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ICON plc November 2009. Forward Looking Statements.
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ICON plc November 2009
Forward Looking Statements Certain statements contained herein including, without limitation, statements containing the words “believes,” “anticipates,” “intends,” “expects” and words of similar import, constitute forward-looking statements concerning the Company's operations, performance, financial condition and prospects. Because such statements involve known and unknown risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. Given these uncertainties, prospective investors are cautioned not to place undue reliance on such forward-looking statements. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. This presentation includes selected non-GAAP financial measures. For a presentation of the most directly comparable GAAP financial measures, please refer to the Quarter 3 2009 press release consolidated income statement headed Consolidated Income Statements (Unaudited) (US GAAP)
Market Fundamentals Still Intact • Outsourcing Penetration expected to increase • More Strategic approach to outsourcing • Cost containment • Globalisation of clinical research • Continued R&D Spending Growth. • Pipelines remain solid • Scientific innovation continues to expand • Increasing Regulation • More patients/ more studies • Post marketing surveillance
Increased Outsourcing • Clients are increasingly focused on their core competencies of • Discovery • Strategic Development • Marketing • Clients are engaging CROs at a more strategic level • Level of management engagement (Executive to executive) • Level of co-operative engagement i.e. sharing drug pipeline intentions • Deeper reliance on CRO scientific and therapeutic expertise • Reduced internal capacity in the companies of strategic partners e.g. staff or asset transfers/reductions • Clients likely to move their % outsourced from ≈ 30% to >50% over the next 5+ years
Market Fundamentals Still Intact • Outsourcing Penetration expected to increase • More Strategic approach to outsourcing • Cost containment • Globalisation of clinical research • Continued R&D Spending Growth. • Pipelines remain solid • Scientific innovation continues to expand • Increasing Regulation • More patients/ more studies • Post marketing surveillance
Market Fundamentals Still Intact • Outsourcing Penetration expected to increase • More Strategic approach to outsourcing • Cost containment • Globalisation of clinical research • Continued R&D Spending Growth. • Pipelines remain solid • Scientific innovation continues to expand • Increasing Regulation • More patients/ more studies • Post marketing surveillance
Opportunities…. but also Risks ICON in this Market Environment
Net New Business Wins and Book to Bill Ratio Book to Bill Ratio Net Business Wins
Analysis of Business Wins Q3 09 Net Wins YTD 09 Net Wins
Coverage of next 4 quarters from Backlog Value of backlog forecast to be earned in next 4 quarters
Projects of Longer duration lead to slower backlog burn
ICON’s Core Strategy is Organic Growth,with acquisitions made to add new services or scale • Capitalise on market fundamentals to drive organic growth in all business units. • Cross-sell services to grow sales and margin • Build Deep Strategic Relationships • Create Stronger differentiation across our services • Retain a flexible business model to respond to differing client outsourcing strategies • Pursue acquisitions to enhance depth and scale of current operations and to add additional complementary services e.g. • Safety/Late Phase • Imaging • Japan • Acquisitions to date – 13 • Revenues acquired $130m • Staff acquired – 1,200 • => Organic growth >80% • Phase I • Bioanalytical / Biomarkers • Therapeutic specialists
ICON in recent Surveys • “ICON is one of three CRO’s cited most frequently as sponsor’s favourite CRO vendors” • “Our confidence goes up that ICON is the right name to own in this environment, given their consistent quality” • ““ ICON is a darling of the industry, the company's stunning growth in 2006 and 2007 surprised its peers. Now, the Dublin-based company is still outpacing just about everybody, but at a less accelerated clip.”
Net Revenue CAGR of 28% since 2005 (E) CAGR 28% * Mid point of Guidance Oct 21st
Earnings Per Share Growth (E) CAGR 37% * Mid point of Guidance October 21st
Cash Flow from Operations / Free Cash Flow FCF Per Share * Estimate assumes DSO of approx 60 days. Historic periods FCF exclude Head-office construction costs
Recent Financial Performance ($ millions) Quarter 3 2009
Recent Financial Performance ($ millions) YTD 2009
ICON Plc Historic Share Price Performane ICON S&P 500 Nasdaq Composite
Investment Case Summary • Top Global Clinical CRO - #4 • Deep customer relationships • Quality of staff • Experienced Management team • Excellent Reputation • Solid market fundamentals • Outstanding record of growth • Strong balance sheet