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INVESTOR & ANALYST MEETING December 16, 2015
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 and enhanced products and services 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 recently acquired Pall Corporation and achieve the anticipated benefits of that transaction, our ability to successfully consummate the separation of Danaher into two public companies and realize the anticipated benefits of that transaction, contingent liabilities relating to acquisitions and divestures, 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 and 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, 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 2014 Annual Report on Form 10-K and Quarterly Report on Form 10-Q for the third quarter of 2015. 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 web site, www.danaher.com, under the heading “Investor Events,” and event name “Danaher 2015 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” refer to year-over-year growth unless otherwise indicated.
Agenda
11:00 am Welcome Matt Gugino 11:05 am Opening Remarks Tom Joyce 11:35 am Diagnostics
Life Sciences & Pall Q&A
Arnd Kaldowski Dan Daniel & Rainer Blair Kaldowski, Daniel, Blair
12:25 pm Lunch All 1:10 pm Fortive Corporation
Transportation Technologies Q&A
Jim Lico Martin Gafinowitz Lico, Gafinowitz
2:05 pm Closing Remarks & Guidance Tom Joyce 2:15 pm Q&A Tom Joyce 2:30 pm Program End
OPENING REMARKS Tom Joyce, President & CEO
Agenda
Portfolio Overview
Current Update
2015 in Review Strengthening our competitive advantage with DBS Investing in high-impact organic growth opportunities Optimizing our portfolio to improve and sustain our market-
leading positions
Danaher Today
Outstanding portfolio of businesses
Dental Life Sciences & Diagnostics
Test & Measurement
Industrial Technologies Environmental
Water Quality $2.0B
Gilbarco Veeder-Root $1.6B
Instruments $2.1B
Dental $2.7B
Product ID $1.6B
Automation $0.8B
Diagnostics $4.9B
Life Sciences $2.4B
Matco/Hennessy $0.6B
Pall $2.8B
Aggregate revenues for FY 2015E.
Sensors & Controls $0.6B
Specialty Industrial $0.4B
DBS is Our Culture
Current Update
Portfolio Overview
Current Update
2015 in Review Strengthening our competitive advantage with DBS Investing in high-impact organic growth opportunities Optimizing our portfolio to improve and sustain our market-
leading positions
Reaffirmed 4Q 2015 adjusted EPS guidance of $1.25-1.29 4Q margins tracking well, offsetting incremental order weakness in
industrial-oriented businesses Taking additional cost actions in 4Q to benefit 2016
Pall transition and Fortive launch both progressing well
Expect ~$100M in 2016 cost savings at Pall Separation expected to close in 3Q 2016
2016 Guidance
Anticipate core revenue growth of 2-3% Initiated adjusted EPS guidance range of $4.80-4.95
Current Update
2016 adjusted EPS guidance implies 12-15% earnings growth
2015 in Review
Portfolio Overview
Current Update
2015 in Review Strengthening our competitive advantage with DBS Investing in high-impact organic growth opportunities Optimizing our portfolio to improve and sustain our market-
leading positions
Top line outperformance in challenging macro environment Targeted investment spend, attractive end markets and business models drove solid
core growth ≥MSD growth at WQ, GVR, Life Sciences, Diagnostics, Fluke, Matco and PID
Core margin expansion while continuing to invest Core OMX of 75 bps >100 bps core OMX at Environmental, T&M and Industrial Tech GM up ~100 bps, helping fund long term investments R&D and S&M spend* up ~40 bps
Solid FCF and earnings performance Expect 24th consecutive year of FCF>NI
2015 Highlights
DBS driving strong performance All figures on this slide are for the nine months ended October 2, 2015 unless otherwise indicated. *As a % of sales.
DBS in Action @ Nobel Biocare
Enhancing commercial execution with DBS Transformative Marketing Funnel Management discipline
Amplifying core growth profile New product launches: NobelActive WP, NobelParallel Increased Feet-on-the-Street 20% in HGMs Digital workflow solutions: added 10,000th Nobel
Clinician customer in 3Q
Significant operating margin expansion DBS implementation driving >10% productivity
improvement Reduced indirect spend and improved W/C turns ~25%
DBS making a meaningful impact only one year in
2014 2015E Core sales growth % LSD MSD
Core OMX ~100 bps >300 bps
Portfolio Overview
Current Update
2015 in Review Strengthening our competitive advantage with DBS Investing in high-impact organic growth opportunities Optimizing our portfolio to improve and sustain our market-
leading positions
2015 in Review
Relative Outperformance in 2015E
DBS continuing to drive meaningful share gains
MSD core growth
Commercial execution Expanding LatAm footprint
MSD core growth
Funnel Management Technology leadership
MSD core growth
New product innovation Funnel Management
15th consecutive quarter ≥HSD core growth
HGM execution
Product innovation & service
DD core growth
VOC driving innovation Franchise expansion
MSD core growth
Accelerated Product Development Transformative Marketing
Product ID
Investing in new product innovation ~40%* new product vitality in 2015 Esko developing new/digital products
Staying ahead with expanded service capability Videojet Remote Service reducing customer downtime
and cost-to-serve Videojet service revenues up ~15% in 2015E Data-driven service driving penetration
Using bolt-on M&A to augment core growth
Esko: digital asset management with MediaBeacon Expanded “track and trace” capabilities with Laetus
Share gains continue at Product ID
2015E vs. 2014
Core sales growth % MSD
Core OMX >100 bps
*Equipment only
Water Quality
Water Quality outgrowing the market by nearly 2X
Expanding global capabilities Hach’s localized products, service and sales driving
high-teens growth in China ChemTreat growing DD in Latin America for 12
consecutive quarters
New product innovation simplifying customer workflows at Hach Real Time Control (RTC) solutions Portable Parallel Analyzer (PPA)
M&A enhancing product offerings and global reach Reactivos extends Hach’s coverage in Mexico Sutron & Lufft Mess complement Hach Environmental’s
offerings
2015E vs. 2014
Core sales growth % MSD
Core OMX ~100 bps
Portfolio Overview
Current Update
2015 in Review Strengthening our competitive advantage with DBS Investing in high-impact organic growth opportunities Optimizing our portfolio to improve and sustain our market-
leading positions
2015 in Review
2015 Portfolio Moves
Exciting and transformational year for Danaher
Closed $13.6B acquisition, largest in our history
Announced 2016 separation into two independent, publicly traded companies, and
One year in at
Completed disposition of to
Announced 11 additional acquisitions for ~$1B YTD
Pall Update
Closed acquisition ahead of schedule in August Financed in a very favorable interest rate environment for
highly-rated companies
Infusion of experienced DHR talent to accelerate adoption of DBS 12 senior leaders from Danaher Focusing on operational improvements Investing to accelerate growth and enhance go-to-market
activities
Now expect >$100M cost savings in 2016 Initial expectation was $60M per year starting in 2016 Anticipate ~$0.07 of adjusted EPS accretion in 2015, plus
incremental ~$0.40 in 2016
Pall off to a solid start
Revenue Gross Margin Operating Margin Free Cash Flow
Post-Separation Danaher
Strong growth, free cash flow and earnings profile
ROW 6%
NA 42%
EU 23%
HGM 29%
Diagnostics 30%
Life Sciences
15%
Product ID
10% Dental 16%
Water Quality
12% Pall Ind 8%
Pall LS 9%
Business
Geography
$16.5B 60% Recurring
>50% Mid-teens >100% FCF/NI Ratio
All figures on this slide based on 2015E.
Business Characteristics Market leading positions and outstanding brands MSD organic revenue growth anticipated Resilient business models with large installed base and
significant aftermarket exposure Expect strong FCF and balance sheet with bias toward M&A
Increasing environmental, healthcare and food safety regulations Proliferating digital trends Improving standards of care in HGMs
Secular Growth Drivers
Danaher’s Opportunity
United by resilient business models with significant room to improve through DBS
All revenue figures are aggregate for FY 2015E. *As a percent of 2015E sales.
BeckmanCoulter
Pall Dental Otherbusinesses
2015E Business OP Margins Revenue Recurring Revenue*
Water Quality $2.0B 55%
Product ID $1.6B 40%
Life Sciences $2.5B 50%
Diagnostics $4.9B 80%
Pall $2.8B 75%
Dental $2.8B 60%
Danaher $16.5B 60%
>20%
Mid-teens
~1/2 of total DHR revenue
Summary
Exciting year with the team executing well in a challenging environment
DBS helping to deliver core growth, margin expansion and share gains across the portfolio
Pall and separation provide expanded opportunity and renewed focus for driving future results
Committed to creating long-term shareholder value
DIAGNOSTICS Arnd Kaldowski, Group Executive
Agenda
Diagnostics Overview & 2015 Highlights Radiometer & Leica Biosystems
Beckman Coulter Update
Improving the customer experience Accelerating growth through commercial execution and
innovation Building the right team to drive results and foster DBS culture
Summary
80%
20%
Consumables/ServiceEquipment
Diagnostics Platform
Customers Hospital labs Reference labs Hospital critical care Histopathology labs
Growth Drivers Rapid growth in healthcare expenditures in HGMs Greater investment in preventative and predictive medicine Skilled labor shortage & cost pressures necessitating
automated solutions
Market Details Market Size ~$29B Growth Rate MSD
2015E Financials Revenue ~$4.9B OP Margin High teens Revenue Breakdown
Exceptional product portfolio coupled with scaled, global presence
39%
20%
34%
7%
NA EUHGM ROW
Geographic Mix
All financial metrics based on 2015E.
2015 Highlights
Strengthening our leading diagnostics portfolio All figures on this slide are for the nine months ended October 2, 2015 unless otherwise indicated.
Beckman Dx continues to improve MSD core growth and gaining share in Immunoassay, Automation
and Urinalysis 500+ bps core OMX improvement since acquisition
Gaining share and expanding margins at Radiometer and Leica Biosystems
Investing in innovation and HGMs S&M in HGMs and R&D spend both increased >10% Launched Veris, our random access Molecular platform
Strong start at MicroScan and Devicor Devicor double digit core growth
Radiometer and LBS Highlights
Radiometer and Leica Biosystems continue to take share All figures on this slide are for the nine months ended October 2, 2015 unless otherwise indicated.
MSD core revenue growth or better for 5th consecutive year Advanced Staining up DD
Key product launches at LBS
Q2: Aperio VERSA, digital research Scanner Q3: CV5030 TM, next generation H&E stainer Q4: Aperio LV1, desktop Scanner with real-time
sharing
Devicor acquisition off to a strong start DBS growth and lean tools already contributing
HSD core revenue growth for 5th consecutive year AQT continues strong with >20% core growth
Continued investments in sales channel Rebuilding, co-locating NA team with Beckman
enabled turn-around to MSD growth Continued expansion of direct business in HGMs
with >15% FOTS additions and 3 new direct geographies
Hemocue core growth accelerating to MSD only two years after acquisition Wins in India and Middle East related to transition of
hemoglobin testing to primary care
Beckman Coulter Update
Diagnostics Overview & 2015 Highlights Radiometer and LBS
Beckman Coulter Update
Improving the customer experience Accelerating growth through commercial execution and
innovation Building the right team to drive results and foster DBS culture
Summary
Winning with Danaher
2011 2015E Core Revenue Growth Flat MSD
Gross Margin % ~40% High 40s
Operating Margin % ~10% >15%
Working Capital ~$0.8B ~$0.5B
Runway for accelerated core revenue growth and continued margin improvement *Includes BEC-Dx and BEC-LS
Accelerating growth Focus on improving customer experience,
quality and commercial execution Investing in innovation Retention and win rates significantly improved R&D investment run rate increased ~$100M FOTS in HGMs increased >30% since 2011
Driving Productivity ~$350M in cost savings vs. $250M estimate* Simplified the complex, inefficient org structure Improved productivity and reduced indirect
spend
Broadening solutions with acquisitions of MicroScan, Normand and Iris
Our First Priorities: Quality Remediation and Customer Satisfaction
DBS critical to remediate quality issues and improve customer satisfaction
Regulatory compliance Before: 3 FDA warning letters, Troponin
restrictions By 2013: warning letters closed, FDA issued
approval for Troponin I assay Process simplification Before: extremely complex, cumbersome
quality system process with >3,600 procedures Current quality system: ~1,900 procedures,
nearly 50% reduction
Reliability of supply Before: significant reagent stock-outs, low OTD Now: >95% OTD
Product quality Before: several instruments below customer
expectations and reliability benchmarks Now: reduced instrument failure rates by >50%
Technical service delivery Before: bottom quartile among IVD players in
US in independent study Now: #1, #2 positions in same study
Quality Management System Customer Support & Product Quality
Investing for Growth
Strengthening commercial coverage in HGM Added >400 FOTS since acquisition Focus on China, Brazil, India, Middle East DD core growth in HGMs
Building global R&D capabilities Added >350 associates to product development India and China development centers with >100
associates combined New products adding >150 bps to 2015E growth Launched Veris and DxH500 in 2015
Funnel Management & Transformative Marketing Continuing to expand installed base Transformative Marketing increased funnel >$100M
Just beginning to see impact from investments and remediation efforts
+LSD
+LSD
+MSD +MSD
2011 2012 2013 2014 2015E
Core Revenue Growth Year-over-year
Flat
Driving Productivity
>$300M in cost reductions helping to fund growth and improve margins
~10%
>15%
2011 2015E
Operating Profit % of sales
Simplified organization to increase accountability and drive results Removed several management layers Reduced headcount by ~1,000 or >8%
Focused on improving manufacturing productivity and reducing indirect spend ~$150M savings from procurement and other
material costs Indirect spend reduced ~10% Reduced capital expenditures >40%
Reduced structural costs >$150M in annual savings ~20% reduction in annual lease expense
Working Capital Improvement
>$300M reduction in working capital since acquisition
AR: Daily Management drives visibility and prioritization
Inventory: Danaher Materials System and improved forecasting process drove 35% reduction through 2014
AP: More diligent usage of procurement card and supplier negotiations
4.5 4.9 5.2
6.4 6.8
2011 2012 2013 2014 2015E
Working Capital Turns
Building a Winning Team
Establishing a foundation for organizational health and company growth
Built a bench, now developing the next generation of Danaher leaders Internal fill rate up >2X from 2011 to 2015 Rigorous succession planning and
development of high potentials
Attracted diverse leadership and talent Talent funnel up 300% from 2011 to 2015
Simplified processes and organization to increase accountability Removed 2 management layers in customer
facing organization
Exporting talent to other Danaher OpCos Several Beckman senior leaders now at Pall
Post-acquisition Leadership
Team
Retained Beckman Leaders
Molecular Diagnostics RA/QA
Human Resources
Infused Danaher Leaders
President Operations Finance Marketing Service
Added External Hires
Sales Med Affairs
Promoted Internal Beckman Talent
Product Management R&D Legal
Summary
Solid year for our Diagnostics platform
Share gains continue at Radiometer/LBS; recent acquisitions off to a good start
Beckman is an outstanding story so far and continues to progress ahead of our initial expectations
Exceptional diagnostics portfolio with opportunities for future success
LIFE SCIENCES & PALL Dan Daniel, Executive Vice President
Rainer Blair, Group Executive
Agenda
Life Sciences Overview & 2015 Highlights
Pall Overview Biopharma Opportunity Priorities
DBS tools and training Focus on the customer with on time delivery Improving profitability while accelerating growth
Summary
Life Sciences
Customers Government, academic and clinical research Food & beverage, forensics, hospital/reference labs Pharma/biotech
Growth Drivers Evolution of life science research Growth of chronic diseases and infections HGMs investing in basic and applied research capacity
Market Details Market Size ~$15B Growth Rate MSD
2015E Financials Revenue ~$2.5B OP Margin Mid/high-teens
Geographic Mix Revenue Breakdown
NA EUHGM ROW
9% 38%
27%
26%
Consumables/ServiceEquipment
35% 65%
Leading global brands serving attractive markets All figures based on 2015E revenues.
2015 Highlights
Positioned for a strong 2015 finish and driving long-term results
MSD core growth with >30 bps OMX (>100 bps ex-FX) HSD core growth at SCIEX last two years New products driving relative outperformance in flow cytometry Expanded reported gross margin 60 bps and OP margin >150
bps over the last three years
Investing in innovation HSD R&D as % of sales for platform Significant new product launches in 2015, including:
SCIEX: X500R Mol Dev: ImageXpress Confocal BEC-LS: Cytoflex LMS: DVM6, DMi8
Continuing portfolio evolution with addition of Pall
All figures on this slide are for the nine months ended October 2, 2015 unless otherwise indicated.
Sustained Outperformance at SCIEX
Focus on innovation and new market penetration driving market share growth
+LSD
2005-2009 2010-2015
Core Growth Investments in innovation driving above-market growth Completely refreshed product portfolio since acquisition
2009: limited product portfolio with gaps Only 4 instruments
2015: >15 instruments covering all markets
Commercial initiatives driving penetration in new markets Focus on higher-growth markets: clinical, food, biologics Significant expansion in HGM, from <15% of sales in 2009 to
>25% in 2015E
X500R QTOF is game changer in routine testing Unparalleled price performance in segment Ease-of-use, scalability to meet various workflows
+MSD/HSD
Pall Overview
Life Sciences Overview & 2015 Highlights
Pall Overview Biopharma Opportunity Priorities
DBS tools and training Focus on the customer with on time delivery Improving profitability while accelerating growth
Summary
Pall
2015* Financials Revenue ~$2.8B OP Margin Mid-teens
Revenue Breakdown
Outstanding, highly strategic asset with very attractive business model
* FYE July 31, 2015
Geographic Mix
NA EU APAC
32%
41%
27%
Consumables/ServiceEquipment
75%
25%
BioPharma 2015* Revenue: ~$1.0B
Medical 2015* Revenue: ~$0.2B
Food & Beverage 2015* Revenue: ~$0.2B
Process 2015* Revenue: ~$0.8B
Microelectronics 2015* Revenue: ~$0.3B
Aerospace & Defense 2015* Revenue: ~$0.2B
Life Sciences: ~$1.5B
Industrial: ~$1.3B
Outstanding company with leadership positions in filtration, separation and purification, and an attractive business model 75% of revenue is recurring/consumables Multiple levels of differentiation: switching cost, regulatory, hard to emulate MSD growth driven by HSD+ growth in Biopharma
High-quality business with significant potential for operational improvement using DBS High impact opportunity with DBS
Substantial earnings accretion, strong cash flow and significant M&A runway potential Now expect ~$100M of cost savings in 2016 Significant working capital opportunities Multiple vectors for bolt-on acquisitions
A unique transformational opportunity
Strategic Rationale
Pall: Biopharma Opportunity & Priorities
Life Sciences Overview & 2015 Highlights
Pall Overview Biopharma Opportunity Priorities
DBS tools and training Focus on the customer with on time delivery Improving profitability while accelerating growth
Summary
The Biopharma Opportunity
$4B+ addressable market growing LDD; Pall touches every step of process
Core growth market is biologic-based therapies 7 of 10 top-selling drugs are biologics >900 biologic drugs in the approval pipeline Impact from genomics revolution yet to come
Attractive market with >80% recurring revenue
and high gross margin Filtration/separation technologies are key enablers;
manufacturing volume drives growth Regulation and performance create barriers to entry Single-use technology adoption: >20% growth at Pall
Significant investment to strengthen product portfolio and accelerate growth
DBS in Action at Pall
Pall associates taking DBS to a new level
Significant DBS deployment immediately at close >400 senior leaders trained as DBS champions >70% of all associates completed DBS introduction
training Enhanced the playbook used at BEC
Outstanding combination of Pall and DHR talent >90% senior Pall level 2/3 leaders retained 12 senior leaders from Danaher (Pres, CFO, Ops) >50 DHR associates facilitating DBS implementation
DBS is gaining traction >50 Kaizen events held since close
“Lean Conversion the DANAHER WAY works, and we
are having fun!” - Pall senior operating leader
“The input and attention to the AR team has been remarkable. Everybody has talked about it! Thank you for engaging upper
management and other departments on our behalf.”
- Pall accounts receivable associate
Focus on the Customer
Improving delivery to drive greater customer satisfaction
On time delivery to customer is our #1 priority DBS enabled immediate process improvements
7 plants identified for lean conversion, prioritized based on customer impact
Performed >25 “Lean” kaizens to date
Before After
~65% >95%
2010 Q4 2015E
A Look Back at BEC OTD Performance
Team Metric Improvement
Profile Output/Associate/Hour 302%
Lab MicroFunnel Plus Output/Associate/Hour 74%
Lab Microfunnel Output/Associate/Hour 65%
Biopharm Line 6 Output/Associate/Hour 91%
Biopharm Line 4 Change Time 71%
Recent “Lean” Kaizen Activity at Pall Puerto Rico Facility
Accelerating Growth and Improving Profitability
DBS a catalyst for cost structure improvement, growth acceleration
Accelerating growth via commercial execution Transformative Marketing: improving visibility in targeted applications Funnel Management: accelerating deal cycle time and improving win rates Speed Design Review: accelerating new product introduction
DBS helping to drive anticipated ~$150M gross margin improvement Lean conversion to drive productivity Simplification of supply chain, freight and scrap DHR procurement helping to reduce direct and indirect material costs
Reducing structural costs to deliver expected ~$150M improvement Public company costs Reduction in indirect spend Simplifying processes and organization
Summary
Leading Life Sciences businesses executing well in attractive markets; uniquely positioned for long-term success
Pall is an outstanding company, unique transformational opportunity for Danaher
DBS is leading the way at Pall, sharpening focus on profitability and accelerating growth
Giving Back
Each year, Gilbarco provides the funds and manpower to build a home for a
family in need in the Greensboro, NC
area.
Pall associates put their heads together to “brave the shave” and raise funds for
St. Baldrick’s mission to fund the
gap in lifesaving childhood cancer
research.
Tektronix’ Full Circle Partnership with the
Red Cross connects
associates’ philanthropic goals and interests with
Red Cross’ services, education, outreach and relief
efforts.
Beckman Coulter is proud to partner with the National
MS Society in support of the more
than 2.1 million people living with MS worldwide.
The American Heart Association's
mission to promote physical activity and heart-healthy living is near and dear to
Videojet associates.
FORTIVE CORPORATION Jim Lico
Agenda
Fortive Overview & 2015 Highlights
Fortive Strategic Priorities
Summary
Overview
Anticipated Capital Structure Investment grade credit rating Strong bias towards M&A
Growth Drivers Changing environmental regulations Energy efficiency, safety and security requirements Growing industrial base in high growth markets Global trend toward connected devices, software and digital service
Future Leadership Jim Lico, President and CEO – DHR leader for 19 yrs Chuck McLaughlin, CFO – DHR leader for 8 yrs
2015E Financials Revenue $6.2B Gross Margin High 40s OP Margin High teens FCF/NI >100%
Revenue Breakdown
Professional Instrumentation
48%
Industrial Solutions
52%
Strong margin and FCF profiles. Structural growth trends. Experienced team. All financial metrics based on 2015E.
Business Geography
NA 58%
EU 16%
HGM 22%
ROW 4%
Advanced Instrumentation & Solutions
Field Solutions Product Realization
Revenue $3.2B GM% ~40% OP Margin High teens
Businesses
Strong brands, leading market positions in attractive industrial verticals
Industrial Technologies Professional Instrumentation
Sensing Technologies
Franchise Distribution
Automation & Specialty
Transportation Technologies
All financial metrics based on 2015E.
Revenue $3.0B GM% >50% OP Margin >20%
2015 Highlights
Separation progressing well 90% of L1 organization in place Strong team with extensive DBS experience
Superior execution and growth investments driving LSD/MSD core revenue growth
Gaining share at Fluke, Gilbarco, Matco Accelerating innovation at Tektronix, Matco, Fluke, JVS
DBS driving improvements and creating opportunity for future growth
>60 bps OMX across portfolio Solid free cash flow driven by improved working capital Reinvigorating M&A pipeline with two GVR bolt-ons so far, and expect more to come
Separation now expected to close in Q3 2016 All figures on this slide are for the nine months ended October 2, 2015 unless otherwise indicated.
Fortive Strategic Priorities
Focused, growth-oriented strategy
Enhance our organic growth profile and generate margin expansion Leverage our strong FCF to deploy capital through strategic and financially-disciplined M&A Deliver outstanding earnings performance and unlock shareholder value using the Fortive Business System (“FBS”)
Fortive Opportunity
Margin Expansion
• ~50+ bps core OMX • Fall-through of ~30%+
Core Growth
• GDP/GDP+ core growth • EMV a meaningful driver
for the next several years
Acquisition Growth
• Spend FCF on acquisitions each year
• 100%+ FCF/NI conversion
Top Quartile Earnings Growth
Value creation model to deliver top quartile earnings growth
+ + =
2002 2008
Operating Profit (Fortive businesses)
2002 2008
Revenue (Fortive businesses)
Impact of M&A (2002 – 2008)
Opportunity to run the playbook again starting in 2016
+Mid-teens CAGR
~40 deals from 2002–2008*
+HSD CAGR
*Excluding acquisitions greater than $400M
DBS Tools Web Marketing, Voice of Customer, Accelerated Product Development
DBS (“FBS”) in Action
DBS still key to strong performance after decades of success
Core Growth
Operating Margin
Working Capital
Qualified leads up ~30% over last 3 years DD sales growth over last 3 yrs
Up >300 bps over last 3 yrs
Reduced DSO 5 days over last 2 years 3 turns improvement over last 2 years
DBS Tools Value Selling, Visual and Daily Management,
Quality System Basic
Core Growth
Operating Margin
Working Capital
>20% revenue growth over last 3 years Development of China-specific designs 3X JVS engine brake penetration over 3 years
Ensuring cost-competitive solutions for customers worldwide
WCT up 50% over last 3 years
Fluke
Customers Industrial maintenance professionals Electricians, contractors and engineers Medical technicians Scientists
Market Details Market Size ~$5B Growth Rate LSD/MSD
2015E Financials Revenue ~$1.1B OP Margin >25%
Geographic Revenue Breakdown
NA EUHGM ROW
Leading player with strong brand in an attractive market
Growth Drivers Increasing market demand for connected devices Continued development in high growth markets Innovative new products and evolution of technology Proliferation of the digital world
Global leader in the manufacture, distribution and service of electronic test tools and software for industrial electronic installation, maintenance
and service, calibration and quality control
41% 32%
21%
All financial metrics based on 2015E.
6%
Fluke Organic Growth Opportunities
Pursue technology-driven, long-term growth opportunities
Build on Fluke Connect: expand beyond hardware into adjacent software, data, SaaS, asset health, APIs Expand diagnostic tools: focus on reliability and predictive maintenance workflows in thermography, vibration and critical power
Drive further expansion in adjacent bio-medical businesses Extend reach and broaden footprint in HGMs
Penetrate current/new markets with recently-launched 3rd generation localized products Expand business in India, SE Asia and Latin America Expand low-cost manufacturing capability
Accelerate Fluke growth rate through continued market expansion
Fluke’s Financial Evolution
Organic growth initiatives and M&A driving ~20% ROIC; additional runway
Revenue $340M
OP Margin ~10%
Investment $550M
ROIC ~5%
Revenue ~$500M
OP Margin ~15%
26 Acquisitions: 1st Year
Contribution
Revenue ~$250M
OP ~$200M
Revenue >$1.1B
OP Margin >25%
Investment $1,380M
ROIC ~20%
1998 2015E
+ + = TODAY AT ACQUISITION
ACQUISITIONS GROWTH/ IMPROVEMENT
Summary
Fortive will be a high-quality diversified industrial growth company Strategy focused on creating value through organic growth, operating margin expansion and disciplined M&A Fortive Business System will be the core of our operating model, the cornerstone of our culture and our competitive advantage
Pursuing a proven model for long-term shareholder value creation
TRANSPORTATION TECHNOLOGIES Martin Gafinowitz, Group Executive
Agenda
Transportation Technologies Overview & 2015 Highlights
Building the Platform Healthy cadence of strategic M&A Adjacencies enhancing growth profile DBS driving continuous improvement
Summary
Transportation Technologies
Customers Major and regional oil companies Service stations Local and long-haul trucking fleets
Growth Drivers Environmental regulations, including air quality Payment security, both in-store and outdoor Larger fueling networks requiring control and automation Fleet managers looking to improve costs and efficiencies
Market Details Market Size ~$9.0B Growth Rate LSD/MSD
2015E Financials Revenue ~$1.6B OP Margin >15%
Geographic Mix Revenue Breakdown
NA EUHGM ROW
7%
55% 17%
21%
Consumables/ServiceEquipment
35% 65%
Market leader in fueling and fleet management with adjacent growth paths All financial metrics based on 2015E.
2015 Highlights
Well-positioned to drive sustained outperformance
Solid MSD core revenue growth MSD/HSD growth in core dispenser business Point-of-sale core growth CAGR ~20% last 3 yrs Growing installed base driving additional revenue
opportunities
Core OMX >100bps while investing for growth Capital equipment investment up 70% in
preparation for EMV volume increase Organizational and technical platform
consolidation between Navman and Teletrac
Strategic bolt-on acquisitions enhancing portfolio Odysii All figures on this slide are for the nine months ended October 2, 2015 unless otherwise indicated.
Building the Platform
Transportation Technologies Overview & 2015 Highlights
Building the Platform Healthy cadence of strategic M&A Adjacencies enhancing growth profile DBS driving continuous improvement
Summary
2002 2004 2006 2008 2010 2012 2014 2015
Building Transportation Technologies
Deployed ~$1.0B of capital on 19 acquisitions since 2002 Significantly improved growth profile with moves into adjacent markets, including
telematics 15+ years of retail petroleum build out adding high growth POS and service revenue Leading position in fuel management with adjacent expansion into telematics
Adjacencies Enhancing Growth Profile
Building on our installed base, not “just a dispenser company”
2002-2008 2009-2015E
Core Revenue Growth
+LSD/MSD
FLAT w/ higher volatility
Payment & Point-of-Sale MSD market growth Positioned in indoor and outdoor PMT and POS Drivers: US & Europe EMV regulations, c-store
sophistication, mobile phone engagement
Operational Services HSD market growth Cloud services complementing installed base of
ATGs, POS and dispensers Drivers: customer network complexity, cost
effectiveness of cloud solutions
Payment
Customers upgrading indoor and outdoor terminals with EMV-compliant systems
Driven by liability shift from credit card companies Widespread data security breaches validate need for
enhanced card security and encryption
Partnership with VeriFone brings most secure and highly-regarded encryption to market
Significant growth driver over next several years >$500M cumulative market opportunity
US EMV opportunity expected to add 1%+ to Fortive annual core revenue growth
Telematics
Leading player in highly-fragmented $4B market HSD core growth past 3 years Surpassed 400k units in 2015, top 5 globally Focused on mid-market fleets (20-500 unit fleets)
Uniting Teletrac and Navman Consolidated front and back office across entire
business New combined platform launched in Q3 with improved
performance and R&D synergy
Transforming businesses to address software systems in vertical markets
Private delivery fleets: routing/scheduling, driver safety Construction: load and operations efficiency
Driving increased adoption in an underpenetrated market
DBS in India
Revenue
Operating Margin
Working Capital
The GVR Coimbatore Journey: Acquired for market position in 2011; loss making, poor quality & delivery; DBS transformed business into leading domestic supplier and profitable export center
>1500 bps OMX since 2011 driven by DBS implementation
Accelerated Product Development Funnel Management
2X revenue Improved OTD to 98% from 80% Exporting dispensers, meters and
pumps
Danaher Reliability System Multi-year kaizen activity for cost
~1500 bps OMX Service margins up DD Winning in one of the most
competitive global cost markets
Daily Management Visual Management
Improved to ~10 turns in 2015E from <2 turns in 2011
Financial Evolution
Organic growth initiatives and M&A driving mid-teens ROIC w/ additional runway
Revenue $420M
OP Margin ~5%
Revenue ~$550M
OP Margin HSD
18 Acquisitions: 1st Full Year Contribution
Revenue ~$630M
OP ~$300M
Revenue ~$1,600M
OP Margin >15%
Investment $1,400M
ROIC Mid-teens
2002 2015E
+ + = ACQUISITIONS GROWTH/ IMPROVEMENT*
*Includes Veeder-Root
Summary
Outstanding high-return platform built on organic initiatives and strategic M&A
Market-leading installed base and technology leadership providing opportunities to accelerate growth
Adjacent market opportunities improving growth profile and providing additional acquisition runway
DBS helping drive continuous improvement
SUMMARY & OUTLOOK Tom Joyce, President & CEO
What You Heard Today
Committed to creating long-term shareholder value
Exciting year with the team executing well in a challenging environment
DBS helping to deliver core growth, margin expansion and share gains across the portfolio
Pall and separation provide expanded opportunity and renewed focus for driving future results
2016 Outlook
Core revenue growth of 2-3% with ~35% fall-through
Pall incremental contribution of $0.40
F/X headwind of ~$225M in revenue and ~$0.06 in EPS, primarily in 1H
Tax rate of 23-24%, consistent with 2015
Anticipated EPS seasonality (as % of 2016 adjusted EPS guidance) Q1 ~21% Q2 ~25% Q3 ~25% Q4 ~29%
Adjusted EPS guidance of $4.80-4.95 Includes Pall and other acquisitions closed in 2015; excludes future acquisitions that have not yet closed.
2015 adjusted EPS(mid-point of guidance)
FX Productivity benefits,lower sharecount offset
by inflation, growthinvestments
Pall contribution Contribution from 2-3%core revenue growth
and late-2014acquisitions
2016 adjusted EPSguidance
*See Appendix for details on special items.
2016 Adjusted EPS Guidance
2016 adjusted EPS guidance implies 12-15% growth y/y
($0.06) $0.05
$0.11 - $0.26
$0.40
$4.30
$4.80 - $4.95
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