Virbac results for the first half of 2024

Exceptional business dynamics in the first half of the year, with revenue growth of 16.1% at constant exchange rates
Strong growth in adjusted current operating income¹
- +3.4 points compared to 2023, which will allow to reach a record level of 21.4% of revenues

Goals for 2024 confirmed
- Revenue growth is expected to be between 7% and 9% at constant exchange rates and ranges
- Adjusted Current Operating Income¹ is expected to be around 16%, compared with 15.1% in 2023.

CONSOLIDATED DATA AS OF JUNE 30 in millions of euros	2024	2023	Change 2024/2023
Income	702.9	610.5	+15.1%
Change at constant exchange rates			+16.1%
Change at constant exchange rates and range²			+11.3%
Adjusted Current Operating Income¹	150.4	109.9	+36.9%
as % of revenue as % of revenue at fixed rates	21.4% 21.3%	18.0%
Amortization of intangible assets resulting from acquisitions	-1.7	-1.9
Current operating income	148.7	108.0	+37.7%
Non-current income and expenses	-2.0	0.5
Operating income	146.7	108.5	+35.1%
Consolidated net income	94.9	74.8	+26.9%
Including net income – group shares	94.7	75.0
Equity – Shares in the Group	994.3	898.5	+10.7%
Net debt³	254.9	-52.4⁴	–
Cash flow from operating activities before interest and taxes⁵	172.6	132.4	+30.4%

¹Adjusted current operating income corresponds to “current operating income before depreciation and amortization of assets arising from acquisitions”
²growth at constant exchange rates and in a range corresponding to organic sales growth, without taking into account exchange rate fluctuations, by calculating the indicator for a given financial year and the indicator for the previous financial year based on the identifiedexchange rates (the exchange rate of the previous financial year is used) and excluding significant scope changes, calculating the indicator for a given financial year based on the consolidation scope for the previous financial year. This change is calculated based on the actual consolidation scope, including the impact of acquisitions (Globion AND Sasaeah), for which the above-mentioned indicator is calculated based on the exchange rate from the previous year
³Nand debt corresponds to the current one (€187.3 million) and non-working (€187.4 million) financial liabilities, as well as leasing liabilities related to the application of IFRS 16 (EUR 3 million)7 EUR million), less cash and cash equivalents (€156.8 million) as published in the financial statementsial position
⁴net cash position as at 31 December 2023
⁵aboutcash flow from operating activities equals adjusted current operating incomeme (1€50.4 million) converted to items that do not affect the cash position, as well as the impact resulting from the disposal of assets. This is the restatement of depreciation and amortization of fixed assets before takeovers for the amount of EUR 22.5 million (including EUR 24.2 million of depreciation and amortization of fixed assets)assets and provisions and -EUR 1.6 million of depreciation of assets from acquisitions), as well as long-term income and expenses (EUR 2 million), other non-cash income and expenses (EUR 0.4 million) and the impact of disposals (EUR 1.3 million)

The accounts have been audited and reviewed by the board of directors on September 13, 2024. The auditors’ report is pending. The reports and a detailed presentation of the half-year results are available on the website corporate.virbac.com.

In the first half of the year, our revenue amounted to EUR 702.9 million compared to EUR 610.5 million in 2023, an overall change of +15.1%. Excluding currency effects, revenues grew significantly by +16.1%. The integration of recently acquired businesses (Globion in India and Sasaeah in Japan) contributed to the growth by +4.8 points. At constant exchange rates and scope, organic growth in the first half of the year reached +11.3%, supported by simultaneous growth in volumes and prices (price effect estimated at ~3.5 growth points) despite the slowdown in inflation. It should be noted that this half of the year benefited from a favorable comparative basis, in particular due to the increase in our production capacity for vaccines for dogs and cats since the beginning of the year.

Europe (+12.3% at constant exchange rates and scope) accounted for almost half of the Group’s organic growth, benefiting from a strong rebound in dog and cat vaccines as well as increased demand for our pet food/care products. The excellent performance of North America (+22.2% at constant exchange rates and scope) benefited from both a favourable base effect (following the distributor sell-off effect in early 2023) and the sustained momentum of our specialty pet products. Latin America (+10.5% at constant exchange rates and scope) benefited from outstanding performances in Chile, Mexico and Central America, which more than compensated for a small decline in Uruguay and Brazil. India continued to drive our expansion in the India, Middle East and Africa region (+9.6% at constant exchange rates and scope) and recorded very significant growth (~20% at actual scope) thanks to the expansion of our portfolio following the acquisition of Globion poultry vaccines. China and Southeast Asia lagged our growth in Asia (+8.8% at constant exchange rates and scope). Despite a rebound in Q2, the Pacific region ended the half-year slightly lower (-0.8% at constant exchange rates and scope), penalized by an unfavourable comparative basis as business benefited from a particularly favourable agricultural and climatic context (prices and herd growth) at the start of 2023.

Current operating income before depreciation and amortization of assets arising from acquisitions is EUR 150.4 million, a significant increase compared to 2023 (EUR 109.9 million). This remarkable increase is primarily due to the improvement in our gross margin (+2.7 points), resulting from volume-driven sales growth and pricing effects. In addition, we benefited from a base effect, as the first half of 2023 was affected by the under-absorption of our fixed costs related to the production of our vaccines for companion animals. Net costs increased by EUR 36.8 million, of which EUR 8.4 million relates to the integration of Globion and Sasaeah. At constant scope, net costs increased by EUR 28.4 million, or 10.4%. This increase in our operating costs is mainly due to marketing and travel costs in line with the growth in business, increased investments in R&D and higher personnel costs following the impact of the salary increase and the strengthening of our workforce, mainly in R&D, Sales and Production. Our profitability continues to improve, with an improvement of 3.4 points to reach a record level of 21.4%. The integration of Globion and Sasaeah had a slightly increasing impact on the Group’s profitability, amounting to around 0.5 points. It should be noted that the ratio of R&D expenses to sales remained stable in the first half of 2024 compared to 2023, due to the phasing effect (acceleration is expected in the second half of the year) and the very strong sales growth dynamics.

Consolidated net income amounted to €94.9 million, an increase of 26.9% compared to the same period in 2023. Other non-current income and expenses represented a net charge of €2.0 million. They include costs related to the acquisition of Sasaeah (-€4.7 million), partially offset by the sale of assets (€2.5 million) and the unused portion of the restructuring reserve. Net financial costs amounted to -€4.8 million compared to +€0.9 million at 30 June 2023, a change mainly due to higher borrowing costs of €2.4 million, as well as higher exchange rate losses (-€3.7 million) as a result of unhedged exposure to the Chilean peso and the depreciation of the currency during the period. Finally, the tax charge increased, mainly in line with business activity.

Net income – Group shares amounted to EUR 94.7 million, which means an increase of 26.2% compared to the first half of the previous year (EUR 75.0 million).

On the financial sideOur net debt amounted to €254.9 million, an increase of €307.3 million compared to December 31, 2023. In addition to a seasonal increase in our working capital requirements and dividend payments, this significant increase is due to the acquisition of Sasaeah in Japan on April 1 and the completion of the minority stake buyout in Globion in India on June 21. It should be noted that following our request to activate the accordion clause in our syndicate agreement, a pool of our banks agreed to increase their commitment by €150 million, bringing the total commitment to €350 million. This syndicate agreement was also subject to an amendment unanimously adopted by our banks, including a new accordion clause of €100 million, which increased the potential amount of our credit facility to €450 million.

Perspectives
We confirm our adjusted guidance: in line with our press release of July 8, 2024, at constant exchange rates and scope, we confirm revenue growth in the range of 7% to 9% and adjusted net profit⁷ indicator of around 16%. The contribution of recent external growth operations⁸ Revenue growth is expected to be around +5.5 points, with a slight increase in Group profitability. At constant exchange rates and scope, revenue growth should therefore be between 12.5% and 14.5%.
Furthermore, excluding acquisitions, our cash position should improve by EUR 60 million.

⁷“Current operating income before depreciation and amortization of assets arising from acquisitions”
⁸takeovers Globion in India and Sasaeah in Japan

ANALYST PRESENTATION – VIRBAC

A virtual analyst meeting will be held on Monday, September 16, 2024 at 2:00 p.m. (Paris time). CEST).

Information for participants:

Link to webcast: https://bit.ly/4caYWSu

This access link is available on corporate.virbac.com, in the “financial press releases” section. This link allows participants to access the live and/or archived versions of the webcast.

You can ask questions via chat (text) directly during the webcast or after watching the replay to the following e-mail address: [email protected].

We focus on animal health from the very beginning
At Virbac, we provide innovative solutions for veterinarians, farmers and pet owners in over 100 countries around the world. Covering over 50 species, our range of products and services enables the diagnosis, prevention and treatment of most pathologies. Every day, we are committed to improving the quality of life of animals and shaping the future of animal health together.

Virbac: Euronext Paris – subfund A – ISIN code: FR0000031577/MNEMO: VIRP
Financial Affairs Department: tel. +33 4 92 08 71 32 – e-mail: [email protected] – Website: corporate.virbac.com

ATTACHMENTS

1.Statement of financial position

See attached PDF file

2.Cash flow statement

See attached PDF file

3.Reconciliation tables for alternative performance indicators

3.1.Net debt

3.2.Cash flow from operating activities before interest and taxes

See attached PDF file