Slide 1: McKesson Corporation Q2 Fiscal 2022 Financial Results
McKesson Corporation Q2 Fiscal 2022 Financial Results November 1, 2021
Slide 2: 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 “believes,” “expects,”
Slide 3: Accelerating our company priorities, delivering growth and long-term shareholder value
Accelerating 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 2 3 4 Focus on Strengthen Streamline Invest in Oncology People and the Core the Business and Biophar
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 Providers • Patient access solutions • GPO services • Automated hub services • Practice management • Pharmacy claims switch Pharmacies Biopharma • Real-world insig
Slide 5: Second Quarter Fiscal 2022 Results
Second Quarter Fiscal 2022 Results
Slide 6: Company Updates
Company Updates Strong Second Quarter Results; Raised Full-Year Guidance Company Updates Business Summary • On November 1, 2021, McKesson announced an • Q2 revenue of $66.6 billion, an increase of 9% from a year ago agreement to sell its retail and distribution businesses • Q2 Adjusted Earnings per
Slide 7: Consolidated Financial Information
Consolidated Financial Information Q2 and YTD Fiscal 2022 Results Results Q2 YoY YTD Q2 YoY ($ and shares in millions, except per share amounts) FY 22 Change FY 22 Change Revenues $ 66,576 9 % $ 129,250 11 % Adjusted Gross Profit $ 3,295 12 % $ 6,439 15 % Adjusted Operating Expenses $ (2,156) 4 % $
Slide 8: U.S. Pharmaceutical
U.S. Pharmaceutical Q2 and YTD Fiscal 2022 Results Results Q2 YoY YTD Q2 YoY ($ in millions) FY 22 Change FY 22 Change U.S. Pharmaceutical Revenues $ 53,411 11 % $ 103,430 12 % Adjusted Segment Operating Profit $ 735 12 % $ 1,417 14 % Adjusted Segment Operating Profit Margin 1.38 % 1 bp 1.37 % 2 bp
Slide 9: Prescription Technology Solutions
Prescription Technology Solutions Q2 and YTD Fiscal 2022 Results Results Q2 YoY YTD Q2 YoY ($ in millions) FY 22 Change FY 22 Change Prescription Technology Solutions Revenues $ 932 40 % $ 1,813 37 % Adjusted Segment Operating Profit $ 144 38 % $ 283 49 % Adjusted Segment Operating Profit Margin 15.
Slide 10: Medical-Surgical Solutions
Medical-Surgical Solutions Q2 and YTD Fiscal 2022 Results Results Q2 YoY YTD Q2 YoY ($ in millions) FY 22 Change FY 22 Change Medical-Surgical Solutions Revenues $ 3,124 23 % $ 5,652 30 % Adjusted Segment Operating Profit $ 319 52 % $ 576 72 % Adjusted Segment Operating Profit Margin 10.21 % 192 bp
Slide 11: International
International Q2 and YTD Fiscal 2022 Results Results Q2 YoY YTD Q2 YoY ($ in millions) FY 22 Change FY 22 Change International Revenues $ 9,109 (5) % $ 18,355 1 % Adjusted Segment Operating Profit $ 163 41 % $ 333 76 % Adjusted Segment Operating Profit Margin 1.79 % 57 bp 1.81 % 77 bp • Q2 FX-Adjust
Slide 12: Corporate
Corporate Q2 and YTD Fiscal 2022 Results Results Q2 YoY YTD Q2 YoY ($ in millions) FY 22 Change FY 22 Change Corporate Adjusted Corporate Expenses $ (83) (39) % $ (237) (21) % • Q2 Adjusted Corporate Expenses decrease driven by net gains of approximately $97 million associated with McKesson Ventures
Slide 13: Opioid-Related Costs
Opioid-Related Costs Results Q2 Q2 YTD Q2 YTD Q2 ($ in millions) FY 22 FY 21 FY 22 FY 21 Opioid-related costs Claims and litigation charges, net (GAAP-only) $ 112 $ — $ 186 $ (131) Opioid Stewardship Assessment (GAAP-only) $ — $ 50 $ — $ 50 Legal fees and other $ 36 $ 41 $ 71 $ 84 Total expense $ 14
Slide 14: Cash
Cash ($ in millions) YTD Cash Balance Walk Cash Dynamics Balance at March 31, 20211 $ 6,396 • Free Cash Flow of ($109) million Operating cash flow 170 Capital expenditures (279) • Returned $1.4 billion of cash to shareholders Free Cash Flow (109) year-to-date Acquisitions (4) Other investing cash fl
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 November 1, 2021 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 expect a return to pre-COVID-19 levels of pharmaceutical prescription and patient engagement levels in the second half of fiscal 2022 • We expect pharmaceutical prescription volumes will continue to demonstrate steady improvement through the second half of ou
Slide 17: Fiscal 2022 Outlook: Consolidated Earnings
Fiscal 2022 Outlook Consolidated Earnings Fiscal 2022 Outlook Fiscal 2021 Actual Revenues 8% to 11% growth 3% growth Previously 4% to 7% growth Adjusted Operating Profit 18% to 22% growth 1% growth Previously 7% to 10% growth Interest Expense $180 to $200 million $217 million Income Attributable to
Slide 18: Fiscal 2022 Outlook: Cash Generation and Deployment
Fiscal 2022 Outlook Cash Generation and Deployment Fiscal 2022 Outlook Fiscal 2021 Actual Free Cash Flow $3.5 to $3.9 billion $3.9 billion Property Acquisitions and Capitalized Software $540 to $640 million $641 million Share Repurchases Approximately $2 billion $770 million1 Diluted weighted averag
Slide 19: Fiscal 2022 Outlook: Operating Segments
Fiscal 2022 Outlook Operating Segments U.S. Pharmaceutical Prescription Medical-Surgical International Technology Solutions Solutions FY22 Revenue 8% to 11% growth 31% to 37% growth 8% to 14% growth 1% decline to 4% growth Previously 5% to 8% growth Previously 20% to 25% growth Previously 3% decline
Slide 20: Appendix
MCKESSON Appendix
Slide 21: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Q2 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 September 30, Six Months Ended September 30, 2021 2020
Slide 22: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Q2 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 September 30, Six Months Ended September 30, 2021 2020 Change 2021 2
Slide 23: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Q2 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 September 30, Six Months Ended September 30, 2021 2020 Change 2021 2
Slide 24: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Q2 Fiscal 2022 and Q2 Fiscal 2021 McKESSON CORPORATION Schedule 3 RECONCILIATION OF GAAP SEGMENT FINANCIAL RESULTS TO ADJUSTED RESULTS (NON-GAAP) (unaudited) (in millions) Three Months Ended September 30, 2021 2020 As reported As adjusted Change As adjusted Foreign Fo
Slide 25: 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) Six Months Ended September 30, 2021 2020 As reported As adjusted Change As adjuste
Slide 26: 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) Six Months Ended September 30, 2021 2020 Change GAAP CASH FLOW CATEGORIES Net cash provided by (used in) operat
Slide 27: 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, 2021 includes a gain of $59 million (pre-tax and after-tax) related to the sale of our Canadian health benefit claims mana
Slide 28: Financial Statement Notes
Financial Statement Notes FINANCIAL STATEMENT NOTES (continued) 2 of 2 (6) Claims and litigation charges, net for the six months ended September 30, 2020 includes a pre-tax net gain of $131 million ($97 million after-tax) related to insurance proceeds received, net of attorneys' fees and expenses aw
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