2019 WATER QUALITY INVESTOR & ANALYST DAY September 17, 2019 - PowerPoint PPT Presentation

2019 WATER QUALITY INVESTOR & ANALYST DAY September 17, 2019

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, the uncertainty of regulatory approvals with respect to Danaher’s acquisition of the Biopharma business of General Electric (“GE Biopharma”) and the timing or conditionality thereof, the parties' ability to satisfy the acquisition agreement conditions and consummate the acquisition of GE Biopharma on the anticipated timetable and terms or at all, Danaher's ability to successfully integrate GE Biopharma's operations and employees with Danaher's existing business, the ability to realize anticipated financial, tax and operational synergies and benefits, GE Biopharma's performance and maintenance of important business relationships, Danaher’s ability to complete the previously-announced initial public offering (“IPO”) of its Dental business on the currently contemplated timeline or at all and achieve the intended benefits thereof, deterioration of or instability in the economy, the markets served by us or GE Biopharma and the financial markets, developments and uncertainties in U.S. policy stemming from the U.S. administration, such as changes in U.S. trade and tariff policies and the reaction of other countries thereto, contractions or growth rates and cyclicality of markets we serve, competition, our ability to develop and successfully market new products and technologies and expand into new markets, the potential for improper conduct by our employees, agents or business partners, our compliance with applicable laws and regulations (including regulations relating to medical devices and the health care industry), the results of our clinical trials and perceptions thereof, our ability to effectively address cost reductions and other changes in the health care industry, our ability to successfully identify and consummate appropriate acquisitions and strategic investments and successfully complete divestitures and other dispositions, our ability to integrate the businesses we acquire and achieve the anticipated benefits of such acquisitions, contingent liabilities relating to acquisitions, investments and divestitures (including tax-related and other contingent liabilities relating to past and future IPOs, split-offs or spin-offs), security breaches or other disruptions of our information technology systems or violations of data privacy laws, the impact of our restructuring activities on our ability to grow, 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, changes in tax laws applicable to multinational companies, litigation and other contingent liabilities including intellectual property and environmental, health and safety matters, the rights of the United States government to use, disclose and license certain intellectual property we license if we fail to commercialize it, risks relating to product, service or software defects, product liability and recalls, risks relating to product manufacturing, the impact of our debt obligations on our operations and liquidity (including the impact of the additional debt Danaher expects to incur to finance the GE Biopharma acquisition), our relationships with and the performance of our channel partners, uncertainties relating to collaboration arrangements with third-parties, commodity costs and surcharges, our ability to adjust purchases and manufacturing capacity to reflect market conditions, reliance on sole sources of supply, the impact of deregulation on demand for our products and services, labor matters, international economic, political, legal, compliance and business factors (including the impact of the United Kingdom’s decision to leave the EU and uncertainty relating to the terms and timing of such separation), disruptions relating to man-made and natural disasters 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 2018 Annual Report on Form 10-K and Quarterly Reports on Form 10-Q for the first quarter of 2019 and second quarter of 2019. These forward-looking statements speak only as of the date of this presentation and except to the extent required by applicable law, 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 the non-GAAP financial measures referenced in the following presentation, the accompanying information required by SEC Regulation G can be found in the back of the presentation and in the “Investors” section of Danaher’s web site, www.danaher.com, under the heading “Quarterly Earnings.” All references in this presentation (1) to company-specific financial metrics relate only to the continuing operations of Danaher’s business, unless otherwise noted; (2) to “growth” or other period-to-period changes refer to year-over-year comparisons unless otherwise indicated; (3) to Operating Profit below the segment level exclude amortization; and (4) to “today” refers to the Company’s 2018 performance. We may also describe certain products and devices which have applications submitted and pending for certain regulatory approvals . 2

Agenda 8:00 AM Welcome Matt Gugino 8:05 AM Water Quality Platform Joakim Weidemanis 8:30 AM ChemTreat Steve Hire 8:45 AM Trojan Steve Bell 9:00 AM Hach Kevin Klau Innovation at Hach Kornelija Zgonc Commercial Execution at Hach Darin Stell 9:50 AM Closing Remarks Joakim Weidemanis 9:55 AM Q&A Weidemanis, Klau, Hire, Bell 10:10 AM Break & gather into groups for Gemba Walk All All 10:25 AM Gemba Walk 11:35 AM Lunch All 12:30 PM Program Ends All 3

WATER QUALITY PLATFORM WQ PROVIDE Joakim Weidemanis, EVP HIGH RES COVER PHOTO 2019 DANAHER WATER QUALITY INVESTOR & ANALYST DAY

Danaher Today LIFE ~$4.3B ~$6.5B ~$6.3B ~$2.8B DIAGNOSTICS ENVIRONMENTAL & APPLIED SOLUTIONS DENTAL SCIENCES WATER QUALITY PRODUCT ID All financial metrics shown reflect FY 2018 revenues Multi-industry science & technology portfolio provides competitive advantages 6

Danaher Business System (DBS) Is Our Competitive Advantage Leadership Lean Growth DBS driving improvement and sustaining long-term results in WQ 7

Revenue By Mix ~$2.4B Non- REVENUE WATER QUALITY recurring Recurring ~45% ~55% MSD CORE REVENUE GROWTH* By Geography STRONG GLOBAL GROWTH DRIVERS W. EU ~25% 19% ADJ. EBITDA NA Increasing regulatory requirements and • MARGIN** HGM 50% changes 29% ROW 2% • Water scarcity and drought conditions ~$20B ADDRESSABLE Sustainability of water resources • By Sales Channel MARKET SIZE Demand for full workflow solutions and • Indirect process efficiencies ~25% A global leader in water Direct ~75% All financial metrics based on FY 2018 unless otherwise indicated measurement & treatment *3-yr CAGR 2015-2018 **Adjusted EBITDA is GAAP operating income excluding (1) depreciation and (2) amortization, Adjusted EBITDA Margin is Adjusted EBITDA divided by sales 8

Where We Play: Most Attractive Areas of Water Quality Environmental Municipal Use Municipal Environmental Environmental mgmt. / Commercial & Drinking water Wastewater Effluent discharge water resources industrial use Water/Wastewater and Environmental Testing Water and Wastewater Treatment Industrial Water Treatment Leader in water analytics with deep expertise in Leader in industrial water Leader in UV disinfection & membrane applied chemistry and biology treatment across the Americas filtration in muni & industrial applications 9

Sustainable Business Model EXAMPLES Steady ‘captive’ consumables POTENTIAL FUTURE LOW ~40% 2-4X CONSUMABLE REVENUES stream off extensive installed base ~60% CYCLICALITY RELATIVE TO ORIGINAL INSTRUMENT REVENUE ‘Mission-critical’ applications Over average instrument life HOURLY COST OF CUSTOMER 2-10X OPEX VS. Low cost, high value-add FACILITY DOWNTIME VS. instrumentation & consumables CAPEX ANNUAL WATER TREATMENT COST MUNICIPALITIES ADDED TROJAN >1K Increasing regulatory & testing REGULATORY UV TREATMENT IN THE LAST 2 requirements drive “stickiness” YEARS DRIVEN BY NEW / STANDARDS ENFORCED REGULATIONS Extensive installed base & mission-critical applications drive strong recurring revenue stream 10

Value Creation at Water Quality 2001 TODAY * ~$2.4B REVENUE ~$350M REVENUE +MSD CORE GROWTH +LSD CORE GROWTH ~55% GROSS MARGIN ~45% GROSS MARGIN ~25% ADJ. EBITDA MARGIN Low-teens ADJ. EBITDA MARGIN >20% ROIC * All financial metrics reflect FY 2018. ROIC = Return on Invested Capital Pre-2002 2004 2006 2008 2010 2012 2014 2016 Today Execution and strategic M&A driving long-term growth & margin performance 11