Virbac: 2020 current operating income showed strong growth (+37.6%
at constant rates and scope), reflecting the excellent evolution of
revenue (+5.7% at constant rates and scope) and a sharp decrease in
expenses
2020 current operating income showed
strong growth (+37.6% at constant rates and scope), reflecting the
excellent evolution of revenue (+5.7% at constant rates and scope)
and a sharp decrease in expenses in the context of the Covid-19
crisis
The divestment of Sentinel that took
place on July 1, 2020 impacted the financial statements for the 2nd
half of the year and allowed the group to reduce its
debt
CONSOLIDATED FIGURES AS OF DECEMBER 31in € million |
|
2020 |
2019 |
2020/2019 Change |
|
Revenue |
934.2 |
938.3 |
-0.4% |
|
Change at constant
exchange rates |
|
|
+3.2% |
|
Change in Revenue at constant exchange rates and scope
1 |
|
|
+5.7% |
|
Current
operating income before depreciation of assets arising from
acquisitions 2 |
128.9 |
122.4 |
+5.2% |
|
as a % of revenueas a % of revenue at constant rates |
13.8%14.4% |
13.0% |
|
|
Depreciation
of intangible assets arising from acquisitions |
8.4 |
15.0 |
|
|
Current
operating income |
120.5 |
107.4 |
+12.2% |
|
Change in Current
operating income at constant exchange rates |
|
|
+21.6% |
|
Change in Current operating income at constant exchange
rates and scope 1 |
|
|
+37.6% |
|
Non-recurring
expenses and income |
-65.2 |
9.4 |
|
|
Operating income |
185.7 |
98.0 |
+89.5% |
|
Current net
income 3 |
78.3 |
63.4 |
+23.5% |
|
Consolidated net income |
141.8 |
54.4 |
+160.5% |
|
Including net income - Group share |
137.5 |
51.5 |
+166.7% |
|
Shareholders’ equity - Group Share |
622.9 |
517.8 |
+20.3% |
|
Net debt 4 |
-63.4 |
368.4 |
-117.2% |
|
Operating cash flow before interest and taxes
5 |
171.4 |
156.5 |
+9.5% |
|
1 The change at constant exchange rates and
scope is the organic growth, excluding the impact of exchange rate
changes, by calculating the indicator for the financial year in
question and the indicator for the previous financial year on the
basis of identical exchange rates (the exchange rate used is the
exchange rate in effect for the previous financial year), and
excluding the impact of changes in scope (i.e. excluding Sentinel
over both periods).2 Current operating income before depreciation
of assets arising from acquisitions reflects current income
adjusted for the impact of allowances for depreciation of
intangible assets resulting from acquisition transactions.3 Current
net income corresponds to consolidated net income adjusted for
non-recurring expenses and income (- €65.2 million), and for
non-current tax (€1.7 million).4 Net debt corresponds to current
(€32.0 million) and non-current (€51.7 million) financial
liabilities as well as a lease obligation related to the
application of IFRS 16 (€34.8 million), less cash and cash
equivalents (€181.9 million) as published in the statement of
financial position.5 Operating cash flow corresponds to operating
income (€185.7 million) adjusted for items having no impact on cash
position and impacts related to transfers. The following items are
adjusted: fixed asset depreciation and impairments (€57.3 million),
provisions for risks and charges (€1.7 million), provisions related
to employee benefits (- €1.1 million), the other expenses and
income without any impact on cash position (€1.0 million), and the
impacts related to disposal of assets (- €73.0 million).
The accounts were audited by the statutory
auditors and examined by the board of directors on March 16, 2021.
The statutory auditor’s report is in the process of being issued.
The statements and detailed presentation of annual results are
available on the corporate site at corporate.virbac.com.
Thanks to the constant mobilization of
the Virbac teams for animal health and the resilience of the
sector, we observed annual revenue of €934.2 million
compared to €938.3 million over the same period in 2019,
corresponding to an overall change of +1.8% excluding Sentinel
(-0.4% at real exchange rates and scope). Excluding the negative
effect of exchange rates and Sentinel, revenue increased by +5.7%
(+3.2% at constant rates and at real scope). Contributions at
constant exchange rates are positive for activities as a whole,
except for the United States which has been greatly impacted by the
Covid-19 crisis and has fallen slightly, excluding Sentinel, and
the impact of shortages of dog and cat vaccines, which resulted in
a significant loss over the year. It should be noted that the pet
business is generally growing by +0.4% at constant rates and +5.5%
excluding Sentinel (-1.6% at real exchange rates and scope), mainly
driven by the double-digit growth of pet food, specialties,
dermatology and hygiene ranges that compensate for the decrease in
vaccine ranges (due to shortages), antibiotics and dental ranges.
The food producing animals segment also shows strong growth of
+6.6% at constant rates (+0.4% at real exchange rates and scope),
mainly driven by the ruminant sector; while aquaculture, which has
suffered greatly from the consequences of Covid-19, is down
compared to the same period in 2019.
The current operating income before
depreciation of assets arising from acquisitions amounts
to €128.9 million, up compared to 2019 (€122.4 million). It should
be noted that, excluding the negative effect of exchange rates,
which had an impact of €10.5 million, growth stood at +13.8%
compared to 2019. This improvement in performance of 0.8 points
(1.4 points at constant exchange rates) as a ratio of revenue, is
explained on the one hand, by the excellent performance of our
sales, which led to a significant improvement in our gross margin
with a favorable mix of our products, and on the other hand, by a
strong reduction and good control of expenses related to the
Covid-19 situation, for which we estimate the impact around €15
million (virtualization of seminars, conferences, events, halting
travel in many countries, reduction of marketing expenses, and
limitation in our R&D expenses, particularly due to delays and
shifts in certain programs). It should be noted that in 2020, the
impact on the ratio of current operating income, before
depreciation of assets arising from acquisitions over revenue from
the divestment of Sentinel is limited to approximately 1 point,
given the good level of sales of Sentinel over the first half of
the year.
Current net income (net consolidated
income adjusted for non-recurring expenses and income and for
non-current taxes) totalled €78.3 million, up 23.5% over
2019. This improvement in current net income is explained by the
reasons given above, in particular the growth of the business and
gross margins, a very strong control of costs, and the net decrease
in financial expenses which amount to €10.4 million, compared to
€20.3 million in the previous financial year, due to the repayment
of loans and lines of credit following the collection of the
proceeds of the divestment of the rights of the Sentinel range.
Net income - Group share
amounted to €137.5 million in 2020, compared to €51.5 million in
the previous year (+166.7%), i.e. an improvement of €86 million at
real rates mainly explained by the divestment of Sentinel
(representing net proceeds of €66.5 million), as well as good
operational performance in 2020.
From a financial
standpoint, our net debt is at - €63.4 million, down
by €431.8 million compared to December 31, 2019 at real rates, and
€71.9 million at constant rates and scope. This positive net cash
position benefited from the impact of the divestment of Sentinel
(€363.3 million), as well as the absence of dividend payment by
Virbac SA in respect to the 2019 results and a strict control of
the working capital requirement and investments that contributed to
the debt reduction. Thus, the Group is in compliance with the
financial ratio (Net debt/EBITDA), which is -0.29 versus 3.75,
which was the maximum limit set at the end of December 2020 as part
of the financial covenant.
OutlookThe animal health sector
demonstrated very good resilience in 2020, which contributed to
limiting the impact on our business. Although the fundamentals of
our industry remain robust, the health crisis could have an impact
on our activities in 2021, depending on its duration, geographical
expansion and the resulting economic and social consequences.
However, and as explained previously, we have implemented a set of
measures and daily management in order to prevent and limit
potential impacts (crisis management system, supply chain and stock
management policies, readjustment of the targets of our safety
stocks, business continuity plans of industrial sites, sourcing
diversification policies and strengthening relationships with our
strategic suppliers, etc.). In addition, our global presence in
terms of geographic areas and species, our highly diversified
product portfolio, our different distribution channels, the very
strong responsiveness and adaptability of our teams through our
organizational model, as well as the robustness of our financial
situation are assets that will enable us to face the financial
consequences of this pandemic. However, we remain vigilant to
developments in the situation in the coming months, and are
mobilized to address them.
It should be noted that the early July 2020
divestment of the Sentinel brands (for which we will continue to
manufacture the Sentinel Spectrum formulation at our US site in
Bridgeton), is expected to result in a revenue decrease of
approximately US$55 million and a decrease in the Ebita2 to revenue
ratio of approximately 3 points on a pro forma full-year basis at
the time of the divestment.
As a continuation of the execution of our
strategic plan, in 2021, we anticipate a growth in revenue at
constant rates and scope of between 3% and 5% (i.e. between 0% and
2% at constant rates and real scope), as well as a ratio of
“current operating income, before depreciation of assets arising
from acquisitions” over “revenue” which should be between 10% and
12% at constant exchange rates. Lastly, as indicated in September,
2020, we are starting a transition phase over the 2021-2022 period.
Our investment level could be around €60 million per year over
these two financial years. In addition, at the next general meeting
of shareholders, a net dividend of €0.75 per share will be proposed
for the 2020 financial year.
Lastly, as a result of the commitments made by
Elanco to the European Commission in connection with the
acquisition of Bayer's animal health division, we obtained in
February 2021 the rights to Elanco's early stage development
programs for parasiticide products. In addition, we have also
obtained a contribution to development costs, as well as the
worldwide rights to two products for pets (Itrafungol and
Clomicalm) whose revenue is around €11 million in a full year.
These asset acquisitions should have a limited impact on the Ebita2
and do not call into question our outlook for 2021.
2Ebita: Current operating income before
depreciation of assets arising from acquisitions
ANALYSTS' PRESENTATION -
VIRBAC
We will hold an
analysts meeting on Thursday, March 18, 2021 at 2:30 p.m. (Paris
time – CET) by videoconferencing.
Access the webcast
(video + slides) via the link below.
Information for
participants:
Webcast access
link:https://bit.ly/3uynLCS
This access link is
available on the corporate.virbac.com site, under the heading
''financial press releases''. This link allows participants to
access the live and/or archived version of the webcast.
You will be able to
ask questions via chat (text) directly during the webcast or after
watching the replay at the following email address:
finances@virbac.com.
Focusing on animal health, from the
beginningAt Virbac, we provide innovative solutions to
veterinarians, farmers and animal owners in more than 100 countries
around the world. Covering more than 50 species, our range of
products and services enables to diagnose, prevent and treat the
majority of pathologies. Every day, we are committed to improving
animals’ quality of life and to shaping together the future of
animal health.
Virbac: NYSE Euronext - compartment A – ISIN
code: FR0000031577/SYMBOL: VIRPFinancial Affairs Department: tel.
04 92 08 71 32 - email: finances@virbac.com - Website:
corporate.virbac.com
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