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Transcript of Mike Wang, VP & GM, Greater China Cluster, Zoetis
MIKE WANG,
Zoetis
Vice President Greater China
Wednesday 19th October
GROWTH
OPPORTUNITY
FOR ANIMAL
HEALTH IN
CHINA
Forward Looking Statements
This presentation contains forward-looking statements, which reflect the current views of
Zoetis with respect to business plans or prospects. These statements are not
guarantees of future performance or actions. Forward-looking statements are subject to
risks and uncertainties. If one or more of these risks or uncertainties materialize, or if
management's underlying assumptions prove to be incorrect, actual results may differ
materially from those contemplated by a forward-looking statement. Forward-looking
statements speak only as of the date on which they are made. Zoetis expressly
disclaims any obligation to update or revise any forward-looking statement, whether as a
result of new information, future events or otherwise. A further list and description of
risks, uncertainties and other matters can be found in our Annual Report on Form 10-K
for the fiscal year ended December 31, 2015, including in the sections thereof captioned
“Forward-Looking Information and Factors That May Affect Future Results” and “Item
1A. Risk Factors,” in our Quarterly Reports on Form 10-Q and in our Current Reports on
Form 8-K. These filings and subsequent filings are available online
at www.sec.gov , www.zoetis.com , or on request from Zoetis.
100+ COUNTRIES
28
5
8 300
4.8 1,050
MANUFACTURING SITES
MAJOR PRODUCT CATEGORIES
CORE ANIMAL SPECIES
BILLION
$
ANNUAL REVENUE
APPROXIMATE NUMBER OF PRODUCT LINES
APPROXIMATE R&D COLLEAGUES
2,800 APPROXIMATE FIELD FORCE MEMBERS
OUR FOCUS
37%1
62%1
COMPANION ANIMAL HEALTH
LIVESTOCK HEALTH
9,000 MARKET PRESENCE IN
WE PROVIDE
MEDICINES VACCINES DIAGNOSTICS GENETIC TESTS SERVICES 60+
YEARS OF EXPERIENCE
Note: Facts and figures shown are as of Dec. 31, 2015 | 1Excludes revenue associated with Client Supply Services, which represented 1% of total 2015 revenue.
APPROXIMATE COLLEAGUES WORLDWIDE
POPULATION
GROWTH
A GROWING
MIDDLE CLASS
INCREASING
URBANIZATION
PREDICTABLE, SUSTAINABLE AND FUNDAMENTAL ECONOMIC DRIVERS
Data source: Vetnosis
ANIMAL PROTEIN CONSUMPTION GROWTH IN CHINA TO
OUTSTRIP GLOBAL AVERAGE IN NEXT 10 YEARS
58 654 69 839
26 043 30 865
19 761
24 903 7 945
9 626 43 133
51 801
2015 2025F
Total Dairy
Bovine meat
Poultry meat
Eggs
Pig meat
China CAGR, %
2016-25
World CAGR , %
2016-25, %
1.7% 1.8%
2.3% 2.3%
Unit: 000’ Metric Tones
China Protein Consumption Growth Outlook (2016 – 2025)
1.8% 1.5%
1.9% 1.6%
1.8% 1.7%
CHINA TO INCREASE ITS WEIGHT IN GLOBAL AH MARKET,
DRIVEN BY MEDICALIZATION & CONSUMPTION GROWTH
Source: Vetnosis, 2015 and 2025 FX neutral projections
Global AH Market
2015 2025F
$29.7B $54.0B
CAGR
6.2%
China AH Market $4.7B $10.1B 7.9%
Unit: US$
2015 2025FGlobal AH Market China Share
$30 B
$54 B
16% 19%
LIVESTOCK
800 million+ pigs
Emerging markets
Developed markets
93% 7.8 billion broiler chickens
Livestock: $ 4.4 Bn
93% of
China AH
market are
Livestock
CHINA THE 2ND LARGEST ANIMAL HEALTH MARKET, MOSTLY SWINE & POULTRY
75 million beef cattle
27 million dairy cows
Data source: China National Statistics, Vetnosis
CHINA SWINE MARKET GROWTH DRIVEN BY AVG
MEDICAL EXPENDITURE & MEDICALIZATION RATE
50
60
70
80
90
100
110
0 1 2 3 4 5 6 7 8 9 10 11 12
Med
icalizati
on
Ra
te (
%)
Average AH Expenditure/Pig (US$)
SWINE AH Expenditure (2015)
Data source: Vetnosis
World Average Medicalization Rate W
orl
d A
ve
rag
e A
H E
xp
en
dit
ure
/ P
ig
Note: Bubble size represents animal population
China
USA
Australia Brazil
France
COMPANION
ANIMALS
11,3
million
cats
Emerging markets
Developed markets
27,6
million
dogs
CHINA 2ND LARGEST ANIMAL HEALTH MARKET
CA: $ 332 Mn
7% of
China
AH
market 7%
CHINA CA MARKET HAS HUGE POTENTIAL TO INCREASE
AVERAGE SPENDING & MEDICALIZATION RATE
1
2
Pet Dog AH Expenditure (2015)
0
10
20
30
40
50
60
70
80
90
100
0 10 20 30 40 50 60
Med
icalizati
on
Rate
(%
)
Average AH Expenditure / Dog (US$)
1
2
Data source: Vetnosis
Wo
rld
Ave
rag
e A
H E
xp
en
dit
ure
/ D
og
World Average Medicalization Rate
Note: Bubble size represents animal population
China
USA
Australia Brazil
France
FOOD SAFETY
PRODUCTIVITY
ENVIRONMENT PROTECTION
QUALITY OF LIFE
ANIMAL WELFARE
• Introduce innovative product with leading technologies
• Leverage advanced services and solution to support growth
• Keep investing in Vets and customer education program
MY FAMILY…
2012, Sept 2014, July 2016, May
Q&A