TMO
#Yes, so in terms of FEI, really we're very excited to have the company as part of Thermo Fisher Scientific and a great addition in terms of colleagues.
The business is on track to have a good year in terms of growth and obviously had a nice contribution in Q3 and a good contribution to our success in Q4.
So integration is just getting underway.
We did the planning between announcement and close, and the teams are executing well, and we're very excited about what FEI is going to bring to the Company over time.
What we expect over time, as we said back in May, is that this business will grow faster than the company average.
Thanks, <UNK>.
Good morning, <UNK>.
<UNK>, thanks for the question.
Obviously, we'll give our guidance in early 2017 on the Q4 call.
The way that I see it is you have the base operational assumptions and the capital deployment assumptions.
And if I think about the environment, the environment looks very similar to what it was in May, so that puts us in a range of 4% to 6% organic growth in terms of that.
And in terms of capital deployment, we will clearly benefit from the accretion that we get from FEI on a year-over-year basis, and certainly the accretion that we get from the Affymetrix transaction.
So at a high level, the way you articulated it, I agree with you.
Obviously, you have to work through all the math, but given the strong acquisitions that we've done this year, we're going to get a nice contribution to our earnings from the capital deployment actions in this year.
The academic end markets, the government end markets, were very similar to what we saw in Q2, with the US growing in the low single digits and the rest of the world a little bit more muted than that, and we didn't really see any meaningful changes in the trends.
We're doing well.
So that is the summary.
So you can parse it different ways and the growth is strong, no matter how you parse it.
Obviously, the bio production and the clinical trials logistics for bio pharma services businesses continue to perform very well and are growing a little bit above the rates there.
But if you just do the math, it implies that the rest is growing very strongly, as well.
So there wasn't much nuance in terms of the strong performance.
I would say that our chroma mass spec business obviously had a good quarter serving that business, as well.
But that's not implying that something did poorly, but given that there's been a lot of questions about what's going on in capital equipment, it's actually been pretty good.
So we feel good about the end market.
It's been a good nine months and it's been a good number of years, and we're well-positioned.
From the industrial and applied markets, they declined very slightly in the quarter.
As I read things outside of Thermo Fisher, what's going on in the broader world, clearly the industrial markets are soft globally.
It didn't seem like any particular geography really jumped out at us as a particular standout off of that.
The applied markets in China continue to be good, so that's obviously positive, things like food safety and environmental protection.
So that's a bright spot.
But we didn't really get any particular pockets of weakness on the industrial and applied that we saw.
<UNK>, the first thing I'd say is I think we're performing incredibly well.
I don't think anything other than that.
And in terms of the academic and government markets, if you go back to what we said at the very beginning of the year, which is probably the best way to think about what's different or what's the same, we expected that the year would start slower in the US in academic and government and then build as the year went on.
And actually, the year started a little bit stronger than we had expected and has stayed study with that at low single digit growth.
So it came a little bit early and it's been very steady.
In terms of the other geographies, obviously given that we expected academic and government to be a little better in aggregate, it basically says it must be a slightly weaker, and clearly that's been offset by the strength in bio pharma.
So that's the sort of looking back in late January, what's changed.
In terms of are we off cycle versus others, I don't know, I think we're gaining share versus others, but that's my opinion.
When we thought about our range of outcomes for the year, we felt comfortable with raising the guidance at the end of Q2 to 4.5% organic growth and we feel comfortable reaffirming that 4.5% outlook.
And the way I think about it is our commercial teams cover a range of customers.
We focus them on where the best opportunities are, and in a way, we don't force a lot of micro level analysis for the investment community.
It's our job to manage through it and we feel well-positioned to deliver a really nice year in terms of performance.
Yes, so given that we owned the business for nine days, but obviously been working with the team for a while, the Life Sciences business is performing very well, both with strong revenue growth and strong bookings performance.
The industrial-related and material science businesses are a little bit more muted.
And as we look at the numbers, it seems like the industrial businesses have bottomed out, which is encouraging, and then obviously as we get into owning the business longer and in the future, we can give you more color on that.
Thanks, <UNK>.
Good morning, <UNK>.
So <UNK>, good question.
As I think about the healthcare and diagnostic end market, it was very similar in Q3 to what we saw in Q2.
What I would say is the more, the super high-value added businesses, transplant diagnostics, the allergy and autoimmunity business, the clinical NextGen sequencing businesses, those businesses are performing very well.
The more routine, volume-related businesses, your basic consumables used every day, has been a little bit softer, but not a change in trend.
So what would have to happen for pickup in growth, two different factors could help drive it.
You don't need both, which is a little bit higher level of activity in the basic consumption of the products for consumables would help, and the other is we have a number of programs that are driving our Life Science tools into the clinic and they will be meaningful drivers, as well.
So the driving into the clinic, that's in our control entirely and that puts us very optimistic about the midterm prospects for the diagnostic business, and then we'll always take the upside if the markets get even better.
<UNK>, in terms of Affymetrix, let me give you an update on the integration, let me give you an update on the business performance.
Integration's going really well.
We are running very smoothly there.
Our synergies are running ahead of plan.
We'll achieve about $11 million in synergies this year, which is a $5 million to $6 million better than we had assumed for this year.
In terms of the business performance, the bioscience business is doing very well, growing sharply and that's very positive, the micro array business, like we mentioned last quarter, is soft.
We expect it to be soft for a few more quarters, as we really drive adoption of the precision medicine micro array, and we're obviously actively marketing that.
So that's a quick update on Affymetrix.
Yes, in terms of the sequencing of the quarter, nothing really jumped out as particularly meaningful in terms of what happened in each month.
And obviously, we have the benefit of the first three weeks of October's results, so if they were off that trend line, that would is factored into our thinking, and it wasn't.
So from that perspective, we didn't really see anything from a calendarization that was any particular impact.
In terms of spending and those things, we're managing the business like we always do, which is we spend aggressively in the areas to drive value added and we are very conservative and frugal on the things that are low value added.
And that's kind of how we run the Company day in and day out, so no significant changes on that front, either.
I don't know the growth by end market for Europe, because we don't manage the Company that way.
Qualitatively, Western Europe was a little bit stronger than Eastern Europe, in terms of performance.
But that's not a change in the trajectory over the last several quarters.
But that's what we've seen.
And from recollection, Germany had a pretty good quarter in terms of growth within the Western Europe, but that's not implying anything particular about any of the other countries.
You're welcome.
<UNK>, are you there.
The things that I think about in planning always goes to the one, new product launches and what are the exciting things we've got in the pipeline and what the impact's going to be and making sure that that's well characterized; two, any particular special causes year-over-year one way or another.
And at least as I sit here today, I don't see any special effects one way or another, so next year should look like this year in terms of some of the high level things.
One of the things we mentioned at the beginning of the year, which we're continuing to execute on, which I'm encouraged about is when the medical device tax was put on a two-year hiatus, we spent the savings on investing in some mid-term restructuring activities.
We will get one more year of that hiatus and we will invest those monies, as well.
So there's no effect year-over-year, but that means we'll have invested about $30 million in actions to drive more efficiency in the second half of 2017 and 2018, which I think is really good and encouraging and is something that we embedded into our long-term model.
So those are some of the things we're thinking about.
And I know that <UNK> is looking forward to giving a detailed set of guidance at the beginning of 2017.
Yes.
It's our job to widen the gap versus others in the industry every day.
That's what we're paid to do is to make the Company stronger and get better every day.
And when I think about how we're performing this year, I think the Company's performing very well.
I'm very proud of the effort and the capabilities of our team and they're delivering.
So I think that's very positive.
Obviously, we benefit from the strong competitive position we have.
We have a very strong e-commerce platform, as you said.
We have the largest commercial team.
We have the best commercial team, in my mind.
And when I think about it, we've got great products, we've got unique position in the emerging markets, which allows us to capitalize on those opportunities.
I highlighted a couple during the quarter, but the way I really believe, and when I visit a customer in China, it's rational for them to do a disproportionate amount of their business with us, because they simply get a better experience.
We've got better people, better supply chain, and a more comprehensive set of offerings.
So I think we're very well-positioned and we feel good about the outlook for the balance of the year, and certainly as we get into 2017 and beyond.
Yes, I guess it's hard ---+ there's always challenges in the world.
We do our very best to navigate through them so that we don't have to spend a lot of time explaining all the things that go wrong.
And I think we do a good job of that, because we deliver good results consistently.
I guess I really can't reconcile for you.
I think the only two comments I can make is that we had a very good growth in chrome and mass spec, so if I look at what I've read about that, we did really well in that end market.
And when I look at our clinical NextGen sequencing business, we grew very quickly.
So I really can't reconcile for you what others are saying.
It's hard to do.
Yes, <UNK>, our business is really focused on the clinical applications of sequencing, and we benefit from the ease-of-use, the low capital cost, and one of the very low volume of sample that you need to run an oncology panel on our sequencer.
And that's allowed for really good adoption.
And you're seeing a steady cadence of new assays that we're launching, which reaffirms to our customers that we're investing and meeting their needs.
So that's the area that we've seen good momentum in.
Thanks, <UNK>.
<UNK>, this is <UNK>.
I'll take the pricing one.
So we look at pricing on a total for the Company and we're about 60 basis points of price.
So it's very consistent with what we've seen for the rest of this year and actually what we saw pretty much for all of last year.
We're lapping some of the things that we did in Japan in terms of the FX offset, but that's going to be offset by some pricing actions we're taking in the UK, as well.
So pricing has been pretty consistent for us.
We've been on a really nice, consistent roll for a number of quarters.
And having visited China twice last quarter, the business is performing well, the bookings are strong, the outlook is good, and so we really haven't seen anything that would say the visibility is any different or if there's any particular strong clouds on the horizon.
The business seems to look good and we're benefiting from our strong competitive position there.
Operator, we have time for just one more.
We have a really strong position there.
It's been a core part of our business for a long time.
But we really haven't changed the risk profile as much.
We do have, obviously, a couple big investment areas that will position us for accelerating growth over time.
One is in the adoption of clinical NextGen sequencing and those applications, and our announcement, as you highlight, on the Cancer Moonshot is an example of that.
And the other is obviously in the area of mass spectrometry, where we've got a fairly big program, as well.
We're not really taking a different strategy, but we've been pursuing one for a number of years, in driving new applications into the clinic while benefiting from a very strong, highly profitable consumables business.
So thank you for the question.
Let me wrap up with just a quick comment, which is, as I reflect back, we're certainly on track to deliver another excellent year and we look forward to announcing our year-end results early in 2017.
And of course, thank you for your support of Thermo Fisher Scientific.
