- Reports Revenue of $1.9 Billion, Growing 22%, and Net Income
of $559 Million, or $1.17 per Diluted Share, Increasing 32% and
33%, Respectively, on a Reported Basis for First Quarter
2021
- Reports Adjusted Net Income of $603 Million, or Adjusted
Diluted EPS of $1.26, for First Quarter 2021
- Delivers 21% Operational Growth in Revenue and 34%
Operational Growth in Adjusted Net Income for First Quarter
2021
- Increases Full Year 2021 Revenue Guidance to $7.500 -
$7.625 Billion and Diluted EPS of $4.08 - $4.19 on a Reported
Basis, or $4.42 - $4.51 on an Adjusted Basis
Zoetis Inc. (NYSE: ZTS) today reported its financial results for
the first quarter of 2021 and increased its guidance for full year
2021.
The company reported revenue of $1.9 billion for the first
quarter of 2021, an increase of 22% compared with the first quarter
of 2020. Net income for the first quarter of 2021 was $559 million,
or $1.17 per diluted share, an increase of 32% and 33%,
respectively, on a reported basis.
Adjusted net income1 for the first quarter of 2021 was $603
million, or $1.26 per diluted share, an increase of 33%, on a
reported basis. Adjusted net income for the first quarter of 2021
excludes the net impact of $44 million for purchase accounting
adjustments, acquisition-related costs and certain significant
items.
On an operational2 basis, revenue for the first quarter of 2021
increased 21%, excluding the impact of foreign currency. Adjusted
net income for the first quarter of 2021 increased 34%
operationally, excluding the impact of foreign currency.
EXECUTIVE COMMENTARY
“We are off to a very strong start in 2021 -- our best quarter
ever -- with 21% operational revenue growth and 34% growth in
adjusted net income, as we continue to build on our innovative
petcare portfolio, expand in key markets outside the U.S., and
accelerate sales of diagnostics products,” said Kristin Peck, Chief
Executive Officer of Zoetis.
“Looking ahead, we are raising guidance for operational growth
in full-year revenue to the range of 10.5% to 12%. The fundamental
growth drivers for our industry continue to show strong and
sustainable momentum, and we remain confident that our diverse
portfolio across species and geographies, our pipeline of
innovative new products and lifecycle innovations, and the agility
and commitment of our colleagues will continue driving our success
in 2021 and beyond."
QUARTERLY HIGHLIGHTS
Zoetis organizes and manages its commercial operations across
two segments: 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 first quarter of 2021:
- Revenue in the U.S. segment was $933 million, an
increase of 19% compared with the first quarter of 2020. Sales of
companion animal products increased 32% driven by growth in its
parasiticides portfolio including the recently launched Simparica
Trio® brand, the new triple combination parasiticide for dogs. Also
contributing to growth was the company’s diagnostic franchise,
resulting from increased sales of point-of-care consumables, and
the key dermatology portfolio across both the Apoquel® and
Cytopoint® brands. The company benefited from the continued
recovery of veterinary clinic businesses, following the impact of
social distancing restrictions that began in the same quarter of
the prior year. Sales of livestock products decreased 4% in the
quarter. The poultry portfolio declined as a result of the expanded
use of lower cost alternatives to the company’s premium products.
Sales of swine products declined due to a non-recurring government
purchase in the same quarter last year. These declines were
partially offset by increased sales in the company’s cattle
portfolio resulting from successful promotional activities.
- Revenue in the International segment was $922 million,
an increase of 27% on a reported basis and an increase of 25%
operationally compared with the first quarter of 2020. Sales of
companion animal products grew 40% on a reported basis and 37% on
an operational basis. Growth resulted from increased sales of the
company’s parasiticides portfolio including the Simparica® and
Revolution®/Stronghold® franchises, as well as the key dermatology
portfolio across both the Apoquel and Cytopoint brands. Growth also
resulted from the company’s broader in-line portfolio, which
benefited from increased pet ownership and medicalization rates, as
well as pent up demand resulting from COVID-19 restrictions. Sales
of livestock products grew 17% on both a reported and operational
basis. Sales of swine products grew as a result of the continuing
expansion of herd production and increased biosecurity measures in
key accounts in the wake of African Swine Fever in China. Sales of
cattle products grew due to promotional activities, key account
penetration and favorable export market conditions in Brazil and
other emerging markets around the world. Growth in the company’s
fish portfolio was primarily the result of increased vaccine sales
in key salmon markets, including favorable timing of vaccination
programs. The recent acquisition of Fish Vet Group also contributed
to growth in the quarter. Sales of poultry products grew modestly
versus the same period in the prior year.
INVESTMENTS IN GROWTH
Zoetis continues to gain market approvals for its innovative
monoclonal antibody (mAb) therapies that alleviate osteoarthritis
(OA) pain in cats. Since its last quarterly earnings announcement,
Zoetis received approval in the European Union (EU) for
Solensia® (frunevetmab), the first injectable mAb for the
alleviation of pain associated with OA in cats, a condition that is
vastly underdiagnosed and undertreated in felines today; it is also
approved in Switzerland.
In China, Zoetis’ second largest market in terms of revenue, the
company received approvals for several of its leading products. On
the livestock side, Fostera® PCV MH, a one-shot vaccine for
pigs that offers long-lasting combined protection against porcine
circovirus type 2 (PCV2) and Mycoplasma hyopneumoniae infections,
was approved, along with Excenel® RTU EZ (ceftiofur
hydrochloride), a key anti-infective for cattle and swine. For
companion animals, Zoetis expanded the reach of its parasiticide
offering for cats with the approval of Revolution® Plus
(selamectin and sarolaner topical solution).
Additionally, Zoetis continues to bring leading products into
new markets. In poultry, the company expanded its line of
recombinant vector vaccines with the approval of Poulvac®
Procerta™ HVT-ND in Canada, Brazil and other smaller markets.
This vaccine provides early protection against the contemporary
Marek and Newcastle viruses in chickens. In parasiticides, the
company received approval of Simparica Trio (sarolaner,
moxidectin, pyrantel chewable tablets) in Japan, Mexico and other
smaller markets.
FINANCIAL GUIDANCE
Zoetis is increasing its full year 2021 guidance, which
includes:
- Revenue between $7.500 billion and $7.625 billion
- Reported diluted EPS between $4.08 and $4.19
- Adjusted diluted EPS between $4.42 and $4.51
This guidance reflects foreign exchange rates as of late April.
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 first quarter
2021 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 May 6, 2021.
About Zoetis
As the world’s leading animal health company, Zoetis is driven
by a singular purpose: to nurture our world and humankind by
advancing care for animals. After nearly 70 years innovating ways
to predict, prevent, detect, and treat animal illness, Zoetis
continues to stand by those raising and caring for animals
worldwide -- from livestock farmers to veterinarians and pet
owners. The company’s leading portfolio and pipeline of medicines,
vaccines, diagnostics and technologies make a difference in over
100 countries. In 2020, Zoetis generated revenue of $6.7 billion
with approximately 11,300 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 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.
DISCLOSURE NOTICES
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; the impact of the coronavirus (COVID-19) pandemic
and any recovery therefrom on our business, suppliers, customers
and employees; 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 and any changes
thereto; 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, 2020, 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. Such risks and
uncertainties may be amplified by the COVID-19 pandemic and its
potential impact on the global economy and our business. 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.
Internet Posting of Information: We
routinely post information that may be important to investors in
the 'Investors' section of our website at www.zoetis.com, on our
Facebook page at http://www.facebook.com/zoetis and on
Twitter@zoetis. We encourage investors and potential investors to
consult our website regularly and to follow us on Facebook and
Twitter for important information about us.
ZTS-COR ZTS-FIN ZTS-IR
ZOETIS INC.
CONDENSED CONSOLIDATED STATEMENTS
OF INCOME(a)
(UNAUDITED)
(millions of dollars, except per
share data)
First Quarter
2021
2020
% Change
Revenue
$
1,871
$
1,534
22
Costs and expenses:
Cost of sales
549
459
20
Selling, general and administrative
expenses
409
389
5
Research and development expenses
118
107
10
Amortization of intangible assets
40
40
—
Restructuring charges and certain
acquisition-related costs
9
9
—
Interest expense
57
53
8
Other (income)/deductions–net
2
(20
)
*
Income before provision for taxes on
income
687
497
38
Provision for taxes on income
129
74
74
Net income before allocation to
noncontrolling interests
558
423
32
Less: Net loss attributable to
noncontrolling interests
(1
)
—
*
Net income attributable to Zoetis
$
559
$
423
32
Earnings per share—basic
$
1.18
$
0.89
33
Earnings per share—diluted
$
1.17
$
0.88
33
Weighted-average shares used to calculate
earnings per share
Basic
475.5
475.6
Diluted
477.9
479.0
(a)
The condensed consolidated
statements of income present the first quarter ended March 31, 2021
and March 31, 2020. Subsidiaries operating outside the United
States are included for the first quarter ended February 28, 2021
and February 29, 2020.
ZOETIS INC.
RECONCILIATION OF GAAP REPORTED
TO NON-GAAP ADJUSTED INFORMATION
CERTAIN LINE ITEMS
(UNAUDITED)
(millions of dollars, except per
share data)
Quarter Ended March 31, 2021
GAAP Reported(a)
Purchase Accounting
Adjustments
Acquisition- Related Costs(1)
Certain Significant Items(2)
Non-GAAP Adjusted(b)
Cost of sales
$
549
$
(2
)
$
—
$
(4
)
$
543
Gross profit
1,322
2
—
4
1,328
Selling, general and administrative
expenses
409
(8
)
—
—
401
Amortization of intangible assets
40
(34
)
—
—
6
Restructuring charges and certain
acquisition-related costs
9
—
(5
)
(4
)
—
Income before provision for taxes on
income
687
44
5
8
744
Provision for taxes on income
129
10
1
2
142
Net income attributable to Zoetis
559
34
4
6
603
Earnings per common share attributable to
Zoetis–diluted
1.17
0.07
0.01
0.01
1.26
Quarter Ended March 31, 2020
GAAP Reported(a)
Purchase Accounting
Adjustments
Acquisition- Related Costs(1)
Certain Significant Items(2)
Non-GAAP Adjusted(b)
Cost of sales
$
459
$
(2
)
$
—
$
(2
)
$
455
Gross profit
1,075
2
—
2
1,079
Selling, general and administrative
expenses
389
(18
)
—
(2
)
369
Amortization of intangible assets
40
(34
)
—
—
6
Restructuring charges and certain
acquisition-related costs
9
—
(7
)
(2
)
—
Other (income)/deductions–net
(20
)
—
—
17
(3
)
Income before provision for taxes on
income
497
54
7
(11
)
547
Provision for taxes on income
74
22
(1
)
(3
)
92
Net income attributable to Zoetis
423
32
8
(8
)
455
Earnings per common share attributable to
Zoetis–diluted
0.88
0.07
0.02
(0.02
)
0.95
(a)
The condensed consolidated
statements of income present the first quarter ended March 31, 2021
and March 31, 2020. Subsidiaries operating outside the United
States are included for the first quarter ended February 28, 2021
and February 29, 2020.
(b)
Non-GAAP adjusted net income and
its components and non-GAAP adjusted diluted EPS are not, and
should not be viewed as, substitutes for U.S. GAAP net income and
its components and diluted EPS. Despite the importance of these
measures to management in goal setting and performance measurement,
non-GAAP adjusted net income and its components and non-GAAP
adjusted diluted EPS are non-GAAP financial measures that have no
standardized meaning prescribed by U.S. GAAP and, therefore, have
limits in their usefulness to investors. Because of the
non-standardized definitions, non-GAAP adjusted net income and its
components and non-GAAP adjusted diluted EPS (unlike U.S. GAAP net
income and its components and diluted EPS) may not be comparable to
the calculation of similar measures of other companies. Non-GAAP
adjusted net income and its components, and non-GAAP adjusted
diluted EPS are presented solely to permit investors to more fully
understand how management assesses performance.
See Notes to Reconciliation of
GAAP Reported to Non-GAAP Adjusted Information for notes (1) and
(2).
ZOETIS INC.
NOTES TO RECONCILIATION OF GAAP
REPORTED TO NON-GAAP ADJUSTED INFORMATION
CERTAIN LINE ITEMS
(UNAUDITED)
(millions of dollars)
(1) Acquisition-related costs include the
following:
First Quarter
2021
2020
Integration costs(a)
$
3
$
6
Restructuring charges(b)
2
1
Total acquisition-related
costs—pre-tax
5
7
Income taxes(c)
1
(1
)
Total acquisition-related costs—net of
tax
$
4
$
8
(a)
Integration costs represent
external, incremental costs directly related to integrating
acquired businesses and primarily include expenditures for
consulting and the integration of systems and processes. Included
in Restructuring charges and certain acquisition-related costs.
(b)
Represents exit and employee
termination costs, included in Restructuring charges and certain
acquisition-related costs.
(c)
Included in Provision for taxes
on income. Income taxes include the tax effect of the associated
pre-tax amounts, calculated by determining the jurisdictional
location of the pre-tax amounts and applying that jurisdiction's
applicable tax rate. For the first quarter ended March 31, 2020,
also includes a tax charge related to a remeasurement of deferred
taxes resulting from the integration of acquired businesses.
(2) Certain significant items include the
following:
First Quarter
2021
2020
Operational efficiency initiative(a)
$
—
$
(17
)
Supply network strategy(b)
1
2
Other restructuring charges and
cost-reduction/productivity initiatives(c)
6
2
Certain asset impairment charges(d)
1
—
Other(e)
—
2
Total certain significant
items—pre-tax
8
(11
)
Income taxes(f)
2
(3
)
Total certain significant items—net of
tax
$
6
$
(8
)
(a)
Represents a net gain resulting
from net cash proceeds received pursuant to an agreement related to
the 2016 sale of certain U.S. manufacturing sites, included in
Other (income)/deductions-net.
(b)
Represents product transfer
costs, included in Cost of sales, related to cost-reduction and
productivity initiatives.
(c)
For the first quarter ended March
31, 2021, represents product transfer costs and employee
termination costs related to cost-reduction and productivity
initiatives and the CEO transition, included in Restructuring
charges and certain acquisition-related costs. For the first
quarter ended March 31, 2020, represents employee termination costs
incurred as a result of the CEO transition, included in
Restructuring charges and certain acquisition-related costs.
(d)
Represents asset impairment
charges related to inventory in our precision livestock farming
business, included in Cost of sales.
(e)
Represents the modification of
share-based compensation related to CEO transition costs, included
in Selling, general and administrative expenses.
(f)
Included in Provision for taxes
on income. Income taxes include the tax effect of the associated
pre-tax amounts, calculated by determining the jurisdictional
location of the pre-tax amounts and applying that jurisdiction's
applicable tax rate.
ZOETIS INC.
ADJUSTED SELECTED COSTS, EXPENSES
AND INCOME(a)
(UNAUDITED)
(millions of dollars)
First Quarter
% Change
2021
2020
Total
Foreign Exchange
Operational(b)
Adjusted cost of sales
$
543
$
455
19
%
3
%
16
%
as a percent of revenue
29.0
%
29.7
%
NA
NA
NA
Adjusted SG&A expenses
401
369
9
%
1
%
8
%
Adjusted R&D expenses
118
107
10
%
1
%
9
%
Adjusted net income attributable to
Zoetis
603
455
33
%
(1)
%
34
%
(a)
Adjusted cost of sales, adjusted
selling, general, and administrative (SG&A) expenses, adjusted
research and development (R&D) expenses, and adjusted net
income (non-GAAP financial measures) are defined as the
corresponding reported U.S. GAAP income statement line items
excluding purchase accounting adjustments, acquisition-related
costs, and certain significant items. These adjusted income
statement line item measures are not, and should not be viewed as,
substitutes for the corresponding U.S. GAAP line items. The
corresponding GAAP line items and reconciliations of reported to
adjusted information are provided in Condensed Consolidated
Statements of Income and Reconciliation of GAAP Reported to
Non-GAAP Adjusted Information.
(b)
Operational growth (a non-GAAP
financial measure) is defined as growth excluding the impact of
foreign exchange.
ZOETIS INC.
2021 GUIDANCE
Selected Line Items
(millions of dollars, except per share
amounts)
Full Year 2021
Revenue
$7,500 to $7,625
Operational growth(a)
10.5% to 12%
Adjusted cost of sales as a percentage of
revenue(b)
Approximately 30%
Adjusted SG&A expenses(b)
$1,820 to $1,870
Adjusted R&D expenses(b)
$500 to $520
Adjusted interest expense and other
(income)/deductions-net(b)
Approximately $260
Effective tax rate on adjusted
income(b)
19% - 20%
Adjusted diluted EPS(b)
$4.42 to $4.51
Adjusted net income(b)
$2,120 to $2,160
Operational growth(a)(c)
12% to 14%
Certain significant items and
acquisition-related costs(d)
$15 - $25
The guidance reflects foreign
exchange rates as of late April 2021.
Reconciliations of 2021 reported
guidance to 2021 adjusted guidance follows:
(millions of dollars, except per share
amounts)
Reported
Certain significant items and
acquisition-related costs(d)
Purchase accounting
Adjusted(c)
Cost of sales as a percentage of
revenue
~ 30.3%
~ (0.2%)
~ (0.1%)
~ 30%
SG&A expenses
$1,850 to $1,900
~ $(30)
$1,820 to $1,870
R&D expenses
$502 to $522
~ $(2)
$500 to $520
Interest expense and other
(income)/deductions-net
~ $260
~ $260
Effective tax rate
~ 19% to 20%
~ 19% to 20%
Diluted EPS
$4.08 to $4.19
$0.03 to $0.05
~ $0.29
$4.42 to $4.51
Net income attributable to Zoetis
$1,955 to $2,005
$15 to $25
~ $140
$2,120 to $2,160
(a)
Operational growth (a non-GAAP
financial measure) excludes the impact of foreign exchange.
(b)
Adjusted net income and its
components and adjusted diluted EPS are defined as reported U.S.
GAAP net income and its components and reported diluted EPS
excluding purchase accounting adjustments, acquisition-related
costs and certain significant items. Adjusted cost of sales,
adjusted SG&A expenses, adjusted R&D expenses, and adjusted
interest expense and other (income)/deductions-net are income
statement line items prepared on the same basis, and, therefore,
components of the overall adjusted income measure. Despite the
importance of these measures to management in goal setting and
performance measurement, adjusted net income and its components and
adjusted diluted EPS are non-GAAP financial measures that have no
standardized meaning prescribed by U.S. GAAP and, therefore, have
limits in their usefulness to investors. Because of the
non-standardized definitions, adjusted net income and its
components and adjusted diluted EPS (unlike U.S. GAAP net income
and its components and diluted EPS) may not be comparable to the
calculation of similar measures of other companies. Adjusted net
income and its components and adjusted diluted EPS are presented
solely to permit investors to more fully understand how management
assesses performance. Adjusted net income and its components and
adjusted diluted EPS are not, and should not be viewed as,
substitutes for U.S. GAAP net income and its components and diluted
EPS.
(c)
We do not provide a
reconciliation of forward-looking non-GAAP adjusted net income
operational growth to the most directly comparable U.S. GAAP
reported financial measure because we are unable to calculate with
reasonable certainty the foreign exchange impact of unusual gains
and losses, acquisition-related expenses, potential future asset
impairments and other certain significant items, without
unreasonable effort. The foreign exchange impacts of these items
are uncertain, depend on various factors, and could have a material
impact on U.S. GAAP reported results for the guidance period.
(d)
Primarily includes certain
nonrecurring costs related to acquisitions and other charges.
ZOETIS INC.
CONSOLIDATED REVENUE BY
SEGMENT(a) AND SPECIES
(UNAUDITED)
(millions of dollars)
First Quarter
% Change
2021
2020
Total
Foreign Exchange
Operational(b)
Revenue:
Companion Animal
$
1,076
$
797
35
%
1
%
34
%
Livestock
779
717
9
%
1
%
8
%
Contract Manufacturing & Human
Health
16
20
(20)
%
5
%
(25)
%
Total Revenue
$
1,871
$
1,534
22
%
1
%
21
%
U.S.
Companion Animal
$
658
$
499
32
%
—
%
32
%
Livestock
275
287
(4)
%
—
%
(4)
%
Total U.S. Revenue
$
933
$
786
19
%
—
%
19
%
International
Companion Animal
$
418
$
298
40
%
3
%
37
%
Livestock
504
430
17
%
—
%
17
%
Total International Revenue
$
922
$
728
27
%
2
%
25
%
Companion Animal:
Dogs and Cats
$
1,016
$
746
36
%
1
%
35
%
Horses
60
51
18
%
2
%
16
%
Total Companion Animal Revenue
$
1,076
$
797
35
%
1
%
34
%
Livestock:
Cattle
$
399
$
370
8
%
(1)
%
9
%
Swine
190
157
21
%
2
%
19
%
Poultry
131
148
(11)
%
—
%
(11)
%
Fish
37
26
42
%
3
%
39
%
Sheep and other
22
16
38
%
9
%
29
%
Total Livestock Revenue
$
779
$
717
9
%
1
%
8
%
(a)
For a description of each
segment, see Zoetis' most recent Annual Report on Form 10-K.
(b)
Operational revenue growth (a
non-GAAP financial measure) is defined as revenue growth excluding
the impact of foreign exchange.
ZOETIS INC.
CONSOLIDATED REVENUE BY KEY
INTERNATIONAL MARKETS
(UNAUDITED)
(millions of dollars)
First Quarter
% Change
2021
2020
Total
Foreign Exchange
Operational(a)
Total International
$
922.3
$
728.4
27
%
2
%
25
%
Australia
57.1
43.3
32
%
15
%
17
%
Brazil
73.6
62.8
17
%
(31)
%
48
%
Canada
46.1
40.1
15
%
4
%
11
%
Chile
34.0
23.0
48
%
5
%
43
%
China
123.2
65.7
88
%
13
%
75
%
France
34.9
29.0
20
%
11
%
9
%
Germany
38.4
33.5
15
%
11
%
4
%
Italy
25.1
21.5
17
%
11
%
6
%
Japan
46.7
41.5
13
%
6
%
7
%
Mexico
33.2
32.2
3
%
(6)
%
9
%
Spain
31.2
28.1
11
%
10
%
1
%
United Kingdom
69.1
55.1
25
%
5
%
20
%
Other developed markets
111.2
86.7
28
%
10
%
18
%
Other emerging markets
198.5
165.9
20
%
(6)
%
26
%
(a)
Operational revenue growth (a
non-GAAP financial measure) is defined as revenue growth excluding
the impact of foreign exchange.
ZOETIS INC.
SEGMENT(a) EARNINGS
(UNAUDITED)
(millions of dollars)
First Quarter
% Change
2021
2020
Total
Foreign Exchange
Operational(b)
U.S.:
Revenue
$
933
$
786
19
%
—
%
19
%
Cost of Sales
184
167
10
%
—
%
10
%
Gross Profit
749
619
21
%
—
%
21
%
Gross Margin
80.3
%
78.8
%
Operating Expenses
131
125
5
%
—
%
5
%
Other (income)/deductions-net
1
1
—
%
—
%
—
%
U.S. Earnings
$
617
$
493
25
%
—
%
25
%
International:
Revenue
$
922
$
728
27
%
2
%
25
%
Cost of Sales
282
224
26
%
—
%
26
%
Gross Profit
640
504
27
%
2
%
25
%
Gross Margin
69.4
%
69.2
%
Operating Expenses
130
125
4
%
3
%
1
%
Other (income)/deductions-net
—
—
*
*
*
International Earnings
$
510
$
379
35
%
3
%
32
%
Total Reportable Segments
$
1,127
$
872
29
%
1
%
28
%
Other business activities(c)
(97)
(87)
11
%
Reconciling Items:
Corporate(d)
(230)
(187)
23
%
Purchase accounting adjustments(e)
(44)
(54)
(19)
%
Acquisition-related costs(f)
(5)
(7)
(29)
%
Certain significant items(g)
(8)
11
*
Other unallocated(h)
(56)
(51)
10
%
Total Earnings(i)
$
687
$
497
38
%
(a)
For a description of each
segment, see Zoetis' most recent Annual Report on Form 10-K.
(b)
Operational growth (a non-GAAP
financial measure) is defined as growth excluding the impact of
foreign exchange.
(c)
Other business activities reflect
the research and development costs managed by our Research and
Development organization as well as our contract manufacturing
business and human health business.
(d)
Corporate includes, among other
things, certain costs associated with information technology,
administration expenses, interest expense, certain compensation
costs, certain procurement costs, and other costs not charged to
our operating segments.
(e)
Purchase accounting adjustments
include certain charges related to the amortization of fair value
adjustments to inventory, intangible assets and property, plant and
equipment not charged to our operating segments.
(f)
Acquisition-related costs include
costs associated with acquiring and integrating newly acquired
businesses, such as transaction costs and integration costs.
(g)
Certain significant items
includes substantive, unusual items that, either as a result of
their nature or size, would not be expected to occur as part of our
normal business on a regular basis. Such items primarily include
restructuring charges and implementation costs associated with our
cost-reduction/productivity initiatives that are not associated
with an acquisition, costs associated with the operational
efficiency initiative and supply network strategy, and the impact
of divestiture-related gains and losses.
(h)
Includes overhead expenses
associated with our manufacturing and supply operations not
directly attributable to an operating segment, as well as certain
procurement costs.
(i)
Defined as income before
provision for taxes on income.
* Calculation not meaningful.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210506005594/en/
Media Contacts: Bill Price
1-973-443-2742 (o) william.price@zoetis.com
Kristen Seely 1-973-443-2777 (o) kristen.seely@zoetis.com
Investor Contacts: Steve Frank
1-973-822-7141 (o) steve.frank@zoetis.com
Keith Gaub 1-973-822-7154 (o) keith.gaub@zoetis.com
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