Cencora(US:COR)2022-02-02 17:32Financial Data and Key Metrics Changes - AmerisourceBergen reported a revenue growth of 13% year-over-year, reaching $59 billion for Q1 2022 [8] - Adjusted operating income increased by 21%, while adjusted EPS grew by 18% [8][32] - Consolidated revenue grew about 14% to $59.6 billion, with consolidated gross profit increasing by 41% to $2 billion [32][33] - The effective income tax rate was 21.3%, consistent with prior year [35] - Adjusted free cash flow was $809 million, with a cash balance of $3.2 billion at the end of the quarter [36] Business Line Data and Key Metrics Changes - U.S. Healthcare Solutions segment revenue increased by 2.7% to $53 billion, driven by sales growth in specialty physician services and MWI Animal Health [37] - International Healthcare Solutions segment revenue was $6.6 billion, with $5.6 billion attributed to the Alliance Healthcare acquisition [42] - Segment operating income for U.S. Healthcare Solutions was $569 million, representing a growth of 0.6% [38] - International Healthcare Solutions segment operating income was $180 million, up 253% on a reported basis [43] Market Data and Key Metrics Changes - Alliance Healthcare's performance has been strong, contributing significantly to the COVID-19 response in multiple countries [44] - The company is seeing significant growth in Alphega's membership as independent pharmacies recognize the value of working with Alliance [19] Company Strategy and Development Direction - The company focuses on pharmaceutical-centric strategies, strong customer relationships, and leadership in specialty pharmaceuticals [9][31] - AmerisourceBergen aims to expand its leadership in specialty and enhance its role in pharmaceutical innovation and access globally [20][52] - The company is committed to ESG initiatives and has published its sixth Annual Global Sustainability Report [26][50] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate the complexities of the healthcare landscape and highlighted the importance of partnerships in addressing COVID-19 [11][29] - The company raised its fiscal 2022 U.S. Healthcare Solutions segment operating income guidance to a range of $2.375 billion to $2.45 billion, reflecting positive trends in COVID therapies [41] Other Important Information - The company renewed its supply agreement with Express Scripts through 2026, emphasizing long-term partnerships [10] - AmerisourceBergen's role in distributing COVID-19 therapies has been pivotal, with over 100 million vaccines distributed worldwide [60] Q&A Session Summary Question: Impact of wage inflation in Europe - Management acknowledged higher labor and transportation costs but noted that these were included in guidance and that the company is managing through inflation effectively [55][56] Question: Role in new COVID antivirals - Management highlighted their significant role in distributing COVID therapies and emphasized their adaptability and strong relationships with government entities [60][61] Question: Specialty and biosimilars growth - Management indicated that specialty physician services are performing well, with increasing acceptance of biosimilars contributing positively to the business [66][70] Question: Drug pricing environment - Management stated that brand drug inflation is in line with expectations and that generic deflation rates remain stable [78] Question: Express Scripts renewal details - Management confirmed no significant changes to pricing or economics in the Express Scripts renewal, emphasizing the importance of long-term partnerships [81][84]