UDG Healthcare plc Jefferies Conference June 2019 Healthc… · capabilities . Global network of business and talent driven by a ‘science first’ perspective. Supplemented by strong

UDG Healthcare plcJefferies Conference June 2019

2 : UDG Healthcare plc

Forward Looking Statements

This Presentation has been prepared by UDG Healthcare plc and contains certain forward-looking statements, beliefs or opinions, including statements with respect to the Group's business, financial condition and operational results.

They represent expectations for the Group’s business, including statements that relate to the Group’s future prospects, developments and strategies, and involve risks and uncertainties both general and specific. The Group has based these forward-looking statements on assumptions regarding present and future strategies of the Group and the environment in which it anticipates operating in the future. However, because such statements involve known and unknown risks, uncertainties and other factors including but not limited to general economic, political, financial and business factors, which in some cases are beyond the Group’s control, and accordingly you should

note that actual results, performance, operations or achievements expressed or implied by such forward looking statements may differ materially from those expressed or implied by such statements and accordingly you should not rely on these forward looking statements in making investment decisions. Except as required by applicable law or regulation, neither the Group nor any other party intends to update or revise these forward looking statements after the date these statements are published, whether as a result of new information, the passage of time, any future events or otherwise.


UDG Healthcare Overview

UDG Healthcare is a global leader in the healthcare advisory, communications, commercial, clinical and packaging services industry. The Group is organised and managed across two divisions, Ashfield and Sharp, and employs 9,000 people in 26 countries.

2Operating divisions

9,000Employees

Top 30Pharma companies

as clients

FTSE 250Listed

30+ yearDividend growth

26Countries


The Shape of UDG – H1 FY19

Business Unit Operating Profit Split

44%

25%

31%

Geographic Revenue Split

63%19%

18%

Customer Concentration (net revenue)

9%

32%59%

Ashfield Communications & AdvisoryAshfield Commercial & ClinicalSharp

North AmericaUKRest of World / Other

# 1 Customer# 2 -10 CustomersOther Customers


Continuous record of operating profit growth

Ashfield and Sharp combined operating profit CAGR of +15%

since FY14

Ashfield Sharp

57.5 68.3 70.6 81.698.4

25.934.0 38.2

41.3

45.8

83.4

102.3108.8

122.9

144.2

FY14 FY15 FY16 FY17 FY18

Operating Profit Growth: Ashfield and Sharp ($m)*

* Excludes Aquilant

Divisional Review:Ashfield


Ashfield Overview

69%

57.568.3 70.6

81.6

98.4


*Adjusted for amortisation of acquired intangible assets, transaction costs, and exceptional items

Operating profit* ($m)

A global leader in healthcare advisory, communication, commercial and clinical services

7,200+People across 25 countries

Delivering services in more than 50 COUNTRIES

Partnering with the top 30 GLOBAL PHARMA COMPANIES

10 YEARSof benchmarking data within STEM with over 300,000 observations

COMPLETED 2 ACQUISITIONS IN MAY 2019

TRANSFORMEDCommunications and Advisory now accounts for >64% of operating profits of Ashfield


Development of Ashfield

Data/Analytics

Digital

Face to Face

Payor

Patient

HCP


Ashfield Communications – Overview & Strategy

What we doScientific and brand creative communications, digital and patient-centredcontent, specialised agencies in behavioural science, rare disease, PR and on-demand advertising services.

Where we do itOffices in New York, New Jersey, Raleigh, Manchester, London, Boston and Brighton.

Strategy & Differentiation

Key focus to increase collaboration between agencies

Strategy to continue to expand into aligned adjacencies to core scientific communication capabilities

Global network of business and talent driven by a ‘science first’ perspective

Supplemented by strong creative communications, digital, data and analytics expertise

Our peopleWe have 1,200 people, including 400 with a PhD or equivalent


Ashfield Advisory - Overview & Strategy

Healthcare consulting focused on brand strategy, planning and launch

120 + peoplebased in Philadelphia,

Boston and London

Acquired in 2017

Strategy: Cross-selling, international expansion, and client and service expansion

Acquired in 2018

Strategic commercial, consulting and analytics business

140 + peoplebased in New York, India

and London

Q – do we need another STEM X slide beyond this

200+ peopleoffering audit services

across 51 countries

Acquired in 2016

Accelerating excellence in brand strategy execution

120 + peoplebased in Boston and San

Francisco

Acquired in 2019

Strategic management healthcare consultancy


Acquisition in Ashfield Advisory

US Based

Offices in Boston and San Francisco

Founded in 1988Strategic management

healthcare consultancy with capabilities in:

• New Product Strategy

• Pricing, Reimbursement & Market Access

• Portfolio Development

120+People

Deal structureInitial consideration of $60m rising to $88.6m in total over a 5-year

earn out

2018 Adjusted Operating Profit of approximately $8m

Acquired in May 2019Significantly expands

Ashfield’s pricing, reimbursement and

market access capabilities and adds further scale to

commercialisation strategy and portfolio support

services$88.6m


Acquisition in Ashfield Healthcare Communications

UK Based

Offices in London and Brussels

Founded in 2013Healthcare policy and

communications agency with capabilities in:

• Market Access Strategy and Policy Development

• Public Affairs

• Payer Engagement

36People

Deal structureInitial consideration of

$10.4m rising to $17.7m in total over a 3 year

earn-out

Acquired in May 2019Continues to broaden

Ashfield Communications’ service offering and

capabilities specifically in healthcare policy and

market access communications

$17.7m


Ashfield Commercial and Clinical - Overview & Strategy

Ashfield continues to invest to expand and differentiate its offering.

Recent activity includes:

50%

50%

of operating profit generated from commercial/CSO related activities

of operating profit from clinical, patient support, medical information, pharmacovigilance, meetings and events and market access services

Where we do itAshfield Commercial and Clinical provides services

across

22 countries

5,500 people

50/50

Divisional Review:Sharp


Sharp Overview

*Adjusted for amortisation of acquired intangible assets, transaction costs, and exceptional items

25.9

34.038.2

41.345.8


31% Operating profit* ($m)

Sharp US

Sharp EU

Sharp Clinical

A global leader in contract packaging and clinical trial supply services

1,600+Employees

Operations in 4 COUNTRIES

Belgium, Netherlands USA, UK

9 GMP & FDAApproved facilities


Sharp H1 FY19 Strategic Overview

• Clinical UK moves to Rhymney facility andreceives MHRA approval

• Clinical US completes move to Bethlehem facility

Clinical Facility Investments Commercial Packaging

• Biotech demand continues to drive capacity expansion plans in the US with the continueddevelopment of Sharp’s US biotech Centre of Excellence

H1 FY19 Summary


45.6

18.9

47.2

21.1

Ashfield Sharp

+6% CC ↗

+12% CC ↗

H1 FY19 Divisional Financial Overview (IAS18)

^ Throughout this presentation, references to underlying growth are financial metrics adjusted for the impact of currency translation movements and any acquisition or disposal activity.

* Net operating margin adjusts for pass-through revenues upon which no margin is earned

• Underlying ̂net revenue increased by +1%

• Underlying ̂operating profit flat (including the impact of STEM aXcellerate investments)

• Net operating margins increased to 12.4%

● H1 FY18 ● H1 FY19

• Underlying ̂net revenue increased by +20%

• Underlying ̂operating profit growth of +12%

• Net operating margin declined to 12.5% (driven by Sharp Europe, Sharp US margins increased)

OPERATING PROFIT ($M)

NET OPERATING MARGIN*

12.3% 12.4% 13.3% 12.5%

UNDERLYING^ NET REVENUE GROWTH RATE+1% +20%

UNDERLYING^ OPERATING PROFIT GROWTH RATE0% +12%


H1 FY19 Summary

Increased Free Cash Flow

conversion rate of 77%

Net debt of $57 million at half-year

end (0.33x) providing significant capacity for continued M&A

EPS growth of 5% (7% constant

currency)

5% increase in interim dividend

to 4.46c per share

Acquisitions of Putnam

Associates and Incisive Health for a combined consideration of

up to $106m

FY19 guidance increased to 5-7% EPS growth (on a constant currency

basis)

UDG Healthcare Summary


Acquisitions ($850m+) & Disposals ($625m+) since 2012Do you have this logo?

Bethlehem site

Acquisitions 2012 2013 2014 2016 2017 2018

DisposedDisposed Disposed

2019


Growth underpinned by long term structural trends

Industry: Positive Market Dynamics

Global pharmamarket growth:

Forecasted global market growth of

4-5% p.a. to 2023*

Volume of medicines: Expected to reach 4.5 trillion

doses by 2021 (+13%)^

Growth in FDA drug approvals: 59

novel drug approvals in 2018

(47 in 2017)^

By 2023, 50% of global spending

expected to be on specialty

medicines*

Growing trend towards healthcare

outsourcing to larger, more global

partners

*The Global Use of Medicine in 2019 and Outlook to 2023, Forecasts and Areas to Watch, QuintilesIMS Institute, January 2019.^ Outlook for Global Medicines through 2021, Balancing Cost and Value, QuintilesIMS Institute, December 2016.


Medium Term Outlook

FY19 Guidance & Outlook

*Constant currency adjusted diluted earnings per share, before the amortisation of acquired intangible assets, transaction costs and exceptional items

Ashfield medium term underlying operating profit growth: 5-10%

Sharp medium term underlying operating profit growth: >10%

Medium term Free Cash Flow conversion

rate: 60-65%

Capex: $50m per annum (Inc. $35m

maintenance capex)

FY19 Guidance

EPS* Growth of 5-7%


1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Historic dividends translated from € to $

16.0

Progressive Dividend Policy 30 year+ history of consistent dividend growth ($ cent)

Documents

UDG Healthcare plc Jefferies Conference June 2019 Healthc… · capabilities . Global network of business and talent driven by a ‘science first’ perspective. Supplemented by strong