarks was about the fact that the team is super passionate and want to do well and they want to fix the issue and they want to do better. They need direction, they need someone who is going to help them to focus, and they need leadership.

Speaker #4: Having a good understanding that the plant are putting in place the planning to make sure that the product will be delivered as the customers requested .

Speaker #4: And then , of course , at the quality which is requested . So it's really around the processes that today are not as simple .

Speaker #4: They should be not as smooth as they should be . And with a bit also of lack of accountability . So strategic investment on one side , and I think it's also about talent .

Speaker #4: One of my remark was about the fact that the team is super passionate and want to do well , and they want to fix the issue , and they want to do better .

Speaker #4: The they need direction , they need someone which is going to help them to focus , and they need leadership . And this is also why we are far advanced into a recruit of are chief operating officer , someone which have global experience long term experience of leading different type of plants , including chemistry , plant someone which is a black belt .

Emmanuelle Ligner: This is also why we are far advanced into a recruit of a Chief Operating Officer, someone who has a global experience, a long-term experience of leading different type of plant, including chemistry plant, someone who is a black belt, someone that has a lean mindset, a productivity mindset. We are on the final stage of that recruitment that will really help as well the team to drive and improve plant performance.

Speaker #4: Someone that has a lean mindset , a productivity mindset . And and we're on the final stage of that recruitment that will really help as well .

Speaker #4: The team to drive and improve plant performance .

Speaker #10: Great . Thanks .

[Analyst]: Great, thanks.

Speaker #2: Thank you . Our next question comes from Tycho Peterson with Jefferies . Tycho , please go ahead .

Operator: Thank you. Our next question comes from Tycho Peterson with Jefferies. Tycho, please go ahead.

Speaker #11: Hey , thanks . I want to go back to the pricing question earlier because I think it's an important point . I think the message coming out of last quarter and admittedly , Emmanuel was before you started , was that , you know , avatar was willing to trade price to hold share .

Emmanuelle Ligner: Hey, thanks. I want to go back to the pricing question earlier because I think it's an important point. I think the message coming out of last quarter, and admittedly, Emmanuelle, was before you started, was that, you know, Avantor was willing to trade price to hold share. That's not what we heard from Brent a minute ago. I guess are you committing to actually taking price in the lab market next year, and can you maybe quantify what you're expecting there? I think that was a very different message than we heard coming out of Q2. Yeah, Tycho, just to be clear there.

Speaker #11: That's not what we heard from a minute ago. So, I guess, are you committing to actually taking price in the market next year?

Speaker #11: And can you maybe quantify what you're expecting there ? Because I think that was a very different message than we heard coming out of TCU .

Speaker #5: Yeah . Tycho , just to be clear there , I mean , we I mean , you know , there are raw materials and there are there's inflation in the channel .

R. Brent Jones: There are raw materials and there's inflation in the channel. We are getting priced against that. The margin pressure you're seeing is differential from the price to the COGS. We've talked about also giving price to drive share and that it's relative to the inflation against the products we're selling. It actually is the same message. I take your point on the nuance and look, it's in the lab. We've continued to say that we're about creating operating income there and we absolutely are doing the actions to drive volume, to drive share. In that connection, the new contracts, which as Emmanuelle Ligner made the comments, we're seeing the impact of the contract losses on share there. It will take time both on the defense and the new contract wins to see those come in there. We absolutely are looking to accrete operating income and then obviously over time, margin.

Speaker #5: We are getting price against that. The margin pressure you're seeing is differential from the price to the COGS. I mean, there.

Speaker #5: So when we've talked about also giving price to drive share in that its relative to the inflation against the against the products we're selling .

Speaker #5: So it actually is the same message . But I take your point on the nuance and look it's in the lab . We've continued to say that we're about creating operating income there .

Speaker #5: And we absolutely are doing the actions to drive volume , to drive share in that connection . The new contracts , which is a manual , made the comments .

Speaker #5: You know , we're seeing the impact of the contract losses on share there . It will take time both on the defense and the new contract wins to see those come in there .

Speaker #5: But, we know we absolutely are looking to accrete operating income, and then obviously over time, margin.

Speaker #11: Okay . And then a capital deployment question I mean given everything going on and it's still early days , Emmanuel . Why is this the right time to be buying back stock ?

Emmanuelle Ligner: Okay. And then a capital deployment question. I mean given everything going on and it's still early days, Emmanuelle, why is this the right time to be buying back stock? You know that it's a little bit confusing given that you're just kind of stepping in here. There's a lot of moving pieces. It's still a volatile backdrop. Maybe talk to the rationale to buy back right now. Look, Tycho, we believe our current share price really does not reflect the long term value of the company, especially in the turnaround. The program is just basically to make sure that we demonstrate our commitment to the long term value of the company. Okay. We are confident in the business, confidence about the fact that we can turn around the performance with revival plan. We look in terms of capital allocation, M&A is always an opportunity.

Speaker #11: You know , that's a little bit confusing given that you're just kind of stepping in here . There's a lot of moving pieces .

Speaker #11: It's still a volatile backdrop . Maybe talk to you . The rationale of the buyback right now .

Speaker #12: Well .

Speaker #4: Look Tycho , we believe our current share price really does not reflect the long term value of the company , especially in the turnaround .

Speaker #4: So , you know , the program is is just basically to make sure that we demonstrate our commitment to , to the long term value of the company .

Speaker #4: Okay . And we our confidence to the business confidence about the fact that we can turn around the performance with revival plan . We look in terms of capital allocation .

Speaker #4: M&A is always an opportunity . But when you when you bring M&A , you need to make sure that you're going to bring the company into a company , which is operating really , really well , right ?

Emmanuelle Ligner: When you bring M&A, you need to make sure that you're going to bring the company into a company which is operating really, really well. Integration of an acquisition needs to be done with a team which have simple processes, which have really great talent in that are going to be able to execute the acquisitions and the integration super well. I think right now, you know, it's just a conviction that the business is going to do better, that we are going to turn it around. I think it was the right message and the right things to do. Okay, and then the last one on Bioscience, you quoted a number of kind of shipping timing issues.

Speaker #4: Integration of an acquisition needs to be done where the team , which have simple processes , which have really great talent in that are going to be able to execute the the acquisition and the integration super well .

Speaker #4: And so I think right now , you know , it's just a conviction that the business is going to do better , that we are going to turn it around .

Speaker #4: And I think it was the right message and the right thing to do.

Speaker #11: Okay . And then the last one on Bioscience , you quoted a number of kind of shipping timing issues . Are you assuming those come back in the fourth quarter ?

Emmanuelle Ligner: Are you assuming those come back in the fourth quarter?

Speaker #11: It was a little bit unclear what's actually baked into guidance from a kind of timing and recapture perspective .

Emmanuelle Ligner: It was a little bit unclear what's actually baked into guidance from a kind of timing and recapture perspective. Yes, I think the team has already started to do some good job in Q3, but not enough and will continue to do so. Yes, we're going to see some improvement in Q4, but as I said as well, some of the plants need some equipment investment, and you know, those things sometimes take some time. We're working as fast as possible. You have my commitment to really focus on executing the demand as much as possible and as fast as possible. Okay, thanks.

Speaker #4: Yes , I think the team has already started to do some good job in in Q3 , but not not enough . And we'll continue to do so .

Speaker #4: So yes , we're going to see some improvement in Q4 . But as I said as well , some of the plant needs some equipment investment .

Speaker #4: And , you know , those things sometimes take some time . So we're working as fast as possible . You have my commitment to to really focus on executing the demand as much as possible and as fast as possible .

Speaker #11: Okay . Thanks .

Speaker #2: Thank you . Our next question comes from Patrick Donnelly with Citi . Patrick , please go ahead .

Operator: Thank you. Our next question comes from Patrick Donnelly with Citi. Patrick, please go ahead.

Speaker #13: Hey , guys . Thank you for taking the question . Brent . Maybe a follow up on the pricing side . Certainly understand understand some of the cadence there .

[Analyst]: Hey guys, thank you for taking the question. Brent, maybe a follow up on the pricing side. Certainly understand some of the cadence there. Can you just talk about, I guess, the moving pieces on margins just high level as we get into next year in terms of what pricing rolls through next year and has to annualize and pressures margins versus some of the offsets. What levers do you guys have to pull? Obviously you've done some cost out of this last couple of years. How much more room is there on that front versus some of the pricing pressures. Maybe just a high level piece on margins would be helpful.

Speaker #13: Can you just talk about I guess the moving pieces on margins just high level as we get into next year in terms of what pricing rolls through next year and has to annualize and pressures , margins versus some of the offsets .

Speaker #13: What do you guys have to pull ? Obviously , you've done some cost out initiatives over the last couple of years . How much more room is there on that versus some of the pricing pressures ?

Speaker #13: Maybe just the high level moving margins would be helpful ?

Speaker #5: Well , we'll an important question , Patrick and I , per other comments here , probably won't make significant comment into 26 . But you know , when you when you think about our margin dynamics broadly here , you know , gross margin down year over year , largely driven , you know , falling on the Tycho question .

Emmanuelle Ligner: Well.

R. Brent Jones: Important question, Patrick, and per other comments here, probably won't make significant comment in the 2026, but when you think about our margin dynamics broadly here, gross margin down year over year, largely driven and following on the Tycho question, we are getting modest price against it, but we're absorbing more inflation. That's been the primary driver, the lab pricing into the gross margin. Now, on a sequential basis, you saw pressure in gross margin that was more just mix of the relative businesses because we didn't have the same level of growth in bioscience as well as primarily there on the business basis and continuing on that. Emmanuelle made the comments that we need to continue to drive at cost broadly and get net cost out rather than offset inflation and offset FX.

Speaker #5: We are getting modest pricing against it . But we're absorbing more inflation . So that's that's been the primary driver . The pricing into the gross margin .

Speaker #5: Now, on a sequential basis, you saw pressure and gross margin that was more just a mix of the relative businesses because we didn't have the same level of growth in bioscience, as well as primarily there on the business basis.

Speaker #5: And continuing on that look , Emanuel made the comments that we need to continue to drive at cost broadly and get net cost out rather than offset inflation and offset FX .

Speaker #5: And , you know , the but when you think about key drivers here , obviously getting pricing , getting price against Cogs are really important in the business .

R. Brent Jones: When you think about key drivers here, obviously getting price and getting price against COGS are really important in the business. The differential segment mix is really, really important and that hurt us in Q3. Finally, productivity, which to project Revive to Avantor revival, Chief Operating Officer driving better productivity at plants. Those will be key parts of it. When we come with the views on 2026, that will certainly be wrapped in our commentary.

Speaker #5: The differential segment mix is really , really important . And that hurt us in Q3 . And then finally productivity , which to project revive to a revival .

Speaker #5: Chief Operating officer driving better productivity at plants . Those will be key parts of it . And when we come with the views on 26 , that will certainly be wrapped in our commentary .

Speaker #4: Can I just add something ? Patrick ?

Emmanuelle Ligner: Can I just add something? I'm absolutely committed to really improve not only the top line but also the bottom line. We need to be an operation which is leveraged, and this is what we're going to do. Part of the revival, of course, we talked about simplification processes. It also means productivity gain. That is going to be very, very important. I think that we will make sure that the entire leadership is really focused behind it.

Speaker #13: Yeah , go ahead .

Speaker #4: I'm absolutely committed to really improve not only the top line , but also the bottom line . Right ? We we need to be an operation , which is leveraged .

Speaker #4: And so this is what we're going to do . So part of the revival of course , we talked about you know simplification processes .

Speaker #4: It also means , you know , productivity gain . That is going to be very , very important . And I think that we will make sure that the entire leadership is really focused behind this .

Speaker #13: Understood . Thanks , Emmanuel . And maybe just a quick one on the academic side , you touched a little bit on it on the prepared remarks .

[Analyst]: Understood. Thanks, Emmanuelle. Maybe just a quick one on the academic government side. Touched a little bit on the prepared remarks. What are the expectations there? Obviously we have the government shutdown. You guys have some exposure there. Maybe just talk about what you're seeing on that front and what the expectations are going forward for that market. A lot of noise there. Appreciate it.

Speaker #13: What are the expectations there ? Obviously we have the government shutdown . You guys have some exposure there . Maybe just talk about what you're seeing on that front and what the expectations are going forward for that market .

Speaker #13: A lot of noise . There . I appreciate it .

Speaker #5: Yeah . Patrick , you know , you saw we were we were down in academic and government Q1 . We had a nice up mid-single digits in Q2 and then down double digits in Q3 .

R. Brent Jones: Yeah Patrick, you saw we were down in academic and government Q1. We had a nice up mid single digits in Q2, and then down double digits in Q3. I think frankly we saw some of the pent up concerns come through in Q3. Significant impact was K through 12, you know, before the school season started there, as well as other softness that we saw through consumables in the form of higher ed there. The U.S. government shutdown is certainly going to exacerbate that; that is really a key driver of the reduction of the Lab guidance for Q4 and for the year down to the mid single digits, that differential as well as the headwinds to consumables. We're certainly forecasting that that continue to be somewhat challenged.

Speaker #5: And I think frankly , we saw some of the pent up concerns come through in Q3 . Significant impact was K through 12 before the school season started there , as well as other softness that we saw through consumables in the form of higher ed .

Speaker #5: There we , you know , the US government shutdown is certainly going to exacerbate that . That is really a key driver of the reduction of the lab guidance for Q4 and for the year down to mid-single digits .

Speaker #5: That differential , as well as the headwinds to consumables . But we we're certainly forecasting that that continue to be somewhat challenged .

Speaker #13: Got it . Thanks , Ben .

Speaker #5: Yep .

[Analyst]: Thanks, Doug.

Emmanuelle Ligner: Yep.

Speaker #2: Thank you . Our next question comes from Doug Schenkel with Wolfe Research . Doug , please go ahead .

Operator: Thank you. Our next question comes from Douglas Schenkel with Wolfe Research. Doug, please go ahead.

Speaker #14: Thank you . And good morning , everybody . A few questions , Emmanuel . You know , it's only been eight weeks . There's a lot going on here .

[Analyst]: Thank you and good morning everybody. A few questions. Emmanuelle, you know, it's only been eight weeks. There's a lot going on here. Is it reasonable to expect you to outline your full assessment and strategic framework by early Q1 or is that too aggressive? That's my first question. My second is really for Brent. Emmanuelle talked a lot about new hires and investments. Revenue growth is likely to remain challenging for the next several quarters. Margin comparisons are notably tough in the first half of next year. When I just look at that fact pattern, my words, not yours, given you don't want to talk too much about 2026, it just seems hard to see a scenario where we would get meaningful EBITDA expansion in 2026. Maybe, maybe no expansion at all. Given those three observations, is there anything you think I'm missing?

Speaker #14: Is it reasonable to expect you to outline your full assessment and strategic framework by early Q1 , or is that too aggressive ? So that's my my first question .

Speaker #14: My second is really for Brent Emanuel talked a lot about new hires and investments , revenue growth is likely to remain challenging for the next several quarters .

Speaker #14: Margin comparisons are notably tough in the first half of next year . So when I just look at that fact pattern , you know , my words , not yours .

Speaker #14: Given you don't want to talk too much about 2026 , but it just seems hard to see a scenario where we would get meaningful EBITDA expansion in 2026 .

Speaker #14: Maybe . Maybe no expansion at all , given those three observations , is there anything you think I'm missing ? And then really , the last one is for both of you .

[Analyst]: The last one is for both of you, recognizing it's been a tough period for tools in terms of downward estimate revisions. I think the challenges, to be fair, have lingered a bit more for Avantor than for most of the group. Clearly, visibility and forecasting has been a challenge for you guys the past few quarters. Do you think this is systems and requires more investment or is this more a function of just competitive dynamics, maybe evolving in a way that you didn't anticipate. Thank you.

Speaker #14: You know , recognizing it's been a tough period for tools in terms of downward estimate revisions . You know , I think the challenge is to be fair , have have lingered a bit more for Avantor Inc than than for most of the group .

Speaker #14: You know , clearly visibility and forecasting has been a challenge for you guys the past few quarters . Do you think this is systems and requires more investment , or is this more a function of just competitive dynamics ?

Speaker #14: Maybe evolving in a way that you didn't anticipate ? Thank you .

Speaker #4: Hey , Doug , good morning . Thanks for thanks for your question . Look , I think in terms of timing , when I when I came , I spoke with the board .

Emmanuelle Ligner: Hey Doug, good morning. Thanks for your question. Look, I think in terms of timing when I came, I spoke with the board, I spoke with the, and I say I needed 100 days to really learn the business, meet everybody that I could, all the stakeholders, our people, the customers, and a few main investors. After 60 days I already need to be in action because first of all, there are some few things which are absolutely obvious, some challenges that we need to fix. That's what I shared with you. Indeed in Q1, I'll come back with you with further thought and with further strategic vision. Absolutely. I'll let Brent answer the question, then we'll come back to the other part.

Speaker #4: I spoke with the team and I said I needed a 100 day to really learn the business . Meet , meet everybody that I could all the stakeholders , our people , the customers and and a few main investors and and look , after 60 days , I already need to be in action because first of all , there are some few things which are absolutely obvious .

Speaker #4: Some challenges that we need to fix . And that's what I shared with you . And indeed in Q1 I'll come back with you with further thoughts and with with further strategic vision .

Speaker #4: Absolutely . I'll answer the question , then we'll come back to to the other part .

Speaker #5: Yeah . Look , look here . I mean , you're absolutely there on the facts . And those are the harder comparators . If you look at the trend of this year , I would just go back to one .

R. Brent Jones: Yeah, look Doug, I mean you're absolutely there on the facts, and those are the harder comparators. If you look at the trend of this year, I would just go back to one. We don't want to signal a lot about 2026 now because there's more work to do there. Again, it's about driving revival and not just how it impacts operations, but also purely on the cost to serve and getting to the top line and the conversion and beyond that. We'll update you when we talk about 2026 and Doug on.

Speaker #5: You know , we don't want to signal a lot about 26 now because there's more work to do there . But again it's about driving revival and not just how it impacts operations , but also purely on the cost to serve and getting to the top line .

Speaker #5: And the conversion . And beyond that , we'll we'll update you when , you know , when we talk about 26 .

Speaker #4: And Doug on the market , my sense is the following . I think production is solid . I think in the R&D aspect from an academy standpoint and even from a pharma very similar certainty and uncertainty is never good .

Emmanuelle Ligner: The market, my sense is the following. I think production is solid. I think in the R&D aspect from an academy standpoint and even from a pharmacist, there is some uncertainty, and uncertainty is never good. I would say it's a mixed market dynamic.

Speaker #4: But so I would say it's a it's a mixed market dynamic .

Speaker #2: Thank you . Our next question comes from Dan Leonard with UBS . Please go ahead .

Operator: Thank you. Our next question comes from Dan Leonard with UBS. Please go ahead.

Speaker #15: Thank you . My first question is on the revival program . Emmanuel , can you frame the cost impacts of that program ? It seems like there's a lot of extra money to be spent on e-commerce , on investment needs and manufacturing , on new hires .

R. Brent Jones: Thank you. My first question is on the revival program. Emmanuelle, can you frame the cost impacts of that program? It seems like there's a lot of extra money to be spent on e-commerce, on investment needs in manufacturing, on new hires. I'm just trying to think about how to balance that with margin objectives.

Speaker #15: And I'm just trying to think about how to balance that with , you know , margin objectives .

Speaker #4: Dan , thanks for your question . Look , I think it's early days for me to really put a number to it . We're really pushing the program as soon as possible .

Emmanuelle Ligner: Dan, thanks for your question. Look, I think it's early days for me to really put a number to it. We're really pushing the program as soon as possible and making sure we make our plan. I don't want to rush on giving you a number which is not accurate. I really want to gain accuracy about numbers, any numbers that we're going to put in front of you. Let us put the plan together, review the plan, and make sure that the plan will have an impact. I think it's back to a further question earlier. I really want to give you answers about how much, when, what we will see, by when. It will take several quarters without any doubt, but it's early days for me. Let me come back to you when we have a precise plan and accurate number.

Speaker #4: And and making sure we make our plan . I don't want I don't want also to to rush on giving you a numbers , which is not accurate .

Speaker #4: Look , I really want to gain accuracy about numbers . Any numbers that we're going to put in front of you . So let us put the plan together .

Speaker #4: Let's review the plan . Let's make sure that the plan will have an impact . And I think it's back to a further question .

Speaker #4: Earlier . You know , I really want to give you answers about how much when , what what what we will see by when .

Speaker #4: It will take several quarters without any , any doubt . But it's early days for me . So let me come back to you when we have a precise plan and accurate number .

Speaker #15: Understood. And then a follow-up: you referenced the couple of large clients you lost from a share loss perspective. How would you characterize the risk of further big share loss?

R. Brent Jones: Understood. You referenced the couple large clients you lost from a share loss perspective. How would you characterize the risk of further big share loss? I can't imagine you have large contracts that turn over every year. Are we in a period of stability now for some time or are there further, you know, just big opportunities ahead in either direction?

Speaker #15: I can't imagine you have large contracts that turn over every year . Are we in a period of stability now ? For some time , or are there further , you know , just big opportunities ahead in either direction ?

Speaker #4: That's a great question , then look what I've discussed with with Corey and what we've discussed with the team is that most of our very large key account contract has been renewed .

Emmanuelle Ligner: That's a great question, Dan. Look, what I've discussed with Cory and what we've discussed with the team is that most of our very large key account contracts have been renewed. We've kept them, and on the contrary, we have opportunity to gain share of wallet in those accounts. I think we are in a much more stable position right now. However, as I explained earlier, the loss that we've seen in the past, they're still having an impact on us. It takes time for those large contracts to switch over, the same way they take time for us to ramp up the share of wallet gains. I think we are in a much more stable area. I think Cory is a very good leader that is bringing a lot of rigor in the business. From that standpoint, I'm confident about the future of the lab business.

Speaker #4: Kept them. And on the contrary, we have the opportunity to gain share of wallet in those accounts. So I think we are in a much more stable position right now.

Speaker #4: However , as I explained earlier , the loss that we've seen in the past , they're still having an impact on us . Okay .

Speaker #4: It takes time for those large contracts to switch over at the same way that it takes time for us to ramp up the share of wallet gains .

Speaker #4: So it I think we are in a much more stable area , I think Curry is a very good leader . That is bringing a lot of rigor in the business , and for that standpoint , I'm confident about the future of the lab business .

Speaker #15: Okay . Got it . Thank you .

[Analyst]: Got it.

R. Brent Jones: Thank you.

Speaker #2: Thank you . Those are all the questions we have time for today . And so I would now turn the call back over to Emmanuelle for closing remarks .

Operator: Thank you. Those are all the questions we have time for today. I'll now turn the call back over to Emmanuelle for closing remarks.

Speaker #4: Thank you , Emily . And thank you , everybody for joining us . Today . We just outlined the the beginning of our I would say , next chapters called Avantor Inc revival .

Emmanuelle Ligner: Thank you, Emily. Thank you, everybody, for joining us today. We just outlined the beginning of our, I would say, next chapter called Avantor Revival. I want you guys to remember and to know that we are moving with urgency to improve our performance. I want to regain your trust. I want to be accurate. I want us to be accurate. I'm looking forward to give you further updates on our progress in the next quarter. Be well, everybody. Thank you.

Speaker #4: I want you guys to remember and to know that I'm we are moving with urgency to improve our performance . I want to regain your trust .

Speaker #4: I want to be accurate . I want us to be accurate . And I'm looking forward to give you further update on our progress in the next quarter .

Speaker #4: Be well everybody . Thank you .

Operator: Thank you, everyone, for joining us today. This concludes our call, and you may now disconnect your lines.

Emmanuelle Ligner: Sa.