Ladies and gentlemen, this is the operator. Today's conference is scheduled to begin momentarily. Until that time, your lines will be placed back on a music hold. Thank you for your patience. Good morning. My name is Krista, and I will be your conference operator today. At this time, I would like to welcome everyone to the Avantours Third Quarter 2026 Earnings Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question at that time, simply press star followed by the number one on your telephone keypad. and if you would like to withdraw your question, again, press star 1. Thank you. I would now like to turn the conference over to Chris Fidyk. Chris, you may begin your conference.

Thank you, operator. Good morning, everyone, and thank you for joining us. Our speakers today are Emmanuel Ligner, President and Chief Executive Officer, Todd Garner, Executive Vice President and Chief Financial Officer, and Steve Eck, Senior Vice President and Chief Accounting Officer. The press release and our presentation accompanying this call are available on our Investor Relations website at ir.avantoursciences.com. Following our prepared remarks, we will open the call for questions. A replay of the call will be made available on our website later today. During this call, we will make forward-looking statements within the meaning of the U.S. federal securities laws, including statements regarding events or developments that we believe or anticipate may occur in the future. These forward-looking statements are subject to a number of risks and uncertainties, including those set forth in our SEC filings. Actual results may differ materially from any forward-looking statements that we make today. These forward-looking statements speak only as of the date they are made. We do not assume any obligation to update these forward-looking statements as a result of new information, future events, or other developments. This call will include a discussion of non-GAAP measures. A reconciliation of these non-GAAP measures can be found in the press release and in the supplemental disclosures package on our investor relations website. I will now turn the call over to Emmanuel.

Thank you, Chris, and good morning, everyone. A special welcome to Todd on his first earning call with Aventor. Todd will introduce himself shortly, and you will hear much more from him at Investors Day on December 8th. Today, I will begin with a high-level update on our third quarter performance. I will then take a closer look at Aventor returns to revenue growth, including the progress we are making with Revival, our comprehensive program to sharpen strategic focus and enhance execution. On slide four, we have the key messages from the quarter. Our third quarter results make a return to organics revenue growth for Avento. This is an important milestone on our revival journey. We have more work to do, but the quarter demonstrates why we believe the action we are taking through revivals are putting us on a path to sustainable growth. Third quarter results exceeded our expectation across revenue and adjusted EPS. Those results were driven by strong performance in our VWR distribution services segments, which accelerated meaningfully after returning to growth last quarter. Organic revenue growth in our bioscience and medtech product segments turned positive this quarter, as anticipated, with performance stronger than we had expected. We once again generated robust free cash flow, which allow us to invest in the business and strengthen our balance sheet. We remain committed to reducing our adjusted net leverage ratio to below three times, and we expect it to achieve this objective by year end. Finally, we are raising our 2026 organic revenue, adjusted EPS, and free cash flow guidance, reflected our third quarter outperformance, as well as the momentum we see across the business and in our end market. Please turn to slide five, where I will review our Q3 performance highlights. In Q3, we generated $1,698,000,000 of revenue, represented year-over-year organic growth of 5.2% and reported growth of 4.6% exceeded our expectations. VWR organic growth accelerated to 5.8% in the quarter. This reflects continued executions against our revival priorities as well as stronger end markets. I will discuss VWR Positive Momentum in a few moments. Turning to BNP, we were pleased to see the segments returning to revenue growth in the quarter, as we had anticipated on our last earning call. On a year-over-year basis, BMP revenue grew 3.6% organically, ahead of our expectation, despite a 150 basis point headwind from the unusual customers' ordering and shipment patterns that we have discussed on prior calls. We saw strong performance from Process Chemical and NuSeal in the quarter. Importantly, our Revival initiative to enhance commercial and operational execution continues to gain traction across BMP. Revival is helping the segments delivering more consistent and predictable performance and, as a result, we believe BMP is well positioned to grow in 2027 and beyond. Moving down the P&L, Adjusted EBITDA margin increased modestly on the sequential basis as operational outperformance and cost discipline helped us absorb headwinds from mixed inflation and targeted gross investments. Adjusted EPS of 22 cents was above our expectations. One of Avantol's key strengths is robust cash generation. In the third quarter, Regarding cash restructuring costs, we generated $169 million of free cash flow, represented strong conversion of adjusted net income. We used this strong cash generation to further strengthen our balance sheet, and we ended the quarter with an adjusted net leverage ratio of 3.1 times. On slide six, we take a closer look at our return to growth. In Q3, Avanto delivered positive organic revenue growth driven by two forces, improving execution and stronger end markets. When we launched our revival program one year ago, we identified five key pillars and began a series of initiatives to sharpen our strategy focused on improved execution. Those actions are increasingly embedded in our operating models and, in Q3, show up in our results. In VWR, the actions we are taking to enhance customer relationships, boost commercial execution, and expand our digital capabilities continue to gain traction. We estimate that approximately half of VWR growth in Q3 was driven by our commercial initiatives. We see progress in the same area we highlighted last quarter. We are expanding our relationships with large customers, we are performing well in small and mid-sized accounts, and our e-commerce platforms continue to show positive trends. BWR growth acceleration in Q3 reinforced our confidence in our competitive position in the global distribution market. In BNP, we are making steady progress on our revival initiatives to strengthen operations and enhance our supply chain. And we have driven sequential increase in manufacturing throughput during 2026. Let me share a few examples of the progress we are making with revival across the organization. On Monday, we announced that Mikey Santiago will join us from Danaher to serve as our chief information officer. With Mikey joining and Todd now on board, our executive leadership team is complete. I'm excited to work with this exceptional group of leaders to execute revival and create shareholder value. In BNP, our manufacturing teams have increased output across critical product lines. In early September, a key North American manufacturing line produced more than 25,000 kilograms of product in a single week, exceeding its original design capacity target and achieving a nearly 99% overall equipment effectiveness ratio for that week. This is a good example of the operational improvement we are making across BNP. We have advanced our digital manufacturing strategy, including the development of digital workflow and electronic batch records at two key manufacturing sites. Those capabilities improve quality, reduce deviation, and enhance delivery performance, supporting a more efficient manufacturing network over time. Across our supply chain network, SNOP and other process improvements initiated are taking hold, contributing to improved customer service and on-time delivery across certain product categories. While I am pleased with our progress, we will continue to invest in our operation. In VWR, we are deploying AI to improve productivity and enhance the customer experience. One example is VWR Internal Sales Assistant, or ISA, which uses AI to combine customer, sales, and product data to help sales teams prepare for meetings, generate leads, prioritize opportunities, and act on recommendations. ISA also simplified administrative tasks. Since its launch last year, ISA has been widely adopted and we have received positive feedback from our sales team, our customers, and our supplier. We plan to expand ISA and add new functionalities. VWI is also enhancing our internal cross-reference platform with AI to allow our teams to proactively identify product substitutes that offer sustainability advantage or cost-saving opportunity to customers. The key takeaway is that revival impact is broad, from leadership and operation to digital capabilities and customer-facing tools. Revival is helping us improve execution and better serve our customers and ultimately translate to the growth acceleration we see in Q3. That is the execution side of the equation. I will now turn to end markets where we are also seeing positive signs. Two points of context are important to note. First, our segments respond differently to end market conditions. VWR is more sensitive to market fluctuations given its significant exposure to research spending, while BMP is more heavily weighted towards production environments. Second, we have a unique perspective on the end markets. Through VWR, we serve a daily needs of scientists across more than 300,000 customer sites around the world. We see lab activity as it happens in daily order rates and in consumption of everyday consumables, which give us a clear view into the health of the scientific ecosystem. What we see is encouraging. The recovery that began in Q2 continued to build in Q3 and, importantly, has broadened. Last quarter, we highlighted a pickup in activity among large pharma and biotech customers. That momentum has continued in Q3. Our large pharma and biotech customers continue to invest in their R&D pipeline, many of which have been supplemented by business development. We also saw green shoots of recovery demand in higher education and early-stage biotech customers in North America this quarter. For some of those customers, a more positive funding environment is translated into greater research activity. We also see strength in certain industrial subsectors, such as my name. From a geographical perspective, our Americas demand is performing very well. We are also seeing good activity in Asia, which remains a smaller region for us. We continue to see the market recovery in Europe lagging that of the Americas and Asia. On average, Europe faces more challenging macro conditions, including high energy costs and government funding pressure. Any improvement in this important geography will represent a tailwind to our business. Overall, we are encouraged by the improving tone across our end market and believe that the demand environment is the most constructive we've seen in several years. Stronger end markets are providing a tailwind, and improving execution is converting this tailwind into growth. We leave this provider a foundation of sustained revenue growth, and we remain focused on execution to build on our positive momentum. Before we walk through the financials, I want to welcome Todd Garner, who joined us as a chief financial officer on September 21st. Todd brings 30 years of finance, operational, and public company leadership experience. He most recently served as CFO of ComMed. In his first weeks, Todd has been meeting our teams around the world and getting to know our operations. As Todd continues to deepen his engagement in our business, Steve Eck will walk through today's results. But first, I would like to give Todd a chance to introduce himself.

Todd? Thank you, Emmanuel, and good morning, everyone. I'm delighted to be here. When I decided to join Avantor, I was drawn to the opportunity to join a strong management team leading a high-quality, cash-generative business with trusted brands and leading positions in attractive markets. I believe my experience and other transformations throughout my career can directly support the execution of the Revival program and help drive meaningful long-term value creation for our shareholders. In these first few weeks, I've immersed myself in the business, going around the world to listen and learn, traveling with sales reps, visiting with customers and suppliers, and touring our facilities. Everything I have learned has reinforced my decision to join. I've been struck by the quality and depth of our teams, their commitment to serving customers, and the rigor with which they operate. Through Revival, we are strengthening processes and building operating disciplines that support greater consistency and predictability. I am excited to help drive Revival forward. My priorities are to continue building a deep understanding of the business and its key drivers, while bringing the transparency, financial rigor, and execution discipline that I have emphasized throughout my career. I look forward to engaging with all of you in the months ahead, including at our Investor Day on December 8th. Finally, I want to recognize Steve Eck for his leadership as our Interim Chief Financial Officer and thank him for helping make my transition seamless. I'll now hand the call over to Steve to walk you through the financials. Steve?

Thank you, Todd, and good morning, everyone. Please turn to slide 9, where I will review our consolidated financial results. In Q3, we generated $1.698 billion of revenue, which grew 5.2% on an organic basis, and it was up 4.6% on a reported basis. Adjusted EBITDA was $257 million, resulting in a margin of 15.1%, and adjusted EPS was 22 cents. We were pleased to see our adjusted EBITDA margin expand sequentially, as strong execution and expense discipline allowed us to absorb mixed and inflationary pressures while also making targeted growth investments. Free cash flow for the quarter was $156 million. Excluding cash restructuring costs, free cash flow was $169 million. Both figures were in line with expectations and underscore Avantour's strong cash generation profile. We strengthened our balance sheet in the quarter and ended the period with an adjusted net leverage ratio of 3.1 times, down from 3.3 times last quarter. Please turn to slide 10. Revenue for the VWR distribution and services segment was $1.23 billion in the third quarter, up 5.8% organically versus the prior year. The primary drivers of both sequential and year-over-year growth were higher volumes, reflecting both improving commercial execution and stronger end markets. Adjusted operating income for VWR was $119 million in Q3, representing an adjusted operating margin of 9.7%. The year-over-year and sequential declines in operating margin primarily reflected mix, inflationary pressures, and growth investments. The key takeaway from the VWR quarter is that our commercial execution continues to improve, allowing us to benefit from a stronger demand environment across many end markets. As Emmanuel mentioned earlier, VWR's growth acceleration reinforces our confidence in VWR's competitive position in the global distribution market. Let me now discuss performance in the bioscience and medtech product segment, or BMP. I'm on slide 11. In the third quarter, BMP revenue was $465 million, representing organic growth of 3.6% versus the prior year, exceeding our expectations. Processed chemicals grew high single digits in the quarter, driven by improving operations, healthy end-market conditions, and strong order performance. New still grew at a low teens rate in the quarter, as we executed effectively against the healthy order book. Fluid handling in research and specialty chemicals were down low single digits in the quarter. Last quarter, we indicated that the serum business within research and specialty chemicals would be a headwind to our growth rate due to the normalization of discrete customer ordering patterns in shipments in 2025. This factor was a headwind of roughly 150 basis points to BMP organic revenue growth in the third quarter as expected. BNP saw healthy order trends across all business units in Q3, with particular strength in new sale orders. Adjusted operating income for BNP was $123 million in the quarter, representing an adjusted operating margin of 26.6%. Margins were flat year over year despite inflationary pressures, and margins increased sequentially versus the second quarter due to increased volumes and mix. There are two key takeaways from the BNP quarter. First, BNP returned to growth as we expected, and the segment's consistency and predictability are improving. Second, we are making steady progress with our revival actions to increase operational throughput and improve customer service, and this progress is reflected in BNP's sequential growth and margin improvement versus the second quarter. Please turn to slide 12. Our ability to consistently generate strong free cash flow is a key strength of Avantor. In the third quarter, excluding cash restructuring costs, we generated $169 million of free cash flow, reflecting strong conversion of adjusted net income. Our capital allocation priorities support revival and our intention to create sustainable shareholder value over the long term. First, we are making targeted investments in the business to enhance customer service, improve execution, and drive organic growth. Second, we are focused on strengthening our balance sheet. During the quarter, we reduced our net debt balance by $173 million and ended the period with net debt of $3.235 billion. Our adjusted net leverage ratio was 3.1 times at the end of Q3, and we expect to reduce our adjusted net leverage ratio to below three times by year-end. Please turn to slide 13, where we'll discuss our increased 2026 guidance. For 2026, we have raised our organic revenue growth outlook to a range of 0.75% to 1.25%, which reflects our Q3 revenue outperformance as well as modestly higher growth assumptions for Q4. Our guidance implies Q4 organic revenue growth of 2.5% to 4.5%. Foreign exchange is expected to be a headwind of 150 basis points to reported revenue in the fourth quarter. As a result, we now expect foreign exchange to contribute approximately 75 basis points to full-year reported revenue growth. In terms of segment performance, we expect VWR will grow mid-single digits in 4Q. This is modestly above our prior expectations and assumes the growth drivers we saw in Q3 continue in the fourth quarter, while also reflecting a range of outcomes related to year-end customer spending patterns, as well as a more difficult comparison than Q3. On the BMP side, we expect year-over-year organic growth to be flat to slightly positive in Q4, reflecting approximately 400 basis points of headwind from discrete comparisons, as well as a more challenging comparison in processed chemicals. We expect BMP to have modest sequential growth from Q3 to Q4. Moving to profitability, our adjusted EBITDA margin guidance remains unchanged as improved execution and operational outperformance enable us to absorb mixed and inflationary pressures while continuing to invest for growth. We anticipate that our adjusted EBITDA margin will expand modestly from Q3 to Q4. We remain highly focused on our cost discipline, and our objective is to deliver a leveraged P&L in the future as we seek to simplify, reinvest, and grow. Moving down the income statement, in 2026, we now expect an adjusted effective tax rate between 22 and 22.5% and a weighted average diluted share count of 679 million shares. Taken together, these assumptions result in an adjusted EPS outlook that has been raised to 81 to 83 cents for the year. Finally, we have increased our free cash flow guidance. We now expect free cash flow between $525 and $550 million in 2026, reflecting our year-to-date financial performance and the strength and consistency of Avantor's cash generation profile. I'll now turn the call back to Emmanuel.

Thank you, Steve. Let me echo Todd's comments and express my appreciation for your excellent leadership as interim CFO. On slide 14, I would like to leave you with three key points from our results. First, the action we are taking as part of Revival are delivering the intended results, and our third quarter performance provide tangible evidence of that progress. We remain focused on executing our initiative to simplify, reinvest, and grow Aventor. We have returned to growth. BWI continued to execute well against the backdrop of strengthening end markets. NBMP delivered positive revenue growth in the quarter, reflecting the operational improvements the team is making. Third, we continue to generate robust free cash flow, enabling us to invest for growth while keeping us on track to reduce our adjusted net leverage ratio to below three times by year end. Our associates around the world are committed to our customers and deserve a note of thanks. We have made excellent progress so far this year and I'm excited about the future. Our investor day will take place on December 8th. At Invest Today, we will take a deeper look at our segments, our strategy, our capital allocation priorities, and how Revival is strengthening Advantos' foundation for sustainable growth. We will also provide a long-term financial framework and outline our roadmap for value creation. The return to growth we reported today is an important milestone, but we believe it is only the beginning. We look forward to sharing our vision of Aventol's future. And now operator, we are happy to take questions.

Thank you. Webcast attendees who would like to view the slide deck, please click the materials button on the left side of your screen to download the slide deck. We will now begin the question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad to raise your hand and join the queue. And if you would like to withdraw your question, again, press star 1. We kindly ask that you limit yourself to one question in one follow-up. For any additional questions, please re-queue. And your first question comes from Casey Woodring with JP Morgan. Please go ahead.

Great. Thank you for taking my questions and congrats on the quarter. I guess my first one, on the strong VWR performance here, you said half the growth was driven by commercial initiatives. Maybe can you just elaborate on that? How much of the VWR beat was driven by previously disclosed large contract wins versus some of the other commercial initiatives you have going on? Maybe just talk about the sustainability of that moving into 4Q.

Sure. Thanks, Cass. And thank you for asking the question. Look, I think we share about half-half. And when we think about the half about the action we have taken, yes, large contracts that we have renewed. We talked about the license to hunt. We talked about the fact that the team was doing very well on growing our share of wallet there. But it's not the only bucket of positive outcome we saw, you know. I think the team is doing very well with small and mid-sized customers, which is definitely a very important segment for us. And then e-commerce has also demonstrated better performance. So overall, the team is executing well and we are happy about where we stand right now. And so in that sense, when we look at the market dynamic, and the action taken by the team, I think, yeah, we believe that those results are sustainable and that we look at our price for Q4 and that implied about the same, you know, the mid-single-digit growth for VWR in Q4.

Got it. That's helpful. And then I guess as a follow-up, you know, just on the margin line, do you think you can expand margins next year? The reason I ask is just, you know, you've been clear that part of Revival has been focused on investing in areas of the business that, you know, have historically seen underinvestment. And there's also been price concessions to protect share in VWR that you've talked about. So just curious in 2027, you know, it's a year where you can normalize pricing and some of the investments in the business and start to see some of the benefits here from volume starting to flow through. Thank you.

Yeah, look, we are right in the middle for our planning and budget process. So I think we'll talk much more about our guide and what we think for 2027 in those details during our Q4 earning course in February. But let me make something very clear. We are very, very pleased with the team performance. The team on raising and executing Revival. We are definitely improving our execution. The market is getting stronger. So we will end up 26 with strong momentum, all right? And which means that, you know, month after month, my confidence level is definitely increasing for next year. So more to come, more detail in our two, four earning calls in February.

Understood. Thank you.

Your next question comes from the line of Vijay Kumar with Evercore ISI. Please go ahead.

Hey, guys. This is Daniel on for Vijay. Thank you for taking our questions. I wanted to ask on the 4Q implied guide about 3.5% organic at the midpoint. I'm curious What's embedded in the assumption that implies that the organic growth is going to moderate from 5% in 3Q? I look at the comps at the corporate level, and they seem pretty similar.

Thank you, Daniel. This is Todd. Nice to meet you. The Q4 guide really assumes the continued momentum we saw in Q3. So I'll take it business by business here in a minute. VWR just grew 5.8%, and we are forecasting mid-single-digit growth in Q4, so that consistent level in Q4 for BWR. BNP on the last quarter, on the Q2 call, Steve called out that there's a 400 basis point headwind on the BNP side in Q4 due to the timing of order patterns specifically in the electronic materials business. So with that 400 basis point headwind hitting Q4, the continued momentum that we saw in Q3, if you carry that over into Q4 with that discrete issue, we get to Q4 itself for BNP is going to look like flat to slightly positive Although organically, it's consistent with Q3. So that's what puts the Q4 revenue guide in that 2.5% to 4.5% range. But we see really good momentum in the business, as Emmanuel said. We don't see things slowing down, but there is that timing issue in Q4 on the BMP side.

Understood. Thank you. And then just my follow-up. A lot of Players in the life science tool space are starting to talk more about AI benefit. I'm curious how Avantour is thinking about the AI opportunity and what that could potentially mean for growth.

Emmanuel, I think there is definitely a consensus in the industry about AI being a tailwind for us. I think it's all about productivity in the pharma. AI is here to help. So any increase of productivity in the money spent by pharma in developing new molecules is good for us. If you have more molecules that need research, development, and manufacturing, The research part, we're serving them with VWR, and in the manufacturing part, we're serving them from BMP. So, yes, indeed, we are very excited about AI and the impact it has potentially on the business, and we see that as a tailwind like the rest of the industry.

Understood. Thank you for taking the questions.

Your next question comes from the line of Luke Sergoit with Barclays. Please go ahead.

Thanks for the question, guys. I think just starting off here, going back to the margin commentary. So the margins kind of, they stuck around this 25.5 level on the growth side. You had a big pickup there in VWR, mid-single-digit volume growth off of 2Q. So just wondering how much of this is due to the contract renewals that you had over the last... You know, like six to 12 months, and the discounting that might have gone into that versus the timing impact of the investments you've made to improve your COGS and manufacturing still waiting to flow through.

Yeah, good morning, Luke. This is Steve. Yeah, like we said in the prepared remarks, we're very pleased with another quarter of sequential EBITDA margin expansion. We did see pressure on margins coming from a couple specific places, which I'm happy to detail for you. The first is mix. This is the most significant driver in the quarter and is primarily coming from VWR. As you know, VWR is about 70% of our revenues, and it did grow faster than BNP in the quarter with its lower gross margin profile that had a meaningful impact on total company gross margins. Secondly, within VWR, why we saw Both across the segment, we saw more strength coming from product categories and customer segments that carry a lower gross margin profile. So a higher mix of VWR revenues versus BNP, as well as some mixed dynamics within VWR that affected VWR's gross margins. The next biggest factor that I'd point you to is inflationary pressures. We continue to see the impacts of inflation across our business, including from the ongoing conflict in the Middle East. I'm really pleased with the development of the EBITDA margin expansion throughout the year, and we expect to see that trend continue into the fourth quarter. So, I appreciate your question.

Let me jump in here, and I'd like to maybe step back for a few minutes. One year ago, when we launched Revival, we really focused on the five pillars, but talent, go-to-market, Supply Chain Service Level, with a very, very clear goal in mind, return eventual to growth. And today we are ahead of expectations. Now, I've shared that in the past, we push a mindset, a culture internally through the organization of simplifying to reinvest for growth, which means self-funding. So the team is working to generate efficiency, productivity, to form investment with a clear mindset, which is profitable goals and constant operating leverage. So revival is not done. We will and we are continuing to work really hard to position Avantor to sustainable growth, expand margin, and create shareholder value. So we are right in the middle of that.

All right, I guess just a quick follow-up on that. You talked about kind of these investments you made in a couple of facilities. Any kind of color, because you're rolling them out all wholesale. So just talk about kind of as we think about the rest of the distribution and manufacturing organization, like what are some early wins or improvements you've seen on those couple of facilities as we think about rolling those forward through 27, 28, and 29?

Sure, I think, look, I think it's, you know, I think the unusual condition of really mask what the BMP underlying strength and the performance of the TM is, okay. We just talked about this on the Q4 guide. We see really good progress in the implementation of the SNOP. Mary Blenn, our COO at Drive, many ties in to make sure that the plants are producing more. I shared some examples this quarter, last quarter as well. Ludovic is really pushing the customer centricity across the team and just two KPIs for you.

For the third quarter in a row,

Our book to build in the BMP is positive. And if we just look at the process chemicals, year-to-date, high single-digit order, and high single-digit sales performance. So we really see that now we have really a stronger alignment. It's down to every effort that the team is doing on the revival pillar of BMP. Commercial side, go-to-market, but also supply chain service level, which is definitely improving.

Your next question comes from the line of Doug Schenkel with UBS. Please go ahead.

Good morning, guys, and thank you for taking my questions. Actually, I know this has come up a lot, but I kind of want to take a different angle on margins and also just Q4 guidance, just as follow-ups to the previous questions. So the first one, it actually looks to me as I play with the model that VWR margin could be down, you know, under 50 basis points year over year in the fourth quarter or something in That would actually be a huge step in the right direction, given what you've had to manage through in terms of strategic price actions and the inflationary pressures that you've faced, especially in that business. I guess my question is, am I playing with the model right? And then I think the follow-up just to some of the other questions is, as you guided Q4, it seems like you... essentially maintained what you were expecting for Q4 and updated guidance largely for the magnitude of the Q3B. I didn't hear anything that suggested there were timing dynamics. It really sounds like pacing is a function of the year-over-year comps. I just want to make sure I have that right as well.

Sure, Doug. Nice to meet you. I will start by saying, while we don't guide specific margins by the segments, we don't see deterioration either. So we do expect margins to expand modestly. I would put the word modestly on it between Q3 and Q4. But we do expect margin expansion. So there might be a little model tweak in there. As Emmanuel said, we are right in the middle of revival with the focus on the long term of developing sustainable, predictable, positive profitability and growth. So we're right in the middle of that. Q3 was a really good sign of progress. We think Q4 will be another. And so that's where we are now, and we can help you a little more with the model offline.

That sounds good. If I could ask one more.

The last couple of quarters, you talked about book to bill of over one.

I think you talked about 1.1 times for BMP, a couple of quarters. You talked about solid order trends this quarter. You've talked about lead times of 30 to 90 days for many products in the portfolio. Just keeping in mind the momentum seemingly that you have heading into your end there and thinking about the order book, is that conversion period still the right way to think about things, 30 to 90 days? Or are there instances where things are stretching a little bit? Thank you.

So three to six months depends on the product line is the right way to look at it. No necessary change on our lead times. The team is really working to make sure that we continue through the S&OP to have a really good say-do ratio with the customers. So look, as I said, the unusual con this year, I think, is masking the BMP underlying performance. But You know, we look at the business also on the quarter after quarter, and we have sequential increase, you know, all the year so far, and we're looking at a modest sequential increase as well in Q4. So I really like the BNP direction of travel right now. Okay. Thank you, guys, and nice to meet you.

Talk soon. Thank you.

Your next question comes from the line of Tycho Peterson with Jefferies. Please go ahead.

Hey, thanks. I appreciate you've had a number of questions on margins. I want to maybe just ask on OPEX, you know, higher STNA, you know, you call that that as an offset to profitability. Just talk a little bit about where those investments are going and when you expect to generate a return from some of that.

Good morning, Tycho. This is Steve. Actually, we're pleased with the performance from an adjusted SG&A perspective this quarter. It's down modestly from the first half of 2026 levels, which I think is noteworthy because we're in the setting of significant investment in the business for our future growth. We're in the midst of revival, as Emmanuel said, but we're still displaying that cost discipline and capitalizing on opportunities to drive productivity. So we think that's heading in the right direction and is part of that story of gradual, sequential EBITDA margin expansion.

And maybe, Taiko, let me give you a few examples of where we want to continue to invest. I mean, definitely AI. We share a couple of tools during our opening remarks, which I think is important. We'll continue to double down on this. Supply chain, definitely, there's still a lot to do there, and Mary is taking the lead. We also want to double down on our e-commerce platform, right? We really see some good performers there. We are happy with where we are. We know that we can do more. So those give you a couple of examples of where we want to continue to invest.

Okay. And then can you talk more about the strength in new skill, you know, upload teams, strong orders, I guess? How durable is the demand you're seeing now, or are there kind of any one-time items in there?

Yeah, no, look, New Seal is an excellent business. It's a very strong brand, great customer relationship. The quality is outstanding and phenomenal reputation. Again, we had some unusual order and shipping patterns in the past, especially on the first half, but Q3, we saw double digits revenue growth and order is strong as well. It's turning to revenue. The team is executing well. I think you may have seen there are also some of our customers that have publicly shared the fact that we have renewed contract, Elapse, which is an important customer of us. We have a very long relationship, more than 10 years. and we renewed the contract up to 2031. And so we're really happy of where we are. So, you know, QSPOR is looking good as well for New Zealand.

Okay. And if I could ask one last quick one, is there anything back to margins structurally that would prevent PWR to get back to the historical 12 to 13% range longer term? Understanding, obviously, in the near term, you have inflationary pressures and other factors, but Anything structurally that would prevent you from getting back to the historical range?

This is a great question. I think why don't we talk about that in Investors Day. We'll give you a framework for the future.

Okay, fair enough. Thanks.

Your next question comes from the line of Eve Bernstein with Bernstein. Please go ahead.

Great. Good morning. Congrats on the quarter, and thanks so much for taking the question. You said you saw stronger end markets in America than Asia, but Europe is still lagging because of more challenging macro conditions. Can you unpack this a little bit? How much of that is weakness due to academic and government specifically versus other end markets? I'd argue that there probably isn't as good a line of sight to macro improvement in Europe and the timing to expect that versus what we had on the Americas a few quarters ago. Is that fair to say? What do you think it takes to get the end market going? And then finally, VWR has a real position of strength in Europe versus the largest global distributor competitor. Can you imagine this exposure? being a drag on growth in the mid-term.

No, that's a great question. Look, Europe is a very important market for us. As you said, we have a leadership position there. Look, the macro environment is we're following it closely. There's tight stand on budget in academy. There's also some industrial suffering, right? Germany, I think we highlight that. And I think what is important is the recovery is really yet to be seen. What I think is important is that in our guide, we are looking at a static wall. So any recovery will give us a tailwind. So I think this is where we stand. It's difficult to anticipate. Therefore, we take the static wall and say, okay, we'll put that in the guide.

Okay, great, thank you. And then e-commerce has been a big focus for you, and just this week you appointed a new chief information officer. Can you talk a little bit about, in e-commerce specifically, what sort of quantitative impacts of the improvements that you've been making have they been having this year? What do you expect for next year? And then for your digital transformation more broadly, which you said is still in early stages, what's the next set of digital priorities and how are you viewing investment as a priority for excess capital?

Sure. Look, it is a very important tool because it is a tool that serves very, very large, broad-based customers, and we want to make sure that the interface with those customers is the best we can. So the first really important step for us was to relaunch VWR.com, which we did. at the end of Q1, early Q2, and we had really good feedback on this. This is just the beginning. What we really want is to bring a tool which is extremely easy to deal with, which provides much more information, which is much more modern in a sense. So I think this is where we are continuing to invest in this. And we have a huge amount of KPI, you know. Thank you very much. I think, again, we want to give you more information during Investors Day, so that will be a deep dive area for us at the day of December 8th.

Great. Thanks a lot.

Your next question comes from the line of Justin Bowers with Deutsche Bank. Please go ahead.

Hi. Good morning, and thank you for taking the question. So can you refresh us on the refile? The Revival Program, the various phases and the duration of the program as you see it now?

Sure. Look, it's a one-year program now, but as I said, we're just in the middle of it. I'm super happy the leadership team is now completed. All right, we started joining us a couple of weeks ago. Mikey started next week. Very exciting, built a very strong team, very diverse, with great life science and med tech experience and expertise. So this is really, really good. Remember, we also complemented the leadership team with many people below. I think we talked about 65% of the entire N-2 being refreshed. We are operating in a much greater discipline right now. The culture is a stronger accountability. We are much more customer-centric. We have simplified a lot. But again, we're not done, right? We simplified, for example, the onboarding process for customers. We talked about that last quarter. Our production level, as we talked about it, especially in the BMP, production and service level are definitely improving. But I think more importantly is our say-do ratio. We spoke about that at the very beginning when I joined. We want to regain our credibility and the trust of all the stakeholders. In April, we said that VWR will return to growth. In our last call, we said that BNP will return to growth. It's very important that we continue to build on that credibility, to continue to build the trust with the shareholder, including investors. It is extremely important for us. But if we look at the overall where we are, we're really happy, but we are absolutely not satisfied. And so we're in the middle of it. We will continue to amplify simplification of processes, to amplify... and our infrastructure systems, for example, especially as Mikey is coming in. I want to really continue to strengthen our culture of execution and really, as I said earlier, just really position the company for sustainable growth. And so we're not done.

Thank you. And you asked my question on leadership. So the one follow-up would be just on the investments that you're making on the BNP side. I know you called some of those out earlier in the year, just trying to understand where we are in that process. And, you know, it does sound like the sales and order book is filling up nicely and lead times are getting back to normal. So any additional color there would be helpful.

Yeah, sure. We'll continue. Mary has put an overall supply chain strategy, which, of course, is a long-term strategy. When we develop those manufacturing strategies, we do not look at next quarter. We look at the next 10 years and what could be the demand. And also, we engage with our customers. This is an industry where security of supply is very important. And we have the strength to be able to manufacture in Asia, in Europe, and in the U.S. So this is about this. It's about making sure that we make the product at the right place, closer to customers for sustainability, but also for security of supply and redundancy. So that's where we are right now. We are finalizing those plans, and I think this is another thing that we can talk at Investors Day.

Thank you.

Your next question comes from the line of Dan Arias with TISL. Your line is open.

Good morning, guys. Thank you. Todd, where will pricing come in for the year? What will the net effect be for 2026?

Good morning. This is Steve. I'm happy to take that one. You know, we're very pleased with the execution of our pricing strategy this year. To give you some perspective, last year we saw a significantly greater cost coming from suppliers and having to absorb that than we were able to necessarily pass on to customers. But through better governance, implementation of tools, these kinds of things, stronger commercial operations execution, we've been able to recover much better this year than last. So it's had a significantly... You know, noteworthy impact on our margins.

Yeah, I can jump in as well here. You know, our number one objective is pricing to offset inflation right now. Okay, and this is very important. I think we've made a lot of progress. If we look at the different metrics, like price over cost, we have improved. We definitely have better tools. I think I spoke last quarter, the fact that we have a higher Christophe Couturier, Some of those very large customers' contracts give us the opportunity to take the price up at the end of the year for the following years, and that's what we're really working hard right now. So, yeah, I imagine some have seen a bit of a headwind on the pricing lag, but I think what is important is very good execution, costly