Cencora (NYSE:COR) FY Conference Transcript

Summary of Cencora (NYSE:COR) FY Conference Call - September 10, 2025 Company Overview - Company: Cencora (NYSE:COR) - Event: FY Conference Call - Date: September 10, 2025 Key Industry Insights - Healthcare Services: The discussion primarily revolves around the healthcare services industry, focusing on Cencora's performance and strategic initiatives. Core Financial Performance - EPS Guidance: Cencora raised its fiscal year 2025 EPS guidance five times since November, now implying a growth of 14% to 15% [3][5] - Operating Income Growth: The adjusted operating income guidance for fiscal year 2025 is set at 15% to 16%, with the U.S. segment expected to grow by 20% to 21% [5][6] - Long-term Growth Goals: The company maintains a long-term guidance of 8% to 12% EPS growth, with organic operating income growth projected at 5% to 8% [11][10] Strategic Acquisitions and Market Position - RCA Acquisition: The RCA acquisition is highlighted as a significant tailwind for fiscal year 2026, contributing positively to growth [8][9] - Oncology Customer Loss: A headwind is anticipated due to the loss of an oncology customer following its acquisition by a competitor [9] - Specialty Business: Cencora's specialty business is performing strongly, particularly in physician practices and health systems, with a focus on high-value services [25][26] Market Dynamics - Utilization Trends: Strong utilization trends are noted, especially in specialty products, which are expected to continue [14][6] - Drug Pricing Environment: The generic drug pricing environment shows moderation in deflation, while branded pricing remains in line with expectations [16][17] Partnerships and Collaborations - Cigna and Walgreens: Cencora maintains strong partnerships with Cigna and Walgreens, with contracts extending through 2029 and 2031, respectively [46][47] - Biosimilars: The company sees biosimilars as a continuing tailwind for its specialty business, particularly in oncology and retina [41] International Business and Growth - International Segment Performance: The international segment has faced challenges, particularly in specialty logistics and consulting services, but is expected to stabilize [63][64] - World Courier: Cencora's World Courier business, a leader in clinical trial logistics, is anticipated to recover as market conditions improve [66] Regulatory Environment - Regulatory Dynamics: The company is closely monitoring potential regulatory changes, including pharma tariffs and drug pricing reforms, to mitigate risks [50][51] Investment and Capital Deployment - Capital Deployment Strategy: Cencora emphasizes balanced capital deployment, focusing on growth-oriented investments and strategic acquisitions [71][72] - Digital Transformation: The company is investing in digital transformation to enhance operational efficiency, particularly in finance and internal audits [75][76] Conclusion Cencora is positioned for continued growth through strategic acquisitions, strong performance in its U.S. segment, and a focus on specialty products. The company is navigating challenges in the international market while maintaining robust partnerships and monitoring regulatory changes.