Agilent Technologies, Inc. · NYSE:A

Agilent Technologies — Wells Fargo Securities 2013 Healthcare Conference

31 slides from Agilent Technologies's conference presentation, Jun 18, 2013

  1. Slide 1: Agilent Technologies Wells Fargo Securities 2013 Healthcare Conference

    Agilent Technologies Wells Fargo Securities 2013 Healthcare Conference Mike McMullen President June 18, 2013 Chemical Analysis Group Boston, MA

  2. 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

  3. Slide 3: The World's Premier Measurement Company

    The World’s Premier Measurement Company EM Markets LDA Markets FY12 Revenue $3.6B, Operating Margin 18% Electronic Life Diagnostics & Chemical Measurement Sciences Genomics Analysis Group Group Group Group FY12 Revenue $3.3B FY12 Revenue $1.6B FY12 Revenue $0.4B FY12 Revenue $1.6B Operating Margin 2

  4. Slide 4: Financial Highlights – Q2 FY13

    Financial Highlights – Q2 FY13 Q1 FY13 Q2 FY13 Q3 FY13 FY13 Actual Actual Guidance Guidance Midpoint(1) Midpoint(1) Revenue $1.68B $1.73B $1.65B $6.80B Core Revenue Growth(2) -2% -4% -6% -3% Operating Margin(3) 17% 19% 17% 18% EPS(3) $0.63 $0.77 $0.62 $2.78 ROIC(3) 14% 17% not guided not guided Oper

  5. Slide 5: Life Sciences Group Overview

    Life Sciences Group Overview Q2’13 Performance Market Size(1): $21B • Orders: $416M, +2% y/y (+3% core(2)) Long Term Market Growth(1): 4-5% • Revenues: $405M, +2% y/y (+4% core(2)) Global Trends • Pharma shift from new chemical entities (NCEs) to new • Operating Margin: 15.0% of revenue, +390 biolog

  6. Slide 6: Diagnostics and Genomics Group Overview

    Diagnostics and Genomics Group Overview Q2’13 Performance Market Size(1): $7B • Orders: $163M, +145% y/y (+5% core(2)) Long Term Market Growth(1): 8-10% • Revenues: $166M, +124% y/y (flat core(2)) Global Trends • Increasing patient population (aging, lifestyle impacts) • Operating Margin: 16.7% of r

  7. Slide 7: Chemical Analysis Group Overview

    Chemical Analysis Group Overview Q2’13 Performance Market Size(1): $13B • Orders: $408M, flat y/y (+2% core(2)) Long Term Market Growth(1): 4-5% • Revenues: $401M, +3% y/y (+5% core(2)) New Global Trends • Operating Margin: 22.1% of revenue, +320 • Global food supply basis points y/y • New environme

  8. Slide 8: Summary

    Summary Agilent is well positioned in an environment of global uncertainty • Strong balance sheet and cash flow • Gross margin improvements underway as part of multi-year effort to reduce manufacturing and logistics costs by almost $200M; 1/3 complete • Additional restructuring and discretionary cos

  9. Slide 9: Appendix

    Appendix

  10. Slide 10: Q2'13 Revenue Distribution

    Q2’13 Revenue Distribution Q2’13 Revenue: $1.73B Page 10

  11. Slide 11: Agilent End Market Performance – Q2'13

    Agilent End Market Performance – Q2’13 Market % of Agilent Agilent Results Mixed results: End Markets Size(2) Revenue(1) Q2’13 vs. Q2’12 $54B Up: Diagnostics & Clinical, Pharma & Biotech, Chemical & Energy; Food Up 8%, driven by continued Pharma & Biotech 14% $11B technology upgrade cycle Flat: Aero

  12. Slide 12: Electronic Measurement Group Overview

    Electronic Measurement Group Overview Q2’13 Performance Market Size(1): $13B Long Term Market Growth(1): 3-4% • Orders: $701M, -27% y/y (-26% core(2)) • Revenues: $760M, -13% y/y (-12% core(2)) Global Trends • Operating Margin: 20.5% of revenue, -290 • Mobile data traffic grows at high double-digit

  13. Slide 13: Financial Goals

    Financial Goals Base Scenario Low Growth Scenario 2014 2015 2016 2014 2015 2016 Revenue Growth – 7% 7% 7% 4% 4.5% 5% Core(1) Operating Margin(2) 20.2% 21.8% 23.0% 19.1% 19.5% 19.8% YOY Incremental – 41% 44% 39% 28% 28% 26% Organic(3) KEY ACTIONS TO SUPPORT MARGIN EXPANSION (including in “Low” Scenar

  14. Slide 14: Financial Goals – By Segment

    Financial Goals – By Segment Base Scenario Low Growth Scenario 2014 2015 2016 2014 2015 2016 Revenue Growth – Core(1) EMG 6% 6% 6% 3% 3% 4% CAG 7% 7% 7% 5% 5% 6% LSG 8% 8% 8% 5% 6% 5% DGG 9% 9% 10% 5% 6% 7% OM % EMG 21.2% 22.1% 22.9% 20.2% 19.8% 19.8% CAG 22.8% 24.3% 25.3% 22.3% 22.9% 23.4% LSG 18.2

  15. Slide 15: Cash and Capital Structure Update

    Cash and Capital Structure Update • Generated $315M cash from operations in Q2 FY13. Net cash of $225M as of April 30th, 2013 • Bought back 5.3M shares for $219M fiscal YTD • In May 2013, authorized the doubling of stock repurchase program, from $500M to $1B • The repurchase program will be executed

  16. Slide 16: Reconciliations

    Reconciliations Page 16

  17. Slide 17: Electronic Measurement Segment

    AGILENT TECHNOLOGIES, INC. ELECTRONIC MEASUREMENT SEGMENT (Unaudited) PRELIMINARY (In millions, except margins and ROIC data) FY 2013 Q1 Q2 Q3 Q4 Total Orders $ 749 $ 701 $ 1,450 Net revenue $ 722 $ 760 $ 1,482 Gross margin % 57.4% 57.1% 57.2% Income from operations $ 125 $ 156 $ 281 Operating margi

  18. Slide 18: Life Sciences Segment

    AGILENT TECHNOLOGIES, INC. LIFE SCIENCES SEGMENT (Unaudited) PRELIMINARY (In millions, except margins and ROIC data) FY 2013 Q1 Q2 Q3 Q4 Total Orders $ 397 $ 416 $ 813 Net revenue $ 401 $ 405 $ 806 Gross margin % 51.9% 50.8% 51.3% Income from operations $ 61 $ 61 $ 122 Operating margin % 15.2% 15.0%

  19. Slide 19: Diagnostics and Genomics Segment

    AGILENT TECHNOLOGIES, INC. DIAGNOSTICS AND GENOMICS SEGMENT (Unaudited) PRELIMINARY (In millions, except margins and ROIC data) FY 2013 Q1 Q2 Q3 Q4 Total Orders $ 165 $ 163 $ 328 Net revenue $ 163 $ 166 $ 329 Gross margin % 60.5% 62.6% 61.5% Income from operations $ 21 $ 28 $ 49 Operating margin % 1

  20. Slide 20: Chemical Analysis Segment

    AGILENT TECHNOLOGIES, INC. CHEMICAL ANALYSIS SEGMENT (Unaudited) PRELIMINARY (In millions, except margins and ROIC data) FY 2013 Q1 Q2 Q3 Q4 Total Orders $ 399 $ 408 $ 807 Net revenue $ 394 $ 401 $ 795 Gross margin % 51.2% 51.4% 51.3% Income from operations $ 81 $ 89 $ 170 Operating margin % 20.6% 2

  21. Slide 21: Reconciliation of Organic Revenue Excluding Currency Adjustments

    AGILENT TECHNOLOGIES, INC. RECONCILIATION OF ORGANIC REVENUE EXCLUDING THE IMPACT OF CURRENCY ADJUSTMENTS (In Millions) (Unaudited) PRELIMINARY Fiscal Year Percent 2012 2011 Inc/(Dec) GAAP Revenue $ 6,858 $ 6,615 Varian acquisition fair value adjustments - 11 Non-GAAP Revenue $ 6,858 $ 6,626 4% Less

  22. Slide 22: 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) PRELIMINARY NON-GAAP ADJUSTMENTS Acquisition & Agilent Asset Intangible Transformational Integration Foundation Adjustment (In millions, except per share amounts) GAAP Impairments Amortization Init

  23. Slide 23: Reconciliation of Organic Revenue

    AGILENT TECHNOLOGIES, INC. RECONCILIATION OF ORGANIC REVENUE (In Millions) (Unaudited) PRELIMINARY Percent Q1'13 Q1'12 Inc/(Dec) GAAP Revenue $ 1,680 $ 1,635 Less revenue from acquisition and divestitures included in segment results (99) - Organic Revenue $ 1,581 $ 1,635 -3% Percent Organic Revenue

  24. Slide 24: Reconciliations of Organic Revenue by Segment and Region

    AGILENT TECHNOLOGIES, INC. RECONCILIATIONS OF ORGANIC REVENUE BY SEGMENT AND ORGANIC REVENUE BY REGION EXCLUDING THE IMPACT OF CURRENCY ADJUSTMENTS (In Millions) (Unaudited) PRELIMINARY Year-over-Year Currency (a) ORGANIC REVENUE Adjustments Currency-Adjusted Year-over-Year Year-over-Year Organic Re

  25. Slide 25: Reconciliation of Organic Revenue

    AGILENT TECHNOLOGIES, INC. RECONCILIATION OF ORGANIC REVENUE (In Millions) (Unaudited) PRELIMINARY Percent Q2'13 Q2'12 Inc/(Dec) GAAP Revenue $ 1,732 $ 1,733 Less revenue from acquisition and divestitures included in segment results 98 - Organic Revenue $ 1,634 $ 1,733 (6%) Percent Organic Revenue b

  26. Slide 26: Reconciliations of Organic Revenue by Segment and Region

    AGILENT TECHNOLOGIES, INC. RECONCILIATIONS OF ORGANIC REVENUE BY SEGMENT AND ORGANIC REVENUE BY REGION EXCLUDING THE IMPACT OF CURRENCY ADJUSTMENTS (In Millions) (Unaudited) PRELIMINARY Year-over-Year Currency (a) ORGANIC REVENUE Adjustments Currency-Adjusted Year-over-Year Year-over-Year Organic Re

  27. Slide 27: Reconciliation from GAAP to Non-GAAP, Three Months Ended January 31, 2013

    AGILENT TECHNOLOGIES, INC RECONCILIATION FROM GAAP TO NON-GAAP THREE MONTHS ENDED JANUARY 31, 2013 (Unaudited) PRELIMINARY NON-GAAP ADJUSTMENTS Asset Acquisition & Impairments Intangible Transformational Integration Adjustment (In millions, except per share amounts) GAAP and write-downs Amortization

  28. Slide 28: Reconciliation from GAAP to Non-GAAP, Three Months Ended April 30, 2013

    AGILENT TECHNOLOGIES, INC RECONCILIATION FROM GAAP TO NON-GAAP THREE MONTHS ENDED APRIL 30, 2013 (Unaudited) NON-GAAP ADJUSTMENTS PRELIMINARY Restructuring Acquisition & and Other Asset Intangible Transformation Integration Adjustment for (In millions, except per share amounts) GAAP Related Costs Im

  29. Slide 29: Reconciliation of ROIC

    AGILENT TECHNOLOGIES, INC. RECONCILIATION OF ROIC (In millions) (Unaudited) PRELIMINARY LSG CAG EMG DGG AGILENT LSG CAG EMG DGG Agilent LSG CAG EMG DGG AGILENT Numerator: Q2'13 Q2'13 Q2'13 Q2'13 Q2'13 Q2'12 Q2'12 Q2'12 Q2'12 Q2'12 Q1'13 Q1'13 Q1'13 Q1'13 Q1'13 Non-GAAP income from operations $ 61 $

  30. Slide 30: Non-GAAP Net Income and Diluted EPS Reconciliations

    AGILENT TECHNOLOGIES, INC. NON-GAAP NET INCOME AND DILUTED EPS RECONCILIATIONS (In millions, except per share amounts) (Unaudited) PRELIMINARY Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 FY2012 Net Diluted Net Diluted Net Diluted Net Diluted Net Diluted Net Diluted Income EPS Income EPS Income EPS Incom

  31. Slide 31: Net Cash

    AGILENT TECHNOLOGIES, INC. NET CASH (In millions) (Unaudited) PRELIMINARY Q2'13 Q2'12 Q1'13 Cash and cash equivalents $ 2,519 $ 3,896 $ 2,450 Restricted cash and cash equivalents — — — Short-term debt, par value (250) (250) (250) Senior notes, par value (2,000) (1,850) (2,000) Other debt (44) — (44)

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