Elanco Animal Health Bank of America Global Healthcare Conference 2026

Yeah. We will obviously note the disclaimers that we normally do in a conference like this. Thanks to Bank of America. It has been great to be in Europe with a lot of our customers and traveling to a lot of our operations here and to be able to have the opportunity here with investors. So thanks for the interest. I would just make a couple comments. We noted our eighth year anniversary as an independent company coming out of Lilly on Friday. It has been a very intentional journey as we have stood up, as we have acquired Bayer, as we have built an omni channel, built a pipeline. We have been very focused the last three years, especially on growth, innovation, cash. We just finished a great quarter where we delivered 10% reported growth that came from Farm Animal Pet for a 50/50 split, U.S. International, 50/50 price volume. So we really had high-quality growth that came from the quarter.

I think the second priority is all around innovation. We have got a basket of six innovations, six blockbuster products that are in big markets where we are in early days, but we have a clear differentiation. We believe medical differentiation that is taking really great share. Zenrelia, Credelio Quattro, Experior, across a lot of markets. Now as I am out here traveling, we are just starting to globalize those innovations. Then third is cash. We have delevered the company after acquiring Bayer. We were 6 to 7 times levered. We will be at approximately 3 times by the end of the year, headed into the 2 times next year. We know that will unlock even more investors. Then in December, we had an investor day to talk about the next three years.

We have been a steady beat raise per quarter the last three years. The next three years, we have an algorithm where we have committed to mid-single-digit revenue, high single-digit EBITDA, low double-digit EPS, $1 billion of cash created between now and 2028, margin expansion to occur year-on-year, and the delevering that will get us into the two. Then a pipeline. Today, we have a pipeline, a basket of six innovations we are launching, but we have 15 projects in clinical development now that are blockbuster potential products. We have had no attrition since December, and we are committing to five to six coming through that pipeline of those 15 between now and 2031. That is a little bit of a summary. Growth, innovation, cash. Last three years, next three years, durable. We have seen good response from the market and we are in a really good place.

I think animal health is a $40 billion industry headed to a $60 billion industry. We are not only going to get market share growth, but we really like the market growth.

I think we got to stick with facts here, right, and what's happened. First of all, animal health last year grew 7%, 10% Farm Animal, 5% in Pet Health. First semester this year, first 6 months, we grew 2% in price and growing high single digit overall in the business driven by innovation. 10 of the 12 companies in animal health grew in the first semester. Most all the major markets globally grew. Derm, para, pet, pharm all grew. I start with just that growth overall. When you look at specifically price is definitely correlated to value in our business.

What we're seeing is we announced in that release that in July and August, our prices actually accelerated. We're seeing that because of the medical differentiation we have in markets that matter to pet owners. Pet owners today, we surveyed at the end of May 1,400 pet owners in the U.S., and 86% said, "We will spend the same or more for health." There is a backing down on food, supplements, hard goods, but not for health. If you've got medical differentiation, we're proving that we can take price, and we're seeing that. We see a responsible market. There's no price war going on. There's always targeted promotions, probably more with corporates than general practices. With differentiated innovation, you can take price and take share.

I am meeting with some corporates here in Europe, there are some here as well. I think the corporate market in the U.S. and U.K. are the primary corporate markets. Today, about a third, a little less than a third of the clinics. There are 30,000 clinics in the U.S. A little less than a third are corporate or conglomerate group purchasing. The U.K. is probably a little higher than that. But what I would tell you is we are very under-indexed with corporates.