Virbac Sa · EURONEXT:VIRP
Virbac Sa — FY2023 Earnings Presentation
43 slides from Virbac Sa's earnings presentation, Mar 20, 2024
Slide 1: 2023 results & perspectives
2023 results & perspectives March 20, 2024 Shaping the future of animal health
Slide 2: Disclaimer
DISCLAIMER This presentation contains forward-looking statements with respect to Virbac’s profitability and financial condition, business operations, projects and outlook. Although Virbac’s management believes that such forward-looking statements are based on reasonable assumptions, as made as of th
Slide 3: 2023 Results & Perspectives agenda
2023 Financial Highlights Habib Ramdani chief financial officer Strategy Execution & Perspectives 2024 Financial Calendar Q&A Session 2023 RESULTS & PERSPECTIVES
Slide 4: 2023 Financials – Summary (1/4)
2023 FINANCIALS – SUMMARY (1/4) FY23 Net Sales FY23 Ebit adjusted¹ €1,247m €188m Strong organic growth of +4.9% at constant exchange Increase of Ebit adjusted¹ by €9.3m (+5%) at constant rates and scope, amidst a normalizing market and despite exchange rates leading to 15.3% Ebit adjusted¹ ratio to
Slide 5: 2023 Financials – Summary (2/4): Forex impact
2023 FINANCIALS – SUMMARY (2/4) Forex impact in €m Unfavorable on Sales Unfavorable on Ebita¹ - €29.1m - €7.7m EUROPE ASIA-PACIFIC EUROPE ASIA-PACIFIC - €3.4m - €28.3m - €2.0m - €9.6m NORTH AMERICA LATIN AMERICA NORTH AMERICA LATIN AMERICA - €4.3m + €6.9m - €0.4m + €4.3m (1) Ebita: Current operating
Slide 6: 2023 Financials – Summary (3/4)
2023 FINANCIALS – SUMMARY (3/4) FY23 Net Result Focus €121m Cash Operating profit increasing by +2.5% at actual rates to Free cash flow of €58.6m, higher by +28%. reach €184.0m, representing 14.8% of revenue, in line with last year. Positive net cash situation of €52.4m, decrease by - €27m compared
Slide 7: 2023 Financials – Summary (4/4): Guidance vs Actual
2023 FINANCIALS – SUMMARY (4/4) Guidance 2023 Actual 2023 Net Sales growth at constant rates & scope ~+4.0% +4.9% ✔ Ebita¹ ratio to revenue at constant rates ~15.0% 15.3% ✔ Net debt evolution² at constant rates & scope ~+ €50m + €44m ✔ (1) Ebita: Current operating profit before depreciation of asset
Slide 8: Consolidated Sales
CONSOLIDATED SALES €m (1) Includes non-material impact of +0.3pts resulting from the integration of GS Partners (acquisition of our distributor in the Czech Republic closed in May) and Globion (acquisition in India closed in November). (2) At constant exchange rates. 8
Slide 9: Sales Evolution by Region
SALES EVOLUTION BY REGION €m (1) At constant exchange rates. (2) RoW: Rest of the world. 9
Slide 10: Sales Growth by Region
SALES GROWTH BY REGION €m - At constant exchange rates Europe FY23 €509.6m Revenue +5.7% €1,276m +4.9% North America Asia €167.4m €225.7m +3.5% +3.2% Pacific Africa €123.8m Middle +5.5% East €44.1m +8.7% Latin America €205.3m +4.9% 10
Slide 11: Sales by Segment
SALES BY SEGMENT €m - At actual rates (1) At constant exchange rates. (2) Contract Manufacturing. 11
Slide 12: Sales Growth by Segment - Companion Animals
SALES GROWTH BY SEGMENT - COMPANION ANIMALS €m - At constant exchange rates COMPANION ANIMALS +3.5% GROWTH +2.1% At CER¹ At actual rates (1) At constant exchange rates. 12
Slide 13: Sales Growth by Segment - Farm Animals
SALES GROWTH BY SEGMENT - FARM ANIMALS €m - At constant exchange rates FARM ANIMALS +6.7% GROWTH +3.0% At CER¹ At actual rates (1) At constant exchange rates. 13
Slide 14: Sales Breakdown by Region & Segment
SALES BREAKDOWN BY REGION & SEGMENT €m - At constant exchange rates Legend: 🡻/🡻%: 2023 growth at constant exchange rates. (1) Australia, New Zealand, Japan, Korea. (2) Contract Manufacturing. 14
Slide 15: Condensed Profit & Loss Statement
CONDENSED PROFIT & LOSS STATEMENT 2022 €m - At actual rates 2023 % % restated¹ Net sales 1 246.9 100 1 216.2 100 Gross Margin on purchasing costs 813.0 65.2 795.0 65.4 Net expenses 580.2 46.5 565.8 46.5 Amortization, depreciations and provisions 44.7 3.6 42.6 3.5 Current operating profit before depr
Slide 16: Ebit Adjusted Evolution
EBIT ADJUSTED¹ EVOLUTION €m EBIT adjusted1 before R&D ratio to revenue 2022 2023@CER 22.8% 23.2% (1) Ebit adjusted: Current operating profit before depreciation of assets arising from acquisitions. (2) At constant exchange rates. 16
Slide 17: Cash Flow Evolution
235.1 Hl operating cash flow Wl Net cash flow 2022 2023
Slide 18: Free Cash Flow Evolution
FREE CASH FLOW EVOLUTION €m 2022.12 2023.12 X% Free cash flow conversion rate² (1) Working Capital requirements. (2) Free cash flow / Net Result Group’s share 18
Slide 19: Net Debt Evolution
NET DEBT EVOLUTION €m Closing net debt at constant rate & scope & excluding share buyback program - €123.4m (- €44m vs Dec 2022) (1) Working Capital requirements. (2) Includes share buyback program of €19.4m. (3) Includes non-cash IFRS 16 variations of + €8.8m. 19
Slide 20: Condensed Balance Sheet Analysis
CONDENSED BALANCE SHEET ANALYSIS €m 2022 2023 Net debt / Shareholder’s equity, Group share -9.5% -5.8% Net debt / Net cash flow -0.5 -0.3 Net debt / Operating cash flow -0.3 -0.2 20
Slide 21: Shareholding Structure as of December 31, 2023
SHAREHOLDING STRUCTURE AS OF DECEMBER 31,2023 21
Slide 22: Strategy Execution & Perspectives
2023 Financial Highlights Strategy Execution & Perspectives Sébastien Huron chief executive officer 2024 Financial Calendar Q&A Session 2023 RESULTS & PERSPECTIVES
Slide 23: Main 2023 Achievements
MAIN 2023 ACHIEVEMENTS Resilient organic growth in a difficult 2023 year (market, vaccines, cyberattack) + 4.9% at constant rates and scope / + 2.5% at real scope & rates with, despite major & prolonged backorders and supply disruptions (@constant rates) : ○ excellent performance of Mexico & Brazil
Slide 24: Virbac Keeps Over-Performing the Market
VIRBAC KEEPS OVER-PERFORMING THE MARKET with +5.0% vs. +3.9% MAT Q3 2023 (W/O Petfood, despite vaccines issues and cybertattack) Source : internal estimates at constant exchange rates using Q3 2022 FX rates as reference (Petfood not reported in Virbac 24
Slide 25: Virbac Performance Roadmap to 2030
VIRBAC PERFORMANCE ROADMAP TO 2030 ● Culture, purpose ● EHS Employees ● ● CSR/ESG Great Place to Work ● Company compliance (anti-corruption program,...) Innovation Acquisition Competitiveness How t o ● R&D acceleration & ● Programmatic M&A and ● Industrial strategy and win “Busters” programs (more d
Slide 26: Virbac Performance Roadmap to 2030: Execution
VIRBAC PERFORMANCE ROADMAP TO 2030 ● GPTW +2 points at global level (77% GPTW), +10 points in France ● 14 certified Great Place to Work (GPTW) countries. Employees ● ● Code of conduct deployed all over the world (translation & trainings) Creation of a CSR department. ESG roadmap execution, full carb
Slide 27: Roadmap Execution: Growth of Vaccines and Petfood
VIRBAC PERFORMANCE ROADMAP EXECUTION Relative growth of vaccines and petfood / Pet care categories within Virbac portfolio 27
Slide 28: From ~15% Ebit Adjusted in 2024 to ~20% Before 2030
VIRBAC PERFORMANCE ROADMAP EXECUTION FROM ~15% EBIT ADJUSTED1 EXPECTED IN 2024 TO ~20% BEFORE 2030 5 points required to reach our target of 20% EBIT Adjusted before 2030 ~ 2 points to come from R&D spending control • R&D acceleration since 2021 (6.5% of net revenues in 2021 to 8.5% of net revenues i
Slide 29: Net Sales & Ebita 2017-2023
VIRBAC PERFORMANCE ROADMAP EXECUTION Net Sales & EBITA1 2017-2023 23.0% 20.7% 16.9% 13.8% 15.1% 9.3% 862 M€ 934 M€ 1 247 M€ Despite the divestment of Sentinel for 400 M$ (deleveraging the company and turning it cash positive) over this period of time. 29 (1) Ebita: Current operating profit before de
Slide 30: Estimated Sales Potential of Main R&D Projects
ESTIMATED SALES POTENTIAL1 OF MAIN R&D PROJECTS (March, 2024) Launch Companion Animals M€ Food Producing Animals M€ Year • Specialties • Biologicals 2024 • Petfood/Pet Care 44 • Parasiticides 5 • Biologicals • Anti-infectives • Parasiticides • Anti-infectives 2025 • Petfood/Pet Care 44 • Specialties
Slide 31: M&A as a Potential Growth Accelerator: Globion Rationale
M&A AS A POTENTIAL GROWTH ACCELERATOR Globion rationale • INDIA ▪ Market growth trends: most populated country in the world (> 1.4 Billion), young population (median age is 28.7 years), purchasing power, 2nd largest egg producer in the world behind China, with highest CAGR… ▪ Protectionism, national
Slide 32: Competition Landscape in India
COMPETITION LANDSCAPE IN INDIA • India ▪ 1.41 billion people ▪ Globally 2nd in egg and 5th in poultry meat production • Poultry Vaccines Turnover Market Players MINR MEUR share Local co. 4,000 45 35% 4 players Local co. 1,200 13 10% 59% market share Globion 1,100 12 10% Local co. 480 5 4% Indian 6,7
Slide 33: Why Hyderabad?
AMBITION TO CREATE IN INDIA A CENTER OF EXCELLENCE FOR VACCINES Human vaccines ● 4 out of 6 indian manufacturers located in Hyderabad A leading scientific ● 65% of all human vaccines 4 veterinary vaccine location manufactured in India are coming from Hyderabad manufacturers leading in pharmaceutical
Slide 34: Integration Plans, Early Results and Potential
INTEGRATION PLANS, EARLY RESULTS AND POTENTIAL Integration plans Ambition to establish a Virbac Center of Excellence for Vaccines in Hyderabad ▪ PEOPLE : new organizational structure with 8 new headcounts, closing absenteeism by 35% (contract workers), creation of a bioacademy for training of new an
Slide 35: M&A as a Potential Growth Accelerator: Sasaeah Rationale
M&A AS A POTENTIAL GROWTH ACCELERATOR Sasaeah rationale MAIN 2020 COMMERCIAL ACHIEVEMENTS (2/2) • A very rare opportunity to acquire a strong position (top 4 company) in JAPAN (approx. JPY 12.4 billion in annual revenues), in a large (#9 AH market in the world), highly protected and captive market,
Slide 36: Sasaeah's Positions in the Japanese Market
Top local Sasaeah player Int. player Int. player Source: Market study Fuji Keizai. Local player Local player Int. player Sasaeah Local player Int. player Int. player Int. player Local player Local player Local player Local player Top local player Int. player Local player Local player Sasaeah Local p
Slide 37: Overview of Sasaeah – Business Description
OVERVIEW OF SASAEAH – BUSINESS DESCRIPTION SASAEAH Group ≃100 FTEs ≃300 FTEs ≃55 FTEs ≃20 FTEs 37
Slide 38: Overview of Sasaeah – Company Snapshot
OVERVIEW OF SASAEAH – COMPANY SNAPSHOT 2023 Revenue Breakdown 2024 Impact1 By geography By category ~+4-5 points revenue growth FY 2023 FY 2023 No expected material JPY JPY change to EBIT 12.4bn 12.4bn Adjusted as a ratio to revenue ~ 280 M€ of acquisition costs Selected KPIs Net debt on EBITDA rati
Slide 39: 2024 Outlook - Guidance
2024 OUTLOOK - GUIDANCE Guidance 2024 Notes assumption of a normalized market growth Net Sales growth (around 4%) with no major supply disruption at constant rates & scope +4% to +6% and no major event (geopolitical included)… including a strategical overinvestment in Ebita¹ ratio to revenue at cons
Slide 40: 2024 Financial Calendar
2023 Financial Highlights Strategy Execution & Perspectives 2024 Financial Calendar Q&A Session 2023 RESULTS & PERSPECTIVES
Slide 41: 2024 Financial Calendar – Upcoming Events
2024 FINANCIAL CALENDAR – UPCOMING EVENTS April 16, 2024* • Q1 Sales June 21, 2024 • Annual shareholders’ meeting July 16, 2024* • Q2-H1 Sales September 13, 2024* • Half-year financial results - Press release September 16, 2024 • SFAF meeting – 1st half 2024 financial & strategic information October
Slide 42: Q&A Session
2023 Financial Highlights Strategy Execution & Perspectives 2024 Financial Calendar Q&A Session 2023 RESULTS & PERSPECTIVES
Slide 43: Shaping the future of animal health
Shaping the future of animal health