AmerisourceBergen Corporation
CEO : Mr. Steven H. Collis
Quarterly earnings growth(YoY,%)
| Period | Revenue | Operating Income | EPS | Release Date |
|---|---|---|---|---|
| 2023 Q1 | 5.4% YoY | 6.0% | 9.3% | 2023-02-01 |
Jim Cleary says,
Name Change to Cencora
- The company plans to change its name to Cencora in H2 2023 to better reflect its role and impact as a leading healthcare solutions organization.
Q1 2023 Financial Results
- Adjusted diluted EPS was $2.71, up 5% YoY.
- Consolidated revenue was $62.8 billion, up 5% YoY due to growth in the US Healthcare Solutions segment.
- Consolidated gross profit was $2.1 billion, up 5% YoY due to growth in the US Healthcare Solutions segment.
- Consolidated operating expenses were $1.4 billion, up 9.8% YoY due to higher distribution, selling and administrative expenses to support revenue growth.
- Consolidated operating income was $734 million, down 2% YoY due to the impact of foreign currency translation for the International Healthcare Solutions segment.
- Net interest expense was $46 million, down 14% YoY due to higher interest income resulting from higher cash balances and interest rates on investments.
- Adjusted free cash flow was $584 million.
US Healthcare Solutions Segment Results
- Revenue was $56.2 billion, up 6% YoY.
- Operating income increased by 1% to $572 million, driven by strong specialty sales and broad-based solid growth in human health distribution businesses.
- The strength in specialty and broad-based good utilization trends in human health distribution helped to offset the previously anticipated higher operating expenses.
International Healthcare Solutions Segment Results
- Revenue was $6.6 billion, down 0.6% YoY on a reported basis, or up 17.7% YoY on a constant currency basis.
- Operating income was $161 million, down 10% YoY on a reported basis due to the impact of foreign currency translation on income for Alliance Healthcare and the divestiture of ProPharma Specialty.
- When looking at the segment on a constant currency basis, it delivered 11% operating income growth driven by solid underlying fundamentals and favorable manufacturer price adjustments.
FY 2023 Guidance
- Diluted EPS guidance raised to a range of $11.50 to $11.75, representing growth of 4% to 7% on an as-reported basis, or 6% to 9% on a constant currency basis.
- COVID-19 treatment distribution contributions expected to be in the range of $0.25 to $0.30, down from the previous range of $0.30 to $0.35.
- US Healthcare Solutions segment as-reported growth guidance now in the range of 1% to 4% growth widened from the prior range of 2% to 4% growth.
- International Healthcare Solutions as-reported operating income guidance raised to a range of a decline of 3% to growth of 1% from the previous range of a decline of 7% to a decline of 3%.
Steve Collis says,
Financial Performance
- Recorded revenue of nearly $63 billion, representing 5% YoY growth.
- Adjusted EPS growth of 5%.
Unified Identity as Cencora
- AmerisourceBergen will operate under a new unified identity as Cencora.
- Cencora better represents their impact across pharmaceutical care.
- Aligns with their growth strategy and long-term vision of building on their leadership in pharmaceutical distribution and growing their high-margin, high-growth businesses.
Expansion of Portfolio of Specialty Solutions
- Acquired PharmaLex, a leading provider of pharmaceutical services.
- PharmaLex enhances capabilities with additional regulatory affairs, development consulting and scientific affairs, pharmacovigilance and quality management and compliance services in both the US and internationally.
Investment in Innovation
- Investing in business to support partners in bringing the latest scientific advancements to patients worldwide.
- Capabilities include technology-centric partnerships and global specialty logistics capabilities.
- Trust gained of pharma and biotechs worldwide to be their partner of choice.
Environmental, Social, and Governance Initiatives
- Published seventh annual environmental, social, and governance report which highlights progress made in fiscal 2022.
- Established a center for excellence that oversees governance of DEI, including DEI Global Counsel and employee resource groups.
- Supporting more than 11,000 jobs within the supply chain and in suppliers’ communities through supplier diversity program.
Updated Guidance
- Jim will provide an in-depth review of the updated guidance.
Q & A sessions,
PharmaLex Acquisition
- PharmaLex is a continuation of AmerisourceBergen’s strategy of investing to further their leadership in specialty distribution and services.
- The acquisition of PharmaLex enhances AmerisourceBergen’s international capabilities and complements their existing manufacturer services platform.
- AmerisourceBergen aims to be the first stop for any services that manufacturers would like to deploy their businesses, including PharmaLex.
- The acquisition brings in about 2,500 team members, and about 800 of them have PhD equivalent degrees, which can uplift the talent and intellectual thought around the manufacturer.
Biosimilar HUMIRA Launch
- The first biosimilar HUMIRA launched this week, and it is an important drug for the US health system.
- The launch is going to be an important creator of headroom for the new innovative therapies that AmerisourceBergen is well-positioned to serve their stakeholders in.
- It is a Part D drug, and it will be incrementally better for AmerisourceBergen in margins, but it’s mostly mail order.
- Some of their customers could be ordering directly, and they have limited locations, and it’s a much easier distribution function for manufacturers to fill.
International Business
- AmerisourceBergen has strong market positions in almost every country they’re in.
- The Alloga business, a successful 3PL business, is a higher percentage of sales in their international segment than they are in the US segment, leading to a significantly higher operating margin in the international segment.
- The acquisition of PharmaLex further enhances their international capabilities.
- AmerisourceBergen’s guidance update on the international business has increased by 4 percentage points at the low end of the range and 4 percentage points at the high end of the range, driven by good utilization trends and performance.
Specialty Products
- Specialty products continue to be a driver for AmerisourceBergen in the US market.
- AmerisourceBergen is a leader in the specialty business, both for physician practices and for non-physician parts of the business.
- The higher-margin services businesses, including 3PL, are a really important part of their international and US business.
Resilience of AmerisourceBergen
- AmerisourceBergen has proven through all sorts of cycles that they are resilient and carry on producing earnings and cash flow, which is essential.
- Their core and specialty businesses and the manufacturer services they provide are fundamental to the health systems.
- AmerisourceBergen is very good at adapting to whichever changes they need to make, such as COVID.
- Continuous patient access to care is essential to all of their businesses, and they work with single-payer systems.
No bad stock 