Q3 Trading Statement

UDG HEALTHCARE PLC

THIRD QUARTER TRADING UPDATE

 Strong Trading in the Third Quarter and Full Year Guidance Reiterated

6 August 2015: 

UDG Healthcare plc ("the Group"), a leading international provider of healthcare services issues the following trading update covering the period from 1 April 2015 to 30 June 2015.

Nine months to 30 June 2015

Group revenues and adjusted operating profits1 for the nine months to 30 June 2015 are significantly ahead of the same period last year. Profit growth in the nine months to June has been driven by the strong performance of both the Sharp Packaging Services division (Sharp) and the Ashfield Commercial & Medical Services division (Ashfield). In addition, reported Group profitability has benefited from currency movements.

Quarter to 30 June 2015

Ashfield Commercial & Medical Services

Trading continues to be strong, with operating profit well ahead of the same quarter last year. The trading performance across Ashfield in the quarter was consistent with the first six months of the year, with robust profit growth in Healthcare Communications and the European commercial businesses.

During the quarter we sold the non-core Speakers Bureau business which we acquired as part of the KnowledgePoint360 acquisition in 2014.

Sharp Packaging Services

Divisional operating profits in the third quarter are significantly ahead of the prior year. The strong Sharp US performance in the first half of 2015 continued into the third quarter as we continue to benefit from increased demand in bottling, biotech and new packaging formats. The expansion of the Allentown campus in Pennsylvania is proceeding on plan, with the first phase of packaging suites due to become operational in the second half of 2016. 

Sharp Europe improved on the prior year and made a small trading loss in the period. We continue to re-align the Sharp Europe cost base with current business activity, while maintaining appropriate capacity for expected business growth.

The dispute in respect of the September 2013 demand for $15m under a purported guarantee by Sharp Clinical Services (UK) Limited in relation to a bond issued in 2010 by its previous owner Bilcare Limited, is no longer being pursued by the bondholders, bringing the matter to a satisfactory conclusion. 

Supply Chain Services

United Drug performed in line with expectations in the quarter. Aquilant performed well in the period with operating profit ahead of 2015. Overall divisional operating profits were behind the same quarter last year due to the disposal of our interest in the UniDrug joint venture in 2014.

Outlook

We are reiterating our guidance for constant currency adjusted diluted earnings per share (EPS)2 for the year to 30 September 2015 of between 7% and 9% ahead of last year.

The average 2014 financial year exchange rates were €1 = £0.8194 and $1.3574. Based on the average exchange rates for the first nine months of fiscal year 2015 of €1 = £0.7518 and $1.1615, the reported EPS growth is expected to be in the range of 18% to 20%, up from the previously guided range of 16% to 18%.

We expect an exceptional charge of approximately €15m in 2015 (€11m of which is a cash charge), at the upper end of our previously guided range of €13m to €15m. The charge primarily relates to the integration of the 2014 acquired healthcare communications business, the closure of Aquilant's UK laboratory distribution business and the re-aligning of Sharp Europe.

The Group also expects to deliver a good underlying cashflow performance for the year. When combined with modest debt levels relative to earnings and significant financing facilities, this continues to leave the Group well positioned to support its future growth objectives both organically and through acquisition.

1 before the amortisation of acquired intangible assets, acquisition costs and exceptional items

2 before the amortisation of acquired intangible assets, acquisition costs and exceptional items (net of tax).

Conference Call: 

UDG Healthcare plc will host a conference call for investors and analysts at 8.00am (BST) today, 6 August 2015 to discuss this statement. The dial-in details are as follows:

Standard International Access: +44 (0) 20 3003 2666

UK Toll Free: 0808 109 0700

Ireland: +353 (0) 1 436 4548

Password: UDG Healthcare

A playback facility will be available for seven days on +44 (0) 20 8196 1998 (UK or International) or + 353 (0) 1 486 4035 (Ireland). The access code for the replay will be 7553233#.

Date for Preliminary Results:

The Group will issue preliminary results for the 12 months to 30 September 2015 on Tuesday 24 November 2015.

Forward-looking information

Some statements in this announcement are forward looking. They represent expectations for the Group's business, and involve risks and uncertainties. The Group has based these forward-looking statements on current expectations and projections about future events. The Group believes that expectations and assumptions with respect to these forward-looking statements are reasonable. However, because they involve known and unknown risks, uncertainties and other factors, which in some cases are beyond the Group's control, actual results or performance may differ materially from those expressed or implied by such forward-looking statements

For reference:

Investors and Analysts:

Media:

Lisa Kavanagh

Powerscourt

Tel: +44-207-250-1446

Jack Hickey (Irish media)

Tel: +353 (83) 4488 339

About UDG Healthcare plc:

Listed on the London Stock Exchange, UDG Healthcare plc is a leading international provider of services to healthcare manufacturers and pharmacies, with operations in 20 countries including the US, UK, Ireland and Germany.

UDG Healthcare plc operates across three divisions: Ashfield Commercial & Medical Services, Sharp Packaging Services and Supply Chain Services.

Ashfield Commercial & Medical Services is a global leader in the provision of sales, marketing and healthcare communications services to pharmaceutical manufacturers with operations in major developed markets. It focuses on supporting healthcare professionals and patients at all stages of the product life cycle. The division provides sales teams, healthcare communications, telesales, nurse educators, medical information, pharmacovigilance, regulatory and event management services to healthcare companies in 19 countries.

Sharp Packaging Services is a leading international provider of pharmaceutical contract packaging and clinical trials materials services with facilities in the US, UK, the Netherlands and Belgium.

Supply Chain Services includes the United Drug Supply Chain Services and the Aquilant Specialist Healthcare Services businesses. The division provides logistics services to healthcare companies, pharmacies and hospitals in the UK and Ireland. United Drug Supply Chain Services is the largest pharmaceutical wholesaler and pre-wholesaler on the island of Ireland. Aquilant Specialist Healthcare Services is a leading provider of outsourced sales, marketing, distribution and engineering services to the medical and scientific sectors in Ireland and the UK.

For more information please go to: www.udghealthcare.com