Slide 1: McKesson Corporation Q2 Fiscal 2023 Results
McKesson Corporation Q2 Fiscal 2023 Results November 1, 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 Expand Oncology Sustainable Streamline People and and Biopharma Core Growth the Portfolio Culture Ecosystems 3 © 2022
Slide 4: Second Quarter Fiscal 2023 Results
Second Quarter Fiscal 2023 Results
Slide 5: Solid operating performance and execution against long-term growth strategies
Solid operating performance and execution against long-term growth strategies Business Highlights Company Updates • Q2 revenues of $70.2 billion increased 5% • Kathleen Wilson-Thompson, a member of McKesson’s independent Directors, was recognized with the Distinguished Alumna Award by • Q2 Adjusted
Slide 6: Consolidated financial information
Consolidated financial information Q2 and YTD Fiscal 2023 Results Results Q2 YoY YTD Q2 YoY ($ and shares in millions, expect per share amounts) FY 23 Change FY 23 Change Revenues $ 70,157 5 % $ 137,311 6 % Adjusted Gross Profit $ 3,072 (7) % $ 6,082 (6) % Adjusted Operating Expenses $ (1,909) (11)
Slide 7: U.S. Pharmaceutical
U.S. Pharmaceutical Q2 and YTD Fiscal 2023 Results Results Q2 YoY YTD Q2 YoY ($ in millions) FY 23 Change FY 23 Change U.S. Pharmaceutical Revenues $ 60,059 12 % $ 117,006 13 % Adjusted Segment Operating Profit $ 756 3 % $ 1,467 4 % Adjusted Segment Operating Profit Margin 1.26 % (12) bp 1.25 % (12)
Slide 8: Prescription Technology Solutions
Prescription Technology Solutions Q2 and YTD Fiscal 2023 Results Results Q2 YoY YTD Q2 YoY ($ in millions) FY 23 Change FY 23 Change Prescription Technology Solutions Revenues $ 1,018 9 % $ 2,084 15 % Adjusted Segment Operating Profit $ 141 (2) % $ 306 8 % Adjusted Segment Operating Profit Margin 13
Slide 9: Medical-Surgical Solutions
Medical-Surgical Solutions Q2 and YTD Fiscal 2023 Results Results Q2 YoY YTD Q2 YoY ($ in millions) FY 23 Change FY 23 Change Medical-Surgical Solutions Revenues $ 2,843 (9) % $ 5,435 (4) % Adjusted Segment Operating Profit $ 307 (4) % $ 575 — % Adjusted Segment Operating Profit Margin 10.80 % 59 bp
Slide 10: International
International Q2 and YTD Fiscal 2023 Results Results Q2 YoY YTD Q2 YoY ($ in millions) FY 23 Change FY 23 Change International Revenues1 $ 6,237 (32) % $ 12,786 (30) % Adjusted Segment Operating Profit1 $ 137 (16) % $ 275 (17) % Adjusted Segment Operating Profit Margin 2.20 % 41 bp 2.15 % 34 bp Q2 F
Slide 11: Corporate
Corporate Q2 and YTD Fiscal 2023 Results Results Q2 YoY YTD Q2 YoY ($ in millions) FY 23 Change FY 23 Change Corporate Adjusted Corporate Expenses $ (144) 73 % $ (289) 22 % Q2 Adjusted Corporate Expenses increased 73% year-over-year driven by net losses of approximately $3 million associated with Mc
Slide 12: Opioid-Related Costs
Opioid-Related Costs Q2 and YTD Fiscal 2023 Results Results Q2 Q2 YTD Q2 YTD Q2 ($ in millions) FY 23 FY 22 FY 23 FY 22 Opioid-related costs Claims and litigation charges, net (GAAP-only) $ (9) $ 112 $ (4) $ 186 Legal fees and other $ 9 $ 36 $ 28 $ 71 Total expense $ — $ 148 $ 24 $ 257 Claims and Li
Slide 13: Cash
Cash ($ in millions) YTD Cash Balance Walk Cash Dynamics Balance at March 31, 20221 $ 3,935 Free Cash Flow of ($56) million Operating cash flow 166 Returned $1.6 billion of cash to shareholders year-to-date Capital expenditures (222) • Repurchased $1.5 billion of shares Free Cash Flow (56) Acquisiti
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 $24.45 to $24.95 FY23 Outlook FY22 Actual COVID-19 vaccine distribution for U.S. government $0.60 to $0.70 $0.89 Previously $0.35 to $0.45 Kitting, storage, and distribution of ancillary supplies for U.S. government $1.00 to $1.10 $1.78 and COVID-19 tes
Slide 16: Full Year FY23 Adjusted EPS guidance increased
Full Year FY23 Adjusted EPS guidance increased $24.45 to $24.95 $225 to $235 million Previously $205 to $225 million ($0.18) $23.95 to $24.65 $1.45 to $1.65 Previously $0.99 to $1.29 FY23 Outlook COVID-19 Related Items Interest Expense Europe Divestiture Timing Operating Performance FY23 Outlook & M
Slide 17: Fiscal 2023 outlook
Fiscal 2023 outlook Consolidated metrics Metric Fiscal 2023 Outlook Fiscal 2022 Actual Adjusted Earnings per Diluted Share $24.45 to $24.95 $23.69 Previously $23.95 to $24.65 Revenues 3% to 7% growth 11% growth Adjusted Operating Profit 4% decline to 2% growth 25% growth Previously flat to 6% declin
Slide 18: Fiscal 2023 outlook
Fiscal 2023 outlook Segment metrics U.S. Pharmaceutical Prescription Technology Medical-Surgical International Solutions Solutions FY23 Revenue 12% to 15% growth 10% to 16% growth 4% to 8% decline 42% to 46% decline Previously 11% to 14% growth Previously 15% to 21% growth Previously 3% to 7% declin
Slide 19: Appendix
Appendix
Slide 20: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Q2 and YTD Fiscal 2023 and 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 September 30, Six Months Ended September 30, 2022 2021
Slide 21: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Q2 and YTD Fiscal 2023 and Fiscal 2022 McKESSON CORPORATION Schedule 2 RECONCILIATION OF GAAP OPERATING RESULTS TO ADJUSTED RESULTS (NON-GAAP) (Continued) (unaudited) (in millions) Three Months Ended September 30, Six Months Ended September 30, 2022 2021 Change 2022 2
Slide 22: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Q2 and YTD Fiscal 2023 and Fiscal 2022 McKESSON CORPORATION Schedule 2 RECONCILIATION OF GAAP OPERATING RESULTS TO ADJUSTED RESULTS (NON-GAAP) (Continued) (unaudited) (in millions) Three Months Ended September 30, Six Months Ended September 30, 2022 2021 Change 2022 2
Slide 23: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Q2 Fiscal 2023 and Q2 Fiscal 2022 McKESSON CORPORATION Schedule 3 RECONCILIATION OF GAAP SEGMENT OPERATING RESULTS TO ADJUSTED RESULTS (NON-GAAP) (unaudited) (in millions) Three Months Ended September 30, 2022 2021 As reported As adjusted Change As adjusted Foreign Fo
Slide 24: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation YTD Fiscal 2023 and YTD Fiscal 2022 McKESSON CORPORATION Schedule 3 RECONCILIATION OF GAAP SEGMENT OPERATING RESULTS TO ADJUSTED RESULTS (NON-GAAP) (Continued) (unaudited) (in millions) Six Months Ended September 30, 2022 2021 As reported As adjusted Change As adjuste
Slide 25: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation YTD Fiscal 2023 and YTD Fiscal 2022 McKESSON CORPORATION Schedule 6 RECONCILIATION OF GAAP CASH FLOW TO FREE CASH FLOW (NON-GAAP) (unaudited) (in millions) Six Months Ended September 30, 2022 2021 Change GAAP CASH FLOW CATEGORIES Net cash provided by operating activit
Slide 26: Financial Statement Notes
Financial Statement Notes McKESSON CORPORATION 1 of 2 FINANCIAL STATEMENT NOTES (1) Transaction-related expenses and adjustments for the three and six months ended September 30, 2022 includes pre-tax gains of $23 million ($3 million after-tax) and $35 million (charge of $1 million after-tax), respec
Slide 27: Financial Statement Notes
Financial Statement Notes FINANCIAL STATEMENT NOTES (continued) 2 of 2 (7) Claims and litigation charges, net for the six months ended September 30, 2021 includes a pre-tax charge of $27 million ($22 million after-tax) related to an agreement to settle opioid-related claims with the State of New Yor
Slide 28: 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 29: 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 30: 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