Agilent Technologies, Inc. · NYSE:A
Agilent Technologies — Credit Suisse Annual Technology Conference 2011
32 slides from Agilent Technologies's conference presentation, Nov 30, 2011
Slide 1: Agilent Technologies Credit Suisse Annual Technology Conference
AGILENT TECHNOLOGIES CREDIT SUISSE ANNUAL TECHNOLOGY CONFERENCE RON NERSESIAN NOVEMBER 30, 2011 EXECUTIVE VICE PRESIDENT THE PHOENICIAN CHIEF OPERATING OFFICER SCOTTSDALE, AZ
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 FY11 Revenue: $3.3B FY11 Revenue: $1.5B FY11 Revenue: $1.8B FY11 Operating Margin* 23% FY11 Operating
Slide 4: Q4 '11 Financial Highlights
Q 4 ’ 1 1 F INANCIAL H IGHLIGHTS Q4 FY11 Q4 FY11 operating performance Actual best in Agilent’s history Orders $1.75B • Revenues in line with guidance Order Growth 4% on a currency-adjusted basis. Revenue* $1.73B • Record EPS up approximately Revenue Growth* 9% 30% from Q4 FY10. • Record Operating M
Slide 5: 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 6: Agilent Operating Model
A G I L E N T O P E R AT I N G M O D E L * SECULAR GROWTH OPERATING MODEL*** Mid-Point FY12 -1σ Mid-Range +1 σ Guidance** Organic Revenue 6% 4% 8% 12% Growth % YoY OM 31% 20% 36% 43% Incremental % *Presented on a non-GAAP basis **FY12 guidance as of November 15, 2011 ***Not company guidance Page 6
Slide 7: Agilent's Outlook & Growth in End Markets
A G I L E N T ’ S O U T LO O K & G R O W T H I N E N D M A R K E T S % of Agilent % Y/Y Market Size, Growth Drivers & Outlook • Drivers: Emerging markets (China); high speed digital I/O demand Industrial, 31% +11% 21% growth driving need for technology refresh Comps & Semi • Market Size: $5B. Market
Slide 8: Q4 '11 Revenue Distribution by Geography
Q 4 ’ 1 1 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 • Q4’11 YoY currency-adjusted revenue growth: Americas +6%, Europe -1%, Asia Pacific +12% • Q4’11 percentage of Agilent revenues: U.S. 29%, China 17%, Japan 11% • ~75% sales through direct channels, ~25% through indirect channels •
Slide 9: Similar Measurement Process Across Agilent
S I M I L A R M EA S U R E M E N T P R O C ES S A C R O S S A G I L E N T Look to the core of measurement Detect Once we convert the & parameter into an electrical Analyze Integrate Interpret Acquire signal, the rest of the measurement is very similar. Page 9
Slide 10: EM Markets Segments and Agilent Position
E M M A R K E T S EG M E N T S A N D A G I L E N T P O S I T I O N Aerospace Defense $3B #1 in market market Customers include: US Secular Department of Defense, growth: Raytheon, Lockheed 3-6% Martin Industrial, Computers, Semiconductors $5B #1 in market market Secular Customers include: Intel, gro
Slide 11: EMG's Strategy to Differentiate and Win
E M G ’ S S T R AT EGY TO D I F F E R E N T I AT E A N D W I N • Highest • Applications performance provide full products for customer industry solutions, and reputation create Technology Differentiate differentiation Leadership in through High-end Application Markets Solutions Competitive Expand in
Slide 12: EMG FY11 Results
E M G F Y 1 1 R E S U LT S FY11 Growth vs. FY10 Orders $3,305M +10% EMG had record Revenue growth, Revenue $3,316M +19% Operating Profit, and Operating Margin in Gross Margin 58.4% unchanged the last decade (FY01-FY11) Operating $760M +$322M Profit Operating 22.9% +7.2 points Margin *Presented on a
Slide 13: EMG Delivers Record Q4 '11 Performance
E M G D ELIVERS R ECORD Q 4 ’ 1 1 P ERFORMANCE EMG’s 24.4% operating profit is a new EMG record Q4’11 • 12% revenue growth YoY Orders $822M (10% currency-adjusted) Revenue $855M • Record Operating Profit and Operating Margin Gross Margin 58.4% • Key product platforms grew YoY, led by oscilloscopes O
Slide 14: Appendix
APPENDIX ae Agilent Technologies
Slide 15: Q1 '12 and FY2012 Guidance
Q 1 ’ 1 2 AND F Y 2 0 1 2 G UIDANCE* Q1’12 FY12 Revenue $1.65B - $1.67B $6.85B - $7.15B Organic Revenue 9% 6% Growth (mid-point) Operating Margin 18.6% 20.4% EPS $0.67 - $0.69 $3.00 - $3.35 EPS Growth (mid-point) 13% 8% OM Incremental 31% *Presented on a non-GAAP basis; guidance as of November 15, 2
Slide 16: Agilent Operating Model
A G I L E N T O P E R AT I N G M O D E L * SECULAR GROWTH OPERATING MODEL*** -1σ Mid-Range +1 σ EMG Organic Rev. Growth % 2% 6% 11% Operating Margin % 19% 21% 23% YoY OM Incremental % -11% 40% 48% CAG Organic Rev. Growth % 5% 8% 11% Operating Margin % 22% 23% 24% YoY OM Incremental % 30% 40% 44% LSG
Slide 17: How to Manage in an Uncertain Environment?
H OW TO M ANAGE IN AN U NCERTAIN E NVIRONMENT ? • Grow expenses slower than targeted organic revenue growth G Mid-Range Maximum Resulting Secular Expense Incremental Growth Growth Operating Margin EMG 6% 3.6% 40% CAG 8% 5.6% 40% LSG 10% 7.0% 30% Agilent 8% 4.8% 36% GIO* 2.5% • Default rule: producti
Slide 18: Post-Recession Wireless Opportunity With LTE
P OST ‐R ECESSION W IRELESS O PPORTUNITY WITH LTE 1,800 Handset Test represents $1.8 1,600 approximately 25% of the $1.6 Communications Test market Millions of Handsets Shipped Each Year 1,400 $1.4 Handset T&M Market ($B) 1,200 $1.2 1,000 $1.0 800 $0.8 600 $0.6 400 $0.4 200 $0.2 0 $0.0 1G 2G 3G 4G H
Slide 19: Cash and Capital Structure Update
C A S H A N D C A P I TA L S T R U C T U R E U P D AT E • Net cash & short term investments of $1.4B* as of October 31, 2011. Most cash held outside of the United States. • Priority use of cash: Reserve for organic, inorganic investments meeting strategic & return criteria. • Use available cash in t
Slide 20: Reconciliations
RECONCILIATIONS “Ee Agilent Technologies
Slide 21: Electronic Measurement Segment
AGILENT TECHNOLOGIES, INC. ELECTRONIC MEASUREMENT SEGMENT (Unaudited) PRELIMINARY (In millions, except margins and ROIC data) FY 2011 Q1 Q2 Q3 Q4 Total Orders $ 797 $ 844 $ 842 $ 822 $ 3,305 Net revenue $ 771 $ 834 $ 856 $ 855 $ 3,316 Gross margin % 58.1% 59.5% 57.7% 58.4% 58.4% Income from operatio
Slide 22: Chemical Analysis Segment
AGILENT TECHNOLOGIES, INC. CHEMICAL ANALYSIS SEGMENT (Unaudited) PRELIMINARY (In millions, except margins and ROIC data) FY 2011 Q1 Q2 Q3 Q4 Total Orders $ 388 $ 380 $ 400 $ 421 $ 1,589 Net revenue $ 349 $ 381 $ 383 $ 405 $ 1,518 Gross margin % 51.1% 50.3% 50.7% 52.4% 51.1% Income from operations $
Slide 23: Life Sciences Segment
AGILENT TECHNOLOGIES, INC. LIFE SCIENCES SEGMENT (Unaudited) PRELIMINARY (In millions, except margins and ROIC data) FY 2011 Q1 Q2 Q3 Q4 Total Orders $ 442 $ 479 $ 445 $ 509 $ 1,875 Net revenue $ 404 $ 464 $ 453 $ 471 $ 1,792 Gross margin % 53.3% 52.2% 51.3% 51.4% 52.0% Income from operations $ 48 $
Slide 24: 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 25: Reconciliation From GAAP to Non-GAAP
AGILENT TECHNOLOGIES, INC RECONCILIATION FROM GAAP TO NON-GAAP YEAR ENDED October 31, 2011 (Unaudited) PRELIMINARY NON-GAAP ADJUSTMENTS Restructuring Varian and Other Acquisition & Acquisition Agilent Related Costs- Asset Intangible Transformation Integration Fair Value Foundation Adjustment (In mil
Slide 26: Reconciliation From GAAP to Non-GAAP
AGILENT TECHNOLOGIES, INC RECONCILIATION FROM GAAP TO NON-GAAP THREE MONTHS ENDED October 31, 2010 (Unaudited) Non-GAAP Adjustments Varian Varian Acquisition Restructuring Acquisition & Related Fair Tax and Other Related Asset Intangible Transformational Business Integration Value Sharing Adjustment
Slide 27: Reconciliation From GAAP to Non-GAAP
AGILENT TECHNOLOGIES, INC RECONCILIATION FROM GAAP TO NON-GAAP THREE MONTHS ENDED October 31, 2011 (Unaudited) PRELIMINARY NON-GAAP ADJUSTMENTS Restructuring Varian and Other Acquisition & Acquisition Agilent Related Costs- Asset Intangible Transformation Integration Fair Value Foundation Adjustment
Slide 28: 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: Q4'11 Q4'11 Q4'11 Q4'11 Q4'10 Q4'10 Q4'10 Q4'10 Q3'11 Q3'11 Q3'11 Q3'11 Non-GAAP income from operations $ 68 $ 97 $ 209 $ 373 $ 62 $ 86 $ 153
Slide 29: Reconciliation of Organic Revenue
AGILENT TECHNOLOGIES, INC. RECONCILIATION OF ORGANIC REVENUE (IN MILLIONS) PRELIMINARY Years Ended October 31, Percent 2011 2,010 Inc/(Dec) GAAP Revenue $ 6,615 $ 5,444 22% Varian acquisition fair value adjustments 11 19 Non-GAAP Revenue $ 6,626 $ 5,463 21% Less revenue from acquisition and divestit
Slide 30: Reconciliation of Incremental Revenue Dollar to Bottom Line
AGILENT TECHNOLOGIES, INC. RECONCILIATION OF INCREMENTAL REVENUE DOLLAR TO BOTTOM LINE (IN MILLIONS) PRELIMINARY Year over Year Q4'11 Q4'10 $ Change Incremental AGILENT GAAP Revenue $ 1,728 $ 1,576 $ 152 Income from Operations $ 313 $ 203 $ 110 73% AGILENT Non-GAAP Revenue $ 1,731 $ 1,584 $ 147 Inco
Slide 31: Reconciliations of Non-GAAP Revenue by Segment and by Region
AGILENT TECHNOLOGIES, INC. RECONCILIATIONS OF NON-GAAP REVENUE BY SEGMENT AND NON-GAAP REVENUE BY REGION EXCLUDING THE IMPACT OF CURRENCY ADJUSTMENTS (IN MILLIONS) (Unaudited) PRELIMINARY Year-over-Year Currency (a) NON-GAAP Adjustments Currency-Adjusted Year-over-Year Year-over-Year Non-GAAP Revenu
Slide 32: Net Cash
AGILENT TECHNOLOGIES, INC. NET CASH (In millions) (Unaudited) PRELIMINARY Q4'11 Q4'10 Cash and cash equivalents $ 3,527 $ 2,649 Restricted cash and cash equivalents — 1,550 Short-term debt, par value (250) (1,501) Senior notes, par value (1,850) (2,100) Total Net Cash $ 1,427 $ 598 The preliminary r
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