Cardinal Health, Inc. · NYSE:CAH
Cardinal Health — Q4 FY2018 Earnings Presentation
22 slides from Cardinal Health's earnings presentation, Aug 6, 2018
Slide 1: Q4 FY18 Cardinal Health, Inc. Earnings Call
Q4 FY18 CARDINAL HEALTH, INC. EARNINGS CALL AUGUST 6, 2018 1
Slide 2: Forward-looking statements and GAAP reconciliation
Forward-looking statements and GAAP reconciliation Cautions Concerning Forward-Looking Statements This presentation contains forward-looking statements addressing expectations, prospects, estimates and other matters that are dependent upon future events or developments. These statements may be ident
Slide 3: Q4 results
Q4 results 3
Slide 4: Q4 FY18 financial summary
Q4 FY18 financial summary GAAP Basis ($M) Non-GAAP Basis ($M) Q4 FY18 Q4 FY18 Revenue $35,349 N/A % change 7% Gross Margin $1,735 N/A % change 7% SG&A $1,270 N/A % change 29% Operating Earnings/(Loss) $(1,080) $465 % change N.M. (27)% Interest & Other1 $107 N/A % change 65% Net Earnings/(Loss)2 $(1,
Slide 5: Q4 FY18 pharmaceutical segment results
Q4 FY18 pharmaceutical segment results Q4 FY18 ($M) Q4 FY17 ($M) YoY change Revenue $31,455 $29,552 6% Segment profit $416 $505 (18)% Segment profit margin 1.32% 1.71% -39 bps Drivers: Revenue + Pharmaceutical and Specialty distribution customers - Divestiture of the company’s China distribution bus
Slide 6: Q4 FY18 medical segment results
Q4 FY18 medical segment results Q4 FY18 ($M) Q4 FY17 ($M) YoY change Revenue $3,898 $3,416 14% Segment profit $114 $138 (17)% Segment profit margin 2.92% 4.03% -111 bps Drivers: Revenue + Acquisition of the Patient Recovery business Segment profit - Performance of Cardinal Health Branded products, p
Slide 7: FY18 results
FY18 results 7
Slide 8: FY18 financial summary
FY18 financial summary GAAP Basis ($M) Non-GAAP Basis ($M) FY18 FY18 Revenue $136,809 N/A % change 5% Gross Margin $7,181 N/A % change 10% SG&A $4,596 N/A % change 22% Operating Earnings $126 $2,585 % change (94)% (7)% Interest & Other1 $352 N/A % change 80% Net Earnings2 $256 $1,578 % change (80)%
Slide 9: FY18 pharmaceutical segment results
FY18 pharmaceutical segment results FY18 ($M) FY17 ($M) YoY change Revenue $121,241 $116,463 4% Segment profit $1,992 $2,187 (9)% Segment profit margin 1.64% 1.88% -24 bps Drivers: Revenue + Pharmaceutical and Specialty distribution customers - Previously announced expiration of a large, mail-order
Slide 10: FY18 medical segment results
FY18 medical segment results FY18 ($M) FY17 ($M) YoY change Revenue $15,581 $13,524 15% Segment profit $662 $572 16% Segment profit margin 4.25% 4.23% +2 bps Drivers: Revenue + Acquisition of the Patient Recovery business Segment profit + Contributions from acquisitions - Performance in Cardinal Hea
Slide 11: Committed to a future of growth
Committed to a future of growth 11
Slide 12: Committed to a future of growth
Committed to a future of growth Area of focus Progress • Cost reductions >$100M (annualized) Cost structure: • Launched initiatives to deliver an additional $100M in savings by Conducting fundamental review of how we operate FY20 (aggregate run rate in excess of $200M) • New management team in place
Slide 13: FY19 outlook
FY19 outlook 13
Slide 14: FY19 financial expectations
FY19 financial expectations FY19 outlook FY18 actual Low-single digit Revenue $136.8B percentage growth Non-GAAP EPS $4.90 to $5.15 $5.00 Non-GAAP ETR 25% - 28% 29.3% Diluted weighted average shares 302M – 307M 315M outstanding Interest and other $340M - $360M $352M Capital expenditures $360M - $390
Slide 15: FY19 segment outlook
FY19 segment outlook Segment Revenue Profit Low-single digit High-single to low-double Pharmaceutical percentage growth digit percentage decline Low-single digit Mid to high-single digit Medical percentage growth percentage growth 15 © 2018 Cardinal Health. All Rights Reserved.
Slide 16: Q4 FY18 trailing five quarters
Q4 FY18 trailing five quarters GAAP TO NON-GAAP RECONCILIATION STATEMENTS AND SUPPLEMENTAL FINANCIAL INFORMATION 16
Slide 17: Q4 FY18 trailing five quarters segment analysis
Q4 FY18 trailing five quarters segment analysis Pharmaceutical segment Q4 FY17 Q1 FY18 Q2 FY18 Q3 FY18 Q4 FY18 Revenue 29,552 28,920 31,146 29,720 31,455 ($M) Segment Profit ($M) 505 467 514 596 416 Medical segment Q4 FY17 Q1 FY18 Q2 FY18 Q3 FY18 Q4 FY18 Revenue 3,416 3,724 4,044 3,916 3,898 ($M) Se
Slide 18: GAAP / Non-GAAP Reconciliation, Fourth Quarter 2018
Cardinal Health, Inc. and Subsidiaries GAAP / Non-GAAP Reconciliation1 Gross Operating Earnings/(Loss) Provision for/ Margin Operating Earnings Before (Benefit from) Net Net Effective Diluted 2 2 Gross Growth Earnings/ Growth Income Income Earnings/ Earnings Tax Diluted EPS 2 2,6 Margin Rate (Loss)
Slide 19: GAAP / Non-GAAP Reconciliation, Fiscal Year 2018
Cardinal Health, Inc. and Subsidiaries GAAP / Non-GAAP Reconciliation1 Gross Operating Earnings/(Loss) Provision for/ Margin Operating Earnings Before (Benefit from) Net Net Effective Diluted 2 2 Gross Growth Earnings/ Growth Income Income Earnings/ Earnings Tax Diluted EPS 2 2 Margin Rate (Loss) Ra
Slide 20: Segment Information
Cardinal Health, Inc. and Subsidiaries Segment Information Fourth Quarter Fourth Quarter (in millions) 2018 2017 (in millions) 2018 2017 Pharmaceutical Medical Revenue Revenue Amount $ 31,455 $ 29,552 Amount $ 3,898 $ 3,416 Growth rate 6% 5% Growth rate 14 % 6% Segment profit Segment profit Amount $
Slide 21: Forward Looking non-GAAP Measures
Cardinal Health, Inc. and Subsidiaries Forward Looking non-GAAP Measures In this document, the Company presents certain forward-looking non-GAAPmetrics. The Company does not provide outlook on a GAAPbasis because changes in the items that the Company excludes from GAAPto calculate the comparable non
Slide 22: Definitions
Cardinal Health, Inc. and Subsidiaries Definitions Interest and Other, net: other (income)/expense, net plus interest expense, net. Non-GAAP Diluted EPS attributable to Cardinal Health, Inc. or "Non-GAAP Diluted EPS" or "Non-GAAP Diluted Earnings Per Share": non-GAAP net earnings attributable to Car