TMO
#What I would say is that, clearly, the oil and gas end markets are soft, but they are very, very, very small for us.
There is some effect, but it does not hit any level of materiality to the Company.
That's what I think about that.
You can just lump it into the commodities material markets are soft and oil and gas is soft, but nothing much to spend dwelling there.
Generally, industrial and applied should be a reasonable market for us this year.
Thanks.
Japan was the primary driver, so we had been growing in the low single digits last year.
We declined in the low single digits.
The full delta between flat and the decline was driven by Japan.
Maybe the difference between flat and the rest was just a little bit of softness that we saw in Europe, so that would be the academic and government story.
It really is a Japan story.
This industry is mostly private companies, in terms of the number of companies.
There's a huge pipeline of those, and we continue to look at those closely.
Every once in a while you will see us be able to get one over the goal line.
Morning, <UNK>.
<UNK>, you on mute.
<UNK>, interestingly enough, if you think about what happens a year ago and what happened this year, you have similar patterns, a very strong finish to the year and then a softer Q1.
<UNK>, when he laid out the guidance, said if you want to be a little bit softer than the balance of the year.
What I would say that dynamic is, if you think about what happened in both of those years, nothing really bad happened in the world.
Everyone on this call has heard me say this.
Customers keep a certain level of money on the side to manage for a disaster.
Both in 2013 and 2014 the way the world ended, things were okay, so people were released funds very late in the year.
That dynamic does the following, which is, if you want to buy something exciting and expensive you buy it, but sometimes if you have a little extra money, you wind up buying something you absolutely know you're going to need.
I'm sure that some high-tech consumables, bioscience reagents, if people had a little bit of money, they bought a little bit knowing that they would use it in the first quarter.
Does that have a tiny bit of an affect.
Sure, but is it something we are calling out.
No, is the way I would think about it.
<UNK>, I guess a couple ways I would think about that.
One, is Japan, not a huge market for us, in aggregate.
Top-five, top-six market, but not a huge market.
Accounted for, for the whole academic and government, about a little more than 3% decline for the Company in the quarter.
It gives you a sense of how soft it was.
There were two factors, as I mentioned in my prepared remarks.
One which we clearly understood and embedded in our guidance, which was a very challenging comparison in Japan because of the consumption tax last year, which had customers pull things forward.
Not having the budget passed until after the quarter end, I don't think we'll see ---+ from everything I've read, from the team that we've worked with for many, many years was not something that they anticipated nor, as far as I could tell, was really expected, so that's the difference in the performance.
I don't know, maybe other people saw that happening and we missed it, but from my understanding, I think we planned it appropriately and that's the way it played out.
Yes.
Basically the segment played out pretty much as the same story as the Company, 2% growth in the quarter we said 3% or 4% for the segment for the full year.
We feel good about the 3% to 4% for the segment for the full year.
Also spend some time talking about that at the analyst meeting coming up, which I believe is May 20, so mark the dates.
Ken's happy, smiling that I'm doing a plug for that.
It's nothing has changed in terms of our outlook for life sciences solutions segment.
In terms of gross margin it's about 45 basis points year over year, negative.
I think you have the combination of drug approvals, biosimilars and vaccines.
That combination of those three are really driving substantial growth in that market.
I would say that it should be a strong end market for a number of years ahead.
Thanks, <UNK>.
In terms of the diagnostics in healthcare, I think the US was generally okay in terms of utilization.
You still have the pattern, which is incredibly exaggerated, meaning that it's now the lowest.
That set of activity is Q1 and it builds steadily as people meet their deductible limits during the course of the year.
But I think that pattern is roughly normalizing, so you have low level activity but your growth rates are somewhat similar throughout the quarters is basically what's going on, so nothing dramatic to note in Q1 in terms of utilization.
In terms of the three-year outlook we are still holding to the $300 million of cost synergies and $50 million of pull through on revenue synergies.
You're welcome.
We obviously, we put in some euro debt last year, which helps a little bit.
We actually seeing a little bit of below the line impact from that.
Part of the synergy actions that we're putting in place is trying to convert some of our suppliers to local currency to improve our natural hedging position.
We don't have a ton of that, but we are out of sync in a few geographies, so we're working on that.
In terms of just regular, overall hedging program, we don't intend to put anything in place with regard to that.
No, we have not changed our strategy on debt pay down.
We're shooting to get down to about between $12 billion and $12.5 billion by the end of the year.
That gets us in the just below 3 range, so back in our target leverage ratio range.
Melissa, we're going to take one more question.
<UNK>, thanks for the question.
In terms of ASI, we closed in February and had the great opportunity to meet with the team there, and the integration is going very smoothly.
Very complementary to our existing single-use technologies, brings some new product range as well, in terms of connectors, which is an important step in the workflow and gives our customers the choice now of a second film, which for certain biologics would be very useful for them, so it gives us a more complete offering, which we very much value.
There's a lot of competitors still out there, so for sure there's there quite a competitive landscape.
We have our niche as a strengthen, others have theirs.
It's an area with great market growth, and we have a great competitive position, but there's quite a few different companies out in the landscape.
Thanks.
So, let me wrap it up.
We feel good about our accomplishments in Q1.
We are in a great position to deliver another strong year.
Of course, we look forward to updating you on our progress next quarter and seeing you in New York City later in May.
Thanks, everyone.
