Waters Corporation · NYSE:WAT
Waters — J.P. Morgan 42nd Annual Healthcare Conference (January 2024)
28 slides from Waters's conference presentation, Jan 9, 2024
Slide 1: J.P. Morgan 42nd Annual Healthcare Conference
Exhibit 99.1 J.P. Morgan 42nd Annual Healthcare Conference Udit Batra, Ph.D. President & CEO January 8, 2024
Slide 2: Cautionary Statements
Cautionary Statements This presentation contains forward-looking statements regarding future results and events, including financial and operational guidance and projected estimates. For this purpose, any statements that are not statements of historical fact may be deemed forward-looking statements.
Slide 3: Key Messages
Key Messages Strong Business Model in Attractive Markets Transformation that is Delivering Well Positioned for Future Growth ©2024 Waters Corporation 2
Slide 4: Key Messages
Key Messages Strong Business Model in Attractive Markets Transformation that is Delivering Well Positioned for Future Growth ©2024 Waters Corporation 3
Slide 5: Waters Serves Regulated Markets with Large Unmet Needs
Waters Serves Regulated Markets with Large Unmet Needs Pharma Clinical Food & Environment Materials HSD HSD MSD MSD Safe renewable energy High-quality medicines Early disease detection Pure food and water Biologics, Novel Modalities Alzheimer's, Endocrine PFAS, Nitrosamines Batteries, Electric Vehic
Slide 6: With a Simple and Repeatable Business Model
With a Simple and Repeatable Business Model 150K+ installed base Growth from 1 new applications & replacement Liquid Mass 2 #1 Chromatography Data System Chromatography Spectrometry ~80% of novel drugs submitted to Simple FDA, EMA, China NMPA using 3 Empower Compliant Efficient Deep understanding of
Slide 7: Resulting in Industry-Leading Profitability
Resulting in Industry-Leading Profitability NYSE:WAT Serving High Volume, Downstream Presence Regulated Applications $3.0B 1 Total Revenue (TTM) Pharma QA/QC testing Late-Stage Drug Development 59.1% Gross Margin (TTM) Food & Environmental Safety Clinical Diagnostics 30.6% 2 Adj. Operating Margin (T
Slide 8: High Pharma Exposure with Broad Geographic Footprint
High Pharma Exposure with Broad Geographic Footprint 1 Waters $3.0B Revenue (TTM) % of Total 12% 28% 34% END PRODUCTS & 1 GEOGRAPHY 1 1 MARKETS SERVICES 35% 30% 48% 58% 37% 18% Pharma Asia Instruments Industrial Americas Consumables Academic & Europe Service Government Note: 1. Revenue data is based
Slide 9: Key Messages
Key Messages Strong Business Model in Attractive Markets Transformation that is Delivering Well Positioned for Future Growth ©2024 Waters Corporation 8
Slide 10: Our Transformation is Delivering
Our Transformation is Delivering Strong operational Renewed portfolio Invested organically results in challenging addressing the needs and inorganically in conditions of our customers high-growth adjacent markets ©2024 Waters Corporation 9
Slide 11: Strong Execution in Challenging Macro Conditions
Strong Execution in Challenging Macro Conditions YTD as of 3Q23 Organic Sales Growth in CC Excluding China Including China 1 1 Y/Y 4-YR Y/Y 4-YR Instruments +1% +9% (6%) +6% Portfolio Recurring +7% +7% +6% +7% Pharma +4% +8% (3%) +7% End Markets Non-Pharma +5% +7% +6% +7% YTD-23 Total +4% +8% 0% +7%
Slide 12: Commercial Initiatives are Contributing
Commercial Initiatives are Contributing Solid progress in our transformation with long-term runway ahead 1 2 3 4 5 Instrument Service Plan Chemistry Adoption Contract Impact Markets Replacement Attachment of eCommerce Organizations with Innovation 25% 550bps >35% 25% 500bps Aged instruments Service
Slide 13: Excellent Operational Performance
Excellent Operational Performance 2023 Challenging Environment Waters Response Pricing 1 Gross Margin Volume Headwinds +160bps Productivity 2 YTD-23 (as of 3Q) FX Headwinds Proactive Cost 3 Adj. Operating Alignment Margin Inflationary Pressures +60bps YTD-23 (as of 3Q) Note: Operating margin results
Slide 14: Innovation Setting New Standards
Innovation Setting New Standards Select Examples Liquid Chromatography Mass Spectrometry TA Instruments Precision Chemistry Eliminates common user Class-leading PFAS Accelerates validation of battery 17x faster, 12x more errors by up to 40% detection safety, quality, performance sensitive separation
Slide 15: Expansion into Faster Growing Segments
Expansion into Faster Growing Segments $12B TAM 20% 35% Biologics of Pharma Revs of Pharma Revs Large Mol Large Mol LSD DD Clinical 3-yr Growth 3-yr Growth 1 2 CAGR 2017-19 CAGR 2021-23 Vs. 10x Batteries 2019 levels Growth Note: $12B Core TAM + $7B Higher Growth Adjacencies TAM = $19B TAM with MSD-H
Slide 16: Transitioning to More Balanced Capital Allocation Mix with M&A
Transitioning to More Balanced Capital Allocation Mix with M&A M&A Execution: Ahead of Plan for Synergy Progress GOAL / KPI 2023 PROGRESS Geographic Initiated direct sales & Segment Lead-sharing ahead of expectations Expansion Despite macro environment, 2023 PROGRESS Wyatt 2Q and GOAL / KPI Waters S
Slide 17: Key Messages
Key Messages Strong Business Model in Attractive Markets Transformation that is Delivering Well Positioned for Future Growth ©2024 Waters Corporation 16
Slide 18: Aligned with Secular Tailwinds that are Stronger than Ever
Aligned with Secular Tailwinds that are Stronger than Ever Waters % Revenue Growth (Y/Y Constant Currency 2008-22) Incremental Growth Vectors 2 vs. Historical Trends 6% 20% 1 Faster Volume Growth Average 1 5% 10% 2008-2022 § Faster Prescription growth 1 Avg § Regulations (PFAS) 0% New Applications 2
Slide 19: Greater Testing Volume Growth from New Therapies and PFAS
Greater Testing Volume Growth from New Therapies and PFAS Drivers of Testing Volume Acceleration 55 novel drugs approved by the FDA in 2023, second highest GLP-1s Expected 3 count ever with a record number of biologics Revenue Growth New therapeutic areas expected to accelerate QA/QC testing: Tailwi
Slide 20: Successfully Pivoting Portfolio to Large Molecule Applications
Successfully Pivoting Portfolio to Large Molecule Applications Liquid Chromatography Linked Detectors UV Mass Spec MALS Solvent Reservoir Well-positioned to solve customer challenges with Degasser novel modalities Chemistry Columns § Formulation development M EA SU R EM EN T M EA SU R EM EN T M EA S
Slide 21: Uniquely Positioned for M&A
Uniquely Positioned for M&A New leadership capabilities unlocking additional vector of shareholder value creation Strong Free Cash Focused on growth Scope of current Flow Conversion opportunities with portfolio may offer can allow for rapid sound industrial advantaged position de-levering logic and
Slide 22: Putting it All Together
Putting it All Together Raising the bar above ‘6+2+2’ with new vectors of EPS growth accretion Historic EPS Growth Algorithm F Fut utur ure e P Po ot te ent ntiia all + Volume + Large Mol + Pricing + Adjacencies LT EPS Historic L.T. Margin Capital EPS Growth Sales Growth Expansion Deployment Growth
Slide 23: ESG Highlights: Leaving the World Better Than We Found It
ESG Highlights: Leaving the World Better Than We Found It Environmental Social Governance Reducing our most significant Becoming more representative Enhancing long-term stakeholder environmental impacts. of the society we live in. value with effective oversight. 2024 Public Company ~77% 100/100 Boar
Slide 24: Key Messages
Key Messages Strong Business Model in Attractive Markets Transformation that is Delivering Well Positioned for Future Growth ©2024 Waters Corporation 23
Slide 25: Appendix: GAAP to Non-GAAP Reconciliations
Appendix GAAP to Non-GAAP Reconciliations
Slide 26: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations Operating Income Reconciliation of GAAP to Adjusted Non-GAAP Reconciliation of Actual GAAP Cashflow to Non-GAAP Free Cash Flow Fiscal Years Trailing Twelve-Months (TTM) Ended September 30, 2023 Ending December 31, 2018 - 2022 Operating Income (in thousands USD) Opera
Slide 27: Net Sales by End Markets and Products & Services
Net Sales by End Markets and Products & Services Reconciliation of GAAP to Adjusted Non-GAAP - YTD Q3 2019 - 2023 % Growth Reported % Organic CC % % Growth Impact of Impact of Organic % Growth % Growth (in millions USD) 2023 2022 2022 2021 2-YR CAGR 2-YR CAGR Reported Currency Acquisitions Constant
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