Cencora, Inc. · NYSE:COR
Cencora — AmerisourceBergen — Investor Day (December 2008)
128 slides from Cencora's investor day presentation, Dec 11, 2008
Slide 1: Welcome to Investor Day
December 11, 2008 Exhibit 99.2 Welcome to Investor Day
Slide 2: President & Chief Executive Officer Dave Yost
President & Chief Executive Officer Dave Yost
Slide 3: Forward-looking statements
3 This presentation contains forward-looking statements about AmerisourceBergen’s future business and financial performance, estimates and prospects. These statements are based on our current expectations and are subject to uncertainty and change in circumstances. Among the factors that could cause
Slide 4: Today's Agenda
4 ABC Today & Tomorrow Distribution & Related Services Generics & Fee for Service Specialty Dist. & Related Services Health Policy Environment Packaging & Business Transformation Financial Review Questions and Answers Today’s Agenda
Slide 5: Today's Speakers
5 Dave Yost Tony Pera Steve Collis Peyton Howell Mike DiCandilo President & Chief Executive Officer Senior Vice President, Supply Chain Management Executive Vice President of ABC President ABSG ABSG President Consulting Services & Health Policy Executive Vice President and Chief Financial Officer of
Slide 6: Today's Theme
6 Today ’ s Theme … Resilient
Slide 7: EPS from Continuing Ops Since Merger
7 1.04 1.42 1.95 1.90 1.19 2.09 2.53 2.89 $0.00 $0.50 $1.00 $1.50 $2.00 $2.50 $3.00 2001 2002 2003 2004 2005 2006 2007 2008 EPS from Continuing Ops Since Merger Resilient GAAP Basis
Slide 8: ABC Channel Position
8 Dispensers Branded Pharma Biotech Generic Pharma Manufacturers Products Retail Hospitals Clinics PBM/Mail Physicians LT Care HBA/OTC Data/Services Dispensers Manufacturers Products ABC Channel Position Resilient Prime Prime Vendor Vendor
Slide 9: AmerisourceBergen
» AmerisourceBergen
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Slide 12: ABC Today
9 Drug Dist. & Services Largest, broadest Specialty Dist. & Services Servicing “right” customers – Generics – Value-added services Investing in our future – ERP/Business Transformation Focused! Heavily customer concentrated Heavily exposed to hospital cap-ex Subject to foreign exchange fluctuations
Slide 13: ABC Tomorrow
10 100% Fee For Service BT/ ERP completed Universal health coverage Generics & Biosimilars Compliance Packaging Manufacturer concentration More predictability Customer efficiency More drug utilization Value-added services Packaging leadership More efficiency ABC Tomorrow Resilient The Changes ABC Op
Slide 14: Primary Growth Drivers Today & Tomorrow
11 Growing faster than market Physician administered Strong Distribution – Oncology Services – Manufacturers – Physicians Growing Market Customer mix advantage Differentiated offer Services – Manufacturers – Dispensers Global Sourcing Primary Growth Drivers Today & Tomorrow Resilient Specialty Drugs
Slide 15: FY 2008 Results
12 Financial Performance Environment – EPS from Continuing Operations up 19%* – Revenue up 7% – Operating Margin up 7 bps FY07 +6 bps, FY06 +7 bps – $680 million in cash generation – Market growth of 1% to 2% – Specialty challenges with anemia drugs Resilient FY 2008 Results *ex: special items, LTC,
Slide 16: Environment: Growing (but slower)
13 Pharmaceutical Market Growth Current Environment – 1% to 2% in CY 2008 – 3 % to 6% CAGR 2008 to 2012 – 1% to 2% in CY 2009 – Increase in generic drug utilization – Fewer FDA approvals of new drugs – Selected drug issues – Challenges of the economy Resilient Environment: Growing (but slower)
Slide 17: Resilient because ...
14 Resilient because … Distribution and Related Services deliver value up and down the channel
Slide 18: Prime Vendor Distribution's Value to Manufacturers
15 Product Delivery Data Delivery Credit Management Inventory Management – Reach over 27,000 pharmacies/physicians daily Prime Vendor Distribution’s Value to Manufacturers Resilient
Slide 19: Prime Vendor Distribution's Value to Dispensers
16 Product Delivery Decreased administration costs Financing Source Just-In-Time Inventory Services to Enhance Business – For more than 30,000 SKUs Prime Vendor Distribution’s Value to Dispensers Resilient
Slide 20: ABC Revenue
17 ABC Revenue Health Systems Alt Site Specialty Group PBM Retail
Slide 21: Retail Customers
18 Retail Healthcare Providers – Regional drugstore chains – Food/Drug combination – National chain niches – Community independent pharmacies – Apothecary shops Retail Customers Resilient
Slide 22: Retail Value-Added Services
19 Good Neighbor Pharmacy ® : 3,000 stores GNP Provider Network ™ : 5,000 stores – 3 Largest Diabetes Shoppe ® : 1,000 stores Private Label Products: 700 SKUs PRxO ® Generics & PRxO ® Generics Plus Patient management programs Business coaching Promotional programs rd Retail Value-Added Services Resi
Slide 23: Alternate Site Customers
20 Nursing Home Providers Managed Care Mail Order Facilities Dialysis Clinics Alternate Site Customers Resilient
Slide 24: Alt. Site Value-Added Services
21 Contract management Pharmacy efficiency improvement Pharmacy automation Unit-of-use packaging Generics Alt. Site Value-Added Services Resilient
Slide 25: Result: Lowest Costs and Improved Patient Outcomes
22 RESULT … Lowest Costs and Improved Patient Outcomes
Slide 26: The Power of cE2 Philosophy
23 Customer Efficiency – Cost Effectiveness Flat (to down) Expenses in FY2009 Continuous Improvement – Does the customer need the service – How can we provide it at best value – Streamlined organization – Consolidated services The Power of cE2 Philosophy Resilient
Slide 27: Acquisition Strategy
24 Trent Asenda Rep-Pharm Bellco Health ABC will be the packager of choice for pharmaceutical manufacturers ABC will be the leading wholesale distributor of branded and generic pharmaceuticals and related services NMCR IgG America AMD Xcenda Brecon FY 06 to FY 08 Acquisitions Acquisition Strategy Re
Slide 28: The ABC Leaders that Continue the Growth
25 Resilient … The ABC Leaders that Continue the Growth
Slide 29: Tony Pera, SVP Supply Chain Management
Senior Vice President, Supply Chain Management Tony Pera
Slide 30: Tony Pera
27 25 years in Generics Manufacturing Co-founder Bedford Laboratories Former head of US generics business of APP, now part of Fresenius Joined ABC as President American Health Packaging in 2006 SVP Supply Chain Management early 2008 Tony Pera Resilient
Slide 31: Generic Pharmaceuticals
28 Generic Pharmaceuticals
Slide 32: Generics Growth Drivers
29 Continued Branded patent expirations Increased awareness and acceptance Government and payers promoting use of generics to reduce Healthcare costs Generic dispensing rates continue to rise Generics Growth Drivers Resilient
Slide 33: Patent Expirations
30 $0 $5 $10 $15 $20 $25 CY 2009 CY 2010 CY 2011 Patent Expirations •Prevacid ® •Topamax ® •Valtrex ® •Effexor XR ® •Aricept ® •Flomax ® •Lipitor ® •Actos ® •Levaquin ® Source: IMS Health Top 3 Products Per Year Resilient
Slide 34: The Generics Market Dynamics
31 One player in 6-month exclusivity period Two players in 6-month exclusivity period Limited players with hard-to-make drug Multiple players in easy-to-make drug The Generics Market Dynamics Resilient
Slide 35: Generics Philosophy
32 Procure products from reliable sources Monitor and react to industry trends Manage PRxO ® Generics program Generics Philosophy – Provide manufacturers market access – Deliver optimal value to customers – Customer compliance Resilient
Slide 36: Generics Profitability Example
33 $20 15%+ $3.00+ Same 60 days+ $20 Lower Higher $100 3% $3.00 Same 30 days $100 Higher Lower Generics Profitability Example Selling Price Gross Margin Gross Profit Dollars Handling Costs Accounts Payable Receivable Working Capital Returns on Capital Generic Brand Name Resilient
Slide 37: Generics Manufacturers
34 Increasing transparency with Manufacturers Building stronger relationships Global Scope Deliver manufacturers significant market share – Provide Inventory and Sales Data – Improved Inventory Management – Transition from transactional to collaborative – Executed agreements through 2011 – Competiti
Slide 38: The Right Customer Mix
35 Retail Healthcare Providers Institutional Healthcare Providers – Regional drugstore chains – Food/Drug combination – Independent pharmacies – Hospital – Long Term Care / Alternate Site The Right Customer Mix Resilient
Slide 39: PRxO Generics
36 Formulary that consists of over 6,500 SKUs Tailored programs address specific customer needs Focused on customer profitability Dynamic market response 100 manufacturers in PRxO ® Generics – Value Pricing – Portfolio Management PRxO ® Generics Resilient
Slide 40: Competitive Edge
37 Competitive Edge Resilient
Slide 41: PRxO Generics Customer Value
Availability Price Quality 38 Competitive and Responsive Secure and Direct Consistent and Timely PRxO ® Generics Customer Value Resilient
Slide 42: Branded Pharmaceuticals
39 Branded Pharmaceuticals
Slide 43: Branded Product Environment
40 FDA approvals slow and pipelines weak Patent Expirations Increased government pressure and scrutiny Fee-For-Service is the norm – $85 billion over next 5 years Branded Product Environment Resilient
Slide 44: Fee-For-Service Process
41 AmerisourceBergen Manufacturer – Maintains target inventory levels – Provides high customer service levels – Credit Management – Other Services – Data - New Product Launches – Manage Returns – Pays fee based on ABCs metric performance – Calculated against purchases Fee-For-Service Process Resilie
Slide 45: Fee-For-Service Results
42 Lower inventory levels More efficient supply chain FFS has produced market changes – Increased cash flow – Less returns – Better forecasting Fee-For-Service Results
Slide 46: Fee for Service Results
43 More Predictable Revenue Improved Manufacturer Relations FFS has produced market changes – Less dependence on price appreciation – ABC prefers to get paid for what we do – Fees more accurately coincide with services – Increased or established communications – Increased transparency – Standardized
Slide 47: Manufacturer Benefits
44 Inventory Control Delivery of Products – Smooth and predictable demand – Supply chain safety – Deliveries to 27,000 ship-to-points per day – 99+% customer service levels – Pick / Pack / Ship approximately 6,600 SKUs Branded products Manufacturer Benefits Resilient
Slide 48: Manufacturer Benefits
45 Credit Management Data – Assume down channel credit risk and cash collections for customer base – Prime vendor model facilitates collections – Inventory data – Available daily – Days on hand – Invoice level sales data – Available daily – End customer information – Marketing and promotion effectiv
Slide 49: The Future of FFS
46 Intend to move remaining price appreciation agreements to FFS FFS renewals continue to pay us for what we do – 95+% of major branded manufacturers on FFS – 99+% of FFS metrics achieved The Future of FFS Resilient
Slide 50: Branded Summary
47 FFS continues to be mutually successful Rewards ABC for value delivered Dramatically improves relationship with manufacturer FFS takes costs out of channel Branded Summary Resilient
Slide 51: Steve Collis, President ABSG
Executive Vice President & President, AmerisourceBergen Specialty Group Steve Collis
Slide 52: Market Leadership
49 Distribution & related services primarily to physicians and biotech manufacturers Specialty Product Distribution & Services Biotech Commercialization Services Specialty Group • Oncology • Infusion services • Outsourced logistics • Plasma-derivative products • Biotech Distribution • Nursing suppor
Slide 53: Integrated, Knowledge-Driven Offerings
50 Reimbursement Management Health Economics Distribution Oncology GPOs Vaccines 3PLogistics Plasma-derivative products Ophthalmology Dialysis/Nephrology Specialty Pharmacy Resilient Integrated, Knowledge-Driven Offerings
Slide 54: Specialty Group Key Business Units
51 The nation’s largest pharmaceutical services company focused on the specialty industry Key business units are customer-focused: – Blood plasma, dialysis/nephrology products, flu vaccine – Biologicals, injectables 3PL, direct distribution, clinical services – Immune globulin-specific specialty pha
Slide 55: $14.6 Billion in FY 2008 Revenue
52 $14.6 Billion in FY 2008 Revenue ICS Besse Oncology ASD Services Resilient
Slide 56: Performance Milestones in FY2008
53 Oncology business posted gains in record revenue and profit, despite anemia market impact 3PL/direct business topped $2 billion revenue for 2 consecutive year Successful integration of Bellco’s dialysis business into ASD Healthcare Signed multi-year contract extension with DaVita Record revenue i
Slide 57: Undisputed Leader in Specialty Product Distribution
54 Largest oncology products distributor and physician services organization in U.S. Largest nephrology/dialysis products distributor Largest blood plasma products distributor High market share in ophthalmology 54 Undisputed Leader in Specialty Product Distribution – More than half of all community-
Slide 58: Specialty Distribution's Value to Manufacturers
55 Product Delivery Data Delivery Credit Management Inventory Management – Reach physicians daily – Scale efficiencies – Physician groups Specialty Distribution’s Value to Manufacturers Resilient
Slide 59: Specialty Services Value to Manufacturers
56 Patient access & support programs Health outcomes & reimbursement strategy Customer Insights & Market Research Specialty Services Value to Manufacturers – Support products with patient assistance, reimbursement mgt., and patient follow-up – Integration of patient/provider education, product distr
Slide 60: Specialty Distribution's Value to Customers
57 Product Delivery Financing Source Just-In-Time Inventory GPO Services – Daily on orders placed the night before – All products in one order – Large-Practice Programs – Special handling requirements Specialty Distribution’s Value to Customers Resilient
Slide 61: Specialty Services Value to Customers
58 Physician Efficiency tools Practice Management Specialty Services Value to Customers – GPO services including training and education – Remittance management – Webinars / ongoing training – Sharing best practices – Informatics Resilient
Slide 62: Oncology Growth
59 Oncology pipeline strongest among all pharmaceutical products 750 medicines in development for cancer, compared to 388 for infectious disease the next closest Oncology Growth Resilient
Slide 63: Oncology Growth
60 Total oncology market sales: ESA impact Reimbursement environment New FDA requirements (REMS) provide opportunities for new services and added new drug approvals Oncology Growth – 2012: $80 billion – Oncology 2% of total revenue, down 20% in FY2009 – FDA, black box, other restrictive activities –
Slide 64: The Power of cE2
61 Significant impact on FY 2008 Performance Flat (to down) Expenses in FY2009 Continuous Improvement – Increased shared services – Increased cost effectiveness to lower expense – Continue to drive integration of business units – Continue to look for efficiencies and cost effectiveness The Power of
Slide 65: Delivering Growth in FY2009
62 Revenue growth of 5% to 7% Leading position and scale in specialty distribution Leader and innovative service provider Delivering Growth in FY2009 – Leverage scale to drive growth – Use customer service focus to expand – Increase shared services using CE2 – Respond to manufacturer needs to reach
Slide 66: Peyton Howell, MHA
AmerisourceBergen Specialty Group President, Consulting Services & Health Policy Peyton Howell, MHA
Slide 67: Overview
64 Market leading position Emerging health policy trends driving growth Health Reform and the new Administration Key health policy trends and breadth of specialty services offering – Patient Access Services – Risk Mitigation and REMS – Patient Education & Compliance Programs – Health Outcomes & Valu
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Slide 71: Breadth of Service Offering
Breadth of Service Offering Marketing leading position in supporting specialty biotech & pharma products to meet the needs of patients, providers and payers. 65 Positioned for changing environment Unparalleled services experience Patient Access & Support Programs Customer Insights & Market Research
Slide 72: Snapshot of FY08 Services
66 Over 8 million unique patient contacts across 80 unique manufacturer programs Over 1500 seat call center capability (Charlotte, Dallas and San Francisco) including reimbursement and nursing professionals Over 130+ consulting professionals (PhD, PharmD, MPH) with over 50 new published health outco
Slide 73: Payer policies expand need for patient access services
67 • Benefit Coordination • Payer Restrictions • AOB Coordination • Physician office questions • Uninsured and increased coinsurance • Patient adherence • Benefit Verification • Prior Auth & Denial Support • Electronic test claims & tracking • Billing guides and coding support • Patient assistance &
Slide 74: Guidance for Industry
N) AmerisourceBergen Guidance for Industry Development and Use of Ris Minimization Action Plans
Slide 75: Guidance for Industry
Guidance for Industry Development and Use of Risk Minimization Action Plans
Slide 76: Guidance for Industry
Guidance for Industry Development and Use of Risk Minimization Action Plans
Slide 77: New Risk Management and REMS requirements need our unique breadth of services
68 PDUFA (Oct 2007) codified the FDA’s authority to require further studies of medical products once they have reached the market. • Federal Register Notice (March, 2008) implemented first phases of REMS (some proposed REMS were due September 21, 2008) • ABSG is uniquely positioned with breadth of o
Slide 78: AmerisourceBergen
N) AmerisourceBergen
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Slide 81: Three Categories of REMS Tools
69 Use of compulsory reminder systems Rx only by specially certified providers Limited dispensing/distribution based on requirements Dispensing only to patients with documentation Patient education including acknowledgement forms Provider training including testing or documentation Provider/pt enrol
Slide 82: Patient Education & Compliance Services Expand Dramatically
70 Significant new focus on keeping patients using treatments appropriately ABSG manages a wide range of such programs including clinical nurse programs as well as non-clinical patient advocates Can be integrated as part of REMS to provide a patient- focused means to streamline resources Often integ
Slide 83: AmerisourceBergen
N) AmerisourceBergen
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Slide 87: Health Reform and the New Administration
72 Health Reform and the New Administration
Slide 88: AmerisourceBergen
») AmerisourceBergen
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Slide 93: Key Priorities of the New Administration
73 Obama Healthcare Plan Improve healthcare quality and drive down costs by reducing inefficiency and waste Provide affordable health insurance options for all Promote prevention and strengthen public health Priorities for Change SCHIP & Medicaid Opportunity to buy-into FEHBP Employer contributions
Slide 94: Sen. Max Baucus Call to Action: Healthcare Reform 2009
74 Chair of Senate Finance Committee, this 90-page report was released in mid-November. The plan is consistent overall with Obama plan, except it advocates specifically for an employer mandate to provide insurance coverage . 4 Key Components: Sen. Max Baucus “Call to Action: Healthcare Reform 2009”
Slide 95: Managed Care Experts Predict Modest Reforms Focused on Uninsured
75 5% 48% 47% Incremental reforms focused on expanding access consistent with the Obama health plan Only minor changes to expand access given other market factors Significant reforms to include the bulk of the Obama health plan or more Managed Care Experts Predict Modest Reforms Focused on Uninsured
Slide 96: AmerisourceBergen
N) AmerisourceBergen
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Slide 99: Key Reforms and Potential Impact for ABC
76 Medicare Part B Reforms Medicare Advantage Uninsured Gov negotiated drug pricing Comparative Effectiveness Biosimilars Health Reform and the New Administration Key Reforms and Potential Impact for ABC No impact for Part B drugs or related physician services is expected. Reductions in payment to M
Slide 100: Making progress on the uninsured leads likely reforms for 2009
77 SCHIP is renewed and an expansion of Medicaid is possible to address the uninsured (focused on children). Ban on pre-existing condition exclusions Potential buy-in option to FEHBP is developed Medicare Physician Fee Schedule cuts are averted although it could be another temporary fix. Concerns re
Slide 101: Concluding Thoughts
78 Unique combination of services rather than the individual components Core services becoming more important to physicians, patients and manufacturers: Breadth of Specialty Services To Drive Future Growth – Payer requirements – Focus on health outcomes and value – New REMS related programs and requ
Slide 102: Mike DiCandilo, CFO and COO of ABDC
Executive Vice President, Chief Financial Officer, & Chief Operating Officer of ABDC Mike DiCandilo
Slide 103: AmerisourceBergen Packaging Group
80 AmerisourceBergen Packaging Group
Slide 104: Packaging Group Overview
81 Three operating companies: 2 U.S., 1 U.K. 13 facilities totaling 1.4 Million sq ft 1,400 employees Over 200 packaging lines Strong regulatory compliance profiles 25+ product launches expected in FY09 Preferred supplier to top global brand manufacturers and preferred relationships with large segme
Slide 105: Packaging Group Value Proposition
82 Low cost, flexible operations Operational Excellence Packaging Group Value Proposition – New product launch capabilities – Adaptive work force – Strong, experienced management team – Exemplary FDA compliance – Lean Six Sigma – Expanded controlled substance capabilities Resilient
Slide 106: Packaging Group Value Proposition
83 Special customized packaging capabilities Unique engineering expertise Packaging Group Value Proposition – Compliance in a bottle (CIAB) – Hospital unit dose, compliance packaging – Clinical trial packaging – Innovative and highly automated packaging processes – Proprietary packaging formats Resi
Slide 107: Product Launch Capabilities
84 Resilient Product Launch Capabilities VIDEO
Slide 108: Packaging Group Summary
85 Well-positioned for continued global pharmaceutical outsourcing Compliance packaging improves patient outcomes and increases pharma sales Customized Packaging (HUD) lowers cost for pharmacies Continued innovations in high value products will fuel growth Quality, performance, and reputation, incre
Slide 109: Business Transformation
86 Business Transformation
Slide 110: Business Transformation: Strategic Intent
87 Develop and deploy enhanced capabilities Develop and deploy enhanced capabilities in all areas of ABC’s business and infrastructure in all areas of ABC’s business and infrastructure Strategic Intent ABC Dispensers Manufacturers Execute Execute an an ERP-enabled ERP-enabled Business Business Trans
Slide 111: BT Program Plan
88 Mobili zation Detail Design Build Test Deploy Scope Confirm ation Design Ongoing Maintenance & Support Phase 2: Detail Design, Build & Test Phase 3: Deployment Phase 4: Support Phase 1: Blueprint *Multiple Detailed Design, Build, Test and Deploy phases will occur based on Deployment schedule We a
Slide 112: Benefits of Business Transformation
89 Easier for customers to do business with ABC Customer access to ordering, receiving, inventory management and account management tools Integrated customer-facing ordering systems with ABC’s ordering / supply management systems More accurate, credible, and valuable data Benefits of Business Transf
Slide 113: BT Investment
90 $200 million to $250 million cumulative through FY 2011 FY 2009 largest spend Included in our guidance Value realization predominantly 2012 and beyond BT Investment $ – Approximately $100 million, 2/3 capitalized, 1/3 expense
Slide 114: What You Need to Know Now
91 BT represents a continued investment by ABC to drive the highest customer satisfaction and efficiency with cost effective solutions & services Strong experienced program management team in charge FY 09 Guidance includes BT cost and capital Primarily a cost through FY 2011, Benefits in FY 2012 Wil
Slide 115: AmerisourceBergen
» AmerisourceBergen
Slide 116: Long Term Financial Goals
93 EPS growth of approximately 15% Revenue growth with market Operating margin expansion ROIC > WACC Free cash flow approximates net income Minimum 30% of free cash returned to shareholders Resilient Long Term Financial Goals
Slide 117: EPS from Continuing Ops Since Merger
94 1.04 1.42 1.95 1.90 1.19 2.09 2.53 2.89 $0.00 $0.50 $1.00 $1.50 $2.00 $2.50 $3.00 2001 2002 2003 2004 2005 2006 2007 2008 EPS from Continuing Ops Since Merger Resilient GAAP basis
Slide 118: Pharmaceutical Distribution Revenues
95 $53.9 $60.4 $65.3 $70.2 $40.0 $45.0 $50.0 $55.0 $60.0 $65.0 $70.0 $75.0 2005 2006 2007 2008 Pharmaceutical Distribution Revenues Resilient
Slide 119: Pharmaceutical Distribution Operating Ratios
96 +7 bps +6 bps +7 bps Operating margin improvement 0.75% 0.95% 1.15% 1.35% 1.55% 1.75% 1.95% 2005 2006 2007 2008 0.75% 1.25% 1.75% 2.25% 2.75% Pharmaceutical Distribution Operating Ratios Operating Expenses % Operating Income % Resilient GP % Op exp % Op Inc %
Slide 120: Cash Generation and Deployment
97 $0.0 $0.5 $1.0 $1.5 $2.0 2005 2006 2007 2008 Debt Repayment Capital Expenditures Dividends Acquisitions Share Repurchases Cash flow from operations Income from continuing operations $ billions Cash Generation Resilient and Deployment
Slide 121: Fiscal Year 2008 Results
98 Diluted EPS from Continuing Operations of $2.89, up 14% ,19% ex-items Record revenue of $70.2 billion, up 7 % Pharmaceutical Dist. operating margin 1.19%, up 7 bps ROIC > WACC Free cash flow: $600 Million, > 100% Income from continuing ops $680 million of share repurchase, > 100% of free cash flo
Slide 122: Fiscal Year 2009 Targets
99 Diluted EPS of $3.08-$3.25, up 7% to 12% Total revenue growth of 1% to 3% Operating Margin expansion – low to mid single digit basis points — Operating expense dollars flat to down ROIC > WACC Free cash flow of $460 to $535 Million – Includes CapEx of $140 Million Share Repurchases of approximate
Slide 123: FY2009 EPS Growth Estimate
100 Revenue Growth Margin Expansion Cash Deployment FY08 7% 4% 8% FY 09 1-3% 2-3% 4-6% FY 09 Drivers - *Excluding special items, LTC, & vaccine write-down Op Inc Growth EPS Growth 11% 19%* 3-6% 7-12% EPS Growth Estimate Market growth 1-2% - Walgreens -3% - Back-ended - Share repurchase $350 million
Slide 124: Fiscal Year 2009 Targets by Business Unit
101 Revenue Growth and Operating Margin by Business Unit Business Unit % of Total Revenue Revenue Growth ABDC ABSG ABPG 0% - 2% 5% - 7% 4% - 6% 77% - 80% 20% - 22% 1/2% Operating* Margin Range 1.03% - 1.09% 1.55% - 1.65% 10% - 12% *Based on total revenue Fiscal Year 2009 Targets Total 1% - 3% 100% 1
Slide 125: Capital Structure Goals
102 Adequate Liquidity Maintain Access To Capital Maintain Flexibility Resilient Capital Structure Goals – Maintenance cash – $750 million revolving credit facility, expires 2011 – $975 million A/R securitization facility expires June and November 2009 – No long-term debt due until 2012, then 2015 –
Slide 126: Fiscal 2009 Capital Deployment
103 What’s Available? Where to deploy? $878 million of cash and short-term investments @ 9/30/08 ($450 million available) Free Cash Flow of $460-$535 million expected for FY09 Total available for investment abut $900 million -$1 billion, excluding additional borrowing capacity $350 million of shares
Slide 127: AmerisourceBergen
N) AmerisourceBergen
Slide 128: Focused on Growing Pharmaceutical Channel
105 Focused on Growing Pharmaceutical Channel Positioned in Channel for Growth Right Investments for Future Growth Resilient