Full Press Release Details
Investor Contact: Jim Greffet (317) 383-9935 greffet_james_f@elanco.com
Media Contact: Colleen Parr Dekker (317) 989-7011 colleen_parr_dekker
Elanco Announces 2020
GREENFIELD, IND. (January 10, 2020) - Elanco Animal
Health Incorporated (NYSE: ELAN) today announced its initial financial guidance for 2020, including total revenue expectations
in the range of $3.05 billion to $3.11 billion, and Core Revenue, which excludes strategic exits, in the range of $3.00 billion
to $3.06 billion. Elanco also expects earnings per share (EPS) for 2020 to be in the range of $0.04 to $0.16 on a reported basis
and $1.09 to $1.16 on an adjusted basis. These revenue and EPS expectations are for stand-alone Elanco only, including full year
revenues for products that may be divested, and do not include any expected revenues from the Bayer animal health business or impact
of transactions related to the acquisition, such as potential issuance of additional shares.
While our audit for FY2019 is not yet complete, the anticipated
results are consistent with the November guidance, trending toward the low end of previously issued Revenue and EPS Guidance ranges.
In our anticipated FY2019 results, Elanco continued to grow revenue and expand margins, largely driven by the strength of Elanco's
targeted growth categories, the portfolio of newly launched products, strategic business development and a sharp focus on execution.
This performance was offset by nearly $100 million of revenue headwinds from environmental issues that arose during the year, including
African Swine Fever, the Australian drought and others.
"In the past year, Elanco has become a stronger, faster
and more fit-for-purpose organization, leveraging the advantage of a singular focus on animal health and a portfolio approach to
drive growth," said Jeff Simmons, president and CEO of Elanco. "This is a resilient, diverse and durable business that
grew in 2019 despite significant environmental pressures, including one of the most significant animal disease epidemics in decades.
As we move into 2020 our focus continues to be on execution, balanced progress and building Elanco from strength to leadership."
In 2020, Elanco expects to see the emergence of competitive
elements the company has been planning for since before the IPO. The Elanco team remains focused on taking advantage of the opportunities
for growth in the year. This includes:
"We built our 2020 plan to balance the strength of industry
fundamentals with the external factors facing our business," said Todd Young, chief financial officer at Elanco. "We
are confident in our strategy to drive growth in 2020. Further, our productivity initiatives will enable us to drive EPS growth
faster than sales. This year will build the foundation that positions Elanco for the next era of growth as a leading animal health
The acquisition of the Bayer animal health business continues
to advance. On January 9, 2020, Elanco received unconditional antitrust clearance from the Chinese competition authority (the State
Administration for Market Regulation or "SAMR") for the acquisition. Antitrust reviews are ongoing in other jurisdictions
"As we look at the Bayer transaction holistically, it
is developing even better than originally expected back in August," Simmons said. "In our view, Elanco stands as one
of the companies with the most potential to create value for our customers, society and shareholders."
| Total Revenue (Core Revenue plus Strategic Exits) | $3.05 - $3.11 billion |
| Core Revenue (excluding Strategic Exits) | $3.00 - $3.06 billion |
| Strategic Exits | Approx. $0.05 billion |
| Reported EPS (GAAP) | $0.04 - $0.16 |
| Adjusted EPS | $1.09 - $1.16 |
| Full-Year 2020 Guidance | |||
| Reported EPS (GAAP) | $0.04 | to | $0.16 |
| Amortization of intangible assets | 0.55 | ||
| Expenses associated with establishing stand-alone capabilities, severance and acquisitions | 0.79 to 0.72 | ||
| Subtotal | 1.38 to 1.43 | ||
| Tax impact of adjustments | (0.29) to (0.27) | ||
| Adjusted EPS | $1.09 | To | $1.16 |
The 2020 guidance presented above is for stand-alone Elanco
only, including full year revenues for products that may be divested, and does not include any expected revenues or expenses from
the Bayer animal health business or impact of transactions related to the acquisition, such as potential issuance of additional
WEBCAST & CONFERENCE CALL DETAILS
As previously announced, Elanco will
host a webcast and conference call at 8:00 a.m. eastern today to discuss 2020 financial guidance and respond to questions
from financial analysts. Investors, analysts, members of the media and the public may access the live webcast and
accompanying slides by visiting the Elanco website at https://investor.elanco.com and selecting Events and Presentations. A
replay of the webcast will be archived and made available a few hours after the event on the company's website, at
Elanco (NYSE: ELAN) is a global animal
health company that develops products and knowledge services to prevent and treat disease in food animals and pets in more than
90 countries. With a 65-year heritage, we rigorously innovate to improve the health of animals and benefit our customers, while
fostering an inclusive, cause-driven culture for more than 5,800 employees. At Elanco, we're driven by our vision of food
and companionship enriching life - all to advance the health of animals, people and the planet. Learn more at www.elanco.com.
Cautionary Statement Regarding Forward-Looking Statements
This press release contains forward-looking
statements, including, without limitation, statements concerning our 2019 financial results, our 2020 guidance, our industry and
our operations, performance and financial condition, including in particular, statements relating to our business, growth strategies,
product development efforts and future expenses.
Forward-looking statements are based on
our current expectations and assumptions regarding our business, the economy and other future conditions. Because forward-looking
statements relate to the future, by their nature, they are subject to inherent uncertainties, risks and changes in circumstances
that are difficult to predict. As a result, our actual results may differ materially from those contemplated by the forward-looking
statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements
include regional, national, or global political, economic, business, competitive, market, and regulatory conditions including,
but not limited to the following:
For additional information
about the factors that could cause actual results to differ materially from forward-looking statements, please see the company's
latest Form 10-K and subsequent Form 10-Qs filed with the Securities and Exchange Commission. Although we have attempted to identify
important risk factors, there may be other risk factors not presently known to us or that we presently believe are not material
that could cause actual results and developments to differ materially from those made in or suggested by the forward-looking statements
contained in this press release. If any of these risks materialize, or if any of the above assumptions underlying forward-looking
statements prove incorrect, actual results and developments may differ materially from those made in or suggested by the forward-looking
statements contained in this press release. For the reasons described above, we caution you against relying on any forward-looking
statements, which should also be read in conjunction with the other cautionary statements that are included elsewhere in this press
release. Any forward-looking statement made by us in this press release speaks only as of the date thereof. Factors or events that
could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We
undertake no obligation to publicly update or to revise any forward-looking statement, whether as a result of new information,
future developments or otherwise, except as may be required by law. Comparisons of results for current and any prior periods are
not intended to express any future trends or indications of future performance, unless specifically expressed as such, and should
be viewed as historical data.
Anticipated 2019 Financial Results
The 2019 anticipated financial results discussed in this press
release are the responsibility of management and have been prepared in good faith on a consistent basis with prior periods. However,
we have not completed our financial closing procedures for the three months and year ended December 31, 2019 and our actual results
could be materially different from the anticipated financial results discussed in this press release. During the course of the
preparation of our consolidated financial statements and related notes as of and for the year ended December 31, 2019, we and our
auditors may identify items that would require us to make material adjustments to the anticipated financial results discussed in
this press release. As a result, you should exercise caution in relying on this information and should not draw any inferences
from this information regarding financial or operating data not discussed. In addition, these anticipated financial results are
not necessarily indicative of the results to be achieved in any future period.
Use of Non-GAAP Financial Measures:
We use non-GAAP financial measures, such
as Core Revenue, which excludes strategic exits, and adjusted EPS to assess and analyze our operational results and trends.
We believe these non-GAAP financial
measures are also useful to investors because they provide greater transparency regarding our operating performance.
Reconciliation of non-GAAP financial measures and reported GAAP financial measures are included in the tables accompanying
this press release and are posted on our website at www.elanco.com. The primary material limitations associated with the use
of such non-GAAP measures as compared to U.S. GAAP results include the following: (i) they may not be comparable to similarly
titled measures used by other companies, including those in our industry, (ii) they exclude financial information and events,
such as the effects of an acquisition or amortization of intangible assets, that some may consider important in evaluating
our performance, value or prospects for the future, (iii) they exclude items or types of items that may continue to occur
from period to period in the future and (iv) they may not exclude all unusual or non-recurring items, which could increase or