Cencora (COR) 43rd Annual J.P. Morgan Healthcare Conference summary

Strategic Vision and Recent Developments

• Focus remains on a pharmaceutical-centric strategy, expanding higher growth, higher margin businesses, and making key investments such as OneOncology and RCA acquisition.

• Long-term guidance targets 8%-12% adjusted EPS growth, supported by a global workforce and diversified services, on a constant currency basis.

• Investments in innovation and infrastructure aim to enhance capabilities and support sustainable success.

• Strong customer partnerships and leadership in specialty pharmaceuticals and animal health are emphasized.

• International segment growth is driven by expanded manufacturer services and logistics, with a pan-European approach.

Financial Performance and Capital Deployment

• Fiscal 2024 revenue reached $294B, with 12% revenue growth, adjusted operating income of $3.6B (up 11% y/y), and adjusted diluted EPS of $13.76 (up 15% y/y).

• Five-year adjusted diluted EPS CAGR was 14%, and adjusted operating income CAGR was 12%.

• Cumulative capital deployment from FY19-FY24 included $2.2B in CapEx, $8.2B in M&A, $1.9B in dividends, and $3.7B in share repurchases.

• Strong free cash flow generation ($3.1B in FY24) supports ongoing investments and shareholder returns.

• Dividend growth recently increased to 8%.

Market Trends and Operational Focus

• U.S. business momentum is driven by broad-based utilization trends and strong specialty product sales, outpacing market growth.

• Generic pricing has stabilized, with less deflation and fewer shortages, and procurement focuses on quality and cost.

• Biosimilars are a tailwind, offering higher margins than branded products, especially in oncology and retina.

• GLP-1s contributed $8.6B in sales (43% growth), but remain minimally profitable; oral GLP-1s may offer slight margin improvement.

• COVID vaccine-related headwinds are expected in early fiscal 2025, but are offset by core business momentum.