Agilent Technologies, Inc. · NYSE:A

Agilent Technologies — 32nd Annual J.P. Morgan Healthcare Conference (January 2014)

31 slides from Agilent Technologies's conference presentation, Jan 13, 2014

  1. Slide 1: Agilent Technologies 32nd Annual J.P. Morgan Healthcare Conference

    Agilent Technologies 32nd Annual J.P. Morgan Healthcare Conference William (Bill) P. Sullivan January 13, 2014 President & CEO San Francisco, CA

  2. 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, the planned separation of our Electronic Measurement Group, revenues, demand, growth opportunities, customer service and innovation pl

  3. Slide 3: The World's Premier Measurement Company

    The World’s Premier Measurement Company EM Markets LDA Markets FY13 Revenue $3.9B, Operating Margin(1) 19% Electronic Life Sciences and Chemical Measurement Diagnostics Analysis Group Group Group FY13 Revenue $2.9B FY13 Revenue $2.3B FY13 Revenue $1.6B Operating Margin(1) 19% Operating Margin(1) 16%

  4. Slide 4: Agilent to Split into Two Companies

    Agilent to Split into Two Companies Strategic Rationale for Separation • Capitalizing on EMG, Agilent has grown LDA to be a sizeable and highly competitive business • Spin-off to create two companies with greater strategic and management focus, each well positioned for growth in its sector • Distinc

  5. Slide 5: New Agilent (LDA) Overview / Revenue Mix

    New Agilent (LDA) Overview • Global leader in Life Sciences, Q4 FY13 Financial Metrics Diagnostics, and Applied markets • Attractive recurring revenue base • Orders: $1.1B, +9% y/y (+10% core(1)) • Balanced geographic revenue profile • Revenues: $1.0B, +6% y/y (+8% core(1)) • Growth opportunities in

  6. Slide 6: New Agilent: Market Profile

    New Agilent: Market Profile Market Size(1): $41B Long Term Market Growth (1): 4-6% Long Term Market Market Revenue Mix(2) End Markets Size(1) Market Growth(1) Position(1) Growth Drivers by End Market • Shift to new biological Pharma & $11B 4-6% #3 entities Biotech • Emerging markets Academia & • Glo

  7. Slide 7: Life Sciences and Diagnostics Group Overview

    Life Sciences and Diagnostics Group Overview Market Size(1): $28B FY13 Financial Metrics Long Term Market Growth(1): 5-7% New Global Trends • Revenues: $2.3B, +16% y/y • Pharma shift from new chemical entities (NCEs) to new • Operating Margin: 16% of revenue biological entities (NBEs) and biosimilar

  8. Slide 8: Chemical Analysis Group Overview

    Chemical Analysis Group Overview Market Size(1): $13B FY13 Financial Metrics Long Term Market Growth(1): 4-5% New Global Trends • Revenues: $1.6B, +2% y/y • Global food supply • Operating Margin: 22% of revenue • New environmental contaminants • Designer drugs Q4’13 Revenue Mix • Rising energy deman

  9. Slide 9: New Agilent: Strategy to Win

    New Agilent: Strategy to Win Creating Shareholder Value  Increase organic growth rate  Leverage large and growing installed base to expand recurring revenues and core instrument sales  Take advantage of greenfield opportunities in developed markets (clinical instrumentation, integrated biology, s

  10. Slide 10: Agilent Technologies 32nd Annual J.P. Morgan Healthcare Conference

    Agilent Technologies 32nd Annual J.P. Morgan Healthcare Conference William (Bill) P. Sullivan January 13, 2014 President & CEO San Francisco, CA

  11. Slide 11: Appendix

    Appendix *geet Page 11

  12. Slide 12: Agilent Financial Highlights – Q4 FY13

    Agilent Financial Highlights – Q4 FY13 Q1 FY13 Q2 FY13 Q3 FY13 Q4 FY13 Q1 FY14 FY14 Actual Actual Actual Actual Guidance Guidance Midpoint(1) Midpoint(1) Revenue $1.68B $1.73B $1.65B $1.72B $1.69B $7.05B Core Revenue Growth(2) -2% -4% -6% -1% 2% 4% Operating Margin(3) 17% 19% 18% 20% not guided not

  13. Slide 13: Agilent End Market Performance – Q4'13

    Agilent End Market Performance – Q4’13 Mixed results: Market % of Agilent Agilent Results End Markets Size(2) Up: Pharma & Biotech, Academia & Revenue(1) Q4’13 vs. Q4’12 $54B Government, Diagnostics & Clinical, Food, Chemical & Energy Down 19% on continued softness Communications 14% $4B in handset

  14. Slide 14: Keysight Technologies Overview

    Keysight Technologies Overview • Leading position in major markets Q4 FY13 Financial Metrics • Orders: $742M, -2% y/y (+1% core(1)) • Revenues: $705M, -14% y/y (-12% core(1)) Communications Aerospace Industrial, • Operating Margin: 19.0% of revenue #1 Defense Computers, #1 Semiconductors #1 Revenue

  15. Slide 15: Keysight Technologies: Strategy to Win

    Keysight Technologies: Strategy to Win The World’s Premier Electronic Measurement Company  World’s premier electronic test and measurement provider in Communications, Aerospace/Defense, and Industrial markets  First to market with leading edge customer-valued technology solutions  Take share in c

  16. Slide 16: Transaction Details

    Transaction Details Transaction  Agilent shareholders will receive a pro rata distribution of shares in Keysight Technologies Structure via a tax-free spin-off  Expected to be completed by early November 2014, subject to the satisfaction of customary closing conditions, including: — Final approval

  17. Slide 17: Spin-off Execution Plan

    Spin-off Execution Plan  Leverage prior experience  Agilent has completed four major spin-offs/divestitures since 2005  Dis-synergies of ~ $100M cumulative over three year period  Little real estate overlap outside of sales offices  Clean ERP separation  Most dis-synergies in shared infrastruc

  18. Slide 18: Reconciliations

    Reconciliations *geet Page 18

  19. Slide 19: Electronic Measurement Segment

    AGILENT TECHNOLOGIES, INC. ELECTRONIC MEASUREMENT SEGMENT (Unaudited) PRELIMINARY (In millions, except margins and ROIC data) FY 2013 Q1 Q2 Q3 Q4 Total Orders $ 749 $ 701 $ 674 $ 742 $ 2,866 Net revenue $ 722 $ 760 $ 701 $ 705 $ 2,888 Gross margin % 57.4% 57.1% 56.6% 56.4% 56.9% Income from operatio

  20. Slide 20: Life Sciences, Diagnostics and Applied Markets (LDA)

    AGILENT TECHNOLOGIES, INC. LIFE SCIENCES, DIAGNOSTICS AND APPLIED MARKETS (LDA) (Unaudited) PRELIMINARY (In millions, except margins data) FY 2013 Q1 Q2 Q3 Q4 Total Orders $ 961 $ 987 $ 926 $ 1,087 $ 3,961 Net revenue $ 958 $ 972 $ 951 $ 1,013 $ 3,894 Gross margin % 53.1% 53.1% 52.5% 54.2% 53.2% Inc

  21. Slide 21: Life Sciences and Diagnostics Segment

    AGILENT TECHNOLOGIES, INC. LIFE SCIENCES AND DIAGNOSTICS SEGMENT (Unaudited) PRELIMINARY (In millions, except margins and ROIC data) FY 2013 Q1 Q2 Q3 Q4 Total Orders $ 562 $ 579 $ 536 $ 642 $ 2,319 Net revenue $ 564 $ 571 $ 564 $ 601 $ 2,300 Gross margin % 54.3% 54.3% 53.6% 55.1% 54.3% Income from o

  22. Slide 22: Chemical Analysis Segment

    AGILENT TECHNOLOGIES, INC. CHEMICAL ANALYSIS SEGMENT (Unaudited) PRELIMINARY (In millions, except margins and ROIC data) FY 2013 Q1 Q2 Q3 Q4 Total Orders $ 399 $ 408 $ 390 $ 445 $ 1,642 Net revenue $ 394 $ 401 $ 387 $ 412 $ 1,594 Gross margin % 51.2% 51.4% 51.0% 52.9% 51.7% Income from operations $

  23. Slide 23: Reconciliation from GAAP to Non-GAAP, Three Months Ended October 31, 2013

    AGILENT TECHNOLOGIES, INC. RECONCILIATION FROM GAAP TO NON-GAAP THREE MONTHS ENDED OCTOBER 31, 2013 (Unaudited) PRELIMINARY NON-GAAP ADJUSTMENTS Acceleration of Share-based Restructuring Acquisition & One-Time and Compensation and Other Intangible Transformational Integration Pre-Separation Expense

  24. Slide 24: Reconciliation from GAAP to Non-GAAP, Three Months Ended July 31, 2013

    AGILENT TECHNOLOGIES, INC RECONCILIATION FROM GAAP TO NON-GAAP THREE MONTHS ENDED JULY 31, 2013 (Unaudited) NON-GAAP ADJUSTMENTS PRELIMINARY Restructuring Acquisition & and Other Asset Intangible Transformational Integration Adjustment for (In millions, except per share amounts) GAAP Related Costs I

  25. Slide 25: Reconciliation from GAAP to Non-GAAP, Three Months Ended April 30, 2013

    AGILENT TECHNOLOGIES, INC RECONCILIATION FROM GAAP TO NON-GAAP THREE MONTHS ENDED APRIL 30, 2013 (Unaudited) NON-GAAP ADJUSTMENTS PRELIMINARY Restructuring Acquisition & and Other Asset Intangible Transformation Integration Adjustment for (In millions, except per share amounts) GAAP Related Costs Im

  26. Slide 26: Reconciliation from GAAP to Non-GAAP, Three Months Ended January 31, 2013

    AGILENT TECHNOLOGIES, INC RECONCILIATION FROM GAAP TO NON-GAAP THREE MONTHS ENDED JANUARY 31, 2013 (Unaudited) PRELIMINARY NON-GAAP ADJUSTMENTS Asset Acquisition & Impairments Intangible Transformational Integration Adjustment (In millions, except per share amounts) GAAP and write-downs Amortization

  27. Slide 27: Reconciliation from GAAP to Non-GAAP, Year Ended October 31, 2013

    AGILENT TECHNOLOGIES, INC. RECONCILIATION FROM GAAP TO NON-GAAP YEAR ENDED OCTOBER 31, 2013 (Unaudited) PRELIMINARY NON-GAAP ADJUSTMENTS Acceleration of Share-based Restructuring Acquisition & One-Time and Compensation and Other Asset Intangible Transformational Integration Pre-Separation Expense Re

  28. Slide 28: Reconciliations of Revenue by Segment and Region Excluding Currency

    AGILENT TECHNOLOGIES, INC. RECONCILIATIONS OF REVENUE BY SEGMENT AND REVENUE BY REGION EXCLUDING THE IMPACT OF CURRENCY ADJUSTMENTS (in millions) (Unaudited) PRELIMINARY Year-over-Year Currency (a) GAAP Adjustments Currency-Adjusted Year-over-Year Year-over-Year Revenue by Segment Q4'13 Q4'12 % Chan

  29. Slide 29: Reconciliations of Organic Revenue by Quarter

    AGILENT TECHNOLOGIES, INC. RECONCILIATIONS OF ORGANIC REVENUE BY QUARTER AND ORGANIC REVENUE EXCLUDING THE IMPACT OF CURRENCY ADJUSTMENTS BY QUARTER (In Millions) (Unaudited) PRELIMINARY Year-over-Year Currency (a) ORGANIC REVENUE Adjustments Currency-Adjusted Year-over-Year Year-over-Year FY13 FY12

  30. Slide 30: Non-GAAP Net Income and Diluted EPS Reconciliations

    AGILENT TECHNOLOGIES, INC. NON-GAAP NET INCOME AND DILUTED EPS RECONCILIATIONS (In millions, except per share amounts) (Unaudited) PRELIMINARY Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 FY 2013 FY 2012 Diluted Diluted Diluted Diluted Diluted Diluted Diluted Net Income EPS Net Income EPS Net Income EPS

  31. Slide 31: Reconciliation of ROIC

    AGILENT TECHNOLOGIES, INC. RECONCILIATION OF ROIC (In millions) (Unaudited) PRELIMINARY AGILENT AGILENT AGILENT AGILENT AGILENT Numerator: Q1'13 Q2'13 Q3'13 Q4'13 FY 13 Non-GAAP income from operations $ 288 $ 334 $ 303 $ 351 1,276 Less: Taxes and Other (income)/expense 46 47 49 56 197 (a) (a) (a) (a

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