Bio-Rad Laboratories, Inc. · NYSE:BIO
Bio-Rad Laboratories — Investor Day (February 2022)
102 slides from Bio-Rad Laboratories's investor day presentation, Feb 25, 2022
Slide 1: Investor Day 2022
Investor Day 2022 FEBRUARY 25, 2022 Bio-Rad Laboratories, Inc. 1
Slide 2: Forward-Looking Statements & Use of Non-GAAP Reporting
Forward-Looking Statements & Use of Non-GAAP Reporting Forward-looking Statements. Some statements in this presentation may be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, without limitation, statements regarding management’s goals
Slide 3: Today's Program
Today’s Program Our Progress, Our Future Lunch Break Norman Schwartz Chief Executive Officer Clinical Diagnostics Dara Wright Executive Vice President, President, Clinical Diagnostics Group Business Transformation Andy Last Executive Vice President, Chief Operating Officer Finance Update Ilan Daskal
Slide 4: Our Progress, Our Future
Our Progress, Our Future Norman Schwartz Chief Executive Officer 4 CONFIDENTIAL / DRAFT
Slide 5: Agenda
• Bio-Rad Today Agenda • Progress Since 2017 • Advancing Our Continued Transformation • 2025 Goals 5
Slide 6: Core Values
Core Values OUR MISSION INVOLVEMENT To provide useful, high-quality products and services that advance INTEGRITY scientific discovery and improve healthcare INNOVATION INDEPENDENCE 6
Slide 7: Investment Thesis
Investment Thesis • Well established company with a strong brand and high-quality products • Key positions in large, diversified markets with many opportunities for growth • Strong recurring revenue providing for consistency and predictability • Healthy balance sheet and strong cash flow for continu
Slide 8: Today's Golden Age of Biology
Today’s Golden Age of Biology Cell & Gene Therapy Covid Testing • 1700+ Cell, Gene & RNA therapy • 4B+ tests performed globally in 2021 clinical trials in 2021 • $38B market in 2021, • Demand for precision medicine vs. $20B in 2020 driving market growth Novel Therapeutics Molecular Diagnostics • 50+
Slide 9: Bio-Rad Today
Bio-Rad Today Global leader of innovative products in life science research and clinical diagnostics 70 $2.9B 7,900 Years Strong Annual Sales* Employees Worldwide Performance Continuous Innovation A History of Contribution Key Competencies Fueling Ongoing Growth Complementary Business Segments Lever
Slide 10: Two Highly Complementary Business Segments
Two Highly Complementary Business Segments Vertically integrated, global commercial platform 47% $2.9B 53% Sales* Life Science Clinical Diagnostics $1.37B* $1.52B 10 *Excludes $32M non-recurring legal settlement; A reconciliation of U.S. GAAP results to non-GAAP results can be found in the Appendix;
Slide 11: Diversified Customer Base & Geographic Profile
Diversified Customer Base & Geographic Profile 70% recurring revenue provides stability and predictability across the business Diversified Customer Base Worldwide Presence Biopharma Hospital Asia-Pacific Labs 15% 25% 34% Clinical Life Diagnostics 21% Science 42% Americas Academic/ Europe, 11% Govt.
Slide 12: Opportunities Across All Product Areas
Opportunities Across All Product Areas 80%+ of sales from products in which Bio-Rad has a leading market position Life Science Clinical Diagnostics Gene Expression Quality Controls Protein Quantitation Immunohematology Bioseparation Infectious Diseases Molecular Biology Diabetes Monitoring Cell Biol
Slide 13: Robust Portfolio Spans Continuum of Fast-Growing Markets
Robust Portfolio Spans Continuum of Fast-Growing Markets Bio-Rad technologies are broadly applicable across multiple growth segments Genomics / Cell Biology / Proteomics / Informatics Discovery Development Production Diagnostics & Monitoring 13 ‹#› CONFIDENTIAL / DRAFT
Slide 14: Our Phase 1 Financial Objectives (2017-2020)
Our Phase 1 Financial Objectives (2017-2020) Driving Revenue Growth Target Revenue Growth 3 – 5% Expanding EBITDA Margins (1)(2) Target EBITDA Margins 20%+ in 2020 Accelerating Free Cash Flow (1)(3) Grow Faster than EBITDA (1) Creating Shareholder Value Deliver Substantial Value (1) A reconciliation
Slide 15: Exceeded Our Revenue Targets
Exceeded Our Revenue Targets $2.9B Driving Revenue Growth Target Revenue(1)(2) Growth 3 – 5% +5.2% CAGR $2.5B Expanding EBITDA Margins $2.3B $2.3B $2.2B Accelerating Free Cash Flow Creating Shareholder Value 2017 2018 2019 2020 2021 (1) A reconciliation of U.S. GAAP results to non-GAAP results can b
Slide 16: Exceeded Our EBITDA Margin Targets
Exceeded Our EBITDA Margin Targets Realized operating leverage 24.1% Driving Revenue Growth 21.7% 17.5% 16.2% Expanding EBITDA Margins Target EBITDA Margins (1)(2) 15.2% 20%+ in 2020 Accelerating Free Cash Flow Creating Shareholder Value 2017 2018 2019 2020 2021 Adjusted EBITDA Margin (1) A reconcil
Slide 17: Exceeded Our Free Cash Flow Targets
Exceeded Our Free Cash Flow Targets Cash flow enables ongoing investment $536M Driving Revenue Growth $476M $359M Expanding EBITDA Margins Accelerating Free Cash Flow Grow Faster than EBITDA (1) $160M Creating Shareholder Value ($7M) 2017 2018 2019 2020 2021 Free Cash Flow(2) (1) A reconciliation of
Slide 18: Created Substantial Shareholder Value
Created Substantial Shareholder Value A result of focus, scale, and operating leverage $22.4B Driving Revenue Growth +28% CAGR $17.3B Expanding EBITDA Margins $11.1B Accelerating Free Cash Flow $8.3B $6.9B Creating Shareholder Value Significant Increase in Market Capitalization 2017 2018 2019 2020 2
Slide 19: Advancing Our Continued Transformation — A Three Phased Approach
Advancing Our Continued Transformation — A Three Phased Approach Improving financial performance 3 Accelerated 2 Growth 2023 - 2025 Performance • Mix & market segment focus & Operational • Operating margin expansion Improvement • Channel performance 1 2020 - 2023 • • • Increase innovation Leverage o
Slide 20: Capital Allocation Priorities
Capital Allocation Priorities Enabling transformation and value creation • Reinvest in the business, including R&D and infrastructure • Support accelerated organic growth with strong balance sheet and cash flow • Provide optionality for tuck-in or larger-scale acquisitions ‹#› 20 20 CONFIDENTIAL / D
Slide 21: Environmental & Social Responsibility Goals
Environmental & Social Responsibility Goals Progress on all fronts 2017 Goals for 2030 46% carbon emission reduction 100% renewable electricity 45% women in U.S. leadership roles 60% of U.S. workforce from under-represented groups 25% reduction of non-recyclable packaging 21
Slide 22: Enhancing Our Financial Profile Through 2025
Enhancing Our Financial Profile Through 2025 • Accelerating our revenue growth profile • Further improving our cost structure 9% Target (1)(2) Core Revenue CAGR Currency Neutral • Expanding profitability • Creating shareholder value through 28% prudent capital deployment Target Profitability Adjuste
Slide 23: Business Transformation
Business Transformation Andy Last Chief Operating Officer 23 CONFIDENTIAL / DRAFT
Slide 24: Agenda
• Transformation Focus & Key Elements Agenda • Key Growth Drivers • COVID Impact • Performance Improvement 24
Slide 25: Phased Corporate Transformation Strategy
Phased Corporate Transformation Strategy Improving financial performance & capabilities 3 Accelerated 2 Growth 2023 - 2025 Performance & Operational • Mix & market segment focus • Operating margin expansion Improvement 1 • Channel performance • Increase innovation 2020 - 2023 • Leverage operational
Slide 26: Balancing Growth Opportunities & Margin Expansion
Balancing Growth Opportunities & Margin Expansion Portfolio optimization to accelerate financial performance Invest and Grow Optimize Profits • Accelerate revenue growth • Improved product mix • Drive innovation • Lower SG&A as % sales • Target faster growth markets • Expanding EBITDA 26
Slide 27: Aligning Investments to Growth Pillars
Aligning Investments to Growth Pillars Accelerating growth & profitability Market Focus Portfolio Focus Investment Focus Biopharma $23B • Digital PCR research/diagnostics • Targeted spend on R&D • Cell biology • Channel & go-to-market Translational research $20B investments Diagnostics $16B • Qualit
Slide 28: Realizing High ROI from Strategic Investments
Realizing High ROI from Strategic Investments Improving profitability & operational performance • Controlled spending discipline • Organizational alignment across the organization – Utilize ‘Balanced Scorecard’ – Integrated strategy & goals • Deliver value from SAP implementation: • Core process imp
Slide 29: Capturing Value From Operational Investments
Capturing Value From Operational Investments Increasing supply chain efficiency Gross Margin Supply Chain Working Capital Expansion Resilience Improvement • Restructuring & • Ensuring business • Integrated business LEAN transformation continuity planning process • Sourcing flexibility • Supplier sou
Slide 30: Improving Operating Efficiency
Improving Operating Efficiency Restructuring Europe across commercial, R&D, supply chain & finance Consolidate R&D in US & targeted European locations Lower our cost basis with improved efficiency Move two manufacturing and effectiveness plants to Singapore • 3 Year program affecting Consolidate adm
Slide 31: Trends Driving Growth Acceleration
Trends Driving Growth Acceleration Market forces are shaping investment direction and focus Next generation Driving funding acceleration Aligning focus to capture therapeutics & vaccines in Biopharma & Translational growth potential markets • Antibody-based biologicals • Biopharma, translational, •
Slide 32: Growth Acceleration Through Multiple Strategies
Growth Acceleration Through Multiple Strategies Aligning channel with growth opportunities Aligning with growth Digital transformation Improve channel profitability opportunities • Grow e-commerce revenue • Optimize cost structure • Biopharma segment to 50%+ • Drive lower cost sales through • Asia-P
Slide 33: Growth Acceleration Through Digital PCR Expansion
Growth Acceleration Through Digital PCR Expansion Potential is expanding as innovation roadmap evolves Expanding Segmented Broader Markets Expanding Potential Performance Portfolio Absolute quantification Translational Research $10B+ Opportunity Highest sensitivity Biopharma • Increased throughput D
Slide 34: Growth Acceleration in Biopharma
Growth Acceleration in Biopharma Significant growth potential in $23 billion Biopharma addressable market growing 10%+ • ddPCRTM & protein purification represent differentiated high value entry points • High relevancy in new therapeutic modalities, which are receiving strong funding • Significant ha
Slide 35: Growth Acceleration in the Molecular Diagnostic Market
Growth Acceleration in the Molecular Diagnostic Market Differentiated technology value propositions and clinical unmet needs • Reproductive and women’s health Digital PCR High sensitivity & absolute counting $6B+ 10%+ • Infectious disease enables improved Addressable CAGR • Transplant monitoring Mar
Slide 36: Growth Acceleration in Asia-Pacific
Growth Acceleration in Asia-Pacific Expanding footprint in a high growth region • Diagnostics $12B+ opportunity Biopharma focus in China, 7%+ growth as Asia-Pacific Japan and South Korea continues to invest and develop health care infrastructure – Faster growth in China, India Increased investment i
Slide 37: Proactive Actions Address COVID Impact
Proactive Actions Address COVID Impact Navigating a dynamic global environment Financial Performance Supply Chain R&D Employee Safety • COVID sales of $580M over 2020 • Massive scale-up for CFX • Temporary R&D program • Rapid implementation & 2021 PCR instruments delays of global safety – Primarily
Slide 38: Strong Core Revenue with 5.6% Two-Year CAGR
Strong Core Revenue with 5.6% Two-Year CAGR (1)(2) COVID temporarily contributed to the topline $2.89B $0.27 COVID $2.51B $ in billions $2.31B $0.31 COVID $1.12 Life $0.89 Science $0.89 Clinical $1.50 $1.41 $1.30 Diagnostics 2019 2020 2021 (1) A reconciliation of U.S. GAAP results to non-GAAP result
Slide 39: Operational Execution Has Led to Improved Financial Performance
Operational Execution Has Led to Improved Financial Performance (1) 2017 2021 Core Revenue(2) 2-Yr CAGR 3.7% 5.6% +1.9% Gross Margin 56.1% 57.3% +1.2% SG&A 37.3% 28.6% -8.7% R&D 9.6% 8.9% -0.7% Operating Margin 9.2% 19.8% +10.6% Adjusted EBITDA 15.2% 24.1% +8.9% (1) All financial metrics are non-GAA
Slide 40: Business Transformation Summary
Business Transformation Summary Driving enhanced operations and accelerated growth Improving Execution • Optimize operating efficiencies & core processes • Improve operating metrics • Increase innovation Accelerating Growth • Expand digital PCR offerings • Accelerate growth in Biopharma • Target new
Slide 41: Life Science
Life Science Simon May President, Life Science Group 41 CONFIDENTIAL / DRAFT
Slide 42: Life Science Agenda
Life Science • Business Profile Agenda • Portfolio & Growth Pillars • Summary 42
Slide 43: Life Science
Life Science • Business Profile • Portfolio & Growth Pillars • Summary 43
Slide 44: Life Science Group Overview
Life Science Group Overview Established leadership positions with diversified presence and product mix Customer Segments Revenue Geography Products Europe, Middle Consumables East, & Africa Academic & Biopharma Americas Government 30% 48% 43% 32% 42% 52% Instruments Hospital Labs 20% 3% 28% Referenc
Slide 45: Global Market Dynamics
Global Market Dynamics Positioned to deliver sustained customer value Market Trends Implications Bio-Rad Competitive Advantage • Cost and time-to-market • Greater analytical sensitivity and 1. Comprehensive portfolio pressures in drug discovery multiplexing A solid foundation and development • Autom
Slide 46: Customer Segments
Customer Segments Expanding reach in large and attractive markets Basic Research Biopharma Applied Markets • Academic, government • Discovery research • Food safety and quality • Primary focus on translational • Pre-clinical and clinical trials • Water quality and pathogen research • Manufacturing a
Slide 47: Product Segments
Product Segments Broad portfolio provides a strong foundation Genomics Proteomics Cell Biology • Cell Sorting & Analysis • Droplet Digital PCR (including Single Cell) • Genotyping & Gene Expression • Protein Quantitation • Cell Imaging • Gene Transfer & Modulation • Protein Purification • Antibody T
Slide 48: Key Accomplishments
Key Accomplishments 2017 - 2021 Established ddPCRTM as a powerful tool across multiple segments • Expanded access in Biopharma manufacturing/QC and applied markets Positioned for growth acceleration with key technologies and acquisitions • Innovated in single cell, digital PCR, antibodies Strengthen
Slide 49: Life Science
Life Science • Business Profile • Portfolio & Growth Pillars • Summary 49
Slide 50: Life Science Strategy & Growth Pillars
Life Science Strategy & Growth Pillars Innovations fueling growth in translational research and biopharma Droplet Digital PCR Biopharma Production Cell Biology Broadening adoption Leveraging our advantages Building on a portfolio with new platforms for new therapeutic modalities of differentiated as
Slide 51: Significant Opportunities in Biopharma
Significant Opportunities in Biopharma Converging forces are driving overall growth potential Strong funding Emerging therapeutic Favorable regulatory for R&D modalities environment $23B 1700+ 50+ Biopharma life science Cell, gene & RNA therapy Novel therapeutics instruments & reagents spend clinica
Slide 52: Droplet Digital PCR
GROWTH PILLAR #1 Droplet Digital PCR A valuable tool in a broad range of important applications Core Technology Enables • Absolute quantification of targets • Exquisite sensitivity – finds ‘needles in haystacks’ • Inhibitor tolerance ‹#› 52 CONFIDENTIAL / DRAFT
Slide 53: Accelerating Innovation – QX600
Accelerating Innovation – QX600 Unequalled sensitivity, multiplexing & dynamic range Unrivalled capabilities • 6-channel detection x 100,000 droplets • AutoDG Flex provides on-demand droplet count selection 70% of survey respondents • Superior performance in rare event detection applications – rated
Slide 54: Accelerating Innovation – QX Continuum
Accelerating Innovation – QX Continuum The benefits of ddPCRTM in a qPCR-like package ‘All-in-one’ droplet digital PCR system • Fully integrated workflow – plate in, answer out • 30 minutes to first result • Dovetails with existing software, reagents, assays • No dead volume or samples vs. partition
Slide 55: Droplet Digital PCR Growth Strategy
GROWTH PILLAR #1 Droplet Digital PCR Growth Strategy Portfolio innovations driving broader adoption QX ONE QX600 QX Continuum Assay portfolio Automation & Throughput Sensitivity & Multiplexing Price & Workflow extensions Launched 2020 Launching 2022 Launching 2023 Ongoing Biopharma production and Se
Slide 56: Biopharma Production
GROWTH PILLAR #2 Biopharma Production Proprietary process resins targeting $2 billion market opportunity Biologic and Biosimilar Development Monoclonal antibody purification Cell and Gene Therapy Viral vector purification Vaccine Development Virus-derived and recombinant protein purification 56 Sour
Slide 57: Biopharma Production Growth Strategy
GROWTH PILLAR #2 Biopharma Production Growth Strategy Boosting productivity for purification of complex molecules • R&D investment focus on innovation – higher yields, fewer purification steps • Fuel demand through applications development • Offer breadth of products for varying scale and customer n
Slide 58: Cell Biology
GROWTH PILLAR #3 Cell Biology Building on a strong asset portfolio Innovating in single cell Leveraging novel analysis antibody technologies 58
Slide 59: Cell Biology Growth Strategy
GROWTH PILLAR #3 Cell Biology Growth Strategy Innovations positioned to gain share in attractive markets Single Cell Analysis $0.8B Rare Cell Detection $1.6B Drug Discovery & Antibody Screening $1.2B Flow Cytometry Assays $0.6B 59 Sources: Markets & Markets (var.); DeciBio; Grandview Research; Roots
Slide 60: Innovating in Single Cell Analysis
GROWTH PILLAR #3 Innovating in Single Cell Analysis Delivering improvements in sensitivity, cell throughput and workflow ddSeq TM Rare Cell Single Cell Analysis Multi-omics Celselect TM Celsingle TM 2022 2023 – 2024 60
Slide 61: Proprietary Antibody Technology Platforms
GROWTH PILLAR #3 Proprietary Antibody Technology Platforms New & advanced antibody toolkits for discovery and development StarbrightTM Dyes Best-in-class performance powering cell analysis assays Pioneer Antibody Screening Library Expert-curated for optimal therapeutic lead generation SpyTagTM and S
Slide 62: Life Science
Life Science • Business Profile • Portfolio & Growth Pillars • Summary 62
Slide 63: Life Science Strategy Drives Accelerated Growth
SUMMARY Life Science Strategy Drives Accelerated Growth Broad Portfolio Established leadership positions provide a solid foundation Multiple Opportunities Large, fast-growing Biopharma market segments Driving Profitable Growth Compelling opportunities to further accelerate growth by: • Rapidly expan
Slide 64: Clinical Diagnostics
Clinical Diagnostics Dara Wright President, Clinical Diagnostics Group 64 CONFIDENTIAL / DRAFT
Slide 65: Clinical Diagnostics Agenda
Clinical • Business Profile Diagnostics • Portfolio & Growth Pillars Agenda • Summary 65
Slide 66: Clinical Diagnostics
Clinical Diagnostics • Business Profile • Portfolio & Growth Pillars • Summary 66
Slide 67: Clinical Diagnostics Group Overview
Clinical Diagnostics Group Overview Global channel with strong recurring revenue Customer Segments Revenue Geography Products Asia-Pacific Instruments Europe, Middle Hospital East & Africa 22% 30% Transfusion 19% Laboratories Laboratories 36% 61% Reference 20% Laboratories 42% Americas 70% Reagents
Slide 68: Global Market Dynamics
Global Market Dynamics Positioned to deliver sustained customer value Market Trends Implications Bio-Rad Competitive Advantage • Global expansion in healthcare access • Consolidating labs with centralized 1. Global installed base with expanding test and the need to manage chronic procurement drive f
Slide 69: Customer Segments
Customer Segments Broad reach across key laboratory segments Hospital Laboratories Reference Laboratories Transfusion Laboratories Clinical testing in the inpatient Patient samples sent from Testing blood donations or outpatient setting doctors’ offices or hospitals for transfusion safety to central
Slide 70: Product Segments
Product Segments Diverse portfolio with strong positions Quality Controls & Immunohematology & Laboratory Diagnostic Testing & Informatics Transfusion Medicine Monitoring • Quality control reagents • Blood typing • Autoimmune • Laboratory informatics • Blood virus testing • Diabetes • Infectious dis
Slide 71: Key Accomplishments
Key Accomplishments 2017 - 2021 Growth Acceleration • Global installed base expansion and regulatory clearances • Portfolio focus on growth products – Increased R&D innovation investment – Entered fast growing molecular controls market • Focus on regional growth drivers Cost Base Optimization • Foot
Slide 72: Clinical Diagnostics
Clinical Diagnostics • Business Profile • Portfolio & Growth Pillars • Summary 72
Slide 73: Clinical Diagnostics Strategy & Growth Pillars
Clinical Diagnostics Strategy & Growth Pillars Extending core franchises and enter molecular diagnostics Core Diagnostics Quality Controls & Informatics Molecular Diagnostics Expand installed base Extend utility of lab QC software Leverage RT-PCR and digital PCR globally and cross-sell menu and driv
Slide 74: Core Diagnostics Growth Strategy
GROWTH PILLAR #1 Core Diagnostics Growth Strategy Serving routine and specialty testing markets globally Products & Applications Strategic Focus Lab Diagnostic Testing • Align portfolio and menu & Transfusion Medicine expansion with global health needs • Diabetes A1c • Support laboratory productivit
Slide 75: Core Diagnostics Growth Strategy Highlights
GROWTH PILLAR #1 Core Diagnostics Growth Strategy Highlights: Clinical Immunology specialty testing is a growing global need BioPlex 2200 Immunoassay Platform • Differentiated platform for complex disease diagnostics serving growing Autoimmune and Infectious Disease testing • Expanding global instal
Slide 76: Quality Controls Growth Strategy
GROWTH PILLAR #2 Quality Controls Growth Strategy Improving laboratory accuracy to improve patient care Products & Applications Strategic Focus Quality Control Assurance • Maintain independent QC leadership • Quality Controls (QC) • Extend product formats, which • QC data management software enable
Slide 77: Quality Controls Growth Strategy Highlights
GROWTH PILLAR #2 Quality Controls Growth Strategy Highlights: A complete offering for laboratory quality control Unity QC Data Management Software • Largest QC data set for peer reporting, 65+ million data points per month, which enables lab quality and productivity • Daily software usage drives pro
Slide 78: Molecular Diagnostics Growth Strategy Highlights
GROWTH PILLAR #3 Molecular Diagnostics Growth Strategy Highlights: Extending infectious disease diagnostics portfolio Syndromic infectious disease molecular diagnostics • Enter high-growth Acute Care Syndromic testing market • $2B+ growing at 8%+ • Leveraging Bio-Rad CFX PCR instrument installed bas
Slide 79: Molecular Diagnostics Growth Strategy Highlights
GROWTH PILLAR #3 Molecular Diagnostics Growth Strategy Highlights: Entering new clinical market segments with digital PCR Digital PCR primed to serve significant clinical opportunities • Digital PCR technology can deliver meaningful value for several clinical applications • $6B clinical opportunity
Slide 80: Clinical Diagnostics
Clinical Diagnostics • Business Profile • Portfolio & Growth Pillars • Summary 80
Slide 81: Clinical Diagnostics Strategy to Drive Accelerated Growth
SUMMARY Clinical Diagnostics Strategy to Drive Accelerated Growth Diverse Portfolio Diverse portfolio addressing high-impact global healthcare needs Strong Global Position Strong global market position with best-in-class service and support Driving Profitable Growth Compelling opportunities to furth
Slide 82: Finance Update
Finance Update Ilan Daskal Chief Financial Officer 82 CONFIDENTIAL / DRAFT
Slide 83: Agenda
• 2017 – 2021 Financial Performance Recap Agenda • 2022 Guidance • 2025 Framework • Capital Allocation • Key Takeaways 83
Slide 84: Revenue Growth Exceeded 2017 Targets
Revenue Growth Exceeded 2017 Targets $ in millions 7.6% Total Revenue CAGR Total Revenue CAGR 7.4% currency neutral Core Revenue CAGR Key Drivers 4.8% currency neutral • Droplet Digital PCR $2,891 • Quality Controls • Process Chromatography $2,514 CORE $2,625 • COVID $2,289 $2,312 $2,160 CORE $2,201
Slide 85: Accelerating profitability
Accelerating profitability Gross Margin expansion(1) Optimizing SG&A(1) +120 bps 37.3% 56.9% 57.3% 35.2% 34.4% 56.1% -870 bps 54.5% 55.0% 30.9% 28.6% 2017 2018 2019 2020 2021 2021 2017 2018 2019 2020 2021 2021 Increase R&D Investment(1) +$52M Key Drivers $259 $228 • Top line growth and product mix $
Slide 86: Consistent Adjusted EBITDA Margin Expansion
Consistent Adjusted EBITDA Margin Expansion (1)(2) Exceeded 20% Adjusted EBITDA 2020 Goals +890 bps 24.1% 21.7% 17.5% 16.2% 15.2% 2017 2018 2019 2020 2021 (1) A reconciliation of U.S. GAAP results to non-GAAP results can be found in the Appendix 86 (2) EBITDA Margin defined as Adjusted EBITDA as a p
Slide 87: Adjusted EBITDA Expansion (2017-2021)
Adjusted EBITDA Expansion (2017-2021) (1) Operational leverage and multiple initiatives 24.1% 0.8% +0.7% • Centralization +1.4% of support • Productivity and efficiency functions • ddPCR initiatives • Commercial • Overhead organization +4.7% • Quality Controls realignment reductions • Process Media
Slide 88: 2022 Non-GAAP Guidance
2022 Non-GAAP Guidance 2021 2022 Guidance Revenue (1) $2.89B 1% to 2% Group Guidance Core Revenue (2) $2.63B 8.5% to 9.5% Life Science: Gross Margin (1) 57.3% 57.5% • Total growth flat to 1.5% • Core growth 16.0% to 18.0% (1) Operating Margin 19.8% ~19% Clinical Diagnostics: • Total growth 2.0 to 3.
Slide 89: Accelerating Core Revenue Growth
OUR 2025 GOALS Accelerating Core Revenue Growth (1) 13.9% Life Science CAGR $1.9B 9.0% $3.7B CAGR $1.5B $1.30~ $1.32B Future Drivers 8.9% CAGR $1.12B • Accelerate growth in $0.79B Biopharma market $3.1B 2017A 2021A 2022 2023 2025 • Key opportunities: 4.8% $2.85~ – Digital PCR CAGR $2.87B Clinical Di
Slide 90: Targeting Significant Margin Expansion
Targeting Significant Margin Expansion Gross Margin(1) 59.0% 59.0% 58.0% 57.3% 57.5% 2021A 2021 2022 2022 2023 2023 2025 2025 Profitability Drivers Adjusted EBITDA Margin(1)(2) • Top line leverage 0.3% 28% • Completion of current restructuring initiatives 24.1% 23.5%~23.8% 24.0%~25.0% • Optimize man
Slide 91: Adjusted EBITDA Expansion (2021-2025)
Adjusted EBITDA Expansion (2021-2025) (1) Improving profitability & operational performance 28% 0.7% 0.4% • Completion of • Biopharma strategy current restructuring 2.1% initiatives – Digital Droplet PCR • Productivity and – Process Media efficiency improvements 24.1% 0.8% • Molecular Diagnostics •
Slide 92: Significant Financial Upside Ahead
Significant Financial Upside Ahead Improving financial performance 3 Accelerated 2 Growth 2023 - 2025 Performance • Mix & market segment focus & Operational • Channel performance Improvement • Increase innovation 1 2020 - 2023 • • Leverage scale Operating margin expansion Globalize • M&A • Portfolio
Slide 93: Free Cash Flow Generation
Free Cash Flow Generation $6 billion in liquidity available for capital allocation $6B Capacity available Free Cash Flow (1)(2) $ in millions $800 $536 3X $3B Leverage -$7 2017 2017A 2021 2021A 2025 2025 $3B Capacity available $2.1B Estimated $3B Cash & $1.0B Investments $0.8B $0.9B 2017A 2021A 2025
Slide 94: Capital Allocation
Capital Allocation 1 2 3 4 We continue to explore • Prioritize focus on larger scale • Continue to generate strong free • Opportunistic share tuck-in acquisitions to transactions cash flow buy-backs accelerate our strategic • Target assets within or • Prudent leverage ratio up to 3X, • Sartorius con
Slide 95: Key Takeaways
Key Takeaways • Accelerating our revenue growth profile • Further improving our cost structure • Expanding profitability • Creating shareholder value through prudent capital deployment ‹#› 95 CONFIDENTIAL / DRAFT
Slide 96: Concluding Remarks
Concluding Remarks Norman Schwartz Chief Executive Officer 96 CONFIDENTIAL / DRAFT
Slide 97: Q&A
Q&A For participants on the webcast, please email questions to: ir@bio-rad.com 97 CONFIDENTIAL / DRAFT
Slide 98: Appendix
Appendix 98 CONFIDENTIAL / DRAFT
Slide 99: Reconciliation of GAAP to Non-GAAP Financial Measures
Reconciliation of GAAP to Non-GAAP Financial Measures Year Ended Year Ended Year Ended Year Ended Year Ended December 31, % of December 31, % of December 31, % of December 31, % of December 31, % of 2017 revenue 2018 revenue 2019 revenue 2020 revenue 2021 revenue GAAP net sales $ 2,160,153 $ 2,289,4
Slide 100: Reconciliation of GAAP to Non-GAAP Financial Measures
Reconciliation of GAAP to Non-GAAP Financial Measures Year Ended Year Ended Year Ended Year Ended Year Ended December 31, % of December 31, % of December 31, % of December 31, % of December 31, % of 2017 revenue 2018 revenue 2019 revenue 2020 revenue 2021 revenue GAAP net sales $ 2,160,153 $ 2,289,4
Slide 101: Reconciliation of GAAP to Non-GAAP Financial Measures
Reconciliation of GAAP to Non-GAAP Financial Measures Year Ended Year Ended Year Ended Year Ended Year Ended December 31, % of December 31, % of December 31, % of December 31, % of December 31, % of 2017 revenue 2018 revenue 2019 revenue 2020 revenue 2021 revenue GAAP net sales $ 2,160,153 $ 2,289,4
Slide 102: Reconciliation of GAAP to Non-GAAP Financial Measures
Reconciliation of GAAP to Non-GAAP Financial Measures Year Ended Year Ended Year Ended Year Ended Year Ended December 31, December 31, December 31, December 31, December 31, 2017 2018 2019 2020 2021 GAAP Net Cash Provided by Operating Activities $ 104,137 $ 285,494 $ 457,897 $ 575,328 $ 656,521 Purc