Huntsworth Plc Capital Markets Day 2019 Disclaimer The information - - PowerPoint PPT Presentation

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Huntsworth Plc Capital Markets Day 2019 Disclaimer The information - - PowerPoint PPT Presentation

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Huntsworth Plc Capital Markets Day 2019 Disclaimer The information contained in this presentation document (the presentation, which term includes any information provided verbally in connection with this presentation document) does not

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Capital Markets Day 2019

Huntsworth Plc

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Disclaimer

The information contained in this presentation document (“the presentation”, which term includes any information provided verbally in connection with this presentation document) does not constitute an offer or solicitation to hold, sell or invest in any security and should not be considered as investment advice or as a sufficient basis on which to make investment decisions. Whilst this presentation has been prepared in good faith, neither Huntsworth plc (the “Company”) nor any of its group undertakings nor any of their respective directors, members, advisers, representatives, officers, agent, consultants or employees: (i) makes, or is authorised to make any representation, warranty or undertaking, express or implied, with respect to the information and
  • pinions contained in it or accepts any responsibility or liability as to the accuracy, completeness
  • r reasonableness of such information or opinions; or (ii) accepts any liability whatsoever for any
loss howsoever arising, directly or indirectly, from use of or in connection with the information in this presentation. The Company is under no obligation to provide any additional information or to update or revise the information in this presentation or to correct any inaccuracies which may become apparent. This presentation may include certain forward-looking statements, beliefs or opinions. There can be no assurance that any of the results and events contemplated by any forward-looking statements contained in the information can be achieved or will, in fact, occur. No representation is made or any assurance, undertaking or indemnity is given that any such forward looking statement are correct or that they can be achieved. 2 Capital Markets Day - 9th May 2019
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Paul Taaffe Chief Executive Officer Welcome

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Agenda

2.30pm – Welcome & Introduction
  • Paul Taaffe
Chief Executive Officer
  • Neil Jones
Chief Financial Officer 2.55pm – Medical Division Presentation
  • Elaine Ferguson
3.25pm – Q&A 3.40pm – Coffee break 4 4.00pm – Marketing Division Presentation
  • Reid Connolly
4.30pm – Q&A 4.45pm – Conclusion & wrap up 5.00pm – Food & drinks at The Anthologist Capital Markets Day - 9th May 2019
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Presenting Team

Capital Markets Day - 9th May 2019 5

Paul Taaffe

Chief Executive Officer

Neil Jones

Chief Financial Officer

Elaine Ferguson

Chief Executive Officer MEDiSTRAVA

Reid Connolly

Chief Executive Officer Evoke

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Paul Taaffe Chief Executive Officer Healthcare Continues To Be Our Focus

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The World Is Getting Older

  • Aging is defined as the time-dependent functional
decline that affects most living organisms. 5
  • The number of people worldwide over the age of
60 is expected to double by 2050 to nearly 2.1 billion.1
  • By 2020, the number of people worldwide aged 60
years and older will outnumber children younger than 5 years.2
  • Global life expectancy is expected to increase an
average of 4.4 years by 2040.3
  • The number of morbidities and the proportion of
people with multimorbidity increases substantially with age. 4
  • Older people are disproportionately represented in
disability populations. 6 7 Life Expectancy At Birth By Region (Both Sexes Combined) From 1950- 20501 Sources: (1) World Population Ageing, 2017 Highlights, The United Nations (2017) (2) Ageing and Health, WHO (Feb 2018) (3) Forecasting life expectancy, years of life lost, and all-cause and cause-specific mortality for 250 causes of death: reference and alternative scenarios for 2016–40 for 195 countries and territories, K. Foreman et al. (Oct 2018) (4) Epidemiology of multimorbidity and implications for health care, research, and medical education: a cross-sectional study, Barnett, Mercer et al (May 2012) (5) The Hallmarks of Aging , Lopez-Otin, Blasco et all (Nov 2013) (6) World Report On Disability, WHO (2011) (7) Adapted from Epidemiology of Chronic Disease Global Perspectives, Harris RE, ed., Massachusetts,Jones and Bartlett Learning, (2013) Ageing And The Border Between Health And Disease 7 Capital Markets Day - 9th May 2019
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And Needing More Healthcare

  • 6 in 10 American adults have a chronic disease in 2019.1
  • By 2020, chronic diseases will account for almost three-

quarters of all deaths worldwide.2

  • Around the world, there will be one new case of dementia

every 3 seconds.3

  • 50 million people worldwide were living with dementia in

2018 and this will triple by 2050.3

8 Sources: (1) Chronic Diseases in America, CDC’s National Centre for Chronic Disease Prevention and Health Promotion (Jan 2019) (2) The world health report. Life in the 21st century: a vision for all. Geneva, WHO, (1998) (3) World Alzheimer Report 2018, Alzheimer’s Disease International, (Sept 2018)

6 in 10

  • f Americans

3/4

  • f deaths

3 Seconds 50

million

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Drivers Of Demand – Rx Drug Sales (2010 - 2024)

Sources: (1) WW Drug Sales Source: Adapted from Evaluate Pharma, (May 2018) (2) Global GDP Source: Adapted from Statista, (2018)

5.5%

Global GDP (2018 – 2022) CAGR

6.5%

Global Pharma CAGR

5.5% Generics CAGR 11.9% Orphan CAGR 5.4% Prescription CAGR 60 66 67 70 76 78 80 81 84 89 95 100 104 109 114 69 77 82 88 94 100 112 125 138 151 169 192 216 240 262 558 590 572 569 581 565 576 583 608 631 663 706 749 785 828 20,000 40,000 60,000 80,000 100,000 120,000 200 400 600 800 1000 1200 1400 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Global GDP in $bn WW Prescription Drug Sales in $bn

Worldwide Total Prescription Drug Sales (2010-2024) and Global GDP ($Bn)

Generics Orphan Prescription excl Generics & Orphan Global GDP in $bn 9 Capital Markets Day - 9th May 2019
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SLIDE 10 SPEND INCREASING IN BIOTECH IN ORDER TO REACH NEED IN CHANGE IN MEDICAL LANDSCAPE EXPANDING ROLE OF EARLY BIOTECH IN DEVELOPING INNOVATIVE MEDICINES NEW MOLECUALR ENTITIES (NMES) ARE ON THE RISE ROBUST GROWTH IN R&D

$3bn

2003

$2m

2007

$1,000

2017

$200(?)

2020 THE FALLING COST TO MAP A HUMAN GENOME3 Sources: (1) IQVIA Institute of Human Data Science, 2019 (2) Evaluate Pharma , 2019 (3) ‘Personalised medicine: coming soon to a clinic near you’ Rathbones, Apr 2017 (4) Adapted from Statista, 2018 (5) ClinicalTrials.gov NMEs treat infectious disease1

20%

NME in 2018 - highest in 5 years1

59

NMEs treat cancer1

27%

Orphan Drug CAGR in 20242

12%

invested by VCs in 20181

$23bn

Pharma R&D spend in 2024. $171.0bn in 20182

$203.9bn

raised in 2018 in Biotech2

$7.2bn

R&D spend by top 15 pharma over 5 years1

32%

Number of trials current ongoing5 Global Pharma CAGR increasing with Global GDP CAGR4

303,828

number of molecules in late-stage development in 20181

39%

Increase in progression time from PHASE I MARKET
  • ver past 10 years1

26%

growth in R&D based
  • n number
  • f 2018
clinical trials1

9%

  • f NMEs
launched in 2018
  • riginated from
early biotechs1

64%

  • f the therapies launched in
the US in 2018 were attributed to early biotechs1

47%

Biotech IPOs in 20182

68

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Massive Innovation

Technologies are informing strategies through RWE as well as making it easier for healthcare professionals to track patient health information and provide personalised care. Agencies will need to be fast learning and adaptive. Ongoing awareness of how patients connect with their therapies will be key. E-COMMERCE GENOMICS RISE OF BIG DATA PERSONALISED MEDICINE NASH RISE OF STEM CELLS USE CRISPR Diagnosis, treatment and lifestyle interventions will be increasingly personalised to individual patient genetics, family history and other factors.

CAR-T

USES THE IMMUNE SYSTEM TO KILL CANCER CELLS HEP C GENOME TREATMENT SELECTION NEW LINKER TECHNO- LOGIES

AI

POWERED HEALTH CARE TELE- MEDICINE BIOPRO- STHESIS ROBOTIC SUPPORT CONTACT LENSES THAT TRACK GLUCOSE VIRTUAL REALITY

3D

PRINTED THERAPIES THE AMAZON EFFECT DRONE DRUG DELIVERY CHATBOT HEALTH ADVISOR SKIN AS A PLATFORM

VOICE

& WEARABLE INTEGRATION 14% CAGR E-COMMERCE GROWTH 2018-2022 1 FALLING COST OF MAPPING A GENOME TECHNOLOGY Source: (1) Pharma E-Commerce Market in Europe – Growth Analysis and Forecast, Technavio (2018) 11 Capital Markets Day - 9th May 2019
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SLIDE 12 GLOBAL HEALTHCARE COMMUNICATIONS MEDICAL MARKETING IMMERSIVE

Huntsworth Is Organised Around Our Clients in Healthcare

Media Navience 12 Capital Markets Day - 9th May 2019
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Execution of Strategy

2016

Communications-focused with Healthcare assets

2019

Healthcare-focused with Communication assets

Revenue £m 180.1 HPBT £m 16.0 EPS p 4.0 Revenue £m * 255.0 HPBT £m * 38.0 EPS p * 8.0

* Based on Analyst consensus 13 Capital Markets Day - 9th May 2019
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Growing Healthcare Focus

Revenue

* Based on Analyst consensus

Profit

51% 49% 2016 Heathcare Comms 72% 28% 2019* Heathcare Comms 77% 23% 2016 Heathcare Comms 85% 15% 2019* Heathcare Comms 14 Capital Markets Day - 9th May 2019
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How Do We Grow Organically?

Combined healthcare divisions target annual revenue growth 5% to 7% per annum over the next 5 years

Sustainable Margins

Marketing 22%+ Medical 24%+ Immersive increasing to 17%+
  • ver next 3
yrs

10% 12% 6% £91m £119m £152m 2016 2017 2018

15 Capital Markets Day - 9th May 2019
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Medical Growth 2014 - 2018 Marketing Growth 2014 - 2018

5 10 15 20 25 30 35 40 2014 2015 2016 2017 2018 £m 10 20 30 40 50 60 70 80 90 2014 2015 2016 2017 2018 £m Core Acquisitions

15% 24%

Average margin

21%

Average margin

16%

Revenue CAGR Revenue CAGR 16 Capital Markets Day - 9th May 2019
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Expanding Capabilities

MARKETING HCP CONSUMER PR & INFLUENCE PAYER MEDIA BUYING East US US West[Giant] ROW US US ROW US [Navience] US [Above Nation] MEDICAL SCIENTIFIC COMMUNICATIONS AND PUBLICATIONS MEDICAL EDUCATION CONSULTANCY EVIDENCE GENERATION REGULATORY US ROW US ROW US ROW US ROW US ROW IMMERSIVE LIVE EXPERIENCE FILM AND IMMERSIVE EMPLOYEE ENGAGEMENT TRAINING AND SCIENTIFIC ENGAGEMENT US ROW US ROW US ROW US ROW Established Start up Expansion areas Acquisitions 17 Capital Markets Day - 9th May 2019
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Acquisition Performance

Above Nation Feb 18 Cost $8m for 75% IRR 28% TCEG July 17 Cost £25.2m for 100% IRR 20% Giant July 18 Cost $72m for 90% IRR 13%+* Navience Sept 18 Cost $24m for 80% IRR 14%+*

* Estimated at time of acquisition (not held long enough to assess actual IRR) 18 Capital Markets Day - 9th May 2019
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Working Capital

  • 100% average cash conversion*
  • H2 weighted cash generation*:

41% H1 136% H2

* Average operating profit to cash, 2014 to 2018, ex-acquisitions Marketing & Medical, 50% (£19m) Immersive, 14% (£5m) Comms, 35% (£13m) NET WORKING CAPITAL BY DIVISION 19 Capital Markets Day - 9th May 2019
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Working Capital

  • Marketing / Medical
  • Immersive
  • Comms
  • GROUP
  • Centralised finance & operations – best practice

70 days targeted net working capital days

  • Improved systems to improve NWC days

30 days targeted net working capital days

  • Tighter focus: driven by clients

55 days targeted net working capital days 65 days targeted net working capital days

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Working Capital Influences

  • New clients
  • Client procurement systems/Terms
  • Out of Pocket expenses

How do we manage this?

  • Dedicated teams
  • Improved practice
  • Internal financial targets
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Net Debt

3rd May 2019 Dec 2019 Dec 2020 £52m* £66m* £87m 2.1x 1.6x 1.1x Facilities £130m + £50m accordion Covenant 3.0x EBITDA

* Based on Analyst consensus 22 Capital Markets Day - 9th May 2019
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Financial Performance

Consensus CAGR in HPBT

34% 27% CAGR in EPS

LEVERAGE BROADLY UNCHANGED

1.5x 1.1x 1.9x 1.6x 4.0 5.8 7.1 8.3 16.0 24.4 30.9 38.3 0.0 5.0 10.0 15.0 20.0 25.0 30.0 35.0 40.0 45.0 0.0x 1.0x 2.0x 3.0x 4.0x 5.0x 6.0x 7.0x 8.0x 9.0x 2016 2017 2018 2019 2016-19 results Leverage EPS HPBT * * * Based on Analyst consensus 23 Capital Markets Day - 9th May 2019
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Summary

  • Continue to strengthen Healthcare offering
  • Drive organic growth
  • Accelerate growth through targeted bolt-on M&A
  • Target leverage around 1.5x, giving ample

covenant headroom

24 Capital Markets Day - 9th May 2019
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Introductions & Capabilties

march 21, 2019

C A P I T A L M A R K E T S D A Y 2 0 1 9

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Pharmaceutical marketing is on a growth trajectory

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The market is increasingly competitive

2017 2018 2018 2017

$3.4 Billion $3.7 Billion

~9% YOY growth in pharma DTC TV spending

FiercePharma, 2019
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…and new drug approvals continuing to break records

2017 2018

22

2016

46 59

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Where do we fit in?

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CASE EXAMPLE

DTC marketing drives growth in industry’s most competitive category

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SLIDE 57 25 50 75 100 2015 2016 2017 2018

23 24 27 5 9 15 28 26 25 29 40 19 12 14 23 3 5 9 14 27 10 7 6 19 14

Psoriasis is the most competitive and highest spending category in pharmaceutical marketing

  • Brands can spend bigger or they can

spend smarter

  • Our client represents ~19% of

consumer media spend in the category— roughly 150mm $USD

23 14 12 19
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SLIDE 58 17.5 35 52.5 70 April

Effective consumer marketing efforts have our clients brand consistently positioned #1 in consumer brand requests

69%

PHYSICIANS RECEIVING BRANDED REQUESTS

54% 42% 41% 30% 28% 2%

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But, Pharma marketing is anything but business as usual…

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healthcare market is in an unprecedented state of

COMPLEX

THE HEALTHCARE MARKET TODAY IS MORE

T H A N E V E R Y B E F O R E

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Disruptive technology and shifting audience behaviors and content consumption Empowered health consumerism reshaping the health landscape and decision making process Shifting HCP dynamics from private practice to large hospitals and group practices Pipeline complexion morphing to encompass more niche diseases and conditions with often minuscule patient populations Pricing pressure & access barriers create an even more challenging landscape

COMPLEX

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Empowered health consumerism

25% 50%

2008 2015

Deloitte Center for Health Solutions Survey, 2015

More consumers today prefer to partner with doctors rather than have their doctors make decisions for them

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Disruptive technology

75% of consumers say the use of technology in managing their health is somewhat or very important 60% of consumers say they are willing to share personal health data generated from digital devices, with their doctor to improve their health 79% of doctors prefer getting information online instead of a sales rep visit 75% 60% 79%

McKinsey, Healthcare Consumerism 2018 Deloitte, Inside the Patient Journey, 2018
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Pipeline complexion

  • Nearly 7,000 medicines are currently in development —

~3/4 of them potentially first-in-class

  • Between now and 2020, 55% of drugs seeking FDA

approval will be considered specialty drugs

  • By 2020, about half of the money spent on the pharmacy

benefit will be on specialty drugs, and these medications will be prescribed for fewer than 2% of patients

CVS Health, Managing the Thriving Specialty Pipeline, 2018 Pharmacy Practice News, 2018 2017 Consumer Report, Quintiles IMS
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Shifting HCP dynamics

45% of HCPs restrict sales rep access—twice that of 2008

2012 2018

Percentage of hospital-employed physicians increased by more than 70%

2010 2008 2016 2016

36% of US hospitals denied access to pharma reps in 2016

Physicians Advocacy Institute, 2018 SK&A, 2016 ZS Associates, 2018 22% 36% 23% 45%
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Pricing pressure & access barriers

  • Rising costs of generic and specialty drugs were mostly driven by

new product entry, whereas the rising costs of brand-name drugs were due to existing drug price inflation

  • Increased scrutiny from media and focus from politicians on

drug pricing

Bloomberg Businessweek, 2017 The Contribution Of New Product Entry Versus Existing Product Inflation In The Rising Costs Of Drugs, 2019
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Creating a unique, transformational platform for growth

2018

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We united the Evoke Health Firsthand, nitrogen, Tonic, Fabric and Traverse brands under one unified global Evoke Brand.

19
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We completed and integrated 3 strategic acquisitions, establishing our position and differentiation.

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SLIDE 70 Full-service media strategy, buying, planning & adtech Full-service HCP agency—largest on the west coast Market Access & Payer Marketing

Media

Navience

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together we are

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purpose-built to navigate today’s complex healthcare landscape

Digital DNA Data-Driven Culturally Connected Creatively Courageous 100% Health

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B O U N D B Y A C O M M O N V I S I O N

health more human™ n

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strategic connectivity drives our approach

Market Access Healthcare Professional Consumer & Patient PR & Influence Digital & MCM Media & Analytics FULL-SERVICE OFFERING

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Advanced media & analytics

Native Media Mobile Media Engagement Media Programmatic Media bile dia ve ia Local Media Performance Metrics Business Intelligence Social Media M M matic a Mob Med N M ment a Nativ Medi Paid & Organic Search Shopper Marketing Progr M Social Media ramm Medi Engag M siness lligence gem edia Strategic Services Point
  • f Care

Market Access Healthcare Professional Consumer & Patient PR & Influence Digital & MCM Media & Analytics FULL-SERVICE OFFERING

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Market Access

Patient & HCP geolocation

Claims matchback Diagnosis codes Insurance coverage Rx/treatment history MD visit history

Pat Tracked campaign engagement & KPIs

Verified engagement Brand-owned efforts Partner-owned efforts Event participation & geo-fencing

a Tra Search & social activity

Social engagement Social listening & monitoring Social followers & amplification Search and paid media targeting SEO & retargeting Media look-alike model

Healthcare Professional Consumer & Patient PR & Influence Digital & MCM Media & Analytics FULL-SERVICE OFFERING

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We’ve moved first, to put our clients first. and we are already seeing positive signs

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How we look at the health

  • f our new business pipeline

Win/conversion rate Business unit collaboration Global complexion Opportunity volume

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2017 2019

30% 12%

Clients shared across business units

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Media revenue at time of ANM Acquisition Current media forecast

$4.9mm $1.5mm

M ED I A + CREATI V E SY N ER GY

Clients shared across business units

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From 2017 to 2019 67%

Clients shared across global markets

Global client remits increased by over

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Significant growth in qualified new business

  • pportunities

Q1 2018 Q1 2019

5X

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New business performance

2018 win rate

62%

2018 win rate: 2+ business units

78%

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Opportunities that align with

  • ur purpose-built offering

Larger in scale Multi-market Multi-audience & multi- stakeholder Multi-market Larger in scale

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We’ve built the foundation for sustainable growth by designing one

  • f the most unique and competitive

agencies in the space

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Full service hubs Regional strategic

  • utposts
new york philadelphia san francisco princeton london chicago los angeles singapore dubai

A global structure designed to meet

  • ur clients needs
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Future areas to explore further

Global expansion Continued investment in integrated PR & influence Strategic content & production High-value consulting (strategic & technology)

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Introductions & Capabilties

march 21, 2019

C A P I T A L M A R K E T S D A Y 2 0 1 9

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