UDG Healthcare plc FY18 Results Presentation & Group Overview - PowerPoint PPT Presentation

UDG Healthcare plc FY18 Results Presentation & Group Overview Year to 30 th September 2018

Contents Page No. FY18 Overview 5-9 FY18 Financial Overview 10-19 Divisional Overview: Ashfield 20-28 Divisional Overview: Sharp 29-31 FY18 Summary 32-34 UDG Healthcare Group & Divisional Overview 35-50 Financial Appendices 51-59 2 : UDG Healthcare plc

FY18 Results Presentation London Stock Exchange, 27 th November 2018 Brendan McAtamney & Nigel Clerkin

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, results, performance, operations or achievements including statements that relate to the Group’s future expressed or implied by such forward looking statements prospects, developments and strategies, and involve risks may differ materially from those expressed or implied by and uncertainties both general and specific. The Group has such forward-looking statements and accordingly you based these forward-looking statements on assumptions should not rely on these forward looking statements in regarding present and future strategies of the Group and making investment decisions. Except as required by the environment in which it will operate in the future. applicable law or regulation, neither the Group nor any However, because they involve known and unknown risks, other party intends to update or revise these forward uncertainties and other factors including but not limited to looking statements after the date these statements are general economic, political, financial and business factors, published, whether as a result of new information, future which in some cases are beyond the Group’s control, actual events or otherwise. 4 : UDG Healthcare plc

FY18 Overview

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 over 8,500 people in 26 countries. 2 8,500 + Top 30 Employees Pharma companies Operating divisions as clients 30+ year FTSE 250 26 Listed Dividend growth Countries 6 : UDG Healthcare plc

Diversification (FY18) Business Unit Operating Geographic Revenue Split Customer Concentration Profit Split* (net revenue) 7% 23% 32% 43% 30% 54% 63% 23% 25% Ashfield Communications & Advisory North America # 1 Customer Ashfield Commercial & Clinical UK # 2 -10 Customers Sharp Rest of World / Other Other Customers * Excluding Aquilant 7 : UDG Healthcare plc

FY18 Financial Highlights EPS* NET OPERATING NET OPERATING DIVIDEND PROFIT REVENUE PROFIT* MARGIN BEFORE TAX* +24% +10% +14% 13.1% +17% 16.0c +22% constant +6% constant +12% constant Increased +15% constant Full year increase currency currency currency from 12.6% currency +20% *Operating profit, profit before tax and EPS are before the amortisation of acquired intangible assets, acquisition costs and exceptional items 8 : UDG Healthcare plc

FY18 Strategic & Operational Updates Ashfield Acquisitions of Ashfield Strong Sharp US Continued rollout of Communications & CreateNYC and Communications second half Future Fit initiatives (HR, Advisory now accounts SmartAnalyst in continues to momentum Finance, IT) for 63% of Ashfield’s July 2018 differentiate its offering Ashfield Commercial & operating profit with a global network of Clinical technology Three Sharp facilities businesses driven by a investments Disposal of upgraded during the “science first” Aquilant in year Restructuring & perspective August 2018 reinvestment programme 9 : UDG Healthcare plc

FY18 Financial Overview

FY18 Financial Summary 2017 2018 2018 Increase Con Constant t FX Incr ncrease $1028.5m $1129.7m ↑10 % ↑6% Net Revenue $129.3m $147.5m ↑14 % ↑12 % Operating profit* $118.9m $138.8m ↑ 17% ↑15 % PBT* 37.12 45.94 ↑24 % ↑22 % EPS (C)* 12.8% 12.7% N/A N/A ROCE% 13.30 16.00 ↑ 20% ↑20 % DPS (C) (0.32x) (0.34x) N/A N/A Net debt to EBITDA The average 2018 exchange rates were $1:€0. 8403 and $1:£0.7436 (2017 $1:€ 0.9047 and $1:£0.7891) * Before amortisation of acquired intangible assets, transaction costs and exceptional items 11 : UDG Healthcare plc 11

FY18 Divisional Operating Profit OPERATING PROFIT ($M) ● FY17 ● FY18 +21% ↗ • Reported operating profit growth +21% • Underlying^ operating profit growth flat 98.4 after incremental Future Fit operating costs 81.6 +11% ↗ (+5% excluding Future Fit costs) • Net operating margin of 13.4% (up from 45.8 12.9%) 41.3 Ashfield Sharp UNDERLYING GROWTH RATE • Reported and underlying^ operating profit 0% +11% growth +11% • Strong US momentum during the second half of UNDERLYING GROWTH RATE (EX FUTURE FIT) the year +5% +11% • Net operating margin of 14.7% (up from 13.7%) NET OPERATING MARGIN* 12.9% 13.4% 13.7% 14.7% ^ 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 12 : UDG Healthcare plc 12

FY18 EPS GROUP EPS ($c) +24% (+22% CONSTANT CURRENCY) 0.5 45.9 3.5 4.8 +2% 37.1 +10% +12% 13 13 : UDG Healthcare plc

FY18 Cash Flow ($m) EBITDA/NET DEBT 0.34x (SEPTEMBER 2017 EBITDA/NET DEBT: 0.32x); +182 83 (50) (50) (61) (18) (18) (26) (26) (53) (33) (2) (61) * Includes Aquilant disposal proceeds & deferred consideration payments 14 : UDG Healthcare plc 14

Free Cash Flow Working Capital $m $m FY17 FY18 FY17 WC outflow $(19)m: 157 182 EBITDA • Normal outflows c. $(24)m • Extended payment terms c. $(15)m • Timing benefit c. $20m Working capital (19) (50) Capex (51) (61) FY18 WC outflow $(50)m: • Normal outflows c. $(10)m • Extended payment terms c. $(10)m FCF CF 87 87 71 • Reversal of 2017 timing benefit c. $(20)m • Future Fit timing outflow c. $(10)m FCF CF Con Conversio ion % 55% 55% 39% 39% Targeting medium term Free Cash Flow conversion of 60 60-65% 65% 15 : UDG Healthcare plc 15

FY18 Exceptional Items Category Description $m FY18 Aq Aquilant Net charge in relation to the impairment of goodwill on Aquilant, in ($91.7m) part offset by one-off payments received relating to the exit of contracts with VSI and Link, and loss on disposal Def Deferred Tax ax Credit Gain reflecting a one- off benefit from a reduction in the Group’s $9.7m deferred tax liabilities following US tax changes Deferred Con Def ontingent Consi sideration Release in respect of Cambridge BioMarketing, MicroMass and $10.6m SellXpert following a review of performance against expected earn- out targets Restructuring Rest Redundancy and onerous lease costs ($14.4m) Ne Net exc exceptional item tems af after r tax tax ($85.8m) 16 : UDG Healthcare plc

Capital Allocation Priorities Progressive shareholder returns policy Strong balance Reinvestment to support sheet to support continued continued sustainable investment growth priorities Acquisitions in line with strategic priorities 17 17 : UDG Healthcare plc

Do Do you hav have thi his log logo? Acquisitions ($750m+) & Disposals ($625m+) since 2012 ACQUISITIONS 2012 2013 Bethlehem site 2014 2014 2016 2017 2017 2018 DISPOSALS 2014 2016 2018 18 : UDG Healthcare plc 18

Progressive Dividend Policy 30 year+ history of consistent dividend growth ($ cent) 16.0 Full year dividend increase of +20% in FY18 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 $ 19 19 : UDG Healthcare plc

Divisional Review: Ashfield

Ashfield FY18 Financial Overview OPERATING PROFIT ($M) ● 2017 ● 2018 +21% ↗ 100.0 90.0 80.0 98.4 +44% ↗ 70.0 81.6 60.0 -6% ↗ 50.0 40.0 30.0 62.1 43.0 38.6 20.0 36.3 10.0 0.0 Communications & Advisory Commercial & Clinical Totals UNDERLYING GROWTH RATE +10% -10% 0% UNDERLYING GROWTH RATE (EX FUTURE FIT) +13% -5% +5% NET OPERATING MARGIN* 22.9% 21.6% 8.7% 8.1% 12.9% 13.4% * Net operating margin adjusts for pass-through revenues. Pass through revenues of $191.3m in 2017 and $185.5m in 2018 21 : UDG Healthcare plc 21