Safe Harbor and Non-GAAP Measures

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Transcription:

Safe Harbor and Non-GAAP Measures Forward-Looking Statements This presentation contains statements about future events and expectations that constitute forward-looking statements. Forward-looking statements are based on our beliefs, assumptions and expectations of our future financial and operating performance and growth plans, taking into account the information currently available to us. These statements are not statements of historical fact. Forward-looking statements involve risks and uncertainties that may cause our actual results to differ materially from the expectations of future results we express or imply in any forward-looking statements and you should not place undue reliance on such statements. Factors that could contribute to these differences include, but are not limited to, the factors described in Risk Factors in VWR s Annual Report on Form 10- K, and its Quarterly Reports on Form 10-Q. Words such as "anticipates, "believes, "continues, "estimates, "expects, "goal, "objectives, "intends, "may, "opportunity, "plans, "potential, "near-term, "long-term, "projections, "assumptions, "projects, "guidance, "forecasts, "outlook, "target, "trends, "should, "could, "would, "will, and similar expressions are intended to identify such forward-looking statements. We qualify any forward-looking statements entirely by these cautionary factors. We assume no obligation to update or revise any forward-looking statements for any reason, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future. Comparisons of results for current and any prior periods are not intended to express any future trends or indications of future performance, unless expressed as such, and should only be viewed as historical data. Non-GAAP Measures To evaluate our performance, we monitor a number of key indicators at the consolidated level and, in certain cases, at the segment level. As appropriate, we supplement our results of operations determined in accordance with U.S. generally accepted accounting principles ( GAAP ) with certain non-gaap financial measurements that we believe are useful to investors, creditors and others in assessing our performance. These measurements should not be considered in isolation or as a substitute for reported GAAP results because they may include or exclude certain items as compared to similar GAAP-based measurements, and such measurements may not be comparable to similarly-titled measurements reported by other companies. Rather, these measurements should be considered as an additional way of viewing aspects of our operations that provide a more complete understanding of our business. We strongly encourage readers to review our consolidated financial statements in our publicly filed reports in their entirety and not rely solely on any one, single financial measurement. See Use of Non-GAAP Financial Measures in our press release issued today. 2

4Q15 Earnings Call Agenda Introduction John Sweeney VP, Investor Relations Overview Manuel Brocke-Benz President & CEO Financials & Outlook Greg Cowan SVP & CFO Business Highlights Manuel Brocke-Benz President & CEO Q&A 3

4Q15 Earnings Call Overview Manuel Brocke-Benz President & CEO 4

Full Year 2015 Performance Summary 3n 4.4% organic growth: above our long-term expectation of 3-4% annual organic growth Americas 5.1% & EMEA-APAC 3.5% organic growth Expanded OI Margin Delevered from 4.4x at Dec. 14 to 4.1x at Dec. 15 Net interest exp: $166.3M in 14 vs. $102.8M in 15 Free Cash Flow of $184.1M, up 16.9% YoY Executed on a value creating acquisition strategy Adjusted EPS of $1.52, up 26.7% YoY 5 5

4Q15 Performance Summary Revenue ($B) Adjusted EPS $1.102 $1.113 $0.42 $0.47 4Q14 4Q15 4Q14 4Q15 4Q15 reported revenues $1.11B, up 1.0% YoY. Strengthening of the U.S. dollar reduced revenues by 6.1% Organic revenue growth: consolidated up 5.6%, Americas up 6.4% and EMEA-APAC up 4.5% Net interest expense of $19.1M, down $12.4M vs. prior year Adjusted EPS grew 11.9% YoY to $0.47 Cash flow from operating activities of $67.7M 6 6

4Q15 EMEA-APAC Organic Acceleration Revenues ($M) $490 $460 4Q14 4Q15 Revenues declined 6.1% on a reported basis. Ongoing strengthening of the US$ reduced EMEA-APAC revenues 4Q15 organic revenue growth 4.5% 0.9% contribution from acquisitions (11.5)% negative impact from currency OI ($M) On a constant currency basis, operating income increased $8.7M or 18.3% YoY $47 $49 4Q15 reported OI of $49.3M 4Q15 OI margin of 10.7%, up 100 bps YoY FY15 OI margin of 9.1%, flat vs. prior year 4Q14 4Q15 7 7

4Q15 EMEA-APAC Biopharma Drives Growth Customer Segment Biopharma Healthcare Education Government Industrial Revenues by Product Consumables Chemicals Equip. & Instruments Growth +DD +MSD -MSD -MSD +MSD Growth +HSD +LSD Flat 8

4Q15 Americas Solid Growth Despite Difficult Comp Revenues ($M) $611 $652 4Q14 4Q15 OI ($M) $39 $38 Americas revenue growth driven by double-digit growth in Biopharma 4Q15 revenues up 6.7% & up 6.4% organic 2.0% contribution from acquisitions (1.8)% impact from foreign currency Operating income declined $0.4 million year-overyear 4Q15 OI margin of 5.9%, down 40 bps vs. prior year as timing of incentive compensation impacted the quarterly margin progression FY15 OI margin of 6.3%, up 50 bps vs. prior year 4Q14 4Q15 9 9

4Q15 Americas Continued Biopharma Strength Customer Segment Biopharma Healthcare Education Government Industrial Revenues by Product Consumables Chemicals Equip. & Instruments Growth +DD -MSD Flat +MSD +LSD Growth +LSD +DD +DD 10

4Q15 Earnings Call Financials & Outlook Greg Cowan SVP & CFO 11

4Q15 P&L ($M, except EPS) 4Q15 4Q14 % chg. Net Sales $1,112.5 $1,101.6 1.0% Cost of Goods Sold 804.6 792.6 1.5% Gross Profit 307.9 309.0-0.4% SG&A 220.2 222.7-1.1% Operating Income 87.7 86.3 1.6% Net Interest (19.1) (31.5) -39.4% Other (1.5) 18.3 Pre-Tax Income 67.1 73.1 Tax (13.6) (24.3) Net Income $53.5 $48.8 Non-GAAP Adjusted EPS $0.47 $0.42 11.9% 12

Cash Flows ($M) 4Q15 4Q14 % chg. FY15 FY14 % chg. Cash From Operations $67.7 $103.9-34.8% $225.0 $191.1 17.7% Capital Expenditures 16.2 10.3 57.3% 40.9 33.6 21.7% Free Cash Flow $51.5 $93.6-45.0% $184.1 $157.5 16.9% 13

Dec. 2015 Deleveraging Continues. Net Debt / LTM Adjusted EBITDA 9.3x 8.4x 7.7x 7.1x 6.4x 6.9x 6.4x 4.4x 4.1x Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 14 14

FY16 Guidance ($M except EPS) 2015 Actual 2016 Guidance Range Low High % chg. Revenue $4,319 $4,490 $4,570 4%-6% Adjusted EPS $1.52 $1.62 $1.70 7%-12% Note: 2016 Revenue and Adjusted EPS guidance assumes that currency exchange rates for the remainder of 2016 remain consistent with current rates. 2016 Adjusted EPS assumes approximately $10M (pretax) of share-based compensation expense; tax rate to calculate 2016 Adjusted EPS of 35%; interest expense of approximately $88M; and approximately 132M weighted average diluted shares outstanding. 15

4Q15 Earnings Call Business Highlights Manuel Brocke-Benz President & CEO 16

2016 Outlook BioPharma Momentum continues into 2016, but perhaps not double-digit growth Industrial Continued improvement Government Constrained Healthcare Opportunity for growth Education Government portion challenging; 2 and 4 year colleges represent an opportunity 17

The VWR Growth Story Remains On-Track 4Q Americas: 6.4% organic, 7 th positive data point 4Q EMEA-APAC up 4.5% organic Leveraging our platform, providing differentiated services, and driving value for our customers Lower interest cost, strengthening our balance sheet & deleveraging Executing a value creating acquisition strategy 4Q15 - another positive data point that indicates that the VWR growth story remains on-track 18

4Q15 Earnings Call Q&A 19

4Q15 Earnings Call Appendix 20

Non-GAAP Reconciliation (in millions, except per share amounts) Reconciliation of Adjusted Net Income FY13 1Q14 2Q14 3Q14 4Q14 FY14 1Q15 2Q15 3Q15 4Q15 FY15 Net income (loss) $ 14.1 $ 17.4 $ 16.6 $ 69.8 $ 48.8 $ 152.6 $ 71.5 $ 18.3 $ 11.0 $ 53.5 $ 154.3 Pre-tax adjustments: Amortization of acquired intangible assets 91.7 25.1 21.5 21.1 21.2 88.9 20.8 20.7 20.6 21.3 83.4 Net foreign currency remeasurement (gain) loss from 38.0 3.0 (8.2) (62.3) (23.4) (90.9) (70.3) 18.6 4.8 1.5 (45.4) financing activities Restructuring and other cost reduction initiatives 32.5 - - - - - - - - - - Legacy facility exit charges - - - - - - 1.4-1.4-2.8 Impairment charges - - 11.3 - - 11.3 - - 3.2-3.2 Gain on disposition of business - - - (11.1) - (11.1) - - - - - Loss on extinguishment of debt 2.0 - - - 5.1 5.1 1.8 0.6 30.3-32.7 Charges associated with executive departures 2.2 - - - - - - - - - - Parent secondary offering costs - - - - - - - 0.9-0.6 1.5 Other - - - - - - - (0.2) (0.4) (0.5) (1.1) Income tax (benefit) provision for pre-tax adjustments (57.3) (9.1) (9.1) 17.1 3.5 2.4 18.6 (14.5) (21.1) (9.7) (26.7) Deferred tax rate change related to amortizable intangible - - - - - - - - - (4.5) (4.5) assets Adjusted Net Income* $ 123.2 $ 36.4 $ 32.1 $ 34.6 $ 55.2 $ 158.3 $ 43.8 $ 44.4 $ 49.8 $ 62.2 $ 200.2 Adjusted EPS* $ 0.94 $ 0.28 $ 0.24 $ 0.26 $ 0.42 $ 1.20 $ 0.33 $ 0.34 $ 0.38 $ 0.47 $ 1.52 Adjusted weighted average shares outstanding, diluted 131.4 131.4 131.4 131.4 131.8 131.5 131.9 132.1 131.5 131.6 131.8 Reconciliation of Adjusted EBITDA FY13 1Q14 2Q14 3Q14 4Q14 FY14 1Q15 2Q15 3Q15 4Q15 FY15 Adjusted Net Income $ 123.2 $ 36.4 $ 32.1 $ 34.6 $ 55.2 $ 158.3 $ 43.8 $ 44.4 $ 49.8 $ 62.2 $ 200.2 Interest expense, net of interest income 190.7 45.8 44.9 44.1 31.5 166.3 27.2 28.4 28.1 19.1 102.8 Depreciation expense 38.3 9.5 10.2 10.2 10.5 40.4 9.7 10.1 10.6 10.7 41.1 Share-based compensation expense 0.6 0.2 0.2 0.1 1.5 2.0 1.1 1.3 1.3 1.2 4.9 Income tax provision applicable to Adjusted Net Income 65.7 19.8 17.9 23.9 20.8 82.4 25.0 26.2 28.0 27.8 107.0 Adjusted EBITDA $ 418.5 $ 111.7 $ 105.3 $ 112.9 $ 119.5 $ 449.4 $ 106.8 $ 110.4 $ 117.8 $ 121.0 $ 456.0 Adjusted EBITDA Margin 10.0% 10.6% 9.5% 10.1% 10.8% 10.3% 10.4% 10.2% 10.8% 10.9% 10.6% * Adjusted Net Income and Adjusted EPS include share-based compensation expense. 21

Non-GAAP Reconciliation (cont.) (dollars in millions) Reconciliation of Net Debt and Net Leverage FY13 1Q14 2Q14 3Q14 4Q14 FY14 1Q15 2Q15 3Q15 4Q15 FY15 Debt and capital lease obligations^^ $ 2,854.4 $ 2,860.2 $ 2,844.6 $ 2,739.0 $ 2,111.9 $ 2,111.9 $ 2,063.3 $ 2,066.5 $ 2,053.0 $ 1,989.0 $ 1,989.0 Less: Cash and cash equivalents (135.6) (130.2) (151.6) (120.8) (118.0) (118.0) (98.5) (129.9) (122.8) (136.3) (136.3) Compensating cash balance (25.9) (16.5) (17.0) (13.9) (2.5) (2.5) (0.2) - - - - Net Debt $ 2,692.9 $ 2,713.5 $ 2,676.0 $ 2,604.3 $ 1,991.4 $ 1,991.4 $ 1,964.6 $ 1,936.6 $ 1,930.2 $ 1,852.7 $ 1,852.7 LTM Adjusted EBITDA $ 418.5 $ 434.0 $ 442.6 $ 448.3 $ 449.4 $ 449.4 $ 444.5 $ 449.6 $ 454.5 $ 456.0 $ 456.0 Net Leverage 6.4x 6.3x 6.0x 5.8x 4.4x 4.4x 4.4x 4.3x 4.2x 4.1x 4.1x Reconciliation of Free Cash Flow FY13 1Q14 2Q14 3Q14 4Q14 FY14 1Q15 2Q15 3Q15 4Q15 FY15 Cash flow from operations $ 200.9 $ 15.2 $ 53.3 $ 18.7 $ 103.9 $ 191.1 $ (9.9) $ 107.0 $ 60.2 $ 67.7 $ 225.0 Less: Capital expenditures (45.3) (6.6) (8.5) (8.2) (10.3) (33.6) (9.5) (7.0) (8.2) (16.2) (40.9) Free Cash Flow $ 155.6 $ 8.6 $ 44.8 $ 10.5 $ 93.6 $ 157.5 $ (19.4) $ 100.0 $ 52.0 $ 51.5 $ 184.1 ^^ As of December 31, 2015, the Company adopted a new accounting standard which changed the presentation of deferred debt issuance costs on our balance sheet as a reduction to debt instead of as a component of other assets. In this table, we have not revised the reported amount of debt for any periods prior to the adoption. For reference, the relevant amount of deferred debt issuance costs as of December 31, 2014 was $11.7 million. 22

VWR Investor Contact John Sweeney, CFA VP Investor Relations ir@vwr.com Phone: (610) 386-1483 23