UDG Healthcare plc FY20 Interim Results Presentation & Group - - PowerPoint PPT Presentation

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UDG Healthcare plc FY20 Interim Results Presentation & Group Overview

19th May 2020 www.udghealthcare.com 6 months to 31st March 2020

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This Presentation has been prepared by UDG Healthcare plc and contains certain forward-looking statements, beliefs or opinions, including statements with respect to the Group's business, financial condition and operational results.

Forward looking statements

Some statements in this announcement are or may be forward looking statements. In particular, any statements that express forecasts, expectations and projections with respect to future matters, including trends in results of operations, margins, growth rates, overall market trends, the impact of interest or exchange rates, the availability of financing, anticipated cost savings and synergies and the execution of the Group’s strategy, are forward looking statements. They represent expectations for the Group’s business, including statements that relate to the Group’s future prospects, developments and strategies, and involve risks and uncertainties both general and specific, because they relate to events and depend upon circumstances that will occur in the future. The Group has based these forward looking statements on assumptions regarding present and future strategies of the Group and the environment in which it will operate in the

• future. However, because they involve known and unknown risks,

uncertainties and other factors including but not limited to general economic, political, financial, health, security and business factors, as well as international, national and local conditions which are beyond the Group’s control, actual results, performance, operations or achievements expressed

• r implied by such forward looking statements may differ materially from

those expressed or implied by such forward looking statements and accordingly you should not rely on these forward looking statements in making investment decisions. Any forward looking statements speak only as

• f the date they are made and, except as required by applicable law or

regulation, neither the Group nor any other party intends to update or revise these forward-looking statements after the date these statements are published, whether as a result of new information, future events or

• therwise. Nothing in this document should be construed as a profit
• forecast. UDG Healthcare plc and its directors accept no liability to third

parties.

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Presentation agenda

Introduction & H1 FY20 overview

Brendan McAtamney, CEO

H1 FY20 financial overview

Nigel Clerkin, CFO

Divisional & strategic review

Brendan McAtamney, CEO

Summary COVID-19 update

Brendan McAtamney, CEO

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Brendan McAtamney Chief Executive Officer, UDG Healthcare plc

www.udghealthcare.com 5 UDG Healthcare is a FTSE 250 global leader in the healthcare advisory, communications, commercial, clinical and packaging services industries.

Operating across two divisions, Ashfield and Sharp, UDG provides outsourced services which enable over 300 healthcare companies from large pharmaceutical to small biotech to bring their products to market, supporting patients to access and adhere to their medications and educating and communicating effectively with healthcare professionals and patients on these products.

UDG Healthcare overview

5 year

• perating profit

CAGR

9,000

employees MSCI ESG Rating Listed Countries

29

pharma companies as clients

Underpinned by positive market dynamics

Growth of global pharma market and R&D spend Increase in number of FDA drug approvals Growing proportion of specialty medicines Healthcare companies

• utsourcing to global

partners

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. *Operating profit and EPS are before the amortisation of acquired intangible assets, transaction costs and exceptional items.

+24%

Operating Profit*

+24% constant currency

ROCE

Increased from 12.2% in H1 FY19

EPS*

+16% constant currency

Net Revenue

+10% constant currency

Net Operating Margin

Increased from 12.0% in H1 FY19

97%

FCF Conversion

Strong H1 FY20 financial performance

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The diversified shape of UDG Healthcare

Business Unit Net Revenue Split

Ashfield Communications & Advisory Ashfield Commercial & Clinical Sharp

Geographic Revenue Split Customer Concentration (Revenue)

66% 18% 16% 8% 34% 58%

North America UK Rest of World / Other # 1 Customer # 2 -10 Customers Other Customers

34% 35% 31% 51% 21% 28%

Business Unit Operating Profit Split

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UDG Healthcare is building a sustainable business while remaining cognisant of our responsibilities to our people, our environment and our community.

In 2019, we achieved an MSCI ESG upgrade to AA In 2019 we were awarded Carbon Disclosure Project score of B-, exceeding the global average of C.

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COVID-19 Response

Protecting the wellbeing of

• ur people

Delivering for our clients Supporting local communities Business impact assessment

CSR

Cost management & liquidity

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COVID-19 Response –Protecting the wellbeing of our people

CSR

Protecting the wellbeing of

• ur people

Delivering for our clients

CSR

Supporting local communities

CSR

Business impact assessment

CSR Cost

management & liquidity

Since the start of the COVID-19 outbreak, our priority has been the health and wellbeing of our people and their families:

Global Response Team Additional health and safety measures Seamlessly working from home Wellbeing initiatives

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COVID-19 Response –Delivering for our clients

Despite the continued challenges, the Group and its people have continued to deliver for clients:

CSR

Protecting the wellbeing of

• ur people

Delivering for our clients

CSR

Supporting local communities

CSR

Business impact assessment

CSR Cost

management & liquidity

• Supported rapid launch of

three oncology therapies

• Supporting the development
• f COVID-19 vaccines and

treatments

• In-field teams pivot to virtual

engagement & support

• Providing medical information

support for a COVID-19 anti- viral clinical trial

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COVID-19 Response –Supporting local communities

CSR

Protecting the wellbeing of

• ur people

Delivering for our clients

CSR

Supporting local communities

CSR

Business impact assessment

CSR Cost

management & liquidity

Donating personal protective equipment to hospitals and surplus raw materials for face shields Donating to local foodbanks and hospitals to support our communities Supporting #fuellingthefrontline and #FeedTheHeroes

Greg Flynn, President of Ashfield Commercial & Clinical, delivering food parcels to the elderly in Philadelphia

#MarkforHeroes

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COVID-19 Response –Business impact assessment

CSR

Protecting the wellbeing of

• ur people

Delivering for our clients

CSR

Supporting local communities

CSR

Business impact assessment

CSR Cost

management & liquidity

51%*

Ashfield Communications & Advisory Business Pre-COVID-19 COVID-19 Impact

Strong H1 FY20 with underlying operating profit growth of 8%

• Some project deferrals and cancellations

within Medical Communications

• STEM reduced activity levels
• Limited impact to date on the remainder of

Communications & Advisory

Ashfield Commercial & Clinical

Performance in line with expectations with H1 FY20 operating profit in line with PY

• In-field based activities such as Meetings &

Events, field based representatives experiencing disruption

• Slight offset from increased call

centre/medical information activity

21%*

Very strong H1 FY20 with underlying operating profit growth of 24%

• Demand remains very robust
• Temporary disruption due to workforce

availability sequentially improving

• Social distancing impact on production

schedules being addressed through increased automation

28%*

Sharp

*of H1 FY20 operating profit

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COVID-19 Response –Cost management & liquidity

Suspended interim dividend for H1 FY20

CSR

Protecting the wellbeing of

• ur people

Delivering for our clients

CSR

Supporting local communities

CSR

Business impact assessment

CSR Cost

management & liquidity Implementing cost control measures to mitigate the potential negative impacts from COVID-19 Board and Senior Executive Team fee and base salary cut Group’s financial position remains robust with net debt / EBITDA of 0.3x

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UDG Healthcare is well positioned beyond the near-term challenges of COVID-19

Excellent market fundamentals Very talented and dedicated people Strong and diversified business Robust financial position

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Nigel Clerkin Chief Financial Officer, UDG Healthcare plc

18 UDG Healthcare plc www.udghealthcare.com 18

H1 FY20 Financial Summary

H1 FY19 H1 FY20 % CC Increase^ % Underlying Increase~

Net Revenue

$546.2m $596.2m ↑10% ↑4%

Operating profit*

$65.6m $81.3m ↑24% ↑10%

EPS (C)*

20.32 23.64 ↑16% ↑5%

ROCE

12.2%

H1 FY19

14.1%

H1 FY20

Net Operating Margin

12.0%

H1 FY19

13.6%

H1 FY20

^ The average H1 FY20 exchange rates were $1:€0.9051 and $1:£0.7797 (H1 FY19 $1:€0.8783 and $1:£0.7725) ~ Throughout this presentation, references to underlying growth are financial metrics adjusted for the impact of currency translation movements and any acquisition or disposal activity *Before amortisation of acquired intangible assets, transaction costs and exceptional items. .

19 UDG Healthcare plc www.udghealthcare.com 19

H1 FY20 Divisional Overview -Continued strong performance across both divisions

Operating profit ($m)

47.4 18.2 58.6 22.7

Ashfield Sharp

+24% CC ↗ +24% CC ↗

^ Throughout this presentation, references to underlying growth are financial metrics adjusted for the impact of currency translation movements and any acquisition or disposal activity. * Net operating margin adjusts for pass-through revenues upon which no margin is earned

• Underlying^ net revenue flat
• Underlying^ operating profit increased by +5%
• Net operating margin increased to 14.3%
• Underlying^ net revenue increased by +13%
• Underlying^ operating profit growth of +24%
• Net operating margin increased to 12.2%

NET OPERATING MARGIN*

12.5% 14.3% 11.0% 12.2%

UNDERLYING^ NET REVENUE GROWTH RATE

• +13%

UNDERLYING^ OPERATING PROFIT GROWTH RATE

+5% +24%

20 UDG Healthcare plc www.udghealthcare.com 20

Strong H1 FY20 EPS growth from both underlying growth and acquisitions

GROUP EPS ($c) +16%

Constant Currency EPS Growth +16%

23.6c 20.3c +5% +11%

Underlying operating profit: +10% Tax: (3%) Interest: (2%)

21 UDG Healthcare plc www.udghealthcare.com 21

Continued strong free cashflowconversion in H1 FY20

H1 FY20 Net Debt: $58m

Ope pening Net t De Debt EB EBITDA Wor Working Capital Capex Di Dividends Tax, Inte nterest, & Capital Lease Re Repayments ts Ac Acquisitions & Di Disposals Closing Net t De Debt*

Net Debt/EBITDA: 0.3x

FCF Conversion: 97%

*Net debt excludes lease liabilities associated with the adoption of IFRS 16

(20)

Medium-term FCF % target raised to 65%-70%

22 UDG Healthcare plc www.udghealthcare.com 22

Strong balance sheet and liquidity position

*The unsecured loan notes and senior bank facilities are subject to compliance with certain covenants including a leverage covenant (net debt to annualised EBITDA) not to exceed 3.5:1. Leverage covenants exclude the impact of IFRS 16.

H1 FY20 Net Debt/EBITDA

Leverage covenant of 3.5x*

$151m cash

at H1 FY20

$230m

Leverage covenant of 3.5x*

Undrawn fully committed RCF

Low leverage Robust liquidity Access to funding

0.3x

Strong cash position

23 UDG Healthcare plc www.udghealthcare.com 23

Strong balance sheet to support continued investment priorities

• Medium-term guidance of
• approx. $50m per annum
• Investments in infrastructure,

talent, and systems

• Proud 30 year+ history of

consistent dividend growth – however, FY20 interim dividend currently suspended due to COVID-19 uncertainty

• Completed 23 acquisitions

(c. $880m) and 5 disposals (c. $635m) since 2012

• Net debt to EBITDA 0.3x at 31st

March 2020

Reinvestment to support continued sustainable growth Progressive shareholder returns policy Acquisitions in line with strategic priorities

All investments are subject to a 3-year 15% ROCE hurdle

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Ashfield Communications & Advisory –H1 FY20 financial overview

51%

% of H1 FY20 Group Operating Profit

^ Throughout this presentation, references to underlying growth are financial metrics adjusted for the impact of currency translation movements and any acquisition or disposal activity. * Net operating margin adjusts for pass-through revenues upon which no margin is earned.

• Strong performance in H1 FY20 with net revenue growth of +30% and operating profit growth of

+37% , driven by good underlying growth and the benefit of acquisitions

• On an underlying^ basis, net revenue growth of +7% and operating profit growth of +8%
• Net operating margins* increased to 20.4%

6m to 31st March 2020 $m H1 FY19 H1 FY20 % Change % Constant Currency % Underlying ^ Growth Net Revenue 154.5 201.0 +30% +31% +7% Operating Profit 30.0 41.1 +37% +37% +8% Net Operating Margin* 19.4% 20.4% +100bps

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Ashfield Commercial & Clinical –H1 FY20 financial overview

^ Throughout this presentation, references to underlying growth are financial metrics adjusted for the impact of currency translation movements and any acquisition or disposal activity. *Net operating margin adjusts for pass-through revenues upon which no margin is earned.

21%

% of H1 FY20 Group Operating Profit

• Performance in line with previously communicated expectations
• Net revenue declined on a reported basis, including the disposal of Ashfield’s pharmacovigilance

business

• On a reported basis, operating profit growth of +1%, reflecting the benefit of 2019 restructuring
• Net operating margins increased to 8.3%

6m to 31st March 2020 $m H1 FY19 H1 FY20 % Change % Constant Currency % Underlying ^ Growth Net Revenue 226.1 209.4 (7%) (6%) (5%) Operating Profit 17.4 17.5 +1%

• Net Operating Margin*

7.7% 8.3% +60bps

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Payor Patient

Healthcare Professional

Data/ Analytics Digital Face to face

Ashfield Commercial and Clinical Ashfield Communications Ashfield Advisory

Call Centre Nurse/PSP Sales Reps Meetings Digital Content Creative Content Scientific Content Research Audit Management Consulting 1997 2010 2016 2020

Successful strategic execution and evolution within Ashfield

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Continued strategy execution in Ashfield

Communications & Advisory accounts for 70% of Ashfield’s

• perating profits

Increasing examples of cross collaboration Disposal of Ashfield Pharmacovigilance

70%

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Collaboration and cross selling -An integrated client solution from Ashfield

Nurse led, patient support programme secured by Ashfield Commercial & Clinical and MicroMass in Q1 FY20 3 year contract to design the

• verall patient experience strategy

and execute an omnichannel patient support programme Programme to launch in H2 FY20, delivered by nurse clinical educators from Ashfield’s contact centre in Fort Washington supported by MicroMass’ behavioural science programmes and insights New solution for the client who has not previously delivered a patient support programme, delivered to patients with high levels of treatment failure and adherence issues

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Sharp –H1 FY20 financial overview

% of H1 FY20 Group Operating Profit

^ Throughout this presentation, references to underlying growth are financial metrics adjusted for the impact of currency translation movements and any acquisition or disposal activity. .

• Strong underlying^ growth with revenue increasing by +13% and operating profit increasing by +24%
• Strong growth driven by continued increased demand for the packaging of serialised biotech and

specialty products

• Well positioned to serve this continued increase in demand following investments made during 2019

and recent capacity expansion / acquisition

6m to 31st March 2020 $m H1 FY19 H1 FY20 % Change % Constant Currency % Underlying ^ Growth Revenue 165.6 185.8 +12% +13% +13% Operating Profit 18.2 22.7 +25% +24% +24% Operating Margin 11.0% 12.2% +120bps

• 28%

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Continued strategic progress in Sharp

Completion of Sharp US commercial capacity expansion Acquisition of a packaging facility near Allentown, Pennsylvania for approximately $5 million Sharp Europe site consolidation

• n track

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Completed 23 acquisitions since 2012, complementing good underlying growth

Bethlehem site

Acquisitions

2012 2013 2014 2016 2017 2018

Disposed Disposed Disposed

2019 2020

Disposed

Macungie site

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Continuous record of strong operating profit growth

Ashfield and Sharp combined operating profit CAGR of +14% since FY14

*Excludes Aquilant *Based on IAS 18 historical operating profit performance

Ashfield Sharp

Operating Profit Growth: Ashfield and Sharp ($m)*

57.5 68.3 70.6 81.6 98.4 108.4 25.9 34.0 38.2 41.3 45.8 50.0 83.4 102.3 108.8 122.9 144.2 158.4

FY14 FY15 FY16 FY17 FY18 FY19

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Summary & outlook

Medium Term Outlook Strong H1 FY20 financial performance Robust balance sheet and liquidity profile Managing the impact of COVID-19 Strong long-term market fundamentals

Ashfield medium term underlying operating profit growth

5-10%

Sharp medium term underlying operating profit growth

>10%

Medium term Free Cash Flow conversion rate

65 - 70%

Capex per annum (Inc. $35m maintenance capex)

$50m 15%

3-year ROCE hurdle rate for all investments

FY20 financial guidance withdrawn

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UDG Healthcare plc Group Overview

6 months to 31st March 2020

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Our strategy is to grow and improve our organisation by providing market-leading

• utsourced services to our clients,
• utstanding development
• pportunities for our people, and

long term sustainable value for

• ur shareholders.

Executing our strategy

Strategic pillars

Our roadmap to achieving our strategy is built around three strategic pillars 2. Transforming through people 3. Continuous improvement

Geographic and service growth Client focus and commercial excellence Talent and people Quality and compliance Improve productivity

In turn our strategic objectives provide clarity and direction on how we deliver our strategy and enable us to evaluate our progress

Strategic objectives

1. Developing and growing market leading positions

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UDG Healthcare overview

Supplemented with inorganic growth Business Market Fundamentals Divisional Growth Drivers Underlying Medium-Term Outlook

• f H1 FY20

Operating Profit

72%

• f H1 FY20

Operating Profit

28%

• $6bn market size
• 5% Growth CAGR
• 15% Outsourcing
• $10bn market size
• 3-8% Growth CAGR
• 40-50% Outsourcing
• $6bn market size
• 6-8% Growth CAGR
• 25% Outsourcing
• $7bn market size
• 6-8% Growth CAGR
• 50% Outsourcing

Commercial & Clinical: Comms & Advisory: Commercial Packaging: Clinical Services: Commercial & Clinical

• Market growth supported by new drug launches
• Growth in outsourcing levels
• Demand for innovative, multi-channel offerings

Communications & Advisory

• Specialty products increasing demand for

multichannel and digital communications

• Fragmented market, benefits for scale players
• Cross-selling opportunities

Sharp

• Increasing outsourcing penetration
• Demand for secondary packaging of

injectable products

• Client demand for strategic

relationships from clinical services through to commercial services

>

5-10%

Underlying

• perating

profit growth

10% +

Underlying

• perating

profit growth

M&A

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Business overview

A global leader in contract clinical, manufacturing,

packaging and technology services

28%

• f H1 FY20

Operating Profit Medium term

• perating profit

growth outlook*

*Underlying growth

A global leader in healthcare advisory, communications, commercial and clinical services for the pharmaceutical and healthcare industries

5-10% 72%

• f H1 FY20

Operating Profit Medium term

• perating profit

growth outlook*

Phase 1-3 Prelaunch Launch In Market Advisory Healthcare Communications Commercial & Clinical Commercial Clinical

>10%

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Investment proposition

• 1. Positive market dynamics

with growing FDA approvals and trend towards increased

• utsourcing
• 2. Global presence and

strong market positions, diversified by geography, services and customers

• 3. Not directly linked to

drug pricing, fee for service model

• 4. Clear medium term

underlying operating profit growth guidance

• 5. Strong balance

sheet to support M&A

• 6. Investments to

support sustainable growth

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Ashfield Overview

72%

57 57.5 68 68.3 70 70.6 81 81.6 98 98.4 10 108.4

FY14 FY15 FY16 FY17 FY18 FY19

*Adjusted for amortisation of acquired intangible assets, transaction costs, and exceptional items

Operating profit* ($m) A global leader in healthcare advisory, communications, commercial and clinical services

7,200

People across 28 countries Delivering services in more than 50

COUNTRIES

Partnering with the top

30 GLOBAL PHARMA COMPANIES TRANSFORMED

Communications & Advisory accounts for approximately 70% of

• perating profits of

Ashfield

*Based on IAS 18 historical operating profit performance

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Supplemented by strong creative communications, digital, data and analytics expertise

Ashfield Communications –Overview & Strategy

What we do

Scientific and creative communications, digital and patient-centered content for medical affairs and brand commercialisation with areas of specialty including behavioural science, rare disease, PR and on-demand advertising services.

Where we do it

Offices in New York, Boston, New Jersey, Raleigh, San Diego, Manchester, London and Brighton.

Strategy & Differentiation

Key focus to increase collaboration between agencies Strategy to continue to expand into aligned adjacencies to core scientific communication capabilities Global network of business and talent driven by a ‘science first’ perspective

Our people

We have 1,400 people, including approximately 400 with a PhD or equivalent

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Ashfield Communications –Market Overview

Competitive landscape

Broad range of peers including:

• Pureplay healthcare communications

businesses (Huntsworth, Precision Health, Intouch Group, Syneos)

• Fragmented market of smaller

independent agencies

• Advertising agencies (WPP, IPG, Havas,

Omnicom)

Key Growth Drivers

• Increasing outsourcing penetration
• Growth of specialty products leading to

increased demand for multi-channel and digital comms

• Increasing number of molecules being

developed and approved

• Migration to direct patient engagement
• Growth in orphan drug and rare diseases

Estimated Ashfield market share <5% Outsourced Market size $7.3bn Estimated market growth rate 3-8% Estimated

• utsourcing

rate 40-45% Margin profile 15%-25%

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Ashfield Advisory -Overview & Strategy

Healthcare consulting focused on brand strategy, planning and launch

140 + people

based in Philadelphia, Boston and London Acquired in

2017 Strategy: Cross-selling, international expansion, and client and service expansion

Acquired in

2018

Strategic commercial, consulting and analytics business

120 + people

based in New York, India and London

200 + people

• ffering audit services

across 51 countries Acquired in

2016

Accelerating excellence in brand strategy execution

125 + people

based in Boston and San Francisco Acquired in

2019

Strategic management healthcare consultancy

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Ashfield Advisory –Market Overview

Competitive landscape

• Competitive landscape includes large

global pure-play consultancies (McKinsey, Accenture) in addition to niche healthcare consultancies

Key Growth Drivers

• Increasing outsourcing penetration
• Changing and increasingly complex

therapies and launches

• Growing demand for data and informed

research to improve decision making

• Increasing number of molecules in

development and positive FDA approval

• utlook

Estimated Ashfield market share <5% Outsourced Market size $2.9bn Estimated market growth rate 6-8% Estimated

• utsourcing

rate 40-45% Margin profile 15%-30%

Sources: Company data, BCG research.

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Ashfield Commercial and Clinical -Overview & Strategy

Ashfield continues to invest to expand and differentiate its offering.

Recent activity includes:

50% 50%

• f operating profit generated

from commercial/CSO related activities

• f operating profit from clinical,

patient support, medical information, pharmacovigilance, meetings and events and market access services

Where we do it

Ashfield Commercial and Clinical provides services across

22 countries 5,100 people 50/50

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Ashfield Commercial & Clinical –Market Overview

Competitive landscape

• Competitive landscape includes large

players Syneos, IQVIA and TouchPoint

• In-country competitors varies by

geographic market

Key Growth Drivers

• Significant potential for increased
• utsourcing, offsetting a decline in the total

number of sales reps

• Increasing demand for innovative models,

multi-channel offerings

• Growth of specialty products leading to

increased complexity and support requirements

• Increasing importance of patient adherence

Ashfield market share varies by geography Outsourced Market size $6.1bn Estimated market growth rate 5% Estimated

• utsourcing

rate 15% Margin profile 7%-15%

Sources: Company data, BCG research.

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Ashfield -Acquisitions In Line With Strategy

Strategic Fit / Capabilities People & Cultural Fit ROCE 15%+ within 3 years

M&A REMAINS A KEY PRIORITY FOR THE GROUP:

Ashfield Advisory

• Strategic consulting
• Brand consulting & advisory
• Market Access, Health Economics and

Outcomes Research

• Patient, commercial & marketing audits

Ashfield Communications

• Extension of communications

capabilities incorporating: – Scientific health comms – Commercial / Creative comms – Patient engagement & behaviour – Public relations – Digital, data & analytics solutions

Ashfield Commercial & Clinical

• Strengthen contract sales capabilities
• Extend clinical / nurse services
• Expand medical information

and commercial call centres

ASHFIELD KEY FOCUS AREAS INCLUDE:

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Sharp Overview

*Adjusted for amortisation of acquired intangible assets, transaction costs, and exceptional items

25.9 34.0 38.2 41.3 45.8 50.0

FY14 FY15 FY16 FY17 FY18 FY19

Operating profit* ($m)

Sharp US Sharp EU Sharp Clinical A global leader in contract packaging and clinical trial supply services 1,800

Employees Operations in

4 COUNTRIES

Belgium, Netherlands USA, UK

8 GMP & FDA

Approved facilities

28%

*Based on IAS 18 historical operating profit performance

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Addressable Outsourced Market size $12-$14bn

Sharp –Market Overview

Competitive landscape

• Commercial competitors include large

pure play Contract Packaging Organisations (CPO) such as PCI, Contract Manufacturing Organisations (CMO) and smaller scale CPO’s

• Clinical competitors include

ThermoFisher, Catalent and Almac

Key Growth Drivers

• Increasing outsourcing penetration
• Demand for secondary packaging of injectable

products

• Increasing requirement to access specialist

technology solutions and capabilities

• Client demand for strategic relationships from

clinical services through to commercial services Estimated market growth rate 6-8% Estimated outsourcing rate: Commercial c. 25%-30% Clinical c. 50% Market share: Commercial c. 5-10% Clinical < 5%

Sources: Company data, Deloitte research.

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Sharp –Acquisitions & Investments In Line With Strategy

Strategic Fit / Capabilities People & Cultural Fit ROCE 15%+ within 3 years

M&A REMAINS A KEY PRIORITY FOR THE GROUP:

Sharp Commercial

• Continued investment in facilities and equipment to

provide additional capacity

• Bolt on acquisitions of other commercial packaging

businesses and facilities

• Expand niche manufacturing capabilities, focused on

biotech / injectables / finished dose formulation

Sharp Clinical

• Expand clinical services offering to provide an

integrated offering

• Focus on formulation development, analytical

testing and manufacturing

• Expand geographical reach

SHARP KEY FOCUS AREAS INCLUDE:

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Segmental Overview

6 months to 31 March 2020 H1 FY20 Change

Net^ Revenue $m Op Profit* $m Net^ Margin Net^ Revenue Net^ Revenue Underlying Op Profit* reported Op Profit* Underlying Net^ Margin

Ashfield $410.4 $58.6 14.3% 8%

• 24%

5% +180bp Sharp $185.8 $22.7 12.2% 12% 13% 25% 24% +120bp Total $596.2 $81.3 13.6% 9% 4% 24% 10% +160bp

^ Adjusted for pass-through revenues. Pass through revenues of $97.4m in H1 FY20 and $110.4m in H1 FY19. *Operating profit before amortisation of acquired intangible assets, acquisition costs and exceptional items

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Ashfield Segmental Summary

6 months to 31 March 2020 H1 FY19 H1 FY19 H1 FY19 H1 FY20 H1 FY20 H1 FY20 % Change % Change % Change % Change

Net^ Revenue $m Op Profit* $m Net^ Margin Net^ Revenue $m Op Profit* $m Net^ Margin Net^ Revenue Net^ Revenue Underlying Op Profit* Op Profit* Underlying

Communications & Advisory $154.5 $30.0 19.4% $201.0 $41.1 20.4% 30% 7% 37% 8% Commercial & Clinical $226.1 $17.4 7.7% $209.4 $17.5 8.3% (7%) (5%) 1%

• Total

$380.6 $47.4 12.5% $410.4 $58.6 14.3% 8%

• 24%

5%

^ Adjusted for pass-through revenues. Pass through revenues of $97.4m in H1 FY20 and $110.4m in H1 FY19. *Operating profit before amortisation of acquired intangible assets, acquisition costs and exceptional items

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Sharp Segmental Summary

6 months to 31 March 2020 H1 FY19 H1 FY19 H1 FY19 H1 FY20 H1 FY20 H1 FY20 % Change % Change % Change % Change

Revenue $m Op Profit* $m Margin Revenue $m Op Profit* $m Margin Revenue Revenue Underlying Op Profit* Op Profit* Underlying

Total $165.6 $18.2 11.0% $185.8 $22.7 12.2% 12% 13% 25% 24%

*Operating profit before amortisation of acquired intangible assets, acquisition costs and exceptional items

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Key performance indicators and non-IFRS performance measures

The Group reports certain financial measurements that are not required under International Financial Reporting Standards (IFRS) which represent the generally accepted accounting principles (GAAP) under which the Group reports. The Group believes that the presentation of these non-IFRS measurements provides useful supplemental information which, when viewed in conjunction with IFRS financial information, provides stakeholders with a more meaningful understanding of the underlying financial and operating performance of the Group and its divisions. These measurements are also used internally to evaluate the historical and planned future performance of the Group’s

• perations and to measure executive management’s

performance based remuneration. None of the non-IFRS measurements should be considered as an alternative to financial measures derived in accordance with IFRS. The non- IFRS measurements can have limitations as analytical tools and should not be considered in isolation or as a substitute for an analysis of results as reported under IFRS.

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Return on Capital Employed (ROCE) Calculation

Calculation

As per Interim Statement As at 31 March 2020 $’000 As at 31 March 2019 $’000

Net assets Balance Sheet 945,303 892,675 Net debt Note 13 58,239 56,780 Assets before net debt Cumulative intangible amortisation Cumulative restructuring costs 1,003,542 226,527 20,632 949,455 197,173 25,714 Total Capital Employed 1,250,701 1,172,342 Average total capital employed Rolling 12 month adjusted operating profit 1,211,522 170,536 1,194, 822 145,753 Return on Capital Employed 14.1% 12.2%

ROCE is the adjusted operating profit expressed as a percentage of the Group’s net assets employed. Net assets employed is the average of the opening and closing net assets in the period excluding net debt adjusted for the historical amortisation of acquired intangible assets and restructuring charges.

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Adjusted EBITDA Calculation

Calculation

As per Interim Statement 6 months Ended 31 March 2020 $’000 6 months Ended 31 March 2019 $’000 12 months Ended 31 March 2020 $’000 12 months Ended 31 March 2019 $’000

Adjusted operating profit Share-based payment expense Depreciation Depreciation of right of use assets Amortisation of computer software Joint venture profit share (Profit)/loss on disposal of PP&E Income Statement Cash Flow Statement Cash Flow Statement Cash Flow Statement Note 10 Note 4 Cash Flow Statement 81,298 2,628 11,331 8,128 4,694 (954) (26) 65,602 2,521 11,764

• 3,657

418 (678) 170,536 4,827 22,697 8,128 9,064 (1,422) 80 145, 753 5,027 24,213

• 7,078

(403) (744) Adjusted EBITDA 107,099 83,284 213,910 180,924

Adjusted EBITDA is adjusted operating profit (operating profit before amortisation of acquired intangible assets, transaction costs and exceptional items) before depreciation, share-based payment expense, amortisation of computer software, the share of joint venture profits/(loss) and profit/(loss) on disposal of property, plant and equipment

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UDG HEALTHCARE PLC 20 Riverwalk Citywest Business Campus Citywest Dublin 24 Ireland Keith Byrne, Head of Investor Relations, Strategy & Corporate Communications investor@udghealthcare.com +353 1 468 9000