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Q4 2021 Earnings-Transcript
Parmeet Ahuja - Vice President, Investor Relations
Mike McMullen - President and Chief Executive Officer
Robert W. McMahon - Senior Vice President and Chief Financial Officer
Jacob Thaysen - Senior Vice President, Agilent & President, Life Sciences and Applied Markets Group
Padraig McDonnell - Senior Vice President, Agilent & President and Chief Commercial Officer Agilent CrossLab Group
Sam Raha - Senior Vice President, Agilent & President, Diagnostics and Genomics Group
Vijay Kumar - Evercore ISI - Analyst
Brandon Couillard - Jefferies - Analyst
Derik de Bruin - Bank of America - Analyst
Dan Leonard - Wells Fargo Securities - Analyst
Puneet Souda - SVB Leerink - Analyst
Patrick Donnelly - Citigroup - Analyst
Josh Waldman - Cleveland Research - Analyst
Paul Knight - KeyBanc Capital Markets - Analyst
Dan Brennan - Cowen - Analyst
Jack Meehan - Nephron Research - Analyst
Catherine Schulte - Baird - Analyst
Tycho Peterson - JPMorgan - Analyst
Operator
Good afternoon and welcome to the Agilent Technologies Fourth Quarter Earnings Conference Call. My name is Bethany and I will be the operator for today's call. [Operator Instructions]
And now, I'd like to introduce you to the host for today's call, Parmeet Ahuja, Vice President of Investor Relations. Sir, please go ahead.
Parmeet Ahuja - Vice President, Investor Relations
Thank you, Bethany. And welcome everyone to Agilent's fourth quarter conference call for fiscal year 2021. With me are Mike McMullen, Agilent's President and CEO; and Bob McMahon, Agilent's Senior Vice President and CFO. Joining in the Q&A after Bob and Mike's comments will be Jacob Thaysen, President of Agilent's Life Sciences and Applied Markets Group; Sam Raha, President of Agilent's Diagnostics and Genomics Group; and Padraig McDonnell, President of Agilent CrossLab Group.
This presentation is being webcast live. The news release, investor presentation and information to supplement today's discussion, along with the recording of this webcast are made available on our website at www.investor.agilent.com.
Today's comments by Mike and Bob will refer to non-GAAP financial measures. You will find the most directly comparable GAAP financial metrics and reconciliations on our website. Unless otherwise noted, all references to increases or decreases in financial metrics are year-over-year and references to revenue growth are on a core basis. Core revenue growth excludes the impact of currency and the acquisitions and divestitures completed within the past 12 months. Guidance is based on exchange rates as of October 31.
We will also make forward-looking statements about the financial performance of the company. These statements are subject to risks and uncertainties and are only valid as of today. The company assumes no obligation to update them. Please look at the company's recent SEC filings for a more complete picture of our risks and other factors.
And now, I'd like to turn the call over to Mike.
Mike McMullen - President and Chief Executive Officer
Thanks, Parmeet. And thanks everyone for joining our call today. The Agilent team delivered another excellent quarter to close out an outstanding record-setting 2021. At $6.32 billion for fiscal 2021, revenues are almost $1 billion higher than last year. Full year core growth is up 15% on top of growing 1% last year. The strength is broad-based for the three business units, all growing more than 10% core for the year. Our full year operating margin was up 200 basis points. Earnings per share are $4.34 or up 32%.
Let's now take a closer look at our strong finish to 2021 and review Q4 results. Our momentum continues as orders increase faster than revenue in Q4. And at the same time, we delivered our fourth straight quarter of double-digit revenue growth. At $1.66 billion, revenues are up 12% on a reported basis. Our core revenues grew 11%, exceeding our expectations. This is on top of 6% core growth last year. Our Q4 operating margin is 26.5%. This is up 160 basis points from last year. EPS is $1.21, up 23% year-over-year. Our earnings growth also exceeded our expectations.
We continue to perform extremely well in Pharma, our largest market, growing 21%, driven by our Biopharma business. Total pharma now represents 36% of our overall revenue. This compared to 31% of our revenues just two years ago. The strong growth in our Chemical and Energy business continues as we delivered 11% growth in the quarter. This is on top of growing 3% in Q4 of last year. PMI numbers are positive and we expect that chemical and energy will continue its strong growth trajectory into fiscal 2022.
In Diagnostics and Clinical, revenues grew 11% on top of growing 1% last year as testing volume started to recover. On a geographic basis, our results are led by strong performance in the Americas and China. Our business in the Americas grew 15% on top of 5% last year. China grew 8% core on top of strong 13% growth in Q4 of last year. China order growth outpaced revenue growth for the third quarter in a row.
Now, looking at a performance by business unit, the Life Sciences and Applied Markets Group generate revenue of $747 million. LSAG is up 11% of both the reported and a core basis. LSAG's growth is broad based and led by strength in liquid chromatography and cell analysis.
The Pharma and Chemical Energy markets were particularly strong for new instrument purchases. Our cell analysis business crossed $100 million revenue mark in the quarter for the first time. During the quarter, the LSAG team announced a new high mobility LC/Q-TOF and enhancements to our VWorks automation software suite. These new well received offerings are used to improved analysis of proteins and peptides to speed development of new protein-based therapeutics.
The Agilent CrossLab Group posted revenue of $572 million. This is up reported 10% and 9% core. Growth is broad based, driven by strength in service contracts and on-demand services as well as our chemistries and supplies. Our focus on increasing connect rates continues to pay off for us.
The strong expansion of our installed base in 2021 and increasing connect rates bodes well continued to strengthen our ACG business moving forward. Our ability to drive growth and leverage our scale produce operating margins of roughly 30%, not more than 200 basis points from the prior year.
The Diagnostics and Genomics Group delivered revenue of $341 million, up 16% reported and up 13% core. Our NASD oligo business led the way with robust double-digit growth in the quarter and achieved full year revenues exceeding $225 million. We expect another year of strong double-digit growth as the team continues to do a great job of increasing throughput with existing capacity. The expansion of our Train B oligo manufacturing facility in Frederick, Colorado is proceeding as planned. We expect this additional capacity to come online by the end of calendar year 2022.
Moving on from our other business group updates, there are several other significant developments for Agilent this quarter. We announced our commitment to achieving net zero greenhouse gas emissions by 2050. We believe our approach delivers the same rigorous sustainability that'd be applied to everything else we do. We also believe these actions are not only the right thing to do, but fundamental to achieving long-term success.
Our sustainable leadership continues to be primarily recognized as well. You may have seen that Investor's Business Daily recently named Agilent to its Top 100 ESG Companies list. We're also a company where diversity and inclusion represent a company priority and is a core element of our culture. During the quarter, we achieved recognition by Forbes as one of the World's Best Employers and as a Best Workplace for Women.
While the Agilent team has a strong track record of delivering above-market growth and leading customer satisfaction, we're always looking to do more. To further accelerate growth and strengthen our focus on customers, we are implementing a new One Agilent commercialization, combining for the first time all customer-facing activities under one leader. The new organization brings together and strengthens our sales, marketing, digital channel and services team.
The new enterprise level commercialization is led by Padraig McDonnell. Padraig will continue to lead the Agilent CrossLab Group as Business Group President as well as serves Agilent's first ever Chief Commercial Officer. The way I'd like to characterize this move is to say we are doubling down on the success we've achieved with ACG, applying a holistic customer-focused approach to all aspects of our business.
We're also moving the chemistries and supplies division to LSAG. This close organizational alignment between instrument and chemistries development will further accelerate our progress on instrument connect rates for chemistries and consumables. We believe that structure of follow strategy and that this new organizational structure will further enhance our customer focus and the execution of our growth strategies.
Looking ahead to the coming year, we are in a strong position to continue to deliver on our build and buy growth strategy. Agilent's business remains strong. We enter the new year with a robust backlog and have multiple growth drivers, coupled with the proven execution excellence of the Agilent team. A year ago to our Agilent Investor Day, we raised our long-term annual growth outlook to the 5% to 7% range, while reaffirming our commitment to annual operating margin improvement and double-digit EPS growth. We are now one year in and well on our way to achieving these long-term goals.
Bob will provide more details, but for fiscal 2022, our initial full year guide calls for a core growth in the range of 5.5% to 7%. We expect to continue our top line growth as we launch market-leading products and services, invest in fast-growing businesses and deliver outstanding customer service. My confidence in the unstoppable One Agilent team and our ability to execute and deliver remains firmly intact. This is our formula for delivering solid financial results, outstanding shareholder returns and continued strong growth.
We are very pleased with our performance in 2021 but not satisfied. As I tell the Agilent team, the best is yet to come for our customers, our team and our shareholders. Thank you being on the call today and look forward to your questions.
I will now hand the call off to Bob. Bob?
Robert W. McMahon - Senior Vice President and Chief Financial Officer
Thanks, Mike. And good afternoon, everyone. In my remarks today, I'll provide some additional details on revenue and take you through the income statement and some other key financial metrics. I'll then finish up with our initial outlook for the upcoming year and for the first quarter. Unless otherwise noted, my remarks will focus on non-GAAP results.
As Mike mentioned, we had very strong results in the fourth quarter. Revenue was $1.66 billion, reflecting reported growth of 12%. And before I get into the details, I want to acknowledge our supply chain team, which has been doing a great job managing in a very challenging global environment.
Core revenue growth at 11% was a point above our top end guidance range. Currency accounted for 0.8% of growth, while M&A contributed half a point of growth during Q4. And as expected, COVID-19-related revenues were roughly flat sequentially and resulted in just over a point headwind to the quarterly revenue growth. Late in the quarter, we did see transit times that were in certain cases greater than anticipated, resulting in some revenues being deferred into Q1. Our results were driven by a continuation of outstanding momentum in Pharma and in Biopharma in particular, while Chemical and Energy and Diagnostics and clinical also delivered strong results for us.
Our largest market, Pharma, grew 21% during the quarter against a tough compare of 12% last year. The Small Molecule segment delivered mid-teens growth, while Large Molecule grew 30%. Pharma was a standout all year, growing 24% for the full year after growing 6% in 2020. And in FY '22, we expect our Pharma business to grow in the high-single digits.
Chemical and Energy continue to show strength growing 11% with instrument growth in the mid-teens during the quarter. This impressive performance was against a 3% increase last year. The C&E business grew 12% for the year after declining 3% in 2020. Growth was driven by continued momentum in chemicals and engineered materials and we expect our C&E business to continue to grow solidly next year in the high-single digits.
Diagnostics and Clinical grew 11% with all three groups growing nicely during the quarter. While the largest dollar contributor to this market is DGG, driven by our pathology-related businesses, the LSAG business continues to penetrate the clinical market and drive growth with strong performances by Cell Analysis and Mass Spec. We saw mid-teens growth in the Americas and strong growth in China, albeit off a small base. For the year, the Diagnostics and Clinical business grew 15% for the year after declining slightly by 1% in 2020. And we expect to continue to grow in the mid to high-single digits in 2022.
Academia and Government, which can be lumpy and represents less than 10% of our business, was up 1% in Q4 versus a flat growth last year. Most research labs continue to remain open globally and increase capacity to pre-pandemic levels. China came in at low-single digits, while the Americas and Europe were roughly flat. For the year, we grew 7% after declining 4% last year. We expect this market will continue to improve slightly in fiscal year 2022 and expect growth of low to mid-single digits.
Food was flat during the quarter against a very tough 16% compare. Europe and the Americas grew while China declined. For the year, food grew 13% after growing 7% in 2020. Looking forward, we expect food to return to historical growth rates in the low-single digits.
And rounding out the markets, Environmental and Forensics declined 2% in the fourth quarter off of 5% decline last year as growth in Environmental was overshadowed by a decline in Forensics. For the year, we grew 5%, off a 2% decline in 2020. And looking forward, like Food, we expect Environmental and Forensics to grow in the low-single digits in the coming year.
For Agilent overall, on a geographic basis, all regions again grew in Q4, led by Americas at 15% China grew 8% in Europe grew 4%. And for the year, Americas led the way with 21% growth, followed by China at 13% and Europe at 12%.
Now let's turn to the rest of the P&L. Fourth quarter gross margin was 55.9%, up 90 basis points from a year ago. Gross margin performance, along with continued operating expense leverage, resulted in an operating margin for the fourth quarter of 26.5%, improving 160 basis points over last year. Putting it all together, we delivered EPS of $1.21, up 23% versus last year. And during the quarter, we benefited from some additional tax savings, resulting in a quarterly tax rate of 13% and our full year tax rate was 14.25%. Our share count was 305 million shares as expected. And for the year, EPS came in at $4.34, an increase of 32% from 2020.
We continued our strong cash flow generation, resulting in $441 million for the quarter, an increase of 17% versus last year. For all of 2021, we generated almost $1.5 billion in operating cash and invested $188 million in capital expenditures. During the quarter, we returned $195 million to our shareholders paying out $59 million in dividends and repurchasing roughly 830,000 shares for $136 million. And for the year, we returned over $1 billion to shareholders in the forms of dividends and share repurchases. And we ended the year with $1.5 billion in cash and $2.7 billion in outstanding debt and a net leverage ratio of 0.7 times. All in all, a great end to an outstanding year.
Now let's move on to the outlook for fiscal 2022. While we are still dealing with the pandemic and we have the additional challenges around logistics and inflationary pressures, we enter the year with strong backlog and momentum. For the full year, we're expecting revenue to range between $6.65 billion and $6.73 billion, representing reported growth of 5% to 6.5% and core growth of 5.5% to 7%, consistent with our long-range goals. And this incorporates absorbing roughly 0.5% headwind associated with COVID-related revenues with the majority of that impact coming in Q1.
We're expecting all three of our businesses to grow, led by DGG. We expect DGG to grow high-single digits with the continued contribution of NASD in cancer diagnostics. We expect ACG to grow at high-single digits with both services in our chemistries and supplies businesses growing comparably while LSAG is expected to grow in mid-single digits.
We expect operating margin expansion of 60 to 80 basis points for the year as we absorb the build-out costs of Train B at our Frederick, Colorado NASD site. And in helping you build out your models, we're planning for a tax rate of 14.25%, consistent with current tax policies and $305 million fully diluted shares outstanding. All this translates to a fiscal 2022 non-GAAP EPS expected to be between $4.76 to $4.86 per share, resulting in double-digit growth.
And finally, we expect operating cash flow of approximately $1.4 billion to $1.5 billion and capital expenditures of $300 million. This capital investment represents an increase over 2021 as we continue our focus on growth, bringing our NASD Train B expansion online and expanding consumables manufacturing capacity for our Cell Analysis and Genomics businesses. We have also announced raising our dividend by 8%, continuing an important streak of dividend increases and providing another source of value to our shareholders.
Now let's move on to our first quarter guidance. But before I get into the specifics, some additional context. Lunar New Year is February 1 this year, a shift from last year when it was in mid-February. As a result, we expect some Q1 revenue to shift to the second quarter of this year as customers shut down ahead of the holiday. In addition, as I mentioned, we do expect to see the largest impact of COVID-related revenue headwinds in the first quarter. We estimate these two factors will impact our base business growth by 2 to 3 points and roughly equal in impact. For Q1, we are expecting revenue to range from $1.64 billion to $1.66 billion, representing reported and core growth of 5.9% to 7.2%. Adjusting for the timing of Lunar New Year and COVID-related headwinds, core growth would be roughly 8% to 10% in the quarter. First quarter 2022 non-GAAP earnings are expected to be in the range of $1.16 to $1.18.
And a couple additional points before opening the call for questions. In conjunction with the new One Agilent commercial organization Mike talked about, we will be reporting under the new structure starting in Q1. In addition, we'll be providing a recast of certain LSAG and ACG historical financials to account for the segment changes after the filing of our Annual Report on Form 10-K in December. I am extremely proud of what the Agilent team achieved in 2021 and look forward to another strong performance in 2022.
With that for me, back to you for Q&A.
Parmeet Ahuja - Vice President, Investor Relations
Thanks, Bob. Bethany, if you could please provide instructions for the Q&A now.
Operator
Certainly. [Operator Instructions] The first question comes from the line of Vijay Kumar with Evercore. You may proceed.
Vijay Kumar - Evercore ISI - Analyst
Hey, guys. Congrats on a nice print here. And thanks for taking my question.
Mike McMullen - President and Chief Executive Officer
Thanks, Vijay.
Vijay Kumar - Evercore ISI - Analyst
Maybe, I think, my first one on - Mike, maybe my first one on the guidance here. A lot of questions around supply chain, inflationary environment. The guide of 5.5% to 7% core growth for fiscal 2022, what is it assuming for pricing versus volume? And does it assume any contribution from inclisiran?
Robert W. McMahon - Senior Vice President and Chief Financial Officer
Hey, Vijay, this is Bob. I didn't get the last part of your question, maybe, inclisiran. Yes. So on the price, we do have built in roughly 1 point of price into our plan, which was slightly higher than what we had this year, Vijay. And in terms of inclisiran, we won't get into individual customer products, but what I would say is NASD is expecting another year of very strong growth.
Vijay Kumar - Evercore ISI - Analyst
And just on that last point, Bob. And maybe, Mike, for you.
Mike McMullen - President and Chief Executive Officer
Sure.
Vijay Kumar - Evercore ISI - Analyst
I think the Analyst Day outlook had NASD ramping up quite meaningfully. Has anything changed on NASD? Did this capacity ramp-up or timing change at all? And I'm curious on Inclisiran, anything changed post the CRL response letter at Novartis?
Mike McMullen - President and Chief Executive Officer
Not at all. What I would say, the one big change is, the business is doing even better that we had communicated in December of last year. So really appreciate the question. As you know, we've been talking about the new capacity coming online, that's still going right per schedule. In fact, we just reviewed it earlier last week and that's due to come online by the end of calendar 2022. But I think the team has just done a fabulous job, which is, we're going to be able to grow double-digit in '22 even without that new capacity because they're able to continue to drive process improvements of broader book of business and larger batches. So, the business is really on fire. I mean, we are very, very happy with it.
Robert W. McMahon - Senior Vice President and Chief Financial Officer
Yeah, Vijay. If we looked at our order backlog, we're taking orders for 2023 already.
Mike McMullen - President and Chief Executive Officer
I mentioned this to Bob the other day, Vijay, that a year ago, we were talking about could we fill up the factory, could it ramp and we've blown right through that.
Vijay Kumar - Evercore ISI - Analyst
Yeah. That's fantastic, Mike. And just - sorry - to clarify, post a complete response letter to Novartis, no change in inclisiran assumptions for you guys, correct?
Mike McMullen - President and Chief Executive Officer
No, no.
Vijay Kumar - Evercore ISI - Analyst
Fantastic. Thank you, guys.
Mike McMullen - President and Chief Executive Officer
You're welcome. Appreciate the feedback.
Operator
Thank you, Mr. Kumar. The next question comes from the line of Tycho Peterson with JPMorgan. You may proceed.
Mike McMullen - President and Chief Executive Officer
Tycho? Please check [Phonetic] if you're on.
Operator
Tycho? Your line is now open.
Mike McMullen - President and Chief Executive Officer
Great. Can we jump to the next in the queue?
Operator
The next question comes from the line - excuse me - of Brandon Couillard with Jefferies. You may proceed.
Brandon Couillard - Jefferies - Analyst
Hey, thanks. Good afternoon.
Mike McMullen - President and Chief Executive Officer
Hey, Brandon.
Brandon Couillard - Jefferies - Analyst
Mike, maybe just starting with the guide for next year. Can you just kind of talk through some of the variables upside, downside that you consider when building the outlook? I'd be curious what you've embedded for China specifically as well?
Mike McMullen - President and Chief Executive Officer
Yes. So when I talk about the - what we see is the potential upside in the guide. And Bob, maybe you can talk about our China assumptions. And by the way, we hope it came through - are very happy with the momentum we have in China. I think the upside sits with our two largest end markets, Pharma and Chemical Energy. And as Bob indicated in his script, we are assuming high singles, I believe, Bob, for the Pharma market, really coming off this toward growth here in 2021. If that high-level growth continues, that would represent upside in our biggest market. And we've got a lot of really positive things happening in the Pharma side, so I think Pharma - let's say C&E as well, right, Bob?
So we've always - I think this is the most bullish language that I've had in the call for some time about the C&E. So, you can imagine there has been even some caution about not overplaying it too much. But I'd say, the two - our two largest end markets represent the highest - where we think we may have some upside relative to our initial first guide for the year.
Bob, can you remind what we had assumed for China?
Robert W. McMahon - Senior Vice President and Chief Financial Officer
Yeah, Brandon, it's a good question on China. And we continue to be very positive on China. If we look at our backlog, our order growth rate has increased higher than our revenue for the last three quarters. We exited 2021 with a record backlog going into 2022 for China. And our guidance comprehends high single-digit growth in China. So, both being led from a geographic basis, growth will be led by Americas and China going forward.
Brandon Couillard - Jefferies - Analyst
Okay. And then, Mike, in terms of the new organizational structure, why need the COO role now? And then, correct me if I'm wrong, are you planning to collapse ACG into the LSAG segment entirely because I thought…
Mike McMullen - President and Chief Executive Officer
Yeah, no. So, thanks for that clarifying question. So, let me handle the second part of your question first, which is the ACG Group will be 100% services in 2022. And then, we're moving over the CSD portion, the chemistry and supplies portion of that business over to Jacob for two reasons. One is, just the breadth of responsibilities that Padraig would have if we had made that change. But we think it's actually going to be a driver of growth. And I'll ask Jacob to make a comment on that here in a second because I think by having those teams even closer together, we're going to be able to even further accelerate our connect rates on instruments with our chemistry products.
Why the change? Hey, it's best to make - when things are going really well, it's really time to put down the hammer and really go as hard as you can. And that's what we're doing here. So, as you may know, when I first came in as CEO, I had five sales forces. I collapsed those into two. This is the next evolution of that overall transformation of the company with this One Agilent culture behind it. The real belief is that the segmentation of our markets really costs are much more of a customer orientation as opposed to a product-centric view of how we want to sell and reach our customers. And when you think about the scale you get with the digital platforms, digital infrastructure, our services organization, this makes sense to do this while you're on top of your game. So, while things are going well, we thought it was really trying to pick the - accelerate down even further.
And Jacob, if you wouldn't mind just a comment or two what you're thinking about your new responsibilities?
Jacob Thaysen - Senior Vice President, Agilent & President, Life Sciences and Applied Markets Group
Yeah. Thanks for that, Mike. And I'm totally excited. I think that with now that you see the consumables business being part of LSAG global [Phonetic] instruments, we can truly build those end-to-end solutions. That will really drive customer expectations. And I think Padraig and the team have over the past few years, actually shown that the defined in consumables that we can really drive a tremendous connect rate. So I think they've already shown the path forward and now being completely into LSAG, we can really accelerate that.
Mike McMullen - President and Chief Executive Officer
Yeah. And, hey, thanks for that, Jacob. And then, maybe just to close off this line of response. Padraig, any thoughts about your additional new responsibilities?
Padraig McDonnell - Senior Vice President, Agilent & President and Chief Commercial Officer Agilent CrossLab Group
Yeah. Thanks, Mike. First of all, really excited about the new role. And I think a unified commercial strategy and organization will really continue to strengthen Agilent's customer focus. And it helps us to align capabilities for the future where we're going to kind of maximize the connect rate and customer lifetime value. And also, I think, accelerate execution of our digital ambitions to deliver near-term growth and strategically invest for the future. So, very excited and already building on what is a great capability in the company.
Brandon Couillard - Jefferies - Analyst
Okay. That's helpful. Thank you.
Mike McMullen - President and Chief Executive Officer
Thanks, Brandon. Appreciate the question.
Operator
Thank you, Mr. Couillard. The next question comes from the line of Derik de Bruin with Bank of America. You may proceed.
Derik de Bruin - Bank of America - Analyst
Hi. Good afternoon.
Mike McMullen - President and Chief Executive Officer
Hey, Derik.
Robert W. McMahon - Senior Vice President and Chief Financial Officer
Hey, Derik.
Derik de Bruin - Bank of America - Analyst
Thanks. Just making sure I'm there. So, a couple of questions. I guess, can you talk a little bit about the margin expansion, 68 basis points is - and just sort of keep that out. I mean, you've got some inflationary pressures, you've got some FX, you've got some COVID headwind coming off. Can you just sort of like keep out what's the underlying margin expansion if just sort of normalize it? You also have obviously the capacity coming on in Colorado. Just how should we think about the margins and just the different pieces?
Mike McMullen - President and Chief Executive Officer
Bob, do you want to take that?
Robert W. McMahon - Senior Vice President and Chief Financial Officer
Yeah. Thanks, Derik. It's a great question. And what we've been able to do even in this last quarter in the face of inflationary pressures, is be able to drive pretty significant margin expansion across our businesses. And so, as we think about that 60 to 80 basis points, just to put kind of perspective, we're anticipating roughly 15 basis point headwind associated with that Train B build up and that's hiring the people and getting the product coming online and so forth.
And so if we think about that, that's closer to 75 to close to that 100 basis points. A lot of that's going to come through SG&A operating leverage and the activities associated with just not growing our business expenses as fast as the top line. And we are going to be looking to cover some of the inflationary pressures on the top line with that price that I talked about before, which we didn't really have any significant price in 2021. We have started to see that. We took quick action earlier this year to reflect that. And so, a combination of it, most of it being in opex leverage, but there will be some small operating leverage of the top line as well, if you take out the - all right, excuse me, at the gross margin, if you take out the NASD expenses as a result of covering our costs through pricing increases.
Derik de Bruin - Bank of America - Analyst
Thanks. And then just a couple of quick follow-ups. Any evidence of stocking about transportation, supply chains, particularly on the consumable side? And just an update on Res Bio, that looks like it's still lagging a bit versus our initial expectations. Thank you.
Mike McMullen - President and Chief Executive Officer
Hey, Derik, a follow-up on those two questions. So - and I'll have Sam comment on the second question. So, we've not seen any real evidence of stocking on the consumables. So I think that's a pretty fair statement, right, Bob?
Robert W. McMahon - Senior Vice President and Chief Financial Officer
That's correct, Mike.
Mike McMullen - President and Chief Executive Officer
And then, what you're going to hear from Sam in a minute, fin[d a little bit more color. We remain very, very bullish about the long-term prospects with Res Bio and a lot of the work is being done to develop new opportunities with our pharma partners. But we're - where are we on the short-term as well. Sam?
Sam Raha - Senior Vice President, Agilent & President, Diagnostics and Genomics Group
Yeah. Hey, thanks, Mike. In terms of Q4, whereas the revenue came in a little bit below expectations and that's driven in part by COVID-19-related delays in clinical trial enrollment, overall, the interest that we're seeing both from our existing customers on the pharma side that we've been doing IHC work with as well as new customers that's very, very real. In fact, we've now signed an agreement, which is our first with a large existing customer giving evidence to the interest that's there.
In terms of the work that we're doing on the PMAs, these are approvals related to existing agreements with our Resolution Bioscience business. We're making good progress on that. And so a lot of momentum in a number of areas. So very pleased to have them as part of our business to really bring together the strategy we've had, which is to be the companion diagnostic development and commercialization partner leveraging multiple modalities, including immunohistochemistry and next-generation sequencing.
Derik de Bruin - Bank of America - Analyst
Thanks, Sam.
Operator
Thank you, Mr. de Bruin. The next question comes from the line - excuse me - of Tycho Peterson. I do apologize. Next question comes from the line of Dan Leonard with Wells Fargo. You may proceed.
Dan Leonard - Wells Fargo Securities - Analyst
Hi. Good afternoon.
Mike McMullen - President and Chief Executive Officer
Good afternoon, Dan.
Robert W. McMahon - Senior Vice President and Chief Financial Officer
Hey, Dan.
Dan Leonard - Wells Fargo Securities - Analyst
So, my first question relates to the 2022 guide. What are some of the factors that might pull performance back down to the mid-single-digit range, specifically something that would start with a five handle?
Robert W. McMahon - Senior Vice President and Chief Financial Officer
Yeah. I think, what I would say is, first of all, I think our guidance is prudent given the beginning of the year. If we saw continued greater than expected disruptions in the supply chain that may impact demand, particularly in some of the applied markets that could do it, although we haven't seen that to be very clear, Dan. We feel very good about where we are given our forecast and backlog. So, I would say, we have a bias towards the upside in our forecast as opposed to bias towards the downside.
Dan Leonard - Wells Fargo Securities - Analyst
Appreciate that. And then, a follow-up on the shift in chemicals and supplies from ACG to LSAG. If the logic behind the move is to increase the connect rate, can you remind me where is the connect rate today and where you want it to be over some period of time?
Robert W. McMahon - Senior Vice President and Chief Financial Officer
Yeah, it's a great question. And the team continues to do a great job under Padraig's leadership here to do that both at the purchase and then on the ongoing aftermarket. What I would say is, right now, if you look at the overall attach rate, it's probably in the mid-20s right now. And if you look at the attach rates year-on-year, we saw very nice growth on the new placements. So, all the new instruments that Jacob and team have been able to sell, that's why we feel very good about the ACG business going forward. So, we still have a long way to go there in terms of opportunity across both the services as well as the consumables. Some of our competitors are higher than that and so we've got aspirations that are well above that mid-20s.
Mike McMullen - President and Chief Executive Officer
Yeah. And Dan, I'd just like to make sure it's clear. We're not making this change because we were dissatisfied with the improvements in our connect rate. This icing on top of the cake to further accelerate it as we look to balance span and control and business responsibilities with the real driver was the one commercial - creation on the one commercial organization. And I think this is a nice secondary benefit that we're actually going to get, we think, even more focused and tighter alignment between our product development groups on the CSD side and instrument side.
Dan Leonard - Wells Fargo Securities - Analyst
Helpful clarification, Mike. Thank you.
Mike McMullen - President and Chief Executive Officer
You're welcome.
Operator
Thank you, Mr. Leonard. The next question comes from the line of Puneet Souda with SVB Leerink. You may proceed.
Puneet Souda - SVB Leerink - Analyst
Yeah. Hi, Mike. Thanks for taking the question.
Mike McMullen - President and Chief Executive Officer
Sure, Puneet.
Puneet Souda - SVB Leerink - Analyst
Thanks. So, first one is on environmental. I mean, you have a leading position there with a number of products across the LSAG product line. Maybe just - could you elaborate a bit more for us what's going on there, specifically related to China, the timing in China. Is that just Lunar New Year? Or is there something more that we need to consider?
Mike McMullen - President and Chief Executive Officer
Yeah. I think there's - maybe I'll start, Bob, and you can jump in on this. So, I think when we talk about - we talked about Environmental and Forensics. I think it's sort of a tale of two cities. So, buried in that number is a decline in forensics. And I think that's probably really tied to governments prioritizing other investments in this COVID-19 world. The demand is just not there.
I think, relative to China, it's been more about priorities. Right now, they're shifting some of their priorities towards the pharma and other COVID-19-related type investments. So, I think, that's probably, I mean…
Robert W. McMahon - Senior Vice President and Chief Financial Officer
Yeah. The only think I would add on that Mike is, there is some shift, but it's also timing.
Mike McMullen - President and Chief Executive Officer
Yeah.
Robert W. McMahon - Senior Vice President and Chief Financial Officer
There are some…
Mike McMullen - President and Chief Executive Officer
Something [Indecipherable]
Robert W. McMahon - Senior Vice President and Chief Financial Officer
Yeah, yeah. There is some budget that we've seen that has shifted into our fiscal first quarter and into FY '22, in particular, in China. I think, long-term, we still see the importance of environmental testing in China and around the world remains to be seen - is still intact, Puneet. And it's more a function of timing than anything else.
Mike McMullen - President and Chief Executive Officer
Yeah. Thanks for jumping in on that, Bob, because we still are very confident about our ability to grow environmentals in China. I think it's well known, the government's real emphasis on continuing to make improvements in the quality of life of our citizens.
Puneet Souda - SVB Leerink - Analyst
Got it. And then, just on the liquid chromatography, just staying on that point. I really appreciate your comments on the chemistry columns and consumables now being part of LSAG. But when we look at the business overall today, you obviously have a strong 1200 series offering. We're also seeing pickup from another leading competitor in the market space that has lost some share over the last few years and there seems like they're gaining some back. But just wondering, what you are seeing in the field and in terms of further competition in this side of the market? I appreciate any thoughts. Thank you.
Mike McMullen - President and Chief Executive Officer
Yeah. Jacob, how about I lead off on here. And first of all, I want to say is, the key competitors in the LC market remain unchanged. There's nobody new in the market. And what I can tell you is that, we're very, very happy with where we are in liquid chromatography. So we're not playing any kind of catch-up game at all here. We delivered high teens growth in the quarter and exited the year with record backlog and our growth rate in orders was significantly higher than our revenue growth rate.
And I think, Jacob, it's fair to say that the strength is both on the large and small molecule size with the real standout of China geographically. And I think you exited the year, but we see is a record backlog. So we're really bullish on our LC business and maybe you want to have some additional comments.
Jacob Thaysen - Senior Vice President, Agilent & President, Life Sciences and Applied Markets Group
Yeah. Thanks, Mike. It's something to be proud of. And I'm actually really good where we are right now. As you said, we are growing very strongly. As I can see, when I look into the market, we are in a very strong position versus our competition also. And just a reminder, we here - a few quarters ago, we did announce that we have expanded our Bio LC portfolio substantially. So we really have the full range of Bio LCs out there, but we also have 2D-LCs and also online LCs to really drive growth in that area. So Bio LC really came timely with all the investment that goes into large molecules right now. So I truly believe we have momentum and we'll continue with that over the next period of time.
Puneet Souda - SVB Leerink - Analyst
Great. Thanks, guys.
Mike McMullen - President and Chief Executive Officer
Thanks, Jacob.
Operator
Thank you, Mr. Souda. The next question comes from the line of Patrick Donnelly with Citi. You may proceed.
Patrick Donnelly - Citigroup - Analyst
Hey, guys. Thanks for taking the questions.
Mike McMullen - President and Chief Executive Officer
Sure, Patrick.
Patrick Donnelly - Citigroup - Analyst
Bob, maybe one for you to start. Just on the margin side. I know you talked about 60 to 80 bps of expansion. It sounds like the NASD facility might be a little bit of a headwind. Can you just talk through the moving pieces there? I know you called out price a little bit as well. Can you just talk about the levers and how much of an offset the facility is, as we can kind of think about the underlying number as well?
Robert W. McMahon - Senior Vice President and Chief Financial Officer
Yeah. So, I would say, maybe on NASD, if I look at it and I break it into two components. If I look at it with the existing capacity, that team not only has driven top line growth, but if we looked at the margin, it actually is accretive to the overall Agilent margin. So that team has done a fabulous job ramping up…
Mike McMullen - President and Chief Executive Officer
It's accretive, right?
Robert W. McMahon - Senior Vice President and Chief Financial Officer
Accretive, yeah. Very nicely. And so, we're making the investment on Train B. It's roughly 15 basis points. That's inclusive of that 60 to 80. So it's a roughly $10 million to $15 million of incremental costs associated with the training and investments as the lines come on board. And so, we're seeing that - take that to a side because those are kind of discrete.
And if I look at the business, what we're seeing is the faster growing areas. We actually are seeing a benefit of mix. And so, we talked a little bit about cell analysis but also cell analysis in LSAG has been very accretive both on the gross margin as well as the operating profit side. And so, we've got these faster growing businesses that are helping with mix. And then we're adding on the incremental price to cover the inflationary pressures that we are seeing and so forth. But we've also got productivity measures in place.
And this is where I think the One Agilent approach to our systems and our infrastructure really pays dividends because we're able to leverage those costs across a larger base. And because a lot of that is internal, we don't have that same level of pressure on cost as we are seeing in some other areas. And so, it's a combination of product mix, that price. I talked about 1% price and then leverage in the operating expense side.
Patrick Donnelly - Citigroup - Analyst
That's helpful. Thanks, Bob. And then, Mike, maybe one for you on C&E. I know, in the script, you kind of called out maybe having the most positive tone you've had in a little while here on that segment. Obviously the end market health seems pretty high from the customers. Can you just talk about, I guess, the conversations you're having there, visibility, again, guiding to high single for next year off a pretty strong '21 is encouraging. So maybe just your confidence. And then again, it sounds like maybe there's even some upside to that number?
Mike McMullen - President and Chief Executive Officer
Yeah. Sure, Patrick. So, yeah - so we're seeing really good end market demand for - and I think Bob highlighted a lot of those like the advanced materials or chemicals. It really speaks to the overall recovery economically on a global basis. And the fact that this - in particular, this customer base had deferred a lot of investments for some period of time. So, they're in a reinvestment mode. And we have pretty good visibility to the funnel. So, I think we probably got at least a six-month lead view on what's coming down on instrument purchases. So, we're feeling really good about the C&E business as well as there's an ACG story here as well where we're continuing to increase services in this segment, which has historically been more of a self-maintainer kind of market, as well as the chemistries and consumables side. So, I think we've got pretty good visibility, given our confidence and be able to put this kind of number out there in a full year guide at this point in time.
Bob, anything else you'd add to that? I know we spent a lot of time talking about this.
Robert W. McMahon - Senior Vice President and Chief Financial Officer
No, I think you got it. You said it well.
Patrick Donnelly - Citigroup - Analyst
Great. Thanks, Mike.
Robert W. McMahon - Senior Vice President and Chief Financial Officer
You're quite welcome.
Operator
Thank you, Mr. Donnelly. The next question comes from the line of Josh Waldman with Cleveland Research. You may proceed.
Josh Waldman - Cleveland Research - Analyst
Hi. Thanks for taking my questions.
Robert W. McMahon - Senior Vice President and Chief Financial Officer
Sure, sure.
Josh Waldman - Cleveland Research - Analyst
Wanted to start with a quick follow-up on supply chain. Yeah. Hey, Bob. Wanted to start with a quick follow-up on supply chain. I wondered if you could give us the magnitude of the push-out you referenced? And is this all LSAG?
Mike McMullen - President and Chief Executive Officer
Well, I'm going to pass it to Bob here in a second, but let me really clear in terms of our language. When I use supply chain, that means material constraints and then we have logistics. I think, the issues that Bob - the transit times was really logistics issue. In terms of our ability to get product to customers and get the raw materials, we feel pretty good about what's been going on there.
Robert W. McMahon - Senior Vice President and Chief Financial Officer
Yeah, exactly. So it was more just longer delivery times. And Josh, it was in the LSAG business, as you would expect. It was roughly a point in the quarter.
Josh Waldman - Cleveland Research - Analyst
Okay. And given the transient nature, it sounds like you're assuming this all hits in the first quarter. Is that kind of what's embedded in your guide?
Robert W. McMahon - Senior Vice President and Chief Financial Officer
We're assuming that it will get better over the course of the first half of next year - or first half of the fiscal year. So not all of it will come back in Q1.
Josh Waldman - Cleveland Research - Analyst
Got it, okay. And then, I wanted to follow-up on your comments within the LC/MS franchise. I believe, in your prepared remarks, you highlighted stronger install rates in this franchise in the fourth quarter. Just wondered if you could provide any additional color on that, maybe what's driving it? Is it higher or faster kind of accelerated refresh levels at legacy accounts or maybe you're seeing kind of increased win rates at new accounts?
Mike McMullen - President and Chief Executive Officer
I'm going to - great question. I'm going to pass that to our expert on this topic. Jacob, maybe you want to talk about what's going on in the LC/MS front.
Jacob Thaysen - Senior Vice President, Agilent & President, Life Sciences and Applied Markets Group
Yeah. Certainly, Mike. And as you mentioned, we had great success with our new Ion Mobility, 6560C that we launched here at ASMS, and we had a fantastic worker and user meeting also that was all subscribed. But as you also speak to, we had tremendous traction on our triple core and [Indecipherable] businesses. And particularly in the biopharma space, we see a lot of smaller accounts also coming live small midsized accounts that are starting to build up their capabilities within the analytical instruments business. So we see a lot of tremendous momentum there. But obviously, also the big accounts that is more in the refresh mode.
Mike McMullen - President and Chief Executive Officer
Yeah. So, I think part of the story, Josh, is new customers, right, particularly on the biopharma side and also doing very well on the refresh side with the existing customers.
Josh Waldman - Cleveland Research - Analyst
Got it. Yeah, really appreciate it guys.
Mike McMullen - President and Chief Executive Officer
You're quite welcome.
Operator
Thank you, Mr. Waldman. [Operator Instructions] Our next question comes from the line of Michael Gokay with KeyBanc Capital Markets.
Paul Knight - KeyBanc Capital Markets - Analyst
Hey, Mike, it's Paul Knight. Thanks for the time.
Mike McMullen - President and Chief Executive Officer
Hey, Paul. How are you doing?
Paul Knight - KeyBanc Capital Markets - Analyst
Good, good. On the Avantor agreement, is there any way you can talk about - does that give you another 5% of addressable market? What are your thoughts around that deal?
Mike McMullen - President and Chief Executive Officer
Yeah. Hey, thanks for noticing that we had worked with Michael's team and have a real agreement we're really excited about. And I'm actually going to pass it over to Agilent's new Commercial Officer to his view on that question.
Padraig McDonnell - Senior Vice President, Agilent & President and Chief Commercial Officer Agilent CrossLab Group
I think - yeah, thanks, Mike. I think we see that it's a really beneficial arrangement that we're going to see not only different customers but at different spaces within customers. And it also helps with overall the addressable market and coverage. So, the Agilent team and the Avantor team will be able to share leads and so on. So we'll be able to cover the market better. We'll also be able to use our digital capabilities to be able to find new customers and also increase the wallet share and customer side. So all around, a very positive development.
Mike McMullen - President and Chief Executive Officer
And Paul, it's hard to put an exact percentage on the question, but we wouldn't be doing it if it was on the margin.
Robert W. McMahon - Senior Vice President and Chief Financial Officer
Yeah. And I was going to say - Paul, this is Bob. Just to add, I mean, we didn't really see any revenue. That's all future opportunity for us. And I think one of the areas that Avantor is strong is in the research area, Academia and Government, and this will help us even cover that market even broader than we do today.
Mike McMullen - President and Chief Executive Officer
Yeah, absolutely.
Paul Knight - KeyBanc Capital Markets - Analyst
Thank you.
Operator
Thank you. The next question comes from the line of Dan Brennan with Cowen. You may proceed.
Dan Brennan - Cowen - Analyst
Hey, Mike. Hey, Bob. How are you guys doing?
Mike McMullen - President and Chief Executive Officer
All right, Dan. How about yourself? Thank you. Thank you.
Dan Brennan - Cowen - Analyst
Doing well, doing well. Maybe first question on NASD. Maybe I missed it. Did you guys give a number for '22, what's implied?
Robert W. McMahon - Senior Vice President and Chief Financial Officer
We did not. But what we did say is, we would expect strong double-digit growth. I'll leave it at that. What I can tell you is we exited at a run rate that was higher than the - if you took our $225 million that we talked about and divided by four, our run rate was higher than that.
Mike McMullen - President and Chief Executive Officer
Right.
Robert W. McMahon - Senior Vice President and Chief Financial Officer
So we continue to ramp.
Mike McMullen - President and Chief Executive Officer
Yeah, thanks for that question. It was hard to explain it in the call narrative, but as Bob mentioned, our Q4 exit rate is higher than the full year number.
Dan Brennan - Cowen - Analyst
And maybe could you give a little color there. I think, Bob, you mentioned in the prepared remarks or in the Q&A that you're taking in orders to '23. Could you just give us a sense like what the utilization is today of your capacity that's available and any color about demand trends book of business things of that nature?
Robert W. McMahon - Senior Vice President and Chief Financial Officer
Yeah. In short, we're running 24/7 at both our Frederick facility as well as our Boulder facility, which was a legacy facility. And we are - feel very good about our ability to continue to expand capacity. What Brian and team have been able to do is increase both throughput as well as yield. And so that's really helped us drive additional capacity with the existing footprint or the existing manufacturing facility. And the Train B, as we talked about, has the opportunity to add more than $100 million of incremental volume coming online starting at the end of this - our fiscal - our calendar 2022.
Dan Brennan - Cowen - Analyst
Got it. And then, maybe on the One Agilent, Mike, could you just give us - I know, Mike, when you got there, you made some changes to the sales force that have made under your predecessor, now you're going further. So how should we see this manifest from the outside over the next, I don't know, one to two years? Does this lead to stronger growth? Is it going to lead to more better margins, more durable growth? Just obviously the customers are going to see something, but how will that manifest in reported results, do you think?
Mike McMullen - President and Chief Executive Officer
I think it's a check for each one of the things you listed there, but the number one reason why we're doing is to drive more growth. And it's just a natural evolution of the transformation of the sales force I started a number of years ago. And it really points to the fact that we have this broad-based portfolio that's selling into the same customer base. And why have two separate sales forces and have to go do the coordination between across sales forces, and then the big push that we made over the last several years in terms of digital, this allow us, I believe, to even go faster on realizing our digital ambitions. And then you've got the voice of the customer will be right in the CEO staff and [Indecipherable], the Head of the service delivery organization.
So, everything relative to the customer facing that we do in this company will be under one leader. We just think it's going to find ways to accelerate our growth, increase our customer satisfaction. And I think as we push more and more of our business because customers want to buy that way through digital, it will have a natural knock-on effect of efficiency gains in the P&L.
Dan Brennan - Cowen - Analyst
Great. And then, maybe one more. Obviously, balance sheet is in great shape. So, the proverbial question about M&A, just wondering what does the funnel look like? Any update on the strategy? I know you've been pretty cognizant of not wanting to go too big here and kind of not disrupt what you built there, but just give us a sense of what the needs are today and what is the outlook for M&A in 2022?
Robert W. McMahon - Senior Vice President and Chief Financial Officer
Yes. Sure, Dan. So I've used - been using this order the last several years of the build and buy a growth strategy. So, we're still very interested on the buy element of fuel and future growth. And for example, in this past year, we did the Res Bio acquisition really got us into liquid biopsy and really allows us to play to our strengths that we already have from our CDx and IHC business. So, we're going to look for continued opportunities such as those where you're in higher growth markets than the total company average, where they can really benefit by being part of Agilent and where they have differentiated technology and differentiated teams. We will stay in our lane, so to speak, on valuations.
I'd say, the - you know that's better than I do, perhaps, Dan. The market is still very robust. We're very active and we just want to make sure that the deal works for our shareholders. But deploying capital for M&A is part of our story going forward and it's all upside.
Dan Brennan - Cowen - Analyst
Great. Thanks, guys. Excellent. Thank you.
Operator
Thank you, Mr. Brennan. The next question comes from the line of Jack Meehan with Nephron Research. You may proceed.
Jack Meehan - Nephron Research - Analyst
Thanks. Good afternoon. Wanted to dig in a little bit more on Cell Analysis. So, heard cleared $100 million in the quarter. What was the 2021 contribution? And similar to the line of questioning on ASP, what's the target there for 2022 growth?
Robert W. McMahon - Senior Vice President and Chief Financial Officer
Yes. So, I'll start with the Cell Analysis business and I'll bring in Jacob here because it has just done a fantastic job, and it's really continued the momentum that we saw at the beginning - throughout '20. So, it ended just short of $400 million for the full year and it grew in the mid-20s. And I would expect us to - looking forward if we think about where the market is headed and the fundamental demand there, that will be growing double-digits for sure going forward.
And as I mentioned before, the beauty of that business is it's right in grain with where the research and technologies are going and where a lot of money is being put in, but it's also an extremely well-run and profitable business for us.
Mike McMullen - President and Chief Executive Officer
And Jacob, maybe you can give some insights in terms of where are the end markets you think that are driving - been driving the growth and where we think it's going to come from in the future?
Jacob Thaysen - Senior Vice President, Agilent & President, Life Sciences and Applied Markets Group
Yeah, thanks for that. It's a really good question. Obviously it's something I'd really like talk about. The Cell Analysis business has been super successful the past years. And our focus on the immuno-oncology space has really paid off. We continue to see opportunities there and we continue to see that our portfolio of being able to measure live cells is required to really drive the research forward. So where we really see the opportunity is, is in the - between biopharma and also the academic market there, that's where we see the biggest and the biggest momentum going forward. While we have seen here in the past period of time also that the Diagnostic business, particularly with our flow cytometry is picking up good speed. But, I would say, the main opportunity sits in the biopharma space.
Mike McMullen - President and Chief Executive Officer
And did you ask a question about NASD?
Jack Meehan - Nephron Research - Analyst
Jack Meehan: No.
Mike McMullen - President and Chief Executive Officer
Okay.
Jack Meehan - Nephron Research - Analyst
Can you down that line just on the comparison.
Mike McMullen - President and Chief Executive Officer
Okay. All right. You're right, Bob.
Jack Meehan - Nephron Research - Analyst
My follow-up was going to be, a lot of discussion obviously around driving growth. I was hoping to just get your philosophy on capex. So I think the guidance implies about 4.5% of sales for 2022. That'd be higher than you've done in the last few years. Do you expect this is going to remain elevated more kind of in the medium term? Or is this just kind of some of the near-term opportunities coming through?
Robert W. McMahon - Senior Vice President and Chief Financial Officer
Yeah. Jack, that's a great question. And what I would say is, if we look at where our - there's different kinds of capex, and it's not all created equal. But the reason that it's being increased is really to fund that growth and capacity expansion, whether that be Train B and NASD or the capacity expansions in places like genomics and cell analysis. And I would say, given our growth trajectory in those areas, I would expect us to continue at probably an elevated level to incorporate that growth.
As Mike said, we've got this buy and build strategy. And that's part of the build strategy. And it has paid off in spades with NASD. And what I would say is, we're not - there's more letters in the alphabet than B. It doesn't end at B. But what I would say is, we're going to be prudent about it, but also be aggressive about going forward.
Jack Meehan - Nephron Research - Analyst
Thank you.
Operator
Thank you, Mr. Meehan. The last question is from the line of Catherine Schulte with Baird. You may proceed.
Catherine Schulte - Baird - Analyst
Hey, guys. Thanks for the questions.
Mike McMullen - President and Chief Executive Officer
Hey, Catherine.
Catherine Schulte - Baird - Analyst
First, on the LSAG guide for mid-single digits. I think on the last call, you talked about the GC replacement cycle coming back on, maybe being in the midst of an LC replacement cycle on small molecule and you'll now have chemistries in there as well. So, should we think about this as being more towards upper end of that mid-single-digit range for '22 or is there some sort of catch-up spend in '21 that maybe is a headwind as we get into '22?
Robert W. McMahon - Senior Vice President and Chief Financial Officer
Yeah. I think you're spot on it, Catherine. It's the former, not the latter. Think about it as a higher end. And that's where, I would say, if we think about where our opportunities for upside are in the instrumentation business and continuing the strong momentum that we've seen. Now we're also going up against, I think, a 15% core growth rate year-on-year. But we feel very good about the momentum in that business, particularly in the areas that you just talked about in Chemical and Energy and in Pharma.
We continue to believe that the pharma business coming out of COVID is structurally a higher growth market. And as we continue to place our focus on the biopharma or the large molecule, if you look at that throughout 2021, that was much - growing much faster than the overall Pharma business. And so, we would expect that - we feel very good about that business going forward.
Catherine Schulte - Baird - Analyst
Okay. And then, maybe one more. You've had a lot of success on NASD. Do you have any interest in entering other areas of manufacturing components for biopharma, whether it's GMP reagents or DNA plasmas or other areas? And is that something that you might get into in '22?
Mike McMullen - President and Chief Executive Officer
Well, Catherine, we're always looking for new drivers of growth that would make sense for Agilent to be directly involved in. So, nothing to report for 2022. We've got a handful of adding different additional letters, if you will, to the - that we serve in NASD, but never say never to the thesis of your question.
Catherine Schulte - Baird - Analyst
Okay. Thank you.
Mike McMullen - President and Chief Executive Officer
Quite welcome.
Operator
Thank you, Ms. Schulte. And the last question is from the line of Noah Baron with JPMorgan. You may proceed.
Tycho Peterson - JPMorgan - Analyst
Can you guys hear me?
Mike McMullen - President and Chief Executive Officer
Yes.
Robert W. McMahon - Senior Vice President and Chief Financial Officer
Hey, Tycho.
Tycho Peterson - JPMorgan - Analyst
It's Tycho. Sorry about the phone issues.
Mike McMullen - President and Chief Executive Officer
No problem at all. So, Dako, I appreciate the China color. Obviously people are focused on China tenders at the moment. It doesn't sound like you're flagging any issues there, specifically for Dako, but can you talk about what you're kind of seeing on the ground there for China? And then, how big is the CDx business? You mentioned that earlier, Mike, and you obviously had a bunch of press releases during the quarter about new approvals for CDx? Yeah. So, Sam, I know this is something you've been talking to your team about relative - specifically about what maybe happened in the China diagnostics market and what's going on there. So we think we've got a pretty good protective position. But why don't you elaborate a bit more?
Sam Raha - Senior Vice President, Agilent & President, Diagnostics and Genomics Group
Yeah. Happy to, Mike. Tycho, thanks for the question. We've had another, just overall for our pathology business, the former Dako business, if you will, a really good quarter, including in China. And you may be referring, Tycho, to the buy China requirements that we're all aware of that are happening specifically to our former Dako business, if you will. The relative unique position, particularly with PD-L1 and having a minimal number of local competitors really differentiates us. So, we haven't felt really pressure from the buy China impacting our business. But we have continued to see really good interest not only in PD-L1 companion diagnostics that brought more broadly speaking in China for our diagnostic products.
Mike McMullen - President and Chief Executive Officer
Sam, if I recall, you've got your PD-L1 registered in China, right?
Sam Raha - Senior Vice President, Agilent & President, Diagnostics and Genomics Group
Yes, we do. I mean, we registered that almost exactly two years ago, becoming the first-ever companion diagnostic in China and it's doing well for us there in China. We've actually now trained over 400 different pathologists throughout China to utilize our companion diagnostic.
Mike McMullen - President and Chief Executive Officer
Yeah. And Tycho, maybe just a follow-up. If I looked at our business in China for DGG for the year, it grew in the 30s, and it was actually in excess of that for Q4. So it had very positive momentum and CDx is roughly $100 million, ex the Res Bio acquisition.
Tycho Peterson - JPMorgan - Analyst
Great. And then, on Cell Analysis, Mike, I know one of the priorities you've talked about is moving that portfolio downstream. Can you talk about those efforts, how actively you're looking at kind of pushing that into QA/QC and further downstream?
Mike McMullen - President and Chief Executive Officer
Yeah. So, Jacob, why don't you follow-up with some thoughts here?
Jacob Thaysen - Senior Vice President, Agilent & President, Life Sciences and Applied Markets Group
So, Tycho, when you said downstream, can you tell a little more?
Tycho Peterson - JPMorgan - Analyst
More in the bioproduction versus R&D, yeah.
Jacob Thaysen - Senior Vice President, Agilent & President, Life Sciences and Applied Markets Group
On the bioprocessing. So, yes, we see a big opportunity in the bioprocessing space, both for Cell Analysis business, but also to our analytical instrument business. So I think that's something we will continue to invest in going forward.
Robert W. McMahon - Senior Vice President and Chief Financial Officer
Yeah. I think what we're seeing right now, Tycho, is moving from truly research into the development area. And then that will then lead into the QA/QC. So, I think you see a multi-step process here. And so, as Jacob said, it's just early days here from that standpoint, but making great progress across all three of those kind of sub-businesses and have high hopes for that to continue.
Mike McMullen - President and Chief Executive Officer
A similar flow that we've seen in pharma for years, right, which is start in our R&D then works its way into QA/QC. And Tycho, I think we built this great business through a series of acquisitions and the way we integrate into it making one business. And this would be an area of obviously future focus for us on the M&A front as well.
Tycho Peterson - JPMorgan - Analyst
Great. Just one last one on the new Agilent, and I know you've got a number of questions on the rollouts there.
Mike McMullen - President and Chief Executive Officer
Sure.
Tycho Peterson - JPMorgan - Analyst
Are there new services you're introducing in conjunction with that? Are you broadening the service portfolio?
Mike McMullen - President and Chief Executive Officer
Not yet, but stay tuned. So, only just a few weeks old.
Tycho Peterson - JPMorgan - Analyst
Fair enough. All right. Thanks.
Mike McMullen - President and Chief Executive Officer
Okay. Thanks a lot, Tycho. Thank you for getting on the call.
Operator
Thank you, Mr. Peterson. There are no additional questions waiting at this time. I would like to pass the conference back to Parmeet Ahuja for any closing remarks.
Parmeet Ahuja - Vice President, Investor Relations
Thanks, Bethany. And thanks, everyone. With that, we would like to wrap up the call for today. Have a great rest of your day.
Operator