Credit Suisse https://www.credit-suisse.com in attendance at Premier’s (PINC) https://www.premierinc.com virtual investor day, noted that the PINC management team emphasized their role as a healthcare improvement solutions provider across two of their business segments. PINC provided the LT CAGR growth rate of MSD-HSD for net revenue, adjusted EBITDA, and adjusted EPS for FY 2021-2024.
The key underlying growth drivers for PINC’s LT targets includes:
- Penetrating deeper into existing accounts within supply chain services to target total non-labor expenses, capture market share beyond acute-care settings, and source higher-margin clinical medical devices
- Investing organically and inorganically to enhance technology & enterprise analytics capabilities to tech-enabled manual processes
- Introducing innovative products & services that are member-focused, differentiated, and easy to use
- Expanding into adjacent markets, including life sciences with research & clinical trials, payers with electronic prior authorization, employers with benefit design and high performing provider networks, and suppliers through their e-invoicing and e-payables capabilities
PINC expects MSD-HSD segment net revenue CAGR FY21-24 for both supply chain services and performance services. For performance services, PINC expects growth to be driven by MSD growth from stable performance from PINC AI within their healthcare provider market, combined with 30-40% growth from their continued expansion into adjacent markets (e.g., life sciences, payers, and suppliers) From a margin perspective, PINC expects performance services adjusted EBITDA margins to be in the range of ~34-36%.
For supply chain services, PINC expects growth to be driven by LSD growth from their more established acute GPO business, augmented by HSD growth from their less penetrated non-acute GPO business.
Additionally, supply chain services will benefit from LSD-MSD growth from untapped opportunities with their non-healthcare GPO business as well as HSD-LDD growth from further membership penetration & product category expansion with their direct sourcing business.
PINC will continue to follow a balanced capital deployment strategy which includes 1) reinvestments in organic growth, 2) disciplined acquisitions & investments, and 3) share repurchase & dividends.
To ask questions, or provide feedback, or news, email Jailendra Singh at jailendra.singh@credit-suisse.com or call 212-325-8121.