IMS Health at Goldman Sachs Annual Global Healthcare Conference - Part 1.

(From Fair Disclosure Wire)

UNIDENTIFIED AUDIENCE MEMBER: Hello, everyone. Thank you for being here. It's my pleasure to take 30 seconds as a start of this session and introduce our next speaker-- pardon me. Nancy Cooper is, as you all know, the Chief Financial Officer for IMS, and somebody who, having joined IMS in 2002--?

NANCY COOPER, SVP AND CFO, IMS HEALTH: '01. UNIDENTIFIED AUDIENCE MEMBER: 2001. Has helped to be an important architect of sustaining a great growth and diversifying and developing the Company in a way that continues to enhance its franchise and our collective intelligence in terms of what goes on in the pharmaceutical value chain. So, we appreciate that both she and Darcy Peck have joined us here today. We look forward to her comments and to your questions later in the segment. Thank you. LINDA COOPER: Great. Thanks, Chris. Let me just do a brief overview of IMS, and then we'll open it up for Q&A. I think the safe harbor speaks for itself, and the financials I'll speak to you today are on an adjusted basis. We have detailed reconciliations to SEC results on our website. I'd also encourage you to refer to our statement on guidance in accordance with Sarbanes-Oxley. Today, I'd like to talk about IMS and how it's a very different company from what we were just a few years ago. And then I'll give you some of the considerations for investing in IMS. As you know, and I'm sure you're hearing a lot about at this conference, this is the time of great change, uncertainly and complexity for our pharma clients. For IMS, change in complexity for our clients spells opportunity for us, and we have more opportunity than ever. Several years ago, we held a traditional information-only view of our business aimed at market research and sales operations, a view that gave us about a $2 billion market opportunity and a great business but not without a lot of room to grow. When we redefined our business to include consulting and services and targeted launch and brand management, we saw our market opportunities feed to more than $5 billion. If you look at the bottom right-- Whoops; I'm missing something. You'll see that launch and brand alone, which we entered about three years ago is a $2 billion opportunity, and in that area, we're just scratching the surface. In sales force effectiveness, where we already have significant market share, plenty of growth exists, as we are launching new offerings to help our clients improve sales productivity and resource optimization. We made several bets several years ago that our clients would be facing a more challenging environment in the foreseeable future, that our clients would need a way to achieve greater productivity from all aspects of their sales and marketing resources and a higher yield from their pipelines, and that they would be willing to look to our highly qualified, global partners for assistance as their marketplace gets more and more complex. We're very excited that the investments we've made in all these areas are paying off and that this was the right strategy for our Company. You can see the results of our operational performance over the last three years, and I have included our guidance in 2006 so that you can see our expectation is for continued excellent performance. In the top left corner, you can see that we've been investing in IMS to generate revenue growth; and we're now in a position to drive operating income growth by leveraging the return from our revenue growth. The big difference from the last three years going forward is the improvement in our operating income growth, which is shown in the upper-right quadrant. In 2006, our guidance is a constant-dollar operating income growth of 9% to 13%, and this is a significant change from prior years of a 5% decline, then flat, and then a 4% operating income growth in 2005. We're very confident we can achieve that result. In fact, we're off to an excellent start in the beginning of 2006. In the first quarter, we delivered 13% constant-dollar revenue growth and 13% constant-dollar operating income growth, the strongest balance growth in many ...