10-KPeriod: FY2022

Cencora, Inc. Annual Report, Year Ended Sep 30, 2022

Filed November 22, 2022For Securities:COR

Summary

Cencora, Inc. (formerly AmerisourceBergen) reported strong revenue growth of 11.5% for the fiscal year ended September 30, 2022, primarily driven by the acquisition of Alliance Healthcare and increased sales within its U.S. Healthcare Solutions segment. Gross profit also saw a significant increase of 19.5%, bolstered by the Alliance Healthcare acquisition and favorable fees from distributing COVID-19 treatments, although offset by LIFO expenses and other factors. The company is strategically focused on optimizing its U.S. and International Healthcare Solutions businesses while also pursuing growth through acquisitions, exemplified by the announced acquisition of PharmaLex. Despite significant investments and an ongoing opioid litigation settlement totaling billions over 18 years, Cencora demonstrated resilience, with operating income showing a modest increase. The company continues to manage its debt effectively and returned value to shareholders through dividends and share repurchases, signaling a commitment to both growth initiatives and shareholder returns.

Financial Highlights

54 data points
Beta

Revenue

$238.59B

3.5% Gross Margin

Net Income

$1.70B

0.7% Net Margin

EPS (Diluted)

$8.04

Total Assets

$56.56B

Cash & Equivalents

$3.39B

Free Cash Flow

$2.21B

Financial Statements
Beta
Revenue$238.59B
Cost of Revenue$230.29B
Gross Profit$8.30B
SG&A Expenses$4.85B
Operating Income$2.37B
Net Income$1.70B
EPS (Basic)$8.15
EPS (Diluted)$8.04
Shares Outstanding (Basic)208.47M
Shares Outstanding (Diluted)211.21M

Key Highlights

  • 1Revenue increased by 11.5% to $238.6 billion, driven by the acquisition of Alliance Healthcare and growth in U.S. Healthcare Solutions.
  • 2Gross profit increased by 19.5% to $8.3 billion, supported by Alliance Healthcare and COVID-19 treatment distribution fees.
  • 3The company announced its intention to acquire PharmaLex for €1.28 billion to enhance its global life sciences services.
  • 4Operating income saw a modest increase of 0.5% to $2.37 billion, with U.S. Healthcare Solutions operating income growing 8.8%.
  • 5A significant opioid litigation settlement liability of $6.0 billion was on the balance sheet, with payments structured over 18 years.
  • 6The company continued its commitment to shareholder returns, increasing its quarterly dividend and repurchasing shares.
  • 7Total debt was $5.7 billion, with significant credit facilities available for ongoing operational needs and strategic initiatives.

Frequently Asked Questions

The primary driver of Cencora's revenue growth was the acquisition of Alliance Healthcare in June 2021, which significantly expanded its international operations. Additionally, revenue growth in the U.S. Healthcare Solutions segment, particularly from an increase in unit volume and sales to specialty physician practices, contributed to the overall increase.

Cencora has entered into a comprehensive settlement agreement to resolve a substantial majority of opioid lawsuits filed by state and local governmental entities. As of September 30, 2022, the company had a $6.0 billion liability on its balance sheet related to this settlement and other opioid litigation, with payments structured to occur over 18 years.

The acquisition of PharmaLex, a leading provider of specialized services for the life sciences industry, is expected to enhance Cencora's role as a partner for biopharmaceutical manufacturers. It will broaden the company's global portfolio of solutions across the pharmaceutical development and commercialization journey.

The acquisition of Alliance Healthcare significantly boosted revenue and gross profit, primarily within the International Healthcare Solutions segment. However, it also led to an increase in operating expenses, including depreciation and amortization, due to the integration of new assets and intangible assets.