Investor Presentation - November 2021 TSX: CRRX Canada's Largest Seniors Care Pharmacy Provider - Seeking Alpha
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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 that are set out under the heading “Risks and Uncertainties” in CareRx’s most recently filed Management’s Discussion and Analysis available on SEDAR at www.sedar.com, which could cause actual results to vary and in some instances to differ materially from those anticipated by CareRx 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 CareRx will derive therefrom and neither CareRx nor any other person assumes responsibility for the accuracy and completeness of any forward looking information. Other than as specifically required by applicable laws, CareRx 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. 2
Canada’s largest and fastest growing provider of pharmacy services to seniors housing communities and other congregate care settings 3 3
The typical senior Medication supply and in a long-term management is a critical care or retirement component of seniors home care home takes • Optimize medication regimen for optimal resident outcomes 4 to 12 • • Ensure highest levels of safety Minimize hospital visits Resident oversight by geriatric-certified medications • daily clinical pharmacists 4 Never has the level of care for these residents 4 4 been so important
Add an image of a Best-in-Class Institutional pharmacist at work Pharmacy Capabilities • High-volume solutions for cost-effective supply of chronic medication • Highest level of safety and adherence for individuals with complex medication regimes • Industry-leading team of clinical pharmacists who work with home operators to provide exceptional medication management services • Largest national footprint enables delivery of responsive, high-touch, local service 5
Best-in-Class Medication Management Technology PACMED® PACVision® Automated strip Automated pouch packaging technology verification technology Digital Pen Nexsys ADC™ Automated dispensing cabinet PharmaPod PharmaConnect Medication incident eMAR Interactive patient portal management system Technology leadership will increasingly be a competitive 6 6 advantage in providing pharmacy services to seniors housing communities
Our Growing Strongest Network in the Sector National Scale >96,000 beds serviced seniors housing >1,600 Geographies: Ontario & Western Canada communities monthly Strong Bed Growth >3.1 M prescriptions 100,000 >96,000 80,000 361 fulfillment centres 60,000 40,000 20,000 20,000 1. Prior to planned further consolidation of fulfillment centres resulting from the integration of the Medical Pharmacies acquisition. 7
Total seniors housing Over the next ~15 years, beds in Canada the number of beds is forecast to grow ~425,000 (and growing) 96,000 >2x 23% 9% Comp A ~37,000 1,025,000 Rest of Market ~292,000 68% ~425,000 8 Note: Incumbent bed counts per management estimates; Total seniors housing beds per CMHC Seniors Housing Report Canada.
Multiple Opportunities for Growth Increase beds under contract Well capitalized and positioned to win new large, national and regional contracts Today • Expand with our seniors housing community 2021 Year-End customers Target >96,000 • Add new seniors housing communities beds contracts • Expand into additional provinces 100,000 beds Make strategic acquisitions Consolidate a highly fragmented market through accretive acquisitions to increase scale and realize operational efficiencies 9 Significant operating leverage as number of beds 9 under contract expands
Disciplined Acquisition Strategy 1 Highly 2 With strong 3 At accretive complementary synergy potential purchase multiples Leverage current Ability to realize Highly accretive market dynamics to substantial synergies acquisitions at make opportunistic through rationalization, discounts to CareRx’s roll-up acquisitions improved purchasing average trading that grow bed count power, and by multiple result in and improve scale implementing CareRx’s strong value creation …At Accretive best practices opportunities Purchase Multiples Proven ability to rapidly integrate 10 acquisitions and realize synergies
Successful Execution of Acquisition Strategy May 2020 April 2021 June 2021 Remedy’sRx SmartMeds Rexall Specialty Pharmacy High-Quality Tuck-In Portion of LTC Pharmacy Transformational Acquisition Business Acquisition • +18,500 beds • +2,400 beds • +4,000 beds • Created strongest national • Strengthened market position in ON • Included fulfilment centre in footprint in the sector • Leader in innovation, quality, and Sudbury, Ontario • Added capacity to scale and customer service • Expected to contribute annualized absorb new beds • Expected to contribute annualized run-rate revenue of ~$14 M & • Integration completed ahead of run-rate revenue of $13 M & nominal Adjusted EBITDA prior to schedule, realizing $3 M in Adjusted EBITDA of $1.5 M prior to any integration synergies annual cost saving synergies any integration synergies Purchase $39 M + up to Purchase $4.5 M + up to Purchase Price: $5 M earn out Price: Price: $3.5M $2.9 M earn out 11 All acquisitions performing in line or ahead of expectations 11
Medical Pharmacies: Our • Purchase Price: Largest & Most Significant • $70 M cash • 550,359 CareRx common shares Acquisition to Date • Financing: August 23, 2021: Completed Acquisition of • $63.3 M private placement LTC Division of Medical Pharmacies • $39 M incremental debt (and • Added ~36,000 beds, serviced through 17 centres concurrent refinancing of existing in Ontario & Western Canada senior and subordinated credit facilities) • Further expanded Canada’s largest national platform • Immediately accretive to earnings • Expected to contribute run-rate annualized revenue of ~$150 M & Adjusted EBITDA of $10-12 M • Further strengthened best-in-class offering, while enhancing growth opportunities On track to realize minimum expected cost savings synergies of $5 M 12 12 One location consolidated in Q3 with four additional locations expected to be consolidated by end of the year
Successful Execution of Our Growth Strategy Ave. Beds Serviced Revenue Adj. EBITDA Revenue Adj. EBITDA (000s) (from continuing ops) (from continuing ops) (from continuing ops) (from continuing ops) ($ millions) ($ millions) ($ millions) ($ millions) 81.8 71.3 165.8 15.3 115.8 49.3 45.6 6.9 89.1 92.4 8.7 31.3 27.9 31.4 6.9 29.0 3.8 2.8 3.1 (0.04) Q3 2018 Q3 2019 Q3 2020 Q3 2021 Q3 2018 Q3 2019 Q3 2020 Q3 2021 Q3 2018 Q3 2019 Q3 2020 Q3 2021 YTD '18 YTD '19 YTD '20 YTD '21 YTD '18 YTD '19 YTD '20 YTD '21 Currently servicing beds >96,000 beds in 13 13 >1,600 seniors and other communities
A New Baseline for >96,0001 beds 23% Continued Growth • Positioned to benefit from increased scale and enhanced capabilities 77% • Experiencing accelerated organic growth • Significantly strengthened position as a Market Opportunity via natural consolidator in a highly fragmented Organic Growth & Acquisitions market: • Strong pipeline of opportunities ~329,000 seniors housing beds1 1. Other bed opportunities available, including group homes, corrections facilities and other congregate living settings. Better positioned than ever to continue to execute on 14 acquisitions and organic growth in what remains a 14 highly fragmented market
1 2 3 Large, high-growth Canada’s largest Leading customer seniors market seniors care value proposition and pharmacy provider national network 4 5 Natural consolidator in Significant operating a highly fragmented leverage market 15 www.carerx.ca
Canada’s Largest Seniors Care Pharmacy Provider TSX: CRRX Investor Presentation November 2021
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