Full Press Release Details
Investor Contact: Tiffany Kanaga (302) 897-0668
Media Contact: Colleen Parr Dekker (317) 989-7011
Elanco Animal Health
Hosts Investor Day, Demonstrating Inflection Point Toward Accelerated Value Creation
GREENFIELD, Ind. (December 15, 2020) - Elanco Animal
Health Incorporated (NYSE: ELAN) today will host its Investor Day, where the executive leadership team will outline the company's
strengthened and expanded Innovation, Portfolio, Productivity (IPP) strategy, introduce a long-term growth algorithm for accelerated
value creation, and discuss 2020 financial targets and 2021 guidance.
"Today offers a transparent look into our business,"
said Jeff Simmons, president and chief executive officer at Elanco. "We are sharing the granular components of our long-term
growth algorithm, which provide a clear path toward our targeted ~3%-4% average annual revenue growth, and double-digit annual
adjusted EBITDA and adjusted EPS growth. Elanco is well positioned in the attractive animal health industry, including enhanced
scale, capabilities, and commercial leadership through the Bayer Animal Health acquisition. We are at an inflection point in our
transformation, with a focus on execution and accountability."
Strengthened and Expanded IPP Strategy
Through its combination with Bayer Animal Health, Elanco has
bolstered its long-standing IPP strategy:
"We are raising and narrowing Q4 2020 revenue guidance,
demonstrating positive momentum in the underlying business, and we are committed to delivering our balanced 2021 guidance,"
said Todd Young, executive vice president and chief financial officer at Elanco. "Today we are outlining a comprehensive
roadmap to long-term margin and net leverage targets, while driving our productivity agenda and synergy capture. We are enhancing
visibility, accountability, and governance, and we expect IPP to underpin accelerated value creation for our shareholders."
For the fourth quarter of 2020, management now expects:
Elanco is providing a 2020 pro forma reference base, inclusive
of fourth quarter of 2020 guidance. This base is materially correct based on the public filings of Bayer and Elanco; however, due
to certain data limitations, including foreign exchange rates, these numbers may have some non-material differences to actual results.
This base is a good faith summary to provide better financial context to investors about the expected performance of Elanco in
For the full year 2021, management expects:
Long-Term Margin & Net Leverage Targets
Elanco expects to achieve adjusted gross margin of 60% in the
2023 to 2024 timeframe, and adjusted EBITDA margin of 31% in 2024. Management also anticipates reaching less than 3x net leverage
Webcast & Conference Call Details
Elanco will host a webcast and conference call at 10:00 a.m.
Eastern today, during which company executives will outline their strategy to drive long-term shareholder value while also providing
financial guidance for the fourth quarter of 2020, the full year 2021, and the long-term outlook. The event will conclude with
a live question and answer session to take inquiries from analysts. Investors, analysts, members of the media, and the public may
access the 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 in the same location on the company's website.
Elanco Animal Health Incorporated (NYSE:
ELAN) is a global leader in animal health dedicated to innovating and delivering products and services to prevent and treat disease
in farm animals and pets, creating value for farmers, pet owners, veterinarians, stakeholders, and society as a whole. With nearly
70 years of animal health heritage, we are committed to helping our customers improve the health of animals in their care, while
also making a meaningful impact on our local and global communities. At Elanco, we are driven by our vision of Food and Companionship
Enriching life and our Elanco Healthy Purpose Sustainability/ESG framework - 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 within
the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 (Exchange Act),
including, without limitation, statements concerning our expectations relating to the integration of Bayer Animal health, expected
synergies and cost savings, reduction of debt, the impact of the COVID-19 pandemic on our business, our 2020 fourth quarter and
2021 as well as long-term outlook, our industry and our operations, performance and financial condition, and including in particular,
statements relating to our business, growth strategies, distribution 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 10-Q 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. 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.
Acquisition of Bayer Animal Health
The valuation of assets acquired and liabilities assumed related
to the acquisition of Bayer Animal Health has not yet been finalized as of December 15, 2020. The purchase price allocation is
preliminary at this time and subject to change, including the valuation of inventories, property and equipment, intangible assets,
income taxes and goodwill, among other items. The amounts recognized will be finalized as the information necessary to complete
the analysis is obtained, but no later than one year after the acquisition date. Finalization of the valuation during the measurement
period could result in a change in the amounts recorded for the acquisition date fair value, which could impact the company's
Use of Non-GAAP Financial Measures:
We use non-GAAP financial measures, such as adjusted EBITDA,
adjusted EBITDA margin, adjusted EPS, and adjusted gross margin to assess and analyze our operational results and trends as explained
in more detail in the following reconciliation tables.
We believe these non-GAAP financial measures are 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 appendix of the Investor Day presentation 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 decrease these measures, which investors may consider to be unrelated to our long-term operations.
These non-GAAP measures are not, and should not be viewed as, substitutes for U.S. GAAP reported measures. We encourage investors
to review the Company's latest Forms 10-K and subsequent for 10-Qs filed with the Securities and Exchange Commission. We
caution investors to use U.S. GAAP measures as the primary means of evaluating our performance, value and prospects for the future,
and non-GAAP measures as supplemental measures.