10-KPeriod: FY2023

DANAHER CORP /DE/ Annual Report, Year Ended Dec 31, 2023

Filed February 21, 2024For Securities:DHR

Summary

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 billion, 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.

Financial Highlights

54 data points
Beta

Revenue

$23.89B

58.7% Gross Margin

Net Income

$4.74B

19.9% Net Margin

EPS (Diluted)

$6.38

Total Assets

$84.49B

Cash & Equivalents

$5.86B

Free Cash Flow

$5.78B

Financial Statements
Beta
Revenue$23.89B
Cost of Revenue$9.86B
Gross Profit$14.03B
R&D Expenses$1.50B
SG&A Expenses$7.33B
Operating Income$5.20B
Interest Expense$286.00M
Net Income$4.74B
EPS (Basic)$6.44
EPS (Diluted)$6.38
Shares Outstanding (Basic)736.50M
Shares Outstanding (Diluted)743.10M

Key Highlights

  • 1Total 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.
  • 2Net 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.
  • 3The company completed the acquisition of Abcam plc for $5.6 billion, a strategic move to bolster its Life Sciences segment, particularly in protein consumables.
  • 4Danaher completed the separation of its Environmental & Applied Solutions business through a spin-off of Veralto Corporation in September 2023.
  • 5The 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.
  • 6The 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.
  • 7The 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.
  • 8Danaher maintained a strong liquidity position with approximately $5.9 billion in cash and cash equivalents as of December 31, 2023.

Frequently Asked Questions

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.

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.

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.

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.