Danaher Corporation · NYSE:DHR
Danaher — Merger or Acquisition (December 2019)
35 slides from Danaher's merger presentation, Dec 2, 2019
Slide 1: Management presentation
Management presentation December 2, 2019 Envista Filed by Envista Holdings Corporation Pursuant to Rule 425 under the Securities Act of 1933, as amended Subject Company: Danaher Corporation Commission File No.: 001-08089
Slide 2: Disclaimer
Disclaimer This presentation is intended solely for investors that are qualified institutional buyers solely for the purposes of familiarizing such investors with Envista Holdings Corporation (the “Company” or “Envista”) and determining whether such investors might have an interest in the Company. A
Slide 3: Exchange offering summary
Exchange offering summary Issuer: Envista Holdings Corporation (“NVST” or “Envista”) Offer to Exchange: Up to an aggregate of 127,868,000 shares* of NVST common stock for outstanding shares of Danaher Corporation (“DHR” or “Danaher”) common stock Target Discount on NVST: 7% based on average VWAPs of
Slide 4: Recent updates
Recent updates +12% +MSD +DD Making progress towards enhanced business performance Ormco Core Growth through 3rd Quarter China Core Growth through 3rd Quarter Investments beginning to enhance growth Significant new products in development for 2020+ +100 BPS Traction on cost initiatives improving mar
Slide 5: Investment highlights
Investment highlights Positioned to accelerate growth with a leading position in some of the most attractive segments of Dental Significant opportunity to expand margins through operating leverage, productivity initiatives and improving portfolio mix Flexible capital structure and strong cash flow p
Slide 6: Envista at a glance
All financial metrics based on 2018 unless otherwise indicated; all pie chart percentages are % of 2018 sales; ODM = Other Developed Markets 1: EBITDA Margin is a non-GAAP financial measure. For a reconciliation to the most directly comparable GAAP measure, please see Appendix. Sales By segment Tota
Slide 7: Envista senior management team
Envista senior management team Operating Leaders Amir Aghdaei President & CEO Mark Nance General Counsel Mischa Reis Strategy & Corp Dev Howard Yu CFO Curt Bludworth CHRO Hans Geiselhöringer President, Nobel Biocare Patrik Eriksson President, KaVo Kerr Filippo Impieri Special Markets Jeff Kappler Pr
Slide 8: Envista Business System
I Relationships Built on Respect Leadership Better Choices, Better Outcomes Lean and Fundamentals Innovation in Action Growth Continuous Improvement as a Competitive Advantage Envista Business System
Slide 9: EBS drives Envista transformation
EBS drives Envista transformation 3 OpCos >25% reduction >40% reduction Imaging/Treatment Unit brands from 11 to 6 Consolidation of back-office functions Focus on improving core growth and margin expansion >10 OpCos >40 Mfg sites >190 Locations Multiple competing brands/OpCos Limited G&A leverage Fu
Slide 10: Business segments
Equipment & Consumables Comprehensive portfolio with strong brands Total Sales: ~$1.5B EBITDA Margin: >10% Channel: >90% Distribution Specialty Products & Technologies World-class implant and orthodontic systems Total Sales: ~$1.4B EBITDA Margin: >20% Channel: >90% Direct Business segments Strong po
Slide 11: Leading player in some of the most attractive segments of dental
Leading player in some of the most attractive segments of dental Envista Category Segment size1 Segment growth2 Key brands Equipment & Consumables Imaging $2B MSD Instruments / Treatment units / Other equipment $4B LSD Consumables $7B LSD Specialty Products & Technologies Implants $5B MSD Orthodonti
Slide 12: Secular trends support long-term market growth
Secular trends support long-term market growth Strong drivers that support improving Specialty penetration An aging population +1B people over age 60 by 2050 >20% of 60+ yr lost all teeth More complex dental cases EM: Middle-class +1.5B EM middle-class people by 2030 Increased dental access Growing
Slide 13: Demonstrated success in China
Demonstrated success in China Envista Greater China sales 2011 Today Products Equipment & ortho Complete portfolio Local Presence 2 small rep offices ~40 associates Coastal cities ~10 offices >900 associates All Tier 1 & 2 cities Local R&D None >30 engineers Manufacturing Sites None 2 Market Positio
Slide 14: Sales growth acceleration: Commercial investments
Investment in SG&A 38% 40% % of sales Significant commercial scale with deep clinical and workflow expertise ($ in millions) +$75M Sales growth acceleration: Commercial investments “Feet on the street” >3,000 employees in our commercial organization, >400 in China 10% growth since 2016 Training & ed
Slide 15: Sales growth acceleration: Innovation investments
Sales growth acceleration: Innovation investments Investments Cumulative R&D spend (2016-2018) >$475M ~2X Software engineer increase (2018 vs. 2015) +$30M Annual R&D spend (2018 vs. 2016) Results – investment areas Development & introduction of Spark clear aligners Developing differentiated N1 impla
Slide 16: Driving sustainable long-term core growth
1 These are not projections and do not constitute guidance; they are growth drivers and are subject to significant business, economic, regulatory and competitive uncertainties and contingencies, many of which are beyond the control of the Company and its management, and are based upon assumptions wi
Slide 17: Growth drivers by segment
Growth drivers by segment EM penetration Brand rationalization Major new products Specialty Products & Technologies Value Implants Equipment & Consumables N1/Surface technology1 X500 X Pro 1 Regulatory approvals not yet received for N1. Not for sale in the U.S.
Slide 18: Spark clear aligner system
Advanced clear aligner technology Target Ormco’s core Orthodontist customer base Available in Australia and the US TruGEN™ material is designed to be clearer than the leading competitor Spark’s™ custom trays are designed to enhance patient comfort Spark™ is proven to have minimal aligner stain Broad
Slide 19: N1 Implant System
N1 Implant System Lowering barriers of adoption for patients and clinicians Reducing Patient fear of surgery Enabling more clinicians to perform surgery Shorter time-to-teeth with higher predictably Minimally invasive, less trauma to bone Less discomfort, noise and vibration Drill speed 50 rpm vs >1
Slide 20: DTX Workflow
DTX Workflow All clinical patient images / files in one place One system: image acquisition through treatment delivery Easy, efficient collaboration Multi-specialty Open architecture Usage info (e.g. equipment productivity) DTX StudioTM software suite DTX Studio™ ecosystem provides simple workflows
Slide 21: X Pro / X500 Intraoral Scanner
X Pro Seamless workflow integration – designed for DTX Feature set comparable with other leading offerings X500 Strong point solution - bridge to DTX studio OEM partnership X Pro / X 500 Intraoral Scanner (IOS) Opportunity to serve different segments of IOS market X 500 X Pro
Slide 22: Expanding operating margin
Expanding operating margin Operating leverage, portfolio mix and cost reduction drive >200bps of margin expansion Targeting >200bps of margin expansion Margin opportunity Operating leverage Portfolio mix – higher growth Specialty Products and Technologies business Benefits of cost reduction initiati
Slide 23: Reducing complexity, footprint and cost structure
Reducing complexity, footprint and cost structure Significant long-term opportunity for cost reduction Imaging / treatment unit brand consolidation Supplier consolidation Site consolidation 2015 2018 >35% >40% 2015 2018 2022 2022 # brands # sites Cost savings target 2018 >20,000 2022 # suppliers
Slide 24: Capital deployment priorities
Capital deployment priorities Nimbleness to build a better Envista Envista M&A approach Capacity to execute 2003 - 2015 # M&A deals 2016 - 2018 >25 2 2016 – 2018 FCF1 >$1B 1: Free cash flow is a non-GAAP financial measure. For a reconciliation to the most directly comparable GAAP measure, please see
Slide 25: Envista M&A priorities
Envista M&A priorities Enhancing Envista growth with small / mid-size opportunities Platform bolt-ons Technology acquisitions and investments Adjacencies Focus on most attractive segments / geographies Enter low share / low penetration categories Gain access to new technologies impacting dentistry L
Slide 26: Envista strategy
Envista strategy Strong EPS growth and compounding returns Core sales growth1,2 Flat today to +LSD/MSD long-term Acquisition growth >$1B free cash flow2 over last 3 years Margin expansion1 Mid-teens EBITDA margin2 today with meaningful expansion Continuous improvement EBS at the core of what we do 1
Slide 27: Thank you
rTnank you
Slide 28: Appendix
Appendix 28 ©) Envista
Slide 29: Historical growth performance
Historical growth performance Historical core growth Stable growth in Specialty and Emerging Markets Sales growth drivers Equipment and Consumables impacted by: Distributor realignment Distributor de-stocking Emerging markets grew at high-single digit rates Specialty business experienced growth acro
Slide 30: Historical margin performance
Historical margin performance Historical Adjusted EBITDA margin1 Continued investment to set business up for success Margin drivers Continued growth investments Research and development Sales and marketing Margin impact from distributor destocking and realignment ($ in millions) 1: Adjusted EBITDA a
Slide 31: Envista history
2004 2006 2008 2010 2012 2014 2016 2017 2018 Equipment & Imaging Consumables Orthodontics Implants Envista history Built from >25 acquisitions, focused on integration / consolidation of platform since 2016 Dental Complex Sybron Dental Consolidation Consolidation Acquire / Build Transformation
Slide 32: Reconciliation of Adjusted EBITDA
Reconciliation of Adjusted EBITDA ($ in millions) Nine-Month Period Ended Year Ended December 31 September 27, 20191 September 27, 2019 September 28, 2018 20181 2018 2017 2016 (unaudited) (unaudited) (unaudited) (unaudited) Reported Net Earnings (GAAP) $153.2 $161.5 $179.5 $219.2 $230.7 $301.1 $272.
Slide 33: Reconciliation of Free Cash Flow
Reconciliation of Free Cash Flow ($ in millions) Three-Month Period Ended Year Ended December 31 September 27, 2019 September 28, 2018 2018 2017 2016 (unaudited) (unaudited) Net cash used in investing activities (GAAP) ($20.7) ($9.6) ($75.5) ($54.9) ($59.4) Net cash provided by (used in) financing a
Slide 34: Reconciliation of Core Sales Growth
Reconciliation of Core Sales Growth Specialty Products & Technologies Core Sales Growth Equipment & Consumables Core Sales Growth Consolidated Core Sales Growth Note: We use the term “core sales” to refer to GAAP sales excluding (1) sales from acquired businesses recorded prior to the first annivers
Slide 35: Non-GAAP Reconciliation Statement Regarding Non-GAAP Measures
Non-GAAP Reconciliation Statement Regarding Non-GAAP Measures Each of the non-GAAP measures set forth above should be considered in addition to, and not as a replacement for or superior to, the comparable GAAP measure, and may not be comparable to similarly titled measures reported by other companie