1

ZOETIS: THE WORLD LEADER IN

ANIMAL HEALTH JUAN RAMÓN ALAIX – CHIEF EXECUTIVE OFFICER

WILLIAM BLAIR 35TH ANNUAL GROWTH STOCK CONFERENCE JUNE 10, 2015

2

FORWARD-LOOKING STATEMENTS

NON-GAAP FINANCIAL INFORMATION

This presentation contains forward-looking statements, which reflect the current views of Zoetis with respect to business

plans or prospects, future operating or financial performance, expectations regarding products, future use of cash and

dividend payments, and other future events. 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, 2014, 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.

We use non-GAAP financial measures, such as adjusted net income and adjusted diluted earnings per share, to assess

and analyze our operational results and trends and to make financial and operational decisions. We believe these non-

GAAP financial measures are also useful to investors because they provide greater transparency regarding our operating

performance. The non-GAAP financial measures included in this presentation should not be considered alternatives to

measurements required by GAAP, such as net income, operating income, and earnings per share, and should not be

considered measures of liquidity. These non-GAAP financial measures are unlikely to be comparable with non-GAAP

information provided by other companies. Reconciliation of non-GAAP financial measures and GAAP financial measures

are included in the tables accompanying our earnings release and are posted on our website at www.zoetis.com.

3

STRONG LONG-TERM

INDUSTRY GROWTH

DRIVERS

4

AT THE CORE OF A $100+ BILLION INDUSTRY

COMPANION ANIMAL

LIVESTOCK

1 Vetnosis Review 2014 2 Vetnosis STORM FORECASTS: 2014-2023

• Pet Supplies

• Vet Services

• Diagnostics

• OTC Health

• Nutrition

• Genetics

• Food Safety

• Herd Health

Management

• Diagnostics

~$24 Billion1

• Medicines

• Vaccines

• Medicated Feed Additives

• Parasiticides

~$24B GLOBAL ANIMAL HEALTH MARKET EXPECTED TO EXCEED $33B BY 20202

ANIMAL HEALTH

5

POWERFUL TRENDS CREATING DEMAND

POPULATION GROWTH

A GROWING MIDDLE CLASS

INCREASING URBANIZATION

PREDICTABLE, SUSTAINABLE AND FUNDAMENTAL ECONOMIC DRIVERS

6

LIMITS ON POPULATION & PRODUCTION DRIVE ANIMAL HEALTH SPEND PROTEIN NEEDS FUEL ANIMAL HEALTH

# OF ANIMALS1 PROTEIN

PRODUCTION1

ANIMAL HEALTH

Beef Cattle

1.4% 1.5% CAGR CAGR

Dairy Cattle

1.2% 1.8% CAGR CAGR

Pigs

1.3% 1.7% CAGR CAGR

Poultry

2.1% 2.5% CAGR CAGR

1-2% 2-3%

6%

TOTAL RANGE

PROJECTED GROWTH BY 2023

CAGR2

GLOBAL

LIVESTOCK

1 OECD-FAO Agricultural Outlook 2014-2023 2 Vetnosis STORM from 2013-2018

7

DRIVERS OF PET CARE GROWTH DISTINCT TRENDS IN EMERGING VS. DEVELOPED MARKETS

INCREASED PET OWNERSHIP

HIGHER MEDICALIZATION (ROUTINE CARE)

SPECIALTY CARE

PRICE

EMERGING MARKETS

DEVELOPED MARKETS

5%

CAGR1 GLOBAL COMPANION ANIMAL HEALTH

1 Vetnosis STORM from 2013-2018

8

RESILIENT INDUSTRY REVENUE GROWTH

2006 – 2014

Animal Health Industry

Revenue Growth

2009 Global Recession

Animal Health Industry

Revenue Growth

Low single digits1

(excl. currency)

1 Data calculated from IFAH Annual Report 2006 and Vetnosis Review 2014

5.1% CAGR1

PROTEIN IS A

DIETARY STAPLE

OWNERS PRIORITIZE

THEIR PET SPENDING

9

MARKET LEADERSHIP

AND COMPETITIVE

ADVANTAGES

10

2014 reported performance is the total sales revenue and growth reported by each AH company, which might include Non-Animal Health sales and merger/acquisition activity.

$4,785

$3,454

$2,754

$2,347

$1,748 $1,499

$1,174 $1,026 $1,016

$418

20

14

Re

po

rte

d S

ale

s (

US

$M

)

4.9%

2.7%

4.5%

9.1%

0.8% 5.5%

0.3% 4.9% 22.6%

5.1%

ZOETIS LEADS ANIMAL HEALTH INDUSTRY

Source: Vetnosis Executive’s Guide 2015

2014 AH REPORTED SALES AND % GROWTH (INCLUDING NON-AH SALES)

11

HIGH-QUALITY PRODUCTS DIRECT SALES INNOVATION

THREE INTERCONNECTED CAPABILITIES ESSENTIAL FOUNDATION FOR OUR SUCCESS IN ANIMAL HEALTH

12

ATTRACTIVE PORTFOLIO ATTRIBUTES

1 Excludes revenue associated with our Client Supply Services (CSS), which represented 1% of total 2014 revenue

DIVERSITY DURABILITY

REVENUE BY SPECIES1

REVENUE BY PRODUCT CATEGORY1

36%

34%

15%

12%

Other livestock

Poultry

Swine

Companion animal

Cattle

29%

26%17%

15%

10%

Other non-pharma

Medicated feed additives

Parasiticides

Other pharmaceuticals

Vaccines

Anti-infectives

2%

3%

• ~20% of revenue

covered by exclusive IP

• Average product franchise duration

of top 25 is 27 Years

• Limited third-party payers

• Strong brand loyalty

13

CONSISTENT REVENUE PERFORMANCE

• We have delivered

consistent performance,

outpacing the industry

• 2014 revenue was $4.8

billion, a 7% increase on

an operational basis

ZTS Annual Revenue Operational

Growth Rates

* Also excludes the impact of incremental revenue from: the acquisition of King Animal Health, acquired by Pfizer on January 31, 2011; the acquisition of Fort

Dodge Animal Health (FDAH), acquired by Pfizer on October 15, 2009; and government–mandated divestitures of legacy FDAH and our legacy products in

connection with the FDAH acquisition

7% 7%

5%

7% 7%

THE RESULT OF OUR MARKET LEADERSHIP, PORTFOLIO, AND LEVERAGING OUR BUSINESS MODEL

14

TRACK RECORD OF

MARGIN EXPANSION

15

SUSTAINABLE MARGIN EXPANSION MARGIN IMPLICATIONS FROM OPERATIONAL EFFICIENCY INITIATIVE

$2,760

$3,582

$4,233 $4,336

$4,561

$4,785 $4,725

$4,725 $4,950

$189

$275

$503 $539

$709 $790

$828

$940

$1,130

Revenue Adjusted Net Income

Actuals Guidance1

• Grow Adjusted EBIT2

margin from 25% in

2014 to approximately

34% in 2017

• Will come from cost

savings of $300

million in 2017, more

than offsetting related

adjusted gross profit2

reduction of $100

million

1Guidance as of May 5, 2015. Revenue and Adjusted Net Income reflect midpoint guidance range. 2Adjusted net income and its components are defined as reported U.S. generally accepted accounting principles (GAAP) net income and its components excluding

purchase accounting adjustments, acquisition-related costs and certain significant items. Adjusted EBIT excludes interest expense net of capitalized interest and

adjusted income taxes.

2

22% 24% 25% 27% 31% 34% Adjusted

EBIT2

Margin 19% 14% 12%

16

OPERATIONAL EFFICIENCY INITIATIVE CLEAR ROADMAP TO $300 MILLION IN SAVINGS BY 2017

REDUCE

COMPLEXITY

• Reduction of 5,000 low growth, low margin SKUs

• Represents less than 10% of our 300 product

lines

SIMPLIFY

OPERATIONS

• Shifting our selling model to ~45 direct countries

and ~75 indirect countries, from 70 direct and 50

indirect

• However, ~95% of our pro-forma 2017 sales

are expected to come from direct markets

BETTER

RESOURCE

ALLOCATION

• Streamlining corporate functions

• Focusing resources closer to customers

• Reducing management layers

• Enhancing R&D focus and better prioritize R&D

projects with highest returns

17

ADDITIONAL OPPORTUNITIES TO ENHANCE

VALUE

R&D

Productivity • 180 product approvals in

2014

• Sarolaner

• IL-31

Supply Network

Strategy • Simplification of internal

plant network

• 200 basis point

improvement to COGS

• Incremental to Operating

Efficiency Initiative

Business

Development • Strategic fit

• Clear synergies

• Financial value

• Anti-trust considerations

18

GROW REVENUE IN LINE WITH OR FASTER

THAN THE MARKET

GROW ADJUSTED NET INCOME1 FASTER

THAN REVENUE

TARGET VALUE-ADDED INVESTMENT

OPPORTUNITIES

CONSISTENT LONG-TERM VALUE PROPOSITION TO SHAREHOLDERS

RETURN EXCESS CAPITAL TO SHAREHOLDERS

1 Adjusted Net Income is a non-GAAP measure and defined as the corresponding reported U.S. generally accepted accounting principles (GAAP) income statement line item,

excluding purchase accounting adjustments, acquisition-related costs and certain significant items. The adjusted net income measure is not, and should not be viewed as, a

substitute for U.S. GAAP reported net income attributable to Zoetis.

APPENDIX

20 |

RECONCILIATION OF GAAP REPORTED TO NON-GAAP ADJUSTED INFORMATION 2015 – 2017 NET INCOME GUIDANCE

in USD millions GAAP Reported Purchase Accounting

Certain Significant

Items & Acquisition-

Related Costs

Non-GAAP

Adjusted1

Full-Year 2015 Net Income Guidance $400 - $515 $40 $290 – $370 $810 - $845

Full-Year 2016 Net Income Guidance $730 - $830 $40 $100 – $140 $910 - $970

Full-Year 2017 Net Income Guidance $995 - $1,085 $40 $40 – $60 $1,095 - $1,165

1 Adjusted Net Income is a non-GAAP measure and defined as the corresponding reported U.S. generally accepted accounting principles (GAAP) income

statement line item, excluding purchase accounting adjustments, acquisition-related costs and certain significant items. The adjusted net income measure

is not, and should not be viewed as, a substitute for U.S. GAAP reported net income attributable to Zoetis.

21 |

RECONCILIATION OF GAAP REPORTED TO NON-GAAP ADJUSTED INFORMATION 2014

in USD millions

GAAP

Reported

Purchase

Accounting

Acquisition

related costs

Certain

Significant

Items

Non-GAAP

Adjusted

Revenue $4,785 $0 $0 $0 $4,785

Cost of Sales 1,717 (4) 0 (33) 1,680

Gross Profit 3,068 4 0 33 3,105

Gross Profit as % of Revenue 64.1% 64.9%

Selling, general and administrative expenses 1,643 0 0 (136) 1,507

Research & Development Expenses 396 (2) 0 (1) 393

Amortization of intangible assets 60 (45) 0 0 15

Total Operating Expenses 2,099 (47) 0 (137) 1,915

Total Operating Expenses as % of Revenue 43.9% 40.0%

Restructuring charges and certain acquisition related costs 25 0 (8) (17) 0

Other (Income) / Expenses 7 0 0 (18) (11)

Income/(loss) before Interest and Taxes 937 51 8 205 1,201

Interest Expense 117 0 0 0 117

Income before provision for taxes on income 820 51 8 205 1,084

Provision for taxes on income 233 17 3 37 290

Income from continuing operations 587 34 5 168 794

Net income attributable to non-controlling interests 4 0 0 0 4

Net income attributable to Zoetis 583 34 5 168 790

22 |

RECONCILIATION OF GAAP REPORTED TO NON-GAAP ADJUSTED INFORMATION 2013

in USD millions

GAAP

Reported

Purchase

Accounting

Acquisition

related costs

Certain

Significant

Items

Non-GAAP

Adjusted

Revenue $4,561 $0 $0 $0 $4,561

Cost of Sales 1,669 (2) 0 (42) 1,625

Gross Profit 2,892 $2 0 $42 2,936

Gross Profit as % of Revenue 63.4% 64.4%

Selling, general and administrative expenses 1,613 1 0 (188) 1,426

Research & Development Expenses 399 (1) 0 (7) 391

Amortization of intangible assets 60 (46) 0 0 14

Total Operating Expenses 2,072 (46) 0 (195) 1,831

Total Operating Expenses as % of Revenue 45.4% 40.1%

Restructuring charges and certain acquisition related costs 26 0 (22) (4) 0

Other (Income) / Expenses (9) 0 0 1 (8)

Income/(loss) before Interest and Taxes 803 48 22 240 1,113

Interest Expense 113 0 0 0 113

Income before provision for taxes on income 690 48 22 240 1,000

Provision for taxes on income 187 16 8 81 292

Income from continuing operations 503 32 14 159 708

Net income attributable to non-controlling interests (1) 0 0 0 (1)

Net income attributable to Zoetis 504 32 14 159 709

23 |

RECONCILIATION OF GAAP REPORTED TO NON-GAAP ADJUSTED INFORMATION 2012

in USD millions

GAAP

Reported

Purchase

Accounting

Acquisition

related costs

Certain

Significant

Items

Non-GAAP

Adjusted

Revenue $4,336 $0 $0 $0 $4,336

Cost of Sales 1,563 (4) (9) (1) 1,549

Gross Profit 2,773 4 9 1 2,787

Gross Profit as % of Revenue 64.0% 64.3%

Selling, general and administrative expenses 1,470 1 (1) (18) 1,452

Research & Development Expenses 409 0 0 (10) 399

Amortization of intangible assets 64 (49) 0 0 15

Total Operating Expenses 1,943 (48) (1) (28) 1,866

Total Operating Expenses as % of Revenue 44.8% 43.0%

Restructuring charges and certain acquisition related costs 135 0 (43) (92) 0

Other (Income) / Expenses (46) 0 0 25 (21)

Income/(loss) before Interest and Taxes 741 52 53 96 942

Interest Expense 31 0 0 0 31

Income before provision for taxes on income 710 52 53 96 911

Provision for taxes on income 274 17 19 62 372

Income from continuing operations 436 35 34 34 539

Net income attributable to non-controlling interests 0 0 0 0 0

Net income attributable to Zoetis 436 35 34 34 539

24 |

RECONCILIATION OF ADJUSTED NET INCOME TO ADJUSTED EBIT 2011 – 2014

in USD millions 2012 2013 2014

Adjusted Net Income1 $539 $709 $790

Interest Expense2 31 113 117

Interest Income2 (1) (3) (6)

Income Taxes2 372 292 290

Adjusted EBIT3 $941 $1,111 $1,191

% of revenue 21.7% 24.4% 24.9%

1 Adjusted Net Income is a non-GAAP measure and defined as the corresponding reported U.S. generally accepted accounting principles (GAAP) income

statement line item, excluding purchase accounting adjustments, acquisition-related costs and certain significant items. The adjusted net income measure

is not, and should not be viewed as, a substitute for U.S. GAAP reported net income attributable to Zoetis.

2 Interest Expense, Interest Income, and Income Taxes include charges as included in adjusted net income

3 Adjusted Earnings Before Interest and Taxes (EBIT) is calculated before the impact of purchase accounting adjustments, acquisition-

related costs and certain significant items and is a non-GAAP financial measure. Adjusted EBIT excludes interest expense net of capitalized interest and adjusted

income taxes.