Leadership team highlights plan for value creation after completing strategic combination of Walgreen Co. and Alliance Boots GmbH in December 2014
DEERFIELD, Ill.--At its 2015 Analyst Day in New York City today, the leadership team of Walgreens Boots Alliance, Inc. (Nasdaq: WBA) outlined the key business drivers that will move the newly-created, international organization forward as it operates in diverse markets across the globe with a common aim and focus.
Executive Vice Chairman and Acting Chief Executive Officer Stefano Pessina said, “We are just over three months since the completion of our strategic combination and the launch of Walgreens Boots Alliance on 31 December 2104, which itself happened months ahead of the original schedule thanks to the extraordinary work of our teams in the final weeks of 2014. We have achieved a lot in a short period of time, and everything we have seen convinces us that there is significant opportunity. It may take different forms in different markets, and there may be many components as it takes time to deliver. But the potential is there.
“Across our organization we have excellent people running solid businesses and running them well on a daily basis. This is an extraordinarily capable and dedicated group with an excellent track record of leading complex international businesses in truly tough conditions to deliver systematic and sustainable value for our investors.
“Beyond that, our size and scope means that if we are effective in our delivery, we will be one of the companies that helps shape the future of health care, pharmacy and retail on a global basis. As our businesses and the markets in which we operate evolve and change, we have many opportunities.”
Addressing the group of analysts today were leaders from the company’s three divisions (Retail Pharmacy USA, Retail Pharmacy International and Pharmaceutical Wholesale), its cross divisional functions (including Global Brands and its Global Pharmacy Market Access group), Walgreens Boots Alliance Development (WBAD) and the company’s finance team.
Pharmaceutical Wholesale an enabling business
Pessina emphasized the strategic and tactical advantages derived from the company’s Pharmaceutical Wholesale division. “Our wholesale business is not only highly cash generative while providing a common platform and true international presence, but it is also an enabling business in a sector with scope for further consolidation,” he said.
“Wholesale lets us enter new markets at scale more rapidly than retail, while its cash flows help give us financial scale and efficiencies. And it brings the mindset of running a low margin operation – with all the rigor and discipline that demands – throughout the combined company’s culture. Finally, it is our wholesale relationships and experience that form the basis of the procurement work being done at WBAD. Without wholesale, we would not be able to achieve anything like what we are in terms of world class procurement in pharmaceuticals.”
Retail Pharmacy USA takes back-to-basics approach
Leaders from the Retail Pharmacy USA division highlighted the industry shifts impacting the division and, in response, where the division will operate and how it intends to win. Included in that plan is creating an integrated, back-to-basics approach in its pharmacy and front of store operations designed to deliver ultimate convenience, customer loyalty and extraordinary customer and patient care. That customer experience also will be supported by investments in key operational efficiencies such as IT systems, modernizing our pharmacies and investing in customer care.
From a retail pharmacy network access perspective, company leaders described how they’re working to create a global market access mindset through disciplined investment, a focus on patient pull-through and evolved stakeholder partnerships. In the specialty pharmacy market, the division is using a differentiated model to manage costs and improve outcomes by providing access to care in a cost effective, clinically appropriate setting and through partnerships involving Biopharma, payers, providers and patients.
Retail Pharmacy International delivers brands and services customers want
With a retail footprint across Europe, Asia, Latin America and the Gulf, the Retail Pharmacy International division has seen increasing demand for its brands globally. As the division’s leaders work to grow the business organically in existing markets, they are also looking for opportunities in new markets. The division continues to benefit from the exchange of learnings across all of its markets; from the virtuous cycle between health care and wellbeing; from insights gained through loyalty programs to increase personalization; from deploying digital solutions; and from its relationship with manufacturers and suppliers.
More specifically in the UK market, Boots is quickly developing new pharmacy and omnichannel models while continuing to innovate in health and beauty in response to changing customer expectations and how they now live their lives. Boots is focused on more personalization and expert care; more confidence in the value it offers with inspiring rewards; and easy and seamless access for all of its customers’ health and beauty needs.
Discovering breakthrough, innovative global brands
Leaders from the Global Brands cross divisional function are moving quickly to drive additional sourcing benefits across the company; help Walgreens and Boots improve pricing and promotions; re-launch the Soap & Glory brand in the USA; and continue driving the performance of powerful brands such as No7, Boots Pharmaceuticals and Well at Walgreens. Over the longer term, growth opportunities for Global Brands include transforming category management capabilities across the company; supporting Walgreens evolution in beauty and personal care offerings; increasing revenue potential through data and analytics capabilities; introducing its portfolio of brands to new markets including Mexico and Chile; and continuing to seek breakthrough innovation and high potential brands to complement the company’s portfolio.
Working within the health care industry places Walgreens Boots Alliance in a privileged position to help improve the health care available to communities around the globe and contribute to building strong foundations for a sustainable future. The company’s leadership described its Corporate Social Responsibility framework through four key areas: community, environment, marketplace and workplace.
Concluding the day, company financial leaders reviewed the integration and restructuring progress made so far.
Pessina added, “This is a dynamic and exciting business to be in. I am honored to be part of it, to be leading it and to be a partner with our shareholders in it.”
The Walgreens Boots Alliance 2015 Analyst Day continues tomorrow, 16 April 2015, beginning at 8 a.m. Eastern time with a half-day session to review financial performance and provide management’s perspective regarding key financial variables.
Live video of tomorrow’s session will be simulcast through the Walgreens Boots Alliance investor relations website at http://investor.walgreensbootsalliance.com. Presentation materials also will be available on the website. A replay of the full conference will be archived on the website for 12 months after the conference.
Cautionary Note Regarding Forward-Looking Statements: All statements in this release that are not historical including, without limitation, estimates of and goals for future financial and operating performance, the expected execution and effect of our business strategies, our cost-savings and growth initiatives and restructuring activities and the amounts and timing of their expected impact, 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," "preliminary," "would," "could," "should," "can," "will," "project," "intend," "plan," "goal," "guidance," "target," "continue," "sustain," "synergy," "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 successfully integrate operations, systems and employees following completion of the strategic combination of Walgreens and Alliance Boots, the impact of private and public third-party payers efforts to reduce prescription drug reimbursements, the impact of generic prescription drug inflation, the timing and magnitude of the impact of branded to generic drug conversions, our ability to realize anticipated synergies and achieve anticipated financial, tax and operating results in the amounts and at the times anticipated, our commercial agreement with AmerisourceBergen, the arrangements and transactions contemplated by our framework agreement with AmerisourceBergen and their possible effects, the occurrence of any event, change or other circumstance that could give rise to the termination, cross-termination or modification of any of our contractual obligations, whether the costs associated with restructuring activities will exceed current estimates, our ability to realize expected savings and benefits from restructuring activities in the amounts and at the times anticipated, changes in management's assumptions, the risks associated with governance and control matters, the risks associated with equity investments in AmerisourceBergen including whether the warrants to invest in AmerisourceBergen will be exercised and the ramifications thereof, the ability to retain key personnel, changes in financial markets, interest rates and foreign currency exchange rates, the risks associated with international business operations, the risk of unexpected costs, liabilities or delays, changes in network participation and reimbursement and other terms, risks of inflation in the cost of goods, risks associated with the operation and growth of our customer loyalty programs, risks associated with acquisitions, divestitures, joint ventures and strategic investments, subsequent adjustments to preliminary purchase accounting determinations, outcomes of legal and regulatory matters, and changes in legislation or regulations. These and other risks, assumptions and uncertainties are described in Item 1A described in Item 1A (Risk Factors) of the Walgreen Co. Annual Report on Form 10-K, as amended, for the fiscal year ended August 31, 2014, which is incorporated herein by reference, and in other documents that Walgreen Co. or Walgreens Boots Alliance, Inc. files or furnishes with the Securities and Exchange Commission (including the Walgreens Boots Alliance, Inc. Form 10-Q filed on 9 April 2015). 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, we do not undertake, and expressly disclaim, any duty or obligation to update publicly any forward-looking statement after the date of this release, whether as a result of new information, future events, changes in assumptions or otherwise.
Notes to Editors:
About Walgreens Boots Alliance
Walgreens Boots Alliance (Nasdaq: WBA) is the first global pharmacy-led, health and wellbeing enterprise in the world.
The company was created through the combination of Walgreens and Alliance Boots in December 2014, bringing together two leading companies with iconic brands, complementary geographic footprints, shared values and a heritage of trusted health care services through pharmaceutical wholesaling and community pharmacy care, dating back more than 100 years.
The company employs over 370,000* people and has a presence in more than 25* countries; it is the largest retail pharmacy, health and daily living destination in the USA and Europe. Including its equity method investments, Walgreens Boots Alliance is the global leader in pharmacy-led, health and wellbeing retail with over 13,100* stores in 11* countries. The company includes the largest global pharmaceutical wholesale and distribution network with over 350* distribution centers delivering to more than 200,000** pharmacies, doctors, health centers and hospitals each year in 19* countries. In addition, Walgreens Boots Alliance is the world’s largest purchaser of prescription drugs and many other health and wellbeing products.
Its portfolio of retail and business brands includes Walgreens, Duane Reade, Boots and Alliance Healthcare, as well as increasingly global health and beauty product brands, such as No7, Botanics and Soap & Glory. More company information is available at www.walgreensbootsalliance.com.
* As at 28 February 2015 including equity method investments
** For 12 months ended 28 February 2015 including equity method investments
Walgreens Boots Alliance, Inc.
USA / Michael Polzin, +1 847 315 2935
International / Laura Vergani, +44 (0)207 980 8585
US / Ashish Kohli, +1 847 315 3810
UK / Gerald Gradwell, +44 (0)207 980 8527