Elanco Q2 2021 Earnings Report
Key Takeaways
Elanco Animal Health reported strong second-quarter results, driven by the inclusion of the Bayer Animal Health business and strong performance in both Pet Health and Farm Animal segments. The company raised its full-year revenue guidance for the third time and is confident in its ability to drive sustainable double-digit adjusted EBITDA and adjusted EPS growth.
Second quarter revenue was $1,279 million, with the inclusion of Bayer Animal Health contributing significantly.
Global Pet Health business drove approximately two-thirds of the upside versus the midpoint of second quarter guidance.
Global Farm Animal business contributed approximately one-third of the upside versus the midpoint of second quarter guidance.
Seven of the planned eight launches for 2021 have occurred in the first half of the year, with eight approvals achieved year to date.
Elanco
Elanco
Forward Guidance
Elanco is updating its full year 2021 guidance for revenue, EPS, and adjusted EBITDA. The company's raised revenue guidance reflects a balanced approach, including strong momentum to exit the second quarter, seasonality in Elanco's higher-margin parasiticide products, likely moderation in pandemic-driven Pet Health tailwinds in the vet clinic, ongoing competitive dynamics, and strength in Elanco's broad-based, durable portfolio.
Positive Outlook
- Strong momentum to exit the second quarter
- Seasonality in Elanco's higher-margin parasiticide products
- Likely moderation in pandemic-driven Pet Health tailwinds in the vet clinic
- Ongoing competitive dynamics
- Strength in Elanco's broad-based, durable portfolio
Challenges Ahead
- Increased logistics costs and inflationary pressure
- Reduced ZoaShield revenue
- Operating costs associated with the KindredBio acquisition
- Reduction in depreciation add-back primarily driven by exiting three manufacturing sites
- The $15 million increase in the midpoint of full year revenue guidance is primarily driven by the $39 million overperformance compared to the midpoint of second quarter of 2021 guidance, partly offset by the phasing of certain aqua orders and the $15 million reduction of expected innovation revenue contribution from ZoaShield in the second half of 2021.