Slide 1: Fiscal 2023 Financial Results, Fiscal 2024 Annual Outlook
McKesson Corporation Fiscal 2023 Financial Results Fiscal 2024 Annual Outlook May 8, 2023
Slide 2: Cautionary Statements
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
Slide 3: Delivering sustainable growth and long-term shareholder value
Delivering sustainable growth and long-term shareholder value Our Vision: To improve care in every setting – one product, one partner, one patient at a time Our Priorities: Focus on Evolve and Expand Sustainable People and Grow the Oncology and Core Culture Portfolio Biopharma Growth Platforms 3 202
Slide 4: Fourth Quarter Fiscal 2023 Results
Fourth Quarter Fiscal 2023 Results
Slide 5: Strong execution leading to sustainable growth
Strong execution leading to sustainable growth Business Summary Company Updates • Fiscal 2023 revenues of $276.7 billion increased 5% • Continued to expand our differentiated oncology and biopharma services platforms • Earnings per diluted share from continuing operations of $25.05 increased $17.79
Slide 6: Consolidated financial information
Consolidated financial information Q4 and Full Year Fiscal 2023 Results Results Q4 YoY Full Year YoY ($ and shares in millions, expect per share amounts) FY 23 Change FY 23 Change Revenues $ 68,910 4% $ 276,711 5% Adjusted Gross Profit $ 3,098 (8) % $ 12,230 (7) % Adjusted Operating Expenses $ (1,87
Slide 7: U.S. Pharmaceutical
U.S. Pharmaceutical Q4 and Full Year Fiscal 2023 Results Results Q4 YoY Full Year YoY ($ in millions) FY 23 Change FY 23 Change U.S. Pharmaceutical Revenues $ 61,676 15 % $ 240,616 13 % Adjusted Segment Operating Profit $ 861 10 % $ 3,106 6% Adjusted Segment Operating Profit Margin 1.40 % (5) bp 1.2
Slide 8: Prescription Technology Solutions
Prescription Technology Solutions Q4 and Full Year Fiscal 2023 Results Results Q4 YoY Full Year YoY ($ in millions) FY 23 Change FY 23 Change Prescription Technology Solutions Revenues $ 1,182 16 % $ 4,387 14 % Adjusted Segment Operating Profit $ 218 35 % $ 679 15 % Adjusted Segment Operating Profit
Slide 9: Medical-Surgical Solutions
Medical-Surgical Solutions Q4 and Full Year Fiscal 2023 Results Results Q4 YoY Full Year YoY ($ in millions) FY 23 Change FY 23 Change Medical-Surgical Solutions Revenues $ 2,689 (6) % $ 11,110 (4) % Adjusted Segment Operating Profit $ 248 (17) % $ 1,159 (4) % Adjusted Segment Operating Profit Margi
Slide 10: International
International Q4 and Full Year Fiscal 2023 Results Results Q4 YoY Full Year YoY ($ in millions) FY 23 Change FY 23 Change International Revenues1 $ 3,363 (61) % $ 20,598 (43) % Adjusted Segment Operating Profit1 $ 80 (46) % $ 498 (29) % Adjusted Segment Operating Profit Margin 2.38 % 66 bp 2.42 % 49
Slide 11: Corporate
Corporate Q4 and Full Year Fiscal 2023 Results Results Q4 YoY Full Year YoY ($ in millions) FY 23 Change FY 23 Change Corporate Adjusted Corporate Expenses $ (149) (19) % $ (457) (21) % Q4 Adjusted Corporate Expenses decreased 19% year-over-year partially driven by lower opioid-related litigation ex
Slide 12: Opioid-Related Costs
Opioid-Related Costs Q4 and Full Year Fiscal 2023 Results Results Q4 Q4 Full Year Full Year ($ in millions) FY 23 FY 22 FY 23 FY 22 Opioid-related costs Claims and litigation charges, net (GAAP-only)1 $ (3) $ 81 $ (8) $ 274 Legal fees and other $ (1) $ 26 $ 36 $ 130 Total expense $ (4) $ 107 $ 28 $
Slide 13: Cash
Cash ($ in millions) YTD Cash Balance Walk Cash Dynamics Balance at March 31, 20221 $ 3,935 Record Free Cash Flow of $4.6 billion Operating cash flow 5,159 Returned $3.9 billion of cash to shareholders year-to-date Capital expenditures (558) Free Cash Flow 4,601 • Repurchased $3.6 billion of shares
Slide 14: Fiscal 2024 Outlook
Fiscal 2024 Outlook On the following slides, McKesson presents an overview of its fiscal 2024 Outlook assumptions. The Company does not provide forward-looking guidance on a GAAP basis as McKesson is unable to provide a quantitative reconciliation of forward-looking Non-GAAP measures to the most dir
Slide 15: Fiscal 2024 Adjusted EPS outlook
Fiscal 2024 Adjusted EPS outlook Solid Business Performance Capital Deployment Fiscal 2024 Adjusted Earnings per Diluted Share guidance Anticipate approximately $3.5 billion in share repurchases range indicates 1% to 4% forecasted growth compared to in Fiscal 2024 prior year Focused investments to a
Slide 16: Solid Adjusted EPS growth in Fiscal 2024
Solid Adjusted EPS growth in Fiscal 2024 $26.10 to $26.90 $25.94 ($2.36) ($0.93) $22.65 See Appendix for additional details FY23 Certain Europe Contribution FY23 Operating Capital Other2 Europe Contribution3 FY24 Items1 Performance Allocation Actual Baseline Outlook See endnotes for details 16 © 202
Slide 17: Fiscal 2024 outlook: Consolidated metrics
Fiscal 2024 outlook Consolidated metrics Metric Fiscal 2024 Outlook Fiscal 2023 Actual Adjusted Earnings per Diluted Share $26.10 to $26.90 $25.94 Revenues 4% to 9% growth 5% growth Adjusted Operating Profit 2% to 6% decline 3% growth Adjusted Operating Profit Excluding Certain Items1 4% to 8% growt
Slide 18: Fiscal 2024 outlook: Segment metrics
Fiscal 2024 outlook Segment metrics U.S. Pharmaceutical Prescription Technology Medical-Surgical International Solutions Solutions FY24 Revenue 9% to 11% growth 7% to 13% growth 1% decline to 3% growth 30% to 34% decline FY24 Adjusted Segment Operating Profit Reported Flat to 3% growth 11% to 15% gr
Slide 19: Long-Term Targets
Long-Term Targets: Raising Adjusted Segment Operating Profit growth targets Long Term Segment Growth Targets1 FY24 FY19 to FY23 Previous Updated Outlook2 CAGR2,3 U.S. Pharmaceutical 4% growth 5% to 7% growth 5% to 8% growth 5% Prescription Technology Solutions 11% growth 11% to 12% growth 11% to 15%
Slide 20: Appendix
Appendix
Slide 21: Endnotes
Endnotes These notes refer to the financial metrics and/or defined terms presented on: Slide 6 – Consolidated financial information 1. Non-GAAP measure representing Net income attributable to noncontrolling interests of $162 million in full year fiscal 2023, adjusted for the proportionate share of a
Slide 22: Endnotes
Endnotes Slide 17 – Fiscal 2024 outlook (Consolidated metrics) 1. Excluding the impacts from the following in FY23: impacts attributable to the U.S. government's COVID-19 vaccine distribution in U.S. Pharmaceutical; impacts attributable to kitting, storage, and distribution of ancillary supplies and
Slide 23: Fiscal 2023 Certain Items and Europe
Fiscal 2023 Certain Items and Europe Adjusted Adjusted Earnings Operating Profit per Diluted Share COVID-19 vaccine distribution for U.S. government $149 million $0.78 Kitting, storage, and distribution of ancillary supplies for U.S. government and $216 million $1.12 COVID-19 tests Net losses associ
Slide 24: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Q4 and YTD Fiscal 2023 and Fiscal 2022 McKESSON CORPORATION Schedule 2 RECONCILIATION OF GAAP OPERATING RESULTS TO ADJUSTED RESULTS (NON-GAAP) (unaudited) (in millions, except per share amounts) Three Months Ended March 31, Year Ended March 31, 2023 2022 Change 2023 2
Slide 25: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Q4 and YTD Fiscal 2023 and Fiscal 2022 Schedule 2 McKESSON CORPORATION (Continued) RECONCILIATION OF GAAP OPERATING RESULTS TO ADJUSTED RESULTS (NON-GAAP) (unaudited) (in millions, except per share amounts) Three Months Ended March 31, Year Ended March 31, 2023 2022 C
Slide 26: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Q4 and YTD Fiscal 2023 and Fiscal 2022 McKESSON CORPORATION Schedule 2 RECONCILIATION OF GAAP OPERATING RESULTS TO ADJUSTED RESULTS (NON-GAAP) (Continued) (unaudited) (in millions) Three Months Ended March 31, Year Ended March 31, 2023 2022 Change 2023 2022 Change Gro
Slide 27: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Q4 and YTD Fiscal 2023 and Fiscal 2022 McKESSON CORPORATION Schedule 2 RECONCILIATION OF GAAP OPERATING RESULTS TO ADJUSTED RESULTS (NON-GAAP) (Continued) (unaudited) (in millions) Three Months Ended March 31, Year Ended March 31, 2023 2022 Change 2023 2022 Change Los
Slide 28: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Q4 and YTD Fiscal 2023 and Fiscal 2022 McKESSON CORPORATION Schedule 2 RECONCILIATION OF GAAP OPERATING RESULTS TO ADJUSTED RESULTS (NON-GAAP) (Continued) (unaudited) (in millions) (a) Certain computations may reflect rounding adjustments. (b) Adjusted earnings per di
Slide 29: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Q4 Fiscal 2023 and Q4 Fiscal 2022 McKESSON CORPORATION Schedule 3 RECONCILIATION OF GAAP SEGMENT OPERATING RESULTS TO ADJUSTED RESULTS (NON-GAAP) (unaudited) (in millions) Three Months Ended March 31, 2023 2022 As reported As adjusted Change Foreign Foreign As reporte
Slide 30: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation YTD Fiscal 2023 and YTD Fiscal 2022 McKESSON CORPORATION Schedule 3 RECONCILIATION OF GAAP SEGMENT OPERATING RESULTS TO ADJUSTED RESULTS (NON-GAAP) (Continued) (unaudited) (in millions) Year Ended March 31, 2023 2022 As reported As adjusted Change Foreign Foreign As r
Slide 31: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation YTD Fiscal 2023 and YTD Fiscal 2022 McKESSON CORPORATION Schedule 6 RECONCILIATION OF GAAP CASH FLOW TO FREE CASH FLOW (NON-GAAP) (unaudited) (in millions) Year Ended March 31, 2023 2022 Change GAAP CASH FLOW CATEGORIES Net cash provided by operating activities $ 5,15
Slide 32: Financial Statement Notes
Financial Statement Notes McKESSON CORPORATION 1 of 3 FINANCIAL STATEMENT NOTES 1. Transaction-related expenses and adjustments for the year ended March 31, 2023 includes pre-tax net gains of $66 million ($35 million after-tax) to remeasure assets and liabilities held for sale to fair value less cos
Slide 33: Financial Statement Notes
Financial Statement Notes FINANCIAL STATEMENT NOTES (continued) 2 of 3 7. Restructuring, impairment, and related charges, net for the three months and year ended March 31, 2023 includes pre-tax charges of $125 million ($95 million after-tax) and $209 million ($160 million after-tax), respectively, p
Slide 34: Financial Statement Notes
Financial Statement Notes FINANCIAL STATEMENT NOTES (continued) 3 of 3 13. Net losses (gains) associated with McKesson Ventures' equity investments for the years ended March 31, 2023 and 2022 included pre-tax net losses of $36 million ($27 million after-tax) and pre-tax net gains of $98 million ($72
Slide 35: Supplemental Non-GAAP Financial Information
Supplemental Non-GAAP Financial Information McKESSON CORPORATION 1 of 4 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 Cor
Slide 36: Supplemental Non-GAAP Financial Information
Supplemental Non-GAAP Financial Information SUPPLEMENTAL NON-GAAP FINANCIAL INFORMATION (continued) 2 of 4 • Adjusted Earnings per Diluted Share Excluding Certain Items (Non-GAAP): We define Adjusted Earnings per Diluted Share Excluding Certain Items as Adjusted Earnings (Non-GAAP), excluding the im
Slide 37: Supplemental Non-GAAP Financial Information
Supplemental Non-GAAP Financial Information SUPPLEMENTAL NON-GAAP FINANCIAL INFORMATION (continued) 3 of 4 LIFO inventory-related adjustments - LIFO inventory-related non-cash charges or credit adjustments. Gains from antitrust legal settlements - Net cash proceeds representing the Company’s share o
Slide 38: Supplemental Non-GAAP Financial Information
Supplemental Non-GAAP Financial Information SUPPLEMENTAL NON-GAAP FINANCIAL INFORMATION (continued) 4 of 4 The Company believes the presentation of Non-GAAP measures provides useful supplemental information to investors with regard to its operating performance, as well as assists with the comparison