Cencora, Inc. — 2023 Q3

Yes, thanks so much for asking that question, Elizabeth. One thing we were really pleased about -- there's obviously so many things we were pleased about during this quarter. But one of the things we were pleased with is that our OpEx growth was slower than our gross profit growth. So as I'm sure you saw our gross profit growth during the quarter was 8.0% and our OpEx growth was 7.6%. And really where we saw the improvement was in the U.S. Healthcare Solutions segment where our operating expense margin declined by 11 basis points.

Yes. There's a lot there. And so let me start out by talking about GLP-1s because they were such a driver of revenue growth during the quarter. And I mentioned during my prepared remarks that we had about 11.5% revenue growth in the quarter and that if we backed out GLP-1s, our revenue growth would have been more in line with our GP growth of 8.0%.

Yes. So Eric, thanks. As you know, we price more on product category, so this would fit into a branded and indeed, oral category that's dispensed mainly in the retail sector. A fairly significant amount of this is going through mail order.

Yes. Thank you for asking the question. And let me say, of course, we were really pleased with the results during the quarter. And as -- and due to that, we did really kind of across the board raised our narrowing of guidance for fiscal year '23. And we have a lot of confidence in our updated fiscal year '23 guidance, and we have a lot of confidence in our long-term guidance, which is, of course, 5% to 8% organic operating income growth. And then including capital deployment, it's double-digit compound annual growth rate for adjusted EPS at the midpoint of the range.

Yes. Charles, thanks for the question. That's -- I'll try to cover all the elements you asked. Of course, one of the ways at AmerisourceBergen has a differentiated value proposition is our strong portfolio of distribution capabilities and key strategic relationships are really -- we juxtapose and relate those into our upstream relationships and try to provide more services to manufacturers.

It's Kevin Caliendo for Andrea. Yes, on the International segment, you've discussed pricing visibility. And on World Courier, there's been a benefit from higher weight per shipment. Is that dynamic what increases pricing organically on a go-forward basis?

Thanks for asking that question. And as we look at the international business, you asked about World Courier, and there has been some benefit from price. But I think as we look forward there, probably a good deal of the benefit we'll see from World Courier will be in volume growth.

Yes. I can start out. It's an interesting question given the interest rate environment and the different -- the sort of near recession we've had, I'm not the economist on this call, but the terms in our business are very stable. There are longer terms often given to the physician segment, but we are not seeing anything discernible, noticeable on changes in terms.

Yes. So this is, of course, something that we monitor and something that we manage very closely and constantly, and there's no meaningful change to call out. Of course, in a working capital management and ROIC and free cash flow are such key value drivers for us over the long term. This is something that we really stay on top of. And I said there's -- as I said, there's no major change to call out.

It's Jonathan Yong on for A.J. Just going back to the generic pricing commentary, and I appreciate that the improvement is in the pockets of products. I guess how are you thinking about this from a competitive landscape? Is the increased pricing perhaps providing an opportunity to gain share in the market if your purchasing might be better than others? Just curious to get your thoughts there.

So yes, like I said earlier, this is -- what we're seeing is the last few months is a moderation of deflation. And again, as you said, it's in pockets. So too early to call a trend. And -- but of course, but [ we're ] a trend, it would be a benefit for us. And then on the sell side, which you talked about, what I'll say on the sell side is it's a competitive market, and it's a stable market also.

It's very quick. It's very soon. Obviously, that was a plant that manufactured a couple of injectable products. We've actually worked closely with Pfizer in this particular instance to see if we could help, we had a distribution center closed by the impacted manufacturer plant. But nothing to report yet. It's -- we're keeping our eye on this. Our supply chain group does a fantastic job, has managed through COVID has managed through all sorts of setback.

George, it's a good question. I mean the growth of these products have been producing headlines, and it has altered. But we are -- far from a rigid organization. We have discussions with our customers. We stay very close to the customers. I think -- in fact, I think one of the things that I've been really proud about the teams in the last few years is we don't just do all customers when it comes to RFPs, the large and the small customers.

That was the last...

Okay. Well, thank you today. Thank you. We are kind of a little bit emotional here as we report our last quarter as AmerisourceBergen. And I know Dave [ Yost ] is going to be turning over. He doesn't like that we haven't changed us. But we are very, very excited to be talking in the future about Cencora. Cencora is a name that I think really resonates with myself and the team as we look towards a future where we're even more of a United Global Health Solutions leader.