Michael Ryskin — Managing Director, Bank of America
Thanks for taking the question, guys. I want to be the first to congratulate both Matt on current and future roles. It's great working with both of you, and I look forward to it. Rainer, I want to start on just I want to start on the order trends commentary real quick on bioprocess. You had some really positive commentary in terms of positive trends in the order book continuing, especially in the consumables. I was wondering if you could dive into that a little bit more in terms of what the book-to-bill was, whether you saw orders accelerate from the first quarter, just sort of expectations for order trends in the third quarter, or any color you can provide maybe by biotech versus pharma, just any additional color you can provide on bioprocess trends. Thanks.
Rainer Blair — President and CEO, Danaher Corporation
Thanks, Mike. Good morning. Let me put the order trend right into the context here of some of our comments. I think first, it's important to note that our biotechnology segment consists of two businesses. One is the bioprocessing business, which is the $6 billion annual revenue business that you were just asking about. The other is the discovery and medical business, which is a $1 billion business. That business, the discovery and medical, behaves a lot more like a life science tools business. Now, to your point here, let's talk about bioprocessing and work through to the orders. Development here. First of all, the performance and trends in Q2 were very consistent with what we saw in Q1. Consumables continued to lead the way globally with low double-digit growth and consumables really driven by commercial demand and large pharma CDMO customers.
Smaller customers, while they were stable, are still below historical trends or historical levels. Equipment remains below those historical trends, with funnels improving, so we're seeing better funnel activity, but we continue to see order delays with trade policy creating some incremental noise here and probably slowing some decision-making. Overall, our book-to-bill was consistent with prior quarters and around one, with some lumpiness in equipment orders. Overall orders activity in the first half and second quarter are fully supportive of a high single-digit core growth in the second half. If you put all that together here, and I think it's important to also comment on the top-line performance here, which continues to drive strong profitability with fall-through of over 50% in bioprocessing in the first half. When you put all that together, we're really encouraged by the strong first half.
We expect high single-digit growth in the second half of the year. All of this reaffirms our belief that bioprocessing is a high single-digit grower both in 2025 and the long term.
Michael Ryskin — Managing Director, Bank of America
Okay. Thanks. I want to touch on something you also brought up a couple of times. You mentioned global trade tensions a few times in the prepared remarks. You just touched on it in your prior answer. If you could expand on that, where you're seeing it, is it sort of what regions geographically and also what customer segments, whether it's pharma or some of the more industrial or applied markets? Is it pausing of orders? Is it cancellations of orders? Is it delays of new orders? Just sort of how are you seeing those dynamics play out?
Do you expect a recovery in that or improvement in that as we go through the rest of the year and we have sort of continued discussion on the tariff front? Thanks.
Rainer Blair — President and CEO, Danaher Corporation
Mike, I think there's a general overlay here of trade uncertainty as it relates to how the tariffs will play out. If we think about the different end markets, in pharma, certainly, as we pointed out, this market continues to grow over time. There is going to be a need for capacity expansions. Now pharma companies have to ask themselves the critical question as to where they're going to build that new capacity. Of course, that's hard to do if you don't know yet what the tariff situation ultimately plays out to be. We would expect that that overhang here clears here, certainly in the next. 6 months-12 months. That's certainly our planning assumption.
That is an overlay on pharma. As it relates to the applied and clinical markets, I think that's less of a factor. Clinical markets, we see volumes remaining fairly consistent. Capacity increases are more incremental in that regard. As it relates to applied markets, I would say the same thing.
Michael Ryskin — Managing Director, Bank of America
Great thanks. I'll leave there.
Doug Schenkel — Analyst, Wolf Research
Good morning. Matt and Matt, congrats and thanks for all the help. Thanks to the Braber team for giving us some time this morning. I just want to talk about bioprocessing a little bit more. I really just want to clarify your bioprocessing assumptions that are embedded into guidance. First, you had previously told us to expect high single-digit bioprocessing revenue growth for the year. Is that still the case? Second, you got two and a half points of price in the biotech segment in Q2. What is your assumption for pricing for the second half within the segment, and what does that imply regarding volume pacing? Third, really more to the point, it seems like you may have increased bioprocessing guidance while reducing DNM assumptions. You kind of referenced this in your response to Mike. I just want to see if that's the case? Thank you.
Matt McGrew — EVP and CFO, Danaher Corporation
Yeah, Doug, maybe I'll take a first stab at it. To your first part of the question on bioprocessing, I think the simple answer is yes, high single-digits is still our guide for the year for the bioprocessing piece. Again, just for folks, that's that $6 billion of the $7 billion in the segment. We are still expecting to see high single-digits.
I think your second question was around price and what we saw here. I think we saw about, call the first half, 1.5%-2% kind of price is what we saw in the segment. I think we're probably going to do roughly the same, maybe a little bit better here in the second half from a price perspective in the segment. From a volume pacing perspective, which I believe you asked about as well, we really will see Q2 kind of step down in Q3. Very traditional for us to have a kind of a volume step down in Q3. We do some work on some of our plants, and typically, Q3 is our lowest volume quarter. You see that both in, you see it really in the margins too, in bioprocessing, Q2 to Q3. Then you step right back up, Q4 is our best quarter in bioprocessing.
I would expect to see the same kind of cadence on that. Lastly, I think it was on just sort of maintaining the full margin or the full guide for the year on the segment. I think that's right. I think on the margin, you're probably a little bit lower at DNM, but we're probably a little bit better here in bioprocessing in that $6 billion piece. Again, it's on the margin. It's not huge, but we would maintain the guide for the full year for the segment, a little better in bioprocessing, maybe a touch worse in DNM. As Rainer said, that DNM piece is very different than bioprocessing. It kind of acts almost like a life science tools business to some degree.
Doug Schenkel — Analyst, Wolf Research
Great. Thank you.
Scott Davis — Chairman and CEO, Melius Research
Hey, good morning, guys. I'll echo my congrats. Rainer, you're lucky to have two rock stars with you there. Three, including John. Sorry, John.
Rainer Blair — President and CEO, Danaher Corporation
Totally agree. Totally agree. Thanks, Scott.
Scott Davis — Chairman and CEO, Melius Research
First, just to clarify something, is the structural cost out part of the story? Is that behind us now?
Rainer Blair — President and CEO, Danaher Corporation
Yeah. I mean, I think we feel very comfortable and confident that we are going to get all of that $150 million. I think we've probably got about half already, Scott, and the other half will come as we work through the second half. I feel very comfortable with it.
Scott Davis — Chairman and CEO, Melius Research
Okay. I'm actually just kind of curious of you here. I mean, early-stage biotech, and just trying to get a sense of what you think. This is going to, how this is going to play out in the next couple of years. Is this a case of where kind of AI spend is crowding out perhaps some of the opportunities? Is there pent-up demand here? I mean, just kind of are we still going to be talking about this in 12 months, I guess, is my question. I'm just kind of curious how you guys view the market?
Rainer Blair — President and CEO, Danaher Corporation
I would say that if we just look where we are today, biotech is at lower activity levels but stable. The investment environment has been tough here with the amount of venture capital that goes into these biotechs, flowing, and those that are already out there really needing to focus on those therapeutic programs that show the best data. I think that is representative of what has been going on here more generally in the sector, that the enormous wave of investment that we saw during and just after the pandemic has waned.
The market is now finding its footing. Now, as it relates to AI, we really see that ultimately as a tailwind because we see then less money being spent on getting to compound ideas, if you will, and more money being spent taking great ideas, which have been validated in silico, as they say, through the development pipeline, ultimately driving more manufactured and commercialized therapies. Of course, that's where our business is, where we have the most volume, of course, the most share. We view this really positively. But we have to say that we're at a low activity level currently in the discovery phase of the biotech market.
Scott Davis — Chairman and CEO, Melius Research
Okay. Good color. All right. I'll pass it on. Congrats again, Matt and Matt.
Matt McGrew — EVP and CFO, Danaher Corporation
Thanks, Scott. Thanks, Scott.
Rainer Blair — President and CEO, Danaher Corporation
Good morning, Tycho.
Tycho Peterson — Analyst, Jefferies
Hey, thanks. Good morning. I want to probe a little bit on the guide. So you're not flowing through the entire EPS beat. I'm just curious if there are areas of maybe incremental caution in the back half of the year. And then on four keys specifically, you've got a step up in life sciences, I think kind of ramping to mid to high single-digits. And the comps there are more difficult. Just curious if you can get us more comfortable with that in particular. Is that contributions from the new SCIEX launches at ASMS?
Matt McGrew — EVP and CFO, Danaher Corporation
Yeah, that's a piece of it. Maybe I'll let Rainer kind of take the second half piece because he can talk about some of the, like you said, some of the new stuff that's out there. Maybe I'll take the first question, which is sort of on the guide and the flow through.
Maybe I'm kind of sort of thinking about the guide like this. We got off to a pretty good start in the first half, both on the cost actions. Like I said to Scott earlier, I feel very comfortable with where we are on those. And we had a little bit better FX as well. Probably FX was maybe a nickel better for us. Like I said, I think we get the full cost actions, which is probably $0.15 or so. I kind of look at that, say, $0.20, and that's what we flowed through to the full year. All the cost actions and the better first half FX. We started in January with, call it, $7.60 as sort of the range, put the $0.20 on top of that, and that's how you get to kind of the high end of the range now at $7.80.
There are two other things here that I think you're right, we have not flowed through fully. I think maybe the easiest way to think about it is, one, we had a good start in respiratory in Q1 and Q2, and two FX. In the second half, that's going to be much more favorable than we thought in January. I think the combination of those two, maybe probably another $0.15-$0.20, that has not flowed through. The reason we haven't flowed it through is, one, we're going to maintain the full-year respiratory guide at $1.7 billion, see how that plays out in Q3, Q4. You know that is a variable number. FX is the same, right? That could fluctuate and come back. That has made a significant movement since January, and that could very well come back.
We have decided now to hold back on respiratory, hold back on the second half FX, and just kind of see what happens, especially in a pretty dynamic policy and operating environment. Just felt like we will sit and see how things play out before we commit to that final 15 cents-20 cents.
Rainer Blair — President and CEO, Danaher Corporation
Yeah. To the second part, Tycho, I mean, what we are really saying is the first half in the life science segment was down low singles. We expect the full year to be flat. The second half needs to be up, positive low singles. What we are really seeing there is the impact of three factors. The first is, and we are actually not assuming a significantly improved activity level. In genomics, we expect to see better comps, as an example. In China, we are seeing it is incrementally firmer with some stimulus dollars following through.
As you suggested, we have a number of new product introductions that are gaining traction in our funnels here in the first half, including SCIEX and Beckman Coulter Life Sciences and some others. We expect those to gain traction here in the second half.
Matt McGrew — EVP and CFO, Danaher Corporation
Maybe to put some numbers around it for you, Tycho, you are sort of that step up from one half to two half to go from down low single to up low single in life sciences, call it $150 million bucks, roughly. If you are kind of trying to bridge that, I would say that genomics, again, remember the first half, we had those two large customers really fall off. I think that is probably a third of it. I would say that we are assuming China, especially China in tools with some easier comps and a better funding environment, is another third of it.
Lastly, new products and kind of other things is the final third. A third, a third, a third between China, genomics, new products, other, that is sort of what we are assuming and have baked into the model for the step up from one half to two half of roughly $150 million.
Tycho Peterson — Analyst, Jefferies
Okay. That is helpful. One quick follow-up. It sounds like you are not flagging any incremental headwinds on volume-based procurement. Obviously, one of your peers did last week. Maybe just get us comfortable that that is not a lingering issue that could get worse.
Rainer Blair — President and CEO, Danaher Corporation
In China, volume-based procurement and the reimbursement changes was essentially what we thought in Q2 and for the first half of the year. In fact, volume was consistent with Q1 and our expectations. There is really no change to our expectations of a $150 million adverse impact from volume-based procurement in 2025.
Now, under the hood there, there have been some recent policy changes, which largely did not affect us because they are really geared to different aspects of the testing menu, which we actually do not have. It's possible that different companies experience different things here. For us, we saw the quarter develop as expected. Volumes were consistent with Q1, and we do not have a different perspective on the $150 million here for the year on volume-based procurement.
Tycho Peterson — Analyst, Jefferies
Okay, that's helpful. Thank you.
Rainer Blair — President and CEO, Danaher Corporation
Thanks, Tycho.
Rainer Blair — President and CEO, Danaher Corporation
Morning, Vijay.
Vijay Kumar — Senior Managing Director, Evercore
Hi, Rainer. Good morning, and thank you for taking my question. Congrats to both Gugino and McGrew. Maybe one on biotech for you, Rainer. Guidance 7% was maintained. You look at your second quarter and third quarter assumptions here for 6%. Implied growth for Q4 should accelerate high singles, maybe 8%-9%ish. What is the guide assuming for Q4 acceleration in biotech? Is that maybe China coming back, small biopharma coming back, or maybe Equifax turning around?
Rainer Blair — President and CEO, Danaher Corporation
No, I mean, I think I would say that we've got high single-digit core for both Q3 and Q4. I do not know that there's any real material changes that we have tried to bake in by a certain geography or in equipment or anything like that. I would say we're just assuming a fairly steady environment, which is we've seen really good double-digit type growth out of consumables. Equipment has been pretty muted, and we expect that to continue here throughout the back half of the year as we work through. I do not think it's a massive change for us. This is not about a step up in activity level.
This is just the normal seasonality, Vijay, that you see with Q3 being sort of the lowest level of activity in bioprocessing and some other markets as well. As the fourth quarter kicks in, that's always been and continues to be the largest quarter for us from an activity level.
Vijay Kumar — Senior Managing Director, Evercore
Understood. Maybe my follow-up sort of related question here. Was there any pull forward either in academic channels or biopharma channels? I think that question comes up because of tariffs. Was there any customer change in customer behavior? Given all of these macro situations, is this bioprocessing sort of high singles? Is this now a sustainable number, or is macro still sort of an overhang when you think about 2026?
Rainer Blair — President and CEO, Danaher Corporation
Vijay, we have not seen any meaningful pull forward. We just have not. We're often asked, and our numbers and our surveys and our customer conversations do not indicate that.
We think the bioprocessing market has for years, and the activity levels continue to confirm that this is a high single-digit growth market, and that'll continue. Now, as it relates to 2026, we obviously have still half a year ahead of us in what is a pretty dynamic operating environment with some questions that still need to be answered, as I spoke to earlier. It is our plan to provide some preliminary thoughts on 2026 for Danaher overall during our October Earnings Call. We just want to see here how the third quarter plays out, and then in October, we'll give you our preliminary thoughts on 2026.
Vijay Kumar — Senior Managing Director, Evercore
That's helpful. Thank you, guys.
Rainer Blair — President and CEO, Danaher Corporation
Thanks, Vijay.
Rainer Blair — President and CEO, Danaher Corporation
Morning, Puneet.
Puneet Souda — Analyst, Leerink Partners
Yeah, hi. Thanks, Rainer. And Matt and Matt, my congrats also.
Just wondering I know you talked about tariffs, but just wanted to clarify. You previously sized at about $350 million in tariff costs with room to mitigate via supply chain and optimization. Can you talk to us about the updated number there and just given the interquarter changes with U.S.-China trade policy and the 145 tariffs going to now 30%?
Matt McGrew — EVP and CFO, Danaher Corporation
Yeah. I would say that from a number perspective, we're still at kind of a couple hundred million dollars of exposure right now today. That's what we would think of. As far as versus the $350 million. I mean, and that obviously could change in very short order.
As far as China and the tariff there, we've got a lot of different things that we can do both internally that we have control over and also other levers that were available to us within the quarter that we were able to use to effectively not have to charge our customers in tariff. And so we took advantage of those levers. Therefore, from our perspective, as we've always said, we plan on offsetting all the tariffs, and we only plan on offsetting them if we have to pay it. We will try and pass that along somehow, some way. But if we don't pay it, we're not going to try and pass it along. That was a net neutral event for us in China.
Puneet Souda — Analyst, Leerink Partners
Got it. Thanks, Matt. And then just briefly on a question that is on minds of investors, just given the impact that has happened in the gene therapy market. One of your customers has seen suspension of their therapies from FDA on safety concerns. The question is, how broad is the exposure to gene therapies? And I totally recognize that innovation doesn't come without risk. So just how are you thinking about this risk overall and the AAV exposure that you have with respect to Aldevron and also the Cytiva segment as well? Thank you.
Rainer Blair — President and CEO, Danaher Corporation
Gene therapy, so AAV-based gene therapy, as you were just suggesting, is really in the early innings, Puneet. This is going to have its vacillations, two steps forward, one step back. Of course, what we just saw here in the news is a step back.
It's not to say that that therapy is not a very interesting and important alternative here for all kinds of different disease forms that are out there, specifically some genetic diseases. I think as we think of the broader picture, genomics is in the early innings and has the potential to be an exciting and effective treatment regimen. Now, as we think about our own exposure here across Danaher, we're not talking about more than a couple hundred dollars. Keep in mind, we're a protein house here with really 85% of what we do focused on proteins. And of course, that's a well-established market, and that's what drives our business and our earnings. Now, we typically talk about these things more narrowly, but if we think about our guidance, and you mentioned Sarepta here and Aldevron. Our guidance in the market is essentially playing out as we expected.
But the Aldevron Sarepta revenue, we expect to be $30 million for the full year, with a minimal contribution here in the second half. So our guide contemplated and did not expect significant revenue contribution from that particular therapy.
Puneet Souda — Analyst, Leerink Partners
Got it. Helpful. All right. Thank you.
Rainer Blair — President and CEO, Danaher Corporation
Thanks, Puneet.
Rainer Blair — President and CEO, Danaher Corporation
Morning, Dan.
Dan Leonard — Analyst, UBS
Good morning. I was hoping, Rainer, that you could elaborate on trends in China outside of diagnostics. Is that business turning a corner? And if you could elaborate further because you touched on it briefly a few times in the prepared remarks.
Rainer Blair — President and CEO, Danaher Corporation
Our China business outside of diagnostics has been firming up. The bioprocessing business has shown slight growth here in the quarter. And we see the biotech and pharma market there showing some more solid activity levels. We do see that in bioprocessing.
As we think of life science tools, we did see more stimulus activity, and that's flowing through not just to orders and to revenues. It's still not at normal activity levels, but we do see it firming up. We're encouraged by what we see here for those two businesses, and that's reflected here in our second-half view. You'll recall Tycho's question here. The firming up of China in life science tools is a part of that.
Dan Leonard — Analyst, UBS
Thank you. And just a clarification question for Matt McGrew. Matt, did I hear you correctly that at current foreign exchange rates, that your guide would be 15 cents higher?
Matt McGrew — EVP and CFO, Danaher Corporation
With both the respiratory and the current FX, probably 15 cents-20 cents. I'm not sure I'd say that the guide's higher, but that's what the math would imply that we have not, if you would, not flowed through. So yeah.
Puneet Souda — Analyst, Leerink Partners
Understood.
Rainer Blair — President and CEO, Danaher Corporation
Between those two, 15-20, and we haven't flowed that through.
Dan Leonard — Analyst, UBS
Thanks a bunch.
Matt McGrew — EVP and CFO, Danaher Corporation
Yep.
Rainer Blair — President and CEO, Danaher Corporation
Thanks, Dan.
Dan Brennan — Analyst, TD Cowen
Great. Thanks for the question, Matt and Matt. Matt, congratulations. Rainer, I wanted to just go back to bioprocess orders, if you don't mind. I just wanted to confirm sort of Mike's earlier question. I think you said the book-to-bill was around one, equipment more lumpy. Because I mean, if I look back at the first quarter transcript, I think you talked about the seventh consecutive quarter of a book-to-bill that was solidly over one. I'm not trying to nitpick. I'm just trying to clarify. Maybe that was related to consumables. Just maybe if you can expand upon that a bit.
Rainer Blair — President and CEO, Danaher Corporation
The trends are really very comparable here.
I would tell you that this book-to-bill is not a perfect measure. That lumpiness, especially with larger orders, sometimes does not play through. What we see here is consistent with what we've seen in prior quarters. It's around one. Yes, we saw some lumpiness here in equipment and some larger orders.
The activity level is very comparable.
Dan Brennan — Analyst, TD Cowen
Okay. Maybe moving over to Cepheid, I know you had a nice quarter. I think it was low double digits, ex-COVID. Could you just speak to kind of what's baked in for the 2025 guide, how we think about that low double digits continuing or changing as we get into the back half of the year? I know you gave some color in the prepared remarks, but any further color there would be great. Thanks.
Rainer Blair — President and CEO, Danaher Corporation
Sure.
As you said, overall, Cepheid exceeded our expectations on a little bit better respiratory and double-digit non-respiratory growth. In fact, the non-respiratory reagents grew low double digits in the second quarter. We did see strength across the test menu with double-digit or better, I have to say, or better growth in sexual health, virology, and hospital-acquired infections. We actually expect that strong non-respiratory demand to continue in the low to mid-teens for the full year. The reason is we continue to expand that installed base, particularly at large IDNs that are standardizing across their network as they go a little bit closer to patients in their satellite settings. It just shows how Cepheid's strategy is playing out. I mean, we see increasing menu adoption and utilization of the existing installed base, and we continue to expand that.
With that, we see the pull-through of assays such as the hospital-acquired infections and virology. Lastly, this recent menu expansion around our MVP, so that's the multiplex vaginitis panel. That's up over 75% in the US. We feel very good about the non-respiratory portfolio continuing to track at higher growth levels, mid-teens.
Rainer Blair — President and CEO, Danaher Corporation
Morning, Rachel.
Rachel Vatnsdal — Analyst, JP Morgan
Great. Good morning, you guys. Thanks for taking the questions. I wanted to echo everyone's earlier comments and congratulations to both of the Matts here. My first question, I just wanted to dig on to some of the trends on bioprocessing equipment. You've highlighted that revenues were weak and orders were lumpy in the quarter given some of that global trade uncertainty, but you said that the funnel remains strong as well.
If we look at some of these press releases on companies building out additional capacity, I just wanted to get your thoughts on how you are thinking about the timing of recovery on bioprocessing equipment given those dynamics. Are you assuming recovery in equipment in the back half of the year on a revenues basis? How are you thinking about the opportunity for onshoring and reshoring longer term?
Rainer Blair — President and CEO, Danaher Corporation
Thanks, Rachel. It is, as you suggested here, that larger projects are in discussion. The decisions are being delayed, certainly for the reasons I talked earlier, trade policy, tariffs, a couple other points. What's also important to note is that the reality of this is that it takes a number of years to build new pharma manufacturing plants. Building that capacity is going to take some time.
It is really too early to determine what all these large announcements will, how they play out, and when that money flows. That said, I mean, Cytiva is very well positioned here to capitalize as these decisions start being taken and move through their CapEx processes. Because of the breadth of our portfolio, our scale, and of course, the global footprint, we can do this anywhere in the world. To your point earlier about how do we think about the guide for 2025 here, we expect 2025 is going to be a down year for equipment. We do not expect in our guide a significant step up here. When I talk about the improved funnel activity, what we do expect here is the continued small capacity expansions that you see where the decisions are much easier to make in existing plant footprints.
We will see as we get to October here, we will talk a little bit more about how we are thinking about 2026.
Rachel Vatnsdal — Analyst, JP Morgan
Great. For my follow-up, I wanted to dig on respiratory a little bit more. You raised the endemic rate on respiratory to $1.7 billion earlier this year. You typically see that split roughly 50/50 between the first half and back half. Just giving your tracking to $900 million at this point, that is slightly ahead of expectations relative to the $1.7 billion assumption for the year. I know it is too early and you guys are kind of pushing towards that 3Q call in terms of how you are thinking about respiratory assumptions. Can you walk us through, would you consider revisiting that endemic rate as we get towards year-end? Would you potentially revisit it for a fifth time?
Can you remind us, what are you currently assuming on that $1.7 billion number in terms of the mix on four-in-one versus COVID-only tests?
Matt McGrew — EVP and CFO, Danaher Corporation
Yeah. No, I mean, I think the way to think about respiratory is we have got a guide that is $1.7 billion. We have been kind of guiding to that really for the last probably three years. It has been a little bit better the last couple of years. We are not. That is not a number that we are completely full into. I think if we start to feel as though that number is a little bit higher, we would sign up to that. I think we have had those conversations. I think I would like to see how this year goes. This year started in January. That felt much more like a typical, sort of a typical respiratory season.
It did get a little higher for a peak higher there, but it followed a more similar pattern than we had seen before. I think if we can get another year behind us, we would be open to revisiting that number for sure. As far as the 1.7, like you said, we are a little north of $900 million. We will see how Q4 plays out. That is usually the big quarter, Q4 and Q1, as you know. Also, the difficulty with respiratory straddling sort of two years does make it a little bit difficult. That is kind of where we are at. Four-in-one, I think we are at this point probably 75%-80% four-in-one. We do do some regular COVID-only, typically mostly, I should not say, well, a lot of it is in Europe, but there is some in the U.S. too that will do that.
Rainer Blair — President and CEO, Danaher Corporation
That has basically been our mix for the last couple of years.
John Bedford — VP of Investor Relations, Danaher Corporation
Thank you, Margo and everybody. We will be around all day for questions. Bye.