2019 water quality investor & analyst day september …

2019 WATER QUALITY INVESTOR & ANALYST DAY

September 17, 2019

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Forward Looking StatementsStatements 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 thosesuggested 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 ofregulatory 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 theacquisition 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 operationsand 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 importantbusiness 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 intendedbenefits 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 todevelop 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 withapplicable 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 addresscost reductions and other changes in the health care industry, our ability to successfully identify and consummate appropriate acquisitions and strategic investments and successfully completedivestitures and other dispositions, our ability to integrate the businesses we acquire and achieve the anticipated benefits of such acquisitions, contingent liabilities relating to acquisitions, investmentsand 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 systemsor 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, taxaudits 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 andenvironmental, 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 toproduct, 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 theadditional 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 arrangementswith 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 deregulationon 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 EUand 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 maycause 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 thefirst 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 notassume 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 inthe “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 thecontinuing 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 OperatingProfit 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 submittedand pending for certain regulatory approvals.

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Agenda8:00 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 HachInnovation at HachCommercial Execution at Hach

Kevin KlauKornelija ZgoncDarin 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

10:25 AM Gemba Walk All

11:35 AM Lunch All

12:30 PM Program Ends All

WATER QUALITY PLATFORMJoakim Weidemanis, EVP

2019 DANAHER WATER QUALITYINVESTOR & ANALYST DAY

WQ PROVIDE HIGH RES

COVER PHOTO

LIFE SCIENCES DIAGNOSTICS DENTAL

WATER QUALITY

ENVIRONMENTAL & APPLIED SOLUTIONS

All financial metrics shown reflect FY 2018 revenues

PRODUCT ID

~$6.5B ~$6.3B ~$2.8B ~$4.3B

Danaher Today

Multi-industry science & technology portfolio provides competitive advantages6

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Danaher Business System (DBS) Is Our Competitive Advantage

DBS driving improvement and sustaining long-term results in WQ

Leadership

Lean Growth

All financial metrics based on FY 2018 unless otherwise indicated*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

REVENUE~$2.4BWATER QUALITY

By Geography

By Sales Channel

Direct~75%

ROW2%

NA50%

W. EU19%

HGM29%

Indirect~25% A global leader in water

measurement & treatment8

MSDSTRONG GLOBAL GROWTH DRIVERS• Increasing regulatory requirements and

changes• Water scarcity and drought conditions• Sustainability of water resources• Demand for full workflow solutions and

process efficiencies

RevenueBy Mix

Non-recurring

~45%Recurring~55%

ADJ. EBITDA MARGIN**~25%ADDRESSABLE MARKET SIZE~$20B

CORE REVENUE GROWTH*

Where We Play: Most Attractive Areas of Water Quality

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Environmental mgmt. / water resources Drinking water Commercial &

industrial use Wastewater Effluent discharge

Environmental Municipal Municipal EnvironmentalUse

Water/Wastewater and Environmental Testing

Water and Wastewater Treatment

Industrial Water Treatment

Leader in water analytics with deep expertise in applied chemistry and biology

Leader in industrial water treatment across the Americas

Leader in UV disinfection & membrane filtration in muni & industrial applications

Sustainable Business Model

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Extensive installed base & mission-critical applications drive strong recurring revenue stream

LOWCYCLICALITY

OPEX VS. CAPEX

REGULATORY STANDARDS

EXAMPLES

~60%~40%

Increasing regulatory & testing requirements drive “stickiness”

Low cost, high value-add instrumentation & consumables

POTENTIAL FUTURE CONSUMABLE REVENUES RELATIVE TO ORIGINAL INSTRUMENT REVENUEOver average instrument life

2-4XSteady ‘captive’ consumables stream off extensive installed base

‘Mission-critical’ applications

HOURLY COST OF CUSTOMER FACILITY DOWNTIME VS. ANNUAL WATER TREATMENT COST

MUNICIPALITIES ADDED TROJAN UV TREATMENT IN THE LAST 2 YEARS DRIVEN BY NEW / ENFORCED REGULATIONS

>1K

2-10X

Value Creation at Water Quality

Execution and strategic M&A driving long-term growth & margin performance11

~$350M REVENUE

+LSD CORE GROWTH

~45% GROSS MARGIN

Low-teens ADJ. EBITDA MARGIN

2001

~$2.4B REVENUE

+MSD CORE GROWTH

~55% GROSS MARGIN

~25% ADJ. EBITDA MARGIN

>20% ROIC

TODAY*

* All financial metrics reflect FY 2018. ROIC = Return on Invested Capital

Pre-2002 2004 2006 2008 2010 2012 2014 2016 Today

How We Win Across Water Quality

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Enhancing our competitive advantage & driving share gains

APPLICATION EXPERTISE

TECHNOLOGY & INNOVATION

COMMERCIAL EXECUTION

• Deep water chemistry and biology expertise• Broad installed base driving integrated

workflow solutions + service

• New tech & applications, opening new markets• Increasing cadence of innovation around

instrument and digital solutions

• Platform approach: key accounts, digital marketing, e-commerce and HGM execution

• Service & aftermarket offering

Water QualityPlatform

Peer Avg.

CORE REVENUE GROWTH VS. PEERS LAST 5 YEARS

+MSD+LSD

DBS and Application Expertise Driving Innovation

REDUCTION IN TIME-TO-MARKET FOR NPD VS 2016

~50%

INCREASE IN NPDREVENUE

SINCE 2016

~35%

ANNUAL CORE GROWTH ADDITION FROM NEW

PRODUCTS SINCE 2016

~250bps

Continuously enhancing customer solutions to solve complex water problems

ACCELERATING NEW PRODUCTS AND DIGITAL SOLUTIONS

CM130Chlorine monitoring system for dialysis1ST FDA –Cleared Chlorine Monitor

TrojanUVFlexHigh-power, ultra-low footprintExpanding UV for any-size facility

Claros Digital solution helping eliminate uncertainty, reduce costs & improve efficiency

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EXAMPLES

+ + +

Sensor Diagnostics Distribution System Collection System

Event Management Source Water Plant KPIs

Technology and Innovation: Digital Solutions For Our Customers

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NEW ADDRESSABLE MARKET WITH CLAROS CAPABILITIES+$1BCLAROS INSTALLED SITES GLOBALLY>4.5K

CLAROS REVENUE CAGR SINCE 2016+35%

Digital solutions to address customer pain points

FULL PLANT VIEW - POWERED BY DATA & MACHINE LEARNING

CONNECTED INSTRUMENTS COMBINED WITH 3RD PARTY DATA

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Commercial Execution in Action

Expanding commercial synergies at a platform level

INITIATIVES: SCALE AT THE PLATFORM LEVEL

• Global approach to strategic Key Accounts

• Accelerating lead generation and win rates using DBS

• Increasing local presence in High Growth Markets

RESULTS

~30%DIGITAL REVENUE CAGR SINCE 2015

~40%CAGR IN KEY ACCOUNT

WINS & RENEWALSSINCE 2015

~10%HGM REVENUE CAGR

SINCE 2015

EXAMPLES OF KEY ACCOUNTS ACROSS WATER QUALITY

Leadership and Talent Development

Common business model allows for talent development and movement across Danaher

65% >95%

>97%

70%

80%

• DBS Leadership development tools support consistent growth

• Bench strength within Water Quality allows for associate development and ‘export’ to other Danaher Opcos

― 16 senior leaders promoted and exported from WQ over the past 18 months. (i.e. Pall, Leica, Danaher, Radiometer)

• Increased focus on internal fill and diverse hiring

• Outside hires to inject new capabilities (i.e. “Digital DNA”)

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SENIOR LEADER RETENTION SINCE 2016

>95%>2,000bpsINCREASED INTERNAL FILL RATE SINCE 2016

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What You’ll Hear Today

~$2.4B platform with strong revenue and margin profile and sustainable recurring revenue business model

Gaining market share through customer-focused workflow solutions, innovation and commercial execution

DBS helping drive long-term sustainable results and compounding returns

CHEMTREATSteve Hire, President


CHEMTREAT PROVIDE ONE HIGH RES COVER PHOTO

(PREFERABLY WITH PEOPLE IN IT)

Providing advancedproblem-solving solutions

CHEMTREAT

TOTAL ANNUAL REVENUE~$0.6B

MSD

RevenueBy Mix

By Geography

By Sales Channel

All financial metrics based on FY 2018 unless otherwise indicated*3-yr CAGR 2015-2018

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STRONG GLOBAL GROWTH DRIVERS• Regulatory change• User sustainability goals• Energy efficiency

CUSTOMER WORKFLOW SOLUTIONS• Improved equipment efficiency • Regulatory compliance & wastewater savings• Increased process throughput• Water use reduction• ‘Zero liquid discharge’• Brand protection

Recurring>90%

Non-recurring

<10%

ROW

NA

HGM


Indirect<5%

Direct>95%

Where We Play at ChemTreat

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PROCESS OPTIMIZATIONFrom cleaning to control technologies to increase production efficiency and quality

UTILITY WATER TREATMENTCooling tower & boiler treatment programs to increase efficiency,

minimize costs and extend equip. life

WASTEWATER TREATMENTEnvironmentally sustainable treatment

methods to reduce discharge costs

WATER REUSEStrategies to minimize consumption, stay ahead of water scarcity issues

INFLUENT CLARIFICATIONRemove impurities from source waters

for utility & industrial processes

PRETREATMENTSolutions to minimize membrane cleaning and replacement



Environmental Municipal Use Municipal Environmental

How We Win at ChemTreat

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COMMERCIAL MODEL

SCALE &EXPAND

• Best-in-class sales & service model• Utilizing DBS to meet customer needs and

drive growth

• Deep industry & application know-how• Fastest analytical turnaround time

• Top 10 player at acquisition (2007) to a leading player today

• HGM >20% of rev today vs 0% at acquisition

Outperforming the market by >2x since acquisition

OF CONSECUTIVE REVENUE GROWTH AT CHEMTREAT

CUSTOMER RETENTION RATE SINCE ACQUISITION

INCREASE IN FEET ON THE STREET SINCE ACQUISITION

50+ YEARS

2X

>95%

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>2x Market

Growth*

Growth Culture

Top Talent

FinancialModel

DBS

Commercial: The Feet on the Street (FOTS) “Flywheel”

Building and retaining top talent, driving above market growth

DRIVE GROWTH CULTURE• Remove roadblocks to winningINVEST IN EXPERIENCED TOP TALENT• Build “Best of the Best” reputation• Doubled the FOTS from 2007• >97% Employee Retention since 2007CREATE “WIN-WIN” FINANCIAL MODEL• Performance-based compensation• Historical predictive ROI model: supports forward investmentCONTINUOUS IMPROVEMENT • Leverage competitive DNA to drive positive change through DBS *Core growth above the market since 2007

Application Expertise: ChemTreat as a Full-Service Partner

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SITUATION: NON-CHEMTREAT PETROCHEMICAL USER• Experiencing increased downtime, lower

production output, regulatory pressure• Estimated cost/productivity impact >$5M• Frustrated with ‘status quo’ chemical

services provider• Looking for ‘new eyes’ and expertise

SOLUTIONSS&M

TEAM

FOTS

1. LOCAL “ON THE GROUND” PROBLEM SOLVING TALENT

2. SUPPORT FROM APPLICATION SPECIALISTS – “DOMAIN EXPERTS”

3. LONG TERM PROCESS CONTROL THROUGH CT VISTA – DIGITAL

CUSTOMER RESULTS• Entered into LT ChemTreat contract• Implemented CTVista+ digital solution• Became a key reference customer

~$7M ANNUAL COST SAVINGS (+20% VS COMPETITION)

+2 ADDITIONAL SITES CONVERTED TO CT BASED ON INITIAL RESULTS

+5 NEW CT CUSTOMERS ADDED AS A RESULT OF REFERENCES

Deep application expertise enhances FOTS effectiveness

Scale and Expand: Increasing Market Presence

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TODAY20152007

Expanded total addressable market by ~3x since acquisition

Markets Served via FOTS Growth

• Top 10 Player• Concentrated regional focus

• Identified market segments that matched problem solving value proposition

• Deployed FOTS growth model

• Talent acquisition increases organically with market success and scale

• Expand model into new regions

Putting it All Together

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Building and retaining top talent to deliver high quality service enables Chemtreat to win at a higher rate than its peers

Highly skilled application support and FOTS solve complex customer problems quickly and effectively

Building scale allows commercial model expansion into new geographic markets

TROJAN TECHNOLOGIESSteve Bell, President


A leading provider of water disinfection & filtration

TROJAN

TOTAL ANNUAL REVENUE~$0.3B

MSD

RevenueBy Mix

By Geography

By Sales Channel


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KEY CUSTOMERS• Municipal water treatment plants: drinking water,

wastewater, reuse• Industrial & consumer goods manufacturers,

including food & beverage, aquaculture, mining, petrochemical

• Hotels, restaurants, homeowners

MUNICIPAL INDUSTRIAL CONSUMER

APPLICATIONS Recurring~45%

Non-recurring

~55%

NAWE

HGMROW


Indirect~70%

Direct~30%

Where We Play at Trojan

APPLICATION ENVIRONMENTSDISINFECTION CONTAMINANT REMOVALWE OFFER:

UV Systems for Drinking water, Wastewater, Point-of-Entry/Use

WE TREAT:Muni wastewaterMuni drinking waterCommercial waterPharma, bottled waterConsumer/home water




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WE OFFER:Membrane Filtration + UV Systems to Remove:TOC, Primary Solids,1,4 Dioxane and PFAs

WE TREAT:Muni drinking waterIndustrial wastewaterProcess (and Reuse) water

How We Win at Trojan

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New markets, new products & unique expertise driving share gains

OF UV SYSTEM REVENUE IS FROM NEW PRODUCTS LAUNCHED SINCE 2016>30%

+DD TROJAN HGM REVENUE GROWTH 2018


INNOVATION


• Largest muni installed base & deep industry knowledge influencing UV protocol & specs

• Enabling new contaminant removal opptys

• Technologies facilitating new UV applications• Enhancing customer efficiency & productivity

• Increasing HGM ‘go-direct’ and local presence• Driving adoption of UV in new regions

# OF PEOPLE TOUCHED BY TROJAN SYSTEMS

EVERYDAY>1B

Application Expertise: Driving New Opportunities

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Pioneering new applications, expanding Trojan’s revenue opportunity

-15%REDUCTION IN WATER

AUTHORITY’S COST FOR PFAS REMOVAL

EXAMPLE: PFAS* CONTAMINANT REMOVAL USING ADVANCED FILTRATION

+$60MINCREASE IN TROJAN’S ADDRESSABLE MARKET

RESULTS

SITUATION• PFAS contaminants present

health risk; challenging to remove• Increasing demand for mobile,

advanced filtration capabilities

TECHNOLOGY READINESS & IP

CUSTOMER INTIMACY & COLLABORATION• Largest muni installed base driving aftermarket

opportunities• Collaborative customer problem-solving: pilot programs

ADVANCED FILTRATION MARKET DEMAND• New contaminant removal presenting critical &

complex customer problems to solve

PFAS Contamination in the US

*PFAS: Per- and Polyfluoroalkyl Substances (man-made chemicals)

Innovation: New Products Enhance Our Competitive Advantage

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High-power, ultra-low footprintTrojanUVFlex™

Modularity to meet exact needsOptiVenn

KEY FOCUS AREAS• Making UV technology more “accessible”• UV & filtration system footprint reductions• Mobile fleet expansion & capacity enhancements• Increasing recurring revenue

DBS ACTIONS• Visual Project Management• Launch Excellence

RESULTS

New technology for pursuit of common goals: safe water & low operating costs

~45% 2018 TROJAN RECURRING REVENUE AS % OF TOTAL

-50% REDUCTION IN TIME-TO-MARKET FOR NEW PRODUCTS SINCE 2016

Impro T96 MF/CCROHigh-capacity, low footprint filtration• Growth “War”

Rooms

Recent New Products

New UV Lamp patentsHigh-power, low maintenance

Commercial Execution: Driving Global Adoption

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Commercial execution and building scale driving share gains

• Regional diversification in HGM

• Collaborating with international governments to develop UV treatment protocol

GO-DIRECT INITIATIVES HIGH GROWTH MARKETS

• Increasing ‘local’ presence

• Adding FOTS: service & sales

• DBS in EU: OTA/Talent upgrades, footprint leverage via Growth Rooms

2XINCREASE IN CUSTOMER-

FACING ASSOCIATESOUTSIDE NORTH AMERICA

>1,000MUNICIPALITIES ADDED TROJAN UV TREATMENT

CAPABILITIES

RESULTS SINCE 2017

TROJAN CUSTOMER WIN RATE

2015 2018

HGM REVENUE GROWTH

>10%


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Leading installed base in UV and water filtration markets

Application expertise helping expand addressable market outside of core municipal customers

New product introductions and commercial execution driving market share gains

HACHKevin Klau, President


HACH PROVIDE HIGH RES

COVER PHOTO

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At Hach, Our Work Matters – And it Motivates Us

Our mission: to ensure water quality for people around the world

Making water analysis better: faster, simpler, greener and

more informative

TOTAL REVENUE~$1.5B

MSD

RevenueBy Mix

By Geography

By Sales Channel

Recurring~60%

Non-recurring

~40%

STRONG GLOBAL GROWTH DRIVERS• Process optimization and energy efficiency• Water/wastewater infrastructure improvements• Continued regulatory and behavioral changes• Water quality awareness intensifying ROW

NA

W. EU

HGM


36

Biotech

Medical

Process &Industrial

Aero

KEY CUSTOMERS• Municipal water facilities• Industrial wastewater• Industrial process: beverage and power• Environmental & oceanographic agencies

Non-recurring

~55%Recurring

~45%

HACH


Indirect~25%

Direct~75%

Where We Play at Hach

APPLICATION ENVIRONMENTSLABORATORY / FIELD ONLINE / PROCESS WE OFFER:

Lab & Portable Instruments, Online Analyzers, Chemistry, Software & Service




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WE MEASURE:Water Quality ParametersMicrobiologyData for Process Control

Sustainable Business Model

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Leading installed base & technical expertise drives strong recurring revenue

LOWCYCLICALITY

OPEX VS. CAPEX

REGULATORY STANDARD

EXAMPLE: HACH SL1000Recurring Revenue:- Consumables- Service- Software

Non-Recurring Revenue:- New instrument

purchases~45%

~55%

of average water treatment plant budgets allocated to water analysis equipment

- Lower complexity OpExpurchase decision

- Mission critical – but not a budget breaker

<4% $3.5koutlay for new unit

$1k/yrin ongoing

testing

Utilizes Hach Method 10260:EPA approved for chlorine testing in drinking water

Hach testing methods are specified by regulatory bodies globally, including the US EPA

How We Win at Hach

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Well-positioned market leader solving customers’ global water quality objectives

TECHNOLOGY LEADER


GLOBAL EXPANSION

• Most reliable, accurate measurement portfolio• Broadest range of parameters• Most advanced and comprehensive digital offering

• Integrated global commercial coverage • Timely expert answers & strong support

• Increasing HGM ‘go-direct’ and local presence• Cross-platform approach

Hach Peer Avg.

CORE REVENUE GROWTH VS. PEERS LAST 5 YEARS

+MSD+LSD

Technology Leader: Innovation

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~350bps of core growth attributable to new products since 2016

Pre-2009 2014 2019 Future

WIMS

Source Water Monitoring

Real Time Control (RTC)

Lab Specs

Mobile Sensor Mgmt. (MSM)

LD02Silica SL1000

Turbidity

SodiumChlorine

ClarosCollect

ATP Alkalinity Chlorine

OptimizationSoftware

INST

RUME

NTAT

ION

SOFT

WAR

E

ACCELERATING PACE OF NEW PRODUCT DEVELOPMENT: 36+ MONTHS 18 MONTHS

RESULTS >35% % INCREASE IN NEW PRODUCT PIPELINE REVENUE 2017 TO 2019 +25% INCREASE IN NEW PRODUCTS

LAUNCHED LAST 2 YEARS

+ + +

Sensor Diagnostics Distribution System Collection System

Event Management Source Water Plant KPIs

Technology Leader: Digital Solutions For Our Customers

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NEW ADDRESSABLE MARKET WITH CLAROS CAPABILITIES+$1BCLAROS INSTALLED SITES GLOBALLY>4.5K

CLAROS REVENUE CAGR SINCE 2016+35%

Digital solutions to address customer pain points

FULL PLANT VIEW - POWERED BY DATA & MACHINE LEARNING

CONNECTED INSTRUMENTS COMBINED WITH 3RD PARTY DATA Primary outcomes include lower costs, improved compliance, and reduced risk for customers

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Commercial Execution: Aligning Resources and Customers

DBS-driven commercial strategy to win in complex & diverse market

EXECUTE THROUGH DBS• Daily Management, Funnel Management,

Targets & Metrics, Situational Leadership

ALIGN WITH CUSTOMER NEEDS• Meet customers at their point in the buying

journey • Support global customers with local resources• Provide tools for self-serve buying• Allows more customer one-on-one time when

needed

5 POINT COMMERCIAL MODEL

1. Key Accounts

2. Field Direct

3. Inside Sales

4. E-commerce

5. Distribution Partners

Level of Hach Engagement

43

Global Expansion: Increased Presence in High Growth Markets

Driving HSD core growth over the past 5 years in HGM

KEY FOCUS AREAS

GLOBAL 5 PT COMMERCIAL MODEL

• Expanding ‘local’ presence & capabilities

• Adding FOTS: service & sales

• Acquiring regional distributors

RESULTS

PRODUCT INNOVATION

• China R&D: China-4-China & Global

• Partnerships: OEM & co-development

• Localizing acquired solutions

CHINA NOW OUR SECOND LARGEST COUNTRY (REVENUE)

>100CUSTOMER PROJECTS IN HGM INVOLVING >1 OPCO

MIX OF GLOBAL AND LOCAL PRODUCTS AVAILABLE IN >40

COUNTRY-SPECIFIC WEB SITES


44

Differentiated business model with scale across the water cycle

Driving market share gains through innovation and commercial execution led by DBS

Expanding our local presence in HGM through sales, service and localized manufacturing initiatives has increased HGM revenues

45

Danaher Business System (DBS) Is Our Competitive Advantage

Balanced approach to create shareholder value

Leadership

Lean Growth

INNOVATION AT HACHKornelija Zgonc, VP Global R&D


DBS Growth Tools

DBS Growth comprised of innovation & commercial tools

Strategic ProductEnvelope

Product Planning Group

CustomerSegmentation

Danaher InnovationProcess

Accelerated Product Development

Speed Design Review…

COMMERCIAL TOOLS

EXAMPLES:

EXAMPLES:Transformative

MarketingValue Selling

Lead Nurturing

Funnel Management Strategic Negotiations

Sales Force Initiative…

Leadership

Lean Growth

INNOVATION TOOLS

47

DBS Innovation Tools

Replicable process for innovation provides competitive advantage

Strategic Product

Envelope

Problem toPortfolio

(P2P)

Product Planning

Group

NPD Project

Management

LaunchExcellence

Define the attractive domain

for innovation

Define a winning roadmap for

attractive segments

Coordinate execution & resources across

multiple projects

Drive cross-functional development

of each new product

Generate & fulfill demand for the

new product

DOMAIN ROADMAPEXECUTION & RESOURCES

CROSS-FUNCTIONAL DEV. FULFILL DEMAND

FROM MARKET INSIGHT…

…TO MARKET SHARE

48

DBS Innovation in Action: Speed Design Review at Hach

BASICS OF SPEED DESIGN REVIEW (SDR)• Gather VOC, go to Gemba

• Obeya room with co-located cross-functional teams

• Simultaneous product, production line and service development

• Agile feedback: targeted sprints with rapid prototyping

SDR: FORMULA FOR REPEATED SUCCESS

CM130 chlorine monitoring system for dialysis

sc4200c cloud connected controller for IoT solutions

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DR300 colorimeter, cloud connected portable instrument & mobile app

INSTRUMENT TIME TO MARKET (TTM)

SDR helping Hach deliver new products to market avg. ~2 years sooner

~2.5

~2

~1

YRS REDUCTION

IN TTM

YRS REDUCTION

IN TTM

YRS REDUCTION

IN TTM

DBS Innovation in Action: Evolving our Digital Solutions

50

Scarce workforce Cost pressure

More data Technology Evolution

Increasing regulations

Value

Unconnected Connected Differentiated Workflows

DataAggregation

Optimization &Automation

Prescriptive Guidance

From individual instruments to differentiated digital solutions

Instrument Process

Combine data from multiple sources with Hach’s water expertise to improve decision making

Data

• Voice of the Customer• User Experience - UX DNA • Danaher Software System

• Scaled Agile Methodology• Continuous Integration

/Continuous Deployment• Personal Review &Team

Inspection • Software Assessments • Visual Project Management

DBS TOOLS FOR SOFTWARE DEVELOPMENT

MARKET CONDITIONS

INCREMENTAL CUSTOMER VALUE CHAIN

51

DBS Innovation Tools: Deployment Results

SOFTWAREDEVELOPMENT

FOCUS

INSTRUMENTTIMING

Re-directing spend toward most impactful new product & digital solutions development

-50% AVERAGE REDUCTION IN INSTRUMENT PROJECT TIMELINES

100% PLANNED FEATURES IN PLACE AT RELEASE

+25% TEAMS FOCUSED ON NEW PRODUCT DEVELOPMENT

PROCESS Using DBS Tools to increase new product funnel pipeline >35% NEW PRODUCT INCREMENTAL

PIPELINE GROWTH

Incremental platform and customer facing features released on quarterly schedule

Reducing time-to-market for new instruments

DBS Innovation Tools equally effective in instrument & digital solutions

RESULTS SINCE 2017

Pike’s Peak Innovation Center

52

Helping further accelerate growth at Hach

Features 10 Obeya Rooms

Pike’s Peak

BENEFITS

Expansion to accommodate growth• 90,000 ft2 of new space

50% Faster Time-to-Market• Development space designed for best-in-

class DBS Growth tools deployment• Vertical integration of rapid prototyping

and compliance testing• Concurrent development and deployment

of manufacturing cells

53

DBS Growth tools used to identify, deliver and launch effective innovation

Improved cadence of new product launches including instruments and digital solutions

Hach’s innovation leadership is a key competitive advantage

Summary

COMMERCIAL EXECUTION AT HACHDarin Stell, VP Global Sales


DBS Growth Tools

DBS Growth comprised of innovation & commercial tools

Strategic ProductEnvelope

Product Planning Group

CustomerSegmentation

Danaher InnovationProcess

Accelerated Product Development

Speed Design Review…

COMMERCIAL TOOLS

EXAMPLES:

EXAMPLES:Transformative

MarketingValue Selling

Lead Nurturing

Funnel Management Strategic Negotiations

Sales Force Initiative…

Leadership

Lean Growth

INNOVATION TOOLS

55

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Hach 5 Point Commercial Model

DBS-driven commercial strategy to win in complex & diverse market

RESULTS SINCE 2015

+2.5x # OF KEY ACCOUNTS

HSD INSIDE SALES CAGR

>30% ECOMMERCE SALES CAGR

SITUATION• Customer segmentation opportunity

• Overlap & gaps of seller coverage

• Insufficient software selling

• Limited Key Account selling skills

DBS ACTIONS• Standard Work, Funnel

Management, Targets & Metrics• Situational Leadership

Meeting customers where they are in their buying journey Strengthening long-term partnerships

5 POINT COMMERCIAL MODEL1. Key Accounts

2. Field Direct

3. Inside Sales

4. E-commerce

5. Distribution Partners

Level of Hach Engagement

DBS Commercial Tools

Increased focus on sales initiatives to accelerate growth

DAILY MANAGEMENT | GROWTH ROOM | STANDARD WORK

Market Insight and Visibility

SalesProductivity

and Prospecting

Lead Generation

and Campaign Awareness

Customer Buying

Journey & Insight

TRANSFORMATIVE MARKETING SALES STANDARD WORK

Market Overview and Channel

StrategySales Funnel Management

Market attractiveness—

How do we win?

Market segmentation—

Customer profile

What triggers interest?—

Sources of info

Value Proposition—

Customer benefit

Customer Buying Behavior

Monthly “Key” Opportunity Review

Are we in control? What’s working? What’s not working?

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Situational Leadership (SLX)

Standard Work• Weekly funnel reviews 30/60/90/+ days

• Set targets & metrics to track

• Reviews on all levels, sustained SW

• 80% of meeting = coaching our team

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Applying DBS to improve sales process and drive growth

DBS Commercial Growth Tools in Action: Sales Funnel MgtIMPLEMENTING PROCESS DISCIPLINE

Visual Management

Commitment: evaluating open opportunities (close date; future activities)

Competency: performance vs plan (funnel additions; closed won)

RESULTS

INCREASE IN $ FUNNEL WINS SINCE 2015>30%

~15% FUNNEL ADDITIONSCAGR SINCE 2015

INCREASE IN CORE GROWTH WHERE

IMPLEMENTED>200bps

2015 2018

Five Point Commercial Model in Action: Global Key Accounts

Global market share gains driven by multilevel cross-border selling59

GLOBAL ACCOUNT MINDSETRegional cross-functional alignment

Sales

Marketing

StrategicSolutions

Commercial Learning

Projects

Applications

Service

• Regional Global Key Account team established

• Global Funnel Management• Thinking beyond own country

BUSINESS PROCESS EFFECTIVENESS

• Cross-border project management• Global Partnerships and innovation

agreements

Global Key AccountsDashboard

RESULTSGlobal Key Accounts Bookings

+DD CAGR

Adding selective accounts from core verticals and

gaining share

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Improving sales efficiency & increasing customer penetration

Five Point Commercial Model in Action: Inside SalesDriving sales prospects with small/medium-sized customers

ESTABLISH TEAM & DISCREET OWNERSHIP

• Assigned accounts, avoiding overlaps & gaps

• Sales tools & support

• Daily targets per seller

>2X INCREASE IN INSIDE SALES FUNNEL SINCE 2015 >70

CADENCE OF DAILY MANAGEMENT

INVEST IN EXPANSION

• North American team expanded associates by 3x

• Established an EU team in 2019 across 6 countries

1 2 3

HSD INSIDE SALESREVENUE CAGR LAST 3 YEARS

ECOMMERCE PLATFORM• Global reach - 46 sites, 22 languages

• Direct customer purchasing portal

• Allows for customized repeat order points

• Aligns teams to receive, qualify and connect leads with optimal coverage partner in under 24 hours

Five Point Commercial Model in Action: E-Commerce

Aligning with customer research and ordering behavior

2015 2016 2017 2018

>30% E-COMMERCE RELATED REVENUE CAGR

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Disciplined application of DBS Growth tools has helped deploy resources more effectively, track success and gain share

The Five Point commercial model aligns our resources with the needs of our customers

Meeting customers where they are in their buying journey has helped to drive loyalty, retention and share gain

Summary

SUMMARYJoakim Weidemanis, EVP


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What You Heard Today

~$2.4B platform with strong revenue and margin profile and sustainable recurring revenue business model

Gaining market share through customer-focused workflow solutions, innovation and commercial execution

DBS helping drive long-term sustainable results and compounding returns

Value Creation at Water Quality

Execution and strategic M&A driving long-term growth & margin performance65

~$350M REVENUE

+LSD CORE GROWTH

~45% GROSS MARGIN

Low-teens ADJ. EBITDA MARGIN

2001

~$2.4B REVENUE

+MSD CORE GROWTH

~55% GROSS MARGIN

~25% ADJ. EBITDA MARGIN

>20% ROIC

TODAY*

* All financial metrics reflect FY 2018

Pre-2002 2004 2006 2008 2010 2012 2014 2016 Today

2019 water quality investor & analyst day september …

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