Elanco Q2 2022 Earnings Report
Key Takeaways
Elanco Animal Health reported a decrease in revenue for Q2 2022, but increased adjusted EBITDA and adjusted EPS due to operational efficiency. The company is reducing its full year revenue expectations due to macro factors, but expects to deliver improved margins.
Revenue was $1,177 million, a decrease of 8% on a reported basis, or a decrease of 4% excluding the unfavorable impact of foreign exchange rates, compared with the second quarter of 2021.
Pet Health revenue was $612 million, a decrease of 11% on a reported basis or a decrease of 7% excluding the unfavorable impact from foreign exchange rates.
Farm Animal revenue was $553 million, a decrease of 2% on a reported basis or an increase of 3% excluding the unfavorable impact from foreign exchange rates.
Adjusted EBITDA was $300 million in the second quarter of 2022, an increase of 3% compared to the second quarter of 2021.
Elanco
Elanco
Forward Guidance
Elanco is updating financial guidance for the full year 2022 and providing financial guidance for the third quarter of 2022.
Positive Outlook
- Durability and diversity of Elanco’s portfolio remains highly valuable to customers.
- Increasing profitability
- Paying down debt
- Driving Innovation forward
Challenges Ahead
- Headwind of approximately $205 million from the unfavorable impact of foreign exchange rates compared to 2021.
- Reduction includes an incremental $65 million headwind from foreign exchange rates
- $100 to $120 million from macro environmental factors including the pace of recovery from China's Covid lockdowns, disruptions in the global supply chain, and the impact from an expected economic slowdown around the world.
- Reduction includes a $40 to $50 million headwind related to company-specific factors including pricing realization, slower innovation ramp, and U.S. parasiticides competition.