Cvs Health Corporation · NYSE:CVS
Cvs Health — Q3 2022 Earnings Presentation
21 slides from Cvs Health's earnings presentation, Nov 2, 2022
Slide 1: Third Quarter 2022 Earnings Conference Call
THIRD QUARTER 2022 Earnings conference call November 2, 2022 KAREN S. LYNCH President and Chief Executive Officer SHAWN M. GUERTIN Executive Vice President and Chief Financial Officer
Slide 2: Cautionary statement concerning forward-looking statements
This presentation includes forward-looking statements. The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements made by or on behalf of CVS Health Corporation (“CVS Health”). By their nature, all forward-looking statements are not guarantees of futur
Slide 3: Financial highlights
Financial highlights Q3 2022 Adj. EPS of $2.09 exceeded expectations; Raising FY 2022 guidance for Revenue, Adjusted Operating Income, Adjusted EPS and Cash Flow from Operations $2.09 10.0% $9.1 billion Q3 adjusted EPS Q3 revenue growth Q3 cash flow from operations Exceeded expectations Reflects gro
Slide 4: Unify our business around the consumer health experience
1 Advance all-payer primary care delivery capabilities Optimize retail portfolio to serve as community 2 health destinations Unify our business around the consumer health experience Diversify our growth portfolio with new 3 health services and scale new sources of value 4 Drive digital-first, techno
Slide 5: CVS Health continues to lead the nation's COVID-19 response
~3M tests administered in Q3 >5M vaccines administered in Q3 CVS Health continues to lead the nation’s Nearly 45M new customers through COVID-19 COVID-19 response testing and vaccine services since inception ~14% of customers new to CVS Health through COVID-19 testing services chose to fill new pres
Slide 6: Q3 2022 Financial Review
Q3 2022 Financial Review 6 ©2022 CVS Health and/or one of its affiliates.
Slide 7: Consolidated results
THIRD QUARTER 2022 Consolidated results Delivered strong results and exceeded expectations Strong revenue growth in millions, except per share amounts Q3 2022 Q3 2021 Change % of 10.0% vs. prior year Total Revenues $81,159 $73,794 10.0% Interest expense of $566 million Adjusted Operating Income $4,2
Slide 8: Capital and cash flow
THIRD QUARTER 2022 Capital and cash flow Liquidity and capital position remain strong Powerful cash generation Committed to investment grade ratings Generated $9.1 billion in cash flow from operations Paid down $2.6 billion of long-term debt Deploying capital to generate shareholder value Repaid net
Slide 9: Health Care Benefits segment
THIRD QUARTER 2022 Health Care Benefits segment Robust revenue growth across all product lines; strong underlying performance leading to improved medical benefit ratio in millions, except MBR Q3 2022 Q3 2021 Change % Total revenue growth reflects growth across all product lines Total Revenues $22,51
Slide 10: Pharmacy Services segment
THIRD QUARTER 2022 Pharmacy Services segment Industry-leading drug trend, Specialty management capabilities and leading customer service levels continue to drive growth Total revenue growth reflects increased pharmacy claims volume, growth in specialty pharmacy and brand inflation, partially offset
Slide 11: Retail / LTC segment
THIRD QUARTER 2022 Retail / LTC segment Retail continues to serve as a community health destination for millions of Americans as we continue to grow retail pharmacy script share Total revenue growth reflects increased prescription and front store volume, including the sale of COVID-19 OTC test kits,
Slide 12: Retail pharmacy
THIRD QUARTER 2022 Retail pharmacy Significant year-over-year growth in a dynamic environment Change vs. Continued growth in retail pharmacy Q3 2021 script share Retail Pharmacy Script Share of 26.8%1,2 Up ~40 bps 3 Growth in prescriptions filled2 reflects Same Store Sales 9.9% increased utilization
Slide 13: 2022 Guidance
2022 Guidance 13 ©2022 CVS Health and/or one of its affiliates.
Slide 14: Total company outlook
FULL-YEAR 2022 GUIDANCE Total company outlook Raising guidance for revenue, adjusted operating income, adjusted EPS, and cash flow from operations in billions, except per share amounts Q2:22 Earnings Call Q3:22 Earnings Call Aug 3, 2022 Nov 2, 2022 $307 to $312 $309 to $314 Revenue growth Total Reve
Slide 15: Health Care Benefits outlook
FULL-YEAR 2022 GUIDANCE Health Care Benefits outlook Guidance for adjusted operating income narrowed in billions, except MBR and Q2:22 Earnings Call Q3:22 Earnings Call membership Aug 3, 2022 Nov 2, 2022 Total Revenues $89.3 to $90.8 $89.3 to $90.8 Revenue growth 9 – 11% 9 – 11% of 9 – 11% Adjusted
Slide 16: Pharmacy Services outlook
FULL-YEAR 2022 GUIDANCE Pharmacy Services outlook Guidance range for adjusted operating income narrowed in billions Q2:22 Earnings Call Q3:22 Earnings Call Aug 3, 2022 Nov 2, 2022 Revenue growth of 6 – 8% Total Revenues $162.5 to $165.3 $162.5 to $165.3 6 – 8% 6 – 8% Adj. operating $7.31 to $7.45 $7
Slide 17: Retail/LTC outlook
FULL-YEAR 2022 GUIDANCE Retail/LTC outlook Raising guidance for revenue and adjusted operating income in billions Q2:22 Earnings Call Q3:22 Earnings Call Aug 3, 2022 Nov 2, 2022 $101.0 to $102.7 $102.7 to $104.0 Revenue growth Total Revenues of 3 – 4% 1 – 3% 3 – 4% Adjusted Operating Income $6.54 to
Slide 18: Other items
FULL-YEAR 2022 GUIDANCE Other items Lowering guidance for adjusted effective tax rate and weighted average diluted share count in billions, except tax rate. Cost reduction Q2:22 Earnings Call Q3:22 Earnings Call initiatives in millions Aug 3, 2022 Nov 2, 2022 Interest Expense ~$2.3 ~$2.3 Capital Exp
Slide 19: Preliminary Outlook
Preliminary Outlook 19 ©2022 CVS Health and/or one of its affiliates.
Slide 20: 2022 Adjusted Baseline
Preliminary Outlook 2022 Adjusted Baseline 2022 results and expectations impacted by several factors not expected to reoccur in 2023, including the net favorable impact of COVID on our business 1. Prior year reserve development improved our YTD results; 2022 Adjusted EPS Guidance Mid-Point $8.60 we
Slide 21: 2023 Preliminary Outlook
Preliminary Outlook 2023 Preliminary Outlook Adjusted Earnings Per Share Components of 2023 Growth • Retail/LTC: at least $6 billion Adjusted Operating Income • Health Care Benefits: Mid to High-Single Digit Growth • Pharmacy Services: Mid-Single Digit Growth $8.70 - $8.90 • Share Repurchases $8.60