Agilent Technologies, Inc. · NYSE:A
Agilent Technologies — Jefferies 2011 Global Healthcare Conference
33 slides from Agilent Technologies's conference presentation, Jun 8, 2011
Slide 1: Agilent Technologies Jefferies 2011 Global Healthcare Conference
AGILENT TECHNOLOGIES J EFFERIES 2011 G LOBAL H EALTHCARE C ONFERENCE MIKE MCMULLEN PRESIDENT JUNE 8, 2011 CHEMICAL ANALYSIS GROUP NEW YORK, NY
Slide 2: Safe Harbor
SAFE HARBOR This presentation contains forward-looking statements (including, without limitation, information and future guidance on our goals, priorities, revenues, demand, growth opportunities, customer service and innovation plans, new product introductions, financial condition, earnings, the con
Slide 3: The World's Premier Measurement Company
T H E W O R L D ’ S P R E M I E R M E A S U R E M E N T C O M PA N Y Electronic Chemical Life LTM Revenue* LTM Revenue* LTM Revenue* Measurement $2.7B Analysis $1.1B Sciences $1.0B Group Group Group FY10 Revenue: $2.8B FY10 Revenue: $1.2B FY10 Revenue: $1.5B FY10 Operating Margin* 16% FY10 Operating
Slide 4: FY 2011 Financial Highlights
FY 2011 FINANCIAL HIGHLIGHTS Q1 FY11 Q2 FY11 FY11 Actual Actual Guidance** (Mid-Point) Revenue* $1.52B $1.68B $6.58B Organic Revenue Growth* 19% 21% 16% Operating Margin* 17.7% 19.3% EPS* $0.60 $0.74 $2.86 ROIC* 21% 25% Operating Cash Flow $120M $378M $1,050M *Presented on a non-GAAP basis; reconcil
Slide 5: Agilent Operating Model
A G I L E N T O P E R AT I N G M O D E L * NEW MODEL*** FY11 Guidance** -1σ MOST +1 σ (Mid-Point) PROBABLE*** Organic Revenue 16% 4% 8% 12% Growth % OM % 18% 20% 21% YoY OM 20% 36% 43% Incremental % ROIC % 23% 25% 27% *Presented on a non-GAAP basis **FY11 guidance as of May 13, 2011 ***Not company g
Slide 6: Large and Diversified Addressable Market
L ARGE AND D IVERSIFIED A DDRESSABLE M ARKET Market segmentation* Agilent revenue diversification (LTM**) Markets Size ($B)* Growth* Aerospace & Pharma & Biotech Defense 14% 11% Academia & Life Sciences $19 5% - 7% Government Communications 8% Chemical Analysis 10 5% - 6% Markets 17% Chemical & Elec
Slide 7: Product Platform Leadership Leveraged Across Markets
PRODUCT PLATFORM LEADERSHIP LEVERAGED ACROSS MARKETS Key Agilent Measurement Platforms* (50% of Agilent Revenues / 30% of Demand Market) Network analyzers Sources & Spectrum analyzers Oscilloscopes Mass Spectrometers Gas Chromatographs Liquid Chromatographs Key Agilent Platforms in Markets Measureme
Slide 8: Life Sciences Market Overview
L IFE S CIENCES M ARKET OVERVIEW Pharma/Biotech (For Profit) Market Size: $19B Growth: 5-7% Growth Drivers • Academic and government investment • Life Science applications – “omics” 14% of Agilent revenue • Growth in generics, developing Academic and Government (Not-For-Profit) economies • Therapeut
Slide 9: Technology-Leading Life Sciences Portfolio
T ECHNOLOGY- LEADING L IFE S CIENCE P ORTFOLIO Powerful Separation Sophisticated Sample Prep Solutions Lab 901 Capillary Electrophoresis & DNA, RNA and 708-DS Dissolution Multiple Affinity 1200 Infinity LC Electrophoresis BioAnalyzer Protein Bioreagents Apparatus Removal Kits Series SureSelect XT Ta
Slide 10: NMR: Transforming Our Portfolio
NMR : T RANSFORMING O UR P ORTFOLIO Agilent NMR portfolio delivers complete analytical solutions from research through production Channel – Immediate Impact • Rapidly staffing global service, support • Solid orders growth, long cycle products mean future revenue Technology – Results Primarily in 201
Slide 11: Life Sciences: Strategy to Win
L I F E S C I E N C E S : S T R AT E G Y TO W I N Grow Market Share • Deliver leading-edge application solutions customers demand • Drive emerging application trends • Leverage strong global presence to expand in developing geographies Strengthen Technology Base • Develop breakthrough products and t
Slide 12: Chemical Analysis Market Overview
C H E M I C A L A N A LY S I S M A R K E T O V E R V I E W Chemical & 13% of Agilent Energy revenue Market Size: $10B Growth: 5-6% 8% of Agilent Environmental revenue Growth Drivers • China, Emerging Markets • Food Safety & Environmental Food 6% of Agilent revenue Regulations • Research Funding Fore
Slide 13: CAG Advantage: Portfolio Transformation
C A G A D VA N TA G E : P O R T F O L I O T R A N S F O R M AT I O N Expand Chemistries and Expand leadership in Atomic Supplies offering and Molecular Spectroscopy MS Analyzed Vials GC Columns HPLC Columns Exoscan ICP-MS with MassHunter Workstation Polymeric Consumables Solid Phase Extraction Colum
Slide 14: CAG Variance Cost Synergy Capture
C A G VAR I AN C O ST S Y N E RGY C APT U R E Leverage Agilent Asia supply chain. Shift manufacturing and material sourcing to lower- cost countries; leverage existing capability. Reduce vertical integration. Outsource internal sub-assemblies. Streamline distribution and commercial centers. Eliminat
Slide 15: Chemical Analysis: Our Winning Formula
C H E M I C A L A N A LY S I S : O U R W I N N I N G F O R M U L A Focus on Growth Geographies. Strong foundation, Agilent core competency. Leading Technology. Innovative products, emerging applications, investment model. Superior Customer Experience. Proven Sales and Services model. M&A Synergy-Cap
Slide 16: Agilent's Strategy to Win
A GILENT ’ S S TRATEGY TO W IN Continue to focus on four point strategy • Market reach and customer trust • Sales, service, and support reach into over 100 countries • #1 customer loyalty ranking in every major product category* • 42% of employees based in Asia • Technology leadership • 10% Revenue
Slide 17: Appendix
APPENDIX Agilent Technologies
Slide 18: Agilent Operating Model
A G I L E N T O P E R AT I N G M O D E L * NEW MODEL*** FY11 -1σ Most +1 σ Guidance Probable (Mid-Point)** EMG Organic Rev. Growth % 19% 2% 6% 11% Operating Margin % 19% 21% 23% YoY OM Incremental % -11% 40% 48% CAG Organic Rev. Growth % 11% 5% 8% 11% Operating Margin % 22% 23% 24% YoY OM Incrementa
Slide 19: Agilent Revenue by End Market
A G I L E N T R E V E N U E BY E N D M A R K E T Average % of LTM** Market Market Agilent End Markets Growth* Size Market Drivers Revenue Life Sciences Academia and 8% $10B Govt. & private/foundation investment in major 8% Government institutions around the world. Pharma & Biotech 5% $9B Shift to bi
Slide 20: Q2 '11 Segment Revenue Distribution by Geography
Q 2 ’ 1 1 S EG M E N T R E V E N U E D I S T R I B U T I O N BY G EO G R A P H Y Agilent LSG Americas Asia Pacific Americas Asia Pacific 33% 33% 37% 42% Europe Europe 25% 30% CAG EMG Americas Americas Asia Pacific 29% Asia Pacific 32% 41% 48% Europe Europe 30% 20% • Q2’11 YoY organic revenue growth:
Slide 21: Financial Strategy
F I N A N C I A L S T R AT E G Y • Drive the center of the operating model to 20% operating margin* and 25% ROIC • Priority uses of cash: - Maintain share count at 346M - Organic, inorganic investments meeting strategic & return criteria - Return cash to shareholders *Presented on a non-GAAP basis P
Slide 22: Reconciliations
RECONCILIATIONS ite Agilent Technologies
Slide 23: Electronic Measurement Segment
AGILENT TECHNOLOGIES, INC. ELECTRONIC MEASUREMENT SEGMENT (Unaudited) PRELIMINARY (In millions, except margin and ROIC data) FY 2011 Q1 Q2 Q3 Q4 Total Orders $ 797 $ 844 $ 1,641 Net revenue $ 771 $ 834 $ 1,605 Gross margin % 58.1% 59.5% 58.9% Income from operations $ 156 $ 191 $ 347 Operating margin
Slide 24: Chemical Analysis Segment
AGILENT TECHNOLOGIES, INC. CHEMICAL ANALYSIS SEGMENT (Unaudited) PRELIMINARY (In millions, except margin and ROIC data) FY 2011 Q1 Q2 Q3 Q4 Total Orders $ 388 $ 380 $ 768 Net revenue $ 349 $ 381 $ 730 Gross margin % 51.1% 50.3% 50.7% Income from operations $ 65 $ 72 $ 137 Operating margin % 18.7% 18
Slide 25: Life Sciences Segment
AGILENT TECHNOLOGIES, INC. LIFE SCIENCES SEGMENT (Unaudited) PRELIMINARY (In millions, except margin and ROIC data) FY 2011 Q1 Q2 Q3 Q4 Total Orders $ 442 $ 479 $ 921 Net revenue $ 404 $ 464 $ 868 Gross margin % 53.3% 52.2% 52.7% Income from operations $ 48 $ 61 $ 109 Operating margin % 11.8% 13.2%
Slide 26: Reconciliation From GAAP to Non-GAAP
AGILENT TECHNOLOGIES, INC RECONCILIATION FROM GAAP TO NON-GAAP TWELVE MONTHS ENDED October 31, 2010 (Unaudited) Non-GAAP Adjustments Varian Acceleration of Varian Acquisition Share-Based Restructuring Acquisition & Related Fair Compensation Tax and Other Related Asset Intangible Transformational Lit
Slide 27: Reconciliation From GAAP to Non-GAAP
AGILENT TECHNOLOGIES, INC RECONCILIATION FROM GAAP TO NON-GAAP TWELVE MONTHS ENDED OCTOBER 31, 2009 (Unaudited) Non-GAAP Adjustments Acceleration of Share-Based Restructuring Compensation Patent and Other Asset Business Expense Related to Intangible Pension Litigation Litigation Adjustment for (In m
Slide 28: Reconciliation From GAAP to Non-GAAP
AGILENT TECHNOLOGIES, INC RECONCILIATION FROM GAAP TO NON-GAAP THREE MONTHS ENDED January 31, 2011 (Unaudited) Non-GAAP Adjustments Varian Varian Acquisition Restructuring Acquisition & Related Fair and Other Intangible Transformation Integration Value Adjustment for (In millions, except per share a
Slide 29: Reconciliation From GAAP to Non-GAAP
AGILENT TECHNOLOGIES, INC RECONCILIATION FROM GAAP TO NON-GAAP THREE MONTHS ENDED April 30, 2011 (Unaudited) PRELIMINARY Non-GAAP Adjustments Varian Acquisition Restructuring Acquisition & Related Fair and Other Asset Intangible Transformation Integration Value Adjustment for (In millions, except pe
Slide 30: Reconciliation of ROIC
AGILENT TECHNOLOGIES, INC. RECONCILIATION OF ROIC (In millions) (Unaudited) PRELIMINARY LSG CAG EMG Agilent LSG CAG EMG Agilent LSG CAG EMG Agilent Numerator: Q2'11 Q2'11 Q2'11 Q2'11 Q2'10 Q2'10 Q2'10 Q2'10 Q1'11 Q1'11 Q1'11 Q1'11 Non-GAAP income from operations $ 61 $ 72 $ 191 $ 324 $ 48 $ 57 $ 100
Slide 31: Revenue Reconciliation
AGILENT TECHNOLOGIES, INC. REVENUE RECONCILIATION (In millions) (Unaudited) PRELIMINARY Percent FY'10 FY'09 Inc/(Dec) GAAP Revenue $ 5,444 $ 4,481 Varian acquisition fair value adjustments 19 - Non-GAAP Revenue $ 5,463 $ 4,481 Less revenue from acquisition and divestitures included in segment result
Slide 32: Revenue Reconciliation
AGILENT TECHNOLOGIES, INC. REVENUE RECONCILIATION (In millions) (Unaudited) PRELIMINARY Percent Q1'11 Q1'10 Inc/(Dec) GAAP Revenue $ 1,519 $ 1,213 25% Varian acquisition fair value adjustments 5 - Non-GAAP Revenue $ 1,524 $ 1,213 26% Less revenue from acquisition and divestitures included in segment
Slide 33: Reconciliation of Organic Revenue
AGILENT TECHNOLOGIES, INC. RECONCILIATION OF ORGANIC REVENUE (IN MILLIONS) PRELIMINARY Percent Q2'11 Q2'10 Inc/(Dec) GAAP Revenue $ 1,677 $ 1,271 Varian acquisition fair value adjustments 2 - Non-GAAP Revenue $ 1,679 $ 1,271 included in segment results (191) (41) Organic Non-GAAP Revenue $ 1,488 $ 1
Agilent Technologies — Jefferies 2011 Global Healthcare Conference on 6ix