• Consolidating commercial operations for Elanco International and Elanco Europe
• Intensifying marketing efforts with a focus on digital capabilities
• Transforming the R&D organization structure with an emphasis on pet health
• Improving operational efficiency

It is calculated that restructuring will eliminate 380 positions including a reduction of 20 percent among senior management.  The restructuring will result in termination of an Executive Vice president and Chief Marketing Officer, the Executive Vice president of Elanco Europe, and the president of U.S. Pet Health and Commercial Operations.

Jeff Simmons, president and CEO of Elanco, stated “As we near the end of 2021 with momentum, consistently achieving our commitments over the past four quarters while executing against our priorities of driving innovation, creating stronger growth, and delivering our company-wide productivity agenda to increase profitability.

The company will record a charge of $86 million to $94 million for the restructuring, resulting in a reduction in fourth quarter net income of between $65 million to $71 million.  The changes should result in savings of $60 million in 2022 and $70 million annually thereafter.

Despite the business speak and gibberish expressed by the CEO in his statement above, the reality is that for the nine months ended September 30th, 2021 the company lost $375 million on revenue of $3,652 million.  This compares with the nine months ended September 30th for FY 2020 during which the company lost $237 million on revenue of $2,134 million.

Elanco Animal Health has a market capitalization of $13,597 million.  ELAN has traded in a 52 week range of $27.33 to $37.49 and closed at $28.74 down 4.8 percent on Tuesday, November 30th.  The company has posted a trailing 12-month operating margin of 6.2 percent and a profit margin of -14.6 percent.  The company has generated a 1.1 percent return on assets on a trailing 12 month basis and the return on equity was -8.7 percent.  Four percent of the shares are held by insiders and the remainder by institutions with approximately three percent of the float short as of November 15th.

The performance of Elanco Animal Health which now incorporates Bayer Animal Health should be compared to Zooetis, operating in the same U.S. and international markets with basically similar products for both companion animals and livestock species.  Quarterly reports for both Elanco and Zooetis can be retrieved by entering the respective company names into the SEARCH block.