Cencora, Inc. Morgan Stanley 24th Annual Global Healthcare Conference

Yeah. Thanks, Erin. First of all, thanks for having us here. I'm excited to be joined by Eva, who's been a terrific addition to our team, and we're excited to talk to you about Cencora today. As you said, Erin, strong growth really due to the positioning that we have within the specialty pharma marketplace. So that's in health systems, that's in community physicians. We've deployed capital to expand our capabilities in those areas, and as you said, we're also focusing our portfolio to make sure that our time investments are aligned with our strategy over the long run.

In terms of momentum, as we look into 2027, we're confident that the trends will continue and that we're very confident in our long-term growth algorithm, our specialty-centric, pharmaceutical-centric strategy, and also the areas that we're continuing to execute to make sure that we're very well positioned in our U.S. segment as well as our international segment.

Yeah. I think as we look forward to 2027, as you can appreciate, Erin, we're in the midst of our planning process now, so we'll certainly have more to say about 2027 on our earnings call. But a couple of things to call out is we'll have another four months benefit of the OneOncology acquisition that we experienced this year. Two, our investment in MSOs and the growth in specialty, we expect will continue to perform well, and we'll have more to say about our guidance in November.

Yeah. I think, Erin, I'll go backwards to go forward a little bit, right? If you go back to 2025, right, you saw utilization trends elevated. They were outside of our growth algorithm, and the company before I got here had commented that we didn't expect those trends to continue. This fiscal year for us, you saw some pressure, I would say, particularly in the January-February timeframe, supported by the IQVIA data. We saw those utilization trends rebound in March and continue through the third quarter in a consistent manner, and that's what our outlook for Q4 represents. Listen, specialty is an increasing part of our business. We believe we're in the right areas as we're focusing on distribution, but also our presence in MSOs in oncology and retina, and believe we have confidence in our long-term growth algorithm, as Bob Mauch said.

Yeah. Thanks, Erin. I will start, and then I will hand it over to Eva. It is an important question. I mean, Walgreens is a really important customer to us, a long-term strategic relationship that goes back more than a decade. On the specifics of the volume move that we disclosed, and you hinted to this, Erin, which is true, it is not uncommon within our industry for very large buyers to have small pieces of their business with other wholesalers. We do have the prime vendor agreements, which ensures that the contract is solid over a long period of time. But there can be smaller ins and outs over the life of that contract, which again, is absolutely normal.

What was abnormal in this case is that it came out through a research report, and our team quickly identified the need to clarify, because what we did not want is to have any investor confusion. We did not want to have people assume it was too big or nothing at all, or anything in between. We wanted to be specific. So the team made a great decision to put out the 8-K, and make sure that we clarified the small scope of that. I think it is important to say that, as we look forward, that Walgreens has been an important strategic partner for us over a long period of time. We have an excellent relationship with their new team, and we will continue to work very productively with them.

Okay. Bob, if I could just add, just again, to level set on the factual context, right?

The vast majority of the business is in the primary contract. This change, which became effective July 1st, basically, was included in our Q4 guidance that we provided back on our earnings call in August 3. There will be a wraparound impact into 2027 of the remaining three quarters, and I will come back to what Bob said. Overall, this is an important customer. As you look at our Q4 guidance, our expectations are to deliver accelerating growth despite the impact of this.