Lazard Capital Markets Healthcare Conference
Jeff Henderson
Chief Financial Officer
Cardinal Health, Inc.
Nov. 17, 2009
© 2009 Cardinal Health, Inc. or one of its subsidiaries. All rights reserved. All other trademarks are the property of their respective owners.
Forward-looking statements and GAAP
reconciliation
This presentation contains forward-looking statements addressing expectations, prospects,
estimates and other matters that are dependent upon future events or developments. These
matters are subject to risks and uncertainties that could cause actual results to differ materially
from those projected, anticipated or implied. These risks and uncertainties include (but are not
limited to) uncertainties and risks regarding the effect of the CareFusion spinoff on Cardinal
Health; the performance of CareFusion and the proceeds realized from future sales of
CareFusion stock; competitive pressures in Cardinal Health’s various lines of business; the loss
of one or more key customer or supplier relationships or changes to the terms of those
relationships; the timing of generic and branded pharmaceutical introductions and the frequency
or rate of branded pharmaceutical price appreciation or generic pharmaceutical price deflation;
changes in the distribution patterns or reimbursement rates for health care products and/or
services; the results, consequences, effects or timing of any inquiry or investigation by any
regulatory authority or any legal or administrative proceedings; the effects of disruptions in the
financial markets, including uncertainties related to the availability and/or cost of credit on
Cardinal Health’s customers and vendors; the ultimate features of government health care reform
initiatives and their enactment and implementation; and conditions in the pharmaceutical market
and general economic and market conditions. In addition, Cardinal Health is subject to additional
risks and uncertainties described in Cardinal Health’s Form 10-K, Form 10-Q and Form 8-K
reports (including all amendments to those reports) and exhibits to those reports. This
presentation reflects management’s views as of Nov. 17, 2009. Except to the extent required by
applicable law, Cardinal Health undertakes no obligation to update or revise any forward-looking
statement. In addition, this presentation includes non-GAAP financial measures. Cardinal Health
provides definitions and reconciling information at the end of this presentation and on its investor
relations page at www.cardinalhealth.com. A transcript of the webcast will be available on the
investor relations page at www.cardinalhealth.com.
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© 2009 Cardinal Health, Inc. or one of its subsidiaries. All rights reserved. All other trademarks are the property of their respective owners.
Fiscal 2009 overview
Revenue*
~$96B
Non-GAAP operating earnings
~$1.4B
Employees
~30K
Countries with direct operations
11
>50K
Customers
*See Cardinal Health audited financial statements filed with the Form 8-K dated Nov. 16, 2009.
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© 2009 Cardinal Health, Inc. or one of its subsidiaries. All rights reserved. All other trademarks are the property of their respective owners.
Q1 FY2010 financial review
GAAP Basis
($M)
%
Change1
Non-GAAP Basis
%
Change1
($M)
$24,781
6%
Operating earnings
$240
(16%)
$323
4%
Earnings from continuing ops
($62)
N.M.
$194
15%
Diluted EPS from continuing ops
($0.17)
N.M.
$0.54
15%
Operating cash flow
$406M
Revenue
Days Receivable
Days Inventory on Hand
20.1
23
1%
change over prior year quarter
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© 2009 Cardinal Health, Inc. or one of its subsidiaries. All rights reserved. All other trademarks are the property of their respective owners.
Our purpose
We make healthcare more cost-effective,
so our customers can focus on their patients
Our Customers
Patients
• Customers are facing enormous pressures to reduce costs and improve performance
• We reduce the costs of care through our sourcing, supply chain efficiencies, reduction
of errors and safety events, and supplier and channel relationships
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© 2009 Cardinal Health, Inc. or one of its subsidiaries. All rights reserved. All other trademarks are the property of their respective owners.
Delivering value to major stakeholders
Impact
Role of New Cardinal Health
Customers
Suppliers
Payors
•
Improve efficiency, eliminate
waste, enable scale and
manage risk
•
•
Most efficient link to endusers, manage risk, smooth
volatility, drive share
•
Cost-effective solutions
that deliver economic
value and secure volume
•
Drive usage of cost
effective solutions, ensure
safety / integrity
•
Improved economics
and outcomes
Improved economics
Consumers
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© 2009 Cardinal Health, Inc. or one of its subsidiaries. All rights reserved. All other trademarks are the property of their respective owners.
Two strong segments
Segment
Key Activities
Pharmaceutical
• Pharmaceutical distribution
• Manufacturer and
specialty services
• Nuclear and pharmacy services
~2/3 of
segment profit1
• Medical product distribution
• Lab product distribution
• Infection prevention products
~1/3 of
segment profit1
Medical
Balanced portfolio of products and services playing a critical role
in the healthcare system
1
Numbers are unaudited estimates of FY10 segment profit contribution.
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© 2009 Cardinal Health, Inc. or one of its subsidiaries. All rights reserved. All other trademarks are the property of their respective owners.
Pharmaceutical Segment
Manufacturer and
Specialty Services
Nuclear and
Pharmacy Services
Pharmaceutical
Distribution
© 2009 Cardinal Health, Inc. or one of its subsidiaries. All rights reserved. All other trademarks are the property of their respective owners.
Medical Segment
Products
Businesses
Channel
Businesses
Medical Products
and Services
• Hospital
• Lab
• Ambulatory
Clinical / Procedural
• Kitting (Presource™)
Canada
• Hospital
(Source Medical)
• Ambulatory
Infection Prevention Products
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© 2009 Cardinal Health, Inc. or one of its subsidiaries. All rights reserved. All other trademarks are the property of their respective owners.
Success at Cardinal Health requires
exceptional financial discipline
Key focus area
Simplifying the portfolio
Financial management implications
• Ongoing, disciplined portfolio reviews
• Resource focus
Strengthen core
• Account profitability management
• Active compliance monitoring
• Selective capital investment to drive differentiation
• Focus on key performance metrics
Shareholder return
• Maximizing cash flow yield
• Exercising capital deployment discipline
• Increasing dividend pay-out
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© 2009 Cardinal Health, Inc. or one of its subsidiaries. All rights reserved. All other trademarks are the property of their respective owners.
We have a clear financial focus
Key financial metrics
Segment profit
margin
Net working
capital days
Operating
cash
flow
Total
shareholder
return
Return on
tangible capital
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© 2009 Cardinal Health, Inc. or one of its subsidiaries. All rights reserved. All other trademarks are the property of their respective owners.
Cardinal Health
Key initiatives for FY10
• Enhance the overall customer experience
• Medical transformation
• Category management
• Sourcing programs
– Medical products and generics
• Lean inventory management
• Enhance internal pricing processes
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© 2009 Cardinal Health, Inc. or one of its subsidiaries. All rights reserved. All other trademarks are the property of their respective owners.
Questions?
© 2009 Cardinal Health, Inc. or one of its subsidiaries. All rights reserved.