Hello, everybody, and thank you for joining our call. I will use the slide show that you should have been able to download, and I'll mention the page number.

I'll start with Page 5. I will, of course, not mention everything that is on the slides.

You can read them at your leisure. Yes, so highlights of 2022.

We had, as you know, a very strong 2021. We were able to rebuild our balance sheet.

During the COVID pandemic, we continued to build the Company, build the group and build our network. We have continued to do that in 2022.

And today, I'll talk a bit about what we plan to do for the next five years. This is a new phase of our development.

We are a much more mature company on much more solid fundamentals in terms of the existing network we have in many countries, including large countries like North America, finished 70% to 80% of our hub-and-spoke laboratory network. It has taken years to do it and a lot of acquisitions and integration.

So a lot of that is behind us. We will continue to finalize that and do it in also new markets, in Asia and finalize those markets where we are not yet present.

On the financial side, we have a strong balance sheet. So we decided that for the next five years, we'll continue to do what we have been doing over the next -- the last few years to finalize this network and really take advantage of the strength of our markets on a global basis.

2022, of course, the world, especially Europe, was hit severely by the consequences of the war in Ukraine and its impact on supply chains and on inflation, which is affecting consumer behavior and affecting some of the industries we are serving, especially retail and the food industry in Europe, so we have seen an impact. We also have seen an impact of inflation, especially in Q4.

Q4 is normally our strongest quarter. And we have seen some headwinds in Q4 of last year that were stronger than we could anticipate.

Of course, we have initiated, through our 2022 measures, to prepare for a new environment, an environment where we have to live with inflation, and all our companies have initiated, mostly in the second half of 2022, because that's when we negotiate contracts for the following year, new terms and their commercial relationships that include the possibility of continued inflation indexing or part indexing mechanism and are working to compensate this massive cost increase that we have seen in -- especially in the second half of 2022. But in spite of those temporary things, we think they will normalize because we all need to eat.

And maybe there has been an adjustment, a brutal one actually in the type of food or consumer products that people consume with less variety, with less R&D by clients. At some point, this will bottom and the volumes will pick up again.

So that's something we see as a temporary event. We can't really say how long it's going to affect.

We can't really say with precision how long it will take for our mechanism to adjust, our pricing to the cost inflation of our inputs will take. But we think over the next few quarters, we should see already significant effect.

That's why we've been conservative in our plans for this year because we want to take into account the uncertainty that still exists, uncertainty about inflation. Nobody knows exactly what it will be this year.

And so I will focus today on, basically, the things that are less transient that we plan to do for the next five years to continue to build the group and continue to strengthen its leadership in its markets. So as you see in 2021, we made significant investments, both organically and inorganically.

On Page 6, we highlight the three main areas where we are investing beyond M&A. M&A will continue to be a factor.

We did a record number of acquisitions last year. But in addition, we now have a size where organic growth is really a way we can continue to build the group and do it in a way that is self-funded.

And that means continuing to build our laboratory network, starting up laboratories, either for new technologies or geographic presence. It cost a lot of cash and money for the next -- for the first two or three years, but then it offers very good return.

And more importantly, developing the IT tools to make our group fully digital, not only the laboratory information systems, but everything around it. On Page 7, you've got a breakdown of, over the last five years, where we have spent our capital.

Those are massive investments. It's really building a global group from scratch and refocusing many of the companies we have acquired to fit this hub-and-spoke model, which enables us to be faster in delivering the services that our clients want and more efficient.

So we can't just always take the companies we buy and leave them where they are or exactly organized as they were or with the portfolio of tests they used to have. They are often too diversified.

We need to reorganize them and put them in the right network. I will comment now on why we do that because there were some questions of, for example, why do we need to own our laboratory campuses.

So I've got a -- we've got a couple of slides on Pages 8, 9 and the following on that. And those things, if you look at one year only, it's difficult to evaluate what is really being done.

So we took a snapshot of what we did over the last five years. And our -- the total area, we are using, we use some offices for some activities, but most of what we do is laboratory testing, so a big part of that is laboratories.

The surface we're using in this period has increased by 1/3. And the surface of laboratories that we own has doubled.

So we have a much larger ownership of our own laboratory campuses and This is something we intend to continue for the next five years. And after those five years, it should get us to a point where we only rent what we think we should rent.

Renting offices is fine. We can move out.

We don't put a lot of CapEx to build clean rooms or specific air and their treatment, et cetera, that we have in laboratories. And the retrospective of the last five years gives an idea of what we want to achieve for the next few years.

And there are a number of reasons why we do that, and we've explained them on Page 9. First of all, although the return on capital employed on those buildings is lower than on our activities, our laboratory activities, it is not negligible, and there are positive things about that once we own the building.

There is no more inflation on the rent or on the cost for utilizing this building. You see the return today is already about 11% on the capital we have deployed.

It's also, like many assets of Eurofins that could be considered, for some of them, potentially separable. It is also a stock of value, because many companies, in times of real need, do some form of refinancing and sale and leaseback and other things like that, that can generate a lot of cash.

The value of those buildings, its economic value, is much higher at the moment than the cost we've had to develop those buildings and the value on the books. But more importantly, it prevents disruptions if we have to move at the end of the lease.

We don't have to lose the investments that we make in the lab. We've had many, many situations over the years, where at the end of our lease period, the owner, after five years or 10 years or whatever period we had secured, ask for a very significant rent increase, 30%, 40%, 50%, 100% sometimes, because they knew that we had to -- if we had to rebuild the lab in a new building that would cost a lot of money, so this is why we're doing that.

On Page 10, you see an example of the many large laboratories we've established, but there are other benefits. The main benefits are the impact on our own operations.

On Page 11, you have an example of the hub-and-spoke network we have developed in North America. That came from the integration of Covance Food Solutions, which had a number of laboratories and our own food testing laboratory network, and we've consolidated the high-volume test, mostly in three locations, in Des Moines in medicine, and in New Orleans.

And we have a number of satellite laboratories, the so-called spokes of the network, which carry out the time-critical assays. And by doing that, we've been able, as you see, for example, on Page 12, to significantly improve the efficiency of our processes in those large campuses.

We've reduced the area in square meter that we use for the same revenues. We've improved it very significantly, in that case, more than 100% revenues per square meter, and the productivity of our employees has also improved by doing so.

So those are very significant investments. We could do some of them with potential landlords.

But in the long term, it would cost us more. So this is one of the three main areas where we are investing to build a group that can offer services to its clients that are extremely differentiated, faster, more reliable and more cost-effective.

Another thing is sometimes we have difficulties to acquire a company in the right place or with the right technology or we want to transfer technology from one country to another. And therefore, we've -- over the last now almost 15 years, at least the last 20 years, actually, we've learned to do our own start-ups.

And doing start-ups is risky. They don't always work.

They don't always work the first time. And overall, they lose a lot of cash at the beginning.

And we've had some of those experiences where a start-up didn't work. But overall, if we take it as a bulk, we now have done more than 200 and we have a lot of data, statistics about their profile and what they do.

For example, the first -- well, the first one, they've been completely integrated. That's long ago.

But the last programs two, three, four, we see that the mature start-up provide a very good return on capital employed. It's very difficult to reach that level of return on capital employed and acquisitions because acquisition incur goodwill.

So it is also beneficial, not only because they are exactly where we need them and with the right IT system from the start, but also from a purely economic point of view. And we've decided, at the beginning of 2022, to really accelerate that process because we have been waiting to do some acquisitions in some places and countries and the owners would never decide to sell.

So we decided, okay, we're going to simply, for the next five years, develop the start-ups where we need them, and we've accelerated that process. Also, the value for acquisitions had really gone to a point where we didn't see the right returns in many areas.

And this is something we intend to continue over the next few years. You see some examples.

Of course, it's simplified and it's averages and it's just to give an indication, financially, of the cash and financial metrics of the start-up on Page 14. Acquisitions.

So on acquisitions, throughout 2022, we haven't seen a significant reduction of valuation for acquisitions. So we have been focusing since a couple of years on smaller companies -- smaller bolt-on companies that we can acquire that have strong client relationships in a given market or strong technology and that we can acquire at acceptable multiples, which means that a number of acquisitions has to be high to reach a certain total revenue level.

So we've exceeded the target that we had of adding EUR 250 million of revenues from acquisitions and the multiples that -- of revenues that we've paid is also acceptable at 1.6, and this spread pretty much all our business lines and geographic activities. The third is a lot of money to build the group is digitalization.

For a number of years, we have been developing our own LIMS. The LIMS is the core of the laboratory, running the central processes.

What we are doing now is complementing this LIMS with a range of other proprietary IT systems that basically cover all the aspects of running our operations and -- including the interface, electronic interface with clients, the electronic payment systems, the electronic quality assurance, clients data repository, document repository. So there are a number of things that now we are seamlessly integrating and which will, of course, contribute and contribute where they are already deployed to higher efficiency, reduction of errors.

And on that basis, we start to be able to develop automation tools that, of course, need a lot of data to drive them; artificial intelligence tools, which will save, not only unqualified labor, but we'll save qualified labor. We still -- we already have some positive example where this is working for -- of the scientists interpreting the results.

And at the same time, we are investing heavily in our IT infrastructure to make our laboratories more secure. Those who are interested about the detail on Page 17, you see an example of what we do in BioPharma product testing in this matter.

And now that we are -- we have finalized the development of those laboratory suits, we also have an evaluation of what they cost compared to [indiscernible] which, of course, only cover a very small part of what we need, but -- which turn out to be now when we have a full transparency of the cost, much more expensive. I will now let Laurent comment on the financials for last year.

Thank you, Gilles, and good afternoon, everyone. On Slide 19, I'm happy to report on a solid set of results for the year 2022 in a challenging environment.

As you can see, we were able to maintain stable revenue, despite EUR 800 million drop on COVID activities. We recorded also an adjusted EBITDA margin of 22.5%, despite the COVID decrease and also an inflationary environment.

And we finally reached net profit of EUR 606 million, resulting in a basic earnings per share of EUR 3.02. Moving to Page 20.

As you can see from our revenue bridge, we fully compensated the EUR 800 million drop of COVID revenues via a strong organic growth, which reached 6.7% in the second half of the year via M&As in line with our objective and also a positive currency tailwind. Moving to Page 21.

On EBITDA, the year was more challenging with several unexpected impacts, of which I will highlight a few. We had energy cost increase, mostly in the latter part of the year, which created a negative impact of EUR 45 million on our EBITDA.

We also saw some labor challenges related to COVID lockdowns or strikes in the French Clinical Diagnostics area in the latter part of the year. And we also saw some disruptions in the food industry and the consumer products industry, which depressed some of our volumes.

All of these were quite unexpected and created pressure on our EBITDA. But nevertheless, on Slide 22, we were able to maintain a very strong cash flow, which enabled us to self-finance the three acceleration pillars that Gilles mentioned and self-finance our CapEx or M&A and/or debt interest service.

Our net debt increased by EUR 600 million, mostly due to the refinancing of a hybrid bond by a senior bond for EUR 400 million, including the hybrid bond that we issued a few weeks ago in January this year. Our leverage remained very low at 1.6x at the very low end of our range.

Moving to Page 23. In the year '22, we improved the net working capital management by 30 bps to about 4.2% of our revenues, with a slight increase of our DSOs by one day, but also an improvement of our DPOs by three days.

And moving to Page 24. Overall, we maintained a very strong credit profile with proactive management of our debt instruments, resulting in no significant maturity for the year 2023, a leverage at the low end of our range and also sustained investment-grade ratings.

To conclude on Page 25, despite the impact from the sharp decrease in COVID activity and the acceleration of the investment in our three pillars and also the inflationary environment that we confronted in '22, we were able to post a ROCE of 13% in the year '22, which, if we exclude the goodwill or the investment we made in owned real estate, were, respectively, above 40% and 50%. I thank you for your attention, and I now give back the microphone to Gilles for the operational update and the outlook presentation.

Thank you. I'll go to Page 27.

Those are just some selections of things. We can't talk here about everything we did last year or we were doing, with one area that is very important for us is to be and remain the innovator in our sector to not only provide tests that other laboratories can provide.

Of course, we can do that. I think with all the investments we did, we can do it faster, better, more reliably than others in most markets and the gap will increase.

I think the gap between us and our competitors will significantly continue to increase over the next few years. But in addition, we want to be the ones who develop the new tests that are needed before others or some time in an exclusive way.

And we did that last year on a number of areas. And all those areas will represent massive growth over the next few years.

We are -- as scientists, as analysts, we are given incredible new tools. We've been given those over the last few years, which enable us to develop many, many new tests and those tests detect problems that then have to be controlled, have to be monitored.

An example -- for example, is PFAS. Our environment has been severely contaminated with PFAS that are chemicals that's almost never destroyed and disappears that end up in our rivers, in our soils, in the waters, in animals, in plants, in food, in our bodies, and there will have to be very significantly more controls of those things.

Similarly to asbestos that became a very big problem 50 years ago or 30 years ago, and that we are just starting to test in large numbers. This thing will certainly require a lot of testing over the next few years.

On Page 28, just an update on TGI, Transplant Genomics. We continue to see a very significant growth.

We're spending a lot to educate doctors to explain the benefits of the test that we're developing compared to others in the market. And we believe that 2023 should be the year where we will with more significant -- even more significant revenues, hit breakeven for that.

On Page 29, I can say a little bit about the divestment we did. We never really had the opportunity to discuss it.

We have a number of activities at Eurofins that were developed over the years by different leaders. And this activity, digital testing, we developed as part of our medical device activity, because medical devices also include software, and the software, of course, has to be secure.

And so we did buy a number of smaller companies in this area, which we'll realize over the years is that actually, the medical device component testing of that was very, very small and that maybe that wasn't core to our activities. So we've been able to disclose of that asset.

And as you can see, there are a lot of value within Eurofins. It's just not being reflected at all by the stock value of the whole, but that's just one small asset, about EUR 70 million revenues, was worth 3x revenues.

And as an investor, I think Eurofins did fairly well with 23% IRR and 6.5x cash multiple on our investment. And there are other assets within Eurofins that potentially, if we needed it, if we needed a lot more cash to invest in our core areas of activity, we could look at.

There are also some assets, smaller things that we don't mind closing or stopping if we think it doesn't work. We've stopped a couple of start-ups that didn't develop as we expected.

So for [indiscernible] about developing something sustainable and that can create a lot of value. And it's not about size.

It's not about how big we are. It's doing the right thing and providing the right returns.

So we don't mind doing divestments if we think they are justified. Another area that's very important for us is our impact on the planet and on society, ESG.

And we are developing a large number of programs on diversity, on our CO2 -- on reducing our CO2 footprint, on governance. This is very, very broad, and I can't talk about it today, but the rating agencies are starting to recognize much better our efforts.

We're doing a lot more work to explain what we're doing and to align it with the KPIs that those agencies want. We were not the earliest doing that because we were waiting for the regulatory obligations, how they would be defined because there's such a diversity of ways of looking at things and look -- and indicators that are required that we didn't see the value of -- the value was in doing things.

The value was not necessarily on explaining it. Now we're starting to explain it.

We've been able also to reduce, significantly, our carbon footprint. We're investing also towards that, and that's part of the benefits of owning our own buildings and we -- that we can make those investments.

We don't depend on landlords to do it for us or not. So this is an area that we're investing in.

But the main thing is we are -- everything that we do has a positive impact. And we are really an enabler -- ESG enabler for our clients, and we've got a chart on Page 32 that aligns that.

There are a lot of definition. It's a lot of detailed work looking at all of our activities.

But if we look one by one at our activities, we see that 98% of our activities contribute to the United Nations Sustainable Development Goals. Now the EU, in its infinite wisdom, is introducing thousands of pages of legislation and a taxonomy.

So far, this taxonomy is extremely restrictive. And then when you look at -- as investors, at what company say about their impact and how green their activities are, we feel there are still a lot of ways to look at it.

A lot of different ways to analyze it, and therefore, we really are looking forward to more standardization of those matters across the world, so we can document in the proper way what we're doing. But I think we are doing quite well and basically all our activities have a positive impact for health, for the environment and for the planet.

So let's talk a bit about the outlook. The outlook, the main thing is we are not in the business of detecting planning, inventing, knowing what the future will be.

Projections are very difficult. And projections for one company depend on what we think the world will do, and there are a lot of unknowns at the moment.

There is a war in Ukraine, and it's further development. There is the level of inflation, supply chain, the cost of energy, wage inflation and the impact of that on our clients, on consumers, on the industries we serve.

And therefore, we could spend month on month in trying to predict everything together with all of our activities. We've decided to simply stick with our long-term objectives of 6.5% organic growth per annum.

Obviously, if inflation remains very much more elevated, things will be higher than that. If inflation goes back to more normal levels, we know our central banks would like to bring it back to 2%.

It seems quite far today, although that's where we were for a long time. So we've decided that for our investors, only thing we could do is to try to explain what we are trying to achieve.

And to give some elements that might be each year slightly different, but on average, over a five-year period, we are trying to -- I mean we're running the Company for the benefit of our long-term investors. That gives those long-term investors an idea of what we think is achievable while, of course, not being able to know exactly what will happen each quarter or each month or each year of that period in terms of the macroeconomic parameters.

What we know is testing is required, testing of pharmaceuticals, food, the environment will always be required. Of course, we are investing a lot to be the most cost-effective, the most efficient, the best player on all aspects in this industry and the leader of that industry in the verticals we are choosing.

And Of course, our clients will have to pay for it. And there will be, at some point, adjustment between the cost of doing that activity.

And the pricing, we're trying not to be too aggressive. We have, in some areas, increased prices by 30%, terminated contracts with clients who didn't want to.

So we are, of course, looking at things much more thoroughly. But in reality, it is a partnership with our clients.

So we -- they try to make -- to be more efficient. We also are working to be more efficient.

But overall, we are confident about the growth of our markets, the long-term prospects of our markets. Whether it will take one, two, three quarters for things to normalize and to adjust the pricing with cost is -- or a bit more, it's very hard to know today, so we've opted to be conservative on objectives for 2023.

As I mentioned earlier, we normally have a very strong fourth quarter. That wasn't the case in the fourth quarter of last year, so we decided to err on the side of caution for this year in terms of objectives.

And of course, after half year, we will know more. And after this year, we can, for next year, give more precise objectives.

I don't think it makes sense to make objectives for 2024 now considering all the uncertainties, the macro uncertainties I've been mentioning. But what we are certain is what we will do.

In those five years, we'll continue to build our network organically and through M&A. Of course, the cost of M&A will adjust at some point with the valuation in public markets.

And if profitabilities of smaller companies are more affected because they can't compete with the more efficient larger players like Eurofins, that will give more opportunities for consolidation. By before 2027, we'll have finalized our hub-and-spoke laboratory network pretty much everywhere.

So that will be certainly beneficial. We'll also have finalized our IT solutions before that and that's why we are also confident on the margin side that before 2027, we will achieve the target margins of 24% that we have set.

That's a lot of work. We have to work through the very brutal changes that have been occurring over the last nine to 12 months.

This will, we think, normalize. It's difficult to know exactly when.

But certainly, it won't take five years. And then we'll continue to benefit from the size and the scale effects that we have been building.

So on the last page, Page 35, what I can conclude is that in only two years, 2022 and 2023, we will have absorbed all the loss of COVID revenues without losing our total revenues. That's quite an achievement for our teams.

And of course, it's a combination of different factors. We also don't know what the exchange rates will do.

We can only -- we decided to pick the average of last year's exchange rate. It makes it easier for everybody because that will be a factor.

And also going forward, for this five-year plan, the more important thing is it can be self-financed while paying a dividend. We are paying a significant dividend of a couple of hundred million now each year to our shareholders.

We intend to continue to do that, maintain a low leverage, which has some optionality. And in the meantime, continue to add about EUR 250 million each year from acquisitions, invest very significantly and allocate each year about EUR 200 million that we would otherwise distribute to our shareholders, in a way, investing for them in buildings that will be part of Eurofins for the long term and make the Company stronger.

Something we never do is mentioned upside. Of course, there are downsides as usual, the war could be much worse.

Nobody knows what could spin out of control and hopefully, it won't. But there are some upside, indeed, is that -- it could be that all the measures we've taken have effects that are very significant already this year, maybe potentially in the second half of this year.

The end markets could recover. We are -- we have made those hypotheses from a fairly pessimistic point of view in terms of the evolution of the end markets of our clients and the growth there.

We also have some internal activities that we've accelerated to review costs, to review overhead and also some activities that maybe we shouldn't have if they don't have the right profitability for the long term. So we are -- were, of course, in a more difficult economic situation, looking closely at those factors, and that could yield some impact.

And the other upside potentially is from consolidation, because those difficulties, of course, if as a market leader in the food testing market, for example, we suffer some issues, the smaller companies will be even more affected. So that's for your introduction.

And even though I wish I could report some stronger results for Q4 of last year and a more bullish outlook for this year, I prefer to give a conservative outlook, what we feel is conservative for this year, and be able to build on that. And then I will be happy, together with Laurent, to take questions.

Thank you.

Two for me, please. I'll just take them one by one if that's all right.

You talked about implementing price increases to combat the cost inflation in '23. And you've also said that you started the year with most of your clients with price increases.

Can you give us some color on the magnitude of the average price increase and --that will help benefit the top line? And how does that compare with the cost inflation that you're seeing?

Are you able to [pull out] all of it back or most of it back? That's the first one, please.

Yes. So we did this process mostly in the last quarter of 2023.

And of course, it's a discussion of each client and in each market. And we've had markets with inflation above 10%, sometimes even 20% like in the Baltics or Hungary or Poland, much less in Southern Europe or in the U.S.

And in those discussions, we've tried to pass on -- or our companies that are trying to pass on what they thought was the inflation of 2022 and it has worked sometimes. With larger clients, a bit less, whether they have been able to pass on 70%, 80% or something like that with the inflation is probably what it is.

We don't have exact measures and some contracts are multiyear, so there is, of course, some delay to being able to do that. The further question is how do we cope with 2023 inflation?

And what mechanism do we put in the contract to index at midyear, depending on the inflation this year? So of course, we don't have central systems to monitor all this.

We have way too many different services and SKUs and projects that are not necessarily fully comparable that we cannot do that. But that's basically the -- just range of increases, I think, we'll have range between 4% and 30%, just to give you an idea.

That's helpful. And I suppose the big surprise today was on the margin outlook for '23.

And I suppose the question here is, okay, you earlier had a margin outlook of 24%, and I appreciate you have all these inflationary and other impacts on the cost base. But you're implementing price increases on the one hand and your report also mentions instances on how you're improving productivity through automation projects, for example, or artificial intelligence.

And you've also mentioned how buying sites can help you with rental savings, for example. So can you please help us understand the degree of caution in the margin guidance?

And is there incremental downside risk here? Or is it almost like the worst case scenario that's baked in here?

And therefore, if things get better, there's scope for upside?

As you know, we always try to err on the side of caution. Obviously, last year, we didn't.

But okay, to our defense, we made our objectives for last year before the war started, so we missed a little bit on the EBITDA by, I think, 6%. The -- it's very difficult.

There are many, many moving parts and many moving parts that are still undecided. You saw the inflation print for Germany today.

I don't think a lot of people expected that. So -- and as I said, it's difficult for the future of those macro aspects of the price of energy and so on.

So it's going to be that, how the macro evolves and how the implementation of all this will work out. That's what we try to explain.

I think there is potential for doing better, especially in the second half. But we have to see how things develops.

That's, unfortunately, all I can say.

I have two questions, please. For your FY '27 outlook, it has 24% EBITDA margin and EUR 10 billion in revenues.

Sir, can you walk us through what are your assumptions there? Do you assume a high inflation environment?

Or you expect inflation to ease? And second, can you please talk about your exposure to reimbursements?

So with unwinding of COVID revenues, there has been decreasing reimbursement rates. And how is it in other clinical diagnostics?

And as you expand into genetic testing and BioPharma testing, what impact on margins do you see? And how do these compare to food and environment testing margins?

Well, the assumptions are very, very broad, and we're talking about a five-year period. Maybe someone should mute their phone .

When we talk of five years, it assumes some normalization of inflation, and it certainly doesn't assume inflation staying at 10% over the period. Maybe it assumes an average of 3% inflation over the period.

It's very difficult to know how inflation will evolve. I'm certainly not the person to know that.

On reimbursement, of course, it includes some reimbursement on the clinical diagnostics, for example. I think France has decided 3.5% reduction of the nominal reimbursement rate of clinical test.

Of course, there will be volume growth. And the question is how much volume growth will compensate that.

Genetics and BioPharma margins tend to be higher than the other margins of our activities. Colleagues from Goldman Sachs had a second question, by the way, operator?

So it's a different type of question on my side. Just to be back on the pricing, Gilles, can you tell us about the evolution over the course of '22 in terms of a pricing increase?

We heard about the bracket 4% to 30%. How much are we in average for '22?

More or less in the range of 6% to 7%? Or even higher than that?

And if you could size up the evolution of the year, would be very much of interest. Second question will deal with the energy pricing evolution.

Where are you? And what sort of assumption do you have in your guidance for next year regarding this specific topic?

Third question would be on -- probably can you detail a bit more the cost-cutting initiatives you're putting in place? And specifically, I was wondering if there is a focus or dedicated focus regarding employment level.

And finally, I was wondering, when I look at the EUR 39 million invested into your start-up program in '22, what is the envelope -- what sort of envelope do you have in mind for '23 onwards? Is it something that's going to reach EUR 100 million over the course of '22/'27?

Or is it too optimistic?

Thank you. Well, in 2022, we didn't have so much pricing impact because we definitely -- we generally negotiate the pricing for clients at the back end of the previous year.

So what we did for 2022 was negotiated in the quarter four of 2021. So I would say it's as usual, maybe 1% or 2% price, maybe a bit more in some areas in BioPharma, where we have many projects where we could price already, throughout the year, the projects starting in 2022.

The bigger impact will be on the things that we have implemented to be effective on the 1st of January of 2023, and we already negotiated some further increase for the 1st of June 2023 in many companies. Now start the negotiation of labor and salary in Europe, especially that will be adjusted on the 1st of April.

So that's also the unknown on the cost side, what level of moderation will be applied and how much moderation will be possible. On the energy, where we gave an indication, we believe the impact, especially on H2 of last year was EUR 45 million.

We don't see that being so different next year because we have contracted our spot contracts. So I think we have -- but it's a mix.

We have so many companies in so many countries, but we think there still will be some energy costs that are higher than usual, maybe not higher than 2022, but higher than usual. And cost cuttings are local initiatives.

Each of our laboratories are looking at how they can be more productive. It's not something we decide centrally or we apply centrally.

People have to improve their profits, and they have to find the best ways to improve their profits in each operation. On start-ups, investments in 2023 were about EUR 39 million.

They will increase a bit in 2022 -- sorry, they will increase a bit in 2023. I don't have the number in front of me.

But I guess maybe, our total CapEx, maybe EUR 50 million will go towards start-ups next year or this year.

A couple of questions from me, please. On the margin guidance for 2023, is it possible that you could maybe try and just help us bridge the 220 basis points of implied decline there?

You obviously expect to get some recovery on some of the pricing, but how much is the price energy dynamic would you say? How much is maybe the COVID accretion dropping out?

What's the impact from the French diagnostics business? Is the volume in foods in there?

Is there any way you would kind of categorize the building blocks of that margin decline, please? And just you can help us understand how it potentially unwinds the other way afterwards?

Yes. So maybe I'll point you to Page 21 of the slide show, because what we'll see next year is not so dissimilar to what has hit H2 of 2022.

So the -- because we should be able to capture a large part, if not all of the inflation of 2022 in our pricing measures, but there will be further inflation in '23 and they cover mainly the categories of personnel where we'll have inflation. Logistics and consumables continue to increase.

The -- we hope we won't have too many COVID-related this year. That should be helpful.

And as we say, reimbursement issues. The issues about the food industry and maybe some consumer product industries are harder to predict.

Our clients are still focusing their line of products. They're still prudent on their R&D.

The agroscience industry is also prudent on their R&D. So this is harder to predict when there'll be growth again there, which means our labs are a bit underutilized.

So we have to take measures to reduce underutilization if volume are not where they should be. BioPharma, it also depends how fast we can completely refill the capacity that was used during COVID for the vaccines development, among other things.

So those are the main -- the main building -- the main blocks. We haven't really quantified these blocks.

The COVID accretion, this is something for the past, because we're already targeting, I think, 23% margin for 2023. So the gap is with that -- what is the gap between a normal situation and a situation where we still have those effects of some of the utilization of some labs due to clients having cut back and some extra costs that we cannot immediately fully pass on to clients.

Those would be the main remaining factors in '23 compared to a normal situation.

Is it fair to assume, as I think about those blocks, the magnitude obviously increases in some of them. But labor challenges, in theory, eases.

COVID-related lockdowns, as you said, not there. COVID absentees and the French strikes in clinical diagnostics, hopefully, we don't see them again now there's more of a resolution there.

Likewise, the supply chain impact on customers in theory should be easing. We're definitely still seeing some challenges in the food industry, but it doesn't feel like there's another leg down there.

So is the magnitude of that more linked to the inflationary side than anything else. Is that fair?

Yes. I think if we sum it down to two points, it is inflation and how fast we can pass on 100% to our clients, in addition to the productivity gains we make every year anyway and the softness of some end markets, which means we are not fully utilizing our capacity and therefore, we have to decide how much we cut back and do we also cut back overhead and things like that.

So those are really the two main factors.

Okay. And then maybe just my second question, just around, is there any way you could guide around expectations around interest and tax?

Again, it's another area, particularly on the interest side, that I think came in a little bit higher than consensus expectations this year. I'm mindful, obviously, you've refi-ed one of the hybrids, rates are obviously higher.

How do we think about interest and tax for 2023 as well so we don't get caught out below the line as well?

Laurent, do you want to comment, please?

Yes. On tax, I mean you're referring probably to the tax paid, which was a bit higher than planned.

It's due to the high profits we incurred in 2021. And depending on the geographies, you don't always pay your taxes the same year that you booked them.

So that should normalize greatly in '23. So you should not have any surprises in that domain.

And on interest, I mean, we have, basically, a very sound and solid maturities now. And so basically, you should not expect anything very different because we had, in '21, a very high refinancing exercise, which created some exceptional interest repayments of about EUR 90 million that we didn't have in '22, so normally in '23, the expense should be more or less similar to '22, a slight increase because some of the latter bonds have slightly higher prices, but nothing very significant.

Okay. And then final question, just on the cash.

If I bridge from the old guidance, EUR 900 million or so down to this new EUR 700 million, EUR 750 million guidance, I mean, I simplified it as kind of lower EBITDA, slightly higher SDIs, marginally higher interest, is that the right way to bridge between the old guidance and the new guidance on free cash flow as you guys reported? Or is there anything else we need to be mindful of in terms of the moving parts in 2023?

Anything, working capital or anything like that we need to be aware of?

No. I mean, in '22, I mean we had a gap, like you said, which was mostly linked to EBITDA, a bit more of a CapEx spend and a bit more of taxes paid.

In '23, we don't expect the tax paid effect to reoccur, so it's going to be a straightforward bridge versus what we give you as a guidance on top line and bottom line basically.

I've got two, please. The first is again on margins and how we get back to 24% in the medium term.

But if I think about your previous margin outlook, I think it was broadly flat for several years with operating leverage offset by the investments you are making. If we then think about how you get three points of uplift, what has actually changed in terms of how you're growing the business to deliver that margin improvement?

It doesn't sound like you're slowing down the rate of investment, productivity automation, the things that you've been doing in the background for a long time. So what is actually going to change in the business to deliver that margin improvement?

And then the second question would be on PFAS. We're seeing legislation start to come through.

How significant do you think PFAS could be for the group? I mean is it something which could enhance group growth over and above the medium-term trends?

Or do you view it as part of the part of the normal background, which supports what you do?

Yes. I think the main answer to your question is it's very difficult to forecast the short-term situation.

So first, we'd like to return to a somewhat normal situation where we can forecast a bit better with our clients, their needs and how much we will fill our laboratories. And once we are in that normal situation, we think we can improve by at least 100 bps every year from the measures that you are -- that you mentioned, automation, productivity, deployment of our IT suits, a better utilization of our CapEx and finalization of our hub-and-spoke laboratory network, which means the labs are better utilized or better -- or more efficient because of higher series of each test.

There's also -- I mean the price is also a not an insignificant element in that. Right now, we are suffering.

We should be pricing a bit higher on average compared to the cost. So the question of when we will recover that is a question.

Is it going to happen fully through 2023, at what point will be the -- there will be an alignment between everybody on inflation anticipation, is that's how you base the price for the following year. So I think those would be the major factors.

And on PFAS, I mean, it's hard to say. In reality, it is a major problem.

And I don't know how the world will deal with it. Usually, it takes always longer than it should to tackle those problems.

We see very massive demand and we're gearing up for that. We are, I think, the most efficient in doing those tests, the fastest and most cost effective.

So we think we'll capture a significant part of that. But in some areas, it hasn't really started.

We were testing PFAS mostly in the environment. We just started testing also as a clinical test, because a lot of people -- as this becomes more and more public, a lot of people will want to know how much they are contaminated and there will be insurance cases and other aspects and litigation.

And then we start finding it in food. And the regulations are just starting to put maximum limits on PFAS in food and that's significant demand.

But when we put the target of 6.5%, it is such a ballpark number and it is made of so many components that we don't break down this component to know, okay, this will be this, this will be that. And it's also -- it should be higher.

It's also a mix because we have some activities like clinical diagnostics that actually are not going up, but down, at least in some markets, not all of it. Our genomics and esoteric clinical diagnostics, you saw what TGI, transplant diagnostic is going -- Transplant Genomics is doing in the U.S.

Obviously, it's very good growth in the niche esoteric molecular areas, but the routine testing that we have in Europe is definitely not growing at double digit. So I think for everybody, the main thing is when -- how long does it take to come back to a somewhat normal business environment, where we can have alignment with our clients and what are going to be the inflation increase going forward, and we get a fair transfer of those increases of costs in the pricing of our clients.

And then that being said, BioPharma should be growing -- continue to grow double digit. Food should be growing back again to mid- to high single digits.

And on top of that, we should get inflation. I would like to have certainty that this level of dialogues and contracts are in place to be more positive as to exactly when we can resume the margin improvement that towards -- we've been working towards for a long time.

Two for myself, please. Just firstly, on the -- thinking from 2023 to 2027 in terms of the margin progression, do you see that as sort of a linear -- progressing linearly in theory?

Or do you think it'll be skewed backwards just because of the fact, I think, as you've pointed out, a lot of your businesses are very operationally geared and the operational gearing tends to mean you tend to be a bit backward weighted in terms of the returns? And then the second question is, I think you've made a couple of comments about underutilized capacity currently as well as closing down some smaller business, which haven't progressed as you would like.

Can you just say what percentage of your business currently is making, let's say, below the returns that you believe are acceptable at the minute? And are you going to take a stricter approach on losses from these sort of businesses going forward?

I don't think I can answer the question whether it's going to be linear and so on because, normally, as soon as the situation normalize, we should get back to a significantly higher margin. The real question is when will the macro economical situation stabilize.

That's the real question. Will it stabilize in 2023?

I'm not saying it's going to be the world back as normal, but still, even in an inflationary environment, companies work with their clients and business goes on. It's just this big uncertainty as to the magnitude of changes and divergence of opinion on that, which makes it a bit more difficult.

And of course, the consumer -- impact on consumers. Consumers are still cutting back on a lot of spend and consumption, especially in Europe, which has an impact on our clients.

So it is more a macro thing. The timing of that normalization of this, that we have a better planning environment, and it's not necessarily skewed forward or backward.

It's just an unknown as to exactly when the business environment will be a bit more plannable. But we gave the 20% as directional, because we don't think there is any reason why we can't get there.

Once we scale our capacity to the needs of our clients, and we have a proper alignment on pricing with them relative to competition, because we are bigger, more effective in competition and the margins we're making are totally normal for that industry. On being stricter internally, yes, of course, we are -- when there are not too many things compensating, we are -- and the business is a bit more difficult, we are maybe less patient with leaders who underdeliver.

And we're, of course, reviewing our overheads and ask our leaders in each country to review their overhead. So we'll be a bit more aggressive on that.

We have cognition to the uncertainties in the environment and I mean, somebody mentioned downside risks. There are some micro downside risks.

And nobody knows exactly the magnitude of the macro downside risk, and we are also working to plan for that. And we have also a contingency plan for a situation, the macro situation that could deteriorate much further.

I'm sorry, would you, like, to have sort of a guess as to the amount of business, at the moment, you feel is below the margins you feel are acceptable?

We have -- well, what I can say is we still have maybe EUR 200 million of revenues, which are loss-making in a significant way or maybe more and that we are addressing. That's one answer.

And then yes, we have a -- our food testing activity in Europe is not performing where it should be performing. And that's, I don't know, EUR 600 million, just to give you an idea of some components.

And that's not counting all the start-ups we have, which are obviously loss-making, but for good reason because they are just ramping up or waiting for their accreditation.

Arthur Truslove from Citi. So first question, you obviously mentioned that your business is very innovative and investing in new labs.

I know it's obviously a bit difficult to generalize. But are you able to give us some kind of an idea of how long a lab that you build or furnish remains at the cutting edge?

Second question, obviously, you start with your 6.5% organic growth guidance for '23. Are you able to give us an idea of which verticals you're expecting to grow faster than that and which ones you're expecting to grow slower than that?

And thirdly, are you able to just give us an idea about how quickly wage inflation is progressing and how that varies by geography and also whether you're seeing any sort of easing or intensifying of that labor inflation?

Well, our labs, in addition to what we spend when we build them, we make every year investments in equipment, in technology, in digitalization, in the software that we use to run them. So that's how they remain on the cutting edge.

And verticals, if I do an analysis, a faster-growing vertical is BioPharma, has been for the last few years with double-digit. Asia has been growing also double digit.

It's not a vertical. It's a region.

The environmental testing sector has been growing actually quite well in Europe, a bit less so in the U.S. It could accelerate with the PFAS phenomenon.

Food testing has been growing well in the U.S. and not growing in Europe last year.

The -- but as I said, for food testing, this will hit the bottom, I think, in Q2 or Q3 of next year, where I doubt it will decrease any further. Those clients who have cut back I doubt, they can cut back even more, because there is a risk of selling food if it's contaminated.

They can decide not to develop more new products. That requires a lot of R&D and testing, but they need to continue to produce their lines.

Even if they are focused on cheaper lines, they still need to be tested. And Clinical Diagnostics, it depends on whether it's mostly esoteric molecular testing, which can be high -- I mean, double digits and sometimes 20%, 30%, or the routine, which is more around zero, so minus 3% as we saw for France, 2% plus 5% for the things that we sell directly to hospitals and clients, but mostly zero for the routine.

I think I've covered most of the activities that we're active in. And wage inflation, yes.

The U.S. started, and it started actually before the war in Ukraine.

There has been some strong push on wages in North America already. It has been for a number of years, but accelerating maybe in '21 at the -- and '22, first part of '22 at the exit of COVID.

There were a lot of people changing jobs. I've heard from our leaders there, anecdotally, that things are starting to be a bit better.

Whether it will stay that way, of course, I don't know. But they mentioned that most people who needed to switch jobs after COVID have done so.

The -- in Europe, we will know more with the wage negotiations in the public sector by the big unions in the big countries, and our labs don't follow those, but it's always an indication. So we'll have those discussions by March, April.

So far, there is some moderation. The wages are not being raised as high as inflation.

But of course, if the inflation indication for Europe for the whole of 2023 remain very high, that might not be tenable for next year. So that's still some of the unknowns.

Thank you very much. So yes, to conclude, we see the same attraction for our sector as in the future.

It could well be that this situation that, as you can imagine, if it affects Eurofins a little bit, it affects smaller market participants in a much bigger way. It turns out to be actually a big opportunity for a well-financed company.

And -- in the end, this sector is required. So we need tests to stay healthy.

The environment needs to be tested. There's going to be even more so with the new green economy we are going towards.

Agriculture has to become more efficient. It has to -- we have to use the soil to sequestrate CO2.

We're providing solutions for that. And BioPharma has many, many new tools to develop the cures of tomorrow for cancer and other chronic diseases.

So our markets, we think, will remain very resilient, that the current transient problem that we're seeing after a few quarters will probably be behind us. We'll use this time to continue to build up our competitive advantage and our unique position to be always more the reference suppliers of the main clients globally.

And so we're going to, as usual, as we did many times in the past, we'll do our best to turn those types of challenges into opportunities and deliver a very strong company over the next five years period. And of course, we try each quarter to do our best to use the cash wisely that our shareholders are making available to us.

Thank you very much.