UDG Healthcare Presentation

www.udghealthcare.com1 : UDG Healthcare plc

UDG Healthcare plcAn International Healthcare Services Organisation

Proposed Sale of Distribution Business AssetsTransforming to focussed international healthcare services

www.udghealthcare.com: UDG Healthcare plc2

FORWARD LOOKING STATEMENTS

This Presentation has been prepared by UDG Healthcare plc (the "Company") and contains certain forward-

looking statements, beliefs or opinions, including statements with respect to the Company's business, financial

condition and results of operations. These statements are made by the Company in good faith based on the

information available to it at the date of this Presentation and reflect the beliefs and expectations of the

directors. By their nature these statements involve risk and uncertainty because they relate to events and

depend on circumstances that may or may not occur in the future. A number of factors could cause actual

results and developments to differ materially from those expressed or implied by the forward-looking

statements.

No representation or warranty is made that any of these statements or forecasts will come to pass or that any

forecast results will be achieved. Forward-looking statements may, and often do, differ materially from actual

results. Any forward-looking statements in this Presentation speak only as of their respective dates, reflect the

Company’s current view with respect to future events and are subject to risks relating to future events and

other risks, uncertainties and assumptions relating to the Company’s operations and growth strategy. Subject

to the requirements of the Financial Conduct Authority, the London Stock Exchange, the Listing Rules and the

Disclosure and Transparency Rules (and/or any regulatory requirements) or applicable law, the Company

explicitly disclaims any obligation or undertaking publicly to release the result of any revisions to any forward-

looking statements in this Presentation that may occur due to any change in the Company’s expectations or to

reflect events or circumstances after the date of this Presentation.


˃ Transaction Overview & Strategic Rationale Liam FitzGerald, CEO

˃ Continuing UDG Healthcare GroupBrendan McAtamney, COO

˃ Financial ImpactAlan Ralph, CFO

˃ SummaryLiam FitzGerald, CEO

˃ Appendix

AGENDA


Transaction Overview and Strategic Rationale

Liam FitzGerald

Chief Executive Officer


TRANSACTION OVERVIEW

Proposed disposal of Distribution businesses to McKesson

Aggregate Cash Consideration* of €407.5m

Price represents 13.4x Adjusted EBITA* for 12 months to September 2014

Subject to UDG Healthcare shareholder approval at EGM on 13 October 2015and clearance from relevant competition authorities

Accelerates Group’s transformation to a more focussed international healthcare services business

*See Definitions in Appendix

Leadership Transition as CEO, Liam FitzGerald, announces plans to retire in March 2016 and Board nominates COO, Brendan McAtamney, as his successor


Revenue of €1,363m in 2014 and €685m in H1 2015

Adjusted EBITA** of €30.3m in 2014 and €13.6m in H1 2015

OVERVIEW OF DISTRIBUTION BUSINESS* ASSETS

*UD and TCP report financial results within the Supply Chain Services Division, MASTA reports under Ashfield Commercial & Medical Services Division

**See Definitions in Appendix

United Drug SCS is a leading pharmaceutical wholesale and pre-wholesale business in RoI and United Drug Sangers is a leading wholesaler in NI

TCP Group provides “direct to patient”and cold chain distribution services in the RoI

MASTA is a leading UK service provider in travel health and specialises in travel and flu vaccine distribution


STRATEGIC & FINANCIAL RATIONALE FOR DISPOSAL

Proceeds will support Group’s future growth plans

– Driving further value creation by growing the existing Ashfield, Aquilant and Sharp market positions

4

The wholesale and distribution business in Ireland has been pressured in recent years despite gaining market share

– On-going international consolidation of the wholesale and pre-wholesale markets means greater scale is increasingly important to drive efficiencies

2

Attractive price for assets3

Disposal will allow businesses to prosper under the ownership of one of the leading international wholesaler and retailer Groups

1

Consistent with group strategy to focus on higher growth, higher margin international healthcare services businesses


Remains Irish Headquartered, high growth, more focussed on internationalhealthcare services markets

Increases Group focus on higher growth and higher margin areas

Continuing Group increased Operating Profit* by 35% in H1 2015

Increases Continuing Group Net Operating Margin* to 11.1% in H1 2015

Gross proceeds of €407.5m will support continued growth and expansion of Group’s Ashfield, Aquilant and Sharp divisions

STRATEGIC IMPACT

*See Definitions and reconciliation in Appendix, includes acquisition and disposal contributions


Continuing UDG Healthcare GroupBrendan McAtamney

Chief Operating Officer


BUSINESS MIX SHIFTS TO HIGHER GROWTH & HIGHER MARGIN

Increased group focus on higher growth and higher margin businesses

H1 2015 Continuing Group Profile

– Operating Profit +35%

– Net Operating margin 11.1%

Operating Profit* (€m)

45.0

53.6

0

10

20

30

40

50

60

70

H1 2014 H1 2015

+19%

31.1

42.0

0

10

20

30

40

50

60

70

H1 2014 H1 2015

Operating Profit Continuing Group* (€m)

+35%

Net Operating Margin* (%)

5.0

11.1

0

5

10

15

20

H1 2015 -reported

H1 2015 -Continuing

Group

48%

22%

30%

Ashfield Sharp SCS/Aquilant

H1 2015 Operating Profit *

62%28%

10%

Ashfield Sharp Aquilant

H1 2015 Operating ProfitContinuing Group**

*See Definitions in Appendix. Operating profit is the same format as adjusted operating profit reported in UDG Healthcare’s interim and annual accounts

**Approximate split, H1 2015 Aquilant % includes Medicare (Magir Limited)


POSITIVE MARKET DYNAMICS SUPPORTING DEMAND FOR SERVICES

INCREASING TRENDS TOHEALTHCARE OUTSOURCING

+ Positivemarket trends

amplifying demand in our growth areas

Increasing product approvals forecast

Increased complexity & importanceof specialty and biotech products

Increasing proportion of semi-virtual (specialty/biotech) companies

Positive healthcaremarket growth outlook

New approvals and increased product complexity are drivers of our businesses


Address scale and geographic gaps

STRATEGIC PRIORITIES FOR PROCEEDS

Develop and strengthen existing market positions:

Ashfield Healthcare Communications Ashfield Commercial

Sharp Pharmaceutical packaging Aquilant Specialist Services

Acquire additional complementary services in our chosen markets

Re-align administrative functions to reflect the new focus of the Group

Capitalise on existing market positions as the demandfor specialist outsourced services in the healthcare sector increases


Disciplined and patient approach to M&A

STRONG ACQUISITION AND INTEGRATION TRACK RECORD

Strong record of successful strategic acquisitions

Demonstrated record of delivering on strategic plan and shareholder value creation

Prior acquisitions confirm Group’s capability to successfully identify,execute and integrate strategic transactions and assets

Sharp (2008) Created US leadership positionPHARMEXX (2012) Established leading pan European CSO businessKnowledgePoint360 (2014) Added international footprint and capabilities

Balance sheet strength facilitates increased investment in ourhigher growth areas both organically and via acquisition


Financial ImpactAlan Ralph

Chief Financial Officer


KEY FINANCIAL IMPACTS

Earnings Guidance– No change to 2015 earnings guidance (including discontinued operations)


** Dividend increases linked to constant currency EPS growth, we expect to continue progressive dividend policy and for the 2016 dividend per share ("DPS")to increase over the 2015 DPS

Currency and geographic profile shifts

– Euro profits reduce from over 20% to less than 10%– Tax rate will increase by 1-2% as a result

Improved growth and margin profile

– Continuing Group increased Operating Profit* 35% in H1 2015– Net Operating Margin* of 11.1% in H1 2015– Increased % of Group costs will lower margin post completion

Dividend– Expect to maintain progressive dividend** policy


KEY FINANCIAL IMPACTS (2)


Proforma Net Cash* of €102.6m post transaction

– Pay down RCF and maintain facility - lower interest expense– Maintain long term private placement debt

Working capital – Distribution businesses cash generative, expect a reduction in cash generation from

working capital

Capex

– Continued on-going investment in Sharp capacity expansion

Pension – Republic of Ireland defined benefit pension scheme will remain with UDG Healthcare,

will look to de-risk it over time


*See Appendix Definitions

FINANCIAL IMPACT –DISPOSAL & CONTINUING GROUP H1 2015

H1 2015

DISTRIBUTIONASSETSDISPOSED

CONTINUING GROUPH1 2015

CHANGECONTINUING GROUP

Revenue €1,131m €685m €446m 25%

Operating Profit* €53.6m €11.6m €42.0m 35%

Net Operating*

Margin 5.0% 1.7% 11.1% +609 bp

Net Cash (€274.9m) €377.5m €102.6m


EXPECTED TIMETABLE AND PROCESS

Sale of Distribution businesses announced 18/09/2015

Expected Circular posting to shareholders 23/09/2015

EGM – Shareholder vote 13/10/2015

Competition approval (anticipated) by 31/03/2016


SummaryLiam FitzGerald

Chief Executive Officer


SUMMARY

Accelerates Group’s transformation to a more focussed international healthcare services business

Significantly improves growth potential and margin profile

Disposed businesses can prosper under the ownership of a leading international wholesale and retail Group

Attractive price provides balance sheet strength for significant investment in our higher growth areas both organically and via acquisition

Opportunity to develop and strengthen existing market positions and capitalise on the increasing demand for healthcare services

Transforming to a more focussed international healthcare services business

Recognise the long-standing loyalty of the staff and customers of these businesses


Appendix


EBITA RECONCILIATION

Disposed Assets

Continuing Group

Disposed Assets

Continuing Group

Disposed Assets

Continuing Group

Year to September (€m)

H12014

H1 2014

H1 2014

FY2014

FY2014

FY2014

H1 2015

H1 2015

H1 2015

Revenue 1,041 685 357 2,127 1,363 764 1,131 685 446

Net Revenue 995 685 310 2,021 1,363 658 1,063 685 378

*Adjusted EBITA - 14.9 - - 30.3 - - 13.6 -

Adjustments - (1.0) - - (3.0) - - (2.0) -

*Operating Profit 45.0 13.9 31.1 102.6 27.3 75.3 53.6 11.6 42.0

*Net Operating Margin

4.5% 2.0% 10.0% 5.1% 2.0% 11.4% 5.0% 1.7% 11.1%

*See Appendix Definitions


DEFINITIONS

"Adjusted EBITA" Earnings before interest, tax, administrative expenses allocated from UDG Healthcare, amortisation of acquired intangible assets, acquisition costs and exceptional items (page 20 of Circular)

"Continuing Group" The Group excluding the Disposed Businesses

"Cash Consideration" Aggregate cash consideration on a cash and debt free basis

"Distribution Businesses" Together (1) United Drug Supply Chain Services (2) United Drug Sangers (3) TCP Group and (4) the MASTA Business. The United Drug Supply Chain Services businesses to be disposed of do not include the Aquilant Business

"Net Operating Margin" Operating profit margin on Net Revenue

"Net Revenue" Revenue less Ashfield pass through costs recorded as revenues

"Operating Profit" Earnings before interest, tax, amortisation of acquired intangible assets, acquisition costs and exceptional Items. Operating profit is the same format as adjusted operating profit reported in UDG Healthcare’s interim and annual financial statements

"Proforma Net Cash" Combined net cash position of cash consideration received and UDG Healthcare net debt position at 31 March 2015


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UDG Healthcare Presentation