Danaher (DHR) Investor update summary

Financial and operating update

• Q2 core growth 7.5%; core operating margin +160 bps YoY; adjusted EPS nearly +30% YoY.

• Q3 outlook reiterated at 6%–8% core growth and $0.66–$0.71 EPS; July and August tracked expectations, with modest impact from market headlines.

• Emerging markets led geographic growth through the first two months of Q3; U.S. performance remained ahead of Europe.

• Planning at least $50 million of quiet restructuring in Q4, excluding Beckman Coulter; Beckman’s cost program targets $250 million in savings and includes a 1,000-person reduction underway in Q3.

Emerging-market strategy and investment

• Emerging markets represented 22% of revenue, or $4 billion pro forma with Beckman Coulter; longer-term ambition is 30% through stronger local execution.

• Low-cost-region sourcing reached nearly 30%, double the 2005 level; China exports were approaching $800 million.

• More than 1,200 engineers and scientists in emerging markets worked on development projects; 2010 hiring additions were weighted to growth roles and emerging markets.

• Strategy combines local teams, distribution, service, sourcing and R&D with localized mid- and opening-price products; newer businesses and life sciences remain under-penetrated.

• Nine emerging-market transactions were completed over five years; Beckman Coulter brought 22% emerging-market sales and a $300 million China business.

China and India

• China served market was about $7 billion, with almost $2 billion in sales and low-double-digit growth; its footprint included nearly 800 engineers and about 10 manufacturing facilities.

• China localization and expanded mid-price offerings supported share gains; Fluke brand awareness reached the 70% range, while second- and third-tier city coverage expanded.

• China’s local R&D center had 800+ engineers across 15 operating companies and was estimated to cut launch time by one to two years for new entrants.

• India served market was $2 billion, with low-double-digit growth; the footprint had expanded to 700+ associates, two manufacturing sites and 300+ R&D associates.

• India coverage exceeded 200 cities; Fluke distributor street coverage rose over 33%, and its H1 sales growth exceeded 50% after targeted expansion.