Walgreens Boots Alliance Inc

Walgreens Boots Alliance — Q1 2025 Earnings Presentation

31 slides from Walgreens Boots Alliance's earnings presentation, Jan 10, 2025

  1. Slide 1: First Quarter Fiscal 2025 Results

    First Quarter Fiscal 2025 Results January 10, 2025 © 2025 Walgreens Boots Alliance, Inc. All rights reserved.

  2. Slide 2: Safe Harbor and Non-GAAP

    Safe Harbor and Non-GAAP Cautionary Note Regarding Forward-Looking Statements: All statements in this presentation that are not historical are forward-looking statements for purposes of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These include, without limitat

  3. Slide 3: 1Q Results Demonstrate Focus on 2025 Priorities

    1Q Results Demonstrate Focus on 2025 Priorities • 1Q financial results represent focus on several areas: − Execution on enterprise cost management − Strength in U.S. pharmacy services and maintained script market share − Underperformance in U.S. retail due to weaker cough cold flu season and continu

  4. Slide 4: Fiscal 2025 Priorities – 1Q Scorecard

    Fiscal 2025 Priorities – 1Q Scorecard Focus Area 1Q Progress Rationalizing footprint • Closed 67 U.S. stores in 1Q with sequencing and closure schedule finalized for next ~450 and controlling costs • Improved labor model driving cost savings • Efficiency gains from micro-fulfillment centers and cent

  5. Slide 5: WBA 1Q25 Financial Highlights

    Reported Fx Constant Fx1 1Q25 $ in millions (except EPS) B/(W) vs. 1Q24 B/(W) vs. 1Q24 Sales $39,459 + 7.5% + 6.9% Operating Income GAAP ($245) ($206) Adjusted1 $593 (13.7)% (14.0)% WBA 1Q25 Net Earnings GAAP ($265) ($197) Financial Adjusted1 $440 (23.0)% (23.2)% Highlights EPS GAAP ($0.31) ($0.23)

  6. Slide 6: U.S. Retail Pharmacy Financials

    1Q25 B/(W) vs. 1Q24 $ in millions Sales $30,866 + 6.6% Adj. gross profit1 $5,251 (4.4)% U.S. Retail Adj. SG&A % of sales1 15.8% + 1.1%p Pharmacy Adj. operating income1 $441 (36.4)% Financials Adj. operating margin1,2 1.2% (0.9)%p • Comparable sales1 +8.5% with pharmacy growth partly offset by retail

  7. Slide 7: U.S. Pharmacy

    1Q25 Total 1Q25 Comparable1 1Q25 vs. 1Q24 Pharmacy sales + 10.4% + 12.7% Prescriptions + 1.5% + 2.3% Prescriptions ex. Immunizations + 2.7% + 3.5% U.S. Pharmacy • Comp pharmacy sales1 +12.7% primarily due to brand inflation and prescription volume • Favorable COVID vaccine margins largely offset low

  8. Slide 8: U.S. Retail

    1Q25 1Q25 vs. 1Q24 Total retail sales (6.2)% Comparable retail sales1 (4.6)% U.S. Retail • Comp retail sales1 down 4.6%: − ~270 bps driven by a weaker cough cold flu season − ~130 bps from discretionary categories including beauty, seasonal and general merchandise, reflecting continued channel shift

  9. Slide 9: International Financials

    Constant Fx1 1Q25 $ in millions B/(W) vs. 1Q24 Sales $6,425 + 6.5% Adj. gross profit1 $1,303 + 3.4% Adj. SG&A % of sales1 17.7% + 0.8%p International Adj. operating income1 $168 + 16.1% Financials Adj. operating margin1 2.6% + 0.2%p • Sales increase driven by Germany wholesale +11.3% and Boots UK +4

  10. Slide 10: Boots UK Financials

    1Q25 1Q25 vs. 1Q24 Pharmacy comp. sales1 + 10.9% Retail comp. sales1 + 8.1% Boots UK Financials • Strong retail comp sales1 +8.1% with growth across all categories, on top of +9.8% in the prior year • Retail sales growth in Destination Health & Beauty, Flagship, and Travel locations • Boots.com sale

  11. Slide 11: U.S. Healthcare Financials

    1Q25 B/(W) vs. 1Q24 $ in millions Sales $2,172 + $241 Adj. gross profit1 $253 + $107 Adj. SG&A1 ($228) + $14 U.S. Healthcare Adj. operating income1 $25 + $121 Financials Adj. EBITDA1 $70 + $109 • 1Q sales led by VillageMD $1.6B, CareCentrix $0.4B, and Shields $0.2B • Sales growth of +12% led by Vill

  12. Slide 12: Cash Flow & Balance Sheet

    B/(W) 1Q25 $ in millions vs. 1Q24 Operating cash flow $(140) + $141 Cash capital expenditure $(284) + $223 Free cash flow1 $(424) + $363 Cash Flow & Balance Sheet • Operating cash flow negatively impacted by seasonal inventory build in U.S., UK and Germany, and legal payments of $137M • Year-over-ye

  13. Slide 13: Maintaining Full-Year Adj. EPS Guidance in a Challenging Environment

    Maintaining Full-Year Adj. EPS1 Guidance in a Challenging Environment • Maintaining FY25 adj. EPS1 guidance of $1.40-$1.80 • Expect growth in U.S. Healthcare and International offset by pressure in U.S. Retail Pharmacy largely driven by weaker retail front end performance • Footprint Optimization Pr

  14. Slide 14: Conclusions

    Conclusions • 1Q results demonstrate early progress against priorities for fiscal 2025: − Payor contracting results support longer-term view of stabilizing pharmacy economics − On track to close ~500 stores this year, and early results are encouraging − Sale process underway for Village Medical • We

  15. Slide 15: Q&A

    Q&A © 2025 Walgreens Boots Alliance, Inc. All rights reserved. 15

  16. Slide 16: Endnotes

    Endnotes • Please see appendix for reconciliations of non-GAAP financial measures and related disclosures. • The Company presents certain information related to current period operating results in “constant currency,” which is a non-GAAP financial measure. These amounts are calculated by translating

  17. Slide 17: Appendix

    Appendix The information on the following pages provides reconciliations of the supplemental non-GAAP financial measures, as defined under SEC rules, presented in this presentation and discussed on the related conference call to the most directly comparable financial measures calculated and presente

  18. Slide 18: Reconciliation of Non-GAAP financial measures

    Reconciliation of Non-GAAP financial measures Walgreens Boots Alliance, Inc. and Subsidiaries Supplemental Information (unaudited) (in millions, except net debt ratio and lease adjusted net debt ratio) The Company defines net debt ratio as net debt divided by adjusted earnings before interest, tax,

  19. Slide 19: Reconciliation of Non-GAAP financial measures

    Reconciliation of Non-GAAP financial measures Walgreens Boots Alliance, Inc. and Subsidiaries Supplemental Information (unaudited) (in millions) NET LOSS TO ADJUSTED OPERATING INCOME, ADJUSTED EBITDA and ADJUSTED EBITDAR As Reported Twelve months ended November 30, 2024 Net loss (GAAP) $ (15,775) Po

  20. Slide 20: Reconciliation of Non-GAAP financial measures

    Reconciliation of Non-GAAP financial measures Walgreens Boots Alliance, Inc. and Subsidiaries Supplemental Information (unaudited) 1 These charges are recorded within Selling, general and administrative expenses and Impairment of goodwill within the Consolidated Condensed Statements of Earnings. The

  21. Slide 21: Reconciliation of Non-GAAP financial measures

    Reconciliation of Non-GAAP financial measures Walgreens Boots Alliance, Inc. and Subsidiaries Supplemental Information (unaudited) (in millions) NET LOSS TO ADJUSTED NET EARNINGS AND DILUTED NET LOSS PER SHARE Three months ended November 30, Change vs. 1Q24 TO ADJUSTED DILUTED NET EARNINGS PER SHARE

  22. Slide 22: Reconciliation of Non-GAAP financial measures

    Reconciliation of Non-GAAP financial measures Walgreens Boots Alliance, Inc. and Subsidiaries Supplemental Information (unaudited) (in millions, except per share amounts) NET LOSS TO ADJUSTED NET EARNINGS AND DILUTED NET LOSS PER SHARE Three months ended November 30, Change vs. 1Q24 TO ADJUSTED DILU

  23. Slide 23: Reconciliation of Non-GAAP financial measures

    Reconciliation of Non-GAAP financial measures Walgreens Boots Alliance, Inc. and Subsidiaries Supplemental Information (unaudited) 1 Footprint Optimization charges are costs associated with a formal restructuring plan. These charges are primarily recorded in Selling, general and administrative expen

  24. Slide 24: Reconciliation of Non-GAAP financial measures

    Reconciliation of Non-GAAP financial measures Walgreens Boots Alliance, Inc. and Subsidiaries Supplemental Information (unaudited) 15 In the three months ended November 30, 2024, the Company and VillageMD executed an amendment to the VillageMD Secured Loan that consolidated certain VillageMD obligat

  25. Slide 25: Reconciliation of Non-GAAP financial measures

    Reconciliation of Non-GAAP financial measures Walgreens Boots Alliance, Inc. and Subsidiaries Supplemental Information (unaudited) (in millions) Three months ended November 30, 2024 Walgreens Boots U.S. Retail Pharmacy 1 International U.S. Healthcare Corporate and Other Alliance, Inc. Sales $ 30,866

  26. Slide 26: Reconciliation of Non-GAAP financial measures

    Reconciliation of Non-GAAP financial measures Walgreens Boots Alliance, Inc. and Subsidiaries Supplemental Information (unaudited) (in millions) Three months ended November 30, 2023 Walgreens Boots U.S. Retail Pharmacy 1 International U.S. Healthcare Corporate and Other Alliance, Inc. Sales $ 28,944

  27. Slide 27: Reconciliation of Non-GAAP financial measures

    Reconciliation of Non-GAAP financial measures Walgreens Boots Alliance, Inc. and Subsidiaries Supplemental Information (unaudited) 1 Operating income for U.S. Retail Pharmacy includes equity earnings in Cencora. As a result of the two-month reporting lag, operating income for the three month period

  28. Slide 28: Reconciliation of Non-GAAP financial measures

    Reconciliation of Non-GAAP financial measures Walgreens Boots Alliance, Inc. and Subsidiaries Supplemental Information (unaudited) (in millions) OPERATING LOSS TO ADJUSTED EBITDA FOR U.S. HEALTHCARE SEGMENT Three months ended November 30, 2024 2023 Operating loss (GAAP) 1 $ (325) $ (436) 2 Acquisiti

  29. Slide 29: Reconciliation of Non-GAAP financial measures

    Reconciliation of Non-GAAP financial measures Walgreens Boots Alliance, Inc. and Subsidiaries Supplemental Information (unaudited) (in millions) EQUITY EARNINGS (LOSS) IN CENCORA Three months ended November 30, 2024 2023 Equity earnings (loss) in Cencora (GAAP) $ (9) $ 42 Goodwill impairment 42 — Ac

  30. Slide 30: Reconciliation of Non-GAAP financial measures

    Reconciliation of Non-GAAP financial measures Walgreens Boots Alliance, Inc. and Subsidiaries Supplemental Information (unaudited) (in millions) ADJUSTED EFFECTIVE TAX RATE Three months ended November 30, 2024 Three months ended November 30, 2023 Loss before Loss before Income tax income tax Income

  31. Slide 31: Reconciliation of Non-GAAP financial measures

    Reconciliation of Non-GAAP financial measures Walgreens Boots Alliance, Inc. and Subsidiaries Supplemental Information (unaudited) (in millions) FREE CASH FLOW Three months ended November 30, 2024 2023 Net cash used for operating activities (GAAP) $ (140) $ (281) Less: Additions to property, plant a

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