Walgreens Boots Alliance, Inc.

Good morning. My name is Krista, and I'll be your conference operator today. At this time, I would like to welcome everyone to the Walgreens Boots Alliance Incorporated Second Quarter 2019 Earnings Conference Call. All lines have been placed on mute to prevent any background noise, and after the speaker's remarks, we will have a question and answer session. If you would like to ask a question during that time, please press star, then the number one on your telephone keypad. And if you would like to withdraw your question, press the pound key. Thank you. I will now turn the call over to your host, Gerald Gradwell, Senior Vice President of Investor Relations. Please go ahead.

Good morning, ladies and gentlemen, and welcome to our second quarter earnings call. I'm here today with Stefano Pessina, our Executive Vice Chairman and Chief Executive Officer of Walgreens Boots Alliance, James Kehoe, our Global Chief Financial Officer, and Alec Gurley, Co-Chief Operating Officer of Walgreens Boots Alliance and President of Walgreens. Our prepared comments are a little longer than usual today, so you should be aware that to provide the customary time for your questions, our call is likely to run at least 15 minutes past our normal one hour. Before I hand you over to Stefano to make some opening comments, I will, as usual, take you through the legal safe harbor and cautionary declarations. Certain statements and projections of future results made in this presentation constitute forward-looking statements that are based on our current market, competitive, and regulatory expectations and are subject to risks and uncertainties that could cause actual results to vary materially. 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 for a discussion of risk factors as they relate to forward-looking statements. In today's presentation, we will use certain non-GAAP financial measures. We refer you to the appendix in the presentation materials available on our Investor Relations website for reconciliations for the most directly comparable GAAP financial measures and related information. You'll find a link to the webcast on our Investor Relations website at investor.walgreensbootsalliance.com. After this call, the presentation and webcast will be archived on the website for 12 months. I will now hand you over to Stefano.

Thank you, Gerald, and hello, everyone. I want to acknowledge up front that this has been a very disappointing quarter for us. There is nothing entirely new in what we have seen impact our business during the quarter. That said, A number of the trends we had been expecting and preparing for impacted us significantly more quickly than we had anticipated. We found ourselves facing a combination of increased reimbursement pressure in the quarter, lower generic deflation, lower brand inflation, and slower than anticipated benefits from our work to refresh and renew our retail offering, primarily in the U.S. Of course, the pharmacy trends are not only impacting our business, they are impacting the overall market, and will likely continue to do so over the coming months. Let me be clear, however. I am convinced that our existing strategic priorities are the right ones and will allow us to deliver sustainable growth into the future. Let me remind you of our four priorities. accelerating the digitalization of our company, transforming and restructuring our retail offering, creating neighborhood health destination around the more modern pharmacy, and rolling out our transformational cost management program. We are making strong progress against these transformation priorities across multiple fronts. However, We now need to respond appropriately to the tougher environment that we find ourselves in. We will build off our existing transformation priorities and we will reinforce and accelerate our actions. We are acting quickly to address select areas of operational weakness with a number of senior appointments, sourcing new talent with new ideas and new approaches, to drive more rapid change in a number of areas of our business. We are also strengthening and refocusing our operational management to ensure increased focus on driving operational excellence. In recent months, we have brought in a new chief digital officer, a new global chief marketing officer, a new Global Chief Supply Chain Officer. We have restructured entirely the organization of our branch business. And since the quarter end, we have voted a new Global Controller and Chief Accounting Officer. We have reviewed our priorities and the business initiatives underway and have reworked our management plans in light of the more adverse environment. First and foremost, we are acknowledging the short-term headwinds we are facing and the limited time we have available to compensate for the impact in the remainder of the year. As a result, we are reducing our guidance for fiscal 2019. James will talk to you about that in a moment. We believe the actions that we are taking will result in improved performance in 2020. Looking beyond that, we are convinced that our business model can deliver sustainable adjusted earning per share growth of mid to high single digits. I will now ask James to take you through the results and our updated guidance for the year. James?