Zoetis Inc.

Please stand by. Your program is about to begin. Welcome to the fourth quarter and full year 2024 Financial Results Conference call and webcast for Zoetis. Hosting the call today is Steve Frank, Vice President of Investor Relations for Zoetis. The presentation materials and additional financial tables are currently posted on the Investor Relations section of Zoetis.com. The presentation slides can be managed by you, the viewer, and will not be forwarded automatically. In addition, a replay of this call will be available approximately two hours after the conclusion of this call via dial-in or on the investor relations section of zoetis.com. At this time, all participants have been placed in a listen-only mode, and the floor will be open for your questions following the presentation. If you would like to ask a question at that time, please press star 1 on your telephone keypad. If at any point your question has been answered, you may remove yourself from the queue by pressing star 2. In the interest of time, we ask that you limit yourself to one question and then queue up again with any follow-ups. Your line will be muted when you complete your question. When posing your question, please pick up your handset to allow optimal sound quality. Lastly, if you should require operator assistance, please press star zero. It is now my pleasure to turn the floor over to Steve Frank. Steve, you may begin.

Thank you, operator. Good morning, everyone, and welcome to the Zoetis fourth quarter and full year 2024 earnings call. I am joined today by Kristen Peck, our chief executive officer, and Whitney Joseph, our chief financial officer. Before we begin, I'll remind you that the slides presented on this call are available on the Investor Relations section of our website, and that our remarks today will include forward-looking statements, and that actual results could differ materially from those projections. For a list and description of certain factors that could cause results to differ, I refer you to the forward-looking statements in today's press release and our SEC filings, including but not limited to our annual report on Form 10-K and our reports on Form 10-Q. Our remarks today will also include references to certain financial measures which were not prepared in accordance with generally accepted accounting principles or U.S. GAAP. A reconciliation of these non-GAAP financial measures to the most directly comparable U.S. GAAP measures is included in the financial tables that accompany our earnings press release and the company's 8K filing dated today, Thursday, February 13, 2024. We also cite operational results which exclude the impact of foreign exchange. With that, I will turn the call over to Kristen.

Thank you, Steve, and good morning, everyone, and welcome to our fourth quarter and full year 2024 earnings call. Today, thanks to the dedication of our purpose-driven colleagues, we reported an excellent full year result in line with the high end of our November guidance. We delivered double-digit operational revenue growth of 11%, highlighting the strength of our strategy and the enduring demand of our brands. and our relentless focus on execution drove broad-based growth across the business. In the U.S., revenue grew 11% while internationally we grew 10% operationally, marking significant revenue milestones even in a competitive landscape. Our ability to grow, defend, and launch products across markets drove 14% operational revenue growth in our companion animal portfolio alongside solid 5% operational revenue growth for our livestock portfolio. Reflecting our commitment to shareholders, adjusted net income grew 15% operationally. As we look ahead to 2025, we are confident that the drivers of our 2024 success are sustainable, positioning us for continued above market growth in the mid to high single digit range for this year and beyond. Our confidence is rooted in the diversity of our business model, where multiple growth drivers powered by scientific innovation and commercial excellence, work together to create and expand markets. This combination ensures that our market-leading franchises deliver long, and in some cases, decades-long, growth tailwinds with significant room for further expansion. While Whitney will discuss the quarter, I want to highlight some of the drivers that will carry us into 2025. Our global Semperica franchise grew 28% operationally on the year, even amidst competition. This success is fueled by the ongoing shift toward triple combination treatments, a market that has grown over 40% in the past 12 months. Currently valued at $2 billion, the global triple combination market, pioneered and led by Sempericatrio in the U.S., is projected to more than double to $4.5 billion by 2028. Over 50% of poppies in the U.S. are now on triple combinations, a clear signal of the market's trajectory. And veterinarians and pet owners tend to stay with trusted, proven solutions, underscoring the importance of our three-year first mover advantage in triples. This dynamic, combined with the strength of our diverse portfolio and robust channel strategy, driving higher compliance and increasing total value for patients. positions us to continue leading in this critical segment. Our osteoarthritis or OA pain franchises, including Librella and Silencia, grew revenue 80% operationally in 2024. Librella's U.S. launch is the most successful in our history, cementing its blockbuster status in less than four quarters, and it's quickly become the fourth largest product in our U.S. pet care portfolio. As Whitney mentioned at the JPMorgan Healthcare Conference in January, True disruptive scientific innovation often follows a nonlinear growth trajectory due to the investment, education, and market development required to establish entirely new categories of care. Even so, innovations like Librella are revolutionizing the treatment paradigm, offering new hope for pets and their owners. With nearly 25 million doses distributed globally, we have already helped millions of dogs regain mobility and improve their quality of life. Just as Labrella is transforming care for dogs, Silencia is doing the same for cats. Now a blockbuster product, Silencia has redefined OA pain management, driving a meaningful increase in feline veterinary visits. By encouraging proactive care, Silencia is bridging longstanding gaps in medicalization and strengthening the relationship between cat owners and their veterinarians. This momentum underscores a significant opportunity to drive sustainable growth in the under-penetrated feline segment and demand for future therapies and long-acting formulations. In our key dermatology franchise, we grew revenue 17% operationally for the year. As we shared at JP Morgan, even with over 25 million dogs treated by our differentiated portfolio to curb itch, the totable addressable market is projected to grow to 2.5 billion by 2028, and 11% CAGR. That's because there are still 20 million dogs worldwide who remain untreated or undertreated. With a long runway for growth ahead, a diverse, safe, and effective portfolio supported by strong customer satisfaction, brand loyalty, and future long-acting formulation positions us to lead and expand the market. And at the heart of our success is our commitment to living our purpose each day, to nurture the world and humankind by advancing care for animals. That means as customer preferences evolve, ensuring our treatments are available where and when they are needed, while always championing the essential role of veterinarians. This commitment has shaped our omni-channel strategy, meeting customers where they are, whether at the clinic or through alternative channels. As a result, Semperica Trio and Apoquel are the top-selling products in U.S. retail, contributing meaningfully higher compliance. When combining retail and home delivery, approximately 20% of our U.S. pet care portfolio flows through alternative channels, driving growth and expanding the total market. We expect this trend to continue into 2025. At the same time, we continue to educate veterinarians and pet owners on the benefits and availability of our treatments. helping to drive informed decisions and better health outcomes. For the year, our livestock portfolio delivered strong 5% operational revenue growth, exceeding our initial expectations of being at the high end of the historical 2% to 4% annual industry growth range. We achieved this result despite the Q4 divestiture of the medicated feed additive product portfolio and certain water-soluble products and related assets. The divestiture was a strategic move to streamline our portfolio, enhance operational focus, and prioritize high-growth, high-value areas that align with our long-term strategy. And we remain deeply committed to livestock and to continue to lead with innovative vaccines and lifecycle solutions, including antibiotic alternatives and advanced therapies that enhance disease prevention and support sustainability aligned with our core capabilities. As a result of the MFA divestiture, our press releases slides highlight organic operational revenue growth for the full year and fourth quarter, excluding all divested products and adjusted for foreign exchange. Based on this and building on the momentum from 2024, we are guiding to a range of 6% to 8% organic operational revenue growth in 2025, and we'll continue to provide updates on this metric throughout the year. We also expect organic operational growth in adjusted net income in the range of 6% to 8% in 2025. Excluding the impact of interest and taxes, we expect bottom line growth of 8% to 10%, reflecting the strength of our business fundamentals and the robust secular trends driving our industry. Our strong underlying performance and financial discipline ensure we remain well positioned to deliver on our value proposition. This guidance underscores the strength of our portfolio and commercial engine as we continue to grow our key franchises. The industry remains essential and resilient, driven by strong underlying demand and the indispensable nature of our work. As we look ahead, we will continue balancing strategic investments in innovation and commercial excellence to sustain our track record of profitable growth and generate long-term value for our shareholders. In 2025, our success will be anchored in the same key drivers that have propelled us over the past decade. We operate in highly attractive end markets driven by scientific innovation and market-leading franchises. With our global scale, we can launch therapies across geographies and channels, ensuring veterinarians and pet owners have access to the best treatments available. And while the operating environment evolves every year with new entrants, shifting geopolitical dynamics, and an evolving regulatory and trade landscape, our agility positions us to navigate these challenges and capitalize on emerging opportunities. Our success is driven by the strength of our strategy, differentiated execution, innovative pipeline, our colleagues, and culture. This is evident in our R&D engine, where we expect at least one major approval annually over the next several years with multiple potential blockbusters in our pipeline. These innovations will drive durable, diversified growth across both companion animals and livestock, reinforcing our commitment to addressing unmet needs. Above all, we remain committed to our track record of value creation and delivering performances that outpace the market, positioning Zoetis as a trusted leader in animal health now and in the future. And finally, a sincere thank you to our colleagues whose dedication makes these results possible. And with that, let me turn it over to Watney.