Slide 1: McKesson Corporation Q3 Fiscal 2022 Results
McKesson Corporation Q3 Fiscal 2022 Results February 2, 2022
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: Focused on our company priorities, delivering growth, and long-term shareholder value
Focused on our company priorities, delivering 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: 1 Focus on 2 Sustainable 3 Streamline 4 Expand Oncology People and Core Growth the Portfolio and Biopha
Slide 4: Advancing our scaled and connected ecosystems with innovation and execution
Advancing our scaled and connected ecosystems with innovation and execution Oncology Biopharma Services • Distribution scale & execution • Patient access solutions Providers • GPO services • Automated hub services • Practice management • Pharmacy claims switch Biopharma • Real-world insights Pharmac
Slide 5: Third Quarter Fiscal 2022 Results
Third Quarter Fiscal 2022 Results
Slide 6: Third quarter ahead of expectations; Raised and narrowed full-year guidance
Third quarter ahead of expectations; Raised and narrowed full-year guidance Company Updates Business Summary On December 8, 2021, McKesson hosted an Investor Day, where Q3 revenue of $68.6 billion, an increase of 10% from a year ago management highlighted progress against growth strategies and prese
Slide 7: Consolidated financial information
Consolidated financial information Q3 and YTD fiscal 2022 results Results Q3 YoY YTD Q3 YoY ($ and shares in millions, expect per share amounts) FY 22 Change FY 22 Change Revenues $ 68,614 10 % $ 197,864 10 % Adjusted Gross Profit $ 3,395 8% $ 9,834 13 % Adjusted Operating Expenses $ (2,142) 1 % $ (
Slide 8: U.S. Pharmaceutical
U.S. Pharmaceutical Q3 and YTD fiscal 2022 results Results Q3 YoY YTD Q3 YoY ($ in millions) FY 22 Change FY 22 Change U.S. Pharmaceutical Revenues $ 55,041 11 % $ 158,471 11 % Adjusted Segment Operating Profit $ 735 12 % $ 2,152 13 % Adjusted Segment Operating Profit Margin 1.34 % 1 bp 1.36 % 2 bp
Slide 9: Prescription Technology Solutions
Prescription Technology Solutions Q3 and YTD fiscal 2022 results Results Q3 YoY YTD Q3 YoY ($ in millions) FY 22 Change FY 22 Change Prescription Technology Solutions Revenues $ 1,031 33 % $ 2,844 35 % Adjusted Segment Operating Profit $ 145 11 % $ 428 33 % Adjusted Segment Operating Profit Margin 1
Slide 10: Medical-Surgical Solutions
Medical-Surgical Solutions Q3 and YTD fiscal 2022 results Results Q3 YoY YTD Q3 YoY ($ in millions) FY 22 Change FY 22 Change Medical-Surgical Solutions Revenues $ 3,082 1% $ 8,734 18 % Adjusted Segment Operating Profit $ 330 18 % $ 906 48 % Adjusted Segment Operating Profit Margin 10.71 % 157 bp 10
Slide 11: International
International Q3 and YTD fiscal 2022 results Results Q3 YoY YTD Q3 YoY ($ in millions) FY 22 Change FY 22 Change International Revenues $ 9,460 2% $ 27,815 2% Adjusted Segment Operating Profit1 $ 222 41 % $ 555 60 % Adjusted Segment Operating Profit Margin 2.35 % 65 bp 2.00 % 73 bp Q3 FX-Adjusted re
Slide 12: Corporate
Corporate Q3 and YTD fiscal 2022 results Results Q3 YoY YTD Q3 YoY ($ in millions) FY 22 Change FY 22 Change Corporate Adjusted Corporate Expenses $ (159) 1 % $ (396) (14) % Q3 Adjusted Corporate Expenses increased 1% year-over-year driven by lower administrative expense, partially offset by net gai
Slide 13: Opioid-Related Costs
Opioid-Related Costs Q3 and YTD fiscal 2022 results Results Q3 Q3 YTD Q3 YTD Q3 ($ in millions) FY 22 FY 21 FY 22 FY 21 Opioid-related costs Claims and litigation charges, net (GAAP-only) $ 7 $ 8,067 $ 193 $ 7,936 Opioid Stewardship Assessment (GAAP-only) $ — $ — $ — $ 50 Legal fees and other $ 33 $
Slide 14: Cash
Cash ($ in millions) YTD Cash Balance Walk Cash Dynamics Balance at March 31, 20211 $ 6,396 Free Cash Flow of $1.2 billion Operating cash flow 1,547 Returned $2.2 billion of cash to shareholders year-to-date Capital expenditures (380) • Repurchased $2.0 billion of shares Free Cash Flow 1,167 Acquisi
Slide 15: Fiscal 2022 Outlook
Fiscal 2022 Outlook On the following slides, McKesson presents an overview of its fiscal 2022 Outlook assumptions. These assumptions consist of certain non-GAAP measures. As outlined in the company’s February 2, 2022 press release, McKesson does not provide forward-looking guidance on a GAAP basis a
Slide 16: Fiscal 2022 outlook: Key assumptions
Fiscal 2022 outlook Key assumptions • We anticipate our role as the central distributor for the U.S. government to deliver Adjusted Earnings per Diluted Share in fiscal 2022 as follows: • Vaccine Distribution: $0.90 to $1.10 in the U.S. Pharmaceutical segment • Kitting, Storage, and Distribution of
Slide 17: Fiscal 2022 outlook: Consolidated metrics
Fiscal 2022 outlook Consolidated metrics Metric Fiscal 2022 Outlook Fiscal 2021 Actual Adjusted Earnings per Diluted Share $23.55 to $23.95 $17.21 Previously $22.35 to $22.95 Revenues 8% to 11% growth 3% growth Adjusted Operating Profit 24% to 27% growth 1% growth Previously 20% to 23% growth Adjust
Slide 18: Fiscal 2022 outlook: Segments
Fiscal 2022 outlook Segments U.S. Pharmaceutical Prescription Technology Medical-Surgical International Solutions Solutions 32% to 36% growth 15% to 19% growth 2% decline to 1% growth FY22 Revenue 8% to 11% growth Previously 31% to 37% growth Previously 8% to 14% growth Previously 1% decline to 4% g
Slide 19: Appendix
Appendix
Slide 20: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Q3 and YTD Fiscal 2022 and Fiscal 2021 McKESSON CORPORATION Schedule 2 RECONCILIATION OF GAAP OPERATING RESULTS TO ADJUSTED RESULTS (NON-GAAP) (unaudited) (in millions, except per share amounts) Three Months Ended December 31, Nine Months Ended December 31, 2021 2020
Slide 21: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Q3 and YTD Fiscal 2022 and YTD Fiscal 2021 McKESSON CORPORATION Schedule 2 RECONCILIATION OF GAAP OPERATING RESULTS TO ADJUSTED RESULTS (NON-GAAP) (Continued) (unaudited) (in millions) Three Months Ended December 31, Nine Months Ended December 31, 2021 2020 Change 202
Slide 22: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Q3 and YTD Fiscal 2022 and Fiscal 2021 McKESSON CORPORATION Schedule 2 RECONCILIATION OF GAAP OPERATING RESULTS TO ADJUSTED RESULTS (NON-GAAP) (Continued) (unaudited) (in millions) Three Months Ended December 31, Nine Months Ended December 31, 2021 2020 Change 2021 20
Slide 23: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Q3 Fiscal 2022 and Q3 Fiscal 2021 McKESSON CORPORATION Schedule 3 RECONCILIATION OF GAAP SEGMENT FINANCIAL RESULTS TO ADJUSTED RESULTS (NON-GAAP) (unaudited) (in millions) Three Months Ended December 31, 2021 2020 As reported As adjusted Change As adjusted Foreign For
Slide 24: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation YTD Fiscal 2022 and YTD Fiscal 2021 McKESSON CORPORATION Schedule 3 RECONCILIATION OF GAAP SEGMENT FINANCIAL RESULTS TO ADJUSTED RESULTS (NON-GAAP) (Continued) (unaudited) (in millions) Nine Months Ended December 31, 2021 2020 As reported As adjusted Change As adjuste
Slide 25: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation YTD Fiscal 2022 and YTD Fiscal 2021 McKESSON CORPORATION Schedule 6 RECONCILIATION OF GAAP CASH FLOWS TO FREE CASH FLOW (NON-GAAP) (unaudited) (in millions) Nine Months Ended December 31, 2021 2020 Change GAAP CASH FLOW CATEGORIES Net cash provided by operating activi
Slide 26: Financial Statement Notes
Financial Statement Notes 1 of 3 (1) Transaction-related expenses and adjustments for the three and nine months ended December 31, 2021 includes pre-tax charges of $823 million ($829 million after-tax) to remeasure assets and liabilities held for sale to fair value less costs to sell related to an a
Slide 27: Financial Statement Notes
Financial Statement Notes FINANCIAL STATEMENT NOTES (continued) 2 of 3 (6) Claims and litigation charges, net for the nine months ended December 31, 2021 includes pre-tax charges of $112 million ($93 million after-tax) related to our estimated liability for opioid-related claims of government entiti
Slide 28: Financial Statement Notes
Financial Statement Notes FINANCIAL STATEMENT NOTES (continued) 3 of 3 (12) Other adjustments, net for the nine months ended December 31, 2020 includes a non-cash goodwill impairment charge of $69 million (pre-tax and after-tax) within International related to our European retail business, partially
Slide 29: Supplemental Non-GAAP Financial Information
Supplemental Non-GAAP Financial Information McKESSON CORPORATION 1 of 3 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 30: Supplemental Non-GAAP Financial Information
Supplemental Non-GAAP Financial Information SUPPLEMENTAL NON-GAAP FINANCIAL INFORMATION (continued) 2 of 3 • Adjusted Operating Profit (Non-GAAP): We define Adjusted Operating Profit as GAAP income (loss) from continuing operations before interest expense and income taxes, excluding amortization of
Slide 31: Supplemental Non-GAAP Financial Information
Supplemental Non-GAAP Financial Information SUPPLEMENTAL NON-GAAP FINANCIAL INFORMATION (continued) 3 of 3 • FX-Adjusted (Non-GAAP): McKesson also presents its GAAP financial results and adjusted results (Non-GAAP) on an FX-Adjusted basis. To present our financial results on an FX-Adjusted basis, we