Cvs Health Corporation · NYSE:CVS
Cvs Health — Q4 2022 Earnings Presentation
20 slides from Cvs Health's earnings presentation, Feb 8, 2023
Slide 1: Fourth Quarter 2022 Earnings Conference Call
FOURTH QUARTER 2022 Earnings conference call February 8, 2023 KAREN S. LYNCH President and Chief Executive Officer SHAWN M. GUERTIN Executive Vice President and Chief Financial Officer
Slide 2: 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 (“CVS Health”). By their nature, all forward-looking statements are not guarantees of futur
Slide 3: Financial highlights
Financial highlights Q4 2022 Adjusted EPS of $1.99 exceeded expectations; Reaffirming 2023 Adjusted EPS guidance to between $8.70 - $8.90 $1.99 9.5% Q4 2022 Adjusted EPS Q4 revenue growth Exceeded expectations Reflects growth across all segments Deployed capital to generate Evidence FY 2023 guidance
Slide 4: Unify our business around the consumer health experience
1 Grow our foundational businesses 2 Advance care delivery and health services Unify our business offerings around the consumer health experience 3 Reimagine our omnichannel health experience and scale new sources of value 4 Harness cutting-edge tech to streamline and simplify 5 Empower our people a
Slide 5: 2022 Financial Review
2022 Financial Review 5 ©2023 CVS Health and/or one of its affiliates.
Slide 6: Consolidated results 2022
FULL-YEAR 2022 Consolidated results Delivered Adjusted EPS 6% above midpoint of initial 2022 guidance Strong revenue growth in millions, except per share amounts 2022 2021 Change % of 10.4% vs. prior year Total Revenues $322,467 $292,111 10.4% Interest expense of $2,287 million Adjusted Operating In
Slide 7: Capital and cash flow
FULL-YEAR 2022 Capital and cash flow Liquidity and capital position remain strong Powerful cash generation Deploying capital to generate shareholder value Generated $16.2 billion in cash flow from operations Returned $2.9 billion in shareholder dividends Committed to investment Announced a 10% incre
Slide 8: Fourth quarter 2022 consolidated results
FOURTH QUARTER 2022 Consolidated results Delivered strong results and exceeded expectations Strong revenue growth in millions, except per share amounts Q4 2022 Q4 2021 Change % of 9.5% vs. prior year Total Revenues $83,846 $76,604 9.5% Interest expense of $552 million Adjusted Operating Income $4,00
Slide 9: Health Care Benefits segment
FOURTH QUARTER 2022 Health Care Benefits segment Robust revenue growth across all product lines in millions, except MBR Q4 2022 Q4 2021 Change % Total revenue growth reflects growth Total Revenues $23,033 $20,699 11.3% across all product lines Adjusted operating income growth driven Adjusted Operati
Slide 10: Pharmacy Services segment
FOURTH QUARTER 2022 Pharmacy Services segment Industry-leading drug trend, Specialty management capabilities and leading customer service levels continue to drive growth Total revenue growth reflects increased pharmacy claims volume, growth in specialty pharmacy and brand inflation, partially offset
Slide 11: Retail / LTC segment
FOURTH QUARTER 2022 Retail / LTC segment Retail continues to serve as a community health destination for millions of Americans as we continue to grow retail pharmacy script share Total revenue growth reflects increased prescription and front store volume, including the impact of an elevated cough, c
Slide 12: Retail Pharmacy
FOURTH QUARTER 2022 Retail Pharmacy Significant year-over-year growth in a dynamic environment Continued growth in retail pharmacy Change vs. script share Q4 2021 Retail Pharmacy Script Share of 26.9%1,2 Up ~10 bps Growth in prescriptions filled2 reflects increased utilization and the impact of an S
Slide 13: 2023 Guidance
2023 Guidance 13 ©2023 CVS Health and/or one of its affiliates.
Slide 14: 2022 Adjusted EPS Baseline
2022 Adjusted EPS Baseline 2022 results and expectations impacted by several factors not expected to reoccur in 2023, including the net favorable impact of COVID on our business 1. Prior year reserve development improved our 2022 results; 2022 Adjusted EPS $8.69 we do not forecast prior year reserve
Slide 15: 2023 Guidance: Adjusted Earnings Per Share
2023 Guidance Adjusted Earnings Per Share Components of 2023 Growth versus 2022 Actuals • Retail/LTC: between $5.95 and $6.05 billion • Health Care Benefits: Low to Mid-Single Digit Growth • Pharmacy Services: Mid-Single Digit Growth • Share Repurchases $8.70 - $8.90 $8.69 Mid to High-Single Digit G
Slide 16: Total company outlook
FULL-YEAR 2023 GUIDANCE Total company outlook Strong positioning and momentum for 2023 in billions, except per share amounts FY 2023 Guidance Revenue growth of 3 – 5% Total Revenues $332.7 to $338.5 3 – 5% Adj. EPS growth Adjusted Operating Income $17.32 to $17.67 (1) – 1% of 5 – 8% versus 2022 base
Slide 17: Health Care Benefits outlook
FULL-YEAR 2023 GUIDANCE Health Care Benefits outlook Reflects membership growth driven in billions, by Individual Exchanges, low to mid- except MBR and Medical Membership FY 2023 Guidance single digit Medicare Advantage growth and Medicaid decline due to redeterminations Total Revenues $101.4 to $10
Slide 18: Pharmacy Services outlook
FULL-YEAR 2023 GUIDANCE Pharmacy Services outlook Revenue growth driven by a successful 2023 selling season and in billions FY 2023 Guidance strong retention, partially offset by lower Medicaid volume Total Revenues $170.2 to $172.7 1 – 2% Value driven by generic and biosimilar launches Adjusted Ope
Slide 19: Retail/LTC outlook
FULL-YEAR 2023 GUIDANCE Retail/LTC outlook Growth in pharmacy scripts and front store core business in billions FY 2023 Guidance Purchasing cost improvements $108.0 to $109.7 Ongoing pharmacy Total Revenues 1 – 3% reimbursement pressure Adjusted Operating Income $5.95 to $6.05 (11) – (10)% Continued
Slide 20: Other items
FULL-YEAR 2023 GUIDANCE Other items FY 2023 Guidance Strong cash flow provides ample opportunity to Cash Flow from Operations ($ billions) $12.5 to $13.5 achieve strategic priorities Capital Expenditures ($ billions) $2.8 to $3.0 Capital expenditures of $2.8 - $3.0 billion as we continue Interest Ex