POSITIONED...POSITIONED Delivering Results FOR GROWTH Analyst & Investor Day October 14, 2015...

POSITIONED

Delivering Results

FOR GROWTH

Analyst & Investor Day

October 14, 2015

Ann B. Gugino

Executive Vice President, CFO & Treasurer

Patterson Companies

Ann Gugino

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• Former vice president of strategy and planning at Patterson Companies

• Former vice president of finance and operations at Patterson Dental

• Previously worked for Ernst & Young LLP

Executive Vice President, CFO & Treasurer

3

Financial Platform Strengths

• Strong cash flow enables key investments • Poised to accelerate return on invested capital (ROIC) • Multi-pronged capital allocation strategy • Conservative, well-capitalized balance sheet • Financial flexibility

Transformation Overview

Acquisition of Animal Health International

Terms

• Purchase price – $1.1B in cash

• Represented approx 16 multiple of LTM March 2015 EBITDA of $68M or

11.5 multiple post-synergy benefits

Financing • New $1.5B unsecured credit facilities

• Currently levered at 2.2x

Benefits • Transaction will be accretive from year one onward

• Proceeds of $715M from sale of Medical used to offset purchase price

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Benefits

Revenue Breakdown

56%

33%

11%

Fiscal 2015

49% 51%

Animal Health

Dental

2015 Pro Forma

Medical

Veterinary

Dental

20% 80%

United States

International

Pro Forma by Geography

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Net Synergies of $20M-30M Over 3 Years

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Net Synergies Range

Benefit ($M)

Back Office/Shared Services $8 – 12

Companion Health 3 – 5

Supply Chain 12 – 17

Dis-Synergies

$20 – 30

(3) – (4)

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Reported Consolidated ROIC 12.8%

Less: Patterson Medical ROIC 5.8%

Continuing Operations ROIC 17.4%

ROIC Analysis FY15

Sustained Sales Growth (Continuing Operations)

2,380 2,382 2,454

755

1,203

1,457

1,000

1,500

2,000

2,500

3,000

3,500

4,000

FY13 FY14 FY15

3,135

3,585

3,911

In millions of $

Dental Veterinary

CAGR =

11.7%

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$

1.62

1.75

1.89

1.50

1.75

2.00

FY13 FY14 FY15

* Excludes deal amortization ** Excludes deal amortization and transaction costs

$

**

CAGR =

8.0%

Consistent Adjusted Diluted EPS Growth (Continuing Operations)

* *

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Cash Returned to Shareholders

147

417

223

182

130

292

0

50

100

150

200

250

300

350

400

450

FY11 FY12 FY13 FY14 FY15 FY16 (E)

In millions of $

*

* Subject to market conditions and operating performance

$

92

200

10

82

48

96

86 43

179

55

362

50

97

Share Repurchases

Dividends

Cash Returned to Shareholders

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Capital Allocation

Expect to

generate $1.5B of

free cash flow

over next 5 years

In millions of $

226

292 279

156

200 230

250

290

330

370

0

50

100

150

200

250

300

350

400

11 12 13 14 15 16(E) 17(E) 18(E) 19(E) 20(E)FY

Investments to drive

organic growth

Opportunistic acquisitions/ investments

Continuous dividend growth

Share repurchases

$

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Cash Repatriation

• Acquisition of Animal Health International & sale of Medical

created unique opportunity to efficiently repatriate excess foreign cash balances

• Repatriating roughly $200M in cash from both Patterson Medical & Patterson Dental Canada

• Performing all repatriations in same FY creates tax synergies, with estimated tax savings in the range of $15M – 20M

• Also allowed us to pay down $100M on revolving credit line needed for acquisition, save on future interest expense & invest in buybacks

• Full cost of repatriation recorded as additional income tax expense in FY16 Q1, about $12M

• For full year, expect normalized income tax rate of about 35%

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Patterson Has Focused on Investing in the

Business, Returning Excess Capital

7-year total capital allocation as % OCF

$32

2009 2010 2011 2012

30%

2013 2014 2015

23%

28%

$48

$125

$30

$12

$54

$37

$50

$52

$97

$30

$55

$23

$362

$22

$43

$15

$179

$40

$86

$146

$96

$63

$86

$82

$97

$11

Capex Acquisitions Dividends Share Repurchases Total

15% 25% 19% 45% 104%

Capex Acquisitions Dividends Share Repurchases

$266

$124

$263

$321

$299

$196

$263

FY:

In millions of $

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Operating CF

.

. . . .

. .

Returning Capital to Shareholders

(% of cumulative 3-year operating cash flow)*

110%

215%

111%

109%

103%

85%

0 20 40 60 80 100 120 140 160 200 300

17% 23% 28% 43%

61% 81% 62% 12%

11% 48% 20% 32%

12% 45% 14% 38%

12% 46% 46%

16% 52% 7% 11%

Peer median % of Cumulative OCF 109%

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Capex Acquisitions Dividends Share Repurchases

*Source: J.P. Morgan

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Adjusted Operating Margin

FY2015 FY16 Target

Dental* 12.6% 12.8-13.0%

Animal Health 4.4%** 4.6-4.8%

Consolidated 8.1% 7.0-8.0%

Target Assumptions

• Minimum of 2-3% sales growth required to maintain margin levels

• 3-5% sales growth results in 20-30bps increase in margins

• 5+% sales growth yields 50bps gain in margins

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FY17-20

Up 30-50bps

Up 30-50bps

Depends on mix

* Excludes Corporate ** Companion only

Perform FY16 Q1 Performance

• Sales from continuing operations of $1.1B

• Dental consumables sales rise 3.8% in constant currency,

excluding Q1’s extra week

• Animal Health sales climbed 48% in constant currency,

reflecting contribution of acquisition

• Adjusted EPS from continuing operations of $0.47, plus EPS

from discontinued Medical operations of $0.10

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Fiscal 2016 Guidance

Guidance Assumptions

• Stable North American & international markets; conditions similar to FY15

• Excludes transaction-related costs, integration expense & deal amortization, non-recurring IT initiative training costs & financial impact from cash repatriation

• Includes 10.5 months of contribution from Animal Health International acquisition

• Includes impact of extra week in FY16 vs. previous year

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1.00

1.50

2.00

2.50

FY13 FY14 FY15 FY16E

1.89

2.40- 2.50

1.75 1.62

Adjusted EPS: $2.40-2.50 (Continuing Operations)

$

**

* Excludes deal amortization ** Excludes deal amortization and transaction costs

* *

5-Year Financial Objectives

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2016-2020

8-12% 4-6%

15+%

EPS Growth Organic RevenueGrowth

ROIC Free Cash FlowConversion

Aggressive, Yet Realistic Organic Targets

100%

POSITIONED

Delivering Results

FOR GROWTH

Questions?

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