Cardinal Health, Inc. · NYSE:CAH
Cardinal Health — Q1 2024 Earnings Presentation
21 slides from Cardinal Health's earnings presentation, Nov 3, 2023
Slide 1: Q1 FY24 Earnings
Q1 FY24 Earnings Cardinal Health, Inc. November 3, 2023 © 2023 Cardinal Health. All Rights Reserved.
Slide 2: Cautions Concerning Forward-Looking Statements
• Q1 FY24 Earnings 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 identified by words such as "expect,"
Slide 3: Q1 results
Q1 results 3 © 2023 2022 Cardinal Health. All Rights Reserved.
Slide 4: Q1 FY24 financial summary
• Q1 FY24 Earnings Q1 FY24 financial summary GAAP Basis ($M) Non-GAAP Basis ($M) Q1 FY24 Q1 FY24 Revenue $54,763 N/A % change 10% Gross Margin $1,768 $1,768 % change 10% 10% SG&A $1,197 $1,197 % change --% 1% Operating Earnings/(Loss)1 $(14) $571 % change N.M. 35% Interest and Other2 $12 N/A % chang
Slide 5: Q1 FY24 Pharmaceutical segment results
• Q1 FY24 Earnings Q1 FY24 Pharmaceutical segment results Q1 FY24 ($M) Q1 FY23 ($M) YoY change Revenue $51,006 $45,828 11% Segment profit $507 $431 18% Segment profit margin 0.99% 0.94% +5 bps Drivers: Revenue Segment profit + Brand and specialty pharmaceutical sales growth + Brand and specialty pro
Slide 6: Q1 FY24 Medical segment results
• Q1 FY24 Earnings Q1 FY24 Medical segment results Q1 FY24 ($M) Q1 FY23 ($M) YoY change Revenue $3,760 $3,778 0% Segment profit $71 -$8 N.M. Segment profit margin 1.89% -0.21% +210 bps Drivers: Revenue Segment profit - PPE, including prior year exit of the non-healthcare + Improvement in net inflati
Slide 7: FY24 outlook
FY24 outlook 7 © 2023 Cardinal Health. All Rights Reserved.
Slide 8: FY24 financial expectations
• Q1 FY24 Earnings FY24 financial expectations FY24 FY23 outlook actual Non-GAAP EPS $6.75 - $7.00 $5.79 Previously $6.50 - $6.75 Interest and Other $100M - $120M $89M Previously $110M - $130M Non-GAAP ETR 23.0% - 25.0% 22.8% Diluted weighted average shares ~249M 262M outstanding Previously 250M - 2
Slide 9: FY24 segment guidance
• Q1 FY24 Earnings FY24 segment guidance Revenue and segment profit Pharmaceutical Revenue growth of Segment profit growth of 10% to 12% 7% to 9% Previously 4% to 6% growth Medical Revenue growth of Segment profit of ~3% ~$400M Bold indicates an update to the FY24 segment guidance provided on August
Slide 10: Medical Improvement Plan
• Q1 FY24 Earnings Medical Improvement Plan The journey to $650M+ in segment profit by FY26 Growth Target Strategic priorities Areas of focus 1 FY23-FY26 1 Mitigate inflation and global Offset with mitigation initiatives supply chain constraints • Exit FY24 offsetting gross impact ~$300M 2 Grow Card
Slide 11: Our long-term targets: FY24-26
Q1 FY24 Earnings Our long-term targets: FY24-26 (FY23 Baseline) 4% to 6% $650M+ at least 12% to 14% Growth CAGR in FY26 $2B Growth CAGR Pharma Medical Share non-GAAP diluted Segment Profit Segment Profit repurchases1 EPS growth No changes to the long-term financial targets provided at Investor Day o
Slide 12: Disciplined Capital Allocation Framework
Q1 FY24 Earnings Table stakes FY24 Progress Investing back into the business to drive $92M in capex in Q1 organic growth Disciplined Two positive outlook updates Maintain investment Capital Allocation from credit rating agencies grade balance sheet Completed 3rd annual opioid settlement payment Fram
Slide 13: Strategic priorities
• Q1 FY24 Earnings Strategic priorities Ruthless prioritization, resilient core and relentless focus 1 Build upon the growth and resiliency of Pharmaceutical Segment • Generate stable, low-single digit 2 Execute Medical Improvement Plan initiatives • Mitigate gross impact of inflation 3 Relentless f
Slide 14: Appendix
Appendix 14 © 2023 Cardinal Health. All Rights Reserved.
Slide 15: GAAP / Non-GAAP Reconciliation, First Quarter 2024
Cardinal Health, Inc. and Subsidiaries 1 GAAP / Non-GAAP Reconciliation Earnings/ Gross Operating (Loss) Provision for/ Net Diluted 2 3 Margin SG&A Operating Earnings Before (Benefit from) Earnings Effective EPS 3 Gross Growth Growth Earnings/ Growth Income Income Net Growth Tax Diluted Growth 2 3 3
Slide 16: GAAP / Non-GAAP Reconciliation, Fiscal Year 2023
Cardinal Health, Inc. and Subsidiaries GAAP / Non-GAAP Reconciliation1 Gross Operating Earnings Net Diluted 2 3 3 Margin SG&A Earnings Before Provision for Earnings Effective EPS Gross Growth Growth Operating Growth Income Income Net Growth Tax Diluted Growth 2 3 3 Margin Rate SG&A Rate Earnings Rat
Slide 17: GAAP Cash Flow to Non-GAAP Adjusted Free Cash Flow
Cardinal Health, Inc. and Subsidiaries GAAP / Non-GAAP Reconciliation - GAAP Cash Flow to Non-GAAP Adjusted Free Cash Flow First Quarter First Quarter (in millions) 2024 2023 GAAP - Cash Flow Categories Net cash provided by operating activities $ 545 $ 23 Net cash used in investing activities (63) (
Slide 18: Segment Information First Quarter
Cardinal Health, Inc. and Subsidiaries Segment Information First Quarter (in millions) 2024 2023 (in millions) 2024 2023 Pharmaceutical Medical Revenue Revenue Amount $ 51,006 $ 45,828 Amount $ 3,760 $ 3,778 Growth rate 11 % 15 % Growth rate -% (9)% Segment profit Segment profit Amount $ 507 $ 431 A
Slide 19: Forward Looking non-GAAP Measures
Cardinal Health, Inc. and Subsidiaries Forward Looking non-GAAP Measures In this document, the Company presents certain forward-looking non-GAAP metrics. The Company does not provide outlook on a GAAP basis because the items that the Company excludes from GAAP to calculate the comparable non-GAAP me
Slide 20: © 2023 Cardinal Health. All Rights Reserved.
20 © 2023 Cardinal Health. All Rights Reserved.
Slide 21: Use of non-GAAP measures and definitions
1 LIFO charges and credits are excluded because the factors relating to last-in first-out ("LIFO") inventory charges or credits, such as pharmaceutical manufacturer price appreciation or deflation and year-end inventory levels (which can be meaningfully influenced by customer buying behavior immedia