Danaher Corporation · NYSE:DHR
Danaher — Investor Day (2021)
97 slides from Danaher's investor day presentation, Sep 9, 2021
Slide 1: 2021 Investor & Analyst Day
OD DANAHER 2021 INVESTOR & ANALYST DAY
Slide 2: Forward Looking Statements
Forward Looking Statements Statements in this presentation that are not strictly historical, including any statements regarding Danaher’s anticipated future financial performance and any other statements regarding events or developments that we believe or anticipate will or may occur in the future a
Slide 3: Agenda
Agenda Welcome Matt Gugino Opening Remarks Rainer Blair DBS Kevin Chance Life Sciences Jennifer Honeycutt & Emmanuel Ligner Q&A Chance, Honeycutt, Ligner Break Product Identification Joakim Weidemanis Water Quality Kevin Klau Q&A Weidemanis, Klau Diagnostics Chris Riley Q&A Riley Closing Remarks Rai
Slide 4: Opening Remarks
Opening Remarks Rainer Blair, President & CEO 2021 INVESTOR & ANALYST DAY
Slide 5: What You'll Hear Today
What You’ll Hear Today Purpose driven portfolio evolution into a science & technology leader Strengthening our competitive advantage with DBS Long-term value creation through strategic M&A Strong foundation for building sustainable results
Slide 6: Recent Financial Highlights
Recent Financial Highlights Strong performance in first half and into Q3 — 1H 2021 core revenue growth +31.0% driven by broad-based strength across the portfolio — 1H 2021 Adjusted Diluted EPS growth ~100%, $3.4B of FCF was up >70% y/y — Q3 tracking in line with expectations Anticipate 2021 core rev
Slide 7: Danaher Today
Danaher Today LIFE SCIENCES ~$14.5B ~$28B DIAGNOSTICS ~$9.0B 2021E TOTAL REVENUE ENV. & APPLIED ~$4.5B All financial metrics reflect FY 2021E results from continuing operations. Purpose-driven science & technology leader
Slide 8: Purpose-Driven Portfolio Evolution
Purpose-Driven Portfolio Evolution Ind. EAS T&M EAS 16% 22% 13% 16% LS & LS TOTAL ANNUAL 33% LS REVENUE Env. 18% ~$21B Dx 40% ~$20B ~$28B 52% Dx T&M Dx Dental 32% Dental 31% 13% 14% 13% 2015 2018 2021E KEY PORTFOLIO MOVES SINCE 2015 2015 metrics shown include Fortive and Envista; 2018 metrics shown
Slide 9: Portfolio Evolution: Strategically Driven
Portfolio Evolution: Strategically Driven LIFE SCIENCES DIAGNOSTICS WATER QUALITY PRODUCT ID STRATEGIC • Shift towards • Molecular Dx • Water scarcity • Food & beverage GROWTH biologics penetration safety High Growth DRIVERS • Sustainability of Markets • Increasing focus on • Decentralization water
Slide 10: Portfolio Evolution: Power of Our Portfolio
Portfolio Evolution: Power of Our Portfolio LEADING POSITIONS IN ATTRACTIVE, UNITED BY A COMMON BUSINESS MODEL FAST-GROWING END MARKETS • Steady consumables stream off extensive • Long-term, strong secular growth installed base drivers • High value, ‘mission-critical’ applications • Regulatory requi
Slide 11: Portfolio Evolution: A Stronger, Better Danaher
Portfolio Evolution: A Stronger, Better Danaher CORE REVENUE OPERATING PROFIT RECURRING REVENUE FREE CASH FLOW GROWTH MARGIN +LDD ~75% >25% >$6B ~17% +LSD ~45% >$3B 2019- 2015 21E 2015 2021E 2015 2021E 2015 2021E 2015 metrics shown include Fortive and Envista.. Recurring Revenue is shown as a % of t
Slide 12: Danaher Business System
Danaher Business System DBS is who we are and how we do what we do
Slide 13: DBS: The Best Team Wins
DBS: The Best Team Wins BOARD & Adding leaders with SAB +3 CSO EST. SCIENTIFIC BoD DIR. WITH EST. CHIEF SENIOR significant scientific ADVISORY SCIENCE BKGRD. SCIENCE LEADERS expertise BOARD SINCE 2017 OFFICER >1,000BPS IMPROVEMENT IN 75% INTERNAL Developing, building AVG. ANNUAL INTERNAL ANNUAL ENGA
Slide 14: Sustainability at Danaher: Differentiating with DBS
Sustainability at Danaher: Differentiating with DBS OUR SUSTAINABILITY PILLARS OUR DBS-DRIVEN COMMITMENTS EXECUTION Innovation One of our five Core Values: Solving our customers’ most complex DBS Innovation Engine Innovation Defines Our Future problems through innovation People By 2025: DBS Learning
Slide 15: Long-Term Value Creation Through Strategic M&A
Long-Term Value Creation Through Strategic M&A MARKET AND COMPANY AND VALUATION • Secular growth drivers • Competitive market position • Focus on ROIC • Fragmented • Strong brand / channel • DBS opportunities • Higher barriers to entry • Consistent revenue visibility • Sustainability • Optionality w
Slide 16: Compounding Returns At Videojet
Compounding Returns At Videojet ACTUAL ROIC MSD CORE REVENUE CAGR MSD CORE REVENUE +1,000BPS CAGR OVER THE VIDEOJET ROIC (%) LAST 10+ YEARS ~100BPS AVG. ANNUAL ESTIMATED ROIC OMX LAST 5 ASSUMING LSD CORE REV. CAGR YEARS Comprint (Brazil) EWA BIS (Poland) Echter + F. Armida Konig SA (Mexico) (Argenti
Slide 17: Outstanding Performance at Recent Acquisitions
Outstanding Performance at Recent Acquisitions ACQUIRED NOV 2016 ACQUIRED AUG 2015 ACTUAL ROIC ACTUAL ROIC HSD CORE REVENUE CAGR DD+ CORE REVENUE CAGR AT ACQ. 2021E AT ACQ. 2021E 2016 – 2021E 2017 – 2021E DD >50% LSD DD+ ~50% >55% ~50% >60% >$2.0B >$1.0B CUMULATIVE Flat/LSD >30% CUMULATIVE High-teen
Slide 18: Putting It All Together
Putting It All Together PRE-2019 FUTURE ANTICIPATED CORE REVENUE GROWTH ANTICIPATED CORE GROWTH RATE DANAHER 5-6% Owned Dental (Envista) MSD+ Now part of DHR Life Sciences 6-7% DHR did not own HSD expected Uniquely positioned across bioprocessing ~$3B 2021E revenue (>10% of DHR) ~$1B 2019 revenue LD
Slide 19: Putting It All Together: Anticipated Long-Term Performance
Putting It All Together: Anticipated Long-Term Performance CORE REVENUE GROWTH CORE REVENUE GROWTH MSD+ ACCELERATION + MARGIN EXPANSION50-75BPS OMX 100bps+ MSD+ + STRONG FREE CASH FLOW>100% FCF / NI 5-6% + FCF+ ACQUISITIONS M&A SPEND PRE-2019 FUTURE = TOP QUARTILE EPS GROWTH & COMPOUNDING RETURNS DD
Slide 20: What You'll Hear From Our Presenters Today
What You’ll Hear From Our Presenters Today Tremendous portfolio of leading franchises serving attractive end-markets Enhancing our growth trajectory and competitive advantage with DBS Strong foundation for building long-term, sustainable results
Slide 21: Danaher Business System
Danaher Business System Kevin Chance, Vice President DBSO 2021 INVESTOR & ANALYST DAY
Slide 22: Danaher Business System (DBS)
Danaher Business System (DBS)
Slide 23: Evolution of the Danaher Business System
Evolution of the Danaher Business System 1984 1991 1999 2001 2003 2005 2007 2009 2011 2013 2015 TODAY 2017E Leadership Leadership Leadership Leadership Lean Growth Lean Growth Lean Growth 2016 Lean Growth LAUNCHED 2009 SHARED 2001 ADDED PURPOSE Mid-1980s LEADERSHIP OUR SHARED PURPOSE ADDED HELPING R
Slide 24: Lean Conversion at Cepheid
Lean Conversion at Cepheid CARTRIDGE WORKFLOW – BEFORE CARTRIDGE WORKFLOW – AFTER Customer Cartridge Valve Body Cartridge Packaging PAL Filling Robal OC Stockroom Stockroom Valve Body Customer Filling Packaging Value Stream Mapping RESULTS 50% Faster deployment of lines DBS ACTIONS Variation Reduc
Slide 25: Accelerating Innovation at Leica Biosystems
Accelerating Innovation at Leica Biosystems PRODUCT EXAMPLE RESULTS Aperio GT 450 Automated, high-capacity digital pathology slide scanner +33 PATENTS GENERATED +1.5X REVENUE DBS TOOLS & PROCESSES ACHIEVEMENT • User-Centered Design THROUGH Q2 2021 • Launch Excellence +>10% MARKET SHARE • Speed Desig
Slide 26: Commercial Execution: E-commerce at Pall
Commercial Execution: E-commerce at Pall SITUATION E-COMMERCE REVENUE AT PALL • Professional customers migrating to digital ordering (AS % OF TOTAL) >15% • Difficult & costly to reach HGM and lower frequency customers • COVID-19 pandemic accelerating customers’ need for digital purchasing and servic
Slide 27: DBS Driving Leadership & Development
DBS Driving Leadership & Development FOUNDATION FOR OUR CULTURE Developing Leaders at Danaher • Structured leadership program EXPERIENCE COACHING TRAINING • DBSU training >1,000 associates annually • >1,300 DBS certified practitioners globally 70% 20% 10% DBS TOOLS TO DRIVE RESULTS Best People Leade
Slide 28: DBS Is Our Ultimate Competitive Advantage
DBS Is Our Ultimate Competitive Advantage DHR EXAMPLES: <5% Leadership Avg. Annual Associate Turnover 2018-2020 >100BPS Lean Growth +LDD Avg. Annual Core OMX Avg. Annual Core Revenue 2018-2020 Growth 2019-2021E OUR SHARED PURPOSE HELPING REALIZE LIFE’S POTENTIAL “OMX” is Operating Margin Expansion W
Slide 29: Summary
Summary DBS has evolved to a balanced approach across Growth, Lean & Leadership Spirit of continuous improvement drives results across all major facets of the business DBS is our sustainable, long-term competitive advantage; it’s who we are and how we do what we do
Slide 30: Life Sciences
Life Sciences Jennifer Honeycutt, Executive Vice President 2021 INVESTOR & ANALYST DAY
Slide 31: Life Sciences Overview
Life Sciences Overview Revenue By Mix ~$14.5B Nonrecurring TOTAL REVENUE 2021E Recurring GLOBAL GROWTH DRIVERS • Shift towards biologics By Geography By End-Market ROW Clinical • Increasing focus on genomic medicine Rsrch./ HGM NA Acad. Applied Ind. • Vaccine, therapeutics & research in response to
Slide 32: Life Sciences Platform Evolution
Life Sciences Platform Evolution Revenue By Revenue By 2015 $3.3B End-Market 2021E ~$14.5B End-Market Clinical LSD CORE REV. GROWTH Clinical Biopharma >20% CORE REV. GROWTH Rsrch./ Acad. >70% RECURRING REV. Ind. Applied ~45% RECURRING REV. Research Applied Biopharma Applied <15% OPERATING MARGIN Ind
Slide 33: Life Sciences Overview
Life Sciences Overview Revenue By Mix ~$14.5B Nonrecurring TOTAL REVENUE 2021E Recurring GLOBAL GROWTH DRIVERS • Shift towards biologics By Geography By End-Market ROW Research / • Increasing focus on genomic medicine Clinical Academic HGM NA Ind. • Vaccine, therapeutics & research in response to CO
Slide 34: Aldevron Overview
Aldevron Overview Revenue By Mix Leading producer of high-quality plasmid DNA, mRNA ~$400M and proteins TOTAL REVENUE • Terrific brand with long-term sustainable growth model 2021E • Scale, quality, reputation, turnaround time and know-how Plasmids ~90% provide differentiated benefit to customers >2
Slide 35: Accelerating Growth Across Life Sciences
Accelerating Growth Across Life Sciences AVG. ANNUAL CORE GROWTH IMPROVEMENT HOW WE DO IT: 2012-2016 2017-2021E “RUNNING THE Creating long-term value with DBS: increase LSD HSD DHR PLAYBOOK” margins, lower G&A, reinvest for growth LSD HSD/LDD NEW PRODUCT Applying DBS rigor to R&D processes to MSD MS
Slide 36: Running the Danaher Playbook at BEC LS
Running the Danaher Playbook at BEC LS RESULTS LAST 5 YEARS Beckman Life Sciences GROSS MARGIN >1,000BPS Core Revenue Growth Avg. Annual Biomek i-Series Automated +HSD/LDD ~200BPS CytoFLEX S Flow G&A* Workstation Cytometer S&M + R&D ~$100M >30 NEW PRODUCT LAUNCHES LAST 3 YEARS Annual spend +LSD >1,0
Slide 37: Innovation Impact at SCIEX
Innovation Impact at SCIEX ― High-res accurate mass spec for +20X +40% ZenoTOF 7600 biopharma and LS research ― Enabling advanced therapeutics: MORE SENSITIVE MORE PROTEINS characterize & quantify molecules at THAN TRADITIONAL ANALYZED VS previously undetectable levels TOF SYSTEMS EXISTING SYSTEMS +
Slide 38: Accelerating Performance at IDT
Accelerating Performance at IDT KEY PRIORITIES AT ACQUISITION RESULTS SINCE ACQUISITION 2018* 2021E +500bps INCREASE IN NON-US Geographic REVENUE AS % OF Expansion TOTAL SINCE ACQ. Annual Revenue ~$300M >$500M Scale & +60K High-teens >20% ADDITIONAL SQ FT OF Core Growth Capacity MANUF. SPACE TO SUPP
Slide 39: Summary
Summary Platform has evolved into higher growth, margin & recurring revenue portfolio indexed to most attractive end-markets Aldevron expands our capabilities into the important, fast- growing field of genomic medicine Enhancing our growth trajectory and long-term competitive advantage with high-imp
Slide 40: Life Sciences
Life Sciences Emmanuel Ligner, VP & Group Executive 2021 INVESTOR & ANALYST DAY
Slide 41: Life Sciences Overview
Life Sciences Overview Revenue By Mix ~$14.5B Nonrecurring TOTAL REVENUE 2021E Recurring GLOBAL GROWTH DRIVERS • Shift towards biologics By Geography By End-Market ROW Research / • Increasing focus on genomic medicine Clinical Academic HGM NA Ind. • Vaccine, therapeutics & research in response to CO
Slide 42: Cytiva Overview
Cytiva Overview Revenue By Mix GLOBAL LEADER ~$6B Equipment in the fast-growing, highly-attractive bioprocessing market TOTAL REVENUE 2021E Consumables TALENTED & INNOVATIVE TEAM with industry-leading expertise By Geography By Application ROW Research SCALED AND DIFFERENTIATED BUSINESS HGM NA in ups
Slide 43: Outstanding First Months at Cytiva
Outstanding First 18 Months at Cytiva KEY PRIORITIES & PROGRESS SINCE ACQUISITION RECENT FINANCIAL RESULTS Brand 32K >3PTS PRODUCTS BRAND POWER & SIGNAGE & PREMIUM VS AT ACQ. 2021E Establishment UPDATED PEERS (KANTAR) Revenue ~$3B ~$6B >200 >1,500 Stand-up Core growth +6-7%* +>35% Systems & Processe
Slide 44: Strengthening Secular Growth Drivers
Strengthening Secular Growth Drivers GROWTH SHIFT IN INCREASING VACCINES & HGM DRIVERS MEDICINE TO FOCUS ON THERAPEUTICS INVESTMENTS IN BIOLOGICS GENOMIC IN RESPONSE TO BIOPROCESSING MEDICINE COVID-19 EXAMPLES +50% +10X 1/3rd +25% INCREASE IN mAbs IN INCREASE IN CELL & SHARE OF GLOBAL ANNUAL GROWTH
Slide 45: Differentiated Positioning Within Bioprocessing
Differentiated Positioning Within Bioprocessing HOW WE WIN BROADEST PORTFOLIO ACROSS BIOPROCESSING WORKFLOW PORTFOLIO • Leading positions in upstream & downstream applications • Single-use-technologies (SUT) >$1B 2021E revenue SERVICE & BEST-IN-CLASS TECHNICAL SERVICE & SUPPORT SUPPORT • Process dev
Slide 46: Broadest Offering Across Bioprocessing Workflow
Broadest Offering Across Bioprocessing Workflow Cell culture & SUT Chromatography Filtration Drug Product Media Bags & Bioreactor Depth Filter Resins Chromatography Polishing Column Filtration Skids & Concentration & Aseptic Mixers Columns Devices Equipment Consumables Sterile Filtration Filling FOC
Slide 47: Differentiating With Service, Innovation & Technical Expertise
Differentiating With Service, Innovation & Technical Expertise FAST TRAK SERVICES >10 Facility Modelling Integrated bioprocess development, manufacturing, COLLABORATION Site Process ARRANGEMENTS Acceptance & training GLOBALLY Test & Start-up Economics • Leading experience & global collaboration part
Slide 48: Accelerating Capacity Expansion Plans
Accelerating Capacity Expansion Plans PLANNED BIOPROCESSING MFG. CAPITAL EXPENDITURES 2021 & 2022 $200M $600M Other Chromatography $1.5B $300M Resins SUT TOTAL +>2,000 ANTICIPATED ASSOCIATE Cell Culture Media NEW-HIRES NEXT 2 YEARS $400M Ongoing capacity investments driving share gains
Slide 49: Extending Leadership Position With High-Impact Investments
Extending Leadership Position With High-Impact Investments ACCELERATING PRODUCT Recent New INNOVATION >$100M Products HiTrap™ and HiScreen™ Broadest & deepest technical INCREASE IN ANNUAL Fibro PrismA R&D SPEND AT PALL & expertise across bioprocessing CYTIVA 2019 – 2021E including chromatography, SU
Slide 50: Summary
Summary Cytiva is off to a tremendous start and exceeding our initial expectations Strong secular drivers create significant long-term growth opportunities Differentiating in bioprocessing with the most comprehensive offering, best-in-class service & support, and scale
Slide 51: Product Identification Platform
Product Identification Platform Joakim Weidemanis, Executive Vice President 2021 INVESTOR & ANALYST DAY
Slide 52: Environmental & Applied Solutions Overview
Environmental & Applied Solutions Overview Revenue By Mix WATER PRODUCT ~$4.5B Non- QUALITY IDENTIFICATION TOTAL REVENUE 2021E Recurring recurring GLOBAL GROWTH DRIVERS By Geography By End-Market • Increasing regulatory requirements W. EU CPG / Packaging Muni • Demand for full workflow solutions and
Slide 53: Product Identification Overview
Product Identification Overview Revenue ~$2.0B By Mix TOTAL REVENUE Non- 2021E recurring Recurring GLOBAL GROWTH DRIVERS • Product safety, regulatory & claims requirements By Geography By End Market • Packaging proliferation with increasing use as a marketing vehicle W. EU NA Industrial Industrial O
Slide 54: Where We Play in the Attractive Packaging Value Chain
Where We Play in the Attractive Packaging Value Chain Brands and Design Packaging Material Suppliers Filling Plants Packaging Packaging Packaging Package Inline coding Distribution Strategy Design Artwork Prep printing and marking and Retail Brand Owners Designers, Agencies Pre-Media Printer-Convert
Slide 55: Recurring Revenue Business Model
Recurring Revenue Business Model RESILIENT PORTFOLIO EXAMPLES CIJ 1880 Printer Coca-Cola bottling • Accelerating digital ~10% SOFTWARE/SAAS plant prints lot codes transformation of AS % OF 2020 PID REVENUE with Videojet ink on packaging design and mfg. 10-20M cans per day >70% • Increasing packaging
Slide 56: How We Win Across Product ID
How We Win Across Product ID • Launching high value, high impact new products CORE REVENUE GROWTH PRODUCT VS. PEERS INNOVATION into the market faster • Increased investment in digital solutions PRODUCT ID +MSD REMOTE • Industry-leading service footprint +MSD SERVICE • Largest remotely connected inst
Slide 57: Digital & Software Solutions at Videojet
Digital & Software Solutions at Videojet Printer health monitoring OPPORTUNITIES & FOCUS AREAS Intervention guidance • Reducing customer downtime and increasing Rapid line recovery productivity • Connected to the ‘cloud’ with a continuous flow of data ECO-SYSTEM 5 Zero lost productivity IOT •
Slide 58: Workflow Software Simplifying Packaging Design
Workflow Software Simplifying Packaging Design CUSTOMER RESULTS 60% FEWER REVISIONS DURING PACKAGING DESIGN 50% LESS LABOR COST DURING PACKAGING Project Manager Data supplier Agency Approvers Production DEVELOPMENT Review & Send to Project Creation Brief Artwork creation Approve Production 2.5X NUMB
Slide 59: Leadership and Talent Development
Leadership and Talent Development RESULTS SINCE 2018 DBS LEADERSHIP TOOLS Visual Project Management, Transformative Marketing, VAVE ~75% AVG. ANNUAL INTERNAL FILL RATE developed at EAS and now used across Danaher AT EAS TALENT DEVELOPMENT & ENGAGEMENT <5% AVG. ANNUAL SENIOR ― Increased focus on inte
Slide 60: Slide 60
Slide 61: Summary
Summary Product ID platform well-positioned in attractive end-markets, with strong recurring revenues and market-leading installed base Gaining market share through product innovation, leading customer service and digital solutions Developing and exporting talent & DBS best-practices across Danaher
Slide 62: Water Quality Platform
Water Quality Platform Kevin Klau, Vice President & Group Executive 2021 INVESTOR & ANALYST DAY
Slide 63: Water Quality Platform
Water Quality Platform Revenue ~$2.5B By Mix TOTAL REVENUE 2021E Non- recurring Recurring STRONG GLOBAL GROWTH DRIVERS • Increasing regulatory requirements and changes By Geography By End Market • Water scarcity and drought conditions W. EU Applied / • Sustainability of water resources NA Municipal
Slide 64: Where We Play: Most Attractive Areas of Water Quality
Where We Play: Most Attractive Areas of Water Quality Leader in water Leader in Leader in UV disinfection Leader in water analytics with deep industrial water & membrane filtration in data management, expertise in applied chemistry treatment across the Americas municipal & industrial applications op
Slide 65: How We Win Across Water Quality
How We Win Across Water Quality CORE REVENUE GROWTH VS. PEERS • Deep water chemistry and biology expertise Avg. core growth APPLICATION 2018 - 2021YTD • Broad installed base driving integrated EXPERTISE Water Quality Platform +MSD workflow solutions + service Peers (wtd. avg.) +LSD +HSD • Platform a
Slide 66: Hach: Reinforcing Our Technology Leadership
Hach: Reinforcing Our Technology Leadership SOFTWARE WIMS Claros Optimization Collect Software Real Time Control Strategic (RTC) Mobile Sensor M&A Mgmt. (MSM) ACCELERATING PACE OF NEW PRODUCT DEVELOPMENT: 36+ MONTHS 18 MONTHS Source Lab Specs Turbidity INSTRUMENTATION Water Monitoring Waste Water LD
Slide 67: Extending Leadership Position Through Software & Digital Solutions
Extending Leadership Position Through Software & Digital Solutions DIGITAL TRANSITION ACCELERATING CORE GROWTH • +LDD core growth in software revenue annually last 5 years • >1,000bps increase in % of recurring revenue last 5 years MOVING FROM PREVENTATIVE TO PREDICTIVE & PRESCRIPTIVE • Existing ins
Slide 68: Sustainability: Helping Protect the Environment
Sustainability: Helping Protect the Environment ANNUAL REDUCTION FOCUS AREAS WITHIN WATER QUALITY RESULTS OVER PAST 3 YEARS • Energy utilization • Greenhouse gas emissions >50% HACH CHINA ENERGY COST • Water usage & water treatment APPLICATION OF DBS TOOLS DRIVING PROGRESS >50KTONS CO2 USED BY HACH
Slide 69: Value Creation at Water Quality
Value Creation at Water Quality 2001 2021E* ~$350M REVENUE >$2.5B REVENUE +LSD CORE GROWTH +HSD CORE GROWTH ~45% GROSS MARGIN >55% GROSS MARGIN Low-teens ADJ. EBITDA MARGIN >25% ADJ. EBITDA MARGIN >20% ROIC * All financial metrics reflect FY 2021E. ROIC = Return on Invested Capital Pre-2002 2004 200
Slide 70: 70
70
Slide 71: Summary
Summary >$2.5B platform with strong revenue and margin profile and sustainable business model Gaining market share through customer-focused workflow solutions, innovation and commercial execution DBS helping drive long-term sustainable results and compounding returns
Slide 72: Diagnostics Platform
Diagnostics Platform Chris Riley, Vice President & Group Executive 2021 INVESTOR & ANALYST DAY
Slide 73: Diagnostics Overview
Diagnostics Overview Revenue By Mix ~$9.0B Non-recurring TOTAL REVENUE 2021E Recurring GLOBAL GROWTH DRIVERS • Penetration of molecular diagnostics By Geography By End Market • Point-of-care & decentralization of health care ROW Molecular • Skilled labor shortages & cost pressures necessitating NA C
Slide 74: Portfolio Indexed to Most Attractive Areas of Diagnostics
Portfolio Indexed to Most Attractive Areas of Diagnostics Largest installed base & PRODUCT LINE REVENUE & BEST IN CLASS test menu, COVID-19 GROWTH RATES MOLECULAR DX +LDD core growth* +MSD/HSD* >40% OF REV. SCALED “NICHE” Each >$1B annual revenue Acute / Immuno- POSITIONS +HSD core growth* POC assay
Slide 75: Significant Opportunity in Molecular Diagnostics
Significant Opportunity in Molecular Diagnostics BEST-IN-CLASS MOLECULAR DX OFFERING MOLECULAR DIAGNOSTICS MARKET PENETRATION • Differentiated position at critical, point-of-care settings • Workflow + speed + accuracy < 50% < 50% • Broadest test menu: >35 OUS, >20 in the US Cepheid GeneXpert® System
Slide 76: Enhancing Cepheid's Long-Term Competitive Advantage
Enhancing Cepheid’s Long-Term Competitive Advantage ACCELERATING GROWTH INVESTMENTS ANNUAL REVENUE & RESULTS SINCE ACQUISITION GLOBAL INSTALLED BASE >35K ~50 ~$3B >4K +2.5X >$0.5B M >30K ASSOCIATES INCREASE IN CUMULATIVE ~$2B HIRED ANNUAL R&D SPEND CAPEX >20K COVID-19 CONTRIBUTIONS >10K ~$1B $600M •
Slide 77: Accelerating Growth at Beckman
Accelerating Growth at Beckman STRATEGIC FOCUS AREAS RESULTS INNOVATION & • Hematology: DxH900 (+ESId) / 690T / 560 • Test menu: cardiac, COVID-19, PCT, IL-6 >2X Core Revenue NEW PRODUCTS NEW PRODUCT Growth • Automation: DxA 5000 / Fit, DxONE INCREMETNAL +MSD REVENUE VS 2018 ~4% COMMERCIAL • Strateg
Slide 78: Reinforcing Our Competitive Advantage at LBS & Radiometer
Reinforcing Our Competitive Advantage at LBS & Radiometer COMMERCIAL EXECUTION CORE REVENUE GROWTH VS PEERS DBS “Commercial Playbook” – Daily Management, Growth Room, Avg. Annual Core Revenue Growth 2018 – 2021E Key Account Management +HSD Installed base annual growth since 2018: +DD LBS BOND INSTRU
Slide 79: Summary
Summary Platform indexed to most attractive areas of Diagnostics Outstanding performance at Cepheid and well-positioned for continued share gains post-COVID DBS accelerating growth at BEC Dx, enhancing competitive advantage at Radiometer & LBS
Slide 80: Closing Remarks
Closing Remarks Rainer Blair, President & CEO 2021 INVESTOR & ANALYST DAY
Slide 81: Portfolio Evolution: A Stronger, Better Danaher
Portfolio Evolution: A Stronger, Better Danaher CORE REVENUE OPERATING PROFIT RECURRING REVENUE FREE CASH FLOW GROWTH MARGIN +LDD ~75% >25% >$6B ~17% +LSD ~45% >$3B 2019- 2015 21E 2015 2021E 2015 2021E 2015 2021E 2015 metrics shown include Fortive and Envista.. Recurring Revenue is shown as a % of t
Slide 82: DBS Is Our Ultimate Competitive Advantage
DBS Is Our Ultimate Competitive Advantage 8 CORE VALUE DRIVERS • CORE REVENUE GROWTH Leadership SHAREHOLDER • OMX • CASH FLOW / WC TURNS • ROIC • QUALITY (EXTERNAL PPM) CUSTOMER • ON-TIME DELIVERY (OTD) Lean Growth • INTERNAL FILL RATE ASSOCIATE • RETENTION “OMX” is Operating Margin Expansion; “WC”
Slide 83: Putting It All Together
Putting It All Together PRE-2019 FUTURE ANTICIPATED CORE REVENUE GROWTH ANTICIPATED CORE GROWTH RATE DANAHER 5-6% Owned Dental (Envista) MSD+ Now part of DHR Life Sciences 6-7% DHR did not own HSD expected Uniquely positioned across bioprocessing ~$3B 2021E revenue (>10% of DHR) ~$1B 2019 revenue LD
Slide 84: Putting It All Together: Anticipated Long-Term Performance
Putting It All Together: Anticipated Long-Term Performance CORE REVENUE GROWTH CORE REVENUE GROWTH MSD+ ACCELERATION + MARGIN EXPANSION50-75BPS OMX 100bps+ MSD+ + STRONG FREE CASH FLOW>100% FCF / NI 5-6% + FCF+ ACQUISITIONS M&A SPEND PRE-2019 FUTURE = TOP QUARTILE EPS GROWTH & COMPOUNDING RETURNS DD
Slide 85: What You Heard Today
What You Heard Today Purpose driven portfolio evolution into a science & technology leader Strengthening our competitive advantage with DBS Long-term value creation through strategic M&A Strong foundation for building sustainable results
Slide 86: Danaher
a DANAHER
Slide 87: Reconciliation of GAAP to Non-GAAP Financial Measures
DANAHER CORPORATION RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
Slide 88: Core Sales Growth and Core Sales Growth Including Cytiva
DANAHER CORPORATION Core Sales Growth and Core Sales Growth Including Cytiva % Change Six- Month Period % Change Year % Change Year % Change Year % Change Year % Change Year Ended July 2, Ended December Ended December Ended December Ended December Ended December 2021 vs. 31, 2020 vs. 31, 2019 vs. 31
Slide 89: Forecasted Core Sales Growth and Core Sales Growth Including Cytiva
DANAHER CORPORATION Forecasted Core Sales Growth and Core Sales Growth Including Cytiva 1 % Change Year Ending December 31, 2021 (Estimated) vs. Comparable 2020 Period Total Company Life Sciences Segment Core sales growth (non-GAAP) +High-teens +High-teens +Low single / mid Impact of Cytiva sales gr
Slide 90: Reconciliation of GAAP to Adjusted P&L Metrics
DANAHER CORPORATION Reconciliation of GAAP to Adjusted P&L Metrics Six-Month Period Ended Year-over- July 2, 2021 July 3, 2020 Year Change Diluted Net Earnings Per Common Share from Continuing Operations (GAAP) 2 $ 4.57 $ 2.06 Amortization of acquisition-related intangible assets A 0.93 0.65 Acquisi
Slide 91: Reconciliation of GAAP to Adjusted P&L Metrics
DANAHER CORPORATION Reconciliation of GAAP to Adjusted P&L Metrics A Amortization of acquisition-related intangible assets in the following historical periods ($ in millions) (only the pretax amounts set forth below are reflected in the amortization line item above): Six-Month Period Ended July 2, 2
Slide 92: Reconciliation of GAAP to Adjusted P&L Metrics
DANAHER CORPORATION Reconciliation of GAAP to Adjusted P&L Metrics the VWAP per share of the Company's common stock over the 20 consecutive trading day period beginning on, and including, the 21st scheduled trading day immediately before April 15, 2022 and April 15, 2023 for the MCPS Series A and Se
Slide 93: Adjusted Average Common Stock and Diluted Shares Outstanding
DANAHER CORPORATION Adjusted Average Common Stock and Common Equivalent Diluted Shares Outstanding (shares in millions) Six-Month Period Ended July 2, 2021 July 3, 2020 Average common stock and common equivalent shares outstanding - diluted (GAAP) 3 735.6 713.1 Converted shares 4 8.6 14.6 Adjusted a
Slide 94: Year-Over-Year Core Operating Margin Changes
DANAHER CORPORATION Year-Over-Year Core Operating Margin Changes Total Company Six-Month Period Ended July 3, 2020 Operating Profit Margins from Continuing Operations (GAAP) 16.00 % First half of 2021 impact from operating profit margins of businesses that have been owned for less than one year or w
Slide 95: Year-Over-Year Core Operating Margin Changes
DANAHER CORPORATION Year-Over-Year Core Operating Margin Changes Total Company Year Ended December 31, 2017 Operating Profit Margins (GAAP) 16.30 % Full year 2018 impact from operating profit margins of businesses that have been owned for less than one year or were disposed of during such period and
Slide 96: Free Cash Flow
DANAHER CORPORATION Free Cash Flow ($ in millions) Full Year Ending Six-Month Period Ended Full Year Ended December 31, Year-over-Year December 31, 2021 5 July 2, 2021 5 July 3, 2020 5 Change 2015 6 Total Cash Flows: Total cash provided by operating activities (GAAP) >$7,500 $ 3,991 $ 2,271 $ 3,828
Slide 97: Core Sales Including Cytiva Note
DANAHER CORPORATION We present core sales on a basis that includes sales attributable to Cytiva (formerly the Biopharma Business of General Electric Company’s (“GE”) Life Sciences business), which Danaher acquired from GE on March 31, 2020. Historically Danaher has calculated core sales solely on a