Agilent Technologies, Inc. · NYSE:A
Agilent Technologies — Merger or Acquisition (September 2013)
37 slides from Agilent Technologies's merger presentation, Sep 19, 2013
Slide 1: Separating Into Two Industry-Leading Public Companies
Agilent Technologies Separating Into Two Industry-Leading Public Companies to Increase Strategic Flexibility and Enhance Shareholder Value September 19, 2013 Page 1
Slide 2: Safe Harbor
Safe Harbor This presentation contains forward-looking statements (including, without limitation, information and future guidance on the company’s goals, priorities, the planned separation of our Electronic Management Group, revenues, demand, growth opportunities, customer service and innovation pla
Slide 3: The World's Premier Measurement Company
The World’s Premier Measurement Company EM Markets LDA Markets FY13(1) Revenue $3.9B, Operating Margin 18% Electronic Life Diagnostics & Chemical Measurement Sciences Genomics Analysis Group Group Group Group FY13 Revenue $2.9B FY13 Revenue $1.6B FY13 Revenue $0.7B FY13 Revenue $1.6B Operating Margi
Slide 4: Agilent to Split into Two Companies
Agilent to Split into Two Companies Strategic Rationale for Separation • Capitalizing on EMG, Agilent has grown LDA to be a sizeable and highly competitive business • Spin-off to create two companies with greater strategic and management focus, each well positioned for growth in its sector • Distinc
Slide 5: Two Independent Publicly Traded Companies
Two Independent Publicly Traded Companies LDA-Focused Company EM-Focused Company (New Agilent) (To Be Named) Chemical Life Analysis Sciences Electronic Measurement Revenue Mix 41% 42% 100% Genomics & Diagnostics 17% Financial Revenue: $3.9B Revenue: $2.9B Operating Margin: 18% Operating Marg
Slide 6: Management Teams
Management Teams New Agilent EM Company Bill Sullivan, President Ron Nersesian, President and CEO and CEO designate Neil Dougherty, Chief Didier Hirsch, Chief Financial Officer designate Financial Officer (formerly VP and Treasurer of Agilent Technologies) Page 6
Slide 7: New Agilent: Life Sciences, Diagnostics, and Applied Markets
New Agilent: Life Sciences, Diagnostics, and Applied Markets Page 7
Slide 8: New Agilent Overview and Revenue Mix
New Agilent Overview • Global leader in Life Sciences, Diagnostics, and FY13(1) Financial Metrics Applied markets • Attractive recurring revenue base • Revenues: $3.9B, +9% y/y (+5% core(2)) • Balanced geographic revenue profile • Operating Margin: 18% of revenue • Growth opportunities in emerging m
Slide 9: New Agilent: Market Profile
New Agilent: Market Profile Market Size(1): $41B Long Term Market Growth(1): 4-6% Long Term Market Market Revenue Mix(2) End Markets Size(1) Market Growth(1) Position(1) Growth Drivers by End Market • Shift to new biological Pharma & $11B 4-6% #3 entities Biotech • Emerging markets Academia & • Glob
Slide 10: What's Different for New Agilent?
What’s Different for New Agilent? Same Different Leadership in Life Sciences, Diagnostics, Pure play Life Sciences, Diagnostics, and and Applied markets Analytical Company Continued strategic push from lab to the Scale and financial strength to stand on its clinic. Ensuring the success of Dako own G
Slide 11: New Agilent: Strategy to Win
New Agilent: Strategy to Win Creating Shareholder Value Increase organic growth rate Leverage large and growing installed base to expand recurring revenues and core instrument sales Take advantage of greenfield opportunities in developed markets (clinical instrumentation, integrated biology, s
Slide 12: Electronic Measurement Focused Company
Electronic Measurement Focused Company Page 12
Slide 13: EM Company Overview
EM Company Overview The World’s Premier Electronic Measurement Company FY13(1) Financial Metrics • Leading position in major markets • Revenue: $2.9B, -13% y/y (-12% core(2)) • Operating Margin: 19% Communications Aerospace Industrial, • ROIC: 31% #1 Defense Computers, #1 Semiconductors #1 Q3’13 Rev
Slide 14: EM Company: Market Profile
EM Company: Market Profile Market Size(1): $13B Long Term Market Growth(1): 3-4% Long Market Term Market Revenue Mix(2) End Markets Size(1) Market Growth Drivers Position Aerospace by End Market Growth(1) Industrial Defense • Mobile data traffic growth 30% 23% • Complex components and Communications
Slide 15: What's Different for EM Company?
What’s Different for EM Company? Same Different Technology leadership Business model completely aligned with shareholders and analysts #1 in key markets Electronic measurement top opportunities are company’s top opportunities Focus: profit and cash generation Whole company 100% focused on EM and Org
Slide 16: EM Company Strategy to Win
EM Company Strategy to Win World’s premier electronic test and measurement provider in Communications, Aerospace/Defense, and Industrial markets First to market with leading edge customer-valued technology solutions Take share in core platforms Top opportunities in electronic measurement ind
Slide 17: EM Company Strong Profitability Throughout the Cycle
EM Company Strong Profitability Throughout the Cycle Goal Actions taken since 2009 downturn Reduced headcount by 2700 people Lower Costs Focused on continuous GM improvement – value engineering Increased use of Contract Manufacturing Shift Fixed Costs Increased indirect channel for variable
Slide 18: Transaction Details
Transaction Details Transaction Agilent shareholders will receive a pro rata distribution of shares in EM Company via a Structure tax-free spin-off Expected to be completed by end of calendar year 2014, subject to the satisfaction of customary closing conditions, including: — Final approval by t
Slide 19: Spin-off Execution Plan
Spin-off Execution Plan Leverage prior experience Agilent has completed four major spin-offs/divestitures since 2005 Dis-synergies of ~ $100M cumulative over three year period Little real estate overlap outside of sales offices Clean ERP separation Most dis-synergies in shared infrastruc
Slide 20: Appendix
Appendix Page 20
Slide 21: New Agilent Historical Consolidated Income Statement
New Agilent Historical Consolidated Income Statement(1) $M FY 2010 FY 2011 FY 2012 Revenue 2,679 3,310 3,543 % YoY 30% 24% 7% COGS 1,245 1,603 1,685 Gross Margin % 54% 52% 52% Operating Expenses 936 1,157 1,225 % Revenue 35% 35% 35% Operating Profit 498 550 633 % Revenue 19% 17% 18% (1) Presented on
Slide 22: EM Company Historical Consolidated Income Statement
EM Company Historical Consolidated Income Statement(1) $M FY 2010 FY 2011 FY 2012 Revenue 2,784 3,316 3,315 % YoY 15% 19% 0% COGS 1,158 1,378 1,428 Gross Margin % 58% 58% 57% Operating Expenses 1,188 1,178 1,136 % Revenue 43% 36% 34% Operating Profit 438 760 751 % Revenue 16% 23% 23% (1) Represents
Slide 23: EM Company in Communications
EM Company in Communications Market Size(1): $4B Key Drivers Long Term Market • Mobile data traffic grows at double-digit rates each year Growth(1): 4-6% • Components and chipsets increase in complexity Market Position(1): #1 • Subscriber growth in China, India, Brazil How We Win Market Reach, Custo
Slide 24: EM Company in Aerospace & Defense
EM Company in Aerospace & Defense Market Size(1): $3B Key Drivers Long Term Market • Growth comes from outside US (Russia, China, India, Middle East) driven by new Growth(1): Flat satellites and radar technologies • Growth of intelligence, surveillance, and reconnaissance Market Position(1): #1 How
Slide 25: EM Company in Industrial, Computer & Semiconductors
EM Company in Industrial, Computer & Semiconductors Market Size(1): $6B Key Drivers Long Term Market • Electronic content in industrial segment continues to proliferate Growth(1): 3-5% • Mobile computing driven by smartphones, tablets, and notebook PCs • Cloud computing requires high-performance inf
Slide 26: EM Company: Key Product Platforms
EM Company: Key Product Platforms Key platforms account for >50% of revenue HP/Agilent Introduced Applications Market Markets Competitors Position (1) Electronic #1 Communications, •Cadence Designs, simulates, & optimizes 1983 Design Aerospace/Defense, •National Instruments electronic circuit perfor
Slide 27: New Agilent: Life Sciences Overview
New Agilent: Life Sciences Overview Market Size(1): $21B FY13(2) Financial Metrics Long Term Market Growth(1): 4-5% Global Trends • Revenues: $1.6B, +3% y/y (+4% core(3)) • Pharma shift from new chemical entities (NCEs) to new • Operating Margin: 16% of revenue biological entities (NBEs) and biosimi
Slide 28: New Agilent: Diagnostics and Genomics Overview
New Agilent: Diagnostics and Genomics Overview Market Size(1): $7B FY13(2) Financial Metrics Long Term Market Growth(1): 8-10% Global Trends • Revenues: $0.7B, +65% y/y (+9% core(3)) • Increasing patient population (aging, lifestyle impacts) • Increasing understanding of cancer markers and pathways
Slide 29: New Agilent: Chemical Analysis Group Overview
New Agilent: Chemical Analysis Group Overview Market Size(1): $13B FY13(2) Financial Metrics Long Term Market Growth(1): 4-5% New Global Trends • Revenues: $1.6B, +2% y/y (+4% core(3)) • Operating Margin: 22% of revenue • Global food supply • New environmental contaminants Q3’13 Revenue Mix • Design
Slide 30: New Agilent: Key Product Platforms
New Agilent: Key Product Platforms Key platforms account for >50% of revenue Market Platform Applications Markets Competitors Position(1) Pharma R&D and QC Pharma & Biotech Waters, Shimadzu, LC Molecular biology, cancer research Academia & Government #1 Thermo Education & Research / Routine testing
Slide 31: Reconciliations
Reconciliations
Slide 32: Reconciliation from GAAP to Non-GAAP, Year Ended October 31, 2010
AGILENT TECHNOLOGIES, INC RECONCILIATION FROM GAAP TO NON-GAAP YEAR ENDED October 31, 2010 (Unaudited) Non-GAAP Adjustments Acceleration Varian Varian of Share-Based Restructuring Acquisition Acquisition Compensation and Other and Related Expense Related Tax Agilent Related Costs Asset Intangible Tr
Slide 33: Reconciliation from Agilent Non-GAAP to New Agilent Non-GAAP, 2010
AGILENT TECHNOLOGIES, INC RECONCILIATION FROM AGILENT NON-GAAP TO NEW AGILENT NON-GAAP YEAR ENDED October 31, 2010 (Unaudited) Adjustment New New Agilent Electronic Agilent Electronic Agilent (In millions) Non-GAAP Measurement Non-GAAP Measurement Non-GAAP Net revenue Change Year Over Year 22% $ 5,4
Slide 34: Reconciliation from GAAP to Non-GAAP, Year Ended October 31, 2011
AGILENT TECHNOLOGIES, INC RECONCILIATION FROM GAAP TO NON-GAAP YEAR ENDED October 31, 2011 (Unaudited) Non-GAAP Adjustments Varian Acquisition Acquisition Restructuring and Related Fair Agilent Agilent and Other Asset Intangible Transformational Integration Value Tax Sharing Foundation Adjustment Ag
Slide 35: Reconciliation from Agilent Non-GAAP to New Agilent Non-GAAP, 2011
AGILENT TECHNOLOGIES, INC RECONCILIATION FROM AGILENT NON-GAAP TO NEW AGILENT NON-GAAP YEAR ENDED October 31, 2011 (Unaudited) Adjustment New New Agilent Electronic Agilent Electronic Agilent (In millions) Non-GAAP Measurement Non-GAAP Measurement Non-GAAP Net revenue Change Year Over Year 21% $ 6,6
Slide 36: Reconciliation from GAAP to Non-GAAP, Year Ended October 31, 2012
AGILENT TECHNOLOGIES, INC RECONCILIATION FROM GAAP TO NON-GAAP YEAR ENDED October 31, 2012 (Unaudited) Non GAAP Adjustments Acquisition & Agilent Adjustment Agilent Asset Intangible Transformation Integration Foundation for Agilent (In millions) GAAP Impairments Amortization Initiatives Costs Donati
Slide 37: Reconciliation from Agilent Non-GAAP to New Agilent Non-GAAP, 2012
AGILENT TECHNOLOGIES, INC RECONCILIATION FROM AGILENT NON-GAAP TO NEW AGILENT NON-GAAP YEAR ENDED October 31, 2012 (Unaudited) Adjustment New New Agilent Electronic Agilent Electronic Agilent (In millions) Non-GAAP Measurement Non-GAAP Measurement Non-GAAP Net revenue Change Year Over Year 4% $ 6,85
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