Mckesson Corporation · NYSE:MCK
Mckesson — 40th Annual J.P. Morgan Healthcare Conference (January 2022)
25 slides from Mckesson's conference presentation, Jan 11, 2022
Slide 1: McKesson Corporation J.P. Morgan Healthcare Conference
McKesson Corporation J . P. Morgan Healthcare Conference January 11, 2022 Brian Tyler Britt Vitalone Chief Executive Officer Chief Financial Officer
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: The foundation of McKesson
The foundation of McKesson • Historically known for pharmaceutical and medical distribution • Solving healthcare related challenges of our customers, their patients and the broader industry
Slide 4: Delivering on Multi-Year Strategic Initiative
Delivering on Multi-Year Strategic Initiative: Innovation Growth Balance sheet and capital structure Long-term shareholder value
Slide 5: Our Company Priorities
Our Company Priorities Focus on Sustainable Streamline Expand People Core the Oncology and Growth Portfolio and Culture Biopharma Ecosystems
Slide 6: Foundation for long-term growth
Foundation for long-term growth Purpose: Vision: Improve care in every setting – Advancing health one product, one partner, one outcomes for all. patient at a time. ICARE Values: Integrity/Inclusion Customer-first Accountability Respect Excellence 6 © 2021 McKesson Corporation. All rights reserved.
Slide 7: Impact-driven organization
Impact-driven organization Diversity, Equity Community Investment Sustainability and Inclusion and McKesson Foundation and ESG 7 © 2021 McKesson Corporation. All rights reserved.
Slide 8: Our distribution scale and strength
Our distribution scale and strength Deliver one-third 99.9% 275,000+ of North America pharmaceutical SKUs of medical- prescription order accuracy surgical supplies medicines daily in North America Central Market leader >50% distributor in U.S. medical- U.S. physicians of COVID-19 surgical served wit
Slide 9: Improving focus to accelerate profit
Improving focus to accelerate profit Centralization of Realigned operating Change Healthcare functional services structure: split-off • U.S. Pharmaceutical • Prescription Technology Solutions • Medical-Surgical Solutions • International Spend Smart program Intent to fully exit European region 9 © 20
Slide 10: Leveraging differentiation to address healthcare challenges and drive growth
Leveraging differentiation to address healthcare challenges and drive growth Oncology Biopharma 18 million patients are living with 13 million+ Americans skip or cancer today1 delay filling prescriptions due to financial considerations2 10 © 2021 McKesson Corporation. All rights reserved. See Supple
Slide 11: Differentiated Oncology ecosystem built over time
Differentiated Oncology ecosystem built over time Onmark GPO Community oncology The largest community Oncology-focused Internally developed Distributor Group Purchasing oncology network specialty pharmacy oncology technology of Specialty Organization and insights business Pharmaceuticals Radiation a
Slide 12: Scaled Biopharma Services ecosystem
Scaled Biopharma Services ecosystem Prescription Technology Solutions (RxTS) 2006 2017 2018 2020 Pharmacy claims switch Automated Patient assistance Automated hub and automated copay insurer authorization programs services and aligned programs process for drug coverage assets 12 © 2021 McKesson Corp
Slide 13: Oncology and Biopharma Services are key growth drivers
Oncology and Biopharma Services are key growth drivers Track record of value creation Large, growing markets with significant unmet needs Differentiated portfolio of assets Strategically positioned for success 13
Slide 14: Shareholder value creation framework
Shareholder value creation framework Organic • Revenue growth at or above market in all segments growth • Disciplined tactics driving margin efficiency + Operating • Increasingly innovative and efficient investments in areas leverage that drive better care and higher growth and margins + Capital • F
Slide 15: Successful execution of our framework
Successful execution of our framework Adjusted Operating Profit Adjusted EPS Capital Management 1 1 +5% +11% – Cumulative 14% Free Cash Flow Free Cash Flow Returned to Shareholders5 $15B 50% CAGR2 CAGR2 4 FY193 FY224 FY19 3 FY22 FY19 FY22 15 © 2021 McKesson Corporation. All rights reserved. See Supp
Slide 16: 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 accelerate growth imperatives Share
Slide 17: FY22 Adjusted EPS outlook
FY22 Adjusted EPS outlook 1 Midpoint represents 32% growth over FY21 U.S. Vaccine & Kitting Program European Exit Update Central distributor of Moderna and J&J COVID- Strategic intent to fully exit the European 19 vaccines for the U.S. government region on-track Contract with CDC runs through Januar
Slide 18: Key takeaways from today
Key takeaways from today Transforming to a diversified healthcare services company Positioned to win in Oncology and Biopharma Services Focusing on shareholder value creation Executing on our strategy to deliver sustainable profit growth and cash flows Investment thesis for McKesson is compelling 18
Slide 19: McKesson
MCKESSON
Slide 20: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Full Year Fiscal 2021, 2020, and 2019 $ in millions FY 2021 FY 2020 FY 2019 GAAP CASH FLOW CATEGORIES Net cash provided by operating activities $ 4,542 $ 4,374 $ 4,036 Net cash used in investing activities (415) (579) (1,381) Net cash used in financing activities (1,6
Slide 21: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Full Year Fiscal 2021, 2020, and 2019 $ in millions 2021 2020 2019 Income from continuing operations (GAAP) $ (4,339) $ 1,126 $ 254 Net income attributable to noncontrolling interests (GAAP) (199) (220) (221) Income from continuing operations attributable to McKesson
Slide 22: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Full Year Fiscal 2021 and 2019 $ in millions Year Ended March 31, 2021 Year Ended March 31, 2019 As reported As adjusted As reported As adjusted (GAAP) Adjustments (a) (Non-GAAP) (GAAP) Adjustments (a) (Non-GAAP) OPERATING PROFIT (LOSS) U.S. Pharmaceutical $ 2,763 $ (
Slide 23: Supplemental Non-GAAP Financial Information
Supplemental Non-GAAP Financial Information McKESSON CORPORATION 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 Corporatio
Slide 24: Supplemental Non-GAAP Financial Information
Supplemental Non-GAAP Financial Information SUPPLEMENTAL NON-GAAP FINANCIAL INFORMATION (continued) LIFO inventory-related adjustments - LIFO inventory-related non-cash expense or credit adjustments. Gains from antitrust legal settlements - Net cash proceeds representing the Company’s share of antit
Slide 25: Supplemental Information
Supplemental Information These notes refer to the financial metrics and/or defined terms presented on: Slide 15 – Successful execution of our framework 1. Metrics exclude the impacts related to the following items: impact from the separation of Change Healthcare, which was completed in the fourth qu
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