Full Press Release Details
Zoetis Reports Fourth Quarter and Full Year 2019 Results
PARSIPPANY, N.J. - Feb. 13, 2020 - Zoetis Inc. (NYSE: ZTS) today reported its financial results for the fourth quarter and full year 2019 and provided full year guidance for 2020.
The company reported revenue of $1.7 billion for the fourth quarter of 2019, which was an increase of 7% compared with the fourth quarter of 2018. Net income for the fourth quarter of 2019 was $384 million, or $0.80 per diluted share, compared with $345 million, or $0.71 per diluted share, in the fourth quarter of 2018.
Adjusted net income1 for the fourth quarter of 2019 was $440 million, or $0.92 per diluted share, an increase of 15% and 16%, respectively. Adjusted net income for the fourth quarter of 2019 excludes the net impact of $56 million for purchase accounting adjustments, acquisition-related costs and certain significant items.
On an operational2 basis, revenue for the fourth quarter of 2019, excluding the impact of foreign exchange, increased 9% compared with the fourth quarter of 2018. Adjusted net income for the fourth quarter of 2019 increased 13% operationally, excluding the impact of foreign exchange.
For full year 2019, the company reported revenue of $6.3 billion, an increase of 7% compared with full year 2018. Net income for full year 2019 was $1.5 billion, or $3.11 per diluted share, an increase of 5% and 6%, respectively.
Adjusted net income for full year 2019 was $1.8 billion, or $3.64 per diluted share, an increase of 15% and 16%, respectively. Adjusted net income for full year 2019 excludes the net impact of $255 million for purchase accounting adjustments, acquisition-related costs and certain significant items.
On an operational basis, revenue for full year 2019 increased 10%, excluding the impact of foreign exchange. Adjusted net income for full year 2019 increased 14% operationally, excluding the impact of foreign exchange.
EXECUTIVE COMMENTARY
"In 2019, Zoetis delivered another year of strong growth and market leadership thanks to our diverse and durable portfolio and commitment to continuous innovation," said Kristin Peck, Chief Executive Officer of Zoetis. "We grew revenue 10% operationally, which is once again above market growth in a competitive, global sector. We also grew our adjusted net income faster than revenue, at 14% operationally, continuing to achieve our goal of growing profitability faster than revenue over the long term."
"Looking ahead in 2020, we are excited about the launch of Simparica Trio, our new triple combination parasiticide for dogs, and we will be heavily focused on bringing this key innovation to customers around the world," said Peck. "Additionally, we will continue to advance our pipeline with innovations in parasiticides, monoclonal antibodies and vaccines; support our latest product launches and lifecycle innovations across the portfolio; and invest in newer growth areas for us such as diagnostics, digital and data analytics. For full year 2020, we expect operational growth of 7% to 9.5% in revenue and 8% to 11% in adjusted net income. As the new CEO of Zoetis, I look forward to carrying on the company's successful formula of customer focus, innovation and execution, as we continue to deliver on our long-term value proposition to shareholders."
QUARTERLY HIGHLIGHTS
Zoetis organizes and manages its commercial operations across two regional segments: the United States (U.S.) and International. Within these segments, the company delivers a diverse portfolio of products for companion animals and livestock tailored to local trends and customer needs. In the fourth quarter of 2019:
INVESTMENTS IN GROWTH
Zoetis diversifies and grows its business through the introduction of new products, lifecycle innovations, business development initiatives, and entries into new markets and technologies. The company is increasingly focused on developing integrated solutions for pet owners, veterinarians and farmers that span the continuum of animal care - helping to predict, prevent, detect and treat diseases.
Since our last quarterly earnings announcement, Zoetis has continued to expand its reference laboratory capabilities in the U.S. with the acquisitions of Phoenix Lab and ZNLabs in November 2019 and Ethos Diagnostic Science this month. This builds on the company's strategy to develop a more comprehensive diagnostics offering with enhanced value for veterinarians.
Zoetis also received approval for Rimadyl (carprofen) for dogs in China, one of the fastest growing companion animal markets in the world. This product, approved in both chewable and injectable formulations, is indicated for the relief of pain and inflammation associated with osteoarthritis (chewables), and for the control of postoperative pain associated with soft tissue and orthopedic surgeries (injectable). It was first approved in the UK in 1993, and is an example of the product durability and longevity generated by the company's focus on lifecycle innovation and geographic expansion.
Zoetis is providing full year 2020 guidance, which includes:
This guidance reflects foreign exchange rates as of late January. Additional details on guidance are included in the financial tables and will be discussed on the company's conference call this morning.
WEBCAST & CONFERENCE CALL DETAILS
Zoetis will host a webcast and conference call at 8:30 a.m. (ET) today, during which company executives will review fourth quarter and full year 2019 results, discuss financial guidance and respond to questions from financial analysts. Investors and the public may access the live webcast by visiting the Zoetis website at http://investor.zoetis.com/events-presentations. A replay of the webcast will be archived and made available on Feb. 13, 2020.
Zoetis is the leading animal health company, dedicated to supporting its customers and their businesses. Building on more than 65 years of experience in animal health, Zoetis discovers, develops, manufactures and commercializes medicines, vaccines and diagnostic products, which are complemented by biodevices, genetic tests and precision livestock farming. Zoetis serves veterinarians, livestock producers and people who raise and care for farm and companion animals with sales of its products in more than 100 countries. In 2019, the company generated annual revenue of $6.3 billion with approximately 10,600 employees. For more information, visit www.zoetis.com.
1 Adjusted net income and its components and adjusted diluted earnings per share (non-GAAP financial measures) are defined as reported net income attributable to Zoetis and reported diluted earnings per share, excluding purchase accounting adjustments, acquisition-related costs and certain significant items.
2 Operational revenue growth (a non-GAAP financial measure) is defined as growth excluding the impact of foreign exchange.
Forward-Looking Statements: This press release 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 approvals or products under development, expected timing of product launches, expectations regarding the performance of acquired companies and our ability to integrate new businesses, expectations regarding the financial impact of acquisitions, future use of cash and dividend payments, tax rate and tax regimes, changes in the tax regimes and laws in other jurisdictions, and other future events. These statements are not guarantees of future performance or actions. Forward-looking statements are subject to risks and uncertainties. If one or more of these risks or uncertainties materialize, or if management's underlying assumptions prove to be incorrect, actual results may differ materially from those contemplated by a forward-looking statement. Forward-looking statements speak only as of the date on which they are made. Zoetis expressly disclaims any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. A further list and description of risks, uncertainties and other matters can be found in our Annual Report on Form 10-K for the fiscal year ended December 31, 2018, including in the sections thereof captioned "Forward-Looking Statements and Factors That May Affect Future Results" and "Item 1A. Risk Factors," in our Quarterly Reports on Form 10-Q and in our Current Reports on Form 8-K. These filings and subsequent filings are available online at www.sec.gov, www.zoetis.com, or on request from Zoetis.
Use of Non-GAAP Financial Measures: We use non-GAAP financial measures, such as adjusted net income, adjusted diluted earnings per share and operational results (which exclude the impact of foreign exchange), to assess and analyze our results and trends and to make financial and operational decisions. We believe these non-GAAP financial measures are also useful to investors because they provide greater transparency regarding our operating performance. The non-GAAP financial measures included in this press release should not be considered alternatives to measurements required by GAAP, such as net income, operating income, and earnings per share, and should not be considered measures of liquidity. These non-GAAP financial measures are unlikely to be comparable with non-GAAP information provided by other companies. Reconciliation of non-GAAP financial measures and GAAP financial measures are included in the tables accompanying this press release and are posted on our website at www.zoetis.com.
| Media Contacts : | Investor Contacts : | |
| Bill Price | Steve Frank | |
| 1-973-443-2742 (o) | 1-973-822-7141 (o) | |
| william.price@zoetis.com | steve.frank@zoetis.com | |
| Kristen Seely | Marissa Patel | |
| 1-973-443-2777 (o) | 1-973-443-2996 (o) | |
| kristen.seely@zoetis.com | marissa.patel@zoetis.com |
CONDENSED CONSOLIDATED STATEMENTS OF INCOME(a)
(millions of dollars, except per share data)
| Fourth Quarter | Full Year | ||||||||||||||||||
| 2019 | 2018 | % Change | 2019 | 2018 | % Change | ||||||||||||||
| Revenue | $ | 1,674 | $ | 1,564 | 7 | $ | 6,260 | $ | 5,825 | 7 | |||||||||
| Costs and expenses: | |||||||||||||||||||
| Cost of sales | 530 | 544 | (3) | 1,992 | 1,911 | 4 | |||||||||||||
| Selling, general and administrative expenses | 472 | 420 | 12 | 1,638 | 1,484 | 10 | |||||||||||||
| Research and development expenses | 132 | 125 | 6 | 457 | 432 | 6 | |||||||||||||
| Amortization of intangible assets | 40 | 39 | 3 | 155 | 117 | 32 | |||||||||||||
| Restructuring charges and certain acquisition-related costs | 18 | 14 | 29 | 51 | 68 | (25) | |||||||||||||
| Interest expense | 56 | 59 | (5) | 223 | 206 | 8 | |||||||||||||
| Other (income)/deductions-net | (11 | ) | (55 | ) | (80) | (57 | ) | (83 | ) | (31) | |||||||||
| Income before provision for taxes on income | 437 | 418 | 5 | 1,801 | 1,690 | 7 | |||||||||||||
| Provision for taxes on income | 53 | 73 | (27) | 301 | 266 | 13 | |||||||||||||
| Net income before allocation to noncontrolling interests | 384 | 345 | 11 | 1,500 | 1,424 | 5 | |||||||||||||
| Less: Net loss attributable to noncontrolling interests | - | - | - | - | (4 | ) | * | ||||||||||||
| Net income attributable to Zoetis | $ | 384 | $ | 345 | 11 | $ | 1,500 | $ | 1,428 | 5 | |||||||||
| Earnings per share-basic | $ | 0.81 | $ | 0.72 | 13 | $ | 3.14 | $ | 2.96 | 6 | |||||||||
| Earnings per share-diluted | $ | 0.80 | $ | 0.71 | 13 | $ | 3.11 | $ | 2.93 | 6 | |||||||||
| Weighted-average shares used to calculate earnings per share | |||||||||||||||||||
| Basic | 476.4 | 480.6 | 478.1 | 483.1 | |||||||||||||||
| Diluted | 480.2 | 484.5 | 481.8 | 486.9 |
* Calculation not meaningful.
RECONCILIATION OF GAAP REPORTED TO NON-GAAP ADJUSTED INFORMATION
(millions of dollars, except per share data)
| Quarter Ended December 31, 2019 | |||||||||||||||||||
| GAAP Reported (a) | Purchase Accounting Adjustments | Acquisition- Related Costs (1) | Certain Significant Items (2) | Non-GAAP Adjusted (b) | |||||||||||||||
| Cost of sales | $ | 530 | $ | (2 | ) | $ | - | $ | (1 | ) | $ | 527 | |||||||
| Gross profit | 1,144 | 2 | - | 1 | 1,147 | ||||||||||||||
| Selling, general and administrative expenses | 472 | (18 | ) | - | (2 | ) | 452 | ||||||||||||
| Research and development expenses | 132 | (1 | ) | - | - | 131 | |||||||||||||
| Amortization of intangible assets | 40 | (34 | ) | - | - | 6 | |||||||||||||
| Restructuring charges and certain acquisition-related costs | 18 | - | (10 | ) | (8 | ) | - | ||||||||||||
| Other (income)/deductions-net | (11 | ) | - | - | - | (11 | ) | ||||||||||||
| Income before provision for taxes on income | 437 | 55 | 10 | 11 | 513 | ||||||||||||||
| Provision for taxes on income | 53 | 19 | 1 | - | 73 | ||||||||||||||
| Net income attributable to Zoetis | 384 | 36 | 9 | 11 | 440 | ||||||||||||||
| Earnings per common share attributable to Zoetis-diluted | 0.80 | 0.08 | 0.02 | 0.02 | 0.92 | ||||||||||||||
| Quarter Ended December 31, 2018 | |||||||||||||||||||
| GAAP Reported (a) | Purchase Accounting Adjustments | Acquisition- Related Costs (1) | Certain Significant Items (2) | Non-GAAP Adjusted (b) | |||||||||||||||
| Cost of sales | $ | 544 | $ | (14 | ) | $ | - | $ | (4 | ) | $ | 526 | |||||||
| Gross profit | 1,020 | 14 | - | 4 | 1,038 | ||||||||||||||
| Selling, general and administrative expenses | 420 | (18 | ) | - | (1 | ) | 401 | ||||||||||||
| Research and development expenses | 125 | (1 | ) | - | - | 124 | |||||||||||||
| Amortization of intangible assets | 39 | (34 | ) | - | - | 5 | |||||||||||||
| Restructuring charges and certain acquisition-related costs | 14 | - | (22 | ) | 8 | - | |||||||||||||
| Other (income)/deductions-net | (55 | ) | - | - | 42 | (13 | ) | ||||||||||||
| Income before provision for taxes on income | 418 | 67 | 22 | (45 | ) | 462 | |||||||||||||
| Provision for taxes on income | 73 | 16 | 4 | (13 | ) | 80 | |||||||||||||
| Net income attributable to Zoetis | 345 | 51 | 18 | (32 | ) | 382 | |||||||||||||
| Earnings per common share attributable to Zoetis-diluted | 0.71 | 0.11 | 0.04 | (0.07 | ) | 0.79 |
See Notes to Reconciliation of GAAP Reported to Non-GAAP Adjusted Information for notes (1) and (2).
RECONCILIATION OF GAAP REPORTED TO NON-GAAP ADJUSTED INFORMATION
(millions of dollars, except per share data)
| Twelve Months Ended December 31, 2019 | |||||||||||||||||||
| GAAP Reported (a) | Purchase Accounting Adjustments | Acquisition- Related Costs (1) | Certain Significant Items (2) | Non-GAAP Adjusted (b) | |||||||||||||||
| Cost of sales | $ | 1,992 | $ | (24 | ) | $ | - | $ | (77 | ) | $ | 1,891 | |||||||
| Gross profit | 4,268 | 24 | - | 77 | 4,369 | ||||||||||||||
| Selling, general and administrative expenses | 1,638 | (72 | ) | - | (2 | ) | 1,564 | ||||||||||||
| Research and development expenses | 457 | (2 | ) | - | - | 455 | |||||||||||||
| Amortization of intangible assets | 155 | (136 | ) | - | - | 19 | |||||||||||||
| Restructuring charges and certain acquisition-related costs | 51 | - | (43 | ) | (8 | ) | - | ||||||||||||
| Other (income)/deductions-net | (57 | ) | - | - | 20 | (37 | ) | ||||||||||||
| Income before provision for taxes on income | 1,801 | 234 | 43 | 67 | 2,145 | ||||||||||||||
| Provision for taxes on income | 301 | 78 | 7 | 4 | 390 | ||||||||||||||
| Net income attributable to Zoetis | 1,500 | 156 | 36 | 63 | 1,755 | ||||||||||||||
| Earnings per common share attributable to Zoetis-diluted | 3.11 | 0.32 | 0.08 | 0.13 | 3.64 | ||||||||||||||
| Twelve Months Ended December 31, 2018 | |||||||||||||||||||
| GAAP Reported (a) | Purchase Accounting Adjustments | Acquisition- Related Costs (1) | Certain Significant Items (2) | Non-GAAP Adjusted (b) | |||||||||||||||
| Cost of sales | $ | 1,911 | $ | (27 | ) | $ | - | $ | (8 | ) | $ | 1,876 | |||||||
| Gross profit | 3,914 | 27 | - | 8 | 3,949 | ||||||||||||||
| Selling, general and administrative expenses | 1,484 | (32 | ) | - | (2 | ) | 1,450 | ||||||||||||
| Research and development expenses | 432 | (2 | ) | - | - | 430 | |||||||||||||
| Amortization of intangible assets | 117 | (101 | ) | - | - | 16 | |||||||||||||
| Restructuring charges and certain acquisition-related costs | 68 | - | (63 | ) | (5 | ) | - | ||||||||||||
| Other (income)/deductions-net | (83 | ) | - | - | 58 | (25 | ) | ||||||||||||
| Income before provision for taxes on income | 1,690 | 162 | 63 | (43 | ) | 1,872 | |||||||||||||
| Provision for taxes on income | 266 | 43 | 13 | 29 | 351 | ||||||||||||||
| Net income attributable to Zoetis | 1,428 | 119 | 50 | (72 | ) | 1,525 | |||||||||||||
| Earnings per common share attributable to Zoetis-diluted | 2.93 | 0.24 | 0.10 | (0.14 | ) | 3.13 |
See Notes to Reconciliation of GAAP Reported to Non-GAAP Adjusted Information for notes (1) and (2).
NOTES TO RECONCILIATION OF GAAP REPORTED TO NON-GAAP ADJUSTED INFORMATION
(millions of dollars)
| Fourth Quarter | Full Year | ||||||||||||||
| 2019 | 2018 | 2019 | 2018 | ||||||||||||
| Transaction costs (a) | $ | - | $ | - | $ | - | $ | 21 | |||||||
| Integration costs (b) | 5 | 11 | 18 | 21 | |||||||||||
| Restructuring charges (c) | 5 | 11 | 25 | 21 | |||||||||||
| Total acquisition-related costs-pre-tax | 10 | 22 | 43 | 63 | |||||||||||
| Income taxes (d) | 1 | 4 | 7 | 13 | |||||||||||
| Total acquisition-related costs-net of tax | $ | 9 | $ | 18 | $ | 36 | $ | 50 |
(2) Certain significant items include the following:
| Fourth Quarter | Full Year | ||||||||||||||
| 2019 | 2018 | 2019 | 2018 | ||||||||||||
| Operational efficiency initiative (a) | $ | - | $ | (1 | ) | $ | (20 | ) | $ | (1 | ) | ||||
| Supply network strategy (b) | - | 2 | 7 | 10 | |||||||||||
| Other restructuring charges and cost-reduction/productivity initiatives (c) | 8 | (4 | ) | 8 | 7 | ||||||||||
| Net gain on sale of assets (d) | - | (42 | ) | - | (42 | ) | |||||||||
| Other (e) | 3 | - | 72 | (17 | ) | ||||||||||
| Total certain significant items-pre-tax | 11 | (45 | ) | 67 | (43 | ) | |||||||||
| Income taxes (f) | - | (13 | ) | 4 | 29 | ||||||||||
| Total certain significant items-net of tax | $ | 11 | $ | (32 | ) | $ | 63 | $ | (72 | ) |
ADJUSTED SELECTED COSTS AND EXPENSES(a)
(millions of dollars)
| Fourth Quarter | % Change | |||||||||||||||||
| 2019 | 2018 | Total | Foreign Exchange | Operational (b) | ||||||||||||||
| Adjusted cost of sales | $ | 527 | $ | 526 | - | % | (5 | )% | 5 | % | ||||||||
| As a percent of revenue | 31.5 | % | 33.6 | % | NA | NA | NA | |||||||||||
| Adjusted SG&A expenses | $ | 452 | $ | 401 | 13 | % | (1 | )% | 14 | % | ||||||||
| Adjusted R&D expenses | 131 | 124 | 6 | % | (1 | )% | 7 | % | ||||||||||
| Adjusted net income attributable to Zoetis | 440 | 382 | 15 | % | 2 | % | 13 | % | ||||||||||
| Full Year | % Change | |||||||||||||||||
| 2019 | 2018 | Total | Foreign Exchange | Operational (b) | ||||||||||||||
| Adjusted cost of sales | $ | 1,891 | $ | 1,876 | 1 | % | (6 | )% | 7 | % | ||||||||
| As a percent of revenue | 30.2 | % | 32.2 | % | NA | NA | NA | |||||||||||
| Adjusted SG&A expenses | $ | 1,564 | $ | 1,450 | 8 | % | (3 | )% | 11 | % | ||||||||
| Adjusted R&D expenses | 455 | 430 | 6 | % | (1 | )% | 7 | % | ||||||||||
| Adjusted net income attributable to Zoetis | 1,755 | 1,525 | 15 | % | 1 | % | 14 | % |
| Selected Line Items (millions of dollars, except per share amounts) | Full Year 2020 |
| Revenue | $6,650 to $6,800 |
| Operational growth (a) | 7.0% to 9.5% |
| Adjusted cost of sales as a percentage of revenue (b) | 30% to 31% |
| Adjusted SG&A expenses (b) | $1,590 to $1,640 |
| Adjusted R&D expenses (b) | $455 to $475 |
| Adjusted interest expense and other (income)/deductions (b) | Approximately $215 |
| Effective tax rate on adjusted income (b) | 20% to 21% |
| Adjusted diluted EPS (b) | $3.90 to $4.00 |
| Adjusted net income (b) | $1,865 to $1,915 |
| Operational growth (a)(c) | 8% to 11% |
| Certain significant items and acquisition-related costs (d) | $20 to $30 |
The guidance reflects foreign exchange rates as of late January 2020.
Reconciliations of 2020 reported guidance to 2020 adjusted guidance follows:
| (millions of dollars, except per share amounts) | Reported | Certain significant items and acquisition-related costs (d) | Purchase accounting | Adjusted (b) | |
| Cost of sales as a percentage of revenue | 30.3% to 31.3% | ~ (0.2%) | ~ (0.1%) | 30% to 31% | |
| SG&A expenses | $1,661 to $1,711 | ~ ($6) | ~ ($65) | $1,590 to $1,640 | |
| R&D expenses | $457 to $477 | ~ ($2) | $455 to $475 | ||
| Interest expense and other (income)/deductions | ~ $195 | ~ $20 | ~ $215 | ||
| Effective tax rate | 19.5% to 20.5% | ~ 0.5% | 20% to 21% | ||
| Diluted EPS | $3.53 to $3.65 | $0.04 to $0.06 | ~ $0.31 | $3.90 to $4.00 | |
| Net income attributable to Zoetis | $1,685 to $1,745 | $20 to $30 | ~ $150 | $1,865 to $1,915 |
CONSOLIDATED REVENUE BY SEGMENT(a) AND SPECIES
(millions of dollars)
| Fourth Quarter | % Change | ||||||||||||||||
| 2019 | 2018 | Total | Foreign Exchange | Operational (b) | |||||||||||||
| Revenue: | |||||||||||||||||
| Livestock | $ | 868 | $ | 872 | - | % | (2 | )% | 2 | % | |||||||
| Companion Animal | 784 | 664 | 18 | % | (1 | )% | 19 | % | |||||||||
| Contract Manufacturing & Human Health | 22 | 28 | (21 | )% | (2 | )% | (19 | )% | |||||||||
| Total Revenue | $ | 1,674 | $ | 1,564 | 7 | % | (2 | )% | 9 | % | |||||||
| U.S. | |||||||||||||||||
| Livestock | $ | 372 | $ | 384 | (3 | )% | - | % | (3 | )% | |||||||
| Companion Animal | 489 | 425 | 15 | % | - | % | 15 | % | |||||||||
| Total U.S. Revenue | $ | 861 | $ | 809 | 6 | % | - | % | 6 | % | |||||||
| International | |||||||||||||||||
| Livestock | $ | 496 | $ | 488 | 2 | % | (3 | )% | 5 | % | |||||||
| Companion Animal | 295 | 239 | 23 | % | (3 | )% | 26 | % | |||||||||
| Total International Revenue | $ | 791 | $ | 727 | 9 | % | (3 | )% | 12 | % | |||||||
| Livestock: | |||||||||||||||||
| Cattle | $ | 506 | $ | 525 | (4 | )% | (2 | )% | (2 | )% | |||||||
| Swine | 162 | 163 | (1 | )% | (2 | )% | 1 | % | |||||||||
| Poultry | 142 | 127 | 12 | % | (1 | )% | 13 | % | |||||||||
| Fish | 44 | 40 | 10 | % | (7 | )% | 17 | % | |||||||||
| Other | 14 | 17 | (18 | )% | (7 | )% | (11 | )% | |||||||||
| Total Livestock Revenue | $ | 868 | $ | 872 | - | % | (2 | )% | 2 | % | |||||||
| Companion Animal: | |||||||||||||||||
| Dogs and Cats | $ | 719 | $ | 613 | 17 | % | (2 | )% | 19 | % | |||||||
| Horses | 65 | 51 | 27 | % | 1 | % | 26 | % | |||||||||
| Total Companion Animal Revenue | $ | 784 | $ | 664 | 18 | % | (1 | )% | 19 | % |
CONSOLIDATED REVENUE BY SEGMENT(a) AND SPECIES
(millions of dollars)
| Full Year | % Change | |||||||||||||||||
| 2019 | 2018 | Total | Foreign Exchange | Operational (b) | ||||||||||||||
| Revenue: | ||||||||||||||||||
| Livestock | $ | 3,030 | $ | 3,154 | (4 | )% | (3 | )% | (1 | )% | ||||||||
| Companion Animal | 3,145 | 2,613 | 20 | % | (3 | )% | 23 | % | ||||||||||
| Contract Manufacturing & Human Health | 85 | 58 | 47 | % | (1 | )% | 48 | % | ||||||||||
| Total Revenue | $ | 6,260 | $ | 5,825 | 7 | % | (3 | )% | 10 | % | ||||||||
| U.S. | ||||||||||||||||||
| Livestock | $ | 1,219 | $ | 1,269 | (4 | )% | - | % | (4 | )% | ||||||||
| Companion Animal | 1,984 | 1,608 | 23 | % | - | % | 23 | % | ||||||||||
| Total U.S. Revenue | $ | 3,203 | $ | 2,877 | 11 | % | - | % | 11 | % | ||||||||
| International | ||||||||||||||||||
| Livestock | $ | 1,811 | $ | 1,885 | (4 | )% | (6 | )% | 2 | % | ||||||||
| Companion Animal | 1,161 | 1,005 | 16 | % | (5 | )% | 21 | % | ||||||||||
| Total International Revenue | $ | 2,972 | $ | 2,890 | 3 | % | (6 | )% | 9 | % | ||||||||
| Livestock: | ||||||||||||||||||
| Cattle | $ | 1,654 | $ | 1,754 | (6 | )% | (4 | )% | (2 | )% | ||||||||
| Swine | 611 | 663 | (8 | )% | (3 | )% | (5 | )% | ||||||||||
| Poultry | 559 | 522 | 7 | % | (3 | )% | 10 | % | ||||||||||
| Fish | 134 | 132 | 2 | % | (4 | )% | 6 | % | ||||||||||
| Other | 72 | 83 | (13 | )% | (6 | )% | (7 | )% | ||||||||||
| Total Livestock Revenue | $ | 3,030 | $ | 3,154 | (4 | )% | (3 | )% | (1 | )% | ||||||||
| Companion Animal: | ||||||||||||||||||
| Dogs and Cats | 2,950 | 2,445 | 21 | % | (2 | )% | 23 | % | ||||||||||
| Horses | 195 | 168 | 16 | % | (3 | )% | 19 | % | ||||||||||
| Total Companion Animal Revenue | $ | 3,145 | $ | 2,613 | 20 | % | (3 | )% | 23 | % |
CONSOLIDATED REVENUE BY KEY INTERNATIONAL MARKETS
(millions of dollars)
| Fourth Quarter | % Change | |||||||||||||||||
| 2019 | 2018 | Total | Foreign Exchange | Operational (a) | ||||||||||||||
| Total International | $ | 791.6 | $ | 727.2 | 9 | % | (3 | )% | 12 | % | ||||||||
| Australia | 46.4 | 36.8 | 26 | % | (7 | )% | 33 | % | ||||||||||
| Brazil | 86.9 | 84.6 | 3 | % | (7 | )% | 10 | % | ||||||||||
| Canada | 64.9 | 64.4 | 1 | % | (1 | )% | 2 | % | ||||||||||
| China | 44.4 | 41.3 | 8 | % | (2 | )% | 10 | % | ||||||||||
| France | 33.7 | 38.3 | (12 | )% | (4 | )% | (8 | )% | ||||||||||
| Germany | 42.6 | 34.9 | 22 | % | (5 | )% | 27 | % | ||||||||||
| Italy | 30.1 | 24.5 | 23 | % | (4 | )% | 27 | % | ||||||||||
| Japan | 40.5 | 34.9 | 16 | % | 4 | % | 12 | % | ||||||||||
| Mexico | 29.4 | 26.2 | 12 | % | - | % | 12 | % | ||||||||||
| Spain | 28.2 | 26.8 | 5 | % | (5 | )% | 10 | % | ||||||||||
| United Kingdom | 52.7 | 46.1 | 14 | % | (3 | )% | 17 | % | ||||||||||
| Other Developed | 100.7 | 95.5 | 5 | % | (5 | )% | 10 | % | ||||||||||
| Other Emerging | 191.1 | 172.9 | 11 | % | (2 | )% | 13 | % | ||||||||||
| Full Year | % Change | |||||||||||||||||
| 2019 | 2018 | Total | Foreign Exchange | Operational (a) | ||||||||||||||
| Total International | $ | 2,972.2 | $ | 2,889.8 | 3 | % | (6 | )% | 9 | % | ||||||||
| Australia | 195.9 | 188.6 | 4 | % | (8 | )% | 12 | % | ||||||||||
| Brazil | 293.0 | 294.7 | (1 | )% | (10 | )% | 9 | % | ||||||||||
| Canada | 206.4 | 202.8 | 2 | % | (3 | )% | 5 | % | ||||||||||
| China | 200.1 | 211.4 | (5 | )% | (4 | )% | (1 | )% | ||||||||||
| France | 116.7 | 129.8 | (10 | )% | (5 | )% | (5 | )% | ||||||||||
| Germany | 153.3 | 146.8 | 4 | % | (6 | )% | 10 | % | ||||||||||
| Italy | 112.0 | 104.0 | 8 | % | (5 | )% | 13 | % | ||||||||||
| Japan | 158.1 | 149.0 | 6 | % | 1 | % | 5 | % | ||||||||||
| Mexico | 116.6 | 100.0 | 17 | % | (1 | )% | 18 | % | ||||||||||
| Spain | 114.4 | 109.9 | 4 | % | (6 | )% | 10 | % | ||||||||||
| United Kingdom | 198.1 | 181.2 | 9 | % | (6 | )% | 15 | % | ||||||||||
| Other Developed | 370.1 | 361.4 | 2 | % | (6 | )% | 8 | % | ||||||||||
| Other Emerging | 737.5 | 710.2 | 4 | % | (7 | )% | 11 | % |
(millions of dollars)
| Fourth Quarter | % Change | |||||||||||||||||
| 2019 | 2018 | Total | Foreign Exchange | Operational (b) | ||||||||||||||
| U.S. : | ||||||||||||||||||
| Revenue | $ | 861 | $ | 809 | 6 | % | - | % | 6 | % | ||||||||
| Cost of sales | 187 | 175 | 7 | % | - | % | 7 | % | ||||||||||
| Gross profit | 674 | 634 | 6 | % | - | % | 6 | % | ||||||||||
| Gross margin | 78.3 | % | 78.4 | % | ||||||||||||||
| Operating expenses | 176 | 128 | 38 | % | - | % | 38 | % | ||||||||||
| Other (income)/deductions | - | - | * | * | * | |||||||||||||
| U.S. Earnings | $ | 498 | $ | 506 | (2 | )% | - | % | (2 | )% | ||||||||
| International: | ||||||||||||||||||
| Revenue | $ | 791 | $ | 727 | 9 | % | (3 | )% | 12 | % | ||||||||
| Cost of sales | 263 | 240 | 10 | % | (3 | )% | 13 | % | ||||||||||
| Gross profit | 528 | 487 | 8 | % | (4 | )% | 12 | % | ||||||||||
| Gross margin | 66.8 | % | 67.0 | % | ||||||||||||||
| Operating expenses | 148 | 148 | - | % | (3 | )% | 3 | % | ||||||||||
| Other (income)/deductions | - | 1 | * | * | * | |||||||||||||
| International Earnings | $ | 380 | $ | 338 | 12 | % | (4 | )% | 16 | % | ||||||||
| Total Reportable Segments | $ | 878 | $ | 844 | 4 | % | (1 | )% | 5 | % | ||||||||
| Other business activities (c) | (102 | ) | (90 | ) | 13 | % | ||||||||||||
| Reconciling Items: | ||||||||||||||||||
| Corporate (d) | (195 | ) | (196 | ) | (1 | )% | ||||||||||||
| Purchase accounting adjustments (e) | (55 | ) | (67 | ) | (18 | )% | ||||||||||||
| Acquisition-related costs (f) | (10 | ) | (22 | ) | (55 | )% | ||||||||||||
| Certain significant items (g) | (11 | ) | 45 | * | ||||||||||||||
| Other unallocated (h) | (68 | ) | (96 | ) | (29 | )% | ||||||||||||
| Total Earnings (i) | $ | 437 | $ | 418 | 5 | % |
* Calculation not meaningful.
(millions of dollars)
| Full Year | % Change | |||||||||||||||||
| 2019 | 2018 | Total | Foreign Exchange | Operational (b) | ||||||||||||||
| U.S.: | ||||||||||||||||||
| Revenue | $ | 3,203 | $ | 2,877 | 11 | % | - | % | 11 | % | ||||||||
| Cost of sales | 655 | 606 | 8 | % | - | % | 8 | % | ||||||||||
| Gross profit | 2,548 | 2,271 | 12 | % | - | % | 12 | % | ||||||||||
| Gross margin | 79.6 | % | 78.9 | % | ||||||||||||||
| Operating expenses | 543 | 456 | 19 | % | - | % | 19 | % | ||||||||||
| Other (income)/deductions | - | - | * | * | * | |||||||||||||
| U.S. Earnings | $ | 2,005 | $ | 1,815 | 10 | % | - | % | 10 | % | ||||||||
| International: | ||||||||||||||||||
| Revenue | $ | 2,972 | $ | 2,890 | 3 | % | (6 | )% | 9 | % | ||||||||
| Cost of sales | 925 | 929 | - | % | (8 | )% | 8 | % | ||||||||||
| Gross profit | 2,047 | 1,961 | 4 | % | (5 | )% | 9 | % | ||||||||||
| Gross margin | 68.9 | % | 67.9 | % | ||||||||||||||
| Operating expenses | 560 | 559 | - | % | (6 | )% | 6 | % | ||||||||||
| Other (income)/deductions | - | 3 | * | * | * | |||||||||||||
| International Earnings | $ | 1,487 | $ | 1,399 | 6 | % | (4 | )% | 10 | % | ||||||||
| Total Reportable Segments | $ | 3,492 | $ | 3,214 | 9 | % | (1 | )% | 10 | % | ||||||||
| Other business activities (c) | (348 | ) | (337 | ) | 3 | % | ||||||||||||
| Reconciling Items: | ||||||||||||||||||
| Corporate (d) | (707 | ) | (666 | ) | 6 | % | ||||||||||||
| Purchase accounting adjustments (e) | (234 | ) | (162 | ) | 44 | % | ||||||||||||
| Acquisition-related costs (f) | (43 | ) | (63 | ) | (32 | )% | ||||||||||||
| Certain significant items (g) | (67 | ) | 43 | * | ||||||||||||||
| Other unallocated (h) | (292 | ) | (339 | ) | (14 | )% | ||||||||||||
| Total Earnings (i) | $ | 1,801 | $ | 1,690 | 7 | % |
* Calculation not meaningful.