Slide 1: McKesson Corporation Q1 Fiscal 2023 Results
McKesson Corporation Q1 Fiscal 2023 Results August 3, 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: 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 Sustainable Streamline Expand Oncology People and Core Growth the Portfolio and Biopharma Culture Ecosystems 3 © 2022
Slide 4: First Quarter Fiscal 2023 Results
First Quarter Fiscal 2023 Results
Slide 5: Delivering against strategic priorities: solid first-quarter performance
Delivering against strategic priorities Solid first-quarter performance Business Summary Corporate Responsibility Updates • Q1 revenues of $67.2 billion increased 7% • Received multiple awards and acknowledgements for diversity, equity, and inclusion achievements • Q1 Adjusted Earnings per Diluted S
Slide 6: Consolidated financial information
Consolidated financial information Q1 Fiscal 2023 Results Results Q1 YoY ($ and shares in millions, expect per share amounts) FY 23 Change Revenues $ 67,154 7 % Adjusted Gross Profit $ 3,010 (4) % Adjusted Operating Expenses $ (1,888) (10) % Adjusted Operating Profit $ 1,137 4 % Interest expense $ (
Slide 7: U.S. Pharmaceutical
U.S. Pharmaceutical Q1 Fiscal 2023 Results Results Q1 YoY ($ in millions) FY 23 Change U.S. Pharmaceutical Revenues $ 56,947 14 % Adjusted Segment Operating Profit $ 711 4 % Adjusted Segment Operating Profit Margin 1.25 % (11) bp Q1 revenue growth driven by specialty product volumes, including incre
Slide 8: Prescription Technology Solutions
Prescription Technology Solutions Q1 Fiscal 2023 Results Results Q1 YoY ($ in millions) FY 23 Change Prescription Technology Solutions Revenues $ 1,066 21 % Adjusted Segment Operating Profit $ 165 19 % Adjusted Segment Operating Profit Margin 15.48 % (30) bp Q1 revenue increase driven by biopharma s
Slide 9: Medical-Surgical Solutions
Medical-Surgical Solutions Q1 Fiscal 2023 Results Results Q1 YoY ($ in millions) FY 23 Change Medical-Surgical Solutions Revenues $ 2,592 3 % Adjusted Segment Operating Profit $ 268 4 % Adjusted Segment Operating Profit Margin 10.34 % 17 bp Q1 revenue increase driven by growth in the primary care bu
Slide 10: International
International Q1 Fiscal 2023 Results Results Q1 YoY ($ in millions) FY 23 Change International Revenues $ 6,549 (29) % Adjusted Segment Operating Profit1 $ 138 (19) % Adjusted Segment Operating Profit Margin 2.11 % 27 bp Q1 FX-Adjusted revenue of $7.1 billion, down 23% year-over-year, driven by the
Slide 11: Corporate
Corporate Q1 Fiscal 2023 Results Results Q1 YoY ($ in millions) FY 23 Change Corporate Adjusted Corporate Expenses $ (145) (6) % Q1 Adjusted Corporate Expenses decreased 6% year-over-year driven by receipt of a tax receivable agreement and lower opioid-related litigation expenses, partially offset b
Slide 12: Opioid-Related Costs
Opioid-Related Costs Q1 Fiscal 2023 Results Results Q1 Q1 ($ in millions) FY 23 FY 22 Opioid-related costs Claims and litigation charges, net (GAAP-only) $ 5 $ 74 Legal fees and other $ 19 $ 35 Total expense $ 24 $ 109 McKesson has settled, or reached agreements to settle, opioid-related claims of a
Slide 13: Cash
Cash ($ in millions) Full-Year Cash Balance Walk Cash Dynamics Balance at March 31, 20221 $ 3,935 Free Cash Flow of $(1.0) billion Operating cash flow (941) Returned $1.1 billion of cash to shareholders in the Capital expenditures (100) quarter Free Cash Flow (1,041) Acquisitions (1) • Repurchased $
Slide 14: Fiscal 2023 Outlook
Fiscal 2023 Outlook On the following slides, McKesson presents an overview of its fiscal 2023 Outlook assumptions. The Company does not provide forward-looking guidance on a GAAP basis as McKesson is unable to provide a quantitative reconciliation of this forward-looking Non- GAAP measure to the mos
Slide 15: Fiscal 2023 outlook
Fiscal 2023 outlook FY23 Adjusted EPS Guidance $23.95 to $24.65 FY23 Outlook FY22 Actual COVID-19 vaccine distribution for U.S. government $0.35 to $0.45 $0.89 Previously $0.05 to $0.20 Kitting, storage, and distribution of ancillary supplies for U.S. government $0.75 to $0.95 $1.78 and COVID-19 tes
Slide 16: Full Year FY23 Adjusted EPS guidance increased
Full Year FY23 Adjusted EPS guidance increased $23.95 to $24.65 $205 to $225 million Previously $195 to $215 million $22.90 to $23.60 $0.99 to $1.29 Previously $0.20 to $0.60 FY23 Outlook COVID-19 Related Items Interest Expense Operating Performance FY23 Outlook & McKesson Ventures May 5, 2022 Augus
Slide 17: Disciplined capital allocation framework
Disciplined capital allocation framework Growth Return capital Maintain a strong investments to shareholders balance sheet Strategy-led investment Grow dividend as earnings Investment-grade balance sheet and free cash expand Strategic acquisitions Ample liquidity 15% increase to quarterly accelerate
Slide 18: Fiscal 2023 outlook: consolidated metrics
Fiscal 2023 outlook Consolidated metrics Metric Fiscal 2023 Outlook Fiscal 2022 Actual Adjusted Earnings per Diluted Share $23.95 to $24.65 $23.69 Previously $22.90 to $23.60 Revenues 3% to 7% growth 11% growth Previously Flat to 4% growth Adjusted Operating Profit Flat to 6% decline 25% growth Prev
Slide 19: Fiscal 2023 outlook: segment metrics
Fiscal 2023 outlook Segment metrics U.S. Pharmaceutical Prescription Technology Medical-Surgical International Solutions Solutions FY23 Revenue 11% to 14% growth 15% to 21% growth 3% to 7% decline 34% to 38% decline Previously 7% to 10% growth Previously 17% to 23% growth Previously 7% to 11% declin
Slide 20: Appendix
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Slide 21: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Q1 Fiscal 2023 and Q1 Fiscal 2022 McKESSON CORPORATION Schedule 2 RECONCILIATION OF GAAP OPERATING RESULTS TO ADJUSTED RESULTS (NON-GAAP) (unaudited) (in millions, except per share amounts) Three Months Ended June 30, 2022 2021 Change Income from continuing operations
Slide 22: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Q1 Fiscal 2023 and Q1 Fiscal 2022 McKESSON CORPORATION Schedule 2 RECONCILIATION OF GAAP OPERATING RESULTS TO ADJUSTED RESULTS (NON-GAAP) (Continued) (unaudited) (in millions) Three Months Ended June 30, 2022 2021 Change Gross profit (GAAP) $ 3,023 $ 3,032 —% Pre-tax
Slide 23: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Q1 Fiscal 2023 and Q1 Fiscal 2022 McKESSON CORPORATION Schedule 2 RECONCILIATION OF GAAP OPERATING RESULTS TO ADJUSTED RESULTS (NON-GAAP) (Continued) (unaudited) (in millions) Three Months Ended June 30, 2022 2021 Change Income tax expense (GAAP) $ (199) $ (26) 665 %
Slide 24: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Q1 Fiscal 2023 and Q1 Fiscal 2022 McKESSON CORPORATION Schedule 3 RECONCILIATION OF GAAP SEGMENT FINANCIAL RESULTS TO ADJUSTED RESULTS (NON-GAAP) (unaudited) (in millions) Three Months Ended June 30, 2022 2021 As reported As adjusted Change As adjusted Foreign Foreign
Slide 25: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Full-Year Fiscal 2023 and Full-Year Fiscal 2022 McKESSON CORPORATION Schedule 6 RECONCILIATION OF GAAP CASH FLOWS TO FREE CASH FLOW (NON-GAAP) (unaudited) (in millions) Three Months Ended June 30, 2022 2021 Change GAAP CASH FLOW CATEGORIES Net cash used in operating a
Slide 26: Financial Statement Notes
Financial Statement Notes McKESSON CORPORATION 1 of 1 FINANCIAL STATEMENT NOTES (1) Restructuring, impairment, and related charges, net for the three months ended June 30, 2022 includes pre-tax charges of $23 million ($17 million after-tax) primarily for Corporate expenses, net as well as Prescripti
Slide 27: 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 28: 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 29: 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