A
#Thanks.
Glad to address both of your questions.
On the NIH front, I think when we talked about the uptick and our improved confidence about the spends in academia and government in the US, I think we do think that the NIH stuff will start to flow through to our business.
Relative to some in our space, we don't have as high a percentage of our business tied to the NIH, but it will be a positive for us.
And I think, again, one more fact pattern, which points to continued view that this market will be solid for us as we move into 2017.
I think I'd have to agree with the comment, which is, I think it really is too soon to get overly excited about this from a US spending.
I've seen this before, where the legislation is announced, and there's a lot of fanfare about it, but we don't always see it backed up by investments.
We are seeing some ---+ looks like some maybe more friendly governmental allocations to this agency, unlike we've seen to the EPA.
So we're not expecting anything dramatic to occur differently in the market, because of this.
But if it would, that would be clearly good news for us.
Why don't you take this one, <UNK>.
It's a great question and the answer is yes, it's precisely what we had expected.
One of the obviously, from one quarter to the next, there could be some one time add-ins that adds a little bit of volatility.
For example, last year both ACG and DGG had very favorable hedging gains, which have gone away, for the whole Company, the hedging gain last year in Q2 was over $7 million, and this Q2 was about $1.5 million, something like that.
So it was mostly in ACG and DDG.
They are were other one time items including regarding the allocation of our shared services among the different businesses, which explain.
But both businesses are on their way to contribute to the operating margin expansion, and the 22% that we're committing to.
<UNK>, maybe I'd also ask <UNK> too.
We talked about this earlier this ---+ last week as well about the operational efficiency improvements that underlying what looks to be flat margins.
Peel back the onion, the hedging gains and other things, there's actually real operational stuff going on there.
Thanks, <UNK> and <UNK>.
As <UNK> had said, there were several things that were factored in last year, that didn't come into play this year.
We're working on a lot of things in terms of improvements.
The mix is somewhat favorable in the context of what we're selling.
But overall, when we look at our plans for the first half, we're up 70 basis points in the first half over last year.
So our ability to actually do the margin improvements, when you pull back and look at in the first half, regardless of all these things, is quite positive.
And it's our fastest-growing business, he's been picking up more of the corporate costs of shared services.
Hope that was helpful.
This is <UNK>.
Let me answer these questions.
First and foremost, this is not biopharma at all.
This is pharma and biopharma combined.
When I talk about 150,000 systems out there, it's the installed base of LC systems in all markets.
So it's not only in pharma, biopharma.
But we think the biggest push is actually right now coming from pharma and biopharma.
And I would still say we are in the midst of a replacement cycle.
We don't see that to be over in the next couple of quarters.
There's healthy demand, and we are in negotiation with a lot of our core customers on upcoming replacements, and how we place these systems, and how we plan it out for them, so it works for them.
<UNK>e, if I could add one other comment to <UNK>'s response.
We've been focused a lot in today's call on pharma, biopharma but keep in mind that the replacement cycle has been very, very subdued on the applied markets side, in liquid chromatography, so we have several ---+ we have tens of thousands of systems on that side of the house, as well.
Again, this is why we look out into 2017 and 2018, we think that our growth rates are sustainable.
Don't ask a German about a baseball analogy.
I'd say on the pharma side, you're probably inning five or six.
Two thirds of the way through, maybe two-thirds.
My point would be that I think the ballgame is just getting started.
We may be in the first inning, we hope to be in the first inning soon of that cycle, on the applied market side.
Thank you, everybody.
And I'd like to thank you all for joining us today on the call.
If you have any questions, of course, please give us a call in IR, and just would hope that we'll see you next week at our analyst day in New York City.
Thanks again.
Bye-bye.
