Slide 1: Agilent Technologies Investor Presentation
AGILENT TECHNOLOGIES I NVESTOR P RESENTATION NOVEMBER 2011
Slide 2: 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 3: 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 4: Q4 '11 Financial Highlights
Q 4 ’ 1 1 F INANCIAL H IGHLIGHTS Q1 FY11 Q2 FY11 Q3 FY11 Q4 FY11 Actual Actual Actual Actual Revenue* $1.52B $1.68B $1.69B $1.73B Organic Revenue Growth* 19% 21% 19% 9% Operating Margin* 17.7% 19.3% 20.2% 21.6% EPS* $0.60 $0.74 $0.77 $0.84 ROIC* 21% 25% 25% 27% Operating Cash Flow $120M $378M $252M
Slide 5: 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 6: 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 % OM % 18% 20% 21% YoY OM 20% 36% 43% Incremental % ROIC % 23% 25% 27% *Presented on a non-GAAP basis **FY12 guidance as of November 15, 2011
Slide 7: Q1 '12 and FY2012 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) EPS $0.67 - $0.69 $3.00 - $3.35 EPS Growth (mid-point) 13% 8% *Presented on a non-GAAP basis; guidance as of November 15, 2011. Page 7
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 • Drivers: Emerging markets (China); high speed digital I/O demand driving Industrial, Comps & 21% of Agilent +11% 31% need for technology refresh Semi revenue growth growth • Market growth: Mid single digits • Drivers: 4G/LTE (Wir
Slide 9: 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 10: Key EMG Platforms
4 K E Y E M G P L AT F O R M S Applications Markets Competitors •General Purpose •Rohde & Schwarz •Aerospace Defense •Anritsu Tests components for cell •Wireless phones and base stations •Computers, Semiconductors, Industrial •Computers, •Danaher (Tek) Semiconductors, Industrial •LeCroy Verifies new
Slide 11: Electronic Measurement: How We Win
E L E C T R O N I C M E A S U R E M E N T: H O W W E W I N Market reach & Technology Scale and customer trust leadership leverage • Largest and strongest • Investment in core • World’s largest Test & portfolio in industry technologies Measurement supply chain • Exceptional direct sales • Introductio
Slide 12: 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 Applications Markets Competitors • Shimadzu Major uses are for • Perkin Elmer research and quality Used to separate a • Thermo Fisher GC Gas chromatography liquid or gas sample into its individual control in the chemical and petroleum
Slide 13: 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 14: Chemical Analysis: Our Winning Formula
C H E M I C A L A N A LY S I S : O U R W I N N I N G F O R M U L A Focus on Growth Geographies. Strong foundation, Agilent core competency. Leading Technology. Innovative products, emerging applications, investment model. Superior Customer Experience. Proven Sales and Services model. M&A Synergy-Cap
Slide 15: 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 • Preparative and Analytical LC in • Pharma and Biopharma • Waters R&D/QC • Shimadzu HPLC • Molecular biology, cancer research • Life Science Research • Thermo/Dionex • Education & Research / Routin
Slide 16: 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 • Deliver 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 and t
Slide 17: Appendix
APPENDIX ae Agilent Technologies
Slide 18: 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% Operating Margin % 19% 21% 23% YoY OM Incremental % -11% 40% 48% CAG Organic Rev. Growth % 5% 8% 11% Operating Margin % 22% 23% 24% YoY OM Incremental % 30% 40% 44% LSG
Slide 19: 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 20: 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 21: CAG Advantage: Portfolio Transformation
C A G A D VA N TA G E : P O R T F O L I O T R A N S F O R M AT I O N Expand Chemistries and Expand leadership in Atomic Supplies offering and Molecular Spectroscopy MS Analyzed Vials GC Columns HPLC Columns Exoscan ICP-MS with MassHunter Workstation Polymeric Consumables Solid Phase Extraction Colum
Slide 22: CAG Varian Cost Synergy Capture
C A G VARIAN C OST S YNERGY C APTURE Leverage Agilent Asia supply chain. Shift manufacturing and material sourcing to lower- cost countries; leverage existing capability. Reduce vertical integration. Outsource internal sub-assemblies. Streamline distribution and commercial centers. Eliminate redunda
Slide 23: 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 24: NMR: Transforming Our Portfolio
N M R : T RANSFORMING O UR P ORTFOLIO Agilent NMR portfolio delivers complete analytical solutions from research through production Channel – Immediate Impact • Rapidly staffing global service, support • Solid orders growth, long cycle products mean future revenue Technology – Results Primarily in 2
Slide 25: 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 • Net cash & short term investments of $1.4B* as of October 31, 2011. Most cash held outside of the United States. • Priority use of cash: Reserve for organic, inorganic investments meeting strategic & return criteria. Increasing pipeline. • Us
Slide 26: Reconciliations
RECONCILIATIONS “Ee Agilent Technologies
Slide 27: 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 28: 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 29: 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 30: 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 31: 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 32: 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 33: Reconciliation from GAAP to Non-GAAP
AGILENT TECHNOLOGIES, INC RECONCILIATION FROM GAAP TO NON-GAAP THREE MONTHS ENDED January 31, 2011 (Unaudited) Non-GAAP Adjustments Varian Varian Acquisition Restructuring Acquisition & Related Fair and Other Intangible Transformation Integration Value Adjustment for (In millions, except per share a
Slide 34: Reconciliation from GAAP to Non-GAAP
AGILENT TECHNOLOGIES, INC RECONCILIATION FROM GAAP TO NON-GAAP THREE MONTHS ENDED April 30, 2011 (Unaudited) PRELIMINARY Non-GAAP Adjustments Varian Acquisition Restructuring Acquisition & Related Fair and Other Asset Intangible Transformation Integration Value Adjustment for (In millions, except pe
Slide 35: Reconciliation from GAAP to Non-GAAP
AGILENT TECHNOLOGIES, INC RECONCILIATION FROM GAAP TO NON-GAAP THREE MONTHS ENDED July 31, 2011 (Unaudited) PRELIMINARY NON-GAAP ADJUSTMENTS Restructuring Varian and Other Acquisition & Acquisition Agilent Related Costs- Asset Intangible Transformation Integration Fair Value Foundation Adjustment (I
Slide 36: Reconciliation from GAAP to Non-GAAP
AGILENT TECHNOLOGIES, INC RECONCILIATION FROM GAAP TO NON-GAAP THREE MONTHS 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
Slide 37: 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: Q1'11 Q1'11 Q1'11 Q1'11 Q1'10 Q1'10 Q1'10 Q1'10 Q4'10 Q4'10 Q4'10 Non-GAAP income from operations $ 48 $ 65 $ 156 $ 270 $ 55 $ 67 $ 58 $ 181 $ 62 $ 8
Slide 38: Reconciliation of ROIC
AGILENT TECHNOLOGIES, INC. RECONCILIATION OF ROIC (In millions) (Unaudited) PRELIMINARY LSG CAG EMG Agilent LSG CAG EMG Agilent LSG CAG EMG Agilent Numerator: Q2'11 Q2'11 Q2'11 Q2'11 Q2'10 Q2'10 Q2'10 Q2'10 Q1'11 Q1'11 Q1'11 Q1'11 Non-GAAP income from operations $ 61 $ 72 $ 191 $ 324 $ 48 $ 57 $ 100
Slide 39: Reconciliation of ROIC
AGILENT TECHNOLOGIES, INC. RECONCILIATION OF ROIC (In millions) (Unaudited) PRELIMINARY LSG CAG EMG Agilent LSG CAG EMG Agilent LSG CAG EMG Agilent Numerator: Q3'11 Q3'11 Q3'11 Q3'11 Q3'10 Q3'10 Q3'10 Q3'10 Q2'11 Q2'11 Q2'11 Q2'11 Non-GAAP income from operations $ 60 $ 79 $ 204 $ 342 $ 56 $ 69 $ 127
Slide 40: Reconciliation of ROIC
AGILENT TECHNOLOGIES, INC. RECONCILIATION OF ROIC (In millions) (Unaudited) PRELIMINARY LSG CAG EMG Agilent LSG CAG EMG Agilent LSG CAG EMG Agilent Numerator: Q4'11 Q4'11 Q4'11 Q4'11 Q4'10 Q4'10 Q4'10 Q4'10 Q3'11 Q3'11 Q3'11 Q3'11 Non-GAAP income from operations $ 68 $ 97 $ 209 $ 373 $ 62 $ 86 $ 153
Slide 41: 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
Slide 42: Reconciliation of Revenue
AGILENT TECHNOLOGIES, INC. REVENUE RECONCILIATION (In millions) (Unaudited) PRELIMINARY Percent Q1'11 Q1'10 Inc/(Dec) GAAP Revenue $ 1,519 $ 1,213 25% Varian acquisition fair value adjustments 5 - Non-GAAP Revenue $ 1,524 $ 1,213 26% Less revenue from acquisition and divestitures included in segment
Slide 43: Reconciliation of Organic Revenue
AGILENT TECHNOLOGIES, INC. RECONCILIATION OF ORGANIC REVENUE (IN MILLIONS) PRELIMINARY Percent Q2'11 Q2'10 Inc/(Dec) GAAP Revenue $ 1,677 $ 1,271 Varian acquisition fair value adjustments 2 - Non-GAAP Revenue $ 1,679 $ 1,271 included in segment results (191) (41) Organic Non-GAAP Revenue $ 1,488 $ 1
Slide 44: Reconciliation of Organic Revenue
AGILENT TECHNOLOGIES, INC. RECONCILIATION OF ORGANIC REVENUE (IN MILLIONS) PRELIMINARY Percent Q3'11 Q3'10 Inc/(Dec) GAAP Revenue $ 1,691 $ 1,384 22% Varian acquisition fair value adjustments 1 11 Non-GAAP Revenue $ 1,692 $ 1,395 21% Less revenue from acquisition and divestitures included in segment
Slide 45: Reconciliation of Incremental Revenue Dollar to Bottom Line
AGILENT TECHNOLOGIES, INC. RECONCILIATION OF INCREMENTAL REVENUE DOLLAR TO BOTTOM LINE (IN MILLIONS) PRELIMINARY Year over Year Q4'11 Q4'10 $ Change Incremental AGILENT GAAP Revenue $ 1,728 $ 1,576 $ 152 Income from Operations $ 313 $ 203 $ 110 73% AGILENT Non-GAAP Revenue $ 1,731 $ 1,584 $ 147 Inco
Slide 46: Reconciliation of Revenue by Region
AGILENT TECHNOLOGIES, INC. RECONCILIATION OF REVENUE BY REGION (IN MILLIONS) PRELIMINARY Q4'11 Year over Year Percent Q4'10 Q1'11 Q2'11 Q3'11 Q4'11 Inc/(Dec) GAAP Americas $ 587 $ 548 $ 546 $ 619 $ 629 7% Europe 401 405 420 403 419 4% Asia Pacific 588 566 711 669 680 16% Revenue $ 1,576 $ 1,519 $ 1,
Slide 47: Reconciliations of Non-GAAP Revenue by Segment and Region
AGILENT TECHNOLOGIES, INC. RECONCILIATIONS OF NON-GAAP REVENUE BY SEGMENT AND NON-GAAP REVENUE BY REGION EXCLUDING THE IMPACT OF CURRENCY ADJUSTMENTS (IN MILLIONS) (Unaudited) PRELIMINARY Year-over-Year Currency (a) NON-GAAP Adjustments Currency-Adjusted Year-over-Year Year-over-Year Non-GAAP Revenu
Slide 48: Net Cash
AGILENT TECHNOLOGIES, INC. NET CASH (In millions) (Unaudited) PRELIMINARY Q4'11 Q4'10 Cash and cash equivalents $ 3,527 $ 2,649 Restricted cash and cash equivalents — 1,550 Short-term debt, par value (250) (1,501) Senior notes, par value (1,850) (2,100) Total Net Cash $ 1,427 $ 598 The preliminary r