Q2 2026 Avantor Inc Earnings Call

July 29, 2026

Speaker #1: Good morning. My name is Krista, and I'll be your conference operator today. At this time, I would like to welcome everyone to Avanture's second quarter 2026 earnings conference call.

Speaker #1: All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. If you would like to ask a question at that time, simply press star, then the number 1 on your telephone keypad.

Speaker #1: And if you'd like to withdraw your question, again press star 1. Thank you. I will now like to turn the conference over to Chris Siddick, Vice President of Investor Relations.

Speaker #1: Good morning. My name is Kriska, and I'll be your conference operator today. At this time, I would like to welcome everyone to Avantor's second quarter 2026 earnings conference call.

Speaker #1: Chris, you may begin.

Speaker #2: Thank you, operator. Good morning, everyone, and thank you for joining us. Our speakers today are Emanuel Ligner, President and Chief Executive Officer; and Steve Ek, Senior Vice President, Interim Chief Financial Officer and Chief Accounting Officer.

Speaker #1: And if you'd like to withdraw your question, again, press star 1. Thank you. I would now like to turn the conference over to Chris Siddick, Vice President of Investor Relations.

Speaker #2: The press release and our presentation accompanying this call are available on our Investor Relations website, at ir.avanturesciences.com. Following our prepared remarks, we'll open the call for questions.

Speaker #1: Chris, you may begin.

Speaker #2: A replay of the call will be made available on our website later today. During this call, we will make forward-looking statements within the meaning of the U.S.

Speaker #2: Thank you, operator. Good morning, everyone, and thank you for joining us. Our speakers today are Emmanuel Ligner, President and Chief Executive Officer; and Steve Ek, Senior Vice President, Interim Chief Financial Officer and Chief Accounting Officer.

Speaker #2: 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.

Speaker #2: The press release and our presentation accompanying this call are available on our Investor Relations website at ir.avantorsciences.com. Following our prepared remarks, we'll open the call for questions.

Speaker #2: Actual results may differ materially from any forward-looking statements that we make today. These forward-looking statements speak only as of date 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.

Speaker #2: A replay of the call will be made available on our website later today. During this call, we will make forward-looking statements within the meaning of the U.S.

Speaker #2: 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.

Speaker #2: This call will include a discussion of non-GAP measures. A reconciliation of these non-GAAP measures can be found in the press release and in the supplemental disclosures package on our Investor Relations website.

Speaker #2: I will now turn the call over to Emanuel.

Speaker #3: Thank you, Chris. And good morning, everyone. Thank you for joining our call today. I will begin with a high-level update on our second quarter performance.

Speaker #3: I will then reflect on the actions we've taken since I came into this role nearly 12 months ago, and discuss the progress we are making in executing revival.

Speaker #2: This call will include a discussion of non-GAAP measures. A reconciliation of these non-GAAP measures can be found in the press release and in the supplemental disclosures package on our Investor Relations website.

Speaker #3: Our comprehensive program to sharpen strategic focus and improve execution. Turning to slide 4. Let me highlight a few key messages. First, we remain highly focused on executing revival, and I am very happy with the progress we made to date.

Speaker #2: I will now turn the call over to Emmanuel.

Speaker #3: Thank you, Chris. And good morning, everyone. Thank you for joining our call today. I will begin with a high-level update on our second quarter performance.

Speaker #3: I will then reflect on the actions we've taken since I came into this role nearly 12 months ago, and discuss the progress we are making in executing revival.

Speaker #3: Revival delivered measurable results and put us on a path to sustainable growth. Second, I'm pleased that our second quarter results exceeded expectations across several key financial metrics.

Speaker #3: Our comprehensive program to sharpen strategic focus and improve execution. Turning to slide 4, let me highlight a few key messages. First, we remain highly focused on executing Revival, and I am very happy with the progress we have made to date.

Speaker #3: Those results were driven by improved performance in our VWR distribution and service segments, which returned to positive organic revenue growth during the quarter. Our bioscience and med-tech product segments performed near the high end of our expectations, and this positioned the return to growth in the second half.

Speaker #3: Third, we delivered excellent free cash flow enabling us to invest in the business while also paying down debt. We remained committed to reduce our adjusted net leverage ratio below 3 times.

Speaker #3: Those results were driven by improved performance in our VWR distribution and service segments, which returned to positive organic revenue growth during the quarter. Our bioscience and medtech product segments performed near the high end of our expectations and are positioned to return to growth in the second half.

Speaker #3: Finally, we raised our 2026 organic revenue growth and adjusted EPS guidance. Our updated outlook reflects both our second quarter performance as well as higher expectations for the second half of the year.

Speaker #3: Third, we delivered excellent free cash flow, enabling us to invest in the business while also paying down debt. We remained committed to reducing our adjusted net leverage ratio below 3 times.

Speaker #3: Please turn to slide 5. Where I will review our Q2 performance highlights. In Q2, we generated 1.69 billion dollars of revenue which declined 0.4% on organic basis and was up 0.5% on a reported basis.

Speaker #3: Finally, we raised our 2026 organic revenue growth and adjusted EPS guidance. Our updated outlook reflects both our second quarter performance, as well as higher expectations for the second half of the year.

Speaker #3: Revenue was stronger than we had anticipated, driven primarily by VWR, which grew 1.7% organically in the quarter. VWR returned to growth earlier than we anticipated, reflecting the deliberate action taken by segment president Corey Walker and his team to strengthen the business.

Speaker #3: Please turn to slide review our Q2 performance highlights. In Q2, we generated $1.69 billion of revenue which declined 0.4% on organic basis and was up 0.5% on a reported basis.

Speaker #3: The segment entered the second half of 2026 with broad-based momentum and we continue to expect growth to accelerate through the remainder of the year.

Speaker #3: I will talk more about the driver of VWR return to growth later in my remarks. Turning to BNP. Revenue was near the high end of our expectations, driven by solid execution across the segments.

Speaker #3: On a year-over-year basis, revenue declined 5.6% organically, reflecting the impact of the discrete factors we had discussed previously. Importantly, BNP delivered sequential revenue growth from Q1 to Q2, and as anticipated, demonstrated a stable trend.

Speaker #3: The segment entered the second half of 2026 with broad-based momentum and we continue to expect growth to accelerate through the remainder of the year.

Speaker #3: I will talk more about the driver of VWR's return to growth later in my remarks. Turning to BNP, revenue was near the high end of our expectations, driven by solid execution across the segments.

Speaker #3: In BNP, we saw stronger order intake and improving operations in the second quarter. Those leading indicators provide evidence that our revival initiatives are gaining traction and, when combined with reduced comparison headwinds from discrete factors, give us confidence that BNP will return to organic growth during the second half of 2026.

Speaker #3: I will discuss revival impact on BNP shortly. Moving down the P&L, adjusted EBITDA grew more than 15% sequentially from Q1, driven by increased volumes in both segments.

Speaker #3: Adjusted earnings per share was 21 cents, above our expectations for the quarter. Finally, one of Aventure's key strengths is our ability to consistently generate strong free cash flow.

Speaker #3: In the second quarter, excluding cash restructuring costs, we generated 152 million dollars of free cash flow. This reflected strong conversion of adjusted net income and keeps us on track to achieve our full-year free cash flow guidance.

Speaker #3: I will discuss revival impact on BNP shortly. Moving down the P&L, adjusted EBITDA grew more than 15% sequentially from Q1, driven by increased volumes in both segments.

Speaker #3: We used this strong cash generation to repay 112 million dollars of debt during the quarter, further strengthening our balance sheet and underscoring our commitment to reduce our adjusted net leverage ratio to below 3 times.

Speaker #3: Adjusted earnings per share was $2.10, above our expectations for the quarter. Finally, one of Avantor's key strengths is our ability to consistently generate strong free cash flow.

Speaker #3: In the second quarter, excluding cash restructuring costs, we generated $152 million of free cash flow. This reflected strong conversion of adjusted net income and keeps us on track to achieve our full-year free cash flow guidance.

Speaker #3: Please turn to slide 6. Last year, we launched Aventure Revival, our comprehensive program to sharpen strategic focus and improve execution across the enterprise. Revival is built on five pillars: commercial excellence, operational performance, portfolio optimization, simplification, and talent.

Speaker #3: We used this strong cash generation to repay $112 million of debt during the quarter, further strengthening our balance sheet and underscoring our commitment to reduce our adjusted net leverage ratio to below three times.

Speaker #3: Guided by insights from customers, suppliers, and associates at Gemba, we have launched initiatives across each pillar that are producing measurable results. Some examples are on slide 7.

Speaker #3: Please turn to slide 6. Last year, we launched Avantor Revival, our comprehensive program to sharpen strategic focus and improve execution across the enterprise. Revival is built on five pillars: commercial excellence, operational performance, portfolio optimization, simplification, and talent.

Speaker #3: We have made important go-to-market changes. We are resegmenting Aventure into VWR and BNP to sharpen our focus, simplify the organization, and better serve customers.

Speaker #3: We revived the VWR brand and accelerated our digital roadmap, including the relaunch of VWR.com, which is driven stronger customer engagement and e-commerce performance. Across both segments, we are extremely focused on commercial excellence to drive every product and service in a way that delights customers.

Speaker #3: We have made important go-to-market changes. We are resegmenting Adventor into VWR and BNP to sharpen our focus, simplify the organization, and better serve customers.

Speaker #3: In BNP, our commercial teams are executed with greater consistency and focus, resulting in stronger customer engagement and a higher win rate. This translates into double-digit order growth for BNP and a book-to-bill ratio of 1.1 during the second quarter, while also expanding our funnel of future growth opportunities.

Speaker #3: We revived the VWR brand and accelerated our digital roadmap, including the relaunch of VWR.com, which has driven stronger customer engagement and e-commerce performance. Across both segments, we are extremely focused on commercial excellence to drive every product and service in a way that delights customers.

Speaker #3: Those go-to-market efforts are reflected not just in BNP's order momentum, but also in VWR's return to growth. In the manufacturing pillar, we have invested across our supply chain to improve productivity and strengthen customer service.

Speaker #3: Those investments combined with the ongoing implementation of a new self and operation planning process are driving execution improvements. For example, during the quarter, we increased the throughput of certain key product lines at a large manufacturing site by more than 25% on average versus the first quarter.

Speaker #3: This progress is a direct result of revival initiatives, including the use of Lean and Six Sigma tools to enhance equipment uptime, reliability, and overall productivity.

Speaker #3: Those investments combined with the ongoing implementation of a new sales and operation planning process are driving execution improvements. For example, during the quarter, we increased the throughput of certain key product lines at a large manufacturing site by more than 25% on average versus the first quarter.

Speaker #3: The simplify how we work pillar delivers benefits both inside and outside the organization. One example is the recent redesign of our customers' onboarding process.

Speaker #3: Drawing on insights from multiple Gemba works and a cross-functional Kaizen event, we redesigned the process from end to end, reducing onboarding from 14 steps to just 8, and cutting completion times from up to 4 days to as little as 2 days for complex accounts or to just minutes for simple accounts.

Speaker #3: This progress is a direct result of revival initiatives, including the use of Lean and Six Sigma tools to enhance equipment uptime, reliability, and overall productivity.

Speaker #3: The Simplify How We Work pillar delivers benefits both inside and outside the organization. One example is the recent redesign of our customers' onboarding process.

Speaker #3: Finally, as I have said before, revival begins and ends with people. We move quickly to complement our strong internal talent with experienced external leaders, refreshing approximately 25% of our senior leadership team, and we are driving a culture transformation across Aventure.

Speaker #3: We are communicating more effectively, collaborating more closely in the field, holding ourselves more accountable through a disciplined focus, and measurable outcomes and putting customer at the center of all what we do.

Speaker #3: Finally, as I have said before, revival begins and ends with people. We move quickly to complement our strong internal talent with experienced external leaders refreshing approximately 25% of our senior leadership team and we are driving a culture transformation across Adventor.

Speaker #3: The positive impact of revival is evident not only in our improved second quarter results, but also in leading indicators such as the strength of our order book and the expansion of our commercial funnels that will ultimately lead to sustainable, profitable growth.

Speaker #3: We are communicating more effectively, collaborating more closely in the field, holding ourselves more accountable through a disciplined focus and measurable outcomes, and putting the customer at the center of all we do.

Speaker #3: Please turn to slide 8. VWR to growth in Q2 marks an important milestone for the segments. While the growth inflection itself is encouraging, the underlying drivers are broad-based as I will describe giving us confidence that we are building sustainable momentum.

Speaker #3: The leadership team couriers built over the past year changes to VWR organization structure and operating model, setting the stage for segments improved performance. With the team structure and operating model in place, we made deliberated decisions to strengthen our capabilities, operation, brand, and commercial excellence.

Speaker #3: Please turn to slide 8. VWR return to growth in Q2 marks an important milestone for the segments. While the growth inflection itself is encouraging, the underlying drivers are broad-based as I will describe giving us confidence that we are building sustainable momentum.

Speaker #3: Together, those actions have led the foundation for the stronger performance our seeing today. Customers turn to VWR for our global scale, the depth, and breadth of our product agnostic catalog, strong supplier relationship, and excellent service.

Speaker #3: The leadership team Couriers built over the past year has implemented meaningful changes to VWR's organizational structure and operating model, setting the stage for segment's improved performance.

Speaker #3: Combined with the changes, we have taken over the past year our strengths are translated into stronger financial results, including stronger growth across key customer segments.

Speaker #3: With the team structure and operating model in place, we made deliberated decisions to strengthen our capabilities, operation, brand, and commercial excellence. Together, those actions have led the foundation for the stronger performance our seeing today.

Speaker #3: Let me review the key factor driving VWR's return to growth in Q2. The first factor was stronger performance with large global customers. As a reminder, revenue from new business win is realized gradually due to the complexity of customer implementation processes, so we can take times before the benefit of strong commercial performance are reflected in our results.

Speaker #3: Customers turn to VWR for our global scale, the depth and breadth of our product-agnostic catalog, strong supplier relationships, and excellent service. Combined with the changes we have taken over the past year, our strengths are translated into stronger financial results, including stronger growth across key customer segments.

Speaker #3: Previously, we discussed several elements impacting our large global customer segments, including reconstructing activity and other industry dynamics. While our commercial focus and execution has improved significantly over the past year, those historical pressured faced in of the course of 2025, with the accumulative impact moderating in the first quarter of this year.

Speaker #3: Let me review the key factor driving VWR's return to growth in Q2. The first factor was stronger performance with large global customers. As a reminder, revenue from new business wins is realized gradually due to the complexity of customer implementation processes, so it can take time before the benefits of strong commercial performance are reflected in our results.

Speaker #3: While they continue to represent a headwind in 2026, their impact is diminishing as we move forward and offsetting action have been successful in driving stronger than anticipated results in this segment.

Speaker #3: Previously, we discussed several elements impacting our large global customer segments, including reconstructing activity and other industry dynamics. While our commercial focus and execution has improved significantly over the past year, those historical pressures faced in the course of 2025, with the cumulative impact moderating in the first quarter of this year.

Speaker #3: Accordingly, year-over-year comparison will become increasingly favorable as the year progresses, allowing our result to more fully reflect our underlying commercial momentum. Our growth rate in the second quarter benefited modestly from this improving comparison dynamic.

Speaker #3: Over the past year, VWR team has taken thoughtful and deliberated steps to expand our relationship with large global customers. The team focused on retaining and expanding large global customer relationship, strategically developing our new customer pipeline, and accelerating the onboarding process for new contracts.

Speaker #3: While they continue to represent a headwind in 2026, their impact is diminishing as we move forward, and offsetting actions have been successful in driving stronger-than-anticipated results in this segment.

Speaker #3: Accordingly, year-over-year comparisons will become increasingly favorable as the year progresses, allowing our results to more fully reflect our underlying commercial momentum. Our growth rate in the second quarter benefited modestly from this improving comparison dynamic.

Speaker #3: We have executed well against the gross opportunity that our efforts have generated, and this new business is contributing to our results sooner and more meaningful than we anticipated.

Speaker #3: Another important driver of VWR performance is improving growth in our small and mid-sized customer segments. With better e-commerce outcome playing an important role. On our last earning calls, we highlighted early sign of improving trends following multiple upgrades to our platform, as well as successful relaunch of VWR.com.

Speaker #3: We advanced our digital roadmap in the second quarter and customers have responded positively to those enhancements. Driving direct traffic, higher conversion, and improved daily sales, particularly among smaller customers who tend to have higher margin.

Speaker #3: Another important driver of VWR performance is improving growth in our small- and mid-sized customer segments, with better e-commerce outcomes playing an important role. On our last earnings call, we highlighted early signs of improving trends following multiple upgrades to our platform, as well as the successful relaunch of VWR.com.

Speaker #3: As a result, e-commerce growth accelerated as the quarter progressed and was accretive to the segment growth for the quarter. Although our recent progress is encouraging, our digital transformation remains in the early stages.

Speaker #3: We continue to see substantial opportunity to enhance the customer's experience, deepen engagement, and drive sustained growth in the channel particularly in Europe. Finally, why deliberate action drove the majority of VWR improved performance and increasing pharma and biotech customer activity provided a modest tailwind during the quarter, reinforcing our decision last year to focus significantly commercial resources on those customers groups.

Speaker #3: It is important to note that activity level in several. Important end markets such as education and in certain geographies particularly Europe, remain stable but at lower level than we would like to see.

Speaker #3: We continue to see substantial opportunity to enhance the customer's experience, deepen engagement, and drive sustained growth in the channel particularly in Europe. Finally, why deliberate action drove the majority of VWR improved performance and increase in pharma and biotech customer activity provided a modest tailwind during the quarter, reinforcing our decision last year to focus significantly commercial resources on those customers groups.

Speaker #3: An improvement in those end markets could represent an additional tailwind to our growth. Overall, we are pleased by VWR improved results but remain focused on execution to sustain and build the positive momentum.

Speaker #3: I will now turn the call over to Steve to discuss the number. Steve, thank you Emmanuel and good morning everyone. Please turn the slide 10 where I will review our consolidated financial results.

Speaker #3: It is important to note that activity levels in several important end markets, such as education, and in certain geographies—particularly Europe—remain stable but at a lower level than we would like to see.

Speaker #3: In Q2, we generated 1.69 billion dollars of revenue, which declined negative 0.4% on an organic basis and was up positive 0.5% on a reported basis.

Speaker #3: Adjusted EBITDA was 254 million dollars resulting in a margin of 15% and adjusted earnings per share of 21 cents. Free cash flow for the quarter was 143 million dollars excluding cash restructuring costs, free cash flow was 152 million dollars.

Speaker #3: Both figures were ahead of expectations and underscore of onto a strong cash flow profile. During the quarter, we repay approximately 112 million dollars of debt and ended the period with adjusted net leverage ratio of 3.3 times adjusted EBITDA leverage was flat sequentially.

Speaker #3: In Q2, we generated $1.69 billion of revenue which declined negative 0.4% on an organic basis and was up positive 0.5% on a reported basis.

Speaker #3: Please turn to slide 11. Revenue for the VWR distribution and services segment was 1.24 billion dollars in the second quarter up 1.7% organically versus the prior year.

Speaker #3: Adjusted EBITDA was $254 million, resulting in a margin of 15%, and adjusted earnings per share of $0.21. Free cash flow for the quarter was $143 million.

Speaker #3: The primary driver of sequential and year-over-year organic revenue growth was increased volumes from strong commercial execution. Adjusted operating income for VWR was 126 million dollars in Q2 representing an adjusted operating margin of 10.2%.

Speaker #3: Excluding cash restructuring costs, free cash flow was $152 million. Both figures were ahead of expectations and underscore Avantor strong cash flow profile. During the quarter, we repaid approximately $112 million of debt and ended the period with an adjusted net leverage ratio of 3.3 times adjusted EBITDA leverage was flat sequentially.

Speaker #3: The year-over-year decline in margin is due primarily to mixed and inflationary pressures. Sequentially, margins increased approximately 100 basis points from the first quarter due to increased volumes and improved mix.

Speaker #3: There are two key takeaways from the VWR quarter. First, VWR returned to growth ahead of our expectations and the majority of this improved performance reflects steps that we have taken to grow the segment.

Speaker #3: Please turn to slide 11. Revenue for the VWR distribution and services segment was $1.24 billion in the second quarter up $1.7% organically versus the prior year.

Speaker #3: Second, VWR demonstrated stable sequential trends with revenue increasing from the first quarter primarily due to strong commercial execution. Let me now discuss the performance in the bioscience and med tech product segment or BMP.

Speaker #3: The primary driver of sequential and year-over-year organic revenue growth was increased volumes from strong commercial execution. Adjusted operating income for VWR was $126 million in Q2, representing an adjusted operating margin of 10.2%.

Speaker #3: I'm on slide 12. In the second quarter, BMP revenue was 452 million dollars down 5.6% organically versus the prior year. This was near the high end of our expectations driven by solid performance across product lines.

Speaker #3: The year-over-year decline in margin is due primarily to pressures. Sequentially, margins increased approximately 100 basis points from the first quarter, due to increased volumes and improved mix.

Speaker #3: There are two key takeaways from the VWR quarter. First, VWR returned to growth ahead of our expectations, and the majority of this improved performance reflects steps that we have taken to grow the segment.

Speaker #3: Across the chemicals grew faster than expectations driven by healthy end market conditions improving operations and strong order performance. Fluid handling a new silver down mid-teens in the quarter as anticipated while research and specialty chemicals declined mid-single digits organically primarily reflecting the anticipated growth headwinds from serum and electronic materials.

Speaker #3: Last quarter, we indicated that new sale and the serum and electronic materials businesses within research and specialty chemicals would be headwinds to our quarterly growth rate due to the normalization of discrete customer ordering patterns and shipments in 2025.

Speaker #3: I'm on slide 12. In the second quarter, BMP revenue was $452 million down 5.6% organically versus the prior year. This was near the high end of our expectations driven by solid performance across product lines.

Speaker #3: We also indicated that we faced a difficult comparison in fluid handling. Collectively, these factors were a headwind of roughly 600 basis points to BMP organic revenue growth in the second quarter.

Speaker #3: Process chemicals grew faster than expectations driven by healthy end market conditions improving operations and strong order performance. Fluid handling a new silver down mid-teens in the quarter as anticipated while research and specialty chemicals declined mid-single digits organically primarily reflecting the anticipated growth headwinds from serum and electronic materials.

Speaker #3: Adjusted operating income for BMP was 118 million dollars in the quarter representing an adjusted operating margin of 26%. The year-over-year decline in margin was primarily driven by lower volumes.

Speaker #3: Margins increased sequentially due to increased volumes and mix. There are two key takeaways from the BMP quarter. First, commercial performance was strong as evidenced by our order trends.

Speaker #3: Last quarter, we indicated that new sales and the serum and electronic materials businesses within Research and Specialty Chemicals would be headwinds to our quarterly growth rate due to the normalization of discrete customer ordering patterns and shipments in 2025.

Speaker #3: During the quarter, BMP delivered double digit order growth and a book to bill ratio of 1.1. Order trends were healthy across all business units and we saw particular strength in our process chemicals and fluid handling order books.

Speaker #3: Second, BMP demonstrated stable sequential trends with performance near the high end of our expectations. Please turn to slide 13. Our ability to consistently generate strong free cash flow is a key strength of Avantor.

Speaker #3: Adjusted operating income for BMP was $118 million in the quarter, representing an adjusted operating margin of 26%. The year-over-year decline in margin was primarily driven by lower volumes.

Speaker #3: In the second quarter, excluding cash restructuring costs, we generated 152 million dollars of free cash flow reflecting strong conversion of adjusted net income. Our capital allocation priorities support revival and our intention to create sustainable shareholder value over the long term.

Speaker #3: Margins increased sequentially due to increased volumes and mix. There are two key takeaways from the BMP quarter. First, commercial performance was strong, as evidenced by our order trends.

Speaker #3: During the quarter, BMP delivered double-digit order growth and a book-to-bill ratio of 1.1. Order trends were healthy across all business units, and we saw particular strength in our process chemicals and fluid handling order books.

Speaker #3: First, we're focused on purposeful investments in the business to enhance customer service and drive top line organic growth. Next, we are focused on strengthening our balance sheet by prioritizing excess free cash flow towards debt repayment.

Speaker #3: Second, BMP demonstrates stable sequential trends, with performance near the high end of our expectations. Please turn to slide 13. Our ability to consistently generate strong free cash flow is a key strength of Avantor.

Speaker #3: During the quarter, we repaid 112 million dollars of debt and ended the period with net debt of 3.4 billion dollars and over the trailing 12 months we've repaid nearly 500 million dollars of debt our adjusted net leverage ratio was 3.3 times at the end of the quarter.

Speaker #3: In the second quarter, excluding cash restructuring costs, we generated $152 million of free cash flow, reflecting strong conversion of adjusted net income. Our capital allocation priorities support revival and our intention to create sustainable shareholder value over the long term.

Speaker #3: We made significant progress in strengthening our balance sheet and that momentum was recognized by Moody's which revised our ratings that looked a positive. In addition, we recently capitalized on favorable market conditions and demand for credit to replace one of our current loans on attractive terms in July.

Speaker #3: First, we're focused on purposeful investments in the business to enhance customer service and drive top-line organic growth. Next, we are focused on strengthening our balance sheet by prioritizing excess free cash flow toward debt repayment.

Speaker #3: We remain committed to reducing our adjusted net leverage ratio to below three times driven both by continued debt paydown and a return to positive adjusted EBITDA growth as performance improves.

Speaker #3: Our objective is to finish the fiscal year at or below this target. Please turn to slide 14 where I will discuss our increased 2026 guidance.

Speaker #3: During the quarter, we repaid $112 million of debt and ended the period with net debt of $3.4 billion. Over the trailing 12 months, we've repaid nearly $500 million of debt. Our adjusted net leverage ratio was 3.3 times at the end of the quarter.

Speaker #3: For 2026, we have raised our organic revenue growth outlook to a range of negative 0.5% to positive 0.5%. This increase reflects our Q2 revenue outperformance as well as higher growth expectations for VWR in the second half of the year.

Speaker #3: We've made significant progress in strengthening our balance sheet, and that momentum was recognized by Moody's, which revised our ratings outlook. We recently capitalized on favorable market conditions and demand for our credit to reprice one of our term loans on attractive terms in July.

Speaker #3: Given the recent strength of the US dollar, foreign exchange is expected to be a headwind to the reported revenue in the second half. As a result, we now expect FX to contribute about 50 basis points to full year revenue.

Speaker #3: We remain committed to reducing our adjusted net leverage ratio to below three times, driven both by continued debt paydown and a return to positive adjusted EBITDA growth as performance improves.

Speaker #3: In terms of segment performance, we continue to expect VWR's growth rate to improve sequentially through the balance of the year. We expect BMP to return to growth during the second half driven by improved execution and more favorable discrete comparisons.

Speaker #3: Our objective is to finish the fiscal year at or below this target. Please turn to slide 14, where I will discuss our increased 2026 outlook. We have raised our organic revenue growth outlook to a range of negative 0.5% to positive 0.5%.

Speaker #3: BMP growth is expected to be stronger in Q3 than in Q4 due to more favorable year-over-year comparisons. Moving to profitability. Our adjusted EBITDA margin guidance remains unchanged.

Speaker #3: This increase reflects our Q2 revenue outperformance, as well as higher growth expectations for VWR in the second half of the year. Given the recent strength of the US dollar, foreign exchange is expected to be a headwind to reported revenue in the second half.

Speaker #3: As operational outperformance enables us to absorb macro inflationary pressures while also making targeted growth investments. We remain highly focused on cost discipline. As reflected in our overall headcount which has declined by approximately 3% this year.

Speaker #3: As a result, we now expect FX to contribute about 50 basis points to full-year revenue. In terms of segment performance, we continue to expect VWR's growth rate to improve sequentially through the balance of the year.

Speaker #3: Looking ahead, our objective is to deliver a more leveraged P&L. Moving down the income statement, we now expect that net interest expense will decline modestly versus 2025 and we also assume a weighted average diluted share count for the year of 677 million shares.

Speaker #3: We expect BMP to return to growth during the second half driven by improved execution and more favorable discrete comparisons. BMP growth is expected to be stronger in Q3 than in Q4 due to more favorable year-over-year comparisons.

Speaker #3: All other modeling assumptions are unchanged. Taken together, this translates to an adjusted EPS outlook that has been raised to 80 cents to 83 cents for 2026.

Speaker #3: Moving to profitability, our adjusted EBITDA margin guidance remains unchanged, as operational outperformance enables us to absorb macro inflationary pressures while also making targeted growth investments.

Speaker #3: Finally, we continue to expect free cash flow between 500 and 550 million dollars in 2026 reflecting Avantor's strong cash generation profile. In terms of phasing, in Q3, we expect to generate adjusted EPS between 20 and 21 cents per share.

Speaker #3: We remain highly focused on cost discipline, as reflected in our overall headcount, which has declined by approximately 3% this year. Looking ahead, our objective is to deliver a more leveraged P&L.

Speaker #3: The midpoint of our Q3 guidance assumes total company organic revenue growth of about 250 basis points in the third quarter. And we expect FX to be a headwind of about 125 basis points to Q3 reported revenue.

Speaker #3: Moving down the income statement, we now expect that net interest expense will decline modestly versus 2025, and we also assume a weighted average diluted share count for the year of 677 million shares.

Speaker #3: We assume that BMP reported revenue in Q3 will be about flat sequentially in year-over-year with year-over-year organic revenue growth largely offset by FX headwinds.

Speaker #3: All other modeling assumptions are unchanged. Taken together, this translates to an adjusted EPS outlook that has been raised to $0.80 to $0.83 for 2026.

Speaker #3: For BMP, the impact of discrete customer ordering patterns and shipments will represent a headwind of about 150 basis points to organic growth in Q3.

Speaker #3: Finally, we continue to expect free cash flow between 500 and 550 million dollars in generation profile. In terms of phasing, in Q3, we expect to generate adjusted EPS between 20 and 21 cents per share.

Speaker #3: Finally, we expect the underlying operating margin drivers in both segments to remain relatively stable sequentially with volumes, mix, and inflationary pressures expected to be the primary factors influencing any sequential changes in segment margins.

Speaker #3: I'll turn the call back over to Emmanuel.

Speaker #1: Thank you, Steve. In closing, and on slide 15, I would like to leave you with three key takeaways. First, nine months into revival, the operational changes we have implemented are delivering measurable results.

Speaker #3: We assume that BMP reported revenue in Q3 will be about flat sequentially and year-over-year, with year-over-year organic revenue growth largely offset by FX headwinds.

Speaker #1: Those improvements are increasingly evident in our operating and financial performance and reinforce the positive trajectory of the business. Second, our growth outlook has improved.

Speaker #3: For BMP, the impact of discrete customer ordering patterns and shipments will represent a headwind of about 150 basis points to organic growth in Q3.

Speaker #1: The VWR team is executing extremely well and the investment and strategic initiative taken over the past year are translating into growth. We also expect BMP will return to growth in the second half underpinned by a stronger book improving operations and more favorable comparisons.

Speaker #3: I'll turn the call back over to Emmanuel.

Speaker #1: Third, we continue to generate strong free cash flow unveiling us to invest in the business while supporting our commitment to reduce debt and strengthen our balance sheet.

Speaker #1: Those improvements are increasingly evident in our operating and financial performance and reinforce the positive trajectory of the business. Second, our growth outlook has improved.

Speaker #1: Let me thanks our Avantor associate around the world for their dedication to serving our customers. Thank you for embracing revival and our new ways of working.

Speaker #1: I am very pleased with the progress we've made together this year. And finally, I am excited to share an important announcement. We plan to host our investors day on Tuesday December 8th in New York City.

Speaker #1: The VWR team is executing extremely well and the investment and strategic initiative taken over the past year are translating into growth. We also expect BMP will return to growth in the second half underpinned by a stronger the book improving operations and more favorable comparisons.

Speaker #1: We're looking forward to sharing a comprehensive overview of our business, strategy, and financial objectives while providing an opportunity for investors to engage more broadly with our leadership team.

Speaker #1: Third, we continue to generate strong free cash flow enabling us to invest in the business while supporting our commitment to reduce debt and strengthen our balance sheet.

Speaker #1: Operator, we're happy to take questions.

Speaker #2: Thank you. We will now begin the question and answer session. If you would like to ask a question, please press star one on your telephone keypad to raise your hand and join the queue.

Speaker #1: Let me thank our Avantor associates around the world for their dedication to serving our customers. Thank you for embracing revival and our new ways of working.

Speaker #2: And if you would like to withdraw that question, again press star one. We do ask that you limit yourself to one question in one follow-up.

Speaker #1: I am very pleased with the progress we've made together this year. Finally, I am excited to share an important announcement: we plan to host our Investors Day on Tuesday, December 8th, in New York City.

Speaker #2: For any additional questions, please re-queue. And your first question comes from Eve Bernstein with bernstein. Please go ahead.

Speaker #3: Great. Thank you so much, good morning. I appreciate the opportunity to ask a question. let's start with VWR. So you said that the growth there was driven primarily by actions that you took to strengthen the franchise.

Speaker #3: How do you assess whether it really was your actions versus broader market recovery and improvement? and your guidance raises attributed to improved expectations for VWR in the year.

Speaker #1: Operator, we're happy to take questions.

Speaker #2: Thank you. We will now begin the question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad to raise your hand and join the queue.

Speaker #3: is that due to expectation for broader market recovery or or is it due to the actions you've been able to take?

Speaker #2: And if you would like to withdraw that question, again press star one. We do ask that you limit yourself to one question in one follow-up.

Speaker #4: Good morning, Eva, and thank you for your question. indeed we evaluated, okay, and let me start saying by, the fact that we are super pleased with VWR performance.

Speaker #2: For any additional questions, please re-queue. And your first question comes from Eve Bernstein with Bernstein. Please go ahead.

Speaker #4: and the very strong execution by the team. So indeed more than half of the growth that we deliberated in Q2 comes from deliberated action that we're taking.

Speaker #3: Great. Thank you so much. Good morning. I appreciate the opportunity to ask a question. Let's start with VWR. So you said that the growth there was driven primarily by actions that you took to strengthen the franchise.

Speaker #4: maybe let me share a few things, splitting the market in large global customers accounts and midsize and smaller customers if you don't mind. so for the large global customers accounts, in the past we talk about some headwind that we had, in contract renewal.

Speaker #3: How do you assess whether it really was your actions versus broader market recovery and improvement? And your guidance raise is attributed to improved expectations for VWR in the year.

Speaker #4: Well, we begin to lack those headwinds from from the history. so this is point number one. Point number two we also shared with you that we have over the past year really, won, many large contracts and each time we did that we negotiated, opportunity.

Speaker #3: Is that due to expectation for broader market recovery or is it due to the actions you've been able to take?

Speaker #1: Good morning, Eve, and thank you for your question. Indeed, we evaluated. Okay. And let me start by saying that we are super pleased with VWR's performance and the very strong execution by the team.

Speaker #4: And the team has worked really, really hard to grab those opportunity to turn around those opportunity into growth and and you know it's a license to hunt.

Speaker #1: So, indeed, more than half of the growth that we deliberated in Q2 comes from deliberate action that we're taking. Maybe let me share a few things, splitting the market into large global customer accounts and midsize and smaller customers, if you don't mind.

Speaker #4: And basically what the team is actually doing and executing is actually gaining share of wallet inside those large accounts. So, it it it's working well.

Speaker #1: So for the large global customers account, in the past, we talked about some headwind that we had in contract renewal. Well, we begin to lack those headwinds from the history.

Speaker #4: We are a bit of advanced versus we thought we will be and and and this is sustainable. The second thing is on mid and small customers.

Speaker #4: you know, e-commerce is really the highlight of Q2 for us. it's part of the revival. It's part of the go-to-market. It is working. We've relaunched VWR.com and the customers are reacted very, very well from that.

Speaker #1: So, this is point number one. Point number two: we also shared with you that we have, over the past year, really won many large contracts.

Speaker #4: So, you know, we see some really positive momentums in that segments as well. The remainder of the growth of course is coming from better pharma, better biotech hand market, primarily in the US.

Speaker #1: And each time we did that, we negotiated opportunity. And the team has worked really, really hard to grab those opportunity to turn around those opportunity into growth.

Speaker #4: So it's a broad-based momentum that we see. The team is completely focused on customers, focused on execution, finding opportunity grabbing those opportunity turning those opportunity to growth.

Speaker #1: And it's a license to hunt. And basically what the team is actually doing and executing is actually gaining share of wallet inside those large account.

Speaker #1: So it's working well. We are a bit of advance versus we thought we sustainable. The second thing is on mid and small customers. E-commerce is really the highlight of Q2 for us.

Speaker #4: And this is why we're confident that VWR growth will actually accelerate in H2.

Speaker #3: Great. Thank you. that's that's really helpful. Maybe just to clarify one of your points in follow-up. So obviously you've talked quite a lot about the re-contracting with those large global customers.

Speaker #1: It's part of the revival. It's part of the go-to-market. It is working. We've relaunched VWR.com, and the customers have reacted very, very well to that.

Speaker #3: and how you're mostly done with that process and so we'll start to see more of the underlying strength of the business as we move past that.

Speaker #1: So we see some really positive momentums in that segment as well. The remainder of the growth, of course, is coming from better pharma, better biotech end market, primarily in the US.

Speaker #3: if you had to quantify how much of a headwind has that been to overall growth? And so even without an underlying improvement in the market, or in other elements of your execution, how much of a tailwind are you now going to start seeing from moving past those pricing actions and and just growing a lower base?

Speaker #1: So it's a broad-based momentum that we see. The team is completely focused on customers, focused on execution, finding opportunity grabbing those opportunity turning those opportunity to growth.

Speaker #4: Yeah. I think, Eva, this is this is a very good question. Look, I think we quantified it as more than half, okay? We we don't go into those customers by customers detail just by practice.

Speaker #1: And this is why we're confident that VWR growth will actually accelerate in H2.

Speaker #3: Great. Thank you. That's really helpful. Maybe just to clarify one of your points in follow-up. So obviously you've talked quite a lot about the recontracting with those large global customers.

Speaker #3: Okay. Thanks very much.

Speaker #2: You are next.

Speaker #4: Thank you.

Speaker #2: Questions. Your next question comes from the line of Callum Titmarsh with Morgan Stanley. Please go ahead.

Speaker #5: Hey guys. Thanks a lot for taking the questions. Maybe just following up on on the previous one. But you know on the channel specifically good to see the organic growth coming through.

Speaker #3: And now that you're mostly done with that process, we'll start to see more of the underlying strength of the business as we move past that.

Speaker #5: But but those growth rates are still below peer. So maybe just help us to better understand the market share dynamics you're seeing there and any you know KPIs you could perhaps give us to show that that that's shifting back in your favor.

Speaker #3: If you had to quantify how much of a headwind has that been to overall growth? And so even without an underlying improvement in the market or in other elements of your execution, how much of a tailwind are you now going to start seeing from moving past those pricing actions and just growing off a lower base?

Speaker #4: Sure. look we we we we have many KPIs that we are looking at, okay? We are looking at the number of new accounts. We're looking at as the what happened for example in the e-commerce platform around you know numbers of click, number of basket which is set up, number of conversion this and and of course I will we we measure a lot of those things on a daily basis.

Speaker #1: Yeah, I think, Eve, this is a very good question. Look, I think we quantified it as more than half, okay? We don't go into those customers-by-customers detail, just by practice.

Speaker #3: Okay. Thanks very much.

Speaker #2: You are next. Question. Your next question comes from the line of Callum Titmarsh with Morgan Stanley. Please go ahead.

Speaker #4: look here's what we're doing to regain market share. we relaunched VWR brand. We relaunched VWR.com. We made significant upgrade on the platform. We not done we have a whole programming place and we are continuing to invest there.

Speaker #4: Hey, guys. Thanks a lot for taking the questions. Maybe just following up on the previous one. But on the channel specifically, good to see the organic growth coming through.

Speaker #4: But those growth rates are still below peer. So maybe just help us to better understand the market share dynamics you're seeing there and any KPIs you could perhaps give us to show that that's shifting back in your favor.

Speaker #4: we have really good structure funnel review that really drive the customer focus. Buy region, buy segments. you know we we we really take care of when we renew a contract what are the opportunity what are the size of the opportunity how those opportunities are actually being converted.

Speaker #1: Sure. Look, we have many KPIs that we are looking at, okay? We are looking at the number of new accounts. We're looking at as the what happened, for example, in the e-commerce platform around numbers of click, number of basket, which is set up, numbers of conversion.

Speaker #4: we we track many things. And and one important thing that we've implemented recently is the pricing tools, all right? We have a much more robust pricing review again on a monthly basis.

Speaker #1: And of course, we'll measure a lot of those things on a daily basis. Look, here's what we're doing to regain market share.

Speaker #4: The entire executive team is part of this. Courier is leading this initiative with this team. I think we shared last call that we have a new pricing leaders.

Speaker #1: We relaunched VWR brand. We relaunched VWR.com. We made significant upgrade on the platform. We're not done. We have a whole program in place and we are continuing to invest there.

Speaker #4: And we work also very closely with our supplier and partners. This is very important. This is a a a a multiple relationship. And this is all part of of revival go-to-market.

Speaker #1: We have a really good structured funnel review that really drives the customer focus—by region, by segments. We really take care of when we renew a contract—what are the opportunities?

Speaker #4: And and we are just really extremely pleased that VWR is back to growth at 1.7% growth and lift versus previous year. And and and we are absolutely committed to continue to grow and to accelerate this growth.

Speaker #4: So I think it's it's this is where we are today. we we we know that the majority of of the growth is coming from the action that we are taking.

Speaker #1: What is the size of the opportunity? How are those opportunities actually being converted? We track many things, and one important thing that we've implemented recently is the pricing tools, all right?

Speaker #4: that the team is implemented and is really focused on delivering. And and that will accelerate in H2.

Speaker #1: We have a much more robust pricing review, again, on a monthly basis. The entire executive team is part of this. Courier is leading this initiative with this team.

Speaker #5: Hey. Good morning, Callum. this is Eva. I'd like to just maybe just add a little bit to what Emanuel said and highlight a little bit.

Speaker #5: well, 1.7% growth is not quite yet market. just wanna highlight that you know we moved from negative 4.8% in one Q to positive 1.7% in two Q.

Speaker #1: I think we shared last call that we have a new pricing leaders. And we work also very closely with our supplier and partners. This is very important.

Speaker #5: And we expect that growth rate to continue to accelerate here as we get into the second half. And part of that is those sustainable improvements we've made.

Speaker #1: This is a multiple relationship. And this is all part of revival go-to-market. And we are just really extremely pleased that VWR is back to growth at 1.7% growth and lift versus previous year.

Speaker #5: part of it is the comparisons from last year. So really nice development of the growth rate. Totally understood. And then Emanuel, nearly you know a year now since you took over here.

Speaker #5: So so maybe just as we think about the kind of areas for investment you identified in 2026 with revival, I guess as we've worked our way through the year, how comfortable are you that those commitments are sufficient to address the issues you had you know as we think about potential costs remaining elevated in into 2027?

Speaker #1: And we are absolutely committed to continue to grow and to accelerate this growth. So I think it's this is where we are today. We know that the majority of the growth is coming from the action that we are taking.

Speaker #5: Thanks a lot.

Speaker #4: All right. So I think good question, Callum. I think it's very important to understand that revival is constantly evolving. So when we arrive we we did a a a several listening to the market, the suppliers, our associates.

Speaker #1: That the team is implemented and is really focused on delivering. And that will accelerate in H2.

Speaker #5: Hey. Good morning, Callum. This is Steve. I'd like to just maybe just add a little bit to what Emmanuel said and highlight a little bit.

Speaker #5: While the 1.7% growth is not quite yet market, just want to highlight that we moved from negative 4.8% in one Q to positive 1.7% in two Q.

Speaker #4: We identified the I would say really high priority that we had. Mary in supply chain is here. She we have invest in supply chain.

Speaker #5: And we expect that growth rate to continue to accelerate here as we get into the second half. And part of that is those sustainable improvements we've made.

Speaker #4: We've growth talents and we brought more talent in the organization. like in the e-commerce platform with our new digital lea leaders came from Medline.

Speaker #5: Part of it is the comparisons from last year. So really nice development of the growth rate.

Speaker #4: All those things are reviewed on a monthly basis. Ludovic Brolier would join us as the head of of BMP segments. But also the transformation leaders has a a really clear operating plan for the revival programs.

Speaker #4: Totally understood. And then, Emmanuel, it's been nearly a year now since you took over here. So maybe just as we think about the kind of areas for investment you identified in 2026 with Revival, I guess as we've worked our way through the year, how comfortable are you that those commitments are sufficient to address the issues you had, as we think about potential costs remaining elevated into 2027?

Speaker #4: And so we take pro project by project I would say. And then we deliver them with tick the box and we move on into another one.

Speaker #4: So there's still a lot to do. we shared many of those. I mean the last one that we share in this call was the onboarding process which is very important for our customers.

Speaker #4: Thanks a lot.

Speaker #1: All right. That's a good question, Callum. I think it's very important to understand that revival is constantly evolving. So when we arrived, we did a thorough listening to the market, the suppliers, and our associates.

Speaker #4: Simplifying the process, accelerating their capabilities to create an account. This is done. And then we move on to the other one. So I think we're continue to invest.

Speaker #1: We identified the I would say really high priority that we had. Mary in supply chain is here. We have invested in supply chain. We've grown talents and we brought more talent in the organization.

Speaker #4: this is something very important for us. You know we ha we we simplify. We save. And then we reinvest for growth. This is the formula that we are applying.

Speaker #5: Thanks, guys.

Speaker #1: Like in the e-commerce platform, we had our new digital leader that came from Medline. All those things are reviewed on a regular basis. Brian Brolier will join us as head of BMP segments, but also the transformation leaders have a really clear operating plan for the revival programs.

Speaker #4: Thanks, Edward.

Speaker #2: You're our next question. Comes on the line of Dan Brennan with TD Cowan. Please go ahead.

Speaker #3: Great. Thank you. I thought I would just if you don't mind just go back to you know VWR VWR distribution and the investments that you made there.

Speaker #3: To kinda stabilize share with the price. I know there was a question asked earlier. But could you just remind us in the back half of the year is that like fully comped out that investment?

Speaker #1: And so we take project by project, I will say. And then we deliver them. We tick the box and we move on into another one.

Speaker #3: 'Cause it looks like you know it might have been like a three-point benefit like you're saying in Q2. I'm just wondering kinda what's baked in for the back half of the year on that investment.

Speaker #1: So there's still a lot to do. We shared many of those. I mean, the last one that we shared in this call was the onboarding process, which is very important for our customers.

Speaker #4: Look I think in in the VWR area so the the the majority of the investment is on the e-commerce platform, the relaunch of the VWR.com.

Speaker #1: Simplifying the process, accelerating their capabilities to create an account—this is done. And then we move on to the other one. So I think we continue to invest.

Speaker #4: And and we'll continue to do so. So I think all our investment are baked into our guidance today.

Speaker #1: This is something very important for us. We simplify. We save. And then we reinvest for growth. This is the formula that we are applying.

Speaker #3: Okay. m-maybe zooming out just on the BMP segment then for a moment. You know book to bill has been above one the last couple quarters obviously growth has been challenged.

Speaker #3: But you had the idiosyncratic factors. Just can you speak a little bit about like the backlog there? Kind of you know what the how much of that business is backlog driven?

Speaker #4: Thanks, guys.

Speaker #1: Thanks, Andrew.

Speaker #2: Your next question comes from the line of Dan Brennan with TD Cowan. Please go ahead.

Speaker #3: Kinda how we translate that strong book to bill into the outlook whether it be in the back half? And then in 27 and then any specific color just on new sale which I know you know you guys have you know kind of a market leadership there.

Speaker #3: Great. Thank you. I thought I would just if you don't mind, just go back to VWR distribution and the investments that you made there.

Speaker #3: To kind of stabilize share with the price. I know there was a question asked earlier. But could you just remind us, in the back half of the year, is that fully comped out that investment?

Speaker #3: Just wondering kind of you know volume and price on new sale and kinda what the outlook that's baked in on that front. Thank you.

Speaker #3: Because it looks like it might have been like a three-point benefit like you're saying in Q2. I'm just wondering kind of what's baked in for the back half of the year on that investment.

Speaker #4: Sure. let me maybe start with with the market. so BMP is is really across diverse set of end markets. All right. Electronic materials. You just talked about new steel and med tech.

Speaker #1: Look, I think in the VWR area, so the majority of the investment is on the e-commerce platform, the relaunch of the VWR.com. And we'll continue to do so.

Speaker #4: Of course our bioprocessing market was our bio chemicals. look overall we are very pleased against with the go-to-market activity that we're doing with the commercial team.

Speaker #1: So I think all our investment are baked into our guidance today.

Speaker #3: Okay, maybe zooming out just on the BMP segment for a moment. Book-to-bill has been above one the last couple of quarters.

Speaker #4: So we talk early on on Q2 on the order intake double digit and the book to bill being positive. what I can tell you that from the first half it's the same.

Speaker #3: Obviously, growth has been challenged, but you had the idiosyncratic factors. Just can you speak a little bit about the backlog there, kind of what the how much of that business is backlog driven, kind of how we translate that strong book to bill into the outlook, whether it be in the back half?

Speaker #4: It's it's low double digit order book for the entire first half which is I think very encouraging. And and all the subsegments are are in growth as well in in in the entire BMP.

Speaker #3: And then in 2027, and then any specific color just on New Sill, which I know you guys have kind of a market leadership there.

Speaker #4: So we're super encouraged by that. The market is solid for all of those subsegments. we have those discrete things that you talk about that give us a comparison but again the team is really focusing on finding the opportunity converting the opportunity bringing the order in.

Speaker #3: Just wondering kind of volume and price on new sale and kind of what the outlook that's baked in on that front. Thank you.

Speaker #1: Sure. Let me maybe start with the market. So BMP is really across diverse set of end markets, electronic materials. You just talked about new steel and medtech, of course.

Speaker #4: And then the supply chain team is is working really hard to make sure that that we supply the customers the best we can. And this this is working well.

Speaker #1: Our bioprocessing market was our biochemicals. Look, overall, we are very pleased again with the go-to-market activity that we're doing with the commercial team. So we talk early on on Q2 on the order intake double digit and the book to bill being positive.

Speaker #4: We continue to invest. Again you know this is something that takes takes time. But we are happy where we are right now. So just a bit of on new steel.

Speaker #4: New steel new steel is doing good. Good order intake on new steels. you know price but no nothing crazy. A good price list but nothing crazy.

Speaker #4: Some good volume as well. some good activity not only in in the implants but in the new market that we are pushing like aerospace.

Speaker #1: But I can tell you that from the first half, it's the same. It's low double digit order book for the entire first half, which is I think very encouraging.

Speaker #4: and that's something that we can give you a bit more colors when we are together at the investor's day.

Speaker #1: And all the subsegments are in growth as well, across the entire BMP. So we're super encouraged by that. The market is solid for all of those subsegments.

Speaker #3: Great. Thank you.

Speaker #2: You're our next question. Comes on the line of VJ Kumar with Evercore ISI. Please go ahead.

Speaker #1: We have those discrete things that you talk about that give us a comparison. But again, the team is really focusing on finding the opportunity, converting the opportunity, and bringing the order in.

Speaker #6: Hi guys. This is Mackenzie on for VJ. Thanks for taking our questions. first one from us. I was wondering if you could talk a little bit more about the guide cadence in the second half.

Speaker #1: And then the supply chain team is working really hard to make sure that we supply the customers the best we can. And this is working well.

Speaker #6: and specifically I know you've talked a few times about expecting VWR to accelerate. But could you give us any color on sort of the size of the ramp or some of the levers to the upside or downside and how we might think about the exit rates in fourth quarter?

Speaker #1: We continue to invest. Again, this is something that takes time. But we are happy with where we are right now. So just a bit on new steel.

Speaker #4: Sure. Mackenzie. I I thought that VJ has changed voice though I'm glad welcome to the call. I'm going to pass it to Steve.

Speaker #1: New steel is doing good. Good order intake on new seals. Price, but nothing crazy. A good price list, but nothing crazy. Some good volume as well.

Speaker #7: Yeah. Thanks Emmanuel. And good morning Mackenzie. happy to step you through our assumptions around the the full year guidance which we've updated. starting with top line.

Speaker #1: Some good activity not only in the implants, but in the new markets that we are pushing, like Aerial Space. And that's something that we can give you a bit more color on when we are together at Investor Day.

Speaker #7: as you know we updated the guide for the consolidated full year organic revenue growth. And that's really driven by the flow through of the VW VWR's outperformance in Q2 as well as our raised expectations for the business in the second half.

Speaker #7: The outlook related to BMP is generally unchanged from our initial guidance. The business continues to perform very well. And in line with our plan.

Speaker #3: Great. Thank you.

Speaker #2: Your next question comes from the line of VJ Kumar with Evercore ISI. Please go ahead.

Speaker #7: We reaffirmed our adjusted EBITDA margin guidance for the full year despite the continued inflationary pressure we're absorbing. for example we've continued to see significant pressure on freight costs for both segments.

Speaker #5: Hey, guys. This is Mackenzie on for VJ. Thanks for taking our questions. First one from us. I was wondering if you could talk a little bit more about the guide cadence in the second half.

Speaker #5: And specifically, I know you've talked a few times about expecting VWR to accelerate. But could you give us any color on the size of the ramp, or some of the levers to the upside or downside, and how we might think about the exit rates in the fourth quarter?

Speaker #7: couple other housekeeping items for non-operational in nature. we expect FX to be a headwind for this second half. we also have slightly lower assumptions for our share count interest expense and if you put all that together you know these are the important factors driving the updated guide of 80 to 83 cents for adjusted EPS for for the full year.

Speaker #1: Sure. Mackenzie, I thought that VJ has changed voice, though. I'm glad. Welcome to the call. I'm going to pass it to Steve.

Speaker #6: Great. That's super helpful. and then follow up just on your end markets here. You know advanced tech was pretty strong and education and government also grew off of a slightly tougher comp.

Speaker #6: Yeah. Thanks, Emmanuel. And good morning, Mackenzie. Happy to step you through our assumptions around the full-year guidance, which we've updated. Starting with top line, as you know, we updated the guide for the consolidated full year organic revenue growth.

Speaker #6: Whereas biopharma and healthcare declined a little bit. I'm just wondering if you can talk about the puts and takes here. what kind of drove each of these end markets and how we should be thinking about them into the second half?

Speaker #6: And that's really driven by the flow-through of VWR's outperformance in Q2, as well as our raised expectations for the business in the second half.

Speaker #6: Thank you.

Speaker #6: The outlook related to BMP is generally unchanged from our initial guidance. The business continues to perform very well and in line with our plans.

Speaker #7: all right.

Speaker #4: I think Mackenzie it's probably because of of BMP here. generally speaking in VWR you know we see more pharma more biotech activity. I would say especially in in USA in America.

Speaker #6: We reaffirmed our adjusted EBITDA margin guidance for the full year, despite the continued inflationary pressure we're absorbing. For example, we continue to see significant pressure on freight costs for both segments.

Speaker #4: other market we see it more or less unchanged all right? Education and Europe are are probably a stable level or at a level that we were kind of expecting.

Speaker #6: A couple other housekeeping items, non-operational in nature. We expect FX to be a headwind for this second half. We also have slightly lower assumptions for our share count and interest expense in the future.

Speaker #4: So a bit low levels. we we wish it was a bit better. And on BMP I think you know all diverse set of market are are healthy and and that is that is reflecting our order book.

Speaker #6: Put all that together, these are the important factors driving the updated guide of 80 to 83 cents for adjusted EPS for the full year.

Speaker #4: process chemical order book in particular you know double digit for the quarter.

Speaker #5: Great. That's super helpful. And then follow-up just on your end markets here. Advanced tech was pretty strong and education and government also grew off of a slightly tougher comp, whereas biopharma and healthcare declined a little bit.

Speaker #2: You're our next question. Comes from the line of Matt Leroux with William Blair. Please go ahead.

Speaker #3: Hi. Good morning everyone. you know Emmanuel obviously over the last year a number of initiatives you've laid out within Revival have moved from evaluation phase to execution phase.

Speaker #5: I'm just wondering if you can talk about the puts and takes here? What kind of drove each of these end markets and how we should be thinking about them into the second half?

Speaker #5: Thank you.

Speaker #3: You know acknowledging you mentioned it's been ongoing process. you know what by the time we get through to the the December annual stage you feel like you'll largely be set in terms of the the the management team changes the implementation of kind of the big items you identified last year.

Speaker #1: All right. I think, Mackenzie, it's probably because of BMP here. Generally speaking, in VWR, we see more pharma, more biotech activity. I would say especially in USA, in America.

Speaker #1: Other market, we see it more or less unchanged, right? Education and Europe are probably a stable level or at a level that we were kind of expecting.

Speaker #3: And I guess as part of that one one thing is the portfolio review. Is that something you expect to sort of be complete by the investor day as well?

Speaker #1: So, a bit low levels. We wish it was a bit better. And on BMP, I think all diverse sets of the market are healthy, and that is reflected in our order book—process chemical order book in particular—double-digit for the quarter.

Speaker #4: Thanks Matt. Yeah. I think I think you're right. We're working hard on all the pillar. Okay? And and for that the the portfolio it it's ongoing.

Speaker #4: it's it's really an important part of our pillar. Okay? And we are of course looking at every businesses assessing any product line any market position the financial profile and we are always asking ourselves you know are we the the best owner.

Speaker #2: Your next question comes from the line of Matt Leroux with William Blair. Please go ahead.

Speaker #3: Hi. Good morning, everyone. Emmanuel, obviously over the last year, a number of initiatives you've laid out within Revival have moved from evaluation phase to execution phase.

Speaker #4: So we're working hard on that part. And and yes we hope that we can give you some some some update at the at the investor's day.

Speaker #3: Acknowledging you mentioned it's been ongoing process. By the time we get through to the December annual state, do you feel like you'll largely be set in terms of the management team changes, the implementation of kind of the big items you identified last year?

Speaker #4: But what I want to say Matt as well is Revival is really a program which is constantly evolving. So we're going through a lot right now.

Speaker #4: But I'm sure because it's it's it's a culture as well that we want to bring to the organization of continuous improvement. So it's not because we will have made some very good progress that we will finish the year with momentum.

Speaker #3: And I guess as part of that, one thing is the portfolio review. Is that something you expect to be complete by the Investor Day as well?

Speaker #1: Thanks, Matt. Yeah, I think you're right. We're working hard on all the pillars, okay? And for that, the portfolio, it's ongoing. It's really an important part of our pillar, okay?

Speaker #4: That we will still not have things that we want to do and we want to improve and we want to progress. So you know it's going to evolve.

Speaker #4: But we'll give you we'll give you more update on the portfolio.

Speaker #1: And we are, of course, looking at every businesses assessing any product line, any market position, the financial profile, and we are always asking ourselves, are we the best owner?

Speaker #3: Okay. That's great. and then the the discrete headwinds in BMP. Reference 600 basis points in Q2. I think you said 150 in Q3. maybe what is that in the fourth quarter?

Speaker #3: And then and I assume that's out of the numbers for the most part next year and and thus setting up potentially a path to return a more durable growth on that side of business.

Speaker #1: So we're working hard on that part. And yes, we hope that we can give you some update at the investors day. But what I want to say, Matt, as well is Revival is really a program which is constantly evolving.

Speaker #7: Yeah. Good morning Matt. This is Steve happy to share there. So as you already pointed out Q2 was the most challenging quarter. you already referenced the the three Q headwind.

Speaker #7: We expect to see. The only other point to make would be related to the fourth quarter. which will also be a pretty difficult comparison of about 400 basis points related to our electronic materials business.

Speaker #1: So we're going through a lot right now. But I'm sure, because it's a culture as well, that we want to bring to the organization—a culture of continuous improvement.

Speaker #7: we do think it's also useful to reflect on the sequential performance of the business which presents you know a little more consistent picture of the improvements and the progress we've made.

Speaker #1: So it's not because we will have made some very good progress that we will finish the year with momentum. That we will still not have things that we want to do and we want to improve and we want to progress.

Speaker #7: You know over the course of the year we expect to to see you know gradual strengthening in the volumes over the course of the year.

Speaker #7: And this is really the result of two major things. You know and we talked about them in the prepared first. The operational improvements that the team has been driving and continue to focus on.

Speaker #1: So it's going to evolve, but we'll give you more updates on the portfolio.

Speaker #7: And the development of that really strong order book we're really excited for the building and sustainable momentum. And I think the profile within 2026 over the course of '26 is is really gradual and improving and really strong.

Speaker #3: Okay. That's great. And then the discrete headwinds in BMP, reference 600 basis points in Q2. I think you said 150 in Q3. Maybe what is that in the fourth quarter?

Speaker #3: And then I assume that’s out of the numbers for the most part next year, and that’s setting up potentially a path to return to more durable growth on that side of the business.

Speaker #4: Maybe I can add because I can sense behind your question is is is your strong interest about 2027 which by the way it's the same for me all right?

Speaker #6: Yeah. Good morning, Matt. This is Steve. Happy to share there. So as you already pointed out, 2Q was the most challenging quarter. You already referenced the 3Q headwind.

Speaker #4: So as you know it's we we may be a bit too early to give guidance there. But let me let me share a few thoughts here.

Speaker #4: I mean both VWR and the BMP team are really executing super well. We are really happy about the fact the team has embraced Revival and the new way of working.

Speaker #6: We expect to see. The only other point to make would be related to the fourth quarter, which will also be a pretty difficult comparison of about 400 basis points related to our electronic materials business.

Speaker #6: We do think it's also useful to reflect on the sequential performance of the business, which presents a little more consistent picture of the improvements and progress we've made over the course of the year.

Speaker #4: We will exit '26 with momentum. there's there's no doubt about this. we will not be completely done for sure. And we'll continue to push more initiative to continuous improve the business.

Speaker #6: We expect to see gradual strengthening in the volumes over the course of the year. And this is really the result of two major things.

Speaker #4: But we will we will we will leave the end the the year with momentum. So 2027 you know every day every month you know the last 90 days I my confidence is is increasing.

Speaker #6: And we talked about them in the prepared remarks. First, the operational improvements that the team has been driving and continues to focus on. And the development of that really strong order book—we're really excited for the building and sustainable momentum.

Speaker #4: And and I'm confident and optimistic that 2027 will be a gross year.

Speaker #6: And I think the profile within 2026 over the course of '26 is really gradual and improving. And really strong.

Speaker #3: Okay. That's great to hear. Thanks.

Speaker #1: Maybe I can add, because I can sense behind your question is your strong interest about 2027, which, by the way, is the same for me, all right?

Speaker #2: You're our next question. Comes from the line of Casey Woodward with JP Morgan. Please go ahead.

Speaker #6: Great. Thank you for taking my questions. yeah just wanted to push on the margin piece right? You reiterated adjusted EBITDA margins for the year.

Speaker #1: So, as you know, we may be a bit too early to give guidance there. But let me share a few thoughts here. I mean, both VWR and the BMP team are really executing super well.

Speaker #6: Maybe just talk a little bit about gross margin expectations for the back half. I know you have some easier comps and VWR given last year's reset.

Speaker #6: But you talked a little bit about inflationary pressure ramping here. So maybe just you could quantify that piece and maybe walk through the moving pieces and levers you can pull whether that's productivity pricing or elsewhere on gross margins.

Speaker #1: We are really happy about the fact the team has embraced Revival and the new way of working. We will exit '26 with momentum. There's no doubt about this.

Speaker #7: good morning Casey. This is Steve. Thanks for your question. yeah consolidated gross margin the rate was essentially flat from one two to two Q of this year.

Speaker #1: We will not be completely done, for sure, and we'll continue to push more initiatives to continuously improve the business. But we will leave the year with momentum.

Speaker #7: we do expect that rate to stay steady through the end of the year. while stability is good obviously we were looking for a margin expansion.

Speaker #1: So 2027, every day, every month, the last 90 days, my confidence is increasing. And I'm confident and optimistic that 2027 will be a growth year.

Speaker #7: So you know what are our priorities in this regard? First you know we're looking to drive as much volume as we can. you know we also want to successfully navigate inflationary pressures with our customers and suppliers constructively.

Speaker #7: you know we prefer an you know wanna drive a strong product sales mix. And wanna also highlight you know our focus on digital investment.

Speaker #3: Okay. That's great to hear. Thanks.

Speaker #2: Your next question comes from the line of Casey Woodward with JP Morgan. Please go ahead.

Speaker #7: You know and we we mentioned it in the prepared remarks. You know the digital capabilities really help us connect better. with our smaller customers which tend to be better margin sales for us.

Speaker #3: Great, thank you for taking my questions. I just wanted to follow up on the margin piece. You reiterated adjusted EBITDA margins for the year.

Speaker #7: so you know we're very focused on that. So excellent job you know by our teams to this point in the year. You know and driving these things and those are gonna be the key levers as we move forward.

Speaker #3: Maybe just talk a little bit about gross margin expectations for the back half. I know you have some easier comps and VWR, given last year's reset, but you talked a little bit about inflationary pressure ramping here.

Speaker #3: So maybe, if you could quantify that piece and walk through the moving pieces and levers you can pull—whether that's productivity, pricing, or elsewhere on gross margins.

Speaker #6: Okay. That's helpful. And then you know I guess I appreciate the the commentary on '27. But just how are you balancing kind of investment into the business that you've kind of talked about here today versus margin expansion for next year?

Speaker #6: Good morning, Casey. This is Steve. Thanks for your question. Yeah, consolidated gross margin, the rate was essentially flat from Q1 to Q2 of this year.

Speaker #6: And you know can you grow EPS next year? Thank you.

Speaker #6: We do expect that rate to stay steady through the end of the year. While stability is good, obviously we were looking for margin expansion.

Speaker #8: Hey Casey. Emmanuel here. look I'll I'll go back to the philosophy that we are pushing simplifying saving reinvesting for growth. All right? I mean I think last quarter we shared that our headcount is down about minus two percent.

Speaker #6: So what are our priorities in this regard? First, we're looking to drive as much volume as we can. We also want to successfully navigate inflationary pressures with our customers and suppliers constructively.

Speaker #6: We prefer and want to drive a strong product sales mix. I also want to highlight our focus on digital investment. We mentioned it in the prepared remarks.

Speaker #8: That was last quarter. At the end of this quarter the headcount is down minus three percent. And basically our objectives and what we are striving as a culture is to drive for leverage P&L.

Speaker #6: The digital capabilities really help us connect better with our smaller customers, which tend to be better margin sales for us. So we're very focused on that.

Speaker #6: Understood. Thank you guys.

Speaker #6: So, excellent job, Barra teams, to this point in the year, in driving these things. And those are going to be the key levers as we move forward.

Speaker #8: Thank you Casey.

Speaker #2: You're our next question. Go comes from the line of Michael Reiskin with Bank of America. Please go ahead.

Speaker #1: Great. thanks for taking the question. I wanna follow up on BMP so facing through the rest of the year. You kinda talked about you know improving third quarter up a little bit.

Speaker #3: Okay, that's helpful. And then I guess I appreciate the commentary on '27, but just how are you balancing investment into the business that you've talked about here today versus margin expansion for next year?

Speaker #1: fourth quarter then the fourth quarter just based on timing. a+and and comps. you know it's fair to think that four Q BMP should be roughly flat organic or maybe just down a little bit.

Speaker #3: And can you grow EPS next year? Thank you.

Speaker #1: Hey, Casey. Emmanuel here. Look, I'll go back to the philosophy that we are pushing simplifying saving reinvesting for growth, all right? I mean, I think last quarter we shared that our headcount is down about minus 2%.

Speaker #1: And then when you were talking about sort of like exit rates and going into next year you know you kinda alluded to you know the headwinds and and some of the idiosyncratic things being past us.

Speaker #1: And really just focusing on sequential growth. So maybe I'll ask it that way. if we look at four Q for both VWR and BMP from a sequential perspective is that the right jumping off point for for '27?

Speaker #1: That was last quarter. At the end of this quarter, the headcount is down minus 3%. And basically, our objective and what we are driving as a culture is to drive for leverage P&L.

Speaker #1: as we model out next year. Thanks.

Speaker #7: Good morning Michael. This is Steve. Happy to answer that. You know I'll start with organic growth for BMP. We expect modest organic growth in three Q.

Speaker #3: Understood. Thank you, guys.

Speaker #7: we do expect the organic growth in four Q to be a little more muted because of the more difficult comps described. sequentially you know on a reported basis BMP we expect for Q three to be about flat sequentially.

Speaker #1: Thank you, Casey.

Speaker #2: Your next question. Comes from the line of Michael Riskin with Bank of America. Please go ahead.

Speaker #5: Great, thanks for taking the question. I want to follow up on BMP, sort of like pacing through the rest of the year. You kind of talked about improving the third quarter, up a little bit, and the fourth quarter.

Speaker #7: With a modest uptick in the fourth quarter.

Speaker #1: Okay. Let's go. And then going back to I think McKenzie's question earlier on some of the end market trends. You know if we look through if we look through what you kinda gave us today it looks like the biggest step up in two Q relative to one Q was actually that advanced technologies.

Speaker #5: Then the fourth quarter is just based on timing. And comps. It's fair to think that 4Q, BMP should be roughly flat, organic, or maybe just down a little bit.

Speaker #5: And then when you were talking about sort of like exit rates and going into next year, you kind of alluded to the headwinds and some of the idiosyncratic things being passed us and really just focusing on sequential growth.

Speaker #1: so just love to go into a little bit deeper into you know where where an advanced technology started to increase either by customer type or product you sell.

Speaker #5: So maybe I'll ask it that way. If we look at Q4 for both VWR and BMP, from a sequential perspective, is that the right jumping-off point for '27 as we model out next year?

Speaker #1: just sort of what led that uptake. was it more on the equipment side or on the consumable side? Just you know any any sense of lumpiness there or just sort of what drove that?

Speaker #1: Thanks.

Speaker #5: Thanks.

Speaker #6: Good morning, Michael. This is Steve. Happy to answer that. I'll start with organic growth for BMP. We expect modest organic growth in Q3. We do expect the organic growth in Q4 to be a little more muted because of the more difficult comps that I already described.

Speaker #8: Sure Michael. just let's let's go maybe through I mean I guess your question was more a bit about VWR isn't it?

Speaker #1: Yeah. Yeah.

Speaker #8: Yeah. So so on VWR as as we said so large global customers especially the large global customers where we had renewed contract with good opportunity.

Speaker #6: Sequentially, on a reported basis, BMP, we expect for Q3 to be about flat sequentially, with a modest uptick in the fourth quarter.

Speaker #5: go. And then going back to, I think, McKenzie's question earlier on some of the end market trends. If we look through what you kind of gave us today, it looked like the biggest step-up in 2Q relative to 1Q was actually that advanced technologies so we just love to go into a little bit deeper into where in advanced technologies saw the increase either by customer type or product you sell.

Speaker #8: And there it's the mix. It's a mix of what the customers really need and it's a mix also in depending of where the customers of large customer and large account are investing.

Speaker #8: But generally speaking we see a we see a good momentum spend in large pharma. Also biotech actually. All right? The funding is is coming back to biotech.

Speaker #8: And we see them spending money it's a mix of equipment. It's a mix of consumables. and and I would say geographically speaking it it USA and America is is really driving it.

Speaker #5: Just sort of what led that uptake? Was it more on the equipment side or on the consumable side? Any sense of lumpiness there, or just sort of what drove that?

Speaker #8: Okay? For the rest I mean I think it's it's a bit unchanged. And and smaller customers that we see through e-commerce platform where where we really see again the the impact of what we've done with VWR dot com.

Speaker #5: Thanks.

Speaker #1: Sure, Michael. Just let's go maybe through I mean, I guess your question was more a bit about VWR, isn't it?

Speaker #8: It's very very broad. It's very very distinct. those customers are usually not buying equipment through the e-commerce platform but so it's a more mix of consumables.

Speaker #5: Yeah. Yeah.

Speaker #1: Yeah. So on VWR, as we said, large global customers—especially the large global customers where we had renewed contracts—offer good opportunity. And there, it's the mix.

Speaker #8: and it's it's across many different applications.

Speaker #1: Okay. Thanks.

Speaker #2: You're our next question. Comes from the line of Paul Knight with KeyBank. Please go ahead.

Speaker #1: It's a mix of what the customers really need, and it's also a mix depending on where the customers of large customers and large accounts are investing.

Speaker #9: Hi Emmanuel. now now that you've been in charge for a while. What's your view on self-manufacturing? Do you wanna increase the level of self-manufacturing or do you think expanding vendor relationships is the really the way to go in the future being kind of a non-competitor?

Speaker #1: But generally speaking, we see good momentum in spend in large pharma and also biotech, actually. The funding is coming back to biotech, and we see them spending money.

Speaker #1: It's a mix of equipment, it's a mix of consumables. And I would say geographically speaking, it's USA and America is really driving it, okay?

Speaker #9: What's what's your walk away and views on self-manufacturing at this time?

Speaker #8: It's a it's a great question Paul. Thank you. I think I think we have a lot of opportunities on self-manufacturing. It's a good service that we're providing to to many many people.

Speaker #1: For the rest, I mean, I think it's a bit unchanged. And smaller customers that we see through the e-commerce platform, where we really see, again, the impact of what we've done with VWR.com.

Speaker #1: It's very, very broad. It's very distinct. Those customers are usually not buying equipment through the e-commerce platform, but so it's a more mix of consumables and it's across many different applications.

Speaker #8: in terms of VWR you know I really like the fact that we are a product agnostic. I really like the fact that we are differentiating ourselves offering the broadest catalog that we can.

Speaker #8: And offer optionality to the customers. You know really top products many very famous brand that actually wants to work with us. And I think this is very important.

Speaker #5: Okay. Thanks.

Speaker #2: Your next question comes from the line of Paul Knight with KeyBanc. Please go ahead.

Speaker #8: Really good relationship with supplier. and then we have also the VWR brand. So product agnostic for VWR I think is a really good positioning.

Speaker #7: Hi, Emmanuel. Now that you've been in charge for a while, what's your view on self-manufacturing? Do you want to increase the level of self-manufacturing, or do you think expanding vendor relationships is really the way to go in the future, being kind of a non-competitor?

Speaker #8: It's a very good value proposition. And self-manufacturing I mean for us internally it's a business that we have. It's a service that we provide to people because we have really good capabilities and capacities.

Speaker #7: What's your walk away and views on self-manufacturing at this time?

Speaker #8: And we are capable to offer really high quality product to the many different customers as as as an OEM. And it's it's a very good service.

Speaker #1: That's a great question, Paul. Thank you. I think we have a lot of opportunities in self-manufacturing. It's a good service that we're providing to many people.

Speaker #8: And it's it's growing actually. So I think a bit of both is very important for us.

Speaker #9: And then regarding BMP obviously a great build out over the years. what's the what's the next steps in your view for BMP?

Speaker #1: In terms of VWR, I really like the fact that we are a product agnostic. I really like the fact that we are differentiating ourselves offering the broadest catalog that we can and offer optionality to the customers.

Speaker #8: Well I think the next steps from BMP for us is just making sure that we continue to drive operational excellence. The SNOP process that we put in which is very important to have a very good visibility of the demand and the supply.

Speaker #1: Really top products made very famous brand that actually wants to work with us. And I think this is very important. Really good relationship with supplier.

Speaker #8: And really continue to invest in you know reducing lead times. Improving on time delivery. Making sure that we continue to serve the customers the best we can.

Speaker #1: And then we have also the VWR brand. So, product-agnostic for VWR, I think it's a really good positioning. It's a very good value proposition.

Speaker #1: And self-manufacturing, I mean, for us internally, it's a business that we have. It's a service that we provide to people because we have really good capabilities and capacities and we are capable to offer really high-quality product to the many different customers as an OEM.

Speaker #8: And and and you know process chemical in particular we really see the impact of what the team has been driving commercially and supply chain.

Speaker #8: I mean we talk to you in the preamble about you know those particular product line where we are invested. Where Maren and the team has done a really good job to take the output by up by twenty-five percent.

Speaker #1: And it's a very good service. And it's growing, actually. So I think a bit of both is very important for us.

Speaker #8: This is really important for us to continue to do so. Reduce lead times. Increase on time delivery. And not measured on our promise date.

Speaker #7: And then regarding BMP, obviously, a great build-out over the years. What's the next steps in your view for BMP?

Speaker #8: But really measure on what the customer deserve. And what the customers want. So improving service level is really important. Quality is really good. Jerry that joined us last quarter is doing a really good job as well.

Speaker #1: Well, I think the next steps from BMP for us are just making sure that we continue to drive operational excellence. The S&OP process that we put in is very important to have very good visibility of the demand and the supply—and really continue to invest in reducing lead times, improving on-time delivery, and making sure that we continue to serve the customers the best we can.

Speaker #8: And and those are the area that we'll continue to invest and continue to continue improve the service level is is really important.

Speaker #9: Thank you.

Speaker #8: Okay.

Speaker #2: And ladies and gentlemen that does conclude our question and answer session. I would now like to turn the conference back over to Emmanuel for closing comments.

Speaker #8: Thank you Christelle. let me conclude the call with a reminder of the key takeaway for Q2. First revival is working. And the team is committed to continue to improve.

Speaker #1: And process chemical in particular, we really see the impact of what the team has been driving commercially and supply chain. I mean, we talked to you in the preamble about those particular product line where we are invested, where Maren and the team has done a really good job to take the output by up by 25%.

Speaker #8: Second our growth trajectory is improving. And third we continue to generate excellent free cash flow. Thank you for joining the call. And have a great day.

Speaker #1: This is really important for us to continue to do so, reduce lead times, increase on time delivery, and not measured on our promise date, but really measure on what the customer deserves and what the customers want.

Speaker #1: So, improving service levels is really important. Quality is really good. Jerry, who joined us last quarter, is doing a really good job as well.

Speaker #1: And those are the areas that we will continue to invest in and continue to improve. The service level is really important.

Speaker #7: Thank you.

Speaker #2: And ladies and gentlemen, that does conclude our question and answer session. I would now like to turn the conference back over to Emmanuel for closing comments.

Speaker #1: Thank you, Christelle. Let me conclude the call with a reminder of the key takeaway for Q2. First, revival is working. And the team is committed to continue to improve.

Speaker #1: Second, our growth trajectory is improving. And third, we continue to generate excellent free cash flow. Thank you for joining the call, and have a great day.

Q2 2026 Avantor Inc Earnings Call

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