Reviewing a challenging but strategically important year for Walgreens
(NYSE: WAG) (Nasdaq: WAG), 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 how the company is positioned for growth in fiscal year
2013 at Walgreens Annual Shareholders Meeting. Addressing more than
2,000 shareholders in Chicago, company leadership discussed the
substantial progress Walgreens is making toward its vision to be the
first choice in health and daily living in America - and beyond.
Wasson said, "With a strong foundation and the right strategies,
structure and talent in place, and with many of last year's headwinds
becoming this year's tailwinds, Walgreens is well-positioned to ensure
its market leadership, growth and profitability well into the future on
behalf of its customers and shareholders."
Having reached new, multi-year agreements with pharmacy benefit managers
Express Scripts, Optum Health and others, Walgreens is focused on three
areas of opportunity ahead:
Delivering a complete Well Experience by transforming the customer
experience across all of the company's touch points, channels and
Transforming the role community pharmacy plays in health care by
offering unparalleled access to innovative, high quality and
affordable health and wellness services
Creating an unprecedented and efficient global platform through its
strategic partnership with Alliance Boots GmbH
"We are taking a multi-pronged approach to delivering the Well
Experience," Wasson said. "We are combining leading-edge design with
enhanced products and services, increased engagement with team members
and customers, and an omni-channel approach that blends our
brick-and-mortar stores with e-commerce and mobile commerce. We are
deliberately blurring many retail channels to fit how consumers shop
To that end, Walgreens has continued to expand its product offerings,
Expanded grocery items and fresh food in stores for on-the-go
consumers with quick, convenient pickup, and a growing selection of
healthy food choices that are important to underserved food desert
Substantial investment continues in private brands, including
Walgreens, Delish, Nice! and many more that have led to a 2 percentage
points increase in private brand penetration year-over-year to 22
Enhanced beauty departments that now include an array of niche and
prestige brands not found in traditional drugstores, including the
introduction of Boots No7.
And mobile device capabilities that have expanded in the past year to
include prescription refills and transfers by scanning the pill
bottle; QuickPrints, an application that enables users to print photos
directly from their devices to any Walgreens store; and in-store maps
that allow customers to use a digital shopping list to map and locate
items in a store.
Walgreens efforts to transform the role community pharmacy plays in
health care begins with its pharmacists, who are seen more and more by
patients as health care partners. Wasson said, "Walgreens pharmacists
have administered more than 5 million flu shots in each of the past four
years and today we are the largest retail provider of immunizations and
vaccinations in the country, which validates that the public
appreciates, wants and values what community pharmacy can do to support
Walgreens is expanding services available at its pharmacies and Take
Care Clinics to include additional immunizations; chronic care
management; primary care; Medicare wellness visits and member
assessments; and health testing.
"With nearly 70 percent of the U.S. population either without a primary
care physician or not utilizing one, and more than 30 million people
gaining insurance coverage in 2014 under health care reform, we are
well-positioned to fill the void in care," Wasson said.
Throughout 2013 and beyond, Walgreens will be creating an unprecedented
and efficient global platform through its strategic partnership with
Alliance Boots. "We are bringing together two iconic brands with a lot
in common," Wasson said. "Boots is to Europe as Walgreens is to the U.S.
In addition, with Alliance Boots bringing an integrated wholesale
business to the table, we believe there is significant opportunity for
supply chain efficiencies. The global pharmaceutical market continues to
grow, particularly in emerging markets where there is increased demand
for vaccines and self-medications. Together we are well-positioned for
growth as we create the first global pharmacy-led, health and wellbeing
During the meeting, the company also reviewed key highlights and
milestones over the past year. Walgreens generated record cash flow from
operations of $4.4 billion and returned $1.9 billion to shareholders in
the form of dividends and stock repurchases. That included the largest
quarterly dividend in the company's history and the 37th
consecutive year in which the company has raised its dividend.
In addition to closing on its first step in the strategic partnership
with Alliance Boots, Walgreens also announced and later completed its
acquisition of drugstore chain USA Drug in the mid-South region of the
country, opened its 8,000th store with a new location in
Hollywood, Calif., and launched its Balance Rewards loyalty program
which has seen more than 50 million people enroll since its introduction.
Wasson concluded, "During the last several years we have worked to
transform the company from the great foundation that our predecessors
gave us. With our three strategic growth objectives in place, Walgreens
is now positioned extremely well for long-term growth."
Nominees to Walgreens board of directors include:
David J. Brailer, MD, PhD, Chairman of Health Evolution Partners
Janice M. Babiak, former Partner at Ernst & Young
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, Retired Chairman and Chief Executive Officer of
Harris Bank and Former Chairman of the Board of Walgreen Co.
Dominic Murphy, Partner at Kohlberg Kravis Roberts & Co.
Stefano Pessina, Executive Chairman of Alliance Boots GmbH
Nancy M. Schlichting, CEO of Henry Ford Health System
Alejandro Silva, Chairman and CEO of Evans Food Group, Inc.
James A. Skinner, Retired Vice Chairman and CEO of McDonald's
Gregory D. Wasson, President and CEO of Walgreen Co.
Chairman Jim Skinner added, "I would like to offer special appreciation
to David Schwartz, who has retired from the board after 12 years of
service to Walgreens, and to Al McNally for his four years of service as
lead director and non-executive chairman of the board. We are grateful
that Walgreens will continue to benefit from Al's leadership and vision
on the board.
"I also want to welcome our two newest members, Stefano Pessina and
Dominic Murphy, who joined our board following the launch of the
strategic partnership between Walgreens and Alliance Boots."
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.
As the nation's largest drugstore chain with fiscal 2012 sales of $72
billion, Walgreens (www.walgreens.com)
vision is to become America's first choice for health and daily living.
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 8,061 drugstores in all 50 states, the
District of Columbia and Puerto Rico. 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 700 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," "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, the 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 and divestitures, 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.
Michael Polzin, 847-315-2920