ims report - gaspare mura
TRANSCRIPT
IMS HEALTH MATERIALS FOR DISCUSSION
Table of Contents • Executive Summary • Industry Overview
• Company Considerations – Share price performance – Recent Corporate Actions – Operating Performance – Valuation
• Trade Idea
• Appendix
Executive Summary • This presentation explores the strategic and financial considerations for IMS Health, an NYSE-listed healthcare IT
services company to determine the key value drivers of its shares
• IMS in 2009 agreed to be acquired by private equity firm TPG and the Canada Pension Plan for $4 billion, making it the largest private-equity buyout of 2009. New CEO Ari Bousbib implemented a new aggressive strategy of acquisitions and changed the business model core to Technology
• This segment has steadily grown in double figures (13%) supported by the acquisitions of cutting-edge
technologies and new hiring
– Since 2010 has IMS invested more than $ 1.1 bn in capital expenditures, software development and acquisitions
– 60% of todays employees have been hired in the last 5 years
• In April 2014, IMS was listed on the New York Stock Exchange (IMS Health Holdings, Inc.) following its strategy of expansion and today its market cap is $9.73bn
• In 2014 IMS acquired Cegedim’s CRM and Strategic Data Businesses placing itself in the TOP 3 of the CRM Market, this move will establish one of the world’s most robust healthcare reference databases with insights on more than
14 million healthcare professionals and increase IMS total addressable market from $45bn to $75bn.
• Our financial analysis and valuation report a company with a consolidated financial status and a consistent and sustainable growth (7-8%) in the future. Furthermore we conclude that the market is currently
undervaluing IMS representing a buying opportunity for investors
INDUSTRY OVERVIEW
Life Sciences Industry Overview
• Total Pharma revenues are expected to increase from $1.23 trillion in 2014 to $1.61 trillion in 2018
• IMS holds 6% of the entire Global Research Market
• The medical technology market is expected to grow at 4.5 percent (CAGR) per year between 2012 and 2018, reaching global sales of $455 billion.
Global Pharma Revenues, 2009-2018
Global Research Revenue Total ($40.29bn)
Global medical technology sales ($bn), 2005-2018
219 241 267 295 299 316 340 349 357 374 394 414 434 455
0% 2% 4% 6% 8% 10%
0
500
1000
1500
2000
Sales Growth (%)
15%
9%
6%
6%
5%
59%
Nielsen
Kantar
IMS
Ipsos
GfK
Others
IMS Market Overview • IMS acquisitions reshaped company’s market
with new offerings and new customers
• Today IMS is able to reach a broader $75bn Healthcare IT service market
• IMS has a global presence, 63% of its revenues come from outside the United States
IMS Global Exposure
IMS Total Addressable Market ($75bn)
37%
38%
8%
10%
7% United States
EMEA
Other Americas
Japan
$5
$45
$25
Core Offerings
Expanded Offerings
Expanded Customers
Sales/ Promotional Audits Market Research Consulting
Workflow Analytics RWE Hosted Service Solutions
Cloud Based Analytics SaaS/ Mobile Apps Knowledge Process Out.
Consumer Health/ OTC Medical Devices Payer Provider
CRM Market Overview
45%
31%
13%
11% VEEVA
Cegedim (IMS)
Oracle (Seible)
Others
Pharma CRM Market
196.1
139.3
120.0
140
225
60
0
50
100
150
200
250
0
50
100
150
CEGEDIM VEEVA ORACLE
CRM REVENUE # OF Sseats
CRM Competitors Revenue and # of Seats
• The CRM market is dominated by Veeva and
Cegedim (now IMS)
• Acquiring Cegedim CRM, IMS entered the TOP 3
revenue leaders in the CRM market
• Former Cegedim’s OneKey is the “most robust’
healthcare reference database. It contains insights
from 13.7 million healthcare professionals
• IMS acquired the revenue leader of the CRM
market
• The CRM industry, currently valued at $20.6
billion, will grow to $36.5 billion worldwide by
2017. In 2017, CRM spending will outpace
spending on enterprise resource planning for the
first time
Competitive Landscape
• Quintiles • Parexel • Inventiv Health
• Veeva • IBM • Cognizant
• Nielsen • Kantar • GfK
• Accenture • Deloitte • McKinsey
Consulting Companies
Global Research
Companies
CRO’s IT Healthcare
COMPANY CONSIDERATIONS
Business Model IMS is a leading global information and technology services company providing clients in the healthcare industry with comprehensive solutions to measure and improve their performance The 2 revenues segments are:
• 19 of TOP 20 Life Sciences companies benefit from IMS Health workflow analytic solutions
• 7 of TOP 10 Life Sciences firms rely on IMS Real World Evidence platforms
• 55+ billion transactions annually
• 10+ petabytes • 90% global pharma
tracked • 800.000 data feeds from
100+ countries
INFORMATION TECHNOLOGY
I. Information II. Technology
How IMS helps Life Sciences companies R&D Market opportunity assessment Clinical trial feasibility/planning Site selection Patient recruitment Trial monitoring Performance management
Pre Launch Drug pricing optimization Launch readiness Commercial planning Brand positioning Message testing Influence networks Territory Design
Launch Market access Health technology assessment Commercial readiness Forecasting Resource allocation Call planning Stakeholder engagement
In Market Commercial operations Sales force effectiveness Sales force alignment Multi-channel marketing Client relationship management Lifecycle management
Key Company Considerations • IMS is a fast growing reality
– In 2010 IMS was a private company with 7.100 employees today they are 10.000
– 60% joined in the past 5 years
• IMS provides its services to more than 50% of the globe
– 5.000 clients across +100 countries
• In April 2014, IMS was listed on the New York Stock Exchange (IMS Health Holdings
Inc.)
• With the acquisition of CEGEDIM, IMS has become the largest healthcare database in
the market
– more than 500 million patients records
– 14 million healthcare professionals
• Revenue streams highly geared towards technology
– From 2010 Technology grew 58% and today represent 43% of IMS’ revenues
Strategic Considerations (i) • The future of IMS is transitioning to Technology as core business
– In 2014 Information represented 57% of global revenue $1.5 billion, technology 43% $1.1 billion in 2010 Information revenue was $1.4 billion and Technology $0.7 billion
– Technology department is steadily growing 13% CAGR 2010-2014
• Since 2010, IMS is consistently investing on its future – IMS has invested more than $1.1 billion in capital expenditures, software development and
complementary acquisitions to expand both offerings and capabilities
– Since 2010 $650 million of capital in 28 acquisitions
• Cegedim’s Information Solutions and CRM businesses Acquisition will have several positive impacts on IMS’ Business – It is forecasted that IMS will save $50 million in annual synergies in three years' time – IMS will address growing demand for end-to-end CRM, multi-channel marketing and master
data management solutions
– IMS will reach a broader IT healthcare service market of $75 bn
Strategic Considerations (ii) • IMS is strongly investing in Emerging markets
– Currently represent 17% of our total revenue ($460 million 2014) and they have grown at about a 12% CAGR since 2010.
– In 2014 emerging markets grown of 10.8% (China, Russia, India and Brazil) – High risk market considering regime and internal conflicts
• IMS’ 63% of revenues are from outside U.S.
• IMS has a strong client-relationship history
– TOP 25 clients have over 25 years and retention rate top 100 clients in 2013-2014 was 99%
Financial Company Considerations (i) • IMS is in a growing trend
– 2014 revenues $ 2.6 bn representing 5.9% year-over-year constant currency growth
• IMS’ Adjusted Net Income in 2014 was $454 million, an increase of 23.6% at constant currency, the result of higher Adjusted EBITDA and lower interest expense
• Since 2010, IMS has generated an average of 6% annual revenue growth and 10%
Adjusted EBITDA growth on a constant currency basis
• In 2014 IMS reported revenue of $2.6 billion and Adjusted EBITDA of $878 million,
representing 5.9% and 9.5% year-over-year constant currency growth, respectively. • Technology Services is likely the basis of these results, delivering 12.3% constant
currency revenue gains year over year • The company posted net loss of $189 million as it paid $221 million in interest
payments and decreased of nearly $1 billion its debt
Financial Company Considerations (ii)
• IPO in April 2014 – New investors bought $1.5 billion worth of company’s stock. – IMS used $1 billion of proceeds from issuance of new shares to reduce debt and lower our
debt-to-Adjusted EBITDA ratio from 6.1 to 4.3 at year end.
– The debt reduction and a refinancing of our existing obligations at attractive rates reduced our interest expense by half.
– Shareholders who invested at the time of the IPO saw a 28% return on their investment through the end of 2014.
Ari Bousbib Era • Ari Bousbib was appointed as Chief Executive Officer on August 16th 2010
I. He improved IMS’ operating efficiency by streamlining the organization, deploying lean methodologies throughout global operations, and standardizing and automating processes
A. in-sourcing development activities and capabilities, 75% of our development resources in-house as of 2014 year end, compared to 30% in 2010
B. increasing our offshore delivery resources to over 2,500 people as of 2014 year end, compared to 250 in 2010, which has driven substantial productivity improvement;
C. shifting our employee mix, with over 50% now client-facing as of 2014 year end, compared to approximately 33% in 2010; and
II. He expanded IMS’ offerings and capabilities by investing over $1.1 billion in 28 complementary acquisitions, internal development projects and capital expenditures since the beginning of 2011 through 2014.
III. These changes have transformed IMS into a more client-centric, service oriented
company with an high-performance culture
Headline Operational Metrics • Technology revenues had a two figures
13% CAGR against 2% CAGR of Information, demonstrating the new drive of IMS
• Asia and Pacific growth are the emerging
markets where IMS is focusing its strategy • The increase of costs due to an expansion
strategy 13’-14’ led to the falling EBIT
By Division, Growth (3Yrs)
EBIT Growth & Margins (3YRs) Sales Growth $bn (3Yrs)
$0
$1
$2
$3
2010 2011 2012 2013 2014
Information Technology Service
0
1
2
3
2012 2013 2014
Americas EMEA Asia Pacific
239
354
208
10%
14%
8%
0%
5%
10%
15%
0
100
200
300
400
2012 2013 2014
EBIT ($ms) Margin%
Financial Forecasts (‘15-’19E) EBIT & Margin (‘15-’19)
Profit & Margin (‘15-’19) Sales & Growth (‘15-’19)
2.839 3.046 3.269 3.511
3.763
7.5%
7.3% 7.3% 7.4%
7.2%
7.0% 7.1% 7.2% 7.3% 7.4% 7.5% 7.6%
0
1
2
3
4
2015E 2016E 2017E 2018E 2019E
Sales Growth (%)
365 421 481 549 621 15.3%
15.9%
16.6% 17.2%
17.8%
14.0%
15.0%
16.0%
17.0%
18.0%
0
200
400
600
800
2015E 2016E 2017E 2018E 2019E
Profit Margin (%)
434 485 542 605 671 15.3%
15.9%
16.6% 17.2%
17.8%
14.0%
15.0%
16.0%
17.0%
18.0%
0
200
400
600
800
2015E 2016E 2017E 2018E 2019E
EBIT Margin (%)
• The company is forecasted to grow its sales by 32.5% y-o-y between 2015-2019
• Cost synergies of CEGEDIM acquisition will see EBIT margin expansion to 17.8% in FY’19
• This will translate into higher profit margins as capital structure will remain constant.
Key Financial Metrics - Gearing Net Debt / EBITDA
Debt / Equity Current Assets / Current Liabilities
0.9x
2.0x 2.2x 2.5x
2.8x 3.1x
3.5x
2013A 2014A 2015E 2016E 2017E 2018E 2019E
Current Assets / Current Liabilities
5.5x
2.4x 2.0x 1.6x 1.3x 1.1x 0.9x
2013A 2014A 2015E 2016E 2017E 2018E 2019E
Net Debt / EBITDA
5.5x
2.4x 2.0x 1.6x 1.3x 1.1x 0.9x
2013A 2014A 2015E 2016E 2017E 2018E 2019E
Debt / Equity
• The company overall has been improving its financial metrics over the forecast period
• In 4 years the company will achieve a consolidated financial position
• Most likely this is the result of the M&A cost synergies
Share Price Performance vs Competitors (Last 12 Months)
40.00
60.00
80.00
100.00
120.00
140.00
160.00
Aug 2014 Sep 2014 Oct 2014 Nov 2014 Dec 2014 Jan 2015 Feb 2015 Mar 2015 Apr 2015 May 2015 Jun 2015
IMS Health Accenture Nielsen Veeva Cognizant IBM Quintiles Parexel
Acquisition History • Since the beginning of 2011, IMS has invested approximately $650 million of capital in 28 acquisitions. • IMS’s strategy has been to acquire companies to expand their expertise and broad their market • This has provided IMS rapid cost savings through synergies and allowed to expand its offering to other markets
offering integrated solutions to its clients
M&A Transaction History over the past 12 months
Announced Date Target Description Revenues Price ($MM)
June 24, 2014 Cegedim’s Information Solution and CRM Business
Healthcare & Pharma CRM 0.9 x ~$420
August 8, 2014 Global Channel Marketing Solutions (GCMS)
Multi-channel marketing services and operations
$31
July 1, 2014 Aileron Solutions Claims-based targeting data
May 8, 2014 Forcea Provider of Business Intelligence and analytics
$11
February 20, 2014 Kent Capital Advisory Firm
2014-1Q NLSN Consumer Health
Consumer Health Business of Nielsen Holdings N.V.
Is IMS’ M&A strategy creating value? • 2015 Revenue growth was driven by
– 1) total company expansion - growth larger on a net basis, – 2) clients getting further saturated with IMS services as IMS built out its revenue ecosystem – 3) clients buying new business lines
• IMS Health in the second quarter 2015 (first time includes CEGEDIM acquisition)
reports a growth of 24.6% at constant currency
• After CEGEDIM acquisition IMS Technology core services is continuing growing double-digit
• There is already a Net income of $47 million compare to a loss of $220 during the same period in 2014
Why Acquiring CEGEDIM CRM Solutions and Strategic Data?
• OneKey Reference Database, provides insights for 13.7 million healthcare professionals to be used for primary market research, will become part of the IMS Nexxus commercial application suite of SaaS-based sales, measurement and marketing tools.
• IMS Health anticipates to save annual costs of roughly $50 million in three years following the deal closure – The present value of synergies could be worth $1.5-$2.0 billion (Seeking Alpha, 27 June 2014)
• In 2014 the company was holding $730 million in cash and equivalents, making it easy to finance the deal combined with unused borrowing facilities.
• The company raised little over a billion in the public offering, which will reduce the net debt position following the deal to roughly $4 billion.
• IMS Health has increased its addressable market from just the $5B pharma data market to now a $75B market which includes data/IT/analytics for the broader healthcare industry
TRADE IDEA
Valuation Commentary (i)
• In order to calculate the intrinsic value of IMS stock, I used a 5-year discounted cash flow forecast for the FY14-19E. These projected figures were designed to incorporate assumptions I made about IMS’ future prospects
• Key assumptions include
– WACC: 7.3%
– Long Term growth rate: 2%
– Tax Rate: 34%
• Applying different assumptions for
terminal growth and WACC, valuation ranges from 29.94-36.73
WACC 33.1 7.3% 8.3% 9.3% 10.3% 11.3%
Gro
wth
Ra
te (%
) 1.0% 27.36 22.14 18.17 15.07 12.56 1.5% 29.94 23.97 19.53 16.10 13.37 2.0% 33.02 26.10 21.07 17.26 14.27 2.5% 36.73 28.59 22.84 18.57 15.27 3.0% 41.31 31.55 24.89 20.05 16.38 3.5% 47.09 35.13 27.29 21.76 17.64 4.0% 54.63 39.54 30.14 23.73 19.08 4.5% 64.86 45.11 33.59 26.05 20.72
Valuation Commentary (ii) • Based on forecasts, a five-year discounted cash flow model yields a per
share valuation of $33.10 • IMS currently trades for $30.15 on the NYSE an implied 10% market discount
compared to fundamental DCF Value • Using trading multiples we see IMS has a 39% premium to the sector
average LTM P/E multiple • IMS has a 14% on the sector average LTM EV/EBITDA multiple
• IMS has a 179% on the sector average LTM EV/EBIT multiple • My analysis tying with the market commentary (“IMS Health Holdings:
Cegedim Acquisition Completed - A Potential Source Of Upside”, Seeking Alpha, 9/4/15) indicates that IMS is materially undervalued and at the moment represents a buying opportunity
Discounted Cash Flow Analysis Financial Year (Dec. Year end) 31-Dec-14 31-Dec-15 31-Dec-16 31-Dec-17 31-Dec-18 31-Dec-19 Terminal Period
Total Turnover 2,641 2,839 3,046 3,269 3,511 3,763
growth (%) 7.5% 7.3% 7.3% 7.4% 7.2%
EBIT 208 434 485 542 605 671
margin (%) 7.9% 15.3% 15.9% 16.6% 17.2% 17.8%
Depreciation & Amortisation 441.0 389.1 398.2 406.2 413.5 420.7
Tax @ 33.5% (69.7) (145.5) (162.6) (181.5) (202.5) (224.7)
Capital Expenditure 72.0 76.7 82.3 88.3 94.8 101.6
Capex/Sales (%) -2.7% -2.7% -2.7% -2.7% -2.7% -2.7%
Change in Working Capital 0.0 247.4 27.9 30.0 32.6 34.0
Working Capital / Sales (%) 0.0% -8.7% -0.9% -0.9% -0.9% -0.9%
Free Cash Flow 507 849 667 708 753 799 799
Discount Factor 0.93 0.87 0.81 0.75 0.70 0.70
Terminal Value 15,400
Present Value 791.0 579.0 573.3 568.5 562.0 10,831
Enterprise Value (m) 13,905
Net Debt 3353.0
Market Capitalisation ($m) 10,552
No. Shares (m) 319.0
Share Price ($) 33.1
Relative Valuation - Trading EV/EBITDA EV/EBIT P/E
Accenture 15.25x 17.45x 21.51x Nielsen 10.44x 15.93x 45.51x GFk 11.94x 33.56x 73.25x Cognizant 20.63x 22.81x 28.51x IBM 7.60x 9.30x 12.78x Quintiles 17.63x 21.24x 26.37x Parexel 16.67x 23.47x 27.99x VeeVa 46.38x 48.99x 84.66x Thomson Reuters 18.47x 18.47x 16.37x Verisk 17.79x 21.63x 32.22x Average 18.28x 23.29x 36.92x Median 17.15x 21.44x 28.25x
LTM EV/EBITDA
LTM EV/EBIT
LTM P/E
IMS 20.90x 65.31x 51.53x
Sector Average 18.28x 23.29x 36.92x
Sector Median 17.15x 21.44x 28.25x
Valuation Summary
29
15
29
27.6
30
16
37
34
0 10 20 30 40 50 60 70 80
EV/EBITDA - Trading
EV/EBIT - Trading
PE - Trading
DCF
APPENDIX
Income Statement IMS Health Hist. Hist. Hist Proj. Proj. Proj. Proj. Proj.
Income Statement 31-Dec-12 31-Dec-13 31-Dec-14 31-Dec-15 31-Dec-16 31-Dec-17 31-Dec-18 31-Dec-19 Net Sales 2,443.0 2,544.0 2,641.0 2,839.1 3,046.3 3,268.7 3,510.6 3,763.4 COGS 1,151.0 1,168.0 1,238.0 1,306.0 1,401.3 1,503.6 1,614.9 1,731.1 SG&A 579.0 596.0 721.0 709.8 761.6 817.2 877.6 940.8 Severance, impairment and other charges 48.0 16.0 33.0 Merger costs 2.0 0.0 0.0 EBIT 239.0 354.0 208.0 434.2 485.2 541.8 604.5 670.7
Amortisation 341.7 341.7 341.7 341.7 341.7 Depreciation 424.0 410.0 441.0 47.4 56.5 64.5 71.8 79.0
EBITDA 663.0 764.0 649.0 823.3 883.4 947.9 1,018.1 1,091.4
Other loss (29.0) (74.0) (276.0) 0.0 0.0 0.0 0.0 0.0 Interest Income 4.0 4.0 4.0 6.2 10.6 14.9 19.9 25.6 Interest Expense 275.0 332.0 221.0 74.9 74.9 74.9 74.9 74.9 Profit before taxes (61.0) (48.0) (285.0) 365.6 421.0 481.8 549.6 621.5
Taxes (19.0) (130.0) (96.0) 0.0 0.0 0.0 0.0 0.0 Profit after tax (42.0) 82.0 (189.0) 365.6 421.0 481.8 549.6 621.5
Net income (42.0) 82.0 (189.0) 365.6 421.0 481.8 549.6 621.5
Shareholder information Diluted weighted average shares outstanding (m) 279.5 287.0 319.0 319.0 319.0 319.0 319.0 319.0 Diluted earnings per share ($0.15) $0.29 ($0.59) $1.15 $1.32 $1.51 $1.72 $1.95 Dividends per share $0.02 $0.01 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 Dividends 4.2 2.6 0.0 0.0 0.0 0.0 0.0 0.0
Balance Sheet IMS Health Hist. Hist. Hist. Proj. Proj. Proj. Proj. Proj.
Balance Sheet (in millions, except per share data) 31-Dec-12 31-Dec-13 31-Dec-14 31-Dec-15 31-Dec-16 31-Dec-17 31-Dec-18 31-Dec-19 Assets Current assets
Cash and cash equivalents 0.0 725.0 390.0 855.9 1,258.2 1,724.0 2,259.0 2,866.6 Restricted cash 0.0 27.0 24.0 24.0 24.0 24.0 24.0 24.0 Accounts receivable, net X 0.0 313.0 330.0 163.2 175.2 188.0 201.9 216.4 Other current assets X 0.0 262.0 270.0 283.9 304.6 326.9 351.1 376.3
Total current assets 0.0 1,327.0 1,014.0 1,327.016 1,762.045 2,262.808 2,835.940 3,483.352
Non-current assets Net PP&E 0.0 117.0 153.0 182.2 208.0 231.8 254.7 277.4 Computer software, net 0.0 263.0 258.0 258.0 258.0 258.0 258.0 258.0 Goodwill 0.0 3,573.0 3,417.0 3,417.0 3,417.0 3,417.0 3,417.0 3,417.0 Other identifiable intangibles, net 2,517.0 2,142.0 2,142.0 2,142.0 2,142.0 2,142.0 2,142.0 Other assets XX 202.0 166.0 283.9 304.6 326.9 351.1 376.3
Total assets 0.0 7,999.0 7,150.0 7,610.1 8,091.7 8,638.4 9,258.7 9,954.0
Liabilities Current liabilities
Short-term debt 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Accounts payable X 103.0 87.0 91.4 98.1 105.3 113.0 121.2 Accrued and other current liabilities X 0.0 583.0 481.0 567.8 609.3 653.7 702.1 752.7 Current portion of long term-debt 0.0 66.0 50.0 50.0 50.0 50.0 50.0 50.0 Deferred revenues X 0.0 180.0 167.0 170.3 182.8 196.1 210.6 225.8
Total current liabilities 0.0 932.0 785.0 879.6 940.1 1,005.1 1,075.8 1,149.7
Non-current liabilities
Postretirement and postemployment benefits 0.0 77.0 95.0 95.0 95.0 95.0 95.0 95.0 Long-term debt 0.0 4,894.0 3,743.0 3,743.0 3,743.0 3,743.0 3,743.0 3,743.0 Deferred tax liability 0.0 1,102.0 904.0 904.0 904.0 904.0 904.0 904.0 Other liabilities 0.0 111.0 81.0 81.0 81.0 81.0 81.0 81.0
Total liabilities 0.0 7,116.0 5,608.0 5,702.6 5,763.1 5,828.1 5,898.8 5,972.7
Equity Common stock 0.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 Retained earnings 0.0 913.0 1,975.0 2,340.6 2,761.5 3,243.3 3,792.9 4,414.4 Accumulated deficit (20.0) (209.0) (209.0) (209.0) (209.0) (209.0) (209.0) Treasury stock 0.0 (6.0) (10.0) (10.0) (10.0) (10.0) (10.0) (10.0) Accumulated other comprehensive loss (7.0) (217.0) (217.0) (217.0) (217.0) (217.0) (217.0)
Total equity 0.0 883.0 1,542.0 1,907.6 2,328.5 2,810.3 3,359.9 3,981.4 Total Liab.& Equity 0.0 7,999.0 7,150.0 7,610.1 8,091.7 8,638.4 9,258.7 9,954.0
Balance? OK OK OK OK OK OK OK (0.0)
Cashflow Statement IMS Health Hist. Hist. Hist. Proj. Proj. Proj. Proj. Proj.
Cash Flow Statement 31-Dec-12 31-Dec-13 31-Dec-14 31-Dec-15 31-Dec-16 31-Dec-17 31-Dec-18 31-Dec-19
Net Income -42.00 82.0 -189.0 365.6 421.0 481.8 549.6 621.5 Depreciation 424.0 410.0 441.0 47.4 56.5 64.5 71.8 79.0 Amortisation 0.0 0.0 0.0 0.0 0.0 Change in OWC 247.4 27.9 30.0 32.6 34.0 Change in other assets (117.9) (20.7) (22.2) (24.2) (25.3) Change in other liabilities 0.0 0.0 0.0 0.0 0.0 Cash from Operating Activities 542.5 484.6 554.0 629.8 709.2
Capex (44.0) (41.0) (72.0) 76.7 82.3 88.3 94.8 101.6 Cash from Investing Activities -76.7 -82.3 -88.3 -94.8 -101.6
Change in Common Stock 0.0 0.0 0.0 0.0 0.0 Change in Treasury Stock 0.0 0.0 0.0 0.0 0.0 Dividends 0.0 0.0 0.0 0.0 0.0 Long Term Debt Repayment 0.0 0.0 0.0 0.0 0.0 Cash from Financing Activities 0.0 0.0 0.0 0.0 0.0
Net Cash Flow 465.9 402.4 465.7 535.0 607.6
Beginning Cash 453 580.0 725.0 390.0 855.9 1258.2 1724.0 2259.0 Ending Cash 580.0 725.0 390.0 855.9 1258.2 1724.0 2259.0 2866.6
Financial Assumptions IMS Health Hist. Hist. Hist. Proj. Proj. Proj. Proj. Proj. Financial Assumptions 31-Dec-12 31-Dec-13 31-Dec-14 31-Dec-15 31-Dec-16 31-Dec-17 31-Dec-18 31-Dec-19 Income statement
Sales growth % 4.1% 3.8% 7.5% 7.3% 7.3% 7.4% 7.2% COGS as % of sales 47.1% 45.9% 46.9% 46.0% 46.0% 46.0% 46.0% 46.0% Annual depr. as % of previous PPE 31.4% 31.0% 31.0% 31.0% 31.0% 31.0% SG&A as % of sales 23.7% 23.4% 27.3% 25.0% 25.0% 25.0% 25.0% 25.0% Non-recurring items amount (29.0) (74.0) (276.0) 0.0 0.0 0.0 0.0 0.0 Effective tax rate 31.1% 270.8% 33.7% 0.0% 0.0% 0.0% 0.0% 0.0%
Shareholder info Diluted weighted average shares outstanding (m) 279.5 287.0 319.0 319.0 319.0 319.0 319.0 319.0 Dividend per share growth rate 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
Balance sheet: current assets Accounts receivable % of sales 0.0% 12.3% 12.5% 12.5% 12.5% 12.5% 12.5% 12.5% Other current assets % of sales 0.0% 10.3% 10.2% 10.0% 10.0% 10.0% 10.0% 10.0%
Balance sheet: non-current assets Capital expenditures % of sales 1.8% 1.6% 2.7% 2.7% 2.7% 2.7% 2.7% 2.7% Amortisation of Goodwill 10.0% 341.70 341.70 341.70 341.70 341.70 Other assets % of sales 0.0% 7.9% 6.3% 6.0% 6.0% 6.0% 6.0% 6.0%
Balance sheet: liabilities Accrued and other current liabilities % of Sales 22.9% 18.2% 20.0% 20.0% 20.0% 20.0% 20.0% Accounts payable and accruals % of COGS 0.0% 8.8% 7.0% 7.0% 7.0% 7.0% 7.0% 7.0% Current portion of long term-debt 0.0% 66.00 50.00 50.00 50.00 50.00 50.00 50.00 Deferred revenues as % sales 0.0% 7.1% 6.3% 6.0% 6.0% 6.0% 6.0% 6.0% Other long-term liabilities % of sales 0.0% 4.4% 3.1% 3.5% 3.5% 3.5% 3.5% 3.5%
Balance sheet: equity Common stock amount 0.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 Share repurchases $ amount (show as positive) 6.0 4.0 0.0 0.0 0.0 0.0 0.0
Debt (£/$ amount) Loans due for repayment 0.0 4,894.0 3,743.0 0.0 0.0 0.0 0.0 0.0 Other long-term debt repayment 0.0 111.0 81.0 0.0 0.0 0.0 0.0 0.0
Interest Rate (%) Short term debt 3.00% 3.00% 3.00% 3.00% 3.00% Loans due for repayment 2.00% 2.00% 2.00% 2.00% 2.00% Other long-term debt repayment 2.00% 2.00% 2.00% 2.00% 2.00% Cash 1.00% 1.00% 1.00% 1.00% 1.00%