Zoetis Inc. · NYSE:ZTS
Zoetis — Q1 2015 Earnings Presentation
17 slides from Zoetis's earnings presentation, May 5, 2015
Slide 1: First Quarter 2015 Financial Results
FIRST QUARTER 2015 FINANCIAL RESULTS May 5, 2015 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, expectations regarding products, future use of cash and dividend payments, and other fut
Slide 3: Juan Ramón Alaix, Chief Executive Officer
JUAN RAMÓN ALAIX CHIEF EXECUTIVE OFFICER
Slide 4: Key CEO Takeaways
KEY CEO TAKEAWAYS STRONG FIRST QUARTER RESULTS All livestock species contributed to growth reflecting continued producer profitability Key brands, China and Latin America contributed to Companion Animal growth Price, new and acquired products from Abbott contribute to growth Adjusted Net Inc
Slide 5: Paul Herendeen, Chief Financial Officer
PAUL HERENDEEN CHIEF FINANCIAL OFFICER
Slide 6: Income Statement Highlights
INCOME STATEMENT HIGHLIGHTS First Quarter 2015* 2014* Change Revenue $1,102 $1,097 - Reported Net Income 165 155 6% Reported Diluted EPS $0.33 $0.31 6% Adjusted Net Income1 207 191 8% Adjusted Diluted EPS1 $0.41 $0.38 8% *Millions of dollars, except per share data 1Non-GAAP adjusted net income and n
Slide 7: Adjusted Income Statement Highlights
ADJUSTED INCOME STATEMENT HIGHLIGHTS First Quarter Foreign 2015* 2014* Change Operational2 Exchange Revenue $1,102 $1,097 - (6)% 6% Adjusted Cost of Sales1 385 375 3% (6)% 9% as a percent of revenue 34.9% 34.2% NA NA NA Adjusted SG&A Expenses1 320 327 (2)% (5)% 3% Adjusted R&D Expenses1 80 87 (8)% (
Slide 8: Segment Performance
SEGMENT PERFORMANCE US EuAfME Revenue grew 9%; Earnings1 grew 13% Revenue was flat*; Earnings1 grew 3%* 600 300 521 270 479 237 500 250 89 400 222 200 81 216 315 300 278 150 112 102 200 100 181 299 156 263 50 100 0 0 1Q’14 1Q’15 1Q’14 1Q’15 1 1 Livestock Companion Animal Earnings Livestock Companion
Slide 9: Operational Efficiency Initiative – Summary Points
OPERATIONAL EFFICIENCY INITIATIVE – SUMMARY POINTS • Preserves key elements of proven business model • Significant portion of reductions focused in areas that do not affect long- term revenue growth • Improves company-wide efficiency to deliver profitable growth over the long term • More profitable,
Slide 10: Operational Efficiency Initiative – Financial Impact
OPERATIONAL EFFICIENCY INITIATIVE – FINANCIAL IMPACT • Reduces 2017 revenue by $280 million • Related reduction in gross profit of $100 million • Expect total savings of $300 million versus prior expectations for 2017 • Increases 2017 operating profit by $200M 10 |
Slide 11: Operational Efficiency: FX Level-Set
OPERATIONAL EFFICIENCY: FX LEVEL-SET Incremental Impact of FX Since Selected Line Items January on 2016 / 2017 Revenue ~215 bps Adjusted cost of sales(1) ~260 bps Adjusted operating expenses(1) ~170 bps Adjusted EBIT(1) ~220 bps Adjusted net income(1) ~235 bps 1Adjusted net income and its components
Slide 12: 2017 Impact of Operational Efficiency and Venezuela
2017 IMPACT OF OPERATIONAL EFFICIENCY AND VENEZUELA Impact to 2017 Outlook At April FX ($ millions except per share amounts) Operational Efficiency Selected Line Items Venezuela Business Initiative Revenue (280) (90) Adjusted gross profit(1) (90) (65) Adjusted operating expenses(1) (290) (10) Adjust
Slide 13: 2015 Financial Guidance Updates
2015 FINANCIAL GUIDANCE UPDATES Operational Selected Line Items Efficiency As Provided on Foreign Venezuela Updated Full Year (millions of dollars, except per share Initiative and amounts) February 11, 2015 Exchange Business 2015 Supply Network Strategy Revenue $4,800 to $4,900 $4,675 to $4,775 ($75
Slide 14: 2015 – 2017 Financial Guidance
2015 – 2017 FINANCIAL GUIDANCE Selected Line Items 2015 2016 2017 (millions of dollars, except per share amounts) Revenue $4,675 to $4,775 $4,650 to $4,800 $4,850 to $5,050 Operational growth 5.5% to 7.5% (1%) to 2% 3% to 7% Adjusted cost of sales as a 35.5% to 36.0% 33% to 34% 32% to 33% percentage
Slide 15: One Time Costs 2015 - 2017
ONE TIME COSTS 2015 - 2017 Pre-tax Charges 2015 - 2017 (millions of dollars) Stand-up costs, acquisition-related costs and other $180 to $210 Operational efficiency initiative (excluding non-cash) $340 to $400 Supply network strategy (excluding non-cash) $60 to $100 Certain significant items and acq
Slide 16: Q&A
Q&A
Slide 17: Slide 17