Cardinal Health, Inc. (CAH) Management Presents at 40th JPMorgan Annual Healthcare Conference (Transcript)

Summary of Cardinal Health, Inc. Conference Call Company Overview - Company: Cardinal Health, Inc. (NYSE: CAH) - Event: 40th JPMorgan Annual Healthcare Conference - Date: January 10, 2022 - Participants: - Mike Kaufmann - CEO - Jason Hollar - CFO - Lisa Gill - JPMorgan Healthcare Services Analyst Key Points Company Aspirations and Strategy - Cardinal Health aims to be healthcare's most trusted partner by focusing on customer needs and delivering innovative healthcare solutions [3][4] - The company is investing in technology and analytics to drive future growth and address complex healthcare challenges [4] Financial Performance - Fiscal 2021 revenue was $162 billion, with a 6% year-over-year growth despite a $200 million headwind from COVID-19 [4][6] - Non-GAAP EPS grew, and the company returned approximately $800 million to shareholders through dividends and share repurchases [6] - The company paid down approximately $550 million of debt, strengthening its balance sheet [6] Business Segments - Cardinal Health operates in two segments: Pharmaceutical and Medical - Pharmaceutical Segment: Generated $146 billion in revenue and $1.7 billion in profit [8] - Medical Segment: Generated $16.7 billion in revenue and $577 million in profit [8] Market Position and Operations - Serves approximately 90% of U.S. hospitals and over 60,000 U.S. pharmacies [4][5] - Operates a network of over 130 nuclear pharmacies and more than 30 nuclear manufacturing facilities [5] Challenges and Supply Chain Issues - The medical segment is facing significant inflationary pressures, with an estimated impact of $150 million to $175 million due to increased costs in freight and commodities [29][30] - The company is experiencing lower volumes and challenges in pricing strategies due to supply constraints [30] Strategic Priorities - Cardinal Health is focused on optimizing core businesses, investing for growth, and deploying capital efficiently [13] - The company has increased its cost savings target by $250 million to a total of $750 million by FY '23 [14] Growth Opportunities - The company sees significant growth potential in specialty distribution, at-home healthcare, and advancements in supply chain technology [18][19] - Investments in digital capabilities and expanding warehouse networks are underway to support the at-home solutions business, which is now valued at $2.2 billion [21] Shareholder Returns - A new three-year authorization for share repurchases of up to $3 billion was approved, with expectations of approximately $1 billion in share repurchases for FY '22 [23] Long-term Financial Targets - Cardinal Health aims for double-digit combined EPS growth and a commitment to dividend yield [24] - The company is targeting a 50% reduction in Scope 1 and Scope 2 greenhouse gas emissions by 2030 [24] Conclusion - Cardinal Health is positioned to benefit from favorable healthcare trends, including an aging population and shifts towards home care [25] - The company is committed to addressing current challenges while focusing on long-term growth and shareholder value [26]