agilent technologies 17.آ  analyst & investor day 2016 1 agilent technologies institutional...

Analyst & Investor Day 2016

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AGILENT TECHNOLOGIES



INSTITUTIONAL INVESTOR MEETINGS

May & June 2017

Safe Harbor

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This presentation contains forward-looking statements (including, without limitation, information and future guidance on the company’s goals, priorities, revenues, operating profit and operating margin, growth opportunities, customer service and innovation plans, new product introductions, financial condition and considerations, earnings, share repurchases, dividends, ability to access capital markets, the continued strengths and expected growth of the markets the company sells into, operations, operating earnings, and tax rates) that involve risks and uncertainties that could cause results of Agilent to differ materially from management’s current expectations. The words “anticipate,” “plan,” “estimate,” “expect,” “intend,” “will,” “should” “forecast” “project” and similar expressions, as they relate to the company, are intended to identify forward-looking statements.

In addition, other risks that the company faces in running its operations include the ability to execute successfully through business cycles; the ability to successfully adapt its cost structures to continuing changes in business conditions; ongoing competitive, pricing and gross margin pressures; the risk that our strategic and cost-cutting initiatives will impair our ability to develop products and remain competitive and to operate effectively; the impact of geopolitical uncertainties on our markets and our ability to conduct business; the impact of currency exchange rates on our financial results; the ability to improve asset performance to adapt to changes in demand; the ability to successfully introduce new products at the right time, price and mix, and other risks detailed in the company's filings with the Securities and Exchange Commission, including our annual report on Form 10-Q for the quarter ended January 31, 2017.

The company assumes no obligation to update the information in these presentations. These presentations and the Q&A that follows include non-GAAP measures. Non-GAAP measures exclude primarily the future impacts of acquisition and integration costs, pension curtailment gain, transformational initiatives, business exit costs and divestiture, and non-cash intangibles amortization. Also excluded are tax benefits that are not directly related to ongoing operations and which are either isolated or cannot be expected to occur again with any regularity or predictability. Most of these excluded amounts pertain to events that have not yet occurred and are not currently possible to estimate with a reasonable degree of accuracy. Accordingly, no reconciliation to GAAP amounts has been provided.

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Premium Portfolio, Global Scale, Positioned for Growth

2

37%

29% 34%

Life Sciences

Diagnostics

Applied Markets

39%

46%

15%

Instruments

Services, Consumables & Informatics(5)

44%

56%

Geographic Revenue Mix (2) Market domain (2) Revenue type (2)

(1) Market size per Company estimates; (2) FY16 Revenue, (3) FY16 Operating Margin presented on a non-GAAP basis, reconciliations to closest GAAP equivalent provided . (4) Operating margin adjusted for reimbursement from Keysight for site services classified as “Other Income.” (5) Includes Services, Consumables, Informatics, Diagnostic and Genomics Products

FY16 financial results

Leadership in steadily growing end-markets

Attractive recurring revenue base

$50.1B 265,000 $4.2B (1)

Most of the world’s

20.7% labs using Agilent solutionsTAM in 6 end markets Revenue Operating Margin

(3,4)

Americas

Europe

Asia

Agilent CrossLab

(ACG)

Life Sciences & Applied Markets

(LSAG)

Diagnostics & Genomics

(DGG)

• Chromatography • Spectrometry • Spectroscopy • Informatics

Lab Enterprise Management solutions for the Analytical and

Clinical Lab

Solutions and tools for Clinical and Clinical Research Laboratories

$2.1B 21%

$1.4B 22%

$0.7B 16%

Agilent Businesses

3

(1) (1) (1)

(2) (2) (2)

• Services • Consumables

Instrumentation and software solutions for

Analytical Laboratories

• Pathology • Genomics Products • Nucleic Acid

Solutions

(1) FY16 Revenue, (2) FY16 Operating Margin presented on a non-GAAP basis, reconciliations to closest GAAP equivalent provided

Analyst & Investor Day 2016

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Agilent Transformation Measures of Success

Outgrow the market

Expand operating margins

Balanced approach to capital allocation

Outgrow the Market

Expand operating margins

Balanced capital

allocation

19.6%

20.7% 280 bps

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Transformational Results Outgrowing the Market, Expanding Margins

3.8% 4.7% 4.9%

6.4% 5.9%

0%

1%

2%

3%

4%

5%

6%

7%

FY12 FY13 FY14 FY15 FY16

(1) Core revenue growth excludes impact of changes in currency translation, M&A, and exited NMR business Presented on a non-GAAP basis, reconciliations to closest GAAP equivalent provided

(2) Operating margin adjusted for reimbursement from Keysight for site services classified as “Other Income” Presented on a non-GAAP basis, reconciliations to closest GAAP equivalent provided

FY14 FY15 FY16

Operating Margin expansion of 280 bps since 2014

Completely offset $40M split dis- synergies in FY15

(2)

(2)

Significant acceleration of core revenue growth(1) since 2014

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Key FY16 Results Revenue Growth, Margin Expansion, Balanced Capital Allocation

(1) Core revenue growth excludes impact of changes in currency translation, M&A, and exited NMR business (2) Operating margin adjusted for reimbursement from Keysight for site services classified as “Other Income” (3) Presented on a non-GAAP basis. reconciliations to closest GAAP equivalent provided

• Revenue Growth Above the Market: up 5.9%(1)(3) on core basis • Expanded Operating Margin: up 110 bps to 20.7%(2)(3)

• Adjusted EPS(3) of $1.98, up 14% • Capital Deployment:

• Cash Dividends: $150M • Share Repurchases: $434M • Strategic Investments: $480M

• Operating Cash Flow of $793M, returning 89% of Free Cash to Shareholders

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FY17 Guidance As of May 22, 2017 based on April 28, 2017 exchange rates

(1) Core revenue growth excludes impact of changes in currency translation, M&A, and exited NMR business (2) Operating margin adjusted for reimbursement from Keysight for site services classified as “Other Income” (3) Presented on a non-GAAP basis..

• Revenue: $4.36B - $4.38B: growth at mid-point 5.0%(1)

• Adjusted Operating Margin: 21.5%(2) at mid-point • EPS(3): $2.15- $2.21: assumed diluted share count 326M • Operating Cash Flow of $825M • Returns to Shareholders

• $170M in dividends • Up to $430M in share repurchases,

subject to market to market conditions

Environment Food Chemical &

Energy Pharma Academia & Government

Clinical & DiagnosticsThe

$50B Opportunity $14B(1) $11B(1)$15B(1)

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Agilent Growth Strategy Grow Share in Attractive Markets

(1) Market sizes per Company estimates

(1)

$10B(1)

Strategically Target Growth Markets

Innovation-driven growth

Emerging market expansion

Complementary M&A

Outgrow the Market

TAM LT market growth Market

position

Chemical & Energy

Environment & Forensics

Food

Pharma

Academia & Government

Clinical & Diagnostics

$4.1B

$5.3B

$4.4B

$15.0B

$10.6B

$10.7B

1-3%

2-4%

4-6%

4-6%

1-3%

6-8%

#1

#2

#2

#2-3

End-markets(2)

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Strong Positions across all end-markets

(1) % of FY16 Agilent Revenue (2) Market size, growth and position per Company estimates

#2

$2.3B

$1.8B

$1.6B

$6.7B

$4.1B

$4.3B

SAM

23%

12%

11%

30%

9%

15%

% of Revenue(1)

100% $50.1B $20.8B

Outgrow the Market

Genomics and Diagnostics

26%

Analytical Lab Services &

Consumables 14%

Analytical Instrumentation

& Informatics 60%

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Growth through Innovation Allocating Investment to Highest Growth Opportunities

Strengthening market leadership

Capturing new services and solutions opportunities

Agilent Infinity II LC System

$324M/yr invested in

R&D(1)

Agilent AdvanceBio SEC Columns

Agilent OneSeq Target EnrichmentDako Omnis

Advanced Staining Solution

Capturing new life sciences & diagnostics growth opportunities

(1) FY16 R&D Expense presented on a non-GAAP basis

Outgrow the Market

Agilent Intuvo 9000 GC

Agilent 8900 Triple-Quad

ICP-MS