Hi, good afternoon, everyone. My name is Erin Wright. I cover healthcare services at Morgan Stanley, and welcome to our, our latest kind of Morgan Stanley Healthcare Conference here in New York. We're happy to have with us today, Cencora, and with them, we have, CEO or COO, sorry, incoming CEO, Bob Mauch, and, and Jim Cleary, the CFO. I would also like to call out the, the current CEO, Steven Collis, is sitting in the front row here, and I congratulate him on the next steps in terms of his, his, his role and his life, and, and, and it's been great working with you and, and really appreciate your support over the years. With that, you do have big shoes to fill, Bob, on that note. But I do wanna speak a little bit, a higher level, kind of, vision question here in terms of what is that high-level vision and the relevant learnings that you've already had from your extensive tenure at Cencora, and how you can best leverage that in your upcoming role before we get into the 8-K today. Yeah, sure. Yeah, thanks, Erin. It's a pleasure to be here, especially to talk with you, Erin. So it's an honor to, you know, have the opportunity to become the president and CEO of Cencora. I have had a long tenure here, working alongside Steve and Jim and the executive team, and I think the important things to think about is because of that long tenure, we've worked closely on our strategy, on execution, on building the business. And, you know, what you can expect from us going forward is a continuation of that execution on our pharmaceutical-centered strategy, continuing to drive efficiency throughout the supply chain, focusing on our customers, and really innovating at the highest level. So I'm thrilled that Steve will remain as executive chair to continue, you know, our relationship and his mentorship of me. So I'm super excited to get started. It'll be October 1st when that officially occurs, and Steve, thank you for the support. And with that, I guess let's start, let's turn it over to the big news today, too, as well, in terms of you updated your near-term guidance, as well as, gave us some initial look at next year in terms of fiscal 2025 and how you're thinking about that now at the low end of the long-term guidance range. Can you walk us through, Bob or Jim, kind of the key components of that and kind of understand sort of the different moving pieces, both near-term and as we go into next year? Sure, Erin, and thanks so much for having us here, and as you all know, we issued an 8-K this morning, early this morning before the market opened, and there were really kind of three things that we covered in the 8-K. The first was for fiscal year 2024, we again raised our Adjusted EPS guidance, and we increased it by $0.05 at both the bottom end of the range and the top end of the range, so it's now $13.60-$13.70 per share, and the reason for that increase in guidance was continued strong performance and execution in our U.S. businesses, and then also some continued favorability regarding net interest expense. And then, the second thing we did in our 8-K is we indicated that for fiscal year 2025, we expect our Adjusted Operating Income growth and our Adjusted EPS growth to be at the bottom end of our long-term guidance range. And as you know, our long-term guidance for Adjusted Operating Income is 5%-8%, and then we expect to get 3%-4% from capital deployment, and so our long-term guidance for EPS is 8%-12%. And again, we indicated today that we expect in fiscal year 2025 to be at the bottom end of that range. And we explained the reasons why, and the principal reasons why, or the principal reason why has to do with COVID. And, as you know, we had very strong performance in fiscal year 2024 on COVID vaccines, and we indicated, for instance, that in the first half of fiscal year 2024, in the U.S. segment, we grew by 16%. We grew operating income by 16%. In ex-COVID vaccines, that would've been 8%. That's disclosure that we did last year, and I think we, you know, did very good disclosure on COVID throughout the last couple of years. And so, you know, a decline in what we earn on COVID vaccines to a more normalized level is really kind of a key driver. And then also on COVID, we did have some earnings in the Q1 of last year. We had $0.06 of earnings in the Q1 of last year from exclusive COVID therapies, and of course, they are no longer the exclusive COVID therapies. And so, you know, those are the principal reasons why we'd be at the bottom end of our long-term guidance range. And then additionally, we indicated, and to a lesser extent, that we'll potentially not have a oncology distribution contract that expires in June as a result of a recently announced M&A event. And so those are the, you know, kind of reasons for what we've said with regard to fiscal year 2025. And then really, the third thing we indicated in the 8-K is that we have extended one of our largest pharmaceutical supply agreements. It's, of course, with Evernorth Health Services, which we also have referred to in our 10-K as, of course, as Express Scripts, and we've extended that for three years through September 2029, which, of course, we are very pleased with. Great. And breaking down some of the components of the guide, in terms of the Florida contract, I guess, how meaningful is that, in terms of the updated guide? And is there anything incorporated into the updated guide in terms of a headwind or a tailwind, I guess, from the Express Scripts contract? Yeah, and so, with regard to kind of the specific dollars, we really haven't, you know, kind of gotten into any more detail than what's in the 8-K. But we were very specific in the 8-K when we indicated, you know, the oncology contract, that that was to a lesser extent. The COVID driver was the much larger driver there. And so, I think we, you know, expressed that in the 8-K through the use of the words to a lesser extent. And then, you know, we had, we didn't reference Express Scripts as a driver either way. But of course, we're, you know, very pleased with that extension. I'm sure Bob would love to comment on that. Yeah, Erin, I think it's a, it's a really important example of how long-term strategic relationships matter. I think you'll see with Cencora that, our large customer relationships are not transactional. There certainly is a lot of volume, a lot of work that has to be done to make sure that products get where they need to be with all of our large customers. But I think, you know, us being able to, you know, renew and extend this relationship is just evidence of the amazing work that our team does as well as the Evernorth, Express Scripts that we do together. And that by extending it, gives us an opportunity to have visibility on the longer term and make sure that we're doing the strategic work together and give us the time to do that. Okay, I may come back to some of the customer relationships in a second, but let's talk a little bit about underlying utilization trends. What's embedded in kind of your expectations now with the updated guidance in terms of the strength we've seen in core distribution US distribution business? Like, how, how sustainable that is, and what's incorporated, embedded in your guidance. Yeah, and so, you know, we've been a beneficiary for quite some time from strong utilization trends, which are continuing. And, you know, we've talked about that, of course, we've seen it in specialty, and we've seen it in both oncology and ophthalmology and specialty, and we've seen it throughout our business. And of course, you know, it's been driven by many things, including, you know, our pharmaceutical-centric strategy and pharmaceuticals being the most cost-effective form of care. Of course, it's driven by aging population, it's driven by innovation. And so, yeah, we've continued to see very solid utilization trends that are benefiting our core business, which is performing well. Okay. And then drug pricing, any changes from a drug pricing perspective? It's been a relatively more favorable, if I want to call it that, or less deflationary environment from a generic standpoint. Is your anticipation that that continues, and I guess likewise on the branded side, any dynamics there, whether it's IRA or otherwise, that you should be thinking about? Yeah, Erin, we really have, you know, nothing new to call out. It's, you know, kind of very much in line with what we've been saying and no updates there. You know, we've talked about for some time a moderation of generic deflation, and that has continued. And so, you know, of course, that's less of a headwind than it was in the past. And then, from a branded pricing standpoint, you know, it's in line with our expectations and consistent with what we've been seeing, and so no new updates there. Okay. And then just switching to specialty, I guess the latest trends, it sounds like it's still continuing to be, you know, an area of strength for you. Can you talk a little bit about your strategies, whether it's One Oncology or otherwise, and the rationale behind the structure, for instance, of that relationship, but just your overall strategy from a specialty standpoint? Yeah, happy, happy to take that one. So, Erin, I think the important area that we're focused on is the growth in the specialty market. So there was a report by IQVIA last year that, you know, predicted that the specialty market would grow from around $200 billion in 2023 to over $400 billion by 2028. So it's an area of focus. There's a lot of innovation, there's a lot of growth. And importantly, for us, it's an area that we're very well positioned, and we have been over decades, frankly, you know, leading in areas of specialty distribution and oncology, and services around oncology, and we'll continue to do that. Our investment in OneOncology is another step in that direction. So we have the very strong GPO presence, we have a very strong distribution presence, and what we're adding here is the MSO portion, so that we're able to even more fully support those physician practices. OneOncology is a terrific partner for us. They came together in 2018. They've grown to 350 sites in 16 states with over 1,000 providers. Significant ability to attract new physicians and new practices into the MSO. And even as of the last week or so, you see the addition of United Urology Group, which is another 225 or so providers that come into the OneOncology network. And in terms of the structure, you know, we're very happy with the way we've executed on the partnership and ultimate acquisition, and working with TPG, it's given us time to get to know the business, to understand what will be needed as we take it over at some point, and so far, their growth has really, you know, met our expectations or even exceeded our expectations, and we're gonna continue to work closely with them to continue to grow. And just the Florida contract, I guess it'll roll off at the mid-2025. Does that change anything in terms of purchasing power for you more meaningfully? I think we were calculating about a $0.25 headwind, but you can correct me if I'm wrong or right, if you want. But you know, how do we think about? Are there other transactions that you can do, for instance, in this space? I think if you think about the MSO landscape in oncology, in particular, the big ones are generally spoken for. So, you know, the way we see it now, it's a matter of attracting the remaining independent physicians, independent practices into the preferred MSO. And again, that's why we're really excited about OneOncology. We think we have an excellent model. One of the things that is not well known about OneOncology is that it's a model where the physician practice remains independent. So what happens is they sign a contract with OneOncology, a long-term contract, for the back office support and the MSO support, but the practice actually remains independent. So it's the best of both worlds in a lot of ways, where they get the support of the MSO, but they get to remain independent as well, and we're finding that to be very attractive in the marketplace. Okay. And under the new Evernorth relationship, in terms of their own insourcing at CuraScript, I guess, does the new contract allow for that to happen, or is there a component of that embedded in the current or the updated Evernorth contract? Our contract with Evernorth really didn't change very much, going forward. I think the important component of that in CuraScript is that's always been a part of our relationship together. You know, Express Scripts and Evernorth have had CuraScript for a very long time, really, all of our relationship, and so we've always worked closely with them on things that they would prefer to distribute themselves versus things that Cencora would distribute. There's no change there, and you know, the partnership is strong. Okay. Okay, and then biosimilars, I do want to talk a little bit about that. I know your exposure is more, or your sweet spot is more in the Part B as opposed to Part D segment, of that market. But can you talk a little bit about what's embedded in your expectations as well, in terms of biosimilars and what that means for you from an economic standpoint? Sure. I'll take that for you want to take it? Go, please. Yeah, look, biosimilar conversions are good for patients, they're good for healthcare, and they're good for Cencora. So as you said, Erin, you know, the sweet spot for us is in the Part B space, and we've seen significant adoption there of the available biosimilars. We expect that will continue as new products come to market. In the Part D space, it's we participate to a lesser extent from an opportunity. So where we would distribute the branded product, it's likely gonna be in a lower margin environment, and as they convert to biosimilars, it would be incrementally more profitable, but still relatively low. So we're very focused on biosimilar adoption overall, 'cause that's good for the efficiency of healthcare, but Part B is the area that really impacts us. Bob, and I'll just echo one of the things you were saying. And you know, of course, biosimilars are financially beneficial for us, particularly in the Part B area, because of the wraparound services, and they're you know, one of the things that over time you know moves us up within our long-term guidance range. Okay. All right. And then as we think about, and this goes back to kind of broader customer relationships as well, and just the underlying environment across retail pharmacy, we have Rite Aid that's coming out of bankruptcy. You have Walgreens that's obviously seeing some commotion and is a partner of yours. Just how do you think about the landscape from here? You also have some DTC relationships or initiatives from some of the pharma manufacturers as well. I don't think that really changes anything from a pharmaceutical supply chain standpoint, but would love to hear your perspective on how you see this all playing out in terms of...and how you navigate that and still play a role in that evolving retail pharmacy landscape. Sorry, that was a bigger question. Yeah. Erin, I think the most important thing in that is the value of community pharmacy to healthcare. So pharmacy- community pharmacies are the most accessible healthcare destination. Many consumers, patients, all of us, family members, if you have multiple diseases, multiple comorbidities, you need a pharmacist, not just a pharmacy, and you're generally gonna find that in a community pharmacy, and we see people choosing to continue to go there. Now, that does in no way diminish the real challenges that are out there within community pharmacy and reimbursement being you know, first and foremost there. So, you know, we're working hard to support our customers. You know, with the independent customers in particular, our Elevate Provider Network is working directly with payers to negotiate reimbursement rates. We find that we're helpful in that. We have a lot more work to do, obviously, but the community pharmacies are viable, they're important. The independents continue to attract patients and stay viable, as well as our larger customers. So we're optimistic about the future because of the need for community pharmacy, but are not blind to the challenges, and we use all the resources that we can, of Cencora, to try to support our customers as much as possible. Bob, and one of the things I'll add there is, Erin, you had mentioned DTC and asked about that. And, you know, we do see some DTC models now, particularly with the GLP-1 manufacturers calling it out. But one thing I think it's important to note is, of course, that's a way for them to get to the consumer, and all of those DTC models that I'm aware of are going through traditional distribution. And so, you know, they will come through the wholesaler. And, of course, we have a very broad-based portfolio of customers and very proud of our customer base and relationships. You know, one of our customers is Amazon, for instance, which is, you know, one of the models that the DTC is going through, so it'll come through with Cencora. Okay, great. I have to ask a policy question, just regulatory dynamics. Anything on the forefront in this election cycle that you're paying attention to? I think we've already addressed a lot of the drug pricing dynamics with IRA, but is there anything more to come that you're paying attention to from the regulatory front? Yeah, we pay very close attention. You know, we spend a lot of time in Washington. We have an office in Washington, D.C., and one of the incredible opportunities that we have is when we're talking to legislators and regulators, we're generally not talking to them about Cencora issues. We're talking about patient access. We're talking about, you know, reimbursement or other issues that are important to those customers. Pharmacist provider status, for example, is something that we spend time talking about in Washington to expand scope of practice for pharmacists in rural areas. So we're at the table, which is important, and oftentimes, we're educating. We're learning, we're educating, we're helping people understand unintended consequences of ideas that might seem good. I always like to say that, you know, in Washington are very bright, well-intended people, but there's no way they can understand the entire spectrum of healthcare or the entire spectrum of the pharmaceutical supply chain. That's something that we do, and we can bring expertise to help them think through that. So IRA, you know, is something that we've been watching for a long time, and I think the way it's playing out, you know, as we've discussed, is not something that's having a direct impact on Cencora because the discounts will go through a reimbursement rather than through a list price change. But the out-of-pocket cap is something that should be very positive for patient access and should be positive for Cencora. Okay. And as we think about the components of both the guidance, and I want to shift gears a little bit to international here, you know, what is kind of your thought process in terms of performance there relative to your long-term goals, and how are you thinking about some of the key drivers as, let's say, over the next five years, how does that international business evolve for you? What's the vision? Sure. Well, let me start and talk a little bit about long-term guidance and those sorts of things with regard to the international business, and I'm sure there's some things that Bob would like to add. Our, you know, our operating income guidance long-term is, you know, 5%-8% for both our U.S. segment and our international segment. You know, we have very good businesses and really kind of been, you know, grown our international business meaningfully since 2021. And, of course, we've been in international markets for quite some time, but we've meaningfully grown the business starting in 2021. And I would have to say, if you look at just the wholesale part of our international business, that probably grows a little bit slower than the wholesale part of our U.S. business. One of the things about our international business is that it has more kind of higher-margin services businesses in it than the U.S. business. For instance, whether it be our 3PL business internationally, which came as part of the Alliance acquisition, or whether it be the World Courier business, or whether it be the PharmaLex business, those types of, you know, higher-margin businesses kind of are what, you know, enable it to grow at about the same rate as the U.S. business over the long term, and you know, have that 5%-8% growth rate. Okay. We talked a lot about customer relationships, but you know, you mentioned World Courier, for instance, and others. But you know, part of your strategy, too, in terms of evolving, I would think would be to partner with the life sciences, partner with your pharma customers. And how is that the next step in the evolution of Cencora, and how does that become a bigger part of the story and the narrative? Because I think that that's something that's underappreciated. I mean, World Courier has done great, and I think that that's something that is a testament to how you can leverage your presence in both pharma, as well as pharma distribution, as well as being a partner in life sciences. Yeah, absolutely, Erin, and that's something that we're really excited about. So as Jim talked about, you know, building the international footprint, so we have really good businesses in all of those markets, but we also now have the ability to go to a pharmaceutical manufacturer, large or small, and talk to them about commercialization, on a global basis, and in particular, in North America and Western Europe, right? Which are key, key areas. In fact, there's an example of a company that we were helping with a broad suite of services, everything from health economics to 3PL and FDA registration support, that they were going in the US first. They had a delay with the FDA, and we were able to quickly pivot to the EU, and recently they have gotten EU approval. We're the only company in our space that can do that. And so we will continue to build our expertise there, use that international footprint, to add value to the biopharma space, again, both large and small. And we'll continue to expand those services in a way that's helpful to the manufacturer and helps us grow our higher growth, higher margin business portfolio. Bob, and just one thing I'd like to add there, and I think Bob and his teams have done a really good job of this, is, you know, really building integrated business development that really allows us to cross-sell between the different businesses. And, you know, I was recently kind of getting an update from our team that's doing that, really focused on the cell and gene market. And while, you know, it isn't from a scale standpoint, you know, a driver of big results at this point in time, it's just really exciting to see what we're doing, kind of cross-selling businesses between, say, our consulting businesses and the World Courier business, which has, you know, such capability in those, specialized shipments. Okay, great. And then in terms of, of as we think about the World Courier business in particular, just could you give us an update just on underlying demand trends across that business, too, in terms of what you're currently seeing? Yeah. Yeah, what we've seen overall in the pharma outsourcing space is, you know, a slowdown in terms of the amount. I think clinical trial volume is a metric of that. So from 2021, which is the peak, to now, that's down about 20%, kind of on a macro basis. It's recovering and beginning to grow again. And what we've seen with World Courier, and we did call it out, you know, recently in our last quarter, where they had a bit of a slowdown due to those trends. But as we go forward, it's an incredibly strong business. It's well-positioned. It's the leader in clinical trial support for cell and gene, for example. So we expect that will continue to grow, and we have that as part of our expectations for 2025 and beyond. You mentioned cell and gene therapy, and I think you recently had an extended kind of relationship, partnership, initiative with Walgreens as well on that front. Can you talk a little bit about just the Walgreens relationship in general, where that stands today? You know, does anything change in terms of how you know you implement your kind of strategic vision, when they're going through, obviously, some changes at their end? Walgreens is an incredibly important partner for Cencora. It's a strong relationship over a decade long. A strong relationship. We support WBA. In Europe, we're the primary distributor for Boots. We're obviously the primary distributor for Walgreens. We source generics together through WBAD. So we are always working together to make sure that we can create value, ideally new value, together. So we're committed to their success, for sure, and I think it's a partnership that is valued by both parties. Okay. And then, I think everyone won't let me walk out of this room without asking about animal health. So, I do have to ask, what's the status in terms of underlying demand trends across both production animal and companion animal, and opportunities you see, whether it's innovation across the space or otherwise, as you're thinking about growth across MWI? Yeah, and so our animal health business is performing very well in the animal health market. During the first nine months of this fiscal year, we have top-line revenue growth of 7%, which I think is probably above the market for that period of time. And actually, I would attribute our success to just, you know, just very good execution by the team. You know, it has been driven a bit by, you know, kind of an additional product that we have, but it's been just overall, like, really good execution by the team. And in terms of the market, I think based on the data I've seen, it still shows that, you know, vet clinic visits are down a bit. I think the market is up, but it's due to price. And that's in the, of course, in the companion animal market, and then in the production animal market, kind of cattle numbers are at record lows. But you know, I think they should start to rebound now, particularly with good moisture we've had this year, and cattle prices are very high. So of course, people you know, really want to spend to keep their cattle healthy. And so overall, I think, you know, the market's been just okay, but probably is in a position to start to rebound. And I think that our, you know, 7% growth has been above market due to execution by our team. Okay. And then, as we kind of model out, and you gave us, obviously, the high-level guidance today for 2025, but anything to think about, we can all kind of map out the COVID dynamics, but in terms of first half versus second half and in terms of the fiscal 2025 or any other moving pieces we should be aware of? You know, we are advanced in our planning for the year, but we haven't fully completed our plan for the year, and you know, we're certainly not doing quarterly guidance or anything like that. Of course, you know, we said we'd be at the bottom end of our long-term guidance range, but I would say, and you know, of course, we called out the COVID, we called out the contract, but I think really the important takeaways here, and we just finished two days of presentations from our businesses is that, you know, our core business is performing, you know, quite well. Return on invested capital is great, and we're seeing, you know, it's being, you know, the performance across our core businesses are being driven by, you know, strong utilization trends. A very good execution, particularly in the U.S. And we talked a lot about international, but the U.S. is, of course, 80% of our operating income. You know, we're really benefiting from our strength and specialty. And so kind of, you know, a number of the things, Erin, that we've been talking about for, you know, quite some time that's been driving our success are continuing. Okay. Lastly, in the last couple minutes here, I did wanna ask about kinda just capital deployment in terms of all the things you kind of talked about, where the focus lies, whether it's on buybacks and, and whether it's M&A, where that M&A priority lies as well, and is there a robust pipeline that you're looking at? Yeah, and so, we will continue, as we have in the past, to have balanced capital deployment. And, of course, we'll continue to invest in our business, which always has the highest return on invested capital. And, you know, we've been spending about $500 million a year on CapEx. That may come up a bit, due to investments in technology and distribution capabilities as we grow. We'll continue to do strategic M&A, and our, you know, last two deals that we've done have been in specialty, which is, you know, a great growth business for us, and in biopharma services, which is, you know, higher margin, higher growth. We'll continue to do opportunistic share repurchases, and, you know, we've bought back $1.2 billion of shares per year for the last two years. I think, you know, we're very successful in buying back stock from WBA as they were selling shares, and then we'll continue to grow our dividend each year also. Just because I have some extra time, on contract renewals, anything coming up? You just renewed, obviously, Evernorth. Anything coming up for renewal that we think about or that's contemplated in that 2025 guide? Yeah, we have nothing additional to call out on that front, Erin. Okay. All right. Okay. Thank you so much for your time. I really appreciate it. Thank you.