Bio-Rad Laboratories, Inc. Investor Day 2017

Transcription

1 Bio-Rad Laboratories, Inc. Investor Day 2017

2 Welcome Norman Schwartz Chairman of the Board, Chief Executive Officer

3 Forward-Looking Statements Some statements in this presentation may be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, without limitation, statements regarding our investment in high growth emerging markets and new products and technologies, improvements to our operational efficiency and our future financial performance. Forward-looking statements generally can be identified by the use of forward-looking terminology such as, anticipate, believe, expect, assume, continue, may, will, intend, estimate, or similar expressions or the negative of those terms or expressions, although not all forward-looking statements contain these words. These statements are subject to risks, uncertainties and other factors that could cause actual results to differ materially from our expectations. Such factors include, but are not limited to, recent changes to our global organizational structure and executive management team, difficulties in implementing our global ERP system, our ability to develop and market new or improved products according to our business plan, currency fluctuations and other factors discussed in more detail in our recent filings with the Securities and Exchange Commission. The forward-looking statements contained in this presentation reflect our views and assumptions only as of the date of this presentation. We do not undertake any obligation to publicly update any forward-looking statements. 3

4 Agenda Norman Schwartz Chairman of the Board, Chief Executive Officer John Hertia Executive Vice President, President, Clinical Diagnostics Group Annette Tumolo Executive Vice President, President, Life Science Group John Goetz Executive Vice President, Chief Operating Officer Christine Tsingos Executive Vice President, Chief Financial Officer Norman Schwartz All Opening Remarks Clinical Diagnostics Overview Life Science & Digital Biology Overview Operations Overview Financial Overview Closing Remarks Q&A 4

5 Company History 1952: David & Alice Schwartz establish Bio-Rad to accelerate the scientific discovery process. 1966: Sales approach $1 million. Company goes public raising $140,000. First international office established in Munich. 1969: Bio-Rad introduces gel electrophoresis. 1978: First commercial test for Hemoglobin A : First test for Hemoglobin A1c. 1986: Introduce first confirmation diagnostic test for AIDS. 1960: Sales: $150,000, 11 employees. Expanding interest in Biological discovery and improved healthcare. 1967: Bio-Rad enters diagnostic market. First T-4 by column test revolutionizing Thyroid testing. ALA test developed to screen for lead poisoning. Continue international expansion. 1970: Sales: $2.7 million, 98 employees. 1975: Acquire controls business. 1980: Sales: $46 million, 700 employees. Listed on the American Stock Exchange. Open offices in Tokyo and Sydney. 1989: Implementation of sickle cell screening system for California. 5

6 Company History 1991: Introduction of the first Hemoglobin variant system. 1998: Enter DNA amplification market with real-time PCR system. 2000: Sales of $726 million. 2005: Sell first BioPlex 2200 system. 2011: Sales reach $2 billion. 7,000 employees worldwide. Acquire Droplet Digital PCR technology. 2014: Begin reorganization with major investments in infrastructure improvements : Major deployments of ERP in US & Europe. 1990: Sales: $287 million. 2,000 employees. 1999: Acquire Pasteur-Sanofi Diagnostics. 2003: Sales reach $1 billion. Norman Schwartz named President & CEO. 2007: Acquire DiaMed, blood typing products. 2008: Listed on the NYSE. 2015: Introduce IH-500 blood typing system. 2017: Acquire Raindance Technologies New Board of Directors named. 6

7 Core Values Innovation Involvement Independence Integrity 7

8 Bio-Rad Today 60+ Years Strong Performance $2B+ Annual Sales 8,000+ Employees Worldwide Continuous Innovation A History of Contribution Key Competencies Fueling Ongoing Growth Complementary Business Mix Leveraging Across the Company Providing Solutions to Advance Scientific Discovery and Improve Healthcare 8

9 Strategic Elements Leader in Life Science & Clinical Diagnostics Direct Focus on the Customer Improve Operational Efficiency & Cash Flow Invest in High-Growth Emerging Markets 9

10 Leading Market Positions Life Science Bio-chromatography DNA Amplification Electrophoresis Gel Image Analysis Protein Assays Digital Biology Diagnostics Autoimmune Testing Diabetes Monitoring HIV Testing Blood Typing Quality Controls 80%+ of Sales from Products in which Bio-Rad has Leading Market Position 10

11 Bio-Rad Global Profile Hospital Labs 35 % Applied 3 % BioPharma 9 % Academic 23 % EMEA 38 % Asia 19 % Customers Geography Products Transfusion Labs Reference Labs 15 % 15 % Americas 43 % Diversified Customer Base Worldwide Presence Broad Product Base 11

12 Investing in High Growth Latin America Middle East Asia High Growth Emerging Markets 12

13 Investing in the Future New Markets New Technologies Cell Biology ddpcr Systems Global ERP System Globalization Global Operating Model 13

14 Goals Targets: 3-5% Revenue Growth (Currency Neutral) 20+% Profitability (Adjusted EBITDA Margin) Creating Shareholder Value 14

15 Our Message Sales Growth Opportunity Operational Efficiency + Improvement Cash and Investment for the Future r $ 15

16 Bio-Rad Laboratories, Inc. Investor Day 2017

17 Clinical Diagnostics Overview John Hertia Executive Vice President, President, Clinical Diagnostics Group

18 Agenda Business Profile Market Segments and Environment Market Highlights and Key Strategies R+D Investment for Growth Summary 18

19 Clinical Diagnostics Profile Highlights Market Size: $55-60B Addressable Market: $5.5B Market Growth ~ 5% Transfusion Laboratory 18 % Customer Segments Reference Laboratory 21 % EMEA 39 % Hospital Laboratory 61 % Revenue Geography Asia 19 % Americas 42 % Reagents 75 % Products Instruments 25 % Source: Bio-Rad Internal 19

20 Clinical Diagnostics Protecting the Blood Supply Diagnostic Testing and Monitoring Quality Assurance Blood Typing Blood Virus Screening HIV Confirmation Testing Transfusion Compatibility Diabetes Infectious Disease Autoimmune Quality Controls Quality Assessments Data Management We Focus on Results Test Results 20

21 Market Environment Industry Technology Geography Global Price Pressure Increased Global Regulation Consolidation in Labs Polarization in Testing Emerging Diseases Integrated/Automated Workflows Expanded Use of Rapid/ Point-Of-Care Devices Molecular Testing and Next-Gen Sequencing Data Explosion Drives Informatics Europe IVD Market Starts Rebounding New PAMA Guidelines in US Continued Strong Growth in China and India The Emergence of Global Accounts Responding to Changing Landscapes 21

22 Market Leadership Markets Addressable Market Size ($M) Market Growth Market Position Blood Typing $1,400 3% 2 Blood Virus Testing $1,200 4% 3 Quality Controls $1,100 5% 1 Diabetes Monitoring $ % 2 Autoimmune $655 7% 4 Source: Bio-Rad Internal Bio-Rad Holds a Leadership Role in Major Markets 22

23 Diabetes A1c Testing Highlights Bio-Rad #2 in the Market Recent Introduction of D-100 Global Connectivity 14,000+ Installed Systems Variant Turbo BRiCare Variant II Turbo Link D-100 D-10 A1c Testing for Every Lab 23

24 Diabetes A1c Testing Growth Strategy D-100 systems provide the right blend of accurate results, high throughput, and streamlined workflow for the laboratory. Track connectivity will further enhance both automation and convenience. Get it Right Get More By including QC, Informatics, BRiCare remote service, and genetic disorders (such as beta-thalassemia). Integrated track capability will further expand into the core lab. Investing in future solutions in near-patient testing and smaller footprint systems to allow labs closer access to patients in physician labs and clinics. Get Closer Get there First Exploring new biomarkers like gestational diabetes can offer a more convenient and specific test for pregnant women. Expanding Diabetes and Hemoglobin Testing 24

25 Quality Controls Highlights Market Leader Broadest Range of QC Materials Comprehensive Data Management 55,000+ Connected Customers Trending Molecular Controls Specimen Integrity Infectious Disease Risk Management RISK MANAGEMENT 25 Reducing Laboratory and Medical Error

26 Quality Controls Growth Strategy Maintain Leadership Through continual innovation and expansion of core products Core Business NGS Molecular Become a Leader In exploding technology markets asking for expertly prepared QC Beyond Analytics Enter fast-growing non core markets Pre-analytic Workflow Non-clinical testing Quality Assurance Software as Service Develop High-Value Informatics Solutions Compliance Inventory Management Business Analytics Expanding Quality Control Leadership 26

27 Autoimmune and Serology Highlights Bio-Rad #4 in Market Only Fully-Automated Multiplex System in Segment FDA Approvals for Syphilis and ToRC Panels New Track Capability 62 BioPlex Assays Autoimmune Serology Specialty Testing IFA Slides Multiplexing Market Potential $1B+ PhD System EIA Microplate BioPlex 2200 More Information Is Better 27

28 Autoimmune and Serology Growth Strategy With its expanded menu, the BioPlex is affordable to a wider range of clinical laboratories. Mid Volume Labs Core Labs For fully automated labs, the BioPlex is compatible with a range of Total Lab Automation (TLA) partners. Slide reader, middleware, and Next Gen BioPlex will provide further entrenchment in the lab of the future. Many untapped regions and markets are expanding autoimmune and serology testing. Geographic Expansion Infectious Disease With game-changing assays like 5 th Gen HIV and Syphilis Total & RPR, BioPlex is very attractive to infectious disease specialists. The addition of Lyme assays will expand appeal in new endemic markets. More Information Is Better 28

29 Blood Typing Highlights Bio-Rad #2 in Market 3,000+ Automated Systems Placed Unrivalled Results Management Gel Cards Trending IH-1000 and Infinity FDA Approvals IH-Com and Manual Systems Approval Growing Demand in Emerging Markets Signed LabCorp Agreement Tango infinity IH-Com & IH-Web Results Management IH-500 (Coming soon to the US) IH-1000 Broadest Portfolio for Safe Transfusions 29

30 Blood Typing Growth Strategy Most comprehensive array of technology and test menu in the market: gel, microplate, or classical tube testing. Choice Scalability High, medium and low throughput systems for any size laboratory or testing network, with increasing modularity. Market Expansion Transfusion Informatics Expanding our portfolio to US, China, and emerging markets in addition to penetrating mid-volume labs has vast upside potential. IH-Com, IH Web and additional informatics tools integrate instruments, software, reagents and quality control into one seamless system. Expanding Transfusion Leadership 30

31 Investing for the future Blood Typing in North America R+D Investments (Geographic and Technology Expansion) Microbiome MDx Panels New Quality Control Segments Track Capability IH-500 and D-100 Systems in China Point of Care MDx 31

32 Summary - Clinical Diagnostics Leadership positions will drive growth in Core Segments Excellent traction with recent platform introductions Significant opportunity through Geographic Expansion Rebalancing our investment portfolio towards higher growth markets 2,000+ system placements per year drives recurring revenue 32

33 Bio-Rad Laboratories, Inc. Investor Day 2017

34 Life Science Overview Annette Tumolo Executive Vice President, President, Life Science Group

35 Agenda Business Profile Market Segments and Trends Market Highlights and Key Strategies R+D Investment for Growth Summary 35

36 Life Science Profile Highlights Market Size: $45B 50B Market Growth 4% CAGR Addressable Market: $8 9B Research 63 % Applied Markets 7 % Asia 26 % Americas 43 % Revenue Geography Consumables 48 % Customer Segments BioPharma 30 % EMEA 31 % Instruments/ Apparatus 52 % Products Source: Bio-Rad Internal 36

37 Life Science Research BioPharma Applied Markets Academic & Industrial Research Amplification & Gene Expression Bio-chromatography Protein Quantification Cell Biology Antibodies Discovery Pre-Clinical Research Clinical Research Manufacturing and Quality Control Food Safety and Quality Testing Water Quality Testing Wine Quality Testing Life Science Education Supplies and Curriculum Delivering Innovation Beyond Products 37

38 Market Leadership Markets Addressable Market Market Market Size ($M) Growth Position Amplification & Gene Expression Thermal Cyclers $100 1% 1 Real-time PCR Systems $250 3% 2 PCR Reagents & Plastics $650 5% 4 Protein Quantification Electrophoresis/Imaging $1,000 5% 1 Multiplex Immunoassays $930 5% 2 Bio-Chromatography Lab Scale $440 5% 2 Process Resins $960 11% 3 38 Strong Positions in Core Markets Where We Have Key Offerings Source: Bio-Rad Internal

39 Market Leadership Markets Addressable Market Market Market Size ($M) Growth Position Cell Biology Flow Cytometry $ % New entrant Analyzers & Sorting Flow Reagents $ % New entrant Antibodies (Abs) Western Blotting/Flow Cytometry $650 7% New entrant Cancer, Immunity $1,000 5% New entrant Custom Ab Generation $200 11% New entrant Food Safety Instruments and test kits $1,600 5% 3 (in Mol. Tests) 39 Entering New Markets with Strong Growth and Unmet Needs Source: Bio-Rad Internal

40 Market Environment Technology Innovations Proven Technologies Global Trends Shape Future Drives Market Excitement Genome Editing (CRISPR) Single Cell Genomics Initiatives Drive Innovation Human Cell Atlas Project Precision Medicine Initiative Cancer Moonshot Western Blotting/ Electrophoresis Mass Spectrometry Nucleic Acid Amplification Chromatography Sequencing Cell Analysis Rising cost of healthcare driving big pharma to reduce cost of drug discovery Strong funding for translational research, accelerating the pace of movement from bench to bedside China s investment in research and medicine driving Asia s markets Globalization of food production and demand driving the need for improved safety Bioinformatics has a significant and growing impact on discovery turning data into knowledge Providing Innovation Which Follows Global Trends and Needs 40

41 Life Science Solutions Genotyping & Gene Expression (PCR & qpcr) Gene Transfer & Modulation Protein Purification (chromatography) Protein Expression (multi-analyte detection) Digital Biology (Droplet Digital PCR, ddseq) Multi-omics Solutions Cell Sorting & Analysis Cellular Imaging Antibodies Protein Quantification (western blotting) 41

42 Protein Quantification Addressable Market: $1.9B #1 Market Leader Image Analysis Western Blotting Electrophoresis #2 Market Leader Multi-plex Immunoassays V3 Western Workflow BioPlex 200 Multiplex Immunoassay System and Assays Oncology Inflammation Apoptosis Toxicity Cell Signaling Cardiovascular ImageLab Software Validated Precision Antibodies Gel Electrophoresis Provide the Best Solutions to Identify and Quantify Protein Samples 42

43 Protein Quantification Growth Strategy Provide best-in-class solutions to identify and quantify protein samples Chemi Western Fluorescent Western Multiplex Immunoassays and Western Antibodies Maintain Leadership Drive Innovation Deliver disruptive alternatives to traditional methods for quantifying and identifying proteins Full user experience from awareness and product access to experimental results Improve Product Accessibility Deliver Sustainable Growth Take market share and grow the business profitably with high value, innovative products Maintaining Leadership and Driving Growth 43

44 Amplification & Gene Expression Addressable Market: $1B #1 Market Leader Thermal Cyclers #2 Market Leader Real-time PCR Systems C1000 Thermal Cycler CFX Real-Time PCR System Amplification Reagents and Assays #4 Market Leader Reagents and Plastics CFX Maestro Analysis Software PCR Plastics and Consumables Integrated Gene Expression Workflow Solutions 44

45 Amplification & Gene Expression Growth Strategy Increase ease of use and efficiency with integrated solutions across Instruments, Software, Reagents, Assays, and Plastics Develop Integrated Solutions Optimize Sales Channels Provide optimized online channels to ensure 24/7 access to solutions across the portfolio Establish New Market Leadership Drive Consumables Attachment High performing consumables support discovery and ensure reliability of results Develop qpcr assays and reagents for emerging genomics applications such as long non-coding RNA (lncrna) Expansion Through Differentiated Solutions 45

46 Cell Biology New Entrant in Growing Market Flow Cytometry Cell Sorters and Analyzers Cell Imagers and Counters Flow Cytometry Reagents & Assays Flow Cytometry Antibodies TC20 Automated Cell Counter Flow Cytometry Antibodies S3e Cell Sorter ZOE Fluorescent Cell Imager ZE5 Cell Analyzer Empowering Researchers to Address Complex Cell Biology Questions 46

47 Cell Biology Growth Strategy Provide integrated solutions with instruments, software, reagents, assays and consumables Deliver Integrated Solutions Simplify Workflows Reduce the complexity of cellular workflows with simplified platforms to expand market opportunity Provide cellular context to genomic and proteomic insights Empower Multi-omic Science Innovate with the Customer Take market share with new, differentiated solutions driven by clear customer unmet needs Taking Share in a High-Growth Market 47

48 Food Safety and Testing Highlights Complete & validated solutions for rapid food pathogens testing Reagents Instruments Software #3 Market Leader in PCR tests Ease of Use Automated workflow (less labor) Automated results (Go / no Go) answer) 48 Building the Future of Food Safety and Testing

49 Food Safety and Testing Growth Strategy Increasing volume of food commodities produced, mainly driven by population increases Globalized production and demand Geographic Expansion Focus on Global Accounts Expand beyond new segments and technologies Access New Markets Menu Expansion Shift from traditional testing methods to rapid methods Building the Future of Food Safety and Testing 49

50 Investing for the future Continue to drive core technologies growth R+D Investments Expand in new and growing markets with streamlined workflows and solutions Focus on the needs of translational researchers and BioPharma Invest in informatics solutions to turn data into knowledge Continue development of next generation, rapid turn-around tests for food safety 50

51 Summary - Life Science Life Science Group has strong positions in core research tools area Investing in disruptive technologies and addressing unmet needs Expanding into higher growth cell biology and antibody markets Growing Food Science business with menu and geographic expansion Focusing on areas of high funding: Translational Research and BioPharma Working on solutions to help customers transform data into information and knowledge 51

52 Bio-Rad Laboratories, Inc. Investor Day 2017

53 Intermission

54 Digital Biology Overview Annette Tumolo Executive Vice President, President, Life Science Group

55 Agenda Droplet Digital PCR Product Profile Core Strategy in Droplets Addressable Markets for NGS and Liquid Biopsy Focus on Digital PCR Liquid Biopsy and Digital PCR Addressing IVD Market Needs Investments for the Future Summary 55

56 56 Digital PCR Product Line Profile Highlights North America and China are regional growth drivers BioPharma fueling growth in diagnostic applications Foundational intellectual property (IP) position Market size:??? BioPharma 30 % Customer Segments Liquid Biopsy/ Diagnostic 20 % Research 50 % EMEA 26 % Revenue Geography Source: Bio-Rad Internal Asia 29 % Americas 45 % Consumables 32 % Products Instruments 68 %

57 Digital Biology Product Markets Life Science Basic + Applied Research Laboratories Droplet Digital PCR Single-Cell RNA-Seq Droplet Digital PCR applications span research, applied & diagnostic markets Single-Cell NGS sample prep primarily a research tool Diagnostics Hospital + Commercial Laboratories Droplet Digital PCR Spanning Bio-Rad s Primary Markets 57

58 Digital Biology Core Strategy Expand leadership position in key markets Grow the digital PCR research market and sustain our leadership position Establish a leadership position in the liquid biopsy IVD market Enter high growth markets where droplets make a difference Expand beyond ddpcr: Enter the NGS sample prep market with droplet-based tools offering unique value propositions 58

59 NGS Market Overview 59 Targeting 3 segments with NGS sample prep solutions that provide a unique value proposition Deep intellectual property for droplets in NGS sample prep Total addressable market in 2018: $365M Sources: DeciBio NGS Market Perspectives (2017) Howe Sound Research Whole Genome and Exome Sequencing Markets (2017), internal market research In Billions $5.0 $4.0 $3.0 $2.0 $1.0 $- $2.8 $ Other RNA-Seq Targeted Resequencing WES Human WGS Focus on Segments Where Droplet Solutions are Enabling Primary Applications Driving NGS Market Growth RNA-Seq Advent of single cell genomics driving application. Whole Genome Seq (WGS) Accelerated by adoption of Illumina NovaSeq ($100 genome). Library prep technology to resolve structural variation, alignment, etc. Targeted Resequencing (TGRS) The primary clinical application, TGRS poised to grow rapidly with adoption in liquid biopsy space, complementing ddpcr.

60 Liquid Biopsy Cancer Market Targeting the Monitoring and Therapy Guidance segments (40+% of market) Longer term opportunities include early detection and applications outside of Oncology Primary Applications Driving Liquid Bx Market ~1,945M In Millions ~368M ddpcr ~415M Diagnosis 7% Monitoring 26% Therapy Guidance 17% Early Detection/ Screening 50% Source: BCC Research High Growth + Multiple Market Opportunities BCC Research

61 Evolution of Nucleic Acid Detection PCR Qualitative qpcr Relative/Indirect Quantification ddpcr Absolute/Direct Quantification Bulk: One measurement Droplets: Many thousands of discrete measurements 1 st Generation (1983) 2 nd Generation (1993) 3 rd Generation (2011) 61

62 Droplet Digital PCR Finding Needles in a Haystack 62

63 Droplet Digital PCR 1983 PCR qpcr ddpcr ,000 wild type molecules 40 mutant molecules Mutant Abundance = 0.1% 40 droplets containing mutant molecules Mutant Abundance = 33% 19,960 droplets without mutant molecules The Power of Partitioning: Increased Sensitivity + Increased Precision 63

64 Droplet Digital PCR Workflow 1983 Prepare Reaction Generate Droplets Amplify Targets Read Droplets 64

65 Enabling Technology ddpcr Gene Expression Infectious Disease Environmental Monitoring Liquid Biopsy Oncology Reference Standards Agriculture/Food Single Cell Analysis 65

66 Liquid Biopsy Why liquid biopsy? Rapid Cost Effective Non-invasive Crowley, E. et al. (2013) Liquid biopsy: monitoring cancergenetics in the blood Nat. Rev. Clin. Oncol. doi: /nrclinonc ctdna from plasma Structural changes Mutations Copy Number Variation (CNV) Methylation Enables Precision Medicine Diagnostic Prognostic Predictive A Holy Grail in Cancer Diagnostics

67 Clinical Adoption of ddpcr for Liquid Biopsy 600+ Peer-reviewed Liquid Biopsy Publications 67

68 Melanoma Liquid Biopsy Test The breakthrough technology in use is called Droplet Digital PCR (ddpcr). It allows researchers to screen a large quantity of molecules from a blood sample, allowing detection of gene mutations for a particular type of cancer. 68

69 Pathway to Diagnostics Growth Strategy CE-IVD marked platforms available outside the US Supports customers developing and validating tests (LDT) FDA submission in process CE-IVD Marked Systems CE-IVD Universal Consumables Licensing program for select 3 rd Party suppliers in some fields 3rd Party Kit Suppliers Bio-Rad Menu Large portfolio of research assays Oncology menu in development Focus on Liquid Biopsy Pathway to Diagnostics: Enabling Broad Adoption 69

70 Investing for the future Simplify the Digital PCR Workflow with Next Generation Platforms Bio-Pharma and diagnostics applications R+D Investments Increase Capability Higher multiplexing for ddpcr Expand ddpcr Assay Menu Applied and IVD oncology markets Provide Droplet-Based NGS Sample Prep Solutions To accelerate single cell genomics research To expand information gained from whole genome sequencing 70

71 Summary Digital Biology Droplet digital PCR has enabled discovery Liquid biopsy applications in oncology are driving the rapid move from translational medicine into the clinic Bio-Rad has a strategy for broad adoption of ddpcr platforms Droplet based NGS sample prep products will accelerate new discoveries in single cell and whole genome sequencing 71

72 Bio-Rad Laboratories, Inc. Investor Day 2017

73 Operations Overview John Goetz Executive Vice President, Chief Operating Officer

74 Agenda A Story of Change Transformational Elements Goals Opportunities Reduction and Control Summary 74

75 Time of Change Startup to Multinational Focus on customer needs first Rapid growth and expansion Acquisitions Vertically integrated divisions Reaching a Crossroads Markets matured, slowed Internal competition Duplication across business units Opportunities for Change Organization structure options Entities and Inventory Common processes Reduced costs 75

76 Transformational Changes ERP ROLLOUT Europe Live (April 2017) STRUCTURAL CHANGE Divisional Functional GLOBAL ORGANIZATIONS Supply Chain + Commercial SHARED SERVICE HUBS Accounting + Corporate 76

77 Transformation Goals Grow revenue faster: Improve our margins: Product divisions focused on new product development Commercial teams focused on aligned growth opportunities Grow Revenue Improve Margins One global supply chain organization focused on cost reduction Improve profitability of the business: Disciplined focus on OPEX spending control. Return Profitability Enterprise System Leverage an ERP system that is scalable: Fully implement ERP Standardize and improve efficiencies Total Cultural Transformation 77

78 The Opportunity Leverage ERP Investment Increase visibility Optimize inventory levels Improve service Reduce scrap Lower project overhead Rationalize Global Footprint Consolidate distribution centers Close redundant commercial sites Increase Asia manufacturing Manage Procurement Centralized Procurement Global price concessions Targeted reduction in direct and indirect purchases 78 Building a Scalable Model

79 The QX200: A Model Product Fully redesigned by Bio-Rad 100% manufactured by Bio-Rad System + Reagent Growth 79 Focus on: Higher Margin Products in Faster-Growing Markets

80 Reduction and Control SG&A Levels: Ongoing Challenges Multiple, Ongoing Projects ERP + Reorganization European HQ Compliance + Regulatory Good News: Subsiding Costs Lowered ERP Spending Shared Services Benefits Control S&GA Lean 6-Sigma Programs R+D Focus: Reduce and Redirect Reduce Spend Closer to Industry Peer Group Redirect Resources to Higher Potential Returns 80

81 Summary - Global Operations Leverage Transformational Investments We Know the Opportunities We Are Going After Them Now 81

82 Bio-Rad Laboratories, Inc. Investor Day 2017

83 Financial Overview Christine Tsingos Executive Vice President, Chief Financial Officer

84 Agenda Driving Revenue Growth Expanding EBITDA Margins Accelerating Free Cash Flow Creating Shareholder Value 84

85 A Bit of History Significant Internal Investment over past 5 years Global ERP System New Organizational Structure New Operating Model Acquisition of Key Technologies Cell Biology Tools for Research Droplet Digital PCR Foreign Exchange Headwinds 85

86 The Path Forward Geographic Expansion Optimized Supply Chain New Products Reduced ERP Spend New Markets Driving Revenue Growth Expanding EBITDA Margins Shared Services Operating Leverage Increased Cash Flow Disciplined Capital Allocation Creating Shareholder Value Accelerating Free Cash Flow Higher Profitability Reduced CAPEX Tax Savings Key Contributions to Value Creation 86

87 Long-Term Financial Goals Target Revenue Growth 3 5 % Driving Revenue Growth Expanding EBITDA Margins Target EBITDA Margins 20+% in 2020 Deliver Substantial Value Creating Shareholder Value Accelerating Free Cash Flow Grow Faster than EBITDA Focus, Scalability, and Operating Leverage 87

88 Long-Term Financial Goals Outlook Assumes Outlook Does NOT Assume Obtain Larger Share of US Blood Typing Market Meet New Product Release Schedule Timely Regulatory Approvals Consolidation of Supply Chain Material Change in Global Regulatory or Macro Environment Trends Prospective M+A initiatives Future Operational Restructuring Impact from Currency Fluctuations Ability to Control SG&A Spend Current Foreign Exchange Rates 88

89 Driving Revenue Growth 4% 3% ~ 180 bps ~ 4.0+% 2% 1% ~ 3.0% ~ (150) bps Tender Pricing Pressure Increasing Competition Blood Virus Bus. Decline ~ 100 bps Blood Typing in US + China Diabetes Monitoring in Asia New Markets Cell sorting and Analysis Digital PCR for Research and Diagnostics Quality Controls Track Compatible D-100 0% Base Business Price / Competition Geographic Expansion New Products Target Growth Long-Term Currency Neutral Target 3 5% 89

90 Expanding EBITDA Margin 25% Adjusted EDITDA margin excludes purchase accounting and costs associated with restructuring, impairments, legal settlements, acquisition-related, and other atypical items. ~ 75 bps ~ (70) bps 20% ~ 500 bps Portfolio Management GnuBio Savings Increased R+D Productivity Reinstatement of Medical Device Tax Decreased D & A ~ 20+% 15% 10% ~ 14% Baseline Adjusted EBITDA ~ 170 bps Mfg. in Singapore Purchasing Power Logistics Efficiency Reduce Scrap Supply Chain Optimization Reduced ERP and IT Spend Shared Services Acquisition Contrib. Operating Leverage and Discipline SG&A Leverage R&D Focus Non-Discretionary 2020 Target Adjusted EBITDA Target 20+% in

91 Accelerating Free Cash Flow 10% 5% Higher Profits Lower Capital Expenditures European tax Benefit ~ 8 10% ~ 4 5% 0% 2017 Forecast 2020 Target Target FCF Margin as Percent of Revenue 91

92 Disciplined Capital Allocation Key Principles to Creating Value Execute 2020 plan to drive significant improvement in margins and cash flow Prioritize investment to drive organic and acquired growth Preserve strategic and financial flexibility r Maintain investment grade rating 92

93 Creating Shareholder Value Priorities for Capital Allocation Free Cash Flow Invest in the Business Targeted R+D Complete Global Systems Operating Model Balance Sheet Cash Attractive Acquisitions Defend Core Business Enter New Adjacent Areas Tuck-In to Transformational Debt Capacity Return Capital to Shareholders Share Repurchase to Return Value 93

94 M&A Strategy STRATEGIC OBJECTIVES Drive Market Leadership Improve Bio-Rad s Weighted Average Market Growth Rate Expand into Strategic Adjacencies Leverage our Core Strengths: Direct Channel, Supply Chain, Geographic Footprint GENERAL FINANCIAL GUIDELINES Accelerate Topline Growth Focus on Cash Contribution and Payback Preserve Investment Grade Credit Rating and Financial Flexibility 94

95 Return Value to Shareholders Successful Execution of 2020 Financial Goals Return on Internal Investments Share Repurchase Program $250 Million to Start Drive Substantial Cash flow Return Capital to Shareholders 95

96 Summary Long-Term Financial Goals The Path Forward: Driving Revenue Growth Expanding EBITDA Margin Accelerating Free Cash Flow Creating Shareholder Value 96

97 Bio-Rad Laboratories, Inc. Investor Day 2017

98 Closing Remarks Norman Schwartz

99 Summary Closing remarks Investments for the future at an inflection point Building on our market and product leadership Increased focus on acquisition opportunities Leveraging our new organization, operating model and systems to drive value 99

100 Q&A

101 Bio-Rad Laboratories, Inc. Investor Day 2017