39th Annual J.P. Morgan Healthcare Conference
January 13, 2021
Forward-Looking Statements
This presentation contains "forward-looking statements" within the meaning of federal securities laws. These forward-looking statements include statements with respect to guidance, estimated full-year 2020 financial and operating results, 2025 targets, growth expectations and targets and other non-historical information. Without limiting the foregoing, statements including the words, "expect," "intend," "will," "plan," "anticipate," "believe," "forecast," "guidance," "outlook," "goals," "target," "estimate" and similar expressions are intended to identify forward-looking statements. Forward-looking statements are subject to the occurrence of many events outside Omnicell's control and are subject to various risks and uncertainties, including those described below. Among other things, there can be no assurance that Omnicell's actual full-year 2020 financial and
operating results, 2021 financial and operating results, other targeted results or growth rates will not differ, perhaps substantially, from the preliminary financial and operating results, guidance, targets and expectations contained in this presentation. In addition, Omnicell has not completed its fourth quarter and full-year 2020 closing and review process, and the final results for the full year 2020 may differ, perhaps substantially, from the statements made in this presentation. During the course of preparing our financial statements and during our review process, we may identify items that would require us to make adjustments which may be material to the amounts described in this presentation. These adjustments may also affect the targets and other expectations discussed in this presentation.
Actual results and other events may differ significantly from those contemplated by forward-looking statements due to numerous factors that involve substantial known and unknown risks and uncertainties. These risks and uncertainties include, among other things (i) risks related to outbreaks of contagious diseases or other adverse public health epidemics including the ongoing COVID-19 pandemic, including the duration and any resurgences of the COVID-19 pandemic, (ii) unfavorable general economic and market conditions, including due to economic disruption caused by public health crises such as the COVID-19 pandemic, (iii) Omnicell's ability to take advantage of the growth opportunities in medication management across all care settings, (iv) Omnicell's ability to develop and commercialize new products and enhance existing products, (v) Omnicell's ability to deliver on our vision of the autonomous pharmacy and the impact that advanced automation, data intelligence and expert services will have on patient care, (vi) risks to growth and acceptance of Omnicell's products and services, including competitive conversions, and growth in the overall demand for medication management and supply chain solutions and medication adherence solutions generally, (vii) risks presented by the transition to selling more products and services on a subscription basis, (viii) potential increased competition, (ix) potential regulatory changes, (x) Omnicell's ability to improve sales productivity to
grow product bookings, (xi) Omnicell's ability to acquire companies, businesses or technologies and successfully integrate such acquisitions and (xii) other risks and uncertainties described in the Risk Factors section
of Omnicell's most recent annual report on Form 10-K and quarterly report on Form 10-Q, filed with the Securities and Exchange Commission. Forward-looking statements should be considered in light of these risks and uncertainties. Investors are cautioned not to place undue reliance on forward-looking statements. All forward-looking statements contained in this presentation speak only as of the date of this presentation. Omnicell undertakes no obligation to update such statements, whether as a result of changed circumstances, new information, future events or otherwise, except as required by law.
Non-GAAP Financial Information
This presentation contains financial measures that are not calculated in accordance with U.S. generally accepted accounting principles ("GAAP"), including estimated 2020 non-GAAP EBITDA, non-GAAP earnings per share, non-GAAP operating margin and non-GAAP EBITDA margin, guidance with respect to 2021 non-GAAP EBITDA and 2021 non-GAAP earnings per share and targeted non-GAAP operating margin and non- GAAP EBITDA margin. Reconciliations of the 2020 estimated non-GAAP financial measures to the most directly comparable estimated GAAP measures are included in the appendix to this presentation. Our 2021 guidance for non-GAAP EBITDA and non-GAAP earnings per share, and our non-GAAP operating margin target and non-GAAP EBITDA margin target, exclude certain items, which include but are not limited to unusual gains and losses, costs associated with future restructurings, acquisition-related expenses, and certain tax and litigation outcomes. These excluded items may be significant. We do not provide a reconciliation of forward-lookingnon-GAAP guidance or targets to the comparable GAAP measures as these items are inherently uncertain and difficult to estimate, and cannot be predicted without unreasonable effort. We believe such a reconciliation would imply a degree of precision that could be confusing to investors. These items may also have a material impact on GAAP earnings per share, total revenues, product revenues, and service revenues in future periods. As such, these forward-lookingnon-GAAP financial measures are limited in their utility for evaluating our future operating results in accordance with GAAP.
© 2021 Omnicell, Inc. | 2 |
Vision
The Autonomous Pharmacy will transform the pharmacy care delivery model by enabling the provider to practice at the top of their license
© 2021 Omnicell, Inc. | 3 |
Delivering Strong Results and Building Momentum
FY 2020 Preliminary Update & Outperformance
Key Metric | Prior Guidance | Update | ||
Product Bookings | $865-$900M | ~$1B | ||
Total Revenue | $881-$887M | $890-$892M | ||
Non-GAAP EBITDA | - | $157-$159M | ||
Non-GAAP EPS | $2.35-$2.40/share | $2.46-$2.51/share |
FY 2021 Preliminary Guidance
$1.085-$1.105B | $228-$240M | $3.38-$3.58 |
Total Revenue | Non-GAAP EBITDA | Non-GAAP EPS |
Previous: $1.015-$1.045B
Projected Long-Term Value Upside
✔Clear leadership position in the digital transformation of healthcare with $70B+ TAM
✔Targeting 14-15%2021-2025 revenue CAGR (organic 11-12%, inorganic 3%)
✔Targeting ~400bps increase in Non-GAAP EBITDA margins from 2021-2025
✔High revenue visibility from recurring revenue, long-termsole-source agreements and strong product backlog
✔Targeting ~50% 2020-2025 revenue CAGR for SaaS, Subscription Software & Tech-Enabled Services
Strong operating performance has driven +286% total shareholder return over the past 5 years
NOTE: Revenue estimate based on composition of 12/31/2020 product backlog, customer timelines and Omnicell hiring plan.
DISCLAIMER: See Appendix for a reconciliation of 2020 non-GAAP EBITDA and 2020 non-GAAP EPS to their most directly comparable GAAP financial measures. We do not provide a reconciliation of forward-lookingnon-GAAP guidance to the comparable GAAP measures as these items are inherently uncertain and difficult to estimate and cannot be predicted without unreasonable effort.
© 2021 Omnicell, Inc. | 4 |
Well Positioned for Continued Growth and Shareholder Value Creation
- Category creator positioned to transform the pharmacy care delivery model
- Leading strategic partner to health systems in large and growing market segments
- Resilient, high-visibility revenue accelerated by high-growth SaaS, Subscription Software & Tech-Enabled Services
- Demonstrated track record of growth and margin enhancement with more expected to come
Leveraging our market leading installed base to drive recurring
revenue growth in advanced services
© 2021 Omnicell, Inc. | 5 |
1 Omnicell Provides Solutions for an Expensive and Error-Prone Medication Management Reality
Medication Management is Expensive and Error-Prone | Omnicell's Current Solutions | |
Deliver Results6 | ||
Safety | 25,000 | 4 | 47 million | 1 | Enhanced | 99.999997% | ||||
Errors Annually | Errors Per Day in | Doses Lost to | Error Per 200 | Patient | Accuracy with Full | |||||
in Hospitals1 | Outpatient Pharmacies2 | Drug Diversion4 | Drug Dispenses1,5 | Safety | Medication Barcode | |||||
Scanning | ||||||||||
Global: $1,250B | 39% | 18.5% | 66% | 10% | ||||||
Reduction in IV | Increase in | |||||||||
Financial | US: $510B | Drop in Margins for For- | Drug Spend Increase | |||||||
Costs Insourcing | Prescription | |||||||||
Profit Health System4 | (5x Inflation)4 | |||||||||
Annual Medication | vs. Outsourcing | Volume | ||||||||
Spending3 | ||||||||||
75% | 3,000-4,500 | 20-30% | 250+ | 54% | 200-300% | |||||
Reduction of | ||||||||||
Efficiency | Pharmacist Tasks | SKUs of Drugs | Prescriptions Are | Active Drug | Nurse Medication | More Doses | ||||
Stored7 | ||||||||||
Are Non-Clinical4 | Managed in Systems4 | Never Filled4 | Shortages4 | Retrieval Time | ||||||
Compliance | 341+ | $39 billion | Greatly Increased Data | |||||||
Compliance | Annual Spend in | Visibility and Regulatory | ||||||||
Requirements4 | Compliance Admin4 | Compliance | ||||||||
People | 50%+ | 1 in 4 | Numerous Problems | 74% | 80% | |||||
Pharmacists Experience | Hospitals Cut Staff | Directly Correlated to Safety | Time Saved By | Time Saved By | ||||||
High Burnout4 | to Manage Costs4 | and Patient Satisfaction4 | Nurses | Pharmacists |
- Poon, China, Churchill, et al. Ann Intern Med 2006; 145(6):426-434.
- Flynn, Barker, Carnahan Am J Pharm Assoc 2003: 43:191-200.
© 2021 Omnicell, Inc.
3. Global Medicine Spending and Usage Trends, IQVIA, March 2020. Gross spend estimate before any rebates/discounts.
4. | Autonomous Pharmacy White Paper and Industry publications. | |
5. | 0.5% Non-IV Dispensing Errors. | |
6. | Statistics below are based on Omnicell customer outcomes, Omnicell estimates. | 6 |
7. | Relative to conventional robots of similar size. |
1 Autonomous Pharmacy Framework
Increasing healthcare value
In 2019, leading health systems jointly created a framework analyzing the technological maturity of pharmacies
The group determined there was a significant opportunity to drive greater healthcare value
The group established a 5-level framework and noted that the majority of the industry was at Level 2 today
As customers move to higher levels, they substantially increase efficiency, safety and compliance while reducing costs
Omnicell provides solutions to facilitate this evolution and drive tremendous value for customers
NOTE: Autonomous Pharmacy White Paper and Industry publications.
© 2021 Omnicell, Inc. | 7 |
1 Omnicell's Autonomous Pharmacy is a New Category of Solutions
That Fundamentally Improve Provider Outcomes
Omnicell One | CPDS | IV RIIS | EnlivenHealth | Omnicell340B | Future Services1 | |||||
One Platform
Omnicell | Future Devices1 |
Connected |
Devices
XT Automated | Anesthesia | XR2 Robot | IV Robot | IVX Workflow |
Dispensing Systems | Workstation | |||
1. Future services and future devices represent potential future technology that is under development and may or may not ever become generally available to the commercial marketplace. Omnicell makes no commitment with regard to such potential future technology.
© 2021 Omnicell, Inc. | 8 |
2 Omnicell Has Unparalleled Breadth and Depth of Customer Base That Enables Significant Ability to Bring New Innovations to Market
45%
install base in
US retail
pharmacy sector
1. As of December 31, 2020.
© 2021 Omnicell, Inc.
145 | ~50% | 17 |
install base in US | ||
sole source contracts | hospitals1 | |
with top 300 US | of top 20 US News | |
Honor Roll | ||
health systems1 | ||
hospitals1 | ||
Omnicell has over 25 years of experience partnering with providers to solve medication management problems
>60%
of post-acute sector served by Omnicell customers
9
2 Leader in Large and Growing Segments
Omnicell is growing its leadership position across a $70B+ total addressable market
Point of Care
Central Pharmacy
340B Software-
Enabled Services
Retail, Institutional
and Payers
Estimated Total Addressable | |
Market Opportunity1 | Key Advanced Services |
$20B
Omnicell One | CPDS |
$15B
Omnicell340B | IV RIIS |
$12B
$23BEnlivenHealth
1. Represents estimated cumulative TAM over 10 years and includes North America, UK, Germany, France, Spain, Kingdom of Saudi Arabia, UAE & Qatar.
© 2021 Omnicell, Inc. | 10 |
3 Resilient and High-Visibility Revenue
Robust Backlog
Deep Customer Relationships
Customer Retention
Robust product backlog
145 of the top 300 U.S. health systems in long-term,sole-source agreements1,2
99%+ customer retention3
Connected Devices, Software Licenses & Other4
Recurring Technical Services and Other Recurring6
~6% ~63%
Types of
Revenue
(2020E)
Recurring SaaS, Subscription
Software & Tech-Enabled
Services5
~31%
Point of Care | 36% through XT series | High revenue visibility from recurring revenue, | |||||
Installed Base Early | |||||||
in Upgrade Cycle | replacement cycle2 | sole-source agreements and backlog | |||||
1. | As defined by Definitive Healthcare. | 3. | Measured over the past year on a revenue basis. | 5. | Includes Central Pharmacy Dispense Services (XR2aaS), EnlivenHealth, IV RIIS Service, | ||
2. | As of 12/31/2020. | 4. | High-visibility revenue based on backlog, pipeline & LT sole-source agreements. | Omnicell340B, Omnicell One Service, RobotRX Service (Pak Plus). | |||
© 2021 Omnicell, Inc. | 6. | Includes revenue from Consumables | 11 |
3 Advanced Services Accelerating Recurring Revenue Growth
SaaS, Subscription Software & Tech-Enabled Services (% of Total Revenue)
20-30%
9-10%
~6%
2020E | 2021E | 2025E |
~50% 2020-2025 Targeted Revenue CAGR
✔ Leveraging established channel and strong customer relationships
✔ Strong demand driven by increasing provider digitization and need to evolve medication supply chain
✔ Omnicell's cloud-based services
enable better outcomes
✔ Subscription-based, recurring revenue streams
✔ Significantly increases core addressable market
✔ High margin unit economics
NOTE: Includes Central Pharmacy Dispense Services (XR2aaS), EnlivenHealth, IV RIIS Service, Omnicell340B, Omnicell One Service, RobotRX Service (Pak Plus).
© 2021 Omnicell, Inc. | 12 |
4 Driving Profitable Growth Through Disciplined Execution
Expected Annual Revenue ($ in Millions)
$1,900-$2,000
$1,650-$1,750
Execute value-enhancing M&A
$1,085-$1,105
Drive innovation and continue to deliver
the Autonomous Pharmacy Vision
Continue market share gains
Capitalize on upgrade cycles
Continue to grow and expand within large existing customer base (sites & product)
2021E | 2025E |
© 2021 Omnicell, Inc. | 13 |
4 Continuing to Drive Margin Expansion
Targeted Non-GAAP Operating Margin (%)
~21%
~17%
~13%
2020E | 2021E | 2025E |
Targeted Non-GAAP EBITDA Margin (%)
✔
✔
✔
Key Drivers of Margin Enhancement
Improving Business Mix- SaaS, Subscription Software
- Tech-EnabledServices targeted to represent 20-30% of revenue by 2025, supporting strong gross margins
Long-TermCustomer Partnerships- Sole-sourceagreements with 145 of the top 300 U.S. health systems1,2 and many outside of the top 300
Economies of Scale- Supply chain and operating
~18%
~25%
~21%
✔ ✔
expense volume leverage
Manufacturing Savings- Cost productivity programs
Process Efficiencies- Increasing virtualization of commercial and implementation processes
2020E | 2021E | 2025E |
1. As of 12/31/2020. 2. As defined by Definitive Healthcare.
DISCLAIMER: See Appendix for a reconciliation of 2020 non-GAAP operating margin and 2020 non-GAAP EBITDA margin to their most directly comparable GAAP financial measures. We do not provide a reconciliation of forward-looking non- GAAP guidance to the comparable GAAP measures as these items are inherently uncertain and difficult to estimate and cannot be predicted without unreasonable effort.
© 2021 Omnicell, Inc. | 14 |
4 Building on Our Track Record of Delivering Shareholder Value
Omnicell's Total Shareholder Return
Time Period | Omnicell (OMCL) | S&P Healthcare (XLV) | Outperformance |
1 Year | +47% | +13% | +34% |
3 Year | +147% | +45% | +102% |
5 Year | +286% | +72% | +214% |
10 Year | +731% | +328% | +402% |
Omnicell outperformed the S&P Healthcare Index on all timeframes
NOTE: Total shareholder returns are based on calendar year and assumes dividends reinvested as of 12/31/2020; all figures are rounded to the nearest whole number.
© 2021 Omnicell, Inc. | 15 |
Well Positioned for Continued Growth and Shareholder Value Creation
1
2
3
4
Category creator positioned to transform the pharmacy care delivery model
Large portion of the healthcare sector: $1,250B annually globally
Leading strategic partner to health systems in large and growing market segments
Clear leadership position in the digital transformation of healthcare with $70B+ TAM
Resilient, high-visibility revenue accelerated by high-growth SaaS, Subscription Software & Tech- Enabled Services
Robust product backlog, long-termsole-source agreements and 99%+ customer retention
Targeting ~50% 2020-2025 revenue CAGR for SaaS, Subscription Software & Tech-Enabled Services
Demonstrated track record of growth and margin enhancement with more expected to come
Targeting 14-15%2021-2025 total revenue CAGR (organic 11-12%, inorganic 3%)
Targeting ~400bps increase in Non-GAAP EBITDA margin from 2021-2025
Leveraging our market leading installed base to drive recurring
revenue growth in advanced services
DISCLAIMER: We do not provide a reconciliation of forward-lookingnon-GAAP guidance to the comparable GAAP measures as these items are inherently uncertain and difficult to estimate and cannot be predicted without unreasonable effort.
© 2021 Omnicell, Inc. | 16 |
Appendix
17
Reconciliation of GAAP to Non-GAAP
(Unaudited, in thousands, except per share data and percentage) | |
Twelve Months Ended | |
December 31, 2020 | |
Reconciliation of GAAP income from operations to non-GAAP income from operations: | |
GAAP income from operations | $ 31,600-34,600 |
GAAP operating income % to total revenues | 3.5%-3.9% |
Share-based compensation expense | ~44,700 |
Amortization of acquired intangibles | ~19,600 |
Acquisition-related expenses | ~5,600 |
Severance and other expenses (1) | ~12,000 |
Non-GAAP income from operations | $113,500-116,500 |
Non-GAAP operating margin (non-GAAP operating income % to total non-GAAP revenues) | 12.7%-13.1% |
Reconciliation of GAAP net income to non-GAAP net income: | |
GAAP net income | $ 28,600-30,600 |
Share-based compensation expense | ~44,700 |
Amortization of acquired intangibles | ~19,600 |
Acquisition-related expenses | ~5,600 |
Severance and other expenses (1) | ~12,000 |
Amortization of debt issuance costs | ~1,600 |
Amortization of discount on convertible senior notes | ~4,800 |
Tax effect of the adjustments above (2) | ~(9,100) |
Non-GAAP net income | $ 107,800-109,800 |
- For the year ended December 31, 2020, other expenses include approximately $1.0 million of IP and legal entities restructuring costs and approximately $1.0 million of certain litigation costs.
- Tax effects calculated for all adjustments except tax benefits and expenses, and share-based compensation expense, using an estimated annual effective tax rate of 21% for fiscal year 2020.
© 2021 Omnicell, Inc. | 18 |
Reconciliation of GAAP to Non-GAAP (Cont'd)
(Unaudited, in thousands, except per share data and percentage) | |
Twelve Months Ended | |
December 31, 2020 | |
Reconciliation of GAAP net income per share - diluted to non-GAAP net income per share - diluted: | |
Shares - diluted GAAP | 43,743 |
Shares - diluted Non-GAAP | 43,743 |
GAAP net income per share - diluted | $ 0.65-0.70 |
Share-based compensation expense | ~1.02 |
Amortization of acquired intangibles | ~0.45 |
Acquisition-related expenses | ~0.13 |
Severance and other expenses (1) | ~0.27 |
Amortization of debt issuance costs | ~0.04 |
Amortization of discount on convertible senior notes | ~0.11 |
Tax effect of the adjustments above (2) | ~(0.21) |
Non-GAAP net income per share - diluted | $ 2.46-2.51 |
Reconciliation of GAAP net income to non-GAAP EBITDA (3): | |
GAAP net income | $ 28,600-30,600 |
Share-based compensation expense | ~44,700 |
Interest (income) and expense, net | ~400 |
Depreciation and amortization expense | ~61,400 |
Acquisition-related expenses | ~5,600 |
Severance and other expenses (1) | ~12,000 |
Amortization of debt issuance costs | ~1,600 |
Amortization of discount on convertible senior notes | ~4,800 |
Income tax expense (benefit) | ~(2,100) |
Non-GAAP EBITDA | $ 157,000-159,000 |
Non-GAAP EBITDA margin (non-GAAP EBITDA % to total non-GAAP revenues) | 17.6%-17.9% |
- For the year ended December 31, 2020, other expenses include approximately $1.0 million of IP and legal entities restructuring costs and approximately $1.0 million of certain litigation costs.
- Tax effects calculated for all adjustments except tax benefits and expenses, and share-based compensation expense, using an estimated annual effective tax rate of 21% for fiscal year 2020.
- Defined as earnings before interest income and expense, taxes, depreciation and amortization, share-based compensation, as well as excluding certain non-GAAP adjustments.
© 2021 Omnicell, Inc. | 19 |
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Omnicell Inc. published this content on 13 January 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 13 January 2021 13:29:03 UTC