Agilent Technologies, Inc. · NYSE:A
Agilent Technologies — Investor Day (December 2024)
75 slides from Agilent Technologies's investor day presentation, Dec 17, 2024
Slide 1: 2024 Analyst and Investor Day
2024 Analyst and Investor Day December 17, 2024 1
Slide 2: Safe harbor
Safe harbor These presentations contain forward-looking statements (including, without limitation, statements on Agilent's (the "company" or "our") priorities, strategy, growth and growth opportunities, productivity, evolving culture and innovation plans; the effects of our new organizational struct
Slide 3: Agenda for the Day
1 Welcome and Safe Harbor (Parmeet) 2 Introduction and Agilent Overview (Padraig) 3 Business overviews A Life Sciences & Diagnostics Markets Group (LDG) (Simon) Agenda for the Day B Applied Markets Group (AMG) (Mike) C Agilent CrossLab Group (ACG) (Angelica) 4 Delivering Excellent Financial Results
Slide 4: Padraig McDonnell
Padraig McDonnell President & Chief Executive Officer 27 years at Agilent Lifelong dedication to customer experience Proven track record of building winning teams 4
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Slide 6: Takeaways for today
Takeaways for today Established leader in $80B markets driven by secular growth Leading market share and sustainable competitive advantage via customer focus Delivering 5-7% long-term core Re-accelerating growth through innovation and market share gains growth and double-digit EPS Driving productivi
Slide 7: Agilent's guiding mission and new vision
Agilent’s guiding mission and new vision MISSION VISION To deliver trusted answers and Innovate and deliver seamless insights to advance the quality solutions for our customers to of life expand frontiers of science 7
Slide 8: We have the right team to drive success
We have the right team to drive success Speakers today Simon May Mike Zhang Bret DiMarco President of Life Sciences President of Applied Chief Legal Officer, and Diagnostics Group Markets Group and Secretary Appointed May 2024 Appointed Nov 2024 Fred Schwarz 20+ years in life sciences 22 years at Ag
Slide 9: Leading lab partner with unsurpassed capabilities and scale
Leading lab partner with unsurpassed capabilities and scale 285K+ 110 $6.5B 26.4% $5.29 Labs served Countries served FY24 revenue FY24 operating margin(1) FY24 earnings per share(1) Lab partner with global scale Evolving product mix Services, Instrumentation Consumables 36% and Software 64% 40% 27%
Slide 10: Agilent's strong fundamentals
Agilent’s strong fundamentals Leading Robust Record level for Unparalleled Strong free cash portfolio customer digital orders customer flow conversion retention support #1 90%+ $1B+ 90%+ 84% In key platform Customer retention Digital orders in Industry leading FY20-24 FCF as a technologies rate FY24
Slide 11: Strategy built on customer-centric vision
Strategy built on customer-centric vision Customer end-market Pharma & BioPharma Clinical & Diagnostics Applied Markets Strategic priorities Portfolio expansion High growth Software and Lab productivity and innovation segments informatics Critical enablers Commercial Digital Ignite Top talent 11
Slide 12: Our strategy enhances our unique positioning to drive value
Our strategy enhances our unique positioning to drive value Establish new org structure to support customer- and market-centric strategy Address customer needs via product launches, innovation, and investments Target high growth segments with our legacy of strong innovation Digitize through software
Slide 13: Serving growing markets that advance quality of life
Serving growing markets that advance quality of life $80B (1) Opportunity 4-6% growth $25B (1) Pharma & 5–7% BioPharma growth Clinical & Chemical & Environmental Food Advanced & Forensics Diagnostics Materials Academic & $14B (1) $20B (1) $8B (1) $7B (1) $6B (1) 5-7% 3-5% 2-4% 2-4% Government 3-5% g
Slide 14: Growth of underlying markets remains strong
Growth of underlying markets remains strong Increase in pharma R&D spend 6%+ Growth per year 2024-26(1) Pharma pipeline growth accelerated by novel modalities 7%+ Pipeline growth from 2024-28(1) Increase in cancer testing 40%+ Increase in tests from 2020-2023(1) Increase in PFAS testing globally & a
Slide 15: Leveraging our technological foundation to meet customer needs
Leveraging our technological foundation to meet customer needs Our foundation was built as a …We shifted to be customer and end-market focused product-centric organization… Pharma & BioPharma Providing trusted solutions to leading innovators of life advancing therapies Clinical & Diagnostics Supplyi
Slide 16: New organizational structure supports market and customer focus
New organizational structure supports market and customer focus Life Sciences & Diagnostics Applied Markets Group Agilent CrossLab Group Group (LDG) (AMG) (ACG) $2.5B $1.3B $2.7B Liquid Chromatography (LC) Gas Chromatography (GC) Analytical Consumables LC Mass Spectrometry (LCMS) GC Mass Spectrometr
Slide 17: Investing in differentiating innovation
Investing in differentiating innovation Leading scientific Refreshed Providing Driving Increasing lab expertise across portfolio across valuable innovation with efficiency with AI all end-markets all major platforms customer ~$450M(1) and advanced in last 5 yrs insights through investment in R&D ana
Slide 18: Launching innovative solutions to meet customer needs
Launching innovative solutions to meet customer needs Pharma & BioPharma Clinical & Diagnostics Applied Markets Upgrading solutions to Delivering superior Enhancing sensitivity and drive higher throughput patient outcomes with speed instruments for and efficiency enhanced precision high-growth appli
Slide 19: Expanding customer value
Expanding customer value Expanding our Targeting fast- offerings growing geographies Increasing lab Investing in Capturing customer productivity software lifetime value 14% 85% 80%+ Revenue Growth Revenue CAGRin enterprise in Customers with demand for Customer contract contracts enterprise in last 5
Slide 20: A customer-first approach to sustainability
A customer-first approach to sustainability Environmental Certified pre-owned Sustainable product Sustainable product product labels instruments design packaging Infinity III LC Series Among the first to adopt Most comprehensive Products designed Streamlined recycling My Green Lab’s ACT circular eco
Slide 21: Meeting our customers with industry-leading services
Meeting our customers with industry-leading services 4000+ 75%+ 2500+ Service engineers Of service engineers hold On-site service calls degrees in chemistry or fulfilled daily biochemistry 800 25% 90%+ Service partners Of service engineers hold Customer support rating advanced degrees $1.6B Analytic
Slide 22: Increasing investments to drive growth
Increasing investments to drive growth Portfolio M&A and Capex Launched Infinity III LC NASD Series – smart sustainable Building capacity for growth footprint Launched 8850 GC System Acquired September 2024 – expands – smallest high-performance CDMO capabilities benchtop GC Launched Revident LC/Q-TO
Slide 23: Focusing on high-growth value chain segments
Focusing on high-growth value chain segments Acquisition of BIOVECTRA strengthens our position as partner of choice for CDMO services Deepening engagement with our Pharma customers Adds expertise in rapidly growing segments (e.g., GLP-1) Provides customers with a single source for gene-editing
Slide 24: Our culture attracts top talent and drives results
Our culture attracts top talent and drives results No. 11 Forbes Named to Newsweek’s Best New Drug Fortune World’s World's Best list of America’s greatest Discovery & Development Best Workplaces Employers workplaces Product 2023 Agilent’s leading work environment enables teams to drive impact Our ta
Slide 25: Pursuing regional opportunities to fuel our long-term growth
Pursuing regional opportunities to fuel our long-term growth China +3% CAGR(1) Government investment in Europe healthcare to service an +6% CAGR(1) aging population Investment driven by Strict European regulations, Government’s 3-year improving lab productivity, equipment renewal sustainability and
Slide 26: Ignite transformation: embarking on a transformational journey
Ignite transformation: embarking on a transformational journey… For our customers Create a seamless customer experience across Agilent products, software and services For our employees Reduce bureaucracy and complexity to enhance our ability to serve our customers For our shareholders Deliver indust
Slide 27: Introducing Ignite: three themes shape our transformation
Introducing Ignite: three themes shape our transformation Simplicity & Growth Productivity & Customer- Acceleration Scalability Centricity Better combine product Operate with customer first Increase operational offerings, expand portfolio, mindset and reduce productivity and reduce and accelerate in
Slide 28: Our roadmap to success
Our roadmap to success Accelerate Rebuilding Momentum • Innovations in high-growth markets expanding share • Lab productivity and service • Experienced team driving leadership driving customer customer-focused, market- lifetime value driven strategy • Strategic pricing boosting • Taking advantage as
Slide 29: Outcomes: deliver above-market growth & margin expansion
Outcomes: deliver above-market growth & margin expansion Above Market Operating Margin EPS Growth Growth Expansion Core Revenue 5-7% annually(1)(2) 50-100+ bps/yr(1) Double Digits Our new market-centric strategy and Ignite transformation drive differentiated results. Inorganic capital deployment is
Slide 30: Simon May
Simon May President of Life Sciences & Diagnostics Markets Group 25 years in life-sciences industry Experience at Bio-Rad and Thermo Fisher Scientific 30
Slide 31: LDG: Leader in growth markets
LDG: Leader in growth markets $59B 4-6% $2.5B 19.6% TAM(1) Market growth(1) FY24 revenue FY24 operating margin(2) Applied Markets CDMO LC & Pharma & LCMS BioPharma Academic & Pathology & Government $25B(1) Pharma & End 5–7% Companion Product Diagnostics BioPharma Market growth Category Revenue Reven
Slide 32: Strong market fundamentals
Strong market fundamentals Higher demand for Accelerating demand in Increased frequency and Growing emphasis on specialized CDMO pharma manufacturing & breadth of cancer testing workflow simplification services driven by new QA/QC and cost reduction modalities 17%+ 200+ 40%+ 25K+ CAGR from 2024-34(1
Slide 33: We are well positioned to win in Life Sciences & Diagnostics
We are well positioned to win in Life Sciences & Diagnostics Portfolio strength Innovation leadership Leading partner Portfolio supports high-growth Advanced therapeutics Comprehensive portfolio with segments including GLP-1 manufacturing for 10+ high strong presence in 50%+ of workflow solutions an
Slide 34: Strong portfolio and customer base
Strong portfolio and customer base Foundation of the lab Leader in Cell Analysis Scaled CDMO services Cornerstone in advanced in LC and LCMS staining pathology NASD + 1290 & 1260 Infinity III LC Seahorse XF Pro Analyzer Dako Omnis 115+ 90K+ 100+ 100M+ Recent innovations Installed base across cell Ne
Slide 35: Fueling the future with our growth vision
Fueling the future with our growth vision Drive portfolio innovation for 150K+ advanced therapeutic modalities Installed base of LC/LCMS $1B+ Expand into high-growth adjacencies Deployed to expand e.g., CDMO & specialized manufacturing therapeutic nucleic acids manufacturing capacity since 2018 Driv
Slide 36: Growing portfolio innovation for advanced therapeutic modalities
Growing portfolio innovation for advanced therapeutic modalities Large LC and LCMS installed base in Large installed base analytical development, commercial/QC Rising demand (MSD-HSD) for workflow Emerging modalities solutions in MAM(1), oligonucleotides, and peptide therapeutics (e.g., GLP-1) Workf
Slide 37: Takeaways for Life Sciences & Diagnostics Markets Group
Takeaways for Life Sciences & Diagnostics Markets Group LDG growth drivers 4-6% • New product launches (e.g., Infinity III) Mid to high underlying single digit growth rate • CDMO expansion long-term of markets growth • Pathology market penetration Strong portfolio plays in attractive & durable marke
Slide 38: Mike Zhang
Mike Zhang President of Applied Markets Group 22 years at Agilent Extensive leadership in Asia and the US, and Applied Markets 38
Slide 39: AMG: Trusted partner across key segments in Applied Markets
AMG: Trusted partner across key segments in Applied Markets $21B 2-4% $1.3B 24.0% TAM(1) Market growth(1) FY24 revenue FY24 operating margin(2) Academic & Clinical & Certified Government Diagnostics Pre-Owned Chemicals & Advanced Pharma & Materials GC & BioPharma GCMS Spectroscopy End & Vacuum Produ
Slide 40: We play in attractive core markets with emerging opportunities
We play in attractive core markets with emerging opportunities Increased demand for Growth in demand for Increasingly stringent Global renewable energy semiconductor testing batteries driven by EV food and environmental transformation creating equipment and software and energy storage regulations fo
Slide 41: We are uniquely positioned to win in Applied Markets
We are uniquely positioned to win in Applied Markets Largest Differentiated Broadest Global Installed Base Innovation Product Portfolio Trusted partner for 100K+ labs, 50+ year legacy of innovation with Best-in-class ability to meet positioned for sustainable growth market shares more than double cu
Slide 42: We enable our customers with our strong, innovative portfolio
We enable our customers with our strong, innovative portfolio Best-in-Class Atomic Top Player in Mass Global Leader in Innovative Molecular Spectroscopy Solutions Spectrometry Separations Spectroscopy 7900 6495D LC / 7010D Triple 1290 8890 Insight200M Liquid Explosive ICP-MS Triple Quadrupole Quadru
Slide 43: Building enduring leadership in emerging opportunities
Building enduring leadership in emerging opportunities Enhance market leadership in PFAS across all #1 testing modalities Market share for PFAS workflow solutions Grow share in semiconductor & batteries with #1 combined GC, GCMS and Spectroscopy leadership Market share in GC, GCMS, and ICPMS Drive c
Slide 44: Leading end-to-end solutions for the PFAS market
Leading end-to-end solutions for the PFAS market Best-in-class instrument, sample prep, Market leadership in automation, and data analysis software routine testing labs driving 30%+ growth in FY24 US, EU, and China regulations driving Rapid expansion of expansion of water, soil, food, air, and PFAS
Slide 45: Takeaways for Applied Markets Group
Takeaways for Applied Markets Group AMG growth drivers 2-4% • Enhance market leadership in PFAS Low to mid- underlying single digit growth rate of • Grow share in semiconductor & batteries long-term core applied • Drive customer lab productivity and lifetime value growth markets by leveraging larges
Slide 46: Angelica Riemann
Angelica Riemann President of Agilent CrossLab Group 25 years at Agilent Extensive product, commercial, and market experience 46
Slide 47: ACG: Leader across all markets
ACG: Leader across all markets $80B 4-6% $2.7B 33.7% TAM(1) Market growth(1) FY24 revenue FY24 operating margin(2) Clinical & Academic & Diagnostics Software & Government Automation Pharma & BioPharma Food End Product Market Consumables Category Services Environmental Revenue & Forensics Revenue Che
Slide 48: Strong market fundamentals
Strong market fundamentals Global shortages of skilled Desire for efficiency and next-level Shift towards personalized laboratory personnel amplifying insights driving demand for medicine fueling demand for need for expert services software solutions specialized consumables 10%+ 85% 38% Of new thera
Slide 49: We are uniquely positioned to win
We are uniquely positioned to win Access across the Service leader Strong installed base Broad portfolio lab Full range of industry- Drive recurring Breadth and depth leading lab services revenue by growing Access to 750K+ across platforms that with 90% customer attach rate in broad instruments acro
Slide 50: Strong partnership, portfolio and customer base
Strong partnership, portfolio and customer base Trusted partner Strong presence Expanding software in services in consumables and automation Delivering AI and ML-powered 4K+ highly trained service Hundreds of complete solutions to boost customer professionals workflows supported productivity 50
Slide 51: Fueling the future with our growth vision
Fueling the future with our growth vision Enhance customer productivity 100% Enterprise services with lab monitoring customers engaged with CrossLab Connect Focus on customer lifetime value with ~400 bps Increase in service consumables, software, and services contract attach rate since 2020 Strength
Slide 52: Enhancing customer productivity with CrossLab Connect
Enhancing customer productivity with CrossLab Connect Turnkey solutions for asset management Digital lab insight and utilization with AI insights across 1000+ types of instruments Optimize Innovativebudget planningfor consumables and lab spend superior Business intelligence with proactive pharma ins
Slide 53: Takeaways for Agilent CrossLab Group
Takeaways for Agilent CrossLab Group ACG growth drivers 4-6% • Increasing services and consumables attach rate High single underlying growth rate • Extending leadership in high-growth digital digit long- and enterprise services term growth of markets • New software and workflow solutions for product
Slide 54: Bob McMahon
Bob McMahon Chief Financial Officer 6+ years at Agilent 10+ years as public-company CFO 30+ yrs in healthcare, including Agilent, Hologic and Johnson & Johnson 54
Slide 55: Agilent shareholder value creation model
Agilent shareholder value creation model Above Market Operating Margin Growth Focused Growth Expansion Capital Deployment Focusing on Faster Growth Segments Process Simplification R&D and Revenue-generating CapEx Increasing Customer Lifetime Value Increasing Productivity via Digital Growth Focused M
Slide 56: Agilent delivering over the current market cycle
Agilent delivering over the current market cycle Revenue Growth Margin Growth(1) EPS Growth(1) +6% CAGR +290 bps 13% CAGR $5.29 $6.5B 26.4% $5.3B 23.5% $3.28 FY20 FY24 FY20 FY24 FY20 FY24 While our end markets have gone through an exceptional period, Agilent has continued to deliver (1) Presented on
Slide 57: Continuing to shift portfolio towards recurring revenues
Continuing to shift portfolio towards recurring revenues Over the past decade Recent Progress Instruments Non-Instruments ~400 bps 64% FY20-24 increase in service-contract attach rate 54% (2) 46% $1.6B in Services 36% FY20-24 Core Revenue CAGR: 10% (3) $0.9B in Consumables FY20-24 Core Revenue CAGR:
Slide 58: Capturing market opportunities drives long-term growth algorithm
Capturing market opportunities drives long-term growth algorithm (1) +5-7% Long-term Projected Segment Projected Growth Long-Term Growth Key Growth Drivers +6% $6.8-6.9B(2) High-Single Digits CAGR $6.5B Increasing connect rates New productivity solutions Enterprise Solutions $5.3B 2.7 ACG 2.0 Mid to
Slide 59: Double-digit EPS growth, enhanced by share repurchases
Double-digit EPS growth, enhanced by share repurchases $5.29 Revenue Growth & 13% +8% CAGR Margin Expansion CAGR +3% CAGR Below-the-Line Optimization $3.28 +2% CAGR Share Repurchases FY20 FY24 High-quality earnings growth driven by revenue and margin expansion 59
Slide 60: Ignite transformation provides roadmap for continued growth
Ignite transformation provides roadmap for continued growth Growth Simplicity & Productivity & Acceleration Customer-Centricity Scalability Better combine product offerings, Operate with customer first Increase operational productivity expand portfolio, and accelerate mindset and reduce complexity i
Slide 61: Margin expansion and reinvestment enabled by Ignite
Margin expansion and reinvestment enabled by Ignite Annual Operating Margin Improvement +50-100+ bps -50 bps +50 bps Strategic 26.4%(1) Re-investment 50-100+ bps Software Leverage on Digital Annual 23.5%(1) Revenue Growth Operating Model Op Margin and Mix Pricing Expansion Procurement FY20 FY24 Reve
Slide 62: Strong cash generation engine and healthy balance sheet
Strong cash generation engine and healthy balance sheet Adj-Net Income Op.Cash Flow Operating Cash Flow $1.8B increased faster than Adjusted $1.5B Net Income – providing funding for growth $1.0B $0.9B 1.1x Net Leverage Ratio with no material repayments until FY 20 FY 24 2026(1) (1) As of 10/31/24, S
Slide 63: Return of capital to shareholders
Return of capital to shareholders Annual Dividend Per Share Diluted Shares Outstanding 0.8% yield(1) 312M $0.99 $0.94 291M 286M $0.72 FY20 FY24 FY25E FY20 FY24 FY25E Best-in-class dividend yield while reducing share count over time (1) Dividend yield based on forecasted cash dividend divided by shar
Slide 64: Excellent stewards of capital, focusing on growth
Excellent stewards of capital, focusing on growth FY20-24 FY20-24 Capital allocation Future Higher $ Investment % Investment priority Organic investment R&D and CapEx $3.5B 34% 50-70% of total investment Targeted M&A aligned with strategy $1.5B 15% Dividend growth $1.2B 12% 30-50% of total Anti-dilu
Slide 65: Agilent's global manufacturing footprint
Agilent’s global manufacturing footprint North America Europe Asia Canada Denmark Netherlands China US Germany UK Malaysia Italy Singapore Global manufacturing footprint provides flexibility & reduces risk Services delivered by local teams 65
Slide 66: Long-term plan: deliver above-market growth & margin expansion
Long-term plan: deliver above-market growth & margin expansion Above Market Operating Margin EPS Growth Growth Expansion Core Revenue 5-7% annually(1)(2) 50-100+ bps/yr(1) Double Digits Our new market-centric strategy and Ignite transformation drive differentiated results Inorganic capital deploymen
Slide 67: Q1 & FY25 guidance reminder
Q1 & FY25 guidance reminder Based on forecasted currency exchange rates Q1 25 Guidance (1) Low End High End FY 25 Guidance (1) Low End High End Net Revenue ($M) $1,650 $1,680 Net Revenue ($M) $6,790 $6,870 Core Revenue Growth (2) -2.0% -0.2% Core Revenue Growth (2) +2.5% +3.5% -0.3% FX, +1.8% M&A -0
Slide 68: Takeaways for today
Takeaways for today Established leader in large, attractive markets driven by secular growth Leading market share and sustainable competitive advantage with our differentiated customer focus Delivering 5-7% long-term core Re-accelerating growth through innovation growth and double-digit EPS Driving
Slide 69: Agilent Trusted Answers
tS Agilent Trusted Answers
Slide 70: Glossary of terms
Glossary of terms ACG Agilent CrossLab Group AMG Applied Markets Group CDMO Contract Development & Manufacturing Organization CGT Cell & Gene Therapy GC Gas Chromatography GCMS Gas Chromatography Mass Spectrometry ICPMS Inductively Coupled Plasma Mass Spectrometry IHC Immunohistochemistry ISH In Sit
Slide 71: Reconciliation of Non-GAAP Income from Operations and Operating Margins
AGILENT TECHNOLOGIES, INC. RECONCILIATION OF NON-GAAP INCOME FROM OPERATIONS AND OPERATING MARGINS (In millions, except margin data) (Unaudited) Year Over Year Operating Operating Margin FY24 FY20 Percent Pts Margin % % Inc/(Dec) GAAP Revenue $ 6,510 $ 5,339 Income from operations: GAAP Income from
Slide 72: Reconciliation of Operating Income and Margin to Non-GAAP and Segment Operating
AGILENT TECHNOLOGIES, INC. RECONCILIATION OF OPERATING INCOME AND MARGIN TO NON-GAAP AND SEGMENT OPERATING INCOME AND MARGIN (In millions, except margin data) (Unaudited) Operating FY24 Margin % Revenue: Life Sciences and Diagnostics Markets Group (LDG) $ 2,466 Agilent Crosslab Group (ACG) 2,747 App
Slide 73: Non-GAAP Net Income and Diluted EPS Reconciliations
AGILENT TECHNOLOGIES, INC. NON-GAAP NET INCOME AND DILUTED EPS RECONCILIATIONS (In millions, except per share data) (Unaudited) FY24 FY20 Net income Diluted EPS Net income Diluted EPS GAAP net income $ 1,289 $ 4.43 $ 719 $ 2.30 Non-GAAP adjustments: Restructuring and other related costs 76 0.26 — —
Slide 74: Net Debt to Adjusted EBITDA Calculation
AGILENT TECHNOLOGIES, INC. NET DEBT TO ADJUSTED EBITDA CALCULATION (in millions, except ratio data) (Unaudited) As of October 31, 2024 Long-term debt $ 3,345 Short-term debt 45 Cash & cash equivalents (1,329) Net debt $ 2,061 Trailing 12- Q1'24 Q2'24 Q3'24 Q4'24 Month GAAP net income $ 348 $ 308 $ 2
Slide 75: Reconciliation of Free Cash Flows to Non-GAAP Net Income Ratio
AGILENT TECHNOLOGIES, INC. RECONCILIATION OF FREE CASH FLOWS TO NON-GAAP NET INCOME RATIO (in millions, except ratio data) (Unaudited) FY24 FY23 FY22 FY21 FY20 Total Net cash provided by operating activities $ 1,751 $ 1,772 $ 1,312 $ 1,485 $ 921 $ 7,241 Less: Payments to acquire property, plant and