Walgreens Boots Alliance, Inc. – Walgreens Boots Alliance Experiences Fiscal 2022 Second Quarter Outcomes

Robust Execution with Continued Progress on Strategic Priorities

Second quarter highlights

• 
  Second quarter earnings per share (EPS*) from persevering with operations was $1.02, a lower in contrast with an EPS of $1.06 within the year-ago quarter; persevering with operations adjusted** EPS elevated 25.9 % to $1.59, up 26.5 % on a continuing foreign money foundation
• 
  Second quarter gross sales from persevering with operations elevated 3.0 % over the year-ago quarter to $33.8 billion, up 3.8 % on a continuing foreign money foundation
• 
  Second quarter working earnings from persevering with operations elevated to $1.2 billion, in contrast with working earnings of $832 million within the year-ago quarter; adjusted working earnings from persevering with operations elevated to $1.7 billion, up 35.9 % on a continuing foreign money foundation
• 
  Strategic evaluate of the Boots enterprise in progress, according to the corporate’s renewed priorities and strategic course, together with larger give attention to U.S. healthcare

Robust operational efficiency

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  Robust execution throughout enterprise segments, led by COVID-19 vaccinations and testing, U.S. retail comparable gross sales up 14.7 %, and Boots UK retail comparable gross sales up 22.0 % with share good points throughout all main classes
• 
  WBA continues to serve native communities to handle the COVID-19 pandemic, with Walgreens administering over 62.8 million vaccines up to now, together with 11.8 million within the second quarter
• 
  Walgreens Well being professional forma gross sales up 128 % in comparison with year-ago standalone outcomes, progressing towards long-term targets
• 
  The expanded Transformational Value Administration Program is on observe to ship $3.3 billion in annual price financial savings by fiscal 2024

Fiscal 2022 outlook

• 
  Sustaining full 12 months adjusted EPS steering of low-single digit progress

DEERFIELD, Unwell.–(BUSINESS WIRE)–
Walgreens Boots Alliance, Inc. (Nasdaq: WBA) as we speak introduced monetary outcomes for the second quarter of fiscal 2022, which ended February 28, 2022.

Chief Govt Officer Rosalind Brewer stated:

“Second quarter outcomes demonstrated broad-based execution, driving sturdy comparable gross sales and sturdy earnings progress. We proceed to make necessary strides alongside our strategic priorities, constructing a consumer-centric, technology-enabled healthcare enterprise on the middle of native communities. VillageMD and Shields are delivering great professional forma gross sales progress in comparison with their year-ago standalone outcomes, and our Walgreens Well being section is on observe towards long-term targets. The strategic evaluate of our Boots enterprise is progressing, and our transformational actions are accelerating sustainable worth creation.”

Overview of Second Quarter Outcomes

WBA second quarter gross sales from persevering with operations elevated 3.0 % from the year-ago quarter to $33.8 billion, a rise of three.8 % on a continuing foreign money foundation. The efficiency displays gross sales progress at Walgreens and within the Worldwide section, and gross sales contributions from the Walgreens Well being section because of the latest acquisitions and consolidation of VillageMD and Shields, partly offset by a decline in gross sales at AllianceRx Walgreens.

Working earnings from persevering with operations was $1.2 billion within the second quarter in comparison with working earnings of $832 million within the year-ago quarter. Adjusted working earnings from persevering with operations was $1.7 billion, a rise of 35.9 % on a continuing foreign money foundation. The will increase mirror sturdy adjusted gross revenue progress throughout each pharmacy and retail in the USA and a continued rebound in Worldwide section gross sales and profitability, partly offset by progress investments in Walgreens Well being.

Web earnings from persevering with operations have been $883 million within the second quarter in comparison with $922 million within the year-ago quarter, reflecting sturdy working efficiency offset by the corporate’s fairness investments, together with the lapping of a acquire on the partial sale of the corporate’s fairness technique funding in Choice Care Well being within the year-ago quarter. Adjusted web earnings from persevering with operations elevated 25.8 % to $1.4 billion, up 26.4 % on a continuing foreign money foundation in contrast with the year-ago quarter.

EPS from persevering with operations within the second quarter was $1.02 in comparison with EPS of $1.06 within the year-ago quarter. Adjusted EPS from persevering with operations was $1.59, a rise of 25.9 % on a reported foundation and a rise of 26.5 % on a continuing foreign money foundation.

Web money supplied by working actions was $1.1 billion within the second quarter and free money move was $669 million, a $431 million lower in free money move in contrast with the year-ago quarter primarily pushed by phasing of working capital, compensation of COVID-19 associated authorities help, and elevated capital expenditures in progress initiatives, together with rollout of latest automated microfulfillment facilities and the VillageMD footprint growth.

Overview of Fiscal 2022 Yr-to-Date Outcomes

Gross sales from persevering with operations within the first six months of fiscal 2022 have been $67.7 billion, a rise of 5.4 % from the identical interval a 12 months in the past, and a rise of 5.7 % on a continuing foreign money foundation, reflecting sturdy comparable gross sales progress at Walgreens and within the Worldwide section.

Working earnings from persevering with operations within the first six months of fiscal 2022 was $2.5 billion in comparison with $298 million in the identical interval a 12 months in the past. This was partly pushed by a $1.5 billion cost from the corporate’s fairness earnings in AmerisourceBergen within the year-ago interval. Adjusted working earnings from persevering with operations within the first six months of the fiscal 12 months was $3.4 billion, a rise of 41.8 % from the identical interval a 12 months in the past on a reported foundation, and up 42.1 % on a continuing foreign money foundation. The will increase mirror sturdy adjusted gross revenue progress throughout each pharmacy and retail in the USA and a continued rebound in Worldwide section gross sales and profitability, partly offset by progress investments in Walgreens Well being.

For the primary six months of fiscal 2022, web earnings from persevering with operations elevated $3.9 billion in comparison with the identical interval a 12 months earlier, to $4.5 billion, reflecting a $2.5 billion after-tax acquire within the first quarter because of the valuation of the corporate’s beforehand held minority fairness and debt investments in VillageMD and Shields, and the lapping of a $1.2 billion cost, web of tax, from the corporate’s fairness earnings in AmerisourceBergen within the year-ago interval. Adjusted web earnings from persevering with operations elevated 39.0 % in fixed foreign money to $2.8 billion.

EPS from persevering with operations for the primary six months of fiscal 2022 elevated $4.54 to $5.15, in comparison with the identical interval a 12 months in the past. Adjusted EPS from persevering with operations was $3.27, a rise of 38.6 % on a reported foundation and a rise of 38.8 % on a continuing foreign money foundation.

Web money supplied by working actions was $2.2 billion within the first six months of fiscal 2022, a lower of $372 million from the identical interval final 12 months, and free money move was $1.3 billion, a lower of $550 million from the identical interval a 12 months in the past pushed by the decline of the AllianceRx Walgreens enterprise, phasing of working capital and elevated capital expenditures in progress initiatives, together with rollout of latest automated microfulfillment facilities and the VillageMD footprint growth.

Enterprise Highlights

WBA continued to execute on its technique and obtain sturdy outcomes throughout its companies, together with:

Rising the core

• 
  Taking part in a number one position in COVID-19 vaccinations and testing
  
  – Walgreens administered 11.8 million vaccinations and 6.6 million assessments in 2Q
  
  – Over 12 million boosters administered up to now
  
  – Largest pediatric vaccine supplier within the pharmacy channel
  
  – Launched the Walgreens COVID-19 Index to advance speedy detection of the Omicron variant and to trace variant exercise by state
• 
  U.S. retail comparable gross sales progress of 14.7 % was the very best in over 20 years
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  Strong progress in U.S. omnichannel enterprise with digital gross sales up 38 % in 2Q, on high of 78 % within the year-ago interval, pushed by 3.9 million identical day pick-up orders
• 
  MyWalgreens membership reached 96.1 million members in 2Q, up 10.9 million since 4Q
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  Three automated microfulfillment facilities opened, on tempo to 22 facilities by the tip of FY24
• 
  Reintroduction of iconic Boots 17 magnificence model in February
• 
  Nationwide launch of Boots Value Benefit program for Benefit cardholders

Creating Walgreens Well being

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  Leveraging VillageMD and Shields majority investments
• 
  Rollout of VillageMD continues with 102 co-located clinics now open, on observe towards 200+ by CY22 year-end; growth into new markets together with Boston, Massachusetts; Jacksonville, Florida; and Tucson, Arizona in February; Denver, Colorado in January; and San Antonio, Texas in December
• 
  Shields contract wins with two important well being methods with geographic attain within the Northwest and Northeast U.S.
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  47 Walgreens Well being Corners launched up to now, on observe towards 100+ by CY22 year-end
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  Added options to the Walgreens Well being shopper app, together with safe chat with well being advisors, to extend entry, engagement, and comfort
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  CareCentrix closing anticipated by the tip of 3Q, topic to regulatory approval

Refocusing the portfolio

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  Strategic evaluate of the Boots enterprise is progressing
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  Accomplished the consolidation of holding in AllianceRx Walgreens from 55 % to one hundred pc, on December 31, 2021
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  Acquired remaining curiosity in Germany wholesale enterprise on January 31, 2022

Constructing a high-performance tradition and successful workforce

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  Achieved latest honors, together with being named to Quick Firm’s record of the World’s 50 Most Revolutionary Corporations, and Time’s 100 Most Influential Corporations
• 
  Launched FY21 Environmental, Social, and Governance (ESG) Report
• 
  Shifting to a hybrid working mannequin, and anticipating to totally reopen U.S. help workplaces on April 4
• 
  Driving the nationwide dialogue on supplier standing for pharmacists, in recognition of their essential position within the COVID-19 response

Enterprise Segments

United States:

The US section had second quarter gross sales of $27.7 billion, a rise of 1.2 % from the year-ago quarter, partly offset by a decline within the AllianceRx Walgreens enterprise. Comparable gross sales elevated 9.5 % from the year-ago quarter.

Pharmacy gross sales decreased 3.3 % in comparison with the year-ago quarter, negatively impacted by a 910 foundation level headwind from the AllianceRx Walgreens enterprise. Comparable pharmacy gross sales elevated 7.3 % within the quarter in comparison with a 12 months in the past, with prescriptions crammed growing by 4.7 %, together with a optimistic impression of roughly 275 foundation factors from COVID-19 vaccinations. Complete prescriptions crammed within the quarter elevated 3.9 % to 300 million, together with immunizations, adjusted to 30-day equivalents.

Retail gross sales elevated 14.5 % and comparable retail gross sales elevated 14.7 % in comparison with the year-ago quarter. Excluding tobacco and e-cigarettes, comparable retail gross sales elevated 15.7 %, reflecting broad based mostly progress throughout all classes. Specifically, well being and wellness elevated 43.3 % aided by at-home COVID-19 assessments and cough chilly flu, and private care and sweetness elevated 9.7 % and 6.5 %, respectively.

Gross revenue elevated 13.8 % in contrast with the year-ago quarter. Adjusted gross revenue elevated 13.7 % pushed by COVID-19 vaccinations and testing and robust retail gross sales progress.

Promoting, basic and administrative bills (SG&A) elevated 4.9 % in comparison with the 12 months in the past quarter. Adjusted SG&A elevated 8.3 %, pushed by investments to help COVID-19 vaccinations and testing income progress and labor investments, partly offset by financial savings from the Transformational Value Administration program.

Working earnings within the second quarter elevated 67.9 % to $1.4 billion in comparison with the year-ago quarter. Adjusted working earnings elevated 36.5 % to $1.6 billion.

Worldwide:

The Worldwide section had second quarter gross sales of $5.6 billion, a rise of two.6 % from the year-ago quarter, together with an antagonistic foreign money impression of 4.9 %. Gross sales elevated 7.5 % on a continuing foreign money foundation, reflecting the continuing restoration within the UK market, regardless of the buying and selling headwind created by the Omicron variant, with Boots UK gross sales rising 15.2 %, and the Germany wholesale enterprise gross sales up 2.5 %.

Boots UK comparable pharmacy gross sales elevated 3.6 % in comparison with the year-ago quarter, reflecting stronger demand for pharmacy companies. Boots UK comparable retail gross sales elevated 22.0 % in contrast with the year-ago quarter, with market share good points throughout all classes, led by magnificence. Footfall improved in comparison with year-ago quarter, although visitors was nonetheless under pre-COVID-19 ranges, with restrictions to fight the Omicron surge in place for many of the quarter. Boots.com continued to carry out properly, with digital gross sales within the second quarter up 60 % in comparison with pre-COVID-19 ranges within the second quarter of fiscal 2020. Boots.com accounted for over 15 % of retail gross sales within the quarter, in comparison with pre-COVID-19 ranges of 9 %.

Gross revenue elevated 11.8 % in comparison with the identical quarter a 12 months in the past, together with an antagonistic foreign money impression of three.4 %. Adjusted gross revenue elevated 15.2 % on a continuing foreign money foundation, reflecting sturdy UK progress, notably from greater retail retailer transactions.

SG&A within the quarter elevated 6.2 % from the year-ago quarter to $1.0 billion, together with a good foreign money impression of two.9 %. Adjusted SG&A elevated 8.1 % on a continuing foreign money foundation. The rise in each SG&A and adjusted SG&A displays elevated investments in labor, advertising and marketing and IT in comparison with the year-ago quarter.

Working earnings grew 62.8 %, together with an antagonistic foreign money impression of seven.4 %, to $173 million. Adjusted working earnings grew to $226 million, a rise of 60.7 % on a continuing foreign money foundation, in comparison with the year-ago quarter.

Walgreens Well being:

The corporate’s Walgreens Well being section, created at first of fiscal 12 months 2022, is a consumer-centric, technology-enabled healthcare enterprise that engages shoppers via a customized, omni-channel expertise throughout the care journey. Walgreens Well being will ship improved well being outcomes and decrease prices for payors and suppliers by delivering care via owned and partnered belongings.

The Walgreens Well being section at the moment consists of:

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  A majority place in VillageMD, a number one, nationwide supplier of value-based main care companies;
• 
  A majority place in Shields, a specialty pharmacy integrator and accelerator for hospitals; and
• 
  The Walgreens Well being organically-developed enterprise that contracts with payors and suppliers to ship medical healthcare companies to their members and members’ caregivers via each digital and bodily channels.

The Walgreens Well being section had second quarter gross sales of $527 million ensuing from the acquisition of VillageMD and Shields. On a professional forma foundation, in comparison with their year-ago standalone outcomes, these companies grew at mixed price of 128 % within the quarter. Shields grew 63 %, pushed by key contract wins, additional growth of current partnerships, environment friendly implementation, and robust executional focus. VillageMD grew 145 %, reflecting current clinic progress and footprint growth.

Gross revenue and adjusted gross revenue have been every $15 million, each reflecting outcomes from Shields and VillageMD. Gross revenue and adjusted gross revenue have been pushed by Shields key contract wins within the present quarter, partly offset by progress investments at VillageMD which added 82 co-located clinics versus the year-ago quarter.

Second quarter SG&A was $227 million, and adjusted SG&A was $92 million reflecting the 2 acquisitions, and additional acceleration of investments within the Walgreens Well being organically-developed enterprise. Working loss was $212 million. Adjusted working loss was $77 million.

Convention Name

WBA will maintain a convention name to debate the second quarter outcomes starting at 8:30 a.m. Jap time as we speak, 2022. The convention name might be simulcast via the WBA investor relations web site at: http://investor.walgreensbootsalliance.com. A replay of the convention name might be archived on the web site for 12 months after the decision.

*All references to EPS and web earnings are to diluted EPS and diluted web earnings, in every case attributable to WBA.

**”Adjusted,” “fixed foreign money” and free money move quantities are non-GAAP monetary measures. See the appendix to this launch for a dialogue of non-GAAP monetary measures, together with a reconciliation to essentially the most carefully correlated GAAP measure.

Cautionary Word Relating to Ahead-Trying Statements: This launch incorporates forward-looking statements made pursuant to the secure harbor provisions of the Non-public Securities Litigation Reform Act of 1995. These embrace, with out limitation, estimates of and objectives for future working, monetary and tax efficiency and outcomes, together with our fiscal 12 months 2022 steering, our long-term progress algorithm and associated assumptions and drivers, in addition to forward-looking statements regarding the anticipated execution and impact of our enterprise methods, together with the strategic evaluate of Boots, the potential impacts on our enterprise of the unfold and impacts of the COVID-19 pandemic, our cost-savings and progress initiatives, together with statements regarding our anticipated price financial savings underneath our Transformational Value Administration and growth of our Walgreens Well being section. All statements sooner or later tense and all statements accompanied by phrases corresponding to “count on,” “outlook,” “forecast,” “would,” “might,” “ought to,” “can,” “will,” “undertaking,” “intend,” “plan,” “aim,” “steering,” “goal,” “purpose,” proceed,” “rework,” “speed up,” “mannequin,” “long-term,” “imagine,” “search,” “estimate,” “anticipate,” “could,” “doable,” “assume,” and variations of such phrases and related expressions are supposed to determine such forward-looking statements.

These forward-looking statements aren’t ensures of future efficiency and are topic to dangers, uncertainties and assumptions, recognized or unknown, that would trigger precise outcomes to differ materially from these indicated or anticipated.

These dangers, assumptions and uncertainties embrace these described in Merchandise 1A (Danger Elements) of our Kind 10-Okay for the fiscal 12 months ended August 31, 2021, as amended, and in different paperwork that we file or furnish with the Securities and Trade Fee. If a number of of those dangers or uncertainties materializes, or if underlying assumptions show incorrect, precise outcomes could differ materially from these indicated or anticipated by such forward-looking statements. All forward-looking statements we make or which can be made on our behalf are certified by these cautionary statements. You shouldn’t place undue reliance on forward-looking statements, which converse solely as of the date they’re made.

We don’t undertake, and expressly disclaim, any obligation or obligation to replace publicly any forward-looking assertion after the date of this launch, whether or not because of new data, future occasions, adjustments in assumptions or in any other case.

Please check with the supplemental data offered under for reconciliations of the non-GAAP monetary measures used on this launch to essentially the most comparable GAAP monetary measure and associated disclosures.

Notes to Editors:

About Walgreens Boots Alliance

Walgreens Boots Alliance (Nasdaq: WBA) is an built-in healthcare, pharmacy and retail chief serving hundreds of thousands of consumers and sufferers each day, with a 170-year heritage of caring for communities.

A trusted, world innovator in retail pharmacy with roughly 13,000 places throughout the U.S., Europe and Latin America, WBA performs a essential position within the healthcare ecosystem. The corporate is reimagining native healthcare and well-being for all as a part of its goal – to create extra joyful lives via higher well being. Via meting out medicines, enhancing entry to a variety of well being companies, offering top quality well being and sweetness merchandise and providing anytime, anyplace comfort throughout its digital platforms, WBA is shaping the way forward for healthcare.

WBA has greater than 315,000 workforce members and a presence in 9 nations via its portfolio of shopper manufacturers: Walgreens, Boots, Duane Reade, the No7 Magnificence Firm, Benavides in Mexico and Ahumada in Chile. Moreover, WBA has a portfolio of healthcare-focused investments situated in a number of nations, together with China and the U.S.

The corporate is pleased with its contributions to wholesome communities, a wholesome planet, an inclusive office and a sustainable market. WBA has been acknowledged for its dedication to working sustainably: it’s an index part of the Dow Jones Sustainability Indices (DJSI) and was named to the 100 Greatest Company Residents 2021.

Extra firm data is offered at www.walgreensbootsalliance.com.

(WBA-ER)

WALGREENS BOOTS ALLIANCE, INC. AND SUBSIDIARIES


SUPPLEMENTAL INFORMATION (UNAUDITED)


REGARDING NON-GAAP FINANCIAL MEASURES

(in hundreds of thousands, besides per share quantities)

The next data supplies reconciliations of the supplemental non-GAAP monetary measures, as outlined underneath SEC guidelines, offered on this press launch to essentially the most straight comparable monetary measures calculated and offered in accordance with typically accepted accounting ideas in the USA (GAAP). The corporate has supplied the non-GAAP monetary measures within the press launch, which aren’t calculated or offered in accordance with GAAP, as supplemental data and along with the monetary measures which can be calculated and offered in accordance with GAAP.

These supplemental non-GAAP monetary measures are offered as a result of administration has evaluated the corporate’s monetary outcomes each together with and excluding the adjusted objects or the consequences of overseas foreign money translation, as relevant, and believes that the supplemental non-GAAP monetary measures offered present further perspective and insights when analyzing the core working efficiency of the corporate’s enterprise from interval to interval and developments within the firm’s historic working outcomes. These supplemental non-GAAP monetary measures shouldn’t be thought-about superior to, as an alternative to or as an alternative choice to, and needs to be thought-about along side, the GAAP monetary measures offered within the press launch.

The corporate doesn’t present a reconciliation for non-GAAP estimates on a forward-looking foundation the place it’s unable to supply a significant or correct calculation or estimation of reconciling objects and the knowledge will not be obtainable with out unreasonable effort. That is because of the inherent issue of forecasting the timing or quantity of assorted objects that haven’t but occurred, are out of the corporate’s management and/or can’t be moderately predicted, and that may impression diluted web earnings per share, essentially the most straight comparable forward-looking GAAP monetary measure. For a similar causes, the corporate is unable to handle the possible significance of the unavailable data. Ahead-looking non-GAAP monetary measures supplied with out essentially the most straight comparable GAAP monetary measures could differ materially from the corresponding GAAP monetary measures.

Fixed foreign money

The corporate additionally presents sure data associated to present interval working leads to “fixed foreign money,” which is a non-GAAP monetary measure. These quantities are calculated by translating present interval outcomes on the overseas foreign money alternate charges used within the comparable interval within the prior 12 months. The corporate presents such fixed foreign money monetary data as a result of it has important operations exterior of the USA reporting in currencies apart from the U.S. greenback and this presentation supplies a framework to evaluate how its enterprise carried out excluding the impression of overseas foreign money alternate price fluctuations.

Comparable gross sales

For the corporate’s United States and Worldwide segments, comparable gross sales are outlined as gross sales from shops which were open for not less than 12 consecutive months with out closure for seven or extra consecutive days, together with because of looting or retailer harm, and with out a main rework or being topic to a pure catastrophe previously 12 months in addition to e-commerce gross sales. E-commerce gross sales embrace digitally initiated gross sales on-line or via cellular functions. Relocated shops aren’t included as comparable shops for the primary 12 months after the relocation. Acquired shops aren’t included as comparable gross sales for the primary 12 months after acquisition or conversion, when relevant, whichever is later. Comparable gross sales, comparable pharmacy gross sales, comparable retail gross sales, comparable variety of prescriptions and comparable variety of 30-day equal prescriptions check with whole gross sales, pharmacy gross sales, retail gross sales, variety of prescriptions and variety of 30-day equal prescriptions, respectively. The strategy of calculating comparable gross sales varies throughout the retail business. In consequence, the corporate’s technique of calculating comparable gross sales will not be the identical as different retailers’ strategies.

With respect to the Worldwide section, comparable gross sales, comparable pharmacy gross sales and comparable retail gross sales, are offered on a continuing foreign money foundation, which is a non-GAAP monetary measure. Seek advice from the dialogue above in “Fixed foreign money” for additional particulars on fixed foreign money calculations.

Key Efficiency Indicators

The corporate considers sure metrics, together with all comparable metrics, variety of prescriptions, variety of 30-day equal prescriptions and variety of places at interval finish, to be key efficiency indicators as a result of the corporate’s administration has evaluated its outcomes of operations utilizing these metrics and believes that these key efficiency indicators offered present further perspective and insights when analyzing the core working efficiency of the corporate from interval to interval and developments in its historic working outcomes. These key efficiency indicators shouldn’t be thought-about superior to, as an alternative to or as an alternative choice to, and needs to be thought-about along side, the GAAP monetary measures offered herein. These measures will not be akin to similarly-titled efficiency indicators utilized by different firms.