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| 8-K - FORM 8-K - SIGMA ALDRICH CORP | d8k.htm |
 Sigma-Aldrich Corporation
2010 Shareholders Meeting
Enabling Science to
Improve Quality of Life
May 4, 2010
Exhibit 99.1 |
 2
2
Cautionary Statement
Our
presentation
today
will
include
forward-looking
statements
relating
to
the
Company’s
future
performance,
goals,
strategic
actions
and initiatives and similar intentions and beliefs, including expectations, goals,
beliefs, intentions and the like regarding future sales, earnings, free cash
flow, share repurchases and other matters. These statements are based on assumptions regarding Company
operations, investments and acquisitions and conditions in the markets the Company
serves. We believe that these expectations are reasonable and
well-founded. The forward-looking statements in this release are subject to risks and uncertainties including, among
others, certain economic, political and technological factors. Actual results could
differ materially from those stated or implied during this review or
contained in other Company communications due to, but not limited to, such factors as (1) global economic conditions, (2)
changes in pricing and the competitive environment and the global demand for our
products, (3) fluctuations in foreign currency exchange rates, (4) changes
in research funding and the success of research and development activities, (5) dependence on
uninterrupted manufacturing operations, (6) changes in the regulatory environment
in which the Company operates, (7) changes in worldwide
tax
rates
or
tax
benefits
from
domestic
and
international
operations,
including
the
matters
described
in
Note
4
–
Income
Taxes –
to the Consolidated Financial Statements in the Company’s Form 10-Q for
the quarter ended March 31, 2010 and in Note 10 – Income Taxes
– to the Consolidated Financial Statements in the Company’s Form
10-K report for the year ended December 31, 2009, (8) exposure to
litigation, including product liability claims, (9) the ability to maintain adequate quality standards, (10) reliance on third
party
package
delivery
services,
(11)
failure
to
achieve
planned
cost
reductions
in
global
supply
chain
rationalization,
(12)
an
unanticipated
increase
in
interest
rates,
(13)
failure
of
planned
sales
initiatives
in
our
Research
and
SAFC
businesses,
(14)
other
changes in the business environment in which the Company operates, and (15) the
outcome of the outstanding matters described in Note
15
–
Contingent
Liabilities
and
Commitments
–
to
the
Consolidated
Financial
Statements
on
the
Company’s
Form
10-Q
for
the
quarter
ended
March
31,
2010
and
in
Note
11
–
Contingent
Liabilities
and
Commitments
–
in
the
Company’s
Form
10-K
report
for
the
year ended December 31, 2009. A further discussion of the Company’s risk
factors can be found in Item 1A of the Company’s Form
10-K report for the year ended December 31, 2009. The Company does not
undertake any obligation to update the matters covered in this
presentation. With over 60% of sales denominated in currencies other than the
U.S. dollar, management uses currency-adjusted growth, and believes
it
is
useful
to
investors,
to
judge
the
Company’s
controllable,
local
currency
performance.
Organic
sales
growth
data
presented
in
this
review is proforma
data and excludes currency impacts. While able to report historical currency
impacts after the fact, we are unable to estimate
changes
that
may
occur
later
in
2010
to
applicable
rates
of
exchange
and
thus
will
be
unable
to
reconcile
the
projected
non-
GAAP currency adjusted internal growth rates to reported GAAP growth rates for
2010. Any significant changes in currency exchange rates would likely
have a significant impact on our reported growth rates due to the volume of our sales denominated in foreign
currencies.
Management
also
uses
proforma
net
income
and
free
cash
flow,
non-GAAP
measures,
to
judge
its
performance
and
ability
to
pursue
opportunities that enhance shareholder value. Management believes this
non-GAAP information is useful to investors as well.
Reconciliations of GAAP to non-GAAP information are included in the
Company’s February 10, 2010 and April 22, 2010 earnings releases posted
on its website, www.sigma-aldrich.com |
 3
3
Agenda
2009 Business and Financial Highlights
Our Company
Plans for Growth
First Quarter Results and Full Year 2010 Outlook |
 4
4
Our Objectives
Mission
–
Enabling science to improve the
quality of life
Vision
–
To be the trusted global partner of choice for
our customers
Objective
–
To deliver sustainable above-market
growth and create value for our Employees,
Customers and Shareholders by building on our core
capabilities and leveraging our financial strength |
 5
5
Who is Sigma-Aldrich?
Delivering Value Through a Balanced Portfolio
Diversified approach to yield consistent returns |
 6
6
70%
Research
Consumables
30%
Fine
Chemicals
& Services
Who is Sigma-Aldrich?
•Research Business
•
Customers
–
Academia
–
Pharma & Biotech
–
Industrial
–
Hospitals
–
Testing Labs
•
Products
(170,000; 48,000 Manufactured)
–
Reagents
–
Chemicals
–
Biochemicals
–
Standards
–
Lab Supplies
–
Kits
•Manufacturing (SAFC)
•
Customers
–
Pharma
–
Biotech
–
Hitech
•
Capabilities
–
Chemical Synthesis
(API’s, Intermediates)
–
Isolation, Extraction,
Purification
–
Fermentation
–
Assay Development
–
Media Formulation
–
Services
A leading Life Science company enabling researchers and manufacturers
to improve the quality of life |
 7
7
2009 Financial Highlights
Record Year for Earnings and Free Cash Flow
Strong performance in a challenging economy |
 8
8
Historical Performance –
Profitable Sales Growth
35 years of continuous EPS growth
•
Demonstrated historic performance
•
Robust business model |
 9
9
Historical Performance –
Shareholder Returns
•Returns
Consistently deliver superior returns
•
Sustained high returns
•
Shareholder returns outperformed
peers
and broad market indices
Peers: Affymetrix, Cambrex, Dionex, Illumina, Life Technologies, Millipore, Qiagen,
Techne, Thermo-Fisher, Waters
$146.02
$105.96
$131.68
$186.91
$176.98
$188.05
$100.00
0
50
100
150
200
2004
2005
2006
2007
2008
2009
31-Mar
SIAL
PEERS
Nasdaq
100
S&P 500
DJIA |
 10
10
2009 Highlights
Key Business Highlights
•
Research Biotech growth drivers
–
Innovative new antibody products
–
Regenerative medicine
•
Fine Chemicals (SAFC) benefits from
sale of H1N1 vaccine components
•
Continued growth in CAPLA markets
(21% of total sales)
•
Increased e-commerce sales to 45%
of world-wide research-based products
(42% in 2008)
Supporting the advancement of science, education, innovation,
thought leadership and environmental sustainability |
 11
11
2009 Highlights
Awards and Recognitions
•Research Biotech
•
Top 5 Innovations of 2009 for knockout rat
–
The
Scientist
magazine
•
2009 North America Healthcare Innovation Award
–
Frost & Sullivan
•
2009 CIO 100 award for innovative web research tool, Your Favorite
Gene powered by Ingenuity
–
CIO
magazine
•SAFC
•
European Outsourcing Award for Best Supply Chain Management
–
Merck
•
2009 Abbott Supplier Excellence Award
•Sigma-
Aldrich •
Best Places to Work in Industry
–
The
Scientist
magazine
•
Most Useful and Easiest to Use Online Catalog
–
BioInformatics |
 12
12
2009 Highlights
Commitment to Corporate Citizenship
•Team
Sigma-Aldrich
Celebrates
5th
Anniversary
•
1,300 employees participated in 23 events
•
Introduced two new sites to the program
–
Castle Hill, Australia
–
Oakville, Canada
•
Employees gave back over 4,200 hours
of service
•
Events:
–
Habitat for Humanity
®
(Lenexa, Kansas)
–
Community outreach program (Arklow, Ireland)
•
Sigma-Aldrich / the Sigma-Aldrich Foundation
donated $1 million in products and cash |
 13
First Quarter 2010 Financial
Results vs. Prior Year
Diluted EPS
Net Income
Sales
$572
$100
$0.81
Q1 2010
(in millions, except EPS)
10 %
19 %
19 %
As Reported
Free Cash Flow
$133
55 %
4 %
10 %
10 %
Excluding
Currency Impact
55 %
YEAR-OVER-YEAR
Diluted EPS, excluding restructuring costs were $0.84, 24% higher than the
same period last year |
 14
14
2010 Outlook
Free Cash Flow
Reported EPS
Organic Revenue Growth
$3.05 to $3.20
> $350 million
Mid single digits |
 15
15
Objectives: 2010-2014
Strategic actions build sustainable value
Top line organic growth (normal economic conditions)
7-8%
Expand cumulative operating margins by 2014
200-300 bpts
Cumulative free cash flow (five years)
> $2 Billion
•
Deliver above-market top-line growth and profits
Five-Year Financial Targets
Incremental Impact |
 16
Initiatives
16
Plan to Achieve Objective
Top Line Growth Initiatives
4% incremental contribution to top line growth
Innovation
ABC
M
Focus
Analytical
Expand into attractive areas of detection and analysis
Biology
Increase focus on biology
Expand traditional product portfolio and build new targeted
platform technologies
Chemistry
Leverage chemistry knowledge to offer products for materials
research and manufacturing
Geographic
Expansion
Increase presence and assets in faster growth economies
Optimize
Go-to-Market
Expand Web and B2B capabilities
Realign sales effort
SAFC/Unique
Mfg. Capabilities
Apply
our
technologies
to
customers’
unique
and
evolving
supply chains |
 17
17
Impact of Top-Line Growth
Initiatives to achieve above market growth rates |
 18
18
Plan to Achieve Objective
Expand Operating Margins
Portfolio optimization
Capacity utilization
Focus on differentiation
Sourcing knowledge
Competitive pricing strategies
Operational excellence
Optimize supply chain
Leverage process improvement
Leverage core competencies through targeted initiatives to create value
|
 19
19
Profitability Drivers
Impact of Initiatives
Net 200-300 basis point improvement in operating margin over five years
|
 20
20
Future Uses of Cash
2010 and Beyond
•
Fund organic growth through
technology, partnerships, licensing
and go-to-market investments
•
Fund inorganic growth
•
Cash dividends
•
Share repurchases
•
Debt reduction
Expect free cash flow to be in excess of $2 billion over next five years
|
 21
21
Infrastructure remains a key differentiator as we drive demand
Investments for Growth
•
Shanghai, China
•
New 35,000 sq. ft. distribution
and warehousing center |
 22
22
Infrastructure remains a key differentiator as we drive demand
Investments for Growth
•
Shanghai, China
•
New 35,000 sq. ft. distribution
and warehousing center
•
Jerusalem, Israel
•
Large-scale fermentation plant
to produce biologics |
 23
23
Infrastructure remains a key differentiator as we drive demand
Investments for Growth
•
Shanghai, China
•
New 35,000 sq. ft. distribution
and warehousing center
•
Jerusalem, Israel
•
Large-scale fermentation plant
to produce biologics
•
Carlsbad, California
•
Capacity expansion to produce
viral vaccine components |
 24
24
Infrastructure remains a key differentiator as we drive demand
Investments for Growth
•
Shanghai, China
•
New 35,000 sq. ft.
distribution
and warehousing center
•
Jerusalem, Israel
•
Large-scale fermentation
plant
to produce biologics
•
Carlsbad, California
•
Capacity expansion to produce
viral vaccine components
•
Verona, Wisconsin
•
New state-of-the-art plant to
make high-potency active
ingredients |
 25
25
Sigma-Aldrich
Uniquely Positioned for Value Creation
Compelling investment opportunity
Unrivaled scientific knowledge and unsurpassed service
Diversified portfolio: products, customers
Expanding global footprint
History of profitable growth
Strong financial position and cash flow
Plans to enhance growth rates and improve profitability
|
 Sigma-Aldrich Corporation
2010 Shareholders Meeting
Enabling Science to
Improve the Quality of Life
Questions? |