Agilent Technologies, Inc. · NYSE:A

Agilent Technologies — Goldman Sachs 33rd Annual Global Healthcare Conference (June 2012)

29 slides from Agilent Technologies's conference presentation, Jun 6, 2012

  1. Slide 1: Agilent Technologies at Goldman Sachs 33rd Annual Global Healthcare Conference

    AGILENT TECHNOLOGIES G OLDMAN S ACHS 33 RD A NNUAL G LOBAL H EALTHCARE C ONFERENCE NICK ROELOFS, PH.D. PRESIDENT JUNE 6, 2012 LIFE SCIENCES GROUP RANCHO PALOS VERDES, CA

  2. 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

  3. 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 Measurement Analysis Sciences Group Group Group FY11 Revenue $3.3B FY11 Revenue $1.5B FY11 Revenue $1.8B FY11 Operating Margin* 23% FY11 Operating Margin* 21% FY11 Operating Margin* 13% FY11 Revenue $6.6B,

  4. Slide 4: FY2012 Financial Highlights

    F Y 2 0 1 2 F INANCIAL H IGHLIGHTS Q1 FY12 Q2 FY12 Q3 FY12 FY12 Actual Actual Guidance(1) Guidance(1) $1.77B - $6.94B - Revenue $1.6B $1.7B $1.79B $7.00B Core Revenue Growth(2) 7% 4% 7% 6% Operating Margin(3) 19.2% 19.5% $0.82 - $3.18 - EPS(3) $0.69 $0.78 $0.84 $3.24 ROIC(3) 23% 26% Operating Cash F

  5. Slide 5: Agilent Operating Model

    A G I L E N T O P E R AT I N G M O D E L * -1σ Most Likely +1σ Core Revenue Growth** 4% 8% 12% Expense Growth 3.5% 5% 6% YoY OM Incremental 20% 36% 43% What it is What it is not • Sustainable throughout a cycle. • Cookie-cutter approach. Businesses will • Goal to grow core revenue, under normal gene

  6. Slide 6: How Agilent Will Win: Focused Portfolio

    H OW AGILENT W ILL W IN: FOCUSED P ORTFOLIO Portfolio focused on high-return opportunities % of Market 3-Year Agilent Focus Agilent Size Market Revenue Growth Pharma & Biotech 14% $11B 4-6% Academic & Government Research 7% $10B 3-5% Chemical & Energy 13% $4B 6-8% Environmental & Forensics 10% $4B 2

  7. Slide 7: Life Sciences Market Overview

    L IFE S CIENCES M ARKET OVERVIEW A GILENT’ S L ARGEST M ARKET O PPORTUNITY Market Size: $21B+ Growth: 4-6% Pharma & 14% of Agilent Biotech revenue Growth Drivers • BRIC market strength • Continuing Global Academic and Government Life Science research Academia & investments 8% of Agilent Government R

  8. Slide 8: Pharma Market Trends

    PHARMA MARKET TRENDS Market Size: $11B Growth: 4-6% Pharma & 14% of Agilent Biotech revenue Market Trends • Rise in biologics; shift from New Chemical Entities (NCE) to New Biological Entities (NBE) • Geographic relocation of therapeutic production • Technology upgrade opportunities (e.g. UHPLC) • N

  9. Slide 9: Winning Solutions in Pharma

    W INNING S OLUTIONS IN P HARMA Market Reach & Customer Trust • Expanding our channel in China, India, Korea, Brazil • Increasing application engineers to support NBE transitions and technology upgrades • World-class service and support Technology Innovation & Application Solutions • Providing advanc

  10. Slide 10: Academic/Government Market Trends

    ACADEMIC/ G OVERNMENT M ARKET T RENDS Market Size: $10B Academia & Growth: 3-5% Government 8% of Agilent Research revenue Market Trends • Academic spending growth remains under pressure in G8 counties – concerns over governmental budgets and stimulus headwinds • Sustained strength in emerging market

  11. Slide 11: Winning Solutions in Academic/Government

    W INNING S OLUTIONS IN A CADEMIC/ G OVERNMENT Market Reach & Customer Trust • Expanding market penetration across all geographies via specialized academic sales channel • Leading in new emerging opportunities via workflow solutions (e.g. translational research investment) • Thought Leader Program –

  12. Slide 12: BAM Services: Accelerating Growth in All Markets

    BAM S ERVICES: ACCELERATING G ROWTH IN A LL M ARKETS BAM Market Growth: 5-6% Bio-Analytical Agilent BAM – Q4’11 & Q1’12 Growth: 10% Measurement (BAM) Services Market Growth: 4-6% Services Agilent BAM Services – Q4’11 & Q1’12 Growth: 17% BAM Services are essential to all markets Consult for Innovatio

  13. Slide 13: Molecular Diagnostics Market Path

    M O L E C U L A R D I A G N O S T I C S M A R K E T P AT H Demonstrated Life Science Success Molecular Diagnostic Market Size*: $4.5B Projected Growth*: 10-15% FY 2011 Revenue: $1.8B • Increased healthcare demands from global aging populations Technology Platform Status Platform Technologies • Emerg

  14. Slide 14: Dako Acquisition – Strategic Rationale

    D A KO A C Q U I S I T I O N – S T R AT E G I C R AT I O N A L E • Builds a solid foundation in two high growth diagnostics markets • Anatomic Pathology - $2.2B growing 8-10%* • Molecular Diagnostics - $4.5B growing 10-15%* • Adds channel and regulatory capability • Strategically complements Agilent

  15. Slide 15: Dako Transaction Terms & Financial Impact

    D A KO T R A N S A C T I O N T E R M S & F I N A N C I A L I M PA C T • $2.2B purchase price, all-cash transaction • Currently owned by European private equity firm, EQT Transaction Partners Terms • Expected to close within the next 60 days, subject to customary closing conditions and regulatory app

  16. Slide 16: How We Win in Life Sciences

    H OW W E W IN IN L IFE S CIENCES Delivering on a Focused Strategy Technology Market Reach & Innovation & Organizational Scale & Leverage Customer Trust Application Capabilities Solutions • Academic/ • Superior • Capitalize on • World-class Government product quality manufacturing in team with life c

  17. Slide 17: Agilent's Strategic Focus Going Forward

    AGILENT ’ S STRATEGIC FOCUS G OING FORWARD 1. Capitalize on Megatrends in Key Measurement Markets • Increasing mobility • Growing demand for energy • Improvements in human health and aging population • Food safety • Environmental 2. Continue Geographic Expansion: Rise of Emerging Markets • China: th

  18. Slide 18: Appendix

    APPENDIX ae Agilent Technologies

  19. Slide 19: Position, Sources and Uses of Cash

    P OSITION, S OURCES AND U SES OF C ASH 1. Cash Position as of 4/30/12 • Cash and cash equivalents of $3.9B, mostly offshore. 2. Sources of Cash • Expect to generate $0.9B Free Cash Flow* in FY 2012 • About 15% of Free Cash Flow generated in the U.S. About 10% can be repatriated tax effectively • Wou

  20. Slide 20: Q2'12 Revenue Distribution by Geography

    Q 2 ’ 1 2 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 • Q2’12 YoY currency-adjusted revenue growth: Americas +16%, Europe -5%, Japan -2%, Asia Pacific ex-Japan -1% • ~75% sales through direct channels, ~25% through indirect channels • Best in class manufacturing capability

  21. Slide 21: Reconciliations

    RECONCILIATIONS “Ee Agilent Technologies

  22. Slide 22: Electronic Measurement Segment

    AGILENT TECHNOLOGIES, INC. ELECTRONIC MEASUREMENT SEGMENT (Unaudited) PRELIMINARY (In millions, except margins and ROIC data) FY 2012 Q1 Q2 Q3 Q4 Total Orders $ 757 $ 957 $ 1,714 Net revenue $ 778 $ 876 $ 1,654 Gross margin % 57.8% 57.0% 57.4% Income from operations $ 160 $ 205 $ 365 Operating margi

  23. Slide 23: Chemical Analysis Segment

    AGILENT TECHNOLOGIES, INC. CHEMICAL ANALYSIS SEGMENT (Unaudited) PRELIMINARY (In millions, except margins and ROIC data) FY 2012 Q1 Q2 Q3 Q4 Total Orders $ 403 $ 408 $ 811 Net revenue $ 396 $ 388 $ 784 Gross margin % 51.7% 50.8% 51.3% Income from operations $ 88 $ 73 $ 161 Operating margin % 22.2% 1

  24. Slide 24: Life Sciences Segment

    AGILENT TECHNOLOGIES, INC. LIFE SCIENCES SEGMENT (Unaudited) PRELIMINARY (In millions, except margins and ROIC data) FY 2012 Q1 Q2 Q3 Q4 Total Orders $ 463 $ 476 $ 939 . Net revenue $ 461 $ 469 $ 930 Gross margin % 52.6% 51.5% 52.0% Income from operations $ 66 $ 59 $ 125 Operating margin % 14.3% 12.

  25. Slide 25: 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

  26. Slide 26: Reconciliation from GAAP to Non-GAAP, Three Months Ended April 30, 2012

    AGILENT TECHNOLOGIES, INC RECONCILIATION FROM GAAP TO NON-GAAP THREE MONTHS ENDED April 30, 2012 (Unaudited) PRELIMINARY NON-GAAP ADJUSTMENTS Acquisition & Intangible Transformational Integration Adjustment (In millions, except per share amounts) GAAP Amortization Initiatives Costs Other for Taxes N

  27. Slide 27: Reconciliation from GAAP to Non-GAAP, Year Ended October 31, 2011

    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

  28. Slide 28: 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: Q2'12 Q2'12 Q2'12 Q2'12 Q2'11 Q2'11 Q2'11 Q2'11 Q1'12 Q1'12 Q1'12 Q1'12 Non-GAAP income from operations $ 59 $ 73 $ 205 $ 337 $ 61 $ 72 $ 191

  29. Slide 29: Reconciliation of ROIC

    AGILENT TECHNOLOGIES, INC. RECONCILIATION OF ROIC (In millions) (Unaudited) PRELIMINARY Agilent Numerator: FY'11 Non-GAAP income from operations 1,310 Less: Taxes and Other (income)/expense 204 (a) Segment return 1,105 Segment return annualized 1,105 Denominator: (b) Segment assets 5,767 Less: (c) N

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