Walgreens 2013 Annual Report Download - page 4

Growing Shareholder Value by Helping People
Get, Stay and Live Well
Dear Shareholders:
We are pleased to update you on Walgreens performance this year as
we achieved record sales of $72.2 billion, strong profits of $2.5 billion
and record free cash flow of $3.1 billion.* Most of all, fiscal 2013 was
a year of major strategic progress as we crystalized and advanced the
transformation of our company for long-term sustainable growth and
value creation. We are “Well” positioned for a strong future.
Continuing to meet our long-term goal of delivering top-tier shareholder
returns, Walgreens returned $1.0 billion to shareholders this year through
dividends. Over the past five years, Walgreens dividend has grown at a
compound annual growth rate of nearly 23 percent, compared with 10 percent
for the Dow Jones Industrial Average and 6 percent for the S&P 500.
We believe the best is yet to come, as we took significant steps in 2013 to
continue to reimagine and redefine the drugstore experience in America –
and the world.
The humble Chicago corner drugstore that opened in 1901 grew into
the nation’s largest retail pharmacy chain through unmatched customer
service, relentless innovation, and a nationwide store network on the
best corners in America. Today, we are establishing the first global
pharmacy-led health, beauty and well-being enterprise, seizing opportunities
to lead the market in the decades ahead.
As we think globally and long term, Walgreens is keenly focused locally
every day on the customers and patients in communities across America
who count on us to meet their health and daily living needs. Many families
are still struggling with the weak jobs market. The healthcare system we
rely on is undergoing rapid and fundamental change. While the national
Affordable Care Act is expanding coverage, the cost of care is rising and
demand is challenging supply, affecting people’s financial security and
stressing providers.
While our economy and healthcare system remain challenging, Walgreens
took decisive steps this year to boost our daily living sales and prescription
volumes. Thanks to the focus, determination and spirit of service by
our 248,000 team members, we continue to transform today’s challenges
into opportunities to deliver exceptional value – every day, and for
the long term.
Strategic Growth Drivers Move Forward
The Walgreens strategic transformation, now five years strong, is driven
by our purpose – to help people get, stay and live well – and our vision,
to be the first choice for health and daily living for everyone in America
and beyond. To achieve our purpose and vision, we are focused on three
strategic growth drivers:
• Create a Well Experience by transforming the customer experience
across all touch points, channels and formats.
• Transform the role of community pharmacy by offering unparalleled
access to innovative, high-quality, affordable health and wellness services
within our communities.
• Establish an efficient global platform to create the first global
pharmacy-led health and well-being enterprise with our strategic
partnership with Alliance Boots, the leading international pharmacy-led
health and beauty group, and our long-term strategic relationship with
AmerisourceBergen, one of North America’s largest pharmaceutical
services companies.
We are pleased to update you on our progress this year in advancing these
strategic growth drivers.
Creating a Well Experience
Walgreens is embracing today’s consumers to become their first choice in
health and daily living. Mindful of the Great Recession and recognizing
their unlimited internet options, people are expecting maximum value –
defined by convenience and quality as well as price.
Consumers today are driving the explosive growth of digital and
mobile technologies – by 2015, more than 50 percent of U.S. retail sales
are projected to be web-influenced. Retail channels – store, online,
mobile – are blurring, and consumers today are shopping wherever and
however they can to get what they want.
2 2013 Walgreens Annual Report
Gregory D. Wasson (left)
President and Chief Executive Officer
James A. Skinner
Chairman of the Board
Letter to Shareholders
* This is a non-GAAP measure. See Reconciliation of Non-GAAP Financial Measures on page 46.