quest diagnostics 8171932C-60AA-469C-929A-995B7737DF39_BarclaysPresentation3.10.09

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  • 1. Barclays Capital Global Healthcare Conference March 10, 2009
  • 2. Who is Quest Diagnostics? •Leader in Providing Healthcare Insights and Solutions • Comprehensive Diagnostic Testing • Routine ——» Esoteric Diagnose • Monitor • Predict • Prevent • –Advanced Information Technology Solutions • Improve Care and Efficiency –Facilitate Introduction of New Therapeutics • Clinical Trials Testing –Innovative Diagnostic Products • Enable Care Closer to the Patient –Risk Assessment Solutions to Life Insurance Industry Touching Patients 150 Million Times Each Year Patients | Growth | People
  • 3. History of Strong Growth 20% Revenue 1999-2008 10-year CAGR 20% 27% EPS* 1999-2008 10-year CAGR 27% $ in billions except EPS Patients | Growth | People *EPS is from continuing operations
  • 4. Favorable Industry Trends Essential Healthcare Service • Growing and Aging Population • Scientific & Medical Innovations • Personal Interest in Health • Convergence of Information Influences >70% of Healthcare Decisions Patients | Growth | People
  • 5. Moving to Higher Growth, Higher Margin Testing Segments 2000 Revenue 2008 Revenue Total Revenue: $3.4 Billion Total Revenue: $7.2 Billion Patients | Growth | People
  • 6. Expanding Market Leadership 2009 2000 • Clinical Testing • • • Gene-based & Esoteric Testing • • • Employer Services • • • Anatomic Pathology Testing •P • • Risk Assessment Services •- • • Healthcare Information Technology •- • • Point of Care (Near Patient) Testing •- • • Clinical Trials Testing •P •P • International Market •- •P Overall Market Leader/Niche Leadership P Market Participant Patients | Growth | People
  • 7. Our Longer Term Goals •Undisputed World Leader in Diagnostic Testing, Information and Services •Profitably Grow > Industry Rate •Expand Operating Income to 20% of Revenues •Expand International Operations to ~10% of Revenues Patients | Growth | People
  • 8. Strategy to Drive Profitable Growth Leverage Capabilities To Create Differentiation Deliver Superior Patient Experience Continuously Drive Six Sigma Quality Lead in Medical Innovation Leverage Unparalleled Assets & Capabilities Expand Diagnostic Scope Expand Geographic Reach Sustainable Competitive Advantage Patients | Growth | People
  • 9. Delivering Superior Patient Experience Patient Gold Standards Prompt, caring, courteous service PSC Appointment Scheduling First laboratory with PSC appointment scheduling Reduces patient wait time; improves convenience Google Health Collaboration Facilitate patient-physician communications Secure electronic access to lab results Patients | Growth | People
  • 10. Leading Medical Innovator Multiple Channels to Access New Technology Internal Development – Nichols Institute Joint Development Relationships Licensing/Distribution Relationships Focused on Addressing Areas of Significant Patient Need Cancer, Cardiovascular Conditions, Infectious Disease Less invasive; less painful; more convenient for patients Leading Experts for Medical Consultation 900 MDs & PhDs Culture of Collaborative Innovation Academic relationships Investment in innovative firms and technologies Partnerships with pharmaceutical companies Patients | Growth | People
  • 11. Continual Stream of Diagnostic Testing Advances Cancer Transplantation/Coagulation LeumetaTM HLA FDA-registered lab HE-4 Coag consultations H/I Breast Recurrence New Technologies/New Applications Cancer of Unknown Primary XSenseTM (Fragile X) Septin 9 Colorectal Cancer Test ClarisureTM (CGH Microarray) Cardiovascular Disease LC/MS for Amino Acids Ion Mobility (Lipid Profile) LC-MS/MS Infectious Disease HepaScoreTM Chikungunya Patients | Growth | People Italics – under development
  • 12. Personalized and Targeted Medicine is an Emerging Opportunity Enables More Appropriate Drug Therapy Rituxan® Rituxan® Sensitivity (CD20) Herceptin® Her2 Campath® Campath Sensitivity (CD2) Irinotecan UGT1A1 Erbitux® RAS Warfarin CYP450 2C9 Carbamazephine HLA - screens out certain Asian patients Abacavir HLA - predisposition to hypersensitivity Aspirin Monitor personal resistance levels Improves Disease Management Leumeta™ CellSearch Hepascore™ Improving Patient Care …..Reducing Medical Costs Patients | Growth | People
  • 13. Unparalleled Assets and Capabilities Serving 50% of US Hospitals & Physicians 2,300 Patient Service Centers and Laboratories 900 MD’s and PhD’s 8,500 Phlebotomists & 5,000 Paramedical professionals 3,500 Courier Vehicles and 25 Airplanes - making 90,000 stops each day >140,000 Physician users of Care360 POC testing in >100 Countries Testing ~1,000,000 Patients a Day through our Labs and POC Devices Patients | Growth | People
  • 14. Expanding Diagnostic Scope Near Patient Testing Opportunity to Improve Patient Care Attractive benefits for hospitals, physician offices, rural and international markets Enables more timely and effective decisions Expanding product menu Platform technology Results integrated into Care360 Reducing Medical Costs Patients | Growth | People
  • 15. Expanding Geographic Reach Broadening Our Geographical Coverage Clear leadership in U.S….with room to grow Leverage existing labs in Puerto Rico, Mexico, and UK Providing cervical cancer screening for Ireland NHS Increase foreign testing sent to Nichols Institute Entered India – serving multiple markets Increasing Market Opportunity Patients | Growth | People
  • 16. On Track to Reduce Costs by $500 Million Leverage Lean Six Sigma to Improve Efficiency Streamline Lab Operations Optimize Logistics Routes and PSC Resources Improve Billing and Call Center Operations Leverage Purchasing Capabilities $300 million savings run rate exiting 2008 Maintain Service Levels & Stimulate Growth Patients | Growth | People
  • 17. 2008 Results Strong Growth in Revenue, Earnings and Cash Flow $7.2 B, ↑ 8.1% Revenues 16.9%, ↑ 0.6% Operating Income ↑14% EPS $3.23, Cash from Operations $1.1 Billion Patients | Growth | People
  • 18. 2009 Guidance Continued Revenue & Earnings Growth ↑ ~3% Revenues Operating Income % approaching 18% $3.50 - $3.70, ↑ 8% - 15% EPS Cash from Operations * ~$1 billion CapEx ~$200 million Strenghening our Leadership Position *Excludes expected payment of the $316 million reserve Patients | Growth | People established for the previously disclosed NID matter
  • 19. Building on Strength Leader in a vital and growing industry Uniquely positioned with unparalleled assets & capabilities History of disciplined growth and successful acquisitions Strong cash generator, with a strong balance sheet Proven management team Focused on Execution Patients | Growth | People
  • 20. Patients | Growth | People