Agilent Technologies, Inc. · NYSE:A
Agilent Technologies — J.P. Morgan 30th Annual Healthcare Conference (January 2012)
33 slides from Agilent Technologies's conference presentation, Jan 9, 2012
Slide 1: Agilent Technologies J.P. Morgan 30th Annual Healthcare Conference
AGILENT TECHNOLOGIES J.P. MORGAN 30TH ANNUAL HEALTHCARE CONFERENCE JANUARY 9, 2012 WESTIN ST. FRANCIS SAN FRANCISCO, CA
Slide 2: William (Bill) P. Sullivan, President and CEO
AGILENT TECHNOLOGIES J.P. MORGAN 30TH ANNUAL HEALTHCARE CONFERENCE WILLIAM (BILL) P. SULLIVAN PRESIDENT CHIEF EXECUTIVE OFFICER
Slide 3: Safe Harbor
SAFE HARBOR 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 con
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 FY11 Revenue: $3.3B FY11 Revenue: $1.5B FY11 Revenue: $1.8B FY11 Operating Margin* 23% FY11 Operating
Slide 5: Q1 '12 and FY 2012 Guidance
Q 1 ’ 1 2 AND F Y 2 0 1 2 G UIDANCE* Q1’12 FY12 Revenue $1.65B - $1.67B $6.85B - $7.15B Organic Revenue 9% 6% Growth (mid-point) Operating Margin 18.6% 20.4% EPS $0.67 - $0.69 $3.00 - $3.35 EPS Growth (mid-point) 13% 8% OM Incremental 31% *Presented on a non-GAAP basis; guidance as of November 15, 2
Slide 6: Agilent's Strategy to Win
A GILENT ’ S S TRATEGY TO W IN Continue to focus on four point strategy • Market reach and customer trust • Sales, service, and support reach into over 100 countries • #1 customer loyalty ranking in every major product category* • 42% of employees based in Asia • Technology leadership • 10% Revenue
Slide 7: Organizational Changes Drive Operational Leverage
O RGANIZATIONAL C HANGES D RIVE O PERATIONAL L EVERAGE Agilent’s operational strength leveraged across Life Sciences, Chemical Analysis and Electronic Measurement 1. Created Chief Operating 2. Centralized Order Fulfillment Officer (COO) Position & Supply Chain Organization • Leverage operational str
Slide 8: Agilent's Outlook & Growth in End Markets
A G I L E N T ’ S O U T LO O K & G R O W T H I N E N D M A R K E T S % of Agilent % Y/Y Market Size, Growth Drivers & Outlook • Drivers: Emerging markets (China); high speed digital I/O demand Industrial, 31% +11% 21% growth driving need for technology refresh Comps & Semi • Market Size: $5B. Market
Slide 9: Nick Roelofs, Ph.D., President, Life Sciences Group
AGILENT TECHNOLOGIES J.P. MORGAN 30TH ANNUAL HEALTHCARE CONFERENCE NICK ROELOFS, PH.D. PRESIDENT LIFE SCIENCES GROUP
Slide 10: Life Sciences Market Overview
L IFE S CIENCES M ARKET OVERVIEW Pharma/Biotech (For Profit) Market Size: $20B Growth: 3-6% Growth Drivers • Academic and government investment • Life Science applications – “omics” 14% of Agilent revenue • Growth in generics, developing Academic and Government (Not‐For‐Profit) economies • Therapeut
Slide 11: Technology-Leading Life Science Portfolio
T ECHNOLOGY‐ LEADING L IFE S CIENCE P ORTFOLIO Powerful Separation Sophisticated Sample Prep Solutions Lab 901 Capillary Electrophoresis & DNA, RNA and 708-DS Dissolution Multiple Affinity 1200 Infinity LC Electrophoresis BioAnalyzer Protein Bioreagents Apparatus Removal Kits Series SureSelect XT Ta
Slide 12: Expanding Our Portfolio
E X PA N D I N G O U R P O R T F O L I O Building upon our leadership position in target enrichment: Halo Genomics • HaloPlex technology complements SureSelect • High-performance solution addresses needs of desktop sequencing market & clinical sequencing space • Small capture sizes (< 1kb) • At spee
Slide 13: LSG Geographic Footprint
L S G G E O G R A P H I C F O OT P R I N T Q4’11 Revenue Distribution Global Workforce Distribution • Rebalance manufacturing to drive cost and leverage Agilent’s global scale • Automation Instrumentation in Singapore – FY09 • LCMS 100% in Singapore - FY11 • NMR electronics 100% in Penang - FY11 • E
Slide 14: LSG Emerging Markets Position
L S G E MERGING M ARKETS P OSITION China • Strong market growth in Academia and Pharma • LSG’s second largest country: 29% YoY growth • Investing in dedicated life science sales, technical support and service teams India • Strong rebound in Pharma market • LSG revenue 15% YoY growth • Expanding Life
Slide 15: Life Sciences: Strategy to Win
L I F E S C I E N C E S : S T R AT E G Y TO W I N Grow Market Share • Drive emerging application trends • Lead industry in application development and delivery • Leverage strong global presence to expand in emerging geographies • Increase share of consumables & reagents in product mix Strengthen Tec
Slide 16: Agilent Technologies J.P. Morgan 30th Annual Healthcare Conference
AGILENT TECHNOLOGIES J.P. MORGAN 30TH ANNUAL HEALTHCARE CONFERENCE JANUARY 9, 2012 WESTIN ST. FRANCIS SAN FRANCISCO, CA
Slide 17: Appendix
APPENDIX ae Agilent Technologies
Slide 18: Q4 '11 Segment Revenue Distribution by Geography
Q 4 ’ 1 1 S EG M E N T R E V E N U E D I ST R I B U T I O N BY G EO G R A P H Y • Q4’11 YoY currency-adjusted revenue growth: Americas +6%, Europe -1%, Asia Pacific +12% • Q4’11 percentage of Agilent revenues: U.S. 29%, China 17%, Japan 11% • ~75% sales through direct channels, ~25% through indirect
Slide 19: Agilent Operating Model
A G I L E N T O P E R AT I N G M O D E L * SECULAR GROWTH OPERATING MODEL*** Mid-Point FY12 -1σ Mid-Range +1 σ Guidance** Organic Revenue 6% 4% 8% 12% Growth % YoY OM 31% 20% 36% 43% Incremental % *Presented on a non-GAAP basis **FY12 guidance as of November 15, 2011 ***Not company guidance Page 19
Slide 20: Agilent Operating Model
A G I L E N T O P E R AT I N G M O D E L * SECULAR GROWTH OPERATING MODEL*** -1σ Mid-Range +1 σ EMG Organic Rev. Growth % 2% 6% 11% YoY OM Incremental % -11% 40% 48% CAG Organic Rev. Growth % 5% 8% 11% YoY OM Incremental % 30% 40% 44% LSG Organic Rev. Growth % 8% 10% 13% YoY OM Incremental % 28% 30%
Slide 21: How to Manage in an Uncertain Environment?
H OW TO M ANAGE IN AN U NCERTAIN E NVIRONMENT ? • Grow expenses slower than targeted organic revenue growth G Mid-Range Maximum Resulting Secular Expense Incremental Growth Growth Operating Margin EMG 6% 3.6% 40% CAG 8% 5.6% 40% LSG 10% 7.0% 30% Agilent 8% 4.8% 36% GIO* 2.5% • Default rule: producti
Slide 22: Electronic Measurement Group - Key Platforms
E LECTRONIC M EASUREMENT G ROUP – K EY P LATFORMS Platforms Applications Markets Competitors Network Tests components for cell phones and base stations • General Purpose • Aerospace Defense • Rohde & Schwarz • Anritsu Analyzers • Wireless • Computers, Semiconductors, Industrial Oscilloscopes Verifie
Slide 23: Post-Recession Wireless Opportunity with LTE
P OST ‐R ECESSION W IRELESS O PPORTUNITY WITH LTE 1,800 Handset Test represents $1.8 1,600 approximately 25% of the $1.6 Communications Test market Millions of Handsets Shipped Each Year 1,400 $1.4 Handset T&M Market ($B) 1,200 $1.2 1,000 $1.0 800 $0.8 600 $0.6 400 $0.4 200 $0.2 0 $0.0 1G 2G 3G 4G H
Slide 24: Chemical Analysis Group - Key Platforms
C H E M I C A L A N A LY S I S G R O U P – K E Y P L AT F O R M S Platforms Applications Markets Competitors GC Separate a liquid or gas sample into its individual • Research and quality control in the chemical • Shimadzu • PerkinElmer components and petroleum industries • Thermo Fisher • Forensics/
Slide 25: Aggressive Expansion of Recurring Revenue Business
AGGRESSIVE E XPANSION OF R ECURRING R EVENUE B USINESS CAG + LSG Services & Consumables FY11: 22% growth (11% organic) CAG + LSG FY11 revenue Opportunity: Penetrate Agilent installed base; Services revenue $657M extend to competitor installed base Consumables revenue $659M Strategies: Consumables •
Slide 26: Life Sciences Group - Key Platforms
L I F E S C I E N C E S G R O U P – K E Y P L AT F O R M S Platforms Applications Markets Competitors HPLC • Preparative and Analytical LC in R&D/QC • Pharma & Biopharma • Waters • Shimadzu • Molecular biology, cancer • Life Science Research • Thermo/Dionex research • Academia/Government • Education
Slide 27: Reconciliations
RECONCILIATIONS “Ee Agilent Technologies
Slide 28: Electronic Measurement Segment
AGILENT TECHNOLOGIES, INC. ELECTRONIC MEASUREMENT SEGMENT (Unaudited) PRELIMINARY (In millions, except margins and ROIC data) FY 2011 Q1 Q2 Q3 Q4 Total Orders $ 797 $ 844 $ 842 $ 822 $ 3,305 Net revenue $ 771 $ 834 $ 856 $ 855 $ 3,316 Gross margin % 58.1% 59.5% 57.7% 58.4% 58.4% Income from operatio
Slide 29: Chemical Analysis Segment
AGILENT TECHNOLOGIES, INC. CHEMICAL ANALYSIS SEGMENT (Unaudited) PRELIMINARY (In millions, except margins and ROIC data) FY 2011 Q1 Q2 Q3 Q4 Total Orders $ 388 $ 380 $ 400 $ 421 $ 1,589 Net revenue $ 349 $ 381 $ 383 $ 405 $ 1,518 Gross margin % 51.1% 50.3% 50.7% 52.4% 51.1% Income from operations $
Slide 30: Life Sciences Segment
AGILENT TECHNOLOGIES, INC. LIFE SCIENCES SEGMENT (Unaudited) PRELIMINARY (In millions, except margins and ROIC data) FY 2011 Q1 Q2 Q3 Q4 Total Orders $ 442 $ 479 $ 445 $ 509 $ 1,875 Net revenue $ 404 $ 464 $ 453 $ 471 $ 1,792 Gross margin % 53.3% 52.2% 51.3% 51.4% 52.0% Income from operations $ 48 $
Slide 31: 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 32: Reconciliation from GAAP to Non-GAAP
AGILENT TECHNOLOGIES, INC RECONCILIATION FROM GAAP TO NON-GAAP YEAR ENDED October 31, 2011 (Unaudited) PRELIMINARY NON-GAAP ADJUSTMENTS Restructuring Varian and Other Acquisition & Acquisition Agilent Related Costs- Asset Intangible Transformation Integration Fair Value Foundation Adjustment (In mil
Slide 33: Reconciliation of Organic Revenue
AGILENT TECHNOLOGIES, INC. RECONCILIATION OF ORGANIC REVENUE (IN MILLIONS) PRELIMINARY Years Ended October 31, Percent 2011 2,010 Inc/(Dec) GAAP Revenue $ 6,615 $ 5,444 22% Varian acquisition fair value adjustments 11 19 Non-GAAP Revenue $ 6,626 $ 5,463 21% Less revenue from acquisition and divestit
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