Agilent Technologies, Inc. · NYSE:A
Agilent Technologies — 31st Annual J.P. Morgan Healthcare Conference (January 2013)
32 slides from Agilent Technologies's conference presentation, Jan 8, 2013
Slide 1: 31st Annual J.P. Morgan Healthcare Conference
31st Annual J.P. Morgan Healthcare Conference Agilent Technologies January 8, 2013 Westin St. Francis San Francisco, CA 1
Slide 2: William Sullivan, Chief Executive Officer
31st Annual J.P. Morgan Healthcare Conference William (Bill) P. Sullivan Chief Executive Officer Page 2
Slide 3: 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 4: The World's Premier Measurement Company
The World’s Premier Measurement Company ELECTRONIC CHEMICAL LIFE DIAGNOSTICS & MEASUREMENT ANALYSIS SCIENCES GENOMICS GROUP GROUP GROUP GROUP FY12 Revenue $3.3B FY12 Revenue $1.6B FY12 Revenue $1.6B FY12 Revenue $0.4B Operating Margin 23% Operating Margin 22% Operating Margin 15% Operating Margin 16
Slide 5: Q1'13 and FY13 Guidance
Q1’13 and FY13 Guidance* Q1’13 FY13 Revenue $1.68B - $1.70B $7.00B - $7.20B Revenue Growth 3% 4% (midpoint) Core Revenue** Growth -2% flat (mid-point) EPS $0.65 - $0.67 $2.80 - $3.10 EPS Growth (mid-point) -4% -5% *Presented on a non-GAAP basis; guidance as of November 19th, 2012 **Core revenue grow
Slide 6: Cash and Capital Structure Update
Cash and Capital Structure Update • Cash of $2.4B. Net cash of $57M as of October 31, 2012 • Generated $485M cash from operations in Q4. Most cash held outside U.S. • Priority use of U.S. cash: - dividend - anti-dilutive share buyback • Larger acquisitions meeting strategic and return criteria to be
Slide 7: Agilent End Market Performance – Q4'12
Agilent End Market Performance – Q4’12 % of Agilent Market Mixed results: End Markets Q4’12 Revenue Size(1) Agilent Results Up: Pharma & Biotech, Computers & ($1.77B) $54B Q4’12 vs. Q4’11 Semi, Forensics Up 6% driven by technology Pharma & Biotech 14% $11B refresh and shifts to lower cost Down: Aero
Slide 8: Agilent's Strategy to Win
Agilent’s Strategy to Win 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* • 41% of employees based in Asia • Technology leadership • 10% Revenue inves
Slide 9: Nick Roelofs, President, Life Sciences Group
31st Annual J.P. Morgan Healthcare Conference Nick Roelofs, Ph.D. President Life Sciences Group 9
Slide 10: Life Sciences Group Overview
Life Sciences Group Overview Markets Market Position $21B Market Size 4-5% Pharma/Biopharma #3 Long Term Market Growth $1.6B 2012 LSG Revenue Academic & 15% #4 Government 2012 LSG Operating Margin #1 in Liquid Chromatography (LC) #3 in Mass Spectrometry (MS) #2 in Nuclear Magnetic Resonance (NMR) As
Slide 11: Macro Trends
Macro Trends • Technology upgrade cycles across multiple platforms • Pharma/biopharma’s shift from new chemical entities (NCEs) to new biological entities (NBEs) and biosimilars • Significant potential for our platforms in emerging markets • Relocation and decentralization of pharma’s infrastructure
Slide 12: LSG - Why We Will Win
LSG - Why We Will Win Customer- Innovate Focused Operational World-Class & Resource Excellence Team Differentiate Allocation • Academic and • Superior product • Capitalize on • Life sciences and government channel quality manufacturing in adjacent market focus • Leading Southeast Asia expertise • In
Slide 13: Diagnostics and Genomics Group Overview
Diagnostics and Genomics Group Overview Markets Market Position $7B Market Size 10-12% Anatomic #2 Long Term Market Growth Pathology $402M 2012 DGG Revenue 16% Molecular Emerging 2012 DGG Operating Margin Diagnostics DGG also sells into the pharmaceutical and Asia Pacific Americas Europe research ma
Slide 14: Macro Trends
Macro Trends • Growing market due to increasing patient population (aging, lifestyle impacts); increasing understanding of cancer Anatomic markers and pathways; and greater access to healthcare in Pathology emerging markets • Companion diagnostics bring diagnostic and treatment solutions together to
Slide 15: DGG - Why We Will Win
DGG - Why We Will Win Customer- Innovate Focused Operational World-Class & Resource Excellence Team Differentiate Allocation • Broad portfolio of • Industry-leading • Leverage global • Diagnostic market strong offerings: CGH companion scale, distribution and and chemistries arrays, IHC/ISH, diagnost
Slide 16: Key Channel and Product Developments in Life Sciences, Diagnostics, and Genomics
Key Channel and Product Developments in Life Sciences, Diagnostics, and Genomics 1290 Infinity Clinical Dako SureFISH Upgrades LC/MS Acquisition Launch New Quaternary Pump 1200 Infinity Series Added regulatory and Catalog of over 450 allows for highest power Liquid Chromatographs diagnostics market
Slide 17: Agilent's Response to An Uncertain Environment
Agilent’s Response to An Uncertain Environment Maintain tight cost and hiring controls • Deliver benefits of variable and discretionary cost structure, ~45% of Agilent revenues • Ongoing hiring controls in developed countries Maintain investment in R&D and technology leadership Deliver on key growth
Slide 18: 31st Annual J.P. Morgan Healthcare Conference
31st Annual J.P. Morgan Healthcare Conference Agilent Technologies January 8, 2013 Westin St. Francis San Francisco, CA Page 18
Slide 19: Appendix
Appendix Page 19
Slide 20: Q4'12 Segment Revenue Distribution by Geography
Q4’12 Segment Revenue Distribution by Geography • Q4’12 YoY core* revenue growth: Americas 2%, Europe -2%, Asia Pacific -4% • Q4’12 percentage of Agilent revenues: U.S. 30%, China 17%, Japan 10% *Core revenue growth is adjusted for the effects of acquisitions and currency Page 20 January 8, 2013
Slide 21: Q4'12 Business Segment Financials
Q4’12 Business Segment Financials EMG LSG • Orders: $755M, -8% y/y (-7% core*) • Orders: $417M, -4% y/y (-1% core*) • Revenues: $816M, -5% y/y (-4% core*) • Revenues: $401M, flat y/y (+3% core*) • Operating Margin**: 23.2% of revenue, -120 • Operating Margin**: 17.7% of revenue, basis points y/y +35
Slide 22: Agilent Operating Model
Agilent Operating Model* -1σ Most Likely +1σ Core Revenue Growth** 4% 8% 12% Expense Growth 3.5% 5% 6% YoY OM Incremental 20% 36% 43% What it is What it is not • Sustainable throughout a cycle. • Cookie-cutter approach. Businesses will • Goal to grow core revenue, under normal generate different OM
Slide 23: Reconciliations
Reconciliations Page 23
Slide 24: Electronic Measurement Segment
AGILENT TECHNOLOGIES, INC. ELECTRONIC MEASUREMENT SEGMENT (Unaudited) PRELIMINARY (In millions, except margins and ROIC data) FY 2012 Q1 Q2 Q3 Q4 Total Orders $ 757 $ 957 $ 811 $ 755 $ 3,280 Net revenue $ 778 $ 876 $ 845 $ 816 $ 3,315 Gross margin % 57.8% 57.0% 55.9% 57.1% 56.9% Income from operatio
Slide 25: Chemical Analysis Segment
AGILENT TECHNOLOGIES, INC. CHEMICAL ANALYSIS SEGMENT (Unaudited) PRELIMINARY (In millions, except margins and ROIC data) FY 2012 Q1 Q2 Q3 Q4 Total Orders $ 403 $ 408 $ 372 $ 421 $ 1,604 Net revenue $ 396 $ 388 $ 381 $ 394 $ 1,559 Gross margin % 51.7% 50.8% 50.1% 52.9% 51.4% Income from operations $
Slide 26: Life Sciences Segment
AGILENT TECHNOLOGIES, INC. LIFE SCIENCES SEGMENT (Unaudited) PRELIMINARY (In millions, except margins and ROIC data) FY 2012 Q1 Q2 Q3 Q4 Total Orders $ 394 $ 410 $ 373 $ 417 $ 1,594 Net revenue $ 395 $ 395 $ 391 $ 401 $ 1,582 Gross margin % 50.9% 48.9% 50.5% 52.8% 50.8% Income from operations $ 58 $
Slide 27: Diagnostics and Genomics Segment
AGILENT TECHNOLOGIES, INC. DIAGNOSTICS AND GENOMICS SEGMENT (Unaudited) PRELIMINARY (In millions, except margins and ROIC data) FY 2012 Q1 Q2 Q3 Q4 Total Orders $ 69 $ 66 $ 106 $ 158 $ 399 Net revenue $ 66 $ 74 $ 106 $ 156 $ 402 Gross margin % 62.6% 65.3% 60.8% 63.4% 62.9% Income from operations $ 8
Slide 28: 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
Slide 29: Reconciliation of Organic Revenue
AGILENT TECHNOLOGIES, INC. RECONCILIATION OF ORGANIC REVENUE (In Millions) (Unaudited) PRELIMINARY Percent Q4'12 Q4'11 Inc/(Dec) GAAP Revenue $ 1,767 $ 1,728 Varian acquisition fair value adjustments - 3 Non-GAAP Revenue $ 1,767 $ 1,731 2% Less revenue from acquisition and divestitures included in s
Slide 30: Reconciliations of Non-GAAP Organic Revenue by Segment and Region
AGILENT TECHNOLOGIES, INC. RECONCILIATIONS OF NON-GAAP ORGANIC REVENUE BY SEGMENT AND NON-GAAP ORGANIC REVENUE BY REGION EXCLUDING THE IMPACT OF CURRENCY ADJUSTMENTS (In Millions) (Unaudited) PRELIMINARY Year-over-Year Currency (a) NON-GAAP ORGANIC Adjustments Currency-Adjusted Year-over-Year Year-o
Slide 31: 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
Slide 32: Net Cash
AGILENT TECHNOLOGIES, INC. NET CASH (In millions) (Unaudited) PRELIMINARY Q4'12 Q4'11 Q3'12 Cash and cash equivalents $ 2,351 $ 3,527 $ 1,923 Restricted cash and cash equivalents — — — Short-term debt, par value (250) (253) (500) Senior notes, par value (2,000) (1,850) (1,600) Other debt (44) — (42)
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