Weitere ähnliche Inhalte
Ähnlich wie Q3 2009 Earning Report of Walgreen
Ähnlich wie Q3 2009 Earning Report of Walgreen (20)
Mehr von earningreport earningreport
Mehr von earningreport earningreport (20)
Kürzlich hochgeladen (20)
Q3 2009 Earning Report of Walgreen
- 1. 4th Quarter and Fiscal Year 2009
Conference Call
September 29, 2009
© Copyright 2009 Walgreen Co. 1
- 2. Fourth Quarter and Fiscal Year 2009
Agenda
Introduction Rick Hans
& Safe Harbor Divisional VP - IR & Finance
4Q and FY Highlights Greg Wasson
& Strategies Update President & CEO
4Q and FY Financials Wade Miquelon
Executive Vice President & CFO
Questions & Answers All
© Copyright 2009 Walgreen Co. 2
- 3. Safe Harbor
Certain statements and projections of
future results made in this presentation
f t lt d i thi t ti
constitute forward-looking information that
is based on current market, competitive
and regulatory expectations that involve
risk and uncertainty.
Please see our latest Forms 10-K and 10-Q
for a discussion of factors as they relate to
forward-looking statements.
© Copyright 2009 Walgreen Co. 3
- 4. 4Q and FY09 Highlights &
Strategies Update
Greg Wasson
President & CEO
© Copyright 2009 Walgreen Co. 4
- 5. Fourth Quarter Highlights
In $ Millions except EPS
4Q08 4Q09 Change
Net Sales $14,597 $15,703 7.6%
Net Earnings $443 $436* (1.5%)
EPS, diluted $0.45 $0.44* (2.2%)
Cash From Operations $548 $852 55.5%
* Includes $33 million after-tax, or $.03 per diluted share, restructuring and restructuring-related costs.
© Copyright 2009 Walgreen Co. 5
- 6. Fiscal 2009 Highlights
In $ Millions except EPS
FY08 FY09 Change
Net Sales $59,034 $63,335 7.3%
Net Earnings $2,157 $2,006* (7.0%)
EPS, diluted $2.17 $2.02* (6.9%)
Cash From Operations $3,039 $4,111 35.3%
* Includes $163 million after-tax, or $.16 per diluted share, restructuring and restructuring-related costs.
© Copyright 2009 Walgreen Co. 6
- 7. On the Frontlines of Healthcare
Healthcare Reform
Support need for healthcare reform
Focus on prevention and wellness
Employer funded medical coverage critical
Employer-funded
Provider of quality, affordable, accessible
healthcare with 68,000 health professionals
Update on flu season
16 000
16,000 certified immunizers
Significant growth in seasonal flu shots
Positioned for H1N1 pandemic
© Copyright 2009 Walgreen Co. 7
- 8. Taking Walgreen Co. to the Market
Co
Platforms in place
7,000 drugstores
Specialty pharmacy and infusion
700 worksite health centers and retail clinics
Direct-to-employer/government/MCO/PBM
Caterpillar – Proprietary, transparent price list
Direct-to-consumer
Prescription Savings Club – nearly 2M members
© Copyright 2009 Walgreen Co. 8
- 9. Consumers Respond to 90-Day at Retail
% of 90-Day Prescriptions
Promotes choice 5.0%
4.5%
Drives adherence
4.0%
Increases compliance 3.5%
Improves outcomes 3.0%
2.5%
Lowers costs
2.0%
2005 2006 2007 2008 2009
% = (# of 90-day Rx/(# of 30-day + 90-day Rx))x100
© Copyright 2009 Walgreen Co. 9
- 10. Leveraging & Enhancing
Our Core Business
Slowing store openings
Re-inventing the
customer experience
Transforming community pharmacy
Expanding health & wellness
Expanding specialty pharmacy
Broadening & deepening
g p g
payor relationships
Rewiring for growth
© Copyright 2009 Walgreen Co. 10
- 11. Projected Net New Store Openings
12%
10% Estimated
8%
6%
3% Growth
4%
2%
0%
2007 2008 2009 2010 2011
New store openings include
new and relocated stores
© Copyright 2009 Walgreen Co. 11
- 12. SG&A Growth Declining
Ahead of Slowing Store Growth
Store Added (including On-Site and
700 25%
e
Walgreen Rx Only stores)
600
20%
500 SG&A
Growth Rate
y
400 15%
300
10%
ns
200
5%
100
es
0 0%
FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09
Organic
g Acquired
q
Adjusted for restructuring and restructuring-related costs
© Copyright 2009 Walgreen Co. 12
- 13. Reinventing the Customer Experience
4Q09 Milestones
– Rolling out CCR in 400 Texas stores
– Rolling out convenience offering of beer and wine
– Re launched walgreens com
Re-launched walgreens.com
2008 2009 2010
3Q09 – Apr/May Fall ’09 – Sep/Oct
09 Calendar 2010
35-store CCR pilot CCR rollout in TX markets CCR rollout nationwide
Category optimization Begin beer and wine rollout Loyalty initiative pilot
Inventory improvements Re-launched Walgreens.com
© Copyright 2009 Walgreen Co. 13
- 15. Cost Reductions & Productivity Gains
Year-over-Year Percent Increase
20%
Gross Profit
15%
SG&A
10%
5%
0%
2004 2005 2006 2007 2008 2009
SG&A adjusted for restructuring and restructuring-related costs in 1Q, 2Q, 3Q and 4Q 2009
Gross Profit adjusted for restructuring and restructuring-related costs in 2Q, 3Q, and 4Q 2009
© Copyright 2009 Walgreen Co. 15
- 17. 4Q and FY09
Financial Review
Wade Miquelon
Executive VP and CFO
© Copyright 2009 Walgreen Co. 17
- 18. Fourth Quarter Highlights
4Q08 4Q09
Net Sales 8.8% 7.6%
Net Earnings 11.7% (1.5%)
EPS (Diluted) $0.45 $0.44*
Prescriptions Sales ($) 7.9% 9.0%
Total Prescriptions (#) 4.9%** 9.1%**
p
Comparable
Prescription Sales 2.0% 4.5%
Front-end Sales 3.7% (1.4%)
Total Sales 2.6%
2 6% 2.4%
2 4%
Rx Scripts 1.1%*** 5.9%***
*Includes $.03 per share, diluted, of restructuring and restructuring-related costs.
**Includes
**I l d 111 b i 4Q08 and 136 b i 4Q09 positive i
bp in d bp in iti impact d t more patients filli 90 d prescriptions
t due to ti t filling 90-day i ti
***Includes 118 bp in 4Q08 and 179 bp in 4Q09 positive impact due to more patients filling 90-day prescriptions
© Copyright 2009 Walgreen Co. 18
- 19. Fiscal Year 2009 Highlights
FY08 FY09
Net Sales 9.8% 7.3%
Net Earnings 5.7% (7.0%)
EPS (Diluted) $2.17 $2.02*
Prescriptions Sales ($) 9.7% 7.8%
Total Prescriptions (#) 6.4%** 6.9%**
p
Comparable
Prescription Sales 3.9% 3.5%
Front-end Sales 4.2% (0.5%)
Total Sales 4.0%
4 0% 2.0%
2 0%
Rx Scripts 2.8%*** 3.6%***
*Includes $.16 per diluted share, of restructuring and restructuring-related costs.
**Includes
**I l d 64 b i FY08 and 137 b i FY09 positive i
bp in d bp in iti impact d t more patients filli 90 d prescriptions
t due to ti t filling 90-day i ti
***Includes 75 bp in FY08 and 173 bp in FY09 positive impact due to more patients filling 90-day prescriptions
© Copyright 2009 Walgreen Co. 19
- 20. Gross Profit Margin
4Q08 4Q09 Change
Gross Profit Margin 27.6% 27.7% +10 bps
Margin impacts
+ Positively impacted by retail pharmacy margins due
to generics
g
- Partially offset by non-retail businesses, and lower
FE margins d e to prod ct mi LIFO and
due product mix,
restructuring and restructuring-related costs
© Copyright 2009 Walgreen Co. 20
- 21. Percent Increase in SG&A Dollars
Two-year Stacked
30% 28.0%
25.5%
% 24.9%
25% 23.4%
10.0%
20% 11.2% 10.2% 8.0% 18.6%
16.9%
16 9% 17.6%
17 6%
15% 8.6% 14.1%
5.7% 7.4%
10% 6.1%
18.0%
18 0%
14.3% 14.7% 15.4%
5% 10.0% 11.2% 10.2%
8.0%
0%
1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08
+1Q08 +2Q08 +3Q08 +4Q08 +1Q09 +2Q09 +3Q09 +4Q09
Note: SG&A data adjusted for vacation accrual in 4Q08 and restructuring and restructuring-related costs in 1Q, 2Q, 3Q and 4Q 2009.
© Copyright 2009 Walgreen Co. 21
- 22. Rewire for Growth on Target
$500 million pre-tax savings in FY10
$1 billion pre-tax savings in FY11
1Q09 2Q09 3Q09 4Q09
Savings $.01 $.02 $.06 $.07
Costs* ($.01) ($.06) ($.06) ($.03)
Net
$.00 ($.04) $.00 $.04
Savings
*Restructuring and restructuring-related charges include impact of CCR markdown activity on gross profit margin
Restructuring
© Copyright 2009 Walgreen Co. 22
- 23. Income Statement Details
4Q08 4Q09
LIFO Provision $24M $48M
g
Restructuring $51M
SKU discontinuation $19M
Consultants and other $23M
Reduction in force $9M
Net Interest Expense $7M $23M
Tax Rate 37.1% 35.8%
© Copyright 2009 Walgreen Co. 23
- 24. Balance Sheet Highlights
4Q08 4Q09 Change
Accounts Receivable $2.5B $2.5B (1.2%)
Inventories $7.2B $6.8B (
(6.3%)
)
Accounts Payable ($4.3B) ($4.3B) 0.4%
Total $5.4B
$5 4B $5.0B
$5 0B (7.4%)
(7 4%)
Total as a % of Sales 37.0% 31.8% 14.1%
© Copyright 2009 Walgreen Co. 24
- 25. FIFO Inventory Trends
4Q08 1Q09 2Q09 3Q09 4Q09
Percent
Change Total 7.2% 10.0% 4.6% (0.3%) (3.5%)
Inventory
I t
Percent
C
Change Total
g
(2.2%)
(2 2%) 0.1%
0 1% (4.0%)
(4 0%) (9.1%)
(9 1%) (11.1%)
(11 1%)
Inventory per
Store*
*Total FIFO inventory/total drugstore locations
Total
© Copyright 2009 Walgreen Co. 25
- 26. Net Cash
1Q09 2Q09 3Q09 4Q09
Cash $886 $909 $2,300 $2,087
Short Term
– $650 $100 $500
Investments
Short Term Debt $1,081 $12 $10 $15
Long Term Debt $1,337 $2,332 $2,338 $2,336
Net Cash* ($1,532M) ($785M) $52M $236M
*Net cash = cash and cash-equivalents plus short-term investments less short-term and long-term debt
© Copyright 2009 Walgreen Co. 26
- 27. Capital Expenditures
Dollars in Billions
FY08 FY09 FY10E
New Stores $1.6 $1.4 lower
Existing Stores $0.3 $0.2 higher
DCs $0.1
$0 1 $0.1
$0 1 lower
IT & Other $0.2 $0.2 higher
Total
T t l $2.2
$2 2 $1.9
$1 9 ~$1.6
$1 6
© Copyright 2009 Walgreen Co. 27
- 28. Cash Flow ($ in Millions)
Cash Flow
from Operations Free Cash Flow
(From St t
(F Statements of Cash Flows)
t f C h Fl ) (FCF=Cash Flow from Operations – C E )
(FCF C h Fl f O ti CapEx)
1,500 1,500
2009
1,000 1,000
2009
2008
500 500
2008
0 0
-500 -500
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
© Copyright 2009 Walgreen Co. 28
- 29. The Road Ahead
Opportunities
– Executing our 3 core strategies
– Significant growth and share gain
– Aggressively investing in business model
Challenges... Our Next Opportunities
– Reimbursement pressure continues
– Economic uncertainty
© Copyright 2009 Walgreen Co. 29
- 33. Calculation of Adjusted SG&A:
Restructuring
Restr ct ring and Restructuring-Related Costs
Restr ct ring Related
Dollars in Millions
1Q08 1Q09
SGA under GAAP $ 3,193 $ 3,482
Less: Restructuring and
g
Restructuring-related Costs $ - $ 14
Adjusted SGA $ 3,193 $ 3,468
Adjusted YOY % Increase 8.6%
© Copyright 2009 Walgreen Co. 33
- 34. Calculation of Adjusted Gross Profit:
Restructuring
Restr ct ring and Restructuring-Related Costs
Restr ct ring Related
Dollars in Millions
2Q08 2Q09
Gross Profit under GAAP $ 4,442 $ 4,657
Plus: Restructuring and
g
Restructuring-related Costs $ - $ 11
Adjusted Gross Profit $ 4,442 $ 4,668
Adjusted YOY % Increase 5.1%
© Copyright 2009 Walgreen Co. 34
- 35. Calculation of Adjusted SG&A:
Restructuring
Restr ct ring and Restructuring-Related Costs
Restr ct ring Related
Dollars in Millions
2Q08 2Q09
SGA under GAAP $ 3,354 $ 3,627
Less: Restructuring and
g
Restructuring-related Costs $ - $ 82
Adjusted SGA $ 3,354 $ 3,545
Adjusted YOY % Increase 5.7%
© Copyright 2009 Walgreen Co. 35
- 36. Calculation of Adjusted Gross Profit:
Restructuring
Restr ct ring and Restructuring-Related Costs
Restr ct ring Related
Dollars in Millions
3Q08 3Q09
Gross Profit under GAAP $ 4,245 $ 4,459
Plus: Restructuring and
g
Restructuring-related Costs $ - $ 65
Adjusted Gross Profit $ 4,245 $ 4,524
Adjusted YOY % Increase 6.6%
© Copyright 2009 Walgreen Co. 36
- 37. Calculation of Adjusted SG&A:
Restructuring
Restr ct ring and Restructuring-Related Costs
Restr ct ring Related
Dollars in Millions
3Q08 3Q09
SGA under GAAP $ 3,331 $ 3,613
Less: Restructuring and
g
Restructuring-related Costs $ - $ 34
Adjusted SGA $ 3,331 $ 3,579
Adjusted YOY % Increase 7.4%
© Copyright 2009 Walgreen Co. 37
- 38. Calculation of Adjusted Gross Profit:
Restructuring
Restr ct ring and Restructuring-Related Costs
Restr ct ring Related
Dollars in Millions
4Q08 4Q09
Gross Profit under GAAP $ 4,035 $ 4,346
Plus: Restructuring and
g
Restructuring-related Costs $ - $ 19
Adjusted Gross Profit $ 4,035 $ 4,365
Adjusted YOY % Increase 8.2%
© Copyright 2009 Walgreen Co. 38
- 39. Calculation of Adjusted SG&A:
Restructuring
Restr ct ring and Restructuring-Related Costs
Restr ct ring Related
Dollars in Millions
4Q08 4Q09
SGA under GAAP $ 3,324 $ 3,644
Less: Restructuring and
g
Restructuring-related Costs $ - $ 32
Adjusted SGA $ 3,324 $ 3,612
Adjusted YOY % Increase 8.7%
© Copyright 2009 Walgreen Co. 39
- 40. Reconciliation of FIFO Inventory:
4Q08 1Q09 2Q09 3Q09 4Q09
Total FIFO
$8,316.3 $9,408.4 $8,742.2 $8,082.4 $8,028.7
Inventory
LIFO Provision $1,067.3 $1,110.5 $1,158.7 $1,191.4 $1,239.4
O
Total LIFO
$7,249.0
$7 249 0 $8,297.9
$8 297 9 $7,583.5
$7 583 5 $6,891.0
$6 891 0 $6,789.3
$6 789 3
Inventory
© Copyright 2009 Walgreen Co. 40
- 41. Calculation of Free Cash Flow:
1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09
Cash Flow from
Operations $390 $1,116 $985 $548 $312 $1,428 $1,519 $852
under GAAP
Capital
Expenditures ($490) ($553) ($610) ($572) ($638) ($454) ($442) ($393)
under GAAP
Free Cash Flow
non-GAAP ($100) $563 $375 ($24) ($326) $974 $1,077 $459
measure
© Copyright 2009 Walgreen Co. 41