CVS Health Corporation · NYSE:CVS
CVS Health — 2018 Guidance Conference Call
14 slides from CVS Health's conference presentation, Jan 4, 2018
Slide 1: 2018 Guidance Conference Call
2018 Guidance Conference Call Dave Denton Executive Vice President & Chief Financial Officer January 4, 2018
Slide 2: Important Information for Investors and Shareholders
Important Information for Investors and Shareholders No Offer or Solicitation Today's presentation is for informational purposes only and not intended to and does not constitute an offer to subscribe for, buy or sell, the solicitation of an offer to subscribe for, buy or sell or an invitation to sub
Slide 3: Important Information for Investors and Shareholders
Important Information for Investors and Shareholders Participants in Solicitation CVS Health, Aetna, their respective directors and certain of their respective executive officers may be considered participants in the solicitation of proxies in connection with the proposed transaction. Information ab
Slide 4: Forward-looking Statements
Forward-looking Statements This presentation contains forward-looking statements within the meaning of the federal securities laws. These forward-looking statements reflect our current views related to our future financial performance, future events and industry and market conditions. This presentat
Slide 5: Revised Outlook 2017 Q4
Guidance: 2017 Q4 Revised Outlook • Adjusted Consolidated Operating Profit and Adjusted EPS at lower end of their respective ranges – For Pharmacy Services segment, robust mid-teens year-over-year adjusted operating profit growth; below guidance range, mainly attributable to softer margin performanc
Slide 6: Enterprise Outlook
Guidance: 2018 Full-year Enterprise Outlook Full-year 2018 Net Revenue Growth 0.75% to 2.50% Enterprise Adjusted Operating 1.0% to 4.0% Profit Growth (1) Tax Rate ~ 27% Assumptions: 1. Assume for guidance purposes only, Aetna transaction closes after year-end 2018, given the uncertainty of the timin
Slide 7: Segment Outlook: Retail/LTC Pharmacy and Pharmacy Services
Guidance: 2018 Full-year Segment Outlook Full-year 2018 Net Revenue Growth 2.5% to 4.0% Retail/LTC Same-Store Sales (1) 2.0% to 3.5% Same-Store Adjusted Scripts (1) (2) 6.0% to 7.0% Operating Profit Growth Low-single digits Net Revenue Change 1.5% to 3.5% Pharmacy Services Total Adjusted Claims (3)
Slide 8: Retail/LTC Outlook
Guidance: 2018 Full-year Retail/LTC Outlook • Drivers of growth: – Broader partnerships established or implemented in 2017 with Optum, Cigna and Express Scripts, and expanded participation as a preferred pharmacy in more Medicare Part D networks – Solid script growth in long-term care business drive
Slide 9: PBM Outlook
Guidance: 2018 Full-year PBM Outlook • Solid growth driven by expected volume increases in both pharmacy network and specialty, growth in Med D lives, and favorable purchasing economics • Adjusted claims growth of ~ 8% • PBM revenue growth in 2018 expected to be affected by: – Start of rebate admini
Slide 10: Below-the-Line
Guidance: 2018 Full-year Below-the-Line • Share repurchases suspended for 2018 due to Aetna transaction – Expect to use cash to pay down existing debt, continue to pay $2 per share annual dividend and fund purchase of Aetna – Absent suspension, share repurchases would have contributed between 340 an
Slide 11: Streamlining Initiative: Potential Impact on Segment Allocations
Guidance: 2018 Full-year Streamlining Initiative: Potential Impact on Segment Allocations • As we drive towards more efficient shared services, critical step is having enterprise aligned on common financial platform • Will move to common financial platform using SAP during 2018 – Expect to have abil
Slide 12: Guidance Comparison to Form S-4
Guidance: 2018 Full-year Guidance Comparison to Form S-4 • Form S-4 related to Aetna transaction contains performance estimates for next several years used as part of deal process; projections were prepared on steady state basis • Differences between the Form S-4 and current expectations for 2018 gi
Slide 13: Non-GAAP Reconciliation Information
Guidance: 2017 Q4, 2017 Full-year and 2018 Full-year Non-GAAP Reconciliation Information CVS Health is providing non-GAAP information on a prospective basis that excludes certain items because of the nature of these items and the impact they have on the analysis of underlying business performance an
Slide 14: Non-GAAP Reconciliation Information
Guidance: 2017 Q4, 2017 Full-year and 2018 Full-year Non-GAAP Reconciliation Information Adjusted operating profit is operating profit excluding the impact of acquisition-related integration costs, charges in connection with store rationalization, goodwill impairments, and adjustments to legal reser