Zoetis Inc. · NYSE:ZTS
Zoetis — Jefferies Presentation (February 2017)
14 slides from Zoetis's conference presentation, February 2017
Slide 1: Positioning Zoetis for Sustainable Growth and Value Creation
POSITIONING ZOETIS FOR SUSTAINABLE GROWTH AND VALUE CREATION JUAN RAMÓN ALAIX CHIEF 1 EXECUTIVE OFFICER
Slide 2: Forward-Looking Statements; Non-GAAP Financial Information
FORWARD-LOOKING STATEMENTS This presentation contains forward-looking statements, which reflect the current views of Zoetis with respect to business plans or prospects, future operating or financial performance, future guidance, future operating models, expectations regarding products, future use of
Slide 3: Agenda
AGENDA • REVIEW OF FULL YEAR 2016 • CONTINUING THE ZOETIS JOURNEY • BUILDING OUR MARKET LEADERSHIP • CREATING VALUE AND FUTURE GROWTH 3
Slide 4: 2016 Income Statement Highlights
2016 INCOME STATEMENT HIGHLIGHTS 5% Operational Revenue 1 Adjusted Earnings Growth 32% Before Interest and Taxes2 to $4.9B Margin 4% Operational decline in 1 17% Adjusted Net Income 2 Adjusted SG&A2 expenses Operational Growth1 to $975M 4 1Operational growth (a non-GAAP financial measure) excludes t
Slide 5: The Zoetis Journey
THE ZOETIS JOURNEY 2013 - 2014 2015 - 2016 2017 STAGE ONE STAGE TWO STAGE THREE • Separation from Pfizer • Commence operational efficiency • Complete operational efficiency initiative initiative • Establishment of our own processes, systems and manufacturing network • Reduce complexity, re-allocate
Slide 6: A Journey of Achievements and Results
• Demonstrated strength of our A JOURNEY OF business model and diverse ACHIEVEMENTS AND portfolio as foundation of a RESULTS successful stand-alone animal health company • Became more lean and efficient with increasing margins and less complexity • Delivered on long-term value proposition for invest
Slide 7: Three Interconnected Capabilities
THREE INTERCONNECTED CAPABILITIES DIRECT SALES WORLD-CLASS HIGH-QUALITY MODEL INNOVATION MANUFACTURING • Deep customer relationships with • $374M1 in R&D investment in • 25 global manufacturing sites, direct sales in approximately 45 2016 with more than 170 product often co-located with R&D countrie
Slide 8: Durable and Diverse Portfolio
DURABLE AND DIVERSE PORTFOLIO PLANNING FOR A CONTINUOUS FLOW OF PRODUCTS <10 10+ 25+ 60+ YEARS YEARS YEARS YEARS Average lifespan of top 24 8 products is approx. 30 years All trademarks are the property of Zoetis Services LLC or a related company or a licensor unless otherwise noted.
Slide 9: Worldwide Market Leader
1 WORLDWIDE MARKET LEADER WELL-POSITIONED ACROSS MULTIPLE GEOGRAPHIES, CATEGORIES & SPECIES 2016 MARKET POSITION 2016 MARKET POSITION 2016 MARKET POSITION BY GEOGRAPHY BY PRODUCT CATEGORY BY SPECIES North America #1 Anti-Infectives #1 Cattle #1 Latin America #1 Other Pharma2 #1 Swine #2 Asia #2 Medi
Slide 10: Industry Leading Revenue Growth with Improving Margins
INDUSTRY LEADING REVENUE GROWTH WITH IMPROVING MARGINS • Despite industry consolidation, Zoetis ZOETIS REVENUE OPERATIONAL1 GROWTH RATES & ADJUSTED EBIT MARGIN2 remains global leader based on total 8% 34.5% sales 32% 7% 7% 6.5% 28% • Grown sales faster than market over 25% 5% 24% four-year period •
Slide 11: Investment in Future Growth Opportunities
INVESTMENT IN FUTURE GROWTH OPPORTUNITIES R&D KEY BRANDS EXTERNAL BUSINESS INVESTMENT AND MARKETS DEVELOPMENT • Allocate resources to high- • Support new products with • Enhance our core product impact projects increased marketing, portfolio and fill in gaps • Continue delivering including direct-to
Slide 12: Return Excess Capital
RETURN EXCESS • Continue to look at most prudent ways CAPITAL to return excess capital to shareholders • Consistent dividend history, with an increase of 10.5% planned for 2017 • Conduct share buyback programs, including authorization of new $1.5B multi-year plan • Leverage ratio of 2.5 - 3.0x1 in a
Slide 13: Delivering on Our Long-Term Value Proposition to Shareholders
DELIVERING ON OUR LONG-TERM VALUE PROPOSITION TO SHAREHOLDERS GROW REVENUE IN LINE WITH OR FASTER THAN THE MARKET GROW ADJUSTED NET INCOME1 FASTER THAN REVENUE TARGET VALUE-ADDED INVESTMENT OPPORTUNITIES RETURN EXCESS CAPITAL TO SHAREHOLDERS 13 1Adjusted Net Income is a non-GAAP measure and defined
Slide 14: Zoetis
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