Agilent Technologies, Inc. · NYSE:A
Agilent Technologies — Goldman Sachs 36th Annual Global Healthcare Conference (June 2015)
31 slides from Agilent Technologies's conference presentation, Jun 9, 2015
Slide 1: New Agilent: The Premier Laboratory Partner for a Better World
NEW AGILENT THE PREMIER LABORATORY PARTNER FOR A BETTER WORLD
Slide 2: New Agilent: Transformative solutions for global challenges
New Agilent Transformative solutions for global challenges Inspiring Discoveries For A Better World Safer World Better Resources Fighting Disease 1
Slide 3: New Agilent at a Glance
New Agilent at a Glance Operating from a position of strength Leadership in steadily Attractive recurring Balanced across new growing end-markets revenue base and existing segments Most of the world’s (1) $45B 265,000 $4B TAM in 6 end-markets labs using Agilent solutions Revenue FY14 Balanced revenu
Slide 4: A Seasoned Executive Team Leading a New Organization
A Seasoned Executive Team Leading a New Organization Life Sciences & Agilent Diagnostics & Applied Markets (LSAG) CrossLabs (ACG) Genomics (DGG) (1) (1) (1) $2.1B $1.3B $0.6B (2) (2) (2) 18% 23% 14% Solutions and software for Lab Enterprise Management solutions Solutions and tools for Clinical Analy
Slide 5: New Agilent Leadership is Moving Quickly
New Agilent Leadership is Moving Quickly Launched Agile Agilent A multi-year cost reduction and rationalization program Rationalized portfolio Successfully closing down NMR, Sale of XRD Restructured for growth and margin Largest organizational change in history of Agilent 4
Slide 6: New Agilent. Catalyzing value creation through market leadership
New Agilent. Catalyzing value creation through market leadership In tune with our customer and our investors The The Expand Accelerate Analytical Clinical operating growth Lab Lab margin Lab Optimize Enterprise capital Mgmt. allocation Premium market positions Premium shareholder value 5
Slide 7: Accelerated organic growth
5% 22% >85% Organic revenue Operating margin Free cash flow growth (1) by 2017 to shareholders Accelerated Operating margin Optimal organic growth to historic highs capital allocation (1) Refers to FY16 onwards and excludes M&A and business exits and divestitures 6
Slide 8: Winning Strategy
Winning Strategy The World’s Premier Laboratory Partner Chemical Academia & Clinical & The Environment & Energy Food Pharma Government Diagnostics $45B (1) Opportunity $13B(1) $22B(1) $10B(1) Premium value creation Premium market positions A Accelerated Organic Growth 1 Lead The Analytical Lab B Ope
Slide 9: How We Will Win
How We Will Win Execution of key strategic priorities next 3 years FY17 FY16 FY15 Lead Leverage Transition Restructured operations Streamline R&D Drive commercial excellence Agile SG&A Optimize infrastructure Integrate Dako businesses Agilent Rationalized portfolio Continuous portfolio reviews Drive
Slide 10: LSAG: Lead The Analytical Lab
LSAG Lead The Analytical Lab 9
Slide 11: LSAG Leads the Analytical Labs Through One Global Go-to-Market Model
LSAG Leads the Analytical Labs Through One Global Go-to-Market Model Key challenges of our Analytical Lab customers Lab manager: Research Scientist: Procurement: How do I secure Which solution will Who provides the 100% uptime with best support our lowest cost-of- round-the-clock diverse discovery o
Slide 12: LSAG Customers
LSAG Customers Leveraging technologies routinely across purposes Markets Customer Types Workflow & technique Food processing companies Nestle Monsanto Routine testing of food Academia and government Mars safety and qualify Contract testing companies 7010 GC-QQQ Petroleum companies Dow Shell
Slide 13: LSAG Outlook
LSAG Outlook Continued strong growth trajectory Key growth initiatives Outlook Maximize oligo synthesis FY14 FY15-17 for DNA/RNA research revenue growth Expand Pharma & A&G New solutions for Biopharmaceutical analysis $2.1B 4-5% Grow Accelerate Mass spec and FY14 Future share in multi-omics market p
Slide 14: ACG: Win in Lab Productivity
ACG Win in Lab Productivity 13
Slide 15: ACG Addresses a Growing Demand for Lab-wide Economic Value and Productivity
ACG Addresses a Growing Demand for Lab-wide Economic Value and Productivity Key challenges of our CrossLab customers Lab manager: Team Lead: Procurement: How do I reduce the How do I optimize How can we lower complexity of the the instrument overall cost of enterprise? performance? ownership across
Slide 16: The New ACG
The New ACG Our recognized and expanding higher tier offerings Lab type Core and adjacent offerings Integrated The routine Benchmarking workflows testing Inventory Supplies Management laboratory Education Business Relocation solutions Sample Prep Application The research support laboratory Maintenan
Slide 17: ACG Outlook
ACG Outlook Leveraging strong presence in the lab Key growth initiatives Outlook Introduce unified informatics FY14 FY15-17 solutions revenue growth Expand OpenLAB Expand informatics enabled $1.3B 5-6% enterprise solutions FY14 Future Evolve enterprise solutions to OM%(1) OM direction deliver greate
Slide 18: DGG: Advance Clinical Diagnostics
DGG Advance Clinical Diagnostics 17
Slide 19: DGG Leads Agilent's Strategy in Clinical Research & Diagnostics
DGG Leads Agilent’s Strategy in Clinical Research (CR) & Diagnostics (Dx) Key challenges of our CR & Dx customers Lab manager: Lab tech: Physician: How can I maximize How can we How can we better productivity and optimize work-flow treat maladies earlier reduce overall cost and obtain real-time and
Slide 20: Agilent's Growth Opportunity
Agilent’s Growth Opportunity Revolution in disease profiling and precision medicine Advanced Agilent clinical Personalized disease profiling opportunity treatment profiling Anatomic Molecular Companion pathology diagnostics diagnostics Accelerated Increased maturity of Big-pharma discovery of new mo
Slide 21: Two Focused Strategic Plays
Two Focused Strategic Plays Cancer and Genetic Disorders Cancer Staining > Pathology Lab Genomics Agilent in unique position to lead Technologies + 10% $4.2B Strong domain expertise and know-how $3.2B Recognized diagnostics brand (Dako) Disease areas Unique access to the pathology lab Fast-gro
Slide 22: Growth Strategy
Growth Strategy From mix & match to an integrated clinical workflow Today 2016 2017 2020 Targeted application Develop integrated development clinical workflow Regain pathology leadership Realize the diagnostics cockpit vision (leverage OpenLAB) From: To: Mix & Match Complete Workflow Work-flow made
Slide 23: DGG Outlook
DGG Outlook Back on the growth track with OM nearing 20% Key growth initiatives Outlook FY14 FY15-17 Accelerate OMNIS market uptake revenue growth Regain pathology leadership Commercialize new CDx assays $663M 6-7% driving precision medicine FY14 Future Build-out genomic workflows and OM%(1) OM dire
Slide 24: Increasing and Predictable Value Creation and Distribution
Increasing and Predictable Value Creation and Distribution 23
Slide 25: Increasing Value Creation
Increasing Value Creation Financial results are on-track Past Future Core Last 3 years Next 3 years revenue growth(1) 4.6% 5.5% 23% Operating FY11 FY14 FY17 LSAG+ACG margin(2) 16.6% 18.8% 22.0% 20% DGG Over 20% beyond 2017 (1) Core growth is reported growth less the effects of FX and M&A. Growth pas
Slide 26: Operating Margin improvements
Operating Margin improvements Equal balance between GM and OpEx FY14 FY15 FY16 FY17 FY14-17 (1) (2) Reported Proforma GM% 53.5% 53.3% 54.0% 55.0% 55.6% +230 bps OpEx%(3) 34.7% 35.4% 35.0% 34.0% 33.6% +180 bps OM%(3) 18.8% 17.9% 19.0% 21.0% 22.0% +410 bps (1) Presented on a non-GAAP basis, reconcilia
Slide 27: Bridge to adj. 22% Operating Margin
Bridge to adj. 22% Operating Margin Revenue Operating Operating (M$) Profit (M$)(1) Margin(1) 60% from FY14 4,048 763 18.8% operating leverage Topline Growth(2) 442 263 423 NMR/XRD Exit -80 20 COS/OpEx Reductions 140 40% from cost Employee Bonus related to OM reductions improvement -25 Split Dis-syn
Slide 28: Capital Structure and Returns
Capital Structure and Returns Increasing returns from FCF and Debt FY15 FY16 FY17 FY18 FCF(1) (M$) 555 620 650 690 FCF(1) % of Revenue 14% 14% 15% 15% Capital Returns - Share Repurchases 365 380 380 380 - Dividend 135 155 180 210 Total (M$) 500 535 560 590 Capital Returns % of FCF(1) 90% 86% 86% 86%
Slide 29: Reconciliation of Income from Operations to Reportable Segment Income from Operations
AGILENT TECHNOLOGIES, INC. RECONCILIATION OF INCOME FROM OPERATIONS TO REPORTABLE SEGMENT INCOME FROM OPERATIONS AND OPERATING MARGINS (In millions, except margin data) (Unaudited) Operating Operating FY 2014 Margin % FY 2011 Margin % Revenue: Life Sciences and Applied Markets Group $ 2,078 Agilent
Slide 30: Reconciliation from GAAP to Non-GAAP
AGILENT TECHNOLOGIES, INC. RECONCILIATION FROM GAAP TO NON-GAAP TWELVE MONTHS ENDED OCTOBER 31, 2014 (Unaudited) NON-GAAP ADJUSTMENTS Acceleration of Share-based Compensation Business Restructuring Asset Related to Transform- Acquisition & Pre- Net Loss on Exit and Unallocated and Other Impairments
Slide 31: Reconciliations of Revenue Excluding the Impact of Currency Adjustments (Core)
AGILENT TECHNOLOGIES, INC. RECONCILIATIONS OF REVENUE EXCLUDING THE IMPACT OF CURRENCY ADJUSTMENTS (CORE) (in millions) (Unaudited) Year-over-Year Currency GAAP Adjustments (a) Currency-Adjusted Year-over-Year Year-over-Year Revenue YTD 2014 YTD 2013 % Change YTD 2014 YTD 2014 YTD 2013 % Change Agil
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