Thermo Fisher Scientific : 2021 Annual Report

The world leader in serving science

To our shareholders, customers and colleagues

Thank you for your ongoing support of Thermo Fisher Scientific. We are all partners in our collective success, and together we are building a brighter future for all. I'm extremely proud of what we achieved in 2021, as we continued to fulfill our Mission and delivered for all our stakeholders. It's a testament to the strength of our global team and our proven growth strategy.

I'm deeply grateful to our more than 100,000 colleagues, who are incredibly passionate about enabling our customers to make the world healthier, cleaner and safer. We know what we do matters, and that fuels our success. That's why we measure our performance, not only by our financial metrics - but also by how well we serve the needs of our customers, by the kind of work experience and career opportunities we provide for our colleagues, by the value we create for our shareholders, and by the positive impact we have for society. On all of these fronts, 2021 stands out as another exceptional year for our company.

to $39.21 billion. We also generated exceptional earnings growth. Our GAAP diluted earnings per share (EPS) increased 22 percent to $19.46, and adjusted EPS¹ grew 28 percent to $25.13. Additionally, we generated very strong free cash flow¹ of $6.81 billion.

At the same time, we returned significant capital to our shareholders through $2.4 billion of stock buybacks and dividends.

Our success during the year enabled us to advance our growth strategy, which consists of three pillars:

• • Developing high-impact, innovative new products

• • Leveraging our scale in high-growth and emerging markets

• • Delivering a unique value proposition to our customers

I'll provide a few highlights of our progress in that framework.

Track record of outstanding performance

In terms of our financial results, we built on the tremendous success we had in 2020. Year-over-year, we grew revenue by 22 percent

Commitment to high-impact innovation

Starting with the first pillar, it was a fantastic year of high-impact innovation. During 2021, we invested $1.4 billion in R&D across our businesses to deliver

Marc N. Casper

Chairman, President and CEO

¹ Adjusted EPS and free cash flow are non-GAAP financial measures. For a reconciliation of these non-GAAP measures to comparable GAAP measures, see pages 6 and 7 of this annual report.

1

Strong Track Record of

Performance

Revenue

(In billions)

$20.92

2017

2018

Earnings per share

(In dollars)

GAAP EPSAdjusted EPS*

2017

• 2019 2020

  2018

• 2019 2020

* Adjusted EPS is defined on pages 6 and 7.

$39.21

2021

new technologies that are helping our customers to advance their important work. There were many highlights throughout the year, and I'll give you a few examples.

$25.13

In mass spectrometry, we extended the impact of our industry-leading Orbitrap platform to bring high-resolution analysis to a range of applications, including toxicology and metabolomics. In our electron microscopy business, we introduced the Thermo Scientific Helios 5 EXL Wafer DualBeam scanning electron microscope to support the development of increasingly smaller and more complex semiconductors. In our bioproduction business, we expanded our line of Thermo Scientific HyPerforma DynaDrive Single-Use Bioreactors to support efficient single-use bioprocessing, from pilot scale all the way to commercial production. And in genetic sciences, we introduced our new Applied Biosystems QuantStudio 7 Pro DX Real-Time PCR system, which enables clinical testing laboratories to advance molecular diagnostics.

This is just a glimpse of the outstanding technology innovation going on across our company.

Leveraging our scale

2021

The second pillar of our growth strategy is leveraging our scale in high-growth and emerging markets to continue to create a differentiated experience for our customers. During the year, we further strengthened our position by expanding our capabilities in these regions.

For example, we increased our capacity to produce single-use technologies by opening new manufacturing sites in China and Singapore, supporting both local and global demand from biopharma customers.

In South Korea, we enhanced our local capabilities by opening customer-focused innovation centers for both the semiconductor industry and our biopharma customers.

Our ongoing investments and the scale we continue to build in these regions position us well to further capture growth opportunities for years to come.

2

Creating value for our customers

Our third pillar is delivering a unique value proposition for our customers. Whether they are developing new treatments for disease, protecting our planet, or keeping people safe, our customers rely on us as a trusted partner in their work. Our collaboration with leading academic medical centers is one example, as we work together to develop more targeted diagnostics and therapies for better patient outcomes. Our support for the global pandemic response is another, as we continue our leadership role in enabling COVID-19 testing and the development and production of vaccines and therapies. In every part of our business, the value we create for our customers drives growth for our company.

In 2021, we invested $2.5 billion in capital expenditures across our businesses to be an even better partner and accelerate our growth. This included expanding our capacity and capabilities in bioproduction, pharma services, laboratory products and biosciences globally.

It was also a very active year of M&A, and we invested $24 billion in strategic acquisitions, including the addition of PPD, Inc., which brings leading clinical research services to our company and complements our existing capabilities to serve pharma and biotech customers. This is an exciting combination because it further enhances our

Revenue Profile

15%

42%

Pharma & Biotech

Academic & Government

58%

Consumables

Collaborating to benefit patients

Thermo Fisher has always understood the value of developing deep relationships with our customers, and one example is our collaboration with leading universities and medical centers on technology innovation. In 2021, we announced collaborations with the Mayo Clinic to accelerate development and adoption of more precise and personalized diagnostics for blood-based cancers; with the University of California, San Francisco, to increase innovation in cell and gene therapy; and with the University of California, Davis, on metabolomics research to advance precision medicine. These are just a few of our customer collaborations that are redefining what it means for industry, academia and healthcare to work together to ultimately benefit patients.