Cardinal Health, Inc. · NYSE:CAH

Cardinal Health — Q3 2024 Earnings Presentation

24 slides from Cardinal Health's earnings presentation, May 2, 2024

  1. Slide 1: Q3 FY24 Earnings

    Q3 FY24 Earnings Cardinal Health, Inc. May 2, 2024 © 2024 Cardinal Health. All Rights Reserved.

  2. Slide 2: Cautions Concerning Forward-Looking Statements

    • Q3 FY24 Earnings 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 identified by words such as "expect,"

  3. Slide 3: Q3 results

    Q3 results 3 © 2024 Cardinal Health. All Rights Reserved.

  4. Slide 4: Q3 FY24 financial summary

    • Q3 FY24 Earnings Q3 FY24 financial summary GAAP Basis ($M) Non-GAAP Basis ($M) Q3 FY24 Q3 FY24 Revenue $54,911 N/A % change 9% Gross Margin $1,947 $1,947 % change 9% 9% SG&A $1,282 $1,281 % change 9% 9% Operating Earnings $367 $666 % change N.M. 10% Interest and Other1 $26 N/A % change (7)% Net Ea

  5. Slide 5: Pharmaceutical and Specialty Solutions

    • Q3 FY24 Earnings Pharmaceutical and Specialty Solutions Q3 FY24 results Q3 FY24 ($M) Q3 FY23 ($M) YoY change Revenue $50,651 $46,496 9% Segment profit $580 $560 4% Segment profit margin 1.15% 1.20% (5) bps Drivers: Revenue Segment profit + Brand and specialty pharmaceutical sales growth + Generics

  6. Slide 6: Global Medical Products and Distribution

    • Q3 FY24 Earnings Global Medical Products and Distribution Q3 FY24 results Q3 FY24 ($M) Q3 FY23 ($M) YoY change Revenue $3,113 $2,989 4% Segment profit $20 $(46) N.M. Segment profit margin 0.64% -1.54% +218 bps Drivers: Revenue Segment profit + Volume growth from existing customers + Improvement in

  7. Slide 7: Other: NPHS, at-Home Solutions and OptiFreight

    • Q3 FY24 Earnings Other: NPHS, at-Home Solutions and OptiFreight® Q3 FY24 results Q3 FY24 ($M) Q3 FY23 ($M) YoY change Revenue $1,167 $1,025 14% Segment profit $111 $106 5% Segment profit margin 9.51% 10.34% -83 bps Drivers: Revenue Segment profit + Growth across the three operating segments + Perf

  8. Slide 8: Outlook

    Outlook 8 © 2024 Cardinal Health. All Rights Reserved.

  9. Slide 9: FY24 financial expectations

    • Q3 FY24 Earnings FY24 financial expectations FY24 FY23 outlook actual Non-GAAP EPS $7.30 - $7.40 $5.79 Previously $7.20 - $7.35 Interest and Other $50M - $65M $89M Non-GAAP ETR 22.0% - 23.0% 22.8% Previously 23.0% - 24.0% Diluted weighted average shares ~247M 262M outstanding Share repurchases ~$7

  10. Slide 10: FY24 segment guidance

    • Q3 FY24 Earnings FY24 segment guidance Revenue and segment profit Pharmaceutical Revenue growth of Segment profit growth of and Specialty Solutions 10% to 12% 8.5% to 9.5% Previously 7% to 9% Global Medical Products Revenue growth of Segment profit of and Distribution ~2% ~$65M Revenue growth of S

  11. Slide 11: Preliminary FY25 financial expectations

    • Q3 FY24 Earnings Preliminary FY25 financial expectations FY25 outlook Non-GAAP EPS At least $7.50 Pharmaceutical and Specialty Solutions At least 1% Segment profit growth Global Medical Products and Distribution ~$175M Segment profit Other: NPHS, at-Home Solutions and OptiFreight® ~10% Segment pro

  12. Slide 12: Strategic priorities

    • Q3 FY24 Earnings Strategic priorities Ruthless prioritization, resilient core and relentless focus 1 2 3 4 Build upon the Execute Medical Accelerate Relentless growth and Improvement growth in key focus on resiliency of Plan initiatives areas shareholder Pharmaceutical value creation and Specialty

  13. Slide 13: GMPD Improvement Plan

    • Q3 FY24 Earnings GMPD Improvement Plan Growth Target Strategic priorities Areas of focus 1 FY23-FY26 Mitigate inflation and global Offset with mitigation initiatives 1 supply chain constraints • Exit FY24 offsetting gross impact ~$300M 2 Grow Cardinal Health Brand Optimize and grow Cardinal Health

  14. Slide 14: Our long-term targets: FY24-26

    Q3 FY24 Earnings Our long-term targets: FY24-26 (FY23 Baseline) 4% to 6% ~$300M 8% to 10% at least 12% to 14% Growth CAGR in FY26 Growth CAGR $2.25B Growth CAGR Pharma and Share non-GAAP diluted Specialty Solutions GMPD Other Segment Profit Segment Profit Segment Profit repurchases1 EPS growth No ch

  15. Slide 15: Disciplined Capital Allocation

    Q3 FY24 Earnings Table stakes FY24 Progress Investing back into the business to drive ~$320M in capex YTD organic growth Disciplined Maintain investment Three positive outlook updates from credit rating agencies Completed 3rd annual Capital grade balance sheet opioid settlement payment and certain s

  16. Slide 16: Compelling investment thesis

    Q3 FY24 Earnings Compelling investment thesis Moving healthcare forward Pharmaceutical and Medical Products Other Growth Cash flow and Value creation Specialty Solutions and Distribution Areas capital deployment Relentlessly focused Resilient and growing business, Executing our plan to Favorable lon

  17. Slide 17: Appendix

    Appendix 17 © 2024 Cardinal Health. All Rights Reserved.

  18. Slide 18: GAAP / Non-GAAP Reconciliation - Third Quarter 2024

    Cardinal Health, Inc. and Subsidiaries 1 GAAP / Non-GAAP Reconciliation Gross Operating Earnings Net Diluted 2 3 3 Margin SG&A Earnings Before Provision for Earnings Effective EPS Gross Growth Growth Operating Growth Income Income Net Growth Tax Diluted Growth 2 3 3 Margin Rate SG&A Rate Earnings Ra

  19. Slide 19: GAAP / Non-GAAP Reconciliation - Fiscal Year 2023

    Cardinal Health, Inc. and Subsidiaries GAAP / Non-GAAP Reconciliation 1 Gross Operating Earnings Net Diluted 2 3 Margin SG&A Earnings Before Provision for Earnings Effective EPS3 Gross Growth Growth Operating Growth Income Income Net Growth Tax Diluted Growth 2 3 3 Margin Rate SG&A Rate Earnings Rat

  20. Slide 20: GAAP Cash Flow to Non-GAAP Adjusted Free Cash Flow

    Cardinal Health, Inc. and Subsidiaries GAAP / Non-GAAP Reconciliation - GAAP Cash Flow to Non-GAAP Adjusted Free Cash Flow Third Quarter Year-to-Date (in millions) 2024 2023 2024 2023 GAAP - Cash Flow Categories Net cash provided by/(used in) operating activities $ (49) $ 1,361 $ 1,685 $ 1,981 Net c

  21. Slide 21: Segment Information

    Cardinal Health, Inc. and Subsidiaries Segment Information Third Quarter Global Medical Products and Pharmaceutical and Specialty Solutions Distribution Other (in millions) 2024 2023 2024 2023 2024 2023 Revenue Amount $ 50,651 $ 46,496 $ 3,113 $ 2,989 $ 1,167 $ 1,025 Growth rate 9% 14 % 4% (8)% 14 %

  22. Slide 22: 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-GAAP metrics. The Company does not provide outlook on a GAAP basis because the items that the Company excludes from GAAP to calculate the comparable non-GAAP me

  23. Slide 23: Definitions

    Cardinal Health, Inc. and Subsidiaries Definitions Growth rate calculation: growth rates in this report are determined by dividing the difference between current-period results and prior-period results by prior-period results. Interest and Other, net: other (income)/expense, net plus interest expens

  24. Slide 24: Definitions continued

    Cardinal Health, Inc. and Subsidiaries Definitions continuned 1 LIFO charges and credits are excluded because the factors that drive last-in first-out ("LIFO") inventory charges or credits, such as pharmaceutical manufacturer price appreciation or deflation and year-end inventory levels (which can b

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