Slide 1: McKesson Corporation Second Quarter Fiscal 2024 Earnings Call
McKesson Corporation Second Quarter Fiscal 2024 Earnings Call November 1, 2023
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: Delivering sustainable growth and long-term shareholder value
Delivering sustainable growth and long-term shareholder value Our Mission: To improve care in every setting – one product, one partner, one patient at a time Our Priorities: Focus on Evolve and Expand Sustainable People and Grow the Oncology and Core Culture Portfolio Biopharma Growth Platforms 3 ©
Slide 4: Second Quarter Fiscal 2024 Results
Second Quarter Fiscal 2024 Results
Slide 5: Focused on strengthening portfolio and driving sustainable value creation
Focused on strengthening portfolio and driving sustainable value creation Business Summary Company Updates • Revenues of $77.2 billion increased 10% • The U.S. Food and Drug Administration awarded Ontada a contract to advance the use of real-world data in the U.S. • Earnings per diluted share from c
Slide 6: Consolidated financial information
Consolidated financial information Q2 and YTD Fiscal 2024 Results Results Q2 YoY YTD Q2 YoY ($ and shares in millions, except per share amounts) FY 24 Change FY 24 Change Revenues $ 77,215 10 % $ 151,698 10 % Adjusted Gross Profit $ 3,045 (1) % $ 5,981 (2) % Adjusted Operating Expenses $ (1,863) (2)
Slide 7: U.S. Pharmaceutical
U.S. Pharmaceutical Q2 and YTD Fiscal 2024 Results Results Q2 YoY YTD Q2 YoY ($ in millions) FY 24 Change FY 24 Change U.S. Pharmaceutical Revenues $ 69,766 16 % $ 136,926 17 % Adjusted Segment Operating Profit $ 815 8% $ 1,586 8% Adjusted Segment Operating Profit Margin 1.17 % (9) bp 1.16 % (9) bp
Slide 8: Prescription Technology Solutions
Prescription Technology Solutions Q2 and YTD Fiscal 2024 Results Results Q2 YoY YTD Q2 YoY ($ in millions) FY 24 Change FY 24 Change Prescription Technology Solutions Revenues $ 1,140 12 % $ 2,384 14 % Adjusted Segment Operating Profit $ 209 48 % $ 432 41 % Adjusted Segment Operating Profit Margin 1
Slide 9: Medical-Surgical Solutions
Medical-Surgical Solutions Q2 and YTD Fiscal 2024 Results Results Q2 YoY YTD Q2 YoY ($ in millions) FY 24 Change FY 24 Change Medical-Surgical Solutions Revenues $ 2,834 —% $ 5,445 —% Adjusted Segment Operating Profit $ 254 (17) % $ 489 (15) % Adjusted Segment Operating Profit Margin 8.96 % (184) bp
Slide 10: International
International Q2 and YTD Fiscal 2024 Results Results Q2 YoY YTD Q2 YoY ($ in millions) FY 24 Change FY 24 Change International Revenues1 $ 3,475 (44) % $ 6,943 (46) % Adjusted Segment Operating Profit1 $ 89 (35) % $ 179 (35) % Adjusted Segment Operating Profit Margin 2.56 % 36 bp 2.58 % 43 bp Q2 FX-
Slide 11: Corporate
Corporate Q2 and YTD Fiscal 2024 Results Results Q2 YoY YTD Q2 YoY ($ in millions) FY 24 Change FY 24 Change Corporate Adjusted Corporate Expenses $ (159) 10 % $ (308) 7% Q2 Adjusted Corporate Expenses increased 10% year-over-year driven by losses of approximately $10 million associated with McKesso
Slide 12: Cash
Cash ($ in millions) YTD Cash Balance Walk Cash Dynamics Balance at March 31, 20231 $ 4,679 Delivered Free Cash Flow of $825 million in the second quarter and $4.3 billion for the trailing twelve months Operating cash flow (87) Capital expenditures (264) Returned $1.7 billion of cash to shareholders
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 $26.80 — $27.40 Solid Business Performance Capital Deployment Fiscal 2024 Adjusted Earnings per Diluted Share guidance Anticipate approximately $3.5 billion in share repurchases in range indicates 3% to 6% growth compared to prior year Fiscal 20
Slide 15: Raising and narrowing Fiscal 2024 Adjusted EPS outlook
Raising and narrowing Fiscal 2024 Adjusted EPS outlook $26.80 to $27.40 $26.55 to $27.35 ($0.06) FY24 Outlook Q2 FY24 Certain Items Operating Other1 FY24 Outlook (McKesson Ventures) Performance August 2, 2023 November 1, 2023 See endnotes for details 15 © 2023 McKesson Corporation. All rights reserv
Slide 16: Fiscal 2024 outlook
Fiscal 2024 outlook Consolidated metrics Metric Fiscal 2024 Outlook Fiscal 2023 Actual Adjusted Earnings per Diluted Share $26.80 to $27.40 $25.94 Previously $26.55 to $27.35 Revenues 8% to 12% growth 5% growth Previously 7% to 12% growth Adjusted Operating Profit Flat to 4% decline 3% growth Adjust
Slide 17: Fiscal 2024 outlook
Fiscal 2024 outlook Segment metrics U.S. Pharmaceutical Prescription Technology Medical-Surgical International Solutions Solutions FY24 Revenue 13% to 15% growth 7% to 13% growth 2% decline to 2% growth 30% to 34% decline Previously 1% decline to 3% growth FY24 Adjusted Segment Operating Profit Repo
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 financial information 1. Non-GAAP measure representing Net income attributable to noncontrolling interests adjusted for the proportionate share of acquisition-related intangibles amortizatio
Slide 20: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Q2 Fiscal 2024 and Q2 Fiscal 2023 McKESSON CORPORATION Schedule 2 RECONCILIATION OF GAAP OPERATING RESULTS TO ADJUSTED RESULTS (NON-GAAP) (unaudited) (in millions) Three Months Ended September 30, Six Months Ended September 30, 2023 2022 Change 2023 2022 Change Income
Slide 21: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Q2 Fiscal 2024 and Q2 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 September 30, Six Months Ended September 30, 20
Slide 22: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Q2 Fiscal 2024 and Q2 Fiscal 2023 McKESSON CORPORATION Schedule 2 RECONCILIATION OF GAAP OPERATING RESULTS TO ADJUSTED RESULTS (NON-GAAP) (Continued) (unaudited) (in millions) Three Months Ended September 30, Six Months Ended September 30, 2023 2022 Change 2023 2022 C
Slide 23: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Q2 Fiscal 2024 and Q2 Fiscal 2023 McKESSON CORPORATION Schedule 2 RECONCILIATION OF GAAP OPERATING RESULTS TO ADJUSTED RESULTS (NON-GAAP) (Continued) (unaudited) (in millions) Three Months Ended September 30, Six Months Ended September 30, 2023 2022 Change 2023 2022 C
Slide 24: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Q2 Fiscal 2024 and Q2 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 Q2 Fiscal 2024 and Q2 Fiscal 2023 McKESSON CORPORATION Schedule 3 RECONCILIATION OF GAAP SEGMENT OPERATING RESULTS TO ADJUSTED RESULTS (NON-GAAP) (unaudited) (in millions) Three Months Ended September 30, 2023 2022 As reported As adjusted Change Foreign Foreign As rep
Slide 26: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Q2 Fiscal 2024 and Q2 Fiscal 2023 McKESSON CORPORATION Schedule 3 RECONCILIATION OF GAAP SEGMENT OPERATING RESULTS TO ADJUSTED RESULTS (NON-GAAP) (unaudited) (in millions) Three Months Ended September 30, 2023 2022 As reported As adjusted Change Foreign Foreign As rep
Slide 27: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Q2 Fiscal 2024 and Q2 Fiscal 2023 McKESSON CORPORATION Schedule 3 RECONCILIATION OF GAAP SEGMENT OPERATING RESULTS TO ADJUSTED RESULTS (NON-GAAP) (Continued) (unaudited) (in millions) Six Months Ended September 30, 2023 2022 As reported As adjusted Change Foreign Fore
Slide 28: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Q2 Fiscal 2024 and Q2 Fiscal 2023 McKESSON CORPORATION Schedule 3 RECONCILIATION OF GAAP SEGMENT OPERATING RESULTS TO ADJUSTED RESULTS (NON-GAAP) (Continued) (unaudited) (in millions) Six Months Ended September 30, 2023 2022 As reported As adjusted Change Foreign Fore
Slide 29: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Q2 Fiscal 2024 and Q2 Fiscal 2023 McKESSON CORPORATION Schedule 6 RECONCILIATION OF GAAP CASH FLOW TO FREE CASH FLOW (NON-GAAP) (unaudited) (in millions) Six Months Ended September 30, 2023 2022 Change GAAP CASH FLOW CATEGORIES Net cash provided by (used in) operating
Slide 30: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Three Months and Trailing Twelve Months Ended Q2 Fiscal 2024 McKESSON CORPORATION Schedule 6 RECONCILIATION OF GAAP CASH FLOW TO FREE CASH FLOW (NON-GAAP) (Continued) (unaudited) (in millions) Three Months Trailing Twelve Ended Months Ended September 30, September 30,
Slide 31: Financial Statement Notes
Financial Statement Notes McKESSON CORPORATION 1 of 2 FINANCIAL STATEMENT NOTES 1. Transaction-related expenses and adjustments for the three and six months ended September 30, 2023 includes pre-tax gains of $48 million ($35 million after-tax) and $76 million ($56 million after-tax), respectively, r
Slide 32: Financial Statement Notes
Financial Statement Notes McKESSON CORPORATION 2 of 2 FINANCIAL STATEMENT NOTES 5. Other adjustments, net for the three and six months ended September 30, 2023 includes a pre-tax provision for bad debts of $210 million ($155 million after-tax) within U.S. Pharmaceutical related to the bankruptcy of
Slide 33: Supplemental Non-GAAP Financial Information
Supplemental Non-GAAP Financial Information McKESSON CORPORATION 1 of 4 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 34: Supplemental Non-GAAP Financial Information
Supplemental Non-GAAP Financial Information SUPPLEMENTAL NON-GAAP FINANCIAL INFORMATION (continued) 2 of 4 • Adjusted Earnings per Diluted Share Excluding Certain Items (Non-GAAP): Prior to fiscal 2024, we defined Adjusted Earnings per Diluted Share Excluding Certain Items as Adjusted Earnings per D
Slide 35: Supplemental Non-GAAP Financial Information
Supplemental Non-GAAP Financial Information SUPPLEMENTAL NON-GAAP FINANCIAL INFORMATION (continued) 3 of 4 Transaction-related expenses and adjustments - Transaction, integration, and other expenses that are directly related to business combinations, the formation of joint ventures, divestitures, an
Slide 36: Supplemental Non-GAAP Financial Information
Supplemental Non-GAAP Financial Information SUPPLEMENTAL NON-GAAP FINANCIAL INFORMATION (continued) 4 of 4 • Free Cash Flow (Non-GAAP): We define free cash flow as net cash provided by (used in) operating activities less payments for property, plant, and equipment and capitalized software expenditur