Walgreens Boots Alliance NASDAQ: WBA Presented by Zhi Cheng (Nicole) Low Yanan (Phoebe) Tan Zulay Sosa Bazante Rahul Gohil Shruti Shah Presented on March 8, 2016

Client Logo 2 Agenda Business Overview Microeconomic Overview Industry Overview Technical Analysis Financial Analysis Financial Projections Valuation Recommendation

Client Logo 3 Current Holdings Purchased 1000 October 6, 1999 Sold September 20, 2006 Sold November 22, 2013 Bought 100 November 13, 2015 Current Position: 400 Shares Cost Basis: Today

Client Logo 4 Global leader in pharmacy-led, health and wellbeing retail Over 13,100 stores in 11 countries One of the largest global pharmaceutical wholesale and distribution networks One of the world’s largest purchasers of prescription drugs, other health and wellbeing products Products No7 (UK’s leading skincare brand, available only at Boots in the UK and at Walgreens, Duane Reade and other select retailers in the USA) Almus (our range of high quality generic medicines) Boots Pharmaceuticals (a wide range of healthcare products) Liz Earle (our premium skincare range) Botanics, Soap & Glory Source: Business Overview

Client Logo 5 Retail Pharmacy USA Retail Pharmacy USA (8,173 drugstores in 50 states) Principal retail pharmacy brands are Walgreens and Duane Reade As of August 2015, approximately 76% of the population of the USA lives within five miles of a Walgreens or Duane Reade Prescription drugs account for 66 % of net sales Retail products are 34 % of net sales Retail Pharmacy International Retail Pharmacy International (4,582 retail stores in 8 countries) Market leader in Europe Boots is the principal retail brand Pharmaceutical Wholesale Pharmaceutical Wholesale Mainly operates under the Alliance Healthcare brand Includes membership of Alphega Pharmacy, our pan-European network for independent pharmacies Business Overview Source:

Client Logo 6 Retail Pharmacy USA – Pharmacy Retail Pharmacy USA – Pharmacy Gross margin pressure in line with expectations Ability to grow pharmacy over time Continued transformation Reduction of unprofitable promotions Transitioned seasonal to higher quality gift Increasing focus on health and beauty Expanding differentiated beauty offering - To approximately 2,000 stores Retail Pharmacy International Retail Pharmacy International Sleek MakeUP brand acquired in November Business Overview Source:

Client Logo 7 Acquisition of Rite-Aid Acquisition of Rite-Aid Rite Aid Corp. stockholders have approved the deal WBA is offering $9 per share cash ($17.2 billion deal) Federal Trade Commission, reviewing the proposed merger for antitrust issues Rite Aid's 4,600 stores in 31 states Closing of 1,000 stores if approved by regulators Synergies & cost savings Synergies & cost savings On track to deliver at least $1 billion per annum by end of FY16 On track to deliver $1.5 billion cost savings goal by end of FY17 Source: WBA Annual 10k 2015 Business Overview

Client Logo 8 Business Overview Strengths -Strong brand recognition -Strong distribution network -Diversified customer base Weakness -High marginal pressure on profits due to many players in industry Increased competition from direct & indirect competitors Opportunities -Aging population -Acquisitions -Growing market for prescription drugs Threats -Saturating market due high number of stores -Strict regulations SWOT

Client Logo 9 Porter’s Five Forces Analysis Industry Rivalry (High) Threat from New Entrants (Moderate) Buyer’s Bargaining Power (Moderate) Threat of Substitutes (High) Supplier’s Bargaining Power (Moderate) Industry Rivalry (High) -Multiple competitors -Undifferentiated products Threat of New Entrants (High) -High industry attractiveness and room for small businesses -Low capital requirement -Industry concentration raises barriers Threat of Substitutes (High) -Multiple alternatives like drug retail chain, supermarket, independent drug store, online drug ordering and mail- order drugs Supplier’s Bargaining Power (Moderate) -Strong long term relationships with suppliers -Industry giant Buyer’s Bargaining Power (Moderate) -Multiple alternatives and existence of public health insurance

Client Logo 10 Macroeconomic Overview Number of adults aged 65 & older Per capita disposable income Total Healthcare expenditure Federal Funding for Medicare & Medicaid Source: IBISWorld

Client Logo 11 Pharmacies & Drug Stores Key Statistics Revenue$264.5 bn Profit$14.3 bn Annual Growth (10-15)1.4% Annual Growth (15-20)5.3% Market Share Product and Services Segment

Client Logo 12 Technical Analysis Source: YahooFinance

Client Logo 13 Technical Analysis Cont’d Source: YahooFinance

Client Logo 14 Financial Analysis

Client Logo 15 DuPont Analysis Tax burden increased in 2015 due to tax benefit from the capital loss of Alliance Boots Call option and will be carried through FY2020 Asset Turnover and Asset to Debt ratio decrease due to the acquisition of Alliance Boots Return on Equity decreases gradually over the past five years

Client Logo 16 Financial Projections Revenue Drivers Exclusion of Rite Aid’s earnings in the forecast of FY2016 Acquisition of Rite Aid: WBA to close 1000 stores of Rite Aid WBA Cost Transformation Program: - WBA will close 200 stores across the U.S. in FY Projected $1.5 billion of cost savings by the end of FY2017

Client Logo 17 WACC Calculation

Client Logo 18 DCF Valuation

Client Logo 19 Relative Valuation

Client Logo 20 Final Recommendation HOLD DCF Valuation: $83.74 Relative Value: $80.58 Estimated Price: $82.79 Merger with Rite Aid will create a drugstore giant Increasing aging population for the next five years Stable disposable income for the next five years Stable Health expenditures for the next five years Current Price: $79.15