What changed in this filing

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Item 1A. Risk Factors

2025-02-20 compared with 2024-02-22 · 40 added, 40 removed, 248 unchanged (24% of the section changed)

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Industry and Economic Risks

Our growth would suffer if the markets into which we sell our products and services decline, do not grow as anticipated or experience cyclicality.

Our growth would be impacted if the markets into which we sell our products and services decline, do not grow as anticipated or experience cyclicality.

Our growth depends in part on the growth of the markets which we serve.

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If the global economy and financial markets, or economic conditions in Europe, the U.S.

or other key markets, continue to be unstable, they could adversely affect the business, results of operations and financial condition of the company and its customers, distributors, and suppliers, having the effect of:

or other key markets, are unstable, that could adversely affect the business, results of operations and financial condition of the company and its customers, distributors, and suppliers, having the effect of:

• reducing demand for some of our products;

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• creating longer sales cycles, and greater difficulty in collecting sales proceeds and slower adoption of new technologies.

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Economic, political, foreign currency and other risks associated with international sales and operations could adversely affect our results of operations.

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Accordingly, our future results could be harmed by a variety of factors, including:

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• interruption to transportation flows for delivery of parts to us and finished goods to our customers;

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An impasse in federal government budget decisions could lead to substantial delays or reductions in federal spending.

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We are subject to risks associated with public health emergencies, pandemics, epidemics, or other health outbreaks.

Our global operations expose us to risks associated with public health emergencies, epidemics, pandemics and other health outbreaks, including the COVID-19 pandemic.

COVID-19 had an adverse impact on certain of our operations, supply chains and distribution systems, and we may experience unpredictable reductions in supply and demand for certain of our products and services.

National, state and local governments have implemented and may continue to implement safety precautions, including quarantines, border closures, increased border controls, travel restrictions, shelter in place orders and shutdowns and other measures.

Our global operations expose us to risks associated with public health emergencies, epidemics, pandemics and other health outbreaks.

These events have had an adverse impact on certain of our operations, supply chains and distribution systems in the past, and may again in the future, and we may experience unpredictable reductions in supply and demand for certain of our products and services.

National, state and local governments may implement safety precautions, including quarantines, border closures, increased border controls, travel restrictions, shelter in place orders and shutdowns and other measures.

These measures may disrupt normal business operations and may have significant negative impacts on businesses and financial markets worldwide.

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The ability of our employees to work may be significantly impacted by future epidemics and pandemics.

In addition, the duration and extent of future revenues from sales of products related to the COVID-19 response are uncertain and dependent primarily on customer testing demand as well as therapy and vaccine demand.

Business Risks

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We sell our products in several industries that are characterized by rapid and significant technological changes, frequent new product and service introductions and enhancements and evolving industry standards.

Competitive factors include technological innovation, price, service and delivery, breadth of product line, customer support, e-business capabilities and the ability to meet the special requirements of customers.

Competitive factors include technological innovation, including the increased adoption and use of artificial intelligence, price, service and delivery, breadth of product line, customer support, e-business capabilities and the ability to meet the special requirements of customers.

Our competitors may adapt more quickly to new technologies and changes in customers’ requirements than we can.

Without the timely introduction of new products, services and enhancements, our products and services will likely become technologically obsolete over time, in which case our revenues and operating results would suffer.

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Many of our existing products and those under development are technologically innovative and require significant planning, design, development and testing at the technological, safety, quality, product and manufacturing-process levels.

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Because we compete directly with certain of our larger customers and product suppliers, our results of operations could be adversely affected in the short term if these customers or suppliers abruptly discontinue or significantly modify their relationship with us.

Our largest customer in the laboratory products business is also a significant competitor.

Our business may be harmed in the short term if our competitive relationship in the marketplace with certain of our large customers results in a discontinuation of their purchases from us.

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Our business could be adversely affected in the short term if any of our large third-party suppliers abruptly discontinues selling products to us.

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Our inability to complete any pending acquisitions or to successfully integrate any new or previous acquisitions could have a material adverse effect on our business.

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If we are not able to realize the value of the goodwill and intangible assets, we may be required to incur material charges relating to the impairment of those assets.

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Operational Risks

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If these or other suppliers encounter financial, operating or other difficulties, or if our relationship with them changes, we might not be able to quickly establish or qualify replacement sources of supply.

The supply chains for our businesses could also be disrupted by supplier capacity constraints, bankruptcy or exiting of the business for other reasons, decreased availability or increased cost of key raw materials or commodities, such as energy, and external events such as global economic downturns and macroeconomic trends, natural disasters, pandemic health issues such as COVID-19, war, terrorist actions, governmental actions and legislative or regulatory changes.

The supply chains for our businesses could also be disrupted by supplier capacity constraints, bankruptcy or exiting of the business for other reasons, decreased availability or increased cost of key raw materials or commodities, such as energy, and external events such as global economic downturns and macroeconomic trends, sanctions and trade restrictions, natural disasters, pandemic health issues, geopolitical developments, war, terrorist actions, governmental actions and legislative or regulatory changes.

Any of these factors could result in production interruptions, delays, extended lead times and inefficiencies.

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Although most of our systems leverage data backups, our disaster recovery planning is not sufficient for every eventuality.

In addition, our customers rely upon our products (i.e.

instruments, etc.) within their environments, which may be at risk of compromise.

In addition, our customers rely upon our products (i.e., instruments, etc.) within their environments, which may be at risk of compromise.

Risks affecting our products may include those associated with remote access solutions, system vulnerabilities, or delay of security updates, which may require customers to take action such as network isolation, password change, or manual update.

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Cyber-attacks, disruptions or other incidents described above, or breaches of security in our networks, in our customers’ or third-party providers’ networks, in third-party products we use, or in cloud-based services provided to us, regardless of whether the breach is attributable to a vulnerability in our products or services, a privileged account compromise, or a failure to maintain the digital security infrastructure or security tools that protect the integrity of our products, services, and systems and data, could materially interrupt our operations or our customer’s operations, delay production and shipments, impact quality, result in theft of our and our customers’ intellectual property and trade secrets, damage our reputation or key relationships, result in defective products or services, legal claims and proceedings, liability and penalties under privacy laws and increased cost for security and remediation, in each case resulting in an adverse effect on our business and financial results.

A violation of data privacy laws could adversely harm our operating results and financial condition, damage our reputation or otherwise materially harm our business.

If we are unable to maintain reliable information technology systems and appropriate controls with respect to global data privacy and security requirements, we may suffer regulatory consequences in addition to business consequences.

As a global organization, we are subject to data privacy and security laws, regulations, and customer-imposed controls in numerous jurisdictions as a result of producing, collecting, processing, storing and transmitting confidential, personal and/or sensitive data in the course of our business.

For example, in the U.S., individual states regulate data breach and security requirements and multiple governmental bodies assert authority over aspects of the protection of personal privacy.

European laws require us to have an approved legal mechanism to transfer personal data out of Europe, and the EU General Data Protection Regulation imposes significantly stricter requirements in how we collect and process personal data.

Several countries, such as China, have passed laws that require personal data relating to their citizens to be maintained on local servers and impose additional data transfer restrictions.

Government enforcement actions can be costly and interrupt the regular operation of our business, and data breaches or violations of data privacy laws can result in fines, reputational damage and civil lawsuits, any of which may adversely affect our business, reputation and financial statements.

Our success is largely dependent upon our ability to attract and retain a highly qualified workforce, comprised of scientific, technical, clinical, and management talent.

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We cannot ensure that we will be able to hire or retain the personnel necessary for our operations or that the departure of any personnel will not have a material impact on our financial condition and results of operations.

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We may incur unexpected costs from increases in fuel and raw material prices, which could reduce our earnings and cash flows.

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Any of these disruptions or other events outside of our control, such as strikes or other labor unrest, could have an adverse effect on our results of operations.

In addition, if any of our facilities, including our manufacturing or warehouse facilities, or the facilities of our suppliers, third-party service providers, or customers, is affected by natural disasters, such as earthquakes, tsunamis, power shortages or outages, fires, floods or monsoons, public health crises, such as pandemics and epidemics, political crises, such as terrorism, war, political instability or other conflict, or other events

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outside of our control, such as trade protectionism, strikes or other labor unrest, our results of operations could be adversely affected.

Moreover, these types of events could negatively impact customer spending in the impacted regions or depending upon the severity, globally, which could also adversely impact our operating results.

Increasing attention to environmental, social and governance matters may impact our business, financial results, stock price or reputation.

We face increasing scrutiny from stakeholders related to our environmental, social and governance (ESG) practices and disclosures, including practices and disclosures related to climate change, diversity and inclusion and governance standards.

Investor advocacy groups, certain institutional investors, lenders, investment funds and other influential investors are also increasingly focused on ESG practices and disclosures and in recent years have placed increasing importance on the implications and social cost of their investments.

In addition, government organizations are enhancing or advancing legal and regulatory requirements specific to ESG matters.

The heightened stakeholder focus on ESG issues related to our business requires the continuous monitoring of various and evolving laws, regulations, standards and expectations and the associated reporting requirements.

We face increasing scrutiny from stakeholders related to our environmental, social and governance practices and disclosures.

Investor advocacy groups, certain institutional investors, lenders, investment funds and other influential investors are also increasingly focused on such practices and related disclosures and in recent years have placed increasing importance on the implications and social cost of their investments.

In addition, government organizations are enhancing or advancing legal and regulatory requirements specific to these matters.

The heightened stakeholder focus on sustainability issues related to our business requires the continuous monitoring of various and evolving laws, regulations, standards and expectations and the associated reporting requirements.

A failure to adequately meet evolving stakeholder expectations may result in noncompliance, the loss of business, reputational impacts, diluted market valuation, an inability to attract customers and an inability to attract and retain top talent.

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Changes in the U.S.

Food and Drug Administration’s (the FDA) regulation of the drug discovery and development process could have an adverse effect on the demand for these products, and increased FDA regulation of laboratory-developed tests could delay and add to the cost of commercialization of these products, as well as subject us to additional regulatory controls.

Food and Drug Administration’s (the FDA) regulation of the drug discovery and development process could have an adverse effect on the demand for these products, and increased FDA regulation of

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laboratory-developed tests could delay and add to the cost of commercialization of these products, as well as subject us to additional regulatory controls.

We are subject to laws and regulations governing government contracts, and failure to address these laws and regulations or comply with government contracts could harm our business by leading to a reduction in revenues associated with these customers.

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Any such failure could, among other things, lead to increased costs, lost revenues, reimbursement to customers for lost drug product, registered intermediates, registered starting materials, and active pharmaceutical ingredients, other customer claims, damage to and possibly termination of existing customer relationships, time and expense spent investigating the cause and, depending on the cause, similar losses with respect to other batches or products.

Production problems in our drug and biologic manufacturing operations could be particularly

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significant because the cost of raw materials for such manufacturing is often high.

Production problems in our drug and biologic manufacturing operations could be particularly significant because the cost of raw materials for such manufacturing is often high.

If problems in preparation or manufacture of a product or failures to meet required quality standards for that product are not discovered before such product is released to the market, we may be subject to adverse regulatory actions, including product recalls, product seizures, injunctions to halt manufacture and distribution, restrictions on our operations, civil sanctions, including monetary sanctions, and criminal actions.

In addition, such problems or failures could subject us to litigation claims, including claims from our customers for reimbursement for the cost of lost or damaged active pharmaceutical ingredients, the cost of which could be significant.

A violation of data privacy or data protection laws could adversely harm our operating results and financial condition, damage our reputation or otherwise materially harm our business.

As a global organization, we are subject to data privacy and data protection laws, rules, and customer-imposed controls as a result of producing, collecting, processing, storing and transmitting confidential, personal and/or sensitive data in the course of our business.

A significant number of countries where we operate have enacted privacy or data protection laws, rules and regulations, the majority of which have extraterritorial scope, creating significant compliance challenges as we seek to maintain our global reach, with significant penalties for non-compliance, based on total worldwide annual revenue from the preceding financial year.

In some cases, there are restrictions on the transfer of personal data outside the home country.

More recently, privacy and data protection regulators are paying special attention to emerging issues linked to new digital technologies, such as the use of artificial intelligence, biometrics, and surveillance technologies, which pose unique challenges to existing privacy and data protection paradigms.

For example, in the U.S., individual states regulate data breach and security requirements, and multiple governmental bodies assert authority over aspects of the protection of personal privacy.

Several countries, such as China, have passed laws that require personal data relating to their citizens to be maintained on local servers and impose additional data transfer restrictions.

Any actual or perceived noncompliance with these laws, rules and regulations, our internal policies and procedures or our contracts governing the processing of personal data could result in significant consequences, including, among other things, business interruption, sanctions and significant pecuniary fines, regulatory inquiries and investigations, adverse publicity, loss of competitive advantage and customer trust, as well as privacy litigation and civil lawsuits with damages, any of which may adversely affect our business, reputation and financial statements.

The importance of privacy and data protection laws, rules and regulations for our industry specifically is constantly growing, as personal data is an integral part of doing business in our sectors, and the legal standards are evolving and becoming more complex worldwide.

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We are subject to product and other liability risks for which we may not have adequate insurance coverage.

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Any noncompliance by us with applicable laws and regulations or the failure to maintain, renew or obtain necessary permits and licenses could result in criminal, civil and administrative penalties and could have an adverse effect on our results of operations.

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Our reputation, ability to do business and financial statements may be impaired by improper conduct by any of our employees, agents, business partners or other third parties.

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Foreign Corrupt Practices Act, the U.K.

Bribery Act 2010 and similar anti-bribery laws in other jurisdictions generally prohibit companies and their intermediaries from making improper payments to government officials for the purpose of obtaining or retaining business, and we operate in many parts of the world that have experienced governmental corruption to some degree.

Bribery Act 2010 and similar anti-bribery laws in other jurisdictions generally prohibit companies and their intermediaries from making improper payments to government

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officials for the purpose of obtaining or retaining business, and we operate in many parts of the world that have experienced governmental corruption to some degree.

Any such improper actions or allegations of such acts could damage our reputation and subject us to civil or criminal investigations in the U.S.

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In preparing our financial statements, we record the amount of tax that is payable in each of the countries, states and other jurisdictions in which we operate.

Our future effective tax rate, however, may be lower or higher than experienced in the past due to numerous factors, including a change in the mix of our profitability from country to country, changes in accounting for income taxes, the results of examinations and audits of

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our tax filings and recently enacted and future changes in tax laws in jurisdictions in which we operate.

Any of these factors could cause us to experience an effective tax rate significantly different from previous periods or our current expectations, which could have an adverse effect on our business, results of operations and cash flows.

In December 2021, the Organization for Economic Cooperation and Development (“OECD”) published a proposal for the establishment of a global minimum tax rate of 15% (the “Pillar Two rule”).

The OECD has recommended that the Pillar Two rule become effective for fiscal years beginning after January 1, 2024.

To date, member states are in various stages of implementation and the OECD continues to refine technical guidance.

While it is uncertain whether the United States will enact legislation to adopt the Pillar Two rule, numerous countries have enacted legislation, or have indicated their intent to adopt legislation, to implement certain aspects of the Pillar Two rules effective January 1, 2024, with general implementation of the remaining global minimum tax rules by January 1, 2025.

The OECD and implementing countries are expected to continue

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to make further revisions to their legislation and release additional guidance.

We are closely monitoring developments of the Pillar Two rule and are currently evaluating the potential impacts in each of the countries in which we operate;

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors