accelerating growth, building value...accelerating growth, building value steve rusckowski chairman,...

Accelerating Growth, Building Value

Steve Rusckowski

Chairman, President and Chief

Executive Officer

36th Annual J.P. Morgan

Healthcare Conference

January 10, 2018

Confidential | Internal Use Only 2

SAFE HARBOR DISCLOSURE

The statements in the following presentation that are not historical facts may be forward-looking

statements. Readers are cautioned not to place undue reliance on forward-looking statements,

which speak only as of the date that they are made and which reflect management’s current

estimates, projections, expectations or beliefs and which involve risks and uncertainties that could

cause actual results and outcomes to be materially different. Risks and uncertainties that may

affect the future results of the Company include, but are not limited to, adverse results from

pending or future government investigations, lawsuits or private actions, the competitive

environment, changes in government regulations, changing relationships with customers, payers,

suppliers or strategic partners and other factors discussed in the Company's most recently filed

Annual Report on Form 10-K and in any of the Company's subsequently filed Quarterly Reports on

Form 10-Q and Current Reports on Form 8-K, including those discussed in the “Business,” “Risk

Factors,” “Cautionary Factors that May Affect Future Results” and “Management’s Discussion and

Analysis of Financial Condition and Results of Operations” sections of those reports.


Quest is a major player in healthcare…

Serves 50% of hospitals

470,000 Physicians

connected to Quanum portal

Expanding retail presence

50% FDA-approved Oncology Precision Medicine drugs since 2014

Q2 Solutions helped

of all develop

675+ EMR interfaces

Access to

~80% of U.S.

insured lives

Serves 1/3 U.S. adult population

and ~50% within 3 years

of the

~$7.7B 2017E revenue


…with unmatched capabilities

~100 Peer reviewed

publications published annually

6,000+ Patient access points

20,000+

650+ Quest-employed MDs and PhDs

40B+ Patient

data points

~$7.7B

Quest owns or controls

~570 issued patents

worldwide 700

pending and Phlebotomists, paramedics and contract nurses

2017E revenue


Quest is the clear leader in a fragmented market

Total

U.S. Lab Market

Outside the Hospital

Lab Segment

Independent

Lab Segment

$79 billion $50 billion $27 billion

DGX

LH

Other

Independent

Labs 56%

24%

20%

Independent

Labs

54%

Hospital

Outreach

35%

11%

POL and Other

Outside

the

Hospital

Inpatient

63% 37%

Total U.S. lab market growing ~2-3%


Hospital Health Systems account for $48B (~60% of market) via three segments

Inpatient Professional

Laboratory Services

(PLS)

~$27 billion market

Hospital

Outreach

Acquire and/or partner on

outreach business

~$17 billion market

Grow reference and advanced diagnostics

business

Reference

Testing

~$4 billion market

Quest #1

Market Characteristics DGX Opportunity

Reference

$4 billion

Hospital

Outreach Inpatient

$27 billion $17 billion


Quest is positioned for continued market leadership during a time of significant change

Utilization Reimbursement Stakeholder Dynamics

Technology Evolution


OPERATING

PRINCIPLES

Our two-point strategy

Remain focused on diagnostic information services

Continue to strengthen organizational capabilities

Deliver disciplined capital deployment and

strategically aligned accretive acquisitions


-4.6%

-1.6%

0.7% 1.5% 1.7%

-5%

-3%

-1%

1%

3%

5%

7%

2013 2014 2015 2016 2017

Organic, Equivalent Revenue

We have made steady progress since 2012…

through 3Q


1.4%

5.6%

1.3%

1.1% 0.9%

-5%

-3%

-1%

1%

3%

5%

7%

2013 2014 2015 2016 2017

Revenue Growth from Acquisitions


through 3Q


-3.2%

4.0%

2.0%

2.6% 2.6%

-5%

-3%

-1%

1%

3%

5%

7%

2013 2014 2015 2016 2017

Total Equivalent Revenue Growth


through 3Q


1 Grow 1-2% per

year through

accretive,

strategic

acquisitions

Be recognized as the

consumer-friendly

provider of diagnostic

information services

4

Offer the broadest

access to diagnostic

innovation 3

Accelerate Growth Strategies

Partner with health

plans, hospital health

systems and other

risk-bearing entities

2

5 Support

population

health with data

analytics and

extended care

services


2017 was a busy year

Acquisitions announced/closed in 2017 position us well for 2018

Hospital Outreach

HOCC / Backus

Hospital Outreach Hospital Outreach *

Hospital Outreach

*Signed, not yet closed


Health Plans Hospital Health Systems

Partner with Health Plans and Hospital Health Systems


Offer the broadest access to diagnostic information


Consumer-friendly provider


Population health, data analytics

and extended care services


Strategic Relationships

position us for growth at the center of the healthcare ecosystem

Consumer Public Health

Provider Partner


$1.3 billion

SAVINGS

2017

IN RUN-RATE SAVINGS

$1.3 Billion By end of 2017

More opportunity for cost savings beyond 2017

Through enhanced quality and customer experience

beyond


We will continue to drive growth and operational excellence

Increase Digital

Enablement

Expand Margins

Transform Platform for

Growth

Deliver Quality & Service w/

QMS

Inspire & Engage

Employees

Cut Waste / Improve

Customer Experience

Reinvent our Growth

Capabilities

Transform How We

Deliver Value


2020 Outlook reaffirmed

Expect to continue accelerating top line growth

– Total revenue 3-5%

– Acquisitions 1-2%

Earnings growth faster than revenue in the mid-to-high single-digit range

– We are confident in our ability to achieve this outlook under PAMA

– Acceleration in industry consolidation represents potential upside

– Meaningful benefit from lower corporate tax rates to return cash to shareholders and reinvest in

the business…more details to come with 4Q17 earnings and 2018 guidance in early February

accelerating growth, building value...accelerating growth, building value steve rusckowski chairman,...

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