Labcorp Holdings Inc. · NYSE:LH
Labcorp — Laboratory Corp of America Holdings — Credit Suisse Healthcare Conference 2015
21 slides from Labcorp's conference presentation, Nov 10, 2015
Slide 1: Credit Suisse Healthcare Conference, November 10, 2015
NOVEMBER 10, 2015 | PHOENIX, AZ CREDIT SUISSE HEALTHCARE CONFERENCE
Slide 2: Forward Looking Statement
1 FORWARD LOOKING STATEMENT Cautionary Statement Regarding Forward Looking Statements This presentation contains forward-looking statements including with respect to estimated 2015 guidance and the impact of various factors on operating results. Each of the forward-looking statements is subject to c
Slide 3: LabCorp Overview
2 • Provides diagnostic, drug development and knowledge services for >70 million patients per year • Leading national clinical laboratory – LabCorp Diagnostics • Leading Contract Research Organization (CRO) – Covance Drug Development • ~$8.5B revenue expected in 2015(1) • ~48,000 employees worldwide
Slide 4: LabCorp Diagnostics Overview
3 LABCORP DIAGNOSTICS OVERVIEW • ~$6.2B in expected revenue in 2015(1) • $60B US Clinical Laboratory market • >36,000 employees worldwide • National network of 37 primary laboratories and 1,750 patient service centers • Offers broad range of 4,500+ clinical, anatomic pathology, genetic and genomic t
Slide 5: Covance Drug Development Overview
4 Pro Forma Segment Financial Summary2 Constant Nine Months Ended Currency 9/30/2015 9/30/2014 Change Change Revenue 1,937$ 1,950$ -0.7% 3.4% Adj. O.I. 261$ 251$ 4.2% Adj. O.I. % 13.5% 12.8% 70 bps • ~$2.6B in expected revenue in 2015(1) • Serves $140B global biopharmaceutical R&D market • >12,500 e
Slide 6: History of Value Added Acquisitions
5 HISTORY OF VALUE ADDED ACQUISITIONS Target Acquisition Profile • Healthcare-related businesses that leverage our core competencies • Market leader • Strong management team • International presence • Accretive to earnings and cash flow in year 1 • Earn cost of capital by years 1 - 4
Slide 7: Historical Capital Allocation
6 HISTORICAL CAPITAL ALLOCATION Share Repurchase 50% $2.8 billion Capital Expenditures 15% Strategic Acquisitions 35% Approximately $5.6 billion in capital deployment between 2010 and 2014 $2.0 billion $0.8 billion
Slide 8: Long-Term Revenue Growth
7 LONG-TERM REVENUE(1) GROWTH (DOLLARS IN BILLIONS) $3.1 $3.3 $3.6 $4.1 $4.5 $4.7 $5.0 $5.5 $5.7 $6.0 $0.0 $1.0 $2.0 $3.0 $4.0 $5.0 $6.0 $7.0 $8.0 $9.0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 (1) 2004-2014 revenues excludes Covance results. 2008 revenue includes a $7.5 million adjustm
Slide 9: Long-Term Revenue Growth with 2015 Guidance
8 LONG-TERM REVENUE(1) GROWTH (DOLLARS IN BILLIONS) $3.1 $3.3 $3.6 $4.1 $4.5 $4.7 $5.0 $5.5 $5.7 $6.0 $0.0 $1.0 $2.0 $3.0 $4.0 $5.0 $6.0 $7.0 $8.0 $9.0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015e 2015 Guidance(2): ~41% Growth (1) 2004-2014 revenues excludes Covance results. 2008 rev
Slide 10: Long-Term Adjusted EPS Growth
9 LONG-TERM ADJUSTED EPS(1)(2) GROWTH $2.62 $3.01 $3.53 $4.45 $4.91 $5.24 $5.98 $6.82 $6.95 $0.00 $1.00 $2.00 $3.00 $4.00 $5.00 $6.00 $7.00 $8.00 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 $6.37 $6.80 (1) EPS, as presented, represents adjusted, non-GAAP financial measures (excludes amort
Slide 11: Long-Term Adjusted EPS Growth with 2015 Guidance
10 LONG-TERM ADJUSTED EPS(1)(2) GROWTH $2.62 $3.01 $3.53 $4.45 $4.91 $5.24 $5.98 $6.82 $6.95 $0.00 $1.00 $2.00 $3.00 $4.00 $5.00 $6.00 $7.00 $8.00 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015e $6.37 $6.80 (1) EPS, as presented, represents adjusted, non-GAAP financial measures (exclude
Slide 12: Free Cash Flow
11 FREE CASH FLOW(1) (DOLLARS IN MILLIONS) $443 $481 $516 $567 $624 $748 $758 $668 $617 $0 $100 $200 $300 $400 $500 $600 $700 $800 $900 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 $759 $536 (1) 2004-2014 figures exclude Covance results.
Slide 13: Free Cash Flow with 2015 Guidance
12 FREE CASH FLOW(1) (DOLLARS IN MILLIONS) $443 $481 $516 $567 $624 $748 $758 $668 $617 $0 $100 $200 $300 $400 $500 $600 $700 $800 $900 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015e $759 $536 (1) 2004-2014 figures exclude Covance results. (2) Includes $120 million of net non-recurring
Slide 14: Third Quarter Consolidated Results
13 THIRD QUARTER CONSOLIDATED RESULTS (DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA) (1) Adjusted Operating Income and Adjusted EPS exclude amortization, restructuring and special items (2) See reconciliation of non-GAAP financial measures in Appendix The following consolidated results include Covance
Slide 15: Third Quarter Pro Forma Segment Results
14 THIRD QUARTER PRO FORMA SEGMENT RESULTS (DOLLARS IN MILLIONS) (1) Adjusted Operating Income excludes amortization, restructuring and special items (2) See reconciliation of non-GAAP financial measures in Appendix Pro forma results assume that the acquisition of Covance closed on January 1, 2014 3
Slide 16: Credit Suisse Healthcare Conference, November 10, 2015
NOVEMBER 10, 2015 | PHOENIX, AZ CREDIT SUISSE HEALTHCARE CONFERENCE
Slide 17: Appendix
16 Appendix
Slide 18: Footnotes to Slides
17 FOOTNOTES TO SLIDES 9 AND 10 (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: $2.45 in 2004; $2.71 in 2005; $3.24 in 2006; $3.93 in 2007; $4.16 in
Slide 19: Reconciliation of Non-GAAP Financial Measures
18 RECONCILIATION OF NON-GAAP FINANCIAL MEASURES The following consolidated results include Covance as of February 19, 2015; prior to February 19, 2015, all consolidated results exclude Covance LABORATORY CORPORATION OF AMERICA HOLDINGS Reconciliation of Non-GAAP Financial Measures (in millions, exc
Slide 20: Reconciliation of Non-GAAP Financial Measures
19 RECONCILIATION OF NON-GAAP FINANCIAL MEASURES The following consolidated results include Covance as of February 19, 2015; prior to February 19, 2015, all consolidated results exclude Covance LABORATORY CORPORATION OF AMERICA HOLDINGS Reconciliation of Non-GAAP Financial Measures (in millions, exc
Slide 21: Restructuring and special items footnote
20 1) During the third quarter of 2015, the Company recorded net restructuring and special items of $26.4 million. The charges included $24.4 million in severance and other personnel costs along with $2.3 million in facility-related costs associated with facility closures and general integration ini
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