UDG Healthcare plc FY19 Interim Results Presentation & Group Overview · 2020-02-14 · 2 : UDG...

UDG Healthcare plcFY19 Interim Results Presentation &

Group Overview

6 months to 31st March 2019

2 : UDG Healthcare plc

Page No.

H1 FY19 Overview 5 - 12

H1 FY19 Financial Overview 13 - 20

Divisional Overview: Ashfield 21 - 25

Divisional Overview: Sharp 26 - 29

H1 FY19 Summary 30 - 32

UDG Healthcare Group & Divisional Overview 33 - 53

Financial Appendices 54 - 62

Contents

FY19 Interim ResultsPresentationLondon Stock Exchange,

21st May 2019


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.

Brendan McAtamney Chief Executive Officer, UDG Healthcare plc

H1 FY19 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 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


H1 FY19 Financial Highlights (IAS18)

* Underlying growth. Throughout this presentation, references to underlying growth are financial metrics adjusted for the impact of currency translation movements and any acquisition or disposal activity. ^Operating profit, profit before tax and EPS are before the amortisation of acquired intangible assets, acquisition costs and exceptional item

EPS^NET

REVENUE*OPERATING PROFIT*^

PROFIT BEFORE TAX^

DIVIDENDNET OPERATING

MARGIN

+5%

+7% constant currency

+6% +3% 12.5%

Increased from 11.8%

+2%

+4% constant currency

+5%

Continued dividend growth

9 UDG Healthcare plc

Acquisition in Ashfield Advisory

US Based

Offices in Boston and San Francisco

Founded in 1988

Strategic management healthcare consultancy with

capabilities in:

• New Product Strategy

• Pricing, Reimbursement & Market Access

• Portfolio Development

120+People

Deal structure

Initial 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 2019

Significantly expands Ashfield’s pricing,

reimbursement and market access capabilities and adds further scale to

commercialisation strategy and portfolio support

services

$88.6m


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

2019Strategic management healthcare consultancy


Acquisition in Ashfield Healthcare Communications

UK Based

Offices in London and Brussels

Founded in 2013

Healthcare policy and communications agency with

capabilities in:

• Market Access Strategy and Policy Development

• Public Affairs

• Payer Engagement

36People

Deal structure

Initial consideration of $10.4m rising to $17.7m

in total over a 3 year earn-out

Acquired in May 2019

Continues to broaden Ashfield Communications’

service offering and capabilities specifically in

healthcare policy and market access

communications$17.7m


Continuous record of operating profit growth

Ashfield and Sharp combined operating profit CAGR of +15%

since FY14

Ashfield Sharp

57.568.3 70.6

81.698.4

25.9

34.0 38.241.3

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

Nigel ClerkinChief Financial Officer, UDG Healthcare plc

H1 FY19 FinancialOverview


H1 FY19 Financial Summary (IAS18)

The average H1 FY19 exchange rates were $1:€0.8783 and $1:£0.7725 (H1 FY18 $1:€0.8310 and $1:£0.7357)^ Net underlying revenue growth of 6%~ Net underlying operating profit growth of 3% Throughout this presentation, references to underlying growth are financial metrics adjusted for the impact of currency translation movements and any acquisition or disposal activity

* Before amortisation of acquired intangible assets, transaction costs and exceptional items.

H1 FY18 H1 FY19 Increase/Decrease Constant FX Increase

Net Revenue $568.7m $548.3m (4%^) (1%^)

Operating profit* $67.4m $68.3m ↑1%~ ↑3%~

PBT* $63.2m $64.5m ↑2% ↑4%

EPS (C)* 20.19 21.21 ↑5% ↑7%

ROCE% 12.9% 12.4% N/A N/A

DPS (C) 4.25 4.46 ↑5% ↑5%

Net debt to EBITDA (0.28x) (0.33x) N/A N/A


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 RATE

0% +12%


H1 FY19 EPS

GROUP EPS ($c) +5%

+4% +4% (1%) (2%)

CONSTANT CURRENCY EPS Growth +7%


H1 FY19 Net Debt Bridge

H1 FY19 Net Debt/(Cash): $57m

FCF Conversion: 77%


Capital Allocation Priorities

Strong balance sheet to support

continued investment

priorities

Acquisitions in line with strategic priorities

Reinvestment to support continued sustainable

growth

Progressive shareholder returns policy


Acquisitions ($850m+) & Disposals ($625m+) since 2012

Do you have this logo?

Bethlehem site

Acquisitions 2012 2013 2014 2016 2017 2018

DisposedDisposed Disposed

2019


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%

Divisional Review:Ashfield


Communications & Advisory - H1 FY19 Financial Overview

44% % of Group H1 FY19 Group Operating Profit

• Underlying^ revenue increased by +6%

• Underlying^ operating profit was marginally down (including the impact of STEM aXcellerateinvestments of $2.3m)

• Net operating margins* declined to 19.5% (driven by STEM aXcellerateinvestments)

Operating profit ($m)

6m to 31st March 2019

H1 FY18 H1 FY19 % Change % Constant Currency

% UnderlyingGrowth

Net Revenue 136.7 154.5 +13% +16% +6%

Operating Profit 28.3 30.1 +6% +9% (1%)

Net OperatingMargin

20.7% 19.5% (120bps) - -

28.3 30.1

+9% CC ↗ ● H1 FY18 ● H1 FY19

^ 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.


Development of Ashfield

Data/Analytics

Digital

Face to Face

Payor

Patient

HCP


Commercial and Clinical - H1 FY19 Financial Overview

^ 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^ revenue declined by (1%)

• Underlying^ operating profit increased by +1% as expected reflecting continued good US momentum, offset by weakness in Europe

• Net operating margins* increased to 7.6%




% UnderlyingGrowth

Net Revenue 235.6 225.0 (5%) (1%) (1%)

Operating Profit 17.3 17.1 (1%) 1% 1%

Net OperatingMargin

7.4% 7.6% +20bps - -

17.3 17.1

● H1 FY18 ● H1 FY19

+1% CC ↗


Ashfield Commercial and Clinical US –Collaboration and Cross Selling

• Ashfield Commercial and Clinical US secured a large contract win in Q1 FY19

• 5 year contract with a “Big Pharma” company to provide a blended service of commercial, clinical, and call centre support

An integrated offering, which supports the Ashfield evolution strategy

Micromass provided behavioural training for the specialist staff in the field and in call centres

Vynamic acted as project manager to the client, and supported the transfer from the incumbent to Ashfield

Ashfield

EngagementSpecialists

Commercial

• Information• Access• Enquires

Clinical

• Medical Information

• Patient Support

37EngagementSpecialists

49One team

Commercial and Clinical US

Divisional Review:Sharp


US - H1 FY19 Financial Overview

^ Throughout this presentation, references to underlying growth are financial metrics adjusted for the impact of currency translation movements and any acquisition or disposal activity. * Includes Sharp Europe operating loss for H1 FY19.

.

31%*% of Group H1 FY19 Group Operating Profit


• Underlying^ operating profit increased by +23%

• Net operating margin increased to 15.7%.




% UnderlyingGrowth

Net Revenue 118.6 145.1 +22% +22% +22%

Operating Profit 18.4 22.7 +23% +23% +23%

Net OperatingMargin

15.5% 15.7% +20bps - -

18.4 22.7

+23% CC ↗● H1 FY18 ● H1 FY19


Europe - H1 FY19 Financial Overview

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



• Operating loss of $1.6m




% UnderlyingGrowth

Net Revenue 23.9 23.7 (1%) +5% +5%

Operating Profit 0.5 (1.6) - - -

Net OperatingMargin

2.1% (6.7%) - - -

● H1 FY18 ● H1 FY19

0.5

-1.6


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


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.


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)

Group Overview


UDG OverviewBusiness Market Divisional Outlook & Growth Drivers

5% Growth CAGR15% Outsourcing

3-8% Growth CAGR40-50% Outsourcing

6-8% Growth CAGR25% Outsourcing

6-8% Growth CAGR50% Outsourcing

Commercial & Clinical

$6bn

Comms & Advisory

$10bn

Commercial Packaging

$6bn

ClinicalServices

$7bn

Ashfield underlying

operating profit growth of

5-10%

Sharp underlying

operating profit growth of

>10%

Commercial & Clinical• Market growth supported by new

drug launches• Growth in outsourcing levels• Demand for innovative, multi-

channel offerings

Comms & Advisory• Specialty products increasing

demand for multichannel and digital communications

• Fragmented market, benefits for scale players

• Cross-selling opportunities

Sharp• Demand for secondary packaging

of injectable products

• Growth in outsourcing levels

Strong M&A track record

5-10% underlying operating

profit growth

M&AUnlevered

balance sheet

69%of H1 FY19 Operating Profit

31%of H1 FY19 Operating Profit


Business Overview & Outlook

A global leader in contract clinical, manufacturing, packaging and technology services

Clinical – A comprehensive integrated clinical trial supply and management service, from pre-clinical through to commercialisation.

Manufacturing – Clinical manufacturing services including analytical services, formulation development, over-encapsulation and placebo manufacture.

Packaging – Commercial packaging solutions in multiple formats including biotech, bottles, blisters, specialty and secondary packaging.

31%of H1 FY19Operating Profit

>10%Medium term operating profit growth outlook*

*Underlying growth

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

healthcare industries

Advisory – Healthcare advisory, strategic consulting, analytics andbenchmarking audit services.

Communications –Scientific and brand creative communications, digital and patient-centred capabilities, specialised agencies in behavioural science, rare disease, PR and on-demand advertising services.

Commercial & Clinical – Commercial and clinical services including salesreps, patient services, contact centres, medical affairs and meetings and events.

5-10%69%of H1 FY19Operating Profit

Medium term operating profit growth outlook*

Technology – Technology to support both commercial and clinical packaging services including design, serialisation solutions and clinical IRT.


Capabilities to support clients at all stages of the product life cycle

PHASE 1-3 PRELAUNCH LAUNCH IN MARKET

ADVISORY

HEALTHCARE COMMUNICATIONS

COMMERCIAL & CLINICAL

COMMERCIAL

CLINICAL


Our Vision & Strategy

Our strategy is to capitalise on the increasing trend among pharmaceutical, biotech and medtech companies to

outsource specialist and non-core activities on an international basis.

Transform through people

Talent & leadershipQuality & complianceValues based culture

Improve productivityCapital deploymentMargin expansion

Operational excellence

Grow & expand market leading positions

Geographic & services expansionClient focus & commercial excellence

Supplementary sources of growth

Our vision to improve the lives of patients around the world by partnering with

pharmaceutical clients and healthcare providers


Investment Proposition

Positive market dynamics with growing FDA

approvals and trend towards

increased outsourcing

Global presence and strong market

positions, diversified by geography, services and customers

Not directly linked to drug pricing, fee for service model

Clear medium term underlying operating profit growth guidance

Investments to support sustainable

growth

1 2 3 4 5 6

Strong balance sheet to support

M&A


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)

Divisional Overview


Ashfield Overview

69%

57.5

68.3 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


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 Communications –Market Overview

Competitive landscapeBroad range of peers including:

• Pureplay healthcare communications businesses (Hunstworth, Precision Health, Intouch Group, Syneos)

• Fragmented market of smaller independent agencies

• Advertising agencies (WPP, IPG, Havas, Omnicom)

Key Growth Drivers• Increasing outsourcing penetration

• Growth of specialty products leading to increased demand for multi-channel and digital comms

• Increasing number of molecules being developed and approved

• Migration to direct patient engagement

• Growth in orphan drug and rare diseases

Estimated Ashfield market share <5%

Outsourced Market size $7.3bn

Estimated market growth

rate 3-8%

Estimated outsourcing rate 40-45%

Margin profile 15%-25%


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


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

2019Strategic management healthcare consultancy


Ashfield Advisory – STEM aXcellerate


Background

STEM has the capacity to continue to grow its core pharmaceutical base and also expand into other related and unpenetrated healthcare verticals including medical devices and clinical trials.

Within STEM’s core biopharma market, the penetration rate in the UK for STEM is c. 40% while the average penetration rate across other key geographies is c. 13% (across US, EU5, China, Japan).

StrategyMaximize Biopharma market opportunity & pilot Medical Device and Clinical Trials market

Execution Add c. 50 incremental headcount to initially focus on the Biopharma market opportunity

Progress Head count ramp up on track, with majority of new headcount recruited in late 2018 / early 2019


Ashfield Advisory –Market Overview

Competitive landscape• Competitive landscape includes

large global pure-play consultancies (McKinsey, Accenture) in addition to niche healthcare consultancies


• Changing and increasingly complex therapies and launches

• Growing demand for data and informed research to improve decision marking

• Increasing number of molecules in development and positive FDA approval outlook

Estimated Ashfield market share <5%



rate 6-8%




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


Ashfield Commercial & Clinical –Market Overview

Competitive landscape• Competitive landscape includes

large players Syneos, IQVIA and TouchPoint

• In-country competitors varies by geographic market.

Key Growth Drivers• Significant potential for increased outsourcing,

offsetting a decline in the total number of sales reps

• Increasing demand for innovative models, multi-channel offerings

• Growth of specialty products leading to increased complexity and support requirements

• Increasing importance of patient adherence

Ashfield market share varies by geography



rate 5%

Estimated outsourcing

rate 15%



Ashfield - Acquisitions In Line With Strategy

Strategic Fit / Capabilities

People & Cultural Fit

ROCE 15%+ within 3 years

M&A REMAINS A KEY PRIORITY FOR THE GROUP:

Ashfield advisory

• Strategic consulting

• Brand consulting & advisory

• Market Access, Health Economics and Outcomes Research

• Patient, commercial & marketing audits

Ashfield communications

• Extension of communications capabilities incorporating:

– Scientific health comms– Commercial / Creative comms– Patient engagement & behaviour – Public relations– Digital, data & analytics solutions

Ashfield commercial & clinical

• Strengthen contract sales capabilities

• Extend clinical / nurse services

• Expand medical information and commercial call centres

ASHFIELD KEY FOCUS AREAS INCLUDE:


Sharp Overview

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

25.9

34.0

38.241.3

45.8


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 COUNTRIESBelgium, Netherlands

USA, UK

9 GMP & FDAApproved facilities


Sharp Commercial –Market Overview

Competitive landscapeCompetitors include:

• Large pure play Contract Packaging Organisations (CPO) such as PCI

• Contract Manufacturing Organisations (CMO)

• Smaller scale CPO’s

Key Growth Drivers• Significant potential for increased outsourcing

• Demand for secondary packaging of injectable products

• Increasing requirement to access specialist technology solutions and capabilities

• Client demand for strategic relationships from clinical services through to commercial services

Outsourced Market size $5-7bn


rate 6-8%

Estimated outsourcing rate c. 25%

Sharp market share US c. 12%, Europe <5%


Sharp Clinical –Market Overview

Competitive landscape• Large competitors include

ThermoFisher, Catalent and Almac


• Demand from emerging and mid-size pharma companies for end-to-end integrated services offerings

• Growth of digital solutions including IRT services and ‘Track and Trace’

Outsourced Market size $6-8bn


rate 6-8%


Sharp market share < 5%


Sharp –Acquisitions & Investments In Line With Strategy

Strategic Fit / Capabilities

People & Cultural Fit

ROCE 15%+ within 3 years

M&A REMAINS A KEY PRIORITY FOR THE GROUP:

Sharp commercial

• Continued investment in facilities and equipment to provide additional capacity

• Bolt on acquisitions of other commercial packaging businesses and facilities

• Expand niche manufacturing capabilities, focused on biotech / injectables / finished dose formulation

Sharp Clinical

• Expand clinical services offering to provide an integrated offering

• Focus on formulation development, analytical testing and manufacturing

• Expand geographical reach

SHARP KEY FOCUS AREAS INCLUDE:

Financial Appendix


Segmental Overview (IAS18)

6 months to March H1 FY19 Change

Net^ Revenue $m Op Profit* $m Net^ Margin Net^ RevenueNet^ Revenue

UnderlyingOp Profit*reported

Op Profit*Underlying

Net^ Margin

Ashfield $379.5 $47.2 12.4% 2% 1% 3% - +10bp

Sharp $168.8 $21.1 12.5% 18% 20% 12% 12% (80bp)

Total $548.3 $68.3 12.5% (4%) 6% 1% 3% +70bp

^ Adjusted for pass-through revenues. Pass through revenues of $110.5m in H1 FY19 and $106.6m in H1 FY18. *Operating profit before amortisation of acquired intangible assets, acquisition costs and exceptional items


Ashfield Segmental Summary (IAS18)

6 months to March H1 FY18 H1 FY18 H1 FY18 H1 FY19 H1 FY19 H1 FY19%

Change%

Change%

Change%

Change

Net^ Revenue $m Op Profit* $m Net^ MarginNet^ Revenue

$mOp Profit* $m

Net^ Margin

Net^ RevenueNet^ Revenue

Underlying Op Profit*

Op Profit* Underlying

Communications & Advisory

$136.7 $28.3 20.7% $154.5 $30.1 19.5% 13% 6% 6% (1%)

Commercial & Clinical

$235.6 $17.3 7.3% $225.0 $17.1 7.6% (5%) (1%) (1%) 1%

Total $372.3 $45.6 12.3% $379.5 $47.2 12.4% 2% 1% 3% -

^ Adjusted for pass-through revenues. Pass through revenues of $110.5m in H1 FY19 and $106.6m in H1 FY18. *Operating profit before amortisation of acquired intangible assets, acquisition costs and exceptional items


Sharp Segmental Summary (IAS18)

6 months to March H1 FY18 H1 FY18 H1 FY18 H1 FY19 H1 FY19 H1 FY19%

Change%

Change%

Change%

Change

Revenue $m Op Profit* $m Margin Revenue $mOp Profit*

$mMargin Revenue

RevenueUnderlying

Op Profit*Op Profit* Underlying

US $118.6 $18.4 15.5% $145.1 $22.7 15.6% 22% 22% 23% 23%

Europe $23.9 $0.5 2.1% $23.7 ($1.6) (6.7%) (1%) 5% - -

Total $142.5 $18.9 13.3% $168.8 $21.1 12.5% 18% 20% 12% 12%

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


Transition to IFRS 15 from IAS 18 –Background

• At 1 October 2018, the Group adopted the new revenue recognition

standard IFRS 15, which replaced IAS 18 Revenue, IAS 11 Construction

Contracts, and related interpretations.

• For the Group’s H1 FY19 and full year FY19 financial results, a meaningful

comparison of performance is only available under IAS 18. The reported

performance under IFRS 15 is misrepresentative, as there is no ‘like for like’

or directly comparable financials available for the prior year period to

compare against under IFRS 15. This comparison will only be available when

the Group reports under IFRS 15 for H1 FY20 and full year FY20 (when

comparative financials will be available from H1 FY19 and full year FY19).

• The Group does not anticipate there to be a significant impact on the

Group’s revenue when compared to the current accounting standards.

$m FY18 IAS18 FY19 IAS 18 IFRS 15 Adj FY19 IFRS 15

Net Revenue

Ashfield 372.3 379.4 1.1 380.5

Sharp 142.5 168.8 (3.2) 165.6

Group 514.8 548.2 (2.1) 546.1

Operating Profit

Ashfield 45.6 47.2 0.3 47.5

Sharp 18.9 21.2 (3.0) 18.2

Group 64.5 68.4 (2.7) 65.7

Operating Margins

Ashfield 12.2% 12.4% - 12.5%

Sharp 13.3% 12.6% - 11.0%

Group 12.5% 12.5% - 12.0%


Key performance indicators and non-IFRS performance measures

The Group reports certain financial measurements that are not required under International Financial Reporting Standards (IFRS) which represent the generally accepted accounting principles (GAAP) under which the Group reports. The Group believes that the presentation of these non-IFRS measurements provides useful supplemental information which, when viewed in conjunction with IFRS financial information, provides stakeholders with a more meaningful understanding of the underlying financial and operating performance of the Group and its divisions. These measurements are also used internally to evaluate the historical and planned future performance of the Group’s operations and to measure executive management’s performance based remuneration. None of the non-IFRS measurements should be considered as an alternative to financial measures derived in accordance with IFRS. The non-IFRS measurements can have limitations as analytical tools and should not be considered in isolation or as a substitute for an analysis of results as reported under IFRS.


Return on Capital Employed (ROCE) Calculation

CalculationIFRS15

H1 FY19$’000

IAS18H1 FY19

$’000H1 FY18

$’000

Net assetsNet debt

892,67556,781

891,06456,781

875,52446,597

Assets before net debtHistorical intangible amortisationHistorical restructuring costs

949,456197,173

25,714

947,845197,173

25,714

922,121201,525

93,655

Total Capital Employed 1,172,343 1,170,732 1,217,301

Average total capital employedAdjusted operating profit

1,194,822145,753

1,194,017148,443

1,069,862137,861

Return on Capital Employed 12.2% 12.4% 12.9%

ROCE is the adjusted operating profit expressed as a percentage of the Group’s net assets employed. Net assets employed is the average of the opening and closing net assets in the year excluding net debt adjusted for the historical amortisation of acquired intangible assets and restructuring charges.


Adjusted EBITDA Calculation

Calculation As per Preliminary StatementIFRS15

H1 FY19$’000

IAS18H1 FY19

$’000H1 FY18

$’000

Adjusted Operating Profit

Share-based payment expense

Depreciation

Amortisation of computer software

Joint venture profit share

(Profit)/loss on disposal of PPE

Income Statement

Cash Flow Statement

Cash Flow Statement

Note 9

Income Statement

Cash Flow Statement

65,602

2,521

11,764

3,657

418

(678)

68,292

2,521

11,764

3,657

418

(678)

67,355

2,563

12,028

2,615

(137)

(274)

Adjusted EBITDA 83,284 85,974 84,150

Adjusted EBITDA is continuing and discontinued earning before net interest, tax, depreciation, share-based payment expense, amortisation of intangible assets, transaction costs, exceptional items adjusted for the share of joint venture profits, dividends received from joint ventures, profit/(loss) on disposal of property, plant and equipment and impairment of intangible assets.

UDG HEALTHCARE PLC20 RiverwalkCitywest Business CampusCitywestDublin 24 Ireland

[email protected]+353 1 468 9000

UDG Healthcare plc FY19 Interim Results Presentation & Group Overview · 2020-02-14 · 2 : UDG...

Documents

Transcript of UDG Healthcare plc FY19 Interim Results Presentation & Group Overview · 2020-02-14 · 2 : UDG...