BrightSpring Health Services (BTSG) investor relations material

Key growth drivers and performance

• Achieved broad-based growth across pharmacy and provider businesses, with specialty pharmacy outperforming and driving a 9% guidance increase for the segment this year.

• Growth underpinned by high service levels, strong manufacturer partnerships, and investment in clinical liaisons, resulting in a 96 Net Promoter Score and participation in 16-17 new drug launches as exclusive or limited network pharmacy.

• Fee-for-service business and clinical hubs expanded, with fee-for-service GP growing 40-50% this year, outpacing core revenue growth.

• Specialty pharmacy revenue grew 40% year-to-date, following 40% growth last year and 30% in 2023, with expectations to maintain a 15% CAGR long-term.

• Investments in IT, AI, and operational efficiency continue to support scalability and future growth.

Market dynamics and future outlook

• Anticipates $90 billion in new drugs at the FDA over the next 5-7 years, with ongoing generic conversions and a healthy innovation pipeline, especially in oncology and rare/orphan therapies.

• Gross profit per script has improved, driven by generic conversions and fee-for-service programs, with specialty mix contributing to higher margins.

• Infusion business, after a two-year re-engineering, is positioned for 30-35% EBITDA growth next year, focusing on both acute and chronic therapies and expanding suite settings.

• Expansion strategy includes deepening presence in existing states and entering new ones, with 90% of nurses employed directly.

• Long-term growth targets remain at 15% CAGR, with potential for businesses to double or triple in size over 5-7 years.

Provider segment and regulatory environment

• Provider businesses, especially hospice, are expected to grow faster than end-market volume, supported by high-quality services and strong rate support.

• Hospice business is expanding its palliative program to all states by next year, focusing on patient-centric care and manageable nurse workloads.

• Home health benefited from a favorable final CMS rule, ending permanent rate cuts and supporting future rate increases, though clawbacks remain a concern.

• Recent acquisition of Amethyst and LHC branches was a unique opportunity; future home health acquisitions will depend on rate stability.

• Automation and AI investments in home community pharmacy aim to offset headwinds from bankruptcies and IRA impacts, with a focus on efficiency and diversified end markets.