Danaher 2011 Annual Report Download - page 36

Table of Contents
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 
Existing businesses 9.5% 17.0%
Acquisitions 8.0% 10.5%
Currency exchange rates 2.0% —
Total 19.5% 27.5%
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Year-over-year price increases in the segment had a negligible impact on sales growth during 2011.
During 2011, sales in the segment’s instrument businesses grew on a year-over-year basis due to increased demand for oscilloscopes and service and
installation tools, partially offset by year-over-year declines in sales attributable to products serving the video end markets. Instrument sales grew in all major
geographies during the year led by Asia and other emerging markets. Instrument sales grew primarily during the first three quarters of 2011 as fourth quarter
2011 sales were essentially flat compared to 2010. Sales of instruments are expected to continue to grow during 2012 on year-over-year basis, albeit at a rate
lower than was experienced during 2011.
Sales in the segment’s communications businesses also grew during 2011 on a year-over-year basis, primarily in North America, as a result of strong demand
for both network management solutions and core network enterprise solutions. Global demand for network security and analysis solutions was also robust in
2011.
Operating profit margins increased 200 basis points during 2011 as compared to 2010. Year-over-year operating profit margin comparisons benefited 220 basis
points from the favorable impact of higher sales volumes and continued productivity improvements net of the impact of costs associated with various sales,
marketing and product development growth investments. The dilutive effect of acquired businesses adversely impacted year-over-year operating profit margin
comparisons by 20 basis points.
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Year-over-year price increases in the segment had a negligible impact on sales growth during 2010.
During 2010, demand increased significantly for the business’ core instruments, including oscilloscopes, thermography products and digital multi-meters.
Sales were strong in all major geographies, with particular strength in China. In addition, distributor inventory reductions that occurred in the first three
quarters of 2009 due to the recessionary economic conditions did not continue into 2010 which positively impacted the year-over-year comparisons. Sales from
existing businesses in the segment’s communications businesses grew at a low double-digit rate during 2010 on a year-over-year basis driven by strong
demand for both network management solutions and core network enterprise solutions.
Operating profit margins increased 660 basis points in 2010 as compared to 2009. The increase in operating profit margins during the period is primarily a
result of higher sales volumes in 2010 compared to 2009 as well as cost savings attributable to the Company’s 2009 restructuring activities. Year-over-year
operating margin comparisons for 2010 also benefited from approximately 265 basis points of incremental restructuring costs incurred in 2009 as compared
to 2010. 2010 acquisition related charges associated with fair value adjustments to acquired inventory and deferred revenue balances (net of comparable
acquisition related charges recorded in 2009) favorably impacted year-over-year operating profit margin comparisons by 55 basis points as such charges were
greater in 2009 than in 2010. The dilutive effect of acquired businesses had a net adverse impact of 130 basis points on year-over-year operating profit margin
comparisons, partially offsetting these favorable year-over-year factors.
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The Company’s Environmental segment provides products that help protect customers’ water supply and air quality and serves two primary markets: water
quality and retail/commercial petroleum. Danaher’s water quality business is a global leader in water quality analysis and treatment, providing
instrumentation and disinfection systems to help analyze and manage the quality of ultra pure, potable, and waste water in residential, commercial, industrial
and natural resource applications. Danaher’s retail/commercial petroleum business is a leading worldwide provider of products and services for the
retail/commercial petroleum market.
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Source: DANAHER CORP /DE/, 10-K, February 24, 2012 Powered by Morningstar® Document Research℠
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