Danaher 2011 Annual Report Download - page 41

Table of Contents
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Existing businesses 4.5% 4.5%
Acquisitions 2.5% 6.5%
Currency exchange rates 3.0% (1.0%)
Total 10.0% 10.0%
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Price increases throughout the segment contributed 1.0% to sales growth on a year-over-year basis during 2011 as compared to 2010 and are reflected as a
component of the change in sales from existing businesses.
Sales from existing businesses in the dental consumables businesses grew at a mid single-digit rate in 2011 driven primarily by increased demand for general
dentistry consumables and orthodontic products and, to a lesser extent, infection control products. Sales in the dental consumables business grew in all major
geographies. Sales from existing businesses in the segment’s dental equipment business grew on a year-over-year basis at a mid single-digit rate due to strong
imaging and instrument product demand. Increased sales of imaging products were led by North America, and to lesser extent, the emerging markets, while
instrument sales growth was driven largely by North America and Europe.
Operating profit margins increased 60 basis points during 2011 as compared to 2010. Higher sales volumes and continued productivity improvements,
including cost reduction actions in the dental equipment businesses, net of the impact of costs associated with various sales, marketing and product
development growth investments increased operating profit margin by 95 basis points on a year-over-year basis. The dilutive effect of acquired businesses
adversely impacted year-over-year operating profit margin comparisons by 35 basis points.
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Price increases throughout the segment contributed 0.5% to sales growth during 2010 and are reflected as a component of the change in sales from existing
businesses.
Sales from existing businesses in the dental consumables businesses were essentially flat in 2010 as compared to 2009. Robust demand for orthodontia
products throughout 2010 in addition to increased sales of infection control products were offset by weak demand for general dentistry consumables (primarily
during the first three quarters of 2010) primarily as a result of adjustments to inventory levels in distribution channels that occurred during those periods.
Demand in the general dentistry consumable businesses increased sequentially in the fourth quarter 2010 as inventories in the distribution channels returned to
more normalized levels. Sales from existing businesses in the segment’s dental equipment businesses grew at a low double-digit rate and increased in all major
product categories during 2010 as compared to 2009. Growth was led by increased sales in the imaging product lines as a result of strong demand for 3D
equipment and a new digital x-ray sensor. Year-over-year demand also increased for the business’ instruments and treatment units. Imaging product sales were
particularly strong in North America and Asia, while instrument and treatment unit sales were particularly strong in Europe.
Operating profit margins decreased 190 basis points during 2010 as compared to 2009. The decrease in operating profit margins was largely due to the
favorable settlement of litigation with Align Technologies that occurred in 2009 and adversely impacted year-over-year operating profit margin comparisons by
515 basis points. The dilutive effect of acquired businesses had a net adverse impact of 10 basis points on year-over-year operating profit margin
comparisons. The favorable impact of higher sales volumes during 2010 compared to 2009, cost savings attributable to the Company’s 2009 restructuring
activities and 145 basis points of incremental restructuring costs incurred in 2009 as compared to 2010 partially offset these adverse impacts.
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The Company’s Industrial Technologies segment designs and manufactures components and systems that are typically incorporated by original equipment
manufacturers and system integrators for sale into a diverse set of applications and end-markets. The businesses in this segment also provide service and
support, including helping customers with integration and installation and providing services to ensure performance and up-time. The Industrial
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Source: DANAHER CORP /DE/, 10-K, February 24, 2012 Powered by Morningstar® Document Research℠
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