Zoetis Inc. · NYSE:ZTS
Zoetis — 39th Annual J.P. Morgan Healthcare Conference (January 2021)
18 slides from Zoetis's conference presentation, Jan 11, 2021
Slide 1: Resilience, Leadership & Growth in Animal Health
RESILIENCE, LEADERSHIP & GROWTH IN ANIMAL HEALTH KRISTIN PECK CHIEF EXECUTIVE OFFICER JANUARY 11, 2021 1 1
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, product appro
Slide 3: Zoetis: Leading Animal Health Across the Continuum of Care
ZOETIS: LEADING ANIMAL HEALTH ACROSS THE CONTINUUM OF CARE • Global leader in attractive 1 2 $40 billion market with sustainable growth drivers and opportunities $6.3B 10% 30% 2019 REVENUE 2019 AVERAGE OPERATIONAL • Diverse and durable portfolio with REVENUE ANNUAL TOTAL SHAREHOLDER proven strength
Slide 4: Key Companion Animal Trends Shaping 2021
KEY COMPANION ANIMAL TRENDS SHAPING 2021 THEMES MARKET EXPECTATIONS ZOETIS FOCUS IN 2021 RISING • COVID-19 strengthening • Build market awareness for PET OWNER human-animal bond; rising health spend chronic pet diseases INFLUENCE • Demand for convenience and price • Increase investment in direct-to-
Slide 5: Key Livestock Trends Shaping 2021
KEY LIVESTOCK TRENDS SHAPING 2021 THEMES MARKET EXPECTATIONS ZOETIS FOCUS IN 2021 RISING PROTEIN • Rising demand for affordable, safe animal • Partner with customers to improve use of DEMAND VS. protein in Asia, LatAm technology for increased productivity SUSTAINABILITY • Increased consumer expectat
Slide 6: Worldwide Market Leader
WORLDWIDE MARKET LEADER WELL-POSITIONED TO DRIVE CONTINUED ABOVE-MARKET GROWTH1 ACROSS ANIMAL HEALTH 2020 MARKET POSITION BY SPECIES BY PRODUCT CATEGORY BY GEOGRAPHY #1 Companion Animal #1 Other Pharma2 #1 North America Latin America #1 Cattle #1 Anti-Infectives #1 Asia #2 #1 Medicated Feed Additive
Slide 7: Diverse, Durable and Innovative Portfolio
DIVERSE, DURABLE AND INNOVATIVE PORTFOLIO Continuous Diversified Leading brands Durable portfolio innovation flow revenue streams Broad portfolio including 13 with average with 1,100+ new with top 10 with ~300 product blockbusters¹ market life of top products and products2 lines across representing
Slide 8: Key Growth Platforms
KEY SCIENCE- NEW CATEGORY BASED DEVELOPMENT GROWTH INNOVATIONS AND EXPANSION PLATFORMS Parasiticides Monoclonal Antibodies Dermatology Pain AND FOCUS DRIVEN BY INNOVATION, EXPERTISE ACQUISITIONS, MARKET AND ALLIANCES AND DEVELOPMENT GLOBAL SCALE PARTNERSHIPS AND EXPANSION Immunotherapies/mAbs Digita
Slide 9: Clear Strategic Priorities to Create Long-Term Value
CLEAR STRATEGIC PRIORITIES TO CREATE LONG-TERM VALUE ADVANCING OUR PRIORITIES IN 2020 • Simparica Trio® • Delivered quality, • Vetscan • High Colleague • New reliable supply Imagyst™ Engagement Sustainability • Librela® framework • Connected with • Performance • Diversity, Equity • Solensia® custome
Slide 10: Delivering Above-Market Operational Revenue Growth
DELIVERING ABOVE-MARKET OPERATIONAL REVENUE GROWTH OPERATIONAL REVENUE GROWTH¹ (VS. MARKET²) Market Revenue Growth Zoetis Revenue Growth 12% 10% 3 4 4 6 8% 8% 8% 8% 8% 7-8% 8% 7% 6% 5 6% 5% 5% 4% 4% 2% 2% 0% -2% 10 1 Operational revenue growth (a non-GAAP financial measure) excludes the impact of fo
Slide 11: Margin Expansion and Adjusted Net Income Growth Faster Than Revenue
MARGIN EXPANSION AND ADJUSTED NET INCOME GROWTH FASTER THAN REVENUE ADJUSTED NET INCOME AND ADJUSTED EBIT MARGIN1 2,400 Adjusted Net Income ($USD M) Adjusted EBIT Margin 44% 37% 38% 35% 39% 34% 1,900 32% $1,755 $1,808 34% 28% $1,525 29% 1,400 $1,185 24% $975 $889 19% 900 14% 400 9% 4% -100 2015 2016
Slide 12: Capital Allocation Focused on Driving Growth and Shareholder Returns
CAPITAL ALLOCATION FOCUSED ON DRIVING GROWTH AND SHAREHOLDER RETURNS 2020 ~$460M1 ~$415M2 ~$125M2 ~$1B Adjusted R&D Capital Business INTERNAL & EXTERNAL Investment Expenditures Development INVESTMENTS In millions ($) Dividends Share Repurchases $500 $698 $626 $2503 ~$630M $300 CAPITAL RETURNS TO $20
Slide 13: Delivering on Our Long-Term Value Proposition to Shareholders
DELIVERING ON OUR LONG-TERM VALUE PROPOSITION TO SHAREHOLDERS Grow Revenue in Grow Adjusted Invest in Return Excess Line with or Net Income Innovation and Capital to Faster than the Faster than Targeted Growth Shareholders Market Revenue Opportunities 13 RESILIENCY STABILITY INNOVATION 13
Slide 14: Key Takeaways
KEY TAKEAWAYS • Our major catalysts for growth in 2021 are: • Strength in petcare • Expansion in markets outside the U.S. • Acceleration of our diagnostics portfolio • Our performance over the last year has reaffirmed we are a strong market leader in an essential industry with the portfolio, focus a
Slide 15: Zoetis
zoetis
Slide 16: Reconciliation of Reported Revenue Growth to Non-GAAP Financial Measures
RECONCILIATION OF REPORTED REVENUE GROWTH TO NON-GAAP FINANCIAL MEASURES in USD Foreign millions 2014 2015 Change Exchange Operational Growth1 Revenue 4,785 4,765 - (8)% 8% in USD Foreign Organic Operational Operational Normalized Organic millions 2015 2016 Change Exchange Operational Growth1 Acquis
Slide 17: Reconciliation of GAAP Reported Net Income to Adjusted Net Income
RECONCILIATION OF GAAP REPORTED NET INCOME TO ADJUSTED NET INCOME 2015 – 2019 in USD millions 2015 2016 2017 2018 2019 Net Income attributable to Zoetis1 $339 $821 $864 $1,428 $1,500 Purchase Accounting Adjustments2 39 60 51 119 156 Acquisition-Related Costs3 22 4 7 50 36 Certain Significant Items4
Slide 18: Reconciliation of Adjusted Net Income to Adjusted EBIT
RECONCILIATION OF ADJUSTED NET INCOME TO ADJUSTED EBIT 2015 – 2019 in USD millions 2015 2016 2017 2018 2019 Adjusted Net Income attributable to $889 $975 $1,185 $1,525 $1,755 Zoetis Net (loss)/ income attributable to - (2) (2) (4) - noncontrolling interests Adjusted Net Income Before $889 $973 $1,18
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