ELANCO ANIMAL HEALTH INC (NYSE:ELAN) Q3 2019 Earnings Conference Call - Final Transcript
Nov 06, 2019 • 08:00 am ET
Ladies and gentlemen, thank you for standing by, and welcome to the Elanco Animal Health Q3 Earnings Conference Call. [Operator Instructions]
After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions]
I would now like to hand the conference over to your speaker, Jim Greffet, Head of Investor Relations. Thank you. Please go ahead, sir.
Good morning. Thank you for joining us for Elanco Animal Health's Q3 2019 earnings call. I'm Jim Greffet, 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 Katy Grissom from Investor Relations.
During this call, we anticipate making projections and forward-looking statements based on our current expectations. Our actual results could differ materially due to a number of factors, including those listed on slide two and those outlined in our latest Form 10-K and 10-Q filed with the Securities and Exchange Commission.
The information we provide about our products and pipeline is for the benefit of the investment community. It's not intended to be promotional and is not sufficient for prescribing decisions.
You can find our press release, the slides referenced on this call and an investor workbook on elanco.com. The slides and the press release also contain further information about the non-GAAP financial measures that we discuss during today's call. After our prepared remarks, we'll be happy to take your questions.
I'll turn the call over to Jeff to provide the highlights. Jeff?
Jeffrey N. Simmons
Thanks, Jim. Good morning, everyone. This quarter marks Elanco's fifth quarter as a public company. We are delivering to our expectations and we're pleased to show continued execution on all elements of our innovation, portfolio and productivity strategy.
Let's begin with the highlights on slide three. We have outlined the importance of our three stream governance structure in this pivotal time in Elanco's history. We have dedicated teams focused on running Elanco, executing on our strategy and delivering results now and into the future, which is where the vast majority of Elanco employees are focused. Secondly, standing up our independent operations and lastly, closing and integrating the Bayer acquisition.
We are moving with purpose and urgency in each stream. First, our top line results show the solid underlying demand for our products and the strength of our fundamentals, highlighted by the double-digit growth in our three targeted categories. Our portfolio approach enabled us to deliver 4% core revenue growth at constant currency. Our productivity efforts also continue to deliver with a 210 basis point increase in our adjusted gross margin to 53.3%. Second, we're building a fit-for-purpose company and establishing a standalone capabilities we need. In Q3, we took another action on this front, announcing a restructuring and reduction in headcount. We also continue to exit transition service agreements with Lilly, including the go-live of our HR system workday this month. Third, after announcing our planned acquisition of Bayer Animal Health on August 20th, we have moved quickly to establish an experienced integration team