Agilent Technologies, Inc. · NYSE:A
Agilent Technologies — Merger or Acquisition (September 2013)
30 slides from Agilent Technologies's merger presentation, Sep 19, 2013
Slide 1: Separating Into Two Industry-Leading Public Companies
Page * Agilent Technologies Separating Into Two Industry-Leading Public Companies to Increase Strategic Flexibility and Enhance Shareholder Value September 19, 2013 Exhibit 99.2
Slide 2: Safe Harbor
Safe Harbor This presentation contains forward-looking statements (including, without limitation, information and future guidance on the company’s goals, priorities, the planned separation of our Electronic Management Group, revenues, demand, growth opportunities, customer service and innovation pla
Slide 3: The World's Premier Measurement Company
Agilent Labs Order Fulfillment Life Sciences Group FY13 Revenue $1.6B Operating Margin 16% Chemical Analysis Group FY13 Revenue $1.6B Operating Margin 22% Electronic Measurement Group FY13 Revenue $2.9B Operating Margin 19% Diagnostics & Genomics Group FY13 Revenue $0.7B Operating Margin 15% Finance
Slide 4: Agilent to Split into Two Companies
Move Designed to Increase Strategic Flexibility and Enhance Shareholder Value Agilent to Split into Two Companies Strategic Rationale for Separation • Capitalizing on EMG, Agilent has grown LDA to be a sizeable and highly competitive business • Spin-off to create two companies with greater strategic
Slide 5: Two Independent Publicly Traded Companies
LDA-Focused Company (New Agilent) EM-Focused Company (To Be Named) Revenue Mix Financial Metrics (1) Key Platforms § Revenue: $3.9B § Operating Margin: 18% § ROIC: 11% § Revenue: $2.9B § Operating Margin: 19% § ROIC: 31% § Liquid & Gas Chromatography § Mass Spectrometry § Spectroscopy § Nuclear Magn
Slide 6: Management Teams
New Agilent EM Company Management Teams Bill Sullivan, President and CEO Ron Nersesian, President and CEO designate Didier Hirsch, Chief Financial Officer Neil Dougherty, Chief Financial Officer designate (formerly VP and Treasurer of Agilent Technologies)
Slide 7: New Agilent: Life Sciences, Diagnostics, and Applied Markets
Page * New Agilent: Life Sciences, Diagnostics, and Applied Markets
Slide 8: New Agilent Overview
Geography Type Life Sciences 42% Chemical Analysis 41% Non- Recurring 59% Recurring 41% New Agilent Overview • Global leader in Life Sciences, Diagnostics, and Applied markets • Attractive recurring revenue base • Balanced geographic revenue profile • Growth opportunities in emerging markets, molecu
Slide 9: New Agilent: Market Profile
End Markets Market Size (1) Long Term Market Growth (1) Market Position (1) Growth Drivers $11B 4-6% #3 • Shift to new biological entities • Emerging markets $10B 3-5% #4 • Global investments in Life Science research $7B 8-10% #2 & emerging • Increasing patient population • Companion diagnostics $4B
Slide 10: What's Different for New Agilent?
Growth through technology leadership, customer intimacy, workflow solutions Higher recurring revenue mix (from 29% to 41% (1) ) Continued strategic push from lab to the clinic. Ensuring the success of Dako Focused on similar markets with higher growth rates and lower cyclicality Leadership in Life S
Slide 11: New Agilent: Strategy to Win
New Agilent: Strategy to Win Creating Shareholder Value § Increase organic growth rate ü Leverage large and growing installed base to expand recurring revenues and core instrument sales ü Take advantage of greenfield opportunities in developed markets (clinical instrumentation, integrated biology, s
Slide 12: Electronic Measurement Focused Company
Page * Electronic Measurement Focused Company
Slide 13: EM Company Overview
• Leading position in major markets • Global electronic measurement technology and market leader • Growth opportunity in emerging markets • Strong cash flow generation and ROIC • Industry leading gross and operating margins • $450M of recurring services & support revenue. $300M of software sales (1)
Slide 14: EM Company: Market Profile
End Markets Market Size (1) Long Term Market Growth (1 ) Growth Drivers Market Position Communications (3 ) $4B 4-6% • Mobile data traffic growth • Complex components and chipsets • Subscriber growth in China, India, Brazil #1 Aerospace & Defense $3B Flat • Satellites and radar modernization outside
Slide 15: What's Different for EM Company?
Electronic measurement top opportunities are company’s top opportunities Same customers and global footprint New name Top talent Strong position in emerging markets Organic growth, tuck-in acquisitions Whole company 100% focused on EM and customer success Focus: profit and cash generation #1 in key
Slide 16: EM Company Strategy to Win
EM Company Strategy to Win § World’s premier electronic test and measurement provider in Communications, Aerospace/Defense, and Industrial markets § First to market with leading edge customer-valued technology solutions ü Take share in core platforms ü Top opportunities in electronic measurement ind
Slide 17: EM Company Strong Profitability Throughout the Cycle
Goal Actions taken since 2009 downturn Restructured Operations to Maintain Strong Profitability During Periods of Market Volatility Lower Costs Shift Fixed Costs to Variable Focus on Core n Reduced headcount by 2700 people n Focused on continuous GM improvement - value engineering n Increased use of
Slide 18: Transaction Structure, Timing and Financial Details
Transaction Structure Timing Financial Details n Agilent shareholders will receive a pro rata distribution of shares in EM Company via a tax -free spin-off n Expected to be completed by end of calendar year 2014, subject to the satisfaction of customary closing conditions, including: — Final approva
Slide 19: Spin-off Execution Plan
§ Leverage prior experience ü Agilent has completed four major spin-offs/divestitures since 2005 § Dis-synergies of ~ $100M cumulative over three year period ü Little real estate overlap outside of sales offices ü Clean ERP separation ü Most dis-synergies in shared infrastructure organization • Repl
Slide 20: Appendix
Page * Appendix
Slide 21: New Agilent Historical Consolidated Income Statement
$M FY 2010 FY 2011 FY 2012 Revenue 2,679 3,310 3,543 % YoY 30% 24% 7% COGS 1,245 1,603 1,685 Gross Margin % 54% 52% 52% Operating Expenses 936 1,157 1,225 % Revenue 35% 35% 35% Operating Profit 498 550 633 % Revenue 19% 17% 18% New Agilent Historical Consolidated Income Statement (1) (1) Presented o
Slide 22: EM Company Historical Consolidated Income Statement
$M FY 2010 FY 2011 FY 2012 Revenue 2,784 3,316 3,315 % YoY 15% 19% 0% COGS 1,158 1,378 1,428 Gross Margin % 58% 58% 57% Operating Expenses 1,188 1,178 1,136 % Revenue 43% 36% 34% Operating Profit 438 760 751 % Revenue 16% 23% 23% EM Company Historical Consolidated Income Statement (1) (1) Presented
Slide 23: EM Company in Communications
Broadest range of solutions across ecosystem, including • Components and chipsets - Simulation tools, network analyzers Market Reach, Customer Trust • Global footprint with R&D in US, Europe and Asia • Recognized leader in electronic test and measurement • Leadership in standards bodies • Handsets -
Slide 24: EM Company in Aerospace & Defense
EM Company in Aerospace & Defense Market Size (1) : $3B Long Term Market Growth (1) : Flat Market Position (1) : #1 Key Drivers How We Win • Growth comes from outside US (Russia, China, India, Middle East) driven by new satellites and radar technologies • Growth of intelligence, surveillance, and re
Slide 25: EM Company in Industrial, Computer & Semiconductors
EM Company in Industrial, Computer & Semiconductors Market Size (1) : $6B Long Term Market Growth (1) : 3-5% Market Position (1) : #1 Key Drivers How We Win • Electronic content in industrial segment continues to proliferate • Mobile computing driven by smartphones, tablets, and notebook PCs • Cloud
Slide 26: EM Company Applications, Market Position and Competitors
Applications Market Position (1) Markets Competitors Designs, simulates, & optimizes electronic circuit performance prior to building the prototype #1 Communications, Aerospace/Defense, Industrial/Computer/S emi (ICS) • Cadence • National Instruments For wireless devices—measures performance at chip
Slide 27: New Agilent: Life Sciences Overview
New Agilent: Life Sciences Overview Pharma & Biotech Academia & Government Research Markets & Market Position #3 #4 Market Size (1) : $21B #1 in Liquid Chromatography (LC) #3 in Mass Spectrometry (MS) #2 in Nuclear Magnetic Resonance (NMR) Q3’13 Revenue Mix by Geography Asia Pacific Americas Europe
Slide 28: New Agilent: Diagnostics and Genomics Overview
New Agilent: Diagnostics and Genomics Overview Anatomic Pathology Molecular Diagnostics Market Size (1) : $7B Markets & Market Position #2 Emerging Q3’13 Revenue Mix by Geography Asia Pacific Americas Europe DGG also sells into the pharmaceutical and research markets • Revenues : $0.7B, +65% y/y (+9
Slide 29: New Agilent: Chemical Analysis Group Overview
New Agilent: Chemical Analysis Group Overview Market Size (1) : $13B Q3’13 Revenue Mix by Geography Asia Pacific Americas Europe Food #1 Environmental and Forensics #1 and #2 Chemical and Energy #1 Markets and Market Position New Global Trends • Global food supply • New environmental contaminants •
Slide 30: New Agilent Platforms, Applications, Market Position and Competitors
Platform Applications Markets Market Position (1) Competitors LC Pharma R&D and QC Molecular biology, cancer research Education & Research / Routine testing Pharma & Biotech Academia & Government #1 Waters, Shimadzu, Thermo LC-MS Discovery and Development Differential Expression and Pathway Analysis
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