10-KPeriod: FY2018

DANAHER CORP /DE/ Annual Report, Year Ended Dec 31, 2018

Filed February 21, 2019For Securities:DHR

Summary

Danaher Corporation reported solid performance for the fiscal year ending December 31, 2018, with total sales reaching $19.9 billion, an increase of 8.5% year-over-year. The company's strategic priorities, including portfolio enhancement, the application of the Danaher Business System (DBS), and talent acquisition, continue to drive value. The Life Sciences and Diagnostics segments were key growth drivers, supported by acquisitions such as Integrated DNA Technologies (IDT) in the Life Sciences segment. A significant strategic move announced was the intention to spin off the Dental business into an independent, publicly-traded company in the second half of 2019. This separation is expected to be tax-free to shareholders and aims to allow Danaher to better focus on its core Life Sciences, Diagnostics, and Environmental & Applied Solutions segments. The company also reported strong operating profit margins, reflecting effective cost management and operational improvements.

Financial Highlights

54 data points
Beta

Revenue

$17.05B

55.8% Gross Margin

Net Income

$2.65B

15.5% Net Margin

EPS (Diluted)

$3.74

Total Assets

$47.83B

Cash & Equivalents

$787.80M

Free Cash Flow

$3.44B

Financial Statements
Beta
Revenue$17.05B
Cost of Revenue$7.54B
Gross Profit$9.51B
R&D Expenses$1.06B
SG&A Expenses$5.39B
Operating Income$3.06B
Interest Expense$137.00M
Net Income$2.65B
EPS (Basic)$3.78
EPS (Diluted)$3.74
Shares Outstanding (Basic)700.60M
Shares Outstanding (Diluted)710.20M

Key Highlights

  • 1Total sales increased by 8.5% to $19.9 billion in 2018.
  • 2The Life Sciences segment experienced strong growth, with core sales up 7.5%, boosted by the acquisition of IDT.
  • 3The company announced its intention to spin off its Dental business in the second half of 2019.
  • 4Operating profit margins improved to 17.1% in 2018 from 16.3% in 2017, driven by sales volume and productivity improvements.
  • 5High-growth markets contributed significantly to sales growth, with core sales increasing at a high-single digit rate.
  • 6Backlog stood at approximately $2.9 billion at the end of 2018, indicating strong near-term revenue visibility.
  • 7Danaher continues to leverage the Danaher Business System (DBS) for continuous improvement across its operations.

Frequently Asked Questions

Danaher announced its intention to spin off its Dental business into an independent, publicly-traded company in the second half of 2019. This move is strategic as it allows Danaher to sharpen its focus on its core Life Sciences, Diagnostics, and Environmental & Applied Solutions segments, potentially unlocking greater value and enabling more targeted resource allocation for each entity.

Acquisitions played a notable role in Danaher's growth in 2018. The company acquired businesses for approximately $2.2 billion, with the acquisition of Integrated DNA Technologies (IDT) being a key contributor to the Life Sciences segment's performance, expanding its product offerings in genomics consumables.

The Danaher Business System (DBS) is a set of lean manufacturing and continuous improvement tools and processes that Danaher applies across its businesses. It is designed to enhance performance in areas such as quality, delivery, cost, growth, and innovation. Investors can see its impact in the company's consistent efforts to improve operating profit margins and drive cost savings, as mentioned in the results of operations.

Danaher experienced growth across its geographic markets in 2018. High-growth markets, which represented 31% of total sales, grew at a high-single digit rate, led by Asia, particularly China. Developed markets, including North America and Western Europe, also contributed to growth, with core sales increasing at a mid-single digit rate.