Quest Diagnostics Incorporated · NYSE:DGX
Quest Diagnostics — Investor Day (November 2014)
20 slides from Quest Diagnostics's investor day presentation, Nov 5, 2014
Slide 1: Our Path Forward
Our Path Forward Steve Rusckowski President and Chief Executive Officer November 5th, 2014
Slide 2: Safe Harbor Disclosure
| 2 Safe Harbor Disclosure The statements in this presentation which are not historical facts may be forward-looking statements. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date that they are made and which reflect management’s current
Slide 3: Empowering Better Health with Diagnostic Insights
| 3 Empowering Better Health with Diagnostic Insights
Slide 4: Delivering on Investor Day 2012 Commitments
| 4 Delivering on Investor Day 2012 Commitments DRIVE SIMPLIFY RESTORE REFOCUS DELIVER $700M RUN-RATE SAVINGS EXPECTED 1 UNIFIED TEAM 3 FEWER LAYERS ~3.5% EXPECTED GROWTH IN 2014 $800M RETURNED P R O C E E D S FROM ASSET S A L E S >$1B THROUGH SHARE REPURCHASES 7 ACQUISITIONS $1B SINCE 2011 & DIVIDE
Slide 5: Our New Team
| 5 Our New Team Steve Rusckowski President & CEO Jon Cohen MD SVP & Group Executive Diagnostic Solutions, Chief Medical Officer Everett Cunningham SVP Commercial Jim Davis SVP Operations Dermot Shorten VP Strategy & Ventures Tim Sharpe VP Compliance Gary Samuels VP Communications John Haydon VP Joi
Slide 6: Quest is the Clear Leader in a Fragmented Market
| 6 Quest is the Clear Leader in a Fragmented Market Total U.S. Lab Market “Outside the Hospital” Lab Segment Independent Lab Segment 10% DGX Hospital Outpatient Hospital Inpatient 39% Independent Labs 14% 35% Hospital Outreach POL 6% Other 6% 37% Small Independent Labs 26% 20% LCA Niche Labs 9% Tie
Slide 7: Market Drivers and Dynamics
| 7 • ACA Lives • Population • Demographics • Esoteric Utilization • Government and Commercial Reimbursement Pressure • Shifting from FFS to Bundled Payments • Growth in Exchanges and Medicaid Reimbursement • Hospital Consolidation • New Models / ACO • Changing Benefit Design • Preventive Care • Pri
Slide 8: The Market Outside the Hospital is Growing
| 8 The Market Outside the Hospital is Growing 3-4% 39% Independent Labs 14% 35% Hospital Outreach POL 6% Other 6% $46 BILLION Growing 3-4% DGX GROWING 4% Hospital Outreach GROWING 2-3% $25B Independent Labs
Slide 9: Quest is Well Positioned to Grow
| 9 Size & Scale High Value Provider Innovation & Insights Quest is Well Positioned to Grow
Slide 10: Unmatched Size and Scale Will Benefit Quest
| 10 Unmatched Size and Scale Will Benefit Quest SERVES IN >$7B REVENUE 50% OF HOSPITALS SERVES 1/3 OF THE U.S. ADULT POPULATION AND WITHIN ~50% 3 YEARS 2,000 PATIENT SERVICE CENTERS >200K Care360 PLACEMENTS >25 MAJOR TESTING SITES 3,500 COURIERS 10,000 PHLEBOTOMISTS, PARAMEDICS, & CONTRACT NURSES,
Slide 11: Greater Pricing Transparency Favors Quest as High-Value Provider
| 11 “Outrageous” blood work bill from Queen of the Valley hospital gives small biz owner pain in neck Greater Pricing Transparency Favors Quest as High-Value Provider Media Focus on Disparities in Healthcare Costs Quest Offers 2-5X Value vs. Hospital and Specialty Boutique Competitors Patients with
Slide 12: Innovation and Insights Enhance Customer Engagement
| 12 Innovation and Insights Enhance Customer Engagement 1st TO OFFER ONLINE ORDER ENTRY & RESULTING SYSTEM 1st TO OFFER PATIENT APPOINTMENT SCHEDULING 1st TO OFFER PATIENT MOBILE APPLICATION INTERACTIVE INSIGHTS PATIENT-PHYSICIAN COORDINATED INSIGHTS
Slide 13: Our Strategy
| 13 Our Strategy Refocus on Diagnostic Information Services 4 Simplify the Organization 3 Drive Operational Excellence 2 Restore Growth 1 Deliver Disciplined Capital Deployment 5 REFOCUS SIMPLIFY DRIVE RESTORE DELIVER
Slide 14: Restore Growth: Near Term Focus
| 14 Commercial Excellence Clinical-Based Focus to Grow Esoteric Testing Partnering with Hospitals Near Term Focus 1 RESTORE
Slide 15: Restore Growth: Longer Term Focus
| 15 Longer Term Focus 1 RESTORE Succeed Internationally Leverage Capabilities into Extended Care Settings Create Value from Information Assets Lead in Precision Medicine
Slide 16: Drive Operational Excellence
| 16 Superior Customer Experience Cost Excellence Drive Operational Excellence 2 DRIVE IN RUN RATE SAVINGS $1.3B THROUGH 2017
Slide 17: Simplify the Organization
| 17 Simplify the Organization 3 SIMPLIFY Continue to Strengthen Team Building a High Performance Culture
Slide 18: Refocus on Diagnostic Information Services
| 18 Refocus on Diagnostic Information Services 4 REFOCUS $800M in Proceeds from 4 Divestitures Sharp Focus on Core
Slide 19: Deliver Disciplined Capital Deployment
| 19 Deliver Disciplined Capital Deployment 5 DELIVER Returning Majority of Free Cash Flow to Shareholders Investing in the Business Value Creating M&A
Slide 20: Key Takeaways
| 20 Key Takeaways We did what we said we’d do Clearly focused on opportunities in our core diagnostic information services business Driving a superior customer experience and boosting efficiency Delivering disciplined capital deployment Well positioned to grow and continue to lead