Slide 1: Agilent Technologies Institutional Investor Meetings
S AGILENT TECHNOLOGIES INSTITUTIONAL INVESTOR MEETINGS February & March 2017 Analyst & Investor Day 2016 1
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, revenues, operating profit and operating margin, growth opportunities, customer service and innovation plans, new product introduction
Slide 3: Premium Portfolio, Global Scale, Positioned for Growth
Premium Portfolio, Global Scale, Positioned for Growth Leadership in steadily Attractive recurring FY16 financial growing end-markets revenue base results Most of the world’s (1) $50.1B TAM in 6 end markets 265,000 $4.2B 20.7% labs using Agilent solutions (3,4) Revenue Operating Margin Geographic Re
Slide 4: Agilent Businesses
Agilent Businesses Life Sciences & Agilent Diagnostics & Applied Markets CrossLab Genomics (LSAG) (ACG) (DGG) (1) (1) (1) $2.1B $1.4B $0.7B (2) (2) (2) 21% 22% 16% Lab Enterprise Instrumentation and Solutions and tools Management solutions software solutions for for Clinical and Clinical for the Ana
Slide 5: Agilent Transformation
Agilent Transformation Measures of Success Expand Outgrow operating the Market Outgrow the market margins Balanced capital Expand operating margins allocation Balanced approach to capital allocation Analyst & Investor Day 2016 4
Slide 6: Transformational Results
Transformational Results Outgrowing the Market, Expanding Margins Significant acceleration of core Operating Margin expansion revenue growth(1) since 2014 of 280 bps since 2014 (2) 280 7% 6.4% Completely 20.7% bps 5.9% offset $40M 6% 4.7% 4.9% split dis- 19.6%(2) 5% synergies in 3.8% FY15 4% 3% 2% 1
Slide 7: Key FY16 Results
Key FY16 Results Revenue Growth, Margin Expansion, Balanced Capital Allocation • Revenue Growth Above the Market: up 5.9%(1)(3) on core basis • Expanded Operating Margin: up 110 bps to 20.7%(2)(3) • Adjusted EPS(3) of $1.98, up 14% • Capital Deployment: • Cash Dividends: $150M • Share Repurchases: $
Slide 8: FY17 Guidance
FY17 Guidance As of February 14, 2017 based on January 31, 2017 exchange rates • Revenue: $4.33B - $4.35B: growth at mid-point 4.5%(1) • Adjusted Operating Margin: 21.2%(2) at mid-point • EPS(3): $2.10- $2.16: assumed diluted share count 324M • Operating Cash Flow of $825M • Returns to Shareholders
Slide 9: Agilent Growth Strategy
Outgrow Agilent Growth Strategy the Market Grow Share in Attractive Markets Chemical & Academia & Clinical & The Environment Energy Food Pharma Government Diagnostics (1) $50B Opportunity $14B(1) $15B(1) $10B(1) $11B(1) Strategically Target Growth Markets Innovation-driven growth Emerging market exp
Slide 10: Strong Positions across all end-markets
Strong Positions across all end-markets Outgrow the Market % of LT market Market End-markets(2) TAM SAM Revenue(1) growth position 23% Chemical & $4.1B $2.3B 1-3% Energy #1 Environment 12% $5.3B $1.8B 2-4% & Forensics 11% Food $4.4B $1.6B 4-6% #2 30% Pharma $15.0B $6.7B 4-6% #2 Academia & 9% $10.6B
Slide 11: Growth through Innovation
Outgrow Growth through Innovation the Market Allocating Investment to Highest Growth Opportunities Strengthening Capturing new life sciences & market leadership diagnostics growth opportunities Genomics and Diagnostics 26% Agilent Intuvo Agilent OneSeq Dako Omnis Target Enrichment 9000 GC Advanced S
Slide 12: Growth through Emerging Market Expansion
Outgrow Growth through Emerging Market Expansion the Market Capture share in growing China and India markets Agilent FY16 Key Strategies Revenue Profile China: Capture 13th Five Year Plan opportunities Emerging Leverage leading position in instrumentation & Developing Economies(1) to grow services a
Slide 13: Growth through M&A
Growth through M&A Outgrow the Market Primary focus to expand offerings around core, add new capabilities Primary Focus Periodic Bolt-on acquisitions(1) Opportunistic Technology Larger acquisitions Expand offerings acquisitions with earnings and around core to complete revenue growth solutions poten
Slide 14: Continue Expanding Operating Margin
Expand Continue Expanding Operating Margin operating margins A multi-year cost reduction and rationalization program Agile Agilent 1 Restructured operations (2) (1) 21.2% 20.7% 19.6% (1) 2 Rationalized portfolio (1) 18.8% 3 Streamline R&D 4 Integrate Dako businesses H1’FY17 FY14 FY15 FY16 FY17
Slide 15: Optimal Capital Allocation
Balanced Optimal Capital Allocation capital allocation A balanced approach 2017-2018 Returns to Shareholders: $1.15B Principles 1 Invest to create 3 Maintain investment shareholder value grade rating 2 High capital returns to shareholders 14
Slide 16: Financial Outlook – Beyond FY17
Financial Outlook – Beyond FY17 Outgrow Expand operating the Market margins Balanced Core Revenue Above market growth capital allocation Adjusted >22% (No M&A case) Operating Margin • Significant Capital Returns to Shareholders Capital Deployment • Complementary M&A Result: Sustained superior earnin
Slide 17: LSAG: Lead The Analytical Lab
LSAG Lead The Analytical Lab 16
Slide 18: LSAG Leads the Analytical Labs
LSAG Leads the Analytical Labs Through One Global Go-to-Market Model Why Customers Choose Agilent Lab manager: Research Scientist: Procurement: Ensure 100% Solution that best Lowest cost-of- uptime with round- supports research ownership, highest the-clock operations needs quality 5 Divisions ‒ Mass
Slide 19: LSAG Key Market and Platform Initiatives
LSAG Key Market and Platform Initiatives Foundation for Future Growth Key growth initiatives New solutions for large molecule analysis Expand Pharma and A&G Leverage Seahorse solutions and expand cell analysis footprint Accelerate Mass spec and multi-omics with tailored Grow share in HW and SW solut
Slide 20: ACG: Win in Lab Productivity
ACG Win in Lab Productivity 19
Slide 21: ACG Strategic Direction
ACG Strategic Direction Improving the science and economics of the laboratory Complete Higher business Differentiated solutions value services customer experience Distinct position in the market with CrossLab brand promise 20
Slide 22: ACG Initiatives
ACG Initiatives Leveraging strong presence in the lab Key growth initiatives Differentiated customer experience Evolve enterprise solutions to deliver greater outcomes Win with CrossLab Expand portfolio breadth through innovation Capitalize on geographic opportunities Leverage Leverage informatics t
Slide 23: DGG: Advance Clinical Diagnostics
DGG Advance Clinical Diagnostics 22
Slide 24: Clinical markets increasingly require fully integrated solutions
Clinical markets increasingly require fully integrated solutions, creating a significant opportunity for Agilent Highest quality & patient safety Meeting customer needs Optimizing healthcare spending Through regulatory compliance By providing complete workflows ...and enabling precision medicine Agi
Slide 25: DGG's four strategic opportunities
DGG’s four strategic opportunities each utilize Agilent's core strengths in selected domains Fight cancer Enable new discoveries Improve the quality of life Partner for novel therapeutics & diagnostics 24
Slide 26: Appendix and Financial Reconciliations
Appendix and Financial Reconciliations 25
Slide 27: Relation of Agilent Segments to End-Markets
Relation of Agilent Segments to End-Markets % of Agilent End-markets LSAG ACG DGG Revenue(1) 23% Chemical & 27% 30% <1% Energy Environment 12% 14% 13% <1% & Forensics 11% Food 15% 11% <1% 30% Pharma 29% 34% 17% Academia & 9% 11% 7% 10% Government Clinical & 15% 4% 5% 71% Diagnostics 100% 100% 100% 1
Slide 28: Reconciliation of Adjusted Non-GAAP Income from Operations
AGILENT TECHNOLOGIES, INC. RECONCILIATION OF ADJUSTED NON-GAAP INCOME FROM OPERATIONS AND INCOME FROM OPERATIONS TO REPORTABLE SEGMENTS AND OPERATING MARGINS (In millions, except margin data) (Unaudited) Operating FY 2016 Margin % Revenue: Life Sciences and Applied Markets Group (LSAG) $ 2,073 Agile
Slide 29: Reconciliations of Income from Operations and Operating Margins
AGILENT TECHNOLOGIES, INC. RECONCILIATION OF ADJUSTED NON-GAAP INCOME FROM OPERATIONS AND OPERATING MARGINS (In millions, except margin data) (Unaudited) Operating Operating Operating FY 2016 Margin % FY 2015 Margin % FY 2014 Margin % Agilent GAAP Revenue $ 4,202 $ 4,038 $ 4,048 Income from operatio
Slide 30: Reconciliations of Revenue by Segment Excluding the NMR Business
AGILENT TECHNOLOGIES, INC. RECONCILIATIONS OF REVENUE BY SEGMENT EXCLUDING THE NMR BUSINESS, ACQUISITIONS, DIVESTITURES AND THE IMPACT OF CURRENCY ADJUSTMENTS (CORE) (in millions) (Unaudited) Life Sciences and Life Sciences and Applied Markets Group Applied Markets Group Diagnostics and Genomics Gro
Slide 31: Reconciliations of Revenue Excluding the NMR Business
AGILENT TECHNOLOGIES, INC. RECONCILIATIONS OF REVENUE EXCLUDING THE NMR BUSINESS, ACQUISITIONS, DIVESTITURES AND THE IMPACT OF CURRENCY ADJUSTMENTS (CORE) (in millions) (Unaudited) Year Ended Year Ended Year Ended Year Ended Year Ended October 31, October 31, October 31, October 31, October 31, 2016
Slide 32: Non-GAAP Income from Continuing Operations and Diluted EPS Reconciliations
Slide 33: Capital Return
AGILENT TECHNOLOGIES, INC. CAPITAL RETURN (in millions) (Unaudited) PRELIMINARY Year Ended October 31, 2016 Payment of dividends > 150 ‘Treasury stock repurchases 434 $ 584 Net cash provided by operating activities $ 793 Investments in property, plant and equipment (138) $ 654 Capital return 80% Man