Iqvia Holdings, Inc. · NYSE:IQV
Iqvia — Quintiles — Baird's 2013 Health Care Conference
38 slides from Iqvia's conference presentation, Sep 10, 2013
Slide 1: Baird's 2013 Health Care Conference
Baird’s 2013 Health Care Conference September 10, 2013 NYSE: Q Copyright © 2013 Quintiles
Slide 2: Forward-Looking Statements and Use of Non-GAAP Financial Measures
Forward-Looking Statements and Use of Non-GAAP Financial Measures This presentation contains forward-looking statements that reflect, among other things, the Company’s current expectations and anticipated results of operations, all of which are subject to known and unknown risks, uncertainties and o
Slide 3: Quintiles
Quintiles Leader in BioPharma Services Serve an attractive and growing market Deep customer relationships with history of innovative partnerships Clear competitive advantages across the value chain Geographically diversified revenue base Market leader in Product Development services IH
Slide 4: Strong Financial Track Record
Strong Financial Track Record S T R O N G P & L R E S U LT S OTHER HIGHLIGHTS 11% Adjusted Service Revenues $9.0bn Total Backlog at 6/30/13 CAGR from ’10 – ‘12 Net New Business (NNB) last 14% Adjusted Net Income(1) CAGR from ’10 – ’12 (BEST IN CLASS) $4.8bn four quarters with each quarter exceeding
Slide 5: Consistent Revenue and EBITDA Gains Driven by Growing Demand
Consistent Revenue and EBITDA Gains Driven by Growing Demand Adjusted Service Revenues(1) Adjusted EBITDA(3) ’10 – ’12 CAGR = 11.0% ’10 – ’12 CAGR = 8.4% 4,000 600 $3,692 $544 $3,295 $490 $2,997 500 $463 3,000 400 $ Millions $ Millions $1,872 $292 2,000 300 200 1,000 100 0 (2) 0 (2) 2010 2011 2012 2
Slide 6: Segment Performance
Segment Performance Six Months Ended June 30, 2013 FINANCIAL P & L R E S U LT S HIGHLIGHTS Service Revenues $2.3bn Net New Business 2,000 $1,833 $1,872 16% year on year growth $ Millions $484 $441 1,500 1,000 1.21x Book-to-bill ratio $1,349 $1,431 500 90 bps Adjusted Income from Operations 0 margin(
Slide 7: Executing Our Vision & Strategy
Executing Our Vision & Strategy “Foot in Today, Foot in Tomorrow” Our Strategic Quintiles We bring people and knowledge together for Agenda Vision a healthier world. Profitable growth at above market rates Biopharma Product Integrated Healthcare Services Lead with investments that Development Other
Slide 8: Broad Service Offering
Broad Service Offering Best In Class Therapeutic and Commercial Expertise Across the Value Chain Product Development Approval Phase Healthcare Phase I Phase II Phase III Commercial IV Delivery Product Development Services Integrated Healthcare Services (“IHS”) (89% of Operating Profit) (11% of Opera
Slide 9: Deep Customer Relationships
Deep Customer Relationships Largest Backlog in Industry Providing Consistency, Sustainability and Diversity Worked with all top 20 biopharma companies in each of last 10 years All of our top 25 key customers worked with both Quintiles segments: PD and IHS $100mm+ service revenues from at least 8 cus
Slide 10: Differentiated from the Others
Differentiated from the Others Global Reach, Therapeutic Expertise, Technology & Informatics Global Reach Deepest Therapeutic Expertise 27,000 Employees 850 PhDs, 800 Medical Doctors 100 Countries Greater than 20 Prime sites and 1,200 Partner sites Development or Commercialization of top 50 Drugs Ov
Slide 11: Innovation, Thought Leadership, and Reputation
Innovation, Thought Leadership, and Reputation 2012 SCRIP CRO of the Year Innovation Thought Leadership Leader in Risk-Based Monitoring and global resourcing Good ReseArch for Comparative Effectiveness Principles Integration of biomarkers and genomics in trials Agency for Healthcare Research and Qua
Slide 12: Attractive Markets for Quintiles
Attractive Markets for Quintiles $91bn Product Development $88bn(1) Relevant Expenditures on Market/$49bn(1) Addressable (2012) Approved Drugs (2012) Estimated Growth of 5 - 8% per year Biopharma Industry Evolving from 2012 - 2015 Addressable (Phase I-IV Clinical)(1) $49bn Outsourced Outsourced (Pha
Slide 13: Strategy Drives Growth, Margin Improvement and Quality
Strategy Drives Growth, Margin Improvement and Quality Growth • Dedicated customer relationship teams translate customer needs to Quintiles solutions • World class sales organization driving proposals and pricing • Targeted segment solutions for high growth markets • Commitment to managed innovation
Slide 14: Product Development at a Glance
Product Development at a Glance Unmatched Breadth of Capabilities and Expertise Biopharma Development Customers • Market leader in Product Development services Ph - I Ph - II Ph - III Ph-IIIB & IV #1 in Clinical Development #2 in Central Lab Product Development Services • $2.7bn in Service Project M
Slide 15: Industry Outsourcing Trends Continue to Favor Product Development
The Industry’s Outsourcing Overall Trends Strategic Continue to Favor Direction Our Productis Development Indisputable Segment The pharmaceutical industry will continue to decrease fixed costs and infrastructure through pervasive outsourcing Source: ISR Reports 2012 15
Slide 16: Quintiles Differentiated Product Offering
Quintiles Differentiated Product Offering Leveraging Capabilities to Deliver Value and Efficiency Ranked #1 by customers in Leadership and Differentiation(1) • 13 Therapeutic Centers of Excellence (CoE) • Biomarker, genomics, and personalized Science Clinical medicine capabilities Dev. • Center for
Slide 17: Product Development Demand is Strong
Product Development Demand is Strong Dedicated customer relationship teams translate customer needs to Quintiles solutions Net New Business Wins ($ mm) • 22% year over year growth in Net New 2,000 Business • Increased RFP volume • Evolution of new partnership models • Strong wins with both large pha
Slide 18: IHS at a Glance
IHS at a Glance Attractive offerings for an evolving market Quintiles’ Offerings Integrated Healthcare Services Commercial Services: • Contract Sales • Market Entry / Market Exit • Integrated Channel Management • Patient Engagement Services • Market Access & Commercialization Consulting • Brand & Sc
Slide 19: Commercial Evolution
Commercial Evolution Traditional: ‘Linear’ Model New: ‘Interconnected’ Turning Evidence Into Value Evidence-Based Medicine Model Physician / Population Payer Hospital Outcomes Deliver Improve Patient(s) Quality Outcome to Reduce Costs Pharma Develop Better Medicines We are well positioned to meet cu
Slide 20: Global & Industry Dynamics Favor Quintiles
Global & Industry Dynamics Favor Quintiles Consistent Leader & Track Record Additional Opportunities in IHS Focus on late stage trials Customer preference for Increased CRO larger CROs share of R&D spend Stabilizing R&D spend Attractive… Sustainable… Consistent Leadership… $9.0bn in backlog as of Q2
Slide 21: Appendix
Appendix 21
Slide 22: Service Revenues Reconciliation
Service Revenues Reconciliation Service Revenues Reconciliation Year Ended December 31 (In Thousands) 2012 2011 2010 2009 2008 Non-GAAP Adjusted Service Revenues: GAAP Service Revenues as Reported $3,692,298 $3,294,966 $3,060,950 $3,010,793 $2,875,595 Deconsolidation of PharmaBio – – (64,198) (87,00
Slide 23: EBITDA Reconciliation
EBITDA Reconciliation EBITDA Reconciliation Year Ended December 31 (In Thousands) 2012 2011 2010 2009 2008 Non-GAAP Adjusted EBITDA: GAAP Net Income as Reported $176,631 $240,327 $165,255 $209,578 $35,295 Interest Expense, Net 131,304 105,126 137,631 106,037 135,432 Income Tax Expense 93,364 15,105
Slide 24: Net Income Reconciliation
Net Income Reconciliation Net Income Reconciliation Year Ended December 31 (In Thousands) 2012 2011 2010 2009 2008 Non-GAAP Adjusted Net Income: GAAP Net Income as Reported $176,631 $240,327 $165,255 $209,578 $35,295 Net (Income) Loss Attributable to Noncontrolling Interests 915 1,445 (4,659) 485 (1
Slide 25: Second Quarter 2013 Earnings Call
Second Quarter 2013 Earnings Call August 1, 2013 Copyright © 2013 Quintiles
Slide 26: Second Quarter 2013 Overview
Second Quarter 2013 Overview Continue to execute on strategy •Our strategy and diversity of our business continue to differentiate Quintiles •Operational delivery excellence will enable us to drive profitable growth • We are focused on bringing a strong value proposition to our customers New busin
Slide 27: Financial Statement Highlights and Other Metrics
Financial Statement Highlights and Other Metrics Three Months Ended June 30 Six Months Ended June 30 (millions of dollars) 2013 2012 % Change 2013 2012 % Change Net New Business $ 1,014.0 $ 900.0 13.0% $ 2,259.0 $ 1,952.0 16.0% Service Revenues $ 944.2 $ 944.9 -0.1% $ 1,871.7 $ 1,832.9 2.1% Adjusted
Slide 28: Segment Performance
Segment Performance Service Revenues and Income from Operations Product Development Integrated Healthcare Services $724.2 $692.1 800 Three Months Ended 450 $ Millions $ Millions 600 375 June 30 $220.0 $252.8 300 400 225 $136.1 $119.2 150 $12.5 $20.2 200 75 0 0 2013 2012 2013 2012 Actual Growth 4.6%
Slide 29: 2013 Guidance
2013 Guidance Service Revenues range of $3.76 billion to $3.81billion • 3.8% to 5.2% year over year constant currency growth Diluted Adjusted Earnings per share range of $1.95 to $2.05 • 10.2% to 15.8% year over year growth range at forecasted rates Annual Effective Income Tax Rate in the range of 3
Slide 30: Summary
Summary 1• Strong half year performance 16% net new business growth 4.2% constant currency service revenues growth 11.6% growth in adjusted net income 2• Continue to execute operational Increase market penetration with profitable strategy growth Leverage scientific knowledge and clinical e
Slide 31: Supplemental Information
Supplemental Information Constant Currency Reconciliation Contractual Revenue Currency Mix and Foreign Exchange Analysis Income Statement Non-GAAP Reconciliation Adjusted Net Income and EPS Reconciliation Adjusted EBITDA Reconciliation Non-GAAP 2013 Guidance Reconciliation 31
Slide 32: Constant Currency Reconciliation
Constant Currency Reconciliation Service Revenues and Income from Operations (millions of dollars) Three Months Ended June 30, 2013 Year on Year Growth Exchange Exchange Consolidated Actual Impact Constant Actual Impact Constant Service Revenues $ 944.2 $ (21.8) $ 966.0 -0.1% -2.3% 2.2% Income from
Slide 33: Contractual Revenue Currency Mix and Foreign Exchange Analysis
Contractual Revenue Currency Mix and Foreign Exchange Analysis Consolidated Service Revenues (millions of dollars) 1 USD Sterling Euro Yen Other Total 2Q '13 $582.7 $65.1 $161.5 $96.7 $38.3 $944.2 % of total 62% 7% 17% 10% 4% 100% 2Q '12 $577.3 $86.4 $164.6 $116.6 $0.0 $944.9 % of total 61% 9% 17% 1
Slide 34: GAAP – Non-GAAP Reconciliation
Income Statement GAAP – Non-GAAP Reconciliation Selling, Income Net Income Three Months Ended June 30, 2013 General and from Attributable (millions of dollars) Administrative Operations to Quintiles As Reported $ 228.8 $ 94.9 $ 38.5 Adjustments Restructuring Costs - 2.8 2.8 Management Fees (26.4) 26
Slide 35: GAAP – Non-GAAP Reconciliation
Income Statement GAAP – Non-GAAP Reconciliation Selling, Income Net Income Six Months Ended June 30, 2013 General and from Attributable (millions of dollars) Administrative Operations to Quintiles As Reported $ 428.1 $ 210.1 $ 86.8 Adjustments Restructuring Costs - 4.7 4.7 Management Fees (27.7) 27.
Slide 36: Reconciliation of Net Income to Non-GAAP Adjusted Net Income and Diluted Adjusted EPS
Reconciliation of Net Income Attributable to Quintiles to Non-GAAP Adjusted Net Income and Diluted Adjusted EPS Three Months Ended June 30 Six Months Ended June 30 (millions of dollars) 2013 2012 2013 2012 1 1 1 1 EPS EPS EPS EPS Net Income Attributable to Quintiles $ 38.5 $ 0.30 1 $ 47.2 $ 0.40 $ 8
Slide 37: Reconciliation of Net Income to Non-GAAP Adjusted EBITDA
Reconciliation of Net Income Attributable to Quintiles to Non-GAAP Adjusted EBITDA Three Months Ended June 30 Six Months Ended June 30 (millions of dollars) 2013 2012 2013 2012 Net Income Attributable to Quintiles $ 38.5 $ 47.2 $ 86.8 $ 90.5 Income from Noncontrolling Interests (0.1) (0.2) (0.3) (0.
Slide 38: Non-GAAP 2013 Guidance Reconciliation
Non-GAAP 2013 Guidance Reconciliation Non-GAAP Adjusted Diluted Adjusted Net Income Earnings Per Share (millions of dollars) Low High Low High Net income attributable to Quintiles $208 - $220 $1.63 - $1.73 Restructuring costs 15 - 15 0.12 - 0.12 Management fees 28 - 28 0.22 - 0.22 Loss on extinguish