Slide 1: McKesson Corporation First Quarter Fiscal 2024 Earnings Call
McKesson Corporation First Quarter Fiscal 2024 Earnings Call August 2, 2023
Slide 2: Cautionary Statements
Cautionary Statements Cautionary Statements This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward- looking statements may be identified by their use of terminology such as
Slide 3: Delivering sustainable growth and long-term shareholder value
Delivering sustainable growth and long-term shareholder value Our Vision: To improve care in every setting – one product, one partner, one patient at a time Our Priorities: Focus on Evolve and Expand Sustainable People and Grow the Oncology and Core Culture Portfolio Biopharma Growth Platforms 3 © 2
Slide 4: First Quarter Fiscal 2024 Results
First Quarter Fiscal 2024 Results
Slide 5: Strong foundation and execution delivering sustainable long-term growth
Strong foundation and execution delivering sustainable long-term growth Business Summary Company Updates • Q1 revenues of $74.5 billion increased 11% • Board of Directors approved a $6.0 billion increase to the share repurchase program, bringing the total remaining authorization • Earnings per dilut
Slide 6: Consolidated financial information
Consolidated financial information Q1 Fiscal 2024 Results Results Q1 YoY ($ and shares in millions, except per share amounts) FY 24 Change Revenues $ 74,483 11 % Adjusted Gross Profit $ 2,936 (2) % Adjusted Operating Expenses $ (1,804) (4) % Adjusted Operating Profit $ 1,170 3 % Adjusted Interest Ex
Slide 7: U.S. Pharmaceutical
U.S. Pharmaceutical Q1 Fiscal 2024 Results Results Q1 YoY ($ in millions) FY 24 Change U.S. Pharmaceutical Revenues $ 67,160 18 % Adjusted Segment Operating Profit $ 771 8 % Adjusted Segment Operating Profit Margin 1.15 % (10) bp Q1 revenue growth driven by increased prescription volumes, including
Slide 8: Prescription Technology Solutions
Prescription Technology Solutions Q1 Fiscal 2024 Results Results Q1 YoY ($ in millions) FY 24 Change Prescription Technology Solutions Revenues $ 1,244 17 % Adjusted Segment Operating Profit $ 223 35 % Adjusted Segment Operating Profit Margin 17.93 % 245 bp Q1 revenue increase driven by growth in ou
Slide 9: Medical-Surgical Solutions
Medical-Surgical Solutions Q1 Fiscal 2024 Results Results Q1 YoY ($ in millions) FY 24 Change Medical-Surgical Solutions Revenues $ 2,611 1 % Adjusted Segment Operating Profit $ 235 (12) % Adjusted Segment Operating Profit Margin 9.00 % (134) bp Q1 revenue increase driven by growth in the extended a
Slide 10: International
International Q1 Fiscal 2024 Results Results Q1 YoY ($ in millions) FY 24 Change International Revenues1 $ 3,468 (47) % Adjusted Segment Operating Profit1 $ 90 (35) % Adjusted Segment Operating Profit Margin 2.60 % 49 bp Q1 FX-Adjusted revenue of $3.7 billion, down 44% year-over-year, driven by the
Slide 11: Corporate
Corporate Q1 Fiscal 2024 Results Results Q1 YoY ($ in millions) FY 24 Change Corporate Adjusted Corporate Expenses $ (149) 3 % Q1 Adjusted Corporate Expenses increased 3% year-over-year driven by a receipt of a payment related to a tax receivable agreement in the first quarter of fiscal 2023, partia
Slide 12: Cash
Cash ($ in millions) YTD Cash Balance Walk Cash Dynamics Balance at March 31, 20231 $ 4,679 Free Cash Flow of ($1.2) billion Operating cash flow (1,052) Returned $770 million of cash to shareholders year-to-date Capital expenditures (124) • Repurchased $696 million of shares Free Cash Flow (1,176) •
Slide 13: Fiscal 2024 Outlook
Fiscal 2024 Outlook On the following slides, McKesson presents an overview of its fiscal 2024 Outlook assumptions. The Company does not provide forward-looking guidance on a GAAP basis as McKesson is unable to provide a quantitative reconciliation of forward-looking Non-GAAP measures to the most dir
Slide 14: Raising Fiscal 2024 Adjusted EPS outlook
Raising Fiscal 2024 Adjusted EPS outlook $26.55 — $27.35 Strong Business Performance Capital Deployment Fiscal 2024 Adjusted Earnings per Diluted Share guidance Anticipate approximately $3.5 billion in share repurchases in range indicates 2% to 5% growth compared to prior year Fiscal 2024 Fiscal 202
Slide 15: Raising Fiscal 2024 Adjusted EPS outlook
Raising Fiscal 2024 Adjusted EPS outlook $205 to $225 million Previously $230 to $250 million $26.55 to $27.35 $26.10 to $26.90 ($0.04) FY24 Outlook Q1 FY24 Certain Items Operating Interest FY24 Outlook (McKesson Ventures) Performance Expense May 8, 2023 August 2, 2023 15 © 2023 McKesson Corporation
Slide 16: Fiscal 2024 outlook
Fiscal 2024 outlook Consolidated metrics Metric Fiscal 2024 Outlook Fiscal 2023 Actual Adjusted Earnings per Diluted Share $26.55 to $27.35 $25.94 Previously $26.10 to $26.90 Revenues 7% to 12% growth 5% growth Previously 4% to 9% growth Adjusted Operating Profit Flat to 4% decline 3% growth Previou
Slide 17: Fiscal 2024 outlook
Fiscal 2024 outlook Segment metrics U.S. Pharmaceutical Prescription Technology Medical-Surgical International Solutions Solutions FY24 Revenue 13% to 15% growth 7% to 13% growth 1% decline to 3% growth 30% to 34% decline Previously 9% to 11% growth FY24 Adjusted Segment Operating Profit Reported 3%
Slide 18: Appendix
Appendix
Slide 19: Endnotes
Endnotes These notes refer to the financial metrics and/or defined terms presented on: Slide 6 – Consolidated financial information 1. Non-GAAP measure representing Net income attributable to noncontrolling interests adjusted for the proportionate share of acquisition-related intangibles amortizatio
Slide 20: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Q1 Fiscal 2024 and Q1 Fiscal 2023 McKESSON CORPORATION Schedule 2 RECONCILIATION OF GAAP OPERATING RESULTS TO ADJUSTED RESULTS (NON-GAAP) (unaudited) (in millions) Three Months Ended June 30, 2023 2022 Change Income from continuing operations (GAAP) $ 997 $ 807 24 % N
Slide 21: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Q1 Fiscal 2024 and Q1 Fiscal 2023 McKESSON CORPORATION Schedule 2 RECONCILIATION OF GAAP OPERATING RESULTS TO ADJUSTED RESULTS (NON-GAAP) (Continued) (unaudited) (in millions, except per share amounts) Three Months Ended June 30, 2023 2022 Change Earnings per diluted
Slide 22: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Q1 Fiscal 2024 and Q1 Fiscal 2023 McKESSON CORPORATION Schedule 2 RECONCILIATION OF GAAP OPERATING RESULTS TO ADJUSTED RESULTS (NON-GAAP) (Continued) (unaudited) (in millions) Three Months Ended June 30, 2023 2022 Change Gross profit (GAAP) $ 3,022 $ 3,023 — % Pre-tax
Slide 23: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Q1 Fiscal 2024 and Q1 Fiscal 2023 McKESSON CORPORATION Schedule 2 RECONCILIATION OF GAAP OPERATING RESULTS TO ADJUSTED RESULTS (NON-GAAP) (Continued) (unaudited) (in millions) Three Months Ended June 30, 2023 2022 Change Interest expense (GAAP) $ (47) $ (45) 4 % Pre-t
Slide 24: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Q1 Fiscal 2024 and Q1 Fiscal 2023 McKESSON CORPORATION Schedule 2 RECONCILIATION OF GAAP OPERATING RESULTS TO ADJUSTED RESULTS (NON-GAAP) (Continued) (unaudited) (in millions, except per share amounts) (a) Certain computations may reflect rounding adjustments. (b) Adj
Slide 25: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Q1 Fiscal 2024 and Q1 Fiscal 2023 McKESSON CORPORATION Schedule 3 RECONCILIATION OF GAAP SEGMENT OPERATING RESULTS TO ADJUSTED RESULTS (NON-GAAP) (unaudited) (in millions) Three Months Ended June 30, 2023 2022 As reported As adjusted Change Foreign Foreign As reported
Slide 26: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Q1 Fiscal 2024 and Q1 Fiscal 2023 McKESSON CORPORATION Schedule 6 RECONCILIATION OF GAAP CASH FLOW TO FREE CASH FLOW (NON-GAAP) (unaudited) (in millions) Three Months Ended June 30, 2023 2022 Change GAAP CASH FLOW CATEGORIES Net cash used in operating activities $ (1,
Slide 27: Financial Statement Notes
Financial Statement Notes McKESSON CORPORATION 1 of 1 FINANCIAL STATEMENT NOTES 1. Transaction-related expenses and adjustments for the three months ended June 30, 2022 includes pre-tax net gains of $12 million (charges of $4 million after-tax) to remeasure assets and liabilities held for sale to fa
Slide 28: Supplemental Non-GAAP Financial Information
Supplemental Non-GAAP Financial Information McKESSON CORPORATION 1 of 4 SUPPLEMENTAL NON-GAAP FINANCIAL INFORMATION In an effort to provide investors with additional information regarding the Company's financial results as determined by generally accepted accounting principles ("GAAP"), McKesson Cor
Slide 29: Supplemental Non-GAAP Financial Information
Supplemental Non-GAAP Financial Information SUPPLEMENTAL NON-GAAP FINANCIAL INFORMATION (continued) 2 of 4 • Adjusted Earnings per Diluted Share Excluding Certain Items (Non-GAAP): Prior to fiscal 2024, we defined Adjusted Earnings per Diluted Share Excluding Certain Items as Adjusted Earnings per D
Slide 30: Supplemental Non-GAAP Financial Information
Supplemental Non-GAAP Financial Information SUPPLEMENTAL NON-GAAP FINANCIAL INFORMATION (continued) 3 of 4 Transaction-related expenses and adjustments - Transaction, integration, and other expenses that are directly related to business combinations, the formation of joint ventures, divestitures, an
Slide 31: Supplemental Non-GAAP Financial Information
Supplemental Non-GAAP Financial Information SUPPLEMENTAL NON-GAAP FINANCIAL INFORMATION (continued) 4 of 4 • Free Cash Flow (Non-GAAP): We define free cash flow as net cash provided by (used in) operating activities less payments for property, plant, and equipment and capitalized software expenditur