Agilent Technologies, Inc. · NYSE:A
Agilent Technologies — Credit Suisse Annual Technology Conference 2010
24 slides from Agilent Technologies's conference presentation, Dec 2, 2010
Slide 1: Agilent Technologies Credit Suisse Annual Technology Conference
AGILENT TECHNOLOGIES CREDIT SUISSE ANNUAL TECHNOLOGY CONFERENCE RON NERSESIAN DECEMBER 2, 2010 PRESIDENT THE PHOENICIAN ELECTRONIC MEASUREMENT GROUP SCOTTSDALE, AZ
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 FY10 Revenue: $2.8B FY10 Revenue: $1.2B FY10 Revenue: $1.5B FY10 Op Profit Margin* 16% FY10 Op Profit
Slide 4: Q4 2010 Financial Highlights
Q 4 2 0 1 0 F INANCIAL H IGHLIGHTS Orders = $1.69B, +32% y/y (+23% organic) Revenues = $1.58B, +36% y/y (+26% organic): • LSG +35% y/y (+17% organic) • CAG +73% y/y (+17% organic) • EMG +23% y/y (+35% organic) Cash Flow from Operations = $367M ROIC* = 24% Operating Profit Margin* = 19% * Presented o
Slide 5: How We Win
H OW W E W IN • Market reach and customer trust • 5,500 sales and marketing employees supporting customers in over 100 countries • #1 customer loyalty ranking in every major product category* • 37% of Agilent revenue from Asia Pacific in Q4’10 • Technology leadership • $600M/year, 11% Revenue invest
Slide 6: Global Scale and Scope
G LOBAL S CALE AND S COPE Global revenue and operational footprint offers unmatched coverage and hedges risk Revenue by Geography Q4’10 Headcount by Geography Q4’10 Agilent 18,500 Worldwide Employees 8,000 7,000 Asia Pacific Americas 6,000 5,000 37% 37% Asia Pacific 4,000 3,000 Europe Europe 2,000 A
Slide 7: Agilent Revenue Distribution by End Market
A G I L E N T R E V E N U E D I S T R I B U T I O N BY E N D M A R K E T $41B Measurement Market Opportunity FY 2010 Agilent Revenue Markets Size ($B) Growth Life Sciences 19 5% - 7% Aerospace & Chemical Analysis 10 5% - 6% Defense Pharma Electronic 12% 14% Measurement 12 4% - 5% Academic & Govt. To
Slide 8: EM Strengths Leveraged Broadly
E M S T R E N G T H S L E V E R A G E D B R O A D LY From the beginning, EM is the technology foundation to launch and build HP/Agilent businesses. Together we win. Life Sciences Chemical Analysis Computer Medical EM Technology and Expertise 1939 Electronic Measurement 2010 Page 8
Slide 9: EM Market Segments and Agilent Position
E M M ARKET S EGMENTS AND AGILENT P OSITION Aerospace Defense $3B #1 in market market Secular Customers include: US growth: Department of Defense, 4-7% Raytheon, Lockheed Martin Industrial, Computers, Semiconductors $5B #1 in market market Secular Customers include: Intel, growth: Foxconn, Flextroni
Slide 10: EMG's Strategy to Differentiate and Win
E M G ’ S S T R AT E G Y TO D I F F E R E N T I AT E A N D W I N EMG introduced >200 new products & applications in FY09-10 Page 10
Slide 11: Significant Shift in Agilent's Business Mix
S IGNIFICANT S HIFT IN AGILENT’ S B USINESS M IX SEGMENT PAST * CURRENT (FY05) (FY10) Aerospace Defense TOTAL 11% 24% Industrial, Computer, Semiconductor TOTAL 63% 40% GENERAL PURPOSE TOTAL 74% 64% COMMUNICATIONS TOTAL 26% 36% Agilent non-bio-analytical TOTAL 100% 100% * Includes divested semiconduc
Slide 12: New EMG Business Model Increases Profits
N EW E M G B USINESS M ODEL I NCREASES P ROFITS Actions taken through recent cycle position EMG for superior financial performance compared with previous cycles Improving business model through the cycle Previous This Cycle Future Cycle (2008-2009) Similar Cycle Future PEAK FY00 FY08 FY - - Revenue
Slide 13: EMG FY10 Results
E M G F Y 1 0 R E S U LT S FY10 Growth vs. FY09 EMG’s highest order Orders $2,994M + 25% growth, gross margin %, and operating Revenue $2,784M + 15% margin in Gross 58.4% + 4.9 points the last decade Margin (FY01-FY10) Op Profit* $438M +$437M 16% ROIC* 23% + 22 points * Presented on a non-GAAP basis
Slide 14: Appendix
APPENDIX Agilent Technologies
Slide 15: EM Market Drivers
E M M ARKET D RIVERS MARKET GROWTH DRIVERS SEGMENT A/D T&M U.S. Defense RDT&E budget; test equipment modernization; defense program spending with bidding process; growth outside US A/D Op Surveillance Homeland security; greenfield for new Agilent products Semiconductor SIA semiconductor revenues; co
Slide 16: Transformed EMG Business Model
T RANSFORMED E M G B USINESS M ODEL Restructure to 12% Migrate portfolio to less Increase variability of cost Proof points operating profit (non cyclical markets structure to modulate with GAAP) at $600M quarterly business cycles revenue • Shed non- • Less investment in • Expanded indirect sales • S
Slide 17: Varian Update
V A R I A N U P D AT E • On track to meet revenue and synergy targets • Increased synergies to $100M from $75M, net of incremental investments in Varian R&D and Support • Legal entities combined November 1, 2010 • Employees transferred to Agilent entities and systems • Customer facing processes, sys
Slide 18: 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 19: 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 20: 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: Q4'10 Q4'10 Q4'10 Q4'10 Q4'09 Q4'09 Q4'09 Q4'09 Q3'10 Q3'10 Q3'10 Non-GAAP income (loss) from operations $ 62 $ 86 $ 153 $ 303 $ 47 $ 62 $ 40 $ 150 $
Slide 21: Life Sciences Information
AGILENT TECHNOLOGIES, INC. LIFE SCIENCES INFORMATION (Unaudited) (In millions) FY 2010 Q1 Q2 Q3 Q4 Total Orders $ 336 $ 331 $ 391 $ 468 $ 1,526 Net revenue $ 340 $ 334 $ 374 $ 431 $ 1,479 Gross margin 54.4% 55.0% 53.8% 51.2% 53.5% Income from operations $ 55 $ 48 $ 56 $ 62 $ 221 FY 2009 Q1 Q2 Q3 Q4
Slide 22: Chemical Analysis Information
AGILENT TECHNOLOGIES, INC. CHEMICAL ANALYSIS INFORMATION (Unaudited) (In millions) FY 2010 Q1 Q2 Q3 Q4 Total Orders $ 242 $ 231 $ 350 $ 401 $ 1,224 Net revenue $ 244 $ 238 $ 329 $ 389 $ 1,200 Gross margin 55.1% 54.5% 52.7% 52.5% 53.5% Income from operations $ 67 $ 57 $ 69 $ 86 $ 279 FY 2009 Q1 Q2 Q3
Slide 23: Electronic Measurement Information
AGILENT TECHNOLOGIES, INC. ELECTRONIC MEASUREMENT INFORMATION (Unaudited) (In millions) FY 2010 Q1 Q2 Q3 Q4 Total Orders $ 642 $ 784 $ 750 $ 818 $ 2,994 Net revenue $ 629 $ 699 $ 692 $ 764 $ 2,784 Gross margin 57.3% 58.8% 58.8% 58.7% 58.4% Income from operations $ 58 $ 100 $ 127 $ 153 $ 438 FY 2009
Slide 24: Net Cash
AGILENT TECHNOLOGIES, INC. NET CASH (In millions) (Unaudited) PRELIMINARY Q4'10 Q4'09 Cash and cash equivalents $ 2,649 $ 2,479 Restricted cash and cash equivalents 1,550 1,566 Investments - debt securities - 36 Short-term debt (1,501) - Long-term debt - (1,516) Senior notes, par value (2,100) (1,35
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