Medpace Holdings, Inc. · NASDAQ:MEDP
Medpace — Baird 2016 Global Healthcare Conference
24 slides from Medpace's conference presentation, Sep 7, 2016
Slide 1: Baird 2016 Global Healthcare Conference
Baird 2016 Global Healthcare Conference September 7, 2016 August J. Troendle, MD President & CEO Jesse J. Geiger CFO & COO, Laboratory Operations
Slide 2: Disclaimer
Disclaimer This presentation does not constitute an offer or invitation for the sale or purchase of securities and has been prepared solely for informational purposes. This presentation contains forward looking statements within the meaning of the U.S. Priv ate Securities Litigation Reform Act of 19
Slide 3: Company Overview
Company Overview MEDPACE
Slide 4: Evolution of Medpace
Evolution of Medpace Global Expansion ¡ Began its global expansion initiative Focused on Therapeutic Expertise in 2004 ¡ Significant acceleration of Founded by August Troendle in ¡ Focused initially on its Cardiology, international footprint in recent years 1992 Endocrinology, and Metabolic Disease
Slide 5: The Medpace Way: Scientifically-Driven, Full-Service CRO
The Medpace Way: Scientifically-Driven, Full-Service CRO ü Disciplined and Integrated Full-Service Operating Model Full-service approach (avoids functional or partial outsourcing services) delivers timely, efficient, and high-quality results for our customers, enabling us ¡ to maintain robust margin
Slide 6: Consistently Utilizing our Disciplined and Integrated Full-Service Model
Disciplined and Integrated Full-Service Model Present Partner with Customer projects in from the Outset areas of our Consistently Utilizing our expertise SOPs and Systems Open to a full-service outsourcing Communicate Our model Expectations Identify the “Right” Escalate / Avoid Scope Customers Chang
Slide 7: High-Science Approach with Deep Therapeutic Expertise
High-Science Approach with Deep Therapeutic Expertise ¡ Entry into, and growth within, target areas Q2 2016 Backlog by Therapeutic Area hinges on team and training built around Q2 2016 Backlog:$466 million highly-qualified physician leads with strong Other (1) clinical, scientific, and regulatory ex
Slide 8: Diversified Customer Base
Diversified Customer Base o Customer Diversification § Largest customer accounted for 7% of FY2015 net service revenue; top ten customers accounted for 40% of FY2015 net service revenue o Focus on customers utilizing a full-service outsourcing model (more prevalent outside top 20 pharma) § These cus
Slide 9: High Growth and Attractive Customer Focus Given Industry Tailwinds
High Growth and Attractive Customer Focus Given Industry Tailwinds o Biopharmaceutical development expenditures are expected to grow from Estimated Medpace Small and Mid-Sized ~$100 billion in 2014 to ~$114 billion in 2019 (3% CAGR)(1) Biopharmaceutical Market Share(2)(3) o Small and mid-sized bioph
Slide 10: Global Platform with Scalable Infrastructure
Global Platform with Scalable Infrastructure Overview Clinical Operations Employee Breakdown by Geography(1) Asia/Pacific South America o Global, full-service CRO with requisite scale to support large, 4% and Africa 2% multi-national studies o Operations in 35 countries, 29 facilities in 25 countrie
Slide 11: Differentiated Model Drives Robust Growth and Margins
Differentiated Model Drives Robust Growth and Margins Drivers of Strong Growth Drivers of Robust Margins o Strong scientific expertise supported by dedicated o Disciplined operating model utilizes a selective medical monitors customer evaluation approach o Focus on higher-growth customers seeking to
Slide 12: Track Record of Strong Organic Growth
Track Record of Strong Organic Growth Historical Net Service Revenue ($ in millions) $350 $320 $300 $290 $244 $250 $200 $177 $150 $100 $50 - 2012 2013 2014 2015 Adjusted EBITDA 28.4% 35.0% 31.8% 31.6% Margin(1) (1) See appendix to this presentation for a definition and reconciliation of EBITDA and A
Slide 13: Robust Margins with Demonstrated Consistency
Robust Margins with Demonstrated Consistency o Consistently produced attractive Adjusted EBITDA margins since founding: § Key drivers are business mix and organically grown, full-service model (avoids functional or partial outsourcing services) o Maintained average Adjusted EBITDA margins in excess
Slide 14: Attractive Free Cash Flow Profile
Attractive Free Cash Flow Profile ($ in millions) $225 110% 120% 74% 75% $150 80% 67% 61% $109 $101 $94 $92 $85 $76 $69 $67 $75 40% $50 $34 $0 0% 2012 2013 2014 2015 LTM Q2 2016 (1) (2) (3) Adjusted EBITDA Free Cash Flow FCF Conversion Net Debt / Adj. 4.7x 1.7x 4.9x 3.7x 3.3x EBITDA Capital $4.8 $4.
Slide 15: Our Platform for Growth
Our Platform for Growth Our Organic Growth Opportunities Deepen Existing Customer Relationships ¡ Preserve unique operating philosophy Leverage Develop New Industry- ¡ Maintain disciplined full service model leading Customer Relationships Margin ¡ Strengthen and expand scientific expertise within Co
Slide 16: First Half 2016 Performance Update
First Half 2016 Performance Update Net Service Revenue Adjusted EBITDA and Adjusted EBITDA Margin(1) ($ in millions) ($ in millions) $200 $70 $180 $180 $60 $56 $160 $50 $48 $153 $140 $40 $120 $30 $100 $20 1H 2015 1H 2016 1H 2015 1H 2016 Adjusted EBITDA 31.7% 31.3% Margin(1) (1) See appendix to this
Slide 17: Net New Business Awards & Recognition Policy
Net New Business Awards & Recognition Policy Net New Business Awards (1) ($ in millions) $415 $360 $329 $292 $217 2012 2013 2014 2015 LTM 06/30/2016 o Award considerations for backlog recognition: § the project has a firm written commitment from the customer § the project has no pending customer fun
Slide 18: Net Book-to-Bill and Backlog Conversion Relationship
Net Book-to-Bill and Backlog Conversion Relationship Historical Net Book-to-Bill(1) Historical Backlog Conversion 1.40x 25% 19.7% 20.6% 18.7% 18.9% 1.30x 1.22x 20% 1.22x 1.24x 1.19x 1.20x 15% 1.17x 1.19x 1.10x 10% 12.1% 1.13x 1.12x 11.9% 11.8% 11.7% 1.00x 5% 2013 2014 2015 LTM Q2 2016 2013 2014 2015
Slide 19: Experienced Management Team
Experienced Management Team Industry Years at Executive Role Experience Medpace Previous Experience ¡ Founded Medpace in 1992 August J. Troendle, President 30 years 24 years ¡ Responsible for the clinical development of lipid altering agents for Sandoz (Novartis) MD Chief Executive Officer ¡ Medical
Slide 20: Investment Highlights
Investment Highlights 1 Disciplined and Integrated Full-Service Model 2 High-Science Approach with Deep Therapeutic Expertise 3 Attractive and Diversified Customer Base 4 Partner of Choice for Biopharmaceutical Customers 5 Global Platform with Scalable Infrastructure 6 Impressive Organic Growth Trac
Slide 21: Appendix
Appendix MEDPACE
Slide 22: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation ($ in millions) 2013 2014 2015 1H 2015 1H 2016 Net income (loss) as reported $ 24.8 $ (15.6) $ (8.7) $ 0.0 $ 8.4 Interest expense, net 18.0 26.5 27.3 14.0 11.9 Income tax provision (benefit) 14.3 (5.7) 0.8 (0.7) 5.7 Depreciation 6.7 6.4 6.4 3.1 3.6 Amortization 23.9 61
Slide 23: Free Cash Flow Reconciliation
Free Cash Flow Reconciliation ($ in millions) 2013 2014 2015 1H 2015 1H 2016 Cash flow from operating activities $ 98.1 $ 75.3 $ 84.1 $ 26.3 $ 20.0 Less: Capital expenditures (4.6) (5.3) (6.5) (2.7) (5.7) Less: Corporate campus lease payments—principal portion (a) - (1.4) (1.3) (0.6) (0.7) Free cash
Slide 24: Glossary
Glossary 1) Adjusted EBITDA is defined as EBITDA, adjusted to exclude non-cash liability-based stock awards, mark-to-market adjustments and CEO 2015 award only, private equity transaction-related cost, corporate campus lease payments, non-recurring litigation matters, goodwill impairment charges, an
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