Slide 1: McKesson Corporation Q1 Fiscal 2022 Financial Results
McKesson Corporation Q1 Fiscal 2022 Financial Results August 4, 2021
Slide 2: 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 “believes,” “expects,”
Slide 3: Accelerating our strategic priorities, delivering growth and long-term shareholder value
Accelerating our strategic priorities, delivering 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: 1 2 3 4 Focus on Strengthen Streamline Invest in Oncology People and the Core the Business and Bioph
Slide 4: Advancing our scaled and connected ecosystems with Innovation and Execution
Advancing our scaled and connected ecosystems with Innovation and Execution Oncology Biopharma Services • Distribution scale & execution Providers • Patient access solutions • GPO services • Automated hub services • Practice management • Pharmacy claims switch Pharmacies Biopharma • Real-world insig
Slide 5: First Quarter Fiscal 2022 Results
First Quarter Fiscal 2022 Results
Slide 6: Company Updates
Company Updates Strong Start to Fiscal 2022; Raised Full-Year Guidance Company Updates Business Summary • On July 21, 2021, McKesson announced that it negotiated a • Q1 revenue of $62.7 billion, an increase of 13% year- comprehensive proposed settlement agreement which, if all over-year conditions a
Slide 7: Consolidated Financial Information
Consolidated Financial Information Q1 Fiscal 2022 Results Results Q1 YoY ($ and shares in millions, except per share amounts) FY 22 Change Revenues $ 62,674 13 % Adjusted Gross Profit $ 3,144 19 % Adjusted Operating Expenses $ (2,094) 6 % Adjusted Operating Profit $ 1,094 55 % Interest expense $ (49
Slide 8: U.S. Pharmaceutical
U.S. Pharmaceutical Q1 Fiscal 2022 Results Results Q1 YoY ($ in millions) FY 22 Change U.S. Pharmaceutical Revenues $ 50,019 12 % Adjusted Segment Operating Profit $ 682 16 % Adjusted Segment Operating Profit Margin 1.36 % 4 bp • Q1 revenue increased due to higher volumes from retail national accoun
Slide 9: Prescription Technology Solutions
Prescription Technology Solutions Q1 Fiscal 2022 Results Results Q1 YoY ($ in millions) FY 22 Change Prescription Technology Solutions Revenues $ 881 34 % Adjusted Segment Operating Profit $ 139 62 % Adjusted Segment Operating Profit Margin 15.78 % 267 bp • Q1 revenue growth driven by higher volumes
Slide 10: Medical-Surgical Solutions
Medical-Surgical Solutions Q1 Fiscal 2022 Results Results Q1 YoY ($ in millions) FY 22 Change Medical-Surgical Solutions Revenues $ 2,528 40 % Adjusted Segment Operating Profit $ 257 107 % Adjusted Segment Operating Profit Margin 10.17 % 328 bp • Q1 revenue growth primarily driven by improvements in
Slide 11: International
International Q1 Fiscal 2022 Results Results Q1 YoY ($ in millions) FY 22 Change International Revenues $ 9,246 8 % Adjusted Segment Operating Profit $ 170 133 % Adjusted Segment Operating Profit Margin 1.84 % 99 bp • Q1 FX-Adjusted revenue of $8.3 billion, down 3% year-over-year, primarily driven b
Slide 12: Corporate
Corporate Q1 Fiscal 2022 Results Results Q1 YoY ($ in millions) FY 22 Change Corporate Adjusted Corporate Expenses $ (154) (7) % • Q1 Adjusted Corporate Expenses year-over-year decline driven by decreased opioid litigation expenses 12
Slide 13: Opioid-Related Costs
Opioid-Related Costs Results Q1 Q1 ($ in millions) FY 22 FY 21 Opioid-related costs Claims and litigation charges, net (GAAP-only) $ 74 $ (131) Legal fees and other $ 35 $ 43 Total expense $ 109 $ (88) Claims and Litigation Charges1: • Q1 opioid-related costs included a GAAP-only pre-tax charge of $
Slide 14: Cash
Cash ($ in millions) YTD Cash Balance Walk Cash Dynamics Balance at March 31, 20211 $ 6,396 • Free Cash Flow of ($1.8) billion Operating cash flow (1,622) Capital expenditures (159) • Used $1.0 billion of cash for payments related to Free Cash Flow (1,781) the exercises of a put right option availab
Slide 15: Fiscal 2022 Outlook
Fiscal 2022 Outlook On the following slides, McKesson presents an overview of its fiscal 2022 Outlook assumptions. These assumptions consist of certain non-GAAP measures. As outlined in the company’s August 4, 2021 press release, McKesson does not provide forward-looking guidance on a GAAP basis as
Slide 16: Fiscal 2022 Outlook: Key Assumptions
Fiscal 2022 Outlook Key Assumptions • We expect pharmaceutical prescription volumes will continue to demonstrate steady improvement through the first half of our fiscal year 2022 • We expect a return to pre-COVID-19 levels of pharmaceutical prescription and patient engagement levels in the second ha
Slide 17: Fiscal 2022 Outlook: Consolidated Earnings
Fiscal 2022 Outlook Consolidated Earnings Fiscal 2022 Outlook Fiscal 2021 Actual Revenues 4% to 7% growth 3% growth Previously 3% to 6% growth Adjusted Operating Profit 7% to 10% growth 1% growth Previously 3% to 6% growth Interest Expense $180 to $200 million $217 million Previously $190 to $210 mi
Slide 18: Fiscal 2022 Outlook: Cash Generation and Deployment
Fiscal 2022 Outlook Cash Generation and Deployment Fiscal 2022 Outlook Fiscal 2021 Actual Free Cash Flow $3.5 to $3.9 billion $3.9 billion Property Acquisitions and Capitalized Software $540 to $640 million $641 million Share Repurchases Approximately $2 billion $770 million1 Diluted weighted averag
Slide 19: Fiscal 2022 Outlook: Operating Segments
Fiscal 2022 Outlook Operating Segments Prescription Technology Medical-Surgical U.S. Pharmaceutical Solutions Solutions International FY22 Revenue 5% to 8% growth 20% to 25% growth 3% decline to 3% growth 1% decline to 4% growth Previously 4% to 7% growth Previously 12% to 17% growth Previously 5% d
Slide 20: Appendix
MCKESSON Appendix
Slide 21: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Q1 Fiscal 2022 and Q1 Fiscal 2021 McKESSON CORPORATION Schedule 2 RECONCILIATION OF GAAP OPERATING RESULTS TO ADJUSTED RESULTS (NON-GAAP) (unaudited) (in millions, except per share amounts) Three Months Ended June 30, 2021 2020 Change Income from continuing operations
Slide 22: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Q1 Fiscal 2022 and Q1 Fiscal 2021 McKESSON CORPORATION Schedule 2 RECONCILIATION OF GAAP OPERATING RESULTS TO ADJUSTED RESULTS (NON-GAAP) (Continued) (unaudited) (in millions) Three Months Ended June 30, 2021 2020 Change Gross profit (GAAP) $ 3,032 $ 2,700 12 % Pre-ta
Slide 23: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Q1 Fiscal 2022 and Q1 Fiscal 2021 McKESSON CORPORATION Schedule 2 RECONCILIATION OF GAAP OPERATING RESULTS TO ADJUSTED RESULTS (NON-GAAP) (Continued) (unaudited) (in millions) Three Months Ended June 30, 2021 2020 Change Income tax expense (GAAP) $ (26) $ (150) (83)%
Slide 24: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Q1 Fiscal 2022 and Q1 Fiscal 2021 McKESSON CORPORATION Schedule 3 RECONCILIATION OF GAAP SEGMENT FINANCIAL RESULTS TO ADJUSTED RESULTS (NON-GAAP) (unaudited) (in millions) Three Months Ended June 30, 2021 2020 As reported As adjusted Change As adjusted Foreign Foreign
Slide 25: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation YTD Fiscal 2022 and YTD Fiscal 2021 McKESSON CORPORATION Schedule 6 RECONCILIATION OF GAAP CASH FLOWS TO FREE CASH FLOW (NON-GAAP) (unaudited) (in millions) Three Months Ended June 30, 2021 2020 Change GAAP CASH FLOW CATEGORIES Net cash used in operating activities $
Slide 26: Financial Statement Notes
Financial Statement Notes McKESSON CORPORATION 1 of 1 FINANCIAL STATEMENT NOTES (1) Restructuring, impairment, and related charges, net for the three months ended June 30, 2021 includes pre-tax charges of $158 million ($129 million after-tax), primarily for Corporate expenses, net as well as our Can
Slide 27: Supplemental Non-GAAP Financial Information
Supplemental Non-GAAP Financial Information McKESSON CORPORATION 1 of 3 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 28: Supplemental Non-GAAP Financial Information
Supplemental Non-GAAP Financial Information SUPPLEMENTAL NON-GAAP FINANCIAL INFORMATION (continued) 2 of 3 • Adjusted Operating Profit (Non-GAAP): We define Adjusted Operating Profit as GAAP income (loss) from continuing operations before interest expense and income taxes, excluding amortization of
Slide 29: Supplemental Non-GAAP Financial Information
Supplemental Non-GAAP Financial Information SUPPLEMENTAL NON-GAAP FINANCIAL INFORMATION (continued) 3 of 3 • FX-Adjusted (Non-GAAP): McKesson also presents its GAAP financial results and adjusted results (Non-GAAP) on an FX-Adjusted basis. To present our financial results on an FX-Adjusted basis, we