Cencora (NYSE:COR) FY 2025 Conference December 02, 2025 01:00 PM ET Company ParticipantsBennett Murphy - Head of Investor RelationsJim Cleary - CFOConference Call ParticipantsDaniel Grosslight - Health Tech and Distribution AnalystDaniel GrosslightEveryone, thanks for joining us for the Cencora Fireside Chat. Hopefully, everyone is now well-fed and well-entertained by Dan Marino. But I have some better entertainment here today for you guys. Obviously, very thrilled to have Jim Cleary, Cencora's CFO, here wi ...

Financial Data and Key Metrics Changes - The company reported a strong fiscal year 2025, with EPS and adjusted operating income both up 16% [5] - The stock price increased by approximately 55% over the year [5] - Long-term operating income guidance was raised to 6%-9% growth, with a 2026 forecast for U.S. healthcare operating income growth of 9%-11% [6][7] Business Line Data and Key Metrics Changes - The U.S. operating income growth is expected to be 9%-11%, with a potential 10%-12% growth when excluding a 1% headwind from a competitor acquisition [7][8] - The company is focusing on expanding its specialty business, particularly in oncology and retina markets, which are seen as key growth drivers [8][15] Market Data and Key Metrics Changes - The international healthcare solutions segment faced challenges, contributing only 15% to overall operating income, while the U.S. segment accounted for 85% [49] - The 3PL market is identified as the fastest-growing part of the international distribution business, with improvements noted in the global specialty logistics business [50][52] Company Strategy and Development Direction - The company is committed to a pharmaceutical-centric approach, focusing on specialty products and management services for physician practices [8][15] - Strategic acquisitions, particularly in the MSO space, are a priority, with plans to acquire the remaining 65% of OneOncology [17][63] - The company is also investing in infrastructure and technology, with capital expenditures projected at about $900 million [62][63] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in long-term growth driven by pharmaceutical innovation and demographic trends [9] - There are concerns about potential policy-induced headwinds affecting coverage and insurance enrollment, but management believes pharmaceuticals remain a critical and efficient form of care [10][12] Other Important Information - The company is evaluating strategic alternatives for underperforming segments, including parts of PharmaLex, while retaining growth-oriented businesses [56][60] - The dividend growth rate was increased to 9%, aligning with long-term EPS growth guidance of 9%-13% [63] Q&A Session Summary Question: What are the key growth drivers for the MSO business? - The MSO business is seen as a natural evolution of the specialty business, providing additional management services to physician practices [14][15] Question: How does the company differentiate itself from competitors in the MSO space? - The company maintains a pharmaceutical-centric focus, which is a key differentiator in its strategy [15] Question: What impact do potential drug pricing changes have on the business? - Management emphasized the importance of community-based providers and the efficiency of pharmaceuticals in maintaining care access [25][26] Question: How is the company addressing challenges in the international market? - The company is focusing on the 3PL market and has seen improvements in its global specialty logistics business [50][52] Question: What is the company's approach to capital deployment? - The company prioritizes balanced capital deployment, including investments in business growth, strategic acquisitions, share repurchases, and dividend payments [62][63]