Elanco Animal Health (ELAN) investor relations material

Strategic vision and market outlook

• Committed to sustainable, reliable growth with a focus on transparency and consistent delivery over the next three to five years, targeting mid-single-digit constant currency revenue growth starting in 2025, driven by innovation, portfolio strength, and commercial capabilities.

• Animal health market expected to grow from $42 billion to $60 billion in ten years, with the company aiming to capture a significant share of this $20 billion expansion.

• Pet health market projected to reach $24 billion by 2030, with resilience in owner spending and omnichannel strategies as key growth drivers.

• Farm animal segment to grow to $27 billion, with a focus on poultry and ruminants, leveraging strong brands and innovation.

• U.S. Pet Health and Farm Animal segments are market leaders, with broad, omnichannel portfolios and innovation driving share gains and double-digit topline growth.

Innovation and product pipeline

• The 'Big Six' innovation basket is expected to deliver $1.1 billion in 2026, doubling by 2028, with five to six new blockbusters anticipated between 2026 and 2031.

• Robust innovation engine has tripled product launches versus peers, with a pipeline of over 150 projects and a stable, high-throughput R&D model.

• Next Wave portfolio targets 8 strategic innovation spaces, with over $2 billion peak sales potential and global expansion in key markets.

• New discovery platforms in monoclonal antibodies and immunotherapeutics are fueling future innovation, with conditional approval pathways secured for key assets.

• Lifecycle management, geographic expansion, and streamlined R&D and manufacturing are prioritized to maximize value from existing and legacy products.

Financial guidance and operational efficiency

• High single-digit adjusted EBITDA growth expected from 2026, with margin expansion of 200–350 basis points by 2028, supported by innovation, portfolio mix, and the Elanco Ascend productivity program.

• Free cash flow projected to exceed $1 billion from 2026–2028, with net leverage targeted below 3x by 2027 and 2–2.5x longer term.

• Elanco Ascend and restructuring initiatives to deliver $200–$250 million in EBITDA savings by 2030, with productivity improvements from site consolidation, procurement, and digital automation.

• Capital allocation prioritizes debt paydown, R&D, manufacturing, disciplined M&A, and eventual return of cash to shareholders as leverage declines.

• Strengthened balance sheet, reducing net leverage from 5.6x in 2023 to an expected 3.7–3.8x in 2025, with consistent execution and repeated upward revisions of innovation revenue targets.