Zoetis Inc. (NYSE:ZTS) Q4 2022 Earnings Call Transcript

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Kristin Peck: Sure, Brandon. I will start and let Wetteny build on both of them. So, in diagnostics, first of all, just ready and are joining you from our national sales meeting actually out in Denver. And I would say the energy in our diagnostics team is just amazing. So, we will €“ as Wetteny mentioned in his prepared remarks, Q1, a little, but we didn’t have them on board until Q2 of 2022. So, what we are expecting as we look into 2022 as we get into the sort of middle of the year and the end of the year is really a return to at least market growth in the U.S., if not faster. We have continued to see very strong growth in international, as you saw from last year, and we expect that to continue into the year. So, we are really excited about the new field force, having them on the ground, having them fully up to speed.

Wetteny and I spent a lot of time with them yesterday. So, I would say super optimistic overall in diagnostics, returning to growth across the board, certainly, the images platform and investments there. And then I will start on China and let’s see what Wetteny has to build on it. We did see overall strong growth in the year of 11% and we are optimistic so far year-to-date in sort of the return in China. We have seen both on the companion and animal side, a really strong rebound there as we look into €“ certainly, for us, our year is both December and January. December, obviously, with the number of people home stick there was a little weaker, but we are seeing really strong rebound in January. And we are looking, I think at a strong year for us in China.

Also, as you look at livestock with opening up China, more return to eating out to travel, to tourism will not just be good for China, to be honest with you, it could be good for livestock across the globe. So, it’s one to watch, obviously, there is huge uncertainty around China not to mention geopolitical tensions and potential UFO these days. But we stayed really confident in where we think China will be for the year. But it remains a big risk both for China as well as for livestock across the board because I think a lot of if China returns, they will see China buying a lot of poultry, beef, etcetera, from Brazil, Europe, the U.S. there. But I don’t know if you want to build anything either on the diagnostics question or China, Wetteny?

Wetteny Joseph: Look, it’s great to be here in Denver with a large number of our colleagues on Valentine’s Day. But look, I think China, we have been very pleased to see how China ended the year high-double digit growth on the quarter. My comments around supply was just the timing of recovery, particularly on revolution, Revolution Plus in that market that might create some dynamics on quarter-to-quarter. But we are expecting really solid growth out of China this year. I think the first quarter though, given the timing of the COVID waves. Just as a reminder, our international segment closes in €“ at the end of November, which means the quarter really started in December for them. And so a lot of that occurred in the first quarter, and we are seeing that having an impact, but we do see a rebound and as Kristin said, it has implications for other markets in terms of exports into China, but we are expecting a really solid rebound there.

Operator: Our next question comes from Elliot Wilbur from Raymond James.

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