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| 8-K - FORM 8-K - SIGMA ALDRICH CORP | d8k.htm |
 Sigma-Aldrich Corporation
2011 Shareholders Meeting
•May 3, 2011
sigma-aldrich.com
Exhibit 99.1 |
 2
Cautionary Statements
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, acquisitions 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
presentation
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)
failure
of
planned
sales initiatives in our Research and SAFC businesses, (6) dependence on
uninterrupted manufacturing operations, (7) failure to achieve planned cost
reductions in global supply chain initiatives and restructuring actions, (8) changes in the regulatory environment in
which the Company operates, (9) changes in worldwide tax rates or tax benefits from
domestic and international operations, including the
matters
described
in
Note
10–Income
Taxes–
to
the
Consolidated
Financial
Statements
in
the
Company’s
Form
10-K
report
for
the
year ended December 31, 2010, (10) exposure to litigation, including product
liability claims, (11) the ability to maintain adequate quality
standards,
(12)
reliance
on
third
party
package
delivery
services,
(13)
an
unanticipated
increase
in
interest
rates,
(14)
other
changes
in
the
business
environment
in
which
the
Company
operates,
and
(15)
the
outcome
of
the
outstanding
matters
described
in
Note
11-
Contingent Liabilities and Commitments to the Consolidated Financial
Statements-in the Company’s Form 10-K report for the year ended
December 31, 2010. A further discussion of risk factors can be found in Item 1A of Part 1 of the Company’s Form 10-K report for
the
year
ended
December
31,
2010.
The
Company
does
not
undertake
any
obligation
to
publicly
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
and
acquisition
impacts.
The
Company
calculates
the
impact
of
changes
in
foreign
currency
exchange
rates
by
multiplying
current
period
activity
by
the
difference
between
current
period
exchange
rates
and
prior
period
exchange rates. The result is the defined impact of changes in foreign currency
exchange rates. While we are able to report historical currency impacts
after the fact, we are unable to estimate changes that may occur later in 2011 to applicable exchange rates. 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 adjusted net income and EPS, adjusted operating income
and operating income margins (excluding restructuring
and
impairment
costs)
and
free
cash
flow,
non-GAAP
measures,
to
judge
its
performance
and
ability
to
pursue
opportunities that enhance shareholder value. Due to the uncertain timing of the
future restructuring and other extraordinary special changes, we are unable
to include a 2011 diluted GAAP EPS forecast or reconcile to our 2011 diluted adjusted EPS forecast or provide
a reconciliation to corresponding GAAP measures . 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 April 26, 2011 earnings release posted on its website,
www.sigma-aldrich.com, and in the Appendix –
Reconciliation of GAAP to Non-GAAP Financial Measures beginning on Slide
23. |
 3
2010/2011 –
Important Transition Years
•
2010 and Q1 2011 performance
was outstanding
•
Company is financially strong
•
Management transition
We have a bright future ahead |
 4
Sigma-Aldrich –
Unique Business Model
•
Leading Life Science and
Hitech
Company
•
Diversified and broad portfolio
–
Products
–
Customers
•
Expanding global footprint
•
Unrivalled customer service
•
World-class management team
•
Consistently strong financial performance
Delivering science with convenience |
 5
Full Year 2010 Financial Results
$ Millions, Except Per Share Amounts
Year-Over-Year
2010
As
Reported
Excluding
Currency Impact
Sales
$2,271
6%
5%
Year-Over-Year
As Reported
2010
Excluding
Restructuring and
Impairment Costs
As
Reported
Excluding
Restructuring and
Impairment Costs
Net Income
$384*
$408
11%
16%
Diluted EPS
$3.12*
$3.31
11%
16%
Free Cash Flow
$424
7%
Achieved new performance record in 2010
*Includes
currency
benefit:
Net
Income
–
$15;
Diluted
EPS
–
$0.12 |
 6
Sales Mix (YTD)
2010 Sales Growth
Adjusted for Currency
Demand for Research products continued to show growth.
SAFC sales set new annual high
28%
SAFC
72%
Research
Full Year 2010 /
Full Year 2009
5%
Total
Company
9%
SAFC
4%
Research |
 7
First Quarter 2011 Financial Results
$ Millions, Except Per Share Amounts
Year-Over-Year
Q1 2011
As
Reported
Excluding
Currency and
Acquisition Impacts
Sales
$632
10%
7%
Year-Over-Year
As Reported
Q1 2011
Excluding
Restructuring and
Tax Benefit
As
Reported
Excluding
Restructuring and
Tax Benefit
Net Income
$119*
$116
19%
12%
Diluted EPS
$0.97*
$0.94
20%
12%
Free Cash Flow
$133
–%
Q1 Sales and Net Income highest in Company history
*Includes
currency
benefit:
Net
Income
–
$1;
Diluted
EPS
–
$0.01 |
 8
Sales Mix (YTD)
2011 Sales Growth
Demand for Research products met expectations.
SAFC sales set new quarterly high
28%
SAFC
72%
Research
Q1 2011 / Q1 2010
10%
18%
8%
Reported
Organic*
7%
Total
Company
16%
SAFC
4%
Research
*Adjusted for Currency and Acquisitions. |
 9
Key Balance Sheet Metrics
21.5%
18.8%
6.5
47
489
$ 623
3/31/11
6.5
6.3
Inventory MOH
25.5%
21.4%
Debt to Capital
22.8%
21.5%
Return on Equity
47
577
$ 373
12/31/09
47
Receivable DSO
539
Total Debt ($M)
$ 569
Cash ($M)
12/31/10
Strong financial position |
 10
Management Transition
Rakesh
Sachdev
Kirk Richter
Interim CFO
Dave Smoller
Chief Scientific Officer
Eric Green
Asia Pacific/Latin Amer.
Mike Harris
EMEA
Gerrit
van den Dool
North America
Regions
Gilles Cottier
SAFC
Frank Wicks
Research
Business Units
President and CEO
Strong leadership team –
Aligned with strategic plan initiatives
Loss of
Jai Nagarkatti
Management Team |
 11
Recent Company Highlights and Achievements
•Technology Initiatives
•
Won
silver
award
in
The
Scientist
magazine
for top 10 innovations for 2010 for engineering
cell lines and knock-out rats using Zinc Finger
Nuclease (ZFN) technology
•
Expanded offering of Antibodies
•
Expanded manufacturing of large molecule
recombinant
proteins
and
small
molecule
APIs
•
Welcomed two new Analytical Standards
companies into Sigma-Aldrich
–
Cerilliant
–
RTC |
 12
Recent Company Highlights and Achievements
•Customer Service
•
New warehouse management
system with Virtual Boxing at the
Milwaukee Distribution Center
•
Sigma-Aldrich China received
“Preferred
Supplier
Award”
from
GSK and Aleve China
•
Continued strong service levels in
North America and Europe;
improved service levels in
Asia-Pacific / Latin America |
 13
Recent Company Highlights and Achievements
•Growth Accelerators
•
SAFC Biosciences
–
Biological drugs
•
SAFC Hitech
–
Chemicals for LEDs and
semiconductors
•
Emerging Markets
–
Strong growth in China, India & Brazil:
25% in Q1 2011 (31% in 2010)
•
eCommerce
–
Increased to 50% of global Research
sales in Q1 2011 (48% in 2010) |
 14
Recent Company Highlights and Achievements
•Company / Employee
Recognition
•
Recognized as Top 100
Employers in UK, France,
Germany and Switzerland
•
Prestigious James B. Eads Award
for outstanding achievement in
Technology and Engineering
in St. Louis awarded to
Samy
Ponnusamy
for his work in
Polymers and Green Chemistry |
 15
Recent Company Highlights and Achievements
•Corporate Citizenship
•
Team Sigma-Aldrich increased
volunteer participation and
contributions
•
Launched Global Citizenship Initiative
•
Sigma-Aldrich and Sigma-Aldrich
Foundation donated ~$1 million
•
Japan earthquake relief fund of $100K |
 16
Sigma-Aldrich Strategic Priorities
•Enhance Growth in Core Research
and SAFC Business
•
Focus on higher growth markets
–
Analytical Chemistry
–
Biology
–
Chemistry/Materials Science
•
Capitalize
on
SAFC’s
unique
manufacturing capabilities and
cGMP facilities
•
Increased presence in faster-growth
economies
•
Expanded customer reach (eBusiness /
Sales Force effectiveness) |
 17
Sigma-Aldrich Strategic Priorities
•Drive Operational Excellence
•
Continue to build upon the success
of our global supply chain initiatives
•
Streamline manufacturing and
distribution footprint
•
Expand global sourcing
•Leverage Strong Cash Flow
•
Actively pursue strategic acquisitions
Strategic actions build sustainable value |
 18
2011 Guidance
*Excludes any restructuring and other extraordinary special charges.
Organic
Revenue Growth
Diluted
Adjusted EPS*
Free
Cash Flow
Mid-single digits
$3.60 –
$3.75
>$400 Million |
 19
Objectives: 2011–2015
Deliver above-market top-line growth and profits
Incremental Impact
Five-Year Financial Targets
>$2 Billion
Cumulative free cash flow (five years)
26–27%
Expand cumulative operating margins by 2015
7–8%
Top line organic growth
(normal economic conditions) |
 20
Shareholder Returns
SIAL Total Shareholder Return for 2010 exceeds 30%
Peers: Life Technologies, Qiagen, Techne, Thermo-Fisher, Waters, Agilent,
Becton Dickinson, Bio-Rad, PerkinElmer, Lonza $124.27
$176.39
$137.81
$222.56
$167.03
$100.00
$235.62
$0
$50
$100
$150
$200
$250
2005
2006
2007
2008
2009
2010
30-Apr
SIAL
PEERS
Nasdaq 100
S&P 500
DJIA |
 21
Sigma-Aldrich: A Bright Future
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
|
 22
Sigma-Aldrich Corporation
2011 Shareholders Meeting
Questions? |
 Appendix
Reconciliation of GAAP to
Non-GAAP Financial Measures
23 |
 24
Reconciliation of Reported Sales Growth to
Adjusted (Organic) Sales Growth
7%
1%
2%
10%
Total Customer Sales
16%
–
2%
18%
SAFC
4%
2%
2%
8%
Research Chemicals
4%
–
2%
6%
Research Biotech
4%
3%
2%
9%
Research Specialties
5%
–
2%
7%
Research Essentials
Adjusted
(Organic)
Acquisition
Benefit
Currency
Benefit
Reported
Three Months
Ended March 31, 2011
5%
1%
6%
9%
–
9%
4%
–
4%
2%
1%
3%
6%
–
6%
2%
–
2%
Adjusted
(Organic)
Currency
Impact
Reported
Twelve Months
Ended December 31, 2010 |
 25
Reconciliation of Reported Net Income to
Adjusted Net Income
$2.85
$3.31
$0.84
$0.94
$353
408
$104
$116
Adjusted net income
–
–
–
(0.04)
–
–
–
(5)
Tax benefit
_
0.05
–
–
–
7
–
–
Impairment charge
0.05
0.14
0.03
0.01
6
17
4
2
Restructuring costs
$2.80
$3.12
$0.81
$0.97
$347
$384
$100
$119
Reported net income
2009
2010
2010
2011
2009
2010
2010
2011
Twelve Month ended
December 31
Three month ended
March 31
Twelve Month ended
December 31
Three month ended
March 31
Diluted Earnings Per Share
Net Income ($M) |
 26
Reconciliation of Operating Cash Flow to
Free Cash Flow
$ Millions
Free cash flow
Less: Capital expenditures
Net cash provided by operating activities
$ 133
$ 133
(18)
(18)
$ 151
$ 151
2010
2011
Three Months Ended
March 31,
$ 396
$ 424
(120)
(99)
$ 516
$ 523
2009
2010
Twelve Months Ended
December 31, |