Cvs Health Corporation · NYSE:CVS
Cvs Health — Q3 2020 Earnings Presentation
22 slides from Cvs Health's earnings presentation, Nov 6, 2020
Slide 1: Third Quarter 2020 Earnings conference call
THIRD QUARTER 2020 Earnings conference call November 6, 2020 Larry Merlo President & Chief Executive Officer Eva Boratto Executive Vice President & Chief Financial Officer ©2019 CVS Health and/or one of its affiliates. Confidential and proprietary.
Slide 2: Cautionary statement concerning forward-looking statements
Cautionary statement concerning forward-looking statements This presentation includes forward-looking statements. The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements made by or on behalf of CVS Health Corporation. By their nature, all forward-lo
Slide 3: Transforming health care for consumers
Transforming health care for consumers to meet people where they are We are a different kind of health company with a powerful combination of expertise and health services that is making health care more accessible, affordable and better + + Industry leading Industry leading Unmatched local Managed
Slide 4: Q3'20 highlights
Q3’20 highlights Keeping us on our long-term growth trajectory; Raising FY Adj. EPS guidance to $7.35 - $7.45 Q3 Revenue Raising FY guidance Q3 Adj EPS of $1.66 growth of 3.5% Adj EPS raised to $7.35 – $7.45 Reflects Primarily in Cash flow from operations raised to outperformance in PSS HCB and Reta
Slide 5: Accelerating growth through diversified assets
Accelerating growth through diversified assets Aetna Connected Plan Next Gen Diabetes Management Innovative Plan Designs • • Driving pharmacy penetration in 2021 Aetna • First-of-its-kind health care benefits Designed to improve health outcomes to people living with diabetes (34M in the book to deli
Slide 6: Supporting local community health
Supporting local community health Leadership in diagnostic testing and vaccination COVID-19 Testing Return ReadySM Vaccinations >6M >70clients Expect to play a significant role in all vaccine administration: and growing • Nearly 13M seasonal flu vaccines administered 40% of clients were not previous
Slide 7: Transforming health care through new health products and services
Transforming health care through new health products and services Pharmacist Panels & Health Advisor HealthHUB® Virtual Care • Operating in >1,000 stores • Nearly 450 HealthHUB locations in ~30 states • Complementing our HealthHUB locations to through end of October meet consumers where they are • I
Slide 8: Q3 2020 Financial Review
Q3 2020 Financial Review 8 ©2020 CVS Health and/or one of its affiliates. Confidential and proprietary.
Slide 9: Consolidated results
Q3 RESULTS Consolidated results in millions, Q3 2020 Q3 2019 Change % Interest expense of $731 million except per share data Total revenues $67,056 $64,810 3.5% Adjusted effective tax rate of 26.1% Adjusted operating income $3,622 $3,947 (8.2%) Weighted-average diluted share count: 1,315 million sha
Slide 10: Cash flow and capital allocation
Cash flow and capital allocation Third quarter results demonstrate strong cash flow from operations and liquidity position Strong cash generation Ample liquidity with access Continue to prioritize paying to ~$9.6 billion down debt • $12.3 billion YTD cash flow from operations, ~20% growth • ~$3.6 bi
Slide 11: Health Care Benefits segment
Q3 RESULTS Health Care Benefits segment Revenue growth primarily driven by strong in millions, except MBR Q3 2020 Q3 2019 Change % membership growth in Government products and HIF Total revenues $18,698 $17,181 8.8% Adjusted operating income decline primarily driven by the planned COVID-19 related i
Slide 12: Pharmacy Services segment
Q3 RESULTS Pharmacy Services segment Revenue decline driven by previously disclosed client losses and continued price compression, partially offset in millions Q3 2020 Q3 2019 Change % by growth in Specialty pharmacy and brand inflation • Specialty pharmacy revenue growth of 6.5% YoY due to net new
Slide 13: 2021 PBM selling season
AS OF OCTOBER 2020 2021 PBM selling season ($, billions) ~$50 billion up for renewal in 2021 4.6 (1.3) selling season 3.3 Selling season largely complete Retention rate of ~98%1 Driving pharmacy penetration in 2021 Aetna book to deliver nearly $300M in incremental revenue2 Gross Net new business Non
Slide 14: Retail / LTC segment
Q3 RESULTS Retail / LTC segment Revenue growth driven primarily by increased prescription volume, higher Front Store sales, increased in millions Q3 2020 Q3 2019 Change % diagnostic testing and brand inflation, partially offset by continued reimbursement pressure and impact of recent Total revenues
Slide 15: Retail pharmacy
Q3 RESULTS Retail pharmacy Change vs. Q3 2019 Same store sales growth driven by strength in Pharmacy; Retail pharmacy script share increased Same store sales1 5.7% 6.7% Growth in prescriptions filled primarily driven by Pharmacy sales continued adoption of patient care programs. 5.8% Prescriptions f
Slide 16: Estimated impact of COVID-19 on Q3 financials
Estimated impact of COVID-19 on Q3 financials Pharmacy Services Retail / LTC Health Care Benefits • Prescription volume • Prescription volume • Planned investments impacted by reduction in impacted by reduction in made in our customers new therapy prescriptions new therapy prescriptions and members
Slide 17: October Business Update
October Business Update 17 ©2020 CVS Health and/or one of its affiliates. Confidential and proprietary.
Slide 18: October business update
October business update 2020 vs. 2019 June July August September3 October3 Retail same store sales1 7.1% 4.6% 4.6% 8.0% 3.9% October Commentary Reduced cough and cold sales in Front Pharmacy sales 9.2% 4.5% 5.5% 10.2% 5.1% Store, as well as lower prescriptions and MinuteClinic® visits given lower fl
Slide 19: 2020 Guidance
2020 Guidance 19 ©2020 CVS Health and/or one of its affiliates. Confidential and proprietary.
Slide 20: Enterprise Outlook
Guidance: 2020 Full Year Enterprise Outlook Nov 6th Sept 15th in millions, except per share data FY20 Guidance FY20 Guidance GAAP EPS $5.60 – $5.70 $5.16 – $5.29 Adjusted EPS $7.35 – $7.45 $7.14 – $7.27 Cash flow from operations $12,750 – $13,250 $11,000 – $11,500 Raised FY20 Adj EPS reflects outper
Slide 21: Enterprise Outlook: 2020 Fourth Quarter
2020 Fourth Quarter Enterprise Outlook Fourth Quarter Outlook HCB: • Expect medical utilization to continue at more normal levels with select geographies affected by COVID-19 waves • Investments discussed have greater impact in Q4 relative to Q3 • Expect to incur seasonal costs in Q4 related to read
Slide 22: ¥ CVSHealth.
¥ CVSHealth.