The world leader in serving science
Marc N. Casper President and Chief Executive Officer January 9, 2018
36th Annual J.P. Morgan Healthcare Conference Marc N. Casper - - PowerPoint PPT Presentation
36th Annual J.P. Morgan Healthcare Conference Marc N. Casper President and Chief Executive Officer January 9, 2018 The world leader in serving science Safe Harbor / Non-GAAP Measures Various remarks that we may make in the following
The world leader in serving science
Marc N. Casper President and Chief Executive Officer January 9, 2018
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Various remarks that we may make in the following presentation 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 1995. 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 September 30, 2017, 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
governing government contracts, as well as the possibility that expected benefits related to recent or pending acquisitions may not materialize as
estimates change, therefore, you should not rely on these forward-looking statements as representing our views as of any date subsequent to today. During this presentation, we will be referring to certain financial measures not prepared in accordance with generally accepted accounting principles, or GAAP, including adjusted EPS and adjusted operating margin. The non-GAAP financial measures of Thermo Fisher’s results of operations and cash flows included in this presentation 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 under the heading “GAAP/Non-GAAP Reconciliation & Financial Package” in the “Investors” section of our website, www.thermofisher.com.
Safe Harbor / Non-GAAP Measures
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Unmatched Depth
Our Mission: To enable our customers to make the world healthier, cleaner and safer
We Are The World Leader in Serving Science
Global Scale
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Attractive Revenue Profile Positions Us for Growth
Balanced and Diverse Customer Base Growing Presence in Emerging Markets Strong Recurring Revenue Mix
NOTE: Pro forma revenue and percentages based on LTM through Q3 2017.
Total Pro Forma Revenue Including Patheon: ~$22B
Industrial & Applied
20%
Diagnostics & Healthcare
21%
Pharma & Biotech
36%
Academic & Government
23%
Consumables
53%
Services
22%
Instruments
25%
Europe
24%
Asia-Pacific
21%
ROW
3%
52%
North America
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Complementary Segments Create Competitive Advantage
Analytical Instruments
Revenue: $4.6B Adj. Operating Income: 21.2%
Life Sciences Solutions
Revenue: $5.6B Adj. Operating Income: 32.4%
Laboratory Products and Services
Pro Forma Revenue: $8.8B Pro Forma Adj. Operating Income: 12.5%
Specialty Diagnostics
Revenue: $3.4B Adj. Operating Income: 26.9%
Microbiology
Antimicrobial Susceptibility Testing Solutions QuantStudio Dx R qPCR
Genetic Sciences Laboratory Chemicals Bioproduction
Cell Culture Reagents
Biosciences
Life Science Reagents
Mass Spectrometry
Fusion Lumos MS
Chromatography
Vanquish UHPLC
Electron Microscopy
Titan Krios TEM
Reproductive Health
Microarrays iCAP Triple Quad MS
Clinical Diagnostics
PCT Biomarkers
Lab Equipment & Consumables
TSX ULT Freezers
ImmunoDiagnostics
ImmunoCAP Allergy and EliA Autoimmunity Tests
NOTE: Revenue and Adjusted Operating Income Margins are based on LTM through Q3 2017. Revenue and Adjusted Operating Income Margin for Laboratory Products and Services are calculated on a Pro Forma basis which includes the pre-acquisition results of Patheon for the entire period
SeqStudio CE System E1 ClipTip Pipette System
Clinical Oncology
Next-Gen Sequencing
Transplant Diagnostics
NXType High-Resolution Genotyping
Chemical Analysis
Gemini Handheld Analyzer
Channel BioPharma Services
Cryostar Tissue Sectioning
Pathology
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Consistently Delivering Excellent Financial Performance
2012 2016 2012 2016
9% CAGR 14% CAGR
Adjusted EPS Revenue Leveraging our industry leadership to achieve outstanding results
12% CAGR
Free Cash Flow
2011 Q3 2017 LTM 2011 2011 Q3 2017 LTM Q3 2017 LTM
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2017 Goals (as communicated at JPM Conference on January 10, 2017)
PPI business system
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2017 Goals (as communicated at JPM Conference on January 10, 2017)
PPI business system
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2017: Another Excellent Year of High Impact Innovation
structure and function
resolution mass spectrometry platforms
in the real world
protein analysis, biobanking, informatics and diagnostics
spectrometry workflows combining instruments, software and consumables
diagnostics
patient sample-to-answer clinical analyzer
Industry-leading R&D Investment
Customer Needs Our Solutions
Innovation investments put us at the forefront of scientific advances
6.6% of Total Manufacturing Revenue
NOTE: R&D and revenue based on LTM through Q3 2017.
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structure and function
resolution mass spectrometry platforms
in the real world
protein analysis, biobanking, informatics and diagnostics
spectrometry workflows combining instruments, software and consumables
diagnostics
patient sample-to-answer clinical analyzer
Industry-leading R&D Investment
Customer Needs Our Solutions
Innovation investments put us at the forefront of scientific advances
6.6% of Total Manufacturing Revenue
NOTE: R&D and revenue based on LTM through Q3 2017.
SeqStudio Genetic Analyzer Oncomine Dx Target Test Q Exactive HF-X Quadrupole-Orbitrap mass spectrometer ClipTip cloud-connected electronic pipette system
2017: Another Excellent Year of High Impact Innovation
Krios G3i Cryo-TEM
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China Market Dynamics $19.8B
Revenue
China
10%
Developed Markets
79%
Emerging Markets account for 21% of revenue
Capitalizing on attractive fundamentals and continuing to gain share
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NOTE: Revenue and geographic percentages in pie chart based on LTM through Q3 2017.
Scale in Emerging Markets: China Example
Other Emerging Markets
11%
2011 2016 LTM Q3 2017
$0.6B $1.7B $2.0B
Thermo Fisher China Revenue
innovation, healthcare and precision medicine, environment and food safety
Customer Experience Center in Guangzhou, China
by over 10% to support growing local and global demand
Average
growth
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2017 Goals (as communicated at JPM Conference on January 10, 2017)
PPI business system
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Quality Productivity Customer Allegiance
Consistently deliver world-class products and services Exceed expectations to maximize customer success Improve operating and process efficiency to strengthen
advantage
Practical Process Improvement (PPI) Business System Drives Operational Excellence
Adjusted Operating Margin %
2011 Q3 2017 LTM
23.4% 18.4%
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2017 Goals (as communicated at JPM Conference on January 10, 2017)
PPI business system
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Affymetrix & FEI: On Track to Meet or Exceed Deal Expectations FEI
(acquired September 2016)
to strong double-digits
Year 3 (2019):
manufacturing capacity which has helped capture incremental growth
versus original deal model
Affymetrix
(acquired March 2016)
introductions and leveraging our commercial reach
Year 3 (2019):
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2017 Goals (as communicated at JPM Conference on January 10, 2017)
PPI business system
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2017 Capital Deployment Summary
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Patheon Overview
Manati, Puerto Rico Florence, SC Greenville, NC Linz, Austria Ferentino and Monza, Italy
Locations
Drug Substance Services - Biologics Drug Substance Services - API Drug Product Services Pharma Development Services
4%
28% 68%
Europe North America ROW
Revenue by Geography
12% 27%
Revenue by Business / Capability
61%
Pharmaceutical Development Services
Drug Substance Services
Serves API Manufacturing Segment
Drug Product Services
Serves Finished Dosage Form Manufacturing Segment
Note: Financials reflect LTM as of Jan 31, 2017
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2017 Goals (as communicated at JPM Conference on January 10, 2017)
PPI business system
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Improving Adjusted ROIC
Note: Adjusted return on invested capital is annual adjusted net income excluding net interest expense, net of tax benefit therefrom, divided by trailing five quarters average invested capital.
10.7%
(w/o M&A)
9.8% 9.8%
Q3 2017 Q3 2016
annually on an operational basis Capital Deployed on M&A:
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2017 Goals (as communicated at JPM Conference on January 10, 2017)
PPI business system
Successfully achieved key business goals & delivered solid returns
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2018 Goals
while continuing debt repayment