McKesson Corporation · NYSE:MCK
McKesson — Q4 FY2018 Earnings Presentation
26 slides from McKesson's earnings presentation, May 24, 2018
Slide 1: Fiscal 2018 Financial Performance and Fiscal 2019 Annual Outlook
McKesson Corporation Fiscal 2018 Financial Performance Fiscal 2019 Annual Outlook Financial Results and Company Highlights May 24, 2018
Slide 2: Forward-Looking Statements
Forward-Looking Statements Some of the information in this presentation is not historical in nature and may constitute forward-looking statements, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements may be identified by the
Slide 3: Opening Remarks
Opening Remarks John Hammergren Chairman and Chief Executive Officer 3 Q4 FY18 Earnings Release May 24, 2018
Slide 4: Highlights
Highlights Strong Finish to Fiscal 2018; Multi-Year Strategic Growth Initiative Launched • Solid Fiscal 2018 performance with 5% revenue growth and Adjusted Earnings of $12.62 per diluted share – Fourth quarter Adjusted Earnings of $3.49 per diluted share, driven by lower tax rate and strong operati
Slide 5: Financial Overview
Financial Overview Britt Vitalone Executive Vice President and Chief Financial Officer 5 Q4 FY18 Earnings Release May 24, 2018
Slide 6: Full Year Fiscal 2018 GAAP to Adjusted EPS Reconciliation
Full Year Fiscal 2018 GAAP to Adjusted Earnings Per Diluted Share Reconciliation GAAP Earnings Per Diluted Share $0.30 Adjustments Amortization of acquisition-related intangibles $2.60 Acquisition-related expenses and adjustments $1.20 LIFO inventory related credits ($0.31) Restructuring charges $2.
Slide 7: Q4 Fiscal 2018 Impairment Charges
Q4 Fiscal 2018 Impairment Charges • The company recognized non-cash after-tax goodwill and long-lived asset impairment charges of approximately $1.7 billion primarily related to McKesson’s European and Canadian retail businesses. • European charges driven by a weakening script growth outlook in the
Slide 8: Condensed Consolidated Statement of Earnings
Condensed Consolidated Statement of Earnings Full Year Fiscal 2018 Adjusted Results* Fiscal YoY Constant YoY ($ in millions, except per share amounts) 2018 Change Currency Change Revenues $208,357 5% $206,781 4% Gross Profit $11,098 - $10,962 (2)% Operating Expense $(7,600) 5% $(7,483) 3% Income fro
Slide 9: Segment Results: Distribution Solutions
Segment Results: Distribution Solutions Full Year Fiscal 2018 Adjusted Results* Fiscal YoY Constant YoY ($ in millions) 2018 Change Currency Change North American Pharmaceutical Distribution & Services $174,186 6% $173,934 6% International Pharmaceutical Distribution & Services $27,320 10% $25,996 5
Slide 10: Segment Results: Technology Solutions & Corporate
Segment Results: Technology Solutions & Corporate Full Year Fiscal 2018 Adjusted Results* Fiscal YoY Constant YoY ($ in millions) 2018 Change Currency Change Technology Solutions Revenues $240 (91)% $240 (91)% Change Healthcare Equity $272 - $272 - Operating Profit $304 (49)% $304 (49)% Corporate Op
Slide 11: Cash
Cash Cash Balance Walk Cash Dynamics ($ in millions) o Working capital: Balance at 3/31/17 $2,783 o Days sales outstanding decreased 2 days from Net Working Capital 451 the prior year to 25 days Other Operating Cash Flows 3,894 o Days sales in inventory was flat at 30 days Cash From Operations 4,345
Slide 12: Items of Interest
Items of Interest • Share repurchase authorization increase of $4.0 billion; total authorization now $5.1 billion • New segment reporting effective Fiscal 2019 – U.S. Pharmaceutical and Specialty Solutions – European Pharmaceutical Solutions – Medical-Surgical Solutions – Other • Multi-year strategi
Slide 13: FY19 Outlook
FY19 Outlook On the following slides, McKesson presents an overview of its Fiscal 2019 Outlook assumptions. These assumptions consist of certain non-GAAP measures. As outlined in the company’s May 24, 2018 press release, McKesson no longer provides forward-looking guidance on a GAAP basis as the com
Slide 14: Fiscal 2019 Adjusted Earnings Outlook
Fiscal 2019 Adjusted Earnings Outlook Fiscal 2019 Fiscal 2018 Outlook Actual Up mid-single digit Revenues $208.4 billion percent growth Down slightly to Income from Continuing Operations before up mid-single digit $3.9 billion Interest Expense and Income Taxes percent growth Earnings per Share $13.0
Slide 15: Fiscal 2019 Segment Adjusted Earnings Outlook
Fiscal 2019 Segment Adjusted Earnings Outlook Year-over-Year Percent Growth Revenues Operating Profit U.S. Pharmaceutical and Specialty Solutions Up low- to mid-single digit Flat to down mid-single digit European Pharmaceutical Solutions Flat to up mid-single digit Flat to up mid-single digit Medica
Slide 16: Fiscal 2019 Adjusted Earnings Assumptions
Fiscal 2019 Adjusted Earnings Assumptions ($ and shares in millions) FY19 Outlook Down low-double digit percent Corporate Expenses growth year over year Income From Equity Method Investment Up low- to mid-single digit percent in Change Healthcare growth year over year Interest Expense Decline year o
Slide 17: Appendix
MSKESSON Appendix
Slide 18: GAAP to Non-GAAP Reconciliation: Q4 Fiscal 2018
GAAP to Non-GAAP Reconciliation Q4 Fiscal 2018 Note: Please see footnote information on the following slide. 18 Q4 FY18 Earnings Release May 24, 2018
Slide 19: GAAP to Non-GAAP Reconciliation: Q4 Fiscal 2017
GAAP to Non-GAAP Reconciliation Q4 Fiscal 2017 19 Q4 FY18 Earnings Release May 24, 2018
Slide 20: GAAP to Non-GAAP Reconciliation: Full Year Fiscal 2018
GAAP to Non-GAAP Reconciliation Full Year Fiscal 2018 Note: Please see footnote information on the following slide. 20 Q4 FY18 Earnings Release May 24, 2018
Slide 21: GAAP to Non-GAAP Reconciliation: Full Year Fiscal 2017
GAAP to Non-GAAP Reconciliation Full Year Fiscal 2017 21 Q4 FY18 Earnings Release May 24, 2018
Slide 22: GAAP to Non-GAAP Reconciliation: Q4 Fiscal 2018 and Q4 Fiscal 2017
GAAP to Non-GAAP Reconciliation Q4 Fiscal 2018 and Q4 Fiscal 2017 Note: Please see footnote information on the following slide. 22 Q4 FY18 Earnings Release May 24, 2018
Slide 23: GAAP to Non-GAAP Reconciliation: Q4 Fiscal 2018 and 2017 (continued)
GAAP to Non-GAAP Reconciliation Q4 Fiscal 2018 and Q4 Fiscal 2017 (continued) 23 Q4 FY18 Earnings Release May 24, 2018
Slide 24: GAAP to Non-GAAP Reconciliation: Full Year 2018 and 2017
GAAP to Non-GAAP Reconciliation Full Year Fiscal 2018 and Full Year Fiscal 2017 Note: Please see footnote information on the following slide. 24 Q4 FY18 Earnings Release May 24, 2018
Slide 25: GAAP to Non-GAAP Reconciliation: Full Year 2018 and 2017 (continued)
GAAP to Non-GAAP Reconciliation Full Year Fiscal 2018 and Full Year Fiscal 2017 (continued) 25 Q4 FY18 Earnings Release May 24, 2018
Slide 26: Reconciliation of GAAP amounts to Free Cash Flow
Reconciliation of GAAP amounts to Free Cash Flow ($ in millions) Free cash flow is not defined under U.S. generally accepted accounting principles (GAAP). Therefore, it should not be considered a substitute for income or cash flow data prepared in accordance with U.S. GAAP and may not be comparable