UDG Healthcare plc - Jefferies Group · UDG Healthcare plc, is a leading international provider of outsourced healthcare solutions, operating across three divisions London Listed,

www.udghealthcare.com 1 : UDG Healthcare plc

UDG Healthcare plc An International Healthcare Services Organisation

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

www.udghealthcare.com : UDG Healthcare plc 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


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

0

20

40

60

80

100

2000 2005 2010 2014 H1 2015

Supply Chain Services

Ashfield Commercial & Medical Services

Sharp Packaging Services

€m

100%

86%

14%

64%

23%

39%

42%

19%

13%

Operating profit by division

Operating profit before amortisation of acquired intangible assets, acquisition costs and exceptional items

30%

48%

22%


Note: Market sizes in 2013 1. 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

STRONG GROWTH TREND ACROSS HEALTHCARE OUTSOURCING

Discovery Development Manufacturing Commercial

Outsourced spend ~$13B ~$27B ~$132B ~$7B

Outsourcing growth

10-20% 6-7% 6-8% 5-15%

Sales/Distribution

Communication

Medical

Lead

opt

imiza

tion

Scre

enin

g

Targ

et v

alid

atio

n

Typical services

API/bulk

Distribution

Formulated dose

Packaging

Clin

ical

supp

ly

Pre-clinical Clinical

Other

Targ

et se

lect

ion

Biopharma total spend ~$40B ~$80B ~$260B2 ~$200B1

OUR AREAS OF FOCUS


POSITIVE MARKET DYNAMICS

INCREASING TREND TO HEALTHCARE OUTSOURCING

+ 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

Improving healthcare market growth outlook


BUSINESS OVERVIEW

GLOBAL COMMERCIAL & MEDICAL SERVICES:

˃ Sales & marketing (CSO & multi-channel)

˃ Healthcare communications

˃ Market access, PV & regulatory

No.1 UK & Europe Emerging in US / Japan Leading global position Emerging in US

48% of Group profits 8.9% Operating Margin

GLOBAL PACKAGING SERVICES:

˃ Commercial packaging

˃ Clinical trials packaging & logistics

˃ Serialisation services

No.2 CPO globally Emerging in clinical trials area


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



47.7 44.4

48.4 46.1 40.2

16.8 20.1 20.6

32.7 43.3

9.6 12.3

15.5

15.7

19.1

2010 2011 2012 2013 2014

STRATEGY & OUTLOOK - TRANSITION TO HIGHER GROWTH

102.6

74.1

84.4

94.5

76.8

˃ Strong market positions in each division

˃ Diversified client base with top-30 pharma

˃ Ashfield and Sharp broad platforms

for future growth

˃ Supply Chain remains strongly cash

generative

˃ Investing across all three divisions

˃ Business mix change benefits growth

˃ Improving operating margin and return on

capital outlook

Operating profit (€m) 5 yr. CAGR 8.5%




Operating profit before amortisation of acquired intangible assets, acquisition costs and exceptional items


H1 2015 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


H1 2015 DIVISIONAL OPERATING PROFIT 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

˃ Exceptional charge in the period of €10.6m (€6.2m cash component primarily on restructuring of Healthcare comms and Ballina closure)

16.7

7.5

20.8

25.9

11.8

15.9

0

5

10

15

20

25

30

Ashfield Commercial &Medical Services

Sharp PackagingServices


(€m)

2014 / 2015 2014 / 2015 2014 / 2015

*Excluding pass through revenues


˃ Global business with offices in 19 countries

– 5,500 employees

– 2014 Revenues €497m (+27%)

˃ 2 main areas of activity

– Contract Sales Outsourcing (CSO)

– Healthcare Communications

16.8

20.1 22.0

32.7

43.3

2010 2011 2012 2013 2014

OPERATING PROFIT (€m)

ASHFIELD COMMERCIAL & MEDICAL SERVICES OVERVIEW


We communicate via a multi-channel approach for a multifaceted audience

$

NURSE HCPs

PAYER PATIENT

Personal interactions

Non-personal interactions

Google

Wikipedia

Mobile apps

SEO

@ eNewsletter, Infographics

Instant messaging

Healthcare portals

Twitter

Kiosk eMail Sign Up

Facebook

YouTube

Publications/Journal Display Ads, features in print

Detail aids

Sales teams

Professional associations

Professional networks

Professional societies

Congress promotion

MSLs

Contact centre

Nurse educators


SHARP PACKAGING SERVICES OVERVIEW

9.6

12.3

15.5 15.7

19.1

0

5

10

15

20

25

2010 2011 2012 2013 2014

OPERATING PROFIT (€m) ˃ Global business

– 3 sites in US & 3 sites in Europe

– Over 1,600 employees

– 2014 Revenues €179m (+7%)

˃ 2 main areas of activity

– Commercial Packaging

– Clinical Trials Packaging


˃ 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 H1 2015 supply

chain profits)

– Aquilant Medical & Scientific

47.7

44.4

48.3 46.1

40.2

2010 2011 2012 2013 2014

OPERATING PROFIT (€m)

SUPPLY CHAIN SERVICES OVERVIEW


FUTURE CAPITAL DEPLOYMENT

EBITDA

~30%

~20%

~15%

Balance

Interest, tax, working capital

CapEx Typically CapEx = Depreciation 30% - 40% in FY15 & 16 (Sharp, SAP)

Dividends Pay-out ratio* 33% - 35% of EPS

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


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

1.04 1.13 1.22 1.27 1.36 1.47 1.63 1.80 2.00 2.27

2.61

3.13 3.57

4.11

4.80

5.50

6.35

7.30

8.00 8.00 8.40

8.66 9.04

9.56

10.12

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


STRATEGIC & FINANCIAL OUTLOOK

Approx 2015 Contribution Mid-term op profit growth

c.50% of profits 5 to 10% annual

c.20% of profits 10% + annual

c.30% of profits -5% to +2% annual




Medium term organic operating profit growth potential

Mix moving to higher growth, higher margin businesses

2015 Guidance ˃ Constant currency adjusted EPS growth range of 7-9% ˃ Growth lower than H1 2015 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

www.udghealthcare.com 17 : UDG Healthcare plc

Q & A

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UDG Healthcare plc - Jefferies Group · UDG Healthcare plc, is a leading international provider of outsourced healthcare solutions, operating across three divisions London Listed,