Cardinal Health, Inc. · NYSE:CAH
Cardinal Health — Q2 2016 Earnings Presentation
22 slides from Cardinal Health's earnings presentation, Feb 1, 2016
Slide 1: Q2 FY2016 Earnings Investor/Analyst Call
Q2 FY2016 Cardinal Health, Inc. Earnings Investor/Analyst call February 1, 2016 © Copyright 2016, Cardinal Health, Inc. or one of its subsidiaries. All rights reserved
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 FY2016 financial summary
Q2 FY2016 financial summary GAAP Basis ($M) Non-GAAP Basis ($M) Q2 FY16 Q2 FY15 Q2 FY16 Q2 FY15 Revenue $31,445 $25,537 % change 23% increase YoY 15% increase YoY Gross Margin $1,609 $1,454 $1,648 $1,454 % change 11% increase YoY 8% increase YoY 13% increase YoY 8% increase YoY Ratio to revenue 5.12
Slide 4: Q2 FY2016 Pharmaceutical segment business analysis
Q2 FY2016 Pharmaceutical segment business analysis Q2 FY16 ($M) Q2 FY15 ($M) YoY Change Revenue $28,287 $22,627 25% Segment Profit $627 $542 16% Segment 2.22% 2.39% Profit Margin Highlights: • Revenue for the Pharmaceutical segment increased 25 percent to $28.3 billion due to growth from existing an
Slide 5: Q2 FY2016 Medical segment business analysis
Q2 FY2016 Medical segment business analysis Q2 FY16 ($M) Q2 FY15 ($M) YoY Change Revenue $3,162 $2,914 9% Segment Profit $106 $115 (8)% Segment 3.36% 3.96% Profit Margin Highlights: • Revenue for the Medical segment increased 9 percent to $3.2 billion. This growth was primarily due to the net contri
Slide 6: Q2 FY2016 GAAP to non-GAAP reconciliation
Q2 FY2016 GAAP to non-GAAP reconciliation Q2 FY 2016 Q2 FY 2015 Gross Operating Net Earnings 1 1 Gross Operating Net Earnings 1 Diluted EPS Diluted EPS 1 Margin ($M) Earnings ($M) ($M) Margin ($M) Earnings ($M) ($M) GAAP $1,609 $563 $326 $0.98 $1,454 $546 $289 $0.86 LIFO charges/(credits) 39 39 24 $
Slide 7: FY2016 Outlook
FY2016 Outlook © Copyright 2016, Cardinal Health, Inc. or one of its subsidiaries. All rights reserved
Slide 8: FY2016 financial expectations
FY2016 financial expectations FY2016 Outlook FY2015 Actual Mid- to high-teens Revenue percentage growth vs. PY $103B Non-GAAP $5.15 to $5.35 $4.381 Diluted EPS 1Non-GAAP diluted EPS from continuing operations Red font indicates a change since previous guidance 8 © Copyright 2016, Cardinal Health, In
Slide 9: FY2016 corporate assumptions
FY2016 corporate assumptions FY2016 Outlook FY2015 Actual Non-GAAP effective tax rate 35.5% - 37%1 37.2% Diluted weighted average Shares outstanding 332M – 334M 335M Interest and other, net $195M - $210M $134M Capital expenditures $510M - $540M $300M Acquisition-related intangible amortization ~$357
Slide 10: Q2 FY2016 trailing five quarters, year-to-date financial summary and GAAP to Non-GAAP reconciliation statements
Q2 FY2016 trailing five quarters, Year-to-date financial summary and GAAP to Non-GAAP reconciliation statements © Copyright 2016, Cardinal Health, Inc. or one of its subsidiaries. All rights reserved
Slide 11: Q2 FY2016 segment analysis
Q2 FY2016 segment analysis Pharmaceutical segment Q2 FY15 Q3 FY15 Q4 FY15 Q1 FY16 Q2 FY16 Revenue 22,627 22,605 24,676 25,140 28,287 ($M) Segment Profit 542 567 535 657 627 ($M) Medical segment Q2 FY15 Q3 FY15 Q4 FY15 Q1 FY16 Q2 FY16 Revenue 2,914 2,774 2,855 2,919 3,162 ($M) Segment Profit 115 102
Slide 12: Year-to-date financial summary
Year-to-date financial summary1 GAAP Basis ($M) Non-GAAP Basis ($M) H1 FY16 H1 FY15 H1 FY16 H1 FY15 Revenue $59,499 $49,607 % change 20% increase YoY 6% increase YoY Gross Margin $3,188 $2,794 $3,227 $2,794 % change 14% increase YoY 7% increase YoY 15% increase YoY 7% increase YoY Ratio to revenue 5
Slide 13: GAAP / Non-GAAP Reconciliation
Cardinal Health, Inc. and Subsidiaries GAAP / Non-GAAP Reconciliation Net Earnings Diluted EPS Gross Net Earnings attributable Diluted EPS attributable Margin Operating Provision for attributable to Cardinal attributable to Cardinal Gross Grow th Operating Earnings Earnings Before Incom e to Cardina
Slide 14: GAAP / Non-GAAP Reconciliation
Cardinal Health, Inc. and Subsidiaries GAAP / Non-GAAP Reconciliation Operating Earnings Before Provision Earnings Earnings from Diluted EPS Diluted EPS Earnings Incom e Taxes for from Continuing from from Continuing Operating Grow th and Discontinued Incom e Continuing Operations Continuing Operati
Slide 15: Total Company Business Analysis
Cardinal Health, Inc. and Subsidiaries Total Com pany Business Analysis Non-GAAP Second Quarter Second Quarter (in millions) 2016 2015 2016 2015 Revenue Amount $ 31,445 $ 25,537 Grow th rate 23 % 15 % Gross Margin Amount1 $ 1,609 $ 1,454 $ 1,648 $ 1,454 Grow th rate 11 % 8% 13 % 8% Operating earning
Slide 16: Segment Business Analysis Second Quarter
Cardinal Health, Inc. and Subsidiaries Segm ent Business Analysis Second Quarter Second Quarter (in millions) 2016 2015 (in millions) 2016 2015 Pharm aceutical Medical Revenue Revenue Amount $ 28,287 $ 22,627 Amount $ 3,162 $ 2,914 Grow th rate 25 % 16 % Grow th rate 9% 4% Segm ent profit Segm ent p
Slide 17: Segment Business Analysis Year-to-Date
Cardinal Health, Inc. and Subsidiaries Segm ent Business Analysis Year-to-Date Year-to-Date (in millions) 2016 2015 (in millions) 2016 2015 Pharm aceutical Medical Revenue Revenue Amount $ 53,427 $ 43,836 Amount $ 6,081 $ 5,766 Grow th rate 22 % 6% Grow th rate 5% 5% Segm ent profit Segm ent profit
Slide 18: GAAP / Non-GAAP Reconciliation
Cardinal Health, Inc. and Subsidiaries GAAP / Non-GAAP Reconciliation Second Quarter (in millions) 2016 2015 GAAP return on equity 19.7 % 18.7 % Non-GAAP return on equity Net earnings attributable to Cardinal Health, Inc. $ 326 $ 289 LIFO charges/(credits), net of tax 24 - Restructuring and employee
Slide 19: GAAP / Non-GAAP Reconciliation
Cardinal Health, Inc. and Subsidiaries GAAP / Non-GAAP Reconciliation Year-to-Date (in millions) 2016 2015 GAAP return on equity 21.8 % 17.8 % Non-GAAP return on equity Net earnings attributable to Cardinal Health, Inc. $ 709 $ 555 LIFO charges/(credits), net of tax 24 - Restructuring and employee s
Slide 20: GAAP / Non-GAAP Reconciliation
Cardinal Health, Inc. and Subsidiaries GAAP / Non-GAAP Reconciliation Second Quarter Year-to-Date (in millions) 2016 2015 2016 2015 GAAP effective tax rate 37.3 % 36.0 % 34.7 % 37.4 % Non-GAAP effective tax rate Earnings before income taxes $ 520 $ 451 $ 1,087 $ 886 LIFO charges/(credits) 39 - 39 -
Slide 21: GAAP / Non-GAAP Reconciliation
Cardinal Health, Inc. and Subsidiaries GAAP / Non-GAAP Reconciliation Fiscal Year (in millions) 2015 GAAP effective tax rate from continuing operations 38.4 % Non-GAAP effective tax rate from continuing operations Earnings before income taxes and discontinued operations $ 1,967 Restructuring and emp
Slide 22: Definitions
Cardinal Health, Inc. and Subsidiaries Definitions Debt: long-term obligations plus short-term borrow ings. Debt to Total Capital: debt divided by (debt plus total Cardinal Health, Inc. shareholders’ equity). Interest and Other, net: other (income)/expense, net plus interest expense, net. Net Debt: