Credit Suisse Healthcare Conference Wade Miquelon CFO, EVP & President International November 12, 2013
Safe Harbor and Non-GAAP Certain statements and projections of future results made in this presentation constitute forward-looking statements that are based on current market, competitive and regulatory expectations that involve risk and uncertainty. Except to the extent required by the law, we undertake no obligation to update publicly any forward-looking statement after this presentation, whether as a result of new information, future events, changes in assumptions or otherwise. Please see our latest Form 10-K &10-Q and subsequent filings for a discussion of risk factors as they relate to forward-looking statements. Today’s presentation includes certain non -GAAP financial measures, and we refer you to the Appendix to the presentation materials available on our investor relations website for reconciliations to the most directly comparable GAAP financial measures and related information. 2
Our Purpose & Vision To help people get, stay and live well Our Purpose Our Vision To be the first choice in health and daily living for everyone in America – and beyond 3
The Best Corners in America 8,131 Locations… …serving 40M customers per week 4
Offering the Best in Health & Wellness Ranked #1 in… Retail Pharmacy Sales and Scripts 90-Day at Retail Generic Utilization and Conversion Flu Shots Administered Retail Pharmacies, 24 Hour, Drive-Thru Worksite and Retail Clinics Hospital On-Site Pharmacies Home Infusion Employer of Pharmacists Certified Immunizing Pharmacists Certified Pharmacy Technicians 5
Front End Gaining Momentum Front t End Comp YOY % Change Drugstor tore A Drugstor tore B Calendar Calendar 3% 3% WAG WAG Drug B Drug A 2% 2% 1% 1% 0% 0% -1% -1% -2% -2% Q1 (J 1 (J-M) M) Q2 (A 2 (A-J) Q3 (J 3 (J-S) Q4 (D- 4 (D-F) Q1 (M 1 (M-M) M) Q2 (J 2 (J-A) WAG -0.3 0.3% -0.7 0.7% 2. 2.2% 2% WAG -1.4 1.4% 0. 0.2% 2% 1. 1.8% 8% Dr Drug ug A A Dr Drug ug B B 1.4% -0.4 .4% -1.0 .0% 0.3% 0.4% -0.3 .3% 6
Continued Strong Growth in Prescriptions Rx Script t Comp YOY % Change Drugstor tore A Drugstor tore B Calendar Calendar 10% 10% WAG WAG Drug B Drug A 8% 8% 6% 6% 4% 4% 2% 2% 0% 0% -2% -2% Q1 (J 1 (J-M) M) Q2 (A 2 (A-J) Q3 (J 3 (J-S) Q4 (D- 4 (D-F) Q1 (M 1 (M-M) M) Q2 (J 2 (J-A) WAG 6.6% 6. 6% 7. 7.6% 6% 8. 8.5% 5% WAG 6. 6.7% 7% 7. 7.0% 0% 7. 7.2% 2% Drug Dr ug A A Drug Dr ug B B 4.7% 5.0% 4.5% 3.0% -0.1 .1% 0.0% 7
Three Strategic Growth Drivers Create a Transform the Role of Establish an Efficient Well Experience Community Pharmacy Global Platform 8
Create a Well Experience Innovative Products Systematic Localized Most Relevant Customer Value and Services Offering Network and Formats Progress Have opened over 500 Well Experience stores and 12 flagship stores to date Launched Boots No7 for women and Botanics in flagships and Phoenix market Expanded offering of Boots products by launching No7 for men nationwide Over 85 million Balance Rewards members registered to date More than 2/3 of all Daily Living purchases involve Balance Rewards loyalty card Private brand penetration increased to 22.3% in Q4 FY13 Launched 400 new private brand items in Q4 FY13 (2,225 in FY2013) 9
Create a Well Experience
Create a Well Experience - Flagships
Create a Well Experience - Flagships
Boots Brands Enhance Beauty Offering Phoenix 190 store roll out complete Displays vary dependent upon type of store New York City Soon to be available in select Walgreens Look Boutique’s
Own Brand Innovation Enables Record Share
Customer Led Innovation - Balance Financial Direct deposit No minimum balance Cash withdrawals Earn points with Balance Rewards Manage account anywhere Use Balance Financial anywhere Corporate Partners 15
Transform the Role of Community Pharmacy Comprehensive Strategic Differentiated Care Partnerships Experience Progress 8.6 million immunizations and vaccinations administered in FY13 398 Take Care clinics rebranded as Healthcare Clinics at Walgreens Expanded services to include diagnosis and treatment of four chronic diseases Increased 90-day at retail penetration & announced Smart90 with Express Scripts Established partnership with Theranos Formed strategic relationship with Health Systems, ACOs and Cystic Fibrosis Services, Inc. 16
Well Network Community Pharmacy & Mail & Mobile Centers of Excellence Pharmacy Specialty Pharmacy, Workplace Health Infusion Services & Centers & Home Infusion Pharmacies Take Care Hospital Clinics Onsite Pharmacies
Innovating - Leveraging Assets & Capabilities Lab tests on samples as small as 1/1,000 Results to you and your doctor in less Pricing dramatically low rates and the size of a typical blood draw than four hours, on average accepting major insurance carriers as well as Medicare and Medicaid. 18
Establish an Efficient Global Platform Leverage Best Expand Own Pursue New Market Design a Winning Optimize the Global Practices, Capabilities, Brand Portfolio Opportunities Global Organization Supply Chain & Innovation Progress Formed JV in Bern, Switzerland Exceeded first year combined synergy estimate AmerisourceBergen began distributing branded drugs on September 1, 2013 Purchased $224M of AmerisourceBergen stock Began launching Boots products in Walgreens stores Alex Gourlay appointed EVP, Presioent of Customer Experience and Daily Living Richard Ashworth appointed Healthcare Director, Health & Beauty UK and Republic of Ireland 19
Alliance Boots Transformational Partnership UK leading skincare brand 17.8 M Members No1 healthcare brand in the UK 20
AmerisourceBergen - Shifting the Paradigm Distribution Agreement Strategic 10-year agreement Expanded service levels and more frequent deliveries Improved economics via operational efficiencies and rates Strategic Collaboration Supply chain and procurement Customer and supplier collaboration Domestic and international growth Equity Alignment Align Common Interests Participate in joint value creation 21
A Globally Integrated Team Combined 12,000+ global store footprint Unprecedented, integrated retail/wholesale global supply chain 4,700+ 35,000+ 8,000+ 700+ 3,300+ 170,000+ Good Neighbor Active Customers in Vaccines, Retail & Onsite Clinics Drugstores Drugstores Pharmacy Network Biological & Injectables Wholesale Clients ~85M 4,500+ 37 26,000+ ~17.8M 25 Balance Reward Oncologist Practices Boots Advantage U.S. Distribution Pharmacists Countries Served Registrations Served Card Members Centers GLOBAL PHARMACEUTICAL FULL MARKET ACCESS U.S. DRUG DISTRIBUTION SUPPLY CHAIN & PRODUCT INNOVATION • ESI Multiyear Contract, Preferred • Specialty Distribution Market • #1 Pharmaceutical Wholesaler in in PDPs Leadership Europe • Omni-channel Leadership • Good Neighbor Pharmacy • Health & Beauty Private Brands Network Innovation • Differentiated Store Experience • Extensive Manufacturer • Global New & Emerging Market Relationships Entry #1 Global Pharmacy-Led Health, Beauty and Daily Living Enterprise & Network
Creating Value for Shareholders Significant Global Robust EBIT Strong Cash Returning Cash to Sound and Flexible Revenues Growth Generation Shareholders Balance Sheet FY16 Goal + Revenue ($ in Billions) 72.2 71.6 72.2 $80 $130B $60 $40 Revenue $20 International $0 Health & Beauty FY11 FY12 FY13 U.S. Retail International Goal Pharmacy Revenue ($ in Billions) Wholesale $60 38.7 38.4 34.2 $40 U.S. Health & $20 Daily Living $0 FY11 FY12 FY13 Alliance Boots financials translated to U.S. dollars at a rate of $1.56/£ 23
Creating Value for Shareholders Significant Global Robust EBIT Strong Cash Returning Cash to Sound and Flexible Revenues Growth Generation Shareholders Balance Sheet FY16 Goal + Adjusted FIFO EBIT ($ in Millions) $6,000 4,674 4,358 4,097 $9.0B - $9.5B $4,000 $2,000 Adjusted FIFO EBIT $0 including FY11 FY12 FY13 $1B Combined Synergies Trading Profit ($ in Millions) Own Brands and Generics $3,000 General Merch. 2,002 1,931 1,744 $2,000 Branded Products Goods not for (Pharma) Resale $1,000 Branded Products Front of Store $0 (Non-Pharma) Growth FY11 FY12 FY13 Alliance Boots financials translated to U.S. dollars at a rate of $1.56/£ 24
Creating Value for Shareholders Significant Global Robust EBIT Strong Cash Returning Cash to Sound and Flexible Revenues Growth Generation Shareholders Balance Sheet FY16 Goal + Cash Flow From Operations ($ in Millions) $6,000 4,431 4,301 3,643 $8.0B $4,000 $2,000 Operating Cash Flow $0 adhering to Capital Allocation Policy FY11 FY12 FY13 Return Cash to Reinvest in Shareholders Core Strategies Total Cash Flow ($ in Millions) 2,571 $3,000 2,498 2,042 Maintain Strong $2,000 Invest in Balance Sheet and Strategic $1,000 Financial Flexibility Opportunities $0 FY11 FY12 FY13 Alliance Boots financials translated to U.S. dollars at a rate of $1.56/£ 25
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