Cardinal Health, Inc. · NYSE:CAH
Cardinal Health — Q4 FY2015 Earnings Presentation
26 slides from Cardinal Health's earnings presentation, Jul 30, 2015
Slide 1: Q4 FY2015 earnings investor/analyst call
Q4 FY2015 earnings investor/analyst call July 30, 2015 © Copyright 2015, Cardinal Health. All rights reserved. CARDINAL HEALTH, the Cardinal Health LOGO and ESSENTIAL TO CARE are trademarks or registered trademarks of Cardinal Health.
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: CAH FY2015 Accomplishments
July 30, 2015 CAH FY2015 Accomplishments • Increased revenue by 13% • Increased gross margin dollars by 11% • Expanded non-GAAP operating earnings by 16%1 to a record $2.5B, and improved margin rates by 7 bps • Grew non-GAAP diluted EPS from continuing operations by 14% to $4.38 • Generated $2.5B in
Slide 4: Q4 and FY2015 results
Q4 and FY2015 results © Copyright 2015 Cardinal Health. All rights reserved. CARDINAL HEALTH, the Cardinal Health LOGO and 4 ESSENTIAL TO CARE are trademarks or registered trademarks of Cardinal Health.
Slide 5: Financial summary
Q4 FY2015 Financial summary GAAP Basis ($M) Non-GAAP Basis ($M) Q4 FY15 Q4 FY14 Q4 FY15 Q4 FY14 Revenue $27,547 $22,894 % change 20% (10)% Operating earnings $558 $387 $611 $461 % change 44% N.M. 33% (2)% Ratio to revenue 2.03% 1.69% 2.22% 2.01% Earnings from continuing ops $293 $234 $333 $284 % cha
Slide 6: Pharmaceutical segment business analysis
Q4 FY2015 Pharmaceutical segment business analysis Q4 FY15 Q4 FY14 % Change ($M) ($M) Revenue $24,676 $20,092 23% Segment profit $535 $377 42% Segment profit margin 2.17% 1.88% Highlights: • Revenue increased due to growth from existing and new customers. • Segment profit increased, driven by strong
Slide 7: Medical segment business analysis
Q4 FY2015 Medical segment business analysis Q4 FY15 Q4 FY14 % Change ($M) ($M) Revenue $2,855 $2,794 2% Segment profit $103 $96 7% Segment profit margin 3.59% 3.43% Highlights: • Revenue increased due to contributions from acquisitions and growth in the Cardinal Health at Home platform, partially of
Slide 8: GAAP to non-GAAP reconciliation
Q4 FY2015 GAAP to non-GAAP reconciliation Q4 FY 2015 Q4 FY 2014 Earnings from Diluted EPS Earnings from Diluted EPS Operating Operating Continuing from Continuing Continuing from Continuing Earnings ($M) Earnings ($M) Operations ($M) Operations Operations ($M) Operations GAAP $558 $293 $0.88 $387 $2
Slide 9: FY2015 financial summary
Q4 FY2015 FY2015 financial summary GAAP Basis ($M) Non-GAAP Basis ($M) FY15 FY14 FY15 FY14 Revenue $102,531 $91,084 % change 13% (10)% Operating earnings $2,161 $1,885 $2,472 $2,133 % change 15% 89% 16% 4% Ratio to revenue 2.11% 2.07% 2.41% 2.34% Earnings from continuing ops $1,212 $1,163 $1,469 $1,
Slide 10: FY2015 GAAP to non-GAAP reconciliation
Q4 FY2015 FY2015 GAAP to non-GAAP reconciliation FY2015 FY2014 Earnings from Diluted EPS Earnings from Diluted EPS Operating Operating Continuing from Continuing Continuing from Continuing Earnings ($M) Earnings ($M) Operations ($M) Operations Operations ($M) Operations GAAP $2,161 $1,212 $3.61 $1,8
Slide 11: FY2016 outlook
FY2016 outlook © Copyright 2015 Cardinal Health. All rights reserved. CARDINAL HEALTH, the Cardinal Health LOGO and 11 ESSENTIAL TO CARE are trademarks or registered trademarks of Cardinal Health.
Slide 12: CAH FY2016 financial expectations
July 30, 2015 CAH FY2016 financial expectations FY2016 outlook FY2015 actual Low double-digit Revenue percentage $103B growth vs. PY Non-GAAP diluted EPS from continuing $4.85 to $5.05 $4.38 operations © Copyright 2015, Cardinal Health. All rights reserved. CARDINAL HEALTH, the Cardinal Health LOGO
Slide 13: FY16 corporate assumptions
July 30, 2015 FY16 corporate assumptions FY16 outlook FY15 actual Non-GAAP effective tax rate 35.5% – 37.0%1 37.2% Diluted weighted average 334M - 336M 335M shares outstanding Interest and other, net $195M - $210M $134M Capital expenditures $510M - $540M $300M Acquisition-related intangible ~$194M o
Slide 14: Pharmaceutical Segment FY16 assumptions
July 30, 2015 Pharmaceutical Segment FY16 assumptions • Low double-digit percentage increase in revenue vs. prior year • Branded drug manufacturer pricing similar to FY15 • Positive Y-o-Y contribution from generics program, including Red Oak Sourcing joint venture, net of payments to CVS Health • De
Slide 15: Medical Segment FY16 assumptions
July 30, 2015 Medical Segment FY16 assumptions • Mid- to high-single digit percentage revenue growth vs. prior year • Mid-single digit percentage segment profit growth vs. prior year • Growth back-half weighted • Above market growth in Cardinal Health at Home • Stronger growth in Cardinal Health bra
Slide 16: © Copyright 2015 Cardinal Health. All rights reserved. CARDINAL HEALTH, the Cardinal Health LOGO
© Copyright 2015 Cardinal Health. All rights reserved. CARDINAL HEALTH, the Cardinal Health LOGO and ESSENTIAL TO CARE are trademarks or registered trademarks of Cardinal Health.
Slide 17: Q4 FY2015 trailing five quarters and GAAP to Non-GAAP reconciliation statements
Q4 FY2015 trailing five quarters and GAAP to Non-GAAP reconciliation statements © Copyright 2015 Cardinal Health. All rights reserved. CARDINAL HEALTH, the Cardinal Health LOGO and ESSENTIAL TO CARE are trademarks or registered trademarks of Cardinal Health. 17
Slide 18: Segment analysis
Q4 FY2015 Segment analysis Pharmaceutical segment Q4 FY14 Q1 FY15 Q2 FY15 Q3 FY15 Q4 FY15 Revenue 20,092 21,209 22,627 22,605 24,676 ($M) Segment Profit 377 451 542 567 535 ($M) Medical segment Q4 FY14 Q1 FY15 Q2 FY15 Q3 FY15 Q4 FY15 Revenue 2,794 2,852 2,914 2,774 2,855 ($M) Segment Profit 96 113 1
Slide 19: GAAP / Non-GAAP Reconciliation Fourth Quarter 2015
Cardinal Health, Inc. and Subsidiaries GAAP / Non-GAAP Reconciliation Fourth Quarter 2015 Operating Earnings Before Provision Earnings Earnings from Diluted EPS Diluted EPS Earnings Income Taxes for from Continuing from from Continuing Operating Growth and Discontinued Income Continuing Operations C
Slide 20: Total Company Business Analysis
Cardinal Health, Inc. and Subsidiaries Total Company Business Analysis Non-GAAP Fourth Quarter Fourth Quarter (in millions) 2015 2014 2015 2014 Revenue Amount $ 27,547 $ 22,894 Growth rate 20 % (10)% Operating earnings Amount $ 558 $ 387 $ 611 $ 461 Growth rate 44 % N.M. 33 % (2)% Earnings from cont
Slide 21: Segment Business Analysis Fourth Quarter
Cardinal Health, Inc. and Subsidiaries Segment Business Analysis Fourth Quarter Fourth Quarter (in millions) 2015 2014 (in millions) 2015 2014 Pharmaceutical Medical Revenue Revenue Amount $ 24,676 $ 20,092 Amount $ 2,855 $ 2,794 Growth rate 23 % (12)% Growth rate 2% 4% Segment profit Segment profit
Slide 22: Segment Business Analysis Fiscal Year
Cardinal Health, Inc. and Subsidiaries Segment Business Analysis Fiscal Year Fiscal Year (in millions) 2015 2014 (in millions) 2015 2014 Pharmaceutical Medical Revenue Revenue Amount $ 91,116 $ 80,110 Amount $ 11,395 $ 10,962 Growth rate1 14 % (12)% Growth rate 4% 9% Segment profit Segment profit Am
Slide 23: GAAP / Non-GAAP Reconciliation Fourth Quarter
Cardinal Health, Inc. and Subsidiaries GAAP / Non-GAAP Reconciliation Fourth Quarter (in millions) 2015 2014 GAAP return on equity 18.7 % 14.5 % Non-GAAP return on equity Net earnings $ 295 $ 234 Restructuring and employee severance, net of tax, in continuing operations 7 4 Amortization and other ac
Slide 24: GAAP / Non-GAAP Reconciliation Fiscal Year
Cardinal Health, Inc. and Subsidiaries GAAP / Non-GAAP Reconciliation Fiscal Year (in millions) 2015 2014 GAAP return on equity 19.4 % 18.3 % Non-GAAP return on equity Net earnings $ 1,215 $ 1,166 Restructuring and employee severance, net of tax, in continuing operations 29 20 Amortization and other
Slide 25: GAAP / Non-GAAP Reconciliation (Schedule 8)
Schedule 8 Cardinal Health, Inc. and Subsidiaries GAAP / Non-GAAP Reconciliation Fourth Quarter Fiscal Year (in millions) 2015 2014 2015 2014 GAAP effective tax rate from continuing operations 44.1 % 34.4 % 38.4 % 35.3 % Non-GAAP effective tax rate from continuing operations Earnings before income t
Slide 26: Definitions and LIFO notes
Cardinal Health, Inc. and Subsidiaries 5 In fiscal 2015, the Company began excluding last-in, first-out ("LIFO") inventory charges/(credits) from its non-GAAP earnings, for consistency with the presentation by some of its peers. The Company did not record any LIFO charges or credits in fiscal 2015 o