Please note that the attached presentations contain. financial projections and other forward-looking statements

Transcription

1 Please note that the attached presentations contain financial projections and other forward-looking statements that are specific to the date of the presentations May 18, 2016 and should not be considered current after such date. 1

2 2016 Analyst Meeting May 18, The world leader in serving science

3 Safe Harbor / Non-GAAP Measures Various remarks that we may make in the following presentations about the company s future expectations, plans and prospects constitute forward-looking statements for purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those discussed in our Form 10-Q for the quarter ended April 2, 2016, under the caption Risk Factors, which is on file with the Securities and Exchange Commission and available in the Investors section of our website under the heading SEC Filings. Important factors that could cause actual results to differ materially from those indicated by forward-looking statements include risks and uncertainties relating to: the need to develop new products and adapt to significant technological change; implementation of strategies for improving internal growth; general economic conditions and related uncertainties; dependence on customers' capital spending policies and government funding policies; the effect of exchange rate fluctuations on international operations; the effect of healthcare reform legislation; use and protection of intellectual property; the effect of changes in governmental regulations; and the effect of laws and regulations governing government contracts, as well as the possibility that expected benefits related to recent or pending acquisitions may not materialize as expected. While we may elect to update forward-looking statements at some point in the future, we specifically disclaim any obligation to do so, even if estimates change, therefore, you should not rely on these forward-looking statements as representing our views as of any date subsequent to today. During these presentations, we will be referring to certain financial measures not prepared in accordance with generally accepted accounting principles, or GAAP, including adjusted EPS, adjusted operating margin, adjusted ROIC and free cash flow. The non-gaap financial measures of Thermo Fisher s results of operations and cash flows included in these presentations are not meant to be considered superior to or a substitute for Thermo Fisher s results of operations prepared in accordance with GAAP. Definitions of these non-gaap financial measures and, for historical periods, a reconciliation of the non-gaap financial measures to the most directly comparable GAAP measures is available in the appendix to these presentations. Please note that the attached presentations contain financial projections and other forward-looking statements that are specific to the date of the presentations May 18, 2016 and should not be considered current after such date. 3

4 Agenda Marc Casper President and CEO Great Track Record Even Brighter Future Stephen Williamson Senior Vice President Chief Financial Officer Tom Loewald Senior Vice President Chief Commercial Officer Continuing to Deliver Exceptional Returns Unique Scale and Depth Create Commercial Advantage Alan Sachs Chief Scientific Officer Innovating to Fulfill Our Mission Syed Jafry Senior Vice President President, Emerging Markets Scale is Our Foundation for Growth in Emerging Markets Mark Stevenson Executive Vice President President, Life Sciences Solutions Life Sciences Solutions The Next Chapter Marc Casper Summary and Q&A 4

5 Great Track Record Even Brighter Future Marc N. Casper President and Chief Executive Officer 2016 Analyst Meeting May 18, 2016 The world leader in serving science

6 Key Takeaways Proven growth strategy delivering outstanding financial performance Robust pipeline of innovative technologies Unmatched presence in emerging markets Unique customer value proposition Attractive long-term financial model 4-6% organic growth 12-15% adjusted EPS growth Expanding ROIC Track record of effective capital deployment Fragmented industry offers plenty of M&A opportunity Disciplined M&A strategy and substantial return of capital 6

7 Building Industry Leadership Over the Past Decade Raman portable spectrometers Sorvall LYNX centrifuge Vanquish UHPLC Ion Torrent S5 Innovation Exactive Orbitrap Bioproduction single-use technologies ImmunoCap Fusion Tribrid Orbitrap Attune Nxt Opened India clinical packaging facility Global footprint Established environmental instruments HQ in Shanghai China Innovation Center established India Chromatography Center of Excellence South America HQ in Brazil Suzhou factory Singapore Lithuania Mfg. Center Biosciences of Excellence Center of Excellence Dubai Customer Experience Center B.R.A.H.M.S A clear and proven strategy, consistently executed 7

8 Continuing Our Impressive Track Record Adjusted EPS Performance $1.87 $2.55 $3.02 $2.92 $3.43 $4.16 $4.94 $5.42 $6.96 $7.39 Shareholder Return $ Thermo Fisher Scientific $100 invested $ S&P Delivering on our commitment to create shareholder value 8

9 We Are The World Leader in Serving Science Global Scale >50,000 employees in 50 countries $17 billion in annual revenue Unparalleled commercial reach Unmatched Depth Leading innovative technologies Deep applications expertise Premier laboratory productivity partner Our Mission: To enable our customers to make the world healthier, cleaner and safer 9

10 We Serve a $100B Market that s Growing 3-5% Annually Strong Short-term Catalysts Increased NIH funding Emerging societal threats Interconnected food supply Strength in biopharma market Diagnostics & Healthcare 25% $17.3B Revenue Pharma & Biotech 30% Attractive Long-term Fundamentals Aging population fuels biomedical research and demand for diagnostics Success in biologic and vaccine development creates growing demand China 5-year plan priorities Industrial & Applied 20% Academic & Government 25% Emerging markets drive growth in environmental and applied markets Thermo Fisher is positioned to grow at least one point faster than the market 10 NOTE: Revenue and end market percentages based on LTM as of Q

11 Our Vision for the Future Customers Fulfill our Mission by helping our customers achieve breakthroughs that improve society Continue to gain market share by delivering the benefits of our scale and depth of capabilities Colleagues Inspire our incredibly talented team to enable our customers success Be recognized as one of the world s most admired companies Shareholders Generate significant shareholder returns by consistently delivering strong EPS growth 11

12 Our Proven Formula for Success Hasn t Changed Organic Growth High-impact innovation Unique customer value proposition Scale in emerging markets Consistently delivering PPI Business System Productivity Quality Customer allegiance Capital Deployment Strategic M&A Return of capital strong EPS growth 12

13 High-impact Innovation Solves Key Societal Issues Leading R&D Spend 6.4% $ % Our Opportunity Cleaner Air monitoring Water quality analysis $ Total R&D $M % of Total Manufacturing Revenue Healthier Infectious disease Precision medicine Oncology testing Safer Food testing Illicit drug detection Pharma QA/QC Leveraging our technology depth to capitalize on new growth opportunities 13

14 Unique Customer Value Proposition Drives Share Gain Biopharma End Market 30% 25% % of Total Company Revenue Improve diagnostics Solve complex analytical challenges Increase lab productivity Utilize strategic outsourcing Accelerate research Customer Support regulatory compliance Enable technical innovation Optimize supply chain Partner on R&D projects Improve production efficiency Our Opportunity Increase share of wallet with existing customers Steady stream of high-impact R&D Comprehensive value-added services Recently acquired capabilities: Life Technologies, ASI, Alfa Aesar, Affymetrix Drive adoption of unique customer value proposition with additional customers Differentiated capabilities propel a bright growth outlook 14

15 Global Reach and Scale Creates Market Differentiation Emerging Markets $3.2 13% $1.3 19% Our Opportunity Leverage our well-established infrastructure in China, India and South Korea to drive additional share gain Capitalize on tailwinds from China s 5-year plan Further leverage our recent expansions in Southeast Asia Annual Revenue $B >12,000 Employees 4,400 Customer-facing employees 26 Demonstration labs % of Total Company Revenue Poised to capitalize on longer-term potential in Russia, Middle East and Brazil Emerging markets remain a significant growth opportunity 15

16 PPI Business System Fuels Growth and Profitability Continuous improvement every day 5S Lean Kaizen Stand-up meetings KPI boards 17.5% 22.5% Adjusted Operating Margin % Quality Consistently deliver world-class products and services Customer Allegiance Exceed expectations to maximize customer success Productivity Improve operating and process efficiency to strengthen our competitive advantage Our Opportunity Strategic PPI deployment for long-term benefit Global sourcing Footprint optimization Low-cost region manufacturing Shared services Proven M&A playbook Operational discipline is our foundation for strong earnings growth 16

17 Strong Track Record of Effectively Deploying Our Capital option B Capital Deployed Q Our Opportunity Dividends Notable M&A Buybacks 18% 3% $28B M&A 79% 2011 Dionex 2011 Phadia 2012 One Lambda 2014 Life Technologies 2016 Affymetrix Share Buybacks $5.1B deployed to repurchase 78M shares 100s of smaller companies $100B Market Thermo Fisher Scientific plus top 2 competitors Dividend Dividend payer since 2012 Continuing our disciplined approach to capital deployment 17

18 Our Capital Deployment Strategy M&A is the primary focus of our capital deployment strategy Fragmented industry and our proven M&A playbook create ample opportunities Expect share buybacks to remain the primary means of returning capital; dividend to grow modestly Capital deployment mix will vary in a given year % of Capital we expect to deploy over next 5 years M&A 60-75% Return of Capital 25-40% We expect to deploy a significant amount of capital to create shareholder value 18

19 Great Track Record Even Brighter Future Long track record of delivering our financial commitments Scale and depth of capabilities are clear market differentiators Proven growth strategy with many exciting new opportunities ahead PPI Business System is our foundation for profitable growth Capital deployment strategy offers significant opportunity to create value 19

20 Continuing to Deliver Exceptional Returns Stephen Williamson Senior Vice President Chief Financial Officer 2016 Analyst Meeting May 18, 2016 The world leader in serving science

21 Attractive Revenue Profile Positions Us for Growth Balanced and Diverse Customer Base Strong Recurring Revenue Mix Growing Presence in Emerging Markets Diagnostics & Healthcare 25% Industrial & Applied 20% Pharma & Biotech 30% Academic & Government 25% Instruments 24% Services 14% Consumables 62% Asia-Pacific 18% Europe 25% ROW 4% North America 53% Total Revenue: $17.3B 21 NOTE: Percentage estimates based on unaudited LTM revenue through Q

22 2015 Review: Ongoing Strong Performance 5% Organic Growth 60 bps Expansion 6% Growth $16.9B $17.0B 22.5% $ % $ Revenue Adjusted Operating Margin Adjusted EPS Solid execution despite significant FX headwind 22

23 2015 Review: Mitigated Significant FX Headwind Initial 2015 Guidance* 2015 Actual Adjusted EPS $ $7.39 YoY Growth 4-6% 6% FX impact -8% -11% FX Neutral YoY Growth 12-14% 17% Strong operating performance drives adjusted EPS growth 23 * Initial 2015 Guidance as provided on January 29, 2015.

24 Achieved Target Leverage Ratio Post Life Technologies Acquisition Leverage Ratio 4.5x* 3.0x Q Q Q1'14 Q4 '15 Total Debt $17.4B $12.5B 24 Leverage ratio = Total debt to trailing twelve months adjusted EBITDA. * Leverage ratio is 5.7x on a reported basis and 4.5x on a pro-forma basis, which includes the EBITDA contribution from Life Technologies.

25 Focused on Return on Invested Capital Adjusted ROIC 9.6% 8.9%* Q Q Q1' Generating solid returns while investing for the future 25 Adjusted ROIC = Annual adjusted net income excluding net interest expense, net of tax benefit, divided by trailing five quarter average invested capital. * Represents the period when the full investment of Life Technologies acquisition is included in adjusted ROIC calculation.

26 2016 Full-year Guidance: Key Assumptions Organic Revenue Growth Total company organic growth of about 4% M&A Contribution $375M of incremental revenue consisting of 1 month from ASI and 9 months each from Alfa Aesar and Affymetrix Affymetrix adds approximately $0.06 to adjusted EPS in 2016 FX Impact Revenue, adjusted operating margin and adjusted EPS headwinds of -0.5%, -10 basis points and -1.0%, respectively Adjusted Operating Margin Expansion Strong productivity and acquisition synergies expected to be partially offset by strategic growth investments and the impact of foreign exchange Calendar Days Compared to 2015, Q has 4 extra selling days, while Q has 4 less selling days Q2 and Q3 have the same number of selling days compared to 2015 Capital Deployment Acquisitions: Acquired Affymetrix for $1.3B in March 2016 Share Buybacks: $1B of share buybacks completed in Q Dividends: $240M of dividend payments 26 NOTE: 2016 Guidance as provided on April 28, 2016.

27 2016 Full-year Guidance: Summary YOY Guidance* Actual Change Revenue $ B $16.97B 5-6% Organic Growth About 4% 5% Adj. Operating Margin % 22.50% bps Adjusted EPS $ $ % Free Cash Flow $2.72B $2.42B 12% Delivering 9-11% adjusted EPS growth 27 * Guidance as provided on April 28, 2016.

28 Financial Model A combination of strong operational execution and disciplined capital deployment generate very strong shareholder returns 2016 (G) 2019 (M) 3-yr CAGR Adjusted EPS $8.12 $ % Focused on delivering strong adjusted EPS growth 28 (G) = Mid-point of guidance as provided on April 28, (M) = financial model.

29 Financial Model: Operational Performance Before Capital Deployment Operational assumptions before future capital deployment: Annual organic revenue growth: 4-6% Adjusted operating margin expansion: 40-50bps from operations plus 10bps from Affymetrix Free cash flow conversion: 90% of adjusted net income Expected Operational Outlook Excluding Impact of Capital Deployment 2016 (G) 2019 (M) 3-yr CAGR / Avg. Revenue $18.0B $ B 4-6% organic Adj. Operating Margin 23.1% 25% bps Adjusted Operating Income $4.1B $ B 6-9% growth Adjusted ROIC 10% 12-13% bps A very strong operational outlook 29 (G) = Mid-point of guidance as provided on April 28, (M) = financial model.

30 Financial Model: Including Capital Deployment Below-the-line and capital deployment assumptions: Deploy $17B of capital: 70% for bolt-on M&A and 30% on share buybacks / dividends Dividends increasing modestly Maintain 2.75x leverage at the end of each year Tax rate of 15% in (G) 2019 (M) 3-yr CAGR Adjusted EPS $8.12 $ % Generating very strong shareholder returns 30 (G) = Mid-point of guidance as provided on April 28, (M) = financial model.

31 A Great Track Record and a Bright Future Adjusted EPS $ $12.20 $6.96 $7.39 $1.87 $2.55 $3.02 $2.92 $3.43 $4.16 $4.94 $ (M) Continuing to deliver exceptional returns 31 (M) = financial model.

32 Unique Scale and Depth Create Commercial Advantage Tom Loewald Senior Vice President Chief Commercial Officer 2016 Analyst Meeting May 18, 2016 The world leader in serving science

33 We Are The World Leader in Serving Science Global Scale >50,000 employees in 50 countries $17 billion in annual revenue Unparalleled commercial reach Unmatched Depth Leading innovative technologies Deep applications expertise Premier laboratory productivity partner Our Mission: To enable our customers to make the world healthier, cleaner and safer 33

34 Industry-leading Capabilities to Meet Customer Needs Industry-leading technologies to solve a broad range of complex analytical challenges Leading positions in attractive niche diagnostic segments Specialty Diagnostics 19% Analytical Instruments 18% $17.3B Revenue Life Sciences Solutions 25% Laboratory Products and Services 38% Unmatched depth of capabilities for life sciences research, discovery and diagnosis Most extensive offering for the laboratory and leading productivity partner 34 NOTE: Revenue and segment percentages based on LTM as of Q

35 Analytical Instruments: Leading Technologies to Solve Complex Challenges Environmental Instruments 8% Consumables 9% ROW 6% Chemical Analysis Instruments 28% Services 25% Instruments 66% Asia-Pacific 35% North America 32% Chromatography and Mass Spectrometry 64% Europe 27% Advanced tools for lab, line and field, with strong emerging market presence Revenue: $3.2B Adjusted Operating Margin: 18.6% 35 NOTE: Revenue and Adjusted Operating Margin based on LTM through Q Percentages based on revenue before inter-company eliminations.

36 Life Sciences Solutions: Unmatched Depth for Research and Discovery Bioproduction 17% Biosciences 44% Instruments 12% Services 5% Consumables 83% Asia-Pacific 24% ROW 4% North America 44% Genetic Sciences 39% Europe 28% Significant recurring revenue and operating margins, and strong global presence Revenue: $4.6B Adjusted Operating Margin: 30.1% 36 NOTE: Revenue and Adjusted Operating Margin based on LTM through Q Percentages based on revenue before inter-company eliminations.

37 Specialty Diagnostics: Leading Positions in Niche Diagnostic Segments Services 2% ROW 3% Anatomical Pathology 10% Transplant Diagnostics 7% Healthcare Market Channel 31% Instruments 7% Asia-Pacific 10% Microbiology 15% Consumables 91% Europe 27% North America 60% Immuno- Diagnostics 16% Clinical Diagnostics 21% Strong recurring, high-margin revenue with significant growth opportunities in emerging markets Revenue: $3.3B Adjusted Operating Margin: 26.8% 37 NOTE: Revenue and Adjusted Operating Margin based on LTM through Q Percentages based on revenue before inter-company eliminations.

38 Laboratory Products & Services: Most Extensive Offering for Laboratory Productivity ROW 3% Biopharma Services 15% Services 17% Asia-Pacific 11% Laboratory Products 30% Research and Safety Market Channel 55% Instruments 23% Consumables 60% Europe 21% North America 65% Leading market positions in all three businesses, strong recurring revenue base Revenue: $6.9B Adjusted Operating Margin: 15.1% 38 NOTE: Revenue and Adjusted Operating Margin based on LTM through Q Percentages based on revenue before inter-company eliminations.

39 Complementary Segments Fundamental to Our Growth Strategy Specialty Diagnostics Analytical Instruments Customer Life Sciences Solutions Laboratory Products and Services High-impact innovation Life science tools into the clinic Laboratory technologies for applied markets R&D centers of excellence (COE) and ability to leverage cross-business technologies and programs Scale in emerging markets Customer reach and experience Manufacturing COEs in low-cost regions Unique customer value proposition 39

40 Commercial Capabilities are Unmatched in Our Industry Solve complex analytical challenges Accelerate research Enable technical innovation Improve diagnostics Increase lab productivity Customer Partner on R&D projects Improve production efficiency Unique customer value proposition Ultimate channel partner Comprehensive services offering Utilize strategic outsourcing Support regulatory compliance Optimize supply chain Leading e-business presence Extensive corporate accounts program 40

41 The Ultimate Channel Partner with Unrivaled Customer Access Choice and Convenience Broadest product portfolio Leading e-commerce transaction platform Customer / supplier self-service Superior product availability and service levels Differentiated Services Purchasing / supplier aggregation services Customized inventory management solutions Diversity solutions Broadest market offering >800,000 products Global Presence Integrated supply chains and warehouses Web platform Pan-European operating model Company leverage in emerging markets 41

42 Comprehensive Services Increase Value of Our Product Portfolio Instrument & Equipment Services Asset Management Scientific Support Glassware Services Chemical Lifecycle Management Inventory Management Scalable instrument and enterprise service solutions 3,200+ Global service employees Our teams of experts are at customer sites every day 42

43 Industry-leading e-business Capabilities Drive Share Gain thermofisher.cn fishersci.com thermofisher.com Localized content and e-commerce Facilitating scientific collaboration Self-manufactured product and rich scientific content Broadest product offering and transactional platform 60 million+ website visits per year Investments in our web presence enhance the customer experience 43

44 Successful Corporate Accounts Model Applies to Multiple Industries Pharma Biotech Academic Healthcare Industrial Clinical Trial Services Enterprise Services Typical account growing at 2-3x market Analytical Technologies Unrivaled customer access Life Sciences Solutions Laboratory Supply Channels Proven Process C-suite Engagement Scientific Collaboration Strategic partnerships accelerate innovation and increase productivity for our customers Laboratory Products Specialty Diagnostics 44

45 Commercial Strength Creates Opportunities option to Gain A Share 3-4x Average share of wallet opportunity Discovery & Development Analytical instruments Laboratory equipment and consumables Vendor-managed inventory Scientific collaboration Customized applications Clinical Trials Packaging and storage Comparator sourcing Risk-controlled clinical supply chain Global distribution network Production & Commercialization Single-use technologies and bioreactors Media and serum Chemical and supply management ISO and GMP storage solutions Safety and personal protection supplies Comprehensive value across the biopharma workflow 45

46 Unique Scale and Depth Create Commercial Advantage Industry-leading and complementary businesses Growth strategy is fueled by our scale and depth Unique customer value proposition driven by our powerful commercial capabilities Plenty of runway to gain greater share of customer spend 46

47 Innovating to Fulfill Our Mission Alan Sachs Chief Scientific Officer 2016 Analyst Meeting May 18, 2016 The world leader in serving science

48 We Take Pride in Our Mission We enable our customers to make the world healthier, cleaner and safer 48

49 Building Industry Leadership Over the Decade Raman portable spectrometers Sorvall LYNX centrifuge Vanquish UHPLC Ion Torrent S5 Innovation Exactive Orbitrap Bioproduction single-use technologies ImmunoCap Fusion Tribrid Orbitrap Attune Nxt Opened India clinical packaging facility Global footprint Established environmental instruments HQ in Shanghai China Innovation Center established India Chromatography Center of Excellence South America HQ in Brazil Suzhou factory Lithuania Biosciences Center of Excellence Singapore Mfg. Center of Excellence Dubai Customer Experience Center B.R.A.H.M.S A clear and proven strategy, consistently executed 49

50 Largest R&D Spend in Our Industry Delivers High-impact Products Laboratory Products Specialty Diagnostics 18% 6% $700M R&D Spend Life Sciences Solutions 46% Analytical Instruments Mass spectrometry Chromatography Portable analytical instruments Specialty Diagnostics Life Sciences Solutions Genetic analysis Bioproduction Cell analysis Molecular biology Laboratory Products Analytical Instruments 30% Transplant diagnostics Allergy and autoimmunity Drugs of abuse Biomarkers Cold-temperature storage Centrifugation Liquid handling 50 R&D Spend and percentages based on LTM through Q

51 Creating an Environment to Nurture Innovation Business-focused R&D teams innovate within their discipline Nearly 4,000 R&D employees Industry-leading patent portfolio Consistent focus on customer needs History of launching high-impact products Globally integrated R&D team fuels innovation across the company Consistent talent management Focus on sharing best practices, tools and expertise Cross-business projects leverage our scale and depth World-class Scientific Advisory Board from leading institutions, including: Institute for Genomic Medicine at Columbia University The Jackson Laboratory Broad Institute Dana Farber Cancer Institute Koch Institute for Integrated Cancer Research at MIT Provides input on new areas to pursue and feedback on ongoing innovation programs Technology Partnerships: CDx Pfizer/Novartis Companion diagnostics Karolinska Institute Beyond PSA National Cancer Institute Match program University of Dundee Protein mass spectrometry 51

52 We Use Technology to Help Our Customers Solve Societal Challenges Wondering What Caused the Cancer U.S. agencies issue rules to protect workers from Zika We re on the verge of seeing cancer in a drastically different light Precision medicine: is it becoming a reality for childhood cancer? While Beijing s Air Quality Improves, Smog Makes Journey to the West Healthier Cleaner Safer Flint Water Crisis Yields First Criminal Charges F.D.A. Proposes a Limit on Arsenic in Rice Cereal for Babies Most Americans Live in Areas with Unhealthy Levels of Air Pollution, Study Finds Simple test might predict who gets world s deadliest infectious disease EU food safety watchdog issues cancer warning on acrylamide Senate Passes Bill to Fight U.S. Opioid Epidemic 52

53 Our Customers Need Fast, Precise Answers Healthier Cleaner Safer Infectious Disease Precision Medicine Oncology Testing Air Quality Water Quality Food Testing 53

54 Healthier: Meeting Increased Demand for Infectious Disease Testing Customer Challenges Our Solutions Identifying sepsis PCT (procalcitonin) immunoassay Detecting Zika Lyophilized reagents and real-time PCR Monitoring Ebola Next-generation sequencing 54

55 Healthier: Supporting the Advancement of Precision Medicine Customer Challenges Our Solutions Testing for inherited diseases Next-generation sequencing panels Discovering chromosome abnormalities CytoScan Dx chip Analyzing metabolic disorders Mass spectrometry 55

56 Healthier: Improving the Effectiveness of Oncology Testing Customer Challenges Our Solutions Detecting cancer Beyond PSA prostate cancer test Refining diagnosis Oncomine cancer panel Monitoring treatment Liquid biopsy 56

57 Cleaner: Assuring Quality of Air and Water Customer Challenges Our Solutions Measuring water quality Chemical oxygen demand analyzer Detecting airborne pollutants 2.5 and 10 micron air particulate monitor Identifying contaminants High-resolution mass spectrometry 57

58 Safer: Keeping Food Supplies Free of Contaminants Customer Challenges Our Solutions Testing for numerous pathogens Microbiology media and real-time PCR Discovering the presence of foreign objects X-ray detection systems Detecting residual pesticides Chromatography and mass spectrometry 58

59 Innovating to Fulfill Our Mission Largest R&D investment in the industry Strong track record of introducing technologies that meet customer needs Applications-focused teams benefit from integrated global R&D organization Solutions to societal challenges achieved with our innovative products 59

60 Scale is Our Foundation for Growth in Emerging Markets Syed Jafry Senior Vice President President, Emerging Markets 2016 Analyst Meeting May 18, 2016 The world leader in serving science

61 Industry-leading Presence in Emerging Markets Emerging Markets 19% E. Europe, Middle East, Africa >$550M Revenue China >$1.4B Revenue South Korea >$250M Revenue Developed Markets 81% $17.3B Revenue Latin America (excl. Brazil) >$250M Revenue Brazil >$100M Revenue India >$200M Revenue S.E. Asia >$350M Revenue Total employees: >12,000 LCR* manufacturing revenue: $1.3B Demonstration labs: NOTE: Revenue based on LTM through Q * LCR: Low-cost region.

62 Leveraging Our Global Scale to Drive Growth Emerging Market Revenue $3.1B $3.2B $1.7B $2.0B $2.3B $1.3B Our Strategy Expand commercial reach in emerging markets Optimize supply chain, service and commercial operations to differentiate the customer experience Drive differentiation through localized technology development Leverage low-cost region manufacturing footprint Provide unique career development opportunities to recruit and retain top talent 62

63 Capitalizing on Growth in Emerging Markets China South Korea Brazil Middle East India Malaysia Other S.E. Asia Singapore Mexico Africa Well-established Country leadership teams Direct commercial presence Demonstration and application development centers Evolving Commercial-focused teams Dealer partners Customer experience centers Manufacturing and supply chain footprint Industry-leading service capabilities Approach based on size and timing of market opportunities 63

64 Thermo Fisher China: A Developed-market Experience in a Developing Market China for China Innovation Largest Commercial Infrastructure Established Manufacturing Footprint 64

65 Thermo Fisher China: A Large and Scalable Infrastructure China Profile in 2015 $1.4B annual revenue 3,800 employees 2,000 commercial employees 400 field service engineers 4 full-scale application labs 7 factories $0.4B Strong Revenue Growth $1.4B Manufacturing Sales Office Shenyang Beijing Xian Jinan Chengdu Wuhan Shanghai Changsha Suzhou Guangzhou Taiwan Hong Kong Market Coverage Focus accounts: 20%+ growth e-commerce: 35%+ growth Regional expansion: 300 commercial staff in Tier 2 cities Product Development Established China Innovation Center 100+ scientists and engineers 20+ CFDA* certification specialists 65 NOTE: Thermo Fisher acquired Life Technologies in Feb * CFDA: China Food and Drug Administration.

66 China Example: Advantages of Scale Leading offering of products and services enables solutionbased selling Local resources support application development and technical services capability Centralized procurement process increases productivity WuXi Pharma (Focus account) Company-level procurement agreement Products for analytical labs, bioproduction and quality control Service agreement to maintain equipment and provide consumables 66

67 Highlights of China s 13th 5-year Plan ( ) Key Objectives Economic Development Double 2010 GDP and income per capita Annual GDP growth: >6.5% Innovation-driven Development Focus on new energy, new materials, biotech, genomics and IT Healthy China Precision medicine End of one-child policy Green China Lower energy consumption Control carbon emissions Areas of Investment: 100+ National Projects Healthcare and Biotech $9B investment in precision medicine Research for breakthrough biological drugs and medical devices Food Safety Farm product quality / security traceability system (14 projects) Investments in third-party labs, Cloud and mobile testing technology Environmental Large investments in energy conservation and environmental improvement Significant number of projects dedicated to water conservation 67

68 Thermo Fisher China: 5-year Plan Creates Exciting Growth Opportunities Markets Our Opportunities Precision Medicine Supporting diagnosis and treatment of cancer and chronic diseases Product localization for faster market access Increasing demand for pre- and post-natal testing Healthcare & Diagnostics Allergy testing, infectious disease, pathology Leveraging the Cloud Biopharma Supporting bioproduction, research and QA/QC Services: software, asset management and vendor-managed inventory Food Safety Lab and mobile testing Detecting genetically modified organisms, pathogens and non-targets Environmental Monitoring ambient / continuous air emissions Detecting contamination in water and soil 68

69 India Spotlight: A $3 Billion Growth Market Our Opportunities Generic pharma growth Food safety initiatives Improved healthcare and diagnostics Environmental challenges Our Approach Tailored value proposition for focus accounts Broad service infrastructure Local product development and manufacturing Software development 69

70 South Korea Spotlight: A $1.5 Billion Growth Market Our Opportunities Growth in biosimilars Increased vaccine production Focus on academic research Our Approach Increasing direct commercial presence Tailored value proposition for focus accounts Investment in web marketing Application development center 70

71 Industry-leading Scale is a Foundation for Growth Most significant emerging-market presence in our industry Developed-market experience in developing markets of China and India Translating commercial success from well-established regions to South Korea and Southeast Asia Making selective investments in other rapidly evolving markets Continuing our proven track record in emerging markets 71

72 Life Sciences Solutions The Next Chapter Mark Stevenson Executive Vice President President, Life Sciences Solutions 2016 Analyst Meeting May 18, 2016 The world leader in serving science

73 We Created Unrivaled Leadership in Life Sciences 2013 Today Life Technologies Leading biosciences business with sluggish growth Leader in bioproduction media Broad genomics presence with aggressive investments in NGS* innovation Thermo Fisher Niche player in biosciences Bioproduction single-use leader Limited genomics offering Leading Position in Life Sciences Biosciences leader now growing significantly faster More comprehensive offering to support bioproduction demand Leader in targeted genomics applications 73 * NGS: Next-generation sequencing

74 Successful Integration has Strengthened Our Company Now growing faster and gaining share 2% 4% Life Sciences Solutions Segment Organic Growth 5% On track to deliver over $300M of cost synergies and $150M of revenue synergies in year 3 of ownership (2016) Aggressively redeployed investments to fuel growth opportunities Leveraging strengths of combined businesses to position Thermo Fisher Scientific for an even brighter future Commercial reach Extensive corporate accounts program Ultimate channel partner Scale in emerging markets and APAC Scalable infrastructure: web and supply-chain operations 74 NOTE: 2014 organic growth percentage is on a pro forma basis, as if Life Technologies was owned for the entire year.

75 Leveraging the Channel to Achieve Revenue Synergies Deep Life Sciences Solutions portfolio Initially 14,000+ SKUs: Gibco media, Applied Biosystems thermal cyclers, Invitrogen end-point PCR kits Industry-leading commercial reach Complements research market offering Adds 1,100 feet on street, including Corporate Accounts 2015 Impact New Life Sciences Solutions customers 1,000+ Organic growth relative to historical * 3x Gibco Sera and Media Applied Biosystems Thermal Cyclers Invitrogen End-point PCR 75 * Based on 14K+ Life Sciences Solutions in-scope products

76 Implemented PPI Business System to Improve Productivity Initial focus on reducing waste and inefficiency >1,300 PPI projects in 2015 Delivered >$40M in savings Increased customer allegiance score by 13% PPI Project Case Study Invitrogen protein gels operations 30% improvement in customer satisfaction >$500K in scrap savings Supported 7% growth plan Quality Consistently deliver world-class products and services Customer Allegiance Exceed expectations to maximize customer success Productivity Improve operating and process efficiency to strengthen our competitive advantage PPI Business System has become engrained in our culture 76

77 Significant Achievements Beyond Integrating the Business Today Re-prioritized and reinvested internally to support growth in biosciences Built on leadership position in bioproduction, investing in manufacturing capacity and assurance of supply Re-focused next-generation sequencing strategy on clinical segment with launch of PGM Dx and Ion Torrent S5 Increased impact from new products launched in the last two years Acquired Affymetrix in Q

78 Affymetrix a Highly Complementary Business ~$350M Annual Revenue ROW Services/Other Instruments Asia- Pacific Europe U.S. Consumables Strong strategic fit with our Life Sciences Solutions business Adds complementary genetic analysis products serving research, clinical and applied markets Significantly expands portfolio of antibodies and assays for high-growth flow cytometry Creates attractive financial benefits by leveraging our scale and customer reach Expect to generate $70M of cost and revenue synergies in year three 78

79 More Exciting Opportunities Ahead Achieving additional revenue synergies through our unique customer access to corporate accounts, channels and emerging markets Further leveraging our operations, IT and commercial infrastructure Continued growth from high-impact R&D investments: Flow cytometry Antibodies Next-generation sequencing Bioproduction 79

80 Flow Cytometry Combined Capabilities Open New Adjacent Markets Thermo Fisher Scientific s unique strengths drive growth Full workflow solution for customers Channel and e-commerce infrastructure provides global reach $2B+ market growing in mid-single digits Leading fluorescent dyes and reagent portfolio Key tool for cancer research, immunotherapy, stem cell biology and single-cell science Attune NxT Flow Cytometer Trusted flow antibodies Speed, performance, simplicity and affordability 80

81 Antibodies Opportunity for Leadership in a Fragmented Segment Challenge: More than 50% of antibody spend in research is wasted due to poorly characterized and ill-defined antibodies Thermo Fisher is changing the game in antibodies Sponsored independent committee of thought leaders to set standards for antibody validation (2015) $2B+ market growing in mid-single digits Core technology needed to detect and quantitate proteins in almost all biology applications Leveraging our expertise in mass spectrometry, protein biology, synthetic biology to validate Using e-commerce expertise to build Destination of Choice that helps customers find the right antibody for their application 81

82 Next-generation Sequencing Well-positioned for Clinical Applications An industry-leading NGS diagnostics player Focused on democratization of targeted sequencing panels Capitalizing on growth in clinical oncology Partnering with pharma customers to advance companion diagnostics $1B+ Clinical segment growing in mid-teens Ion Torrent PGM Dx Broader uptake of sequencing in clinical labs Ion Torrent S5 XL 82

83 Bioproduction Strengthening Our Leadership in a High-growth Market Capitalizing on leadership in cell culture media, single-use technologies and analytics Completed integration of ASI acquisition, providing increased choice and surety of supply for single-use products Expanding across the workflow by introducing best-in-class technologies, creating new growth opportunities Analytical technologies for monoclonal antibodybased biotherapeutics Expanded offerings in purification Launched UHPLC for accurate biotherapeutic characterization $5B+ bioproduction market growing double digits Driven by new biologics, biosimilars and immunotherapies 83

84 Life Sciences Solutions The Next Chapter Successful integration has created market leadership and accelerated growth PPI Business System has enhanced our culture of continuous improvement Implementing our proven M&A playbook to integrate Affymetrix Life Sciences Solutions is even better positioned today to tap multiple areas of growth 84

85 Key Takeaways Proven growth strategy delivering outstanding financial performance Robust pipeline of innovative technologies Unmatched presence in emerging markets Unique customer value proposition Attractive long-term financial model 4-6% organic growth 12-15% adjusted EPS growth Expanding ROIC Track record of effective capital deployment Fragmented industry offers plenty of M&A opportunity Disciplined M&A strategy and substantial return of capital 85