Non Deal Roadshow - Europe

Transcription

1 Non Deal Roadshow - Europe 2015 May Analyst Meeting February/March 2016 The world leader in serving science The world leader in serving science

2 Non-GAAP Measures This presentation contains certain financial measures not prepared in accordance with generally accepted accounting principles, or GAAP, including adjusted operating margin, adjusted EPS and adjusted ROIC. 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 Investors section of our website, thermofisher.com, under the heading Financial Information. 2

3 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 We enable our customers to make the world healthier, cleaner and safer 3

4 Four Complementary Reporting Segments Industry-leading technologies to solve a broad range of complex analytical challenges Chromatography and Mass Spectrometry Chemical Analysis Instruments Environmental and Process Instruments Clinical Assays Immunodiagnostics Microbiology Anatomical Pathology Transplant Diagnostics Healthcare Market Channel Specialty Diagnostics 19% Leading positions in attractive niche diagnostics segments Analytical Instruments 18% Total revenues ~$17B Life Sciences Solutions 25% Laboratory Products and Services 38% Extensive portfolio to accelerate life sciences research, discovery and diagnosis Biosciences Genetic Sciences Bioproduction Research and Safety Market Channels Laboratory Products BioPharma Services Industry-leading offering to increase laboratory productivity 4 Percentages based on unaudited 2015 revenue including estimates for intercompany eliminations and other accounting policy adjustments.

5 Diverse Customers, Product Mix & Geographic Reach Balanced and diverse customer base Strong recurring revenue mix Growing presence in emerging markets Diagnostics Pharma & Healthcare & Biotech 25% 30% Industrial & Applied 20% Academic & Government 25% Instruments Equipment & Software 25% Services 13% Consumables 62% Asia- Pacific 18% Europe 25% ROW 4% North America 53% End Markets Products Geographies 5 Percentages based on unaudited 2015 revenue.

6 Strong Track Record of Financial Performance Consistently delivering on our financial commitments 6 Adjusted ROIC = Annual adjusted net income excluding net interest expense, net of tax benefit, divided by trailing five quarter average invested capital.

7 High-Impact Innovation Across Our Technology Portfolio Enhancing our market leadership Laboratory Products & Services 7% Creating the next exciting growth opportunities Orbitrap Fusion Tribrid mass spectrometer PDM 3700 personal dust monitor Specialty Diagnostics 18% $700M Annual R&D Spend Life Sciences Solutions 45% Attune NxT acoustic focusing cytometer Gemini handheld chemical analyzer Analytical Instruments 30% Ion Reporter monitor with Oncomine Panel Q Exactive Focus mass spectrometer and Vanquish UHPLC system One Lambda HLA Kit with Ion PGM NGS QuantStudio 3 and 5 Cloud-enabled real-time qpcr systems 7

8 Expanding Impact of Our Customer Value Proposition Accelerate research Solve complex analytical challenges Improve diagnostics Enable technical innovation Expanding with existing customers 8% CAGR in biopharma last 5 years Increase lab productivity Customer Partner on R&D projects Adding new customer segments Utilize strategic outsourcing Support regulatory compliance Improve production efficiency Optimize supply chain Large biopharma Clinical reference and contract testing labs Chemical, petrochemical Medical devices Academic Small and medium-sized biotech 8

9 Established Leading Presence in Emerging Markets China Revenue ($B) $1.4 Developed Markets 82% $17B Revenue Emerging Markets 18% $ South Korea Brazil Middle East Southeast Asia Replicating our China strategy in additional high-growth regions $3B in revenue today, with many opportunities to grow 9

10 2015 PPI Business System Cost Savings Initiatives Facility Rationalization, Restructuring Low-Cost-Region Manufacturing 16% 5% PPI Projects Quality Productivity $330M of Savings 48% Customer Allegiance Global Sourcing 31% 10 Note: Represents estimated 2015 gross savings from listed initiatives before inflation.

11 Actively Managing the Capital Structure 2015 Capital Deployed Leverage Ratio* $500M in share buybacks $240M in dividends ~$700M in bolt-on M&A 3.6X 3.4X 3.2X 3.0X 2015 Q1'15 Q2'15 Q3'15 Q4'15 Positioned to take advantage of strong capital deployment capacity in * Leverage ratio is calculated as total gross debt to adjusted TTM EBITDA.

12 Completed Value Adding Acquisitions Advanced Scientifics, Inc Provider of customized single-use systems and process equipment for bioprocess production Integrated into Life Sciences Solutions segment Annual sales run rate of ~$80M Completed transaction on 2/4/15 for $300M Leading global manufacturer of research chemicals Integrated into Laboratory Products and Services segment Annual sales run rate of ~$125M Completed transaction on 9/30/15 for ~$400M 12

13 Capital Deployment: Acquisition of Affymetrix Acquisition Announced January 8, 2016 Business Profile Leader in cellular and genetic analysis products used by customers in life sciences and translational research, molecular diagnostics, reproductive health, and agricultural biotechnology Headquartered in Santa Clara, CA Approx. 1,100 employees Europe 23% Financial Profile Approximately $350M annual revenue RoW 4% APAC 12% U.S. 61% Instruments 5% Services/Other 11% Consumables 84% 13

14 Capital Deployment: Acquisition of Affymetrix Strategic Rationale Strengthens leadership in Biosciences and Genetic Analysis Strong fit into Life Sciences Solutions Segment Leverage our unique customer value proposition to cross sell our portfolio Transaction Details Purchase Price: Approx. $1.3B Financing: Cash and short term debt Path to Completion: Affymetrix shareholder approval and customary regulatory approvals Expected Close: By end of Q Creating Shareholder Value Accretion: Expected to be immediately accretive to adjusted EPS and add approximately $0.10 in the first full year Synergies: Expected to generate $70M of synergies by year three $55M in cost synergies $15M of adjusted operating income benefit from revenue related synergies 14

15 2016 Goals Capture Year 3 Synergies from Life Technologies Acquisition Achieve $150M run rate in revenue synergies generating $50M of adjusted operating income Revenue Drive incremental growth by innovating at a rate faster than our competition Capitalize on our strength in emerging markets through leveraging commercial reach Seize opportunities in developed markets Leverage our unique customer value proposition by cross selling our total portfolio Margin Continue to drive cost management through: utilization of global sourcing, expansion to lowcost regions, rationalization of facilities, and leveraging our PPI business system Capital Deployment Conduct shareholder friendly capital deployment through strategic M&A, share buybacks and dividends ROIC Continue to deliver on increases in adjusted ROIC 15

16 Our Proven Formula for Success Consistently Strong EPS Growth Organic Growth High-impact innovation Unique customer value proposition Scale in emerging markets PPI Business System Productivity Quality Customer allegiance Capital Deployment Strategic M&A Return of capital 16