Labcorp Holdings Inc. · NYSE:LH
Labcorp — Laboratory Corp of America Holdings — J.P. Morgan Healthcare Conference 2018
33 slides from Labcorp's conference presentation, Jan 9, 2018
Slide 1: J.P. Morgan Healthcare Conference, January 9, 2018
J.P. MORGAN HEALTHCARE CONFERENCE JANUARY 9, 2018 | SAN FRANCISCO, CA
Slide 2: Forward Looking Statement
1 FORWARD LOOKING STATEMENT Cautionary Statement Regarding Forward Looking Statements This presentation contains forward-looking statements, including statements about the Company’s performance against strategic objectives and the impact of various factors on operating and financial results. Each of
Slide 3: Agenda
2 AGENDA Company Overview 2018 Priorities Long-term Strategic Initiatives Financial Strength
Slide 4: Who We Are
3 WHO WE ARE Our Mission is to improve health and improve lives LabCorp is a leading global life sciences company that is deeply integrated in guiding patient care Our Strategic Objectives are to: Deliver World-Class Diagnostics Bring Innovative Medicines to Patients Faster Use Technology to Improve
Slide 5: LabCorp Overview
4 LABCORP OVERVIEW • Provides diagnostic, drug development and technology-enabled products and solutions for ~120 million patient encounters per year • Operates in two segments – Diagnostics and Drug Development • >57,000 mission-driven employees worldwide • Proprietary data sets with >30 billion la
Slide 6: LabCorp Diagnostics Segment Overview
5 LABCORP DIAGNOSTICS SEGMENT OVERVIEW • ~$7.2B revenue in 2017(1) • Offers broad range of clinical, anatomic pathology, genetic and genomic tests • Processes >2.5 million patient specimens per week • Vast patient database – roughly 50% of U.S. population • Significant patient access points, with ~1
Slide 7: Covance Drug Development Overview
6 COVANCE DRUG DEVELOPMENT OVERVIEW • ~$3.0B revenue in 2017(1) • Market leader in early development, central laboratory, and Phase I-IV clinical trial management services • Xcellerate® includes one of the world’s most comprehensive investigator performance databases • Collaborated on 86% of the 22
Slide 8: Attractive Customer Mix and Geographic Presence
7 29% 23% 11% 32% 3% 3% (2) 29% 23% 11% 32% 3%3% Pharma & Biotech Other Payers Medicare & Medicaid Managed Care (Fee for Service) Patient Managed Care (Capitated) (2) Attractive Customer Mix and Geographic Presence(1) EXPANDED REVENUE BASE 1. Based on nine months ended September 30, 2017, which incl
Slide 9: Agenda
8 AGENDA Company Overview 2018 Priorities Long-term Strategic Initiatives Financial Strength
Slide 10: Our 2018 Priorities
9 OUR 2018 PRIORITIES Drive Profitable Growth Optimize Enterprise Margins Integrate Key Acquisitions
Slide 11: Driving Profitable Growth
10 1. Based on nine months ended September 30. 2. Includes $1.0 billion from acquisition of Chiltern. DRIVING PROFITABLE GROWTH Diagnostics: Capitalize on Growth Opportunities • Health systems, large physician groups and managed care partnerships • Expand 23andMe collaboration • Mitigate pricing imp
Slide 12: Integrating Key Acquisitions
11 • Generates approximately $500 million in profitable revenue growth in 2018 • Successful “Best of the Best” approach to selecting and retaining talent • Dedicated and experienced integration teams, focused on customer retention and synergies Maximize Value Through Flawless Integration INTEGRATING
Slide 13: Optimizing Enterprise Margins
12 OPTIMIZING ENTERPRISE MARGINS Continue Value Creation Through the LaunchPad Business Process Improvement Initiative Covance LaunchPad • Applying LaunchPad principles to Drug Development • Rightsizing implemented in mid-2017; $25 million in incremental savings in 2018 • Multi-year initiative, deta
Slide 14: Agenda
13 AGENDA Company Overview 2018 Priorities Long-term Strategic Initiatives Financial Strength
Slide 15: Healthcare Is Undergoing a Period of Unprecedented Change
14 Transition to Value-Based Care Enhance Drug Development Process Role of the Consumer HEALTHCARE IS UNDERGOING A PERIOD OF UNPRECEDENTED CHANGE • Improving efficiency in care delivery • Reducing the overall cost of patient care • Utilizing advanced tools and analytics to deliver better outcomes vi
Slide 16: Expanding LabCorp's Role in the Healthcare System of the Future
15 EXPANDING LABCORP’S ROLE IN THE HEALTHCARE SYSTEM OF THE FUTURE • National access • Comprehensive test menu • Extensive sales and service organization • Scientific innovation • Cost advantages through economies of scale Clinical Decision Support • Programs for key disease states • Lab reports inc
Slide 17: Expanding LabCorp's Role: Streamlining Clinical Studies
16 EXPANDING LABCORP’S ROLE IN THE HEALTHCARE SYSTEM OF THE FUTURE • Xcellerate® suite of informatics • Companion diagnostics leadership • Differentiated and growing patient and investigator database • Insight through patient engagement • Dedicated biotech offering through combination of Covance and
Slide 18: Increasing Leadership in Companion and Complementary Diagnostics
17 On pace to significantly exceed $100 million in cumulative new CDx-related revenue from the acquisition of Covance through 2018 • Dedicated CDx organization with capabilities across development, validation, testing, regulatory support, commercialization and market access • Opened purpose built, s
Slide 19: LabCorp Data as Key Competitive Advantage
18 LabCorp Data is a Key Competitive Advantage for Patient Recruitment, Site Selection and Protocol Design EXPANDING LABCORP’S ROLE IN THE HEALTHCARE SYSTEM OF THE FUTURE LabCorp Diagnostics Patient Data • Our patient data is identifiable • Represents the “real world” • Billions of data points • Lab
Slide 20: Incorporating Patient Intelligence into Clinical Research
19 EXPANDING LABCORP’S ROLE IN THE HEALTHCARE SYSTEM OF THE FUTURE Incorporating Patient Intelligence into Clinical Research and Drug Development • Powered by survey responses from patients that want to be contacted about clinical trials • Supported by LabCorp patient flow and increased emphasis on
Slide 21: Developing a Broad Consumer Platform
20 EXPANDING LABCORP’S ROLE IN THE HEALTHCARE SYSTEM OF THE FUTURE Developing a Broad Consumer Platform to Create Deep Relationships • Organizing around the empowered consumer • Creating a convenient, seamless experience • Providing easy access to lab test results and personalized content • Offering
Slide 22: Bringing our High-Quality Offering to Consumers
21 EXPANDING LABCORP’S ROLE IN THE HEALTHCARE SYSTEM OF THE FUTURE • Patient Service Centers opened inside Walgreens stores • Strong patient volume, net promoter scores, and patient feedback • Start to roll out to new markets in 2018 • Launch new at-home, self-collection offering built on LabCorp’s
Slide 23: Differentiated Solutions Are Resonating With Customers
22 2016 >$200 million 2017 ~$500 million OUR DIFFERENTIATED SOLUTIONS ARE RESONATING WITH CUSTOMERS Value-Based Care Solutions Streamlining Clinical Studies Consumer Platform Completed 3 marquee transactions in 2017 Cumulative new orders won through the combination of LabCorp patient data and Covanc
Slide 24: Agenda
23 AGENDA Company Overview 2018 Priorities Long-term Strategic Initiatives Financial Strength
Slide 25: Revenue Growth
24 $4.1 $4.5 $4.7 $5.0 $5.5 $5.7 $5.8 $6.0 $0.0 $2.0 $4.0 $6.0 $8.0 $10.0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 $8.5 $9.4 $10.2 $6.2 $6.6 $7.2 REVENUE(1) GROWTH (DOLLARS IN BILLIONS) (1) 2007-2014 revenues excludes Covance results. 2008 revenue includes a $7.5 million adjustment rel
Slide 26: Adjusted EPS Growth
25 ADJUSTED EPS(1)(2) GROWTH (1) EPS, as presented, represents adjusted, non-GAAP financial measures (excludes amortization, restructuring and other special charges). Diluted EPS, as reported in the Company’s Annual Report were: $3.93 in 2007; $4.16 in 2008; $4.98 in 2009; $5.29 in 2010; $5.11 in 20
Slide 27: Strong Free Cash Flow
26 STRONG FREE CASH FLOW(1) (DOLLARS IN MILLIONS) (1) Free Cash Flow represents Operating Cash Flow less Capital Expenditures in each of the years presented. 2008-2014 figures exclude Covance results, and other items discussed in the Appendix. (2) Guidance issued on October 25, 2017. 10 Year Average
Slide 28: Track Record of Effective and Balanced Capital Deployment
27 TRACK RECORD OF EFFECTIVE AND BALANCED CAPITAL DEPLOYMENT TO BUILD SHAREHOLDER VALUE Approximately $2.3 Billion in Capital Deployment in 2017(1) Chiltern Acquisition $1.2 Billion (52%) LabCorp Diagnostics Acquisitions $0.6 Billion (26%) 1. Based on nine months ended September 30, 2017. 2018 Free
Slide 29: Key Takeaways
28 KEY TAKEAWAYS Global leader in life sciences with leading diagnostics and drug development businesses strategically positioned to improve health and lives Relentless focus on execution in 2018 Driving long-term growth through innovation in value-based care, the drug development process, and our c
Slide 30: J.P. Morgan Healthcare Conference, January 9, 2018
J.P. MORGAN HEALTHCARE CONFERENCE JANUARY 9, 2018 | SAN FRANCISCO, CA
Slide 31: Appendix
30 Appendix
Slide 32: Footnotes to Adjusted EPS Growth Slide
31 FOOTNOTES TO “ADJUSTED EPS GROWTH” SLIDE 1) EPS, as presented, represents adjusted, non-GAAP financial measures (excludes amortization, restructuring and other special charges). Diluted EPS, as reported in the Company’s Annual Report were: $3.24 in 2006; $3.93 in 2007; $4.16 in 2008; $4.98 in 200
Slide 33: Footnotes to Strong Free Cash Flow Slide
32 FOOTNOTES TO “STRONG FREE CASH FLOW” SLIDE(1) (1) 2007-2014 figures exclude Covance results. (2) Operating Cash Flow and Free Cash Flow in 2011 exclude the $49.5 million Hunter Labs settlement. LABORATORY CORPORATION OF AMERICA HOLDINGS Reconciliation of Non-GAAP Financial Measures (in millions)
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