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ICON plc November 2009. Forward Looking Statements Certain statements contained herein including, without limitation, statements containing the words.

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Presentation on theme: "ICON plc November 2009. Forward Looking Statements Certain statements contained herein including, without limitation, statements containing the words."— Presentation transcript:

1 ICON plc November 2009

2 Forward Looking Statements Certain statements contained herein including, without limitation, statements containing the words “believes,” “anticipates,” “intends,” “expects” and words of similar import, constitute forward-looking statements concerning the Company's operations, performance, financial condition and prospects. Because such statements involve known and unknown risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. Given these uncertainties, prospective investors are cautioned not to place undue reliance on such forward-looking statements. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. This presentation includes selected non-GAAP financial measures. For a presentation of the most directly comparable GAAP financial measures, please refer to the Quarter 3 2009 press release consolidated income statement headed Consolidated Income Statements (Unaudited) (US GAAP)

3 Global Full Service Clinical Development

4 ICONs Global Footprint

5 ICON Plc Staff Growth 1990 - Today

6 Market Environment

7 Market Fundamentals Still Intact Outsourcing Penetration expected to increase –More Strategic approach to outsourcing –Cost containment –Globalisation of clinical research Continued R&D Spending Growth. –Pipelines remain solid –Scientific innovation continues to expand Increasing Regulation –More patients/ more studies –Post marketing surveillance

8 Increased Outsourcing Clients are increasingly focused on their core competencies of –Discovery –Strategic Development –Marketing Clients are engaging CROs at a more strategic level –Level of management engagement (Executive to executive) –Level of co-operative engagement i.e. sharing drug pipeline intentions –Deeper reliance on CRO scientific and therapeutic expertise Reduced internal capacity in the companies of strategic partners e.g. staff or asset transfers/reductions Clients likely to move their % outsourced from ≈ 30% to >50% over the next 5+ years

9 Market Fundamentals Still Intact Outsourcing Penetration expected to increase –More Strategic approach to outsourcing –Cost containment –Globalisation of clinical research Continued R&D Spending Growth. –Pipelines remain solid –Scientific innovation continues to expand Increasing Regulation –More patients/ more studies –Post marketing surveillance

10 Clinical Compounds in Development

11 R&D Spending Growth

12 CRO Market Size 1996 – 2012 (E)

13 Total Biotech Funding ($ Millions)

14 Market Fundamentals Still Intact Outsourcing Penetration expected to increase –More Strategic approach to outsourcing –Cost containment –Globalisation of clinical research Continued R&D Spending Growth. –Pipelines remain solid –Scientific innovation continues to expand Increasing Regulation –More patients/ more studies –Post marketing surveillance

15 Opportunities…. but also Risks ICON in this Market Environment

16 Book to Bill RatioNet Business Wins Net New Business Wins and Book to Bill Ratio

17 Q3 09 Net WinsYTD 09 Net Wins Analysis of Business Wins

18 Analysis of Backlog by client Q3 09

19 Total Backlog Level ($ Millions) 6%

20 Value of backlog forecast to be earned in next 4 quarters Coverage of next 4 quarters from Backlog

21 Projects of Longer duration lead to slower backlog burn

22 Strategy

23 Capitalise on market fundamentals to drive organic growth in all business units. Cross-sell services to grow sales and margin Build Deep Strategic Relationships Create Stronger differentiation across our services Retain a flexible business model to respond to differing client outsourcing strategies Pursue acquisitions to enhance depth and scale of current operations and to add additional complementary services e.g. –Phase I –Bioanalytical / Biomarkers –Therapeutic specialists –Safety/Late Phase –Imaging –Japan Acquisitions to date – 13 Revenues acquired $130m Staff acquired – 1,200 => Organic growth >80% ICON’s Core Strategy is Organic Growth, with acquisitions made to add new services or scale

24 Market Feedback

25 ICON in recent Surveys “ICON is one of three CRO’s cited most frequently as sponsor’s favourite CRO vendors” “Our confidence goes up that ICON is the right name to own in this environment, given their consistent quality” ““ ICON is a darling of the industry, the company's stunning growth in 2006 and 2007 surprised its peers. Now, the Dublin-based company is still outpacing just about everybody, but at a less accelerated clip.”

26 Financial Performance

27 CAGR 28% (E) Net Revenue CAGR of 28% since 2005 * Mid point of Guidance Oct 21st

28 CAGR 37% Earnings Per Share Growth * Mid point of Guidance October 21st (E)

29 Cash Flow from Operations / Free Cash Flow FCF Per Share * Estimate assumes DSO of approx 60 days. Historic periods FCF exclude Head-office construction costs

30 Return on Equity

31 31 Sept 0931 Sept 08% Increase Net Revenue220225(2.3%) Direct Costs127 (0.6%) SG & A EBITDA 54 39 64 35 (16.0%) 10.7% D & A985.9% EBIT302712.1% Net Income242112.0% EPS (Inc SFAS 123R)40c35c14.3% Weighted Average no. of Shares (Inc SFAS123R) 59.9m61.8m(3.0%) Recent Financial Performance ($ millions) Quarter 3 2009

32 31 Sept 0931 Sept 08% Increase Net Revenue6606452.3% Direct Costs376364(3.4%) SG & A EBITDA 174 110 187 94 (6.9%) 17.5% D & A23219.5% EBIT877318.6% Net Income685718.5% EPS (Inc SFAS 123R)113c93c21.5% Weighted Average no. of Shares (Inc SFAS123R) 59.7m61.4m(2.6%) Recent Financial Performance ($ millions) YTD 2009

33 Summary Balance Sheet and Cash Flow ($ millions) 9 Mths ended Sept 31, 09 Full Year ended Dec 31, 08 Full Year ended Dec 31, 07 Full Year ended Dec 31, 06 Cash$173.0$101.1$118.6$102.9 Debt$28.0$105.4$94.8$5 Net Cash/Debt$145.0($4.3)$23.8$97.9 Total assets$922.1$867.3$693.1$476.3 Total Liabilities$381.3$410.9$304.9$173.6 Shareholder’s equity$540.8$456.4$388.4$302.7 Cashflow from operations $198.4$81.3$42.9$50.4 Capital expenditures$26.0$67.9$75.4$31.5

34 YTD Sept 31, 09 Full Year ended Dec 31, 08 Full Year ended Dec 31, 07 Full Year ended Dec 31, 06 Sales Growth2.3%37%38%39% EPS Growth21.5%38%41%177% EBITDA Margin16.7%14.7%14%13.8% EBIT Margin13.1%11.5%11.0%10.5% ROE18.0%17%14%13% ICON Key Financial Metrics ($ millions)

35 ICON S&P 500 Nasdaq Composite ICON Plc Historic Share Price Performane

36 Top Global Clinical CRO - #4 Deep customer relationships Quality of staff Experienced Management team Excellent Reputation Solid market fundamentals Outstanding record of growth Strong balance sheet Investment Case Summary


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