Cardinal Health, Inc. · NYSE:CAH
Cardinal Health — Q2 FY2015 Earnings Presentation
23 slides from Cardinal Health's earnings presentation, Jan 29, 2015
Slide 1: Q2 FY2015 earnings investor/analyst call
Q2 FY2015 earnings investor/analyst call January 29, 2015 © Copyright 2015, Cardinal Health. All rights reserved. CARDINAL HEALTH, the Cardinal Health LOGO and ESSENTIAL TO CARE are trademarks or registered trademarks of Cardinal Health.
Slide 2: Forward-looking statements and GAAP reconciliation
Forward-looking statements and GAAP reconciliation 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 ident
Slide 3: Q2 FY2015 Financial summary
Q2 FY2015 Financial summary GAAP Basis ($M) Non-GAAP Basis ($M) Q2 FY15 Q2 FY14 Q2 FY15 Q2 FY14 Revenue $25,537 $22,240 % change 15% (12)% Operating earnings $546 $519 $639 $579 % change 5% 2% 10% 10% Ratio to revenue 2.14% 2.33% 2.50% 2.60% Earnings from continuing ops $289 $275 $400 $313 % change
Slide 4: Pharmaceutical segment business analysis
Q2 FY2015 Pharmaceutical segment business analysis Q2 FY15 Q2 FY14 % Change ($M) ($M) Revenue $22,627 $19,443 16% Segment profit $542 $482 12% Segment profit margin 2.39% 2.48% Highlights: • Revenue increased due to growth in the base of existing customers as well as the impact of new customers. • S
Slide 5: Medical segment business analysis
Q2 FY2015 Medical segment business analysis Q2 FY15 Q2 FY14 % Change ($M) ($M) Revenue $2,914 $2,799 4% Segment profit $115 $131 (12)% Segment profit margin 3.96% 4.69% Highlights: • Revenue increased, driven by acquisitions and growth from existing customers. • Segment profit declined due to a year
Slide 6: GAAP to non-GAAP reconciliation
Q2 FY2015 GAAP to non-GAAP reconciliation Q2 FY 2015 Q2 FY 2014 Earnings from Diluted EPS Earnings from Diluted EPS Operating Operating Continuing from Continuing Continuing from Continuing Earnings ($M) Earnings ($M) Operations ($M) Operations Operations ($M) Operations GAAP $546 $289 $0.86 $519 $2
Slide 7: FY2015 outlook
FY2015 outlook © Copyright 2015 Cardinal Health. All rights reserved. CARDINAL HEALTH, the Cardinal Health LOGO and 7 ESSENTIAL TO CARE are trademarks or registered trademarks of Cardinal Health.
Slide 8: CAH FY2015 financial expectations
January 29, 2015 CAH FY2015 financial expectations FY15 outlook FY14 actual Revenue high single-digit growth $91.1B Non-GAAP diluted EPS from continuing $4.28 to $4.38 $3.84 operations © Copyright 2015, Cardinal Health. All rights reserved. CARDINAL HEALTH, the Cardinal Health LOGO and 8 ESSENTIAL T
Slide 9: FY15 corporate assumptions
January 29, 2014 FY15 corporate assumptions FY15 outlook FY14 actual Non-GAAP effective tax rate 36.0% – 37.0%1 35.3% Diluted weighted average 336M – 337M 345.2M shares outstanding Interest and other, net $135M – $145M $86.8M Capital expenditures $340 – $350M $249M Acquisition-related intangible ~$1
Slide 10: © Copyright 2015 Cardinal Health. All rights reserved. CARDINAL HEALTH, the Cardinal Health LOGO
© Copyright 2015 Cardinal Health. All rights reserved. CARDINAL HEALTH, the Cardinal Health LOGO and ESSENTIAL TO CARE are trademarks or registered trademarks of Cardinal Health.
Slide 11: Q2 FY2015 trailing five quarters and GAAP to Non-GAAP reconciliation statements
Q2 FY2015 trailing five quarters and GAAP to Non-GAAP reconciliation statements © Copyright 2015 Cardinal Health. All rights reserved. CARDINAL HEALTH, the Cardinal Health LOGO and ESSENTIAL TO CARE are trademarks or registered trademarks of Cardinal Health. 11
Slide 12: Segment analysis
Q2 FY2015 Segment analysis Pharmaceutical segment Q2 FY14 Q3 FY14 Q4 FY14 Q1 FY15 Q2 FY15 Revenue 19,443 18,762 20,092 21,209 22,627 ($M) Segment Profit 482 452 377 451 542 ($M) Medical segment Q2 FY14 Q3 FY14 Q4 FY14 Q1 FY15 Q2 FY15 Revenue 2,799 2,657 2,794 2,852 2,914 ($M) Segment Profit 131 111
Slide 13: GAAP / Non-GAAP Reconciliation Second Quarter 2015
Cardinal Health, Inc. and Subsidiaries GAAP / Non-GAAP Reconciliation Second Quarter 2015 Operating Earnings Before Provision Earnings Earnings from Diluted EPS Diluted EPS Earnings Income Taxes for from Continuing from from Continuing Operating Growth and Discontinued Income Continuing Operations C
Slide 14: GAAP / Non-GAAP Reconciliation Fiscal Year 2014
Cardinal Health, Inc. and Subsidiaries GAAP / Non-GAAP Reconciliation Fiscal Year 2014 Operating Earnings Before Provision Earnings Earnings from Diluted EPS Diluted EPS Earnings Income Taxes for from Continuing from from Continuing Operating Growth and Discontinued Income Continuing Operations Cont
Slide 15: Total Company Business Analysis
Cardinal Health, Inc. and Subsidiaries Total Company Business Analysis Non-GAAP Second Quarter Second Quarter (in millions) 2015 2014 2015 2014 Revenue Amount $ 25,537 $ 22,240 Growth rate 15 % (12)% Operating earnings Amount $ 546 $ 519 $ 639 $ 579 Growth rate 5% 2% 10 % 10 % Earnings from continui
Slide 16: Segment Business Analysis Second Quarter
Cardinal Health, Inc. and Subsidiaries Segment Business Analysis Second Quarter Second Quarter (in millions) 2015 2014 (in millions) 2015 2014 Pharmaceutical Medical Revenue Revenue Amount $ 22,627 $ 19,443 Amount $ 2,914 $ 2,799 Growth rate 16 % (15)% Growth rate 4% 13 % Segment profit Segment prof
Slide 17: Segment Business Analysis Year-to-Date
Cardinal Health, Inc. and Subsidiaries Segment Business Analysis Year-to-Date Year-to-Date (in millions) 2015 2014 (in millions) 2015 2014 Pharmaceutical Medical Revenue Revenue Amount $ 43,836 $ 41,256 Amount $ 5,766 $ 5,511 Growth rate1 6% (11)% Growth rate 5% 13 % Segment profit Segment profit Am
Slide 18: GAAP / Non-GAAP Reconciliation Second Quarter
Cardinal Health, Inc. and Subsidiaries GAAP / Non-GAAP Reconciliation Second Quarter (in millions) 2015 2014 GAAP return on equity 18.7 % 17.2 % Non-GAAP return on equity Net earnings $ 289 $ 278 Restructuring and employee severance, net of tax, in continuing operations 4 6 Amortization and other ac
Slide 19: GAAP / Non-GAAP Reconciliation Year-to-Date
Cardinal Health, Inc. and Subsidiaries GAAP / Non-GAAP Reconciliation Year-to-Date (in millions) 2015 2014 GAAP return on equity 17.8 % 19.6 % Non-GAAP return on equity Net earnings $ 555 $ 617 Restructuring and employee severance, net of tax, in continuing operations 17 13 Amortization and other ac
Slide 20: GAAP / Non-GAAP Reconciliation
Schedule 8 Cardinal Health, Inc. and Subsidiaries GAAP / Non-GAAP Reconciliation Second Quarter Year-to-Date (in millions) 2015 2014 2015 2014 GAAP effective tax rate from continuing operations1 36.0 % 44.1 % 37.4 % 34.2 % Non-GAAP effective tax rate from continuing operations Earnings before income
Slide 21: GAAP / Non-GAAP Reconciliation Fiscal Year
Cardinal Health, Inc. and Subsidiaries GAAP / Non-GAAP Reconciliation Fiscal Year (in millions) 2014 GAAP effective tax rate from continuing operations 35.3 % Non-GAAP effective tax rate from continuing operations Earnings before income taxes and discontinued operations $ 1,798 Restructuring and emp
Slide 22: GAAP / Non-GAAP Reconciliation Second Quarter
Cardinal Health, Inc. and Subsidiaries GAAP / Non-GAAP Reconciliation Second Quarter Year-to-Date (in millions) 2015 2014 2015 2014 Revenue $ 25,537 $ 22,240 $ 49,607 $ 46,763 GAAP operating earnings $ 546 $ 519 $ 1,012 $ 990 Restructuring and employee severance 7 10 26 20 Amortization and other acq
Slide 23: Definitions and notes on non-GAAP measures
Cardinal Health, Inc. and Subsidiaries 5 In fiscal 2015, the Company began excluding last-in, first-out ("LIFO") inventory charges/(credits) from its non-GAAP earnings, for consistency with the presentation by some of its peers. The Company did not record any LIFO charges or credits in the first or