CRL: Mgmt Lunch: Growing Confidence in 2H26 Setup

研报英文原文证据摘录

CRL: Mgmt Lunch: Growing Confidence in 2H26 Setup

242.5A 224.9A

quarters are finally into 1Q26 RFPs and bookings and could manifest 2026 206.1A 262.7E 267.2E 269.3E

in 2H26 volume upside surprise. Biotech has stabilized with improved 2027 242.0E 260.0E 267.5E 269.1E

capital access, while global biopharma clients have largely completed All values in USD unless otherwise noted.

reprioritization efforts. Forward-looking metrics in the DSA business now Priced as of prior trading day's market close, EST (unless otherwise noted).

position CRL for organic growth in 2H, with 1Q book-to-bill in the "good

range" leading us to believe there could be room for improvements later

this year.

Better understanding of drivers of margin improvement cadence in

2H. We gained meaningful clarity on the margin step-up expected in

2H26 which assumes no contribution from volume growth. Mgmt walked

through the cadence: 2Q margins ~20% higher than 1Q, with 1H averaging

~18% and then expanding by 500bps in 2H. This expansion is broken down

into:

• ~55% comes from recent divestitures (CDMO closed May 6th, European

assets May 27th) and the K.F. acquisition benefit weighted to 4Q.

• 25% comes from cost structure initiatives, including the incremental

$100M in cost savings being executed.

• Remaining 20% comes from RMS business mix improvements and the

roll-off of elevated NHP costs pressuring 1H.

Competitive market opportunities. Mgmt sees opportunities across China,

NAMs, and organic share gains including a recent competitor's bankruptcy.

CRL's China business (~$150M) has grown consistently with good margins

despite lower pricing, and mgmt is evaluating further expansion while

monitoring geopolitical risks and in-licensing activity. On NAMs, the