8 January 2020 Equity Research Americas | United States

Walgreens Boots Alliance WBA

Q&A Our Way: A Soft 1Q, But Full Year Outlook

Maintained; Management Offers Its Thoughts Target price (12M, US$) 60.00

Managed Care & Healthcare Facilities | Earnings Neutral

US Pharmacy Adversely Affected by Script Volume and Reimbursement Pressure: Price (8 Jan 20, US$) 55.83 In the US, a 15% Y/Y decline in operating income was driven by a soft start to the year 52-week price range 74.43 - 49.29 with pharmacy script volume being up 2.8% in Q1, below WBA’s plan of around 4% for Market cap (US$ m) 49,457.65 the full year. WBA pointed to several reasons for the slower than expected script growth, Enterprise value (US$ m) 63,819 including competitive pressures in Medicaid and Medicare Part D. Management says the reimbursement pressure seen in FQ1 was in-line with the company’s budget. Additionally, Research Analysts the Y/Y gross margin decline of 150 bps seen in Q1 was anticipated. A.J. Rice Retail Pharmacy Expectations for Full Fiscal Year Maintained. While retail pharmacy 212 325 8134 results were driven by weakness in the gov’t plans as well as timing, WBA says that in the [email protected] back half of the year, the company believes it should see script growth reaccelerate to 3.5- Eduardo Ron 4.5%. Additionally, WBA has a strong relationship with UNH in the Medicare Part D space, 212 325 7491 and management believes growth in this segment will drive overall script growth this year. [email protected] WBA has also launched a co-branded Medicare Advantage offering with UNH and enrollment is exceeding initial expectations. Caleb Harris, CPA 212 325 7458 WBA Further Building on Relationship with UNH and Other Partners: WBA [email protected] discussed the 14 patient service centers that WBA operates with UHC, noting that UHC representatives will be within the Walgreens store and have space allocated where they can Alexander Khan educate and help patients with questions on various UHC government plans. Also within 212 325 7714 [email protected] those 14 locations UNH offers, through Optum, a homecare visit program (HouseCalls) where some patients can get a nurse practitioner to come to their home for various difference services. The company also noted its recent deals with CNC and MCK. WBA’s FY20 Consolidated Outlook Maintained as 1Q Op Underperformance is Offset by 1Q Favorable Tax Rate and Some Acceleration of Cost Savings. For FY20, WBA had previously anticipated a 2% tax full year headwind to adj EPS. WBA still expects its tax rate to be in the 17% range for 2Q-4Q. WBA says the Q1 performance was slightly worse than expected (due to slower script growth), but that as the year progresses the cost savings program could yield more results than originally anticipated. Share price performance

Financial and valuation metrics Year 8/19A 8/20E 8/21E 8/22E EPS (CS adj.) (US$) 5.99 5.95 6.20 6.35 Prev. EPS (US$) - - - - Revenue (US$ m) 136,866.0 140,132.3 144,785.8 149,826.8 EBITDA (US$ m) 8,412.0 8,040.5 8,274.9 8,287.6 P/OCF (x) 8.5 7.5 7.9 7.2 EV/EBITDA (current) 7.8 8.1 7.9 7.9 Net debt (US$ m) 15,813 14,361 13,586 12,511 On 08-Jan-2020 the S&P 500 INDEX closed at 3253.05Daily Jan09, 2019 - Jan08, 2020, 01/09/19 = US$72.23 ROIC (%) 14.98 14.12 13.83 13.49

Number of shares (m) 885.86 IC (current, US$ m) 39,966.00 Net debt (Next Qtr., US$ m) .0 Dividend (current, US$) 1.83 Quarterly EPS Q1 Q2 Q3 Q4 2019A 1.46 1.64 1.47 1.42 Net debt/tot eq (Next Qtr.,%) 2020E 1.37 1.48 1.58 1.53 Source: Company data, Refinitiv, Credit Suisse estimates 2021E 1.52 1.62 1.57 1.50

DISCLOSURE APPENDIX AT THE BACK OF THIS REPORT CONTAINS IMPORTANT DISCLOSURES, ANALYST CERTIFICATIONS, LEGAL ENTITY DISCLOSURE AND THE STATUS OF NON-US ANALYSTS. US Disclosure: Credit Suisse does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision.

8 January 2020

Walgreens Boots Alliance (WBA) Analyst: A.J. Rice Price (08 Jan 2020): US$55.83 Target Price: 60.00 Rating: Neutral

Income Statement 8/19A 8/20E 8/21E 8/22E Company Background Revenue (US$ m) 136,866.0 140,132.3 144,785.8 149,826.8 EBITDA (US$ m) 8,412 8,040 8,275 8,288 Walgreen Co. together with its subsidiaries, operates a drugstore chain in Depr. & amort. (1,471) (1,442) (1,466) (1,490) EBIT (US$) 6,941 6,598 6,809 6,798 the United States. The Company provides its customers with multichannel Net interest exp (704) (658) (638) (618) access to consumer goods and services, & pharmacy, health & wellness PBT (US$) 6,315 6,032 6,263 6,272 services in communities across America.

Income taxes (869) (861) (1,012) (1,027) Profit after tax 5,446 5,172 5,251 5,245 Minorities 20 3 -0 -0 Blue/Grey Sky Scenario Net profit (US$) 5,529 5,257 5,349 5,359 Reported net income (US$) 5,529 5,257 5,349 5,359 Other NPAT adjustments 0 0 0 0 Adjusted net income 5,529 5,257 5,349 5,359 Cash Flow 8/19A 8/20E 8/21E 8/22E EBIT 6,941 6,598 6,809 6,798 Net interest (704) (658) (638) (618) Change in working capital (740) (301) (749) (292) Cash flow from operations 5,594 6,602 6,080 6,567 CAPEX (1,702) (1,813) (1,945) (2,088) Free cashflow to the firm 3,892 4,789 4,135 4,479 Acquisitions (741) 0 0 0 Divestments - - - - Cash flow from investments (2,307) (1,813) (1,945) (2,088) Net share issue(/repurchase) (4,160) (1,740) (1,801) (1,881) Dividends paid (1,643) (1,617) (1,579) (1,544) Changes in Net Cash/Debt (2,201) 1,452 775 1,074 Balance Sheet (US$) 8/19A 8/20E 8/21E 8/22E Assets Cash & cash equivalents 1,023 875 850 1,125 Account receivables 7,226 7,007 7,239 7,866 Other current assets 1,118 686 853 886 Total current assets 18,700 18,721 19,744 21,388 Total fixed assets 13,478 13,365 13,328 13,378 Our Blue Sky Scenario (US$) 70.00 Investment securities - - - - Total assets 67,598 89,515 91,235 93,719 Our $70/share blue sky scenario is predicated on the company further Liabilities offsetting its reimbursement headwinds through execution of its cost Total current liabilities 25,769 24,637 24,436 25,013 Total liabilities 43,445 63,821 63,553 64,083 reduction program as well as potentially gaining clarity to benefits of its Shareholder equity 23,512 25,052 27,041 28,995 many partnerships. Better sentiment could drive upside to our target price Total liabilities and equity 67,598 89,515 91,235 93,719 with a blue sky scenario of $70 for WBA.

Net debt 15,813 14,361 13,586 12,511 Per share 8/19A 8/20E 8/21E 8/22E Our Grey Sky Scenario (US$) 45.00 No. of shares (wtd avg) 924 884 863 844 CS adj. EPS 5.99 5.95 6.20 6.35 Our $45/share grey sky scenario is predicated on the company further Prev. EPS (US$) - - - - being unable to offset reimbursement pressure through its traditional Dividend (US$) 1.78 1.83 1.83 1.83 Free cash flow per share 4.21 5.42 4.79 5.31 pharmacy tailwinds. Earnings 8/19A 8/20E 8/21E 8/22E Sales growth (%) 4.1 2.4 3.3 3.5 Share price performance EBIT growth (%) (11.0) (4.9) 3.2 (0.2) Net profit growth (%) (7.6) (4.9) 1.8 0.2 EPS growth (%) (0.5) (0.6) 4.2 2.4 EBITDA margin (%) 6.1 5.7 5.7 5.5 EBIT margin (%) 5.1 4.7 4.7 4.5 Pretax margin (%) 4.6 4.3 4.3 4.2 Net margin (%) 4.0 3.8 3.7 3.6 Valuation 8/19A 8/20E 8/21E 8/22E EV/Sales (x) 0.48 0.46 0.44 0.41 EV/EBITDA (x) 7.8 8.1 7.9 7.9 EV/EBIT (x) 9.4 9.7 9.3 9.1 P/E (x) 9.3 9.4 9.0 8.8 Price to book (x) 1.2 1.1 1.0 0.9 Asset turnover 2.0 1.6 1.6 1.6 Returns 8/19A 8/20E 8/21E 8/22E On 08-Jan-2020 the S&P 500 INDEX closed at 3253.05 ROE stated-return on (%) 13.2 11.9 11.2 10.4 Daily Jan09, 2019 - Jan08, 2020, 01/09/19 = US$72.23 ROIC (%) 15.0 14.1 13.8 13.5 Gearing 8/19A 8/20E 8/21E 8/22E Net debt/equity (%) 65.5 55.9 49.1 42.2 Interest coverage ratio (X) 9.9 10.0 10.7 11.0 Quarterly EPS Q1 Q2 Q3 Q4 2019A 1.46 1.64 1.47 1.42 2020E 1.37 1.48 1.58 1.53

2021E 1.52 1.62 1.57 1.50 Source: Company data, Refinitiv, Credit Suisse estimates

Walgreens Boots Alliance 2

8 January 2020

Highlights from Management Q&A

We had a post quarterly conference call with WBA management to review 1FQ20 results, fiscal 2020 expectations, its Transformational Cost Management Program, and its various partnerships. In the text below, we list questions and the company’s responses. The answers are not verbatim, but we put the company’s answers in their proper context in a give-and-take format. 1Q20 Earnings

Question: In 1QFY20, Retail USA segment operating income was down 16%, Retail International division operating income was down 40%, and Wholesale segment was up about 5%. Can you discuss what drove these moves, particularly with regard to the variance from internal assumptions? Answer: In US Retail, there were three primary items impacting operating income performance in the quarter. First, there was a soft start to the year, with pharmacy script volume comps being up 2.8%. This rate of growth was below WBA’s plan of around 4% going into the year. There were a few things driving this, including a continued competitive environment in the Medicare Part D and Medicaid plan book of business on the pharmacy side. As various PBMs and insurance companies look to gain more lives under coverage, they have the potential to shift volume away from WBA. As such, the company experienced softness in those two books of business. The other issue impacting US Retail was a timing phenomenon given Thanksgiving being the last week of November (the end of WBA’s quarter). WBA believes that given this timing some people chose to fill prescriptions in the beginning of December. WBA sees its December prescription volume back up in the mid-single digit range. Importantly, WBA continues to see reimbursement pressure, but at the same level planned for coming into the fiscal year. The reimbursement pressure seen in FQ1 was in-line with the company’s budget. The gross margin decline of 150 bps seen in Q1 was also anticipated. WBA believes that, not only was Q1 reimbursement pressure in-line with expectations, WBA’s expectations going forward for the back half of the year remain consistent with its view coming into the fiscal year with regard to reimbursement pressure. Regarding SG&A, WBA faced a headwind driven by the reinstatement of the bonus in the US business. Last year in Q1, WBA had a bonus accrual but it is fair to assume that it was less than 100%. For 2020, WBA accrues a bonus of 25% each quarter. As indicated earlier, the bonus accrual is expected to be $350-400 mln this year, straight-lined on a quarter to quarter basis throughout the year. For International, there are three primary items to highlights with respect to the first quarter. First, WBA continues to see an ongoing challenge in consumer confidence driven by Brexit uncertainty. WBA held its retail market share, though the overall market was down, adversely affecting both sales and gross profit. On the SG&A side, there are three items to highlight driving the 40% Y/Y decline in operating profit. The first, similar to the US, is the headwind from the bonus reinstatement. The second relates to investments in IT – WBA is investing in the RPI segment, specifically in Boots UK from a position of relative strength. WBA is making investments in Beauty and anticipates being the market leader in Beauty, continuing to transform the company’s offerings (e.g. having the optimal products, services, and store layout/shopping experience for the consumer going forward). Regarding IT systems in the UK, one of the major investments is a new pharmacy system. WBA noted on its quarterly conference call that not only will this help the company become more efficient from a cost transformation perspective, as WBA needs to offset the ongoing UK NHS reimbursement pressure, but it will also help free-up pharmacist time for more value-add services. WBA indicated on its quarterly conference call earlier today that the PSNC (Pharmacy Services Negotiating Committee) on behalf of all the pharmacies in the UK signed a 5-year agreement with the National Health Service (NHS) that starts next spring and which calls for flat funding over the next five years. However, underlying that flat funding is a portion allocated toward pharmacy services. So, in order to ensure that WBA captures that funding and reimbursement Walgreens Boots Alliance 3

8 January 2020 for pharmacy services, WBA needs to free up more pharmacist time, which the investments in new pharmacy system will help enable, while also allowing the company to introduce new services. For example, in the UK, pharmacists will be able to prescribe medication in addition to dispensing it in certain cases. Finally, the other factor leading to the adjusted operating income decline related to SG&A. WBA is experiencing a period of abnormal inflationary pressures in some of its cost base in the UK. For example, living wages are increasing faster than anticipated. In addition, some rental expenses are going up, which is a phenomenon currently seen across the entire UK market. Question: You mentioned the bonus headwind impacted both International and the US – is the compensation structure the same for both regions or is one more bonus- driven than the other? Answer: There are differences between various markets given that WBA must remain competitive in local markets but it is essentially comparative. Walgreens and Boots are going to be compensated with the majority of the bonus based on operating income. It is fair to assume that the revenue/profit split is reflective of how much of the $350-400 mln bonus pool goes to one division vs. the other, given the size of the US operations vs. the UK. Question: On the Business Transformation Initiative – the $1.8 bln by 2022 – it sounds like you are generally on track if not ahead for 2020 contribution. Does that skew more to US/International/Wholesale or is it pro rata about the same as what you ultimately expect to achieve, and is there any place to highlight where the company is running ahead of or behind plan right now for this year? Answer: It will be more or less pro rata. The majority of the savings is going to come out of the US, with the second largest bucket out of the UK, but that does not mean WBA is not doing various different initiatives within some of the smaller markets in International and Wholesale. WBA highlighted a second wave of transformational work on Chile, Mexico, and Thailand this quarter. But it will basically be pro rata based on the size of the businesses. WBA is very confident it will achieve the $1.8 bln and continues to make substantial progress to date as well as in 1Q. The company has a very robust pipeline with visibility, and, as such, is very confident to meet or exceed the $1.8 bln. Given the soft start in 1Q, it is probably fair to assume that the company might accelerate a few actions this year against the cost transformation program to have some additional benefits relative to SG&A within the back half of the year to offset some of the softness in the beginning of the year, ultimately as the company indicated to maintain guidance. Question: Operating Cash Flow saw a significant boost Y/Y, up $600 mln to $1.1 bln. Was it Y/Y purely driven by the easy comp from having to make working capital investments and integration of Rite Aid stores last year? Was this Y/Y increase in line with your expectations? Answer: WBA has always focused on reducing working capital and this quarter specifically working capital improved by $1 bln which led to the Y/Y increase in free cash flow by over $600 mln. Working capital will always be a focus and is part of the Cost Transformation Program. The two key priorities are that WBA continues to focus on inventory across its different retail platforms, part of this through making investments in retail SAP, pilot stores in Gainesville, and reducing the number of SKUs in store to improve inventory management. Additionally, as part of the Cost Transformation Program, WBA is focused on extending payable days to be more reflective of industry standards. The company has begun working with some larger suppliers in getting more industry standard terms, helping extend payable days and ultimately helping working capital. WBA believes a business like theirs can generate roughly $5 bln in free cash flow in any given year. Question: It looks like share repurchase activity contributed ~4% to EPS growth (vs. 3.5% contribution assumed in full year guidance). Does the strong FCF in 1Q change your target for share repurchases for the year?

Walgreens Boots Alliance 4

8 January 2020

Answer: No, WBA still anticipates doing $1.75 bln of share repurchases this year as originally indicated. Also, the company does anti-dilutive purchases which occur in Q1. Together, those two activities are in WBA’s expectations for FY20. Retail Pharmacy USA Question: Adjusted scripts filled in comparable stores grew 2.8% Y/Y, a slowdown from the 3.3% in Q4. What drove the sequential step down in growth? Answer: There are a few items, including weakness in the government plans as well as timing. WBA indicated however that going into the back half of the year, the company believes it should see script comps around 3.5-4.5% given the timing element and also turning into the New Year. Additionally, WBA has a strong relationship with UnitedHealth, for example in the Medicare Part D space where UNH works with AARP. Walgreens believes it will see Part D script growth Y/Y in that book of business. Additionally, WBA launched a co-branded Medicare Advantage offering with UnitedHealth. The number of lives that have signed up for this MA plan have exceeded WBA’s expectations so far, and the company believes it will see some script volume from that enrollment as the year progresses. Further, WBA has announced a relationship with CNC, and the company believes it can see script volume from that as well, going into the back half of the year. Question: The company called out an 80 bps benefit to comparable sales from a strong cough, cold and flu season. Was this all scripts? Answer: It was not scripts – that 80 bps is on the front end; it is all OTC-driven. The company did have a good flu immunization year (up Y/Y) which was embedded in 1Q results on the Pharmacy side, but the 80 bps cited was on the front end, impacting OTC sales. Question: Retail Pharmacy USA sales grew 1.6% Y/Y, with Pharmacy sales growing 2.9% Y/Y and Front End sales declining 2.7%. The store optimization program had a 50 bps negative impact to growth. How does this 50 bps break out between pharmacy and front end sales? Answer: The loss of business is more skewed toward the front end. The front end is a convenience driven model for the most part (outside of beauty), so you lose the majority of that business when you transfer someone over to a different location because it is not necessarily convenient for them. Shifting to the pharmacy side, WBA might retain a lot more of that business in shifting/transferring a prescription to another Walgreens location. However, revenue generated from the pharmacy business is a lot higher than the front of the store. So even though you may lose more front store business in terms of volume, and you lose less volume from the pharmacy and retain a lot more, the impact still from a sales perspective can be more skewed toward pharmacy. Question: For pharmacy, adjusted gross profit declined mid-single digit as the impact of procurement savings and script growth were more than offset by reimbursement pressure. Our understanding is that gross margin for pharmacy has been in the high- teens, is that still the case? Answer: Yes, that is still an accurate assumption. Retail Pharmacy International Question: Retail Pharmacy International sales declined 2.7% on a constant currency basis, due to Boots UK and lower sales in Chile, reflecting social unrest. Can you talk a bit about your Chile operations? Did this have much impact on operating profit which was down 40% Y/Y? Answer: The decline was driven primarily by Boots UK. Chile has an impact but it is a smaller market in general. In Chile, there was a significant impact from the disruption there, both on sales and profitability, but it is a relatively small market (~300 stores vs. 2,500 in the UK). The issues in Chile are continuing today; there was significant disruption in 1Q from store closures and a reduction in store hours. Right now some stores have reopened but still at reduced hours. Walgreens Boots Alliance 5

8 January 2020

Additionally, WBA had some stores damaged that will be closed down for an extended period of time. Question: I believe you have closed 28 of the 200 expected Boots UK locations. If I recall properly, many of these 200 stores were loss making and approximately 2/3 of them are within walking distance to another Boots store. Within the 200 stores, is the impact to revenue and profitability tracking WBA’s expectations? Answer: It is still playing out as the company thought. WBA has previously indicated it expects that the store closings represent 8% of revenue and 1% of profitability and that is still the expectation going forward. Pharmaceutical Wholesale Question: Pharmaceutical Wholesale had strong sales and Y/Y operating income growth in the quarter at 8.3% and 4.9%, respectively, on a constant currency basis. What drove this performance and how did this compare to your expectations? Does the company continue to expect mid-to-high single digit revenue growth with steady margins in this segment? Answer: WBA highlighted that the company won a direct manufacturing contract prior and started to lap that. WBA still saw some sales growth from that in 1Q. Additionally, the majority of the business and markets in wholesale continue to grow. The mature markets are growing low-single digits, and WBA sees some growth in the emerging markets. WBA also looks to hold operating margins flat which leads to modest growth of adjusted operating income Y/Y. Enterprise

Question: I understand that you achieved 15% of your expected 2020 full year savings on the Business Transformation Initiative in Q1 and you expect to double that run rate as you exit the year. How should we think about the ramp throughout 2020? Can you size the impact this program had on SG&A in the quarter? I understand that you said inflation and volume impacts are about $400 mln, bonuses are $300 mln and incremental investments are $100-150 mln. Are these costs evenly spread throughout the year? Answer: The overwhelming majority is going to be SG&A. As for 2020 expectations, WBA may pull certain things forward to make up for the soft start to the year. The 15% will start to build over time into the back half of the year. It is probably fair to assume the 15% might go to 20% or 25%, with a compounding benefit. Every quarter that goes by, more savings start to hit the P&L in the SG&A line and by 4Q there is the 100% impact for the year. 2020 Outlook Question: Your Q2 outlook assumes an expected EPS headwind of 13% from reimbursement pressure (7%) and bonus payments (6%), which were budgeted in full year guidance. If I recall properly, 2Q19 saw 37% of the annual reimbursement pressure. How does that compare Y/Y? Answer: Regarding the timing of reimbursement pressure, it is pure timing of contract true up. Traditional PBM contracts go through a true-up process starting January 1, so PBMs send information and WBA’s team reviews that information, and has conversations with the PBMs which take a couple months (end of February into March) – that is when a true up may be seen. This is what WBA saw last year with some smaller PBMs renting some larger PBM networks which created a lower reimbursement rate for WBA, which was trued up last year. This year, when WBA says of the 13% headwind in Q2, 7% is the timing of reimbursement, contract true- ups that were budgeted for in 2020 happened sooner than anticipated (i.e. WBA anticipated it happening in the back half of the year, but it is happening in Q2 instead). As such, WBA indicated that Q2 will have more pressure, purely from timing. The company emphasized that reimbursement pressure in 1Q and all of 2020 is in line with prior company expectations, though with a phasing driven by the timing of one PBM contract true-up. Walgreens Boots Alliance 6

8 January 2020

Question: WBA has previously discussed the company’s expectations for seasonality for the year. Given that we have seen an elevated flu season and your comments around the 13% headwind in Q2, is this framework still the right way to think about things? Answer: 2Q usually drives more sales from a dollar perspective and is usually the strongest quarter for two reasons: holidays (gift-giving) and depending on what happens in the cold/cough/flu season, the stronger the flu season the stronger sales are for OTC. Given the severity already seen this flu season, if this continues, it would be a positive for front end sales in the US, as well as for Boots. As Beauty is a significant part of Boots’ business, the holiday period is very important and WBA derives a significant amount of sales in 2Q. Further, a stronger flu season would help Boots’ OTC business as well. Question: In 2Q19, WBA essentially removed all bonuses and while 1Q19 was a little below plan, it was enough for the company to accrue bonus expense. In 2Q19, WBA reduced its outlook and reversed the accrual in Q1. I believe you previously said to assume a little headwind in Q1, the greatest headwind in Q2, and normalized in Q3 and Q4 as bonus provision is accrued roughly 25% per quarter. Answer: That is the right way to think about it. Last year, WBA had an accrual in 1Q19 of less than 100%. In 2Q, WBA, had the guide down and reversed out the 1Q accrual (SG&A positive). In 3Q and 4Q, there were minimal accruals because certain markets (particularly wholesale) did get a bonus but the largest divisions (Walgreens and Alliance Boots) as well as WBA corporate did not get bonuses. Going into 2020, bonus expectations from a Y/Y headwind are expected at $350-400 mln of additional expenses. Heading into the year WBA accrues that on a straight-line basis and it is fair to assume that in 1Q it was relatively close to a 100% accrual. Question: WBA had an effective tax rate of 9.8% in the quarter. What drove the reduction in tax rate compared to 16.2% in 1Q19? Does the company still expect a 17% tax rate for 2020? Answer: The 9.8% in 1Q as compared to WBA’s expectation coming into the year of 17% is from discrete items, namely items based on sale-leaseback activity. The sale-leaseback activity generated positive cash flow for the company and also triggered a favorable tax event. Going forward from Q2 to Q4, WBA expects the effective tax rate to be closer to what the company indicated in guidance previously (~17%). For the full year from a tax headwind perspective, WBA had previously indicated a 2% tax headwind to adjusted EPS. That 2% is probably slightly less now given where 1Q ended up, with 2Q-4Q going back toward the 17% tax rate. Question: Given that the 2% headwind will now be less, and WBA has referenced a 6.5% impact from bonus payments, 3.5% from share repurchase, and 5% from operational performance, which of those is altered to maintain an overall flat outlook? Answer: It is probably fair to assume that some of the underlying performance (the 5%), given the soft start to the year, will come down slightly. WBA is still confident in achieving back-half expectations with some additional cost savings, but it is fair to assume a slight headwind/less of a tailwind given the soft start to the year. Question: In your full year 2020 EPS outlook of +/-3% growth, do you this still assume a $0.05 adverse assumption for FX? Answer: FX has shifted from a headwind to a $0.02 tailwind based on current market rates. The flat guidance with +/-3% is on a constant-currency basis, so from $5.99 with the $0.02 tailwind implies $6.01 +/-3%. Miscellaneous Question: WBA recently announced plans with United to open 14 UHC Medicare service centers within Walgreens in five metro areas – is this similar to what WBA is doing with HUM with Partners in Primary Care?

Walgreens Boots Alliance 7

8 January 2020

Answer: WBA has a several different relationships with United. The 14 patient service centers are a bit different than a primary care offering; there are two different components to it. The UHC representative will be within the Walgreens store and have space allocated where they can educate and help patients with questions on various UNH government plans. Also within those 14 locations UNH offers, through Optum, a homecare visit program where some patients can get a nurse practitioner to come to their home for various difference services. Alternatively, if a patient does not want a home visit they can leverage these 14 centers to do the visits there instead of the patient’s home. Separately, WBA is also piloting with Southwest Medical in the Nevada market a primary care offering within Walgreens as well. Question: Do you believe having multiple primary care partners is an issue for your co-parties or for customers? What are the pros and cons? Answer: It creates an opportunity for WBA, as the company is looking to create in local communities a healthcare offering and to be a provider of choice where patients work and live. There might not be one national partner, especially when thinking about primary care offerings, to do that with. Instead it will probably be a couple different partners. Question: Could you provide some color on what WBA is doing in Medicaid with RxAdvance and Centene? Answer: WBA signed a collaboration with Centene which gives the company the ability gain more of their book of business and also expand their Medicaid lives under coverage. WBA was also given the opportunity to take a small equity stake in RxAdvance, and WBA looks to share in some of the upside benefit in the business as a result. Question: What is the opportunity WBA sees from the GPO formed with Kroger? Answer: The GPO utilizes Kroger’s scale and WBA’s sourcing abilities and combines the two to leverage both companies’ strengths to achieve better efficiencies as well as better pricing and benefits. This began in December and WBA expects to see some benefits ramp up in the back half of the year. Question: Similar, any additional color on the opportunity in Germany with McKesson? Answer: The German market is one of the largest wholesaling markets in Europe. It is a competitive market and has been for multiple years. This is a deal where WBA and McKesson came together looking at how to make sure the two businesses continue to grow, and created a JV to become more efficient (WBA has a 70% ownership in the JV). WBA believes the combined entity is positioned well in the market to continue to grow into the future and believes it will be accretive in the mid-term post the local customary closing positions being met. Question: Any comments that WBA could provide on recent opioid litigation news? Answer: WBA still believes there is a reason the company is not part of the potential proposed settlement and the multi-district litigation. While WBA is named in some lawsuits, the company believes it has a fundamentally different business model than traditional for-profit wholesalers. Pre-2013 WBA was self-distributing generic drugs to its own pharmacies and was not financially incentivized from a wholesale perspective to have additional inventory in the system. WBA was essentially just running supply chain logistics for prescriptions that had been written by a licensed doctor and dispensing from pharmacies. WBA pharmacists are trained to practice with two different components when dispensing a prescription: 1) verify the patient-prescriber relationship, and 2) in their professional opinion make sure they believe the patient is fit to have that prescription. Question: Are there any other particular topics that WBA would like to highlight? Answer: While there was soft script volume in 1Q, WBA believes it has clear line of sight to get that back in the back half of the year. Additionally, the reimbursement pressure is essentially in line with what WBA planned for coming into the year, which is why WBA is comfortable maintaining guidance.

Walgreens Boots Alliance 8

8 January 2020 20208January

Companies Mentioned (Price as of 07-Jan-2020) Anthem, Inc. (ANTM.N, $299.54) CVS Health (CVS.N, $73.58) Centene Corporation (CNC.N, $63.03) Humana Inc. (HUM.N, $366.87) McKesson (MCK.N, $137.85) The Kroger Co. (KR.N, $28.59) UnitedHealth Group Inc. (UNH.N, $289.79) Walgreens Boots Alliance (WBA.OQ, $59.29, NEUTRAL, TP $60.0) WellCare Health Plans, Inc. (WCG.N, $331.27)

Disclosure Appendix Analyst Certification I, A.J. Rice, certify that (1) the views expressed in this report accurately reflect my personal views about all of the subject companies and securities and (2) no part of my compensation was, is or will be directly or indirectly related to the specific recommendations or views expressed in this report.

3-Year Price and Rating History for Walgreens Boots Alliance (WBA.OQ)

WBA.OQ Closing Price Target Price Date (US$) (US$) Rating 19-Jan-17 83.49 97.00 O 12-Jul-17 77.52 97.00 * 20-Dec-18 69.61 95.00 04-Jan-19 69.57 85.00 11-Mar-19 60.68 79.00 02-Apr-19 55.36 70.00 28-Jun-19 54.67 60.00 N * * Asterisk signifies initiation or assumption of coverage.

OUTPERFORM NEUTRAL

As of December 10, 2012 Analysts’ stock rating are defined as follows: Outperform (O) : The stock’s total return is expected to outperform the relevant benchmark* over the next 12 months. Neutral (N) : The stock’s total return is expected to be in line with the relevant benchmark* over the next 12 months. Underperform (U) : The stock’s total return is expected to underperform the relevant benchmark* over the next 12 months. *Relevant benchmark by region: As of 10th December 2012, Japanese ratings are based on a stock’s total return relative to the analyst's coverage universe which consists of all companies covered by the analyst within the relevant sector, with Outperforms representing the most attractive, Neutrals the less attractive, and Underperforms the least attractive investment opportunities. As of 2nd October 2012, U.S. and Canadian as well as Europea n (excluding Turkey) ratings are based on a stock’s total return relative to the analyst's coverage universe which consists of all companies covered by the analyst within the relevant sector, with Outperforms representing the most attractive, Neutrals the less attractive, and Underperforms the least attractive investment opportunities. For Latin America, Turkey and Asia (excluding Japan and Australia), stock ratings are based on a stock’s total return relative to the average to tal return of the relevant country or regional benchmark (India - S&P BSE Sensex Index); prior to 2nd October 2012 U.S. and Canadian ratings were based on (1) a stock’s absolute total return potential to its current share price and (2) the relative attractiveness of a stock’s total return potential within an analys t’s coverage universe. For Australian and New Zealand stocks, the expected total return (ETR) calculation includes 12-month rolling dividend yield. An Outperform rating is assigned where an ETR is greater than or equal to 7.5%; Underperform where an ETR less than or equal to 5%. A Neutral may be assigned where th e ETR is between -5% and 15%. The overlapping rating range allows analysts to assign a rating that puts ETR in the context of associated risks. Prior to 18 May 2015, ETR ranges for Outperform and Underperform ratings did not overlap with Neutral thresholds between 15% and 7.5%, which was in operation from 7 July 2011. Restricted (R) : In certain circumstances, Credit Suisse policy and/or applicable law and regulations preclude certain types of communications, including an investment recommendation, during the course of Credit Suisse's engagement in an investment banking transaction and in certain other circumstances. Not Rated (NR) : Credit Suisse Equity Research does not have an investment rating or view on the stock or any other securities related to the company at this time. Not Covered (NC) : Credit Suisse Equity Research does not provide ongoing coverage of the company or offer an investment rating or investment view on the equity security of the company or related products. Volatility Indicator [V] : A stock is defined as volatile if the stock price has moved up or down by 20% or more in a month in at least 8 of the past 24 months or the analyst expects significant volatility going forward. Analysts’ sector weightings are distinct from analysts’ stock ratings and are based on the analyst’s expectations for the fundamentals and/or valuation of the sector* relative to the group’s historic fundamentals and/or valuation: Overweight : The analyst’s expectation for the sector’s fundamentals and/or valuation is favorable over the next 12 months. Market Weight : The analyst’s expectation for the sector’s fundamentals and/or valuation is neutral over the next 12 months. Underweight : The analyst’s expectation for the sector’s fundamentals and/or valuation is cautious over the next 12 months. *An analyst’s coverage sector consists of all companies covered by the analyst within the relevant sector. An analyst may cov er multiple sectors.

Walgreens Boots Alliance 9

8 January 2020 20208January

Credit Suisse's distribution of stock ratings (and banking clients) is:

Global Ratings Distribution Rating Versus universe (%) Of which banking clients (%) Outperform/Buy* 48% (31% banking clients) Neutral/Hold* 38% (25% banking clients) Underperform/Sell* 13% (22% banking clients) Restricted 2% *For purposes of the NYSE and FINRA ratings distribution disclosure requirements, our stock ratings of Outperform, Neutral, and Underperform most closely correspond to Buy, Hold, and Sell, respectively; however, the meanings are not the same, as our stock ratings are determined on a relative basis. (Please refer to definitions above.) An investor's decision to buy or sell a security should be based on investment objectives, current holdin gs, and other individual factors. Important Global Disclosures Credit Suisse’s research reports are made available to clients through our proprietary research portal on CS PLUS. Credit Suisse research products may also be made available through third-party vendors or alternate electronic means as a convenience. Certain research products are only made available through CS PLUS. The services provided by Credit Suisse’s analysts to clients may depend on a specific client’s preferences regarding the frequency and manner of receiving communications, the client’s risk profile and investment, the size and scope of the overall client relationship with the Firm, as well as legal and regulatory constraints. To access all of Credit Suisse’s research that you are entitled to receive in the most timely manner, please contact your sales representative or go to https://plus.credit-suisse.com . Credit Suisse’s policy is to update research reports as it deems appropriate, based on developments with the subject company, the sector or the market that may have a material impact on the research views or opinions stated herein. Credit Suisse's policy is only to publish investment research that is impartial, independent, clear, fair and not misleading. For more detail please refer to Credit Suisse's Policies for Managing Conflicts of Interest in connection with Investment Research: https://www.credit- suisse.com/sites/disclaimers-ib/en/managing-conflicts.html . Any information relating to the tax status of financial instruments discussed herein is not intended to provide tax advice or to be used by anyone to provide tax advice. Investors are urged to seek tax advice based on their particular circumstances from an independent tax professional. Credit Suisse has decided not to enter into business relationships with companies that Credit Suisse has determined to be involved in the development, manufacture, or acquisition of anti-personnel mines and cluster munitions. For Credit Suisse's position on the issue, please see The analyst(s) responsible for preparing this research report received compensation that is based upon various factors including Credit Suisse's total revenues, a portion of which are generated by Credit Suisse's investment banking activities

Target Price and Rating Valuation Methodology and Risks: (12 months) for Walgreens Boots Alliance (WBA.OQ) Method: Our $60 target price for Walgreens Boots Alliance embeds a roughly 10x multiple on CY20 EPS. We rate WBA Neutral as we are looking for clear indications that visibility on earnings growth is improving before considering raising our investment rating.

Risk: Risks to our $60 target price and Neutral rating includes reduced tailwinds to offset reimbursement pressure, lower generic deflation, and lower brand inflation. WBA may face pressure in an evolving competitive landscape and if the pricing environment becomes more competitive. Additionally, profitability may be diluted more than we expect by new payor relationships intended to drive volume.

Please refer to the firm's disclosure website at https://rave.credit-suisse.com/disclosures/view/selectArchive for the definitions of abbreviations typically used in the target price method and risk sections. See the Companies Mentioned section for full company names Credit Suisse currently has, or had within the past 12 months, the following as investment banking client(s): WBA.OQ, CVS.N, ANTM.N, UNH.N Credit Suisse provided investment banking services to the subject company (WBA.OQ, CVS.N, ANTM.N, UNH.N) within the past 12 months. Within the last 12 months, Credit Suisse has received compensation for non-investment banking services or products from the following issuer(s): CVS.N, ANTM.N, UNH.N Credit Suisse has managed or co-managed a public offering of securities for the subject company (CVS.N, UNH.N) within the past 12 months. Within the past 12 months, Credit Suisse has received compensation for investment banking services from the following issuer(s): WBA.OQ, CVS.N, ANTM.N, UNH.N Credit Suisse expects to receive or intends to seek investment banking related compensation from the subject company (WBA.OQ, WCG.N, CVS.N, ANTM.N, UNH.N, KR.N) within the next 3 months. Credit Suisse currently has, or had within the past 12 months, the following issuer(s) as client(s), and the services provided were non- investment-banking, securities-related: CVS.N, ANTM.N, UNH.N Credit Suisse currently has, or had within the past 12 months, the following issuer(s) as client(s), and the services provided were non- investment-banking, non securities-related: UNH.N Credit Suisse or a member of the Credit Suisse Group is a market maker or liquidity provider in the securities of the following subject issuer(s): ANTM.N, CVS.N, CNC.N, HUM.N, MCK.N, KR.N, UNH.N, WBA.OQ, WCG.N A member of the Credit Suisse Group is party to an agreement with, or may have provided services set out in sections A and B of Annex I of Directive 2014/65/EU of the European Parliament and Council ("MiFID Services") to, the subject issuer (WBA.OQ, CVS.N, ANTM.N, UNH.N) within the past 12 months.

Walgreens Boots Alliance 10

8 January 2020 20208January As of the date of this report, Credit Suisse beneficially own 1% or more of a class of common equity securities of (WCG.N). For date and time of production, dissemination and history of recommendation for the subject company(ies) featured in this report, disseminated within the past 12 months, please refer to the link: https://rave.credit-suisse.com/disclosures/view/report?i=481848&v=-

139itt9wh6gu3hc8bwep9etzh .

Important Regional Disclosures Singapore recipients should contact Credit Suisse AG, Singapore Branch for any matters arising from this research report. The analyst(s) involved in the preparation of this report may participate in events hosted by the subject company, including site visits. Credit Suisse does not accept or permit analysts to accept payment or reimbursement for travel expenses associated with these events. For Credit Suisse Securities (Canada), Inc.'s policies and procedures regarding the dissemination of equity research, please visit https://www.credit-suisse.com/sites/disclaimers-ib/en/canada-research-policy.html. Investors should note that income from such securities and other financial instruments, if any, may fluctuate and that price or value of such securities and instruments may rise or fall and, in some cases, investors may lose their entire principal investment. This research report is authored by: Credit Suisse Securities (USA) LLC ...... A.J. Rice ; Eduardo Ron ; Caleb Harris, CPA ; Alexander Khan Important disclosures regarding companies that are the subject of this report are available by calling +1 (877) 291-2683. The same important disclosures, with the exception of valuation methodology and risk discussions, are also available on Credit Suisse’s disclosure website at https://rave.credit-suisse.com/disclosures . For valuation methodology and risks associated with any recommendation, price target, or rating referenced in this report, please refer to the disclosures section of the most recent report regarding the subject company.

Walgreens Boots Alliance 11

8 January 2020

This report is produced by subsidiaries and affiliates of Credit Suisse operating under its Global Markets Division. For more information on our structure, please use the following link: https://www.credit-suisse.com/who-we-are This report may contain material that is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation or which would subject Credit Suisse or its affiliates ("CS") to any registration or licensing requirement within such jurisdiction. All material presented in this report, unless specifically indicated otherwise, is under copyright to CS. None of the material, nor its content, nor any copy of it, may be altered in any way, transmitted to, copied or distributed to any other party, without the prior express written permission of CS. All trademarks, service marks and logos used in this report are trademarks or service marks or registered trademarks or service marks of CS or its affiliates.The information, tools and material presented in this report are provided to you for information purposes only and are not to be used or considered as an offer or the solicitation of an offer to sell or to buy or subscribe for securities or other financial instruments. CS may not have taken any steps to ensure that the securities referred to in this report are suitable for any particular investor. CS will not treat recipients of this report as its customers by virtue of their receiving this report. The investments and services contained or referred to in this report may not be suitable for you and it is recommended that you consult an independent investment advisor if you are in doubt about such investments or investment services. Nothing in this report constitutes investment, legal, accounting or tax advice, or a representation that any investment or strategy is suitable or appropriate to your individual circumstances, or otherwise constitutes a personal recommendation to you. Please note in particular that the bases and levels of taxation may change. Information and opinions presented in this report have been obtained or derived from sources believed by CS to be reliable, but CS makes no representation as to their accuracy or completeness. CS accepts no liability for loss arising from the use of the material presented in this report, except that this exclusion of liability does not apply to the extent that such liability arises under specific statutes or regulations applicable to CS. This report is not to be relied upon in substitution for the exercise of independent judgment. CS may have issued, and may in the future issue, other communications that are inconsistent with, and reach different conclusions from, the information presented in this report. Those communications reflect the different assumptions, views and analytical methods of the analysts who prepared them and CS is under no obligation to ensure that such other communications are brought to the attention of any recipient of this report. Some investments referred to in this report will be offered solely by a single entity and in the case of some investments solely by CS, or an associate of CS or CS may be the only market maker in such investments. Past performance should not be taken as an indication or guarantee of future performance, and no representation or warranty, express or implied, is made regarding future performance. Information, opinions and estimates contained in this report reflect a judgment at its original date of publication by CS and are subject to change without notice. The price, value of and income from any of the securities or financial instruments mentioned in this report can fall as well as rise. The value of securities and financial instruments is subject to exchange rate fluctuation that may have a positive or adverse effect on the price or income of such securities or financial instruments. Investors in securities such as ADR's, the values of which are influenced by currency volatility, effectively assume this risk. Structured securities are complex instruments, typically involve a high degree of risk and are intended for sale only to sophisticated investors who are capable of understanding and assuming the risks involved. The market value of any structured security may be affected by changes in economic, financial and political factors (including, but not limited to, spot and forward interest and exchange rates), time to maturity, market conditions and volatility, and the credit quality of any issuer or reference issuer. Any investor interested in purchasing a structured product should conduct their own investigation and analysis of the product and consult with their own professional advisers as to the risks involved in making such a purchase. Some investments discussed in this report may have a high level of volatility. High volatility investments may experience sudden and large falls in their value causing losses when that investment is realised. Those losses may equal your original investment. Indeed, in the case of some investments the potential losses may exceed the amount of initial investment and, in such circumstances, you may be required to pay more money to support those losses. Income yields from investments may fluctuate and, in consequence, initial capital paid to make the investment may be used as part of that income yield. Some investments may not be readily realisable and it may be difficult to sell or realise those investments, similarly it may prove difficult for you to obtain reliable information about the value, or risks, to which such an investment is exposed. This report may provide the addresses of, or contain hyperlinks to, websites. Except to the extent to which the report refers to website material of CS, CS has not reviewed any such site and takes no responsibility for the content contained therein. Such address or hyperlink (including addresses or hyperlinks to CS's own website material) is provided solely for your convenience and information and the content of any such website does not in any way form part of this document. Accessing such website or following such link through this report or CS's website shall be at your own risk. This report is issued and distributed in European Union (except Switzerland): by Credit Suisse Securities (Europe) Limited, One Cabot Square, London E14 4QJ, England, which is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Germany: Credit Suisse (Deutschland) Aktiengesellschaft regulated by the Bundesanstalt fuer Finanzdienstleistungsaufsicht ("BaFin"). United States and Canada: Credit Suisse Securities (USA) LLC; Switzerland: Credit Suisse AG; Brazil: Banco de Investimentos Credit Suisse (Brasil) S.A or its affiliates; Mexico: Banco Credit Suisse (México), S.A., Institución de Banca Múltiple, Grupo Financiero Credit Suisse (México) and Casa de Bolsa Credit Suisse (México), S.A. de C.V., Grupo Financiero Credit Suisse (México) ("Credit Suisse Mexico"). This document has been prepared for information purposes only and is exclusively distributed in Mexico to Institutional Investors. Credit Suisse Mexico is not responsible for any onward distribution of this report to non-institutional investors by any third party. The authors of this report have not received payment or compensation from any entity or company other than from the relevant Credit Suisse Group company employing them; Japan: by Credit Suisse Securities (Japan) Limited, Financial Instruments Firm, Director-General of Kanto Local Finance Bureau ( Kinsho) No. 66, a member of Japan Securities Dealers Association, The Financial Futures Association of Japan, Japan Investment Advisers Association, Type II Financial Instruments Firms Association; Hong Kong: Credit Suisse (Hong Kong) Limited; Australia: Credit Suisse Equities (Australia) Limited; Thailand: Credit Suisse Securities (Thailand) Limited, regulated by the Office of the Securities and Exchange Commission, Thailand, having registered address at 990 Abdulrahim Place, 27th Floor, Unit 2701, Rama IV Road, Silom, Bangrak, Bangkok10500, Thailand, Tel. +66 2614 6000; Malaysia: Credit Suisse Securities (Malaysia) Sdn Bhd; Singapore: Credit Suisse AG, Singapore Branch; India: Credit Suisse Securities (India) Private Limited (CIN no.U67120MH1996PTC104392) regulated by the Securities and Exchange Board of India as Research Analyst (registration no. INH 000001030) and as Stock Broker (registration no. INZ000248233), having registered address at 9th Floor, Ceejay House, Dr.A.B. Road, Worli, Mumbai - 18, India, T- +91-22 6777 3777; South Korea: Credit Suisse Securities (Europe) Limited, Seoul Branch; Taiwan: Credit Suisse AG Taipei Securities Branch; Indonesia: PT Credit Suisse Sekuritas Indonesia; Philippines:Credit Suisse Securities (Philippines ) Inc., and elsewhere in the world by the relevant authorised affiliate of the above. Additional Regional Disclaimers Australia: Credit Suisse Securities (Europe) Limited ("CSSEL") and Credit Suisse International ("CSI") are authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority ("FCA") and the Prudential Regulation Authority under UK laws, which differ from Australian Laws. CSSEL and CSI do not hold an Australian Financial Services Licence ("AFSL") and are exempt from the requirement to hold an AFSL under the Corporations Act (Cth) 2001 ("Corporations Act") in respect of the financial services provided to Australian wholesale clients (within the meaning of section 761G of the Corporations Act) (hereinafter referred to as “Financial Services”). This material is not for distribution to retail clients and is directed exclusively at Credit Suisse's professional clients and eligible counterparties as defined by the FCA, and wholesale clients as defined under section 761G of the Corporations Act. Credit Suisse (Hong Kong) Limited ("CSHK") is licensed and regulated by the Securities and Futures Commission of Hong Kong under the laws of Hong Kong, which differ from Australian laws. CSHKL does not hold an AFSL and is exempt from the requirement to hold an AFSL under the Corporations Act in respect of providing Financial Services. Investment banking services in the United States are provided by Credit Suisse Securities (USA) LLC, an affiliate of Credit Suisse Group. CSSU is regulated by the United States Securities and Exchange Commission under United States laws, which differ from Australian laws. CSSU does not hold an AFSL and is exempt from the requirement to hold an AFSL under the Corporations Act in respect of providing Financial Services. Credit Suisse Asset Management LLC (CSAM) is authorised by the Securities and Exchange Commission under US laws, which differ from Australian laws. CSAM does not hold an AFSL and is exempt from the requirement to hold an AFSL under the Corporations Act in respect of providing Financial Services. This material is provided solely to Institutional Accounts (as defined in the FINRA rules) who are Eligible Contract Participants (as defined in the US Commodity Exchange Act). Credit Suisse Equities (Australia) Limited (ABN 35 068 232 708) ("CSEAL") is an AFSL holder in Australia (AFSL 237237). Malaysia: Research provided to residents of Malaysia is authorised by the Head of Research for Credit Suisse Securities (Malaysia) Sdn Bhd, to whom they should direct any queries on +603 2723 2020. Singapore: This report has been prepared and issued for distribution in Singapore to institutional investors, accredited investors and expert investors (each as defined under the Financial Advisers Regulations) only, and is also distributed by Credit Suisse AG, Singapore Branch to overseas investors (as defined under the Financial Advisers Regulations). Credit Suisse AG, Singapore Branch may distribute reports produced by its foreign entities or affiliates pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Singapore recipients should contact Credit Suisse AG, Singapore Branch at +65-6212-2000 for matters arising from, or in connection with, this report. By virtue of your status as an institutional investor, accredited investor, expert investor or overseas investor, Credit Suisse AG, Singapore Branch is exempted from complying with certain compliance requirements under the Financial Advisers Act, Chapter 110 of Singapore (the “FAA”), the Financial Advisers Regulations and the relevant Notices and Guidelines issued thereunder, in respect of any financial advisory service which Credit Suisse AG, Singapore Branch may provide to you. EU: This report has been produced by subsidiaries and affiliates of Credit Suisse operating under its Global Markets Division In jurisdictions where CS is not already registered or licensed to trade in securities, transactions will only be effected in accordance with applicable securities legislation, which will vary from jurisdiction to jurisdiction and may require that the trade be made in accordance with applicable exemptions from registration or licensing requirements. This material is issued and distributed in the U.S. by CSSU, a member of NYSE, FINRA, SIPC and the NFA, and CSSU accepts responsibility for its contents. Clients should contact analysts and execute transactions through a Credit Suisse subsidiary or affiliate in their home jurisdiction unless governing law permits otherwise. Please note that this research was originally prepared and issued by CS for distribution to their market professional and institutional investor customers. Recipients who are not market professional or institutional investor customers of CS should seek the advice of their independent financial advisor prior to taking any investment decision based on this report or for any necessary explanation of its contents. CS may provide various services to US municipal entities or obligated persons ("municipalities"), including suggesting individual transactions or trades and entering into such transactions. Any services CS provides to municipalities are not viewed as "advice" within the meaning of Section 975 of the Dodd-Frank Wall Street Reform and Consumer Protection Act. CS is providing any such services and related information solely on an arm's length basis and not as an advisor or fiduciary to the municipality. In connection with the provision of the any such services, there is no agreement, direct or indirect, between any municipality (including the officials,management, employees or agents thereof) and CS for CS to provide advice to the municipality. Municipalities should consult with their financial, accounting and legal advisors regarding any such services provided by CS. In addition, CS is not acting for direct or indirect compensation to solicit the municipality on behalf of an unaffiliated broker, dealer, municipal securities dealer, municipal advisor, or investment adviser for the purpose of obtaining or retaining an engagement by the municipality for or in connection with Municipal Financial Products, the issuance of municipal securities, or of an investment adviser to provide investment advisory services to or on behalf of the municipality. If this report is being distributed by a financial institution other than Credit Suisse AG, or its affiliates, that financial institution is solely responsible for distribution. Clients of that institution should contact that institution to effect a transaction in the securities mentioned in this report or require further information. This report does not constitute investment advice by Credit Suisse to the clients of the distributing financial institution, and neither Credit Suisse AG, its affiliates, and their respective officers, directors and employees accept any liability whatsoever for any direct or consequential loss arising from their use of this report or its content. No information or communication provided herein or otherwise is intended to be, or should be construed as, a recommendation within the meaning of the US Department of Labor’s final regulation defining "investment advice" for purposes of the Employee Retirement Income Security Act of 1974, as amended and Section 4975 of the Internal Revenue Code of 1986, as amended, and the information provided herein is intended to be general information, and should not be construed as, providing investment advice (impartial or otherwise). Copyright © 2020 CREDIT SUISSE AG and/or its affiliates. All rights reserved. When you purchase non-listed Japanese fixed income securities (Japanese government bonds, Japanese municipal bonds, Japanese government guaranteed bonds, Japanese corporate bonds) from CS as a seller, you will be requested to pay the purchase price only.

Walgreens Boots Alliance 12