Cardinal Health, Inc. · NYSE:CAH

Cardinal Health — Q2 2024 Earnings Presentation

24 slides from Cardinal Health's earnings presentation, Feb 1, 2024

  1. Slide 1: Q2 FY24 Earnings

    Q2 FY24 Earnings Cardinal Health, Inc. February 1, 2024 © 2024 Cardinal Health. All Rights Reserved.

  2. Slide 2: Cautions Concerning Forward-Looking Statements

    • Q2 FY24 Earnings Cautions Concerning Forward-Looking Statements This presentation contains forward-looking statements addressing expectations, prospects, estimates and other matters that are dependent upon future events or developments. These statements may be identified by words such as "expect,"

  3. Slide 3: Q2 results

    Q2 results 3 © 2024 Cardinal Health. All Rights Reserved.

  4. Slide 4: Q2 FY24 financial summary

    • Q2 FY24 Earnings Q2 FY24 financial summary GAAP Basis ($M) Non-GAAP Basis ($M) Q2 FY24 Q2 FY24 Revenue $57,445 N/A % change 12% Gross Margin $1,846 $1,846 % change 11% 11% SG&A $1,283 $1,284 % change 8% 8% Operating Earnings $482 $562 % change N.M. 20% Interest and Other1 ($8) N/A % change N.M. Ne

  5. Slide 5: Q2 FY24 Pharmaceutical segment results

    • Q2 FY24 Earnings Q2 FY24 Pharmaceutical segment results Q2 FY24 ($M) Q2 FY23 ($M) YoY change Revenue $53,520 $47,673 12% Segment profit $518 $464 12% Segment profit margin 0.97% 0.97% 0 bps Drivers: Revenue Segment profit + Brand and specialty pharmaceutical sales growth + Generics program from ex

  6. Slide 6: Q2 FY24 Medical segment results

    • Q2 FY24 Earnings Q2 FY24 Medical segment results Q2 FY24 ($M) Q2 FY23 ($M) YoY change Revenue $3,928 $3,797 3% Segment profit $71 $17 N.M. Segment profit margin 1.81% 0.45% +136 bps Drivers: Revenue Segment profit + at-Home Solutions + Improvement in net inflationary impacts, + Global Medical Prod

  7. Slide 7: FY24 outlook

    FY24 outlook 7 © 2024 Cardinal Health. All Rights Reserved.

  8. Slide 8: FY24 financial expectations

    • Q2 FY24 Earnings FY24 financial expectations FY24 FY23 outlook actual Non-GAAP EPS $7.20 - $7.35 $5.79 Previously $6.75 - $7.001 Interest and Other $50M - $65M $89M Previously $100M - $120M Non-GAAP ETR 23.0% - 24.0% 22.8% Previously 23.0% - 25.0% Diluted weighted average shares ~247M 262M outstan

  9. Slide 9: FY24 segment guidance

    • Q2 FY24 Earnings FY24 segment guidance 1 Revenue and segment profit Pharmaceutical Revenue growth of Segment profit growth of 10% to 12% 7% to 9% Medical Revenue growth of Segment profit of ~3% ~$380M Previously ~$400M Bold indicates an update to the FY24 segment guidance provided on November 3, 2

  10. Slide 10: Preliminary FY24 segment guidance

    • Q2 FY24 Earnings Preliminary FY24 segment guidance Pro-forma, updated reporting segments1 FY23 Actuals3 FY24 Outlook Long-Term Target Revenue: Revenue: Pharmaceutical ~$188.8B 10% to 12% Growth 4% to 6% and Specialty Solutions Segment Profit: Segment Profit: Segment Profit ~$1.87B 7% to 9% Growth

  11. Slide 11: Strategic priorities

    • Q2 FY24 Earnings Strategic priorities Ruthless prioritization, resilient core and relentless focus 1 2 3 4 Build upon the Execute Medical Accelerate Relentless growth and Improvement growth in key focus on resiliency of Plan initiatives areas shareholder Pharmaceutical value creation and Specialty

  12. Slide 12: Accelerating Growth in Specialty

    • Q2 FY24 Earnings Accelerating Growth in Specialty Cardinal Health announces agreement to acquire Specialty Networks Tech-enabled multi-specialty group purchasing and practice enhancement organization in urology, rheumatology and gastroenterology 1 Provider Services Group Purchasing Services Increa

  13. Slide 13: GMPD elements of the Medical Improvement Plan

    • Q2 FY24 Earnings GMPD elements of the Medical Improvement Plan The previously announced Medical Improvement Plan target of at least $650M of segment profit by FY26 continues… with elements of that plan to reside in the results of both GMPD and Other Growth Target Strategic priorities Areas of focu

  14. Slide 14: Our long-term targets: FY24-26

    Q2 FY24 Earnings Our long-term targets: FY24-26 (FY23 Baseline) 4% to 6% ~$300M 8% to 10% at least 12% to 14% Growth CAGR in FY26 Growth CAGR $2.25B Growth CAGR Pharma and Share non-GAAP diluted Specialty Solutions GMPD Other Segment Profit Segment Profit Segment Profit repurchases1 EPS growth No ch

  15. Slide 15: Disciplined Capital Allocation

    Q2 FY24 Earnings Table stakes FY24 Progress Investing back into the business to drive $206M in capex YTD organic growth Disciplined Maintain investment Two positive outlook updates from credit rating agencies Capital grade balance sheet Completed 3rd annual opioid settlement payment and certain sett

  16. Slide 16: Compelling investment thesis

    Q2 FY24 Earnings Compelling investment thesis Moving healthcare forward Pharmaceutical and Medical Products Other Growth Cash flow and Value creation Specialty Solutions and Distribution Areas capital deployment Relentlessly focused Resilient and growing business, Executing our plan to Favorable lon

  17. Slide 17: Appendix

    Appendix 17 © 2024 Cardinal Health. All Rights Reserved.

  18. Slide 18: GAAP / Non-GAAP Reconciliation

    Cardinal Health, Inc. and Subsidiaries 1 GAAP / Non-GAAP Reconciliation Earnings/ Gross Operating (Loss) Provision for/ Net Diluted 2 3 Margin SG&A Operating Earnings Before (Benefit from) Net Earnings Effective EPS 3 Gross Growth Growth Earnings/ Growth Income Income Earnings/ Growth Tax Diluted Gr

  19. Slide 19: GAAP / Non-GAAP Reconciliation

    Cardinal Health, Inc. and Subsidiaries GAAP / Non-GAAP Reconciliation1 Gross Operating Earnings Net Diluted 2 3 Margin SG&A Earnings Before Provision for Earnings Effective EPS 3 Gross Growth Growth Operating Growth Income Income Net Growth Tax Diluted Growth 2 3 3 Margin Rate SG&A Rate Earnings Rat

  20. Slide 20: GAAP Cash Flow to Non-GAAP Adjusted Free Cash Flow

    Cardinal Health, Inc. and Subsidiaries GAAP / Non-GAAP Reconciliation - GAAP Cash Flow to Non-GAAP Adjusted Free Cash Flow Second Quarter Year-to-Date (in millions) 2024 2023 2024 2023 GAAP - Cash Flow Categories Net cash provided by operating activities $ 1,189 $ 597 $ 1,734 $ 620 Net cash used in

  21. Slide 21: Segment Information

    Cardinal Health, Inc. and Subsidiaries Segment Information Second Quarter (in millions) 2024 2023 (in millions) 2024 2023 Pharmaceutical Medical Revenue Revenue Amount $ 53,520 $ 47,673 Amount $ 3,928 $ 3,797 Growth rate 12 % 15 % Growth rate 3% (7)% Segment profit Segment profit Amount $ 518 $ 464

  22. Slide 22: Forward Looking non-GAAP Measures

    Cardinal Health, Inc. and Subsidiaries Forward Looking non-GAAP Measures In this document, the Company presents certain forward-looking non-GAAP metrics. The Company does not provide outlook on a GAAP basis because the items that the Company excludes from GAAP to calculate the comparable non-GAAP me

  23. Slide 23: Definitions

    Cardinal Health, Inc. and Subsidiaries Definitions Growth rate calculation: growth rates are determined by dividing the difference between current-period results and prior-period results by prior-period results. Interest and Other, net: other (income)/expense, net plus interest expense, net. Segment

  24. Slide 24: Definitions Continued

    Cardinal Health, Inc. and Subsidiaries Definitions Continued 1 LIFO charges and credits are excluded because the factors that drive last-in first-out ("LIFO") inventory charges or credits, such as pharmaceutical manufacturer price appreciation or deflation and year-end inventory levels (which can be

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