10-KPeriod: FY2022

Zoetis Inc. Annual Report, Year Ended Dec 31, 2022

Filed February 14, 2023For Securities:ZTS

Summary

Zoetis Inc. reported robust financial performance for the fiscal year ended December 31, 2022. The company achieved a 4% increase in total revenue, reaching $8.08 billion, driven by strong operational growth, particularly in companion animal products. Key drivers included volume growth from new products and price increases, with notable contributions from its dermatology portfolio. The company demonstrated resilience despite global economic challenges and supply chain headwinds experienced by some products. Zoetis continues to invest in research and development to fuel innovation and expand its diverse product lines across companion animals and livestock, positioning itself for sustained future growth. The company's strategic focus on driving innovative growth, enhancing customer experience, and leading in digital and data analytics appears to be yielding positive results. The U.S. segment saw a 7% revenue increase, while the International segment experienced a 1% rise, with operational growth offsetting foreign currency impacts. Zoetis also maintained a strong financial position with substantial cash reserves and access to credit facilities, enabling continued investment and shareholder returns through its share repurchase program.

Financial Highlights

53 data points
Beta

Revenue

$8.08B

69.6% Gross Margin

Net Income

$2.11B

26.1% Net Margin

EPS (Diluted)

$4.49

Total Assets

$14.93B

Cash & Equivalents

$3.58B

Free Cash Flow

$1.33B

Financial Statements
Beta
Revenue$8.08B
Cost of Revenue$2.45B
Gross Profit$5.63B
SG&A Expenses$2.01B
Interest Expense$221.00M
Net Income$2.11B
EPS (Basic)$4.51
EPS (Diluted)$4.49
Shares Outstanding (Basic)468.89M
Shares Outstanding (Diluted)470.38M

Key Highlights

  • 1Total revenue increased by 4% to $8.08 billion in 2022, driven by operational growth of 8%.
  • 2Companion animal products represented 64% of total revenue, showing strong growth, particularly in dermatology and parasiticides.
  • 3Key products like Simparica/Simparica Trio and Apoquel continue to be major revenue contributors, accounting for 12% and 10% of revenue respectively.
  • 4The company maintained a solid financial position with $3.58 billion in cash and cash equivalents and access to a $1.0 billion revolving credit facility.
  • 5Zoetis is actively investing in R&D, with expenses increasing by 6% to $539 million, focusing on both new product development and product lifecycle innovation.
  • 6The company repurchased $1.6 billion of its common stock in 2022 under its authorized repurchase program.
  • 7International revenue saw operational growth, though it was offset by unfavorable foreign exchange movements.

Frequently Asked Questions

In 2022, Zoetis reported a 4% increase in total revenue to $8.08 billion, driven by an 8% operational revenue growth. This growth was primarily fueled by companion animal products, with key dermatology products and parasiticides like Simparica Trio showing strong performance. The company also maintained a healthy financial position with $3.58 billion in cash and cash equivalents and continued to invest in R&D, increasing expenses by 6% to $539 million.

The U.S. segment reported a 7% increase in revenue, primarily driven by companion animal products like Simparica Trio, and growth in the dermatology portfolio. The International segment's revenue increased by 1%, with operational revenue growth of 9% in companion animal products, particularly from new mAb launches like Librela and Solensia, and growth in the Simparica franchise. However, unfavorable foreign exchange movements negatively impacted the reported International revenue by 8%.

Zoetis's growth strategy is focused on several key pillars: driving innovative growth through new products and lifecycle innovations; enhancing customer experience by providing compelling and personalized interactions; leading in digital and data analytics to improve animal care and livestock productivity; cultivating a high-performing organization by attracting and retaining top talent; and championing a healthier, more sustainable future. The company continues to invest in R&D and strategic acquisitions to support these objectives.

Zoetis dedicates significant resources to R&D, increasing its expenses by 6% to $539 million in 2022. The company's R&D efforts focus on developing new products and solutions, as well as product lifecycle innovation, which includes expanding claims for existing products across additional species, creating new formulations, and entering new markets. A substantial portion of R&D investment is directed towards leveraging existing products, complemented by external research collaborations.