Slide 1: McKesson Corporation Third Quarter Fiscal 2024 Earnings Call
McKesson Corporation Third Quarter Fiscal 2024 Earnings Call February 7, 2024
Slide 2: Cautionary Statements
Cautionary Statements Cautionary Statements This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward- looking statements may be identified by their use of terminology such as
Slide 3: Our Company Priorities
Our Company Priorities Expand Focus on Oncology Evolve and Sustainable People and Grow the Core and Biopharma Portfolio Growth Culture Platforms Commitment to Scaled and durable Differentiated assets Technology modernization investing in talent distribution assets and capabilities in and process sim
Slide 4: Third Quarter Fiscal 2024 Results
Third Quarter Fiscal 2024 Results
Slide 5: Delivering growth and operational excellence
Delivering growth and operational excellence Business Summary Company Updates • Revenues of $80.9 billion increased 15% • The US Oncology Network expanded its community oncology footprint with the addition of Nashville Oncology Associates • Earnings per diluted share from continuing operations of an
Slide 6: Consolidated adjusted financial information
Consolidated adjusted financial information Q3 and YTD Fiscal 2024 Results Adjusted Results Q3 YoY YTD Q3 YoY ($ and shares in millions, except per share amounts) FY 24 Change FY 24 Change GAAP Revenues $ 80,898 15 % $ 232,596 12 % Gross Profit $ 3,131 3% $ 9,112 —% Operating Expenses $ (1,904) 4% $
Slide 7: U.S. Pharmaceutical
U.S. Pharmaceutical Q3 and YTD Fiscal 2024 Results Results Q3 YoY YTD Q3 YoY ($ in millions) FY 24 Change FY 24 Change U.S. Pharmaceutical Revenues $ 73,023 18 % $ 209,949 17 % Adjusted Segment Operating Profit $ 828 6% $ 2,414 8% Adjusted Segment Operating Profit Margin 1.13 % (13) bp 1.15 % (10) b
Slide 8: Prescription Technology Solutions
Prescription Technology Solutions Q3 and YTD Fiscal 2024 Results Results Q3 YoY YTD Q3 YoY ($ in millions) FY 24 Change FY 24 Change Prescription Technology Solutions Revenues $ 1,205 7% $ 3,589 12 % Adjusted Segment Operating Profit $ 193 25 % $ 625 36 % Adjusted Segment Operating Profit Margin 16.
Slide 9: Medical-Surgical Solutions
Medical-Surgical Solutions Q3 and YTD Fiscal 2024 Results Results Q3 YoY YTD Q3 YoY ($ in millions) FY 24 Change FY 24 Change Medical-Surgical Solutions Revenues $ 3,031 2% $ 8,476 1% Adjusted Segment Operating Profit $ 282 (16) % $ 771 (15) % Adjusted Segment Operating Profit Margin 9.30 % (195) bp
Slide 10: International
International Q3 and YTD Fiscal 2024 Results Results Q3 YoY YTD Q3 YoY (FX-Adjusted; $ in millions) FY 24 Change FY 24 Change International Revenues $ 3,664 (18) % $ 10,906 (37) % Adjusted Segment Operating Profit $ 104 (27) % $ 292 (30) % Adjusted Segment Operating Profit Margin 2.84 % (37) bp 2.68
Slide 11: Corporate
Corporate Q3 and YTD Fiscal 2024 Results Results Q3 YoY YTD Q3 YoY ($ in millions) FY 24 Change FY 24 Change Corporate Adjusted Corporate Expenses $ (147) 674 % $ (455) 48 % Q3 Adjusted Corporate Expenses increased 674% year-over-year driven by a prior year pre-tax benefit of $126 million associated
Slide 12: Cash
Cash ($ in millions) YTD Cash Balance Walk Cash Dynamics Balance at March 31, 20231 $ 4,679 Delivered Free Cash Flow of $100 million in the third quarter and Operating cash flow 167 $2.9 billion for the trailing twelve months Capital expenditures (418) Returned $2.6 billion of cash to shareholders y
Slide 13: Fiscal 2024 Outlook
Fiscal 2024 Outlook On the following slides, McKesson presents an overview of its fiscal 2024 Outlook assumptions. The Company does not provide forward-looking guidance on a GAAP basis as McKesson is unable to provide a quantitative reconciliation of forward-looking Non-GAAP measures to the most dir
Slide 14: Raising and narrowing Fiscal 2024 Adjusted EPS outlook
Raising and narrowing Fiscal 2024 Adjusted EPS outlook Solid Business Performance Capital Deployment Fiscal 2024 Adjusted Earnings per Diluted Share guidance Anticipate $3.0 to $3.5 billion in share repurchases in Fiscal range indicates 5% to 7% growth compared to prior year 2024 Fiscal 2024 Adjuste
Slide 15: Raising and narrowing Fiscal 2024 Adjusted EPS outlook
Raising and narrowing Fiscal 2024 Adjusted EPS outlook $27.25 to $27.65 $26.80 to $27.40 ($0.05) FY24 Outlook Q3 FY24 Certain Items Operating Other1 FY24 Outlook (McKesson Ventures) Performance November 1, 2023 February 7, 2024 See endnotes for details 15 © 2024 McKesson Corporation. All rights rese
Slide 16: Fiscal 2024 adjusted outlook
Fiscal 2024 adjusted outlook Consolidated metrics Metric Fiscal 2024 Outlook Fiscal 2023 Actual Earnings per Diluted Share $27.25 to $27.65 $25.94 Previously $26.80 to $27.40 GAAP Revenues 11% to 14% growth 5% growth Previously 8% to 12% growth Operating Profit 2% decline to 1% growth 3% growth Prev
Slide 17: Fiscal 2024 adjusted outlook: segment metrics
Fiscal 2024 adjusted outlook Segment metrics U.S. Pharmaceutical Prescription Technology Medical-Surgical International Solutions Solutions FY24 Revenue 16% to 18% growth 9% to 13% growth Flat to 4% growth 29% to 33% decline Previously 13% to 15% growth Previously 7% to 13% growth Previously 2% decl
Slide 18: Appendix
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Slide 19: Endnotes
Endnotes These notes refer to the financial metrics and/or defined terms presented on: Slide 6 – Consolidated adjusted financial information 1. Non-GAAP measure representing Net income attributable to noncontrolling interests adjusted for the proportionate share of acquisition-related intangibles am
Slide 20: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Q3 Fiscal 2024 and Q3 Fiscal 2023 McKESSON CORPORATION Schedule 2 RECONCILIATION OF GAAP OPERATING RESULTS TO ADJUSTED RESULTS (NON-GAAP) (unaudited) (in millions) Three Months Ended December 31, Nine Months Ended December 31, 2023 2022 Change 2023 2022 Change Income
Slide 21: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Q3 Fiscal 2024 and Q3 Fiscal 2023 McKESSON CORPORATION Schedule 2 RECONCILIATION OF GAAP OPERATING RESULTS TO ADJUSTED RESULTS (NON-GAAP) (Continued) (unaudited) (in millions, except per share amounts) Three Months Ended December 31, Nine Months Ended December 31, 202
Slide 22: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Q3 Fiscal 2024 and Q3 Fiscal 2023 McKESSON CORPORATION Schedule 2 RECONCILIATION OF GAAP OPERATING RESULTS TO ADJUSTED RESULTS (NON-GAAP) (Continued) (unaudited) (in millions) Three Months Ended December 31, Nine Months Ended December 31, 2023 2022 Change 2023 2022 Ch
Slide 23: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Q3 Fiscal 2024 and Q3 Fiscal 2023 McKESSON CORPORATION Schedule 2 RECONCILIATION OF GAAP OPERATING RESULTS TO ADJUSTED RESULTS (NON-GAAP) (Continued) (unaudited) (in millions) Three Months Ended December 31, Nine Months Ended December 31, 2023 2022 Change 2023 2022 Ch
Slide 24: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Q3 Fiscal 2024 and Q3 Fiscal 2023 McKESSON CORPORATION Schedule 2 RECONCILIATION OF GAAP OPERATING RESULTS TO ADJUSTED RESULTS (NON-GAAP) (Continued) (unaudited) (in millions, except per share amounts) (a) Certain computations may reflect rounding adjustments. (b) Adj
Slide 25: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Q3 Fiscal 2024 and Q3 Fiscal 2023 McKESSON CORPORATION Schedule 3 RECONCILIATION OF GAAP SEGMENT OPERATING RESULTS TO ADJUSTED RESULTS (NON-GAAP) (unaudited) (in millions) Three Months Ended December 31, 2023 2022 As reported As adjusted Change Foreign Foreign As repo
Slide 26: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Q3 Fiscal 2024 and Q3 Fiscal 2023 McKESSON CORPORATION Schedule 3 RECONCILIATION OF GAAP SEGMENT OPERATING RESULTS TO ADJUSTED RESULTS (NON-GAAP) (Continued) (unaudited) (in millions) Nine Months Ended December 31, 2023 2022 As reported As adjusted Change Foreign Fore
Slide 27: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Q3 Fiscal 2024 and Q3 Fiscal 2023 McKESSON CORPORATION Schedule 6 RECONCILIATION OF GAAP CASH FLOW TO FREE CASH FLOW (NON-GAAP) (unaudited) (in millions) Nine Months Ended December 31, 2023 2022 Change GAAP CASH FLOW CATEGORIES Net cash provided by operating activitie
Slide 28: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Three Months and Trailing Twelve Months Ended Q3 Fiscal 2024 McKESSON CORPORATION Schedule 6 RECONCILIATION OF GAAP CASH FLOW TO FREE CASH FLOW (NON-GAAP) (Continued) (unaudited) (in millions) Trailing Twelve Three Months Months Ended Ended December December 31, 31, 2
Slide 29: Financial Statement Notes
Financial Statement Notes McKESSON CORPORATION 1 of 2 FINANCIAL STATEMENT NOTES 1. Transaction-related expenses and adjustments for the three and nine months ended December 31, 2023 includes pre-tax gains of $2 million (pre-tax and after-tax) and $78 million ($58 million after-tax), respectively, re
Slide 30: Financial Statement Notes
Financial Statement Notes FINANCIAL STATEMENT NOTES (continued) 2 of 2 5. Other adjustments, net for the three and nine months ended December 31, 2023 includes pre-tax provisions for bad debts of $515 million ($381 million after-tax) and $725 million ($536 million after-tax), respectively, within U.
Slide 31: Supplemental Non-GAAP Financial Information
Supplemental Non-GAAP Financial Information McKESSON CORPORATION 1 of 3 SUPPLEMENTAL NON-GAAP FINANCIAL INFORMATION In an effort to provide investors with additional information regarding the Company's financial results as determined by generally accepted accounting principles ("GAAP"), McKesson Cor
Slide 32: Supplemental Non-GAAP Financial Information
Supplemental Non-GAAP Financial Information SUPPLEMENTAL NON-GAAP FINANCIAL INFORMATION (continued) 2 of 3 • Adjusted Segment Operating Profit (Non-GAAP) and Adjusted Segment Operating Profit Margin (Non-GAAP): We define Adjusted Segment Operating Profit as GAAP segment operating profit, excluding a
Slide 33: Supplemental Non-GAAP Financial Information
Supplemental Non-GAAP Financial Information SUPPLEMENTAL NON-GAAP FINANCIAL INFORMATION (continued) 3 of 3 Other adjustments - The Company evaluates the nature and significance of transactions qualitatively and quantitatively on an individual basis and may include them in the determination of our ad