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Earnings Call Analysis
Q4-2023 Analysis
Biotage AB
Biotage's Q4 report depicted a successful end to the year, characterized by impressive results particularly from the Astrea acquisition. The company highlighted its transformation into a global leader in separation technology, catering to a wide spectrum of chemical entities ranging from small molecules to biologics. This focus is part of Biotage's strategy to communicate more clearly its value proposition to investors, employees, and stakeholders. With Torben Jørgensen making a return as the CEO and Andrew Kellett confirmed as the permanent CFO, the management team is set to carry forward this momentum.
A significant part of Biotage's strong Q4 performance was the notable increase in recurring revenue, which hit 76% for the quarter and 67% for the year, surpassing their target of a 60-40 split between recurring and non-recurring revenue streams. This shift represents a strategic move towards more stable, predictable income, reflecting the company's resilience and adaptability in a diversifying market.
Astrea has been pivotal to Biotage's successful year, contributing substantially to the Q4 revenue with SEK 273 million, at a gross margin of 61%. For the full year, Astrea's revenue increased by 64% to SEK 502 million, evidencing a compound annual growth rate of 75% since 2021. While acknowledging irregular quarterly revenue patterns due to ongoing investments in commercial and operational infrastructure, the company’s management is optimistic that Astrea’s growth will lead to increased profitability due to its scalability. Astrea's newly introduced fiber technology, AstreAdept, has also started to show a promising market response since its launch in late September 2023.
Despite challenging market conditions, including the aftereffects of COVID-19 and caution around instrument purchases, Biotage delivered a robust set of annual results, with over SEK 1.8 billion in revenue and over SEK 0.5 billion in adjusted EBITDA. The company has experienced strong organic growth in various sectors, particularly in Biologics & Advanced Therapeutics, where revenue surged by 32% in Q4. With adjusted EBITDA reaching SEK 194 million in Q4, a 30% margin, and a full-year total of SEK 518 million, a 28% margin reflecting a 12% increase over the previous year, Biotage has cemented its financial resilience and growth trajectory.
Welcome to Biotage Q4 2023 Report Presentation. [Operator Instructions]
Now I will hand the conference over to CEO, Torben Jørgensen; and CFO, Andrew Kellett. Please go ahead.
Well, welcome to this webinar, where we are going to present our Q4 results and also a little bit on the full year. And as you know, there is the disclaimer there, and I don't want to say any more of that.
What I want to -- like to start with is a little bit on what we are trying to simplify the message, what kind of company we are. And we are redefining that we are the Global Go-To Separations company, to make it more simple, and utilizing all of the modalities that we now have in our portfolio, going from small molecules to biologics. And it makes it much, much clearer, seeing from our point of view, to put the message right out to people like yourself, and also to our employees and to our stakeholders in general terms.
And saying that, I just want to say it has been a fantastic time to come back. Some of you know that I have been here before and are now just, for the time being, getting in as CEO. And going to more of the executive summary before I leave the word to Andrew Kellett that, as you have also seen, is now a permanent CFO and not just an interim CFO.
As you can see by the numbers, we have had a fantastic end of the year and a Q4, with, of course, fantastic results out of Astrea. We can say now that we really are in a transformation of delivering both very strong revenue and adjusted profits. I also think you can see that we are having a more balanced focus on the defendable markets. Some of you know that since I was here last time, I was aiming at getting to 60-40 on recurring revenue. And you can see now in Q4, that we have reached 76%; and for the year, 67%. So first time in a full year that we have overshoot our 60-40 rule, and hopefully that will continue going forward.
There's no doubt also you can see that with the acquisition of Astrea, we wanted to get into other modalities, specifically in therapeutics. And going from, let's say, 4% of our top line in '22, it is now up to 1/4 of the whole business, which gives us also a strong belief in going forward with respect to keeping the recurring revenue at a very, very high level going forward.
So I don't think it's necessary to speak that much about the numbers right now. That can maybe come when we have the question session. And by that, I just want to leave the word to our CFO, Andrew.
Thank you, Torben. The business had a great Q4 performance, as Torben has just highlighted, a strong set of results from the core business and, as anticipated, outstanding results from Astrea. Full year, we delivered over SEK 1.8 billion in revenue and over SEK 0.5 billion in adjusted EBITDA. These results are more impressive when set against the backdrop of the market environment in 2023.
The strength of Biotage is the diversification of products and geography. Biotage now has a strong position in the Biologics & Advanced Therapeutics area, which now represent approximately 1/4 of our business compared to 4% a year ago. This complements its existing strength in the small molecule market.
For the full year, we grew our revenues in Biologics & Advanced Therapeutics, Analytical Testing, Diagnostics and Water & Environmental Testing. Our scale of business grew strongly in Q4, up 32%, recovering some of the declines seen in previous quarters. Overall, our small molecule business did report declines in the year due to the well-publicized challenges with the unwind tail of COVID aftereffects and the near-term customer caution around instrument purchases.
Now just a few words in Astrea. I know there's been a lot of interest in the recently acquired Astrea business, so I wanted to provide more color on this performance. In Q4, Astrea delivered SEK 273 million in revenue, a gross margin of 61% and an adjusted EBITDA of SEK 99 million and a 36% margin. Since acquisition, Astrea has delivered revenues of SEK 393 million, a gross margin of just under 62% and an adjusted EBITDA of SEK 109 million, 28% margin. Full year, Astrea's revenues were SEK 502 million, an increase of 64%. Since 2021, Astrea has grown revenue at a compound annual growth of approximately 75%.
As I previously commented, Astrea is a growing business and not at a stage where it neatly fits into a stable, uniform quarter format like the core business. In 2023, like 2022, we've seen quite large quarter revenue phasing differences. Until the business achieves the largest scale and our investments in the commercial area and a wider infrastructure are fully bedded down, we won't be able to properly assess the underlying real phasing patterns quarter-by-quarter. We believe the phasing in 2024 will not be as marked as it was in 2023, although, like many of the businesses in the market, we believe H2 will be stronger than H1.
Over the last few years, a significant investment has been made in all areas of the Astrea business from R&D, commercial, operations, support, new systems, new facilities, et cetera. So as the business grows, profits can accelerate, i.e., we have a very scalable business where we can add significant revenue without step changes in the operating cost base.
I'd also like to make a brief comment on Astrea's recently launched fiber technology, AstreAdept. We are pleased with the market reaction since the launch of this technology in late September 2023. The sales pipeline from a standing Q4 start has grown considerably, as well as very encouraging signals of different customers starting to repeat buy as they trial for themselves how this nanofiber technology transforms cell and gene therapy purification. It's early days, but we've reached -- but we're excited about this technology will positively impact the market going forward.
Excluding Astrea, our EMEA business delivered solid organic growth in Q4 of just under 15%. This helped mitigate a slight softness in the American business in Q4, just under 5%. APAC organic revenue declines continue to moderate. In Q4, it was just under 22% compared to Q3 of 31%. Overall, our Q4 organic growth rate was just minus 4%. Full year, our Americas business grew 5% organically, EMEA was consistent with 2022 and APAC declined by 27%, with a large proportion of that decline coming from China, which we've clearly flagged in previous commentaries.
If we look at our total group business, Americas and EMEA grew nicely in Q4 and the full year, and together account for 80% of our business in 2023 compared to 70% last year. Our APAC business in all was steady on Q4 2022, with APAC now accounting for 20% of our total business compared to 30% last year.
Our recurring revenue, which we define as consumables and services, were SEK 489 million in Q4, representing 76% of revenue compared to 50% in Q4 '22, with systems, which we classify as nonrecurring revenue, of SEK 154 million, representing 24% of our business compared to 48% in Q4 last year. For the full year, our recurring revenues were approximately SEK 1.25 billion, representing 2/3 of our revenue, with nonrecurring of SEK 600 million representing 1/3 of our revenue. We are now a far more balanced business, less reliant on equipment sales, sales that are usually the first casualty in any market softness.
As I previously commented, the principal KPI we'll be using to assess performance business is adjusted EBITDA. This assures we get clear visibility of real trading performance and can understand trends not affected by either large or one-off unusual costs and noncash accounting entries.
As you can see, overall, we've delivered an outstanding adjusted EBITDA in Q4 of SEK 194 million, a 30% margin, which was 119% above Q4 2022. For the full year, we have delivered SEK 518 million of adjusted EBITDA and a 28%, up 12% over 2022. A reconciliation between the IFRS reported results and adjusted performance figures are supplied in this presentation.
So to conclude, Biotage of today is a stronger, more diversified business, better able to offer customers a broader range of products and services in more markets and better able to withstand market turbulence now and in the future. It is a business that has attractive gross margins and has the strength to defend those margins even in a cautious market. It's a nicely profitable business as we've seen, that, in 2023, delivered SEK 518 million and a 12% increase over 2022, which in itself was a record year.
It's a business that is continuing to invest meaningfully in R&D for future success and to be at the forefront of innovation leadership. In 2023, we invested in [ adjusted ] SEK 159 million in R&D, approximately 8.3% of sales compared to 6.4% in 2022. It's business with a strong balance sheet backed by gross cash of SEK 0.6 billion and a net cash of SEK 335 million. In Q4, adjusted cash generation from operations was SEK 187 million compared to SEK 133 million in Q4 '22. For the full year, it was broadly static at SEK 435 million.
Finally, we have an attractive set of assets to focused in the right markets with a highly committed and engaged employee base with a passion to win. We're delivering today, and we're excited about tomorrow.
Back to you, Torben.
Thank you, Andrew. And as you have just heard from Andrew, fantastic, good results in Q4. And of course, that is invigorating us to continue to work on getting the good results also in the coming year.
Just I want to remind you all that it's still a vulnerable business area we're in. And as you have seen other companies are cautious in the first half of '24, and just wanted to make everyone aware of that, that could be the same for us. But so far so good, it looks very well, and you have seen outstanding numbers for Q4.
And with that, I will leave it over for questions.
[Operator Instructions] The next question comes from Viktor Sundberg from Nordea.
Congrats on a very strong quarter. I just had a question here on the new targets. For me, they seem to be pretty much in line with the previous targets, is that how we should view that? And a double-digit in organic growth, in your opinion, is that below, say, low teens? Or does it include the teams range in that number as well? Any color here on guidance would be helpful.
I think that what you should read into it that we strongly believe that we will be double digits, but we also need to be a little cautious of what we have seen happening in the market. Would we be very disappointed to get short of that? Yes, we would. But of course, we would like to perform even better, but that we are shooting for double-digit, and if that's going to be 11%, 12%, 15%. has to be seen. But that you at least have, you can say, a bottom floor what is our expectations.
With respect to the adjusted EBITDA, we would, of course, like to see -- we have seen it in the late 20s. Could we expect to be even higher? Has to be seen. But we have an ambition to improve year-on-year on our adjusted EBITDA.
And given the kind of extreme seasonality we see in Astrea, it makes it kind of hard to model for 2024. And you kind of alluded to here on the call that we might not shoot -- put in as high seasonality 2024. What's the underlying reason for this Q4 trend, if you could dig into that a bit more? And how should we view that for 2024? Can you give any color of the number of customers that ordered this much in Q4 and how we should view that?
Yes, Viktor. I think what you're seeing with the phasing -- I wouldn't say it's seasonality, it's more a phasing, is the kind of just the receipts of orders and then, obviously, the lag between us being able to produce it and then deliver it. So I wouldn't -- don't think of it as a seasonal business. It's not. It's just we've seen, particularly in '23, a lot of orders coming later. And then with just the sheer scale that, being able to then produce them and make sure they fit and then deliver them.
So we -- as this business grows and develops and we expand our commercial teams, we're going to get more well known and we're going to get more a steadier flow of orders into our business. So we can't, at the moment, kind of make detailed guesses on a quarter-by-quarter basis. But as this business grows and becomes a lot bigger, we will see a more normalized phasing pattern of revenue rather than maybe what we've been seeing in '22 and '23.
Can I just add one comment to that. I think when we went into Q4, the issue was more are we able to do all of the manufacturing. And I must give very, very strong credit to the people in Isle of Man that they were able to put all of the products through in one go. That gives us confidence in that when we believe that it's going to take off in the future, we have capacity to manufacture, because that was more our issue going into the quarter than if the business were there, because the orders were there. But fantastic performance of the people out on Isle of Man.
And given -- just another question here on another topic. But given that your instruments, such as Isolera and Selekt and some other products in the peptide workflow, I mean, included in research around GLP-1, do you expect any kind of tailwinds within that business from the current GLP-1 [ trends ] surrounding obesity, for example? I guess it was a bit weaker in Q4, but maybe going forward.
Go ahead.
There is no doubt that what we are seeing also in some of our, let's say, basic business of what we call the core Biotage, there is quite a lot of new things happening, not the least in the peptide area, the workflow of peptide, and we are seeing an interesting flow of request and orders coming in, in that area. So there is something cooking in that area, and we have been spending quite a lot of time and research -- resources.
And as you also heard in Andrew's speech that we have increased the percentage of R&D compared to the top line, and some of that has gone in that direction. So there is something that we are believing in, in there. And of course, we are going also to look more and more into synergistic effects between Astrea products and core Biotage products, what we can do there.
Okay. Very helpful. And I just had a final one here also on the small molecules. It seems that APAC is continuing to weigh, maybe not a surprise there. But when will we start to see growth in that region again? And I just wonder also globally, with this inventory challenge that has been going on in 2023, did you see any light at the end of the tunnel in terms of inventory?
Do you want to...
Yes. I think, again, APAC is the -- we've seen declines moderate, and I think we will continue to see that. Obviously, we're washing out all that COVID effect. Particularly from China, one of the biggest drivers of declining APAC is our Chinese business. Saying the Chinese business is -- we're back to a stable Chinese business pre-COVID. So it's not as just the Chinese business has gone away.
From an inventory perspective, we -- yes, we have been carrying more inventory over this period, particularly with the supply chain shocks and issues, we want to be sure that we've got inventory on hand to meet customers. And that's kind of one of our kind of selling points as well into the market. But we're happy that there isn't -- we haven't got some sort of obsolete inventory overhang that's weighing in, in the balance sheet. The stuff we've got, we can use.
Sorry. I meant the inventory at your customers, if that's coming down globally. I mean because that's been a problem for a lot of other life sciences companies.
Yes. Well, obviously, we don't know. But we're seeing our customers -- yes, we're seeing our customers beginning -- are ordering, particularly. So I don't -- I think that's -- with a lot of other commentary of the other businesses in the market, they're seeing that kind of washing out and maybe that has effectively been washed out now. It's very difficult to know in detail what's going on with our customers. But from our perspective, a lot of that is just about being washed out.
The next question comes from Simon Larsson from Danske Bank.
A few questions also from my side, please. So if you could maybe help us understand a little bit better on the seasonality pattern for Astrea here, maybe in Q1 as we don't really have the numbers from last year's Q1, right? So it's hard to really understand, yes, the sequential sort of development here. So obviously, very strong entities this year. But are there any sort of dynamics we should be aware of here going into Q1 that is sort of -- I would assume we're looking at a quite sharp sequential decline in sales, but any help there would be good.
Yes. I think -- yes, I mean, Q4 was clearly very, very strong and we wouldn't be expecting Q1 to be anywhere near that. I mean the business clearly is in a growth phase. We've not disclosed obviously what our Q1 2023 was. But you could expect -- we're happy we're coming into in our business with good backlog, with good visibility of the pipeline, so we're happy that the business is on the right track. It is growing.
As I say, it's difficult for us to, again, give you guidance on an exact quarterly phasing because we are still understanding that as we grow, and we get all the commercial teams embedded and we've got all that infrastructure in place and get our name out into the market more as to how those ordering patterns are going to bed down into a quarterly phasing. We're still, in a way, going through that learning process as well.
So I don't want to kind of start giving you quarter number that we can't actually -- that's not actually backed up by real science. So at the moment, we believe, as I said, that H2 is going to be stronger than H1. And that is pretty customary for, I think, everybody in the market who's saying that.
And Simon, can I just say, you know that we're never giving guidance on a few quarters or the year. If you're asking do we believe in that we are growing the business over the year of '24 compared to '23? Yes. As Andrew says, we're still learning on the pattern. Yes, there's been a couple of years, '22, '23, where it has been very clear that it's second half of the year that is, for the Astrea business, very high. But we're also seeing that there is hopefully coming more normalcy into it, but we will have to wait and see how much that is. But we are expecting growth for the year as a whole.
Yes. Makes sense. That's clear. And I guess you touched a bit upon it, Andrew. But on visibility, I mean, really -- I mean, how far into 2024 do you have an idea on what sort of sales will look like? What's the visibility typically in this kind of business?
It's getting a lot better. Well, our pipeline is growing. We're investing significantly in the commercial infrastructure. And so with that, you'd expect our pipeline and our backlog to be growing, which it is. So yes, as we go into 2024, we are a lot more -- we have a lot more visibility, a lot more comfort around the year than maybe we did in 2023. So you could expect that we're more of a grown-up organization, we've been investing and so on. So we're getting more visibility. So yes, we do. All of our leading indicators are in the right direction.
Yes. Okay. That makes sense. And also a bit maybe on the gross margin of the Astrea business also. I mean what's your expectations on improving that number here going forward? I think you had some maybe not as sort of good contracts here going sort of out of 2023, and those were to be negotiated as I understood it. Can we expect any gross margin improvements here in the sort of midterm?
Yes. I think we're systematically working through some of the contracts, and that is an ongoing process A lot of them have been done. There are still a few where we still need to kind of see the end of the contract and then renegotiate pricing. So yes, we -- our ability to drive margins is kind of multifaceted from a self-help in terms of operational efficiency through to renegotiating existing contracts at better pricing, which we've had good results from. But also, again, getting a lot more new customers at very, very attractive pricing and delivering margins. So yes, that takes time to just feed through into our overall margin picture, but we're going in the right direction in that regard.
Cool. And maybe the final one from my end. So you mentioned a bit on the AstreAdept launch, and it sounds quite encouraging to me. And I mean do you expect -- it's only a business that needs to be built from the bottom up, I realize that. But do you expect any meaningful contribution from Astrea, that nanofiber product, here in this fiscal year?
That's, I suppose, a difficult one, Simon. In terms of our overall -- in terms of kind of our plans for 2024, it's not a material part. But it's a new product, we just don't know when that click happens, when suddenly -- we've seen all encouraging signs in terms of our pipeline, customers starting to buy. I mean part of it is seeing is believing. Obviously, we've got data showing just a phenomenal amount of efficiency they can give, and our customers are just going to want to try and see it themselves.
So it's going to start at a low level, but we don't know when it's going to really start to tick up. I mean that could be very soon. It could be later. We do know we've got a great product. We think we've got the world-class products out now, and it's just kind of getting the market and getting customers bought into, yes, the results that you are seeing are real.
The next question comes from Karl Norén from SEB.
A couple of questions from my side as well here. Maybe if we start on Astrea. I mean, of course, very strong Q4 here. But could you maybe explain a little bit what kind of orders this is that you delivered in Q4? Is it a single customer? Or a few large customers? Or is it widespread? Any color on that would be very helpful.
Yes. I mean Astrea -- just Astrea has some very core key customers, large customers, and Q4 was driven a lot by these core key customers ordering, which we kind of flagged, I suppose, coming into Q4 that this was the case. So yes, that's what drove a lot of Q4. These are not kind of -- in any way, kind of one-off or whatever like that. But they -- yes, the -- just the scale of the ordering obviously drove that jump in Q4 revenue.
Yes. And this...
Can I give one comment more to that. Yes, that's right. But we can also say that these customers are continuing ordering also in 2024, so it's not a one-off.
Understood. That's clear. And a question related to that, I mean, the gross margin here for Astrea looks a little bit lighter in Q4, and I guess maybe it's related to that there is some older contracts which you delivered a lot on here in the fourth quarter. But you've also talked a lot about improving the gross margins here in Astrea going forward. So I'm just wondering a bit on what kind of levels do you think is reasonable to assume for Astrea in terms of gross margin if we look 2 to 3 years out.
Well, you're right on Q4. I mean, yes, quarter-to-quarter performance of margin is driven by customer mix. And therefore, when you've got a mixture of new customers, existing customers with new -- with revised pricing and existing customers that were due to revise the pricing, so you've got all that kind of mix come together.
Yes, we believe Astrea is a nice margin business. I mean, right now, it's delivering nice margins. Is there more to come on that? Yes, absolutely. Once we start kind of growing the customer base, driving more efficiency out of our manufacturing operations and then renegotiating -- fully finishing that exercise of renegotiating prices on existing contracts, yes, there's quite a bit in the tank left to drive -- to keep on driving those margins.
Yes. Good. And then I also have a question on the Astrea target that you mentioned. When you did the acquisition of Astrea preaching GBP 80 million in revenues by 2025, is that still in play? Or how should we see it?
We -- the numbers you have out there, as we have said also with the numbers for 2023, they are out there. We are working on it. We will see what we get because we're still looking into the seasonality of the business. And I would just say so far, so good.
Yes. You have delivered strong here in Astrea since you acquired it. Then I just a question on the small molecule side. I mean we touched on it before on Viktor's question, but are you seeing -- overall, are you seeing improved momentum in that business here? Or would you say it's relatively stable quarter-over-quarter from the previous quarters?
I would say that what we're seeing here -- as you know, we have been in negative growth in the last year or so, we're seeing some improvement. So we get in the first hand up to 0 level and then move on from there? Yes, we do. Are we seeing a massive takeoff? No, we're not. But we are slowly got -- slowly increasing our, say, growth in the area, and there is more to come. And we are still taking market shares in some of the areas that we are active in.
Yes. That's good. And just a final one from me on M&A. I mean you have a quite solid balance sheet right now, and it seems like Astrea is performing quite well. What's your appetite for M&A right now? And do you have a pipeline of acquisitions that you want to acquire during the year?
We always have a pipeline, but we are also in a situation where -- and I think we have been a little bit straightforward in that, at least now that I'm back in office, that we are concentrating on what we have right now. We want to improve our KPIs. We want to look at focused areas of implementation, also integration and looking at the synergies between the Astrea and core Biotage. What we are aiming a little more of is [ the extent ], because we have quite a lot of partner discussions ongoing and are wanting to see them continue to develop over time. So yes, we have a pipeline. Are we putting enormous resource in behind right now? No.
The next question comes from Odysseas Manesiotis from Berenberg.
Congrats on the strong quarter. I first wanted to clarify something you said on the first question about setting the floor around 10%, 11%. I'm just considering your midterm 3-year rolling targets here. I mean the 5.5% growth and 21.8% adjusted EBITDA margins versus the targets implies quite a step-up for '24 and '25. I just wanted to get a feeling what's your conviction on above 10% growth this year and margin expansion in '24? And are we expecting to see more of that work towards the 3-year average being done in '25 rather than this year?
That -- if I refer to my answer to the last question, yes, we are looking at improving our KPIs. And that's the reason why we are putting some emphasis on that right now in the beginning of 2024 to secure that we get efficacy. As you have seen, that we have got quite a lot of efficacy out of Isle of Man in Q4, showing that we can absolutely improve when we have a very good business stream in there. We are going to look into all of the areas where we can see synergistic effects and be more efficient going forward. So do I have a strong belief that we can reach these numbers? Yes, I do.
And looking at China, given that you commented it's essentially stable now since pre-COVID, should we expect some permanent market share losses here like some of your peers have been implying? Or do you expect a lot of this demand to just come back as your customers restock and the market recovers there?
I would say that, as Andrew alluded to, we are back on a growth path from before the COVID. Are we going to see China come back to the 15%, 16% of our business? No. And we don't have the appetite to see that because then that means that we are stagnating in other areas. And of course, there was a lot of, let's say, flash chromatography business in the COVID times that are not coming back. So can we keep up a steady growth on our China business as it is today? We are happy.
And last one on the scale-up recovery this quarter, which was quite strong. Was that driven by the lipid nanoparticle purification part of the business for mRNA drugs? Or was it more on the small molecule side will essentially drove us from quarter here?
I don't know, on that question, actually.
Okay.
Me, neither.
Yes. But we need to dig into that because I don't have, let's say, the clarity on which areas it was in. So let us come back to that question.
The next question comes from Mattias Häggblom from Handelsbanken.
I have a few. So first question, on Astrea full year numbers, I get too, in local currency, roughly 60% year-over-year during 2023. So when the company reported 9-month figures, and after I think has grown 38% year-to-date, the company said it was on track for its 2025 targets. So maybe can we return to how you feel about those targets for 2025? Because I heard in a previous question here, it sounded like you were a bit shying away or at least hesitant to comment. But given the strong fourth quarter and a strong full year, I would anticipate you to be on track for those targets or even ahead. So maybe that's my first question, just a clarification around that.
Yes. I mean in terms of GBP, the Astrea business achieved GBP 38 million in 2023 versus GBP 23.2 million in 2022. So it's -- that's at a local currency growth, GBP growth is 64%. In terms of 2025, I suppose I don't have a crystal ball when we made those projections a few years ago. I think Astrea, as you've seen right now is delivering. Yes, the goals were ambitious. And as we move into '24, '25, there are lots of opportunities and there are lots of kind of risks around, I suppose.
Am I fixating on them right now? No, because I think Astrea is growing. There's still more to come, I suppose. [ Results have played for us ], as Torben said, it's good so far. [ Results have played for ]. Yes, we're on track. I suppose if it came to 2025 and we hit or exceeded those goals, I'd say brilliant. If we fell a bit short of them, would I be crying? No, because the business would have delivered anyway some outstanding growth and performance anyway.
So it's -- we're happy so far. We're happy with the direction. 2025 is still -- end of 2025 is still a long way off. Still plenty can happen. But we're happy so far. So I suppose we're neither confirming or kind of -- or shying away from them, it's just that it is -- there's a long way to go yet until we get there.
And yes, that's clear. Just related to that, can you remind me of the structure of the earn-outs and the timing, because to some extent, I guess, they relate to those historical targets. Or was it more on a product introduction basis? I can't recall the details, maybe my memory of it.
Say that again, Mattias, we kind of -- you broke off slightly.
Yes. I was just curious about -- reminding me about the structure for the earnouts, those things -- the announcement. Wasn't they also related to those targets to some extent?
Yes. Yes, so there's 3 earn-outs. There's a USD 20 million -- these are well in U.S. dollars. There's a USD 20 million earn-out on -- based on 2023 performance. There's a USD 15 million earn-out relating to performance measures in 2024 this year. And there's a further USD 10 million earn-out in 2025 based on performance.
But -- and the last one relates 100% to the nanoparticle.
Correct.
That's clear. And maybe can you talk about the softness in Americas you saw in Q4? Was it broad-based? Or was there certain large customer accounts that you saw the effect?
No. It was -- I mean, I think most just got up to a slow start in October. By mid-November and certainly after Thanksgiving, the business really picked up. It just wasn't -- we just run out of runway at the end of the year to kind of recover the bit of the slow start in October. So certainly, it wasn't just a slowness throughout the quarter, it was -- they kind of just -- it just got up to a slow start in October.
Good. And final one, if I may try my luck. We are still -- well, legacy Biotage have some easier comps ahead for the next few quarters. I think, Torben, you alluded to whether or not it can return to growth in first half before then. Obviously, Astrea will be part of organic growth. But the comps are easier, but the macro is difficult. So is returning to growth for legacy Biotage organically first half, would that be too optimistic?
I hope not, but has to be seen. And we are working diligently on that going forward. I would say that the first signs of what we see of order in, in Q1 and also the backlog we took with us, I think we are at least going away from a negative percentage growth. And we need to start to learn walking before we start running. So I'm happy so far, and I hope that I can give you numbers later on in the year, saying that, yes, we are on a growth path again on the legacy.
There are no more questions at this time. So I hand the conference back to speakers for any closing comments.
Thank you very much. Thank you for all of your questions. And we hope that we will continue to deliver good results going forward. And I know we are going to see some of you, your investors, in the next 24 hours. So feel free if there is other questions coming forward, and we will try to accommodate you. But thanks for participating.