Sigma Aldrich (SIAL) 8-K Regulation FD Disclosure

Sigma-Aldrich Corporation

We are Committed to Accelerating our Customers’

Success through Leadership in

Life Science, High Technology and Service

Exhibit 99.1

2

Cautionary Statements

Our

presentation

today

will

include

forward

looking

statements

about

the

Company’s

future

performance,

goals,

strategic

actions

and

initiatives

and

similar

intentions

and

beliefs,

including

expectations

for

sales

and

earnings

growth,

cash

flow,

debt

levels,

share

repurchases

and

return

on

equity,

assumptions

regarding

Company

operations,

investments

and

acquisitions

and

conditions

in

the

markets

the

Company

serves.

While

we

believe

that

these

expectations

are

based

on

reasonable

assumptions,

such

statements

are

subject

to

risks

and

uncertainties

including,

among

others,

certain

economic,

political

and

technological

factors

and

we

can

give

no

assurance

that

the

goals

will

be

achieved.

Actual

results

may

differ

materially

from

those

stated

or

implied

during

this

meeting

or

contained

in

other

Company

communications

due

to,

but

not

limited

to,

such

factors

as

(1)

changes

in

pricing

and

the

competitive

environment,

(2)

fluctuations

in

foreign

currency

exchange

rates,

(3)

dependence

on

uninterrupted

manufacturing

operations,

(4)

changes

in

the

regulatory

environment

in

which

the

Company

operates,

(5)

changes

in

worldwide

tax

rates

or

tax

benefits

from

domestic

and

international

operations,

including

the

matters

described

in

Note

10

to

the

Consolidated

Financial

Statements

-

Income

Taxes

-

in

the

Company’s

Form

10-K

report

for

the

year

ended

December

31,

2007,

(6)

exposure

to

litigation,

including

product

liability

claims,

(7)

changes

in

research

funding

and

the

success

of

research

and

development

activities,

(8)

the

ability

to

maintain

adequate

quality

standards,

(9)

reliance

on

third

party

package

delivery

services,

(10)

the

impact

of

acquisitions

and

success

in

integrating

and

obtaining

projected

results

from

the

acquisitions,

(11)

other

changes

in

the

business

environment

in

which

the

Company

operates,

and

(12)

the

outcome

of

the

matters

described

in

Note

11-Contingent

Liabilities

and

Commitments-in

the

Company’s

Form

10-K

report

for

the

year

ended

December

31,

2007.

The

Company

does

not

undertake

any

obligation

to

publicly

update

the

matters

covered

in

this

presentation.

With

over

60%

of

sales

denominated

in

currencies

other

than

the

U.S.

dollar,

management

uses

currency-adjusted

growth,

and

believes

it

is

useful

to

investors,

to

judge

the

Company’s

controllable,

local

currency

performance.

While

able

to

report

historical

currency

impacts,

we

are

unable

to

estimate

changes

that

may

occur

in

applicable

rates

of

exchange

later

in

2008

and

thereafter.

T

hus,

we

are

unable

to

provide

GAAP

growth

rates

for

such

future

periods

as

required

by

Regulation

G

adopted

by

the

SEC.

Any

significant

changes

in

currency

exchange

rates

would

likely

have

a

significant

impact

on

our

reported

growth

rates

due

to

the

volume

of

our

sales

denominated

in

foreign

currencies.

Management

also

uses

both

GAAP

and

adjusted

sales,

income

and

process

improvement

savings

amounts

and

comparisons

to

reflect

what

it

believes

is

ongoing

and/or

comparable

operating

results

excluding

currency

impacts,

the

sales

benefit

from

acquisitions

and

an

inventory

purchase

accounting

charge.

Management

excludes

these

other

items

in

judging

its

historical

performance

and

in

assessing

its

expected

future

performance

and

believes

this

non-GAAP

information

is

useful

to

investors

as

well.

However,

management

considers

currency-adjusted

growth

and

adjusted

income

only

in

conjunction

with,

and

not

apart

from,

comparable

GAAP

financial

information.

We are Committed to Accelerating our Customers’

Success through Leadership in

Life Science, High Technology and Service

Enhancing Global Reach

Through Excellence

4

Celebrating $2 Billion In Sales

•

Major Milestone For Sigma-Aldrich

•

Global Reach Of Company

•

Leadership In Life Science & High Technology

A Major Supplier In Life Science & High Technology

5

Sigma-Aldrich Overview

•

2007 Performance

-

$2.0 Billion in Sales

-

21.5% Pretax Margin

-

20.6% Return on Equity

-

Strong Cash Flow

•

130,000 Products

•

1,000,000 Customers

•

80,000 Accounts

•

7,900 Employees in

36 Countries

Five Key Initiatives To Achieve Objectives

6

•

Increase Focus on Becoming Customer Centric

•

Maintain Leadership in Life Science & High Technology

Strategic Plan Objectives

Building For The Future

Strategic

Financial

•

Achieve Minimum 10% Annual Top & Bottom Line Growth

•

Maintain 20% Return on Equity

•

Retain Effective Debt to Capital Ratio

•

Reinvest Cash From Operations In Sales And EPS Growth

Achieve Above Market Growth

7

Sales Growth Goals

Building For The Future

Research Essentials

19

%

5

%

4-5

%

4

%

Research Specialties

37

8

7-8

6

Research Biotech

15

4

7-8

>10

SAFC

29

7

8-9

>10

    Internal

100

%

7

%

7

%

7

%

Acquisitions

3

    Total

10

%

2007

Sales

Mix

2007

Organic

Growth

2008

Expected

Growth

Growth

Long-Term

Largest Research Chemical Supplier & Top 10 Fine Chemical Company

8

Research Market

$10 Billion Worldwide

3-4% Growth

USA 40%; Europe 35%; Int’l 25%

Our Markets

Fine Chemical Market

$50 Billion Worldwide

2-3% Growth

USA 55%; Europe 30%; Int’l 15%

0

0.5

1

1.5

VWR

Becton Dickinson

Qiagen

Wako

Thermo Fisher

GE Healthcare

Applera

Invitrogen

Merck

Sigma-Aldrich

Annual Revenue ($B)

0

0.5

1

1.5

2

2.5

3

Dishman

Siegfried

SAFC

Albemarle

NPIL

Covidient

Lonza

DSM

Evonik

BASF

Annual Revenue ($B)

5 Year Compound Growth:  Sales -

11% ; EPS -

13%

9

Sales Growth

7.6%

0.3%

8.6%

3.3%

18.3%

17.6%

7.9%

7.5%

13.4%

8.6%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

2003

2004

2005

2006

2007

Reported

Adjusted for Currency/Acquisitions

Reported

Acquisition Benefit

Financial Performance

Adjusted for Currency/Acquisitions

Profit (EPS) Growth

6%

3%

25%

10%

13%

8%

9%

9%

14%

2%

0%

5%

10%

15%

20%

25%

30%

2003

2004

2005

2006

2007

Reported

Currency Adjusted

Stock Buyback

Sales Growth Exceeds Market Growth Rate

10

0%

2%

4%

6%

8%

10%

12%

14%

16%

2003

2004

2005

2006

2007

Financial Performance –

Sales Growth

Reported

Research Chemicals (71%

-A)

Fine Chemicals (29%

-A)

-10%

0%

10%

20%

30%

40%

50%

60%

70%

2003

2004

2005

2006

2007

Market

Adjusted for Currency

Reported

Market

Adjusted for Currency/Acquisitions

Acquisitions

11

EPS Contributors -

2007 vs. 2006

Financial Performance

$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

$2.05

$0.10

5%

($0.01)

(1%)

$0.02

1%

($0.07)

(3%)

$0.25

12%

$2.34

YTD 2007 Gain Primarily From Operations and Favorable Currency

20% Target Achieved For 5 Years

12

Return on Equity

Financial Performance

20.4%

21.1%

21.1%

20.9%

20.6%

0%

5%

10%

15%

20%

25%

2003

2004

2005

2006

2007

Accelerating Customers' Success Drives Above Market Growth

13

2007 Highlights

•

Service Remained Strong

•

Research Achieved 95% Same Day Shipment

•

SAFC Improved On Time Deliveries To 86%, With Future Order

Growth >30%

•

Employees Recognized By Customers For Customer Success

Driven Approach

•

Official Recognition By Abbott For

The Second Year In A Row

•

Official Recognition By The Academy

Of Science For Supporting Research

Align Structure With Customers And Markets

25% Of Sales In CAPLA Markets By 2010

14

2007 Highlights

•

Sales Growth In CAPLA: 20%

•

Commitments To Produce And Store

Products Closer To Customers In China and

South Korea

•

Commenced Project to Expand Fermentation

Capabilities in Israel

Expand In Faster Growing Geographic Markets

E-Centric Organization

15

2007 Highlights

Key Drivers –

Migration To Electronic Commerce

•

Improved Search Capabilities

•

Enhanced Infra Structure (Websphere)

•

Entered Into Research Partnership

With Ingenuity

•

Introduced Online Chat For Technical

Service Inquiries

Build On Internet Superiority

16

2007 Highlights

•

Involved Customers In Improvement Initiatives

•

Improved Product Quality

•

Implemented A Multi-Year Supply Chain Initiative

Leverage Process Improvement

Achieved $15.0 Million Savings Target While Improving Quality & Service

Added New Capabilities

17

2007 Highlights

•

Acquisitions

Epichem

Molecular Medicine BioServices

•

In-Licensed >45 Technologies

Including Sangamo Biosciences

•

Revenue Stream = Outlicensing

$1.4 Million

Fill Growth Target                   

Through Acquisitions

MMB

Epichem

Annualized

Revenue

$52 Million

Plan Initiatives On-Track

18

Summary of 2007 Performance

Successfully Continued Implementing New Initiatives

Launched Supply Chain Initiative

Achieved Geographic Expansion & Internet Goals

Achieved Process Improvement  Savings Objective

Added Technology, Capacity & Geographic Reach

Through Two Acquisitions & New License Agreements

Improved Operating And Pre-Tax Margins

Maintained ROE >20%

17% Compound Annual Growth -

Last 5+ Years

19

Stock Performance

(*)

Post-Split

(To 2-29)

Low 21

High 29

High 31

Low 27

Low 28

High 34

Low 31

High 40

Low 37

High 57

High 57

Low 48

5-Years

3-Years

1-Year

Dow Jones

10

7

6

S&P 500

11

7

4

NASDAQ

16

7

10

Sigma-Aldrich

17

23

41

Last

Last

Last

Price History

(*)

Stock Returns

$15

$20

$25

$30

$35

$40

$45

$50

$55

$60

2003

2004

2005

2006

2007

2008

Exceed Market Growth / Increase Pre-Tax Margins

20

2008 Projections

Key Assumptions

•

December 2007 FX Rates

•

Effective Tax Rate Of 30-32%

•

Repurchase Of Up To 4 Million Shares

Sales (excluding future acquisitions)

    Organic

7

%

    Currency

3

%

    Acquisition

<1

%

          Total

10

%

EPS ($2.52 - 2.62)

8

12

%

Return On Equity

> 20

%

Financial Performance & Projections

New Programs Supporting Five Initiatives To Offset Market Conditions

21

2008 Challenges

•

Big Pharma Focused On Driving Drugs To Market

•

U.S. Academic Funding Less Than Robust Growth

•

Impact of Economic Slowdown on SAFC Growth

Efforts To Drive Organic Sales Growth To 7%

22

2008 Opportunities

•

Expanded Sales Efforts

•

Increased Outsourcing By

Pharma

Companies

-

Growth In

CRO’s

-

Clinical Trials Conducted Abroad

-

Larger Relationships With Key Suppliers

•

Growth In Small And Medium Size Biotechs

•

Opportunities In Emerging Markets

•

Expanding Footprint In Hi-Tech

•

Environmental Sustainability & Global Awareness

Regularly Scheduled Reviews

23

Company Planning History

Outcome

1999 Plan

Developed "One Company" Approach

Divested B-Line Systems

Committed To Repurchase Shares

Add Leverage

Shareholding and Performance Reward Programs Added

2001 Update

Divested Diagnostics

2002 Plan

Sales & Marketing Activities Enhanced

2004 Update

R&D and Quality Programs Upgraded

2005 Plan

"Customer Centric" Approach

Five Key Initiatives To Drive Growth

2007 Update

Streamline Supply Chain

(Eight Interdependent Initiatives)

2008 Plan

Enhance "Customer Centric" Approach/Improve Margins

2008 Plan Builds On Current Initiatives

24

2008 Company Plan Approach

•

Intend To Follow Past Approach

-

Use Cross-Section Of Internal Resources

-

Engage External Consultant

•

Evolutionary

-

Sharpen Focus On Existing Initiatives

-

Implement Supply Chain Initiatives To Improve Margins

Formal Approach To Business Planning

25

Company Planning Approach

•

Develop Plans With 3-Year Implementation Cycle

•

Interim Review Midway To Sharpen Focus

•

Involve Employees With “High Potential”

Timing

Develop And Communicate Plan

Q2-Q4 2008

Implement

Q1 2009

Recent Promotions & New Responsibilities Strengthen Mgmt Team

26

Organization

Jai Nagarkatti

President & CEO

Doug Rau

Vice President

Human Resources

Frank Wicks

President

SAFC

Dave Julien

President

Research Specialties

Operations & Marketing

Gilles Cottier

President

Research Essentials

International

David Smoller

President

Research Biotech

R & D

Mike Hogan

Chief Administrative Officer

& Chief Financial Officer

Karen Miller

Vice President

Controller

Kirk Richter

Vice President

Treasurer

Carl Turza

Vice President

Chief Information Officer

Kevin Krosley

Vice President

Process Improvement

Gerrit

van den Dool

Vice President

Sales

Rich Keffer

VP, General Counsel

& Secretary

Steve Walton

Vice President

EHS & Quality

We are Committed to Accelerating our Customers’

Success through Leadership in

Life Science, High Technology and Service

Enhancing Global Reach

Through Excellence

Initiatives Set Actions For 2006 -

2008

28

Building For The Future

1.

Align Structure With Customers And Markets

2.

Expand In Faster Growing Geographic Markets

3.

Build On Internet Superiority

4.

Leverage Process Improvement For Excellent

Investment Returns

5.

Fill Growth Target Through Acquisitions

Five Key Initiatives

29

Research Essentials

Research

Specialties

37%

($761M)

Research Essentials

19%

($388M)

SAFC

29%

($591M

Research Biotech

15%

($299M)

Business

Units

Customer

Types

Driving

Forces

Long-Term

Growth

Goal

Research

Essentials

Economic

Buyers

Relationship

Selling

4%

Research

Specialties

Lab

Scientists

Transactional

Selling

6%

Research

Biotechnology

Life

Scientists

Innovation

>10%

SAFC

Project &

Development

Managers

Customer

Intimacy

>10%

Innovative Solutions For Economic Buyers

30

Research Essentials

Market Overview

•

Market

-

Growth ~  2%

-

Size >$2.0 Billion

-

SIAL Share ~15 %

•

Customer Requirements

-

Low Transactional Costs

-

Customized Service, Packaging, And Pricing

-

Responsive And Flexible Account Management

-

Support Customers Where The Work Gets Done

•

Competitors

-

US And Europe Served By Two Broad Line Distributors

-

CAPLA Markets Highly Fragmented And Served By Local Suppliers

Research Essentials Is Our Base Business With Research Specialties

31

Research Essentials

Business Unit Overview

•

~10,000 Products

•

$388 M Sales

•

Competitive Pricing

•

A Broad Customer Base With 80,000 Accounts

•

Account Management is Key

Relationship Selling

32

Research Essentials

Value Drivers

•

Global Account Management

•

Product Portfolio

-

Differentiated Pricing

-

Consistent Quality

-

Customization

Plan Globally-Service Locally

33

Research Essentials

Value Drivers

•

International Operations

-

Conduct Business In Local Languages

-

Supply Chain Enhancement

-

Support Customers Shift To Where The Work Gets Done

Focus On Global Innovation

34

Research Essentials

Strategy

•

Align Resources To Meet Changing Needs Of Our Largest Customers

•

Create Value Through Business Solutions For Economic Buyer

•

Leverage Our Global Presence And Common Systems

•

Maximize Components Of Our Pricing Strategy

•

Continue To Build Infrastructure In CAPLA

•

Focus Our Acquisition & Collaboration Activity In CAPLA

Take Market Share For Growth

35

•

Product Portfolio

-

Maximize Pricing Strategy

-

Differentiate Marketing Approach By Product Initiatives

-

Reduce Cost Through Supply Chain & OEM Initiatives

Research Essentials

Growth Opportunities And Tactics

Take Market Share For Growth

36

•

Leverage Global Presence

-

Enhance Service And Build Infrastructure In High Growth Economies

With Aggressive Focus In China & India

-

Increase Use Of Selected International Locations To Support Our

Overall Global Business Strategy

-

Build Organization Depth By Managing Our Talent Globally

•

Create Innovative Business Solutions

-

Expand on Successful Customer Centric Solutions with Global

Pharmaceutical Customers

-

Add New Services To Customers Thru Partnership & Collaboration

-

Leverage Our Supply Chain Expertise

Research Essentials

Growth Opportunities And Tactics

Leverage Strong Leadership Position

37

Research Essentials

Distinct Advantages Over Competitors

•

Strong Global Brand Recognition

•

Demonstrated Service & Process Improvement Culture

•

Trusted Business Partner

•

Established Global Presence Across Developed & Fast

Growing Economies

•

Common Systems

•

Broad Product Offering & Customer Base

•

Supply Chain Expertise

Deliver Above-Target Growth

38

Research Essentials

2007 Results

•

2007 Results:  4.6% Sales Growth (Currency Adjusted)

•

Key Drivers

-

Value Pricing, Product Initiatives, Account Management Focus

-

CAPLA

-

20% Sales Growth

•

Brazil, China & India Growing ~35 to 50%

-

Announced Plan To Build Hi-Tech Packaging Plant In Korea &

Manufacturing Plant In China

Take Market Share & Leverage Global Reach

39

Research Essentials

2008 Goals And Initiatives

Sales Increase Goal -

4 to 5%

Major Initiatives

•

Product Portfolio:

-

Expand On Best Practices

-

Focus On Cell Culture

-

Drive OEM Supply Agreements

•

CAPLA:

-

Add Distribution & Manufacturing Capabilities In China, India & Korea

-

Expand In New Markets in Latin America & South East Asia

-

Revitalize Japan Sales By Moving Closer To Customers

-

Increase Acquisition & Collaboration Activity

Innovative Solutions In Services & Products

40

Research Specialties

Research

Specialties

37%

($761M)

Research Essentials

19%

($388M)

SAFC

29%

($591M

Research Biotech

15%

($299M)

Business

Units

Customer

Types

Driving

Forces

Long-Term

Growth

Goal

Research

Essentials

Economic

Buyers

Relationship

Selling

4%

Research

Specialties

Lab

Scientists

Transactional

Selling

6%

Research

Biotechnology

Life

Scientists

Innovation

>10%

SAFC

Project &

Development

Managers

Customer

Intimacy

>10%

We Are The Leader

41

Research Specialties

Market Overview

•

Market

-

Growth –

3 to 4%

-

Size >$2.5 Billion

-

SIAL Share ~ 30%

•

Customer Requirements

-

Easy To Locate Products

-

Simple And Transparent Order Processes

-

Product Availability And Rapid Delivery

•

Competitors

-

A Few Large Competitors

-

Numerous Specialized Companies

42

Research Specialties

Business Unit Overview

•

~100,000 Products

•

$ 761 M Sales

•

Mainly Sold At Catalog Prices, Low Discounts. High Margin, High Inventories

•

1M End Users

•

Number 1 In Many Markets

•

Internet And Catalog Are Key

Research Specialties Is Our Base Business With Research Essentials

The Leader In Customer & Technical Services

43

Research Specialties

Value Drivers

•

Product Portfolio

-

Breadth Of Line

-

Specialty, Unique And Common Products

-

Innovative, New Products ~3,000 Per Year

-

Competitively Priced

-

Consistent Quality And Availability

•

Internet, Catalog And Customer Service

-

Ease Of Ordering And Tracking

-

Accessible Product Data And Information

-

Problem Solving And Customized Solutions

-

Answers To Technical Questions

Revitalize Our Core Business

44

Research Specialties

Strategy

•

Maintain #1 Market Position

•

Enhance World-Class Internet

•

Target Marketing Across Customers, Regions And Products

•

Provide Innovative New Products And Differentiate Services

•

Provide High Quality Products in Shortest Cycle Time

•

Expand Geographically

•

Improve Pricing Strategies

Broadest Product Line Available

45

Research Specialties

Growth Opportunities And Tactics

•

Product Portfolio

-

Enhance Business Development Function

-

Increase Collaboration, Licensing, And

Exclusive Relationships

-

Innovative New Products

-

Provide Innovative Services

-

Address Niche Market Opportunities

-

Increase Organic Sales Into Target Market

Segments And Regions

-

Implement Pricing Strategies

Recognized As #1 Catalogs In Market

46

Research Specialties

Growth Opportunities And Tactics

Our Firepower: Print

Global Coverage

•

1 M catalogs/year

•

3 M newsletters, 30 issues/year

Hitting the Target

•

1.6 M names, up to date, incl

profiles

•

Directed to specified “communities”

Being Effective

•

Well-recognized titles

•

Execution discipline

•

Managed feedback: 660K processed

2.5 Million Catalogs In Circulation

1 Million Plus Customer List

The Catalog Of The Future

47

Our Shopping Mall: The Web

Number 1 Site in Research Industry:

•

23 M Visits In 2007

•

Extraordinary Search Capabilities

660K Registered Web Users

5 M E-Mails

Search Engine Marketing

Sponsored Ads, Collaboration

Merchandising

E-Commerce: $550 M  Sales

Research Specialties

Growth Opportunities And Tactics

Extend Our Offering Of Products And Services

48

•

New Products

•

New “Solutions”

And Services

•

New Platforms/Collaborations

-

Ionic Liquids

-

Chem

Dose Tablets

-

Hybrid Particle Technology

-

SAMS (Self-Assembly Materials)

•

Acquisitions (IP/Companies)

Research Specialties

Growth Opportunities And Tactics

Innovation

Strengthen Our Leadership Position

49

Research Specialties

Distinct Advantages Over Competitors

•

Customer Communication

-

1 Million Customer Contact Data

-

660K Web Registration

•

Internet, Catalog And Newsletter

-

23M Internet Visits

-

1M New Catalogs/Annually

-

3M Newsletters/Annually

•

Global Reach And Service

-

19 Distribution Centers

•

Innovation And Business Development

-

3,000 New Products, Licenses And Acquisitions

•

Capabilities For Customized Services

-

Procurement, Manufacturing/QC

-

Packaging And Distribution

Delivered Above Target Growth

50

Research Specialties

2007 Results

•

2007 Results:  8.3% Sales Growth (Currency Adjusted)

•

Key Drivers

-

New Services And Products

-

International Expansion

-

Price

-

Internet

-

Global Agreements/Relationships

-

Targeted Marketing

Continue To Add Services

51

Research Specialties

2008 Goals And Initiatives

•

Products

-

Expand Attractive Groups; Selectively Add Resources

•

Customer Communication

-

Refine Segment Ownership

-

Sales Development In Asia/Pacific (SAMS, Web, Print, Local Adaptions)

-

Drive Change From Print To Web

-

Improve Selling Via Account Management

•

Operations

-

Optimize Service Levels And Inventory Globally

•

Organization

-

System Change To Address Product And Discount Ownership

-

Drive Globalization Of Marketing

Sales Increase Goal –

7 to 8 %

Major Initiatives

Innovative Life Science Products

52

Research Biotech

Research

Specialties

37%

($761M)

Research Essentials

19%

($388M)

SAFC

29%

($591M

Research Biotech

15%

($299M)

Business

Units

Customer

Types

Driving

Forces

Long-Term

Growth

Goal

Research

Essentials

Economic

Buyers

Relationship

Selling

4%

Research

Specialties

Lab

Scientists

Transactional

Selling

6%

Research

Biotechnology

Life

Scientists

Innovation

>10%

SAFC

Project &

Development

Managers

Customer

Intimacy

>10%

Continued Investment In Technology

53

Research Biotech

Market Overview

•

Market

-

Growth -

4-5%

-

Size –

>$5.0 Billion

-

SIAL Share  >5%

•

Customer Requirements

-

Technology And Solution-Oriented Products

-

Data Associated With Products

-

Technical Sales And Support

-

Service And Quality

•

Competitors

-

Invitrogen,Thermo

Fisher,  Qiagen, GE Healthcare, Millipore -

Recognized Technology Leaders

-

Smaller Niche Players, Santa Cruz, CST

Continually Expand Technology Portfolio

54

Research Biotech

Business Unit Overview

•

~20,000 Products

•

$299 M Sales

•

Product Innovation And Ease Of Use Key

•

Internet Search Capabilities Required

•

Intellectual Property Portfolio Facilitates Market Growth FTO

Essential For Pharma

Biotech

•

R&D Capabilities Essential

Providing Innovative Solutions

55

Research Biotech

Value Drivers

•

Product Portfolio

-

Enabling

-

Validation Data

-

Timesaving And Convenience

•

Sales, Marketing and Business Development

-

“White Coat”

Selling With A Technical Sales Force

-

Access to Knowledge ( Scientists)

-

Applications Marketing On The Web

-

Collaborations With Academia (Thought Leaders)

Lead With Break Through Products

56

•

First To Market With Innovative, Solution Oriented Products

•

Focus On The Drug Discovery Workflow

•

Increase Value Of Existing Product Lines By Adding Scientific

Data To Our Products

-

Antibodies-

Prestige Program

-

Application Data

-

Ingenuity

•

Target Market Sub-Segments Growing At > 10%

•

Acquire, License And Develop New Technologies

Research Biotech

Strategy

Broad Opportunities In Biotechnology

57

Research Biotech

Growth Opportunities And Tactics

•

Emerging Market Sub-Segments (Genomics/Proteomics/Functional Genomics)

•

Large Pharma

And Biotech Projects

•

Custom Collaborations

-

Technology Access Programs

•

Recent Acquisitions And Licensed Technologies

-

Sangamo

-

Epigenetics

-

Atlas Antibodies

•

IP Out-licensing

•

Revitalize Sales to Academic Segment

-

Antibodies

-

Oligos

Innovation Is A Facilitator To Our Strategy

58

•

Gene Editing Technology-Sangamo

•

Epigenetics-Epigentik

•

Web Based Content-

Ingenuity

•

Antibodies That Are Validated With Science-Atlas

•

VC investments To Put A Stake In Horizon III

Technologies And Markets

Research Biotech

Growth Opportunities And Tactics

Broad Search Selections Improve Customer Experience

59

•

Drive Awareness Of New Products With Scientific Content On The Web

Research Biotech

Growth Opportunities And Tactics

Adding Content To Search

60

60

Ingenuity

Research Biotech

Partnership With Sangamo

61

Gene Modification -

Ultimate Gene Silencing!

-

Correction ; Disruption ; Insertion

•

Gene Editing Within A Living Cell

P

229

:

CCA

L

230:

CTC

Targeting A Genomic Location With Base Pair Resolution

Research Biotech

Growth Opportunities And Tactics

Technology Through Collaborations

62

Example: Custom Lentivirus Production For In Vivo Uses

Media Alone

GFP-Lentivirus Purified

For In Vivo Utilization

Rat Brain –

Injections On Day E15

•

Innovative Technology Provide Enabling Products

Research Biotech

Growth Opportunities And Tactics

Invest In Venture Capital Opportunities

63

•

Strategic Partner Investment In Prolog Ventures

•Early Stage Life Science Venture Fund

•Access To Deal Flow For 2nd

And 3rd

Horizon Technologies

•Early Look At Potential Acquisitions And Emerging Markets

•Introduction To Thought Leaders And Entrepreneurial Talent

Research Biotech

Growth Opportunities And Tactics

Broadest Capabilities In Gene To Drug Spectrum

64

Research Biotech

Distinct Advantages Over Competitors

•

Broad Access To Customers/Collaborators

•

Expanding And Exclusive Internet Content And Capabilities

•

In Depth Expertise Across The Research Workflow

•

Widest IP Portfolio In Gene Silencing

•

First To Market Gene Editing Technology Platform-Sangamo

•

Leading Position In Custom Genomics

•

Antibody Production Capabilities And Alliances Expanding

Growth Accelerated Later In 2007

65

Research Biotech

2007 Results

•

2007 Results:  3.7% Sales Growth (Currency Adjusted)

•

Key Drivers

-

Strong Growth In Genomics and Functional Genomics

-

Slow Growth In Genosys

-

New Technologies Gaining Traction

Increase Technical Focus In Products And Sales

66

Research Biotech

2008 Goals And Initiatives

•

Continued Focus On Pharma/Biotech

•

Major Growth Opportunities With Gene Silencing Products

•

Key New Product Launches In Genomics, Functional Genomics,

Cell Signalling

•

Add Science To Our Products

-

New Web Content

-

Application Data

-

Academic Collaborations

•

New R and D Group Resource Focused On Customers Pre And

Post Selling

Sales Increase Goal –

7 to 8%

Major Initiatives

Comprehensive Approach For Large Customers

67

Research Sales

Research

Specialties

37%

($761M)

Research Essentials

19%

($388M)

SAFC

29%

($591M

Research Biotech

15%

($299M)

Business

Units

Customer

Types

Driving

Forces

Long-Term

Growth

Goal

Research

Essentials

Economic

Buyers

Relationship

Selling

4%

Research

Specialties

Lab

Scientists

Transactional

Selling

6%

Research

Biotechnology

Life

Scientists

Innovation

>10%

SAFC

Project &

Development

Managers

Customer

Intimacy

>10%

Total Research Sales

$1.45 Billion

80,000 Customer Accounts

Managed Accounts (~53% of Research Sales)

68

Research Sales

Academia & Pharma

Trends

Changing Landscape In Key Market Segments

Source: AAAS Reports I through XXXII, based on OMB and agency R&D budget

data –

Revised April, 2007.  Includes conduct of R&D and R&D facilities.

•

Government Funding Decreasing,

Becoming More Focused

•

Collaborative Industry Funding Increasing

•

Fewer Large Centers Of Research, More

Small Entities

740

923

1009

0

500

1000

1500

2004

2005

2006

Number of Pharma Mergers

Source: Dealogic, January 2007 –

Includes Biotech, Pharmaceutical and Medical

Device Companies

•

Mergers And Acquisitions Continue,

Driven By Scramble For Innovation

•

Drives Vendor Consolidation, Cost-

Cutting And Centralization

•

Outsourcing Moving From Vendor

Model To Partner And Virtual Company Models

69

Research Sales

Changing Landscape

Trends

•

Pharma:

Consolidations, Weak Research

•

Academia:

Decreasing Funding

•

Internet:

Ready Availability Of Information

Customer Behavior

•

Doing More With Less

•

Increased Collaborations

•

Creation Of Centers Of Excellence

•

Increased Levels Of Outsourcing

•

Partnerships & Alliances To Reduce

B-to-B Transaction Costs

Exploiting Opportunities Requires New Approach To Customers

70

Research Sales

Challenge in Customer Engagement

•

Needs Analysis Often Fails Without

Resource Intensive Support...

•

…

Requiring A Simplified Sales

Approach To Achieve Customer

Engagement In The Majority Of   

The Market

Source: Sales Exec Council

Communicate The Value Proposition

71

Sales

Sales

CUSTOMER

Communication Mix

Products & Services

Logistics

Price, Discount, T&C

Research Sales

Value Drivers

Comprehensive Relationship With Key Accounts

72

Research Sales

Strategy

Align Sales Resource –

Account Managers & Sales Specialists To

Better Capitalize On Sales Opportunities

-

Promote Innovative & Value Added Solutions

(Business, Product and Application)

-

Address Total Cost of Ownership

-

Strive For Long Term Collaborations

Act Globally -

Differentiate Approach By Customer

73

Research Sales

Growth Opportunity And Tactics

•

Account Management (Global, Regional, Local)

-

Differentiate Products And Services Through Customized Business Solutions

-

Improve Customer Interaction Through Sales Analytics To Increase

Sales Effectiveness

-

Maximize Price And Discount Effectiveness With Dedicated Cross Functional

Sales & Marketing Resources

•

Sales Specialists

-

Differentiated Selling For Product and Customer Segments

-

“White Coat”

Selling For Innovative Technology Segments

Combined Approach Enhanced Sales Growth

74

Research Sales

2007 Results

•

High Single Digit Growth With Our 3,000 Worldwide Managed Accounts

•

Low Double Digit Growth In Several Life Science And Analytical

Segments, Innovative Technologies Slower Then Expected

•

Increased Demand For Customized Solutions

•

Official Recognition By 2 Large Life Science Companies

Increase Activities With Managed Accounts

75

Research Sales

2008 Goals & Initiatives

•

Managed Accounts Goal 7+ %

-

Expand On New And Innovative Business Solutions

-

Focus On Largest Customers & Biotech Accounts

-

Leverage Differentiated Technology Selling Approach

•

Focus On Innovative Technologies/Products And Leverage

Into Existing Portfolio

•

Revitalize Custom Genomics

•

Further Optimize Price And Discount Effectiveness

76

SAFC

Research

Specialties

37%

($761M)

Research Essentials

19%

($388M)

SAFC

29%

($591M)

Research Biotech

15%

($299M)

Business

Units

Customer

Types

Driving

Forces

Long-Term

Growth

Goal

Research

Essentials

Economic

Buyers

Relationship

Selling

4%

Research

Specialties

Lab

Scientists

Transactional

Selling

6%

Research

Biotechnology

Life

Scientists

Innovation

>10%

SAFC

Project &

Development

Managers

Customer

Intimacy

>10%

Innovative Solutions for Manufacturing Customers

Changing Market Dynamics Provide Opportunities

77

SAFC

Market Overview

•

Market

-

Size -

$50 Billion

-

Growth –

2-3%

-

SIAL Share –

Top 10 Player

•

Customer Requirements

-

Products From Stock: Quality, Availability and Price

-

Make To Order: On-Time, On Quantity, On Quality, Solution Provider

-

Serum Free Media

-

Expanding Breadth Of Materials For Semiconductor Industry

•

Competitors

-

Larger Competitors Divesting Non-Strategic Assets

-

Fragmented Market –

Many Small, Medium and Large Players

-

Asian Companies Gaining More Expertise

Expanding SAFC's Capabilities

78

SAFC

Business Unit Overview

1990

2000

2004

2005

2006

2007

2008

Fine Chemicals

Division

Organized

Operational

Improvements

1999 Strategic

Plan

2005

Strategic

Plan

JRH &

Proligo

Acquired

SAFC Branded

Ultrafine &

Tetrionics

Acquired

Iropharm

&

Pharmorphix

Acquired

Epichem

&

MMB

Acquired

Provide World-Class Chemistry And Biochemistry Support

79

SAFC

Value Drivers

•

Small Molecule API And Biologic

Drug Products

•

Technical Expertise

•

Industry Leading Project Mgmt

SAFC Pharma

Complex Custom Development &

Manufacturing

20%

SAFC Supply Solutions

Customized Raw Materials

•

Broad Range Of Raw Materials

•

Customized And Flexible Service

•

Compliance Support

•

Pharma, Diagnostics &

F&F Food-Grade Focus

43%

SAFC Biosciences

Critical Raw Materials

For Cell Culture Manufacturing

•

World’s Largest Media Supplier

•

Sera And Supplements

•

Custom Media Development And

Manufacturing Services

26%

SAFC Hitech

Collaborative Chemistry Services

Enabling Future Technology

•

Collaborative Research Expertise

•

Process Development And Scale Up

•

Commercial Scale Manufacturing

•

Silicon And Compound Semiconductor

And Performance Material

11%

Exceed Customer Expectations

80

SAFC

Strategy

•

Gain Market Share In High Growth Segments Through

Exceeding Customer Expectations

•

Seek Niche Technology Opportunities To Expand The Current

Capability Profile

•

Strengthen Existing Skills As The Responsive Experts To The

Biopharmaceutical Industry

•

Continued Focus And Offer Innovation Within Supply Solutions

•

Fuel The Growth In Our New Hitech

Segment To Ensure It

Delivers On Its Exciting Promise To Customers

•

Resource And Train In CAPLA Region For Faster Growth

Be The Industry Leader In Development And Manufacturing Services

81

SAFC Pharma

Growth Opportunities And Tactics

-

Novel Excipients

&

Adjuvants

-

Bacterial & Fungal

Fermentation

-

Analytical Services & 

Development

-

Animal or Plant Sourced            

API’s  

-

Chiral Separations

-

Viral Drug Product

-

Medicinal Chemistry

-

High Potent Conjugation

-

Solid State Chemistry

-

High Potent API’s

•

Focus On Complex And Niche Technologies

Be The #1 Supplier To The Biopharmaceutical Industry

82

SAFC Biosciences

Growth Opportunities And Tactics

•

Focus On Supplying Cell Culture Based Critical Raw Materials

Through 

-

Increasing Customer Intimacy

-

Capturing Early and Late Stage Clinical Projects

-

Continuing To Develop And Offer Single Use Disposables

-

Developing And Optimizing State Of The Art Media Services

-

Assisting Customers With Supply Chain Management

Be A Total Supply Chain Partner

83

SAFC Supply Solutions

Growth Opportunities And Tactics

•

Target Market Segments With Enhanced

Quality And Customized Solutions

-

Production Raw Materials

-

Services Across The Supply Chain

-

Solution Provider

-

Enhanced Quality Systems

Be An Innovator In New Technologies

84

SAFC Hitech

Growth Opportunities and Tactics

•

Focus On Collaborative Chemistry

Services Enabling Future Technology

For Performance Materials

-

Compound Semiconductor Markets

-

Silicon Semiconductors

-

Large Area Displays

-

Photovoltaics

Unrivalled Scientific Knowledge & Global Reach

85

SAFC

Distinct Advantages Over Competitors

•

Breadth, Depth and Diversity of Chemical Knowledge

•

Expanding Technology Offering

•

Strong Project Management

•

Global Infrastructure

•

Financial Stability

Vast Range Of Capabilities Drives Growth

86

SAFC

2007 Results

•

2007 Results: 14.7% Currency Adjusted Sales Growth;

(7.1% Adjusted For Currency And Epichem

Acquisition)

•

Key Drivers:

-

Continued Strong Performance Of Supply Solutions

-

Organic Pharma

Growth >20%

-

CAPLA Region Double Digit Growth

-

Bioscience Growth Impacted

By Market Conditions

New Activities / Capacity To Increase Growth Rate

87

SAFC

2008 Goals and Initiatives

Sales Increase Goal –

8 to 9%

Major Initiatives:

•

Implement A Global Accounts Strategy

•

Complete Capacity Expansion Initiatives

•

Continue To Resource And Train In High Growth International Areas

•

Fuel Growth In Hitech

•

Expand Services In Pharma

•

Hit Targeted Sales Of Acquisitions

Initiatives Set Actions For 2006 -

2008

88

Building For The Future

1.

Align Structure With Customers And Markets

2.

Expand In Faster Growing Geographic Markets

3.

Build On Internet Superiority

4.

Leverage Process Improvement For Excellent

Investment Returns

5.

Fill Growth Target Through Acquisitions

Five Key Initiatives

CAPLA 25% Of Total Sales By 2010

89

CAPLA

2007 Sales

USA &

Europe

78%

CAPLA

20%

Exports to

CAPLA

2%

19%

9%

16%

14%

20%

0%

5%

10%

15%

20%

25%

2003

2004

2005

2006

2007

Brazil

34%

China

35%

India

50%

Faster Growing Markets

(2007 Reported Sales Growth):

Strategic Plan Initiative

90

CAPLA

Expand in Growing Economies

Objective:

Achieve 25% Of Sales By 2010

Focus:

•

Capitalize On Country Specific Opportunities

•

Increase Presence In Rapidly Growing Countries

•

Increase Acquisitions, Partnerships               

And Collaborations

•

Optimize Supply Chain

Argentina

Australia

Brazil

Canada

China

IP

India

Japan

Malaysia

Mexico

New Zealand

Singapore

South Korea

Taiwan

Innovative Customer Solutions

91

•

Revitalize Japan Sales

-

Infrastructure In Place To Support Growth

-

Increase Research Direct End User Selling

-

Leverage Price Strategy To Increase Margin

•

Localize Products And Services

-

Expand Local OEM Of High Volume Essentials And Difficult To

Transport Items

-

Develop Capabilities To Increase Scientific Support Through

Localized Website, Technical Seminars And Training.

•

Develop Local Programs To Meet Customers’

Needs

-

Leverage Core Competencies To Customize Services

CAPLA

Capitalize On Country Specific Opportunities

Doubled Sales Between 2005 & 2007 -

100 Employees

92

Wuxi

CAPLA

Increase Presence in Rapidly Growing Countries

Shanghai

Beijing

Guangzhou

Shenyang

XI'an

Wuhan

Chengdu

Wuxi (New Site)

2009

2009

2009

Doubled Sales Between 2005 & 2007 -

200 Employees

93

CAPLA

Increase Presence in Rapidly Growing Countries

Bangalore

Hyderabad

Mumbai

Kolkata

New Delhi

Q2 08

Pune

Lucknow

Chandigarh

Chennai

Ahmadabad

Geographic Expansion

94

•

Leverage Our Geographic Reach To Extend New Products And Services

•

Continue Aggressive Review Of Targets In Rapidly Growing Markets

-

Will Continue To Be Judicious On The Evaluation

•

Successful Integration Of Acquisitions With Assets In CAPLA

CAPLA

Increase Acquisitions, Partnerships And Collaborations

Operational Excellence

95

•

Expand Infrastructure To Manage Growth

-

Increase Infrastructure in Rapidly Growing Markets To

Support Local Customers

-

Develop Operations In New Geographic Markets

•

Focus On Customer Service Enhancements

-

Continue To Accelerate Collaboration With Contract

Research Organizations (CROs) In India And China

•

Drive Asset Productivity

-

Optimize Existing Assets In Mature Markets

-

Increase Throughput In Emerging Market Facilities

-

Drive Efficiency Through Process Improvement Initiatives

CAPLA

Optimize Supply Chain

CAPLA 25% Of Sales By 2010

96

CAPLA Plan Is On Track –

Continue To…

•

Accelerate Growth In Rapidly Growing Countries

•

Add

Local

Products

And

Services

To

Meet

Customers’

Needs

•

Increase Infrastructure To Support Growth

•

Leverage Process Improvement To Drive Profitability And Innovation

•

Develop Local Talent

CAPLA

Expected Results

Initiatives Set Actions For 2006 -

2008

97

Building For The Future

1.

Align Structure With Customers And Markets

2.

Expand In Faster Growing Geographic Markets

3.

Build On Internet Superiority

4.

Leverage Process Improvement For Excellent

Investment Returns

5.

Fill Growth Target Through Acquisitions

Five Key Initiatives

98

0

100

200

300

400

500

600

eCommerce Sales

Using ‘e’

to Integrate With Customer Processes

•

$550 Million In “e”Sales For 2007

•

~40% Of Sigma-Aldrich Research

Sales Now Transacted Electronically

•

System-To-System (B2B) Integration

Linking Deeper Into Customer

Business Processes: Evolution

Beyond “e”

Orders

•

International eCommerce Adoption   

Is Accelerating

•

New Platform Enables Shorter

Implementation Cycle

99

Leverage Content –

The Conversion Funnel

PPC

Affiliates

SEO

Contextual

Networks

Social

Networks

Verticals

eCommerce

Functionality

AWARENESS

INTEREST

PURCHASE

CONVINCE

In-site

Search

Content

Rich Media

Content

Interactive

Content

Site

Usability

Product

Detail

Content

Registration

On-line

Services

In-site

Merchandising

eMail

Marketing

Acquire, Convert, Service & Retain Customers

Faster Is Better

100

Improving the Customer Experience

•

WebSphere Commerce –

Ordering: Easier And Faster

“Well Done! You Took An Already Good Web Site And

Made It Better…Hopefully I Will Discover More Useful

Additions As I Continue To Use The New Site.”

Gregory Kienast

Chemical Tracking & Stock Coord.

Univ. of Illinois

Facilitating "Custom" Product Ordering

101

Growing Beyond “Ready to Ship”

Products

•

Sigma-Aldrich Is No Longer Just About Pre-Pack Materials

Sitting In Our Warehouses

•

Making eCommerce Work For All Business Units & Product Lines

Improving The Search Experience

102

Changing The Assumptions Behind Search

Find Products Associated With Genes

With Your Favorite Gene™

Find Products Related To Biological

Pathways With PathFinder

Browse For Products Using The

Traditional Catalog Index With The

Online Product Catalog

Search For Chemicals By Graphical

Structure Using The Structured

Product Search

Improving The "Hit" Rate

103

2007

2006

Improving Search Through Analytics

Null Search Normalized to Site Views

3.00%

3.50%

4.00%

4.50%

5.00%

5.50%

6.00%

6.50%

7.00%

21.92% decrease in Null Searches YTD

2007

Buy/Search Ratio Normalized to Site Visits

2.00%

2.05%

2.10%

2.15%

2.20%

2.25%

2.30%

2.35%

2.40%

2.45%

2.50%

9.50% Increase Confirmations

going through Search YTD

2007

Improvements In Search Performance Led To Improved

Conversion And Strong Increases In Customer Satisfaction …

72.0

72.5

73.0

73.5

74.0

74.5

75.0

Multi-Language Capabilities

104

•

New Content Translation Process

•

New Web Content Management System

•

New Multi-Language Search Architecture

~30,000 Japanese products have been

translated.  Website search available in

July –

print materials available now.

Focus on Global Content

#1 In Our Industry

105

Customer Validation

Annual Website Visits

7,000,000

11,000,000

15,000,000

19,000,000

23,000,000

2002

2003

2004

2005

2006

2007

Strong Site Growth Continues …

Sigma-Aldrich.com Is Now The

Most Popular Chemistry Site In

The World

Most Popular In Biology

Alexa Rankings, March 2008

The most visited sites in all 'Biology' categories.  26,735 sites.

1.The National Center for Biotechnology Information

www.ncbi.nlm.nih.gov

2.

Naturejobs

www.nature.com

3.

Botanical

www.botanical-online.com

4.

Entrez Browser

www.ncbi.nlm.nih.gov/Entrez

5.PubMed

www.ncbi.nlm.nih.gov/sites/entrez

6.SigmaAldrich

-Aldrich

www.Sigma-Aldrich.com

7.Bioinfo.PL -

polish bioinformatics site

bioinfo.pl

8.American Society for Microbiology

www.asm.org

9.Nature

www.nature.com/nature

10.National Center for Infectious Diseases

www.cdc.gov/ncidod/index.htm

Most Popular In Chemistry

Alexa Rankings, March 2008

The most visited sites in all 'Chemistry' categories. 4,364 sites.

1.Sigma-

Aldrich Corporation

www.sigmaaldrich.com

2.

Royal Society of Chemistry

www.rsc.org

3.

WebElements

www.webelements.com

4.

Stanford University

www.slac.stanford.edu

5.Chemical Abstracts Service (CAS)

www.cas.org

6.

Department of Chemistry, University of Oxford

www.chem.ox.ac.uk

7.Dynamic Periodic Table

www.dayah.com/periodic

8.Scripps Research Institute

www.scripps.edu

9.Chemical Forums

www.chemicalforums.com

10.CDRH HOME PAGE

www.fda.gov/cdrh/index.html

Continue To Innovate

106

2008 & Beyond

•

Engrain Sigma-Aldrich Website Even Deeper Into Our

Customers’

Processes

•

Extend Our Expertise In Connecting With Customers

•

Refine Our Integrated Approach To Content, Search,

Analytics, And Usability

•

Utilize Global Content Management Capabilities To Provide

Localized Customer Experience

•

Continually Improve Site Performance And Usability

107

Building For The Future

1.

Align Structure With Customers And Markets

2.

Expand In Faster Growing Geographic Markets

3.

Build On Internet Superiority

4.

Leverage Process Improvement For Excellent

Investment Returns

5.

Fill Growth Target Through Acquisitions

Five Key Initiatives

Supply Chain Initiative To Enhance Margins

108

Leveraging Process Improvement

•

Revitalize Our Supply Chain

•

Continue Efforts To Maintain Investment Returns

Eight Major Initiatives

109

Procurement

Custom Services

Facilities

Distribution

Consolidation and

Decoupling

Slow Seller Management

Planning and Forecasting

Freight Management

Supply Chain

Largest Opportunities Are In Two Broad Areas

110

Revitalizing Our Supply Chain

“

What We Sell”

Custom Services

Consolidation And Decoupling

Slow Seller Management

“How We Execute”

Planning And Forecasting

Facilities

Distribution

Freight Management

Procurement

Top Line Growth Through Custom Services

111

Customer Request

Business Analysis

Supply Chain

Process Improvement

Systems

Flexible, Robust,

Processes

Marketing

Popular Configurations

Other Customer

Sales

Process of

Organic Growth

Rapid

Response

Processes

Business Analysis

Custom Services

Result Is Sales Neutral And Reduces Cost

112

Consolidation and Decoupling

•

Simplify Product Offering While Maintaining Breadth Of Product Line

-

Consolidate Redundant Brand/Grade Offerings

-

Eliminate Unnecessary SKUs

•

Enable Improved Efficiency Through Flexibility

-

Decoupling Brands From Sites

-

Purchase, Test (QC) And Package Any Brand At Any Site

Consolidation & Decoupling -

# of products

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

Jan-

07

Feb-

07

Mar-

07

Apr-

07

May-

07

Jun-

07

Jul-

07

Aug-

07

Sep-

07

Oct-

07

Nov-

07

Dec-

07

Jan-

08

Consolidation

Decoupling

New Approach To Improve Profitability

113

Slow Seller Management

Slow Sell

Hubs

Packaging

Strategy

Global Drop

Ship

Annual Stock

Return

Forecasting

Process &

Stocking Policy     

Changes

•

Slow Sellers “Bring Customers To The

Store”

•

94K Products (70%) Sell <30 Units/Yr

-

6% Of Research-Based Sales

-

15% Of Inventory

•

Move Stock To CDC’s

•

Package On Demand

S-A's 95% Fill Rate Costs $600+M In Inventory

114

Planning And Forecasting

Production

QC

Packaging

95%

fill rate

Produced cumulated

Inventory

$600+ Million

Procurement

Procured cumulated

Improved Service At Lower Costs

115

Planning and Forecasting

•

Improve Demand Planning

-

Customer-Based Demand Management

-

Increase Product Availability In CAPLA To Support High Growth Rate

•

Implement Sales And Operations Planning

-

Continued Planning Skill Development

-

Process Improvements-

On-Time Performance And Cycle             

Time Reduction

-

System Enhancements

Some "Easy Wins" Are Complete Or In Process

116

Facilities

•

Rapid Asia-Pacific Sales Growth Requires Infrastructure Investment

•

Focus Long-Term Regional And Global Facility Plans

-

Align Along Centers Of Excellence

•

Integrate Acquisitions

•

Consolidation

117

Global Distribution -

Future

CDC

CDC

Europe

Europe

South Korea

Australia

Ireland

UK

Spain

Portugal

France

Argentina

Brazil

CDC

CDC

US

US

China

Canada

India

Japan

Chile

Venezuela

Mexico

Sales Subsidaries:

•Belgium

•Netherland

•Italy

•Denmark

•Poland

•Czech Republic

•Hungary

•Austria

•Russia

•Greece

•Switzerland

•South Africa

Singapore

Malaysia

Norway

Finland

Sweden

Israel

Preferred Eastern, European and Middle Eastern Dealers

Multibrand ex SD

Replenishment ex US + SD

Multibrand ex US

118

Freight Management

•

Leverage Our Spend

•

Organize Globally

•

Reduce Number Of Carriers And Freight Forwarders

•

Improve Efficiency

Annual Freight Spend Is $100M; Largest Opportunity In Europe & CAPLA

Largest Opportunity For Margin Improvement

119

Procurement

•

Leverage Our Spend

-

Global, Integrated Organization

-

Provide Additional Skills Training For Sourcing Teams

-

Implement Additional Spend Analysis And Contract Management Tools

•

Manage Our Vendors

-

Focus On 20% Of Suppliers That Represent 80% Of Lines

-

Implement Additional Vendor Management Tools

•

Improve Productivity

-

Fully Utilize SAP Capabilities To Automate Transactions Across The

Value Chain

•

Reduce Supply Chain Risk

-

Increase Dual Sourcing And Risk Mitigation

Plans

Pretax Margins Expected To Improve By 1.5% by 2012

120

Savings & EPS Benefits

2008

2009

2010

2011

2012

Expected Savings

$0-$2

$10-$15

$20-$25

$25-$35

$35-$45

($millions, pretax)

EPS Benefit

$0-$0.01

$.05-$.08

$.11-$.14

$.14-$.19

$.19-$.24

Simple, Common Approach Is Foundation Of Success

121

Continue Efforts To Maintain Investment

Results

•

AIM For Improvement In Key

Business Processes

•

MEASURES To Determine If

Changes Are Improvements

•

CHANGES To Anything And

Everything Can Be Tested For

Improvement

Sixth Straight Year Of $15+ Million In Savings

122

Process Improvement Results

•

“It’s All About The Business!”

•

Superior Improvements =

Superior Performance

•

Documented Savings Are A

Fraction Of The Impact

Producing Material Improvements To The Bottom Line

123

Process Improvement

•

Cost Savings –

Global Purchasing Efforts Saved More Than

$10 Million

•

Impact From 30 Advanced Improver Projects In Locations

•

Growing Impact On Top-Line Growth Initiatives

•

Quality and Safety Focused Improvements Have Led To

Record Performance

$15 Million Savings Goal To Hold Existing Margins

124

Process Improvement Focus –

2008

•

Spread Of Improvement Efforts And Support Into CAPLA

•

Broadening The Improver Network Through Hands-On Skill

Development

•

Launch Of Multiple Initiatives Aimed At Reducing The

Environmental Impact Of Our Operations

•

Continued Support Of The Hundreds Of Local Improvement

Efforts Taking Place And Producing Results Around The World

Aligning With Our Communities

125

Global Citizenship

Environmental Sustainability

= Social Responsibility

= Corporate Accountability

Sustainability Metrics To Be Published

126

Environmental Sustainability

2008 Projects

•

Worldwide Energy Measurement        

And Conservation

•

Technology Sharing (Reduce,         

Reuse, Recycle)

-

Internal -

eNet

-

External –

Customers / Investors Via

Public Website

Sustaining Successful Communities

127

Social

Responsibility

2008 Projects

•

Communities

-

Team Sigma-Aldrich

•

Workplace

-

Outstanding Safety Performance

-

Recognition For Improvement (Safety,

Quality, Environment)

•

Customers

-

Highest Quality And Leading Edge Products

-

Translate Discoveries Into Meaningful

Therapies And Cures

•

Suppliers

-

Expect High Quality Materials And Safe

Work Environments

Earn The Trust Of Customers, Investors & Employees

128

Corporate Accountability

2008 Projects

•

Fiscal:  Using The Data

•

Governance:  Act With Integrity

Initiatives Set Actions For 2006 -

2008

129

Building For The Future

1.

Align Structure With Customers And Markets

2.

Expand In Faster Growing Geographic Markets

3.

Build On Internet Superiority

4.

Leverage Process Improvement For Excellent

Investment Returns

5.

Fill Growth Target Through Acquisitions

Five Key Initiatives

Add To Growth/Maintain Returns

130

Acquisitions –

General Criteria

•

Acquisitions Must Create Shareholder Value Over Reasonable

Planning Horizon:

-

Both Sales And Profit Growth > Long-Term Target (10%)

-

Meet Or Exceed Cost Of Capital (Roughly 15%)

-

Enhance Life Science/High Technology Position

•

Annual Revenue Target:  3% (Roughly $65 Million)

Need Expansion Into New Markets To Fill Revenue Gap

131

Acquisitions –

Investment Opportunities

•

New Market Opportunities In:

-

Regenerative Medicine (Stem Cells)

-

Electronics (Material Science)

-

Biomaterials (Material Science)

-

Contract Research Services

-

Analytical Services

-

Automation Reagents

-

Functional Genomics And Proteomics

-

Molecular Diagnostics

-

Pharma

Services

Add Capabilities With Focus On Global Innovation

132

Acquisitions –

Broad Strategy

•

Primary Focus On Biotech, SAFC And Emerging Markets:

-

Biotech:  “First To Market”

Technologies For Development And Launch Of Innovative,

Solution-Oriented Products

-

SAFC:

-

Capabilities To Retain/Enhance #1 Position In Biosciences

-

Products/Services To Fill Gaps In Becoming A Full Line Supplier For Drug

Development (Both Pharma

& Bioscience)

-

Diversification (e.g., High-Tech And Material Sciences)

-

Emerging International Markets:

-

Penetrate/Accelerate Ability To Better Serve Local Markets

-

Improved Access To Low Cost Sourcing And Services

-

Diversify Geographic Mix (To Reach 25% Of Total By 2010)

•

Selective “Bolt On”

Acquisitions To Build Other Units:

-

New (Usually Small) Technology Line Extensions To Maintain Leadership Position,

Product Line Breadth/Diversity (Chemistry) Or Diversify Customer

Base (Analytics)

-

Market Share, Market Presence, Scale And/Or Cost Position

133

Acquisitions –

Annualized Revenue Added

UltraFine

(Capacity)

Tetrionics

(Technology)

JRH (Product Line)

Proligo (Technology)

Beijing Superior (Geography)

Iropharm

(Capacity)

Pharmorphix

(Technology)

Advanced Separation

Technologies (Technology)

Epichem

(Technology)

Molecular Medicine

BioServices

(Technology)

$31

$190

$25

$52

Research

Specialties

SAFC

Multi-Unit

0

20

40

60

80

100

120

140

160

180

200

2004

2005

2006

2007

134

Screened Candidates Enter Internal Review Process

Acquisitions -

How We Source Candidates

Third Parties

•Venture Capital Firms

•

Investment Bankers

•

Direct Candidate

Contact

Internal Groups

•

Business Development

(Staff & Web Site)

•

International Team

•

Sales,

•

R&D

•

Marketing

External Contacts

•

Personal/Business

Networks

•Customers

•

In-licensing

Discussions

•

Competitors

•

Trade Shows,

Associations &

Conferences

•Universities

“Triage”

Selection Criteria

•

Corporate & BU Objectives

•Technology/Market Potential

•

Staff Expertise/Experience

•Reputation & Brands

•

Ease of Integration

•Seller’s Expectations

•Financial Criteria

Strategic Plan Acquisition Review

(300 Screened         175 Candidates)

Enough Target To Achieve Objective

135

Acquisitions –

Internal Review

•

Horizons Screen

-

Revitalize

-

Growth Opportunities

-

Future Business

•

Business Unit Analysis

•

EMG Review

•

Target Contact

-

Availability

-

Technical Details

•

Due Diligence

•

Formulate Proposal

•

Board Approval (As Applicable)

136

Strategic Plan

Financial Objectives

•

Obtain Minimum 10% Top And Bottom Line Growth

•

Maintain 20% Return On Equity Over Plan Period

•

Maintain Effective Debt To Capital Ratio

•

Reinvest Cash In Sales And EPS Growth

137

($ In Millions)

Balance Sheet

ASSETS

KEY RATIOS

Cash

238

$      

174

$       

Receivable DSO

50

50

Receivables

276

248

     US

37

38

Inventories

654

596

     Europe

54

54

Other Current Assets

115

95

     CAPLA

61

62

Property, Plant and Equipment

682

645

Other Assets

664

576

Inventory MOH

(1)

7.3

7.6

2,629

$   

2,334

$    

Debt to Capital

25.0

%

27.2

%

LIABILITIES AND EQUITY

Short-term Debt

331

$      

189

$       

Other Current Liabilities

304

253

Long-term Debt

207

338

Noncurrent Liabilities

170

143

(1)

Equity

1,617

1,411

2,629

$   

2,334

$    

12/31/07

12/31/07

12/31/06

Significant portion of decrease due to the

lower MOH of the Epichem and MMB

acquisitions (2.7 and 1.8 MOH, respectively)

12/31/06

138

($ In Millions)

Balance Sheet

ASSETS

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

2003

2004

2005

2006

2007

Cash

Other Current Assets

PP&E

Other Assets

LIABILITIES & EQUITY

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

2003

2004

2005

2006

2007

Total Debt

Other Current Liab.

Other Noncurrent Liab.

Equity

139

Balance Sheet

Hold DSO & MOH / Maintain Debt Ratio

Accounts Receivable     

Days Sales Outstanding

(DSO)

Inventory          

Months On-Hand

(MOH)

Dept-To-Capital

Ratio

54

50

48

50

50

44

45

46

47

48

49

50

51

52

53

54

55

2003

2004

2005

2006

2007

7.6

7.7

7.4

7.6

7.3

7.0

7.2

7.4

7.6

7.8

8.0

2003

2004

2005

2006

2007

19.6%

13.3%

28.9%

27.2%

25.0%

10.0%

15.0%

20.0%

25.0%

30.0%

2003

2004

2005

2006

2007

140

Active Working Capital

Management

55%

49%

44%

41%

39%

40%

42%

40%

0%

10%

20%

30%

40%

50%

60%

2000

2001

2002

2003

2004

2005

2006

2007

Excluding

JRH &

Proligo 37%

Percentage of Sales:  (Accounts Receivable + Inventory –

Accounts Payable) / Sales

Provided $300 Million in Cash 2000-2007

($48.2)

Million

141

Cash Flow -

Sources and Uses

Sources

0

200

400

600

800

1000

2003

2004

2005

2006

2007

Operations

Uses

0

200

400

600

800

1000

2003

2004

2005

2006

2007

Dividends

Capital Expenditures

Acquisitions

Share Repurchase

(in 000’s)

Operations Self-Funding;

Use Debt for Share Repurchases & Acquisitions

142

•

Have Repurchased 84.0 Million Shares To Date

5.2m -

1999     45.9m -

2000     8.2m –

2001     5.2m –

2002     5.5m –

2003

2.0m –

2004     4.0m –

2005     4.0m –

2006     4.0m –

2007 

•

Represents ~40% of Otherwise Outstanding Shares

•

Average Price:  $20.46 Per Share (“All In”)

•

Authorized Up To 6.0 Million More Shares

•

Shares Outstanding 12/31/07 –

129.4 Million

Share Repurchase

Continue Modest Repurchase Program

Rewards Tied To Performance

143

Performance

Share Holding

Opportunity

Requirement

Target

Number

Positions Included

(Salary Multiple)

(% Of Salary)

1

Chairman

3X

-

1

President & CEO

3X

67%

6

Business Unit Presidents, CAO/CFO,

General Counsel)

2X

50-55%

17

Key Management Group

1X

25-30%

30

Senior Management Group

0.5X

20%

488

Managers & Directors

0.25X

10-15%

Employees –

Share Commitment &

Performance Reward Programs

144

Operating Cash Flow

$ 420 –

430

Cash Requirements

-

Capital Expenditures

$ 115  

-

Dividends

$   66

-

Acquisitions

TBD

-

Share Repurchase

TBD

Expected Cash Flow –

2008

(In Millions)

Financially Strong

Nearly     

$250 Million

Available

145

Directors

$  406

$  560

$  2,970

7.3

Officers/Executives

8,832

11,203

28,635

3.2

Directors/Managers

3,928

11,425

20,021

5.1

$13,166

$23,188

$51,626

3.9

Times

Current

Total

Shareholdings

Current

Requirement

Requirement

@ 12/31/07

Requirement

Directors & Employee Shareholding (000’s)

Enhancing Global Reach

Through Excellence

147

2008 Goals

•

Deliver Sales & EPS Forecast

•

Develop Plan To Drive Growth For 2009 –

2011

•

Build Bench Strength To Support Long-Term Growth

•

Enhance Environmental Sustainability

148

2008 Forecast

•

Sales

-

Organic Growth

7%

-

Currency (At 12/31/07 Rates)

3%

•

EPS

$2.52 –

2.62

+ 8 –

12%

•

ROE

>20%

149

Summary

•

Five Key Customer Success Drive Initiatives

-

Customer-Centric Approach

-

Geographic Opportunities

-

Internet Superiority

-

Process Improvement

-

Acquisitions

•

Competitive Advantages

-

Broad & Innovative Offering

-

Global Presence

-

Superior Technical Service

•

Financial

-

Strong Financial Position

-

Positive Cash Flow

-

Longer Tem Margin Improvement

We Are Committed To Accelerating Our Customers' Success Through

Leadership In Life Science, High Technology & Service

Sigma-Aldrich Corporation

We are Committed to Accelerating our Customers’

Success through Leadership in

Life Science, High Technology and Service