01—Abstract
Summary
Summary of the 10-K filed February 21, 2024. Cited figures are marked; the original filing is the authoritative source.
Danaher Corporation (DHR) reported a decrease in total sales and net earnings for the fiscal year ended December 31, 2023, compared to the previous year.
This decline was primarily driven by a significant reduction in demand for COVID-19 related products and a general slowdown in certain end markets. The company's core sales also saw a notable decrease. Despite the overall revenue decline, Danaher continued to execute its strategic priorities, including the significant acquisition of Abcam plc for $5.6 billiona, strengthening its Life Sciences segment.
The company also completed the separation of its former Environmental & Applied Solutions business into Veralto Corporation. Danaher's diversified business segments—Biotechnology, Life Sciences, and Diagnostics—face varying market dynamics, with Biotechnology experiencing the most pronounced sales decrease due to the normalization of COVID-19 related demand. The company remains focused on innovation, operational efficiency through its Danaher Business System (DBS), and strategic capital allocation for long-term shareholder value creation.
02—Key points
Key Highlights
- Total sales decreased by 10.5% to $23.89 billion in 2023, with core sales declining by 10.0%, largely due to a significant drop in COVID-19 related product demand.
- Net earnings attributable to common stockholders decreased to $4.74 billion ($6.38 per diluted share) in 2023, down from $7.10 billion ($9.66 per diluted share) in 2022.
- The company completed the acquisition of Abcam plc for $5.6 billion, a strategic move to bolster its Life Sciences segment, particularly in protein consumables.
- Danaher completed the separation of its Environmental & Applied Solutions business through a spin-off of Veralto Corporation in September 2023.
- The Biotechnology segment experienced the most significant sales decline at 18.0% in 2023, primarily driven by the decrease in COVID-19 related product demand and a general slowdown in bioprocessing.
- The Life Sciences segment saw a modest sales increase of 1.5%, driven by acquisitions and demand in research and applied markets, although operating profit margins declined.
- The Diagnostics segment's sales decreased by 11.5%, mainly due to the drop in COVID-19 related molecular diagnostic tests, though clinical diagnostics businesses showed growth.
- Danaher maintained a strong liquidity position with approximately $5.9 billion in cash and cash equivalents as of December 31, 2023.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2023, Danaher Corp kept $0.20.
- Revenue$23.89B100.0%
- Cost of revenue−$9.86B41.3%
- Gross profit$14.03B58.7%
- Operating costs−$8.83B37.0%
- Operating income$5.20B21.8%
- Interest, other & tax−$459.0M1.9%
- Net income$4.74B19.9%
Where FY2023 revenue went
$23.89B- Cost of revenue: $9.86B, 41% of revenue
- SG&A: $7.33B, 31% of revenue
- Net income: $4.74B, 20% of revenue
- R&D: $1.50B, 6.3% of revenue
- Interest, other & tax: $459.0M, 1.9% of revenue
Kept 20% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2023filed February 21, 2024Financial Statements
FY2023 against FY2022
| Line item | FY2023FY2022 | Change |
|---|---|---|
| Revenue | $23.89B$26.64B | −10.3% |
| Cost of Revenue | $9.86B$10.46B | −5.7% |
| Gross Profit | $14.03B$16.19B | −13.3% |
| R&D Expenses | $1.50B$1.53B | −1.6% |
| SG&A Expenses | $7.33B$7.12B | +2.9% |
| Operating Income | $5.20B$7.54B | −31.0% |
| Interest Expense | $286.00M$204.00M | +40.2% |
| Net Income | $4.74B$7.10B | −33.2% |
| EPS (Basic) | $6.44$9.80 | −34.3% |
| EPS (Diluted) | $6.38$9.66 | −34.0% |
| Shares Outstanding (Basic) | 736.50M725.10M | +1.6% |
| Shares Outstanding (Diluted) | 743.10M737.10M | +0.8% |
05—Questions
Frequently Asked Questions
What were the main drivers of Danaher's financial performance in 2023?
The primary driver for the decrease in sales and earnings in 2023 was the significant decline in demand for COVID-19 related products as pandemic-related needs normalized. Additionally, a slowdown in demand within certain Biotechnology and Diagnostics sub-segments, as well as broader economic conditions impacting customer spending, contributed to the weaker performance compared to 2022.
How did the Abcam acquisition impact Danaher's strategy and financial results?
The acquisition of Abcam plc for $5.6 billion significantly strengthens Danaher's Life Sciences segment, enhancing its position in the proteomics market with Abcam's specialized protein consumables. While the acquisition contributes to future growth opportunities, it also incurred acquisition-related costs and amortized intangible assets, which had a dilutive effect on operating profit margins in the short term.
What is the outlook for Danaher's segments in 2024, particularly concerning the decline in COVID-19 related sales?
Danaher anticipates that the impact of reduced demand and inventory normalizations, particularly in the Biotechnology segment's bioprocessing business, will continue into the first half of 2024, with a gradual improvement expected by the end of the year. The company is focused on offsetting these headwinds through growth in other product lines and segments, leveraging its Danaher Business System (DBS) for continuous improvement and cost management.
How did the spin-off of Veralto Corporation affect the company's financial reporting?
The separation of Danaher's former Environmental & Applied Solutions business into Veralto Corporation, completed in September 2023, resulted in Veralto being reported as a discontinued operation for all periods presented in the financial statements. This means Veralto's results are excluded from Danaher's continuing operations, and associated separation costs were recognized accordingly.
06—Continue