01—Abstract
Summary
Summary of the 10-K filed May 9, 2022. Cited figures are marked; the original filing is the authoritative source.
McKesson Corporation's fiscal year 2022 (ending March 31, 2022) was marked by robust revenue growth and a significant recovery from the impacts of the COVID-19 pandemic in the prior year.
Total revenues increased by 11% to $264 billiona, driven primarily by the U.S. Pharmaceutical segment. The company saw improvements in gross profit, up 8%, bolstered by specialty pharmaceuticals, COVID-19 vaccine distribution, and increased patient visits in primary care. A significant strategic development during the year was the initiation of exits from European businesses, including the sale of UK and Austrian operations and agreements to sell EU businesses.
These divestitures are part of a strategy to focus on core healthcare services. While these actions led to substantial charges related to fair value remeasurements, the underlying operational performance of the company remained strong.
The company also reported a substantial charge related to its estimated liability for opioid-related claims, a significant ongoing legal matter. Despite these charges, McKesson returned $3.8 billionb to shareholders through repurchases and dividends, underscoring a commitment to shareholder returns.
02—Key points
Key Highlights
- Revenue increased by 11% to $264 billion in fiscal year 2022, driven by strong performance in the U.S. Pharmaceutical segment.
- Gross profit saw an 8% increase, benefiting from specialty pharmaceuticals, COVID-19 vaccine distribution, and improved patient visit volumes in primary care.
- McKesson is actively exiting its European businesses, with agreements in place for the sale of UK and Austrian operations, and plans to sell EU businesses, reflecting a strategic focus on core operations.
- The company incurred significant charges related to the fair value remeasurement of European businesses designated as held for sale.
- A substantial opioid-related litigation charge of $274 million was recorded in fiscal year 2022, adding to the previously recognized significant liability.
- McKesson returned $3.8 billion to shareholders via $3.5 billion in stock repurchases and $277 million in dividends.
- The company's Prescription Technology Solutions (RxTS) segment demonstrated strong growth, with revenues increasing by 34%.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2022, McKesson Corp kept $0.00.
- Revenue$263.97B100.0%
- Cost of revenue−$250.84B95.0%
- Gross profit$13.13B5.0%
- Operating costs−$11.09B4.2%
- Operating income$2.04B0.8%
- Interest, other & tax−$924.0M0.4%
- Net income$1.11B0.4%
Where FY2022 revenue went
$263.97B- Cost of revenue: $250.84B, 95% of revenue
- Net income: $1.11B, 0.4% of revenue
- SG&A: $10.54B, 4.0% of revenue
Kept 0.4% as net incomeNet income $1.11B · 0.4%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2022filed May 9, 2022Financial Statements
FY2022 against FY2021
| Line item | FY2022FY2021 | Change |
|---|---|---|
| Revenue | $263.97B$238.23B | +10.8% |
| Cost of Revenue | $250.84B$226.08B | +11.0% |
| Gross Profit | $13.13B$12.15B | +8.1% |
| SG&A Expenses | $10.54B$8.85B | +19.1% |
| Operating Expenses | $11.09B$17.19B | −35.5% |
| Operating Income | $2.04B-$5.04B | +140.4% |
| Interest Expense | $178.00M$217.00M | −18.0% |
| Net Income | $1.11B-$4.54B | +124.5% |
| EPS (Basic) | $7.32$-28.26 | +125.9% |
| EPS (Diluted) | $7.23$-28.26 | +125.6% |
| Shares Outstanding (Basic) | 152.30M160.60M | −5.2% |
| Shares Outstanding (Diluted) | 154.10M160.60M | −4.0% |
05—Questions
Frequently Asked Questions
What were the main drivers of McKesson's revenue growth in fiscal year 2022?
McKesson's revenue growth was primarily driven by market expansion within its U.S. Pharmaceutical segment, which saw increases in specialty pharmaceuticals, branded pharmaceutical price increases, and higher volumes from retail national account customers. The company also benefited from the recovery of prescription volumes post-COVID-19 and the contribution from its COVID-19 vaccine distribution program.
What is the status of McKesson's European business divestitures?
McKesson announced its intention to exit its European businesses. The company completed the sale of its Austrian business and its UK retail and distribution businesses. Agreements are in place to sell certain EU businesses, with the closure anticipated in the second half of fiscal year 2023. These divestitures are part of a strategy to streamline operations and focus on core healthcare services.
How is McKesson addressing the opioid litigation liability?
McKesson is a defendant in numerous lawsuits related to the distribution of controlled substances, including opioids. In February 2022, the company and two other distributors entered into a significant settlement agreement with a substantial majority of U.S. states, territories, and local governmental entities, involving payments over 18 years. McKesson recorded additional charges of $274 million in fiscal year 2022 related to these and other opioid settlements, with a total estimated liability of $8.3 billion as of March 31, 2022. The company continues to defend itself in matters not covered by the settlement.
06—Continue