Avantor, Inc. (NYSE:AVTR) Q4 2022 Earnings Call Transcript

Michael Stubblefield: Yes. Thanks for the question, Josh. What I would say about our guidance is that it certainly does reflect the number of variables that we see and certainly is underpinned by our view of really strong end market fundamentals, particularly in the life sciences space. The 250 basis points of kind of macro headwinds that we’ve categorized certainly reflects our view today of destocking, as well as I would say, a step down in our applied growth rates from ’22 into ’23. We ran well ahead of our long-term algorithm in ’22 in that part of the market. Most quarters were high single digit, low double digits, in an end market that more classically for us grows mid-single digits. So within that 250 basis points also reflects a normalization of growth in that part of the business and a pretty meaningful step down in the semiconductor end market, for example.

On the other side, we do see continued strong contribution from price in the year ahead, maybe not quite as strong as in ’22, but certainly above our long-term algorithm. So we’re closely monitoring the dynamics that are at play here. We’re certainly working hard to identify opportunities to offset some of the headwinds in other parts of our portfolio like in bio materials. We recognize there’s a sequential ramp in growth rates throughout the year to achieve the guidance that we’ve put out there. But we have certainly confidence in the shape of the plan, given the demand signals that we see today, as well as a moderation in comparables in the back half of the year. So when we put all that together, I think we’re confident in the plan. I think it’s a prudent place to start.

Operator: Those are all the questions we have time for today. So I’ll now turn the call back to Michael for the conclusion remarks.

Michael Stubblefield: Yes. Thank you, and thank you all for participating in our call today. Certainly appreciate your support and look forward to updating you when we meet next. And until then, take care and be well, everyone. Thank you.

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