ICON plc
Goldman Sachs Mid-Cap
Conference
March 11th 2005
www.iconclinical.com
Overview
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.
www.iconclinical.com
Snapshot
Fourth largest Clinical CRO in the world
Quintiles
PPD
Parexel
ICON
Dedicated team model and quality ethos
differentiates ICON from competitors
Over $300m in Net Revenues and approx 2700
staff
37 offices in 23 countries on five continents
www.iconclinical.com
Offices: US
Chicago
Doylestown
San Francisco
New York City
Irvine
Long Island
Houston
Philadelphia
Delaware
Nashville
Baltimore
Tampa
Raleigh-Durham
www.iconclinical.com
Offices: Europe and Middle East
Marlow
Stockholm
Amsterdam
Manchester
Riga
Dublin
Eastleigh
Moscow
Barcelona
Tel Aviv
Paris
Budapest
Frankfurt
www.iconclinical.com
Offices: ROW
Montreal
Seoul
Sydney
Hong Kong
Bangkok
Tokyo
Taiwan
Chennai
Buenos Aires
Singapore
Johannesburg
www.iconclinical.com
Current Services in Drug Development
Pre-clinical
6%
Phase I
Phase II
Phase III
Launch
Phase IV
Strategic Drug Development and Regulatory Consulting (US & EU)
5% Phase I
8%
16%
Central lab (Global)
Data Management & Statistical Consulting (Global)
57%
Trial Management & Monitoring (Global)
3%
2.5%
IVRS (Global)
Central Imaging Lab (US & EU)
2.5%
Contract Staffing (US)
www.iconclinical.com
ICON plc
Market Dynamics
www.iconclinical.com
Three Elements Supporting Growth
Growth in Underlying spending (1)
Total 2005 R&D spend estimated at > $82bn; 10% growth forecast
to continue
Total 2005 Development Spend estimated at >$54bn; 11% growth
forecast
Continued growth in outsourcing(1)
Industry estimated to outsource approximately 27% of
development and growing by 1% per annum.
Market growth estimated at 14%
Pharma reducing supplier numbers
Fewer CROs servicing Large Pharma = Market share gains for
Global and multi-service CROs
(1) Source Jeffries & Co.
www.iconclinical.com
Strong Market Environment
Preferred Providers
Improving Pipelines
Biotech / Specialty Companies
Regulatory Environment
www.iconclinical.com
RFP Volume / Value Trends – US
Last 4 Quarters
RFP Volume Growth
75.0%
RFP Value Growth
65.0%
66%
65.0%
55.0%
43%
45.0%
45.0%
39%
35.0%
-04
04
Nov -
Aug
-23%
-04
Ma y
-25.0%
Q3
-15.0%
4
04
Nov-
-5.0%
-04
Aug
-5%
-0
May
-25.0%
14%
5.0%
Q3
-15.0%
35.0%
15.0%
15.0%
-5.0%
36%
25.0%
25.0%
5.0%
53.0%
55.0%
www.iconclinical.com
Bio-Tech, Mid-Sized and Japanese companies
are now significant outsourcers
Biotech and specialty companies account for a growing percentage of
projects in development: 55% of 2002 Clinical trials are derived from
biotech companies.
Currently estimated to be more compounds in development in
biotech/specialty than in all of Top 20 Pharma
% of ICON revenues
ICON’s sales to non Top 20 pharma companies have been rising strongly:
50%
40%
30%
35%
20%
21%
5%
10%
16%
26%
12%
39%
17%
40%
42%
27%
31%
13%
11%
12%
14%
23%
22%
Scope for
Growth
0%
FY2000 FY2001 FY2002 FY2003 FY2004 FY2005
YTD
Non-Bio / Non-Big Pharma
Biotech
www.iconclinical.com
$ millions
ICON Gross Business Wins
Last 9 Quarters
$150
$140
$130
$120
$110
$100
$90
$80
$70
$60
$50
$40
$30
$20
$10
$0
$136
$129
$101
$93
$99
$93
$84
$72
$73
Q2 Nov Feb-03 May-03 Aug-03 Nov-03 Feb-04 May-04 Aug-04 Nov-04
02
www.iconclinical.com
Total Backlog
$Millions
$500
$488
$450
$464 $453
$450
$422 $427
$400
$ millions
$350
$336 $327
$300
$276 $282
$250
$200
$352
$241 $246
$223
$235
$150
$100
$50
$0
May-01 Aug-01 Nov-01 Feb-02 May-02 Aug-02 Nov-02 Feb-03 May-03 Aug-03 Nov-03 Feb-04 May-04 01-Aug Nov-04
ICON plc
Financial
Performance
(Fiscal Years ending May 31)
www.iconclinical.com
Net Revenue CAGR of 38% over last 5 Years
$297
$300
Millions
$226
$200
$157
$116
$100
$81
$60
$0
FY1999
FY2000
FY2001
FY2002
FY2003
FY2004
www.iconclinical.com
7 Years of Earnings Per Share Growth….
$2.00
$1.88
$1.80
$1.50
$1.60
Millions
$1.40
$1.16
$1.20
$0.92
$1.00
$0.66 $0.70
$0.80
$0.60
$0.40
$0.48
$0.23
$0.20
$0.00
FY1997
FY1998
FY1999
FY2000
FY2001
FY2002
FY2003
FY2004
www.iconclinical.com
…However, ICON Has Traditionally
Experienced Low Cancellation Rates
but in Q1 05……
Cancellations as % of Opening Backlog
10%
10.00%
$46m cancellations
inc. 2 major
projects
9%
8%
7%
6%
5%
4.30%
4%
3.60% 3.60%
3.60%
3.00%
3%
2%
1.80%
1%
3.00%
1.80%
1.30%
0.80%
2.30%
1.70%
1.40%
0.60%
0.40%
0%
Q3
01
Q4
01
Q1
02
Q2
02
Q3
02
Q4
02
Q1
03
Q2
03
Q3
03
Q4
03
Q1
04
Q2
04
Q3
04
Q4
04
Q1
05
Q2
05
www.iconclinical.com
Quarterly Revenue and Operating Profit
$12.0
$76.9
$73.2
$66.0
$10.0
$68.9
$59.3
$8.4
$53.5
$ Millions
$8.0
$39.6
$36.2 $37.8
$6.0
$4.1
$4.4 $4.6
$43.0
$5.1
$46.9
$7.2
$77.9
$9.6
$8.8
$78.3
$79.5
$9.5
$7.6
$7.0
$6.3 $6.2
$5.2
$4.0
$2.0
$0.0
Q1 Q2 Q3 Q4
02 02 02 02
Q1 Q2 Q3 Q4
03 03 03 03
Q1 Q2 Q3 Q4
04 04 04 04
Q1 Q2
05 05
www.iconclinical.com
Quarterly EPS
$0.55
51c
43c
$0.45
36c
$0.35
$0.25
15c
17c
19c 20c
21c
22c 23c
25c
29c
27c 28c
31c
44c 45c
52c
47c
41c
38c
33c
$0.15
$0.05
-$0.05 Q1 Q2 Q3 Q4
FY2000
Q1 Q2 Q3 Q4
FY2001
Q1 Q2 Q3 Q4
Q1 Q2 Q3 Q4
FY2002
FY2003
Q1 Q2 Q3 Q4
FY2004
Q1 Q2
FY2005
www.iconclinical.com
Summary Balance Sheet and Cashflow
($ millions)
Nov 30, 2004
(Half Year)
May 31, 2004
(Year)
$71.0
$78.8
$370.4
$335.3
$10.0
$0.0
$236.3
$216.8
($2.0)
$43.6
Capital expenditures
$7.5
$13.1
Fully diluted shares outstanding
14.1
13.7
Cash and cash equivalents
Total assets
Total debt
Shareholder’s equity
Cashflow from operations
www.iconclinical.com
Current Issues /
Strategic
Development
www.iconclinical.com
Current Tactical Issues
Recovery from Exceptional Cancellation Quarter
to Restore Growth
Net Wins $120m in Nov Qtr
Good net wins again expected for Feb quarter
Capitalise on Lab Investments and Sales
Success to Eliminate Losses
Continue Sales Success
Add more major clients
Develop technological base
www.iconclinical.com
ICON LABS Net New Business Wins
Average
Net Business Wins
Book to Bill Ratio
$20
1.8
Book-to-Bill
1.35
1.9
1.5
1.4
1.4
1.1
0.97
$ millions
$15
0.7
$10.8
$10
$12.0
$11.3
$9.3
$8.8
$6.9
$6.6
$5
$4.9
$0
Q3 03 Q4 03 Q1 04 Q2 04 Q3 04 Q4 04 Q1 05 Q2 05
www.iconclinical.com
Strategic Mission
To continue to develop our business as
a global, full service, clinically focused
CRO, and to leverage the synergies
between our multiple services.
Use “Full Service” to Leverage Client
Relationships and Capture more of the Spend
Strategic Product
Development /
Consulting
6%
Central
Laboratory
8%
Clinical Trial
Management
Phase II – IV
57%
Phase I
5%
Central Imaging
Lab
2.5%
Data Management
&
Biostatistics
16%
IVRS
2.5%
Contract Staff
3%
Current Strategic Initiatives
Investing in Operations in Japan
Creation of Data Management Operation in India
Partnership with Medidata Solutions in EDC
Developing specialised Phase IV Division
New IT in 2005 to enhance efficiency
New Trial Management and Project
Collaboration Systems
New Document Management System
New eLearning System
Current Acquisition / Investment
Focus
Central Labs
to increase scale
Additional Central Imaging Expertise
to broaden offering
Phase I in US
to compliment EU facility
Analytical Labs
to compliment EU facility
New Expertise in any of core areas
to add scale / unique expertise
Future Development
Get more business from current clients
Add new clients
Organic
Sell more new services - IVRS/Lab/Consulting/Phase I
Expand global presence
Increase therapeutic experience
Acquisitions
Goal
Add new services and broaden existing ones
To be the best
www.iconclinical.com