31 st Annual J.P. Morgan Healthcare Conference JOHN CHIMINSKI PRESIDENT & CEO

Transcription

1 31 st Annual J.P. Morgan Healthcare Conference JOHN CHIMINSKI PRESIDENT & CEO

2 Forward Looking Statements This presentation contains both historical and forward-looking statements. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements generally can be identified by the use of statements that include phrases such as believe, expect, anticipate, intend, estimate, plan, project, foresee, likely, may, will, would or other words or phrases with similar meanings. Similarly, statements that describe our objectives, plans or goals, particularly regarding our future financial performance and prospects, are, or may be, forward-looking statements. These statements are based on current expectations of future events. If underlying assumptions prove inaccurate or unknown risks or uncertainties materialize, actual results could vary materially from Catalent Pharma Solutions expectations and projections. Some of the factors that could cause actual results to differ include, but are not limited to, the following: general industry conditions and competition; product or other liability risk inherent in the design, development, manufacture and marketing of our offerings; inability to enhance our existing or introduce new technology or services in a timely manner; conditions in the credit markets and economic conditions generally, such as interest rate and currency exchange rate fluctuations; technological advances and patents attained by competitors; our substantial debt and debt service requirements that restrict our operating and financial flexibility and impose significant interest and financial costs; and our ability to successfully integrate acquired businesses and realize any anticipated synergies, cost reductions, or other benefits of such acquisitions. For a more detailed discussion of these and other factors, see the information under the caption Risk Factors in our most recent Annual Report on Form 10- K filed with the Securities and Exchange Commission. All forward-looking statements speak only as of the date of this presentation or as of the date they are made, and Catalent Pharma Solutions does not undertake any obligation to update any forward-looking statements as a result of new information or future events or developments unless required by law. 1

3 Non-GAAP Financial Measures Management measures operating performance based on consolidated earnings from continuing operations before interest expense, expense/ (benefit) for income taxes and depreciation and amortization, and adjusted for the income or loss attributable to non-controlling interest ( EBITDA from continuing operations ). EBITDA from continuing operations is not defined under U.S. GAAP and is not a measure of operating income, operating performance or liquidity presented in accordance with U.S. GAAP and is subject to important limitations. Management believes these non- GAAP financial measures provide useful supplemental information for its investors evaluation of the Company s business performance and are useful for period-over-period comparisons of the performance of the Company s business. We believe that the presentation of EBITDA from continuing operations enhances an investor s understanding of our financial performance. We believe this measure is a useful financial metric to assess our operating performance from period to period by excluding certain items that we believe are not representative of our core business, and use this measure for business planning purposes. In addition, given the significant investments that we have made in the past in property, plant and equipment, depreciation and amortization expenses represent a meaningful portion of our cost structure. We believe that EBITDA from continuing operations will provide investors with a useful tool for assessing the comparability between periods of our ability to generate cash from operations sufficient to pay taxes, to service debt and to undertake capital expenditures because it eliminates depreciation and amortization expense. We present EBITDA from continuing operations in order to provide supplemental information that we consider relevant for the readers of the financial statements, and such information is not meant to replace or supersede U.S. GAAP measures. Our definition of EBITDA from continuing operations may not be the same as similarly titled measures used by other companies. In addition, the Company evaluates the performance of its segments based on segment earnings before minority interest, other (income) expense, impairments, restructuring costs, interest expense, income tax (benefit)/expense, and depreciation and amortization ( Segment EBITDA ). Under the indentures governing our outstanding notes, our ability to engage in certain activities such as incurring certain additional indebtedness, making certain investments and paying certain dividends is tied to ratios based on Adjusted EBITDA (which is defined as EBITDA in the indentures). Adjusted EBITDA is based on the definitions in our indentures, is not defined under U.S. GAAP and is subject to important limitations. We have included the calculations of Adjusted EBITDA for the periods presented. Adjusted EBITDA is the covenant compliance measure used in certain covenants under the indentures governing our notes, particularly those governing debt incurrence and restricted payments. Because not all companies use identical calculations, our presentation of Adjusted EBITDA may not be comparable to other similarly titled measures of other companies. The most directly comparable GAAP measure to EBITDA from continuing operations and Adjusted EBITDA is earnings / (loss) from continuing operations. A reconciliation of earnings / (loss) from continuing operations to EBITDA from continuing operations to Adjusted EBITDA is included as an appendix to this presentation. 2

4 Catalent s Transformational Journey 2012 Actions and Progress Sold North American Packaging business Acquired Aptuit CTS Acquired JV partner s interest in German Softgel business Extended debt maturities Continued 13 quarter EBITDA growth trend 3

5 The Global Leader in Development Solutions & Advanced Delivery Technologies Our Clients Drug, Biologic, OTC, & VMS Companies 83 top 100 pharma 41 top 50 biotech Where We Work Discovery & Design 15% Clinical Testing 15% Product Supply 70% 450+ in pipeline 7000 on market What We Provide Development Solutions (20%) Advanced Delivery Technologies (80%) $1.8B revenue 1 $410M EBITDA 1 (1) Pro Forma for full year contribution of Aptuit CTS acquisition and R.P. Scherer GmbH, excluding unrealized synergies 4

6 Development Solutions The Market $7B spent in our offerings today Strong growth in outsourced R&D Fragmented today Trend to fewer, larger suppliers Our Position Leading shares #2 clinical supply #2 respiratory dev t #1 integrated FY12 Aptuit CTS purchase >50% of FDA NMEs since 2004 Optiform Screening GPEx Cell Lines Product Formulation Analytical CMC Regulatory Consulting Clinical Supplies Enable Advanced Delivery 5

7 Advanced Delivery Technologies The Market Complex formulation need growing 1:5 now 3:5 in 20 Seeking partners with: Proven IP, experts Reliable product supply Our Position Leading provider #1 advanced delivery #1 finished dose IP drives long-term contracts, revenues Touched >80% of top 200 compounds Liquigels Softgel Zydis Fast Dissolve OptiDose Controlled Release SecureVial Glass Free Blow-Fill-Seal Unit Dose Inhalation MDI, DPI Leverage Development Solutions 6

8 Catalent s Promise to Customers 7

9 Our Operational & Regulatory Excellence Operational and quality excellence are core competitive advantages for us On Time Delivery (%) Relentless focus on LEAN, reliably supplied 90 EHS rigor: ~60% safer today Customer driven: on time delivery ~99% 85 FY09 FY13 YTD Productivity & performance metric-driven Workplace Safety Incidents 58% Our quality and regulatory track record is excellent 48 regulatory audits in last year 28 with zero observations Rigorous quality metrics & operating mechanisms All sites inspection-ready Rejects FY09 FY09 FY13 YTD 65% FY13 YTD Our ability to reliably supply is the foundation of our business 8

10 New Product Launch Excellence Over 450 new products in development Growing pipeline of Rx, OTC and VMS Over 250 APIs in development including 55 NCEs 50 US ANDAs including 13 potential FTFs Global reach: US, EU, LATAM, APAC Catalent-Supplied New Product Launches 115 Proven track record of launches Catalent operational excellence applied to new product development and launch QBD and Stage Gate-driven processes Centralized operating mechanisms for project tracking and revenue visibility 59 FY12 FY13 Est We expect to double the number of customer product launches in FY13 11 Oct

11 Broad and Diverse Revenue Streams Geography Customer Product Offering ROW 27% Europe 42% US 31% All Other 42% Top 20 58% All Other 77% Top 20 23% MRT 23% Softgel Rx 30% Softgel Consumer Health 19% 80+ countries 1,000+ customers 7,000+ products, none >3% of sales Diverse markets and offerings Note: Revenue by Geography, Customer, Product and Offering shown above reflective of FY12 revenues, and include impact of Aptuit CTS since date of acquisition and excludes discontinued operations 10 10

12 Development Solutions Drive Short-Term Growth New quotes drive new business we re up 500% over last 2 years We ve grown revenues organically by 18% plus Aptuit purchase Quotes Revenues +18% Aptuit +18% organic 2Q11 1Q13 FY10 FY11 FY12 Short-cycle development revenue accelerates Catalent growth 11

13 Advanced Delivery Technologies Sustain Long-Term Growth Current Products Dev t Pipeline New Wins BFS Injectables Softgel Rx MRT +20% +19% Softgel Cons. Health 1QFY11 1QFY13 1QFY11 1QFY13 Currently produced Rx/Gx, OTC, VMS 75% of rev Already signed PI Filed, Consumer ~ launches New & Renewing $5B Sales Funnel 12

14 Advanced Delivery Technologies Ensure Growth Visibility Long-Term Revenue +4-5% Funnel Pipeline Current Products FY14 FY17 Advanced Delivery follows the molecule throughout full product lifecycle 13

15 Catalent Growth Forecast Revenue +5-6% Development Solutions +7-8% Advanced Delivery Technologies +4-5% FY14 FY17 Delivery technologies yield predictable growth, development solutions offer upside 14

16 Solid Financial Growth Since 2009 Revenue Proforma includes full-year impact of Aptuit CTS acquisition Adjusted EBITDA US$ mm US $mm Margin (%) 1,850 $1,818 (1) $410 (1) $1, $ , $354 1,450 $1,399 $1,480 $1, $ % $314 (1) 22.6% , Compound Annualized Revenue Growth of 6.6% since 2009; Adjusted EBITDA Margin +300 bps since 2009 (1) Pro Forma for full year contribution of Aptuit CTS acquisition and R.P. Scherer GmbH, excluding unrealized synergies (2) CAGRs represent as reported financials 15

17 Thirteen Quarters of Financial Momentum LTM Adjusted EBITDA US$ mm Q4 '09 Q1 '10 Q2 '10 Q3 '10 Q4 '10 Q1 '11 Q2 '11 Q3 '11 Q4 '11 Q1 '12 Q2 '12 Q3 '12 Q4 '12 Q1 '13 Improved offering mix to higher margin (Oral Tech, Dev t & Clinical) Operating leverage enabled by functional re-alignment Adjusted EBITDA up more than $115M Expanded Adj. EBITDA margin +300 bps Note: Historical financials shown pro forma for divestiture of Printed Components business in Q4 FY 11 and N.A. Commercial Packaging in Q4 FY 12; includes Aptuit CTS since inception (2/17/12) 16

18 discover more. CATALENT PHARMA SOLUTIONS 14 SCHOOLHOUSE ROAD SOMERSET, NJ Investors

19 Adjusted EBITDA Reconciliation ($ millions) Sep 30, Dec 31, Mar 31, Jun 30, Sep 30, Dec 31, Mar 31, Jun 30, Sep 30, Dec 31, Mar 31, Jun 30, Sep 30, Dec 31, Mar 31, Jun 30, Sep 30, Earnings / (Loss) from continuing operations Quarters Ended 24.7 (89.5) (134.1) 1.3 (235.0) (15.6) (27.0) (1.3) (3.7) 2.9 (6.8) 12.5 (2.7) (0.9) (19.5) Interest expense, net Income tax (benefit) / (7.5) (11.7) (2.5) (2.0) provision Depreciation and Amortization Noncontrolling interest (0.7) (0.6) 1.8 (0.9) (1.2) (2.3) 0.8 (1.5) (1.8) (1.4) 0.5 (0.8) (0.9) - - EBITDA from continuing operations (61.1) 86.2 (174.6) Non-cash stock compensation expense (2.9) (1.1) Impairment charges and (gain)/loss on sale of assets 0.1 (0.2) (0.2) (0.5) (0.4) (0.4) (0.6) 3.3 (0.2) US GAAP Restructuring 1.4 (0.1) Acquisition, integration and other special items Property and casualty losses (0.5) (14.1) Foreign exchange (gain)/loss (59.2) 63.9 (11.6) (11.8) 31.1 (13.1) 0.1 (21.9) (6.6) (1.7) (1.6) 0.2 Other (Sponsor's fee, severance) (2.2) Adjusted EBITDA, quarter Estimated cost savings Adjusted EBITDA - Trailing 12 months Note: Historical financials shown pro forma for divestiture of Printed Components business in Q4 FY 11 and N.A. Commercial Packaging in Q4 FY 12; includes Aptuit CTS since inception (2/17/12) 18

20 Debt Maturities More than 83% of debt matures in FY 17 and beyond Achieved >80% participation in extension of senior secured T/L's from FY 14 to FY 17 Established $400M T/L C with FY 18 maturity with strong order book; $200M successful add-on with funds used to pay down non-extended USD T/L Issued $350M of new 7.875% notes due in FY 19 to repay portion of our existing 9.5% notes due FY 15 B2/B+ issuer rating maintained through five refinancing events and two acquisitions Continued access to significant excess liquidity, over $300M, for general corporate purposes including capex 19