McKesson (MCK) Investor Day 2025 summary

Strategic priorities and business evolution

• Four growth pillars: people/culture, oncology/multispecialty, core pharmaceutical distribution, and portfolio modernization, with ongoing tactical evolution and disciplined portfolio management.

• Recent portfolio actions include exiting non-core businesses and focusing on high-growth, high-margin areas like oncology, multispecialty, and biopharma services.

• New organizational structure enhances alignment to strategy, with North American Pharmaceutical, Oncology & Multispecialty, and Prescription Technology Solutions as core segments.

• Medical Surgical Solutions business to be separated via IPO and subsequent spin-off by the second half of 2027, targeting a tax-free public separation and maintaining dividend levels and credit ratings.

• Modernization initiatives include technology upgrades, automation, and digital transformation to enhance operational efficiency and customer experience.

Financial performance and guidance

• Fiscal 2026 guidance raised: adjusted operating profit growth of 10%-14% and adjusted EPS growth of 15%-17% (excluding venture gains, 17%-19%), with FY26 adjusted EPS guidance at $38.05–$38.55.

• Oncology & Multispecialty segment expects 27%-31% revenue growth and 49%-53% AOP growth, driven by organic expansion and acquisitions.

• Prescription Technology Solutions segment guidance increased to 9%-13% revenue and 11%-15% AOP growth, reflecting strong demand for access and affordability solutions.

• Long-term adjusted EPS growth target updated to 13%-16%, with Oncology & Multispecialty AOP growth at 13%-16%, North American Pharmaceutical at 5%-8%, and Prescription Technology Solutions at 10%-13%.

• Free cash flow expected at $4.4–$4.8 billion in FY26, with return on invested capital up 1,800 basis points since 2020 and a 357% share price increase over five years.

Business segment highlights and growth drivers

• Oncology platform is market-leading, supporting 3,300+ providers and 1.4 million patients annually, with a growing focus on clinical trials and data-driven insights.

• Expansion into retina and ophthalmology through US Retina and Prism Vision Group, applying oncology expertise to new specialties.

• Prescription Technology Solutions leverages technology and AI to improve medication access, affordability, and adherence, supporting over 100 million patient access events annually and $10B in annual out-of-pocket savings.

• Specialty pharmaceuticals are a key growth engine, with $180 billion in specialty revenues and 18% CAGR in specialty distribution since 2021.

• Leading position in North American pharmaceutical distribution, with 1/3 of pharmaceuticals distributed in the region and >99% inventory service level.