Virbac SA · EURONEXT:VIRP
Virbac SA — FY2012 Earnings Presentation
56 slides from Virbac SA's earnings presentation, March 2013
Slide 1: 2012 Financials and Strategic Update
2012 Financials and Strategic Update March 2013
Slide 2: Agenda
Agenda • 2012 results • Virbac strategic perspectives • Appendix
Slide 3: Key points on 2012 financial performance (1/2)
Key points on 2012 financial performance (1/2) • High growth : +11.6% globally +8.2% organically Companion animals : +10.4% Canileish in Europe Iverhart and other ranges in the US Food producing animals : +5.1% Emerging markets Positive impact of exchange rates • Continued improvement of profitabili
Slide 4: Key points on 2012 financial performance (2/2)
Key points on 2012 financial performance (2/2) • Divestment of business in specialized channels : France in April, Benelux in December • Significant strategic acquisitions : New-Zealand (dairy cattle) Chile (aquaculture) • Very strong financial structure : Equity 346 M€ Net debt 134 M€
Slide 5: Consolidated sales
Consolidated sales 31.12.2012 Million euros 2012 2011 Var. % Consolidated sales 695.2 623.1 +11.6% - exchange rate impact vs. 2011 (16.9) - Consolidated sales at constant rates 678.3 623.1 +8.9% - change of perimeter (11.7) (6.8) Consolidated sales, pro-forma at constant exchange rates 666.6 616.2 +
Slide 6: 2012 quarterly growth of sales
2012 quarterly growth of sales* * Pro forma sales, excluding impact of exchange rates +9.8% 10% +8.6% +8.3% Year :+8.2% +6.1% 5% 176.4 M€ 173.1 M€ 179.0 M€ 166.8 M€ 0% Q1 Q2 Q3 Q4
Slide 7: Breakdown of sales growth in 2012
Breakdown of sales growth in 2012 M€ +16.9 700 +2.7 695.2 Organic growth % +11.6% 690 +8.2% +8.4 680 +28.8 +1.3% +4.7% 670 660 650 +21. 6+3.5% 640 630 -3.6 623.1 -0.6% 620 610 600 2011 2012 E2011 Discontinued Base New Business Acquisitions Exchange Business Products Rates (OTC divestment)
Slide 8: Sales growth by region
Sales growth by region 2012 - at constant scope - North America : Europe : 312.1 M€ 110.6 M€ +3.8% +25.6% Asia : 90.9 M€ Africa/Middle East : +15.5% 30.5 M€ Latin America : -4.4% Pacific : 64.5 M€ 86.6 M€ +18.0% -1.9%
Slide 9: Growth by segment 2012 Companion Animals
Growth by segment 2012 Companion Animals At constant exchange rates Net Growth at constant rates Organic growth Businesses / Ranges Revenue - 5% 0% to +5% to +10% to - 5% 0% to +5% to +10% to > 15% > 15% 2012 (M€) to 0% +5% +10% +15% to 0% +5% +10% +15% Companion Animals 423,6 9,3% 10,4% Parasiticid
Slide 10: Growth by segment 2012 Food Producing Animals
Growth by segment 2012 Food Producing Animals At constant exchange rates Net Growth at constant rates Organic growth Businesses / Ranges Revenue - 5% 0% to +5% to +10% to - 5% 0% to +5% to +10% to > 15% > 15% 2012 (M€) to 0% +5% +10% +15% to 0% +5% +10% +15% Food Producing Animals 259,5 8,6% 5,1% Bo
Slide 11: Top 10 brands represent 1/3 of sales
Top 10 brands represent 1/3 of sales Top 10 product/ranges* Top 10 product/ranges* +% 31% 32% Top 5 Top 5 21% 22% Other Next 5 Next 5 Other 10% 10% 69% 68% 75% 2011 2012 * Iverhart, Canigen, Cydectin, Effipro, Vet Complex, Equimax, Leucogen, Canileish, Ostovet, Epi-Otic
Slide 12: 2012 Profit & Loss statement
2012 Profit & Loss statement 2012 % 2011 % Variation Million euros Net sales 695.2 100 623.1 100 11.6% Margin on material costs 478.3 428.0 11.7% Increase (decrease) of inventory reserves -1.4 0.3 Gross margin on material cost 479.7 69.0 427.7 68.6 12.2% External expenses 158.7 22.8 145.4 23.3 9.2%
Slide 13: Comparison of half year results
Comparison of half year results H1 H2 Full Year 21.9% EBIT before 21.1% 20.6% R&D* 19.3% 19.7% 18.2% 5.3% 5.9% 6.5% R&D* 5.9% 6.5% 7.0% EBIT 15.8% 16.0% 11.7% 12.3% 13.8% 14.1% 2011 2012 2011 2012 2011 2012 * net of Research Tax Credit
Slide 14: Breakdown of EBIT growth in 2012
Breakdown of EBIT growth in 2012 M€ +34.6 120 110 -12.1 98.1 100 +1.9 -8.1 90 -3.9 85.7 80 70 60 50 2011 2012 Sales & Other Acquisitions Net Margin R&D Marketing expenses (net of acquisition costs)
Slide 15: Acquisition of Stockguard (New Zealand)
Acquisition of Stockguard (New Zealand) Reminder : Major player on the New-Zealand market in intramamaries and sterile injectables used in dairy cattle and sheep 9.3 M NZD (5.8 M€ at current rate) sales in fiscal year 2011-2012 Acquisition of 100% on July 1st, 2012 • Brings significant commercial sy
Slide 16: Acquisition of Centrovet (Chile) 1/2
Acquisition of Centrovet (Chile) 1/2 N°1 on the Chilean Market 82 M USD sales in 2012 Other Other 13% Vaccines 26% Pig & Poultry 44% Aquaculture 19% Antibacterials 68% 30% Acquisition of 51% in November 2012 Option to buy 49% by end of 2017.
Slide 17: Acquisition of Centrovet (Chile) 2/2
Acquisition of Centrovet (Chile) 2/2 Acquisition price for the first 51% (in M USD) • Upfront in 2012 61.4 • Adjustment based on 2012-2013 performance (estimate) 31.3 • Future royalties on new product (estimate) 3.9 TOTAL booked in 2012 96.6 M USD 45% Contribution to 2012 results (in M€) for 1 month
Slide 18: Evolution of cash-flows
Evolution of cash-flows M€ 123.5 +15.2% 120 107.2 100 92.5 +15.3% 80.3 80 60 40 Operating Cash-flow 20 Net Cash-flow 0 2011 2012
Slide 19: 2012 Cash-flow statement
2012 Cash-flow statement (million euros) Sources of funds Uses of funds Cash-flow 92.5 Tangible assets 29.0 Sale of assets 8.3 Intangible assets 6.9 Dividends 15.8 Purchase of treasury shares 1.5 Decrease in working capital (2.1) Acquisitions 91.8 Other 2.3 Total Sources of funds 100.8 Total Uses of
Slide 20: Evolution of cash-flows
Evolution of cash-flows M€ 100 92.5 90 80.3 80 70 +2.1 58.7 60 50 -35.9 40 30 -43.3 20 15.8 10 -21.2 Net cash- Working Free Working Free CAPEX Net cash- CAPEX flow Capital cash-flow Capital cash-flow flow 2011 2012
Slide 21: Evolution of net debt
Evolution of net debt 111.8 133.9 M€ 100 Acquisitions 91.8 35.9 69.7 50 Free cash-flow (58.7) Acquisitions Sale of assets (8.3) Dividends 15.8 30.7 Other 3.6 Debt from Acquired entities Free cash-flow (15.8) 20.0 Dividends 13.7 3.1 Share buy-back 30.3 -47.6 Other 2.5 Net debt Net debt Net debt Dec 2
Slide 22: Balance Sheet analysis
Balance Sheet analysis (million euros) 578.1 578.1 78.6 Working Capital 402.9 402.9 346.2 Shareholder ’s equity 76.3 Fixed assets 326.6 499.5 311.4 Minority interests 98.0 + LT reserves 21.9 Net financial 133.9 debt 69.7 2011 2012 2011 2012 INVESTED CAPITAL CAPITAL EMPLOYED
Slide 23: Balance Sheet – financial ratios
Balance Sheet – financial ratios 2010 2011 2012 38.7% 22.4% Net debt 1.0% Shareholder's equity 1.45 0.87 Net debt Cash-flow 0.05 1.09 0.65 Net debt Operating cash-flow 0.03
Slide 24: Shareholding
Shareholding Number of shares : 8 458 000 0,4% Treasury shares Employees savings plan Employees savings plan 0,9% 1,2% Others 33,3% Others 49,0% 49,7% Dick Family 65,5% Dick Family In shares In voting rights
Slide 25: Agenda
Agenda • 2012 results • Virbac strategic perspectives • Appendix
Slide 26: Turnover growth, Virbac Group
Turnover growth, Virbac Group (million €) 695 623 573 + 50% 467 2009 2010 2011 2012
Slide 27: Operating profit growth, Virbac Group
Operating profit growth, Virbac Group (EBIT, million € and % of sales) 14,1% 13,8% 13,5% 98,1 85,7 12,5% 77,6 + 70% 58,3 2009 2010 2011 2012
Slide 28: Growth of market capitalization
Growth of market capitalization (million €, end of december) 1264 1132 1045 X2 623 2009 2010 2011 2012
Slide 29: Strategic initiatives
Strategic initiatives Innovation Increase of R&D spending (7.5%* of turnover in 2012, +50% in € between 2009 and 2012) Global alignment by specie Significant new products launched : Effipro/Effitix, Canileish, Suprelorin, Easotic Investment in three key markets US : +50% from 2009 to 2012 : # 1 Virb
Slide 30: Strategic initiatives
Strategic initiatives Acquisitions and joint-ventures in emerging markets Synthesis in Colombia Centrovet in Chile Santa Elena in Uruguay SBC in Taïwan Strategic decisions to strengthen the long term competitiveness Aquaculture with Centrovet (and SBC in Taïwan) Vaccines for food producing animals (
Slide 31: Sales breakdown by region and business
Sales breakdown by region and business YTD December 2012 North Other developed Emerging Europe America countries* countries 45.8% 15.8% 15.3% 23.1% Companion 32.1% 15.1% 7.4% 6.3% 61% animals Food producing 37% 13.4% 16.6% animals 7.3% Others 2% * Australia, New Zealand, Japan, Korea
Slide 32: Growth levers
Growth levers • Centrovet / Aquaculture • US / Companion animals • Europe • Rest of world
Slide 33: The aquaculture market
The aquaculture market M ton of proteins 140 112 Mt 130 110 Mt 120 102 Mt 110 95Mt 90Mt 97Mt 100 61 90 wild 80 65Mt 66Mt 70 61 wild 60 50 40 30 51 farm 20 36 farm 10 2008 2011 2008 2011 2008 2011 2008 2011 Cattle Swine Poultry Fish / Shrimp
Slide 34: Forecast of global meat consumption by species (mT)
Forecast of global meat consumption by species (mT) (CARG : 2011-2021E) 7% +5,9% 6% 5% 4% 3% CARG 2011 – 2021E GlobaL +2,5% Meat consumption : +2,4% +2% 2% +1,7% +1,5% 1% +0,2% Farmed Fish Sheep & Goat Poultry Pig Cattle Wild Fish Source : Vetnosis
Slide 35: Benefit of fish meat
Benefit of fish meat Feed conversation Edible yield rate 8 38% 3 50% 2 43% 1,2 68%
Slide 36: Benefit of fish meat
Benefit of fish meat Feed conversation Edible yield rate 8 38% 3 50% 2 43% 1,2 68%
Slide 37: The animal health market in aquaculture
The animal health market in aquaculture M tons Cold water Warm water M€ of proteins 40 450 M€ 500 36 Mt 36 450 32 400 28 350 24 300 20 250 16 200 M€ 150 M€ 200 vaccines 12 150 6 Mt 8 100 4 50 10 M€ vaccines Farm fish Animal health Farm fish Animal health proteins market proteins market
Slide 38: Growth of Centrovet turnover
Growth of Centrovet turnover M€ Oral salmon vaccine
Slide 39: Vaccines in aquaculture
Vaccines in aquaculture 0,4 Response 0,35 Vaccination 0,3 Mortalidad diaria 0,25 Mortalidad 0,2 Primovacunación 0,15 0,1 Curva IgM Suceptibility 0,05 window Primovacunación 0 1062 1139 1216 1293 1370 1447 1524 1601 1678 1755 1832 1909 1986 2063 2140 2217 2294 2371 2448 2525 2602 2679 2756 2833 2910
Slide 40: Vaccines in aquaculture
Vaccines in aquaculture 0,4 Booster I Booster II 0,35 0,3 Mortalidad diaria 0,25 0,2 Mortalidad Dos boosters 0,15 0,1 Suceptibility Curva IgM 0,05 window Dos boosters 0 1062 1128 1194 1260 1326 1392 1458 1524 1590 1656 1722 1788 1854 1920 1986 2052 2118 2184 2250 2316 2382 2448 2514 2580 2646 2712 2
Slide 41: Growth of Centrovet turnover
Growth of Centrovet turnover M€ EBIT range : 20% of sales
Slide 42: Growth levers
Growth levers • Centrovet / Aquaculture • US / Companion animals • Europe • Rest of world
Slide 43: The US Companion animal: market bigger than Europe, growing 50% faster
The US Companion animal : market bigger than Europe, growing 50% faster (US $ billion) 5,5 4,7 37,9% + 3,1% p.a Europe 39,2% 62,1% +4,5% p.a. US 60,8% 2008 2012 (MAT Q3)
Slide 44: Virbac market shares in companion animals
Virbac market shares in companion animals % 10 5 3,8% 3,1% 3,2% 3,3% 2,9% 2008 2009 2010 2011 2012* * MAT Q3 Europe US
Slide 45: Virbac market shares in companion animals
Virbac market shares in companion animals % 10,1% 10 9,5% 9,7% 8,9% 8,5% Potential for 5 growth 3,8% 3,1% 3,2% 3,3% 2,9% 2008 2009 2010 2011 2012* * MAT Q3 Europe US
Slide 46: US category strategy
US category strategy Parasiticides / heartworm • 40% growth in 2012 • Enter new channels (pharmacies) through a strategic partnership (specific brand) Parasiticides / fleas and tick • Failure of Effitix launch because of exclusivity contracts signed by large vet distributors • Participation to the m
Slide 47: Growth levers
Growth levers • Centrovet / Aquaculture • US / Companion animals • Europe • Rest of world
Slide 48: Europe
Europe 2013 : a year of consolidation • Slow market growth • Expected reduction of CaniLeish sales linked to the injection protocol (year 2 of Spain, Italy, Greece) • One new product launch (cattle parasiticide) 2014 : year of rebound • Market growth ? • Five new product launches in both companion a
Slide 49: Main projects in development for Europe
Main projects in development for Europe March 2013 2013 2014 Launch date Food producing animals Companion animals
Slide 50: Growth levers
Growth levers • Centrovet / Aquaculture • US / Companion animals • Europe • Rest of world
Slide 51: Rest of world
Rest of world Double digit growth expected in all Asian and Latin American markets (market growth + sales force expansion essentially) in 2013 Fatest growth expected in Brazil (> 20%) , lowest in Australia (> 5%) Focus on some global/multi local products : Effipro, Easotic, Cortavance, Multimin Five
Slide 52: 2013 Financial perspective
2013 Financial perspective Sales • Organic growth in the 5% to 7% range • Total group turnover should come close so 800m€, at current exchange rates (including Stockguard and Centrovet full year) Profit • Ambition to grow the group EBIT ratio by 0,5 point • Net profit will grow significantly less th
Slide 53: Agenda
Agenda • 2012 results • Virbac strategic perspectives • Appendix
Slide 54: Appendix
Appendix • April 16* Q1 sales • June 17 Annual shareholders’ Meeting • June 26 Payment of 2012 dividend • July 18* Q2 – H1 sales • August 30* Half-year financial results • October 17* Q3 sales • January 16, 2014* Q4 – Full year sales * After market close
Slide 55: Thank you
Thank you for your attention
Slide 56: 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