McKesson Corporation · NYSE:MCK
McKesson — Credit Suisse Healthcare Conference 2015
39 slides from McKesson's conference presentation, 2015
Slide 1: McKesson Corporation – Credit Suisse Healthcare Conference
McKesson Corporation Credit Suisse Healthcare Conference John Hammergren Chairman and Chief Executive Officer
Slide 2: Forward-Looking Statements
Forward-Looking Statements Some of the information in this presentation is not historical in nature and may constitute forward-looking statements, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements may be identified by the
Slide 3: McKesson At A Glance
McKesson At A Glance Delivering Better Health For More Than 180 Years 182 $179B $3.1B in operating year history of serving customers in revenues cash flow Delivering Nearly More than 1/3 77,ooo employees worldwide of all prescription 12,000 medicine in North America owned and banner pharmacies 3.3B
Slide 4: Healthcare Industry And Politics
Healthcare Industry And Politics Pharmaceutical Interoperability Innovation Value-Based Cost, Quality Reimbursement and Access
Slide 5: Healthcare Landscape: Dynamics Today
Healthcare Landscape: Dynamics Today Chronic Consolidation Regulatory Diseases and and Technology Complexity Changing Convergence Demographics Anthem – Cigna Accountable Longer Life Interoperability Care Act Expectancies Aetna – Humana Cybersecurity Value-Based Care Increase In Walgreens – Telemedic
Slide 6: Long-Term Partnerships With Rite Aid And Walgreens
Long-Term Partnerships With Rite Aid And Walgreens Rite Aid Walgreens Working together 20+ year relationship through for more than a decade RelayHealth Pharmacy An Integrated and Improving Patient Care with Efficient Solution Retail Pharmacy Solutions • Direct distribution to over 4,5001 • Pharmaceu
Slide 7: A Long Track Record Of Driving Innovation In A Dynamic Industry
A Long Track Record Of Driving Innovation In A Dynamic Industry NorthStar private label Fee For US Oncology Service Model expands specialty Celesio: European OneStop generics introduced platform expansion 2002 2005 2010 2013 2004 2007 2012 2015 Health Mart Cypress: Global Canada: Tripled Adding scal
Slide 8: North America Pharmaceutical Distribution And Services
Distribution Solutions North America Pharmaceutical Distribution And Services
Slide 9: Healthcare Leadership Across North America Pharmaceutical Distribution And Services
Healthcare Leadership Across North America Pharmaceutical Distribution And Services Doubled Size A Leader in Community of OneStop Oncology in the U.S. since FY20101 Next-Day North America Service Revenue Growth Pioneers in Private or Better to Label Since 2002 95 % 12% of Canadian CAGR3 Population2
Slide 10: Expanding Relationships With Retail And Independent Pharmacy
Expanding Relationships With Retail And Independent Pharmacy 2K+ BANNERS2 SOURCING SERVICING NEARLY PARTNER of CHOICE More2 than 40 % of 4,200 stores Canadian independent pharmacies2 Nearly 1,700 pharmacies across 33-state operating areas1 10+ years of leadership Benefit from the scale and strength
Slide 11: Proven Leadership: Sourcing Generics In U.S.
Proven Leadership: Sourcing Generics In U.S. OneStop proprietary generics program Competitive Expert Customer-specific pricing product sourcing solutions Sourcing generics for 22% CAGR2 20K+ pharmacies1 since Fiscal 2003 11 1Data valid as of October 29, 2015 for U.S. customer base 2Computed from FY2
Slide 12: A Valuable Partner To Institutions And Health Systems
A Valuable Partner To Institutions And Health Systems Solutions-Led Approach Federal IDNs Alternate site Department of Veterans Affairs Supply partnerships Tailored capabilities Department of Defense with the nation’s leading health for long-term care and systems and alliances specialty pharmacies 1
Slide 13: Well Positioned In Specialty Distribution And Services Across North America
Well Positioned In Specialty Distribution And Services Across North America MULTI-CHANNEL PRESENCE #1 In COMMUNITY ONCOLOGY Supporting the pharmaceutical development lifecycle 60 • iKnowMed: #1 Oncology Research sites1 EHR2 • Payer contracting ABOUT 300 Ongoing active trials 1 Canada • 7 specialty p
Slide 14: Medical-Surgical Distribution and Services
Distribution Solutions Medical-Surgical Distribution and Services
Slide 15: Medical-Surgical: A Leader Across Alternate Site
Medical-Surgical: A Leader Across Alternate Site #1 Market Share Market #1 Share Surgery Home Care Physician Surgery Centers Home #1 Long-term Long Term Offices Centers Care Care Care 6K Customers 12K Customers 200,000 6,000 12,000 18,000 Customers Customers Customers Customers Customers Leading glo
Slide 16: Solid Progress On PSS Integration
Solid Progress On PSS Integration 100% extended care Nearly 75% of Preferred suppliers distribution centers on combined distribution growing 3x faster one platform by Fiscal 2016 centers consolidated to date Harmonized 3,000+ Improving cost and payment Excellent private label products terms with sup
Slide 17: Global Sourcing and International Pharmaceutical Distribution and Services
Distribution Solutions Global Sourcing and International Pharmaceutical Distribution and Services
Slide 18: Strong Global Retail Pharmacy Footprint
Strong Global Retail Pharmacy Footprint 12,000+ owned and banner pharmacies globally HealthMart 4,200+ Canada Banners 2,000+ International Owned / Banners 6,500+ 18 Data valid as of October 2015
Slide 19: Celesio Brings Global Opportunities
Celesio Brings Global Opportunities Extensive European Distribution Pharmacy Network Lloyds Network Pharmacy
Slide 20: Expanding Our International Platform
Expanding Our International Platform Strong Progress on Integration and Strategic Acquisitions Grow Customer Operational Global Sourcing European Our People Relationships Success Pharmacy Network (EPN) Deploying capital to expand scale and create value 20
Slide 21: Distribution Solutions: Strong And Diversified
Distribution Solutions: Strong And Diversified Operational Excellence At The Center Of All We Do Scaled leadership Attractive and portfolio healthcare market spanning 20 countries Deep relationships Operational Diverse 100+ manufacturers Excellence customer base Effective capital Global procurement
Slide 22: Technology Solutions
Technology Solutions
Slide 23: Connecting Healthcare And Focusing On Customer Needs
Connecting Healthcare And Focusing On Customer Needs Payers Providers Pharmacies Diversifying and evolving Scaling and integrating to Redefining roles in care to enable value-based adapt in the shifting delivery and consumer reimbursement payment environment engagement Over 300 ~630K 50K + payers pr
Slide 24: Partnering With Customers To Enable Better Business And Better Health
Partnering With Customers To Enable Better Business And Better Health Connectivity Payer Imaging Process over $1 trillion in >4,000 hospitals Deployed in more than billing annually and facilities 2,850 facilities 2.4 billion clinical Over 95% of top 25 health 68 million images transactions per year
Slide 25: A Unique Value Proposition With A 360° View Of Healthcare
A Unique Value Proposition With A 360° View Of Healthcare • Diversified portfolio • Expertise working with payers, hospitals, physicians, pharmacies • Driving Connectivity: RelayHealth selected as CommonWell service provider 25
Slide 26: Leading The Industry Towards A Vision Of Person-Centered Interoperability
Leading The Industry Towards A Vision Of Person-Centered Interoperability 34 member companies 70%+ of acute EHR 24%+ of ambulatory EHR Expected to enable at least 5,000 sites by the end of 2015 26 Data valid as of October 1, 2015
Slide 27: Financial Update
Financial Update
Slide 28: Solid Performance: First Half of Fiscal 2016
Solid Performance: First Half of Fiscal 2016 $96B 13% Growth Total Revenues Total Revenues1 24% Adjusted EPS Growth1 17 Growth Adjusted Operating Profit % 1 1For the first half of Fiscal Year 2016. Represents non-GAAP information calculated on an Adjusted Earnings and Constant Currency basis. The re
Slide 29: Steadily Increased Operating Cash Flows
Steadily Increased Operating Cash Flows OCF ($ Billions) 7-Year Moving Average $3.0 $2.5 OCF ($ Billions) $2.0 $1.5 $1.0 $0.5 FY09 FY10 FY11 FY12 FY13 FY14 FY15 29
Slide 30: A Portfolio Approach To Capital Deployment
A Portfolio Approach To Capital Deployment Nearly $24 Billion deployed during FY2009 – FY2015 Fiscal 2016 $600 - $650 $600+ $500 17 $1.5 million million million percent billion in planned in acquisitions in share increase in scheduled long- internal announced buybacks quarterly term debt investments
Slide 31: A History Of Strong Culture And Leadership
A History Of Strong Culture And Leadership | Delivering Operational Excellence 99.98% order accuracy across North America Fostering Innovation Nearly 500 active and pending patents Driving Execution Experienced and tenured management team
Slide 32: McKesson
MSKESSON
Slide 33: Reconciliation of GAAP Operating Results to Adjusted Earnings
RECONCILIATION OF GAAP OPERATING RESULTS TO ADJUSTED EARNINGS (NON-GAAP) FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2015 TO FISCAL YEAR 2010 (unaudited) (in millions, except per share amounts) Six Months Ended September 30, 2015 Amortization Acquisition Claim and of Acquisition- Expenses and Litigation
Slide 34: Reconciliation of GAAP Operating Results to Adjusted Earnings
RECONCILIATION OF GAAP OPERATING RESULTS TO ADJUSTED EARNINGS (NON-GAAP) FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2015 TO FISCAL YEAR 2010 (unaudited) (in millions, except per share amounts) Year Ended March 31, 2014 Amortization Acquisition Claim and of Acquisition- Expenses and Litigation Adjusted A
Slide 35: Reconciliation of GAAP Operating Results to Adjusted Earnings
RECONCILIATION OF GAAP OPERATING RESULTS TO ADJUSTED EARNINGS (NON-GAAP) FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2015 TO FISCAL YEAR 2010 (unaudited) (in millions, except per share amounts) Year Ended March 31, 2012 Amortization Acquisition Claim and of Acquisition- Expenses and Litigation Adjusted A
Slide 36: Reconciliation of GAAP Operating Results to Adjusted Earnings
RECONCILIATION OF GAAP OPERATING RESULTS TO ADJUSTED EARNINGS (NON-GAAP) FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2015 TO FISCAL YEAR 2010 (unaudited) (in millions, except per share amounts) Year Ended March 31, 2010 Amortization Acquisition Claim and of Acquisition- Expenses and Litigation Adjusted A
Slide 37: Reconciliation of GAAP Segment Results to Adjusted Earnings
RECONCILIATION OF GAAP SEGMENT FINANCIAL RESULTS TO ADJUSTED EARNINGS (NON-GAAP) FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2015 TO FISCAL YEAR 2010 (unaudited) (in millions) Six Months Ended September 30, 2015 Year Ended March 31, 2015 Year Ended March 31, 2014 Year Ended March 31, 2013 Corporate & Cor
Slide 38: Reconciliation of GAAP Segment Results to Adjusted Earnings
RECONCILIATION OF GAAP SEGMENT FINANCIAL RESULTS TO ADJUSTED EARNINGS (NON-GAAP) FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2015 TO FISCAL YEAR 2010 (unaudited) (in millions) Year Ended March 31, 2012 Year Ended March 31, 2011 Year Ended March 31, 2010 Corporate & Corporate & Corporate & Distribution Te
Slide 39: Reconciliation of GAAP Segment Results to Adjusted Earnings
RECONCILIATION OF GAAP SEGMENT FINANCIAL RESULTS TO ADJUSTED EARNINGS (NON-GAAP) FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2015 (unaudited) (in millions) Six Months Ended September 30, 2015 Six Months Ended September 30, 2014 GAAP Non-GAAP Change Adjusted Constant Adjusted Adjusted Foreign Foreign As E