capital markets day 2019 - huntsworth · 2019-08-01 · & wearable integration 14% cagr...

Capital Markets Day 2019Huntsworth Plc

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2Capital Markets Day - 9th May 2019

Paul TaaffeChief Executive Officer

Welcome

Agenda

2.30pm – Welcome & Introduction• Paul Taaffe

Chief Executive Officer

• Neil JonesChief 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

Presenting Team

Capital Markets Day - 9th May 2019 5

Paul TaaffeChief Executive

Officer

Neil JonesChief Financial

Officer

Elaine FergusonChief Executive

OfficerMEDiSTRAVA

Reid ConnollyChief Executive

OfficerEvoke

Paul TaaffeChief Executive Officer

Healthcare Continues To Be Our Focus

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


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 10of Americans

3/4of deaths

3 Seconds

50million


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 11469 77 82 88 94 100 112 125 138 151 169 192 216 240 262

558 590 572 569 581 565 576 583 608 631 663706

749785

828

0

20,000

40,000

60,000

80,000

100,000

120,000

0

200

400

600

800

1000

1200

1400

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

Glo

ba

l GD

P in

$b

n

WW

Pre

scrip

tion

Dru

g Sa

les i

n $b

n

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

Generics Orphan Prescription excl Generics & Orphan Global GDP in $bn


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

$3bn2003

$2m2007

$1,0002017

$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

$203.9bnraised in 2018

in Biotech2

$7.2bn

R&D spend by top 15 pharma over 5 years1

32%

Number of trials current ongoing5

GlobalPharma 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 over past 10 years1

26%

growth in R&D based on number

of 2018 clinical trials1

9%

of NMEs launched in 2018 originated from early biotechs1

64% of the therapies launched in the US in 2018 were attributed to early biotechs1

47%

Biotech IPOs in 2018268

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-COMMERCEGENOMICS

RISE OF BIG

DATA

PERSONALISEDMEDICINE

NASHRISE OF STEM CELLS

USECRISPR

Diagnosis, treatment and lifestyle interventions will be increasingly

personalised to individual patient genetics, family history and other factors.

CAR-TUSES THE IMMUNE

SYSTEM TO KILL CANCER CELLS

HEP CGENOME

TREATMENT SELECTION

NEW LINKER

TECHNO-LOGIES

AI POWERED

HEALTHCARE

TELE-MEDICINE

BIOPRO-STHESIS

ROBOTICSUPPORT

CONTACT LENSES

THAT TRACK GLUCOSE

VIRTUAL REALITY

3DPRINTEDTHERAPIES

THE AMAZON

EFFECT

DRONEDRUG

DELIVERY

CHATBOTHEALTH

ADVISOR

SKINAS 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)


GLOBAL HEALTHCARE

COMMUNICATIONS

MEDICAL MARKETING IMMERSIVE

Huntsworth Is Organised Around Our Clients in Healthcare

MediaNavience


Execution of Strategy

2016Communications-focused with

Healthcare assets

2019Healthcare-focused with Communication assets

Revenue £m 180.1HPBT £m 16.0EPS p 4.0

Revenue £m * 255.0HPBT £m * 38.0EPS p * 8.0

* Based on Analyst consensus


Growing Healthcare Focus

Revenue


Profit

51%49%

2016

Heathcare Comms

72%

28%

2019*

Heathcare Comms

77%

23%

2016

Heathcare Comms

85%

15%

2019*

Heathcare Comms


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%+ over next 3

yrs

10%12%

6%

£91m

£119m

£152m

2016 2017 2018


Medical Growth2014 - 2018

Marketing Growth2014 - 2018

0

5

10

15

20

25

30

35

40

2014 2015 2016 2017 2018

£m

0

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


Expanding Capabilities

MARKETING

HCP CONSUMER PR & INFLUENCE PAYER MEDIA BUYING

East US

USWest[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 areasAcquisitions


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)


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


Working Capital

• Marketing / Medical

• Immersive

• Comms

• GROUP

- Centralised finance & operations – best practice70 days targeted net working capital days

- Improved systems to improve NWC days30 days targeted net working capital days

- Tighter focus: driven by clients55 days targeted net working capital days

65 days targeted net working capital days


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


Net Debt

3rd May 2019

Dec2019

Dec 2020

£52m*

£66m*

£87m

2.1x1.6x

1.1x

Facilities£130m +

£50m accordion

Covenant3.0x EBITDA



Financial Performance Consensus

CAGR in HPBT34%27% CAGR in EPS

LEVERAGE BROADLY UNCHANGED

1.5x 1.1x1.9x 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

*

*



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


Introductions & Capabilties

march 21, 2019

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

Pharmaceutical marketing is on a growth trajectory

4

The market is increasingly competitive

2017 201820182017

$3.4 Billion $3.7 Billion

~9% YOY

growth in

pharma DTC

TV spending

FiercePharma, 2019

5

…and new drug approvals continuing to break records

2017 2018

22

2016

4659

�6

Where do we fit in?

7

CASE EXAMPLE

DTC marketingdrives growth in industry’s most competitive category

25

50

75

100

2015 2016 2017 2018

232427

59

15

28

2625

29

40

1912

1423

3

5

9

1427

1076

19

111444

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

17.5

35

52.5

70

April

Effective consumer marketing efforts have our clients brand consistently positioned #1 in consumer brand requests69%

PHYSICIANS RECEIVING BRANDED REQUESTS

54%

42% 41%

30% 28%

2%

10

But, Pharma marketing is anything but business as usual…

11

healthcare market is in an unprecedented state of

COMPLEXT H E H E A LT H C A R E M A R K E T T O D AY I S M O R E

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

12

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

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

14

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 2018Deloitte, Inside the Patient Journey, 2018

�15

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

�16

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%

�17

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, 2017The Contribution Of New Product Entry Versus Existing Product Inflation In The Rising

Costs Of Drugs, 2019

18

Creating a unique, transformational platform for growth2018

19

We united the Evoke Health

Firsthand, nitrogen, Tonic,

Fabric and Traverse brands

under one unified global

Evoke Brand.

19

20

We completed and integrated

3 strategic acquisitions,

establishing our position

and differentiation.

Full-service media

strategy, buying,

planning & adtech

Full-service HCP

agency—largest on

the west coast

Market Access &

Payer Marketing

Media

Navience

together we are

23

purpose-built to navigate today’s complex healthcare landscape

Digital DNA

Data-Driven

Culturally Connected

Creatively Courageous

100% Health

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

health more human™n

strategicconnectivity

drives ourapproach

Market Access

Healthcare Professional

Consumer & Patient

PR & Influence

Digital & MCM

Media & Analytics

FULL-SERVICE OFFERING

Advanced media & analytics

Native Media

Mobile Media

Engagement Media

Programmatic Media

bile dia

ve ia

Local Media

Performance Metrics

Business Intelligence

Social Media

MM

matic a

MobMed

NM

ment a

NativMedi

Paid & Organic Search

Shopper Marketing

ProgrM

Social Media

rammMedi

EngagM

siness lligence

gemedia

Strategic Services

Point of Care

Market Access

Healthcare Professional

Consumer & Patient

PR & Influence

Digital & MCM

Media & Analytics


Market Access

Patient & HCP geolocation

Claims matchbackDiagnosis codes Insurance coverage Rx/treatment history MD visit history

Pat

Tracked campaign engagement & KPIs

Verified engagementBrand-owned efforts Partner-owned efforts Event participation & geo-fencing

aTra

Search & social activity

Social engagementSocial listening & monitoring Social followers & amplification

Search and paid media targetingSEO & retargeting Media look-alike modelHealthcare Professional

Consumer & Patient

PR & Influence

Digital & MCM

Media & Analytics


We’ve moved first, to put our

clients first. and we are already

seeing positive signs

How we look at the health of our new business pipeline

Win/conversion rate

Business unit collaboration

Global complexion

Opportunity volume

2017 2019

30%

12%

Clients shared across business units

Media revenue at time of

ANM Acquisition

Current media forecast

$4.9mm$1.5mm

M E D I A + C R E AT I V E S Y N E R G Y

Clients shared across business units

From 2017 to 2019

67%

Clients shared across global markets

Global client remits increased by over

Significant growth in

qualified new business

opportunities

Q1 2018 Q1 2019

5X

New business performance

2018 win rate

62%2018 win rate:

2+ business units

78%

Opportunities that align with

our purpose-built offering

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

stakeholder

Multi-marketLarger in scale

We’ve built the foundation for

sustainable growth by designing one

of the most unique and competitive

agencies in the space

Full service hubs

Regional strategic outposts

new york

philadelphia

san francisco

princeton

london

chicago

los angeles

singapore

dubai

A global structure designed to meet our clients needs

Future areas to explore further

Global expansion

Continued investment in integrated PR & influence

Strategic content & production

High-value consulting (strategic & technology)

45

Introductions & Capabilties

march 21, 2019

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

capital markets day 2019 - huntsworth · 2019-08-01 · & wearable integration 14% cagr...

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