12 MAY 2021

UDG Healthcare plc (“UDG Healthcare” or “Group”), a leading international healthcare services provider, announces its results for the six months to 31 March 2021, in which the Group delivered a strong performance.

Key updates

  • Adjusted diluted earnings per share (EPS) increased by 8%* against a strong comparative period
  • Group net revenue flat* on the prior period
  • Adjusted operating profit increased by 10%* (8% underlying and 2% acquisition benefit):
    - A good performance across both parts of Ashfield with adjusted operating profit up 7%* against a strong comparative period; and
    - A continued strong performance from Sharp with adjusted operating profit increasing by 19%*
  • Adjusted Group net operating margins increased from 13.6% to 14.8% with margins increasing in both Ashfield and Sharp
  • $80 million committed to strategic acquisitions to date, including:
    - Acquisition of PHMR Limited (“PHMR”), a market access consultancy based in the U.K. and Ireland, announced in January 2021 for up to $43.6 million; and
    - Acquisition of Nuvera LLC (“Nuvera”), a US-based healthcare consultancy specialising in patient support programmes for a total potential consideration of up to $36 million in April 2021 (post period end)
  • Robust balance sheet with net debt to EBITDA of 0.2x and a continued strong free cash flow conversion performance of 76%
  • The FY21 financial guidance provided with our First Quarter Trading Update on 26 January has been adjusted as follows to reflect the benefit of the acquisition of Nuvera announced today:
    - Constant currency adjusted operating profit growth of between 12% and 14% (previously 11% and 13%) ahead of the $165.3m reported in FY20
    - Constant currency adjusted diluted earnings per share (EPS) growth of between 10% and 12% (previously 9% and 11%) ahead of the 47.71 $ cent reported in FY20

* on a constant currency basis

Chief Executive’s comment

Chief Executive Officer, Brendan McAtamney commented:

“We are pleased to report another strong trading performance, predominantly driven by underlying operating profit growth across both Ashfield and Sharp, supplemented by the benefit of recent acquisitions.

We continue to expand the range of services we offer clients across many therapeutic areas including several COVID-19 related projects. Additionally, we continued to execute strategic acquisitions, committing $80m to date in FY21, expanding our capabilities in market access and patient support programmes, and further growing our presence across the U.K., E.U. and U.S.

Looking ahead, our businesses remain resilient, supported by their market leading positions and compelling service offerings, underpinned by excellent long-term market fundamentals.”

Shareholders are referred to today’s announcement of a recommended cash offer for the entire issued and to be issued share capital of UDG Healthcare plc by Nenelite Limited (a newly incorporated company and affiliate of Clayton, Dublier & Rice LLP, formed for Clayton, Dublier & Rice LLP, in its capacity as adviser to Clayton, Dublier & Rice LLC as manager of CD&R Funds X and XI)).

Financial Results – six months to 31 March 2021

 IFRS based

31 March 2021

$'m

31 March 2020

$'m

 Increase / (decrease)

%

 
         
Revenue 661.4 693.6 (5)  
Operating profit 72.6 68.5 6  
Profit before tax 65.1 62.3 5  
Diluted earnings 
per share ("EPS") (cent)
20.35 22.03 (8)  
  31 March 2021 31 March 2020 30 September 2020  
Net debt ($'m) 34.3 58.2 16.2  
Net debt ($’m) including IFRS 16 lease liabilities 136.3 157.1 119.9  
Net debt/annualised EBITDA (times) 0.2 0.3 0.1  
Alternative performance measures 31 March 2021 
$'m
31 March 2020 
$'m
Increase
(decrease)

%

Constant

currency

increase (decrease)
%

Revenue 661.4 693.6 (5) (7)
Net Revenue 609.0 596.2 2 -
Adjusted operating profit 90.0 81.3 11 10
Adjusted profit before tax 82.4 75.0 10 10
Adjusted diluted earnings per share ("EPS") (cent) 25.55 23.64 8 8

 

Group development and outlook

Supporting our clients to develop treatments and vaccines for COVID-19 and protecting our people

Across the Group, we continue to use our expertise to support our clients in their efforts to bring COVID-19 treatments and vaccines to the market.

Sharp continues to support the packaging and distribution of multiple clinical trials and treatments related to COVID-19. Ashfield is providing support on multiple COVID-19 related products, ranging in scale and at various stages of progress. It is due to the commitment and dedication of our people across the Group that we have been able to continue to support our clients as they develop drugs and treatments for patients across the world.

Corporate development

The Group continued to make good progress from a corporate development perspective, completing two strategic and complementary acquisitions to date for a total consideration of up to $80m.

As previously announced, in January 2021, Ashfield completed the acquisition of PHMR, a market access consultancy based in the U.K. and Ireland. The business specialises in healthcare technology assessment, pricing and reimbursement strategy, and real-world evidence generation. PHMR was acquired for a total consideration of up to $43.6 million, comprising an initial consideration of $30 million, with an earn-out of up to $13.6 million payable over two years, based on the achievement of agreed performance targets.

In April 2021, post the period end, Ashfield completed the acquisition of Nuvera, a healthcare consultancy business specialising in helping clients to design, implement and manage patient support programmes that enhance access to treatments, and improve adherence to rare disease and specialty therapeutics. Based in New Jersey, USA, Nuvera’s service offering is highly complementary to Ashfield Engage’s Patient Solutions business. Nuvera was acquired for a total consideration of up to $36 million, $24 million paid initially, in addition to an earn-out of up to $12 million over a three-year period.

Balance sheet and liquidity

The Group’s net debt was $34.3 million (0.2x net debt to EBITDA) at 31 March 2021. This compares to the Group’s banking covenant of 3.5x net debt to EBITDA.

The Group’s strong balance sheet leaves it well placed to fund the continued organic and inorganic development of its two global growth platforms Ashfield and Sharp, through capital investment and further strategic acquisitions as those opportunities arise.

Group outlook

The FY21 financial guidance provided with our First Quarter Trading Update on 26 January has been adjusted as follows to reflect the benefit of the acquisition of Nuvera announced today:

  • Constant currency adjusted operating profit growth of between 12% and 14% (previously 11% and 13%) ahead of the $165.3m reported in FY20
  • Constant currency adjusted diluted earnings per share (EPS) growth of between 10% and 12% (previously 9% and 11%) ahead of the 47.71 $ cent reported in FY20.

Notes:

1. Alternative performance measures (“APMs) are 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. APMs are presented to provide readers with additional financial information that is regularly reviewed by management. 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. APMs should not be considered in isolation or as a substitute for an analysis of results as reported under IFRS. See “Additional Information” on page 32 for definitions and reconciliations to the closest respective equivalent GAAP measure.

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