London meeting highlights strategic partnership with Alliance Boots
as Walgreens positions itself to become first choice for health and
daily living in America and beyond
DEERFIELD, Ill. -- (Business Wire)
With an unmatched global platform at the corner of the retail and health
care industries, Walgreens (NYSE: WAG) (Nasdaq: WAG) outlined its
strategic growth drivers and long-term goals at its 2013 Analyst Meeting
today in London.
Summarizing Walgreens key growth drivers to position the company for
long-term growth and shareholder value creation, President and CEO Greg
Wasson said, “We are focused on creating a complete Well Experience for
our customers across all of our touch points; transforming the role
community pharmacy plays in health care; and establishing an
unprecedented and efficient global platform through our strategic
partnership with Alliance Boots. As our two iconic brands come together,
we will have a platform that will be very difficult, if not impossible,
Wasson outlined Walgreens fiscal year 2016 financial goals assuming the
exercise of the company’s option to proceed to a full combination with
Alliance Boots. Together, the companies aim to have sales of $130
billion or greater; adjusted operating income between $9 billion and
$9.5 billion, or $8.5 billion to $9 billion on a GAAP basis; $1 billion
in combined synergies; and operating cash flow of $8 billion or more.*
“This combination accelerates our core strategies, creates an unmatched
global supply chain and provides a platform for global expansion beyond
the U.S. and Europe into new markets around the world,” said Wasson.
During the meeting, executives with Alliance Boots provided analysts
with insights into their financial performance and the businesses they
operate including Boots, its pharmacy-led health and beauty retailing
business, and Alliance Healthcare, its pharmaceutical wholesaling and
Stefano Pessina, Executive Chairman of Alliance Boots, commented, “The
Alliance Boots financial track record, growth strategy and unique
portfolio of businesses across many countries position us well to take
full advantage of opportunities in the changing health care markets. We
believe our Group represents a solid investment for Walgreens, and that
together we will create a successful, sustainable and profitable global
player. I have full confidence in this, both as the leader of Alliance
Boots and a shareholder in Walgreens.”
Later, leadership from Walgreens outlined how Walgreens is creating a
Well Experience for customers through four strategies – customer value,
innovative products and services, systematic localized offerings and the
most relevant networks and formats.
Analysts also learned how Walgreens is pursuing its health care strategy
through a comprehensive care offering with the goal of developing the
most complete national network of integrated health care services in the
country; a differentiated experience to serve customers where, when and
how they want; and strategic partnerships that improve care, drive down
costs and ultimately meet patient needs for better overall health.
Finally, Walgreens and Alliance Boots executives outlined how they
intend to create long-term shareholder value through the companies’
joint synergy programs. Walgreens reiterated its goal to achieve $1
billion in combined synergies in the fourth year of the strategic
partnership, which represents approximately 1 percent of the estimated
combined pharmacy and general merchandise cost of goods sold by fiscal
“With many of last year’s headwinds turning into this year’s tailwinds,
our performance this year is all about execution,” Wasson said. “We
won’t let the tailwinds alone carry us. Rather, we must optimize those
tailwinds to get the most from them. We are confident we have the
strategies, structure and talent in place to do that and to create
long-term shareholder value.”
A video webcast of the conference was simulcast through Walgreens
investor relations website at: http://investor.walgreens.com.
The webcast and presentation materials will be archived on the website
for 12 months after the conference. An audio podcast also will be
available on the investor relations website.
* Figures assume constant currency and exercise of option to acquire
remaining 55 percent interest in Alliance Boots GmbH
As the nation's largest drugstore chain with fiscal 2012 sales of $72
billion, Walgreens (www.walgreens.com)
vision is to become America’s first choice for health and daily living.
Each day, Walgreens provides more than 6 million customers the most
convenient, multichannel access to consumer goods and services and
trusted, cost-effective pharmacy, health and wellness services and
advice in communities across America. Walgreens scope of pharmacy
services includes retail, specialty, infusion, medical facility and mail
service, along with respiratory services. These services improve health
outcomes and lower costs for payers including employers, managed care
organizations, health systems, pharmacy benefit managers and the public
sector. The company operates 8,067 drugstores in all 50 states, the
District of Columbia and Puerto Rico. Take Care Health Systems is a
Walgreens subsidiary that is the largest and most comprehensive manager
of worksite health and wellness centers and in-store convenient care
clinics, with more than 700 locations throughout the country.
About Alliance Boots
Alliance Boots is a leading international, pharmacy-led health and
beauty group delivering a range of products and services to customers.
For the financial year ended 31 March 2012, Alliance Boots reported
revenue of £23.0 billion ($35.7 billion***), (£25.4 billion ($39.4
billion***) including share of associates and joint ventures), and
EBITDA of £1,443 million ($2,237 million***), (£1,568 million ($ 2,430
million***) including share of associates and joint ventures). Working
in close partnership with manufacturers and pharmacists, Alliance Boots
is committed to improving health in the local communities it serves and
helping its customers and patients to look and feel their best. Alliance
Boots focus is on growing its two core businesses: pharmacy-led health
and beauty retailing and pharmaceutical wholesaling and distribution.
Alliance Boots has a presence in more than 25** countries and employs
over 116,000** people. Alliance Boots has pharmacy-led health and beauty
retail businesses in 11** countries and operates more than 3,330**
health and beauty retail stores, of which just over 3,200** have a
pharmacy. In addition, Alliance Boots has around 625** optical
practices, of which around 185** operate on a franchise basis. Its
pharmaceutical wholesale businesses supply medicines, other healthcare
products and related services to more than 170,000** pharmacies,
doctors, health centers and hospitals from over 370** distribution
centers in 21** countries.
** Figures include Alliance Boots associates and joint ventures
*** At a $1.55=£1 exchange rate.
Cautionary Note Regarding Forward-Looking Statements. Statements in
this release that are not historical, including, without limitation,
estimates of future financial performance, including the amounts and
timing of future accretion and synergies, are forward-looking statements
made pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. Words such as "expect," "likely,"
"outlook," "forecast, "would," "could," "should," "can," "will,"
"project," "intend," "plan," "goal," "continue," "sustain," "synergy,"
"on track," "believe," "seek," "estimate," "anticipate," "may,"
"possible," "assume," variations of such words and similar expressions
are intended to identify such forward-looking statements. These
forward-looking statements are not guarantees of future performance and
involve risks, assumptions and uncertainties, including, but not limited
to, those relating to the transactions contemplated by the Purchase and
Option Agreement and other agreements relating to our strategic
partnership with Alliance Boots and their possible effects, the parties'
ability to realize anticipated synergies and achieve anticipated
financial results, the risks associated with international business
operations, the risks associated with governance and control matters,
whether the option to acquire the remainder of the Alliance Boots equity
interest will be exercised and the financial ramifications thereof,
changes in vendor, payer and customer relationships and terms, changes
in network participation, levels of business with Express Scripts
customers, the implementation, operation and growth of our customer
loyalty program, changes in economic and market conditions, competition,
risks associated with new business areas and activities, risks
associated with acquisitions, the ability to realize anticipated results
from capital expenditures and cost reduction initiatives, outcomes of
legal and regulatory matters, and changes in legislation or regulations.
These and other risks, assumptions and uncertainties are described in
Item 1A (Risk Factors) of our most recent Annual Report on Form 10-K,
which is incorporated herein by reference, and in other documents that
we file or furnish with the Securities and Exchange Commission. Should
one or more of these risks or uncertainties materialize, or should
underlying assumptions prove incorrect, actual results may vary
materially from those indicated or anticipated by such forward-looking
statements. Accordingly, you are cautioned not to place undue reliance
on these forward-looking statements, which speak only as of the date
they are made. Except to the extent required by law, Walgreens does not
undertake, and expressly disclaims, any duty or obligation to update
publicly any forward-looking statement after the initial distribution of
this release, whether as a result of new information, future events,
changes in assumptions or otherwise.
Adjusted Operating Income is a non-GAAP financial measure, which is
not calculated or presented in accordance with generally accepted
accounting principles in the United States (GAAP), and is provided as
supplemental information in addition to the financial measures that are
calculated and presented in accordance with GAAP. This supplemental
non-GAAP financial measure is presented because management evaluates the
company’s financial results on both a GAAP and adjusted basis and
believes that the non-GAAP financial measure provides additional
perspective and insights when analyzing the core operating performance
of the Company’s business from period to period and trends in the
company’s operating results. This supplemental non-GAAP financial
measure should not be considered superior to, as a substitute for or as
an alternative to, and should be considered in conjunction with, the
GAAP financial measures presented in this press release.The
company does not provide a non-GAAP reconciliation for non-GAAP
estimates on a forward-looking basis where it is unable to provide a
meaningful or accurate calculation or estimation of reconciling items
that are out of the Company’s control and the information is not
available without unreasonable effort.
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Michael Polzin, 847-315-2920
Rick Hans, CFA, 847-315-2385
Ashish Kohli, CFA,
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