Waters Corporation · NYSE:WAT
Waters — J.P. Morgan 41st Annual Healthcare Conference (January 2023)
28 slides from Waters's conference presentation, Jan 9, 2023
Slide 1: J.P. Morgan 41st Annual Healthcare Conference
J.P. Morgan 41st Annual Healthcare Conference Udit Batra, Ph.D. President & CEO January 9, 2023
Slide 2: Cautionary Statements
Cautionary Statements This For this presentation purpose, any contains statements forward that -looking are not statements statements regarding of historical future fact results may be and deemed events, forward including -looking financial statements and operational . Words guidance such as “may,”
Slide 3: Key Messages
Key Messages Consistently Strong Execution Innovation Revitalized Adjacencies Gaining Traction
Slide 4: Waters at a Glance
Waters at a Glance (NYSE:WAT) ï,§ Liquid chromatography, mass spectrometry, and thermal analysis innovator ï,§ Industry-leading service and informatics ï,§ Partner with customers around the world to ensure the: —Efficacy, safety & quality of medicines and vaccines —Purity of our food and water —Dura
Slide 5: A Simple and Repeatable Business Model
A Simple and Repeatable Business Model Note: Awards 1. for Total proven R&D excellence spending as and a percentage innovation in of Customer non-service Experience total company programs revenue . 3. According based on to trailing internal twelve analysis, -months ~80% (TTM) of the as reported, dru
Slide 6: High Exposure to Resilient, Growing Markets
High Exposure to Resilient, Growing Markets TOTAL ADDRESSABLE MARKET $12BN1 MSD GROWTH ~80% of Waters Revenues1 in Resilient Markets Note: statements Growth and rates are here subject reflect to inherent our internal uncertainties analysis of that historical, could cause long -actual term market res
Slide 7: With a Strong, Innovative Portfolio
With a Strong, Innovative Portfolio Waters Portfolio (Select Products Shown) Instruments Recurring Revenues Source: Waters Corporation data, analysis, and estimates. ©2023 Waters Corporation
Slide 8: Resulting in Industry-Leading Financials
Resulting in Industry-Leading Financials Note: publicly 1. reported Based on total calculations performance comparing or analytical Waters’ instrument 3-year average segment compound performance growth (depending rates from on year which -over is -the year most constant relevant currency comparison
Slide 9: Key Messages
Key Messages Consistently Strong Execution Innovation Revitalized Adjacencies Gaining Traction
Slide 10: Broad Strength in Our Results
Broad Strength in Our Results 2022 YTD (As Of 3Q22) Total: +14% Organic Revenue Growth in Constant Currency Y/Y Organic Sales Growth in Constant Currency (Year-To-Date As Of 3Q22) Portfolio Geography End Markets Instruments +19% Americas +17% Pharma +12% Service +9% Europe +10% Indust. & Applied +15
Slide 11: Consistently Strong Execution Since Our Transformation...
Consistently Strong Execution Since Our Transformation... Organic Revenue Growth in Constant Currency Execution Scorecard (3-yr CAGR FY20-22 YTD As Of 3Q22) Portfolio Geography End Markets Instruments +10% Americas +9% Pharma +10% Recurring +8% Europe +9% Non-Pharma* +7% Asia +8% *Non-pharma = Indus
Slide 12: ...Leading to Top-Quartile Results
...Leading to Top-Quartile Results YTD Organic Sales Growth 1 3-yr CAGR FY20-22 YTD As Of 3Q22 publicly Note: 1. reported Based on total calculations performance comparing or analytical Waters’ instrument 3-year average segment compound performance growth (depending rates from on year which -over is
Slide 13: Strong Contribution from Commercial Initiatives
Strong Contribution from Commercial Initiatives Commercial Initiatives Solid Progress Made with Long-Term Runway Ahead 1 Instrument Replacement Strong cadence established; lasting tailwind with ongoing replacement 2 Service Attachment +350bps since 2019; 650bps remaining vs +1000bps target 3 Contrac
Slide 14: Key Messages
Key Messages Consistently Strong Execution Innovation Revitalized Adjacencies Gaining Traction ©2023 Waters Corporation 13
Slide 15: New Products Solving Unmet Needs
New Products Solving Unmet Needs Launches during the Past Two Years Characterize biologics Robust QA/QC with by shape and mass 17x faster, 12x more Biologics testing, Supporting new more precision and speed Enabling large sensitive separation of new food safety, and battery testing demand 100x incre
Slide 16: Innovation Supporting Core Growth Opportunities
Innovation Supporting Core Growth Opportunities ï,§ï Up to 15x better sensitivity1 ï,§ï Up to 45% smaller and up to 50% more power efficient2ï,§ï Data review time reduced by up to ~50% with waters_connect3 PFAS Testing Market New regulatory limits driving increased surveillance testing with greater
Slide 17: Key Messages
Key Messages Consistently Strong Execution Innovation Revitalized Adjacencies Gaining Traction
Slide 18: Taking Capabilities into Faster-Growing Adjacencies
Taking Capabilities into Faster-Growing Adjacencies Strong Core Position ï,§ï Pharma QA/QC ï,§ï Late-Stage Drug Developmentï,§ï Food and Environmental Safetyï,§ï Clinical Diagnosticsï,§ï Materials Testing Faster-Growing Adjacencies ï,§ï Bio-separations ï,§ï Bioanalytical Characterizationï,§ï LC-MS i
Slide 19: High-Growth Adjacencies
High-Growth Adjacencies TAM Market Growth Growth Drivers Bio-separations1 $1.4BN 8-10% ï,§ï and Biologics volume and novel modality complexity Bioanalytical $1.8BN 10-12% ï,§ï Raw material, process development, and Characterization2 QA/QC testing of biologics and novel modalities LC-MS in Diagnostic
Slide 20: Accelerating Bioanalytical Characterization
Accelerating Bioanalytical Characterization 1 RAW MATERIALS 2 PROCESS 3 QA / QC FOR TESTING DEVELOPMENT BIOLOGICS Fingerprinting components Upstream and downstream Critical quality attributes Cell culture media testing bioprocess optimization measurement during production C U ST O M E R E X A M P L
Slide 21: Leaving the World Better Than We Found It
Leaving the World Better Than We Found It 2022 ESG Highlights Environmental Social Governance Reducing our most significant Becoming more representative Enhancing long-term stakeholder environmental impacts. of the society we live in. value with effective oversight. ~60% 100/100 44% of electricity f
Slide 22: Putting It All Together
Putting It All Together Near-Term Mid-Term $19BN ï,§ $12BN Core TAM Market $12BN ï,§ $12BN Core TAM + $7BN Adjacencies Opportunity CORE CORE + ADJACENCIES + ï,§ MSD-HSD end market mix Growth MSD ï,§ MSD end market mix + Additional volume leverage +100bps + Productivity gains + + Productivity gains +
Slide 23: Key Messages
Key Messages Consistently Strong Execution Innovation Revitalized Adjacencies Gaining Traction
Slide 24: Appendix: GAAP to Non-GAAP Reconciliations
Appendix GAAP to Non-GAAP Reconciliations
Slide 25: Reconciliation of GAAP to Adjusted Non-GAAP Net Sales
Reconciliation of GAAP to Adjusted Non-GAAP Net Sales by Operating Segments, End Markets, Geography, and Products & Services YTD Q3 2019—2022 % Growth Currency % Growth % Growth Currency % Growth (in millions USD) 2022 2021 Reported Impact CC 2021 2020 Reported Impact CC 2022 vs. 2021 2021 vs. 2020
Slide 26: Reconciliation of GAAP to Adjusted Non-GAAP Net Sales (cont'd)
Reconciliation of GAAP to Adjusted Non-GAAP Net Sales by Operating Segments, End Markets, Geography, and Products & Services YTD Q3 2019—2022 (cont’d) % Growth Currency % Growth Reported % CC % (in millions USD) 2020 2019 Reported Impact CC 3 YR CAGR 3 YR CAGR 2020 vs. 2019 2022 vs. 2019 2022 vs. 20
Slide 27: Operating Income Reconciliation of GAAP to Adjusted Non-GAAP
Operating Income Reconciliation of GAAP to Adjusted Non-GAAP Trailing Twelve Months (TTM) Ended October 1, 2022 (in thousands) Operating Operating Income Trailing Twelve Months Income Percentage GAAP $ 849,312 28.8% Adjustments: Purchased intangibles amortization 6,598 0.2% Acquired in-process resea
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