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| Statement |
|---|
| Overall, we observed continued strong growth in PFAS and battery-related applications, which have continued to partially offset weakness in more cyclical areas |
| This took a lot of effort from our sales team who did a fantastic job capitalizing on the available opportunities in the market with our competitive portfolio |
| We also expect to deliver 20 to 30 basis points of additional operating margin expansion versus 2023, resulting in an adjusted operating margin of slightly over 31% |
| As 2022 ended, the results of our transformation clearly showed on the top line, having delivered several years of very strong, above-average sales growth |
| We will continue to navigate the current market environment well and deliver earnings growth for our shareholders in 2024 |
| We've made strong progress towards our environmental goals with 77% of our electricity now sourced from renewable or low carbon sources |
| For the full year, our focus and effort resulted in gross margin of 59.6%, an expansion of 160 basis points, and an adjusted operating margin of 30.9%, an expansion of 70 basis points, which is after reinvesting in our high growth adjacencies |
| Our continued focus on operational excellence with pricing, productivity, and proactive cost alignment, together with lower incentive compensation, allowed us to deliver a fourth quarter gross margin of 61.2%, an expansion of 170 basis points, and fourth quarter adjusted operating margin of 34.9%, an expansion of 120 basis points |
| Finally, we were recognized as one of the world's most sustainable companies, achieving a variety of ESG awards |
| We're very proud of what we've achieved at Waters in 2023 |
| Waters was recognized as one of the best companies to work for but by the US News and World Report, and we achieved a perfect score of 100 on the Human Rights Campaign Foundation's Corporate Equality Index |
| In 2023, we exceeded our objective for a further 100 basis points of service plan attachment and delivered a 200 basis point increase for the year |
| And third, we are well positioned for future long-term growth |
| Our non-GAAP earnings per fully diluted share landed at the high end of our guidance at $3.62, driven by strong margin performance |
| We're also proud that our governance has been recognized |
| Chemistry growth has been supported by strong customer demand for MaxPeak Premier Columns, serving large molecule workflows, and adoption of ecommerce |
| And with a strong EPS result in Q4, non-GAAP earnings per fully diluted share came in at $11.75, which reflects underlying growth of approximately 2% before FX headwinds of 3% and 1% dilution from the Wyatt acquisition |
| Mass spec, the BioAccord has made great strides |
| Recurring revenues grew 6% overall and high-single-digits outside of China, with robust growth throughout the year |
| And A&G with a very strong year, roughly 10%, 12% for 2023 |
| And then, as we've said before, what we are super excited about is this whole push for innovative medicines |
| Now, long term, we've said we'll do about 100 basis points better than what we've historically done |
| So, really pleased with what we're doing on large molecule applications, with 35% of our pharma revenues now coming from biologics |
| We believe that the best reflection of good operational execution is effective margin management when things slow down |
| Excluding China, pharma and industrial grew low-single-digits and A&G grew mid-teens for the year, each reflecting solid results against double-digit comps |
| This resilience, focus and commitment allowed us to deliver excellent operational results in our P&L |
| Our full-year gross margin was 59.6%, which is 160 basis points better than the previous year |
| In academic and government, our ex-China Business continued to perform well with mid-single-digit growth |
| We expect to extend our strong margin performance into 2024 and deliver a gross margin of 59.8% for the full year, which is 20 basis points of expansion versus 2023 |
| Our Wyatt acquisition delivered excellent results again, adding over 3% growth to the reported sales |
| Statement |
|---|
| Similar to others in the industry, our growth in 2023 was slower than usual, driven by unprecedented weakness in China and cautious spending from customers in other regions |
| A key challenge in 2023 was the abrupt turn we saw in China where conditions deteriorated as the year progressed |
| In the fourth quarter, sales declined 4.5% as reported, which was in line with our expectations |
| In pharma, our results were impacted by a further weakening in China, which declined 45% for the quarter |
| The Americas declined 2% and Europe declined 6%, driven by this year's muted budget flush dynamics |
| For the full year, China sales declined more than 20% overall, which was a 5% headwind to our total growth |
| By geography, sales in Asia fell 16% as China weakness more than offset mid-single-digit growth in the rest of Asia |
| Outside of China, pharma sales declined 4% as instruments sales were impacted by a muted budget flush, in line with our expectations |
| This was weaker than most of us had anticipated |
| We expect weakness in China to continue, particularly in the first half of the year, which also plays into the growth phasing of our guide |
| During 2023, we saw volume and FX headwinds, while inflationary pressure continued |
| So, for example, CDMOs struggling with overcapacity, as well as geopolitical challenges or branded generics pulling back spend because of anti-corruption campaigns or industrial business, especially food and environmental, slowing down because of government pulling back reimbursement |
| China declined approximately 20% as weakness has broadened into non-pharma segments due to weak economic conditions |
| However, this was more than offset by a decline of almost 40% in China, where demand has deteriorated after the benefits of stimulus ended in the second quarter |
| For the full year, sales declined 0.5% as reported and 2% in organic constant currency |
| And flat in a year where there was significant macro challenges |
| Organic constant currency sales declined 8% against the high-single-digit growth comparison last year |
| Therefore, our total first quarter reported sales growth guidance is negative 8.5% to negative 6.5% |
| In organic constant currency by end market, pharma declined 11%, industrial declined 4% and academic and government declined 9% |
| The spending environment for instruments remained challenging into year-end |
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