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    AVTR
    Earnings call· Mar 2026(Q1 FY26)

    Avantor Q1 FY26 earnings call AVTR

    Apr 29, 2026 Source

    Executive summary

    Avantor Q1 FY26 — Revival Program Drives Operational Stability and Reaffirmed Full-Year Guidance

    Avantor's Q1 FY26 results surpassed expectations, driven by improved execution in its BioScience and Medtech product segments and the positive early impact of its "Revival" program. The company reaffirmed its full-year guidance, anticipating VWR's growth rate bottomed in Q1 and BMP's will bottom in Q2, positioning Avantor for a return to positive organic revenue growth in the second half of the year despite emerging inflationary headwinds. Leadership changes and operational enhancements are central to this turnaround.

    Highlights

    5

    • Q1 results exceeded expectations, with adjusted EPS of $0.17 ahead of forecast.

    • VWR e-commerce platform showed improved performance in traffic, conversion, and revenue growth following upgrades.

    • BMP segment's book-to-bill ratio was over 1.1x, indicating strong order performance.

    • Process chemicals within BMP grew double-digits organically due to improving operations and strong orders.

    • Revival program led to a 25% refresh of senior leadership and a 2% reduction in overall headcount year-to-date.

    Concerns

    4

    • VWR Distribution and Services revenue declined 5% organically versus prior year, impacted by soft European market conditions and U.S. winter weather.

    • BMP revenue declined 2% organically, with fluid handling and new sales down double digits due to difficult comps.

    • Middle East conflict represents an incremental headwind of $10 million to $20 million to 2026 operating income due to inflationary pressures.

    • Adjusted net leverage ratio increased by 0.1x sequentially to 3.3x due to lower trailing 12-month adjusted EBITDA.

    Guidance & targets

    7
    CategoryTargetConfidence
    Full-year 2026 Adjusted EPS
    reaffirmed
    high materiality
    High
    Q2 2026 Adjusted EPS
    $0.19 and $0.20 per share
    medium materiality
    High
    VWR Organic Growth Rate
    positive organic growth
    high materiality
    High
    BMP Organic Growth Rate
    reach a bottom in Q2
    high materiality
    High
    Company Organic Revenue Growth
    return to positive revenue growth
    high materiality
    High
    Adjusted Net Leverage Ratio
    sustainably below 3x
    high materiality
    High
    FY26 Operating Income Headwind
    $10 million to $20 million
    medium materiality
    High

    Segment performance

    2
    SegmentRevenueYoYQoQMargin
    VWR Distribution & Services
    Organic revenue decline driven by volume, industry dynamics, and European market weakness. U.S. winter weather negatively impacted revenues by 50 basis points. E-commerce platform showed improved performance in traffic, conversion, and revenue growth. Margin decline due to volume, net price capture, and increased freight costs. Segment is stabilizing and Q1 performance was in line with expectations.
    Adjusted operating income: $105 million
    		$1.15 billion-5% organically—9.2% adjusted operating margin
    Bioscience and Medtech Products (BMP)
    Organic revenue ahead of expectations due to better execution in process chemicals and new sales. Mid-single-digit headwind to organic growth from idiosyncratic customer ordering patterns in new sales, serum, and electronic materials. Pricing was positive. Margin decline due to inventory provisions, lower volumes, and mix. Operational efforts are bearing fruit, with increased stability and modestly declining back orders. Strong order performance across all business units.
    Adjusted operating income: $103 millionProcess chemicals organic growth: double digitsFluid handling and new sales organic decline: double digitsResearch and specialty chemicals organic decline: ~100 basis pointsBook-to-bill: >1.1x
    		$431 million-2% organically—23.8% adjusted operating margin

    Operational metrics

    16
    Adjusted EBITDA
    $219 million
    Q1 FY26
    Adjusted EPS
    $0.17ahead of expectation
    Q1 FY26

    Due to good execution in BMP, specifically process chemicals and new sales.

    Debt Repayment
    $105 million
    Q1 FY26
    Adjusted Net Leverage Ratio
    3.3xup 0.1x sequentially and year-over-year
    Q1 FY26

    Primarily due to lower trailing 12-month adjusted EBITDA.

    Overall Headcount Change
    down 2%
    YTD FY26

    Talent investments are self-funded with increased productivity.

    Kaizen Events Completed
    over 8 weeks
    Q1 FY26

    Part of enhancing operations led by COO Mary Blenn.

    CapEx Council Sanctioned Projects
    12 projects
    Q1 FY26

    Focus on near-term needs and long-term strategic requirements.

    VWR E-commerce Performance
    improved performance
    Q1 FY26

    Followed multiple upgrades and successful relaunch of vwr.com.

    BMP Process Chemicals Organic Growth
    double digitsYoY
    Q1 FY26

    Due to improving operations and strong order performance.

    BMP Fluid Handling and New Sales Organic Decline
    double digitsYoY
    Q1 FY26

    Due in part to difficult comps.

    BMP Research and Specialty Chemicals Organic Decline
    about 100 basis pointsYoY
    Q1 FY26
    BMP Book-to-Bill
    more than 1.1x
    Q1 FY26

    Order trends healthy across all business units, particular strength in process chemicals.

    Middle East Conflict Inflationary Headwind
    $10 million to $20 millionincremental
    FY26

    Estimated impact from inflationary pressures, incorporated into reaffirmed guidance.

    Customer Prebates Impact on FCF
    meaningful and anticipated headwind
    Q1 FY26

    Significant impact on cash flow, but anticipated and part of guidance.

    Pricing in BMP
    positive
    Q1 FY26
    Gross Margin
    —
    Q1 FY26

    Sequentially, decrementals on volume offset by pricing actions; year-over-year price-cost spread was negative due to VWR margin reset; expected to grind up during the year.

    Industry KPIs

    5
    MetricValueDetails
    Revenue EPS guidancereaffirmed
    Pricing price realizationpositive
    Segment organic revenue growth-5%%
    Bioprocessing orders book to bill>1.1x
    Organic core revenue growth by end market—

    Deals & partnerships

    3
    James Finn (from Medline)New hire for Chief Digital Officer

    Joined as Chief Digital Officer as part of leadership refresh.

    [indiscernible] (from Cytiva)New hire to lead BMP and serve as Chief Transformation Officer

    Will lead BMP and serve as Chief Transformation Officer, joining from Cytiva.

    Keith Balzo (from Cytiva)New hire for Chief Procurement Officer

    Joined as Chief Procurement Officer as part of leadership refresh.

    Risks & headwinds

    5
    Soft market conditions in EuropeQ1 FY26

    VWR revenue down 5% organically

    Mitigation: Reorganization and team reversion in Europe; expectation of stabilization and positive growth in H2.

    Adverse winter weather in the U.S.Q1 FY26

    Negatively impacted VWR segment revenues by about 50 basis points

    Mitigation: Team flexibility ensured delivery of expectations; orders were not lost.

    Idiosyncratic customer ordering patterns and shipmentsFY26, particularly Q1 and Q2

    Mid-single-digit headwind to BMP organic revenue growth in Q1; will increase sequentially from Q1 to Q2 by more than 500 basis points

    Mitigation: Working with supply chain and customers for normalization; focus on process chemicals order book.

    Middle East conflict inflationary pressuresFY26

    Incremental headwind of $10 million to $20 million to 2026 operating income

    Mitigation: Established a task force to identify, monitor, and mitigate; evaluating contract terms for pass-through of freight-related surcharges.

    Lower trailing 12-month adjusted EBITDAQ1 FY26

    Adjusted net leverage ratio increased by 0.1x sequentially and year-over-year to 3.3x

    Mitigation: Debt reduction remains the top capital allocation priority to reduce leverage sustainably below 3x.

    What to watch in Q2 FY26

    5

    VWR Organic Growth Rate

    Q2 FY26
    Current-5% organically in Q1 FY26
    Targetsequential improvement

    Why it matters

    Indicates stabilization of the VWR segment and progress towards positive growth in the second half of the year.

    We expect that VWR's growth will improve gradually over the course of 2026, with the segment showing positive organic growth in the second half.

    Q&A highlights

    7

    Asked about specific actions to offset inflationary pressures, particularly transportation costs, and other watch areas.

    Emmanuel Ligner explained that a task force has been established, led by the new Chief Procurement Officer, to evaluate the impact of inflation from the Middle East conflict. They are focusing on inbound/outbound freight and critical materials. He noted that the company has experience with surcharges from post-COVID inflation and aims to reproduce that success.

    “We have a task force in place already evaluating the impact. I think, Steve, in the opening remarks, talked about the $10 million to $20 million headwind that we are seeing that we are contemplating in the reforming of our guide. And I think it's really an action for us in terms of monitoring and in terms of things what we can pass to our customers.”

    asked by Dan Leonard · answered by Emmanuel Ligner

    2 min read6 chapters

    Detailed Narrative

    01

    Revival Program's Early Impact

    Avantor's "Revival" program is already yielding positive results, with clear improvements in execution and increased accountability across the organization. The program emphasizes a data-driven approach to performance and a more intense focus on customer service, contributing to improved and more stable operational performance in both VWR and BMP segments.

    02

    Leadership and Talent Enhancement

    As part of the Revival initiative, Avantor has moved swiftly to recruit exceptional leaders, refreshing approximately 25% of the senior leadership team. Key hires include a Chief Operating Officer, Chief Procurement Officer, Head of VWR Sourcing, Head of VWR Pricing, Chief Digital Officer (James Finn from Medline), and a new Head of BMP/Chief Transformation Officer (from Cytiva). These talent investments are largely self-funded through increased productivity, with overall headcount down approximately 2% year-to-date.

    03

    Operational Enhancements and Capital Investments

    The company is actively enhancing operations, led by COO Mary Blenn, through initiatives like over 8 weeks of Kaizen events in Q1 across its network. A newly established CapEx council meets monthly to plan and monitor capital commitments, sanctioning 12 projects in Q1. One example is a North American manufacturing facility project to install modular automation equipment, expected to enhance quality, compliance, throughput, reduce unit costs, and free up capacity, yielding attractive returns.

    04

    VWR E-commerce Relaunch Success

    The VWR e-commerce platform demonstrated improved performance in traffic, conversion, and revenue growth rates in the U.S. and Europe during Q1. This positive trend follows multiple upgrades as part of the company's digital roadmap and the successful relaunch of vwr.com, indicating stabilization in the VWR segment.

    05

    BMP Order Strength and Operational Stability

    The Bioscience and Medtech Products (BMP) segment showed strong order performance in Q1, achieving a book-to-bill ratio of over 1.1x across all business units, with particular strength in process chemicals. Operational efforts are bearing fruit, with increased stability, modestly declining back orders, and better line of sight to improved performance.

    06

    CFO Transition

    Brent Jones, Executive Vice President and Chief Financial Officer, will depart Avantor next month. Emmanuel Ligner expressed gratitude for his leadership and contributions, including developing a deep and talented finance team. Steve Eck, Senior Vice President and Chief Accounting Officer, will take over the finance function.

    AI-generated summary of the company’s earnings call. Not investment advice.