Elanco Animal Health Reports $4.4B Revenue

Elanco Animal Health has recently released its 10-K report, providing a comprehensive overview of the company's financial performance and operations. Elanco is a global leader in animal health, focusing on developing, manufacturing, and marketing products for pets and farm animals. The company's diverse product portfolio, which includes approximately 200 brands, serves animals across various species, primarily dogs and cats, as well as cattle, poultry, swine, sheep, and aquaculture.

In the year ended December 31, 2023, Elanco reported a total revenue of $4,417 million, showing a marginal increase of 1% compared to the previous year. The revenue is influenced by changes in foreign currency exchange rates, with approximately 51% of the revenue denominated in foreign currencies. The company's pet health segment contributed $2,104 million, representing a 48% share of the total revenue, while the farm animal segment contributed $2,271 million, representing a 51% share of the total revenue.

Elanco's revenue by product category for the year ended December 31, 2023, indicated a 2% decrease in pet health revenue, primarily driven by a decrease in volume and an unfavorable impact from foreign exchange rates, partially offset by an increase in price. On the other hand, the farm animal segment saw a 4% increase in revenue, attributed to a rise in both price and volume.

The company's financial performance was also impacted by various factors, including acquisition and integration activities, macroeconomic factors, the Russia-Ukraine conflict, seasonality, and goodwill impairment. Elanco incurred costs totaling $93 million in 2023 related to integration activities, including the build-out of processes and systems to support its global organization. Additionally, the company recorded a significant pre-tax impairment charge of $1,042 million related to goodwill impairment, driven by a sharp increase in long-term treasury rates.

Looking ahead, Elanco announced the sale of its aqua business to a subsidiary of Merck Animal Health for approximately $1.3 billion in cash, with the intention to use the after-tax cash proceeds to accelerate its debt paydown efforts. The company also approved a restructuring plan to improve operational efficiencies, resulting in the elimination of approximately 420 personnel across its global organization and expected annualized net savings of $30 to $35 million.

Today the company's shares have moved -0.7% to a price of $16.26. Check out the company's full 10-K submission here.

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