Agilent Technologies, Inc. · NYSE:A
Agilent Technologies — J.P. Morgan 29th Annual Healthcare Conference (January 2011)
33 slides from Agilent Technologies's conference presentation, Jan 10, 2011
Slide 1: J.P. Morgan 29th Annual Healthcare Conference
A GILENT T ECHNOLOGIES J.P. MORGAN 29TH ANNUAL HEALTHCARE CONFERENCE JANUARY 10, 2011 WESTIN ST. FRANCIS SAN FRANCISCO, CA
Slide 2: Didier Hirsch, Chief Financial Officer
A GILENT T ECHNOLOGIES J.P. MORGAN 29TH ANNUAL HEALTHCARE CONFERENCE DIDIER HIRSCH SENIOR VICE PRESIDENT CHIEF FINANCIAL OFFICER
Slide 3: Safe Harbor
S AFE H ARBOR 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 c
Slide 4: The World's Premier Measurement Company
T H E W O R L D ’ S P R E M I E R M E A S U R E M E N T C O M PA N Y Electronic Chemical Life LTM Revenue* LTM Revenue* LTM Revenue* Measurement $2.7B Analysis $1.1B Sciences $1.0B Group Group Group FY10 Revenue: $2.8B FY10 Revenue: $1.2B FY10 Revenue: $1.5B FY10 Operating Margin* 16% FY10 Operating
Slide 5: Q4 2010 Financial Highlights
Q 4 2 0 1 0 F INANCIAL H IGHLIGHTS Orders = $1.69B, +32% y/y (+23% organic) Revenues = $1.58B, +36% y/y (+26% organic): • LSG +35% y/y (+17% organic) • CAG +73% y/y (+17% organic) • EMG +23% y/y (+35% organic) Cash Flow from Operations = $367M ROIC* = 24% Operating Margin* = 19% *Presented on a non-
Slide 6: FY11 Guidance As Of 11/12/10 Press Release & Earnings Call
FY11 GUIDANCE AS OF 11/12/10 PRESS RELEASE & EARNINGS CALL Revenue range = $6.1B - $6.3B Y/Y revenue growth = total 12-15%, organic 6-10% EPS* range = $2.30 to $2.50 per share Cash Flow from Operations = $950M FY11 guidance is not being confirmed or updated at this time. *Presented on a non-GAAP bas
Slide 7: Cash And Capital Structure Update
C A S H A N D C A P I TA L S T R U C T U R E U P D AT E • $1.5B World Trade debt paid back on Dec. 10, 2010 • Net cash & short term investments of $598M* as of Oct. 31, 2010 • Share re-purchase to maintain basic outstanding share count of 346 million shares • Priority uses of cash: 1) Create value,
Slide 8: Varian Update
V A R I A N U P D AT E • On track to meet revenue and cost synergy targets • Increased cost synergies to $100M from $75M, net of incremental investments in Varian R&D and Support • Legal entities combined Nov. 1, 2010 • Employees transferred to Agilent entities and systems • Customer facing processe
Slide 9: How We Win
HOW WE WIN Market reach and customer trust • 6,000 sales and marketing employees supporting customers in over 100 countries • #1 customer loyalty ranking in every major product category* • 37% of Agilent revenue from Asia Pacific in Q4’10 Technology leadership • $600M/year, 11% Revenue invested in R
Slide 10: Global Scale And Scope
G LO B A L S C A L E A N D S C O P E Global revenue and operational footprint offers unmatched coverage and hedges risk Revenue by Geography Q4’10 Headcount by Geography Q4’10 Agilent 18,500 Worldwide Employees 8,000 7,000 Asia Pacific Americas 6,000 5,000 37% 37% Asia Pacific 4,000 3,000 Europe Eur
Slide 11: Revenue Distribution By End Market
A GILENT R EVENUE D ISTRIBUTION BY E ND M ARKET $41B Measurement Market Opportunity FY 2010 Agilent Revenue Markets Size ($B) Growth Life Sciences 19 5% - 7% Aerospace & Pharma Chemical Analysis 10 5% - 6% Defense 12% 14% Electronic Academic & Govt. Measurement 12 4% - 5% 7% Total Market 41 5% - 7%
Slide 12: FY 2011 Priorities
F Y 2 0 1 1 P RIORITIES VARIAN VALUE LIFE SCIENCES ORGANIC GROWTH CAPTURE INVESTMENT • Outpace competitors’ • Maintain focus on • Invest in sample growth on an organic customer preparation solutions basis • Drive revenue • Expand academic • Develop differentiable synergies and government solutions t
Slide 13: Nick Roelofs, President, Life Sciences Group
A GILENT T ECHNOLOGIES J.P. MORGAN 29TH ANNUAL HEALTHCARE CONFERENCE NICK ROELOFS PRESIDENT, LIFE SCIENCES GROUP
Slide 14: Q4'10 Segment Revenue Distribution By Geography
Q 4 ’ 1 0 S E G M E NT R E VE NUE D I S T RI BUT I O N BY G E O G RAP H Y Agilent LSG Asia Pacific Americas Asia Pacific Americas 37% 37% 27% 41% Europe Europe 32% 26% CAG EMG Asia Pacific Americas Americas 32% 36% Asia Pacific 36% 45% Europe Europe 32% 19% Page 14
Slide 15: Life Sciences Market Overview
L IFE S CIENCES M ARKET OVERVIEW Pharma/Biotech Market Size: $19B (For Profit) Growth: 5-7% Growth Drivers • Academic and government investment • Life Science applications – “omics” • Growth in generics, developing economies 14% of Agilent revenue • Therapeutic conversion to New Biological Entities
Slide 16: Life Sciences – New Products
L IFE S CIENCES – N EW P RODUCTS T ECHNOLOGY L EAD ERS HIP 1200 Infinity Liquid Chromatography Series • The 1200 Infinity Series includes the new Agilent 1220 Infinity LC, the new Agilent 1260 Infinity LC and the enhanced Agilent 1290 Infinity LC • 1290 offers the industry largest power range (1200b
Slide 17: Life Sciences – New Portfolio
L IFE S CIENCES – N EW P ORTFOLIO B RINGING N EW C APABILITIES TO O UR C USTOMERS • NMR • MRI • X-Ray NMR Family 7T Active Shield Human MRI • Prep HPLC • Dissolution PrepStar SD1 Preparative HPLC 708DS - Dissolution System SuperNova – X-Ray Difractometer All backed by our top-rated customer service
Slide 18: Life Sciences – Strategy To Win
L I F E S C I E N C E S – S T R AT E G Y T O W I N Grow market share • Deliver the leading-edge application solutions customers demand • Drive emerging application trends • Leverage strong global presence to expand in developing geographies Strengthen technology base • Develop breakthrough products
Slide 19: Chemical Analysis Market Overview
C H E M I C A L A N A LY S I S M A R K E T O V E R V I E W Chemical & 12% of Agilent Market Size: $10B Energy Testing revenue Growth: 5-6% Growth Drivers Environmental 8% of Agilent • Food safety Testing revenue • China and developing countries • Lab productivity • Replacement market $0.3 B Food 6%
Slide 20: Chemical Analysis – New Products
C H E M I C A L A N A LY S I S – N E W P R O D U C T S T ECHNOLOGY L EAD ERS HIP High-end Mass Spec – GC-QQQ and ICP-MS • GC-QQQ 7000B • ICP-MS – Model 7700 • MassHunter SW – Making MS operation easier from tuning to final report GC-QQQ 7000B 5975T LTM GC-MSD • Industry’s first laboratory quality pe
Slide 21: Chemical Analysis & Life Sciences – New Products
C H E M I CAL A NALY S I S & L I F E S CI E NCE S – N E W P RO DUCT S T ECHNOLOGY L EAD ERS HIP Agilent MS Analyzed Vials • Vials and Closures analyzed by GC/MS and LC/MS • High-purity validated supplies ship with MS spectra MS Analyzed Vials LC Columns (SEC, Ion Exchange) for Biological Samples • B
Slide 22: Chemical Analysis – New Portfolio
C H E M I C A L A N A LY S I S – N E W P O R T F O L I O B RINGING N EW C APABILITIES TO O UR C USTOMERS • Spectroscopy • Consumables 720 ICP-OES 490 Micro GC • Mass Spec • Vacuum Columns and Supplies Ion Pump VS Series MS He Leak Detector GC-MS (Ion Trap) All backed by our top-rated customer servic
Slide 23: Strategy To Win – Chemical Analysis
S T R AT E G Y T O W I N – C H E M I C A L A N A LY S I S Strengthen the core • Sustain technology leadership • Strengthen industry-leading customer satisfaction and loyalty • Expand applications portfolio Outgrow the market • China • Food testing • Consumables • High-End Mass Spec Deliver the Varia
Slide 24: FY 2011 Priorities
F Y 2 0 1 1 P RIORITIES VARIAN VALUE LIFE SCIENCES ORGANIC GROWTH CAPTURE INVESTMENT • Outpace competitors’ • Maintain focus on • Invest in sample growth on an organic customer preparation solutions basis • Drive revenue • Expand academic • Develop differentiable synergies and government solutions t
Slide 25: Appendix
APPENDIX Agilent Technologies
Slide 26: Reconciliation From GAAP To Non-GAAP
AGILENT TECHNOLOGIES, INC RECONCILIATION FROM GAAP TO NON-GAAP THREE MONTHS ENDED October 31, 2010 (Unaudited) Non-GAAP Adjustments Varian Varian Acquisition Restructuring Acquisition & Related Fair Tax and Other Related Asset Intangible Transformational Business Integration Value Sharing Adjustment
Slide 27: Reconciliation From GAAP To Non-GAAP
AGILENT TECHNOLOGIES, INC RECONCILIATION FROM GAAP TO NON-GAAP TWELVE MONTHS ENDED October 31, 2010 (Unaudited) Non-GAAP Adjustments Varian Acceleration of Varian Acquisition Share-Based Restructuring Acquisition & Related Fair Compensation Tax and Other Related Asset Intangible Transformational Lit
Slide 28: Reconciliation Of ROIC
AGILENT TECHNOLOGIES, INC. RECONCILIATION OF ROIC (In millions) (Unaudited) PRELIMINARY LSG CAG EMG Agilent LSG CAG EMG Agilent LSG CAG EMG Numerator: Q4'10 Q4'10 Q4'10 Q4'10 Q4'09 Q4'09 Q4'09 Q4'09 Q3'10 Q3'10 Q3'10 Non-GAAP income (loss) from operations $ 62 $ 86 $ 153 $ 303 $ 47 $ 62 $ 40 $ 150 $
Slide 29: Life Sciences Information
AGILENT TECHNOLOGIES, INC. LIFE SCIENCES INFORMATION (Unaudited) (In millions) FY 2010 Q1 Q2 Q3 Q4 Total Orders $ 336 $ 331 $ 391 $ 468 $ 1,526 Net revenue $ 340 $ 334 $ 374 $ 431 $ 1,479 Gross margin 54.4% 55.0% 53.8% 51.2% 53.5% Income from operations $ 55 $ 48 $ 56 $ 62 $ 221 FY 2009 Q1 Q2 Q3 Q4
Slide 30: Chemical Analysis Information
AGILENT TECHNOLOGIES, INC. CHEMICAL ANALYSIS INFORMATION (Unaudited) (In millions) FY 2010 Q1 Q2 Q3 Q4 Total Orders $ 242 $ 231 $ 350 $ 401 $ 1,224 Net revenue $ 244 $ 238 $ 329 $ 389 $ 1,200 Gross margin 55.1% 54.5% 52.7% 52.5% 53.5% Income from operations $ 67 $ 57 $ 69 $ 86 $ 279 FY 2009 Q1 Q2 Q3
Slide 31: Electronic Measurement Information
AGILENT TECHNOLOGIES, INC. ELECTRONIC MEASUREMENT INFORMATION (Unaudited) (In millions) FY 2010 Q1 Q2 Q3 Q4 Total Orders $ 642 $ 784 $ 750 $ 818 $ 2,994 Net revenue $ 629 $ 699 $ 692 $ 764 $ 2,784 Gross margin 57.3% 58.8% 58.8% 58.7% 58.4% Income from operations $ 58 $ 100 $ 127 $ 153 $ 438 FY 2009
Slide 32: Net Cash
AGILENT TECHNOLOGIES, INC. NET CASH (In millions) (Unaudited) PRELIMINARY Q4'10 Q4'09 Cash and cash equivalents $ 2,649 $ 2,479 Restricted cash and cash equivalents 1,550 1,566 Investments - debt securities - 36 Short-term debt (1,501) - Long-term debt - (1,516) Senior notes, par value (2,100) (1,35
Slide 33: Revenue Reconciliation
AGILENT TECHNOLOGIES, INC. REVENUE RECONCILIATION (In millions) (Unaudited) PRELIMINARY Percent Q4'10 Q4'09 Inc/(Dec) GAAP Revenue $ 1,576 $ 1,167 35% Varian acquisition fair value adjustments 8 - Non-GAAP Revenue $ 1,584 $ 1,167 Less revenue from acquisition and divestitures included in segment res
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