Labcorp Holdings Inc. · NYSE:LH
Labcorp — Laboratory Corp of America Holdings — Investor Day (February 2018)
99 slides from Labcorp's investor day presentation, Feb 27, 2018
Slide 1: Investor and Analyst Day February 2018
Investor and Analyst Day February 2018
Slide 2: Forward Looking Statement and Use of Adjusted Measures
2 Forward Looking Statement and Use of Adjusted Measures This presentation contains forward-looking statements including but not limited to statements with respect to estimated 2018 guidance and the related assumptions, the impact of various factors on operating and financial results, expected savin
Slide 3: Enterprise Strategic Overview
Dave King Chairman and Chief Executive Officer Enterprise Strategic Overview
Slide 4: Who We Are
Who We Are Our Mission is to Improve Health and Improve Lives LabCorp is a Leading Global Life Sciences Company that is deeply integrated in guiding patient care Our Strategic Objectives are to: Deliver World-Class Diagnostics Bring Innovative Medicines to Patients Faster Use Technology to Improve t
Slide 5: A Sound Foundation Supports the Combination
A Sound Foundation Supports the Combination 1 Creates powerful life sciences enterprise with a market opportunity of over $200 billion 3 2 Expands growth opportunities for Diagnostics and Drug Development businesses Capitalizes on strengths to create a differentiated offering 5
Slide 6: Opens Attractive Growth Opportunities Across Multiple Global Markets
Opens Attractive Growth Opportunities Across Multiple Global Markets U.S. Clinical Lab Testing Market ~$80 billion Global Addressable Outsourced R&D Spend ~$35 billion Global Addressable Market ~$200 billion LH Ex-U.S. Clinical Lab Testing Market ~$100 billion Ex-U.S. Clinical Lab Opportunity LH(1)
Slide 7: Creates a Differentiated Offering to Better Serve All Healthcare Stakeholders
Creates a Differentiated Offering to Better Serve All Healthcare Stakeholders 7 • Patient database reaching ~50% of U.S. population • Proprietary data sets with >30 billion lab test results across a growing menu of nearly 5,000 assays • Broad physician, health system and managed care relationships •
Slide 8: 2018 Priorities Drive Profitable Growth
2018 Priorities Drive Profitable Growth Optimize Enterprise Margins Integrate Key Acquisitions 8
Slide 9: Strategic Initiatives to Capitalize on Long-term Market Opportunities
Transition to Value-Based Care Enhance the Drug Development Process Embrace the Role of the Consumer • Improve efficiency in care delivery • Reduce the overall cost of patient care • Utilize advanced tools and analytics to deliver better outcomes via personalized medicine and population health • Add
Slide 10: Differentiated Solutions are Resonating with Customers
28% Patients Seen in Denver LabCorp at Walgreens 2016 >$200 million 2017 ~$500 million Value-Based Care Solutions Streamlining Clinical Studies Consumer Platform Completed 3 marquee transactions in 2017 Cumulative new orders won through the combination of LabCorp patient data and Covance capabilitie
Slide 11: Creates Long-term Shareholder Value
Creates Long-term Shareholder Value $4.1 $4.5 $4.7 $5.0 $5.5 $5.7 $5.8 $6.0 $0.0 $2.0 $4.0 $6.0 $8.0 $10.0 $12.0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 $8.5 $9.4 $10.4 $2.3 $2.8 $3.6 $6.2 $6.6 $6.9 (1) 2007-2014 revenues excludes Covance results. 2008 revenue includes a $7.5 million
Slide 12: LabCorp is Well Positioned for Future Growth
LabCorp is Well Positioned for Future Growth Financial Strength and Flexibility Quality and Service Stable and Global Business Innovation Multiple Avenues for Future Growth 12
Slide 13: Covance Drug Development Strategic Overview
John Ratliff Chief Executive Officer, Covance Drug Development Jonathan Koch Group President of Clinical Development and Commercialization Services, Covance Drug Development Covance Drug Development Strategic Overview
Slide 14: The Drug Development Landscape
14 The Drug Development Landscape Strong Market Trends and Client Demand Improving regulatory environment Venture funding remains solid Significant innovation in emerging biotech segment Total Molecules 8,837 Total Molecules 11,197 Total Molecules 12,500 Total Molecules 13,454 Strong therapeutic gro
Slide 15: 2017: A Transformative Year
15 2017: A Transformative Year Addressing Challenges and Positioning for Growth Talented Team, Enhanced Capabilities, Process Efficiency Enhanced Tools and Technology Chiltern Integrated Capabilities Deeper Executive Talent Bench and International Expansion Book to Bill 1.36 LaunchPad Business Proce
Slide 16: Covance Growth Strategy
EXTRAORDINARY POTENTIAL EXCEPTIONAL PEOPLE ENERGIZING PURPOSE 16 Covance Growth Strategy Leveraging LabCorp/Covance Combined Strength, Utilizing Market Leading Assets, Demonstrating Clinical Leadership, Maximizing Tools and Technology NOW Strengthen & Expand NEXT Grow & Deepen NEEDED Evolve & Lead ►
Slide 17: Leveraging LabCorp-Covance Combined Strength
17 Leveraging LabCorp-Covance Combined Strength Unique Offerings and Differentiated Value Patient-Centered Solutions and Data Insights Scientific Collaboration (e.g., Companion Diagnostics, Real World Evidence) LaunchPad Business Process Improvement Initiatives
Slide 18: Unique Patient-Centered Solutions and Data Insights
18 Leveraging LabCorp-Covance Combined Strength Unique Patient-Centered Solutions and Data Insights Empowered patients are searching for treatment alternatives and choosing to participate in clinical studies Real world data is used to find the right patients for a clinical study Matching patients’ p
Slide 19: Holistic Approach to Patient Intelligence
19 Leveraging LabCorp-Covance Combined Strength Holistic Approach to Patient Intelligence Protocols / Trial Insights / Clinical Labs Data LabCorp Patient Data Patient Survey / Voice of Patient ► ~115 million patient encounters annually ► ~1,900 patient service centers ► High-quality data, including
Slide 20: Scientific Collaboration with Market Leading Companion Diagnostics Capabilities
20 Leveraging LabCorp-Covance Combined Strength Scientific Collaboration with Market Leading Companion Diagnostics (CDx) Capabilities ► Supported more than 300 CDx, in vitro diagnostic and medical device studies ► Collaborated with over 40 clients on more than 165 CDx projects in 2017 ► CDx-related
Slide 21: Utilizing Market Leading Assets: Central Laboratory Services
21 Utilizing Market Leading Assets As an Example… Central Laboratory Services
Slide 22: Expanding Clinical Capabilities: Stronger Together with Chiltern
Expanding Clinical Capabilities Stronger Together with Chiltern Presence • Broad customer base with strong growth potential across all segments Therapeutic Capabilities • Broad therapeutic offering across all phases of development • The most experienced central laboratory (e.g., biomarkers, companio
Slide 23: LaunchPad Business Process Improvement Initiative
23 LaunchPad Business Process Improvement Initiative Re-engineering Processes and Integrating New Technology to Drive Margin Expansion Net Savings: $20M in 2017, and additional $130M over three years ending in 2020 After achieving $100M in cost synergies from LabCorp's acquisition of Covance Talent
Slide 24: Maximizing Tools and Technologies
Reduces the time, cost and risk of specimen based research. 24 Maximizing Tools and Technologies Innovative Solutions Focused on Client Needs Contributed to $1B+ of Revenue Across Clinical Development in 2017
Slide 25: Key Takeaways
Key Takeaways 25 Diagnostics and Drug Development combination creates differentiation from competition through data, patient intelligence, and scientific collaboration Transformative investments in talent, solutions, and technology positioning Covance for growth Strong book to bill of 1.36 and backl
Slide 26: LabCorp Diagnostics Strategic Overview
LabCorp Diagnostics Strategic Overview Gary Huff Chief Executive Officer, LabCorp Diagnostics
Slide 27: LabCorp Diagnostics At-a-Glance
27 LabCorp Diagnostics At-a-Glance Expertise • Unmatched depth and breadth of solutions • Scientific, therapeutic, value-based care and IT expertise • Experienced senior leadership • 11 Centers of Excellence • ~600 M.D. and Ph.D. Financial Strength • Significant free cash flow • Stable business with
Slide 28: Creating Differentiated Value for our Consumers, Customers, and Employees
28 Creating Differentiated Value for our Consumers, Customers, and Employees Multiple Growth Opportunities • Health systems and hospitals • Managed care • Independent physicians • Companion diagnostics Data Powerhouse with IT Expertise • ~50% of U.S population / >30 billion lab test results • Big da
Slide 29: Leadership in a Stable, Growing, and Fragmented Market
29 Leadership in a Stable, Growing, and Fragmented Market LabCorp, $7B Quest Diagnostics, $8B Independent Labs, $13B Hospital Labs, $47B Physician Office Labs, $4B Independent Labs, $13B Hospital Labs, $47B Physician Office Labs, $4B Market dynamics are creating opportunity $27B Inpatient & Outpatie
Slide 30: Well-Positioned to Capture the Addressable Market
Well-Positioned to Capture the Addressable Market Physician Office Labs Hospital Outreach and Reference Labs Independent Labs Addressable Market $37B Driving Profitable Growth Deliver innovative value-based care solutions Accretive and strategic acquisitions Value creation through diagnostics and dr
Slide 31: Multiple Industry Dynamics Play to LabCorp's Strengths
31 Multiple Industry Dynamics Play to LabCorp’s Strengths Consumerism • Consumers are taking greater responsibility for their wellness and healthcare • Demand low cost, high quality, access and technology • Access: Partner with health retailers • Convenience: consumer initiated programs and in-home
Slide 32: 2018 Diagnostics Priorities
Drive Profitable Growth 32 Optimize Opportunities − Acquisition Integration − Bad Debt Improvement − LabCorp at Walgreens Expansion 1. 2. 2018 Diagnostics Priorities
Slide 33: Driving Growth Through Focus on Key Customer and Testing Segments
33 Driving Growth Through Focus on Key Customer and Testing Segments Accretive and strategic acquisitions Leverage combination of diagnostics and drug development Deliver innovative value-based care solutions How Will We Grow? Smart Growth Customer Segments Testing Segments Physician Groups Managed
Slide 34: Utilizing Technological Innovation to Improve Care, Lower Cost and Enhance Experiences
34 Utilizing Technological Innovation to Improve Care, Lower Cost and Enhance Experiences Improve Care • Value-based care solutions and tools • Laboratory analytics and decision support tools 1 Lower Cost, Improve Quality 2 Enhance Experiences 3 • Automation expansion, including Propel • Standardiza
Slide 35: Key Takeaways
35 Key Takeaways Well-positioned for long-term profitable growth through our differentiated laboratory solutions and combination with Drug Development capabilities Committed to quality, service and innovative solutions providing the foundation for new and deeper collaborations with customers Lab mar
Slide 36: Broad Capabilities that Support the Transition to Value-Based Care
Brian Caveney, M.D. Chief Medical Officer Bryan Vaughn Senior Vice President, Health Systems, LabCorp Diagnostics Broad Capabilities that Support the Transition to Value-Based Care
Slide 37: Value-Based Care is an Evolution
37 Value-Based Care is an Evolution Health Systems Deep, innovative partnerships Clinicians Efficient workflow, timely information Payers Data sharing, provider collaboration The transition is complex and iterative Accurate and timely diagnoses play a critical role Fee-for- service Value- based
Slide 38: Uniquely Positioned to Succeed in Value-Based Care
38 Uniquely Positioned to Succeed in Value-Based Care Powered by standardized lab systems and data, flexible data interfaces and feeds, and technology-enabled tools Lower Cost of Utilization • Managed care networks, benefits • Health system partnerships • Consumer empowerment Right Test, Right Patie
Slide 39: Offering Leading, Broad-Based Solutions in Value-Based Care
39 Offering Leading, Broad-Based Solutions in Value-Based Care Leading Laboratory Services • National access • Comprehensive test menu • Sales and service organization • Scientific innovation • Power of scale Payer and Provider Collaboration • Help stakeholders achieve total cost of care metrics in
Slide 40: Actionable Data for Every Stakeholder
40 Actionable Data for Every Stakeholder Providers • Identifies untreated problems • Patient-specific recommendations based on current guidelines / standards of care delivered with lab results Payers • Targeted data feeds • Lower overall medical expenses through earlier disease identification Patien
Slide 41: Driving Value Through Broad-Based Partnerships with Health Systems
41 Driving Value Through Broad-Based Partnerships with Health Systems Highly Efficient Lab Provider Positioned for value-based care and consumer driven future Redeploy Capital, IT, Time Clinical Trials Participation Innovation Leverage Quality, Programs and Tools Simplification and Standardization
Slide 42: Health Systems Opportunity
42 Health Systems Opportunity Value-based care will drive today’s fee-for-service settings to look more like cost centers Hospitals Post-acute Alt Sites Specialists Primary Care $47B Hospital Labs $4B Physician Office Labs Multi-billion dollar opportunity in health system partnerships driven by LabC
Slide 43: Major Academic Health System Case Study
43 Major Academic Health System Case Study Case Study Multi-faceted relationship with Mount Sinai Health System Outreach Acquisition • Divesture of non-core asset • Gained square footage by reducing infrastructure Reference Testing • Consolidation of lab partners • Reduces expense, IT, and complexit
Slide 44: Innovation with Health Systems to Help Improve Patient Care
44 Innovation with Health Systems to Help Improve Patient Care
Slide 45: Multi-Pronged Approach to Deliver Value to an ACO
45 Multi-Pronged Approach to Deliver Value to an Accountable Care Organization (ACO) Clinically integrated network with 240 physicians Multiple EHRs, multiple value-based contracts Case Study Deployed Care IntelligenceTM population health tool Standardized, timely lab result data High quality, cost
Slide 46: Key Takeaways
46 Key Takeaways Developing innovative tools, technology and business models to further our value proposition for patients and health systems Supporting health systems’ transition to value-based care represents a multi-billion dollar long-term growth opportunity Uniquely positioned to succeed in val
Slide 47: Extending our Leadership in Companion Diagnostics
Extending our Leadership in Companion Diagnostics Marcia Eisenberg, Ph.D. Chief Scientific Officer, LabCorp Diagnostics Steven Anderson, Ph.D. Chief Scientific Officer, Covance Drug Development
Slide 48: Precision Medicine and Companion Diagnostics (CDx)
48 Precision Medicine and Companion Diagnostics (CDx) 21% 28% 27% 34% 2014 2015 2016 2017 Personalized Medicines Top 30% of FDA Approvals for First Time in 2017(1) Key Drivers in Precision Medicine ► Genomic and proteomic biomarkers are key features of developing new therapies and diagnostics • Defi
Slide 49: Two Decades of Experience with CDx Commercialization
49 Two Decades of Experience with CDx Commercialization 1998 2002 2006 2012 2016 2017 Validation and launch of HerceptTest First commercial launch of EGFR Mutation Analysis Validation and launch of ALK for NSCLC Launch of COBAS EGFR V2 Plasma Launch of Thermo Fisher Oncomine Dx Target Test Validatio
Slide 50: Unmatched Franchise Providing End-to-End Clinical Development and Commercial Lab Testing
50 Unmatched Franchise Providing End-to-End Clinical Development and Commercial Lab Testing Solutions Commercialization a t o r y A pp r o v a l Cli n i c a l U t ili t y Drug Development Biomarker/CDx Development Preclinical Phase I Phase II Phase III NDA Submission Biomarker Development CDx Assay
Slide 51: Dedicated CDx Laboratory Combines Unmatched Expertise with Leading Technology
51 Dedicated CDx Laboratory Combines Unmatched Expertise with Leading Technology ► 36,000 sq. ft. facility in North Carolina ► Dedicated laboratory and staff for development, validation, and transfer of CDx assays • Focus on Genomics and Molecular Pathology • Associated GMP manufacturing capabilitie
Slide 52: Two CDx Solutions Enable Flexible Collaboration with Customers
Two CDx Solutions Enable Flexible Collaboration with Customers 52 Pharma IVD CRO CDx Partnership Single Site Pathway (ssPMA) ► Faster route for development and commercialization ► Develop and validate test on established IVD platform ► Laboratory service provider also leads the regulatory submission
Slide 53: Strong Demand for Companion Diagnostics Will Drive Profitable Revenue Growth
53 Strong Demand for Companion Diagnostics Will Drive Profitable Revenue Growth $55 $106 $244 $0 $100 $200 $300 2015 2016 2017 $114 $153 $300 $0 $100 $200 $300 2015 2016 2017 CDx-Related Net Orders ($M) CDx-Related Backlog ($M)
Slide 54: End-to-End Support for a New Oncology Therapy and Associated CDx Assay
End-to-End Support for a New Oncology Therapy and Associated CDx Assay 54 For a recently approved immuno-oncology therapy, Covance and LabCorp Diagnostics collaborated to provide five distinct drug development services: Demonstration of end-to-end capabilities that are a differentiator in Companion
Slide 55: Capitalizing on Multiple CDx Growth Drivers
Comprehensive commercial strategy, including global CDx partnerships Interest in and use of the single site PMA regulatory approach drives improvements in efficiency, flexibility and cost Technological advancements enabled by multiplexing, such as Next Generation Sequencing, Gene Expression Profilin
Slide 56: Key Takeaways
Key Takeaways 56 An increasing focus on precision medicine, with expansion beyond Oncology applications, provides a significant growth opportunity in CDx Dedicated resources and flexible approaches to CDx development allow Covance and LabCorp to provide solutions that meet client needs LabCorp and C
Slide 57: Break
LabCorp Break
Slide 58: Unmatched Data, Powerful Insight
Unmatched Data, Powerful Insight Lance Berberian Chief Information Officer Gabriela Feldberg Head of Feasibility, Recruitment and Engagement, Covance Drug Development
Slide 59: Compelling Combination of Data and Tethered Relationships is a Key Competitive Advantage
59 Compelling Combination of Data and Tethered Relationships is a Key Competitive Advantage for the Enterprise Our Data • Timely • Standardized • Precise • Identified Our Relationships • Patients • Physicians and Health Systems • Investigators • Pharmaceutical Companies • EMR Providers Actionable •
Slide 60: Covance Offers a Suite of Differentiated Drug Development Tools
60 Covance Offers a Suite of Differentiated Drug Development Tools for Trial Planning and Execution • Metrics and Benchmarking • Trial Forecasting • Clinical Data Hub • Monitoring Solutions • Data Management • Insights • GlobalCODE • snapTRACK • LabCODE • Pulse • Drive cellerate®
Slide 61: LabCorp Diagnostics Offers Tools That Serve Key Customer Segments
61 LabCorp Diagnostics Offers Tools That Serve Key Customer Segments Service Physicians / Health Systems Consumers Payers / Managed Care Guidance on Test Selection Placement of Electronic Orders (Portal and EMR) Mobile Optimized Reservations Multi-Channel Check-In Delivery of Electronic Test Reports
Slide 62: Power of the LabCorp Data for Trial Design, Site Selection, and Patient Recruitment
Power of the LabCorp Data for Trial Design, Site Selection, and Patient Recruitment Real World Data • Not biased and represents people as they live with their disease • Patient data is granular and identifiable Vast Test Menu • 30+ billion test results across thousands of diagnostic assays • >2.5 mi
Slide 63: Power of the Xcellerate Investigator Database
Covance supports ~50% of all clinical trials Power of the Xcellerate Investigator Database Number of Patients Date of First Patient In Quality Lab Cancellations and Queries Standardized Site Rank > 175,000 unique investigators > 15,000 unique protocols Investigator Performance Database 63
Slide 64: Exceeding Recruitment Goals for a Global Multi-Study Registration Program
Case Study 64 Covance Value Proposition Exceeding Recruitment Goals for a Global Multi-Study Registration Program UNIQUE SOLUTIONS CLIENT CHALLENGE Randomize 2,700 patients within a very narrow timeframe for a suite of registration studies Get all sites across the globe up and running as quickly as
Slide 65: Ulcerative Colitis Example
Ulcerative Colitis Example 65
Slide 66: Understanding the Impact of Study Design on the Available Patient Pool
Understanding the Impact of Study Design on the Available Patient Pool 51,814 patients between June 2016 and May 2017 identified 48,708 patients between 18 and 80 years old 20,288 without Crohn’s Disease, IBD and UC Proctitis 20,146 without Malignancy, Inherited Immuno Syndrome, TB and HIV/AIDS 20,0
Slide 67: Covance Data Insights Show Workload of Key Investigators
Covance Data Insights Show Workload of Key Investigators # Active Studies # Investigators Patients Per Investigator 9+ 28 72 5-8 63 33 4 123 87 2-3 169 15 1 644 10 0 27 11 • Objective site performance data around the globe which includes 8+ pharma programs and 53 active UC studies • Creates immediat
Slide 68: Location of Covance Sites in Relation to Ulcerative Colitis Patients
Location of Covance Sites in Relation to Ulcerative Colitis Patients 68 Sample from Seven UK GP Surgeries BLUE DOTS – Crohn’s and UC Patients from EMR SIZE OF BLUE DOTS – Number of Patients STARS – Covance sites COLOR OF STARS – Green high score to red low score DOTS – UC patients who match study de
Slide 69: Protocol Design to Maximize Patient Enrollment Opportunity
Case Study 69 LabCorp/Covance Value Proposition Protocol Design to Maximize Patient Enrollment Opportunity UNIQUE SOLUTIONS CLIENT CHALLENGE Result: The eligible patient population increased by more than 50% without compromising the objectives of the trial Study to test if a drug reduced progression
Slide 70: Rescued Patient Enrollment for a Study of a Rare Mutation
70 LabCorp/Covance Value Proposition Rescued Patient Enrollment for a Study of a Rare Mutation Leveraged LabCorp database with de-identified health information on patients with the rare mutation UNIQUE SOLUTIONS Seeking patients with AML and a rare genetic mutation <15% of AML patients CLIENT CHALLE
Slide 71: Piloting a Virtual Real World Evidence Study
Case Study 71 LabCorp/Covance Value Proposition Piloting a Virtual Real World Evidence Study Developed a cross-enterprise virtual study model leveraging the Covance patient support call center, local LabCorp Patient Service Centers and Covance Central Labs to screen participants, collect lab specime
Slide 72: Setting Up for Long Term Success
Setting Up for Long Term Success 72 Continuing to add real world data sources to further accelerate patient recruitment Driving a higher volume of patients through fewer sites by leveraging deep relationships with key health systems Utilizing LabCorp’s large network of Patient Service Centers to con
Slide 73: Key Takeaways
Key Takeaways 73 Direct engagement through multiple channels with patients, physicians, investigators, and health systems create a holistic data strategy Significant ongoing investment in talent, technology and capabilities will increase the power of our differentiated data and informatics Unmatched
Slide 74: Accelerating the Consumer Innovation Platform
Accelerating the Consumer Innovation Platform Tom Kaminski Senior Vice President, Corporate Strategy Mark Wright Senior Vice President, Customer Products, LabCorp Diagnostics
Slide 75: Why Focus on Patients as Consumers?
75 44% 42% 28% 5% 2% 36% 33% 30% 7% 10% 17% 23% 33% 84% 84% Not sure No Influence Influence Primary 2017 LabCorp Consumer Study N=1,500 MOE +/- 2.5% Who is involved in the decision on where to get your lab testing (e.g. hospital lab vs. third-party commercial lab) • Consumers are taking greater resp
Slide 76: Organizing Around the Empowered Consumer
76 Organizing Around the Empowered Consumer Convenient and Flexible Options “It is easy to get the lab testing I want or need in the setting that I choose.” Access and Insights “I understand my results in the context of my overall health. I manage my health information and decide when and how to sha
Slide 77: Consumer Engagement is a Priority
Consumer Engagement is a Priority • Capturing e-mail and mobile phone numbers for LabCorp consumers across multiple touch points to enable richer engagement and customer satisfaction • Continue to directly engage with patients through online appointment scheduling, automated check-ins, as well as el
Slide 78: LabCorp | PreCheck
Seamless mobile experience to make reservations, automatically incorporating demographic and insurance information on file 78 LabCorp | PreCheck™
Slide 79: LabCorp | Express
Streamlined experience for patient check-in with minimal manual entry 79 LabCorp | Express™
Slide 80: Patient Out-of-Pocket Cost Estimates
Patient Out-of-Pocket Cost Estimates • The estimator service is enabled across the LabCorp PSC network and for LabCorp in-office phlebotomists • Estimates are customized for each individual and health plan • For select genetic testing, consumers can obtain cost estimates online without visiting a PS
Slide 81: LabCorp | Patient
Every patient that registers in LabCorp | Patient™ is given the opportunity to participate in research LabCorp | Patient™ All test results displayed in an easy to read and intuitive visual plus official report available for download 81
Slide 82: LabCorp at Walgreens
82 LabCorp at Walgreens LabCorp PSCs in Walgreens stores are attracting new patients 28% 18% 0% 10% 20% 30% LabCorp at Walgreens PSCs Comparable LabCorp PSCs % of patients seen new to LabCorp
Slide 83: Meeting Consumers Where They Want to be Met
83 Meeting Consumers Where They Want to be Met Consumer genetics Telemedicine Home health
Slide 84: Moving Reliable Self-Collected Testing to the Home
Moving Reliable Self-Collected Testing to the Home 84 Illustrative
Slide 85: Key Takeaways
85 Key Takeaways Consumer engagement is vital to Diagnostics, Drug Development, and other key stakeholders (e.g., managed care, providers) Deploying industry-leading technology-enabled solutions will improve the consumer experience Our consumer platform will continue to accelerate revenue growth
Slide 86: Finance Overview
Finance Overview Glenn Eisenberg Chief Financial Officer
Slide 87: The LabCorp Playbook: Delivering Long-Term Shareholder Value
87 The LabCorp Playbook: Delivering Long-Term Shareholder Value Revenue Growth Margin Optimization EPS Growth Disciplined Capital Deployment Return Capital to Shareholders Capital Expenditures and Strategic Acquisitions Capital Expenditures and LaunchPad Initiatives Strong Cash Flow
Slide 88: Track Record of Accelerating Growth
88 Track Record of Accelerating Growth $6.0 $6.2 $6.6 $6.9 $7.1 $0.0 $2.0 $4.0 $6.0 $8.0 $10.0 $12.0 $14.0 2014 2015 2016 2017 2018 $2.3 $6.80 $7.91 $8.83 $9.60 $0.00 $2.00 $4.00 $6.00 $8.00 $10.00 $12.00 $14.00 $16.00 2014 2015 2016 2017 2018 Revenue Adjusted EPS(3) $11.50 $9.4 $10.4 $11.5 (In Bill
Slide 89: 2018 Guidance
89 2018 Guidance (1) Calculated based on the preliminary restatement of revenue in 2017 related to the Company’s adoption of the new revenue recognition accounting standard (ASC 606) effective January 1, 2018. See Appendix for additional details. Metric Guidance LabCorp Diagnostics Revenue Growth (1
Slide 90: 2018 Adjusted EPS Guidance Bridge
90 2018 Adjusted EPS Guidance Bridge (1) (1) Adjusted EPS exclude amortization, restructuring charges and special items as well as a net benefit in the fourth quarter of 2017 of $5.00 per diluted share due to the implementation of the Tax Cuts and Jobs Act. See Appendix for non-GAAP reconciliation $
Slide 91: Disciplined Capital Deployment to Build Shareholder Value
91 Disciplined Capital Deployment to Build Shareholder Value Approximately $11.5 Billion in Capital Deployment Between 2013 and 2017 49% 25% 15% 11% Covance Acquisition: $5.6 Billion Other Acquisitions: $2.9 Billion Share Repurchase: $1.7 Billion Capital Expenditures: $1.3 Billion
Slide 92: Targeted Capital Expenditures that Strengthen Capabilities and Support Growth
92 Targeted Capital Expenditures that Strengthen Capabilities and Support Growth ► Investments in 2018 to support future growth include: • Capacity and automation for 23andMe collaboration • Patient service centers in Walgreens stores • Genomics and immunotoxicology capabilities in drug development
Slide 93: Track Record of Acquisitions that Drive Growth and a Differentiated Offering
93 Track Record of Acquisitions that Drive Growth and a Differentiated Offering Target Acquisition Criteria • Businesses that leverage our core competencies • Market leader • Strong management team • International presence • Accretive to earnings and cash flow year 1 • Earn cost of capital by year 3
Slide 94: Strong Balance Sheet Enables Return of Capital to Shareholders
0.0x 1.0x 2.0x 3.0x 4.0x $0 $200 $400 $600 $800 $1,000 $1,200 2013 2014 2015 2016 2017 94 Strong Balance Sheet Enables Return of Capital to Shareholders Debt and Leverage: • Investment grade philosophy with targeted leverage of 2.5x – 3.0x gross debt to EBITDA • Strong liquidity including $1 billion
Slide 95: Key Takeaways
95 Key Takeaways Multi-faceted platform for profitable growth through organic initiatives, strategic acquisitions, and margin optimization Track record of strong and reliable free cash flow, and disciplined capital deployment Execution of the LabCorp playbook continues to generate long-term sharehol
Slide 96: Appendix
LabCorp Appendix
Slide 97: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures 97 Adjusted EPS 2014 2015 2016 2017 Diluted earnings per common share 5.91$ 4.35$ 7.02$ 12.21$ One-time benefit from Tax Cuts and Jobs Act - - - (5.00) Restructuring and special items 0.34 2.44 0.64 0.98 Amortization expense 0.55 1.12 1.17 1.41 Adjusted
Slide 98: Preliminary Reconciliation for the New Revenue Recognition Accounting Standard (ASC 606)
98 Preliminary Reconciliation for the New Revenue Recognition Accounting Standard (ASC 606) Effective January 1, 2018, the Company adopted the FASB-issued converged standard on revenue recognition, using the full retrospective method. Although the Company has not completed all of the analysis requir
Slide 99: Lunch and Q&A
LabCorp Lunch and Q&A
Laboratory Corp of America Holdings — Investor Day (February 2018) on 6ix