Virbac: Significant increase in operating profit from ordinary
activities for the first half of 2021 due to the sound market
performance and dynamism of our business
CONSOLIDATED FIGURES AS AT JUNE 30thin millions of
€ |
|
2021 |
2020 |
Change 2021/2020 |
|
Revenue |
529.4 |
478.3 |
+10.7% |
|
Change at constant exchange rates |
|
|
+14.0% |
|
Change at constant exchange rates and scope 1 |
|
|
+21.3% |
|
Current operating profit before depreciation of assets
arising from acquisitions 2 |
105.3 |
85.5 |
+23.2% |
|
as a % of revenueas a % of revenue at constant rates |
19.9%19.7% |
17.9% |
|
|
Depreciation of intangible assets from acquisitions |
2.2 |
6.3 |
|
|
Operating profit from ordinary activities |
103.1 |
79.1 |
+30.3% |
|
Non-recurring expenses and income |
0.0 |
5.4 |
|
|
Operating profit |
103.1 |
73.8 |
+39.8% |
|
Current net profit 3 |
74.4 |
53.6 |
+38.9% |
|
Consolidated net profit |
74.4 |
49.7 |
+49.7% |
|
Including net profit - Group share |
72.7 |
47.2 |
|
|
Shareholders’ equity - Group Share |
699.7 |
548.0 |
+27.7% |
|
Net debt 4 |
-54.5 |
348.2 |
-115.6% |
|
Operating cash flow before interest and taxes
5 |
123.7 |
104.2 |
+18.7% |
|
1 Change at constant exchange rates and scope
corresponds to organic growth of sales, excluding exchange rate
variations, calculated by using 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 previous financial year’s), and excluding the change in scope,
calculated by using the indicator for the financial year in
question on the basis of the scope of consolidation for the
previous year, and excluding sales of Sentinel, a product that was
sold on July 1, 2020, over the two financial years in question.2
Current operating profit, before depreciation of assets arising
from acquisitions, reflects current profit adjusted for the impact
of allowances for depreciation of intangible assets resulting from
acquisition transactions.3 Net profit from ordinary activities
corresponds to consolidated net profit adjusted for non-recurring
expenses and income (€0 million), and for non-current tax (€0
million).4 Net debt corresponds to current (€75.1 million) and
non-current (€16.2 million) financial liabilities as well as a
lease obligation related to the application of IFRS 16 (€38.5
million), less the cash position and cash equivalents (€184.3
million) as published in the statement of financial position.5
Operating cash flow corresponds to operating profit (€103.1
million) adjusted for items having no impact on the cash position
and impacts related to disposals. The following items are adjusted:
fixed asset depreciation and impairments (€22.3 million),
provisions for risks and charges (€-1.4 million), provisions
related to employee benefits (- €0.5 million), and the other
expenses and income without any impact on the cash position (€0.4
million), and the impacts related to disposals (- €0.2
million).
The accounts were audited by the statutory
auditors and examined by the board of directors on September 14,
2021. The statutory auditor’s report is in the process of being
issued. The statements and detailed presentation of half-year
results are available on the corporate site at
corporate.virbac.com.
Thanks to the
Virbac teams’ constant dedication to
animal health and the resilience of the sector, we posted a revenue
in the first half year of €529.4
million, an increase of +17.9% compared
to 2020 excluding Sentinel (10.7% at actual scope). Excluding the
unfavorable impact of exchange rates, revenues rose by 21.3%
excluding Sentinel (+14.0% at actual scope). All areas had
double-digit organic growth at the end of June, reflecting both the
sector’s momentum and the successful execution of our strategic
plan. In Europe, revenue grew by 18.4% at real rates (+18.7% at
constant exchange rates). In the Asia Pacific region, growth at
real rates was +23.5% (+26% at constant exchange rates). In the
United States, business in the first half of the year excluding
Sentinel grew by 24.3% (+36.4% at constant exchange rates). In
Latin America, apart from Chile, business grew by 19.8% at real
rates (+31.5% at constant exchange rates). Finally, in Chile,
business in the first half of the year is down by -19.1% at real
rates (-15.1% at constant rates). In terms of species, companion
animal business grew by 24.4% overall at constant exchange rates
excluding Sentinel (+8.7% at constant exchange rates and actual
scope, and +5.8% at actual exchange rates and scope), mainly driven
by the remarkable double-digit growth of the specialty, internal
parasiticides, petfood, dermatology and dental ranges, and by the
rebound of the dog and cat vaccines range compared to the first
half of 2020, which was impacted by our production disruption
issues. It should be noted that sales of Itrafungol and Clomicalm,
products acquired in March 2021, represented approximately €4
million in sales over the period from March to June. The food
producing animals segment also showed strong growth, at +17.7% at
constant exchange rates (+14.2% at real exchange rates), mainly
driven by the ruminants sector and the swine-poultry products
sector, while the aquaculture sector was, as expected,
significantly down compared to the same period in 2020.
The current operating profit before
depreciation of assets arising from acquisitions amounts
to €105.3 million, significant growth compared to the first half of
2020 (€85.5 million). This improvement in performance is mainly due
to the exceptional growth in our revenue, driven by a very strong
performance in all areas and good market dynamics. It is partially
offset by a rebound in our commercial and R&D expenses because
the first half of 2020 was marked by a significant reduction in
expenses related to the Covid-19 situation (delay and postponement
of R&D projects, postponement of seminars, conferences, events,
halt of travel in many countries, reduction in marketing expenses,
etc.). It should also be noted that this half-yearly result
benefits from the recognition of exceptional items in the amount of
€6.6 million (€4 million in compensation for the continuation of
R&D projects acquired in the 1st quarter of 2021 from Elanco,
€1 million in additional margin on the Clomicalm and Itrafungol
products having benefited from a zero cost of sales in connection
with the acquisition, and €1.6 million in the form of the reversal
of a provision for disputes, which has now become unnecessary). All
of these elements represent a positive impact of 1.2 percentage
points on the ratio of “current operating profit, before
depreciation of assets arising from acquisitions” over “revenue”
for the period.
Net profit from ordinary
activities (net consolidated profit adjusted for
non-recurring expenses and income and for non-current
taxes) was €74.4 million, up 38.9% compared to the first
half of 2020. This very strong improvement in our net profit is
explained by the reasons given above, in particular the very strong
growth of our business and the effective control of our costs,
despite the rebound observed in the first half of 2021. It should
be noted that our financial result corresponds to a charge of €1.6
million, which is significantly down from the first half of 2020
(charge of €8.7 million). This is explained by the decrease in the
cost of net debt of €3.0 million resulting from the repayment of
our bank financing as a result of the disposal of the Sentinel
range, and by the improvement of the foreign exchange profit due to
the relative stability of the Chilean peso against the euro and the
US dollar over the 1st half of 2021 compared to the same period in
2020.
Net Profit - Group Share
reached €72.7 million, a strong increase compared to the first half
of the previous year (€47.2 million), buoyed by operational
performance and the factors mentioned above.
On the financial side, our net
debt amounts to - €54.5 million at the end of June 2021, compared
to - €63.4 million at the end of December 2020. This relative
stability of the net debt over the first six months of the year is
mainly due to the cyclical nature of our cash generation model;
with cash generation occurring more in the second half of the year.
This situation was exacerbated over the period by higher capital
expenditure, higher working capital requirements in the first half
of 2021 due to the strong growth in our revenue, and finally the
payment of dividends in respect of the results for 2020.
OutlookThe excellent performance
of the animal health market and our performance over the past
period lead us to revise our annual outlook upwards.
We currently anticipate like-for-like revenue
growth (excluding the impact of the sale of Sentinel) of 14% to 17%
(or 11% to 14% at constant exchange rates and actual scope), and a
ratio of “current operating profit before depreciation of assets
arising from acquisitions'' over “revenue” of around 16% at
constant exchange rates. For the record, we estimate that the
impact of products acquired from Elanco (Clomicalm and Itrafungol),
and from iVet (petfood US) could represent approximately 1.5
percentage points of growth in revenue. We also anticipate an
unfavorable impact of exchange rates on revenue of approximately
€13 million associated with currency impairment. Debt relief should
be around €60 million for the year at constant exchange rates.
So far, the health crisis has not had an overly
negative impact on the animal health sector, but, as explained
above, we have implemented a set of measures and day-to-day
monitoring to prevent and limit its potential impact. In addition,
our overall presence in terms of geographical areas and species,
our highly diversified product portfolio, our varied distribution
channels, the high responsiveness and adaptability of our teams,
and the robustness of our financial situation are key assets to
face the consequences of this pandemic. However, we are remaining
vigilant to new developments in the coming months and are well
placed to address them.
ANALYSTS' PRESENTATION -
VIRBAC
We will hold an
analyst meeting on Thursday, September 16, 2021 at 2:30 p.m. (Paris
time - CEST) in the Auditorium l’Edouard VII Business Center, 23
square Edouard VII - 75 009 Paris (France).
Participants may
arrive 15 minutes before the start of the meeting. Access to the
meeting will be subject to presentation of the health pass.
You may also attend
the meeting using the webcast (audio+slides) available via the link
below.
Information for
participants:
Webcast access link:
https://bit.ly/3x3Z7Ki
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 can 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 / MNEMO : VIRPFinancial Affairs Department: tel.
04 92 08 71 32 - email: finances@virbac.com - Website:
corporate.virbac.com
- Virbac_ 2021 Half year results
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