On August 8, 2024, Elanco Animal Health Inc (ELAN, Financial) released its 8-K filing detailing the financial results for the second quarter of 2024. Elanco Animal Health Inc is a global leader in animal health, engaged in innovating, developing, manufacturing, and marketing products for companion and food animals. The company operates globally, selling its products in over 90 countries, with a product portfolio of approximately 200 brands.
Performance Overview
Elanco reported revenue of $1,184 million for Q2 2024, surpassing the analyst estimate of $1,078.75 million. The company also reported an adjusted net income of $147 million, translating to an adjusted EPS of $0.30, significantly higher than the analyst estimate of $0.01 per share. However, the reported net loss stood at $50 million, or $(0.10) per share.
Key Financial Achievements
Elanco's adjusted EBITDA for the quarter was $275 million, representing 23.2% of revenue. This marks a 24% increase compared to the same period in 2023. The company's net leverage ratio was 5.6x adjusted EBITDA, reflecting efforts to reduce debt following the sale of its aqua business.
Income Statement Highlights
| Category | 2024 | 2023 | Change (%) | CC Change (%) |
|---|---|---|---|---|
| Pet Health | $579 million | $518 million | 12% | 13% |
| Farm Animal | $594 million | $527 million | 13% | 14% |
| Total Revenue | $1,184 million | $1,057 million | 12% | 13% |
| Reported Net Loss | $(50) million | $(97) million | (48)% | |
| Adjusted EBITDA | $275 million | $222 million | 24% | |
| Reported EPS | $(0.10) | $(0.20) | (50)% | |
| Adjusted EPS | $0.30 | $0.18 | 67% |
Balance Sheet and Cash Flow
Elanco's cash provided by operations was $200 million in Q2 2024, a significant increase from $61 million in Q2 2023. This improvement was primarily due to better working capital management and lower project spend. The company also paid down approximately $1.3 billion in gross debt through August 8, 2024, following the sale of its aqua business.
Guidance and Future Outlook
Elanco has updated its full-year 2024 financial guidance, now expecting revenue between $4,410 million and $4,460 million, with organic constant currency growth raised to 3% to 4%. The company also anticipates adjusted EBITDA of $900 million to $940 million and adjusted EPS of $0.88 to $0.96.
Elanco made significant progress on the three strategic outcomes of our IPP strategy in the second quarter – grow revenue, deliver innovation and improve cash. The second quarter represents our fourth consecutive quarter of underlying constant currency revenue growth," said Jeff Simmons, Elanco President and CEO.
Elanco's performance in Q2 2024 demonstrates its resilience and strategic focus on innovation and debt reduction. The company's ability to exceed revenue and adjusted EPS estimates highlights its strong market position and operational efficiency, making it a noteworthy consideration for value investors.
Explore the complete 8-K earnings release (here) from Elanco Animal Health Inc for further details.
