Cardinal Health, Inc. · NYSE:CAH
Cardinal Health — Q3 2016 Earnings Presentation
22 slides from Cardinal Health's earnings presentation, Apr 28, 2016
Slide 1: Q3 FY2016 Earnings Investor/Analyst call
Q3 FY2016 Cardinal Health, Inc. Earnings Investor/Analyst call April 28, 2016 © Copyright 2016, Cardinal Health, Inc. or one of its subsidiaries. All rights reserved
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: Q3 FY16 Financial summary
Q3 FY16 Financial summary GAAP Basis ($M) Non-GAAP Basis ($M) Q3 FY16 Q3 FY15 Q3 FY16 Q3 FY15 Revenue $30,662 $25,375 % change 21% increase YoY 18% increase YoY Gross Margin $1,689 $1,459 $1,702 $1,459 % change 16% increase YoY 12% increase YoY 17% increase YoY 12% increase YoY Ratio to revenue 5.51
Slide 4: Q3 FY16 Pharmaceutical segment business analysis
Q3 FY16 Pharmaceutical segment business analysis Q3 FY16 ($M) Q3 FY15 ($M) YoY Change Revenue $27,527 $22,605 22% Segment Profit $660 $567 16% Segment 2.40% 2.51% Profit Margin Highlights: • Revenue for the Pharmaceutical segment increased 22 percent to $27.5 billion due to growth from new and exist
Slide 5: Q3 FY16 Medical segment business analysis
Q3 FY16 Medical segment business analysis Q3 FY16 ($M) Q3 FY15 ($M) YoY Change Revenue $3,138 $2,774 13% Segment Profit $128 $102 26% Segment 4.08% 3.66% Profit Margin Highlights: • Revenue for the Medical segment increased 13 percent to $3.1 billion due to the net contribution from acquisitions as
Slide 6: Q3 FY16 GAAP to non-GAAP reconciliation
Q3 FY16 GAAP to non-GAAP reconciliation Q3 FY 2016 Q3 FY 2015 Gross Operating Net Earnings 1 1 Gross Operating Net Earnings 1 Diluted EPS Diluted EPS 1 Margin ($M) Earnings ($M) ($M) Margin ($M) Earnings ($M) ($M) GAAP $1,689 $656 $386 $1.17 $1,459 $591 $365 $1.09 LIFO charges/(credits) 12 12 8 0.02
Slide 7: FY2016 Outlook
FY2016 Outlook © Copyright 2016, Cardinal Health, Inc. or one of its subsidiaries. All rights reserved
Slide 8: FY16 financial expectations
FY16 financial expectations FY2016 Outlook FY2015 Actual Mid- to high-teens Revenue percentage growth vs. PY $103B Non-GAAP $5.17 to $5.27 $4.381 Diluted EPS 1Non-GAAP diluted EPS from continuing operations Red font indicates a change since previous guidance. 8 © Copyright 2016, Cardinal Health, Inc
Slide 9: FY16 corporate assumptions
FY16 corporate assumptions FY2016 Outlook FY2015 Actual Non-GAAP effective tax rate 35.5% - 36.5%1 37.2% Diluted weighted average Shares outstanding 330M – 331M 335M Interest and other, net $185M - $200M $134M Capital expenditures $450M - $480M $300M Acquisition-related intangible amortization ~$348
Slide 10: Q3 FY2016 trailing five quarters, Year-to-Date Financial summary and GAAP to Non-GAAP reconciliation statements
Q3 FY2016 trailing five quarters, Year-to-Date Financial summary and GAAP to Non-GAAP reconciliation statements © Copyright 2016, Cardinal Health, Inc. or one of its subsidiaries. All rights reserved
Slide 11: Q3 FY2016 Segment analysis
Q3 FY2016 Segment analysis Pharmaceutical segment Q3 FY15 Q4 FY15 Q1 FY16 Q2 FY16 Q3 FY16 Revenue 22,605 24,676 25,140 28,287 27,527 ($M) Segment Profit 567 535 657 627 660 ($M) Medical segment Q3 FY15 Q4 FY15 Q1 FY16 Q2 FY16 Q3 FY16 Revenue 2,774 2,855 2,919 3,162 3,138 ($M) Segment Profit 102 103
Slide 12: Year-to-Date Financial summary
Year-to-Date Financial summary1 GAAP Basis ($M) Non-GAAP Basis ($M) YTD FY16 YTD FY15 YTD FY16 YTD FY15 Revenue $90,162 $74,983 % change 20% increase YoY 10% increase YoY Gross Margin $4,877 $4,254 $4,929 $4,254 % change 15% increase YoY 9% increase YoY 16% increase YoY 9% increase YoY Ratio to reve
Slide 13: GAAP / Non-GAAP Reconciliation: Third Quarter 2016
Cardinal Health, Inc. and Subsidiaries GAAP / Non-GAAP Reconciliation Third Quarter 2016 Net Earnings Diluted EPS Gross Net Earnings attributable Diluted EPS attributable Margin Operating Provision for attributable to Cardinal attributable to Cardinal Gross Grow th Operating Earnings Earnings Before
Slide 14: GAAP / Non-GAAP Reconciliation: Fiscal Year 2015
Cardinal Health, Inc. and Subsidiaries GAAP / Non-GAAP Reconciliation Operating Earnings Before Provision Earnings Earnings from Diluted EPS Diluted EPS Earnings Incom e Taxes for from Continuing from from Continuing Operating Grow th and Discontinued Incom e Continuing Operations Continuing Operati
Slide 15: Total Company Business Analysis
Cardinal Health, Inc. and Subsidiaries Total Com pany Business Analysis Non-GAAP Third Quarter Third Quarter (in millions) 2016 2015 2016 2015 Revenue Amount $ 30,662 $ 25,375 Grow th rate 21 % 18 % Gross m argin Amount1 $ 1,689 $ 1,459 $ 1,702 $ 1,459 Grow th rate 16 % 12 % 17 % 12 % Operating earn
Slide 16: Segment Business Analysis Third Quarter
Cardinal Health, Inc. and Subsidiaries Segm ent Business Analysis Third Quarter Third Quarter (in millions) 2016 2015 (in millions) 2016 2015 Pharm aceutical Medical Revenue Revenue Amount $ 27,527 $ 22,605 Amount $ 3,138 $ 2,774 Grow th rate 22 % 20 % Grow th rate 13 % 4% Segm ent profit Segm ent p
Slide 17: Segment Business Analysis Year-to-Date
Cardinal Health, Inc. and Subsidiaries Segm ent Business Analysis Year-to-Date Year-to-Date (in millions) 2016 2015 (in millions) 2016 2015 Pharm aceutical Medical Revenue Revenue Amount $ 80,954 $ 66,440 Amount $ 9,220 $ 8,540 Grow th rate 22 % 11 % Grow th rate 8% 5% Segm ent profit Segm ent profi
Slide 18: GAAP / Non-GAAP Reconciliation: Return on Equity, Third Quarter
Cardinal Health, Inc. and Subsidiaries GAAP / Non-GAAP Reconciliation Third Quarter (in millions) 2016 2015 GAAP return on equity 23 % 23.4 % Non-GAAP return on equity Net earnings attributable to Cardinal Health, Inc. $ 386 $ 365 LIFO charges/(credits), net of tax 8 - Restructuring and employee sev
Slide 19: GAAP / Non-GAAP Reconciliation: Return on Equity, Year-to-Date
Cardinal Health, Inc. and Subsidiaries GAAP / Non-GAAP Reconciliation Year-to-Date (in millions) 2016 2015 GAAP return on equity 22.3 % 19.5 % Non-GAAP return on equity Net earnings attributable to Cardinal Health, Inc. $ 1,095 $ 920 LIFO charges/(credits), net of tax 31 - Restructuring and employee
Slide 20: GAAP / Non-GAAP Reconciliation: Effective Tax Rate
Cardinal Health, Inc. and Subsidiaries GAAP / Non-GAAP Reconciliation Third Quarter Year-to-Date (in millions) 2016 2015 2016 2015 GAAP effective tax rate 36.9 % 34.6 % 35.5 % 36.3 % Non-GAAP effective tax rate Earnings before income taxes $ 612 $ 558 $ 1,700 $ 1,444 LIFO charges/(credits) 12 - 51 -
Slide 21: GAAP / Non-GAAP Reconciliation: Fiscal Year Tax Rate
Cardinal Health, Inc. and Subsidiaries GAAP / Non-GAAP Reconciliation Fiscal Year (in millions) 2015 GAAP effective tax rate from continuing operations 38.4 % Non-GAAP effective tax rate from continuing operations Earnings before income taxes and discontinued operations $ 1,967 Restructuring and emp
Slide 22: Definitions
Cardinal Health, Inc. and Subsidiaries Definitions Debt: long-term obligations plus short-term borrow ings. Debt to Total Capital: debt divided by (debt plus total Cardinal Health, Inc. shareholders’ equity). Interest and Other, net: other (income)/expense, net plus interest expense, net. Net Debt: