Elanco Animal Health Inc (ELAN) 2023 Q1 法說會逐字稿

Good morning, and welcome to Elanco Animal Health's First Quarter 2023 Earnings Call. (Operator Instructions) As a reminder, this conference is being recorded. I would now like to turn the call over to Katy Grissom, Head of Investor Relations. Thank you. Please go ahead.

早上好，歡迎來到 Elanco Animal Health 的 2023 年第一季度收益電話會議。 （操作員說明）提醒一下，正在錄製此會議。我現在想把電話轉給投資者關係主管 Katy Grissom。謝謝。請繼續。

Good morning. Thank you for joining us for Elanco Animal Health's First Quarter 2023 Earnings Call. I'm Katy Grissom, Head of Investor Relations. Joining me on today's call are Jeff Simmons, our President and Chief Executive Officer; Todd Young, our Chief Financial Officer; and Scott Purucker from Investor Relations.

早上好。感謝您加入我們的 Elanco Animal Health 2023 年第一季度財報電話會議。我是投資者關係主管 Katy Grissom。我們的總裁兼首席執行官傑夫·西蒙斯 (Jeff Simmons) 和我一起參加今天的電話會議；我們的首席財務官 Todd Young；和投資者關係部的 Scott Purucker。

The slides referenced during this call are available on the Investor Relations section of elanco.com. Today's discussion will include forward-looking statements. These statements are based on our current assumptions and expectations and are subject to risks and uncertainties that could cause actual results to differ materially from our forecast. For more information, see the risk factors discussed in today's earnings press release as well as our latest Form 10-K and 10-Q filed with the SEC.

本次電話會議中引用的幻燈片可在 elanco.com 的投資者關係部分獲取。今天的討論將包括前瞻性陳述。這些陳述基於我們當前的假設和預期，並受到可能導致實際結果與我們的預測存在重大差異的風險和不確定性的影響。如需更多信息，請參閱今天的收益新聞稿中討論的風險因素以及我們向美國證券交易委員會提交的最新 10-K 和 10-Q 表格。

We do not undertake any duty to update any forward-looking statements. Our remarks today will focus on non-GAAP financial measures. Reconciliations of these non-GAAP measures are included in the appendix of today's slides and in the earnings press release. After our prepared remarks, we'll be happy to take your questions.

我們不承擔更新任何前瞻性陳述的義務。我們今天的發言將重點關注非 GAAP 財務指標。這些非 GAAP 措施的對賬包含在今天幻燈片的附錄和收益新聞稿中。在我們準備好的評論之後，我們很樂意回答您的問題。

I'll now turn the call over to Jeff.

我現在將電話轉給傑夫。

Thanks, Katy. Good morning, everyone. As we open 2023, we're encouraged by our improving business results this quarter. We saw sequential improvement in many leading indicators of underlying demand and easing environmental factors that pressured our business in 2022. While we expect macro factors to persist, Elanco is making a necessary disciplined decisions to stabilize the business and progress our innovation pipeline while focusing on improving our cash flow generation and returning to constant currency sales growth in the second half of this year.

謝謝，凱蒂。大家，早安。在我們開啟 2023 年之際，我們對本季度不斷改善的業務成果感到鼓舞。 2022 年，我們看到許多潛在需求領先指標的連續改善和緩解對我們業務造成壓力的環境因素。雖然我們預計宏觀因素將持續存在，但 Elanco 正在做出必要的、有紀律的決定，以穩定業務並推進我們的創新渠道，同時專注於改進我們的現金流產生和今年下半年恢復穩定的貨幣銷售增長。

Beginning on Slide 4. This year is off to an encouraging start. Improvement in our underlying business, notably in Pet Health, increases our confidence in the outlook for the first half and full year of 2023, allowing us to raise the bottom end of the guidance range for our key metrics. We progressed important operational and pipeline milestones and reduced uncertainty in key areas, including the completion of the Bayer ERP system integration and the positive collaboration and progress with the EPA on Seresto.

從幻燈片 4 開始。今年的開端令人鼓舞。我們基礎業務的改善，尤其是寵物健康業務的改善，增強了我們對 2023 年上半年和全年前景的信心，使我們能夠提高關鍵指標指導範圍的下限。我們取得了重要的運營和管道里程碑，並減少了關鍵領域的不確定性，包括完成拜耳 ERP 系統集成以及與 EPA 在 Seresto 方面的積極合作和進展。

The pipeline continued to advance with conditional approval of our parvovirus product and initial submission of our IL-31 monoclonal antibody for dermatology. Overall, our pipeline is in an even better position than it was just 2 months ago. Additionally, we remain confident in our liquidity and the business' ability to generate cash throughout the year. While our operating cash flow was seasonally lower in the first quarter, we continue to expect improvement throughout the year, leading to approximately $100 million of cash available for debt paydown this year.

隨著我們細小病毒產品的有條件批准和我們用於皮膚病學的 IL-31 單克隆抗體的初步提交，管道繼續推進。總的來說，我們的管道比 2 個月前的情況更好。此外，我們對我們的流動性和業務全年產生現金的能力充滿信心。雖然我們的經營現金流在第一季度出現季節性下降，但我們繼續預計全年會有所改善，從而導致今年約有 1 億美元的現金可用於償還債務。

We remain confident in our position relative to our financial debt covenants and our ability to reduce debt and leverage over time. Finally, while our executive leadership and global team remain committed to near-term delivery, we are also actively planning for the expected launches of our potential blockbuster innovation.

我們對我們在金融債務契約方面的地位以及我們隨著時間的推移減少債務和槓桿的能力仍然充滿信心。最後，雖然我們的執行領導和全球團隊仍然致力於近期交付，但我們也在積極規劃我們潛在的重磅創新的預期發布。

At the end of the call, I will share some considerations for our encouraging yet balanced outlook as we expect to see an inflection point in 2024 as we receive approvals and begin launching our potential blockbusters.

在電話會議結束時，我將分享一些關於我們令人鼓舞但平衡的前景的考慮，因為我們預計在 2024 年會看到一個拐點，因為我們獲得批准並開始推出我們的潛在重磅炸彈。

Moving to Slide 5. In the first quarter, Elanco delivered revenue of $1.257 billion, a reported growth of 3% and constant currency growth of 6%. In April, we completed our global systems integration, bringing the legacy Global Bayer Animal Health business into the Elanco ERP environment. As a part of our system cutover preparation, we proactively communicated to our customers our expectations of a 2- to 4-week shipping blackout periods for legacy Bayer Animal Health products that would occur in April.

轉到幻燈片 5。在第一季度，Elanco 實現了 12.57 億美元的收入，報告的增長率為 3%，貨幣增長率為 6%。 4 月，我們完成了全球系統集成，將遺留的全球拜耳動物保健業務納入 Elanco ERP 環境。作為我們系統切換準備的一部分，我們主動向客戶傳達了我們對 4 月份將出現的傳統拜耳動物保健產品 2 至 4 週的運輸停電期的預期。

Our February guidance assumed that customers would likely shift purchases of legacy Bayer products from the second quarter into the first quarter to ensure continuity of supply in the market. Our best estimate based on our results, analysis of individual markets and customer conversations, results in a benefit from the ERP blackout in the range of $90 million to $110 million or a 7 to 9 percentage point benefit to growth.

我們 2 月份的指引假設客戶可能會將舊版拜耳產品的採購從第二季度轉移到第一季度，以確保市場供應的連續性。根據我們的結果、對個別市場的分析和客戶對話，我們的最佳估計結果是 ERP 停電帶來的收益在 9000 萬到 1.1 億美元之間，或者說增長收益增加了 7 到 9 個百分點。

Excluding the ERP blackout, revenue performance in the first quarter was largely in line with our expectations and represents a sequential improvement for both Pet Health and Farm Animal compared to our fourth quarter 2022. In Pet Health, the U.S. market remains strong overall, despite the continued low single-digit declines in U.S. vet clinic visits. Excluding the benefit from the ERP blackout, our Pet Health Business was approximately flat, representing an improvement from the high single-digit and low double-digit declines we reported over the last several quarters.

不包括 ERP 停電，第一季度的收入表現基本符合我們的預期，並且與我們的 2022 年第四季度相比，寵物健康和農場動物的連續改善。在寵物健康方面，美國市場總體保持強勁，儘管美國獸醫診所的訪問量繼續保持低個位數下降。排除 ERP 停電帶來的好處，我們的寵物健康業務基本持平，這表明我們在過去幾個季度報告的高個位數和低兩位數下降有所改善。

Bobby Modi, our Executive Vice President of U.S. Pet Health, and his team have refined the strategy and improved execution in our largest and highest margin business area, leading to improved performance in 4 key areas: share of voice, physical availability, pricing and innovation.

我們的美國寵物健康執行副總裁 Bobby Modi 和他的團隊改進了我們最大和利潤率最高的業務領域的戰略並改進了執行，從而提高了 4 個關鍵領域的績效：話語權份額、實體可用性、定價和創新.

We have increased our share of voice in 3 ways. We are driving more efficient and targeted conversations with clinics through digital tools, leveraging innovation to gain more mind share from vets and adding inside sales reps to provide broader and more frequent engagement with Elanco.

我們通過 3 種方式增加了我們的發言權。我們正在通過數字工具推動與診所進行更有效和更有針對性的對話，利用創新從獸醫那裡獲得更多的思想分享，並增加內部銷售代表以提供與 Elanco 更廣泛和更頻繁的接觸。

As an example of our expanding digital efforts total touch points with vet care professionals was up 15% year-over-year in the first quarter, resulting in greater and faster clinic lead generation. Next, we're expanding physical availability of our products. More total distribution points across retailers and clinic shelves, more meaningful locations in stores and new channels, contributing to improved dispensing across our portfolio.

作為我們不斷擴大的數字化努力的一個例子，第一季度與獸醫護理專業人員的總接觸點同比增長 15%，從而產生更多更快的診所潛在客戶。接下來，我們正在擴大我們產品的實際可用性。零售商和診所貨架上更多的總分銷點，商店和新渠道中更有意義的位置，有助於改善我們產品組合的分配。

In the first quarter, we expanded total distribution points for our retail portfolio by 17%, which contributed to the U.S. Seresto and Advantage family growth in the quarter. Regarding price, we significantly upgraded our capabilities in this space. We're taking a disciplined approach to maximizing revenue via list price increases and trade promotion optimization.

第一季度，我們將零售組合的總分銷點擴大了 17%，這為本季度美國 Seresto 和 Advantage 系列的增長做出了貢獻。關於價格，我們顯著提升了我們在這個領域的能力。我們正在採取一種有紀律的方法，通過提高標價和優化貿易促銷來最大化收入。

U.S. Pet Health grew price more in the first quarter than any quarter in the last year, which contributed to the global pet health price growth of 5%. Finally, we're capturing additional sales from innovation and product refreshes with 6 products approved or launched in U.S. Pet Health the last 6 months as we are building a launch excellent muscle through improved capabilities.

美國寵物保健品在第一季度的價格漲幅超過去年任何一個季度，這推動了全球寵物保健品價格增長 5%。最後，我們通過創新和產品更新獲得了額外的銷售額，過去 6 個月我們在美國寵物健康部門批准或推出了 6 種產品，因為我們正在通過改進的能力建立一個優秀的發布肌肉。

Our retail category management efforts on the Advantage family are driving higher velocity and lower cannibalization than we expected for our value-oriented relaunch of canine Advantix. Overall, in the first quarter, we believe these actions help the U.S. Pet Health business to outpace the overall category in OTC dispensing and drive year-over-year growth in Elanco Rx product sales from distributors out to the veterinary clinic despite continued pressure from competitive innovation.

我們在 Advantage 系列上的零售類別管理工作正在推動比我們以價值為導向重新推出犬類 Advantix 時更快的速度和更低的自相殘殺。總的來說，在第一季度，我們認為這些行動有助於美國寵物保健業務在非處方藥配藥方面超過整體類別，並推動 Elanco Rx 產品銷售從分銷商到獸醫診所的同比增長，儘管來自競爭的持續壓力創新。

Additionally, we likely benefited from the macro factors, including improved consumer conditions and a potentially earlier parasiticide season. We are pleased with the positive outcomes from the actions we have taken to strengthen our position in U.S. Pet Health market but acknowledge there's still a lot to play out this year with uncertainty around the economy, retailer pricing and competitive actions.

此外，我們可能受益於宏觀因素，包括消費條件改善和可能提前的寄生蟲季節。我們對我們為加強我們在美國寵物健康市場的地位而採取的行動取得的積極成果感到高興，但我們承認，由於經濟、零售商定價和競爭行動的不確定性，今年仍有很多事情要做。

We look forward to continued progression to improve this business. Now a few comments about our Pet Health business internationally. In Europe, the economic environment has been better than expected, but our performance was pressured in the quarter compared to the very strong start in the first quarter of 2022. While the Pet Health market and Elanco sell-out data for available countries in Europe is improving sequentially, we still expect continued environmental pressure on the business in the second quarter.

我們期待著繼續進步以改善這項業務。現在就我們的國際寵物健康業務發表一些評論。在歐洲，經濟環境好於預期，但與 2022 年第一季度非常強勁的開局相比，我們在本季度的業績受到壓力。雖然歐洲可用國家的寵物健康市場和 Elanco 銷售數據是環比改善，我們仍然預計第二季度業務將繼續面臨環境壓力。

In farm animal, the underlying business benefited from the strength in Europe and Asia, led by poultry, offset by a decline in the U.S. related to vaccine supply and competition in select product categories. Despite this, we remain encouraged by the growth opportunity for Experior this year. Six of the largest U.S. cattle feeding organizations have moved to commercial adoption of Experior with broad acceptance by the beef processors. Experior adoption continues to strengthen the value of our overall cattle portfolio offering, including Rumensin.

在農場動物方面，基礎業務受益於以家禽為首的歐洲和亞洲的實力，但被美國與疫苗供應和特定產品類別競爭相關的下滑所抵消。儘管如此，我們仍然對 Experior 今年的增長機會感到鼓舞。美國六家最大的牛飼養組織已開始商業採用 Experior，並得到牛肉加工商的廣泛認可。 Experior 採用繼續增強我們整體牛產品組合的價值，包括 Rumensin。

Finally, in China, while poultry is improving, swine prices were pressured to start the year. We're cautiously monitoring progress in this market and assume gradual improvement throughout the year. Across our pet and farm animal businesses, we continue to expect year-over-year environmental and competitive pressure. However, the successful completion of our ERP system integration, our innovation progress and positive indicators in our business, notably in U.S. Pet Health and international poultry support our decision to raise the bottom end of guidance on our key metrics for both the first half and the full year.

最後，在中國，雖然家禽價格正在好轉，但豬肉價格在年初受到壓力。我們正在謹慎監測這個市場的進展，並假設全年會逐步改善。在我們的寵物和農場動物業務中，我們繼續預期同比環境和競爭壓力。然而，我們的 ERP 系統集成的成功完成、我們的創新進展和我們業務的積極指標，特別是在美國寵物健康和國際家禽方面，支持我們決定提高上半年和下半年關鍵指標的指導底線整整一年。

Starting with productivity. We are pleased with the completion of the ERP integration, the last major milestone associated with the Bayer Animal Health transaction. I am proud of the team's preparation, their leadership and the execution to advance us into this new phase. We look forward to the flexibility, the simplicity and the optionality of operating this business now on one consolidated system.

從生產力開始。我們對 ERP 整合的完成感到高興，這是與拜耳動物保健交易相關的最後一個重要里程碑。我為團隊的準備、領導和執行力將我們推進到這個新階段感到自豪。我們期待現在在一個綜合系統上運營這項業務的靈活性、簡單性和可選性。

Moving to portfolio. We continue to collaborate with the EPA as they near completion of their review of Seresto, which included expert counsel from the FDA in the process. We appreciate the EPA's approach and diligence during the science-based review process. Elanco continues to align with the EPA on their recommended stewardship actions supporting the continued registration of the product.

轉向投資組合。我們繼續與 EPA 合作，因為他們即將完成對 Seresto 的審查，其中包括來自 FDA 的專家顧問。我們讚賞 EPA 在基於科學的審查過程中的方法和勤奮。 Elanco 繼續與 EPA 就其建議的管理行動保持一致，以支持產品的持續註冊。

We expect the formal results to be communicated by the EPA as they are finalized in the coming weeks. As a leader in Animal Health, we are committed to the well-being of pets and welcome the opportunity to work with the EPA on these stewardship actions that we believe will raise the bar and support the continued safety of Seresto to protect pets from fleas and ticks and the deadly diseases they can carry.

我們預計 EPA 將在未來幾週內最終確定正式結果。作為動物健康領域的領導者，我們致力於寵物的福祉，並歡迎有機會與 EPA 合作開展這些管理行動，我們相信這些行動將提高標準並支持 Seresto 的持續安全，以保護寵物免受跳蚤和蜱蟲和它們可以攜帶的致命疾病。

Slide 7 details our progress towards unlocking Elanco's next area of growth and value through innovation. The pipeline continues to strengthen with advances in all key programs in line with our expectations. Since February, we launched 4 new products, received 3 approvals in major markets and initiated the submission of our 6 new potential blockbuster product.

幻燈片 7 詳細介紹了我們在通過創新解鎖 Elanco 的下一個增長和價值領域方面取得的進展。隨著所有關鍵項目的進展符合我們的預期，管道繼續加強。自2月以來，我們推出了4款新產品，在主要市場獲得了3個批准，並啟動了我們6款新的潛在重磅產品的申報。

The R&D organization is executing with excellence while driving partnership across manufacturing and commercial. In mid-March, we began shipping Bexacat, our once-daily oral SGLT2 inhibitor, diabetes product for cats in the U.S. Earlier this month, we received FDA conditional approval for varenzin-CA1, a daily oral treatment for the control of anemia associated with chronic kidney disease in cats. These portfolio-enhancing products are both first-in-class fee line innovations, and we view them as market creation opportunities.

研發組織正在卓越執行，同時推動製造和商業領域的合作夥伴關係。 3 月中旬，我們開始在美國運送 Bexacat，這是我們每日一次的口服 SGLT2 抑製劑，用於貓的糖尿病產品。本月早些時候，我們收到了 FDA 有條件批准的 varenzin-CA1，這是一種每日口服治療藥物，用於控制與貓相關的貧血貓的慢性腎臟疾病。這些增強投資組合的產品都是一流的費用線創新，我們將它們視為市場創造機會。

Next, the USDA approved our Elwood, Kansas monoclonal antibody, manufacturing site and granted conditional approval for our canine parvovirus treatment. As our first monoclonal antibody, this approval represents a significant milestone in our journey to advance this important platform. With a total addressable market in the U.S. of approximately 330,000 canine parvovirus cases per year, the conditional approval highlights the value and need for this unique treatment.

接下來，美國農業部批准了我們位於堪薩斯州埃爾伍德的單克隆抗體生產基地，並有條件地批准了我們的犬細小病毒治療。作為我們的第一個單克隆抗體，這一批准代表了我們推進這一重要平台的旅程中的一個重要里程碑。在美國，每年大約有 330,000 例犬細小病毒病例，有條件的批准凸顯了這種獨特治療的價值和必要性。

We already have a strong interest from the veterinary community for this potential blockbuster product. We expect to begin shipping in the coming weeks as we finalize state approvals. Important to understand the conditional approvals for our parvovirus treatment and varenzin are a reflection of agreed-upon approval pathways with the regulatory agencies to allow for accelerated market access, given both these products address significant unmet needs. For both, we plan to continue to progress towards full approval and do not expect the current status to be commercially limiting.

獸醫界已經對這種潛在的重磅產品產生了濃厚的興趣。我們預計在未來幾週內完成州批准後開始發貨。重要的是要了解我們的細小病毒治療和 varenzin 的有條件批准反映了與監管機構商定的批准途徑，以允許加速市場准入，因為這兩種產品都解決了未滿足的重大需求。對於兩者，我們計劃繼續朝著完全批准的方向前進，並且預計當前狀態不會在商業上受到限制。

On the Pet Health OTC side, we've expanded our OTC R&D capability to enhance our efforts here. Since our last call, we launched canine Advantix, a flea and tick preventative for dogs, and Advantage, a flea preventative for cats, at a small subset of U.S. retailers. These value offerings are a cornerstone of our good, better and best approach to flea and tick retail category management.

在寵物健康 OTC 方面，我們擴大了 OTC 研發能力，以加強我們在這方面的努力。自上次通話以來，我們在一小部分美國零售商處推出了 canine Advantix（一種狗用跳蚤和蜱蟲預防劑）和 Advantage（一種貓用跳蚤預防劑）。這些超值產品是我們良好、更好和最好的跳蚤和壁蝨零售品類管理方法的基石。

Additionally, we're pleased to announce the approval and launch of Adtab in several EU markets, our third OTC introduction this year. Leveraging the Advantage brand name, Adtab is an oral monthly flea and tick product for both dogs and cats. This addition establishes Elanco in the emerging OTC oral parasiticide market in Europe.

此外，我們很高興地宣布 Adtab 在幾個歐盟市場獲得批准並推出，這是我們今年第三次推出 OTC 產品。利用 Advantage 品牌名稱，Adtab 是一款針對狗和貓的每月口服跳蚤和蜱蟲產品。這一增加使 Elanco 在歐洲新興的 OTC 口服殺寄生蟲劑市場站穩了腳跟。

Finally, in March, we completed the initial technical submission to the USDA for our IL-31 monoclonal antibody for canine dermatology. Each of our potential blockbusters is progressing as planned with a path towards approval by the first half of 2024. Experior, Bovaer and our Parboil product are novel first-in-class products while our broad-spectrum parasiticide and JAK inhibitor dermatology asset are expected to be differentiated from the current products in these large and growing markets.

最後，在 3 月，我們完成了針對犬類皮膚病學的 IL-31 單克隆抗體向美國農業部的初步技術提交。我們的每一個潛在重磅炸彈都在按計劃取得進展，並有望在 2024 年上半年獲得批准。Experior、Bovaer 和我們的 Parboil 產品是一流的新型產品，而我們的廣譜殺寄生蟲劑和 JAK 抑製劑皮膚病學資產預計與這些龐大且不斷增長的市場中的現有產品區分開來。

Now I'll pass it to Todd to provide more on the first quarter results and financial guidance.

現在我將它傳遞給托德，以提供更多關於第一季度業績和財務指導的信息。

Thank you, Jeff, and good morning, everyone. Today, I will focus my comments on our first quarter adjusted measures, so please refer to today's earnings press release for a detailed description of the year-over-year changes in our reported results.

謝謝你，傑夫，大家早上好。今天，我將重點關注我們第一季度調整後的指標，因此請參閱今天的收益新聞稿，詳細了解我們報告的業績同比變化。

Starting on Slide 9. In the first quarter, we delivered $1.257 billion of revenue, reported growth of 3% or growth of 6% in constant currency. Price contributed 5% in the quarter. As Jeff referenced, we believe our ERP system integration led to a shift in sales from the second quarter to the first. In February, we assumed this shift would benefit first quarter revenue by $40 million to $80 million. However, we now estimate the shift to be approximately $90 million to $110 million. A few factors drove the revised estimate of the customer-initiated demand shift.

從幻燈片 9 開始。第一季度，我們實現了 12.57 億美元的收入，報告增長 3% 或按固定匯率計算增長 6%。價格在本季度貢獻了 5%。正如 Jeff 所提到的，我們相信我們的 ERP 系統集成導致銷售額從第二季度轉移到第一季度。 2 月份，我們假設這一轉變將使第一季度收入受益 4000 萬至 8000 萬美元。但是，我們現在估計這種轉變約為 9000 萬至 1.1 億美元。有幾個因素推動了對客戶發起的需求轉移的修訂估計。

First, we believe our customers demonstrated a higher level of sensitivity than we anticipated related to the potential for extended disruption from the system cutover and general supply chain concerns. Additionally, we believe sequentially stronger dispensing at our retail partners contributed to the magnitude of purchases in the U.S. Pet Health business.

首先，我們相信我們的客戶表現出比我們預期更高的敏感性，這與系統切換和一般供應鏈問題可能導致的長期中斷有關。此外，我們認為，我們的零售合作夥伴的配藥業務持續走強，這對美國寵物保健業務的採購規模做出了貢獻。

We believe estimating the benefit of the shift in sales resulting from the ERP blackout provides important context to better understand the trends in our underlying business performance.

我們認為，估計 ERP 停電導致的銷售變化帶來的好處可以為更好地了解我們的基本業務績效趨勢提供重要的背景信息。

Therefore, on Slide 10, we provide our revenue results by business area on a reported and a constant currency basis as well as our estimate for the benefit in the quarter from the ERP blackout. For Pet Health, constant currency growth was 8% with an estimated benefit of 10 to 12 percentage points from the ERP blackout.

因此，在幻燈片 10 上，我們按報告和固定貨幣為基礎按業務領域提供我們的收入結果，以及我們對 ERP 中斷對本季度收益的估計。對於 Pet Health，持續的貨幣增長率為 8%，ERP 停電估計帶來 10 到 12 個百分點的收益。

In the U.S., Pet Health revenue grew 12%, including an estimated 12 percentage point benefit from the ERP blackout. The approximately flat underlying business performance was driven by innovation and growth in our OTC parasiticide portfolio, offset by supply disruption for certain vaccines and continued pressure on legacy parasiticide products.

在美國，寵物保健收入增長了 12%，其中估計 12 個百分點的收益來自 ERP 停電。基本持平的基本業務業績是由我們的 OTC 殺寄生蟲劑產品組合的創新和增長推動的，但被某些疫苗的供應中斷和傳統殺寄生蟲劑產品的持續壓力所抵消。

Recent retail dispensing data indicates improving dynamics in the OTC flea and tick market with Elanco maintaining our market leadership position. Seresto and the Advantage family both grew in the quarter in the U.S., benefiting from an improving macro environment and the commercial efforts Jeff described.

最近的零售配藥數據表明，隨著 Elanco 保持我們的市場領導地位，OTC 跳蚤和蜱蟲市場的動態正在改善。 Seresto 和 Advantage 系列在美國的季度均有所增長，受益於改善的宏觀環境和 Jeff 描述的商業努力。

In the first quarter, we temporarily suspended our minimum advertised price or MAP policy to avoid potential extended interruptions in product availability in the retail channel before or after our ERP blackout period.

在第一季度，我們暫時暫停了我們的最低廣告價格或 MAP 政策，以避免在我們的 ERP 停電期之前或之後零售渠道的產品可用性可能出現長時間中斷。

During the MAP suspension, a number of retailers offered lower prices to consumers, primarily on Seresto. Elanco did not materially change our trade promotion strategy with customers in the quarter helping to drive the 5% price increase in global pet health. We believe some of the Seresto dispensing strength in the first quarter may be a result of this dynamic and anticipate potential softening and dispensing trends throughout the remainder of the season as prices moved higher as a result of the reimplementation of our MAP policy at the end of April.

在 MAP 暫停期間，許多零售商向消費者提供較低的價格，主要是在 Seresto 上。 Elanco 在本季度沒有實質性地改變我們與客戶的貿易促進策略，這有助於推動全球寵物保健品價格上漲 5%。我們認四月。

We believe maintaining MAP pricing is an important component of protecting the value of our brands long term. Outside the U.S., last year's robust start to the year creates a difficult comparison in the first quarter.

我們相信維持 MAP 定價是長期保護我們品牌價值的重要組成部分。在美國以外，去年的強勁開局使得第一季度很難進行比較。

International Pet Health grew 5% in constant currency with an estimated benefit of 11 percentage points from the ERP blackout. China was negatively impacted by the post lockdown COVID outbreak in the first quarter. However, we are encouraged by the latest data in these markets pointing to improving end market demand starting as early as March.

International Pet Health 以固定匯率計算增長了 5%，預計 ERP 停電帶來 11 個百分點的收益。中國在第一季度受到封鎖後 COVID 爆發的負面影響。然而，我們對這些市場的最新數據感到鼓舞，這些數據表明終端市場需求最早將於 3 月開始改善。

Globally, our Farm Animal business grew 5% in constant currency with an estimated benefit of 4 to 5 percentage points from the ERP blackout. In the U.S., our farm business declined 6% with an estimated benefit of approximately 2 percentage points from the ERP blackout. The decline in the underlying business was driven by vaccine supply disruptions, poultry customers rotating off of Elanco products and lower demand for our cattle implants.

在全球範圍內，我們的農場動物業務以固定匯率計算增長了 5%，預計 ERP 停電帶來 4 到 5 個百分點的收益。在美國，我們的農場業務下降了 6%，估計 ERP 停電帶來的收益約為 2 個百分點。基礎業務的下滑是由於疫苗供應中斷、家禽客戶不再使用 Elanco 產品以及對我們的牛植入物的需求下降。

These headwinds were partially offset by the continued ramp of our innovation portfolio, mainly Experior and our new nutritional health products. Outside the U.S., constant currency growth was 10% with an estimated benefit of approximately 6 percentage points from the ERP blackout. The growth in the underlying business was driven by strength in Europe and Asia, led by poultry and price, partially offset by timing of purchases in the Aqua business.

這些不利因素部分被我們創新產品組合的持續增長所抵消，主要是 Experior 和我們的新營養保健產品。在美國以外的地區，持續的貨幣增長率為 10%，預計 ERP 停電帶來的收益約為 6 個百分點。基礎業務的增長是由歐洲和亞洲的強勢推動的，主要是家禽和價格，部分被 Aqua 業務的採購時間所抵消。

Continuing down the income statement on Slide 11. Gross margin increased 230 basis points to 60.8%, gross margin benefited from the ERP blackout by an estimated 130 to 170 basis points as more sales of higher-margin legacy Bayer Animal Health products were realized in the first quarter. Additionally, the improvement was driven by price growth and continued productivity gains across our manufacturing network, partially offset by inflation.

繼續下滑幻燈片 11 的損益表。毛利率增加 230 個基點至 60.8%，毛利率受益於 ERP 停電估計 130 至 170 個基點，因為更高利潤的傳統拜耳動物保健產品的銷售額在第一季度。此外，這種改善是由價格增長和我們整個製造網絡的生產率持續提高所推動的，部分被通貨膨脹所抵消。

Operating expenses increased 1% year-over-year in the quarter, with R&D expenses flat at $81 million and SG&A expenses up 1%, primarily driven by employee-related expenses, partially offset by the favorable impact of foreign exchange rates. Interest expense was $64 million compared to $52 million last year, in line with our expectations.

本季度運營費用同比增長 1%，其中研發費用持平為 8100 萬美元，SG&A 費用增長 1%，主要受員工相關費用的推動，部分被匯率的有利影響所抵消。利息支出為 6,400 萬美元，而去年為 5,200 萬美元，符合我們的預期。

Adjusted EBITDA was $379 million or growth of 12% with an estimated $70 million to $90 million of benefit from the ERP blackout. Adjusted EBITDA margin was 30.2%, an increase of 260 basis points with an estimated 370 to 460 basis point benefit from the ERP blackout.

調整後的 EBITDA 為 3.79 億美元，增長 12%，ERP 停電帶來的收益估計為 7,000 萬至 9,000 萬美元。調整後的 EBITDA 利潤率為 30.2%，增加了 260 個基點，預計 ERP 停電帶來 370 至 460 個基點的收益。

Adjusted EPS was $0.45 in the quarter with an estimated benefit of approximately $0.11 to $0.14 from the ERP blackout, assuming a corporate consolidated tax rate of 21.9%.

本季度調整後每股收益為 0.45 美元，假設企業綜合稅率為 21.9%，ERP 停電帶來的收益估計約為 0.11 至 0.14 美元。

Before moving to our guidance, let me offer a few words on our cash, debt and working capital on Slide 12. Cash used for operations was $145 million in the quarter. The year-over-year decline in the first quarter operating cash flow reflects higher cash interest and a lower reported net income excluding the impact from the ERP integration.

在轉向我們的指導之前，讓我在幻燈片 12 上簡單介紹一下我們的現金、債務和營運資金。本季度用於運營的現金為 1.45 億美元。第一季度經營現金流量同比下降反映了較高的現金利息和較低的報告淨收入（不包括 ERP 整合的影響）。

Historically, the first quarter is our lowest cash-generating quarter with accounts receivable increasing due to the sequential increase of sales from the fourth quarter to the first quarter and the timing of our corporate bonus payout in March. Additionally, inventory increased in the quarter with Pet Health inventory declining slightly and Farm Animal inventory growing, largely driven by the pressured sales volume over the last several quarters.

從歷史上看，第一季度是我們現金產生最低的季度，由於銷售額從第四季度到第一季度連續增長以及我們在 3 月份發放企業獎金，應收賬款有所增加。此外，本季度庫存增加，寵物保健庫存略有下降，農場動物庫存增加，這主要是受過去幾個季度銷售量壓力的推動。

We have established a cross-functional team focused on improving our net working capital performance, especially as it relates to inventory on our balance sheet. We have begun implementing plans to reduce throughput in certain manufacturing facilities to help manage our balance sheet inventory levels down.

我們已經建立了一個跨職能團隊，專注於提高我們的淨營運資本績效，特別是因為它與我們資產負債表上的庫存有關。我們已經開始實施降低某些製造設施產量的計劃，以幫助降低我們資產負債表的庫存水平。

With the post-COVID stabilization of global supply chains and our ERP integration complete, we believe we can start to improve this area of our business. We ended the quarter with net debt of $5.8 billion as we drew $200 million on our revolver to offset the typical seasonality of cash flow in line with our expectations.

隨著 COVID 後全球供應鏈的穩定和我們 ERP 集成的完成，我們相信我們可以開始改善我們的這一業務領域。本季度結束時，我們的淨債務為 58 億美元，因為我們從循環貸款中提取了 2 億美元，以抵消現金流的典型季節性，這符合我們的預期。

At the end of March, our net leverage ratio was 5.4x, slightly lower than the 5.5x at the end of 2022. With our tighter EBITDA guidance and our continued expectations of $100 million of free cash flow available for debt paydown, we now anticipate our year-end net leverage ratio to be between 5.3 and 5.8x.

3 月底，我們的淨槓桿率為 5.4 倍，略低於 2022 年底的 5.5 倍。隨著我們更嚴格的 EBITDA 指引以及我們對 1 億美元的自由現金流可用於償還債務的持續預期，我們現在預計我們的年終淨槓桿率在 5.3 至 5.8 倍之間。

Given the recent volatility in the banking sector and increased investor focus on liquidity, Slide 19 in the appendix provides the latest view of our debt position. In March, we took advantage of volatility in the SOFR forward curve to lock in interest rates through the second quarter of 2025 for the $1 billion of swaps that were set to roll off in October of this year. This will keep our fixed rate debt at between 65% and 70% of total debt through 2023 and 2024.

鑑於銀行業近期的波動以及投資者對流動性的日益關注，附錄中的幻燈片 19 提供了我們債務狀況的最新觀點。 3 月，我們利用 SOFR 遠期曲線的波動性將利率鎖定到 2025 年第二季度，以鎖定將於今年 10 月到期的 10 億美元掉期利率。這將使我們的固定利率債務在 2023 年和 2024 年之前保持在總債務的 65% 到 70% 之間。

Importantly, we continue to expect durable cash flows from our business and are confident in our ability to service our debt with our current liquidity position. Now let's move to our financial guidance, starting on Slide 14. As Jeff said, we are raising the bottom end of our guidance range across all key metrics, driven by the successful completion of the ERP system integration, our innovation progress and the positive indicators in our base business, notably in U.S. Pet Health and international poultry.

重要的是，我們繼續期望我們的業務產生持久的現金流，並對我們以目前的流動性狀況償還債務的能力充滿信心。現在讓我們轉到我們的財務指導，從幻燈片 14 開始。正如 Jeff 所說，在成功完成 ERP 系統集成、我們的創新進展和積極指標的推動下，我們正在提高所有關鍵指標的指導範圍的底端在我們的基礎業務中，特別是美國寵物健康和國際家禽。

For the full year, we are raising the bottom end of our guidance by $30 million and now expect revenue to be between $4.31 billion and $4.4 billion or approximately flat to a 2% constant currency decline. For adjusted EBITDA, we are raising the bottom end of our guidance by $20 million and now expect $940 million to $1 billion.

對於全年，我們將指引的底端提高了 3000 萬美元，現在預計收入將在 43.1 億美元至 44 億美元之間，或大致持平至 2% 的匯率持續下降。對於調整後的 EBITDA，我們將指導下限提高了 2000 萬美元，現在預計為 9.4 億至 10 億美元。

Finally, we anticipate adjusted EPS of $0.76 to $0.83, an increase of $0.02 on the bottom compared to our February guidance. Slide 21 in the appendix provides updates to several of our additional assumptions.

最後，我們預計調整後的每股收益為 0.76 美元至 0.83 美元，與我們 2 月份的指導相比增加了 0.02 美元。附錄中的幻燈片 21 更新了我們的一些額外假設。

On Slide 15, we provide our updated financial guidance for the first half of the year and the second quarter. We reflected the raised bottom end of the full year guidance in the first half guidance. While we're encouraged by the positive leading indicators, we continue to expect a decline in the top line for the first half of 2023 of approximately 2% to 4%, driven primarily by environmental and competitive factors and supply constraints in our U.S. Farm business.

在幻燈片 15 上，我們提供了今年上半年和第二季度的最新財務指南。我們在上半年的指導中反映了全年指導的下限。雖然我們對積極的領先指標感到鼓舞，但我們繼續預計 2023 年上半年的收入將下降約 2% 至 4%，這主要是受環境和競爭因素以及我們美國農場業務的供應限制所推動.

As shown on Slide 16, we expect the $90 million to $110 million of estimated benefit from the ERP blackout in the first quarter will unwind, negatively impacting revenue growth by approximately 8 to 9 percentage points in the second quarter.

如幻燈片 16 所示，我們預計第一季度 ERP 停電帶來的 9000 萬至 1.1 億美元的估計收益將會消失，對第二季度的收入增長產生約 8 至 9 個百分點的負面影響。

Excluding the estimated impact of the ERP blackout, we expect the decline in the base businesses will be largely in line with the first quarter. The shift is also expected to negatively impact adjusted EBITDA and adjusted EPS in the second quarter, as shown on Slides 22 and 23. In line with our initial guidance in February, adjusted EPS is also impacted by year-over-year headwinds from higher interest, taxes and favorable FX rates and additional operating expense investments.

排除 ERP 停電的估計影響，我們預計基礎業務的下滑將與第一季度基本一致。如幻燈片 22 和 23 所示，預計這一轉變還將對第二季度調整後的 EBITDA 和調整後的每股收益產生負面影響。根據我們 2 月份的初步指引，調整後的每股收益也受到利率上升帶來的同比逆風的影響、稅收和有利的匯率以及額外的運營費用投資。

Finally, moving to Slide 17. For the full year, consistent with our initial outlook from February, our implied second half guidance for this year represents flat to 2% constant currency growth. Our guidance reflects sequential improvement in growth in both the first and second half of this year. We are confident in the second half of 2023 expected return to growth for several reasons.

最後，轉到幻燈片 17。對於全年，與我們 2 月份的初步展望一致，我們對今年下半年的隱含指引表示貨幣增長率持平至 2%。我們的指引反映了今年上半年和下半年增長的連續改善。我們有信心在 2023 年下半年恢復增長，原因有幾個。

First, we expect our innovation portfolio will continue to ramp as existing innovation products grow and new products are launched. Second, we assume an improvement in vaccine supply will occur starting in the third quarter. Price is off to a strong start, and we continue to expect contribution of more than 2% for the full year.

首先，我們預計隨著現有創新產品的增長和新產品的推出，我們的創新組合將繼續增加。其次，我們假設疫苗供應將從第三季度開始出現改善。價格開局強勁，我們繼續預計全年的貢獻率將超過 2%。

Finally, we see improving macro conditions in China, Europe and the U.S. compared to the significant pressure we experienced in the second half of 2022.

最後，與我們在 2022 年下半年經歷的巨大壓力相比，我們看到中國、歐洲和美國的宏觀環境正在改善。

Now I'll hand it back to Jeff for closing comments.

現在我將把它交還給 Jeff 以徵求結束意見。

Thanks, Todd. While our team is focused on delivering in 2023, we acknowledge the desire to better understand the opportunity for Elanco in 2024 and beyond. We are not giving guidance beyond 2023 today, but I want to provide you with some context on how we're thinking about the future.

謝謝，托德。雖然我們的團隊專注於 2023 年的交付，但我們承認希望更好地了解 Elanco 在 2024 年及以後的機會。我們今天不會提供 2023 年以後的指導，但我想為您提供一些關於我們如何思考未來的背景信息。

First, our portfolio outlook is balanced. We expect continued competitive and generic pressure but also anticipate improved supply and stabilization in our base Pet Health business. Regarding innovation, we expect our parvovirus treatment, Experior, our new OTC products and others will continue to ramp delivering incremental innovation revenue in 2024 on the path towards $600 million to $700 million by 2025.

首先，我們的投資組合前景是平衡的。我們預計持續的競爭和一般壓力，但也預計我們的基礎寵物保健業務的供應和穩定性會有所改善。關於創新，我們預計我們的細小病毒治療、Experior、我們的新 OTC 產品和其他產品將在 2024 年繼續增加創新收入，到 2025 年達到 6 億美元至 7 億美元。

For our 4 other late-stage assets with blockbuster potential, we're confident in a path towards first half 2024 approvals. However, as we know regulatory time lines are subject to many factors and the competitive landscape is uncertain. We are focused on progressing what is in our control, timely, quality and comprehensive submissions.

對於我們其他 4 項具有重磅炸彈潛力的後期資產，我們有信心在 2024 年上半年獲得批准。然而，正如我們所知，監管時間表受到許多因素的影響，競爭格局也不確定。我們專注於推進我們控制的、及時、高質量和全面的提交。

With that said, we are actively reviewing our launch plans and are focused on speed to market post approval. Based on recent experience with ZORBIUM, Bexacat, and parvovirus, we expect launches to be around 2 to 4 months post approval. We have not finalized our launch investment plans. However, we expect more limited incremental spending ahead of launches with consideration for more significant investment post launch.

話雖如此，我們正在積極審查我們的發布計劃，並專注於批准後的上市速度。根據最近在 ZORBIUM、Bexacat 和細小病毒方面的經驗，我們預計上市將在批准後 2 到 4 個月左右。我們尚未最終確定啟動投資計劃。然而，我們預計在發布前會有更多有限的增量支出，同時考慮在發布後進行更重大的投資。

The team is working closely to optimize these U.S. launches and will take a thoughtful approach to staging investment. Finally, with the completion of our ERP integration, we continue to expect to drive additional synergies and reduced project cash needs to less than $20 million next year, contributing to expected improved operating cash flow.

該團隊正在密切合作以優化這些在美國的發布，並將採取深思熟慮的方法進行投資。最後，隨著我們 ERP 整合的完成，我們繼續期望在明年推動額外的協同效應並將項目現金需求減少到不到 2000 萬美元，從而有助於預期改善的運營現金流。

We hope this additional context is helpful as you consider the opportunity for Elanco in 2024 and beyond. We are encouraged by the milestones achieved, reduced uncertainty and positive leading indicators and have a balanced outlook for our expected progress in the medium term. With that, I'll turn it over to Katy to moderate the Q&A.

當您考慮 Elanco 在 2024 年及以後的機會時，我們希望這些額外的背景信息對您有所幫助。我們對實現的里程碑、減少的不確定性和積極的領先指標感到鼓舞，並對我們在中期的預期進展持平衡的展望。有了這個，我會把它交給凱蒂來主持問答。

Thanks, Jeff. (Operator Instructions) Operator, please provide the instructions for the Q&A session, and then we'll take the first caller.

謝謝，傑夫。 （接線員說明）接線員，請提供問答環節的說明，然後我們會接聽第一個來電者。

(Operator Instructions) Our first question comes from Chris Schott from JPMorgan.

（操作員說明）我們的第一個問題來自摩根大通的 Chris Schott。

This is Ekaterina on for Chris. So first, on ERP, I think you mentioned the magnitude of the ERP dynamic was greater than you were expecting in the quarter. Can you just elaborate a bit more on how you know that, that was all ERP and maybe not strong underlying kind of demand than you were expecting? How are you approaching, I guess, separating out the ERP piece from just like demand? And then the second question is on channel inventory levels in the quarter. So some of your competitors have mentioned distributors lowering inventory levels in Q1. So if you take out all that's happened with the ERP piece for the Bayer product, is this something that you also saw for the Elanco business? And then maybe how did that impact Q1?

這是克里斯的葉卡捷琳娜。所以首先，關於 ERP，我想你提到 ERP 動態的幅度比你在本季度預期的要大。您能否詳細說明一下您是如何知道的，這都是 ERP，並且可能沒有您預期的那麼強大的潛在需求？我猜，您是如何處理將 ERP 部分與需求分開的？然後第二個問題是關於本季度的渠道庫存水平。所以你的一些競爭對手提到分銷商在第一季度降低了庫存水平。所以，如果你把拜耳產品的 ERP 部分發生的所有事情都去掉，這是否也是你在 Elanco 業務中看到的？然後也許這對第一季度有何影響？

Thanks for the question, Ekaterina. With respect to the $90 million to $110 million estimate we've provided for the bridging stock ordered by our customers, we've done a lot of analysis with respect to both specific orders from our customers and conversations with them, understanding what sales have been in historic periods and then also just looking at underlying demand trends, we're dispensing data and inventory levels.

謝謝葉卡捷琳娜的提問。關於我們為客戶訂購的過橋庫存提供的 9000 萬至 1.1 億美元的估計，我們對客戶的具體訂單和與他們的對話進行了大量分析，了解銷售情況在歷史時期，然後也只是看看潛在的需求趨勢，我們正在分配數據和庫存水平。

This number is our best estimate. I've also got the benefit of having already seen April sales. So we feel very good about this $90 million to $110 million, it is a timing issue. This is why we made the decision in February to guide to the first half, understanding that this would be a little noisier than we'd ideally like. But net-net, we feel very good about that, but we are pleased with underlying demand.

這個數字是我們最好的估計。我還受益於已經看到了 4 月份的銷售情況。所以我們對這 9000 萬到 1.1 億美元感覺非常好，這是一個時間問題。這就是為什麼我們在 2 月份決定將指南帶到上半年，因為我們知道這會比我們理想中的要嘈雜一些。但是淨淨，我們對此感覺非常好，但我們對潛在需求感到滿意。

We think it was higher than what our original estimate was as our customers probably were more concerned, they'd be out of product longer than our confidence in the execution we would have. Great news for us, execution was on the money. And we had the U.S. up and running by April 10. The rest of the country is staged over the course of April, we're up, we're running. We're shipping product. We're billing, we're collecting. So really pleased with how the team executed this ERP cutover.

我們認為它高於我們最初的估計，因為我們的客戶可能更擔心，他們的產品停產時間比我們對執行的信心要長。對我們來說是個好消息，執行是有錢的。我們在 4 月 10 日之前讓美國啟動並運行。該國其他地區在 4 月期間上演，我們正在運行，我們正在運行。我們正在運送產品。我們在計費，我們在收款。對團隊執行此 ERP 切換的方式非常滿意。

And then with the question on channel inventory, the first part to note, most of the U.S. sales for the Bayer legacy products go directly to our retail customers. So there's not much impact on that distributor levels or in the farm channel. Overall, those levels have been consistent with what we have had since the end of Q2 of 2020. But we are attuned to distributors with higher cost of capital, focusing on inventory levels. And so we factored that into our forward guidance as well.

然後是關於渠道庫存的問題，首先要注意的是，拜耳傳統產品在美國的大部分銷售直接面向我們的零售客戶。因此，對分銷商級別或農場渠道的影響不大。總體而言，這些水平與我們自 2020 年第二季度末以來的水平一致。但我們適應了資金成本較高的分銷商，重點關注庫存水平。因此，我們也將其納入我們的前瞻性指導中。

Our next question comes from Erin Wright from Morgan Stanley.

我們的下一個問題來自摩根士丹利的 Erin Wright。

As you think about the 3 companion animal blockbuster products in 2024 to the parasiticide and the derm launches, is the time line still on track? Has there been any changes there? Is there any possibility of expediting those launches? And how are you thinking about your conversations with the FDA just given delays across certain competitor products with the FDA specifically? And what investments, and you kind of touched on this, I think, at the very end, Jeff, but what kind of investments do you need to make from a commercial perspective to roll these out? How should we think about that incremental commercial investment that you need to make in 2024? And can you talk about the strategy around distribution, pricing across parasiticides and derm?

當您想到 2024 年的 3 款伴侶動物重磅產品到殺寄生蟲劑和真皮劑的上市時，時間線是否還在正軌上？那裡有什麼變化嗎？是否有可能加快這些發布？鑑於某些競爭對手產品與 FDA 的延遲，你如何看待你與 FDA 的對話？什麼投資，我想，你在最後提到了這一點，傑夫，但從商業角度來看，你需要進行什麼樣的投資才能推出這些投資？我們應該如何考慮您需要在 2024 年進行的增量商業投資？你能談談關於寄生蟲劑和皮膚病的分銷、定價策略嗎？

Thanks, Erin. It's the right question to ask relative to the timing. What I would say is kind of as we step back and look at the pipeline position, I'd say the following things. And as I mentioned, we're controlling what we can control. First, I think quality of the team, what Ellen has done with her and her team, the quality of our regulatory team. Second is the quality of the packages, which we're very confident in. The dialogue with the regulators, I can point to proof points, 3 approvals here recently, parvo, USDA; AdTab, [EU]; and Varenzin, FDA, I think the track record and recent success is an example of this team and what they're capable of.

謝謝，艾琳。相對於時間而言，這是正確的問題。我要說的是，當我們退後一步，看看管道位置時，我會說以下內容。正如我提到的，我們正在控制我們能控制的東西。首先，我認為團隊的素質，艾倫與她和她的團隊所做的一切，以及我們監管團隊的素質。其次是包裝的質量，我們對此非常有信心。與監管機構的對話，我可以指出證據，最近在這裡獲得了 3 項批准，parvo，USDA； AdTab，[歐盟]； FDA 的 Varenzin，我認為過去的記錄和最近的成功就是這個團隊及其能力的一個例子。

I also think we're going into some new spaces, Erin, maybe for us, but not new spaces for regulatory. So derm with a JAK or an IL-31 short-acting or para, these are new areas. Delays that typically come like we saw with parvo in new areas. So I would say our confidence level is on that, the size of pipeline and the size of shots on goal in major markets to us, we sit in a very strong position relative to the number that we do have.

我還認為我們正在進入一些新的空間，艾琳，也許對我們來說，但不是新的監管空間。所以使用 JAK 或 IL-31 短效或 Para 的皮膚，這些都是新領域。通常會出現延遲，就像我們在新領域看到的 parvo 一樣。所以我想說我們的信心水平在於，管道的規模和主要市場對我們的射門規模，相對於我們擁有的數量，我們處於非常有利的地位。

Relative to the investment, that's why we wanted to highlight a little bit to give you perspective on '24 as count on, as we've seen with these recent approvals for us, launching 2 to 4 months after approval, and we believe today, we've got and you've seen it, all the things we're doing to drive today's demand are going to help. So the physical availability, the share of voice, the launch capabilities with digital, we believe ahead of the launches, we don't see a major step up, Erin, we'll see that major step-up coming after the approvals, and we'll model that accordingly. So that's the update. Again, a lot of progress in the pipeline in a much stronger position than even 2 months ago with everything that happened this quarter.

相對於投資，這就是為什麼我們想強調一點，讓您對 24 年的看法，正如我們最近對我們的這些批准所看到的那樣，在批准後 2 到 4 個月啟動，我們今天相信，我們已經看到了，我們為推動今天的需求所做的所有事情都會有所幫助。因此，物理可用性、語音份額、數字發布功能，我們相信在發布之前，我們不會看到重大進展，Erin，我們會在批准後看到重大進展，並且我們將相應地建模。這就是更新。再一次，與 2 個月前相比，本季度發生的一切都在管道中取得了很多進展。

Our next question comes from Balaji Prasad from Barclays.

我們的下一個問題來自巴克萊銀行的 Balaji Prasad。

So a couple of questions on Seresto. If you could maybe elaborate on more with what your discussions with the EPA entail? And have you been able to reconcile your safety methodology with that of the EPA? On the same topic, could you also speak about the covenants and both on the interest rate and the interest coverage and the net leverage ratio and see if there's any kind of situation where Seresto withdrawal, if it comes to it, would impact these covenants?

所以有幾個關於 Seresto 的問題。您是否可以詳細說明您與 EPA 的討論內容？您是否能夠將您的安全方法與 EPA 的方法相協調？在同一主題上，您能否也談談關於利率、利息覆蓋率和淨槓桿率的契約，看看是否存在任何情況，如果涉及到 Seresto 退出，會影響這些契約嗎？

Thanks, Balaji. On Seresto, yes, we've made nice progress from our last update in February, and we'll share that, as I mentioned, we are very pleased with this progress. We aligned with the EPA on EPA's recommendations, which linked to stewardship actions, all supporting the continued registration of Seresto. We do expect, Balaji, formal results to be communicated by the EPA in the coming weeks. Again, we're confident in the safety of the profile of the product. We're also appreciative of the raising of the bar for the category overall.

謝謝，巴拉吉。在 Seresto 上，是的，自 2 月的上次更新以來，我們取得了不錯的進展，我們將分享這一點，正如我提到的，我們對這一進展感到非常滿意。我們在 EPA 的建議上與 EPA 保持一致，這些建議與管理行動相關，所有這些都支持 Seresto 的持續註冊。 Balaji，我們確實希望 EPA 在未來幾週內公佈正式結果。同樣，我們對產品配置文件的安全性充滿信心。我們也很感激整體類別標準的提高。

I just highlight a little bit on Seresto because it's so important to us. We saw sequential improvement in the quarter. We saw the U.S. -- after you calculate out for the cut over, the U.S. return to growth. Some of that may be attributed to an earlier season, people coming back to retail, but I also think this increased physical availability was a factor.

我只是在 Seresto 上強調了一點，因為它對我們來說非常重要。我們看到本季度環比有所改善。我們看到了美國——在你計算出削減後，美國恢復增長。其中一些可能歸因於較早的季節，人們回到零售店，但我也認為實體可用性的增加是一個因素。

OUS was down a little bit. It was a strong quarter a year ago as well as some of the inventory management. I kind of step back and say, we sold more than half of our 2022 Seresto in the first 3 months. So we like what we see. Again, there's a lot of the season remaining. The engagement with the EPA is positive progress, and we'll wait for the formal results here in the coming weeks.

OUS有點下降。一年前這是一個強勁的季度以及一些庫存管理。我有點退後一步說，我們在前 3 個月售出了 2022 Seresto 的一半以上。所以我們喜歡我們所看到的。同樣，這個賽季還剩下很多時間。與 EPA 的合作取得了積極進展，我們將在未來幾週內在這裡等待正式結果。

Balaji, with respect to the debt covenants, we feel very comfortable with our liquidity position, our overall cash flow and how we see the business progressing over the next 8 quarters. With that, we don't think there's any covenant risk whatsoever, we've laid out all the debt-related metrics on Slide 9 in the appendix of the deck. So that if anyone has questions, you can find all the information there on towers and the like. So we feel very good about where we stand.

Balaji，關於債務契約，我們對我們的流動性狀況、我們的整體現金流以及我們如何看待未來 8 個季度的業務進展感到非常滿意。有了這個，我們認為不存在任何契約風險，我們已經在幻燈片附錄的幻燈片 9 上列出了所有與債務相關的指標。因此，如果有人有疑問，您可以在那裡找到有關塔等的所有信息。所以我們對自己的立場感覺很好。

Our next question comes from Umer Raffat from Evercore ISI.

我們的下一個問題來自 Evercore ISI 的 Umer Raffat。

It looks like the base business is tracking better, but then I'm just really confused around some of the free cash flow and inventory stuff. So let me be more specific. If base business tracked well and there was another $100 million in revenues pull forward, then why is free cash flow minus $145 million because it should have driven EBITDA as well.

看起來基礎業務跟踪得更好，但後來我真的對一些自由現金流和庫存的東西感到困惑。所以讓我更具體一點。如果基礎業務進展順利並且收入又增加了 1 億美元，那麼為什麼自由現金流會減去 1.45 億美元，因為它也應該推動 EBITDA。

And then secondly, on inventory, I'm just -- it's something about the disclosures makes me uncomfortable. Todd, you said Bayer goes straight to retail partners, so no inventory, but the 10-K says ahead of Bayer ERP blackout, there was an additional inventory build as of December 31, and it was further increased in 1Q. So I guess I don't understand what the magnitude of this inventory is and to what extent is it driving the performance we're seeing right now?

其次，在庫存方面，我只是——披露的內容讓我感到不舒服。托德，你說拜耳直接與零售合作夥伴聯繫，所以沒有庫存，但 10-K 表示在拜耳 ERP 停電之前，截至 12 月 31 日還有額外的庫存，並且在第一季度進一步增加。所以我想我不明白這個庫存的規模是多少，以及它在多大程度上推動了我們現在看到的業績？

Umer, thanks for the question. With respect to the free cash flow, you'll see that the accounts receivable balance has increased significantly given most of these $90 million to $110 million of sales would have happened in the last couple of weeks of the quarter. And so there wouldn't have been cash flow coming in from those collections, but there is the EBITDA that comes from that revenue being recognized in the quarter. So that's the main driver.

烏默爾，謝謝你的提問。關於自由現金流，您會看到應收賬款餘額顯著增加，因為這 9000 萬至 1.1 億美元的銷售額中的大部分發生在本季度的最後幾週。因此，這些收款不會產生現金流，但本季度確認的收入會產生 EBITDA。所以這是主要的驅動因素。

And then let's talk about the difference between inventory on our balance sheet and inventory at retail partners. Again, as we communicated, inventory at retail partners was low at the end of last year. That's something that was a headwind for our business here. There's certainly more inventory there because of our ERP blackout and the purchases made in the U.S. on that. Then let's talk about the inventory on our balance sheet. So again, we had volumes down on farm. We got 5% price. So with the underlying base business still in decline, but having more price, that's lower volume.

然後讓我們談談資產負債表上的庫存與零售合作夥伴的庫存之間的區別。同樣，正如我們所傳達的那樣，去年年底零售合作夥伴的庫存很低。這對我們在這裡的業務來說是一個不利因素。由於我們的 ERP 停電以及在美國進行的採購，那里肯定有更多的庫存。然後讓我們談談資產負債表上的庫存。因此，我們再次減少了農場的產量。我們得到了 5% 的價格。因此，由於基礎業務仍在下降，但價格更高，因此銷量較低。

When you think about the split on inventory between Pet Health and Farm Animal, that help is generally higher margin, which means its inventory balance on the balance sheet is lower because the cost of goods sold are lower. On the farm side, again, the flip flop occurs, lower gross margin, higher comp value. So we've got struggles in our Farm Animal volumes in the U.S. that's driving for the increase in inventory on the balance sheet.

當您考慮 Pet Health 和 Farm Animal 之間的庫存拆分時，這通常有助於提高利潤率，這意味著其資產負債表上的庫存餘額較低，因為銷售商品的成本較低。在農場方面，觸發器再次發生，毛利率較低，補償價值較高。因此，我們在美國的農場動物銷量方面遇到了困難，這導致資產負債表上的庫存增加。

You'll see we had -- Pet Health inventories actually did reduce. That's in line with expectations of greater sales of the Bayer product in the first quarter, that happened, Farm Animal inventories are up. The other item to note is foreign exchange rates. We have a lot of inventory that sits outside the U.S., in Europe with our manufacturing footprint there. As the dollar weakened in the quarter, the balance sheet value of that inventory increased because it's in euro. So again, hopefully, we've separated inventory in our balance sheet, inventory at retailers from the numbers. And again, operating cash flow generally in line with where we expected to be in Q1. We still expect $100 million of free cash flow this year to pay down debt.

你會看到我們 - 寵物健康庫存實際上確實減少了。這符合第一季度拜耳產品銷量增加的預期，結果發生了，農場動物庫存增加了。另一個需要注意的項目是外匯匯率。我們有很多庫存位於美國以外，在歐洲，我們的製造足跡在那裡。隨著美元在本季度走弱，該庫存的資產負債表價值增加，因為它以歐元計價。因此，希望我們再次將資產負債表中的庫存、零售商的庫存與數字分開。同樣，經營現金流總體上符合我們對第一季度的預期。我們仍然預計今年將有 1 億美元的自由現金流來償還債務。

Our next question comes from Michael Ryskin from Bank of America.

我們的下一個問題來自美國銀行的 Michael Ryskin。

Great. First, I want to ask about your comments on price. I think you indicated 5% in the first quarter balance between companion and assets. But I think you said for the year, only 2% or more than 2%. That implies very little price for the rest of the year. I'm just wondering what's driving that. Is that lighting up on comps? Is that a negative impact in 2Q because of the ERP? Is that type of the MAP suspension? And then I've got a follow-up.

偉大的。首先，我想問一下您對價格的看法。我認為你在第一季度表示同伴和資產之間的餘額為 5%。但我認為你說的是一年，只有 2% 或超過 2%。這意味著今年剩餘時間的價格非常低。我只是想知道是什麼驅動了它。那是在點亮伴奏嗎？由於 ERP，這對第二季度有負面影響嗎？是那種類型的 MAP 懸架嗎？然後我有一個後續行動。

Sure, Mike. You're right. We've said we'll get more than 2% price for the full year. It was a good first quarter, recognizing 5%. We did get a benefit from those Bayer legacy products where we've taken more price this year coming more in the first quarter, so there would be an expectation to be less in the second quarter.

當然，邁克。你說得對。我們已經說過全年我們將獲得超過 2% 的價格。這是一個很好的第一季度，確認了 5%。我們確實從那些拜耳遺留產品中獲益，我們今年在第一季度採取了更多的價格，因此預計第二季度的價格會更低。

Any follow-up?

有後續嗎？

Okay. And then the follow-up. It goes back to the blockbuster product launches for next year. Jeff, I appreciate your comments towards the end of the prepared remarks. That was really helpful, but I wanted to dig a little bit deeper. You talked about first half '24, obviously, January is first half, June is also first half. So given that we're still early in '23, you don't have that clarity, just wondering your point on anticipating launching coming 2 to 4 months post approval.

好的。然後是跟進。它可以追溯到明年的重磅產品發布。傑夫，感謝您在準備好的發言結束時發表的評論。這真的很有幫助，但我想更深入地挖掘一下。你說的是 24 年上半年，顯然，一月是上半年，六月也是上半年。因此，鑑於我們仍處於 23 年早期，您還不清楚，只是想知道您對預期在批准後 2 到 4 個月內啟動的觀點。

If you've got a scenario where you've got a June approval, 2 to 4 months puts you much later in the year. Does that change a little bit in terms of your thoughts on ramping, especially for something like the broad-spectrum parasiticide, would you expect pretty major seasonality in the market? You want to be on the market in the first half of the year. So is there any consideration of doing sort of like an at-risk ramp in volumes, in manufacturing, to be ready to launch the day after approval? Is that a possibility? Or is there just a limited wiggle room there?

如果您遇到的情況是您在 6 月獲得批准，那麼 2 到 4 個月會使您在今年晚些時候獲得批准。就您的想法而言，這是否會有所改變，尤其是對於廣譜殺寄生蟲劑之類的東西，您是否預計市場會出現相當大的季節性？你想在今年上半年上市。那麼，是否有任何考慮在製造中進行類似風險的產量提升，以準備在批准後的第二天推出？有這種可能嗎？還是那裡只有有限的迴旋餘地？

The right question, Michael. We are putting a lot of time. As you know, we've invested in talent and capabilities in this area. We're using each one of these launches, ZORBIUM, Bexacat and now parvo to really test all of these capabilities. We brought in Tim Bettington, so there's a lot of concentrated effort on all these scenarios.

正確的問題，邁克爾。我們投入了大量時間。如您所知，我們在該領域的人才和能力方面進行了投資。我們正在使用這些發射中的每一個，ZORBIUM、Bexacat 和現在的 parvo 來真正測試所有這些功能。我們請來了 Tim Bettington，所以在所有這些場景上都集中了很多精力。

What I would say is, I'd just highlight a couple of things that are key, I think, as you look at '24, the ramping of all of these approvals we just mentioned. I'll point to parvo, Experior's ramping. Those are our first 2 of the 6 blockbusters we've talked about that will be critical out of the gate. Even point to AdTab, which is a $50 million to $100 million, oral OTC space. That's what we see as potential over time with this product. So ramping first will be the most important critical thing as we go into '24.

我想說的是，我只想強調幾件關鍵的事情，我認為，當你看到 24 年時，我們剛才提到的所有這些批准的增加。我會指出 parvo，Experior 的增長。這些是我們討論過的 6 部大片中的前 2 部，它們從一開始就很關鍵。甚至指向 AdTab，這是一個價值 5000 萬到 1 億美元的口服 OTC 空間。隨著時間的推移，這就是我們認為該產品的潛力。因此，當我們進入 24 世紀時，首先提升將是最重要的關鍵事情。

And then look, we're trying to be balanced and pragmatic here because there's a lot of dynamics, the good news is we've got 4 shots on goal, all kind of going into different major markets with Bovaer, with 2 derm products in para. I would say specifically to para, seasonality has become less of a factor. When you start looking at drop shipping increased compliance, there's less of a spring pop as much as if you can get this into a program, it becomes a lot more less seasonal.

然後看，我們在這裡試圖保持平衡和務實，因為有很多動態，好消息是我們有 4 次射門，所有這些都與 Bovaer 一起進入不同的主要市場，其中有 2 種真皮產品段。我想特別對帕拉說，季節性因素已經變得不那麼重要了。當您開始關註一件代發增加的合規性時，春天的流行就少了，就像您可以將其納入計劃一樣，它變得不那麼季節性了。

We will launch. We will launch better and with more excellence than we ever have in the company's history, with the right resources, given the market potential, what I tried to do today though is to say most of that investment will come after that 2 to 4 months after an approval. That's the setup. But be assured, we've got a lot of interest and focus on this, and we'll keep you updated as we progress.

我們將推出。我們將推出比公司歷史上任何時候都更好、更卓越的產品，擁有合適的資源，考慮到市場潛力，我今天試圖做的是說大部分投資將在 2 到 4 個月後進行一個批准。這就是設置。但請放心，我們對此很感興趣並非常關注，我們會在進展過程中及時通知您。

Our next question comes from Nathan Rich from Goldman Sachs.

我們的下一個問題來自高盛的 Nathan Rich。

Jeff, maybe going back to Seresto, could you elaborate on what you meant by stewardship actions from the EPA? And while I think it sounds like you expect continued registration for Seresto. Would there be any changes in how you are able to market the product going forward? And then a quick follow-up, if I could, on the MAP holiday. How are you thinking about the impact that, that had on the Pet Health sales in the quarter? And is that impact contemplated in the $90 million to $110 million range when thinking about the 1Q to 2Q shift?

Jeff，也許回到 Seresto，你能否詳細說明 EPA 的管理行動是什麼意思？雖然我認為這聽起來像是您希望繼續註冊 Seresto。您今後的產品營銷方式是否會發生任何變化？然後，如果可以的話，在 MAP 假期進行快速跟進。您如何看待這對本季度寵物健康銷售額的影響？在考慮第一季度到第二季度的轉變時，是否考慮了 9000 萬至 1.1 億美元的影響？

Yes. Thanks for the question, Nate. We won't elaborate much further other than to say, as I mentioned, on Seresto and EPA, great productive dialogue. A lot that's happened here recently. Formal results will come in the coming weeks. A lot of, I would say, sequential improvement, demand and interest in Seresto. We see no change, if anything, a sequential step up, as I mentioned, it's nice to see the U.S. come back to growth. And that's driven -- that's why it took a little time on U.S. Pet Health, what Bobby has done with increasing retail expertise and capability.

是的。謝謝你的問題，內特。正如我所提到的，除了說關於 Seresto 和 EPA 的偉大富有成效的對話之外，我們不會進一步詳細說明。最近這裡發生了很多事情。正式結果將在未來幾週內公佈。很多，我想說，對 Seresto 的連續改進、需求和興趣。正如我所提到的，我們沒有看到任何變化（如果有的話）連續上升，很高興看到美國恢復增長。這是有動力的——這就是為什麼在美國寵物健康上花了一點時間，鮑比在增加零售專業知識和能力方面所做的。

When we look at just our overall physical availability going up 17%, we're taking price and we're seeing a lot of loyalty from both the e-comm sector as well as the brick-and-mortar. So look for more to come. But again, I'll reemphasize the most important point, we're pleased with the EPA's recommended stewardship actions. We won't get into those details now, but we believe they're the right thing for the category for our product and others in collars to support the continued registration of Seresto and raise the bar in the category, that's key.

當我們只看我們的整體實體可用性上升 17% 時，我們正在考慮價格，並且我們看到來自電子商務部門和實體店的很多忠誠度。所以期待更多的到來。但我再次強調最重要的一點，我們對 EPA 推薦的管理行動感到滿意。我們現在不會討論這些細節，但我們相信它們對於我們的產品類別和項圈中的其他產品來說是正確的，以支持 Seresto 的持續註冊並提高該類別的標準，這是關鍵。

As you look at MAP pricing, I kind of want to step back a little bit. This is minimized advertised pricing. This is used commonly in CPG and retail and been in Animal Health for a long time. It protects the long-term value of the brand. We extended a MAP holiday or held off on that to avoid extended disruptions in supply during the cutover. Yes, we did see retailers compete on price, like products like Seresto. And even despite that, Elanco still achieved our 5% price in Pet Health, really important, I would say. So yes, I do think it was a factor, but we reinstated our MAP policy at the end of April. I can highlight that we are back up to normal operating environment, and we'll continue to stay on that policy as we go through the rest of this year.

當您查看 MAP 定價時，我有點想退後一步。這是最小化的廣告定價。這在 CPG 和零售業中普遍使用，並且在動物保健領域使用了很長時間。它保護了品牌的長期價值。我們延長或推遲了 MAP 假期，以避免在切換期間延長供應中斷。是的，我們確實看到零售商在價格上展開競爭，比如 Seresto 等產品。儘管如此，Elanco 仍然實現了我們在寵物健康方面 5% 的價格，我想說這真的很重要。所以是的，我確實認為這是一個因素，但我們在 4 月底恢復了 MAP 政策。我可以強調，我們已經恢復到正常的運營環境，並且在今年餘下的時間裡，我們將繼續堅持這一政策。

And Nate, with respect to the $90 million to $110 million, again, we think there may have been a little more underlying dispensing in Q1. That's why we had our less -- more than our $40 million to $80 million we'd estimated in February. We do expect it reverses, as you saw in Q2, MAP's back in play, and we're continuing to execute the underlying fundamentals that will drive this category.

而 Nate，關於 9000 萬至 1.1 億美元，我們認為第一季度可能有更多的潛在分配。這就是為什麼我們的收入比我們在 2 月份估計的 4000 萬到 8000 萬美元要少。正如您在第二季度看到的那樣，我們確實預計它會逆轉，MAP 重新發揮作用，我們將繼續執行將推動這一類別的基本面。

Our next question comes from Jon Block from Stifel.

我們的下一個問題來自 Stifel 的 Jon Block。

Jeff, just on the innovation sales, is the $210 million to $250 million -- sorry, $210 million to $250 million still the right number for this year? I might have just missed that. And is there a number for the quarter? And then, Jeff, Seresto, I think, was down 9% normalized for the quarter. Do you still expect that to grow this year, just maybe just a quick tack on, Todd. The updated expectations of price more than 2% -- so if it's 3%, just throw out a number, it sort of implies volumes came down very modestly since the initial guide because the bottom end of the range came up [$30 million], the top end was left unchanged. Is that a fair way to frame it? And if so, was that more of a Pet Health thing or Farm Animal thing from your perspective?

Jeff，就創新銷售額而言，2.1 億至 2.5 億美元 - 抱歉，2.1 億至 2.5 億美元仍然是今年的正確數字嗎？我可能只是錯過了。這個季度有數字嗎？然後，傑夫，我認為 Seresto 在本季度正常化後下降了 9%。托德，你是否仍然預計今年會增長，只是可能只是快速應對。更新後的價格預期超過 2%——所以如果它是 3%，只需拋出一個數字，這有點意味著自最初指導以來銷量下降非常溫和，因為範圍的底端出現了 [3000 萬美元]，頂端保持不變。這是一種公平的框架方式嗎？如果是這樣，從您的角度來看，這更像是寵物健康還是農場動物？

Thanks, Jon. No change to our innovation sales, as we highlight, drivers to that will be pet therapeutics, Experior, the OTC products, now we'll have parvo coming in here. We'll be shipping that product in the next couple of weeks. So everything stays the course. And again, those will all be drivers as we ramp going forward. Yes, Seresto is down. We're still not globally where we want to be in full recovery here with Seresto.

謝謝，喬恩。正如我們強調的那樣，我們的創新銷售沒有變化，驅動因素將是寵物療法、Experior、OTC 產品，現在我們將有 parvo 進入這裡。我們將在接下來的幾週內運送該產品。所以一切都照常進行。再一次，這些都將成為我們前進的驅動力。是的，Seresto 已關閉。在全球範圍內，我們仍未達到我們希望與 Seresto 一起完全康復的地步。

As I highlighted in international, a couple of factors, a big 11% growth quarter -- first quarter of last year. So there's a challenging compare. And we saw internationally, again, the retailer inventory oversight management, they had lower inventory. So those were factors. So again, all the things that we highlighted, we are leaning in with a pretty significant campaign on Seresto here that kicked off in April in the second quarter and some of the increased operating expense is an investment to build on the demand that we've seen pick up on Seresto in Q1. So we'll keep you updated as we go forward.

正如我在國際上強調的那樣，有幾個因素，一個 11% 的大增長季度——去年第一季度。所以這是一個具有挑戰性的比較。我們再次在國際上看到零售商庫存監督管理，他們的庫存較低。所以這些都是因素。因此，再次強調所有我們強調的事情，我們在 Seresto 上開展了一項非常重要的活動，該活動於第二季度的 4 月開始，部分增加的運營費用是一項建立在我們需求基礎上的投資在第一季度看到了 Seresto 的回升。因此，我們會在前進的過程中為您提供最新信息。

And then, Jon, with respect to your question on price, overall, we captured price pretty well across our business, the one area where there was softness was U.S. Farm where generic competition continues to be a place where price is more challenging to capture. We felt like we retired a lot of risk in Q1, the ERP system up running and executed with no glitches, continued improvement sequentially in the Pet Health business, and just environment stabilization. So that was the big drivers of raising the bottom end of our guidance. Yes. If we get more price, that would be obviously a positive and we'd be happy to have a lot of different factors between volumes and price across our global business that are embedded in our guidance. We feel good about where we sit in the start to the year.

然後，喬恩，關於你關於價格的問題，總的來說，我們在整個業務中都很好地捕捉到了價格，一個疲軟的領域是美國農場，在那裡，仿製藥競爭仍然是一個價格更難以捕捉的地方。我們覺得我們在第一季度消除了很多風險，ERP 系統運行和執行沒有任何故障，寵物健康業務持續改進，環境穩定。因此，這是提高我們指導底端的主要驅動力。是的。如果我們獲得更高的價格，那顯然是積極的，我們很高興在我們的指導中嵌入我們全球業務的數量和價格之間的許多不同因素。我們對年初的位置感到滿意。

Our next question comes from David Westenberg from Piper Sandler.

我們的下一個問題來自 Piper Sandler 的 David Westenberg。

Congrats. ERPs are hard. So I'll just put that out there right away. Can you talk about the methodology in terms of calculating the benefit in ERP? And can you kind of get into details, I mean, what exactly is happening for us at Wall Street, idiots that really don't know what's going on in the industry from like a nuts and bolts level, like it's going to distributors, it's going to like the main warehouses of vets? I mean, just kind of help us bridge what exactly is happening to get to that to $90 million to $110 million calculation for us.

恭喜。 ERP 很難。所以我會馬上把它放在那裡。您能談談計算 ERP 收益的方法嗎？你能詳細說說嗎，我的意思是，我們華爾街到底發生了什麼，白痴們真的不知道這個行業正在發生什麼，比如螺母和螺栓的水平，就像它去分銷商一樣，它是會喜歡獸醫的主要倉庫嗎？我的意思是，只是幫助我們將實現這一目標的確切情況與我們計算的 9000 萬至 1.1 億美元聯繫起來。

And then I just have a quick second question in terms of the guidance. Are you factoring anything competitively with Librela now that it got approval or BI's Triple, I think, it is actually now maybe a little bit behind schedule. So any of the pushes and pulls in the guidance with the competitive factors?

然後我有一個關於指導的快速第二個問題。既然 Librela 獲得了批准或 BI 的 Triple，你是否正在考慮任何與 Librela 競爭的因素，我認為，它實際上現在可能有點落後於計劃。那麼，競爭因素對指導的推動和拉動有何影響？

Yes. With respect to the $90 million to $110 million, this is an estimate based off talking to our customers, looking at historic sales data and looking at underlying trends with inventory levels and pull out. When you think about it, it's in terms of -- we have our customers that order product every week. And so we went out and told U.S. customers, both on the farm and pet side -- but we'll focus on that because it's the bigger notional number. So we went and told a big online retailer, we will be not selling new product for the next 10 days, but you'll be back up and running and ordering product on April 10.

是的。關於 9000 萬至 1.1 億美元，這是基於與我們的客戶交談、查看歷史銷售數據並查看庫存水平的潛在趨勢並退出的估計。當你考慮它時，它是——我們的客戶每週都會訂購產品。所以我們出去告訴美國客戶，包括農場和寵物方面——但我們會關注這一點，因為它是更大的名義數字。所以我們去告訴一家大型在線零售商，我們在接下來的 10 天內不會銷售新產品，但您將在 4 月 10 日恢復正常運行並訂購產品。

That retailer has to make a decision, do I trust, I'll have that. I need to make my sales. I need to make my cash flows for the quarter. And so they're evaluating, do they buy enough product for 10 days because they trust us and they buy it for 15 days because they're concerned. So that's sort of the valuation that's happening. If you think about distributor in, let's say, Mexico, and we went to them and said, you're going to be the 35th country to come up on our ERP implementation, and you're going to be blacked out with no ability to buy product for the next 26 days. (inaudible) Do they buy a month's worth of product? Do thahey buy 6 weeks? Those sorts of things. So we get into -- we were confident in our execution. That's why we were at [40 to 80]. We think they probably took a little more conservative approach. That's how you get to the $90 million to $110 million. Again, we gave first half guidance back in February because we knew this would be complicated, and we're increasing the bottom end of that first half guidance because the good start we're off due to the year.

那個零售商必須做出決定，我相信嗎，我會做出決定的。我需要做我的銷售。我需要計算本季度的現金流量。所以他們正在評估，他們購買的產品是否足夠使用 10 天，因為他們信任我們，他們購買了 15 天，因為他們擔心。這就是正在發生的估值。如果你考慮分銷商，比方說，墨西哥，我們去找他們說，你將成為第 35 個提出我們 ERP 實施的國家，你將被拒之門外，無法購買未來 26 天的產品。 （聽不清）他們是否購買了一個月的產品？ thahey 買 6 週嗎？諸如此類的事情。所以我們進入 - 我們對我們的執行充滿信心。這就是我們處於 [40 至 80] 的原因。我們認為他們可能採取了更保守的方法。這就是您獲得 9000 萬至 1.1 億美元的方式。同樣，我們在 2 月份給出了上半年的指導，因為我們知道這會很複雜，並且我們正在增加上半年指導的底端，因為今年我們有了良好的開端。

Yes. On the guidance, just to build, David, on your second question, yes, we have in our assumptions the competitors from February, that guidance hasn't changed and nothing has changed relative to even the recent news on new approvals coming in.

是的。關於指導，大衛，關於你的第二個問題，是的，我們假設 2 月份的競爭對手，該指導沒有改變，即使是最近關於新批准的消息也沒有改變。

Our next question comes from Brandon Vazquez from William Blair.

我們的下一個問題來自威廉布萊爾的布蘭登巴斯克斯。

A lot of product-specific questions have already been asked. So I guess one that kind of struck or got my attention was, if I heard you correctly, I think you said you -- macro trends are kind of improving globally. And as you look through the back half of the year, you kind of expect them to continue improving. Just kind of curious if you could talk a little bit about that because I think there's a lot of concern from investors, not just in health, but in general, that macro didn't kind of deteriorate in the back half. So what are you guys seeing there? And then maybe the follow-up to that is what's your confidence in being able to kind of keep the pricing benefits you're talking about now if there is a worsening macro environment.

許多特定於產品的問題已經被問到。所以我想，如果我沒聽錯的話，我想引起我注意的是，宏觀趨勢在全球範圍內正在改善。當你回顧今年下半年時，你會希望他們繼續改進。只是有點好奇你是否可以談談這個，因為我認為投資者有很多擔憂，不僅僅是在健康方面，而且總的來說，宏觀經濟並沒有在後半段惡化。那麼你們在那裡看到了什麼？然後也許後續行動就是如果宏觀環境惡化，你對能夠保持你現在談論的定價優勢的信心是什麼。

Sure. Thanks, Brandon. Recall, the back half of last year for us was really ugly. The environment was really tough. We saw lots of pressure across Europe. You had the COVID lockdowns in China that really negatively impacted our business in 2022. So when we talk about the improving conditions, our question going into this year was, was there going to be the sequential improvement? Where are we going to see customers coming back to the OTC channels or Pet Health product? We've seen that.

當然。謝謝，布蘭登。回想一下，去年下半年對我們來說真的很糟糕。環境真的很艱苦。我們在整個歐洲看到了很大的壓力。中國的 COVID 封鎖確實對我們 2022 年的業務產生了負面影響。因此，當我們談論改善情況時，我們進入今年的問題是，是否會出現連續改善？我們將在哪裡看到客戶回到 OTC 渠道或 Pet Health 產品？我們已經看到了。

We feel good about that. And that's what we speak to with respect to improving macro environment. Again, we've got challenges here in our underlying business as we guide that to down 2% to 4% in Q2. So we're clearly not calling a massive rate recovery, but rather just greater stabilization than we had last year.

我們對此感覺很好。這就是我們所說的改善宏觀環境。同樣，我們在我們的基礎業務中遇到了挑戰，因為我們將其引導到第二季度下降 2% 至 4%。因此，我們顯然不是在稱利率大幅回升，而只是比去年更加穩定。

With respect to the question on pricing, again, the teams have done a very good job of executing price increases to start the year. That's demonstrated in the 5% we received in Q1. There continues to be a lot of competition in the marketplace and a lot of underlying dynamics we're focused on. That's why we've said more than 2% for the full year, and the teams continue to do well to ensure they're capturing as much of that as they can.

關於定價問題，各團隊在年初執行提價方面做得非常好。我們在第一季度收到的 5% 證明了這一點。市場上仍然存在很多競爭，我們關注很多潛在的動態。這就是為什麼我們說全年超過 2%，並且團隊繼續做得很好，以確保他們盡可能多地獲得這些。

Our next question comes from Steve Scala from TD Cowen.

我們的下一個問題來自 TD Cowen 的 Steve Scala。

This is Chris on for Steve. Two questions, both on parvovirus. So first, do you expect any capacity constraints on the U.S. launch? And then second, what is the time line for ex U.S. launches? And how should we think about the U.S. versus ex U.S. split behind your $100 million guide on that product.

這是史蒂夫的克里斯。兩個問題，都是關於細小病毒的。那麼首先，您預計美國的發射會受到任何容量限制嗎？其次，美國前發射的時間表是什麼時候？我們應該如何考慮美國與前美國的分裂背後你對該產品的 1 億美元指導。

Yes, Chris, thank you. We're excited about the parvo launch. We'll be shipping products in the next couple of weeks. We expect about 70%. We need state approvals now that will follow this federal conditional approval. We expect about 70% of the states to be in the first month. So -- and we'll be shipping in the next couple of weeks as states come on. Yes, excited about having our first monoclonal antibody plant, Elwood, Kansas approved and would emphasize that we will plan to be ramping. But as we move from a smaller leader to a higher leader capacity that will happen throughout the second half of the year. So the launch will be limited initially by capacity.

是的，克里斯，謝謝你。我們對 parvo 的發布感到興奮。我們將在接下來的幾週內發貨。我們預計約為 70%。我們現在需要州批准，這將遵循聯邦有條件的批准。我們預計大約 70% 的州將在第一個月內完成。所以——隨著各州的到來，我們將在接下來的幾週內發貨。是的，很高興我們的第一個單克隆抗體工廠在堪薩斯州埃爾伍德獲得批准，並強調我們將計劃擴大規模。但隨著我們從一個較小的領導者轉變為一個更高的領導者能力，這將在今年下半年發生。因此，發射最初將受到容量的限制。

The vet interest is high. I also want to just take this moment to highlight this is a conditional approval. This will not be at all commercial limiting to us, it really comes as a regulatory body like the USDA in this case, sees a 330,000 cases a year, a parvovirus is a 90% plus mortality from this virus and 0 dogs dying in our trial, let's accelerate this product in the market. We'll continue with full approval, but there's really no restrictions here with the conditional approval other than there's a high need, there's a high vet interest. We will ramp throughout the second half and be in a really strong supply situation as we end this year.

獸醫的興趣很高。我還想藉此機會強調這是有條件的批准。這根本不會對我們造成商業限制，在這種情況下，它實際上是像美國農業部這樣的監管機構，每年有 330,000 例病例，細小病毒是這種病毒的 90% 以上的死亡率，在我們的試驗中有 0 隻狗死亡，讓我們加速這款產品的上市。我們將繼續獲得完全批准，但除了有很高的需求，有很高的獸醫興趣外，有條件的批准實際上沒有任何限制。我們將在整個下半年增加產量，並在今年年底時處於非常強勁的供應狀態。

With that, I will just make a couple of quick closing comments. Thank you for great questions today and continue to invest our interest. Elanco looks at this quarter is and say, we're doing this one quarter at a time. We're not where we want to be yet, but I think this quarter showed necessary actions, disciplined decisions, a lot of progress and proof points as we look at the overall business and what's critical.

有了這個，我將做一些快速的結束評論。感謝您今天提出的重要問題，並繼續投入我們的興趣。 Elanco 看著這個季度是說，我們一次做一個季度。我們還沒有達到我們想要的目標，但我認為本季度顯示了必要的行動、有紀律的決策、大量的進展和證據，因為我們審視了整體業務和關鍵因素。

Overall, engagement in Elanco is growing on the inside. Our focus is high. And I would say the headline here is we're tracking to our expectation. We're seeing nice sequential improvement coming out of Q4, areas that are stabilizing, some areas returning to growth. I would point specifically that the retiring of risk that we saw, not only in the first 3 months, but the first 4 months, around the stand-up of our IT system, around Seresto, and the overall management of the business as well as the market that matters most to us is U.S. Pet Health.

總體而言，對 Elanco 的參與度在內部增長。我們的關注度很高。我想說這裡的標題是我們正在追踪我們的期望。我們看到第四季度出現了良好的連續改善，正在穩定的領域，一些領域恢復增長。我要特別指出的是，我們不僅在前 3 個月，而且在前 4 個月，圍繞我們的 IT 系統、圍繞 Seresto 以及業務的整體管理以及對我們來說最重要的市場是美國寵物健康。

The lead indicators are driving the lag indicators that's going to set this business up for long-term success. As well as then Ellen's area in innovation, launching 4 products, having 3 approvals, 2 of our 6 blockbusters now in the marketplace and our last major blockbuster initial submission made. So we still have a challenge here in Q2. We expect to return to growth in the second half and be assured we're focused right now on what we can control, and that is execution across this company. We look forward to fielding questions throughout the quarter from all of you. Thank you for your continued interest in Elanco. Have a great day.

領先指標正在推動滯後指標，這些指標將為該業務的長期成功奠定基礎。以及當時 Ellen 的創新領域，推出了 4 種產品，獲得了 3 項批准，我們的 6 款重磅炸彈中有 2 款現已上市，我們最後的主要重磅炸彈首次提交。所以我們在第二季度仍然面臨挑戰。我們希望在下半年恢復增長，並確信我們現在專注於我們可以控制的事情，那就是整個公司的執行力。我們期待在整個季度中回答大家的問題。感謝您對 Elanco 的持續關注。祝你有美好的一天。

This concludes today's conference call. Thank you for your participation. You may now disconnect.

今天的電話會議到此結束。感謝您的參與。您現在可以斷開連接。