Summary of Elanco Animal Health Conference Call Company Overview - **Company**: Elanco Animal Health - **Industry**: Animal Health Key Points Financial Performance - Elanco reported revenues of **$892 million** from its basket of innovation, exceeding the guidance of **$840-$880 million** for the year [2][3] - The revenue guidance for 2026 has been raised to **$1.15 billion** due to strong momentum [3] - The company expects **4%-6% organic constant currency growth**, **8% adjusted EBITDA growth**, and **10% adjusted EPS growth** for 2026 [10][11] Product Performance - **Credelio Quattro** and **Zenrelia** are key products driving growth, with Quattro being positioned as the best medicine in the parasiticides market, which is valued at **$1 billion** and growing at **30%** [3][4] - Zenrelia has achieved a **double-digit market share** in the U.S. and has expanded to **3,500 clinics** following a label update [4][21] - **Experior**, another product, generated revenues exceeding **$200 million** in 2025, growing **80%** in a total addressable market of **$350 million** [5][6] Market Dynamics - The company is monitoring the impact of geopolitical events, such as the conflict in Iran, but currently does not see a material impact on costs or supply chain [8] - The willingness to spend on pet health is increasing, with **one-third** of pet owners spending more on their pets' health than their own [33] Innovation and R&D - Elanco is focused on expanding its product pipeline, with over **10 potential blockbuster products** expected in the next decade [15][16] - The company is investing in **AI and automation** to enhance efficiency across various functions, including R&D and manufacturing [45][46] Strategic Initiatives - Elanco plans to continue pursuing **M&A** to enhance R&D capabilities while maintaining a focus on deleveraging [40][41] - The company is also expanding its geographic reach, with approvals for Quattro in Australia and submissions in Canada, the EU, UK, and Japan [27][28] Future Outlook - The company anticipates that the globalization of its products will be a key driver for long-term growth, with significant potential in international markets [28] - The launch of **Befrena** is expected in mid-2026, with a phased rollout planned [25][26] Operational Efficiency - Elanco Ascend is expected to contribute **$200 million-$250 million** in net EBIT improvement by 2030, with a focus on gross margin enhancement [55][56] - The company aims to achieve **$25 million** in savings this year from restructuring efforts, with a total expected benefit of **$60 million** by 2027 [57] Additional Insights - The competitive landscape is being closely monitored, with potential impacts from foreign exchange rates and competitive responses to Elanco's product success [12][13] - The company emphasizes the importance of a comprehensive portfolio to meet the evolving needs of pet owners [36][37]

Elanco Animal Health Conference Call Summary Company Overview - **Company**: Elanco Animal Health (NYSE: ELAN) - **Date**: March 11, 2026 - **Key Speakers**: CFO Bob VanHimbergen, U.S. Business Head Bobby Modi Key Points Financial Performance - Elanco ended Q4 with strong performance, exceeding guidance on revenue, earnings, and cash flow, resulting in a reduction of debt levels [2][3] - Revenue from innovation basket reached **$892 million**, with expectations raised to **$1.15 billion** for 2026 [3] - Projected growth rates for 2026 include mid-single-digit top-line growth, high single-digit EBITDA growth, and low double-digit EPS growth [3] Product Innovations - **Credelio Quattro**: - Achieved a **40% market share** in the endectocide space, with significant growth potential as it is currently in only **1/3 of U.S. clinics** [4][5] - Approximately **35%** of Quattro's volume comes from new starts, indicating strong brand loyalty among new puppies [5] - **Zenrelia**: - Momentum increased in Q3 and Q4 of 2025, with **3,500 clinics** signed on, now present in over **50% of U.S. clinics** [8][9] - Ongoing collaboration with the FDA for label updates, which could enhance market share further [9][10] - **Befrena**: - Anticipated strong demand with **83%** of veterinarians indicating they would adopt the product [14] - Positioned to leverage existing clinics that already use Zenrelia for faster adoption [14][15] Market Dynamics - Elanco's corporate partnerships are gradually increasing, with **90%** of corporate partners seeing net sales growth in 2025, up from **13%** in 2024 [22] - The U.S. farm business grew **17%** in Q4, driven by strong performance from Experior, which has surpassed **$200 million** in annual revenue [29][25] - Favorable cattle market conditions are expected to continue, supported by high beef prices and favorable producer economics [30][32] Cost Management and Efficiency - Elanco Ascend program aims for **$250 million** EBIT improvement, with **$25 million** expected in 2026 from restructuring actions [37] - Anticipated **40 basis points** gross margin improvement in 2026, with further enhancements expected over the next several years [38] Strategic Focus - Continued emphasis on organic growth and debt reduction, with plans to reach leverage below **3 times** by 2027 [59] - Small tuck-under M&A opportunities will be pursued, focusing on enhancing R&D capabilities without derailing deleveraging efforts [60][61] Investor Insights - The pharmaceutical business is viewed as underappreciated, with efficient EBITDA margins comparable to the pet side [62] - The innovation pipeline is expected to drive growth across all business segments, with a focus on differentiated products in established markets [63] Conclusion - Elanco is positioned for growth through its innovative product pipeline, strong market presence, and strategic focus on efficiency and corporate partnerships. The company aims to leverage its strengths in both the pet and farm sectors to enhance shareholder value and drive long-term growth.

Elanco Animal Health FY Conference Summary Company Overview - **Company**: Elanco Animal Health (NYSE: ELAN) - **Date of Conference**: March 10, 2026 - **Key Speakers**: Bob VanHimbergen (CFO), Bobby Modi (Head of U.S. Pet Health and Global Digital Transformation) Key Points Financial Performance - **Q4 2025 Performance**: - Revenue growth of 9% organically - U.S. Pet Health business grew by 10% - U.S. farm business grew by 17% - International business also performed well with 9 countries showing growth and all top 5 franchises increasing sales [6][19] - **2026 Guidance**: - Mid-single-digit top-line growth - High single-digit EBITDA growth - Low double-digit EPS growth - Deleveraging target to below 3 times by 2027 [6][55] Innovation and Product Launches - **Innovation Basket**: - Contributed over $400 million in growth year-over-year - Expected to grow by an additional $250 million in 2026 [22][55] - **New Product Launches**: - Launched 12 differentiated assets in the last 3 years, contributing to market share growth [10] - Quattro and Zenrelia are highlighted as key products driving growth [28][46] Market Dynamics - **U.S. Pet Health**: - Strong growth driven by new product launches and increased market share in various categories including pain, vaccines, and parasiticides [10][28] - Combo products are growing rapidly, with 30% growth in the category and two-thirds of puppies starting on combo products [33][34] - **Farm Business**: - Grew 17% in Q4, led by cattle and poultry, with the Experior product crossing $200 million in revenue [19][20] - International farm business grew by 4%, driven by global protein demand [21] Pricing Strategy - **Pricing Dynamics**: - 2% price increase in 2025 with 5% volume growth - Expecting acceleration in pricing for 2026 [15][16] - **Market Positioning**: - Focus on value-based pricing and maintaining a balance between volume and pricing [15][16] Competitive Landscape - **Zenrelia's Market Position**: - Gained significant market share in Brazil (40%) and Japan (30%) [21][37] - Anticipated to perform well against new competitors due to its efficacy and established market presence [46] Future Outlook - **Long-term Growth**: - Industry expected to grow by $20 billion over the next decade, with opportunities in both pet and farm segments [62] - Continued investment in R&D to ensure a robust pipeline of new products [51][65] - **Margin Improvement**: - Expected net EBITDA improvement of $200-$250 million by 2030 through operational efficiencies and cost management [58][59] Additional Insights - **Consumer Trends**: - Increased willingness to spend on pet care, supporting growth in the animal health market [62][65] - **Omni-channel Strategy**: - Focus on providing products through various channels to meet consumer preferences [64][65] This summary encapsulates the key insights and financial performance of Elanco Animal Health as discussed in the FY conference, highlighting growth drivers, market dynamics, and future outlook.

Core Insights - Elanco Animal Health reported a full-year revenue of $4.715 billion, reflecting a 6% growth, with an organic constant-currency revenue growth of 7% projected for 2025 [1][8] - The company achieved an adjusted EBITDA of $901 million and an adjusted EPS of $0.94, an increase from $0.91 in 2024 [1] - Elanco's fourth-quarter revenue reached $1.14 billion, marking a 12% increase on a reported basis and a 9% organic constant-currency growth [3][4] Financial Performance - Full-year adjusted EBITDA was $901 million, with adjusted EPS at $0.94, up from $0.91 in 2024 [1] - Fourth-quarter adjusted EBITDA was $189 million, a 7% year-over-year increase, while adjusted EPS was $0.13, down 7% due to a higher anticipated tax rate [2] - The full-year adjusted gross margin was 54.9%, remaining flat compared to 2024, as inflation and higher manufacturing costs offset price and volume benefits [1] Growth and Innovation - Elanco's innovation revenue for 2025 was $892 million, with a raised outlook for 2026 to $1.15 billion, indicating at least $250 million growth year-over-year [7][9] - Key products driving growth include Credelio Quattro, Zenrelia, and the soon-to-launch Befrena, with Credelio Quattro being highlighted as the fastest blockbuster in the company's history [9] - The company reported strong performance in U.S. Farm Animal and U.S. Pet Health segments, with growth rates of 17% and 10% respectively in the fourth quarter [4] Strategic Initiatives - Elanco's net leverage improved to 3.6x by year-end 2025, with a target of 3.1–3.3x by the end of 2026, and net debt reported at approximately $3.2 billion [6][14] - The company announced an agreement to acquire AHV International, expected to contribute modestly in 2026 and more significantly in 2027 [6][15] - Management is focused on cash generation and has initiated a company-wide productivity initiative, Elanco Ascend, aimed at achieving $25 million in savings in 2026 [16] Market Dynamics - Elanco expects accelerating price contributions in 2026, with 2025 price growth at about 2% [10] - The company noted strong relationships with major distributors, with 90% of corporate accounts growing in 2025 compared to 13% in 2024 [11][13] - There were no significant changes in distributor stocking trends, with strong dispensing patterns observed [12] 2026 Guidance - For 2026, Elanco guided organic revenue growth of 4–6%, with projected revenue between $4.95 billion and $5.02 billion, adjusted EBITDA of $955–$985 million, and adjusted EPS of $1.00–$1.06 [8][18] - The first-quarter guidance includes revenue of $1.28 billion to $1.305 billion and adjusted EBITDA of $290 million to $310 million [15]

Core Insights - The company achieved 9% organic constant currency revenue growth in Q4, marking 10 consecutive quarters of underlying growth driven by the U.S. farm and pet health sectors [1] Revenue Performance - Innovation revenue reached $892 million in 2025, outperforming expectations due to the rapid adoption of the 'Big Six' products, particularly Credelio Quattro and Zenrelia [1] - Credelio Quattro has become the fastest blockbuster in company history, gaining significant share in the $1.4 billion U.S. broad-spectrum parasiticide market through its unique four-ingredient differentiation [1] - Zenrelia is exceeding international expectations with double-digit market share in key regions like Brazil and Japan, driven by superior efficacy recognized by veterinarians [1] Sector Growth - U.S. Farm Animal growth of 17% was propelled by market leadership in cattle with Experior and Pradalex, despite historically small herd sizes [1] Strategic Initiatives - The 'no-regret' launch strategy, supported by expanded sales teams and DTC investment, is successfully converting innovation into market share gains across all major categories [1] - Operational efficiency and strong cash focus improved the net leverage ratio to 3.6x ahead of internal timelines, while the new Elanco Ascend initiative is set to drive further efficiencies starting in 2026 [1]

Financial Data and Key Metrics Changes - Elanco reported $1.14 billion in revenue for Q4 2025, a 12% increase year-over-year, with 9% organic constant currency growth driven primarily by volume increases [24][25] - Full-year revenue reached $4.715 billion, representing a 6% growth compared to 2024, with adjusted EBITDA of $901 million and adjusted EPS of $0.94, up from $0.91 in 2024 [27][28] - The net leverage ratio improved to 3.6x at year-end, with expectations to reduce it to 3.1x-3.3x in 2026 [6][30] Business Line Data and Key Metrics Changes - U.S. Pet Health revenue grew 10% in Q4, driven by key innovation products like Credelio Quattro and Zenrelia, while international pet health grew 8% [24][25] - U.S. Farm Animal business achieved a 17% growth in Q4, with strong contributions from products like Experior and Pradalex, while international farm animal grew 4% [25][9] - Innovation revenue for 2025 was $892 million, with expectations to reach $1.15 billion in 2026 [5][10] Market Data and Key Metrics Changes - The U.S. broad-spectrum parasiticide market is growing at 30% year-over-year, with Credelio Quattro gaining significant market share [12][11] - Zenrelia achieved over 30% market share in Japan and 40% in Brazil, indicating strong international performance [15][14] - The overall animal health market is projected to add $20 billion in value over the next decade, with Elanco positioned to capitalize on this growth [36][39] Company Strategy and Development Direction - Elanco is focused on growth, innovation, and cash management, with a commitment to introducing new products and enhancing its portfolio [5][20] - The acquisition of AHV International is aimed at expanding Elanco's leadership in the dairy industry, particularly in North America and Europe [21][22] - The company is implementing a productivity initiative, Elanco Ascend, to drive efficiencies and margin enhancements starting in 2026 [34][22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in Elanco's trajectory, highlighting strong momentum and a commitment to transforming animal care [35][40] - The company anticipates sustainable revenue growth driven by innovation and strategic pricing, despite competitive pressures [33][76] - Management acknowledged the impact of inflation and competitive responses on their guidance, emphasizing a balanced approach to growth [76][75] Other Important Information - Adjusted gross margin increased to 54.9% for the full year, flat compared to 2024, with price and volume benefits offset by inflationary pressures [27][26] - The effective tax rate for 2025 was 21.8%, a year-over-year increase due to the recognition of non-recurring tax credits in 2024 [28][27] Q&A Session Summary Question: Insights on Zenrelia's international share gains - Management noted that Zenrelia's efficacy is driving rapid share gains in international markets, with significant momentum in Japan and Brazil [44][45] Question: Impact of Covetrus and MWI merger on Elanco - Management emphasized strong relationships with distributors and the value they add, indicating confidence in navigating the evolving distribution landscape [50][51] Question: Clarification on pricing strategy for 2026 - Management expects price growth to accelerate in 2026, reflecting the enhanced value of their innovation and comprehensive portfolio [57][58] Question: Stocking dynamics and competitive positioning in parasiticides - Management reported strong dispensing demand with no significant stocking issues, positioning Elanco favorably in the parasiticides market [66][67] Question: Timeline for Zenrelia label update in the U.S. - Management confirmed constructive dialogue with the FDA regarding the label update, with expectations for alignment with international standards [69][70]

Financial Data and Key Metrics Changes - Elanco reported $1.14 billion in revenue for Q4 2025, a 12% increase year-over-year, with 9% organic constant currency growth driven primarily by volume increases [23][24] - Full-year revenue reached $4.715 billion, representing a 6% growth, with Adjusted EBITDA of $901 million and Adjusted EPS of $0.94, compared to $0.91 in 2024 [26][27] - The net leverage ratio improved to 3.6 times at year-end, with expectations to reduce it to 3.1-3.3 times in 2026 [6][28] Business Line Data and Key Metrics Changes - U.S. Pet Health revenue grew 10% in Q4, driven by innovation products like Credelio Quattro and Zenrelia, while international pet health grew 8% [23][24][9] - U.S. Farm Animal business achieved a 17% growth in Q4, with strong contributions from Experior and Pradalex, while international farm animal grew 4% [24][9] - Innovation revenue for 2025 was $892 million, with expectations to reach $1.15 billion in 2026 [5][10] Market Data and Key Metrics Changes - The U.S. broad-spectrum parasiticide market grew 30% year-over-year, with Credelio Quattro gaining significant market share [12][11] - Zenrelia achieved over 30% market share in Japan and 40% in Brazil, indicating strong international performance [15][42] - The overall animal health market is projected to add $20 billion in value over the next decade, with Elanco positioned to capitalize on this growth [34] Company Strategy and Development Direction - Elanco's strategy focuses on growth, innovation, and cash management, with a commitment to introducing new products and enhancing operational efficiency [5][21] - The company is expanding its leadership in the dairy industry through the acquisition of AHV International, which will enhance its portfolio and market presence [20][21] - Elanco Ascend, a productivity initiative, aims to drive efficiencies and margin enhancements starting in 2026 [32] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in Elanco's trajectory, highlighting strong momentum and a commitment to transforming animal care [33][38] - The company anticipates sustainable revenue growth driven by innovation and strategic pricing, despite competitive pressures [31][36] - Management acknowledged the importance of adapting to changing consumer behaviors in both pet health and farm animal sectors [35][37] Other Important Information - Adjusted gross margin increased to 51.2% in Q4, driven by price and volume increases, while operating expenses grew by 10% to support strategic investments [24][25] - The effective tax rate for 2025 was 21.8%, reflecting a year-over-year increase due to non-recurring tax credits recognized in 2024 [27] Q&A Session Summary Question: Insights on Zenrelia's international share gains - Management noted that Zenrelia's efficacy is increasingly recognized, leading to significant share gains in international markets like Japan and Brazil, with expectations for continued growth in the U.S. [41][42][44] Question: Impact of Covetrus and MWI merger on Elanco - Management emphasized strong relationships with distributors and the value they add, indicating confidence in maintaining competitive advantages despite market changes [48][49] Question: Clarification on pricing strategy for 2026 - Management confirmed expectations for accelerating price growth in 2026, driven by the value of new innovations and a comprehensive portfolio [54][56] Question: Stocking dynamics and competitive positioning in parasiticides - Management reported strong dispensing demand with no significant stocking issues, indicating a solid position in the parasiticides market [65][66] Question: Timeline for Zenrelia label update in the U.S. - Management is in constructive dialogue with the FDA regarding the label update, with confidence in achieving alignment with international standards [68][70]

Financial Data and Key Metrics Changes - Elanco reported $1.14 billion in revenue for Q4 2025, a 12% increase on a reported basis, with 9% organic constant currency growth driven primarily by volume increases [23][24] - Full-year revenue reached $4.715 billion, representing 6% growth, with Adjusted EBITDA of $901 million and Adjusted EPS of $0.94, compared to $0.91 in 2024 [26][27] - The net leverage ratio improved to 3.6 times at year-end, with expectations to reduce it to 3.1-3.3 times in 2026 [5][27] Business Line Data and Key Metrics Changes - U.S. Pet Health revenue grew 10% in Q4, driven by key innovation products like Credelio Quattro and Zenrelia, while international pet health grew 8% [23][24][9] - U.S. Farm Animal business achieved 17% growth in Q4, supported by strong performance from Experior and Pradalex, while international farm animal grew 4% [24][9] - Innovation revenue for 2025 was $892 million, with expectations to reach $1.15 billion in 2026 [4][10] Market Data and Key Metrics Changes - The U.S. broad-spectrum parasiticide market grew 30% year-over-year, with Credelio Quattro gaining significant market share [12][11] - Zenrelia achieved over 30% market share in Japan and 40% in Brazil, indicating strong international performance [14][43] - The farm animal market is expected to benefit from increasing animal protein consumption, projected to grow at 5% annually in the U.S. [36] Company Strategy and Development Direction - Elanco is focused on growth, innovation, and cash management, with a commitment to introducing new products and expanding market share [5][20] - The acquisition of AHV International aims to enhance Elanco's portfolio in the dairy industry, particularly in North America and Europe [20] - The company is implementing a productivity initiative, Elanco Ascend, to drive efficiencies and margin enhancement starting in 2026 [20][33] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in Elanco's trajectory, highlighting the company's ability to lead in the animal health industry amid a projected $20 billion market growth over the next decade [34][35] - The company anticipates sustainable revenue growth driven by innovation and strategic pricing, while acknowledging competitive pressures and inflationary challenges [32][75] - Management expects to gain incremental market share in pet health and strengthen leadership in farm animal products [32][36] Other Important Information - Adjusted gross margin for Q4 increased to 51.2%, with operating expenses growing by 10% to support strategic investments [24][25] - The effective tax rate for 2025 was 21.8%, reflecting a year-over-year increase due to non-recurring tax credits recognized in 2024 [27] Q&A Session Summary Question: Insights on Zenrelia's International Share Gains - Management highlighted Zenrelia's efficacy as a key driver for its rapid share gains in international markets, with expectations for continued growth in the U.S. following potential label updates [41][43] Question: Impact of Covetrus and MWI Merger - Management emphasized strong relationships with distributors and the value added through collaboration, indicating confidence in maintaining competitive advantages despite market changes [48][49] Question: Pricing Strategy for 2026 - Management confirmed expectations for accelerating price growth in 2026, driven by the value of new innovations and a comprehensive portfolio [54][55] Question: Stocking Dynamics and Competitive Positioning - Management reported strong demand and multiple orders from distributors, indicating no significant stocking issues as the spring season approaches [64][66] Question: Timeline for Zenrelia Label Update - Management confirmed ongoing constructive dialogue with the FDA regarding the label update, with expectations for alignment with international standards [67][70] Question: Corporate Accounts and Portfolio Gaps - Management noted significant progress in corporate account penetration and highlighted the importance of upcoming products like Befrena in enhancing their competitive position [76][78]

Core Insights - Elanco Animal Health reported significant financial results for Q4 and full year 2025, with a focus on growth, innovation, and cash generation, and provided guidance for 2026 [1][2][3] Financial Performance - Q4 2025 revenue reached $1,144 million, a 12% increase year-over-year, with 9% organic constant currency growth [2][3] - Full year 2025 revenue was $4,715 million, up 6% on a reported basis and 7% in organic constant currency [1][2] - Adjusted EBITDA for Q4 2025 was $189 million, with a margin of 16.7%, while full year adjusted EBITDA was $901 million, representing a margin of 19.2% [1][2] - The company reported a net loss of $276 million for Q4 2025 and a net loss of $232 million for the full year [2][3] Business Segments - Pet Health segment revenue for Q4 2025 was $489 million, an 11% increase, driven by new products like Credelio Quattro and Zenrelia [2][3] - Farm Animal segment revenue was $640 million in Q4 2025, a 12% increase, supported by volume growth in cattle and poultry [2][3] Innovation and Growth Strategy - Elanco exceeded its innovation revenue target for 2025, achieving $892 million, and raised the target for 2026 to $1.15 billion [1][2] - The company plans to continue its focus on innovation, with expectations of five to six blockbuster-potential approvals over the next six years [1][2] Financial Guidance - For full year 2026, Elanco expects revenue between $4,950 million and $5,020 million, representing 4% to 6% organic constant currency growth [1][3] - Adjusted EBITDA guidance for 2026 is set at $955 million to $985 million, with adjusted EPS expected to be between $1.00 and $1.06 [1][3] Restructuring and Cost Management - The company recorded $155 million in restructuring costs in Q4 2025, with expected savings of approximately $25 million in 2026 and $60 million in 2027 [1][2] - Elanco's net leverage ratio improved to 3.6x adjusted EBITDA by the end of 2025, with a target of reducing it to below 3x by 2027 [1][3]

Group 1: Fund Performance - Baron Health Care Fund rose 13.10% in Q4 2025, outperforming the Russell 3000 Health Care Index which gained 11.92% and the Russell 3000 Index which gained 2.40% [1] - For the full year, the Fund returned 10.28%, compared to 14.56% and 17.15% gains for the respective indexes [1] - Strong stock selection in biotechnology contributed to the Fund's relative gains in the quarter [1] Group 2: Investment Focus - The Fund seeks to invest in businesses with secular growth opportunities, sustainable competitive edges, and strong management [1] - The healthcare sector is viewed as a strong area in the U.S. economy, offering attractive investment opportunities with positive momentum heading into 2026 [1] Group 3: Elanco Animal Health Incorporated - Elanco Animal Health has a market capitalization of $12.079 billion and closed at $24.31 per share on February 5, 2026 [2] - The stock gained 3.58% over the past month and 111.02% over the last 52 weeks [2] - Elanco operates in an attractive industry with growth drivers such as increased pet ownership and higher spending on pets [3] Group 4: Innovation and Growth Potential - Elanco's management expects innovation revenue to reach $840 million to $880 million in 2025, increasing to $1.1 billion in 2026 [3] - Key innovation products include Credelio Quattro, Zenrelia, Befrena, Bovaer, and Experior, which are expected to drive growth and gross margin expansion [3] - The innovation pipeline includes five to six additional products expected to be approved between 2026-2031, with potential peak sales of $2 billion [3] Group 5: Financial Targets - Management targets 200-350 basis points of EBITDA margin expansion from 2025-2028 [3] - The company aims for $1 billion of cumulative free cash flow from 2026-2028 to pay down debt and reduce net debt to EBITDA from 3.7-3.8 times at the end of 2025 to 2.0-2.5 times by the end of 2028 [3]