Slides
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1 December 17, 2024 2024 Analyst and Investor Day
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2 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 structure and Ignite transformation; the size and growth of our markets; our revenue, revenue growth, earnings per share, operating margin and margin expansion, operating cash flow, capital allocation, dividends, share repurchases, share count assumptions and the effects of acquisitions; our products, services and solutions; expanding customer value; our investment plans and shareholder value creation) 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 quarterly report on Form 10-Q for the quarter ended July 31, 2024. 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 charges primarily related to restructuring and other related costs, asset impairments, amortization of intangibles, transformational initiatives, acquisition and integration costs, and net (gain) loss on equity securities. We also exclude any tax benefits that are not directly related to ongoing operations and which are either isolated or are not expected to occur again with any regularity or predictability. With respect to the company’s guidance, 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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3 Agenda for the Day Welcome and Safe Harbor (Parmeet) Introduction and Agilent Overview (Padraig) Delivering Excellent Financial Results (Bob) Takeaways and Q&A (Padraig) Life Sciences & Diagnostics Markets Group (LDG) (Simon)A 1 2 B C 4 5 Business overviews3 Applied Markets Group (AMG) (Mike) Agilent CrossLab Group (ACG) (Angelica)
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4 President & Chief Executive Officer Padraig McDonnell 27 years at Agilent Lifelong dedication to customer experience Proven track record of building winning teams
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6 Takeaways for today Leading market share and sustainable competitive advantage via customer focus Re-accelerating growth through innovation and market share gains Driving productivity and reinvestment through Ignite Established leader in $80B markets driven by secular growth Cultivating strong leadership team and culture Delivering 5-7% long-term core growth and double-digit EPS
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7 Agilent’s guiding mission and new vision To deliver trusted answers and insights to advance the quality of life M I S S I O N V I S I O N Innovate and deliver seamless solutions for our customers to expand frontiers of science
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8 We have the right team to drive success Angelica Riemann President of Agilent CrossLab Group Bob McMahon Chief Financial Officer Jenipher Dalton Chief Quality and Regulatory Officer Tom Callihan Chief Transformation Officer Simon May President of Life Sciences and Diagnostics Group Fred Schwarz Chief Strategy Officer Bret DiMarco Chief Legal Officer, and Secretary Mike Zhang President of Applied Markets Group Speakers today Jonah Kirkwood Chief Commercial Officer Appointed May 2024 20+ years in life sciences Experience at Bio-Rad and Thermo Fisher Scientific Appointed Feb 2024 24 years at Agilent Extensive product, commercial, and market experience Appointed Nov 2024 22 years at Agilent Extensive leadership in APAC & US Appointed Sep 2018 Previously CFO at Hologic 20 years at Johnson & Johnson 100+ years total experience at Agilent and previous experiences at industry peers
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9 Leading lab partner with unsurpassed capabilities and scale FY24 operating margin(1) 26.4%285K+ Labs served Countries served 110 FY24 revenue $6.5B Lab partner with global scale $5.29 FY24 earnings per share(1) Americas EMEA Asia-Pacific Services, Consumables and Software 64% Instrumentation 36% FY24 Revenue Evolving product mix Services, consumables and software up 600bps in 5 years 40% FY24 Rev 27% FY24 Rev 33% FY24 Rev (1) Presented on a non-GAAP basis; reconciliations to closest GAAP equivalent provided on Agilent’s Investor Relations website.
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10 Agilent’s strong fundamentals $1B+ Digital orders in FY24 Record level for digital orders In key platform technologies #1 Leading portfolio FY20-24 FCF as a % of adjusted net income 84% Strong free cash flow conversion Industry leading customer satisfaction rating 90%+ Unparalleled customer support Customer retention rate 90%+ Robust customer retention
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11 Strategy built on customer-centric vision Customer end-market Clinical & Diagnostics Applied Markets Pharma & BioPharma Portfolio expansion and innovation High growth segments Lab productivity Software and informatics Strategic priorities Critical enablers Commercial Digital Ignite Top talent
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12 Target high growth segments with our legacy of strong innovation Digitize through software and target high-growth segments and geographies Focus on profitable growth Deliver margin flexibility while investing for growth Address customer needs via product launches, innovation, and investments Establish new org structure to support customer- and market-centric strategy Our strategy enhances our unique positioning to drive value Drive strong cash flow Utilize to invest organically and inorganically
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13 Serving growing markets that advance quality of life Pharma & BioPharma Academic & Government $14B (1) 3-5% growth Opportunity $80B (1) 4-6% growth $25B (1) 5–7% growth Pharma & BioPharma Clinical & Diagnostics Clinical & Diagnostics $20B (1) 5-7% growth Applied Markets Environmental & Forensics $7B (1) 2-4% growth Chemical & Advanced Materials $8B (1) 3-5% growth Food $6B (1) 2-4% growth (1) 2024 Total Available Market. Market size and long-term growth rates per company estimates.
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14 Semiconductor and Battery growth driven by supply chain reshoring, next-generation computing and EVs $500M+ Market Growing HSD-DD per year(2) Increase in cancer testing Increase in tests from 2020-2023(1) 40%+ Increase in pharma R&D spend Growth per year 2024-26(1) 6%+ Increase in PFAS testing globally & across end-markets Growing 15-20% per year(2) $300M+ Market Pharma pipeline growth accelerated by novel modalities Pipeline growth from 2024-28(1) 7%+ Growth of underlying markets remains strong (1) Source: Agilent internal and market research; (2) 2024 Served Available Market. Market size and long-term growth rates per company estimates.
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15 Leveraging our technological foundation to meet customer needs Providing trusted solutions to leading innovators of life advancing therapies …We shifted to be customer and end-market focused Pharma & BioPharma Supplying proven solutions to researchers and practitioners advancing medical diagnostics Clinical & Diagnostics Delivering reliable solutions to leaders pioneering testing (e.g., environmental, chemical, food) Applied Markets Our foundation was built as a product-centric organization… We’re driving focus, scale and innovation to better serve our customers
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16 New organizational structure supports market and customer focus Agilent CrossLab Group (ACG) Applied Markets Group (AMG) Life Sciences & Diagnostics Group (LDG) Commercial Organization Providing best-in-class customer-first service across all end markets Clinical & Diagnostics Applied Markets Pharma & BioPharma Liquid Chromatography (LC) LC Mass Spectroscopy (LCMS) NASD + BIOVECTRA (CDMO) Cell Analysis Genomics Pathology Companion Diagnostics Gas Chromatography (GC) GC Mass Spectrometry (GCMS) Spectroscopy Vacuum Certified Pre-owned Instruments Analytical Consumables Services Software Lab Automation $2.5B $1.3B $2.7B
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17 Investing in differentiating innovation Providing valuable customer insights through 270+ collaborators Leading scientific expertise across all end-markets Driving innovation with ~$450M(1) investment in R&D Refreshed portfolio across all major platforms in last 5 yrs Increasing lab efficiency with AI and advanced analytics (1) Presented on a non-GAAP basis; reconciliations to closest GAAP equivalent provided on Agilent’s Investor Relations website.
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18 Launching innovative solutions to meet customer needs Applied Markets Enhancing sensitivity and speed instruments for high-growth applications 8850 GC System New 7010D Triple Quadrupole GCMS Pharma & BioPharma Upgrading solutions to drive higher throughput and efficiency 1290 & 1260 Infinity III LC Revident LC/Q-TOF Clinical & Diagnostics Delivering superior patient outcomes with enhanced precision Dako Omnis IHC/ISH platform Hundreds of Instrument + Consumables + Services workflows launched to solve customer problems Smallest high- performance GC Leading sensitivity First smart- featured LC High resolution and accuracy Leading throughput and turnaround
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19 Expanding customer value Increasing lab productivity Investing in software Expanding our offerings Targeting fast- growing geographies Capturing customer lifetime value Customers with demand for advanced software in Applied Markets 85% Customer contract renewal rate 80%+ Revenue Growth in enterprise contracts in last 5 years 14% Revenue CAGR in enterprise contracts in last 5 years 14%
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20 A customer-first approach to sustainability Environmental product labels Certified pre-owned instruments Sustainable product design Sustainable product packaging Among the first to adopt My Green Lab’s ACT Labels across 40% of our instrument revenues Most comprehensive circular economy program in the instruments sector Streamlined recycling and greener packaging produces less waste Products designed sustainably to use less energy Infinity III LC Series Named #19 Most Sustainable Company by Time Magazine
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21 $1.6B Analytical Lab services revenue generated Meeting our customers with industry-leading services Customer support rating 90%+800 Service partners Service engineers 4000+ 75%+ Of service engineers hold degrees in chemistry or biochemistry On-site service calls fulfilled daily 2500+ 25% Of service engineers hold advanced degrees ~10% Core Revenue CAGR FY20-24
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22 Increasing investments to drive growth Portfolio M&A and Capex Acquired September 2024 – expands CDMO capabilities Acquired July 2024 – expands software capabilities $1B+ FY24 Investment Launched Infinity III LC Series – smart sustainable footprint ~$450M FY24 R&D investments(1) Building capacity for growth Launched 8850 GC System – smallest high-performance benchtop GC Launched Revident LC/Q-TOF – next-generation, high- resolution instrument designed for the Applied Markets (1) Presented on a non-GAAP basis; reconciliations to closest GAAP equivalent provided on Agilent’s Investor Relations website. NASD
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23 Acquired September 2024 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 technology Expands portfolio of end-to-end services (e.g., sterile fill-finish services) Focusing on high-growth value chain segments 100+ New customers 50+ Years of CDMO knowledge and experience $140M-150M FY25 Revenue(1) BIOVECTRA and NASD are a $1B+ revenue opportunity by 2030 (1) Guidance as of 11/25/24, based on forecasted currency exchange rates.
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24 No. 11 Fortune World’s Best Workplaces Named to Newsweek’s list of America’s greatest workplaces Best New Drug Discovery & Development Product 2023 Forbes World's Best Employers Our culture attracts top talent and drives results Agilent’s leading work environment enables teams to drive impact Our talented, ambitious, and high-performing teams form our culture’s foundation Our culture is evolving to increase focus and accountability
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25 India +13% CAGR(1) Europe +6% CAGR(1) Americas +7% CAGR(1) Asia-Pacific(2) +6% CAGR(1) China +3% CAGR(1) Strict European regulations, improving lab productivity, sustainability and new Biopharma modalities enablement Demographic growth and government initiatives drive expansion in domestic pharma manufacturing and CRO/CDMO capabilities Government investments in Pharma/Biopharma increasing Quality focus broadening to Environmental and Food Safety testing Government investment in healthcare to service an aging population Investment driven by Government’s 3-year equipment renewal stimulus policy Anticipated tax reform expected to strengthen US R&D and Manufacturing Technology competition and deregulation expected to increase innovation Pursuing regional opportunities to fuel our long-term growth (1) FY20-24 Core Revenue CAGR; (2) Asia-Pacific excluding China and India
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26 Ignite transformation: embarking on a transformational journey… For our shareholders Deliver industry-leading shareholder value through differentiated growth For our employees Reduce bureaucracy and complexity to enhance our ability to serve our customers For our customers Create a seamless customer experience across Agilent products, software and services
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27 Introducing Ignite: three themes shape our transformation Simplicity & Customer- Centricity Productivity & Scalability Growth Acceleration Better combine product offerings, expand portfolio, and accelerate innovation Operate with customer first mindset and reduce complexity in processes Increase operational productivity and reduce overlapping activities Driving accelerated value via innovation, productivity and pricing enhancement
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28 Our roadmap to success Rebuilding Momentum Accelerate • Experienced team driving customer-focused, market- driven strategy • Taking advantage as the market recovers • Ignite Transformation to drive growth and margin • Innovations in high-growth markets expanding share • Lab productivity and service leadership driving customer lifetime value • Strategic pricing boosting profitability 2025 2026
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29 Our new market-centric strategy and Ignite transformation drive differentiated results. Inorganic capital deployment is an upside to long-range guidance. Long-term plan: deliver above-market growth & margin expansion (1) Operating Model over the next 3-5 years assuming normalized market growth of 4-6%, Does not include FY25 guidance; (2) Core revenue growth excludes impact of future M&A and changes in currency translation. Core Revenue EPS Growth 5-7% annually (1)(2) 50-100+ bps/yr (1) Above Market Growth Operating Margin Expansion Double Digits
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30 President of Life Sciences & Diagnostics Markets Group Simon May 25 years in life-sciences industry Experience at Bio-Rad and Thermo Fisher Scientific
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31 LDG: Leader in growth markets (1) 2024 Total Available Market. Market size and growth per company estimates; (2) Presented on a non-GAAP basis; reconciliations to closest GAAP equivalent provided on Agilent’s Investor Relations website. Pharma & BioPharma $25B (1) 5–7% growth Academic & Government $14B (1) 4-6% growth Pharma & BioPharma Clinical & Diagnostics Academic & Government Applied Markets CDMO Genomics & Cell Analysis LC & LCMS Pathology & Companion Diagnostics FY24 operating margin(2) 19.6%$59B TAM(1) FY24 revenue $2.5B End Market Revenue Product Category Revenue Market growth(1) 4-6%
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32 Strong market fundamentals Increased frequency and breadth of cancer testing Higher demand for specialized CDMO services driven by new modalities Accelerating demand in pharma manufacturing & QA/QC Growing emphasis on workflow simplification and cost reduction 40%+ Increase in tests from 2024-30(3) Clinical lab technologist shortage in the US(4) 25K+17%+ CAGR from 2024-34(1) New drug launches expected 2024-28(2) 200+ (1) Source: BCG, Goldman Sachs, Internal estimates; (2) Source: IQVIA; (3) Source: Industry ARC; (4) Source: Forbes.
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33 We are well positioned to win in Life Sciences & Diagnostics Innovation leadership Advanced therapeutics manufacturing for 10+ high growth modalities Portfolio strength Portfolio supports high-growth segments including GLP-1 workflow solutions and CGT Leading partner Comprehensive portfolio with strong presence in 50%+ of pathology labs, ex-China
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34 Strong portfolio and customer base Scaled CDMO servicesLeader in Cell Analysis Cornerstone in advanced staining pathology Foundation of the lab in LC and LCMS 100M+ Patient specimens processed annually 100+ New customers from acquisition of BIOVECTRA 90K+ Installed base across cell analysis solutions 115+ Recent innovations introduced in LC and LCMS 1290 & 1260 Infinity III LC Seahorse XF Pro Analyzer Dako Omnis NASD +
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35 Fueling the future with our growth vision Drive portfolio innovation for advanced therapeutic modalities Drive pathology market penetration Platform & menu expansion Expand into high-growth adjacencies e.g., CDMO & specialized manufacturing $1B+ Deployed to expand therapeutic nucleic acids manufacturing capacity since 2018 Patients tested with PD-L1 antibody in 90+ countries since 2016 7M+ 150K+ Installed base of LC/LCMS
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36 Growing portfolio innovation for advanced therapeutic modalities Large installed base Large LC and LCMS installed base in analytical development, commercial/QC Emerging modalities Rising demand (MSD-HSD) for workflow solutions in MAM(1), oligonucleotides, and peptide therapeutics (e.g., GLP-1) Portfolio innovations Workflow innovations in Infinity III LC enhance user experience and productivity by up to 30% (1) Multi-attribute Monitoring
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37 Takeaways for Life Sciences & Diagnostics Markets Group Key messages Mid to high single digit long-term growth 4-6% underlying growth rate of markets • New product launches (e.g., Infinity III) • CDMO expansion • Pathology market penetration LDG growth drivers Strong portfolio plays in attractive & durable markets Focused on high-growth segments We win through innovation and expanded capabilities
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38 President of Applied Markets Group Mike Zhang 22 years at Agilent Extensive leadership in Asia and the US, and Applied Markets
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39 AMG: Trusted partner across key segments in Applied Markets Certified Pre-Owned GC & GCMS Spectroscopy & Vacuum FY24 operating margin(2) 24.0%2-4% Market growth(1) FY24 revenue $1.3B Chemicals & Advanced Materials Food Environmental & Forensics Pharma & BioPharma Academic & Government End Market Revenue Product Category Revenue (1) 2024 Total Available Market. Market size and growth per company estimates; (2) Presented on a non-GAAP basis; reconciliations to closest GAAP equivalent provided on Agilent’s Investor Relations website. Clinical & Diagnostics $21B TAM(1)
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40 We play in attractive core markets with emerging opportunities Global renewable energy transformation creating new chemical & energy testing applications 40%+ World’s electricity to be renewables by 2028(2) 10%+ Growth in demand for batteries driven by EV and energy storage Battery market growth through 2029(1) Increased demand for semiconductor testing equipment and software 8%+ Semiconductor market growth through 2030(1) Increasingly stringent food and environmental regulations for pollutants 15-20% PFAS testing market growth through 2030(1) (1) Source: McKinsey, Internal estimates; (2) Source: IEA
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41 We are uniquely positioned to win in Applied Markets Largest Global Installed Base Trusted partner for 100K+ labs, positioned for sustainable growth from platform refresh cycle Differentiated Innovation 50+ year legacy of innovation with market shares more than double the closest competitor Broadest Product Portfolio Best-in-class ability to meet customer needs driven by the scale of our portfolio
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42 We enable our customers with our strong, innovative portfolio Best-in-Class Atomic Spectroscopy Solutions Top Player in Mass Spectrometry Global Leader in Separations Innovative Molecular Spectroscopy #1 Mass Spec. Strongest GCMS / LCMS Portfolio in R&D, QA/QC, and contract testing #1 GC | #1 LC Broadest GC & LC portfolio with best-in-class scale 50% Faster liquid detection for aviation security 10%+ Market Share Expansion since 2020 driven by Semicon business Insight200M Liquid Explosive Detection System 1290 Infinity III LC 8890 GC 7900 ICP-MS 6495D LC / Triple Quadrupole 7010D Triple Quadrupole GCMS
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43 Building enduring leadership in emerging opportunities Enhance market leadership in PFAS across all testing modalities Grow share in semiconductor & batteries with combined GC, GCMS and Spectroscopy leadership Drive customer lab productivity and lifetime value by leveraging largest installed base #1 Market share for PFAS workflow solutions #1 Market share in GC, GCMS, and ICPMS 100K+ Applied Markets customer labs
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44 Leading end-to-end solutions for the PFAS market Market leadership in routine testing labs Best-in-class instrument, sample prep, automation, and data analysis software driving 30%+ growth in FY24 Rapid expansion of PFAS testing US, EU, and China regulations driving expansion of water, soil, food, air, and consumer product testing Complete workflows with robust analyses End-to-end workflow solutions enable faster compliant workflow launches and both targeted and non-targeted analyses
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45 Takeaways for Applied Markets Group Low to mid- single digit long-term growth 2-4% underlying growth rate of core applied markets • Enhance market leadership in PFAS • Grow share in semiconductor & batteries • Drive customer lab productivity and lifetime value by leveraging largest installed base AMG growth drivers Key Messages Doubling down on core innovations and portfolio expansion Building leadership in high-growth emerging opportunities Unlocking the lab productivity through workflow automation solutions Drive integrated software and informatics solutions
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46 President of Agilent CrossLab Group Angelica Riemann 25 years at Agilent Extensive product, commercial, and market experience
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47 ACG: Leader across all markets Chemical & Advanced Materials Pharma & BioPharma Food Environmental & Forensics Clinical & DiagnosticsAcademic & Government Software & Automation Consumables Services FY24 operating margin(2) 33.7% FY24 revenue $2.7B End Market Revenue Product Category Revenue (1) 2024 Total Available Market. Market size per company estimates; (2) Presented on a non-GAAP basis; reconciliations to closest GAAP equivalent provided on Agilent’s Investor Relations website. $80B TAM(1) Market growth(1) 4-6%
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48 Strong market fundamentals Desire for efficiency and next-level insights driving demand for software solutions Global shortages of skilled laboratory personnel amplifying need for expert services Shift towards personalized medicine fueling demand for specialized consumables 10%+ 85% Lab technician shortage in UK, Europe, US and Canada(1) Of new therapeutics approved by FDA in 2023 are personalized medicines(2), with above market growth expected through 2032 Customers with demand for advanced software in Applied Markets 38% (1) Source: Contract Pharma, Europe PMC, Forbes; (2) Source: Personalized Medicine Coalition; Global Market for Personalized Medicine
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49 We are uniquely positioned to win Strong installed base Drive recurring revenue by growing attach rate in broad installed base across 285K labs Service leader Full range of industry- leading lab services with 90% customer services support satisfaction score Broad portfolio Breadth and depth across platforms that span end markets and workflows Access across the lab Access to 750K+ instruments across labs globally
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50 Strong partnership, portfolio and customer base Trusted partner in services Strong presence in consumables Expanding software and automation Delivering AI and ML-powered solutions to boost customer productivity Hundreds of complete workflows supported 4K+ highly trained service professionals
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51 Fueling the future with our growth vision Enhance customer productivity with lab monitoring Focus on customer lifetime value with consumables, software, and services Strengthen customer relationships through the delivery of solutions 100% Enterprise services customers engaged with CrossLab Connect ~400 bps Increase in service contract attach rate since 2020 15+ yrs Of enterprise services partnership with top biopharma companies
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52 Enhancing customer productivity with CrossLab Connect Digital lab insight Innovative consumables for superior pharma and biopharma workflows e.g., PFAS, GLP-1, Batteries Optimize budget planning and lab spend with proactive instrument maintenance and deployment strategies Full service support Full range of digital services and solutions from enterprise to self-serve to optimize productivity Industry expert guidance for managing lab and enterprise operational considerations and compliance Drive growth in Agilent and non-Agilent installed base across Pharma & BioPharma, Clinical & Diagnostics, Applied Markets Business intelligence Turnkey solutions for asset management and utilization with AI insights across 1000+ types of instruments
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53 Takeaways for Agilent CrossLab Group High single digit long- term growth 4-6% underlying growth rate of markets • Increasing services and consumables attach rate • Extending leadership in high-growth digital and enterprise services • New software and workflow solutions for productivity enhancements ACG growth drivers Key messages Supporting customers across all end markets Emphasis on customer lifetime value drives growth Strong expertise shared in and beyond our installed base
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54 Chief Financial Officer Bob McMahon 6+ years at Agilent 10+ years as public-company CFO 30+ yrs in healthcare, including Agilent, Hologic and Johnson & Johnson
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55 Agilent shareholder value creation model Focusing on Faster Growth Segments Increasing Customer Lifetime Value Pricing Excellence Process Simplification Increasing Productivity via Digital Sourcing and Network Optimization R&D and Revenue-generating CapEx Growth Focused M&A Growing Dividends Share Repurchases Operating Margin Expansion Growth Focused Capital Deployment Above Market Growth Strong history of delivering value to shareholders, and we are evolving to re-accelerate returns
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56 Agilent delivering over the current market cycle $5.3B $6.5B FY20 FY24 Revenue Growth +6% CAGR 23.5% 26.4% FY20 FY24 Margin Growth (1) +290 bps $3.28 $5.29 FY20 FY24 EPS Growth (1) 13% CAGR (1) Presented on a non-GAAP basis; reconciliations to closest GAAP equivalent provided on Agilent’s Investor Relations website. While our end markets have gone through an exceptional period, Agilent has continued to deliver
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57 FY20-24 Core Revenue CAGR: 8% $0.9B (3) in Consumables FY20-24 Core Revenue CAGR: 19% $0.3B (2) in NASD Continuing to shift portfolio towards recurring revenues FY20-24 increase in service-contract attach rate ~400 bps FY20-24 Core Revenue CAGR: 10% $1.6B (2) in Services Over the past decade Non-Instruments contributed 80% of revenue growth in past decade(1) Recent Progress FY14 FY24 46% 54% 36% 64% Instruments Non-Instruments (1) 2014 revenue excluding Keysight Technologies = $4.0B increasing to $6.5B in FY24, non-instruments represented $2.0B of increase; (2) FY24 Revenue for Analytical Lab Services; (3) FY24 Revenue
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58 1.2 1.3 2.1 2.5 2.0 2.7 Capturing market opportunities drives long-term growth algorithm FY20 FY24 ACG LDG AMG $5.3B $6.5B +6% CAGR +5-7% (1) Projected Long-Term Growth (1) Core growth, excluding the impact of FX and future M&A – Assumes normalized market growth of 4-6%. Market-focused organization delivering above market growth $6.8-6.9B(2) FY25 FY28+ High-Single Digits Mid to High-Single Digits Low to Mid-Single Digits Long-term Projected Segment Growth Increasing connect rates New productivity solutions Enterprise Solutions Maximizing NPI (eg Infinity III) Specialized CDMO capabilities Pathology growth via advanced staining PFAS Market Leadership Leveraging Semicon and EV battery growth Key Growth Drivers (2) Per company guidance as of Nov 25, 2024
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59 Double-digit EPS growth, enhanced by share repurchases FY20 +8% CAGR +3% CAGR FY24 $3.28 $5.29 Revenue Growth & Margin Expansion Share Repurchases Below-the-Line Optimization High-quality earnings growth driven by revenue and margin expansion 13% CAGR +2% CAGR
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60 Ignite transformation provides roadmap for continued growth Simplicity & Customer-Centricity Productivity & Scalability Growth Acceleration Better combine product offerings, expand portfolio, and accelerate innovation Operate with customer first mindset and reduce complexity in processes Increase operational productivity and reduce overlapping activities Re-focusing innovation pipeline & NPI process Rigorous & ongoing portfolio optimization supported by M&A Launching next-gen digital ecosystem & e-commerce Investing in seamless software & informatics solutions Simplification & customer-centric alignment of organization Improving productivity in sourcing & manufacturing network Optimize IT & data infrastructure Strategic Pricing approach Driving accelerated value via innovation, productivity and pricing enhancement
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61 Agilent’s global manufacturing footprint Global manufacturing footprint provides flexibility & reduces risk Services delivered by local teams US Canada North America Asia China Malaysia Singapore Europe Germany Denmark UK Netherlands Italy
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62 Margin expansion and reinvestment enabled by Ignite Leverage on revenue growth and Ignite drive 50-100+ bps annual Op Margin Expansion (1) Presented on a non-GAAP basis; reconciliations to closest GAAP equivalent provided on Agilent’s Investor Relations website. FY20 FY24 23.5%(1) 26.4%(1) +50 bps +50-100+ bps -50 bps Leverage on Revenue Growth and Mix Software Digital Operating Model Pricing Procurement Strategic Re-investment Revenue Leverage 50-100+ bps Annual Op Margin Expansion Ignite Programs Annual Operating Margin Improvement
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63 Strong cash generation engine and healthy balance sheet Operating Cash Flow increased faster than Adjusted Net Income – providing funding for growth Net Leverage Ratio with no material repayments until 2026(1) 1.1x (1) As of 10/31/24, Short term debt was $45 million, next maturity is 2026 senior notes with a principal amount of $300M, maturing in September 2026. $1.0B $1.5B $0.9B $1.8B FY 20 FY 24 Adj-Net Income Op.Cash Flow
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64 Return of capital to shareholders FY20 FY24 FY25E $0.72 $0.94 $0.99 FY20 FY24 FY25E 312M 291M 286M Annual Dividend Per Share Diluted Shares Outstanding Best-in-class dividend yield while reducing share count over time 0.8% yield(1) (1) Dividend yield based on forecasted cash dividend divided by share price on Oct. 31, 2024.
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65 Excellent stewards of capital, focusing on growth Higher priority Lower priority FY20-24 $ Investment Organic investment R&D and CapEx Capital allocation Dividend growth Opportunistic share repurchases Targeted M&A aligned with strategy Anti-dilutive share repurchases FY20-24 % Investment Future 50-70% of total investment 30-50% of total investment $1.2B $1.9B $2.2B $3.5B $1.5B 34% 15% 12% 18% 21%
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66 Our new market-centric strategy and Ignite transformation drive differentiated results Inorganic capital deployment is an upside to long-range guidance Long-term plan: deliver above-market growth & margin expansion (1) Operating Model over the next 3-5 years assuming normalized market growth of 4-6%, Does not include FY25 guidance; (2) Core revenue growth excludes impact of future M&A and changes in currency translation. Core Revenue EPS Growth 50-100+ bps/yr (1) Above Market Growth Operating Margin Expansion Double Digits 5-7% annually (1)(2)
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Q1 & FY25 guidance reminder 11/25/2024 Q4'24 Financial Results Overview67 (1) As of Nov 25, 2024, based on forecasted currency exchange rates. Presented on a non-GAAP basis. (2) Core growth is reported growth adjusted for the effects of acquisitions and divestitures, and FX. (3) The 2024 Stock Repurchase Program that authorized up to $2 billion was approved by the Board in May 2024. The new program became effective on August 1, 2024; however, the 2023 Stock Repurchase Program was allowed to be depleted first. Based on forecasted currency exchange rates Q1 25 Guidance (1) Low End High End FY 25 Guidance (1) Low End High End Net Revenue ($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 includes -2% Lunar New Year impact -0.2% FX, +2.0% to +2.2% M&A EPS $1.25 $1.28 EPS $5.54 $5.61 FY25 Financial Considerations Net Interest + Other Income/Expense: $25M of expense ($2M expense for Q1) Guidance assumes diluted share counts of 286M for Q1 and for the full year Operating Cash Flow of $1.6-1.7B and CapEx of $0.45B Shareholder Returns: $287M in dividends. Anti-dilutive share repurchases at a minimum. (3) EPS Guidance includes $0.05 of dilution from BIOVECTRA and associated financing
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68 Takeaways for today Leading market share and sustainable competitive advantage with our differentiated customer focus Re-accelerating growth through innovation Driving productivity and reinvestment through Ignite Transformation Established leader in large, attractive markets driven by secular growth Cultivating strong leadership team and culture Delivering 5-7% long-term core growth and double-digit EPS
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70 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 Situ Hybridization LC Liquid Chromatography LCMS Liquid Chromatography Mass Spectrometry LC/QTOF Liquid Chromatography Quadrupole Time of Flight Mass Spectrometry LDG Life Sciences and Diagnostics Markets Group NASD Nucleic Acids Solutions Division PFAS Per and Polyfluoroalkyl Substances QA/QC Quality Assurance / Quality Control
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GAAP Revenue $ 6,510 $ 5,339 Income from operations: GAAP Income from operations 1,488$ 22.9% 846$ 15.8% Non-GAAP adjustments: Restructuring and other related costs 76 — Asset impairments 8 99 Intangible amortization 102 184 Transformational initiatives 11 53 Acquisition and integration costs 12 41 Other 24 33 Non-GAAP income from operations 1,721$ 26.4% 1,256$ 23.5% 2.9% Page 1 We provide non-GAAP income from operations and non-GAAP operating margin amounts in order to provide meaningful supplemental information regarding our operational performance and our prospects for the future. These supplemental measures exclude, among other things, charges related to restructuring and other related costs, asset impairments, amortization of intangibles, transformational initiatives and acquisition and integration costs. Our management recognizes that items such as amortization of intangibles can have a material impact on our cash flows and/or our net income. Our GAAP financial statements including our statement of cash flows portray those effects. Although we believe it is useful for investors to see core performance free of special items, investors should understand that the excluded items are actual expenses that may impact the cash available to us for other uses. To gain a complete picture of all effects on the company’s profit and loss from any and all events, management does (and investors should) rely upon the GAAP income statement. The non-GAAP numbers focus instead upon the core business of the company, which is only a subset, albeit a critical one, of the company’s performance. Readers are reminded that non-GAAP numbers are merely a supplement to, and not a replacement for, GAAP financial measures. They should be read in conjunction with the GAAP financial measures. It should be noted as well that our non-GAAP information may be different from the non-GAAP information provided by other companies. Year Over Year Percent Pts Inc/(Dec) AGILENT TECHNOLOGIES, INC. RECONCILIATION OF NON-GAAP INCOME FROM OPERATIONS AND OPERATING MARGINS (In millions, except margin data) (Unaudited) FY24 FY20 Operating Margin % Operating Margin %
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Revenue: Life Sciences and Diagnostics Markets Group (LDG) 2,466$ Agilent Crosslab Group (ACG) 2,747 Applied Markets Group (AMG) 1,297 Agilent GAAP Revenue $ 6,510 Income from operations: GAAP Income from operations 1,488$ 22.9% Non-GAAP adjustments: Restructuring and other related costs 76 Asset impairments 8 Intangible amortization 102 Transformational initiatives 11 Acquisition and integration costs 12 Other 24 Non-GAAP income from operations 1,721$ 26.4% Breakdown of reportable segment income from operations: Life Sciences and Diagnostics Markets Group (LDG) 484$ 19.6% Agilent Crosslab Group (ACG) 925 33.7% Applied Markets Group (AMG) 312 24.0% Agilent - Non-GAAP income from operations 1,721$ 26.4% Operating Margin % AGILENT TECHNOLOGIES, INC. RECONCILIATION OF OPERATING INCOME AND MARGIN TO NON-GAAP AND SEGMENT OPERATING INCOME AND MARGIN (In millions, except margin data) (Unaudited) FY24 Page 2 We provide non-GAAP income from operations and non-GAAP operating margin amounts in order to provide meaningful supplemental information regarding our operational performance and our prospects for the future. These supplemental measures exclude, among other things, charges related to restructuring and other related costs, asset impairments, amortization of intangibles, transformational initiatives and acquisition and integration costs. Our management recognizes that items such as amortization of intangibles can have a material impact on our cash flows and/or our net income. Our GAAP financial statements including our statement of cash flows portray those effects. Although we believe it is useful for investors to see core performance free of special items, investors should understand that the excluded items are actual expenses that may impact the cash available to us for other uses. To gain a complete picture of all effects on the company’s profit and loss from any and all events, management does (and investors should) rely upon the GAAP income statement. The non-GAAP numbers focus instead upon the core business of the company, which is only a subset, albeit a critical one, of the company’s performance. Readers are reminded that non-GAAP numbers are merely a supplement to, and not a replacement for, GAAP financial measures. They should be read in conjunction with the GAAP financial measures. It should be noted as well that our non-GAAP information may be different from the non-GAAP information provided by other companies.
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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 — — Asset impairments 19 0.06 99 0.32 Intangible amortization 102 0.35 184 0.59 Transformational initiatives 11 0.04 53 0.17 Acquisition and integration costs 12 0.04 41 0.13 Pension settlement loss 2 0.01 4 0.01 Net (gain) loss on equity securities (1) — (28) (0.09) Other 17 0.06 12 0.05 Adjustment for taxes (a) 12 0.04 (61) (0.20) Non-GAAP net income 1,539$ 5.29$ 1,023$ 3.28$ AGILENT TECHNOLOGIES, INC. NON-GAAP NET INCOME AND DILUTED EPS RECONCILIATIONS (In millions, except per share data) (Unaudited) FY20FY24 (a) The adjustment for taxes excludes tax expense (benefits) that management believes are not directly related to on-going operations and which are either isolated or cannot be expected to occur again with any regularity or predictability. For the years ended October 31, 2024 and October 31, 2020, management used a non-GAAP effective tax rate of 12.50% and 15.25%, respectively. Historical amounts are reclassified to conform with current presentation. We provide non-GAAP net income and non-GAAP net income per share amounts in order to provide meaningful supplemental information regarding our operational performance and our prospects for the future. These supplemental measures exclude, among other things, charges related to restructuring and other related costs, asset impairments, amortization of intangibles, transformational initiatives, acquisition and integration costs, pension settlement loss and net (gain) loss on equity securities. Asset impairments include assets that have been written-down to their fair value. Restructuring and other related costs include incremental expenses incurred in the period associated with restructuring programs, usually aimed at changes in business and/or cost structure. Such costs may include one-time termination benefits, facility-related costs and contract termination fees. Transformational initiativesinclude expenses associated with targeted cost reduction activities such as manufacturing transfers including costs to move manufacturing, site consolidations, legal entity and other business reorganizations, insourcing or outsourcing of activities. Such costs may include move and relocation costs, one-time termination benefits and other one-time reorganization costs. Included in this category are also expenses associated with company programs to transform our product lifecycle management (PLM) system and human resources and financial systems. Acquisition and Integration costs include all incremental expenses incurred to effect a business combination. Such acquisition costs may include advisory, legal, tax, accounting, valuation, and other professional or consulting fees. Such integration costs may include expenses directly related to integration of business and facility operations, the transfer of assets and intellectual property, information technology systems and infrastructure and other employee-related costs. Page 3 Our management uses non-GAAP measures to evaluate the performance of our core businesses, to estimate future core performance and to compensate employees. Since management finds this measure to be useful, we believe that our investors benefit from seeing our results “through the eyes” of management in addition to seeing our GAAP results. This information facilitates our management’s internal comparisons to our historical operating results as well as to the operating results of our competitors. Our management recognizes that items such as amortization of intangibles can have a material impact on our cash flows and/or our net income. Our GAAP financial statements including our statement of cash flows portray those effects. Although we believe it is useful for investors to see core performance free of special items, investors should understand that the excluded items are actual expenses that may impact the cash available to us for other uses. To gain a complete picture of all effects on the company’s profit and loss from any and all events, management does (and investors should) rely upon the GAAP income statement. The non-GAAP numbers focus instead upon the core business of the company, which is only a subset, albeit a critical one, of the company’s performance. Readers are reminded that non-GAAP numbers are merely a supplement to, and not a replacement for, GAAP financial measures. They should be read in conjunction with the GAAP financial measures. It should be noted as well that our non-GAAP information may be different from the non- GAAP information provided by other companies. Pension settlement loss relates to the relief of the US Retirement Plan pension obligation due to increased lump sum payouts over a specified accounting threshold. Net (gain) loss on equity securities relates to the realized and unrealized mark-to-market adjustments for our marketable and non-marketable equity securities. Other includes certain legal costs and settlements, special compliance costs, acceleration of stock-based compensation expense and other miscellaneous adjustments.
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As of October 31, 2024 Long-term debt 3,345$ Short-term debt 45 Cash & cash equivalents (1,329) Net debt 2,061$ Q1'24 Q2'24 Q3'24 Q4'24 Trailing 12- Month GAAP net income 348$ 308$ 282$ 351$ 1,289$ Non-GAAP adjustments: Asset impairments 8 — — 11 19 Restructuring and other related costs 3 1 67 5 76 Intangible amortization 26 26 25 25 102 Transformational initiatives 3 1 1 6 11 Acquisition and integration costs 2 (1) 4 7 12 Pension settlement loss — — — 2 2 Net (gain) loss on equity securities — (1) (1) 1 (1) Other (6) 7 3 13 17 Adjustment for taxes (4) 15 4 (3) 12 Non-GAAP net income 380$ 356$ 385$ 418$ 1,539$ Add: (1) Net interest expense 4$ 1$ 3$ 8$ 16$ GAAP provision for (benefit from) income taxes 55 66 61 50 232 Adjustment for taxes 4 (15) (4) 3 (12) (2) Non-GAAP provision for income taxes 59$ 51$ 57$ 53$ 220$ (3) Depreciation expense 36$ 37$ 38$ 44$ 155$ Adjusted EBITDA 1,930$ Net debt to adjusted EBITDA ratio 1.1 Page 4 AGILENT TECHNOLOGIES, INC. NET DEBT TO ADJUSTED EBITDA CALCULATION (in millions, except ratio data) (Unaudited)
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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 equipment (378) (298) (291) (188) (119) (1,274) Free cash flows 1,373$ 1,474$ 1,021$ 1,297$ 802$ 5,967$ GAAP net income 1,289$ 1,240 1,254 1,210 719$ 5,712$ Non-GAAP adjustments: Restructuring and other related costs 76 46 — — — 122 Asset impairments 19 277 — 2 99 397 Intangible amortization 102 139 191 194 184 810 Transformational initiatives 11 25 30 37 53 156 Acquisition and integration costs 12 16 25 41 41 135 Business exit and divestiture costs (gain) — (43) 7 5 — (31) Pension settlement loss 2 4 4 1 4 15 Net (gain) loss on equity securities (1) 42 63 (92) (28) (16) Change in vair value of contingent consideration — 1 (25) (21) — (45) Loss on extinguishment of debt — — 9 17 — 26 Other 17 20 12 9 12 70 Adjustment for taxes 12 (158) (5) (71) (61) (283) Non-GAAP net income 1,539$ 1,609$ 1,565$ 1,332$ 1,023$ 7,068$ Free cash flows to non-GAAP net income ratio 84% Page 5 AGILENT TECHNOLOGIES, INC. RECONCILIATION OF FREE CASH FLOWS TO NON-GAAP NET INCOME RATIO (in millions, except ratio data) (Unaudited)