Slide 1: Fourth Quarter and Full Year 2023 Financial Results
Fourth Quarter and Full Year 2023 Financial Results February 13, 2024
Slide 2: Forward-looking Statements and Non-GAAP Financial Information
Forward-looking Non-GAAP Financial Statements Information This presentation contains forward-looking statements, which reflect the current views of We use non-GAAP* financial measures, such as adjusted net income, adjusted diluted Zoetis with respect to: business plans or prospects, future operating
Slide 3: Kristin Peck, Chief Executive Officer
Kristin Peck Chief Executive Officer
Slide 4: Key Takeaways
FOURTH QUARTER AND FULL YEAR FINANCIAL RESULTS Key Takeaways Strong Global Growth Continued in 2023 • Generated 7% operational1 revenue growth and 7% operational1 increase in adjusted net income2, with revenue in the U.S increasing 6% and International up 9% operationally1. • Full year revenue of $8
Slide 5: Wetteny Joseph, Executive Vice President and Chief Financial Officer
Wetteny Joseph Executive Vice President and Chief Financial Officer
Slide 6: Income Statement Highlights: Fourth Quarter
FOURTH QUARTER AND FULL YEAR FINANCIAL RESULTS Income Statement Highlights Fourth Quarter 2023* 2022* Change Revenue $2,213 $2,040 8% Reported Net Income 525 461 14% Reported Diluted Earnings Per Share $1.14 $0.99 15% Adjusted Net Income1 569 539 6% Adjusted Diluted Earnings Per Share1,2 $1.24 $1.15
Slide 7: Income Statement Highlights: Full Year
FOURTH QUARTER AND FULL YEAR FINANCIAL RESULTS Income Statement Highlights Full Year 2023* 2022* Change Revenue $8,544 $8,080 6% Reported Net Income 2,344 2,114 11% Reported Diluted Earnings Per Share $5.07 $4.49 13% Adjusted Net Income1 2,457 2,297 7% Adjusted Diluted Earnings Per Share1,2 $5.32 $4
Slide 8: Adjusted Income Statement Highlights: Fourth Quarter
FOURTH QUARTER AND FULL YEAR FINANCIAL RESULTS Adjusted Income Statement Highlights Fourth Quarter Foreign 2023* 2022* Change Exchange Operational1 Revenue $2,213 $2,040 8% —% 8% Adjusted Cost of Sales2 727 650 12% 3% 9% as a percent of revenue3 32.9% 31.9% NA NA NA Adjusted SG&A Expenses2 562 507 1
Slide 9: Adjusted Income Statement Highlights: Full Year
FOURTH QUARTER AND FULL YEAR FINANCIAL RESULTS Adjusted Income Statement Highlights Full Year Foreign 2023* 2022* Change Exchange Operational1 Revenue $8,544 $8,080 6% (1)% 7% Adjusted Cost of Sales2 2,548 2,440 4% (4)% 8% as a percent of revenue3 29.8% 30.2% NA NA N/A Adjusted SG&A Expenses2 2,130
Slide 10: U.S. Segment Performance: Fourth Quarter
FOURTH QUARTER AND FULL YEAR FINANCIAL RESULTS U.S. Segment Performance Fourth Quarter 2023* 2022* Change Revenue $1,211 $1,112 9% Companion Animal 941 853 10% Livestock 270 259 4% Cost of Sales 255 216 18% Gross Profit 956 896 7% Gross Margin 78.9% 80.6% NA Operating Expenses 184 187 (2)% Other (In
Slide 11: U.S. Segment Performance: Full Year
FOURTH QUARTER AND FULL YEAR FINANCIAL RESULTS U.S. Segment Performance Full Year 2023* 2022* Change Revenue $4,555 $4,313 6% Companion Animal 3,529 3,341 6% Livestock 1,026 972 6% Cost of Sales 900 803 12% Gross Profit 3,655 3,510 4% Gross Margin 80.2% 81.4% NA Operating Expenses 786 765 3% Other (
Slide 12: International Segment Performance: Fourth Quarter
FOURTH QUARTER AND FULL YEAR FINANCIAL RESULTS International Segment Performance Fourth Quarter Foreign 2023* 2022* Change Exchange Operational1 Revenue $982 $901 9% 1% 8% Companion Animal 507 450 13% 3% 10% Livestock 475 451 5% (2)% 7% Cost of Sales 322 274 18% 1% 17% Gross Profit 660 627 5% —% 5%
Slide 13: International Segment Performance: Full Year
FOURTH QUARTER AND FULL YEAR FINANCIAL RESULTS International Segment Performance Full Year Foreign 2023* 2022* Change Exchange Operational1 Revenue $3,911 $3,681 6% (3)% 9% Companion Animal 2,047 1,862 10% (2)% 12% Livestock 1,864 1,819 2% (5)% 7% Cost of Sales 1,234 1,083 14% (5)% 19% Gross Profit
Slide 14: International Segment Performance by Market: Fourth Quarter
FOURTH QUARTER AND FULL YEAR FINANCIAL RESULTS International Segment Performance Fourth Quarter Foreign 2023* 2022* Change Exchange Operational1 Total International $982.1 $901.3 9% 1% 8% Australia 75.0 64.2 17% (2)% 19% Brazil 117.2 96.2 22% 7% 15% Canada 71.1 65.2 9% (2)% 11% Chile 31.4 34.8 (10)%
Slide 15: International Segment Performance by Market: Full Year
FOURTH QUARTER AND FULL YEAR FINANCIAL RESULTS International Segment Performance Full Year Foreign 2023* 2022* Change Exchange Operational1 Total International $3,911.2 $3,680.8 6% (3)% 9% Australia 322.7 288.7 12% (5)% 17% Brazil 392.7 329.5 19% 4% 15% Canada 254.6 237.5 7% (5)% 12% Chile 140.2 141
Slide 16: Financial Guidance
FOURTH QUARTER AND FULL YEAR FINANCIAL RESULTS Financial Guidance Selected Line Items (millions of dollars, except per share amounts) Full Year 2024 Revenue $9,075 to $9,225 Operational growth1 7% to 9% Adjusted cost of sales as a percentage of revenue2 Approximately 29.5% Adjusted SG&A expenses2 $2
Slide 17: Q&A
Q&A
Slide 18: Appendix
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Slide 19: Reconciliation Of Reported Growth To Non-GAAP Financial Measures
FOURTH QUARTER AND FULL YEAR FINANCIAL RESULTS Reconciliation Of Reported Growth To Non-GAAP Financial Measures Fourth quarter ended December 31, 2023* 2022* Change Foreign Exchange Operational1 Revenue by Product Category Key Dermatology $375 $347 8% 1% 7% Diagnostics (companion animal) 87 80 9% 1%
Slide 20: Reconciliation Of Adjusted Net Income To Adjusted EBIT
FOURTH QUARTER AND FULL YEAR FINANCIAL RESULTS Reconciliation Of Adjusted Net Income To Adjusted EBIT Dollars in millions 2021 2022 2023 Adjusted net income attributable to Zoetis1 $2,240 $2,297 $2,457 Interest expense2 224 221 239 Interest income2 (6) (50) (103) Income taxes2 511 583 618 Adjusted E
Slide 21: Reconciliation Of GAAP Reported To Non-GAAP Adjusted Information (2023)
FOURTH QUARTER AND FULL YEAR FINANCIAL RESULTS Reconciliation Of GAAP Reported To Non-GAAP Adjusted Information 2023 GAAP1 Purchase Acquisition- Certain Non-GAAP in USD millions, except per share data Reported Accounting Related Costs Significant Items Adjusted2 Cost of sales $2,561 $(10) $— $(3) $2
Slide 22: Reconciliation Of GAAP Reported To Non-GAAP Adjusted Information (2022)
FOURTH QUARTER AND FULL YEAR FINANCIAL RESULTS Reconciliation Of GAAP Reported To Non-GAAP Adjusted Information 2022 GAAP1 Purchase Acquisition- Certain Non-GAAP in USD millions, except per share data Reported Accounting Related Costs Significant Items Adjusted2 Cost of sales $2,454 $(6) $— $(8) $2,
Slide 23: Reconciliation Of GAAP Reported To Non-GAAP Adjusted Information (2021)
FOURTH QUARTER AND FULL YEAR FINANCIAL RESULTS Reconciliation Of GAAP Reported To Non-GAAP Adjusted Information 2021 GAAP1 Purchase Acquisition- Certain Non-GAAP in USD millions, except per share data Reported Accounting Related Costs Significant Items Adjusted2 Cost of sales $2,303 $(6) $— $(8) $2,
Slide 24: Reconciliation Of Adjusted Net Income Growth To Non-GAAP Financial Measures
FOURTH QUARTER AND FULL YEAR FINANCIAL RESULTS Reconciliation Of Adjusted Net Income Growth To Non- GAAP Financial Measures Adjusted Change From Foreign in USD millions Net Income1 Prior Year Exchange Operational2 2021 $2,240 21% 2% 19% 2022 $2,297 3% (8)% 11% 2023 $2,457 7% —% 7% 1 Adjusted net inc
Slide 25: Reconciliation Of Reported Revenue To Non-GAAP Financial Measures
FOURTH QUARTER AND FULL YEAR FINANCIAL RESULTS Reconciliation Of Reported Revenue To Non-GAAP Financial Measures Change From Foreign in USD millions Revenue Prior Year Exchange Operational1 2021 $7,776 16% 1% 15% 2022 $8,080 4% (4)% 8% 2023 $8,544 6% (1)% 7% 1 Operational results (a non-GAAP financi
Slide 26: zoetis
zoetis