Cardinal Health, Inc. · NYSE:CAH
Cardinal Health — Q4 FY2021 Earnings Presentation
26 slides from Cardinal Health's earnings presentation, Aug 5, 2021
Slide 1: Q4 FY21 Cardinal Health, Inc. Earnings Call
Q4 FY21 CARDINAL HEALTH, INC. EARNINGS CALL AUGUST 5, 2021
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: FY21 highlights
FY21 highlights ▪ Grew revenue 6% versus the prior year to $162B Financial ▪ Grew non-GAAP EPS, despite ~$200M year-over-year non-GAAP Performance operating earnings headwind related to COVID-19 ▪ Surpassed enterprise cost savings target for 3rd consecutive year ▪ Returned nearly $800M to shareholde
Slide 4: Q4 results
Q4 results 4
Slide 5: Q4 FY21 financial summary
Q4 FY21 financial summary GAAP Basis ($M) Non-GAAP Basis ($M) Q4 FY21 Q4 FY21 Revenue $42,586 N/A % change 16% Gross margin1 $1,475 $1,451 % change (7)% (8)% SG&A $1,129 $1,132 % change (1)% (1)% Operating earnings $162 $320 % change (40)% (28)% Interest and other2 $28 % change 4% N/A Net earnings3
Slide 6: Q4 FY21 Pharmaceutical segment results
Q4 FY21 Pharmaceutical segment results Q4 FY21 ($M) Q4 FY20 ($M) YoY change Revenue $38,344 $33,241 15% Segment profit $358 $359 0% Segment profit margin 0.93% 1.08% -15 bps Drivers: Revenue + Pharmaceutical Distribution + Specialty Solutions + Reduced pharmaceutical demand in the prior year related
Slide 7: Q4 FY21 Medical segment results
Q4 FY21 Medical segment results Q4 FY21 ($M) Q4 FY20 ($M) YoY change Revenue $4,246 $3,453 23% Segment profit -$63 $120 -153% Segment profit margin -1.50% 3.49% -498 bps Drivers: Revenue + COVID-19: Elective procedures and PPE pricing Segment profit - COVID-19: Inventory reserve on certain PPE produ
Slide 8: FY21 results
FY21 results 8
Slide 9: FY21 financial summary
FY21 financial summary GAAP Basis ($M) Non-GAAP Basis ($M) FY21 FY21 Revenue $162,467 N/A % change 6% Gross Margin $6,778 $6,754 % change (1)% (2)% SG&A $4,533 $4,499 % change (1)% (1)% Operating Earnings1 $472 $2,255 % change N.M. (5)% Interest & Other2 $133 N/A % change (44)% Net Earnings3 $611 $1
Slide 10: FY21 Pharmaceutical segment results
FY21 Pharmaceutical segment results FY21 ($M) FY20 ($M) YoY change Revenue $145,796 $137,495 6% Segment profit $1,684 $1,753 -4% Segment profit margin 1.15% 1.28% -12 bps Drivers: Revenue + Pharmaceutical Distribution + Specialty Solutions Segment profit - Generics program volume declines, including
Slide 11: FY21 Medical segment results
FY21 Medical segment results FY21 ($M) FY20 ($M) YoY change Revenue $16,687 $15,444 8% Segment profit $577 $663 -13% Segment profit margin 3.46% 4.30% -84 bps Drivers: Revenue + COVID-19: PPE and lab volumes Segment profit - COVID-19: Inventory reserve on certain PPE products, partially offset by la
Slide 12: FY22 outlook
FY22 outlook 12
Slide 13: FY22 financial expectations
FY22 financial expectations FY22 outlook FY21 actual Non-GAAP EPS $5.60 - $5.90 $5.57 Interest and other $150M - $180M $133M Non-GAAP ETR 23.5% - 25.5% 22.8% Diluted weighted average 287M - 292M 294M shares outstanding Capital expenditures $400M - $450M $400M The company does not provide forward-loo
Slide 14: FY22 Pharmaceutical segment outlook
FY22 Pharmaceutical segment outlook “Normalized” Revenue Segment Profit Segment Profit1 High-single digit Mid-single digit Low to mid-single digit percentage growth percentage growth percentage growth Key assumptions ▪ COVID-19: Overall segment profit tailwind compared to prior year of ~$100M ▪ Volu
Slide 15: FY22 Medical segment outlook
FY22 Medical segment outlook “Normalized” Revenue Segment Profit Segment Profit1 Low-double digit Mid to high-single digit Approximately flat percentage growth percentage growth Key assumptions ▪ COVID-19: Overall segment profit tailwind compared to prior year of ~$100M ▪ Elective procedures to rema
Slide 16: FY22 Operating earnings bridge
FY22 Operating earnings bridge Implied Growth $2.25B 1 Key Assumptions ▪ FY22 operating earnings implied growth driven primarily by contributions from strategic growth areas and cost savings initiatives ▪ ~$200M year-over-year COVID-19 tailwind, split evenly across both segments ▪ Investing incremen
Slide 17: FY22 strategic priorities
FY22 strategic priorities ▪ Focus on optimizing our global supply chain, prioritizing customer Optimize experience, and driving commercial excellence 1 core ▪ Maximize generics program performance businesses ▪ Deliver cost savings towards our 5-year, $750M goal ▪ Fuel growth and innovation in our fi
Slide 18: Optimizing core businesses
Optimizing core businesses 1 Updates & key actions in progress ▪ Launching initiatives to deliver additional $250M in savings by FY23 Across the ($750M cumulative cost savings vs. FY18 baseline) Enterprise ▪ Investing incremental ~$120M in FY22 in technology enhancements to drive growth and efficien
Slide 19: Investing in Growth Areas & Innovation
Investing in Growth Areas & Innovation 2 Updates & key actions in progress Expecting double-digit FY22 revenue and profit growth, in aggregate: ▪ Continuing commercial momentum in Biopharma services, including new Specialty program wins and strength in supporting cell and gene therapy Solutions ▪ La
Slide 20: Deploying Capital Efficiently
Deploying Capital Efficiently 3 Priorities FY22 guidance assumption Capital expenditures of $400M to Invest in the business $450M and incremental technology investments of ~$120M Strengthen our Debt paydown of ~$850M to balance sheet complete June 2022 debt tower 1% dividend increase for FY221 Retur
Slide 21: Appendix
Appendix 21
Slide 22: GAAP / Non-GAAP Reconciliation
Cardinal Health, Inc. and Subsidiaries 1 GAAP / Non-GAAP Reconciliation Gross Operating Earnings Net Diluted Margin SG&A2 Earnings Before Provision for Earnings3 Effective EPS 3 Gross Growth Growth Operating Growth Income Income Net Growth Tax Diluted Growth Margin Rate SG&A2 Rate Earnings Rate Taxe
Slide 23: GAAP / Non-GAAP Reconciliation
Cardinal Health, Inc. and Subsidiaries GAAP / Non-GAAP Reconciliation1 Operating Earnings/ Net Gross Earnings/ (Loss) Provision for/ Earnings/ Diluted Margin SG&A2 Operating (Loss) Before (Benefit from) Net (Loss)3 Effective EPS 3 Gross Growth Growth Earnings/ Growth Income Income Earnings/ Growth T
Slide 24: © 2021 Cardinal Health. All Rights Reserved.
24 © 2021 Cardinal Health. All Rights Reserved.
Slide 25: 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 26: Definitions
Cardinal Health, I nc. and Subsidiaries Definitions Growth rate calculation: growth rates are determined by dividing the difference between current-period results and prior-period results by prior-period results. I nterest and Other, net: other (income)/expense, net plus interest expense, net. Segme