INVESTOR & ANALYST MEETING December 15, 2016

Transcription

1 INVESTOR & ANALYST MEETING December 15, 2016

2 Forward Looking Statements Statements in this presentation that are not strictly historical, including any statements regarding events or developments that we believe or anticipate will or may occur in the future are "forward-looking" statements within the meaning of the federal securities laws. There are a number of important factors that could cause actual results, developments and business decisions to differ materially from those suggested or indicated by such forward-looking statements and you should not place undue reliance on any such forward-looking statements. These factors include, among other things, deterioration of or instability in the economy, the markets we serve and the financial markets, the impact of our restructuring activities on our ability to grow, contractions or growth rates and cyclicality of markets we serve, competition, our ability to develop and successfully market new products and technologies and expand into new markets, the potential for improper conduct by our employees, agents or business partners, our ability to successfully identify, consummate and integrate appropriate acquisitions and successfully complete divestitures and other dispositions, our ability to integrate the recent acquisitions of Pall Corporation and Cepheid and achieve the anticipated benefits of those transactions, contingent liabilities relating to acquisitions and divestitures (including tax-related and other contingent liabilities relating to the distributions of each of Fortive Corporation and our communications business), our compliance with applicable laws and regulations (including regulations relating to medical devices and the healthcare industry) and changes in applicable laws and regulations, our ability to effectively address cost reductions and other changes in the healthcare industry, risks relating to potential impairment of goodwill and other intangible assets, currency exchange rates, tax audits and changes in our tax rate and income tax liabilities, litigation and other contingent liabilities including intellectual property and environmental, health and safety matters, risks relating to product, service or software defects, product liability and recalls, risks relating to product manufacturing, the impact of our debt obligations on our operations and liquidity, our relationships with and the performance of our channel partners, commodity costs and surcharges, our ability to adjust purchases and manufacturing capacity to reflect market conditions, reliance on sole sources of supply, labor matters, international economic, political, legal, compliance and business factors (including the impact of the UK referendum to leave the EU), disruptions relating to man-made and natural disasters, security breaches or other disruptions of our information technology systems and pension plan costs. Additional information regarding the factors that may cause actual results to differ materially from these forward-looking statements is available in our SEC filings, including our 2015 Annual Report on Form 10-K and Quarterly Report on Form 10-Q for the third quarter of These forward-looking statements speak only as of the date of this presentation and the Company does not assume any obligation to update or revise any forward-looking statement, whether as a result of new information, future events and developments or otherwise. With respect to any non-gaap financial measures included in the following presentation, the accompanying information required by SEC Regulation G can be found in the Investors section of Danaher s website, under the heading Events & Presentations, and event name Danaher 2016 Investor & Analyst Meeting. All references in this presentation to earnings, revenues and other company-specific financial metrics relate only to the continuing operations of Danaher s business, unless otherwise noted. All references in this presentation to growth or other period-to-period changes refer to year-over-year comparisons unless otherwise indicated. We may also describe certain products and devices which have applications submitted and pending for certain regulatory approvals.

3 Agenda 9:30 am Welcome Matt Gugino 9:35 am Opening Remarks Tom Joyce 10:05 am Life Sciences Pall Water Quality Q&A Dan Daniel Rainer Blair Lance Reisman Daniel, Blair, Reisman 11:00 am Break All 11:20 am Diagnostics Product Identification Dental Q&A Arnd Kaldowski Joakim Weidemanis Amir Aghdaei Kaldowski, Weidemanis, Aghdaei 12:15 pm Closing Remarks & Guidance Tom Joyce 12:25 pm Q&A Tom Joyce 12:40 pm Program End / Lunch

4

5 OPENING REMARKS Tom Joyce, President & CEO

6 Danaher Today Life Sciences Diagnostics Dental Environmental & Applied Solutions ~$5.3B revenue ~$5.0B revenue ~$2.8B revenue ~$3.7B revenue Water Quality Product ID All financial metrics shown reflect 2016 estimated ( 2016E ) revenues from continuing operations. Building a multi-industry, science & technology company

7 2016 Highlights Team executing well in current macro environment Consistent core revenue growth across all 4 segments Estimated FCF of ~$2.5B expected to exceed Net Income for 25 th consecutive year Expanding margins while reinvesting Core OMX up 90bps YTD Ex-Pall GM up 130bps y/y, G&A* down, R&D/S&M* up 90bps Announced and closed ~$5B in acquisitions, including Cepheid and Phenomenex ~10 deals across all 5 platforms Completed separation of Fortive in July * As a % of total revenues. All figures on this slide are for the nine months ended September 30, 2016 unless otherwise indicated. ~20% adjusted EPS growth y/y expected in 2016

8 What You ll Hear Today Danaher Business System is our culture and our competitive advantage Outstanding portfolio with significant growth and margin opportunities Superior FCF generation and disciplined M&A help drive compounding long-term returns

9 DBS is Our Culture

10 DBS Principles and 8 Core Value Drivers Leadership Shareholder Core Growth OMX Cash Flow / WC Turns ROIC Growth Lean Customer Associate Quality (External PPM) On-Time Delivery Internal Fill Rate Retention OMX is Operating Margin Expansion; WC is Working Capital Expand capabilities, drive consistent execution, sustain results

11 Leadership & Talent The Best Team Wins Expectations of Danaher leaders To lead through DBS Build leadership pipeline for their business, succession plans for critical roles Talent development helps fuel performance Export talent across Danaher Ensure DBS leadership at acquisitions Infused DHR Leaders President CFO, Finance Operations Service Promoted Pall Talent Business Presidents General Managers HR Legal Senior Leadership Team Retained Pall Leaders General Managers Technology IT Added External Hires Legal Compliance Sustaining the DBS culture across Danaher as we grow and evolve

12 Danaher Business System is our culture and our competitive advantage Outstanding portfolio with significant growth and margin opportunities Superior FCF generation and disciplined M&A help drive compounding long-term returns

13 Outstanding Portfolio Overview ~$17B REVENUE Danaher Today EAS 22% By Business Dental 16% Diagnostics 30% Life Sciences 32% ~55% GROSS MARGIN Mid-teens OPERATING MARGIN Business Characteristics Market leading positions Resilient business models >100% FREE CASH FLOW TO NET INCOME Outstanding brands Large installed base Equipment 35% By Mix Consumables 65% By Geography HGM 29% ROW 7% EU 24% NA 40% Strong Secular Growth Drivers Increasing environmental, healthcare and food safety regulatory requirements and changes Improving standards of care in high growth markets (HGM) Proliferation of digital trends Strong growth, free cash flow and earnings profile All financial metrics based on 2016E unless otherwise indicated.

14 Portfolio Evolution Other/ Niche Life Sciences 17% & Diagnostics Tools 32% Dental T&M Test & Measurement 15% T&M Dental Life Sciences Diagnostics 16% & Diagnostics 30% Environmental Life Industrial Sciences Dental PID Technologies 32% 10% Water Quality 12% Environmental Environmental 15% Industrial Technologies Motion 21% Strengthening our competitive advantage with DBS Investing in the highest impact growth opportunities 2002 Today Improving and sustaining our marketleading positions Revenue $4.6B ~$17B HGM %* ~8% ~28% GM %* 39% ~55% Consumables %* < 15% ~65% Associates 29,000 60,000+ *As a % of total revenues. Strategic priorities have helped drive portfolio evolution

15 Portfolio Key Initiatives Building Scale at the Platform Level 1999 Recent Key Strategic Acquisitions 2014 Premium Implants Digital Dentistry Spin-off of Fortive Beachhead Asset + Adjacencies, Bolt-ons 2015 Biopharmaceuticals 2016 Portfolio Optimization Molecular Diagnostics Recent strategic initiatives helping to optimize Danaher s portfolio for the long-term

16 Portfolio Business Model Well-established installed base drives aftermarket exposure, recurring revenues Reduced revenue volatility Increased customer intimacy Higher margin opportunities enable reinvestment Reinvestment fuels growth Consistently increased R&D, S&M Funded by higher GM, lower G&A Contributions of recent M&A Consumables 65% Equipment 35% All figures shown as a % of 2016E revenues. ~75% ~95% ~75% United by resilient business models with strong recurring revenue streams

17 Portfolio Growth Opportunity Approximately ½ of our total revenue has been part of Danaher for 5 years or less DBS Driving Core Revenue Growth Water Quality LSD MSD Product ID LSD MSD Radiometer LSD MSD/HSD Anticipated Core Revenue Growth of Recent Acquisitions Average age of the portfolio today is ~8 years MSD MSD DD MSD

18 Growth Opportunity Strategic Investment Investments in R&D Outperformance Accelerated Product Development Speed Design Review R&D + >50bps AS A % OF REVENUE LAST 4 YEARS Commercial Initiatives Market Penetration Funnel Management Transformative Marketing S&M + >100bps AS A % OF REVENUE LAST 4 YEARS Building Scale High Growth Markets LDD CAGR HGM REVENUE LAST 4 YEARS Case Study Case Study Case Study DHR China Dental Revenue X500R/B +MSD Core Revenue Growth each of the last 7 years Today 2011 ~$25M >$150M Outperformance by investing in the highest impact organic opportunities

19 Portfolio Margin Opportunity Approximately ½ of our total revenue has been part of Danaher for 5 years or less DBS Driving Operating Margins Water Quality Low-teens ~25% Product ID Low-teens ~25% Radiometer High-teens >25% Margins: New vs Tenured Midteens OPM ~50% GM OpCos owned < 5 years + >500 bps 20%+ OPM OpCos owned >10 years < 5 years > 12 years 55%+ GM Significant room to expand gross and operating margins All figures referenced are based on 2015 weighted averages.

20 Expect bps of core OMX annually for Danaher, driven by DBS Margin Opportunity Meaningful Runway Early innings at Pall, Nobel, Cepheid Significant runway at recent acquisitions Lean tools, direct/indirect spend, pricing 2nd wave at Beckman Coulter Expanded installed base Bolt-ons enhance higher margin opportunities Dental platform being treated as a new acquisition Represents >$10B (~60%) of $17B revenue DHR portfolio

21 Danaher Business System is our culture and our competitive advantage Outstanding portfolio with significant growth and margin opportunities Superior FCF generation and disciplined M&A help drive compounding long-term returns

22 Free Cash Flow A Key Differentiator Danaher FCF / NI Conversion $3,000 $2,000 $1.9B $2.2B $2.3B ~$2.5B 300% FCF 250% 200% 115% 135% 133% ~125% FCF/NI 150% $1, % 50% $ E 0% All figures referenced reflect Danaher results from continuing operations. Expect FCF to exceed Net Income for the 25 th consecutive year in 2016

23 M&A Our Strategic Approach M&A Considerations What We Look For MARKET Secular and structural growth drivers Fragmented (consolidation opportunities) COMPANY Competitive market position Strong brand and/or channel Consistent revenue visibility Higher margin businesses VALUATION Focus on ROIC DBS opportunities Sustainability Synergies with Danaher OpCos Combination of value and growth deals Pursuing value creation opportunities with a tailored integration for each deal

24 M&A Where We Focus Large Value Creating Opportunities Platform Extensions with Synergies Technology Additions to Platforms High Growth Markets Building a strong portfolio to drive shareholder value

25 Average ROIC of OpCos owned >10 years Start MSD M&A ROIC Performance TODAY Highteens Average ROIC of OpCos owned 5-10 years Start MSD TODAY DD Average ROIC of OpCos owned < 2 years TODAY MSD In 5 years DD All figures referenced are the weighted average ROIC for each group of OpCos shown. Consistent upward ROIC trajectory over the long-term

26 Building a multi-industry, science & technology company Summary Danaher Business System is our culture and our competitive advantage Outstanding portfolio with significant growth and margin opportunities Superior FCF generation and disciplined M&A help drive compounding long-term returns

27

28 LIFE SCIENCES Dan Daniel, Executive Vice President

29 Life Sciences Overview ~$5.3B REVENUE Mid-teens OPERATING MARGIN ~$40B MARKET SIZE Life Sciences Revenue 2016E Equipment 40% By Mix Consumables 60% By Geography HGM 27% ROW 9% EU 29% NA 35% Growth Drivers Evolution of life science research Growth of chronic diseases and infections HGM investing in basic and applied research capacity Customers Pharma/biotech Government, academic and clinical research Food & beverage, forensics, hospital/ reference labs Leading global brands serving attractive markets All financial metrics based on 2016E unless otherwise indicated.

30 2016 Highlights DBS having an immediate impact at Pall* MSD core growth and >400 bps OMX, >150 bps GM Improved OTD by >2,000 bps >$20M in working capital improvement Continuing to expand margins, driving investment in innovation across the platform Core OMX >75bps, HGM revenue up HSD >100 new product launches in 2016/2017, including a 50% increase in LS Tools Expanded growth and margin opportunity Entered highly attractive chromatography consumables market with Phenomenex acquisition Today ~75% of operating profit from OpCos owned < 7 years * Results since acquisition. All figures on this slide are for the nine months ended September 30, 2016 unless otherwise indicated. Positioned for a good 2016 finish and driving long-term results

31 How We Win in Life Sciences Strong global brands supported by high level of innovation Best-in-Class analytical technologies focused on key applications Leverage global sales force to target highest growth segments Service and low-cost manufacturing provides competitive advantage Compete on performance, speed and accuracy in biopharma, academic, applied and clinical research verticals Focused on areas of highest growth and highest customer impact

32 Broad set of DBS tools provide levers for growth and operational improvements Examples of DBS Tools Growth Lean Leadership Leadership Speed Design Review Accelerated Product Development Lean Conversion Value Stream Mapping Executive Champion Orientation Danaher Leadership Program Market Segmentation Sourcing Workshop & Supply Base Management Building Inclusive Leaders Growth Lean Sales Force Initiative/ Value Selling Production Preparation Process Situational Leadership Funnel Management Danaher Materials System Strategic Negotiations Transformative Marketing Customer Service & Support Performance for Growth

33 Broad Presence in Biologic Drug Development Process ~$1.5B biologics revenue exposure across our Life Sciences Platform Workflow Target selection & validation Lead Generation / Optimization Cell Line Development Pre-Clinical / Clinical Process Development Drug Production (Process Dev./Clinical and Commercial) Market Growth + MSD + HSD + HSD + HSD + HSD + HSD/ LDD Company DHR Revenue ~$500M ~$1B

34 X500B QTOF SCIEX First high-res Mass Spec solution specifically designed for complex biologics characterization Easy-to-use: accessible to even novice MS users Compact footprint Differentiated BioPharmaView software enables faster decisions Increases exposure to fastgrowing biologics market DBS Driving Growth New Product Innovation in Biologics HSD MARKET GROWTH Vi-CELL MetaFLEX Beckman Coulter Life Sciences Identified unmet market needs and used existing technology to quickly develop new product Tests for cell viability, a critical component of biologics drug research and process development Internal collaboration (Radiometer technology) < 6 mos TO LAUNCH 22 hrs A DAY UPTIME < 60 sec TURN- AROUND Unique new products to create value for our customers, expand addressable market by >$200M

35 DBS Driving Growth Innovation & Commercial Execution at BEC-LS New product innovation & commercial execution drove >200 bps share gains New product innovation DBS disciplined tollgate process Breakthrough innovation: Flow Cytometry Salesforce alignment & incentives From geography to specific customer/market needs Sales & service driving the right behaviors to sell more of what we have Demand generation Market visibility & lead generation from marketing and service leads Funnel Management for growth execution R&D Vitality R&D NPD focus R&D On-time to market Marketing Visibility Marketing Lead conversion Core Revenue Growth E <$50M >$100M ~70% ~90% ~55% ~80% <10% ~85% < 30% >80% LSD MSD

36 DBS Driving Growth & Lean SCIEX Replaced JV structure with customer focused model, improved processes with DBS 2005 to to 2016E Targeted investments in innovation driving above-market growth Completely refreshed product portfolio Integrated, best-in-class software capabilities X500R/B QTOF are game changers in routine testing Commercial initiatives driving penetration in new markets and higher-growth segments Core Revenue Growth GM %* R&D %* OMX HGM %* # of New Products LSD MSD/HSD ~50% Mid-50s ~7% ~10% bps + >600 bps < 15% >25% 1 >15 * As a % of total revenue. Franchise re-positioned for continued outperformance

37 SCIEX Phenomenex Acquisition A leading provider of chromatography consumables >60% GROSS MARGINS ~25% OPERATING MARGINS ~95% CONSUMABLES REVENUE Strategic Rationale Highly attractive SCIEX adjacency with high consumables mix Strong brand, leading position in +MSD growth separations consumables market Opportunity to drive growth, productivity improvements, and enhanced GTM capabilities using DBS Expect double-digit ROIC in less than 5 years All financial metrics on this slide based on 2015 unless otherwise indicated.

38 Summary Outstanding global brands built on best-in-class technologies, in attractive markets DBS growth tools driving new product innovation Significant opportunity going forward through organic execution and attractive value creation via M&A 38

39

40 PALL Rainer Blair, President

41 Pall Overview Pall Revenue 2016E By Mix By Geography ~$2.8B REVENUE Equipment 25% Consumables 75% ROW 11% NA 30% HGM 26% EU 33% Growth Drivers Expanding production of biopharmaceuticals Increasing global standards of medical care Environmental and safety regulations Growing complexity in electronics manufacturing ~$20B MARKET SIZE SUT, Lab 21% Medical 13% LS Food & Bev 14% By End-Markets Biopharma 52% Process 7% Machinery 17% Aero 20% Ind. Energy 30% MicroE 26% Customers Pharma/Biotech/Medical Food/Dairy/Beverage producers Process industries, micro-electronics manufacturing All financial metrics based on 2016E unless otherwise indicated. Outstanding, highly strategic asset with a very attractive business model

42 Pall s Biopharma Opportunity Significant Runway in Biopharma Pall Touches Every Step of Bioproduction Large and growing pipeline of biologic molecules Single-use technologies (SUT) adoption still in early innings Continuous bioprocessing still to come 7 of 10 top-selling drugs are biologics >2,500 biologic molecules in the approval pipeline, +15% y/y < 20% of current processes for marketed drugs use SUT $4B+ addressable market growing LDD 9 out of 12 FDA cleared biologics last year specified Pall products in their processes

43 2016 Highlights Improving operational and commercial execution Increased on-time delivery (OTD) by >2,000bps and improved working capital turns by ~20%* Increased sales funnel by 70%* Reducing manufacturing and operating costs Achieved >$100M in year 1 cost savings vs. initial $60M target Accelerating innovation through reinvestment +50% increase in new product launches in 2016 across Life Sciences and Industrial Reduced development time for top 10 projects by 25%* * Results since acquisition. All figures on this slide are for the nine months ended September 30, 2016 unless otherwise indicated. Pall is off to a strong start MSD CORE GROWTH >150bps GROSS MARGIN SINCE ACQ. >400bps OMX SINCE ACQ. STR Bioreactors (Biopharma) 5nm PTFE Filters (MicroE)

44 Tailored Acquisition Integration with DBS Growth Leadership Lean Tailoring the Integration Using the Danaher Business System Enhanced the Beckman playbook Prioritized the highest-impact issues Key Areas of Focus Improving execution Deep DBS bench in action Pall associates fully embracing DBS Reducing costs Accelerating innovation >50 DHR ASSOCIATES FACILITATING DBS >300 KAIZEN EVENTS SINCE CLOSE Rapid DBS adoption has been a critical driver of Pall s great start >70% OF ASSOCIATES COMPLETED DBS TRAINING IN THE FIRST 90 DAYS

45 DBS Driving Lean Kaizens in Action Lean Conversion Timonium, MD Manufacturing Cell OTD improvement from 82% to 95% Enabled same day response vs next day Productivity improvement of 84% Reduced floor space required by 25% Lean Kaizen Pall Ilfracombe, UK Facility Team 1: OTD from 85% to 96% Team 2: 80% reduction in avg. stock outs Team 3: 75% reduction in data entry time Team 4: 60% reduction in reworks Floor space freed up New cell for lower volume products & same day / next day requests All financial metrics on this slide represent changes since acquisition. Improvements in OTD enabling Pall to maximize value provided to customers

46 Meaningful gains in quality and delivery >250 operational process improvements (kaizens) 19 line moves, 4 plant/warehouse consolidations Significantly reduced costs >$40M savings from procurement, scrap reduction Reduced logistics costs by ~10% Reduced plant labor by 100bps (as % of sales) DBS commercial initiatives driving better go-tomarket capabilities DBS Driving Lean & Growth Operational & Commercial Execution Stream-lined sales funnel process to improve win rates Marketing campaigns improving market visibility by 3x and sales opportunities by 5x All financial metrics on this slide represent changes since acquisition unless otherwise indicated. On-Time Delivery +2,000 BPS E Marketing Generated Sales Opportunities E Better execution driving increased margins, accelerating growth opportunities >5X

47 DBS Driving Growth Product Innovation Pall has a strong innovative foundation >350 scientists worldwide across 11 facilities >1,300 patents held, >680 pending, add ~25/year Accelerating new product development Compressed cycle times with standard DBS tools 35 new products launched (vs 24 in 2015) On-time to market project tracking up +2,700bps y/y Recent Technology Recognition Cadence Acoustic Separator Changing the Game in Continuous BioProcessing Preserving entrepreneurial spirit with DBS rigor Focus on larger breakthrough projects Implemented new DBS-based framework to rapidly assess and convert concepts to actionable projects BioSMB GMP (Biopharma) DBS enables increased investment in innovation for competitive advantage

48 Summary Well-positioned to win, with exposure to highgrowth end markets and critical applications DBS helping drive cost savings, improve commercial initiatives and accelerate innovation Pall is off to a great start with plenty of runway ahead

49

50 WATER QUALITY Lance Reisman, Group Executive

51 Water Quality Overview ~$2.1B REVENUE Mid-20s OPERATING MARGIN Water Quality Revenue 2016E Equipment 40% By Mix Consumables 60% ~$15B MARKET SIZE By Geography HGM 28% EU 18% ROW 2% NA 52% Growth Drivers Increasing regulatory requirements and changes Water scarcity/drought conditions, sustainability Demand for full workflow solutions, efficiency Customers Municipal water facilities (waste & drinking water) Industrial applications (food & beverage, pharma, chemical, power) Research & environmental, agriculture/irrigation All financial metrics based on 2016E unless otherwise indicated. Strong fundamental growth drivers and diverse, global customer base

52 2016 Highlights Expanding global presence, capabilities +DD increase in Feet-on-the-Street (FOTS) in NA, HGM +HSD service revenue growth Bolt-on acquisitions helping accelerate growth 7 deals over last 3 years expanding adjacencies and increasing presence in HGM Continued focus on innovation Trojan UVFlex winning in growing reuse space New product launches over past 3 years driving MSD growth in drinking water vertical in 2016 All figures on this slide are for the nine months ended September 30, 2016 unless otherwise indicated. Investment in new products and go-to-market driving share gains

53 How We Win in Water Quality End User Municipal Industrial Environmental Served Customers Municipal drinking and waste water facilities Industrial plants (Power, F&B, O&G, etc.) Government and scientific research agencies Application Monitor and treat drinking and wastewater Monitor and treat inflow, utility and discharge water Measure natural resource water (seas, rivers, weather) Brand Equity Product Advantages Regulatory and workflow in drinking & waste water; Reuse Deliver application expertise via products, service, proprietary chemicals End-to-end monitoring with differentiated capabilities Commercial Advantages Direct selling (1,000+ Associates in Water Quality) & channel partner network Dedicated resources per OpCo focused on targeted segments Strategic initiatives (Transformative Marketing, Funnel Management, tender execution, services) Winning with strong brands, product & commercial innovation across segments

54 Strategic Rationale Recent bolt-on successes augment core growth, provide additional M&A runway Expanding into Meteorology Expanding Market Position via M&A Adding Communications Capabilities Expansion in Latin America Adds critical part of water cycle management to portfolio Positive macro trends Channel and project synergy Leading, differentiated communications position Complementary portfolios Direct channel strength in NA, HGM project success Helping WQ gain share Strong footprint, direct reach Beachhead for future regional expansion

55 DBS is our sustainable competitive advantage, evolving over time Examples of DBS Tools Growth Lean Leadership Leadership Speed Design Review Accelerated Product Development Lean Conversion Value Stream Mapping Executive Champion Orientation Danaher Leadership Program Market Segmentation Sourcing Workshop & Supply Base Management Building Inclusive Leaders Growth Lean Sales Force Initiative/ Value Selling Production Preparation Process Situational Leadership Funnel Management Danaher Materials System Strategic Negotiations Transformative Marketing Customer Service & Support Performance for Growth

56 DBS Driving Growth & Lean Continued Success * As a % of total revenues. Lean Continuous improvement carries on 10+ years later Problem Solving Process Lean Conversion +200bps ON-TIME DELIVERY YTD +400bps OMX SINCE bps GM SINCE 2011 REINVESTMENT Growth Using DBS growth initiatives to drive share gains Commercial execution New products Utilizing platform capabilities Funnel Management Transformative Marketing +70bps R&D / S&M* SINCE 2011 Driving profitability improvement while gaining ~150bps of share last several years +2X +15% LEAD GEN. REVENUE HACH 2016 BOOKINGS GLOBAL KEY ACCOUNTS HACH 2016

57 DBS Building Leadership Developing Leaders at Danaher Utilizing a combination of development programs and processes EXPERIENCE 70% Stretch roles Application of key learnings, develop Delivering results Experiential learning in trainings COACHING 20% Development plan execution Senior leader coaching Mentoring Best practice sharing Coaching guides TRAINING 10% Situational Leadership General Manager Development Program Danaher Leadership Program

58 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% % 90.00% 80.00% 70.00% 60.00% 50.00% 40.00% 30.00% 20.00% 10.00% 0.00% DBS Building Leadership Talent Development Water Quality is a net exporter of talent Filling leadership needs via internal fill Candidate pool > existing senior positions (~2x+) New Presidents: typically held 4-6 developmental positions, 10 years at Danaher 26 SENIOR LEADERS Developed, promoted and exported from WQ over the last 3 years Internal Fill Senior Leader Retention 65% 70% 80% >95% >95% >97% President President E E HGM President CEO VP DBS Office Water Quality developing leaders across the platform and Danaher

59 Summary Exposure to highly attractive segments within water, with breadth and scale across the portfolio Continuous improvement enables high-impact organic and inorganic growth investments DBS helping Water Quality develop leaders across the platform and Danaher

60

61 Giving Back X-Rite partners with Junior Achievement to help empower and inspire young people through entrepreneurship, financial literacy and work-readiness programs. Hach is proud to support an organization dedicated to improving lives across the globe with the most basic of human needs: clean water. Beckman Coulter s long-standing partnership with ACS allows the team to support their local communities and many associates impacted by cancer. Direct Relief uses innovative approaches for the efficient delivery of medical aid, serving the needs of communities close to our associates around the world. Oral Health America s mission to improve communities access to oral health care is a cause near and dear to KavoKerr associates.

62

63 DIAGNOSTICS Arnd Kaldowski, President & Group Executive

64 Diagnostics Overview ~$5.0B REVENUE Equipment 20% By Mix Consumables 80% Midteens OPERATING MARGIN Diagnostics Revenue 2016E HGM 35% ROW 7% ~$35B MARKET SIZE By Geography EU 19% NA 39% Growth Drivers Rapid growth in healthcare expenditures in HGM Greater investment in preventative, predictive medicine Skilled labor shortage, cost pressures necessitating automated solutions Hospital labs Reference labs Customers Hospital critical care Histopathology labs All financial metrics based on 2016E unless otherwise indicated. Exceptional product portfolio coupled with scaled, global presence

65 2016 Highlights Driving productivity to fund growth OMX ~100bps and continuing to expand R&D, FOTS Line of sight to 20% OPM Increased momentum of new platform launches BEC Dx expects meaningful new product revenue generated from recent product launches Continued share gains across certain product lines and geographies RAD, LBS share gains in Blood Gas, POC Immunoassay, Adv. Staining HSD sales growth across HGM Cepheid acquisition accelerates our molecular strategy Complementary addition with growth, OMX runway at DHR All figures on this slide are for the nine months ended September 30, 2016 unless otherwise indicated. MSD core growth at LBS, Radiometer with continued OMX across the platform

66 Cepheid Overview >$600M REVENUE ~50% GROSS MARGIN ~75% CONSUMABLES REVENUE Cepheid is a leading player in the fast-growing, highly attractive molecular diagnostics (MDx) industry $6B market growing HSD/LDD, sizeable market penetration runway Only ~1/3 of US hospitals have MDx capabilities Largest installed base, broadest test menu in MDx Further strengthens Danaher s $5B Diagnostics platform Meaningful opportunities with DBS DD CORE REVENUE GROWTH Operational efficiency, profitable growth, increased scale (including in HGM) All financial metrics based on 2016E unless otherwise indicated. Significant growth runway, with tremendous upside through the platform & DBS

67 How We Win in Diagnostics Innovative clinical workflow solutions enable customers to improve operations Breadth of Offering Leading Products Scaled global distribution and service network Surgical, Intensive Care Emergency Neo-natal Hematology, Chemistry, Microbiology Stem Cell Transplant BOND / Advanced Staining Fastest turn-around time in the market Serving large installed bases in all major geographies Anatomic Pathology, Cytology, Molecular Medicine Labs Point of Care Oncology, Tumor Boards Chemistry / IA & Automation Highest throughput in the market Automation DBS services Blood Banking, Urinalysis Highest quality, broadest product line for critical care testing at hospital POC

68 Broad range of DBS tools deployed to drive growth Examples of DBS Growth Tools Growth Lean Leadership Leadership Speed Design Review Accelerated Product Development Lean Conversion Value Stream Mapping Executive Champion Orientation Danaher Leadership Program Market Segmentation Sourcing Workshop & Supply Base Management Building Inclusive Leaders Growth Lean Sales Force Initiative/ Value Selling Production Preparation Process Situational Leadership Funnel Management Danaher Materials System Strategic Negotiations Transformative Marketing Customer Service & Support Performance for Growth

69 DBS Driving Growth in HGM Application of DBS growth tools in HGM enables strong execution, market penetration Building broader commercial capabilities Expanding direct channels to HGM end-users RAD, BEC Dx China salesforce now >2x vs 2011 BEC Dx associates in LatAm, ME now >3x vs 2011 Localizing products particularly in China LBS launched new products developed by China R&D team BEC Dx opened R&D center in Suzhou for instruments, reagents: produce 120+ different assays BEC Dx R&D engineers in China & India now >6x vs 2014 BEC Dx Revenue: Going Deeper in China DD Diagnostics revenue CAGR in HGM over the last 5 years $- Dx HGM Revenue 2016E ~$1.8B REVENUE >10% CAGR E. Europe & Russia Middle East & Africa LatAm Other India China E

70 DBS Driving Growth New Product Innovation Continued investment in R&D outpacing sales growth R&D spend: 2x sales growth over the last 2 years Number of Dx R&D associates up >25% vs 2013, BEC Dx up >30% DBS tools accelerating time to market Visual Project Management, Speed Design Review BEC Dx projects on-time to market from <25% to ~70% Increased momentum of new product launches Launched 8 new instruments in 2015/16 vs 2 in 2014/15 VERIS Molecular Diagnostics DxH500 Mid range Hematology analyzer ABL9 Blood gas analyzer Diagnostics R&D +35% over the last 3 years, driving new product launch cadence

71 Summary Full scale offering across clinical diagnostics Cepheid helps enhance our molecular diagnostics offering and the entire platform DBS growth tools accelerating new product innovation and going deeper in HGM

72

73 PRODUCT ID Joakim Weidemanis, Group Executive

74 Product ID Overview ~$1.6B REVENUE Equipment 45% By Mix Consumables 55% Mid-20s OPERATING MARGIN PID Revenue 2016E HGM 35% ROW 4% ~$8B MARKET SIZE By Geography EU 30% NA 31% Demand for brand consistency Consumer product safety and traceability Changing consumer behavior in HGM Packaging used to drive demand, now a key element in marketing campaigns Consumer packaged goods (CPG) Pharmaceuticals Growth Drivers Customers Packaging converters & printers Industrial products All financial metrics based on 2016E unless otherwise indicated. Strong fundamental growth drivers and diverse, global customer base

75 2016 Highlights New product innovation and expanded service capabilities drive share gains Esko: new software platforms for workflow digitization X-Rite: breakthrough appearance digitization offering DD service revenue growth continues; increased new product vitality Consistent DBS execution helping to fund reinvestment, accelerate core growth Sustainable productivity improvements, cost savings ~75bps core OMX Bolt-on acquisitions augmenting core growth Videojet: expanded traceability capabilities with Laetus Esko: digital asset management with MediaBeacon All figures on this slide are for the nine months ended September 30, 2016 unless otherwise indicated. Videojet core revenue growth MSD or better in each of the last 7 years

76 Bolt-ons Anchor companies How We Differentiate and Win Packaging Strategy Packaging Design Artwork Creation Package printing Inline coding and marking Distribution and Retail 2012 Packaging management, CAD and pre-press software Flexography imagers 2002 Marking and Coding 2013 Color standards Color workflow 2013 Spectrophotometers Color formulation SW + 12 bolt-on acquisitions 2015 Digital asset management and distribution software 2015 Pharma inspection Track and Trace Acquiring and extending capabilities to support simplification & agility of packaging value chain

77 Examples of DBS Tools Growth Lean Leadership Leadership Speed Design Review Accelerated Product Development Lean Conversion Value Stream Mapping Executive Champion Orientation Danaher Leadership Program Market Segmentation Sourcing Workshop & Supply Base Management Building Inclusive Leaders Growth Lean Sales Force Initiative/ Value Selling Production Preparation Process Situational Leadership Funnel Management Danaher Materials System Strategic Negotiations Transformative Marketing Customer Service & Support Performance for Growth Broad range of DBS tools driving operational improvements and share gains

78 Videojet Consistent DBS Execution Funding and Accelerating Growth Focused on continuous improvement 64 lean kaizens in 2016 Consistently improve manufacturing productivity ~5% each year Continued material cost savings: procurement and value engineering efforts drive ~5% savings annually Expanded DBS application for process innovation and productivity Customer experience Commercial growth New product development >200 BPS Operating Margin Expansion E Disciplined DBS application driving cost savings, enabling growth investments

79 Significant increase in qualified leads Generated through sustained, multi-year initiative Digital and Tele-Lead generation +30% vs 2013 DBS Driving Growth Transformative Marketing at Videojet New Customer Equipment Revenue +85% Expanding reach, improving messaging to drive increased market productivity Targeted contacts +135% since 2013 Organic web traffic +40% since 2013 Integrating with Funnel Management for improved sales productivity E Sales Engineer Productivity +20% Commercial innovation added bps of growth E

80 DBS Driving Growth Service Offering at Videojet Growing through disciplined service commercialization Sustained DD growth over past 3 years Fleet Connected with Remote Service 4x +45% Printers Under Service Contract Differentiating portfolio to better address customer needs, drive replacement Offerings based upon usage, response needs Drive customer productivity Expanding Remote Service Solutions Videojet Connect : significantly faster response time, reduced cost to serve Expanding to full product range and installed base; using predictive analytics E E Early innings of remote offering; differentiating with service to drive share gains

81 World leader in color management Entering new market beyond color with breakthrough technology Digital Appearance Management Footwear personalization drives >10x increase in use of new materials and colors Virtualizing design concept workflow cuts time to market by 60%, simplifies materials management Use of DBS accelerated project execution 40% reduction in design time Initial sales figures realized sooner post-launch DBS Driving Growth Breakthrough Innovation at X-Rite Voice of the Customer To identify opportunity size and entry points Digital Mechanical Model Digitally rendered close to reality models, different materials applied (digitally) Speed Design Review Accelerated product development and launch DBS helps turn innovative concepts into profitable products in less time

82 Summary Differentiated product suite extending through full packaging workflow Focus on improvement driven by DBS contributes to commercial and new product innovation Continue to outgrow the market, expand margins, execute M&A to augment growth 82

83

84 DENTAL Amir Aghdaei, Group Executive

85 Dental Overview ~$2.8B REVENUE Equipment 30% Midteens OPERATING MARGIN Dental Revenue 2016E By Mix Consumables 70% ~$20B MARKET SIZE By Geography HGM 20% EU 23% ROW 6% NA 51% Growth Drivers Global demographic trends aging population Growing middle class in high growth markets Digitizing the dental practice Cosmetic and aesthetics dentistry Customers General practices Specialists: Endo / Ortho Perio / Surgical Group practices Schools, hospitals, government All financial metrics based on 2016E unless otherwise indicated. Strong fundamental growth drivers and diverse, global customer base

86 2016 Highlights Approaching the Dental platform as a new acquisition Improving performance trajectory LSD core revenue growth and >100bps OMX Nobel off to a great start: MSD growth, >500bps OMX since acquisition Ormco, Equipment: LSD/MSD core growth, improving margins Reinvesting: R&D up ~10%, commercial initiatives up 5% Continued success in HGM +45% HGM annual revenue over the last 3 years, >500 FOTS in HGM A leading China dental player: >$150M sales, DD+ growth Building scale at the platform level KaVo & Kerr integration announced Built platform digital center of excellence Operational leverage: factory consolidation All figures on this slide are for the nine months ended September 30, 2016 unless otherwise indicated. Solid performance, good trajectory, more work to do

87 Dental Platform Evolution Revenue GM %* OPM %* HGM %* R&D spend E $0.6B $2.1B $2.8B ~46% ~50% ~55% ~5% Low-teens Mid-teens 13% 18% >20% <$25M $75M >$150M Platform Repositioning Brand consolidation Focused leadership team 10% 50% 50% 30% Facility rationalization New product investment 90% 70% Equipment Consumables * As a % of total revenues. Evolved into full-scale dental provider with equipment, consumables, implants

88 Extensive portfolio, global partnerships, DBS is our competitive advantage How We Win in Dental Breadth of Offering Reach Execute with DBS Leading brands in all specialties Seamless workflow integration based on digital technologies Cover all dentists clinical needs >3,000 SALES REPS >2,000 COURSES PER YEAR 99% OF DENTIST OFFICES Growth Innovation investment Rigorous funnel management drives share gains Lean 50+ kaizens per year drive OP improvement, generate reinvestment $ for growth Leadership Attract/retain the best talent especially in HGM

89 Breadth of Offering Providing the Full Dental Solution Yesterday / Today: Point Solutions Equipment Consumables Software / Digital Full Product Suite Today / Tomorrow: Integrated Workflows Integrating, owning and optimizing dentists workflows Provide clinical know-how and efficiency improvements, easy to use digital integration Cover entire dental workflows across Ortho, Endo, Implant and Restorative Nobel acquisition added incremental digital and workflow capabilities Diagnostics Treatment Planning Transitioning the Dental platform from Old World to New World Treatment Execution

90 Examples of DBS Lean Tools Growth Lean Leadership Leadership Speed Design Review Accelerated Product Development Lean Conversion Value Stream Mapping Executive Champion Orientation Danaher Leadership Program Market Segmentation Sourcing Workshop & Supply Base Management Building Inclusive Leaders Growth Lean Sales Force Initiative/ Value Selling Production Preparation Process Situational Leadership Funnel Management Danaher Materials System Strategic Negotiations Transformative Marketing Customer Service & Support Performance for Growth Lean tools helping drive significant margin expansion at Dental

91 Dental as a New Acquisition Margin Development Gross Margin G&A* + >75 BPS E -50 BPS E Operating Margin R&D* + >100 BPS E +20 BPS E * As a % of total revenues. Line of sight to 20% operating margins

92 DBS driving growth and margin improvement at Ormco Series of Lean Kaizens (over the last months) Impact of Lean Conversion DBS Driving Lean Ormco Example Results in 2016E -15% SQ FT FOOTPRINT -35% CYCLE TIME +20% ON TIME DELIVERY +30% PRODUC- TIVITY >75bps OMX Y/Y +2X INVENTORY TURNS +50% THROUGH- PUT / VOL. 5S tool storage improved Heijunka level-loaded demand Kanban deployed pull system Revised cell layout for flow, productivity -75% PAST DUE SHIPMENTS +15% YIELD Created capacity to absorb new product demand +10% R&D SPEND Y/Y MSD CORE GROWTH

93 Repositioning for Growth Focused structure to facilitate improving core growth and margins Consolidated Platform Structure Until 2014 Today Future >10 OpCos $50-$400M sales each 10 Presidents, CFOs, et al. Separate operations, manufacturing sites Limited leverage of G&A / back-office 30% fewer manufacturing sites, sales offices Brand consolidation Consolidated commercial leadership Adding R&D, S&M capabilities Build a sustainable foundation based on DBS Rejuvenated innovation Digitally integrated workflow

94 Summary Breadth of product offering, full workflow solutions are differentiators Cost savings and platform consolidation driving reinvestment into commercial initiatives and new products, led by DBS Runway to 20% OPM and improving core growth

95

96 SUMMARY & OUTLOOK Tom Joyce, President & CEO

97 What You Heard Today Exciting year with the Team executing well Outstanding portfolio with significant growth and margin opportunities Danaher Business System is our culture and our competitive advantage Committed to creating long-term shareholder value

98 2017 Outlook Core revenue growth of 3-4% with ~35-40% fall-through Incremental contribution of ~$0.08* from Cepheid, Phenomenex, and other 2016 acquisitions Incremental F/X headwind of ~$375M in revenue and ~$0.08* in EPS Tax rate of ~21%, consistent with 2016 Anticipated EPS seasonality (as % of 2017 adjusted EPS guidance) Q1 ~21% Q2 ~25% Q3 ~24% Q4 ~30% *Impact to adjusted EPS Adjusted EPS guidance of $ Includes all acquisitions closed through 12/14/2016.

99 2017 Adjusted EPS Guidance $ $0.30 $ $3.95 $3.59 ($0.08) $0.06 $ adjusted EPS (mid-point of guidance) FX Productivity benefits, lower interest expense offset by higher sharecount, inflation, growth investments Contribution from Cepheid, Phenomenex, and other 2016 acquisitions Contribution from 3-4% core revenue growth at ~35-40% fall-through 2017 adjusted EPS guidance implies 7-10% growth y/y 2017 adjusted EPS guidance

100

101 Non-GAAP Reconciliations Danaher Corporation Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measures Year-Over-Year Core Operating Margin Changes Total Company Nine Month Period Ended October 2, 2015 Operating Profit Margins from Continuing Operations (GAAP) First nine months 2016 impact from operating profit margins of businesses that have been owned for less than one year or were disposed of during such period and did not qualify as discontinued operations 14.90% (0.45) Third quarter 2016 gain on resolution of acquisition-related matters 0.15 Acquisition-related transaction costs deemed significant, change in control payments, and fair value adjustments to inventory, in each case related to the acquisition of Pall Corporation and incurred in the third quarter of Fair value adjustments to Nobel Biocare acquisition-related inventory incurred in the first quarter of 2015 Year-over year core operating profit margin changes for first nine months 2016 (defined as all year-over-year operating profit margin changes other than the changes identified in the line items above) (Non-GAAP) Nine Month Period Ended September 30, 2016 Operating Profit Margins from Continuing Operations (GAAP) % Danaher Corporation Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measures Gross Profit, Research & Development and Sales and Marketing Expense Excluding the Impact of Pall Danaher Corporation (GAAP) Adjusted EPS guidance of $ Nine Month Period Ended September 30, 2016 Less Impact of Pall and Pall acquisition-related items ("Pall Impact") Danaher Corporation excluding Pall Impact (Non-GAAP) Year over Year Change: Gross Profit as % of Sales 110 Bps 20 Bps 130 Bps R&D and S&M as % of Sales (80) Bps 170 Bps 90 Bps

102 Non-GAAP Reconciliations Danaher Corporation Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measures Reconciliation of Operating Cash Flows from Continuing Operations (GAAP) to Free Cash Flow from Continuing Operations (Non-GAAP) $ in Billions Years Ended December E Free Cash Flow from Continuing Operations ($ in millions): Operating Cash Flows from Continuing Operations (GAAP) $ 2.4 $ 2.7 $ 2.8 $ 3.1 Less: purchases of property, plant & equipment (capital expenditures) from continuing operations (GAAP) (0.5) (0.5) (0.5) (0.6) Free Cash Flow from Continuing Operations (Non-GAAP) $ 1.9 $ 2.2 $ 2.3 $ 2.5 Ratio of Free Cash Flow to Net Earnings ($ in millions): Free Cash Flow from Continuing Operations from Above (Non-GAAP) $ 1.9 $ 2.2 $ 2.3 $ 2.5 Net Earnings from Continuing Operations (GAAP) Free Cash Flow from Continuing Operations to Net Earnings from Continuing Operations Conversion Ratio (Non-GAAP) 115% 135% 133% 125% Adjusted EPS guidance of $

103 Non-GAAP Reconciliations Danaher Corporation Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measures Adjusted Forecasted Diluted Net Earnings Per Share from Continuing Operations Year Ended December 31, 2015 Year Ending December 31, 2016 Forecasted Diluted Net Earnings Per Share from Continuing Operations (GAAP) Pretax amortization of acquisition-related intangible assets Pretax acquisition-related transaction costs deemed significant and fair-value adjustments Actual Low End of Guidance Range High End of Guidance Range $ 2.47 $ 2.86 $ A 0.81 A 0.81 A 0.21 B - - Pretax charge for early extinguishment of borrowings 0.26 C 0.26 C Pretax gain on resolution of acquisition-related matters (0.02) D (0.02) D Mid-point of Guidance Range Year-Over-Change (mid-point of 2016E guidance compared to 2015) Pretax gain on sales of investments (0.02) E (0.32) E (0.32) E F F F Tax effect of all adjustments reflected above (0.16) (0.16) (0.16) Discrete tax adjustments and other tax-related G (0.08) 0.14 adjustments G G 0.14 Forecasted Adjusted Diluted Net Earnings Per Share $ 2.98 $ 3.57 $ 3.61 $ 3.59 from Continuing Operations (Non-GAAP) 1 20% 1 The forward-looking estimates set forth above do not reflect future Fourth-Quarter 2016 gains and charges that are inherently difficult to predict and estimate due to their unknown timing, effect and/or significance, such as certain future gains or losses on the sale of investments, acquisition or divestiture-related gains or charges and discrete tax items. Adjusted EPS guidance of $