Walgreens and Alliance Boots Outline Strategic Growth Drivers at Analyst Meeting

  Walgreens and Alliance Boots Outline Strategic Growth Drivers at Analyst

    London meeting highlights strategic partnership with Alliance Boots as
Walgreens positions itself to become first choice for health and daily living
                            in America and beyond

Business Wire

DEERFIELD, Ill. -- February 13, 2013

With an unmatched global platform at the corner of the retail and health care
industries, Walgreens (NYSE: WAG) (Nasdaq: WAG) outlined its strategic growth
drivers and long-term goals at its 2013 Analyst Meeting today in London.

Summarizing Walgreens key growth drivers to position the company for long-term
growth and shareholder value creation, President and CEO Greg Wasson said, “We
are focused on creating a complete Well Experience for our customers across
all of our touch points; transforming the role community pharmacy plays in
health care; and establishing an unprecedented and efficient global platform
through our strategic partnership with Alliance Boots. As our two iconic
brands come together, we will have a platform that will be very difficult, if
not impossible, to replicate.”

Wasson outlined Walgreens fiscal year 2016 financial goals assuming the
exercise of the company’s option to proceed to a full combination with
Alliance Boots. Together, the companies aim to have sales of $130 billion or
greater; adjusted operating income between $9 billion and $9.5 billion, or
$8.5 billion to $9 billion on a GAAP basis; $1 billion in combined synergies;
and operating cash flow of $8 billion or more.*

“This combination accelerates our core strategies, creates an unmatched global
supply chain and provides a platform for global expansion beyond the U.S. and
Europe into new markets around the world,” said Wasson.

During the meeting, executives with Alliance Boots provided analysts with
insights into their financial performance and the businesses they operate
including Boots, its pharmacy-led health and beauty retailing business, and
Alliance Healthcare, its pharmaceutical wholesaling and distribution business.

Stefano Pessina, Executive Chairman of Alliance Boots, commented, “The
Alliance Boots financial track record, growth strategy and unique portfolio of
businesses across many countries position us well to take full advantage of
opportunities in the changing health care markets. We believe our Group
represents a solid investment for Walgreens, and that together we will create
a successful, sustainable and profitable global player. I have full confidence
in this, both as the leader of Alliance Boots and a shareholder in Walgreens.”

Later, leadership from Walgreens outlined how Walgreens is creating a Well
Experience for customers through four strategies – customer value, innovative
products and services, systematic localized offerings and the most relevant
networks and formats.

Analysts also learned how Walgreens is pursuing its health care strategy
through a comprehensive care offering with the goal of developing the most
complete national network of integrated health care services in the country; a
differentiated experience to serve customers where, when and how they want;
and strategic partnerships that improve care, drive down costs and ultimately
meet patient needs for better overall health.

Finally, Walgreens and Alliance Boots executives outlined how they intend to
create long-term shareholder value through the companies’ joint synergy
programs. Walgreens reiterated its goal to achieve $1 billion in combined
synergies in the fourth year of the strategic partnership, which represents
approximately 1 percent of the estimated combined pharmacy and general
merchandise cost of goods sold by fiscal year 2016.

“With many of last year’s headwinds turning into this year’s tailwinds, our
performance this year is all about execution,” Wasson said. “We won’t let the
tailwinds alone carry us. Rather, we must optimize those tailwinds to get the
most from them. We are confident we have the strategies, structure and talent
in place to do that and to create long-term shareholder value.”

A video webcast of the conference was simulcast through Walgreens investor
relations website at: http://investor.walgreens.com. The webcast and
presentation materials will be archived on the website for 12 months after the
conference. An audio podcast also will be available on the investor relations

* Figures assume constant currency and exercise of option to acquire remaining
55 percent interest in Alliance Boots GmbH

About Walgreens

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
8,067 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

About Alliance Boots

Alliance Boots is a leading international, pharmacy-led health and beauty
group delivering a range of products and services to customers. For the
financial year ended 31 March 2012, Alliance Boots reported revenue of £23.0
billion ($35.7 billion***), (£25.4 billion ($39.4 billion***) including share
of associates and joint ventures), and EBITDA of £1,443 million ($2,237
million***), (£1,568 million ($ 2,430 million***) including share of
associates and joint ventures). Working in close partnership with
manufacturers and pharmacists, Alliance Boots is committed to improving health
in the local communities it serves and helping its customers and patients to
look and feel their best. Alliance Boots focus is on growing its two core
businesses: pharmacy-led health and beauty retailing and pharmaceutical
wholesaling and distribution. Alliance Boots has a presence in more than 25**
countries and employs over 116,000** people. Alliance Boots has pharmacy-led
health and beauty retail businesses in 11** countries and operates more than
3,330** health and beauty retail stores, of which just over 3,200** have a
pharmacy. In addition, Alliance Boots has around 625** optical practices, of
which around 185** operate on a franchise basis. Its pharmaceutical wholesale
businesses supply medicines, other healthcare products and related services to
more than 170,000** pharmacies, doctors, health centers and hospitals from
over 370** distribution centers in 21** countries.

** Figures include Alliance Boots associates and joint ventures (including

*** At a $1.55=£1 exchange rate.

Cautionary Note Regarding Forward-Looking Statements. Statements in this
release that are not historical, including, without limitation, estimates of
future financial performance, including the amounts and timing of future
accretion and synergies, 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," "goal,"
"continue," "sustain," "synergy," "on track," "believe," "seek," "estimate,"
"anticipate," "may," "possible," "assume," 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,
those relating to the transactions contemplated by the Purchase and Option
Agreement and other agreements relating to our strategic partnership with
Alliance Boots and their possible effects, the parties' ability to realize
anticipated synergies and achieve anticipated financial results, the risks
associated with international business operations, the risks associated with
governance and control matters, whether the option to acquire the remainder of
the Alliance Boots equity interest will be exercised and the financial
ramifications thereof, changes in vendor, payer and customer relationships and
terms, changes in network participation, levels of business with Express
Scripts customers, the implementation, operation and growth of our customer
loyalty program, changes in economic and market conditions, competition, risks
associated with new business areas and activities, risks associated with
acquisitions, the ability to realize anticipated results from capital
expenditures and cost reduction initiatives, outcomes of legal and regulatory
matters, and changes in legislation or regulations. 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 initial distribution of this release,
whether as a result of new information, future events, changes in assumptions
or otherwise.

Adjusted Operating Income is a non-GAAP financial measure, which is not
calculated or presented in accordance with generally accepted accounting
principles in the United States (GAAP), and is provided as supplemental
information in addition to the financial measures that are calculated and
presented in accordance with GAAP. This supplemental non-GAAP financial
measure is presented because management evaluates the company’s financial
results on both a GAAP and adjusted basis and believes that the non-GAAP
financial measure provides additional perspective and insights when analyzing
the core operating performance of the Company’s business from period to period
and trends in the company’s operating results. This supplemental non-GAAP
financial measure should not be considered superior to, as a substitute for or
as an alternative to, and should be considered in conjunction with, the GAAP
financial measures presented in this press release. The company does not
provide a non-GAAP reconciliation for non-GAAP estimates on a forward-looking
basis where it is unable to provide a meaningful or accurate calculation or
estimation of reconciling items that are out of the Company’s control and the
information is not available without unreasonable effort.

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Media Contact:
Michael Polzin, 847-315-2920
Investor Contacts:
Rick Hans, CFA, 847-315-2385
Ashish Kohli, CFA, 847-315-3810
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