Cardinal Health, Inc. · NYSE:CAH
Cardinal Health — Investor Day (September 2007)
24 slides from Cardinal Health's investor day presentation, Sep 19, 2007
Slide 1: Essential to care Investor Relations Conference FY 2008
Essential to care Investor Relations Conference FY 2008 Exhibit 99.1 September 19, 2007
Slide 2: Forward-looking statements and GAAP-reconciliation
Forward-looking statements and GAAP-reconciliation These presentations contain forward-looking statements addressing expectations, prospects, estimates and other matters that are dependent upon future events or developments. These matters are subject to risks and uncertainties that could cause actua
Slide 3: Financial review
Financial review Jeff Henderson Chief Financial Officer September 19, 2007
Slide 4: Agenda
Agenda • Company performance • Value focused financial strategy • Financial targets and goals
Slide 5: FY07 consolidated performance
FY07 consolidated performance FY 07 was a very good year for Cardinal Health $79,664 $1,931 $2.86 12.4% $86,852 $2,163 $3.42 16.9% 9% 12% 20% FY 2006 ($M) FY 2007 ($M) % Change Revenue Non-GAAP operating earnings Non-GAAP diluted EPS from continuing operations Non-GAAP return on equity
Slide 6: Return to strong growth: Non-GAAP consolidated NOPAT
Return to strong growth Non-GAAP consolidated NOPAT (All years include the impact of equity compensation) $1.47 $1.09 $1.22 $1.35 $1.15 $1.29 FY02 FY03 FY04 FY05 FY06 FY07 FY08E $B Annual growth rate 13% 10% (14%) 12% 13% Note: For comparative purposes, reported amounts include the net effect of equ
Slide 7: Return to strong growth: Non-GAAP diluted EPS
Return to strong growth $3.42 $2.86 $2.47 $2.93 $2.59 $2.23 FY02 FY03 FY04 FY05 FY06 FY07 FY08E $ 16% 13% (16%) 16% 20% Annual growth rate Non-GAAP diluted earnings per share (All years include the impact of equity compensation) Note: For comparative purposes, reported amounts include the net effect
Slide 8: Value-focused financial strategy
Value-focused financial strategy
Slide 9: Cardinal Health
CardinaiHeaith
Slide 10: Balance sheet management
Balance sheet management Days of inventory Return on invested capital 1 • Portfolio optimization – Divested PTS for $3.3B – Acquired VIASYS for $1.5B FY04 FY05 FY06 FY07 FY08E • Effective use of capital – Days of inventory 1.8% > 9.0% PTS (FY06) VIASYS (FY10) Non-GAAP
Slide 11: Capital deployment
Capital deployment • Up to 50% of OCF returned to shareholders – Returned over $4.2B in capital since beginning of FY07 – Increased dividend 4x since FY05…and still going – Announced a 2-year $2B share repurchase authorization in August Consistent and transparent capital allocation strategy that is
Slide 12: Capital deployment: cash flow generation
Capital deployment Significant cash flow generation to fund growth and drive shareholder returns $2.3 $2.1 $2.2 $0.5 $0.9 $1.0 $1.4 $2.7 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 $B Note: All years include operating cash flows from continuing and discontinued operations. FY05 and FY07 a
Slide 13: Capital deployment: total capital deployed
Capital deployment 3.6 1.2 2.3 5.8 FY04 FY05 FY06 FY07 Total capital deployed ($B) Returning capital to shareholders accounted for nearly 60% of the total capital deployed from FY04 to FY07 Acquisitions Capital expenditures Returned to shareholders
Slide 14: Capital structure
Capital structure Net debt to capital Debt to total capital -15% 0% 15% 30% 45% FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 15% 30% 45% FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 Peers include other pharmaceutical wholesalers CAH Peer average ¹ CAH Peer average ¹
Slide 15: Growing returns
Growing returns 7.0% 5.4% 7.1% 5.4% FY04 FY05 FY06 FY07 FY08 FY09 FY10 ROIC (%) Non-GAAP return on invested capital All years include the impact of equity compensation Note: For comparative purposes, reported amounts include the net effect of equity compensation expense of which 14% was allocated to
Slide 16: Cardinal Health
CardinaiHeaith
Slide 17: Financial discipline and controls
Financial discipline and controls • Consistent and transparent capital allocation strategy Improvements to financial discipline and controls provide greater transparency and confidence • Significant and improving level of financial disclosure • Disciplined approach to acquisitions • New finance team
Slide 18: Cardinal Health: Essential to care
‘CardinalHealth Fssential to care”
Slide 19: Financial targets and goals
Financial targets and goals Long-term financial goals Fiscal 2008 targets Non-GAAP EPS 12 – 16% Above range ($3.95 – $4.15) Consolidated: Revenue growth Segment profit growth 7 – 10% 7 – 10% HSCS – Pharma Segment profit growth vs. Long-term goal In range Segment: 6 – 9% 4 – 7% HSCS – Medical Below r
Slide 20: Financial targets and goals
September 19, 2007 Financial targets and goals Over FY'08 - FY'10 3 Year Period: Fiscal Year 2008 Revenue: + 8 - 10% In range Op Earnings ¹ : + 10 - 13% At or above top end of range EPS : + 12 - 16% Above range ($3.95 - $4.15 per share ³ ) Segment Revenue Segment Profit FY08 profit growth vs. long-t
Slide 21: Increasing contribution of CMP
Increasing contribution of CMP Clinical and Medical Products is expected to account for up to 40% of total segment profits by FY10 35-40% 21% 25% 26% 29-32% 32-35% FY05 FY06 FY07 FY08 FY09 FY10 % of total segment profit Note: FY08 – FY10 projections based on long-term guidance ranges
Slide 22: Performance range
Performance range $2.93 $2.47 $2.86 $3.42 $2.93 $2.47 $2.86 $3.42 FY04 FY05 FY06 FY07 FY08 FY09 FY10 EPS ($) Non-GAAP diluted EPS range based on long-term targets FY08 projection based on current FY guidance. FY09 & FY10 projections based on long-term guidance range. All years include the impact of
Slide 23: Cardinal Health: Essential to care
‘CardinalHealth Fssential to care”
Slide 24: GAAP / Non-GAAP Reconciliation
CARDINAL HEALTH, INC. AND SUBSIDIARIES GAAP / NON-GAAP RECONCILIATION (in millions) GAAP Operating Earnings $ 1,621.2 $ 1,896.1 $ 2,092.9 $ 1,782.2 $ 1,844.9 $ 1,373.7 Non-GAAP Operating Earnings Special items 135.8 88.5 38.7 141.5 80.5 772.0 Impairment charges and other — — — 38.3 5.8 17.3 Equity b