Post on 09-Jun-2020
Investor Update
September 2018
Investor Update September, 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.
Investor Update September, 2018 | 3
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18-Month Price Chart
Capital Markets Profile
1. As of Sept. 5, 20182. As at Sept 5, 2018 from Thomson Reuters Eikon. Common share count as of Q2 2018
MD&A 208,739,240 as at June 30, 2018.
Major Shareholders
Global Healthcare Investments & Solutions 41%
Management & Board 1%
Total 42%
Stock Symbol TSX: CHH
Price1 $0.36
52-Week Low / High $0.20/$0.81
Market Capitalization $73.9M
Shares Outstanding2 208,139,399
March 2017 September 2018
Investor Update September, 2018 | 4
Repositioning the Business
Clear and focused strategic direction
1. Strategic focus on seniors healthcare services • Establish Centric as the leading provider of pharmacy and other
healthcare services to Canadian Seniors
2. Commitment to strengthening balance sheet
• Review of existing businesses and assets that are not core to strategic direction
• May consider divestitures to reduce debt and pursue growth opportunities
Investor Update September, 2018 | 5| 5
Specialty Pharmacy
Investor Update September, 2018 | 6
Specialty Pharmacy for Seniors Residences
Automated high-volume drug dispensing medication management
Continue to pursue organic growth opportunities with new RFPs, increasing retirement home penetration and implementing top-line initiatives
Investor Update September, 2018 | 7
Seniors Medical Cannabis Strategic Partnerships
Multi-year strategic partnership with Canopy Growth Corporation (TSX: WEED; NYSE: CGC)
Leverage Specialty Pharmacy footprint and clinical pharmacist expertise with Canopy’s sophisticated educations programs and superior medical cannabis products
• Spectrum Cannabis beneficial to seniors with leading softgel capsule technology
Pharmacist education and oversight is key to increasing effective cannabis use in long-term care and retirement settings
Canopy has advanced meaningful business development funds to help promote pharmacy growth and cannabis initiatives
Provides revenue generating opportunity in pre-license stage
Investor Update September, 2018 | 8
Pharmacy Regulatory Changes
Pan-Canadian Pharmaceutical Alliance ("pCPA") and Canadian Generic Pharmaceutical Association ("CGPA") agreement came into effect April 1, 2018• Prices of commonly prescribed drugs were reduced by 25%-40%• Discounts of up to 90% off the price of brand-name equivalents
Alberta Blue Cross Pharmaceutical Services Agreement • Established a new funding framework• Reduced dispensing fees and frequency of dispensing
Net impact to Adjusted EBITDA: ~$1 million in Q2 2018
After completion of business re-engineering plan, annualized net impact of up to $2 million
Investor Update September, 2018 | 9
Business Re-engineering Plan
Maximize efficiency of national platform
Key initiatives:• Changing operating and service model
• Centralization of certain functions
• Workforce reductions
• Increased operational efficiency
• Digitization and automation of pharmacy operations
Completion expected by end of 2018
Investor Update September, 2018 | 10
Adding New Beds
Leverage our scale by adding more beds under care
Signed new contracts with regional multi-site home operators in Ontario and BC• Adds ~1,400 beds by Q4 2018
Leveraging National Business Development team
Investor Update September, 2018 | 11
Karie Update
Continued collaboration to launch Karie device
First units to be launched later this summer, with first 2,000 Karie devices expected to be deployed by end of 2018
Centric selected as Pharmacy Fulfillment Partner for AceAge's participation in upcoming Industry Innovation Partnership Program study
Investor Update September, 2018 | 12
Patients taking their medications improperly resulted in 92K of admissions to homes.
Nurses are administeringmedications 90 times a day
28% of seniors hospital
admissions are due to adverse drug interactions
Seniors Pharmacy Opportunity
Sources: Statistics Canada; Canadian Institute for Health Information.
4-12medications/patient
30patients/nurse
100-200patients per home
3administrations/patient/day
4Mseniors living at home
400Kseniors in long-term care and retirement home beds
Requires proximity, efficiency and accuracy… and innovation
Investor Update September, 2018 | 13| 13
Surgical & Medical Centres
Investor Update September, 2018 | 14
Serves a Diverse Customer Base
Private paid non-insured surgeries
Government outsourced insured surgeries (e.g. Workers’ Comp)
Canada’s first Centre of Excellence in metabolic and bariatric surgery
General, orthopaedic, ENT & sinus, cosmetic surgeries
Diagnostics (MRI, CT, full body scan)
Family practice, women’s health, executive health
5 25 8 72 245Facilities Operating
RoomsProcedure
RoomsBeds Physicians
Investor Update September, 2018 | 15| 15
Financial Review
Investor Update September, 2018 | 16
H1 Year-Over-Year Results
Six months ended June 30, 2018 ($millions) H1 ‘18 H1 ‘17
Revenue $87.7M $86.2M
Adj. EBITDA $7.3M $9.4M
Adj. EBITDA margin 8.3% 10.9%
$64.6, 74%
$23.1, 26%
Revenue by Segment($ millions)
$6.2, 62%
$3.8, 38%
Adjusted EBITDA by Segment($ millions)
Specialty Pharmacy Surgical and Medical Centres
1.8%
22.6%
Investor Update September, 2018 | 17
Specialty Pharmacy
9.3
6.2
14.6% 9.6%
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
0
2
4
6
8
10
12
14
16
18
20
H1 2017 H1 2018
Adj. EBITDARevenue
63.8 64.6
H1 2017 H1 2018
($ million)
Adj. EBITDA Margin
1.3% 33.4%($ million)
Investor Update September, 2018 | 18
3.13.8
13.8% 16.3%
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
0
2
4
6
8
10
12
14
H1 2017 H1 2018
Surgery and Medical Centres
Adj. EBITDARevenue
22.4 23.1
H1 2017 H1 2018
($ million)
Adj. EBITDA Margin
3.2% 21.7%($ million)
Investor Update September, 2018 | 19
Generated Positive Cash Flows
9.85
5.71
H1 2017 H1 2018
Cash Flow from Operations
($ million)
Anticipate cash flow from operations will continue to be positive going forward
Investor Update September, 2018 | 20
Trailing Twelve Months Results
Specialty Pharmacy
Surgery & Medical Centres
Q2’18 TTM Q2’17 TTM Q2’18 TTM Q2’17 TTM
Revenue 125.0 126.8 45.2 43.1
Adj. EBITDA 13.9 18.9 6.8 5.3
Adj. EBITDA margin 11.1% 14.9% 15.1% 12.3%
Investor Update September, 2018 | 21
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 Q2 2018
Adjusted EBITDA/Total Debt
Debt Levels
1. Adjusted EBITDA from continuing operations and Total Debt on an LTM basis
5.5x
Targeting 3.5x in the medium term
Q2’18: Regulator changes
effect Adj. EBITDA
Q1’16: Reduce debt by $30m through redemption
of remaining Alaris preferred partnership unity &
complete purchase/cancellation of $164M second
lien Senior Secured Notes
Q2’16: Successful refinancing &
reduction of April 2016 Convertible
Notes & extend revolving Credit Facility
Q2’17: Close new 5-
year Credit Facilities
Q1’17: Conversion of all
Convertible Notes and Loan to
Common SharesQ4’15: Divest
Physiotherapy,
Rehabilitation and
Assessment operations
for gross proceeds of
$250M