Cvs Health Corporation · NYSE:CVS
Cvs Health — Q1 2020 Earnings Presentation
21 slides from Cvs Health's earnings presentation, May 6, 2020
Slide 1: First Quarter 2020 Earnings conference call
FIRST QUARTER 2020 Earnings conference call May 6, 2020 Larry Merlo President & Chief Executive Officer Eva Boratto Executive Vice President & Chief Financial Officer ©2019 CVS Health and/or one of its affiliates. Confidential and proprietary.
Slide 2: Cautionary statement concerning forward-looking statements
Cautionary statement concerning forward-looking statements This presentation includes forward-looking statements. The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements made by or on behalf of CVS Health Corporation. By their nature, all forward-lo
Slide 3: CVS Health is uniquely positioned to help the country through the COVID-19 pandemic
CVS Health is uniquely positioned to help the country through the COVID-19 pandemic First priority is the wellbeing and safety of our Second priority is maintaining the continuity of our colleagues, consumers and the communities we serve businesses and operations • Executing robust COVID-19 response
Slide 4: Financial highlights
Financial highlights Q1 2020 Enterprise results reflect strong underlying 2020 Full-Year Adjusted EPS guidance range of $7.04 to performance $7.17 and cash flow from operations guidance range of Strong first quarter $10.5 to $11 billion remain unchanged in unprecedented • Q1 Adjusted EPS of $1.91, u
Slide 5: Strength and diversity of our Enterprise
Strength and diversity of our Enterprise Our integrated, innovation-driven health care model is providing benefits to members and consumers across the health care system that will continue into the future as needs evolve New opportunities to serve our members and consumers Uncertainties Significan
Slide 6: Enterprise Priorities Update
Enterprise Priorities Update 6 ©2020 CVS Health and/or one of its affiliates. Confidential and proprietary.
Slide 7: Enterprise priorities to accelerate growth
Grow and Deliver Enterprise priorities differentiate our transformational businesses products and services to accelerate growth Consumer focused – be local, make it simple, improve health Create a consumer- Modernize Enterprise centric technology functions and infrastructure capabilities 7 ©2020 CVS
Slide 8: Grow and differentiate our businesses
Integrated value offerings In collaboration with federal, state and local governments, MinuteClinic® practitioners are administering COVID-19 rapid tests across 5 states. Through May 4, we had administered nearly 90k tests with real-time results Pharmacist Panels that integrate pharmacy and medical
Slide 9: Deliver transformational products and services
Oncology Transform Oncology Care program rolled out to over 40 providers and CONTINUED PROGRESS care ~1,300 Commercial insured and ON STRATEGIC PRIORITIES Medicare members across 17 states Chronic Kidney Deliver Disease care Chronic Kidney Disease (CKD) care management program is currently available
Slide 10: Create a consumer-centric technology infrastructure
CarePass® CarePass subscription program has ~2.2M enrolled members as of Q1 2020, membership ~40% growth from prior quarter Retail Retail prescription home delivery is up prescription more than 1,000% compared to Q1 2019 CONTINUED PROGRESS ON STRATEGIC PRIORITIES home delivery Utilization of telemed
Slide 11: Modernize Enterprise functions and capabilities
Client service Investing in improving client service delivery with continued progress CONTINUED PROGRESS delivery toward process simplification and ON STRATEGIC PRIORITIES delivering net savings • Enhancing self-service capabilities by eliminating unnecessary member and Modernize patient inquiries,
Slide 12: Q1 2020 Financial Review
Q1 2020 Financial Review 12 ©2020 CVS Health and/or one of its affiliates. Confidential and proprietary.
Slide 13: Consolidated results
Q1 RESULTS Consolidated results in millions, except per share data Q1 2020 Q1 2019 Change % Interest expense of $733 million Total revenues $66,755 $61,646 8.3% Adjusted effective tax rate of 27.0% Adjusted operating income $4,113 $3,595 14.4% Weighted-average diluted share count: 1,312 million shar
Slide 14: Cash flow and capital allocation
Q1 RESULTS Cash flow and capital allocation Strong cash generation and Continue to prioritize paying down commitment to disciplined capital debt and maintaining dividend, with allocation priorities no share repurchases planned until leverage target met Generated $3.3 billion of cash flow from operat
Slide 15: Pharmacy Services segment
Q1 RESULTS Pharmacy Services segment Revenue growth drivers • Growth driven by Specialty pharmacy revenue reflecting full benefit of IngenioRx that started onboarding in Q2 2019 and COVID-19 related pull- in millions Q1 2020 Q1 2019 Change % forward of scripts and increase in 90-day prescriptions, p
Slide 16: Retail / LTC segment
Q1 RESULTS Retail / LTC segment Revenue growth drivers • Strong prescription volume growth described below and increased Front Store revenues (up ~2% pre- COVID-19), partially offset by continued reimbursement pressure and increased GDR in millions Q1 2020 Q1 2019 Change % • GDR1 of 89.3%, up ~ 60 b
Slide 17: Retail pharmacy
Q1 RESULTS Retail pharmacy Change vs. Q1 2019 Growth in prescription volume driven by Same store sales1 9.0% continued adoption of patient care programs, COVID-19 related prescription volume and leap Pharmacy sales 9.3% day Pharmacy adjusted prescription volume2 9.8% Growth in Front Store sales prim
Slide 18: Health Care Benefits segment
Q1 RESULTS Health Care Benefits segment Revenue growth primarily driven by strong membership growth in Government products in millions, except MBR Q1 2020 Q1 2019 Change % Adjusted operating income slight decline primarily due to membership declines in Commercial insured Total revenues $19,198 $17,8
Slide 19: Estimated impact of COVID-19 on Q1 financials
Q1 RESULTS Estimated impact of COVID-19 on Q1 financials Pharmacy Services Retail / LTC Health Care Benefits Corporate / Other Increase in prescription Increase in prescription Lower discretionary Realized capital losses volume due to pull- volume; same drivers as utilization starting mid in investm
Slide 20: April Business Update
April Business Update 20 ©2020 CVS Health and/or one of its affiliates. Confidential and proprietary.
Slide 21: April business update
April business update March 2020 YoY April 2020 YoY3 Retail same store sales1 17.5% 1.4% Change in April prescription and claims processed volume year-over-year versus Pharmacy sales 17.2% 5.3% March driven by reversal of the pull- forward in scripts seen in March, and Pharmacy adjusted prescription