Slide 1: Q1 Fiscal 2021 Financial Results
McKesson Corporation Q1 Fiscal 2021 Financial Results August 3, 2020
Slide 2: Cautionary Statements
Cautionary Statements Except for historical information contained in this presentation, matters discussed may constitute “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, that involve risks and uncerta
Slide 3: Company Updates
Company Updates Q1 Exceeded Expectations; Raising Full-Year Guidance Company Updates Business Summary • On July 1, 2020, McKesson announced the • Q1 revenue of $55.7 billion, flat year-over-year realignment of its reportable segments commencing in the second quarter of fiscal 2021 • Adjusted Earning
Slide 4: Consolidated Financial Information
Consolidated Financial Information Q1 Fiscal 2021 Results Results Q1 YoY ($ and shares in millions, except per share amounts) FY 21 Change Revenues $ 55,679 — % Adjusted Gross Profit $ 2,649 (4) % Adjusted Operating Expenses $ (1,969) (2) % Adjusted Operating Profit $ 707 (24) % Interest expense $ (
Slide 5: U.S. Pharmaceutical and Specialty Solutions
U.S. Pharmaceutical and Specialty Solutions Q1 Fiscal 2021 Results Results Q1 YoY ($ in millions) FY 21 Change U.S. Pharmaceutical and Specialty Solutions Revenues $ 45,062 2 % Adjusted Segment Operating Profit $ 589 (2) % Adjusted Segment Operating Profit Margin 1.31 % (5) bp • Q1 revenue growth dr
Slide 6: European Pharmaceutical Solutions
European Pharmaceutical Solutions Q1 Fiscal 2021 Results Results Q1 YoY ($ in millions) FY 21 Change European Pharmaceutical Solutions Revenues $ 6,246 (7) % Adjusted Segment Operating Profit $ 35 -% Adjusted Segment Operating Profit Margin 0.56 % 4 bp • Q1 FX-Adjusted revenue of $6.4 billion, down
Slide 7: Medical-Surgical Solutions
Medical-Surgical Solutions Q1 Fiscal 2021 Results Results Q1 YoY ($ in millions) FY 21 Change Medical-Surgical Solutions Revenues $ 1,801 (5) % Adjusted Segment Operating Profit $ 124 (22) % Adjusted Segment Operating Profit Margin 6.89 % (147) bp • Q1 revenue decline driven by lower primary care pa
Slide 8: Other & Corporate
Other & Corporate Q1 Fiscal 2021 Results Results Q1 YoY ($ in millions) FY 21 Change Other1 Revenues $ 2,570 (13) % Adjusted Segment Operating Profit $ 137 (50) % Adjusted Segment Operating Profit Margin NM NM Corporate Adjusted Corporate Expenses $ (178) 30 % • Q1 Adjusted Segment Operating Profit
Slide 9: Opioid-Related Costs
Opioid-Related Costs Results Q1 Q1 ($ in millions) FY 21 FY 20 Opioid-related costs Litigation reserves adjustment $ — $ — Legal fees and other $ 43 $ 36 Total expense $ 43 $ 36 Legal Fees and Other: • Opioid-related costs, primarily litigation expenses, included in Adjusted Operating Expenses 9
Slide 10: Cash
Cash ($ in millions) YTD Cash Balance Walk* Cash Dynamics Balance at March 31, 2020 $ 4,023 • Free Cash Flow of ($1.2) billion Operating cash flow (1,062) Capital expenditures (117) • Paid $74 million in dividends Free Cash Flow (1,179) Acquisitions (4) • Remaining share repurchase Other investing c
Slide 11: Fiscal 2021 Outlook
Fiscal 2021 Outlook On the following slides, McKesson presents an overview of its fiscal 2021 Outlook assumptions. These assumptions consist of certain non-GAAP measures. As outlined in the company’s August 3, 2020 press release, McKesson does not provide forward-looking guidance on a GAAP basis as
Slide 12: Fiscal 2021 Outlook: Key Enterprise Assumptions
Fiscal 2021 Outlook Key Enterprise Assumptions • We are not assuming that a second wave of COVID-19 returns, leading to shelter at home scenarios precluding patient consumption of healthcare services, supplies and pharmaceutical products • We are not assuming any systemic customer insolvency events
Slide 13: Fiscal 2021 Outlook
Fiscal 2021 Outlook Fiscal 2021 Outlook Fiscal 2020 Actual Revenues High end of 2% to 4% growth $231.1 billion Previously 2% to 4% growth Adjusted Operating Profit 7% to 10% decline $3.8 billion Previously 10% to 15% decline Adjusted Operating Profit 1% to 4% decline $3.6 billion (Excluding Change H
Slide 14: Fiscal 2021 Outlook: Year-over-Year Change by Segment
Fiscal 2021 Outlook Year-over-Year Change U.S. Pharmaceutical European Medical-Surgical and Specialty Pharmaceutical Other Solutions Solutions Solutions Full Year 3% decline to 1% growth 8% to 12% growth 5% to 10% decline 3% to 6% growth FY21 Revenue Previously 0% to 5% decline Previously 3% to 8% d
Slide 15: Appendix
Appendix
Slide 16: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation 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, 2020 Change vs. Prior Quarter Amortization Transaction- LIFO Gains fr
Slide 17: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Q1 Fiscal 2020 Schedule 2 (Continued) Three Months Ended June 30, 2019 Amortization of Restructuring, acquisition- Transaction- LIFO inventory- Gains from impairment and As reported related related expenses related antitrust legal related charges, Other As adjusted (G
Slide 18: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Q1 Fiscal 2021 and Q1 Fiscal 2020 McKESSON CORPORATION Schedule 3 RECONCILIATION OF GAAP SEGMENT FINANCIAL RESULTS TO ADJUSTED RESULTS (NON-GAAP) (unaudited) (in millions) Three Months Ended June 30, 2020 2019 As reported As adjusted Change As reported As adjusted As
Slide 19: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Q1 Fiscal 2021 and Q1 Fiscal 2020 McKESSON CORPORATION Schedule 6 RECONCILIATION OF GAAP CASH FLOWS TO FREE CASH FLOW (NON-GAAP) (unaudited) (in millions) Three Months Ended June 30, 2020 2019 Change GAAP CASH FLOW CATEGORIES Net cash used in operating activities $ (1
Slide 20: Financial Statement Notes
Financial Statement Notes McKESSON CORPORATION 1 of 1 FINANCIAL STATEMENT NOTES (1) Total operating expenses for the three months ended June 30, 2020 includes a pre-tax net gain of $131 million ($97 million after-tax) related to insurance proceeds received, net of attorneys' fees and expenses awarde
Slide 21: Supplemental Non-GAAP Financial Information
Supplemental Non-GAAP Financial Information McKESSON CORPORATION SUPPLEMENTAL NON-GAAP FINANCIAL INFORMATION 1 of 3 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 22: Supplemental Non-GAAP Financial Information
Supplemental Non-GAAP Financial Information SUPPLEMENTAL NON-GAAP FINANCIAL INFORMATION (continued) 2 of 3 • Adjusted Segment Operating Profit (Non-GAAP): We define Adjusted Segment Operating Profit as GAAP segment operating profit, excluding amortization of acquisition-related intangibles, transact
Slide 23: Supplemental Non-GAAP Financial Information
Supplemental Non-GAAP Financial Information SUPPLEMENTAL NON-GAAP FINANCIAL INFORMATION (continued) 3 of 3 The Company evaluates the aforementioned Non-GAAP measures on a periodic basis and updates the definitions from time to time. The evaluation considers both the quantitative and qualitative aspe