Walgreens Boots Alliance, Inc.

Ladies and gentlemen, thank you for standing by, and welcome to the Walgreens Booth Alliance Inc. first quarter 2021 conference call. At this time, all participants are in their listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during this session, you will need to press star 1 on your telephone. We ask that you please limit your questions to 1. Thank you. Please be advised that today's conference is being recorded. If you require any further assistance, please press star zero. I would like to now hand the conference over to your speaker today, Gerald Bradwell, Senior Vice President of Special Projects and Investor Relations. Please go ahead.

Good morning, ladies and gentlemen, and welcome to our earnings call for the first quarter earnings of fiscal year 2021. On the call with me today are 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. Before I hand you over to Stefano to make some opening comments, I will, as usual, take you through the legal safe harbour 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. 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 and 10-Q for a discussion of risk factors as they relate to forward-looking statements. And note in particular that these forward-looking statements may be affected by risks relating to the spread and impact of the COVID pandemic. In today's presentation, we'll use certain non-GAAP financial measures. We refer you to the appendix in the presentation materials available on our Investor Relations website. for reconciliations to 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. Before I pass you on to Stefano, there is one change in definition we use in today's earnings that I would like to draw your attention to. Moving forward, comparable retail sales are now inclusive of our digitally initiated sales, as we believe this more adequately reflects our global omnichannel retail strategy. The full definition and historical restatements can be found in the appendix tables of this presentation or in our 10Q to be filed later today. I will now hand you over to Stefano.

Thank you, Gerald. Welcome, everyone. We are delighted to be announcing a start to the financial year that is better than we had initially expected. As you all are well aware, The retail market has seen many ups and downs over the past months. With the current increase in COVID infections in recent weeks, things have once again proved more challenging. In these difficult conditions, I am pleased to say we have adapted well through the continued dedication of our people. and as a result of work and investment we have undertaken in recent years. The improvements we have made to the skills, infrastructure, processes and systems in our businesses is reflected in these results. The continued effort to contain the spread of the virus has seen varying responses globally that have placed restrictions on populations and communities. People have had to adjust to life under these new conditions, both in terms of their health and retail behavior. The availability of vaccinations to provide the community with an element of protection from the virus will result in a return to more normalized social activities. The consistent work we have done to build our capability to offer healthcare services via pharmacy is highlighted by the resources we are able to bring to bear, particularly in the U.S., to support the government initiatives for provision of both COVID testing and vaccination, from customer identification and recruitment through to scheduling, providing the service, and offering a comprehensive follow-up. The pandemic has demonstrated very clearly the importance of one of our key strengths in being a convenient healthcare provider in the heart of the community. Our capabilities in this area have been significantly enhanced by the investment we have made to date in the acceleration of our digital strategy and the expansion of our healthcare services. We have transformed the data infrastructure of our businesses and combined it with enhancement in our fulfillment capabilities. As a result, we now provide a modern and flexible customer offering that is both multi-channel and a truly personalized service. Through the pandemic, we have also materially improved the capacity of our systems. Today, A sizable amount of our business is transacted digitally and fulfilled via pick-up, either in-store, at the drive-thru, via curbside collection or home delivery. In the months to come, you will hear a lot more from us about our new digitally-enabled products and services. As we continue to invest in accelerating our program to update our customer offerings, infrastructure and fulfillment capacities. We have also continued to look at how we best focus our resources and assets to the greatest effect. You have seen this clearly in some of our recent announcements. We have just announced a significant transaction with our long-standing partner Amerisource Bergen to sell them our international health distribution business Alliance Healthcare. This is a great transaction for both businesses that will drive growth for each company without losing any of the benefits we have delivered already from our work together. It significantly enhances the range, scope, and scale of Abifee's network in what is increasingly a business driven by scale and reach. While Alliance Healthcare was always a very important part of our company, our focus must be on delivering against the significant opportunities we have in our retail pharmacy business. The transaction positions Alliance Healthcare as a key part of ABC, a company dedicated to and focused on its area of business and its true expertise. For WBA, it relieves both management time and resources, which can be focused on and invested in further accelerating the development of our core retail pharmacy businesses. Importantly, the transaction secures an attractive multiple for a high-quality business. We will employ the proceeds to reduce debt and accelerate the development of our healthcare services. We have been able to begin this work almost immediately, using some of the funds to accelerate our investment in VillageMD. This will facilitate a significant acceleration of the growth of their own business, including a faster deployment of clinics within our store. Looking forward, we are still early in the financial year. However, we remain cautiously optimistic for the year as a whole. There is no doubt we have many opportunities ahead, but these opportunities may be in part tempered by the risk of further short-term disruption from continued and new restrictions and lockdowns. as communities continue to struggle to contain the spread of the virus while vaccination programs take place. I will stress, however, that the issues are short-term and may impact the next few months, while the opportunities we see stretch forward for years to come. Overall, this first quarter of the financial year has been a strong quarter for the group, and an excellent start to what has the potential to be a better year than we expected. With that, I will ask James now to take you through the results.