first quarter 2018 - amazon s3...financial results conference call may 9, 2018 centric health...

First Quarter 2018

Financial Results Conference Call May 9, 2018

Centric Health Corporation Q1 2018 | 2

Forward Looking Statements

Certain of the statements contained in this presentation are "forward-looking information“ within the meaning of

applicable Canadian securities legislation. Forward-looking information includes, but is not limited to, business

strategy, plans and other expectations, beliefs, goals, objectives, information and statements about possible future

events. Forward-looking information generally can be identified by the use of forward-looking terminology such

as “outlook”, “objective”, “may”, “will”, “expect”, “intend”, “estimate”, “anticipate”, “believe”, “should”, “plans” or

“continue”, or similar expressions suggesting future outcomes or events. You are cautioned not to place undue

reliance on such forward-looking information. Forward-looking information is based on current expectations,

estimates and assumptions that involve a number of risks, which could cause actual results to vary and in some

instances to differ materially from those anticipated by Centric Health and described in the forward-looking

information contained in this presentation. No assurance can be given that any of the events anticipated by the

forward-looking information will transpire or occur or, if any of them do so, what benefits Centric Health will

derive therefrom and neither Centric Health nor any other person assumes responsibility for the accuracy and

completeness of any forward-looking information. Other than as specifically required by applicable laws, Centric

Health assumes no obligation and expressly disclaims any obligation to update or alter the forward-looking

information whether as a result of new information, future events or otherwise.

All dollar figures are in Canadian dollars unless otherwise stated.


Jack ShevelChairman


David Murphy Appointed as President & CEO

▪ Extensive senior leadership experience in the healthcare industry

• Cardinal Health – President of Canadian division

• Stryker Corporation – President Canada and Latin America

▪ Strong track record of operational excellence and organizational development


Agenda

1. Highlights

2. Regulatory Updates

3. Outlook and Growth Strategy

4. Financial Review

5. Closing Comments

6. Questions


Year-Over-Year Results

Q1 ‘18 Q1 ‘17

Revenue $44.5M $43.6M

Adj. EBITDA $3.8M $4.5M

Adj. EBITDA margin 8.6% 10.2%

$33.5, 75%

$10.9, 25%

Revenue by Segment($ millions)

$3.5, 70%

$1.5, 30%

Adjusted EBITDA by Segment($ millions)

Specialty Pharmacy Surgical and Medical Centres

2.1%

14.0%


Most Importantly….

Despite sweeping regulatory changes and headwinds, the Company still

expects year-over-year Adjusted EBITDA growth for 2018


Regulatory Update – False Creek

▪ Recent poll shows ~81% of B.C. residents support private healthcare where there are excessive delays

▪ Proposed changes to the Medicare Protection Act to be challenged

▪ Seeking injunction to suspend constitutional challenge


Mitigating Regulatory Impacts

▪ Alberta revised funding (May 2018)• Reduced dispensing fees and frequency

of dispensing• Continued discussions with stakeholders

▪ Increased savings target from $4.0 million to $7.5 million• Maximizing efficiencies through further

automation• Consolidating sites and deploying high-

volume fulfillment centres• Workflow analysis to gain efficiencies

▪ $2 million in savings implemented to date


Karie: Transforming Drug Delivery

▪ Market potential:

• 1,000 Canadians turning 65 every day

• Drug compliance is the primary reason seniors are admitted to hospitals

▪ Initially, Centric will be sole distributor

• $60-80 monthly charge

• ~$3,000 of annual drug usage per senior

▪ Centric owns 17.5% of AceAge

• Can be increased to 32.5%


Karie Progress

▪ Designed and manufactured in Canada

▪ Manufacturing underway of first 2,000 units for delivery in August

▪ Showcased at LTC conference with strong interest from operators

▪ Actively meeting with industry leaders with over 350 units reserved by home operators for pilot projects


▪ Introductory meetings with Amazon, Google and Walmart innovation teams

▪ Preparing for integration with smart home technology

▪ Distinctive advantages for medical cannabis industry

Karie: Positioned for Further Innovation


Holistic Cannabis Solution – Uniquely Positioned

▪ Applied for medical cannabis sales-only (distribution) licence – anticipated to become active in second half of 2018 (no assurance can be provided)

▪ Meeting with potential LP partners with hopes to finalize agreements by end of Q3 2018

▪ Access to senior residents (>42,000), Karie users (targeting 100,000) and supporting doctors

▪ Offers the industry validation with greater safety for complex care patients

▪ With greater than 100 clinical pharmacists on site, can offer LPs low customer acquisition cost with high percentage conversion

DOCTORS LICENCED PRODUCERS

Scripts Supply

DISTRIBUTION LICENCE

SENIORS AT HOME

SENIORS IN CARE


Leslie ChoChief Financial Officer


Q1/18 Results

4.5 3.8

Q1 2017 Q1 2018

Adj. EBITDARevenue

43.6 44.5

Q1 2017 Q1 2018

8.6%10.2%

($ million)

Margin:

2.1% 14.0%($ million)


Q1 Segment Results – Specialty Pharmacy

Q1 2018 Q1 2017

Division

Revenue

$M

AdjustedEBITDA

$M

Margin

%

Revenue

$M

AdjustedEBITDA

$M

Margin

%

Specialty Pharmacy 33.5 3.5 10.5 32.9 4.9 15.0

Surgical and Medical Centres 10.9 1.5 14.1 10.7 1.2 11.0

Corporate - (1.3) - - (1.7) -

Total 44.5 3.8 8.6 43.6 4.5 10.2


Q1 Segment Results – Surgery and Medical

Q1 2018 Q1 2017

Division

Revenue

$M

AdjustedEBITDA

$M

Margin

%

Revenue

$M

AdjustedEBITDA

$M

Margin

%



Corporate - (1.3) - - (1.7) -

Total 44.5 3.8 8.6 43.6 4.5 10.2


Q1 Segment Results – Corporate

Q1 2018 Q1 2017

Division

Revenue

$M

AdjustedEBITDA

$M

Margin

%

Revenue

$M

AdjustedEBITDA

$M

Margin

%



Corporate - (1.3) - - (1.7) -

Total 44.5 3.8 8.6 43.6 4.5 10.2


Continual Financial Transformation

1. Adjusted EBITDA from continuing operations and Total Debt on an LTM basis

Targeting 3.5x by 2019

4.0x

5.0x

6.0x

7.0x

8.0x

9.0x

10.0x

Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018

Adjusted EBITDA/Total Debt

5.19x


Strong Foundation for the Future

✓ Strong CEO in place

✓ Leaders in innovation and technology

• Karie

• High-volume solutions

• Partnership with Think Research for automated workflows

✓ Platform for expanded offerings to seniors

• Medical cannabis

✓ Unique national surgical platform


David MurphyPresident & CEO


Questions

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