Company leadership presents how Walgreens is
positioned for growth and for creating long-term shareholder
value
Reviewing a year of major strategic progress in transforming
Walgreens (NYSE: WAG) (Nasdaq: WAG) for long-term sustainable
growth and value creation, Chairman James A. Skinner, President and
Chief Executive Officer Gregory D. Wasson and Executive Vice
President, Chief Financial Officer and President, International
Wade D. Miquelon today outlined the company’s growth opportunities
and strategy at Walgreens Annual Shareholders Meeting. Addressing
nearly 2,000 shareholders in Chicago, company leadership also
discussed the substantial progress Walgreens has made since
announcing its “plan to win” in 2009.
Wasson said, “Our ‘plan to win’ was a journey to innovate and
reinvent Walgreens for a new era of growth and value creation.
Toward that end, we slowed new store growth to invest more in our
existing store base. We looked at new, innovative retail concepts
both in the U.S. and around the world. We made major acquisitions
such as Duane Reade in New York City and drugstore.com, forged a
strategic partnership with Alliance Boots and began a long-term
strategic relationship with AmerisourceBergen. All of this
culminated in a year of solid progress in fiscal 2013 and a
five-year total shareholder return for our stock of 145
percent.”
In the last fiscal year, Walgreens reached record sales of $72.2
billion with an adjusted net earnings increase of 16.3 percent to
$3 billion, while GAAP net earnings increased 15.2 percent to $2.5
billion. Operating cash flow was $4.3 billion for the year, and
free cash flow reached a record $3.1 billion. The company continued
to return significant cash to shareholders with $1 billion paid in
dividends, and provided a total shareholder return in the last 12
months of 53 percent.
“We are in two dynamic industries – retail and health care –
that are converging as consumers become more involved in shopping
for their health care solutions,” said Wasson.
U.S. health care spending is expected to grow from 17 percent of
gross domestic product to 20 percent by 2020, driven by an aging
population and health care reform, which is expected to bring 30
million more people into the system. At the same time, health care
is beginning to see a shift in payment models from fee-for-service
to pay-for-performance. That’s good for Walgreens and community
pharmacy, as the company is well positioned to play a greater role
in these emerging models and expand its role beyond the pharmacy
market to the much larger $2.6 trillion health care market.
On the retail side, consumers continue to look for value and
extraordinary service coming out of the Great Recession, and
Walgreens introduced 2,000 new private brand items last year to
meet growing demand for trusted retail brands. In addition, more
opportunity in categories such as beauty and fresh foods is opening
up to Walgreens as consumers shop across all retail channels. And
finally, digital commerce is expanding rapidly and driving major
change in both retail and health care.
Walgreens is seizing the opportunity created by these trends to
lead the market for decades ahead by focusing on its three
strategic growth drivers: creating a Well Experience, advancing
community pharmacy and establishing an efficient global platform on
behalf of its customers and shareholders.
Creating a Well Experience
Beyond enhancing the physical store, Well Experience also means
a highly engaged employee delivering extraordinary customer care
with the right products and solutions in every community in
America. Walgreens has expanded the number of stores incorporating
its Well Experience concepts from 400 at the start of fiscal 2013
to 600 today.
Walgreens is ensuring it has the right products and solutions by
making it easy for shoppers to get in and out with what they need,
elevating its beauty offering and accelerating the convergence of
retail and health care by pulling together its pharmacy and health
care services with its over-the-counter health and wellness
products into more seamless solutions for customers.
Boosting the Well Experience was last year’s launch of the
Balance® Rewards loyalty program, with 74 million active members,
making Balance Rewards one of the most successful launches of a
loyalty program in the history of retail.
In addition, Miquelon noted, “Our front-end comparable store
sales have improved steadily over the last three quarters, and we
have outperformed our largest drugstore competitors.”
Advancing Community Pharmacy
Walgreens is advocating a greater role for community pharmacy to
offer unparalleled access to innovative, high-quality, affordable
health and well-being services. The company believes its
pharmacists and nurse practitioners can help fill the gap in
primary care, expand health and wellness and lower overall health
care costs by practicing at the top of their professions.
Walgreens is well positioned to serve the growing demand for
pharmacy-led health and well-being services by advancing community
pharmacy through three main goals: delivering comprehensive care
for its customers by leveraging its community presence in all 50
states; providing a differentiated experience that competitors
can’t easily match; and building strategic partnerships with
physicians, health insurance companies, hospital systems and large
employers.
Miquelon noted Walgreens is focused on serving customers with
asthma, high blood pressure, high cholesterol and diabetes. “These
four chronic disease states alone drive a high percentage of health
care costs in the country, and we now offer a
cost effective solution to patients and payers,” he said.
Earlier last year, Walgreens Healthcare Clinics began offering
diagnosis and treatment of these four disease states, in addition
to acute care, prevention and wellness, and monitoring and disease
management services.
As Walgreens pursues its goals to advance community pharmacy, it
is ensuring that policymakers are aware of and understand the value
community pharmacy can bring to the health care system.
Establishing an Efficient Global Platform
Through its strategic partnership with Alliance Boots and its
strategic, long-term relationship with AmerisourceBergen, Walgreens
is elevating its growth strategies across the United States and
beyond as the global market for health care solutions grows.
“The greater scale and global reach of all three companies will
create new global opportunities,” said Wasson. “We can streamline
the world’s pharmaceutical supply and distribution, reduce costs
and increase access to pharmaceuticals, make it easier for
manufacturers to bring new products to the market, and bring the
benefits of global sourcing and best practices to serve community
pharmacies across the U.S. and around the world.”
To build this global platform, Walgreens and Alliance Boots
already are sharing best practices and capabilities, including
executive talent and products like Boots No7. Walgreens and
Alliance Boots also are creating substantial synergies through
their joint venture and a platform for growth beyond the U.S. and
Europe to serve new and emerging markets.
Miquelon said, “In fiscal year 2013, our combined synergies with
Alliance Boots totaled $154 million, ahead of our initial
expectation of $100 million to $150 million in synergies.”
Wasson concluded, “Building from our ‘plan to win’ that we
launched five years ago, I’m confident that today we are positioned
for growth. That confidence comes from the progress we’ve made over
the last five years and, most of all, from the soul of our company
– our people. They are the ones who truly help people get, stay and
live well through their personal relationships with our customers,
patients and the communities we serve.”
During shareholder voting at the meeting, the following nominees
were presented for election to Walgreens board of directors:
- Janice M. Babiak, former Partner at
Ernst & Young LLP
- David J. Brailer, MD, PhD, Managing
Partner and CEO, Health Evolution Partners
- Steven A. Davis, Chairman and CEO of
Bob Evans Farms Inc.
- William C. Foote, Retired Chairman and
CEO of USG Corporation
- Mark P. Frissora, Chairman and CEO of
The Hertz Corporation
- Ginger L. Graham, President and CEO of
Two Trees Consulting
- Alan G. McNally, Former Chairman of the
Board of Walgreen Co. and Retired CEO of Harris Bank
- Dominic Murphy, Partner at Kohlberg
Kravis Roberts & Co.
- Stefano Pessina, Executive Chairman of
Alliance Boots GmbH
- Nancy M. Schlichting, President and CEO
of Henry Ford Health System
- Alejandro Silva, Chairman and CEO of
Evans Food Group, Inc.
- James A. Skinner, Chairman of Walgreen
Co.
- Gregory D. Wasson, President and CEO of
Walgreen Co.
Chairman Jim Skinner added, “I’d like to thank our shareholders
and owners for believing in Walgreens today and our limitless
promise for tomorrow. We look forward to moving ahead together as
we redefine Walgreens for a new generation as a place, in your
community, that always strives to help people get, stay and live
well.”
Ten of the 13 board members are independent, consistent with the
requirement in the company’s governance guidelines that a majority
of its board be independent.
Preliminary voting results were announced at the meeting. The
final voting results on all agenda items will be disclosed in a
Current Report on Form 8-K to be filed by Walgreens with the
Securities and Exchange Commission after certification by the
inspector of elections.
About Walgreens
As the nation's largest drugstore chain with fiscal 2013 sales
of $72 billion, Walgreens (www.walgreens.com) vision is to be the
first choice in health and daily living for everyone in America,
and beyond. 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 8,200 drugstores in all 50 states, the District of
Columbia, Puerto Rico and the U.S. Virgin Islands. 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 750 locations
throughout the country.
Cautionary Note Regarding Forward-Looking Statements: Statements
in this document that are not historical 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,"
"target," "continue," "sustain," "on track," "believe," "seek,"
"estimate," "anticipate," "may," “possible,” "assume," and
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 our ability to realize anticipated synergies
and achieve anticipated financial results, changes in vendor, payer
and customer relationships and terms, competition, industry
consolidation and the effects thereof, changes in economic and
business conditions, risks associated with new business and
business retention initiatives and activities, failure to obtain
new contracts or extensions of existing contracts, risks associated
with acquisitions, divestitures, joint ventures and strategic
investments, the ability to realize anticipated results from
capital expenditures and cost reduction initiatives, and outcomes
of legal and regulatory matters. 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 date of this report, whether as a result of new information,
future events, changes in assumptions or otherwise.
Please refer to the supplemental information presented below for
reconciliations of the non-GAAP financial measures used in this
release to the most comparable GAAP financial measure and related
disclosures.
WALGREEN CO. AND SUBSIDIARIES SUPPLEMENTAL
INFORMATION (UNAUDITED) RECONCILIATION OF NON-GAAP FINANCIAL
MEASURES (In millions)
The following information provides reconciliations of the
supplemental non-GAAP financial measures, as defined under SEC
rules, presented in this press release to the most directly
comparable financial measures calculated and presented in
accordance with generally accepted accounting principles in the
United States (GAAP). The company has provided these non-GAAP
financial measures in the press release, which are not calculated
or presented in accordance with GAAP, as supplemental information
and in addition to the financial measures that are calculated and
presented in accordance with GAAP. These supplemental non-GAAP
financial measures are presented because management has evaluated
the company’s financial results both including and excluding the
adjusted items and believes that the supplemental non-GAAP
financial measures presented provide 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 historical operating results. These supplemental non-GAAP
financial measures 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 the
press release.
Twelve months ended August 31,
August 31, 2013 2012 Net earnings (GAAP) $
2,450 $ 2,127 Acquisition-related amortization 241 161 Alliance
Boots related tax add-back 124 - LIFO provision 151 195 Hurricane
Sandy costs 24 - Acquisition-related costs 60 82 DEA settlement
costs 47 - Distributor transition costs 8 - Increase in fair market
value of warrants (110) - Gain on sale of Walgreen Health
Initiatives, Inc. (13) - Adjusted net earnings $ 2,982 $ 2,565
Twelve monthsended
August 31, 2013 Net cash provided by operating activities (GAAP)
$4,301 Less: Additions to property and equipment 1,212 Free cash
flow(1) $3,089 (1) Free cash flow is defined as net
cash provided by operating activities in a period minus additions
to property and equipment (capital expenditures) made in that
period. This measure does not represent residual cash flows
available for discretionary expenditures as the measure does not
deduct the payments required for debt service and other contractual
obligations or payments for future business acquisitions.
Therefore, we believe it is important to view free cash flow as a
measure that provides supplemental information to our entire
statements of cash flows.
WalgreensMichael Polzin,
847-315-2920http://news.walgreens.com@WalgreensNewsfacebook.com/Walgreens
West Africa Gold (NASDAQ:WAGI)
Historical Stock Chart
From Jun 2024 to Jul 2024
West Africa Gold (NASDAQ:WAGI)
Historical Stock Chart
From Jul 2023 to Jul 2024