Jefferies Global Healthcare Conference Grand Hyatt, New York City 3 June 2015

Transcription

1 UDG Healthcare plc An International Healthcare Services Organisation Jefferies Global Healthcare Conference Grand Hyatt, New York City 3 June

2 FORWARD LOOKING STATEMENTS Some statements in this presentation are forward-looking. They represent expectations for the Group s business and involve risks and uncertainties. UDG Healthcare plc has based these forward-looking statements on current expectations and projections about future events. The Group believes that expectations and assumptions with respect to these forward-looking statements are reasonable. However, because they involve known and unknown risks, uncertainties and other factors, which are in some cases beyond the Group s control, actual results or performance may differ materially from those expressed or implied by such forward-looking statements 2

3 UDG Healthcare plc UDG Healthcare plc, is a leading international provider of outsourced healthcare solutions, operating across three divisions London Listed, FTSE 250 constituent Market Cap 1.25bn Operating in 20 countries FY 2014 Revenue 2.13bn Over 8,300 employees FY 2014 Operating Profit 102.6m m Operating profit by division % Sharp Packaging Services % 13% 23% 42% 22% Ashfield Commercial & Medical Services 20 86% 64% 39% 48% Supply Chain Services 0 100% 30% H Operating profit before amortisation of acquired intangible assets, acquisition costs and exceptional items

4 STRONG GROWTH TREND ACROSS HEALTHCARE OUTSOURCING Discovery Development Manufacturing Commercial Biopharma total spend ~$40B ~$80B ~$260B 2 ~$200B 1 Outsourced spend ~$13B ~$27B ~$132B ~$7B Outsourcing growth 10-20% 6-7% 6-8% 5-15% Typical services Target selection Target validation Screening Lead optimization Pre-clinical Clinical Clinical supply API/bulk Formulated dose Packaging Distribution Medical Sales/Distribution Communication Other OUR AREAS OF FOCUS Note: Market sizes in Including sales, marketing, medical services and commercial R&D 2. Including outsourced logistics spend, but excluding internal spend on supply chain Source: Analyst and market reports; CEPTON; BCG analysis 4

5 POSITIVE MARKET DYNAMICS INCREASING TREND TO HEALTHCARE OUTSOURCING Improving healthcare market growth outlook + Positive market trends amplifying demand in our growth areas Increasing product approvals (and type of approvals) / deep pipelines Increased Specialty & biotech product importance Increasing proportion of semi-virtual (specialty/biotech) companies 5

6 BUSINESS OVERVIEW GLOBAL COMMERCIAL & MEDICAL SERVICES: GLOBAL PACKAGING SERVICES: Sales & marketing (CSO & multi-channel) Healthcare communications Market access, PV & regulatory Commercial packaging Clinical trials packaging & logistics Serialisation services No.1 UK & Europe Emerging in US / Japan Leading global position Emerging in US No.2 CPO globally Emerging in clinical trials area 48% of Group profits 8.9% Operating Margin 22% of Group profits 10.6% Operating Margin SUPPLY CHAIN SERVICES: Pharma wholesale Pre-wholesale - bulk distribution Medical device sales & distribution No.1 RoI and N Ireland No.1 RoI Leading in UK & Ireland 30% of Group profits 2.2% Operating Margin 6

7 STRATEGY & OUTLOOK - TRANSITION TO HIGHER GROWTH Strong market positions in each division Diversified client base with top-30 pharma Ashfield and Sharp broad platforms Operating profit ( m) 5 yr. CAGR 8.5% for future growth Supply Chain remains strongly cash generative Investing across all three divisions Business mix change benefits growth Sharp Packaging Services Ashfield Commercial & Medical Services Improving operating margin and return on capital outlook Supply Chain Services Operating profit before amortisation of acquired intangible assets, acquisition costs and exceptional items

8 H HIGHLIGHTS FINANCIAL OPERATING STRATEGIC Operating profit up 19% (10% constant currency) PBT up 26% EPS ahead 23% despite disposals (12% constant currency) Operating margin increased by 41bps Proposed 8% increase in dividend 25 years of consistent growth Constant currency EPS guidance range increased from 5-8% to 7-9% Strong performance across all divisions Ashfield operating profit 55% ahead, driven by commercial Europe and Healthcomms Sharp operating profit 57% ahead Supply Chain Services operating profit 5% lower excluding disposals, wholesale increased market share Growth divisions increased profit by 55% combined Significant margin expansion at Sharp and Ashfield Healthcomms integration completed creating strong platform for growth Sharp capacity expansion underway 8

9 H DIVISIONAL OPERATING PROFIT ( m) Ashfield Underlying Operating margin* increased to 11.6% from 9.7% Benefitted from KP360 and Galliard acquisitions - Healthcomms now over 50% of profit Underlying profit growth of 9% Sharp US profits increased 60%, good momentum Europe loss of 0.3m US expansion underway Supply Chain Underlying profit down 5% excluding disposals Good performance from Aquilant (+14%) Wholesale market share gain / / / 2015 Ashfield Commercial & Medical Services *Excluding pass through revenues Sharp Packaging Services Supply Chain Services Exceptional charge in the period of 10.6m ( 6.2m cash component primarily on restructuring of Healthcare comms and Ballina closure) 9

10 ASHFIELD COMMERCIAL & MEDICAL SERVICES OVERVIEW OPERATING PROFIT ( m) 43.3 Global business with offices in 19 countries 5,500 employees Revenues 497m (+27%) 2 main areas of activity Contract Sales Outsourcing (CSO) Healthcare Communications

11 We communicate via a multi-channel approach for a multifaceted audience Publications/Journal Display Ads, features in print Healthcare portals Sales teams MSLs enewsletter, Infographics Mobile apps Contact centre Nurse educators Instant messaging SEO Twitter Kiosk Sign Up Non-personal interactions NURSE $ PAYER HCPs PATIENT Personal interactions Detail aids Congress promotion Professional associations YouTube Professional networks Facebook Google Professional societies 11

12 SHARP PACKAGING SERVICES OVERVIEW 25 OPERATING PROFIT ( m) Global business sites in US & 3 sites in Europe Over 1,600 employees Revenues 179m (+7%) 2 main areas of activity Commercial Packaging Clinical Trials Packaging

13 SUPPLY CHAIN SERVICES OVERVIEW OPERATING PROFIT ( m) Ireland & UK focussed Over 1,200 employees 2014 Revenues 1,452m (-2%) Specials & UniDrug disposals in 2014 Now 2 broad areas of activity Pharma Wholesale (79% of H supply chain profits) Aquilant Medical & Scientific

14 FUTURE CAPITAL DEPLOYMENT ~30% Interest, tax, working capital EBITDA ~20% ~15% CapEx Typically CapEx = Depreciation 30% - 40% in FY15 & 16 (Sharp, SAP) Dividends Pay-out ratio* 33% - 35% of EPS Balance Acquisitions / Debt Acquisitions primarily in Ashfield Target 15% ROCE in 3 years Debt leverage 2.02x, Covenants 3.5x *Dividend increases linked to constant currency EPS growth 14

15 25 YEAR HISTORY OF DIVIDEND PER SHARE GROWTH ( cent)

16 STRATEGIC & FINANCIAL OUTLOOK Medium term organic operating profit growth potential Approx 2015 Contribution Mid-term op profit growth Ashfield Commercial & Medical Services c.50% of profits 5 to 10% annual Sharp Packaging Services c.20% of profits 10% + annual Supply Chain Services c.30% of profits -5% to +2% annual Mix moving to higher growth, higher margin businesses 2015 Guidance Constant currency adjusted EPS growth range of 7-9% Growth lower than H due to the timing of acquisitions and disposals in 2014 Foreign exchange benefit anticipated from translation of US dollar and Sterling profits with over 70% of profits generated in these currencies 16

17 Q & A 17