IMS Health Revenues Rise on Back of Restructure

In the US, IMS Health has finished quarter one with 13% revenue growth to $574m, on the back of its 'aggressive' restructuring actions.

Operating income rose 5% to $116m and earnings per share were up 6% to $0.37, compared with $0.35 in last year's first quarter. Operating margins were 20.3%, slightly better than the firm's expectations.

Regional revenue growth was 9% across the Americas, 18% in the Asia Pacific region, and in EMEA new market measurement offerings across the region helped drive 15% growth. Chairman and CEO David Carlucci said that the firm is now delivering its product initiatives in Germany and the UK and these include enhanced Sales Force Effectiveness, oncology and promotional information offerings.

In January, the firm announced plans to restructure and cut staff numbers by 10% during 2008. Carlucci said that about three-quarters of the proposed restructuring actions in the quarter took place in EMEA, which he anticipates will lead to improving operating performance in the region in the second half.

The firm's Consulting & Services (C&S) business was off to a slower start this year; growing 15% compared with 'exceptional growth' of 44% in the first quarter of last year. Carlucci expects 'healthy' double-digit growth in C&S throughout 2008.

IMS Health's cost expense was $458m and grew by 15% in the quarter. However, SVP and CFO Leslye Katz says that he is confident that through continued implementation of the restructuring plan, tight controls on hiring and discretionary spending and improved C&S utilization, this expense growth rate will slow.

The restructuring plan is still anticipated to generate cost savings of $55m to $60m by 2009, with about 45% of these savings taking place in 2008. A large part of the reorganization will include the migration of production and data collection work to lower cost locations in Europe and Latin America and to offshore service providers.

Through to mid-April, the firm spent about $24m on three acquisitions: Robinson & James, a primary market research consulting company in Australia; Fourth Hurdle, a UK health economics and outcomes research company; and HBI, a US acquisition in the payer market that expands the company's benchmarking capabilities for health plans.

Web site: www.imshealth.com .

All articles 2006-23 written and edited by Mel Crowther and/or Nick Thomas, 2024- by Nick Thomas, unless otherwise stated.

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