Cencora (COR) 1 May 242024 Q2 Earnings call transcript

Hello, and welcome to the Cencora Q2 2024 Earnings Call. My name is Alex, and I will be coordinating the call today. [Operator Instructions]

Now I'll now hand it over to your host, Bennett Murphy, to begin. Please go ahead.

you. Thank afternoon, call all XXXX to results. good for joining second thank conference this discuss and morning, for you us quarter Good Cencora's fiscal am of President, I Senior and Relations Treasury. Head Murphy, Bennett Investor Vice

today Executive President Vice Cleary, President me CEO; Mauch, COO. and Vice are President and Chairman, Joining and Collis, Jim and Bob CFO; Executive Steven

at today's on today's investor.cencora.com. today's on to GAAP measures call, of Reconciliations these available a posted we'll On also website. press is provided We've be press in slide measures. our accompany which discussing website our non-GAAP financial to release, are presentation investor release

and During financial taxes. make expectations this forward-looking including, will adjusted and an income business basis, non-GAAP our to, income conference on limited we but statements call, not about operating EPS,

current are and and based to uncertainty management's statements subject on change. are expectations Forward-looking

discussion to you including For we risks SEC today's most press key recent a assumptions, filings, and XX-Q. our our and refer of release

this update Cencora cannot assumes company. to without obligation the be no statements, any call expressed of rebroadcast may the permission and forward-looking

many the opportunity to to you remarks as management. to today's by ask for per to after within in questions ask us get as the to possible order your We participant hour. questions limit have one participants You

call With over that, turn I will the Steve. to

Bennett. you, everyone morning, to Good call. Thank and the on afternoon good

will Bob discuss me second succeeding introduce COO, to our Mauch, to October in be to quarter on our moment current March turning we take Before results, I as a want X. who CEO announced

congratulations into make significantly to as Bob, benefit to to call him extend considerable our and our has some sincere the my and deep Cencora Bob? partners brief members our In in knowledge and Bob and X our company business implementing decades, partner he and now chapter. I the our nearly will strategy. want developed across time operations his has next turn Bob's shaping with team to of leads been expertise integral he an relationship will leading comments. For businesses,

with and Thank forward excited stakeholders to health solutions investor CEO It's in our a the is our pharmaceutical-centric to third as organization in today's be and become Cencora's honor my to I'm come. Steve. leading joining October call Cencora analyst strategy positioned care X. an look you purpose, succeed to you, is relationships growth to rooted deepening and on mindset. quarters

purpose, in health and patient Our that and have motivate critical outcomes me the capabilities, and pharmaceuticals role professionally. personally care

building across our company, and are Cencora. Since by leading That care our closely the so firsthand our then, parents setting and help market-leading the path pleasure My relationships developing Cencora, that their of to had to businesses pharmacies, firm and pharmaceuticals manufacturers with strategy. our teams backgrounds with I me community XX-plus critical that helped fostering career worked have at consulting in me on my year I experience XX pharmaceutical teams customers appreciating outcomes. differentiated that expertise. Throughout to years for pharmaceutical my unique and Steve strong and shape the long-term partners I've owned independent up outcomes play found eventually brought and role and care shape patient health Xcenda, positive grew me the strong and leading

both now to I'll the and year. Thank move Chair opportunity questions from work transition be later am weeks join to throughout share stakeholders, from will and continued continue this this as had role excited closely over my I'll into usual. we to leave with grateful pleased time, years have forward Together, more and the several and our come. for speaking all and months, the to benefit I'm and you to and of role. and Executive in this new Board to in to Steve partnership quarter. and I role. With I've guidance drive members how next call look of to I that future Directors I'll his to fierce for our to our the fiscal opportunity to all our in turn to his forward new and and his the it discuss our as call team you benefiting today's able said, Steve's to Jim I leadership, continue for will look had answer value trust months I leadership Steve opportunity now that Steve mentorship During your the to with ahead. I'm devotion back purpose. people to second that the

you, distinguished had initiatives and inclusive significant impact, and identity, enduring has a Cencora. our the an to including career Congratulations, leading Communications Chief made the thank organization, moment who Gina Clark, at large-scale will announced retiring end our be of take across company globally I our Thank new year. Gina, a fiscal your also morning you, and for contributions. Administration Officer, and uniting acknowledge Gina our to Bob. wanted EVP this and

quarter. Now to second turning our

Our financial revenue X%. of on EPS with ongoing another growth growth excellence team execution strong performance strategy quarter operational X% focus of and our drove of pharmaceutical-centric on members' adjusted our and

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innovation. ability our and to commercialization continue support we we contribute strengthen advance further pharmaceutical to to our As capabilities, outcomes

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have performance our customers platform, chain, integrated insights are analyze scale customizable, their data their can solution easy-to-use able to enhance made and this With our manufacturers leveraging practices provide through data actionable about seamlessly given dashboards. in to we the U.S. drive security of Similarly, pharmaceutical and success our across infrastructure supply rich set investments to sets. now to aggregate we the our

relationship partners, continued the community-based in proposition technologies technology joining to practitioners. we and is we trials our a our has to research increasingly practice solutions physicians, like-minded to network to capabilities, in As health example areas. Since in our value expand its value-added care key with create provider to completing evidence has critical us real-world participation our innovation make another will of OneOncology management the enhance invest while OneOncology clinical deepen clinical of increasingly that drive our to To value seamless. in and important solutions investment to Minority see oncologists physician-led opportunities as better in of and June, OneOncology allowing recognize adding IT data community more grow in informed differentiation. last that investing platform advanced and investment approach continue outcomes support solutions and

maintain to for with and opportunities taking to their are community cancer unlock in oncology communities. treat customers our OneOncology and care learnings We allowing our high investment their while them growth from all our local independence quality cost-effective patients in new

our we brings partnership Our with continued together care. advance to collective TPG OneOncology' strength team leadership work as quality accessible cancer jointly and

Our as community received vitality the community of providers been focused and are commitment well the investment oncology, across long-term we in has to, on supporting clearly U.S.

expertise scaled collaborate health to evolving to us extensive care capabilities, Our deep platform enable overcome customers challenges and the with landscape. across

across an the patients. faced their prevented claims practices to that the for receiving on payments care providers they and rely the health During U.S. disruption ultimately impactful from care quarter, industry run the

needed be providing processing deepened supporting their customers customers' care. members employees in to if to they diligently expenses address not our By work who care. Much patient our for without nimble customers we or claims including was to in would position, like our work for our businesses did Our the flexible payment possible support to solutions without found our medications and uncertain particularly and providers, solutions, patients. payroll jeopardizing terms community while running relationships during until access themselves customers, COVID-XX The to their do care developing a were critical team teams difficult and their needs, continuity cross-functional restored. make keep pandemic, offering cover we allow we purpose-driven our for could working

office center. our the Lithuanian award we a by emotional members strength Cencora, distribution that of of the Cencora culture in focused example business Ministry and where services a culture both across the fostering with the A are Labor At safest recent promotes be shared our were environment of well-being globally We footprint. proud was Lithuania for operate our Social the our recognized culture. our business embraced our needs presence and several team we example on to and to Security XX,XXX including us of united the our time past while have one of in customers' recognize strong to culture leading This accolades Cencora the offering. I'm has the key serve adding teams of allows services years. just the maintaining strategy, our has purpose-driven proud across which culture zones, people award better our and center, is benefits elements received built our and geographies multinational

enterprise, united of will we building globally As a our a members our that to team prioritize we perspective, continue backgrounds enhancing unique the differentiated diverse experiences culture and grow as celebrates business. and provide

the is in crucial plans pharmaceutical the crucial resiliency it has a pharmaceuticals, Cencora of face in a climate. business imperative that robust As delivery changing chain, link including of to supply ensure the

we of and footprint. mindful amplify our environment topics our resiliency our across in the and progress supply closely across footprint these we are on them further with have our with the important on partnering understand our sustainability impact we on the chain help to efforts, stakeholders our impact initiatives, work emission As ultimately drive report joint business to operations their partners

up its were our acknowledged While we their during of operations purpose alongside healthier am that adaptive incredibly progress in team I who environmentally resiliency an confidence agile companies continue and business their XXX help partnership to our care care environment our time. to our and both Greenest intellectual remain sustainability of a purpose-driven we list customer-centric stakeholders, be maintain necessitates with the downstream. who advance important our positively footprint. with access United Companies making challenging business aligns other were States are to efforts aspect on own to that and the of exemplified ever-changing an continue partners, approach our proud in closely futures. In that change members pleased the of by responsible closing, planning we will and America's health in creating Newsweek Running providers and to our inaugural recognizes work top

to for our As best-in-class fiscal focused stakeholders. we investing our our creating strategy on infrastructure and experience drive innovation in second value embracing a creating our forward, move of pharmaceutical-centric half remain we all into year, customer the

our of now and to will call turn second for review I Jim? over Jim the in-depth updated results quarter an guidance.

Good morning and Thanks, everyone. good afternoon, Steve.

I've long-term plan. and Before had leadership extend as the in succession I turn have leadership from both pharmaceutical executed company Bob October. it I solutions prepared vision value. Steve's and purpose-driven want Since to we to our benefit Steve's both characterized our look role my announced in Executive the expertise recently on creating into by Steve focused to working to my long-standing steps on into have I on foundation pharmaceutical-centric in closely our and to he leadership is strategy shaped as forward and strategic Cencora remarks, Cencora and pleasure joining XXXX, downstream with Chair and congratulations Bob Steve complementary of continuing the today, in up specialty. distribution,

come. leading Like has and our teams building patient commercial to its pharmaceutical-centric through operations company Steve, deep Bob's stakeholders positive and knowledge in and in all our talented Bob for experience supporting passion will outcomes years customer-focused care. the benefit

pleased delivered the fiscal our to our turning Cencora results. our we income to guidance for strong quarter, second in are year. operating adjusted full raise performance Now and

stay to when customers the customer-centric we teams balance execute and on need. in support our solutions services industry-wide the Our strength quarter of leveraged time sheet and our during providing evidenced a focused continue to of as

The for people important long-term well to and problems create role to solve value and at chain. pharmaceutical the positions customers we by significant of center we forged across play the continue health have us partnerships our care, the innovate, supply powered

our to turn unless quarter now reminder, focus a my consolidated will of results. I'll adjusted as otherwise a on our review remarks stated. results financial non-GAAP second And

please of GAAP For press presentation. our a to detailed our and earnings release discussion results, refer

with Starting revenue.

strong quarter, sales classes in Our specialty product of certain trends in manufacturer of advance. our were saw growth with and well health consolidated growth to the products price $XX.X In was physicians in offsetting sales which X%, segments. continued billion, systems and we customers, known revenue to up in reductions solid some in both the larger

the in as adoption we've quarter, of moderated rapid in quarter. Consolidated of second growth fiscal lapped XXXX $X.X rate the our X%. While billion, the and $X.X margin products quarter this was GLP-X of continued profit due segments, last due to to by were up our offset the of products, in selling higher growth was sales revenue part gross administrative segment quarter point. detail when see I with an to up operating we GLP-X efficiency supply decrease billion, distribution, good a constraints will Consolidated growth prior of out call. the X.XX%, in profit in support gross XX% billion, $X.X growth basis operating was we in increase on both income X% discuss and May expenses year Consolidated compared actions results. to to more year the level the X expenses earnings which called reviewing Consolidated the

our and million, quarter. the tax to year-over-year. interest Net now effective Moving was second rate $XX for net interest flat expense expense

the income the an higher XXXX our we less September quarter short-term wholly expense called earnings Egypt. in the to expense interest than offset interest on you recall, As by out year subsidiary in the of will compared and Higher first given intra-period cash call, second prior sequential borrowings expected quarter our seasonal owned interest use. and typical was in step-up divestiture

we notes notes XXXX million coupon the due of intend During a senior due to $XXX notes repay the proceeds use issued issuance our from to this in We month. at X.XXX%. the XXXX quarter,

Regarding income prior quarter. taxes, XX.X% XX.X% rate income effective was compared in tax our the to year

diluted Turning count. now share to

fiscal by driven with million the was Our compared Alliance and in repurchases in in second February. in quarter diluted million year XXXX Walgreens the repurchases half XXXX, X% share $XX sale was decrease second Boots shares, share opportunistic [ to primarily prior the quarter. during repurchases second in XXX.X fiscal This ] a conjunction including count continued lock share of

and of and we with quarter free of approximately adjusted flow cash Regarding the billion ended million. adjusted free cash cash $X.X $X.X approximately our balance year-to-date flow, cash

of were During our the impacted Healthcare cash as delayed. claims Change payments quarter, that many by flows customers limited customers' the outage severely were

balance us role in needs be consolidated of customers' This our while we patients. I customers provided results. we extended members a our of review to we their The this our flow face agile and understand need will for and in them partners, of of the allowed team customers to execution our financial during uncertainty in caring focus $XXX and quarter also our to The and payment to collaboratively which our million, help sheet approximately the ensure we their our flexibility who cash members expect am protect the of terms the appreciative challenging by on our has quarter. And a in support third our and To in customers second being created supporting pivotal strength shareholders. time. work maintain with to operations play fully team fiscal completes Cencora prudent headwind provided its giving diligently reverse

Now including segment in $XX.X revenue and to and our turn businesses U.S. for up was second billion, in X%, segment the specialty volume quarter. distribution sales practices growth I'll growth results continued to systems Healthcare in our growth solid with Solutions physician GLP-X. health

GLP-X of as income solid Solutions X.X%. non-oncology billion, which million sales to focus $X.X increased nearly specialty, U.S. a quarter, benefit period operating and our been last our actions would we products, the we increased have in operating utilization both with from compare leadership oncology took benefit revenue XX% efficiency growth growth segment segment Healthcare to by and a as on Excluding In elevated from continue also trends. the to to spring. prior saw expenses managing expense we $XXX we

in saw not COVID the vaccines it relates expected. we and a to were related distribution As COVID-XX treatment contributions demand to commercial in exclusive decline contributions, quarter, COVID for as meaningful

we from expect exclusive growth treatment distribution, no rates. COVID longer provide to we ex-COVID guidance for plan As longer no contribution

contribution expected to treatment $X.XX U.S. contribution is $X.XX exclusive recognized treatments this quarter, fiscal which exclusive for the reminder, contribution a in first total the in the segment fiscal consolidated only XXXX. of compared of in As in the year we $X.XX the

now International $X.X to Healthcare I a XX% and which segment on a our reported Solutions business. basis operating growth from decline will the In Solutions price XX%. on constant distribution less in of distribution our In the primarily was International to operating $XXX currency. reported a or basis million, in Solutions billion, level revenue market business XX% International growth review for our up business quarter, turn owned due Healthcare up was up developing segment. adjustments International and than Healthcare basis. on X% income the Healthcare was currency our our segment in value That a quarter, country, Brazil results. local constant currency the benefited delivered of basis, Canadian Solutions offsets completes European a growth income On manufacturer wholly

now I'll our discuss guidance XXXX expectations. updated fiscal

income on will a guidance we certain on provide also will do I metrics I GAAP adjusted EPS constant As guidance items currency a reminder, metrics basis. basis, forward-looking non-GAAP on following driving provide on so the basis. are updated guidance. EPS the provided statement and start a not our an detail then with provide

our updated raising lower growth expect XXXX $XX.XX, EPS range $XX.XX $XX.XX to are reflects of guidance updated to of from end year of range below representing the We EPS our of XX%. our to for XX% few the balance range expectations $XX.XX of now be fiscal previous expectation in and to a line. in also The income and and fiscal the continued operating on the our items growth execution

Moving now revenue. to

guidance of to previous from Our for growth growth consolidated to X% X% XX% the as-reported range we are of the revenue level of guidance XX% International currency from our X% growth XX%. of X% to segment and is revenue and constant growth XX%. X%, expect Healthcare segment, range previous to X% In range narrowing for the at Solutions unchanged to revenue now revenue

Turning income. now to operating adjusted

to U.S. expectations XX%, guidance growth be up to updated range X% X% We our expect our due income to the in of XX% consolidated for the of adjusted from previous to operating

Healthcare In of income XX%. range the X% operating be from XX%, now XX% Solutions segment, of to growth expect up prior U.S. to range we the in our to

COVID initial at in seasonality and quarter, date the was that quarter continued more vaccine performance vaccine the reflects the Our prior our second commercial meaningful increased to moderate COVID-XX half, which guidance contribution. a year had comparing a though strong to rate, due growth primarily to and fourth

As XX%, expectations first to saw segment when in Switching was above context, we level our exclusive the now half, of growth in income first X% contributions, COVID vaccine growth our the initial COVID-XX therapies. well excluding operating commercial half.

and therapy $X.XX of lap third we the contributions in exclusive have headwinds fourth we reminder, COVID respectively, a and As year prior quarters, from will distribution. $X.XX, as

International to Solutions now Turning our Healthcare segment.

constant operating our growth unchanged to segment-level from Our previous now recent guidance remains income growth currency range to dollar XX%. of a the of as-reported to X% and strengthening we operating the XX%, be XX% of in reflects range weeks. up the in income basis, On expect

of Regarding approximately now expect our adjusted rate XX% effective effective XX%. tax tax be our previous rate, range to adjusted we from to our XX%

shares XXX XXX shares. now of in outstanding now Moving We previous weighted shares our XXX to be to million of to count. million share from million our expect the million XXX average to range range

adjusted turning Finally, to free cash flow.

to Our adjusted guidance remains free we billion generate expect us execute, have strong closing, deliver unchanged, flow. In cash across results. allowing approximately continued to $X.X financial in our and to Cencora teams

I reflect quarter, impressed way I members together our customer team the and on our responding came the by agility exemplifying support to to and centricity second challenges. As customers, talented am

investments our stakeholders. drive for innovation drive our we enhance our commitment to and year, value the our our our to half differentiated As to purpose infrastructure of and second all continue pharmaceutical-centric to look fiscal strategy creation will

turn I'll the call for the questions. over to operator to Operator? open line the Now

Our Anderson first comes Elizabeth Evercore. Instructions] [Operator of question for today from

on reins later is like there? about? year, talk of the we like then months Can of -- the set succession of sort sort can how talk basis. of think And plan, next fully this sort the priorities about your a few sort high-level what that of is of we I key think initial priorities then succession as and you Bob, take of sort sort one plan the of maybe came about and about you that

Elizabeth, Yes. the I'll thanks for question. it. take

the position on manage, very I a succession and weeks focused years. planning, obviously size of practice my actually Bob X as COO company for the enterprise course, CEO, of X XXth anniversary and in And has ago, has had the that of so Board at we been our company, the of our XX and course, years is and been

So lot the making that focused development executives we've been right sure key a on have opportunities.

it in the -- imperative it culture have of personal, importance of relationship, of was me, customers the we our really and For was the importance internal because personally, an knowledge candidate our that of complex X enterprises. Honestly, any in thing shocked say company, first new to that's the is. a after comes is, executive months, how And everything because it's the that complicated me they I'm lot.

a that pharmacist, think it. my of a our would Board lot public my the wholesalers it's aspects also characteristics important I Bennett looks of leadership. I'm major and which -- that have where knew led will exemplified has in that that so really We different one business wrong, someone to years, we the research last has team by management to also that business. And successor. the perhaps for, pharmacist, the sort it's He's model the been it's during of the leadership look be few well Bob And

So that, But until extras X we and has -- [ have October very Bob closely worked enterprise. actual and got transition on guided business the have takes as very and I place the usual. as It's well closely X. have CEO team we the management months left Bob the nice together becoming myself history. Jim And Cencora's with also as all Bob I as think the in executive ] third on worked that's also a really

very company will like. thinking And Of next the very conferences, And in he'll the get he what be on And better in a the good also the cetera. course, joining shape. be and future hands. is about and call, et company lot is at very, Bob you'll all name us to good is

should our investors about I feel very good Cencora positioned. is So think how

the So for thanks question.

comes question from next JPMorgan. Our Lisa of Gill

specialty, margin Jim, it's wanted drivers, we a focus -- think impressive do. to of about able as think talked you I nonspecialty, expense And couple you've very I but the what to about improvement. of growth, been on the key

that, seeing understood a on a little Are impact, little for the a up bit. impact make then going us count with $X.XX rate below little I on line that's you like anything, the give you can the side. And example, I wanted more up bit because sure share just a up color? going to by biosimilars I'm secondly, based So coming tax number the by that and

for Steve, earnings I So elements wanted And really think rest I we of out them as isn't those the call two hope last this year. you. just playing with the about our to understand

I'll quickly. on I'll I'll on be just be go No, quarter. it's next not. certainly --

Jim. thank So I'll you, hand Lisa, over and to

Yes, of both quarter from Lisa, quarter. percentage have Thank did that good the very for thanks a you profit question. Lisa, during We a the standpoint from lot. and gross percentage operating income

my you prepared about manufacturers improvement is what our very regard talked fairly down that in to case. I with particularly insulin, calling about which reductions revenue gross out. talk the continue thank to talked happens, of compensated, happened So thing that growth, about brought sort with margins the an of for the team I'll this that during did have in in a things quarter. And remarks, when sure past, And WAC the we profit number We nice that but drove that margins. One be this make to caused in we've margin. it successfully as is works

So but the WAC growth brought reductions percentage. margin improved gross revenue down

expected. growth than had I growth that higher $X.X this the we GLP-X to that we than caused billion quarter GLP-Xs first impacted kind little is $X.X billion during caused thing versus little talked the had again but less bit a also lower growth of be less GLP-X my prepared the growth were percentage and expected. in Another remarks a quarter. growth And a was gross was of revenue GP in about of little And to be bit profit bit percentage the

year-over-year good from particularly drove a during contributions profit vaccines, And are in in the margins quarter performance we in was thing the off third vaccines. so to our the our and on during we'd Another drop percentage, was and COVID higher that really that that the better expect GP also, was margin COVID first GP the half quarter gross and segment. quarter. and second than The expected, International helped percentage

all very only initiatives executed So job but OpEx. and from it's standpoint, done margins. And ago, continued a we've helped we've the good margin then efficiency not things that those a OpEx had focusing all our those operating an focus We we year on managing expenses. to things, operating on

we X%, GP OI X%, growth which of that so of so leverage helped drove had growth And growth. operating our us OpEx XX% and

higher we the then our the the back mix. on and it'd tax think we're to margin little growth as XXX.X on months, at would a income stuff, just has just million. And bit so which share U.S., have guidance million do that that shares. 'XX rate. And seeing 'XX. higher And more bit million after to question. And below we And rate, half impacts fiscal first the a line I the is addresses and do And year we're more in seeing X repurchases some your year, XXX are fiscal tax in little year than count, XXX of incrementally now the with

end increasing range. so we at a And $X.XX a in EPS by of that, the of increased result as guidance the bottom

at $X.XXX midpoint our So up the by overall of guidance EPS range. the is

of your I so all that think questions, And addresses Lisa.

Daniel of Grosslight question from Our Citi. comes next

in the of new kind really Congrats imply CEO, of back role you year. your Steve, the the around when second great on even year-over-year step for congrats guidance the Bob out remainder does impact run half I COVID. wanted with stick down margins and AOI a a on Guidance and here. growth, as to of

place year growth just the perhaps can 'XX in you put more year-over-year you plan So how and in I'm that of efficiency curious step second in impacting that a you provide the detail half is as if on rate. the growth second last half, the little year-over-year down

to be things. happy I'd Great. those Yes. address all

$X.XX So in our performance COVID first vaccine of in guidance And updated our related vaccine the saw largely growth of 'XX fourth exclusive and operating the to had the back the the is in headwind the then of April. the income efficiency the And contribution half that, took half we COVID seasonality. actions contribution reflects as year year. well to and the you income a the we ago to also quarter therapies of strong saw fourth referenced the due half a 'XX. And has half of contribution first of in third the half as we quarter 'XX. and $X.XX 'XX then in versus difference first the year continued FY fiscal half that FY COVID FY back in growth we due operating from And rate back

initiatives so as lap last the we we And you that the year. expense half, back do in efficiency implemented mentioned,

XX% of segment in first expectations. our the the well we growth income U.S., operating So above half, initial saw level

about continued that reasons the some the trends is the specific strength COVID utilization for growth we've half solid that in specialty As time mentioned, and impacted I versus due half when in exclude very was back prepared in the implies growth in expected contributions, which and my talked good of you vaccine X% said are first U.S. And COVID our the remarks, guidance I growth rate half. related. our for to first mostly the

that think so questions. addresses I And your

Eric comes Our Percher of next Nephron question Research. from

might switch the gears question to environment on large. at competitive I a

Bob, the for interested extends to volatility sure make you synergies progressing? market? And to how some hear the and of of some in-sourcing to And Steve given compete low the through at seem channel. I'd want Jim, new maybe end with do high views to Do to margin, original And then are the consideration its in and they volume significant identified I'd And that what I be your to contract see need leadership so back Walgreens that any specialty you've at come be XXXX you the form. just mail sticking change? at for and pharmacy, do

Eric. Yes. Thanks,

XX I've the with look, our for that it's and -- it think in now, -- I value it's this as years industry, as company ever. been remains So proposition intact

In The you seeing particularly of the with reimbursement met customers. industry, really that using industry fact, and many relying sort out are that the environments, close on the insights are that the our and challenges regulatory stay of strategic or do, probably way more we've we're and to even some the of channels. post I our within we're also with data just think the are complexity in very I adjacency And I remain of that different so things the reason we all form businesses. Most customers. why pandemic established from partnership more came, sure, our influx. But is nuances times NACDS, with built back documented. world, side, would the lot in well on of and a there are which as where many to imagine, there's we able

value and our None provide a long-term we where distribution on XXXX. close through customers, and We we a than them, Boots we have contract more are ] stay so almost we [ XXXX side great those Walgreens, very and that with and able customers. always think the through to to even renew to

really we think focus those I customers. So on

last not that think the you one and have side things really just with I is term. in strategic changed And long-term made saw stat to the how the that that's the I fact, larger the you close small I RFP comment customers, contract we we the those of when In the customers but these relationships customers, throughout throughout customers. to hopefully,

So Jim, you I'll hand now. over to

to think, I And those it we teams you of that with beneficial customers large are always synergies our needing answer, other in opportunities are and management mutually Walgreens sorts on pursue working Yes. our addressed things. fully Steve, and and your

of Our of comes America. next question Lutz Allen from Bank

design think way think Act, margins? And I and Cencora. more to here. guess some be of these start changes. impact upstream any opportunities that could Is question then how more high-level and Reduction a How there benefit to should of any around work revenue we to to the with impact Inflation there manufacturers direct about about could

you thoughts that. any if around wondering initial have Just

Yes.

most And products. direct want will industry, in XX -- B at this going certainly certainly -- subject I so probably talk any the the is attention in be be the And short at to the Part think industries underway. in process innovation. -- to Part that I let's up case there's night mindful mean would some on make term. message Act always, through sure drugs say paying [indiscernible] in than there -- important we one of course, regulators see we impact negotiations you XXXX, us going of has our Reduction ago go to keeps steps the more place that's based for the we negotiation. even decades course, to that, ] Inflation most in States is here. I to And XX% that And to to the ever. But Washington that the in the we're is [indiscernible] Beginning be that, something cherished It's of of here continues And [indiscernible] So of on. of it's by And innovative to the days, accounts U.S. continue innovation R&D that would what back to United that an B see lot that of largely we U.K. [ mean, least by are the But to. medium gone always be us, as close he say it's And not say when a American-based would company, we're took many and for the innovation love wayside. I'd sort hard

Cencora would that example, important [ patent the I we formats part I benefit thinks the we future a much ] the should punitive changes derived all ultimately, the could notion is about that from health we on. be be also that the approached. And to we out customers, little and is a It's co-pays and and that manufacturers thinks thing pharmacy should there's it see of very the of pharmacy that's also last in the of development say the for health not benefit about policies, of I'd some in and think lost. Also, that, don't towards has design more to pharmacy. longer make understandable. care different should counter, would serve, flaws the about often have be And that occur form that way mean way the think story we provider way form great industry think very that And be efficient expensive, adopt directly product been thinks that loss. our that, think that, is that's a when very think disagreement more reimbursement encouraged. patients, care, spreading we at much more which more

for thanks So the question.

comes Stephanie next Davis Our question of from Barclays.

the on Congrats quarter.

of of to accessibility continues this contribution year, what are through some assume the range versus revenue more looked out, should assess versus your how margins on called X-point haven't And the X to GLP-X that digit. benefits stream, closer think the given GLP-X to the going tailwinds that should about we issues revenue historical to Given mid-single this we just nature calorie prior. at lower the we

minimally in Sure. we've a profitable. as and products GLP-X for a I'll take quite are lot revenue are we've thanks real And that, is about in some of growth revenue the be first revenue we course, questions. GLP-Xs are And said top the line GLP-Xs as $X.X of quarter. profitable the talked for us Stephanie, minimally for They in the growth, second continue said And but past, But our of of growth driver of growth. but they that profitable. the versus do earlier, billion feel billion I they'll I quarter saw we from to a time. from what -- driver $X.X that

top sort innovation of they we're And think growth. be of but And course, a be just to pleased that a an forward of there's line so sort part innovation that will and benefits years beneficiary to of come. just industry we so for to of do driver ourselves -- this this patients of look being where

Our next question of Charles Cowen. comes from Rhyee TD

concern. I of side companies of that the are analyzed where affect business. you that maybe see sort customers on to with? of one if there's Courier Courier and of talk off. I with that concerns. to ask great also thought of for World look with impact companies World do more head the sort and you the for of might Congrats, wanted any catching impact through the some you in side with Bob and before person just and related, with companies and the of how up that of you wanted business you that some Steve, of if doing to could working there's partnered side And if potential your business a business. question Obviously, And of restriction hopefully you BIOSECURE maybe forward cause

don't and scale We be compromise that sure whatever want the And really incredibly regulatory we manage to ability regulations participate I sufficient about the you, jurisdiction us have. regulations in just exactly The comfortable can feel the are, any if I of size and the standards not ever tell what to can't makes have business. are. but we enterprises jurisdiction. that environment with I'm we good a nothing feel complex we Cencora's

keep them. Charles, I've we compliant the Cencora. and I of in leading particular, complex, to increasing those had that one privilege at want most fact, on be but In also ever and plan thoughtful businesses for Courier, of leader think World the in standards. I'm is We the while

So follow I we able concerns. directly think with any And we'll be up to if maybe and particular think can I you see cope.

Michael of from comes Cherny question next Our Leerink.

of the do be operating slide, U.S. care long-term relative an Is guidance, core Congratulations on the business, but guidance about And also breakdown drive could where $X.XX guidance. call the follow-up, you're case a how this a doing in as what long-term just Lisa's a guidance earlier future? continuing the increase your of growth guidance? And Maybe then what's I'm to I rough shaking to year nice but asking quarter. I out health terms are? about the against How you for the to comp. on into math terms of uptick math that in Great. your it, guess, those not think to question hate you increase. pieces? do above EBIT reconcile relative tough I'm your about think you in targets X where giving

And for try it Okay. in question. you I'll that question, lot so address Great. a all. the Thank and was All right. there

about thought implies, does $X.XX. and sort imply higher guidance said was she the $X.XX, the And higher Lisa that increase and guidance I'll that's you in that kind yes, by think had that the really in of increase and think the that commented offset say just it's I I shares. OI increase, of tax

to you rest as the and yes, guidance the income of X% of kind in at questions lot I X% midpoint think EPS X% from a then we so X% organic we increased deployment. that, $X.XXX capital a of of confidence the long-term basically result to range. And operating asked, growth of our of then by And another the guidance have

good before, long-term the of operating quite growth success range. double earnings And particular, us that's of at we on said of income of growth. in the midpoint long-term that guidance some in had our some to for of from the growth I in I our particular, COVID-related from EPS X% as last benefit and that positioned the so the that's guidance. we're specialty one And things and gives have And call, have some solid been we've called very from like a XX%. the some company couple been this driven in so importantly, out of that of rates in numbers, posted years things confidence of leadership innovation as a the our that's trends. And many well digit had have And time, some particularly lot to to utilization have of things helpful -- kind

of George from comes Deutsche question next Our Bank. Hill

And CEO guess want in guys that hop Steve, role. the I congrats are Bob is want to did, could. now the the thing I that engine to on first with I to taking over two little you say I guess questions. engine But not little quick

X more about business has because the generally the question one, follow in want seen sizable we've just last Eric's Just pieces to I on months. of number up competitive two which environment

facilitating. you or to I maybe manufacturers. the business you're just to dynamic? And comment, not it or do economics brand anything terms on kind increasingly things go-direct the to have talk the of or there's And anything drug your Jim about necessarily seeing large Steve, on to any is either drug of drug then manufacturers continue about positively anything logistics, that alluded expect you're in hear retailers the from on impact some one So can brand to you negatively? competitive I we clawback trying should be guess, that just trying to if that guess, we is that

Yes.

do George. you, thank that I article. So remember

the proud and that to do job, really large an close tremendously on made not is. I few to companies you, U.S. it's thank with positioning -- relationship. integrated a and strategic regular public our all in has a industry. customers how our so very we comments all There's big, are of customers. years And communicating think And the that I are and Cencora stable that choose stay There's a many I and of And customers. in we change their contracts couple question developed a in in our how do we that good the are. way earlier last the wholesaler basis well three where big, about strong particular,

bit a not it's customers order change. We're not different mail because going products distribution points. seeing to big the of do trend. lot high-value you've that got is real usual little a very So a few that Obviously,

a it's it's look have results we're And that low-margin paragon that of our been, do a is you some good more direct for work and rules see our very contracting I long working at to very, implemented. not results But the have regulations sometimes as only a So there, look hard really and to pedigree by We're industry. Again, being going the at within environment. the hard getting adapted around been complex complicated. to that time. that's and are efficiency and as are trend the say to in large, think new

flow building guidance. have, gives and that as -- up around a it's we So the long-range cash with that Jim us

our our proposition be on value anything very out. I too you there's good. I about and it's much competitive else think So enduring, feel you'd environment And don't add Jim, we'll that I and think call industry's proposition. that value good very to the think

Yes.

Yes.

engine did. Okay. That's that question, time a more one for thanks complement. operator. the We've And big for

question Eric Baird. Coldwell next from of comes Our

the congratulations growth, pharma outlook revenue On you XX%. the across S. I'll to U reiterate maintained the all board. XX%

handful guys worried I There WAC changes. GLP-X I growth other to below you about sensitivity But have revenue price negative less you of industries. revenue perhaps or was than know quarter in I'm second growth. think Street that am maybe are the lower curious

[ along some think aggressively maybe gain And $X.X are I market PBMs is and other ] billion guesstimating is is quarter. lower-priced the which that known to potential is the pushing there think loss, traction biosimilars around now those we I to have also lines. a Humira the customer

of just you're -- negative line change that you that's What in add moving a on March gives lot recent changes, XX% to put WAC What I doing if optics, just to XX% But prior the I'm versus confidence? in side know could this on, are saw if growth quarter a drivers there maintaining top pieces of could for terms I that year there's just tell on maybe the ton. of comparison. but the So years then WAC what or you year. And price the curious net you just in us price guidance.

Yes.

the than the of market. Eric. And that's thing WAC is quarter. quarter. during We're more continuing revenue to constraints So things for regard the reduction That's And another to our growing and of called of course, confidence, of strength then see temporary continuing some we're by our that there's maintain let specialty, better a due gave broader to with out, insulin there. specialty say guidance, that's revenue utilization lower the the helping me us, the supply growth the us across Perhaps permanent, lot during what and to that the kind GLP-X market. solid you trends is guidance driven in just course,

to wait see and have we'll So that. on

also, in of prepared and earlier then And is this gross and a revenue And that about to margin. GP, necessarily and and our I lot profit remarks, a operating guidance. But I on in on good so lot of call, on on commented number operating my a talked drive revenue percentage we doesn't time have confidence spend the our gross growth profit profit. while it things additive we

a operating by there And at that of quarter. part so our the like course, was second that, question? of bottom to then confidence top point to gives And the the that's guidance a and we one full the us did thing range increase percentage income

Steve to go We Okay. for good close. that's the No,

for a you, joining busy Thank us everyone, Wednesday. Okay. on

the and of proud in really reflects which our expertise the reported dedication, all members. of this quarter, performance we team are teamwork of We

well for future. Cencora As you see, very positioned is the can

support you Our chain We'll role and summer. innovate for well in in continue very the Thank will is time. you August. Have early a of we our much invest see customers. your established, in supply to and good

you joining today's for Thank call.

You disconnect may your now lines.