01—Abstract
Summary
Summary of the 10-K filed November 22, 2022. Cited figures are marked; the original filing is the authoritative source.
Cencora, Inc. (formerly AmerisourceBergen) reported strong revenue growth of 11.5%a 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%b, 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.
02—Key points
Key Highlights
- Revenue increased by 11.5% to $238.6 billion, driven by the acquisition of Alliance Healthcare and growth in U.S. Healthcare Solutions.
- Gross profit increased by 19.5% to $8.3 billion, supported by Alliance Healthcare and COVID-19 treatment distribution fees.
- The company announced its intention to acquire PharmaLex for €1.28 billion to enhance its global life sciences services.
- Operating income saw a modest increase of 0.5% to $2.37 billion, with U.S. Healthcare Solutions operating income growing 8.8%.
- A significant opioid litigation settlement liability of $6.0 billion was on the balance sheet, with payments structured over 18 years.
- The company continued its commitment to shareholder returns, increasing its quarterly dividend and repurchasing shares.
- Total debt was $5.7 billion, with significant credit facilities available for ongoing operational needs and strategic initiatives.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2022, Cencora, Inc. kept $0.01.
- Revenue$238.59B100.0%
- Cost of revenue−$230.29B96.5%
- Gross profit$8.30B3.5%
- Operating costs−$5.93B2.5%
- Operating income$2.37B1.0%
- Interest, other & tax−$667.6M0.3%
- Net income$1.70B0.7%
Where FY2022 revenue went
$238.59B- Cost of revenue: $230.29B, 97% of revenue
- Net income: $1.70B, 0.7% of revenue
- SG&A: $4.85B, 2.0% of revenue
Kept 0.7% as net incomeNet income $1.70B · 0.7%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2022filed November 22, 2022Financial Statements
FY2022 against FY2021
| Line item | FY2022FY2021 | Change |
|---|---|---|
| Revenue | $238.59B$213.99B | +11.5% |
| Cost of Revenue | $230.29B$207.05B | +11.2% |
| Gross Profit | $8.30B$6.94B | +19.5% |
| SG&A Expenses | $4.85B$3.59B | +34.9% |
| Operating Income | $2.37B$2.35B | +0.5% |
| Net Income | $1.70B$1.54B | +10.3% |
| EPS (Basic) | $8.15$7.48 | +9.0% |
| EPS (Diluted) | $8.04$7.39 | +8.8% |
| Shares Outstanding (Basic) | 208.47M205.92M | +1.2% |
| Shares Outstanding (Diluted) | 211.21M208.47M | +1.3% |
05—Questions
Frequently Asked Questions
What was the primary driver of Cencora's revenue growth in the fiscal year ended September 30, 2022?
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.
How is the company addressing the significant opioid litigation liability?
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.
What is the strategic importance of the PharmaLex acquisition?
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.
How did the acquisition of Alliance Healthcare impact the company's financial performance?
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.
06—Continue