Iqvia Holdings, Inc. · NYSE:IQV
Iqvia — QuintilesIMS — Q3 2016 Earnings Presentation
39 slides from Iqvia's earnings presentation, Nov 2, 2016
Slide 1: QuintilesIMS Q3 2016 Earnings Call
QuintilesIMS Q3 2016 Earnings Call November 2, 2016 Copyright © 2016 QuintilesIMS. All rights reserved.
Slide 2: Legal
Legal This presentation should be viewed in conjunction with QuintilesIMS’s Q3 2016 earnings call Safe Harbor Statement This presentation includes “forward-looking statements”, including statements regarding future financial and operating results, especially those set forth under the heading “Q4 201
Slide 3: Update: Merger and Integration
Update: Merger and Integration New Company • Merger closed October 3rd, 2016 Flexible Capital • 3.7x leverage ratio, strong balance sheet Structure Share Repurchase • $1.5 billion, expected by end of 2017 Authorization Cost Synergies • $100 million to $200 million run-rate annual exiting 20191 Raise
Slide 4: 3rd Quarter Results
3rd Quarter Results Service Revenue ($M) Revenue ($M) +7.5% @ AFx +3.9% @ AFx +6.8% @ CFx +3.6% @ CFx $791 $1,136 $1,094 $735 Q3 2016 Q3 2015 Q3 2016 Q3 2015 Dollars are at actual foreign exchange rates 3 Growth rates at actual (AFx) and constant (CFx) currency
Slide 5: 3rd Quarter Revenue
3rd Quarter Revenue Standalone Offering 3rd Quarter Versus Prior Year Constant ($ millions) 2016 2015 Reported Currency Information $381 $373 2.1% 0.9% Technology Services $410 $362 13.0% 12.9% Total $791 $735 7.5% 6.8% Dollars are at actual foreign exchange rates 4
Slide 6: 3rd Quarter Earnings
3rd Quarter Earnings Standalone 3rd Quarter Versus Prior Year ($ millions, except per share data) Constant 2016 2015 Reported Currency Adjusted EBITDA1 $238 $218 9.0% 5.0% Net Income $54 $43 24.5% 6.5% Diluted EPS $0.16 $0.13 24.8% 6.7% Adjusted Net Income1 $132 $129 2.2% 4.7% Adjusted Diluted EPS1
Slide 7: New Research & Development Solutions Operating Metrics
New Research & Development Solutions Operating Metrics • R&D Solutions is a long-cycle business over multiple years Backlog Metrics - R&D Only • Commercial and Integrated Engagement Services are shorter cycle businesses • More conservative, more accurate, less cancelations Backlog - • Better alignme
Slide 8: 3rd Quarter Results
3rd Quarter Results Standalone Revenue ($M) Adjusted Diluted EPS ($) +3.9% @ AFx +6.4% @ AFx +3.6% @ CFx $1,136 $1,094 $1.00 $0.94 Q3 2016 Q3 2015 Q3 2016 Q3 2015 Dollars are at actual foreign exchange rates 7 Growth rates at actual (AFx) and constant (CFx) currency Adjusted Diluted EPS calculation
Slide 9: Net New Business and Backlog on a Contracted Basis
Net New Business and Backlog on a Contracted Basis Standalone Last Twelve Months As of 9/30/16 Next Twelve Months ($ billions) Net New Book-to- Backlog Backlog Estimated to Backlog Business Bill Coverage1 Convert to Revenue Product $4.4 1.29 2.7x $9.4 ~$2.7 Development Dollars are at actual foreign
Slide 10: 3rd Quarter Income
3rd Quarter Income Standalone Versus 3rd Quarter ($ millions, except per share data) Prior Year 2016 2015 Reported Income from Operations $168 $167 0.4% Adjusted Income from Operations1 $199 $179 11.2% Net Income Attributable to Quintiles $99 $111 (10.9)% Diluted EPS $0.82 $0.89 (7.9)% Adjusted Net
Slide 11: 3rd Quarter Segment Performance
3rd Quarter Segment Performance Standalone Segment 3rd Quarter Versus Prior Year Constant ($ millions) 2016 2015 Reported Currency Product Development Service Revenue $874 $810 7.9% 8.6% Income From Operations $207 $181 14.1% 11.7% Operating Margin 23.7% 22.4% 130 bps 60 bps Integrated Healthcare Se
Slide 12: New Capital Structure
New Capital Structure Debt Maturity Ladder ($M) 2500 2000 Revolver 4.875% USD Notes & 1500 4.125% EUR Notes 5% USD TLB 3.5% EUR Notes 1000 Receivables & Notes Term Term Loans TLA 500 Term Term Loans Loans Loans 0 2016 2017 2018 2019 2020 2021 2022 2023 2024 2026 Metrics Quintiles IMS QuintilesIMS To
Slide 13: New Segments
New Segments New Segments Commercial Solutions • Substantially IMS legacy businesses plus Quintiles legacy Real World Late Phase, Payer/Provider and Advisory businesses Research & Development Solutions • Substantially Quintiles legacy Product Development segment Integrated Engagement Services • Subs
Slide 14: Non-GAAP Metrics
Non-GAAP Metrics Net Income to Adjusted EBITDA & Net Income Net Income to Adjusted Net Income Net Income Net Income Provision for (benefit from) income taxes Provision for (benefit from) income taxes (Income) loss in unconsolidated affiliates (Income) loss in unconsolidated affiliates (Income) loss
Slide 15: 4th Quarter 2016 Revenue Guidance
4th Quarter 2016 Revenue Guidance Segment Revenue ($ millions) Reported QuintilesIMS Revenue at Previous Guided FX Rates $2,030 - $2,070 Deferred Revenue Adjustment1 ~$(60) Foreign Exchange Impact2 ~$(20) QuintilesIMS Revenue Including Deferred Revenue $1,950 - $1,990 Adjustment and Current FX3 Comm
Slide 16: 4th Quarter 2016 Guidance
4th Quarter 2016 Guidance ($ millions, Reported except per share data) Adjusted EBITDA1 $500 - $515 Adjusted Diluted EPS1 $1.04 - $1.08 Adjusted Book Tax Rate1,2 30% - 32% Adjusted Cash Tax Rate1,2 11% - 13% Dollars are at actual foreign exchange rates, revenue guidance excludes revenue from reimbur
Slide 17: QuintilesIMS Combined Metrics
QuintilesIMS Combined Metrics 2016 Year-to-Date 2016 Q4 Full-Year ($ millions) QuintilesIMS QuintilesIMS QuintilesIMS Y/Y IMS Quintiles Guidance1,2,3 2016 2015 Growth Revenue $2,367 $3,412 $1950 - $1990 ~$7.7 billion ~$7.2 billion ~7.0% Adjusted $712 $703 $500 - $515 ~$1.9 billion ~$1.7 billion ~11.
Slide 18: QuintilesIMS
Q) QuintilesIMS” 17
Slide 19: Appendix: QuintilesIMS
Appendix: QuintilesIMS 18
Slide 20: QuintilesIMS Combined Historical Non-GAAP Metrics
QuintilesIMS Combined Historical Non-GAAP Metrics 2016 Q4 ($ millions) 2015 Q4 2016 Q1 2016 Q2 2016 Q3 Guidance2,3,4 Revenue1 $1,939 $1,881 $1,969 $1,926 $1,950 - $1,990 Adjusted EBITDA5 $463 $460 $466 $489 $500 - $515 Dollars are at actual foreign exchange rates, does not include pass-through reven
Slide 21: Net Income to New Adjusted EBITDA: Q4 2015
Net Income to New Adjusted EBITDA: Q4 2015 Three Months Ended December 31, 2015 (in millions) IMS Health Quintiles Combined Net Income $ 29 $ 105 $ 134 Provision for (benefit from) income taxes 19 51 70 (Income) loss in unconsolidated affiliates - 3 3 Deferred revenue purchasing accounting adjustmen
Slide 22: Net Income to New Adjusted EBITDA: Q1 2016
Net Income to New Adjusted EBITDA: Q1 2016 Three Months Ended March 31, 2016 (in millions) IMS Health Quintiles Combined Net Income $ 43 $ 107 $ 150 Provision for (benefit from) income taxes 20 43 63 (Income) loss in unconsolidated affiliates - - - Deferred revenue purchasing accounting adjustments
Slide 23: Net Income to New Adjusted EBITDA: Q2 2016
Net Income to New Adjusted EBITDA: Q2 2016 Three Months Ended June 30, 2016 (in millions) IMS Health Quintiles Combined Net Income $ 24 $ 87 $ 111 Provision for (benefit from) income taxes 7 37 44 (Income) loss in unconsolidated affiliates - 8 8 Deferred revenue purchasing accounting adjustments 2 -
Slide 24: Net Income to New Adjusted EBITDA: Q3 2016
Net Income to New Adjusted EBITDA: Q3 2016 Three Months Ended September 30, 2016 (in millions) IMS Health Quintiles Combined Net Income $ 54 $ 99 $ 153 Provision for (benefit from) income taxes 13 38 52 (Income) loss in unconsolidated affiliates - 4 5 Deferred revenue purchasing accounting adjustmen
Slide 25: Appendix: Quintiles
Appendix: Quintiles 24
Slide 26: Year-to-date Financial Highlights
Year-to-date Financial Highlights Standalone Versus ($ millions, Year-to-Date Prior Year except per share data) 2016 2015 Reported Income from Operations $3,187 $3,832 (16.9)% Adjusted Income from Operations1 $497 $469 6.1% Net Income Attributable to Quintiles $648 $594 9.1% Diluted EPS $293 $283 3.
Slide 27: Year-to-date Segment Performance
Year-to-date Segment Performance Standalone Year-to-Date Versus Prior Year ($ millions) Constant 2016 2015 Reported Currency Product Development Service Revenue $2,602 $2,346 10.9% 11.4% Income From Operations $583 $515 13.3% 7.2% Operating Margin 22.4% 21.9% 50 bps (80) bps Integrated Healthcare Se
Slide 28: Constant Currency Reconciliation
Constant Currency Reconciliation Standalone (in millions) Three Months Ended September 30 Year on Year Growth Exchange Exchange Consolidated Actual Constant Actual Constant Impact Impact Service Revenue $ 1,136.4 $ 3.5 $ 1,132.9 3.9% 0.3% 3.6% Income from Operations $ 167.8 $ 8.4 $ 159.4 0.4% 5.0% (
Slide 29: Contractual Revenue Currency Mix and Foreign Exchange Analysis
Contractual Revenue Currency Mix and Foreign Exchange Analysis Standalone Consolidated Service Revenues (in millions) Time Period USD Sterling Euro Yen Other1 Total 3Q '16 $746.2 $75.2 $161.6 $114.5 $38.9 $1,136.4 % of total 66% 7% 14% 10% 3% 100% 3Q '15 $747.2 $68.5 $145.7 $94.4 $37.7 $1,093.5 % of
Slide 30: Net Income to Adjusted Net Income
Net Income to Adjusted Net Income Standalone 2016 2015 Net Income Net Income Three Months Ended September 30th Income from Attributable to Income from Attributable to (in millions) Operations Quintiles Operations Quintiles Reported $ 167.8 $ 99.2 $ 167.0 $ 111.3 Restructuring Costs (0.5) (0.5) 12.0
Slide 31: Net Income to Adjusted EBITDA
Net Income to Adjusted EBITDA Standalone Three Months Ended Nine Months Ended September 30, September 30, (in millions) 2016 2015 2016 2015 Net Income $ 99.2 $ 111.3 $ 292.6 $ 282.6 Interest Expense, Net 23.8 24.3 70.8 72.8 Income Tax Expense 38.5 40.2 117.9 108.0 Depreciation and Amortization 34.6
Slide 32: Net Income to Adjusted Net Income
Net Income to Adjusted Net Income Standalone Three Months Ended Nine Months Ended September 30, September 30, (in millions) 2016 EPS1 2015 EPS1 2016 EPS1 2015 EPS1 Net Income $ 99.2 0.82 $ 111.3 0.89 $ 292.6 2.41 $ 282.6 2.24 Restructuring Costs (0.5) - 12.0 0.10 27.8 0.23 23.5 0.19 Merger Related C
Slide 33: Appendix: IMS
Q) QuintilesIMS” 32
Slide 34: Other P&L and Cash Flow Metrics
Other P&L and Cash Flow Metrics Standalone 3rd Quarter Versus Prior Year ($ millions) 2016 2015 Reported Q3 Operating Income $115 $89 29.1% Q3 YTD Operating Income $307 $276 11.3% Q3 Net Cash Provided by Operating $167 $111 50.1% Activities Q3 YTD Net Cash Provided by Operating $263 $326 (19.4)% Act
Slide 35: Year-to-date Revenue
Year-to-date Revenue Standalone Offering Year-to-date Versus Prior Year Constant ($ millions) 2016 2015 Reported Currency Information $1,140 $1,101 3.5% 4.0% Technology Services $1,227 $1,008 21.7% 22.4% Total $2,367 $2,109 12.2% 12.8% Dollars are at actual foreign exchange rates 34 Year-to-date rep
Slide 36: Year-to-date Earnings
Year-to-date Earnings Standalone Year-to-date Versus Prior Year ($ millions, except per share data) Constant 2016 2015 Reported Currency Adjusted EBITDA1 $712 $654 8.8% 7.0% Net Income $121 $388 (68.9)% (72.4)% Diluted EPS $0.36 $1.14 (68.4)% (72.0)% Adjusted Net Income1 $411 $390 5.3% 8.8% Adjusted
Slide 37: Balance Sheet Metrics
Balance Sheet Metrics Standalone ($ millions) September 30, 2016 December 31, 2015 Current Assets $2,781 $1,092 Total Assets $9,613 $7,459 Current Liabilities $1,062 $1,033 Total Liabilities $7,767 $5,887 36
Slide 38: Net Income to Adjusted EBITDA
Net Income to Adjusted EBITDA Standalone Three Months Ended September 30, Nine Months Ended September 30, (in millions) 2016 2015 2016 2015 Net Income $ 54 $ 43 $ 121 $ 388 Provision for (benefit from) income taxes 13 8 40 (219) Other (income) loss, net — (6) 7 (16) Interest expense 48 44 141 124 In
Slide 39: Net Income to Adjusted Net Income & Per Share Data
Net Income to Adjusted Net Income & Per Share Data Standalone Three Months Ended September 30, Nine Months Ended September 30, (in millions, except per share data) 2016 2015 2016 2015 Net Income $ 54 $ 43 $ 121 $ 388 Provision for (benefit from) income taxes 13 8 40 (219) Amortization associated wit