Cencora (COR) Barclays 28th Annual Global Healthcare Conference summary

Recent financial performance and guidance

• Reported 21% operating profit growth in the U.S. segment for the fiscal first quarter, with broad-based strength even after accounting for acquisition timing and customer losses.

• Increased enterprise operating income guidance to 11.5%-13.5% and U.S. segment guidance to 14%-16% for the year following the OneOncology acquisition.

• Raised long-term guidance twice in the past six months, now projecting 7%-10% organic operating income growth and 3%-4% from capital deployment, totaling a 10%-14% long-term target.

• Q2 expected to be the lowest growth quarter due to annualization of RCA and timing of OneOncology integration, with normalization anticipated in Q4.

Strategic acquisitions and MSO strategy

• Closed the OneOncology acquisition and highlighted strong performance from Retina Consultants of America (RCA), both key to the MSO (Management Services Organization) strategy.

• MSO strategy seen as a natural evolution, focusing on pharmaceutical-centric specialties like retina and oncology, leveraging existing distribution and GPO relationships.

• Synergies expected between RCA and OneOncology in clinical trials, back office, and data analytics.

• Future acquisitions likely to be smaller, bolt-on investments in specialty, as two leading platforms are now established.

Market trends and business outlook

• Underlying pharmaceutical demand remains inelastic despite macroeconomic fluctuations, with no significant volatility observed.

• Generic pricing deflation has moderated, with price stability attributed to manufacturer portfolio management and increased inspections.

• A robust pipeline of generics and biosimilars is expected to provide ongoing tailwinds through 2030, supporting both innovation and cost savings.

• IRA-related pricing changes are being managed through contract renegotiations, with success in maintaining gross profit dollars.