Cardinal Health 2012 Annual Report Download - page 3

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1
Pharmaceutical segment highlights
Our Pharmaceutical segment recorded another
exceptional year with revenue growth of 4 percent
to $97.9 billion and segment prot up 17 percent
to $1.6 billion. Generic pharmaceutical programs,
including new product launches, the positive impact
of acquisitions and increased margin under branded
pharmaceutical agreements contributed to segment
prot growth.
Consistent with our strategy to build additional
balance in our customer base and grow our generics
business, we recently gained the opportunity to serve
another 500 pharmacies through the acquisition of Dik
Drug, a regional wholesaler. We ended the year with
non-bulk sales comprising 59 percent of total sales, up
from about 51 percent three years ago, a shift that also
improved prot margin.
While demand in the low energy side of our nuclear
business remained soft in 2012, indicative of the
industry’s macroeconomic and reimbursement
trends, the Positron Emission Topography (PET)
business continued to show growth. And our Specialty
Solutions group posted another year of robust
revenue growth, in excess of 50 percent. The business
continues to build important relationships with
biopharmaceutical companies, providers and payors
by oering innovative and value-enhancing programs,
as evidenced by increased revenues from both new
and existing customers.
Medical segment highlights
Revenue increased 8 percent to $9.6 billion for our
Medical segment. Prot was $332 million, down
11 percent due to the expected commodity
input cost headwind and costs associated with
investment in our medical business systems
transformation. We were pleased the Medical
segment returned to prot growth in the fourth
quarter of 2012 and we believe that the segment
is positioned for solid double-digit growth in
2013. The commodity headwinds appear to have
subsided and we expect to reap some of the
benets from our 2012 systems installation through
improved margins and lower inventories.
Our 2012 stream of product launches — designed
to bring quality, value and enhanced clinical
benets to our customers — was well-received.
Preferred products, including Cardinal Health-
branded products, grew faster than the rest of
our product portfolio. We continue to expand our
preferred products program, building out new
product categories with Cardinal Health-branded
products, as well as select national brands. From a
channel perspective, Ambulatory Care — physician
oces, surgery centers and other sub-acute
markets — recorded strong growth.
International highlights
From an international perspective, our Canadian business recorded double-digit revenue growth.
The integration of Futuremed Healthcare Products Corp., our 2012 acquisition in the Canadian long-term
care market, complements our existing acute care medical-surgical platform and is progressing well.
Our business in China once again posted double-digit revenue growth. We have now grown our footprint
there to include 11 distribution sites and expanded our Chinese platform to include consumer healthcare
products for retail pharmacies, direct-to-patient specialty distribution and medical device distribution.