The IDEXX Opportunity… · 8/16/2017 · 1 © 2017 IDEXX Laboratories, Inc. All rights reserved....

1 © 2017 IDEXX Laboratories, Inc. All rights reserved.

The IDEXX OpportunityJonathan Ayers, Chairman and Chief Executive Officer

IDEXX Investor Day I August 16, 2017


Safe Harbor Disclaimer

The following information contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These

forward-looking statements are based on management’s current expectations and beliefs, as well as a number of assumptions concerning future

events. These statements are subject to risks, uncertainties, assumptions and other important factors. You are cautioned not to put undue

reliance on such forward-looking statements because actual results may vary materially from those expressed or implied. The reports filed by

the Company pursuant to United States securities laws contain discussions of these risks and uncertainties. The Company assumes no

obligation to, and expressly disclaims any obligation to, update or revise any forward-looking statements, whether as a result of new information,

future events or otherwise. You are advised to review the Company’s filings with the United States Securities and Exchange Commission (which

are available from the SEC’s EDGAR database at www.sec.gov and via the Company’s website at www.idexx.com).

We refer in this presentation to 2017 outlook communicated on August 1, 2017; these references speak only as of August 1, 2017 and shall not

be deemed to be a reiteration or affirmation of the guidance or an indication that our expectations have not changed since that time.

Non-GAAP Financial Measures

In this presentation, we refer to some non-GAAP financial measures. For a reconciliation to the most comparable GAAP financial measures, we

refer you to our footnotes and the Appendix to this presentation, which also refer to our Definitive Proxy Statement filed March 23, 2017 and

Annual Report on Form 10-K for the year ended December 31, 2016, both of which are available at http://www.idexxproxymaterials.com.

Please refer to additional footnotes in the Appendix.

http://www.sec.gov/

http://www.idexx.com/

http://www.idexxproxymaterials.com/


IDEXX – Accelerating Momentum in a Strong Market

• Strong market growth and favorable

demographic trends

• Attractive model of leadership with

enduring recurring revenue

• Widening innovation gap and new

commercial model has accelerated

organic growth of CAG Diagnostics

Recurring Revenue

• In 2017, we are seeing a growing

opportunity to build very long-term

sustainability into the model


We Lead with Best-in-Class Offerings in Each Diagnostic and

Software Modality and with Global Scale

Canada

Latin

America

EMEA

Other

Asia

Japan

Australia &

New Zealand

China

U.S.

~40%

$1.5 B*

* Revenue at the manufacturer level. Includes reference lab, in-house instruments and consumables, rapid assay, digital, ultrasound and veterinary software. Excludes

bioresearch. Figures calculated in USD to best reflect our understanding of the relative regional revenue figures.


The Core Business Model Consists of Profitable Recurring RevenueCAG Diagnostics Recurring Revenue Leads the Way - 74% of total

Annual Recurring Revenues ($B)1,2,3

% of Total

IDEXX

Revenues

85% 86% 87% 87%

IDEXX

VetLab®**

Rapid

Assay

CAG Other

Water Testing

Livestock Testing*

Companion

Animal

Diagnostics

74%

of total IDEXX

Revenue

83%

0.0

0.3

0.6

0.9

1.2

1.5

1.8

2012 2013 2014 2015 2016 2017E ***

($)

Reference

Labs

88%

* Livestock, poultry and dairy testing ** IDEXX VetLab includes consumables, service and accessories. 1,2,3 Please refer to the Appendix for descriptive footnotes.

*** All references to 2017E reflect the midpoint of 2017 outlook communicated August 1, 2017. Please refer to our Safe Harbor Disclaimer.


The Global Market is $3.8 Billion with Strong Secular Growth TrendsU.S. represents ~$2.4B, or ~65% and International represents ~$1.4B or ~35%

Canada

U.S.

Latin

America

Europe, Middle

East & Africa

Japan

Australia &

New Zealand

China &

Other Asia

$2.4B

* Revenue at the manufacturer level. Includes reference lab, in-house instruments and consumables, rapid assay, digital, ultrasound and information management. Excludes bioresearch.

Figures stated in USD, based on December 31, 2016 exchange rates.

2016 Companion Animal Diagnostics and

Software Market Estimate ($B)*


U.S. Market Backdrop; Pet-related Spending Growth has Significantly

Outpaced Personal Consumption

0

400

800

1,200

1,600

2,000

2,400

1980 1985 1990 1995 2000 2005 2010 2016

U.S. Personal Consumption Expenditure for Key Categories*

Indexed (1980 = 100)

Total Personal Consumption

Expenditure (PCE)

Veterinary and Related Services

Pets and Related Products

* Analysis based on data from Bureau of Economic Analysis last revised on March 31, 2017. ** Compound Annual Growth Rate.

Yet, veterinary services, pets and related products together still

comprise only ~0.8% of total consumption expenditure

CAGR**

1980-2016

8.9%

6.6%

5.7%


Pet Owners Say Pets Support their Health and Well-being

80%

81%

84%

86%

88%

0% 20% 40% 60% 80% 100%

Reduce stress

Percentage of Pet Owners Who are Aware that Pets…

Help with conditions like PTSD in

war veterans

Reduce depression

Reduce anxiety

Increase our sense of well-being

Source: Pet Owner Survey conducted in 2016 by The Human Animal Bond Research Institute (HABRI) Foundation in partnership with Cohen Research Group (n = 1,995 pet owners), which had a margin of error of plus or minus 2.2%.


Pet Owners View their Pets as Members of their Families and Can’t

Imagine Giving Them Up

0% 20% 40% 60% 80% 100%

“I feel that my pet is

an important part

of my family.”

“I couldn’t imagine

giving up my pet

for any reason.”

Strongly Agree Agree

98%

95%



The Pet-human Bond Continues to Strengthen

Percentage of U.S. Pet Owners Responding Whether

Their Pets’ or Their Own Medical Needs Come First (%)

My pet’s

medical needs

come first

Not sure

whose needs

come first

Source: American Pet Products Association 2016-17 Pet Owners’ Survey. A total of 2,559 pet owner surveys were completed; Dog owner sample: 505, cat owner sample: 451;

Surveys were conducted with a nationally representative sample of the Ipsos Online Panel.

46%53%51% 50%

2014 2016 2014 2016


Most Pet Owners Prioritize Pet Care with at least Annual Pet Care Visits

67% 58%39%

0%

20%

40%

60%

80%

100%

More than 1 visit per year

1 visit per year

How many times a year do you take your pet to the veterinarian?

86% 86%77%


Baby Boomers(53 yrs to 71 yrs)

Millennials(19 yrs to 36 yrs)

Gen X(37 yrs to 52 yrs)


Most Pet Owners Are Willing to Spend on their Pets, and Millennials

Are Taking it to a Whole New Level – 41% Say Money is No Object

Baby Boomers(53 yrs to 71 yrs)

Millennials(19 yrs to 36 yrs)

Gen X(37 yrs to 52 yrs)

41% 36%21%

0%

20%

40%

60%

80%

100%

“Money is no object

to me when it comes

to my pets.”

“I spend a moderate

amount of money on

my pet.”

“I am budget-

conscious.”

How much money do you spend on your pet each month?


Average of 33%

where money is no

object to me when

it comes to my pets


Today, ~40% of U.S. Clinical Visits Include a Diagnostic Test of Any Kind

2016 U.S. Pet Visits and Diagnostic Testing*

Total

Pet VisitsClinical Visits* Clinical Visits

Including

any Dx Test**

100%

41%~200M

58% of

total visits

~80M

* Based on IDEXX Practice Intelligence data, secondary data sources, modeling. “Clinical Visits” are visits that include a veterinary professional seeing a pet, and thus exclude visits for pharma, diet and product sales, boarding, grooming, etc.

** Diagnostic test includes all of the following: fecal, heartworm or vector-borne disease tests, chemistry, hematology, microbiology, biopsy and/ or cytology; whether performed in-house or at the reference lab, by any product or service provider.

Excludes radiology.

*** Roughly estimated based on the best data available.

~350M

Clinical Visits

Including a

Chemistry Panel***

~24M

~12%


Chemistry Testing Represents the Majority of IDEXX VetLab

Consumables and Reference Lab Revenue

2016 Worldwide IDEXX VetLab Consumables Revenue ($MM)

81%

Revenue from

Chemistry

Consumables*Other

2016 U.S. Reference Labs Revenue ($MM)

49%

Revenue

from Test

Codes that

include a

Chemistry

Panel Other

* IDEXX VetLab chemistry consumables excluding IDEXX VetStat® consumables.


The Chemistry Panel Provides Essential Insight when Pets are Sick

Strong

Finding of

Likely

Disease

Catalyst® Chemistry 21 Results when Run for Canine Sick Appointments*

26% 27% 35% 44%14% 15%

16%

18%

0%

20%

40%

60%

80%

100%

Young(0 – 2 years)

Adult(3 – 6 years)

Senior(7 – 10 years)

Geriatric(11+ years)

0 - 1

2

3 or

more

* Catalyst Chemistry 21 runs, which include Chem 17 and Lyte4 CLIPs for sick and emergency patients. Date of birth used to determine age. N=44,510.

Number of Results

Exceeding Critical Values


…But also Uncovers a Large Amount of Hidden Disease When Seemingly

Well Pets Receive Preventive Care Testing Including a Chemistry Panel

Catalyst Chemistry 21 Results when Run for Canine Preventive

Care (Seemingly “Well” Pets)*

18% 17%23%

32%14% 14%

16%

20%

0%

20%

40%

60%

80%

100%

* Catalyst Chemistry 21 runs, which include Chem 17 and Lyte4 CLIPs for patients when “wellness” was the reason for visit. Date of birth used to determine age. N = 14,770

Strong

Finding of

Likely

Disease

0 - 1

2

3 or

more

Young(0 – 2 years)

Adult(3 – 6 years)

Senior(7 – 10 years)

Geriatric(11+ years)

Number of Results

Exceeding Critical Values


IDEXX is in an “Opportunity Plus” Zone to Accelerate Growth of the

Diagnostic Annuity

• People prioritize spending on their pets

• Pets can’t tell you how they feel

• Pets age 7 times faster than humans*

• Running Diagnostics is essential,

but underutilized

• IDEXX has uniquely expanded the

diagnostics toolset

* Example: A dog becomes a senior at age 7, geriatric at 11, cats at 9 and 14 respectively.


Veterinary Practices’ Routine Testing Generates a Profitable and Growing

IDEXX Recurring Revenue Annuity

CAG Diagnostics Recurring Revenues1,2,3

74% of IDEXX Total

IDEXX

VetLab*

Rapid

Assay

0.0

0.3

0.6

0.9

1.2

1.5

1.8

2012 2013 2014 2015 2016 2017E **

$Billions

in Annual

Revenue

Reference

Labs

Growth is a function of:

• Growth in utilization – breadth and

depth of IDEXX’s unique toolkit

• Exceptional levels of customer

retention

• Steady growth from new customers

• Price realization through expanding

value

1,2,3 Please refer to the Appendix for descriptive footnotes. * IDEXX VetLab includes consumables, service and accessories.

** All references to 2017E reflect the midpoint of 2017 outlook communicated August 1, 2017. Please refer to our Safe Harbor Disclaimer.


1

13

82

2

14

88

1

15

98

2

18

100

2

19

101

0

20

40

60

80

100

IDEXX’s Diagnostic Innovation Expands the Value of the

Diagnostic Tool Kit to the Practice and the Pet in a Unique Fashion

IDEXX Invests More than 80%

of Industry R&D

VCA Inc.* Heska Abaxis IDEXX Laboratories

* * * * *

* VCA does not report any R&D investments in its filings with the U.S. Securities and Exchange Commission (“SEC”).

Sources: Company SEC filings; earnings releases.

Comparison of Annual R&D Investment of Major Veterinary Diagnostics Companies$MM, calendar years shown

2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016


~99% of CAG Revenue is Sold Direct or with an IDEXX In-Country Presence,

Driving Adoption of Diagnostics and IDEXX Innovation

Direct sales force Joint Direct &

Distribution

Distributor

only


IDEXX U.S. Example of the Commercial Model Transformation:

We have Deepened our Presence with Customers, Accelerating

Adoption of our Unique Innovations

* Includes all field-based sales and technical services headcount, excluding management. 2012-2016 as of December 31 of each calendar year, 2017E projected as of December 31, 2017.

215235 248

358390

435

2012 2013 2014 2015 2016 2017E

Total U.S. CAG Field-Based Professional Headcount*

2x

~


In 2016, IDEXX U.S. Customers Had Higher Dx Utilization and are

Growing Their Diagnostics Faster Than Non-IDEXX Practices

15.9%14.6%

9.1%

3.8%

5.1% 4.9%

9.8%

5.6% 6.1% 6.4%

Q1 2016 Q2 2016 Q3 2016 Q4 2016

Quarterly Year over Year Growth of Diagnostic Revenue

per Practice

Diagnostic Revenue as a % of Total

Practice Revenue

IDEXX

Practices*

Competitive

Practices**

Competitive

Practices**

IDEXX

Practices*

* Practices using both IDEXX Catalyst for in-house chemistry and IDEXX Reference Labs at > $500 per month on average ** Use neither IDEXX Catalyst for in-house chemistry nor IDEXX Reference Labs at > $500 per month on average.

Source: Analysis based on IDEXX Loyal and Competitive practices within Practice Intelligence data set (n = 3,503).


$11K

$20K

Growth in Diagnostic Revenue

2016 vs. 2015

Non-IDEXX

Practices**

IDEXX

Practices*

+

+

5.7% 6.9%% YoY

Growth

$86K

Growth in Practice Revenue

2016 vs. 2015+

+

6.5% 7.0%

$126K

AND

Non-IDEXX

Practices**

IDEXX

Practices*

* Practices using both IDEXX Catalyst for in-house chemistry and IDEXX Reference Labs at > $500 per month on average ** Use neither IDEXX Catalyst for in-house chemistry nor IDEXX Reference Labs at > $500 per month on average.

Source: Analysis based on IDEXX Loyal and Competitive practices within IDEXX Practice Intelligence data set (n = 3,503).

In 2016, IDEXX U.S. Practices* Grew Faster

In Both Diagnostics and Total Practice Revenue


IDEXX Loyal Customers Use of Chemistry Panel Testing Shows a

Significant Gap between the Average and Best Demonstrated Practice

6%

9%

10% 11% 13%14%

15%17%

19%

25%

28%

31%

0%

5%

10%

15%

20%

25%

30%

35%

IDEXX Loyal Practices: Percentage of 2016 Clinical Visits Including a Chemistry Panel*

Bottom

Decile

Top

Decile

23456789 Top

5%

Top

2%

Mean 13%

2.4x

• Figures rounded to nearest 1%.

Source: Analysis of IDEXX Practice Intelligence and IDEXX Internal Data for 2,730 U.S. practices that use IDEXX for both their in-house and reference lab chemistry testing..


A Closer Look by Modality Shows “Testing begets Testing” IDEXX Customers with higher chemistry panel testing use more of both in-house and

reference lab chemistry panels

4%6% 7% 7% 7% 8% 8% 8% 8%

10% 11% 12%2%

3%3% 4% 6% 6% 8%

9%12%

15%17%

19%

0%

5%

10%

15%

20%

25%

30%

35%

IDEXX Customers: Percentage of 2016 Clinical Visits Including a Chemistry Panel*

• Figures rounded to nearest 1%.

Source: Analysis of IDEXX Practice Intelligence and IDEXX Internal Data for 2,730 U.S. practices that use IDEXX for both their in-house and reference lab chemistry testing.

Overall Mean

13%

Ref Lab Chemistry

Panels(Average - 6.1%)

In-House Chemistry

Panels(Average - 7.0%)

Bottom

Decile

Top

Decile

23456789 Top

5%

Top

2%


SDMA Adds Essential Information to the Chemistry Panel -- Expanding

the Clinical Utility of both Sick Animal and Wellness Testing

* Data on file at IDEXX Laboratories, Inc. Westbrook, Maine U.S.A.

Canine IDEXX SDMA® results by age (n = 537,814)

Prevalence of Kidney Disease Increases with Age in Dogs (n= 537,814)*

Disease

hidden by

traditional

parameters


IDEXX SDMA – Increasing Evidence, Recognition and Adoption

as an Essential Element of the Chemistry Panel

SDMA is earlier than creatinineKidney damage as early as 25%

SDMA is more reliable than creatininee.g., Unaffected by lean body mass

IDEXX SDMA is an essential element in the chemistry panel

Kidney as a general disease indicator

2015

2016

2017 10+ Milliontests and counting


Traditional

Parasitology

Panels

Panels

Including IDEXX

Fecal Antigens

Hookworm Roundworm Whipworm

IDEXX Innovation, Another Example: Fecal Antigen Technology

U.S. Parasitology Revenue is

Augmenting U.S. Reference Lab Growth

2013 2014 2015 2016 2017

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

Fecal Antigen:

IDEXX Proprietary Innovation

which finds more

intestinal parasites

and finds them earlier


IDEXX VetLab Instrument Suite - Innovation that Uniquely Expands Utility

Catalyst One®

Chemistry, T4, Electrolytes,

Catalyst SDMA

ProCyte Dx®

Complete CBC,

Retics & Bands

SediVue Dx®

Urine Sediment

SNAP Pro®

New: Fecal SNAP

for Screening of

Intestinal Parasites

IDEXX VetLab Station

2-Way Integration

Practice

Management

System

Menu

Performance

Connectivity


U.S. Example: IDEXX Innovation and Commercial Model Augments Solid Market Growth to

Drive the Potential for Sustained Double-Digit CAG Diagnostics Recurring Revenue Growth

2017E*

Revenue

* These projections assume that foreign currency exchange rates will remain the same as in 2017. ** 2017E Revenue based on midpoint of outlook communicated August 1, 2017. Please refer to our Safe Harbor Disclaimer.

*** Estimated contribution to U.S. CAG Dx Recurring Revenue potential compound annual growth rate from this driver.

IDEXX U.S. CAG Dx Recurring Revenue

Growth Potential – Next Five Years

Constant Currency*

New and Incremental

Revenue Streams

Net Customer Additions

1% - 2%**

Base Market Growth: 5 – 6%

Dx Revenue per Pet Visit

2% - 3%**

~3%**

Pet Visit Growth

~2022

Revenue3% - 4.5%**

9% - 13% Compound Annual

Growth Rate

IDEXX Innovation and Commercial Model Impact adds 4 – 7%


IDEXX Total Global Revenue Growth Potential: Ongoing 10%+ Annually,

Driven By Global CAG Diagnostics Recurring Expansion

2017E*

Revenue

$1.955B

IDEXX Total Company Annual Revenue Growth Potential 2022 vs. 2017E,

Constant Currency

CAG CapitalVeterinary Software & Digital

8% - 12%***

LPD, Water & Other

6% - 8%***

CAG Recurring

International CAG Dx

12% - 16%***

9% - 13%***

U.S. CAG Dx

~2022

Revenue

10%+ Compound Annual

Growth Rate

* These projections assume that foreign currency exchange rates will remain the same as in 2017. ** 2017E Revenue based on midpoint of guidance range communicated on August 1, 2017. Please refer to our Safe Harbor Disclaimer. *** Estimated potential revenue compound annual growth rate for this business segment.


Summary: We are in an “Opportunity Plus” Zone To Drive Sustainable

Global Business Growth with Enhanced Durability

An Enduring Recurring Revenue Business

Model with . . .

. . . favorable long-term global growth

dynamics . . .

. . . further augmented by IDEXX’s unique

innovation and commercial model . . .

. . . generating exceptional long-term

financial returns.


Capturing Our OpportunityBrian McKeon, Executive Vice President and CFO

IDEXX Investor Day I August 16, 2017


Strong execution towards a consistent strategy yielding excellent financial outcomes

• Accelerated revenue and EPS growth

• High cash flow conversion, high ROIC and outstanding shareholder returns

We are in an “opportunity plus” growth zone -- increasing select areas of investment

to maximize our long-term business value and durability

Strong momentum and ongoing potential positions us to continue delivering

performance aligned with our long-term financial goals

• 10%+ annual constant currency revenue growth*

• 15-20% annual constant currency EPS gains** – supported by ongoing operating margin expansion

Financial Review – Key Messages

* These projections assume that foreign currency exchange rates will remain the same as in 2017.

** EPS growth potential outlook excludes year over year changes in share-based compensation tax benefits.


Core Business Characteristics

• Global market leadership –

grounded in innovation

• Robust underlying market

growth

• High-margin, durable

recurring revenue streams

• Strong cash generation

Strong Growth Driven By Consistent Focus on Core Businesses

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

1.8

2.0

2006 2011 2016

IDEXX Revenue1 ($B)

Livestock Testing**

Water Testing

Companion

Animal Group

(CAG)

* Compound Annual Growth Rate (CAGR) ** Livestock, poultry and dairy testing1 Please refer to the Appendix for descriptive footnotes. 4 Non-GAAP financial measure, please refer to the Appendix for descriptive footnotes.

$

7%

6%

86%

1% Other

10% Constant Currency CAGR4,*


Growth Has Accelerated – Driven By CAG Diagnostics Recurring Annuity

0%

2%

4%

6%

8%

10%

12%

14%

16%

2009 2010 2011 2012 2013 2014 2015 2016 2017 YTD

* All references to 2017 YTD mean January 1, 2017 through June 30, 2017. 2,3 Please refer to the Appendix for descriptive footnotes.

5 Non-GAAP financial measure, please refer to Appendix for descriptive footnotes.

*

Growth before Normalization for Changes in Distributor Inventory and Margin Capture Related to 2015 U.S. Go-Direct

Annual CAG Diagnostics Recurring Normalized Organic Revenue Growth2,3,5


Recurring Revenues Expanding

Annual Recurring Revenues ($B)1,2,3

% of Total

IDEXX

Revenues

85% 86% 87% 87%

IDEXX

VetLab®**

Rapid

Assay

CAG Other

Water Testing

Livestock Testing*

* Livestock, poultry and dairy testing ** IDEXX VetLab includes consumables, service and accessories. 1,2,3 Please refer to the Appendix for descriptive footnotes.

*** All references to 2017E reflect the midpoint of 2017 outlook communicated August 1, 2017. Please refer to our Safe Harbor Disclaimer.

Companion

Animal

Diagnostics

74%

of total IDEXX

Revenue

83%

0.0

0.3

0.6

0.9

1.2

1.5

1.8

2012 2013 2014 2015 2016 2017E ***

$

Reference

Labs

88%


Strengthened Commercial Capability Driving High U.S. CAG Growth

U.S. CAG Diagnostics Recurring

Normalized Organic Revenue Growth2,3,5

0%

5%

10%

15%

2009 2010 2011 2012 2013 2014 2015 2016 2017YTD

* Includes all field-based sales and technical services headcount, excluding management. Headcount as of December 31, 2012 and projected headcount as of December 31, 2017.2,3,5 Non-GAAP financial measures, please refer to Appendix for descriptive footnotes.

215

435

2012 2017E

~

2x

Total U.S. CAG Field-Based Professional

Headcount*

Growth Normalized for Changes in Distributor Inventory and Margin Capture Related to 2015 U.S. Go-Direct


U.S. Reference Lab Organic Revenue Growth5,*

8%9%

11%

13%14% 14%

2012 2013 2014 2015 2016 2017 YTD

U.S. Lab Growth Is Accelerating Driven By Test Differentiation and Commercial Capability

5 Non-GAAP financial measure, please refer to Appendix for footnotes.

* Includes Reference Lab, Bioresearch and Telemedicine revenue. International Reference Lab organic revenue will be discussed in the IDEXX Reference Labs presentation on August 17, 2017.


In-Clinic Trends Continue to Strengthen Following Go-Direct Transition

0

50

100

150

200

250

300

350

400

450

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

2015 2016 2017

IDEXX and Abaxis North America Competitive Chemistry Placements*

* Abaxis competitive chemistry placements based on figures reported in company conference calls.

IDEXX

Abaxis


Rapid Assay Returns to Solid Growth

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

2015 2016 2017

Global Rapid Assay Normalized Constant Currency Revenue Growth,

with Contribution to Growth of Rapid Assay Product Segments (year over year %)4,6

4Dx® Plus

First Generation/Feline

Other Rapid Assay

-3.3%

-8.0% -3.7%-0.8%

-0.7%

6.7%

2.1%

5.8%

11.4%

8.5%

4,6 Non-GAAP financial measures, please refer to Appendix for footnotes.


3,5 Non-GAAP financial measures, please refer to Appendix for footnotes.

Strong International CAG Gains Driven By Catalyst

International CAG Diagnostics Recurring

Organic Revenue Growth3,5

0%

3%

6%

9%

12%

15%

18%

2012 2013 2014 2015 2016 2017YTD

International Chemistry Instrument

Installed Base

0

5,000

10,000

15,000

20,000

25,000

30,000

2012 2013 2014 2015 2016 2017YTD

Catalyst®

VetTest®


Operating Margins Are Increasing

14%

15%

16%

17%

18%

19%

20%

21%

22%

2012 2013 2014 2015 2016 2017E*

4,7 Non-GAAP financial measures, please refer to Appendix for footnotes. Operating margin includes hedges.

* All references to 2017E reflect the midpoint of 2017 outlook communicated August 1, 2017. Please refer to our Safe Harbor Disclaimer.

Adjusted Constant Currency

Reported (Adjusted for Non-Recurring Items)

Operating Margin, Reported and Adjusted Constant Currency4,7


Investments in Global Commercial Capability Are Yielding High Returns

2017E vs. 2012 Global Incremental CAG Sales & Marketing Investment and Incremental Gross Profit (Constant Currency $MM)4

Sales & Marketing

Investment

Gross Profit

2012 – 2017E

CAGR (%)12% - 13% 12% - 13%


$0

$100

$200

$300

$400

$500


Delivering Higher Targeted EPS Growth

16%

25%

2016 2017E

4,7 Non-GAAP financial measures, please refer to Appendix for footnotes. * 2017E includes impact of the new accounting guidance related to share-based compensation, which we estimate will result in $0.30-$0.34 of EPS benefit in 2017.

All references to 2017E reflect the midpoint of 2017 outlook communicated August 1, 2017. Please refer to our Safe Harbor Disclaimer.

29% - 33%*

2012 – 2015

CAGR

Constant Currency Adjusted EPS Growth4,7

Excluding Impact from New Share-Based Tax Benefit Accounting

17% - 19%


Driving Strong Cash Flow

* ~102% of net income in 2014 and ~86% in 2015 when adjusted for net working capital changes associated with the U.S. go-direct change.

** All references to 2017E reflect the midpoint of 2017 outlook communicated August 1, 2017. Please refer to our Safe Harbor Disclaimer. 8 Non-GAAP financial measure, please refer to Appendix for footnotes.

• Targeted cash conversion

95%-100% of net income

- 5-year performance and

2017 outlook consistent

with this range

• Low capital investment

intensity (4%-5% of revenues)

• ~80% of excess cash

available for U.S. deployment

104%97%

105%

75%

128%

95%

2012 2013 2014 2015 2016 2017E**

Free Cash Flow as % of Net Income8

*

*


Disciplined Execution Yielding Outstanding Returns

31% 30% 29% 29%

34%

38%

2012 2013 2014 2015 2016 2017E

Return on Invested Capital Excluding Cash & Investments9

(After Tax)

*

23%

Return on Invested Capital Including Cash & Investments

(After Tax)

22% 21% 20% 23% ~25%


* All references to 2017E reflect the midpoint of 2017 outlook communicated August 1, 2017. Please refer to our Safe Harbor Disclaimer.


Looking Forward – “Opportunity Plus” Zone To Drive Sustainable

Global Business Expansion and Enhanced Durability

• Strong market growth and favorable

demographic trends

• Innovation pipeline – “early innings” of

capturing potential

• Commercial teams “hitting their stride”

• Widening competitive advantage

• High incremental returns from core

business investment


“Greenfield” & New Innovation Continue As Key Growth Drivers

2017E* vs. 20153.5%

Average annual contribution to growth rate

Other &

TBD

2022E vs. 2017E3% to 4.5%

Average annual contribution to growth rate

IDEXX SDMA®

+ 1.2%

SediVue®

+ 1.8%

Fecal Antigen

+ 0.5% Reference Lab

SNAP®

Slide

Reference Lab

IDEXX Greenfield and New Innovation – Annual Contribution to Revenue Growth ($MM)

Estimated Achievement & Future Potential

IDEXX SDMA

~1.5%

Fecal Antigen

+0.5% - 1%

SediVue

+ 0.5%

* 2017E Revenue based on midpoint of guidance range communicated on August 1, 2017. Please refer to our Safe Harbor Disclaimer.


High U.S. CAG Diagnostics Recurring Revenue Growth Potential Driven by Solid Market Growth, Customer Acquisition and Greenfield/Innovation Benefit

2017E**

Revenue

IDEXX U.S. CAG Dx Recurring Revenue

Growth Potential – Next Five Years

Constant Currency*

New and Incremental

Revenue Streams

Net Customer Additions

1% - 2%***

Base Market Growth: 5 – 6%

Dx Revenue per Pet Visit

2% - 3%***

~3%***

Pet Visit Growth

~2022

Revenue3% - 4.5%***


Growth Rate

IDEXX Innovation and Commercial Model Impact adds 4 – 7%


* These projections assume that foreign currency exchange rates will remain the same as in 2017. ** 2017E Revenue based on midpoint of guidance range communicated on August 1, 2017. Please refer to our Safe Harbor Disclaimer. *** Estimated contribution to U.S. CAG Dx Recurring Revenue potential compound annual growth rate from this driver


Higher International CAG Diagnostics Recurring Revenue Growth Potential Supported By Catalyst Expansion

2017E**

Revenue

IDEXX International CAG Dx Recurring

Revenue Growth Potential Next Five Years

Constant Currency*

Greenfield, Innovation

Benefit

Catalyst Expansion

Benefit

4% - 5%***

6% - 7%***

Base Market Growth

~2022

Revenue2% - 4%***


Growth Rate

* These projections assume that foreign currency exchange rates will remain the same as in 2017. ** 2017E Revenue based on midpoint of guidance range communicated on August 1, 2017. Please refer to our Safe Harbor Disclaimer. *** Estimated potential revenue compound annual growth rate from this driver.


IDEXX Has Ongoing 10%+ Annual Revenue Growth PotentialDriven By Expansion of CAG Diagnostics Recurring Revenue

2017E*

Revenue

$1.955B

IDEXX Total Company Annual Revenue Growth Potential 2022 vs. 2017E,

Constant Currency*

CAG CapitalVeterinary Software & Digital

8% - 12%***

LPD, Water & Other

6% - 8%***

CAG Recurring

International CAG Dx

12% - 16%***

9% - 13%***

U.S. CAG Dx

~2022

Revenue

10%+ Compound Annual

Growth Rate

* These projections assume that foreign currency exchange rates will remain the same as in 2017. ** 2017E Revenue based on midpoint of guidance range communicated on August 1, 2017. Please refer to our Safe Harbor Disclaimer. *** Estimated potential revenue compound annual growth rate for this business segment.


Targeting Continued Solid Operating Margin Gains While Supporting Near-Term Commercial and IT Investments

Margin Drivers 2016 / 2017E* 2018 Target Longer-Term Target

Gross Margin Expansion

CAG Recurring Annuity Growth (Price/Mix)

Lab Scale/Productivity

Sourcing/Manufacturing (Cost/Mix)

Operating Expense Leverage

Sales & Marketing

R&D

IT

G & A Other

Acquisition Impact

Average Annual Operating Margin Gains (ex. currency impacts)4

~150 bps ~50 - 100 bps 50 - 100+ bps

Impact on operating margin: Positive Neutral Negative

* 2017E Revenue based on midpoint of guidance range communicated on August 1, 2017. Please refer to our Safe Harbor Disclaimer. 4 Non-GAAP financial measure, please refer to Appendix for footnotes.


$0

$100

$200

$300

$400

$500

$600

$700

2012 2013 2014 2015 2016 2017 YTD

$2.0 billion

capital deployed

30% cumulative share count

reduction

$66 average

purchase price

Capital Allocation Aligned With Focus on Core Business Growth and

Shareholder Value Creation

Capital Allocated to Share Repurchases (Annually, $MM)

• Emphasis on organic growth

investment

- Capital spending ~4-5% of revenue

• Limited acquisitions

(core business fold-ins,

distribution and technology)

• Allocation of excess capital to

share repurchases (varied

investment pace)


Discrete Projects Impact 2018/19 Capital Spending and FCF Metrics

Impact on:

Capital Spend as a % of Revenue

FCF8 as a % of Net Income

Estimated Capital Spending for Discrete Projects

German Lab Relocation & Expansion $ 15MM$ 15MM

2019E

Westbrook Expansion $ 30MM$ 30MM

$ 45MM$ 45MM

2%

~(15%)

2018E



2012 2013 2014 2015 2016 2017 YTD

Debt to Adjusted EBITDA10 Ratio

3.5x

3.0x

2.5x

2.0x

1.5x

1.0x

0.5x

Capital Structure – Managing Consistent with Target Leverage Range

Net

Gross


Optimal

Range

2.5x – 3.5x


Well-Positioned to Drive Sustainable, Strong Financial Performance

Revenue Growth

10%+

Operating Margin Expansion

50-100 bps

Capital Allocation Leverage

+1%-3%Incremental

EPS Growth

Long-Term EPS Growth Potential**

15%-20%

Long-Term Financial Model*

* These projections assume that foreign currency exchange rates will remain the same as in 2017.

** EPS growth potential outlook excludes year over year changes in share-based compensation tax benefits.

Appendix


Footnotes

1 IDEXX Reportable Segment Revisions and Divested Revenues: Prior to January 1, 2015, our Companion Animal Group (“CAG”) segment included herd testing diagnostic

services processed within and managed by our CAG reference laboratories. We have transitioned the responsibility for these diagnostic services to our Livestock, Poultry and Dairy

(“LPD”) segment to more effectively align our business with the nature and customers of these livestock services. Revenue and revenue growth calculations have been retrospectively

revised to reflect this change in the composition of our reportable segments. 2006 revenue also excludes divested revenue (primarily attributed to our pharmaceutical business) totaling

$15.3 million.

2 Normalization for Go-Direct Transition: Effective January 1, 2015, we fully transitioned to an all-direct sales strategy in the U.S. We incurred one-time transitional impacts related

to the drawdown of distributor inventory in the fourth quarter of 2014, and reported revenues for 2014 have been adjusted to exclude this $25 million impact. Further, During the three

months ended December 31, 2014, we began recognizing revenue on rapid assay kits and instrument consumables upon delivery to end users in the U.S., instead of at distribution. We

also began to capture additional revenue that was previously earned by our distribution partners, net of other changes related to this all direct strategy, such as free next-day shipping and

a new returns policy for expired product. We refer to this net additional revenue as distributor margin capture, and 2015 revenue has been adjusted ~$40 million to exclude this impact.

3 Recurring Revenue: Annual recurring revenue for LPD, Water, Veterinary Software Services and Diagnostic Imaging Systems and IDEXX VetLab include and exclude the following

as applicable: LPD excludes government sponsored eradication programs and herd health screening revenues, Water excludes sealer and filtration instruments, Veterinary Software

Services and Diagnostic Imaging Systems excludes client server based placements and radiography instruments, Rapid Assay excludes SNAP Pro instruments, and IDEXX VetLab

includes consumables, service and accessories.

4 Constant Currency: Constant currency references are non-GAAP financial measures and exclude the impact of changes in foreign currency exchange rates. Management believes

that constant currency information provides valuable supplemental information regarding our revenue, operating margin and EPS performance because it is consistent with how

management evaluates our performance and facilitates comparisons with prior and future periods. We estimated the net impacts of currency on our revenue, operating margin, and EPS

results by restating results to the average exchange rates or exchange rate assumptions for the comparative period, which includes adjusting for the estimated impacts of foreign currency

hedging transactions and certain impacts on our effective tax rates. The periods 2012-2017 were restated to 2017 forecast rates and may vary from previously reported constant currency

figures. See Exhibit A for the impact of currency on revenue growth for 2012-2016 and 2017 YTD results. See Exhibit B for the impact of currency on operating margin and EPS growth

for 2012-2016 results and projected full-year 2017 outlook. Note on Slide 35: The adjusted constant currency compound annual growth rate (“CAGR”) from 2006-2016 excludes the impact

of changes in foreign currency exchange rates, which had an unfavorable impact of 0.5% to the CAGR.

5 Organic Revenue Growth: Organic revenue growth is a non-GAAP financial measure. Management believes that reporting organic revenue growth provides useful information to

investors by facilitating easier comparisons of our revenue performance with prior and future periods and to the performance of our peers. See Exhibit A for impact of currency and

acquisitions to CAG Diagnostics Recurring (both U.S. and International) revenue for 2012-2017 (YTD). Note on Slide 39: For U.S. Reference Lab organic revenue growth, the impact from

currency was immaterial and the impact from acquisitions was less than 1% for all years.


Footnotes

6 Rapid Assay Revenue Adjustments: See the table below for the impact of foreign exchange and go-direct normalizations to Rapid Assay revenue growth. Also refer to Footnotes

1 and 2 for more detail. Foreign exchange impacted reported growth by the following: Q1 2015 -2.7%, Q2 2015 -3.1%, Q3 2015 -2.5%, Q4 2015 -4-4%, Q1 2016 -0.5%, Q2 2016 +0.2%, Q3

2016 +0.4%, Q4 2016 -0.1%, Q1 2017 -0.3%, Q2 2017 -0.5%. Distributor Inventory drawdown impacted reported growth by: Q1 2015 -3.2%, Q2 2015 +6.5%, Q3 2015 -3.2%, Q4 2015

+43.7%. Margin capture impacted reported growth by: Q1 2015 +10.6%, Q2 2015 +10.1%, Q3 2015 +10.9%, Q4 2015 +10.5%. See footnotes 2 and 4 for more detail on constant currency

and go-direct normalization.

7 Adjusted Operating Margin and Adjusted EPS: Adjusted Operating Margin and Adjusted EPS are non-GAAP financial measures. Adjusted Operating Margin and Adjusted EPS

excludes non-recurring items. Management believes that reporting Adjusted Operating Margin and Adjusted EPS provides useful information to investors by facilitating easier comparisons

of our Operating Margin and EPS performance with prior and future periods. Refer to Exhibit B in the Appendix for a reconciliation of reported to adjusted Operating Margin and EPS

growth.

8 Free Cash Flow: Free cash flow is a non-GAAP financial measure. Free cash flow, with respect to a measurement period, is the cash generated from operations during that period,

including tax benefits attributable to share-based compensation arrangements, and specific to year ended December 31, 2012 a royalty prepayment to obtain exclusive patent rights,

reduced by the Company’s investments in property and equipment. Management believes free cash flow is a useful measure because it indicates the cash the operations of the business

are generating after appropriate reinvestment for recurring investments in property and equipment that are required to operate the business. Since adoption of ASU 2016-09 in 2017, the tax

benefit from share-based compensation is included in cash generated from operations and will no longer be an adjustment in our free cash flow calculation. Refer to Exhibit C for our

calculation of free cash flow for years ending December 31, 2011 through December 31, 2016, and calculation of estimated free cash flow for year ending December 31, 2017.

9 ROIC: After-tax return on invested capital represents after-tax income from operations for the year ended December 31, 2016, divided by average invested capital using the beginning

and ending balance sheet values. This measure is calculated both excluding and including cash and investments. After-tax return on invested capital, after-tax income from operations and

average invested capital are not measures of financial performance under GAAP and should be considered in addition to, and not as a replacement of or a superior measure to, return on

assets, net income, total assets or other financial measures reported in accordance with GAAP. Management believes that reporting after-tax return on invested capital provides useful

information to investors for evaluating the efficiency and effectiveness of our use of capital. For further information on how ROIC is calculated, please see Appendix A in the Company’s

Definitive Proxy Statement filed March 23, 2017 available at http://www.idexxproxymaterials.com.

10 Debt to Adjusted EBITDA: Adjusted EBITDA, gross debt, and net debt are non-GAAP financial measures. Adjusted EBITDA is a non-GAAP financial measure of earnings before

interest, taxes, depreciation, amortization and share-based compensation. Management believes that using Adjusted EBITDA, gross debt and net debt in the Adjusted EBITDA ratio is a

useful and recognized measure for evaluating financial leverage. Adjusted EBITDA for 2014 is further adjusted to exclude impacts in the second half of 2014 related to the U.S. all-direct

transition. For further information on how Adjusted EBITDA and the Debt to Adjusted EBITDA Ratio are calculated, see the Company's Annual Report on Form 10-K for the year ended

December 31, 2016 available at http://www.idexxproxymaterials.com.




Exhibit A: Reported to Organic Growth Reconciliation

2 See Footnote 2 for detail on

adjustments to IDEXX Revenue

from the Go-direct

3 See Footnote 3 for a

description of IDEXX recurring

revenue

4 See Footnote 4 for a

description of constant

currency. Note that all years

are restated to 2017 Forecast

rates and currency impact will

vary from previously reported

figures.

CAG Diagnostics Recurring 3

2009 2010 2011 2012 2013 2014 2015 2016 2017 YTD

Reported Growth 2% 6% 11% 8% 9% 8% 11% 12% 13%Currency Impact 4

-1% 1% 2% -2% 0% -1% -5% -1% -1%

Acquisition Impact 0% 1% 0% 1% 0% 0% 1% 0% 0%

Organic Growth 3% 5% 8% 8% 9% 8% 16% 12% 14%Distributor Inventory Adjustment 2

3% -3%

Margin Capture Adjustment 2-4%

Normalized Organic Growth 3% 5% 8% 8% 9% 11% 9% 12% 14%

U.S. CAG Diagnostics Recurring 3 2009 2010 2011 2012 2013 2014 2015 2016 2017 YTD

Reported Growth 5% 5% 8% 10% 8% 6% 17% 10% 13%

Currency Impact 4 0% 0% 0% 0% 0% 0% 0% 0% 0%


Organic Growth 4% 4% 8% 8% 8% 6% 18% 10% 13%Distributor Inventory Adjustment 2

4% -5%

Margin Capture Adjustment 2-6%

Normalized Organic Growth 4% 4% 8% 8% 8% 10% 7% 10% 13%

International CAG Diagnostics Recurring 3

2009 2010 2011 2012 2013 2014 2015 2016 2017 YTD

Reported Growth -2% 8% 16% 4% 10% 11% -2% 14% 12%Currency Impact 4

-4% 1% 7% -4% -2% -2% -15% -2% -3%


Organic Growth 2% 7% 9% 8% 11% 12% 12% 16% 15%

Reconciliation of Annual Organic Revenue Growth*


Exhibit B: Reported to Adjusted Summary P&L Reconciliation

RevOp.

Profit

Op

MargEPS Rev

Op.

Profit

Op

MargEPS Rev

Op.

Profit

Op

MargEPS Rev

Op.

Profit

Op

MargEPS Rev

Op.

Profit

Op

MargEPS Rev

Op.

Profit

Op

MargEPS

Reported $1,293 262.6 20.3% $1.59 $1,377 266.8 19.4% $1.74 $1,486 260.3 17.5% $1.79 $1,602 299.9 18.7% $2.05 $1,775 350.2 19.7% $2.44 $1,955

Reported EPS Growth 14% 9% 3% 15% 19%

Impairment charge 8.2 0.06

Impact of distributor inventory drawdown 25.1 20.8 0.14

Non-recurring expenses associated with

transition to all-direct sales strategy9.5 0.06

Expense ramp-up in advance of transition to

new sales strategy5.0 0.03

Non-recurring income tax benefit related to the

deferral of intercompany profits-0.02

Third-party service provider bankruptcy 3.9 0.03

Pharmaceutical milestone payment -3.5 -0.02

Adjusted $1,293 259.1 20.0% $1.57 $1,377 270.7 19.7% $1.77 $1,511 295.6 19.6% $2.00 $1,602 308.1 19.2% $2.11 $1,775 350.2 19.7% $2.44 $1,955

Adjusted EPS Growth 15% 13% 13% 5% 16%

Adjusted Constant Currency $1,312 265.9 20.3% $1.61 $1,386 278.4 20.1% $1.82 $1,522 302.8 19.9% $2.05 $1,692 329.3 19.5% $2.27 $1,790 374.4 20.9% $2.64 $1,968

Adjusted Constant Currency Growth 126 bps 18% 10 bps 16% 20 bps 16% -10 bps 14% 170 bbs 25%

Impact of Adjustments on EPS Growth 0% 0% -0.001 0% 0% -3% -0.006 -3% -2% -12% -0.018 -10% 2% 11% 0.015 9% 0% 3% 0.005 3% 0% 0.000 0%

Impact of Fx on Adjusted EPS Growth -2% -3% -0.002 -3% -1% -3% -0.004 -3% -1% -3% -0.003 -3% -6% -7% -0.002 -8% -1% -8% -0.012 -9% ~0.5% ~0.001 ~1%

+ ~100-

125 bps

+ ~100-

125 bps

+ ~110-

135 bps

Adjusted Operating Margin

and EPS Growth

(Dollars in millions)

2012 2013 2014 2015 2016 2017


Exhibit C: Operating to Free Cash Flow Reconciliation

Cash Flow Reconciliation

Amounts in thousands

Year Ended December 31

2011 2012 2013 2014 2015 2016 2017

Net cash provided by operating activities 220,700 230,282 245,996 235,846 216,364 334,571 ~360,000

Royalty prepayment to obtain exclusive patent rights - 6,250 - - - - -

Financing cash flows attributable to tax benefits from share-based compensation

arrangements16,007 14,676 14,158 16,078 11,315 14,703 -

Investing cash flows attributable to purchases of property and equipment (52,464) (65,492) (77,612) (60,523) (82,921) ~(64,786) ~(90,000)

Free Cash Flow 184,243 185,716 182,542 191,401 144,758 284,488 ~270,000

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