USA- Elanco Animal Health Incorporated has unveiled its financial performance for the fourth quarter and full year 2023, showcasing resilience and growth despite challenges and offering an outlook for 2024.
President and CEO of Elanco Animal Health, Jeff Simmons, expressed satisfaction with the company’s performance, citing a return to constant currency revenue growth in 2023, with a notable 5% growth in the fourth quarter, totaling US$1.035 billion.
“Elanco ended 2023 with momentum, returning to constant currency revenue growth for the full year and delivering 5% growth in the fourth quarter, primarily driven by our farm animal business, innovation revenue and price growth,” said Jeff Simmons.
While the company exceeded its sales expectations and demonstrated strong operating expense management in the fourth quarter, adjusted EBITDA was adversely impacted by approximately US$18 million of unexpected items, primarily the significant devaluation of the Argentinian peso that occurred in December of 2023.
“Over the past year, we have enhanced our commercial infrastructure to support future growth, doubled year over year innovation sales, returned to revenue growth and taken actions to accelerate debt paydown,” Jeff added.
Pet Health and Farm Animal segments played pivotal roles in driving this growth, with a particular highlight on innovation revenue and price growth. Despite surpassing sales expectations and exhibiting robust expense management, the adjusted EBITDA faced challenges, largely attributed to unexpected events such as the significant devaluation of the Argentinian peso.
Looking ahead to 2024, Elanco anticipates a 1% to 3% constant currency revenue growth, with contributions from both pet health and farm animal segments. Excitement surrounds three late-stage pipeline products, anticipated to bolster revenue in the second half of the year upon regulatory approval.
The company announced a strategic restructuring aimed at enhancing investments in key areas, improving efficiency, and reducing leverage. This includes selling the aqua business to Merck Animal Health, positioning Elanco for significant debt paydown, and improved financial flexibility.
While Elanco reported a 5% increase in revenue for Q4 2023, challenges such as reduced throughput and higher expenses affected the gross profit margin, while operating expenses witnessed a decrease primarily due to lower promotional spending and system integration benefits.
Looking forward, Elanco aims to navigate the gross margin decline in the first half of 2024, with an anticipated recovery in the second half. Operating expenses are projected to increase, driven by investments in commercial capabilities, particularly in the pet health sector.
The company’s guidance for 2024 reflects steady growth, with revenue expected between US$4.45 billion and US$4.54 billion. Efforts to streamline operations and capitalize on innovation are evident in the strategic restructuring, poised to drive long-term value creation.
Investors, analysts, and stakeholders can access further details on Elanco’s financial performance and outlook through today’s webcast and conference call.
As Elanco continues its mission to advance animal health and enrich lives globally, the company remains committed to delivering value to its customers and stakeholders alike.
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