Virbac SA · EURONEXT:VIRP
Virbac SA — FY2009 Earnings Presentation
38 slides from Virbac SA's earnings presentation, March 2010
Slide 1: 2009 Financials and Strategic Update
2009 Financials and Strategic Update March 2010
Slide 2: Agenda
Agenda • 2009 results • The world wide veterinary market • The new competitive landscape • Virbac’s growth levers 2
Slide 3: Key points on 2009 financials (1/2)
Key points on 2009 financials (1/2) • Sales : +5.4% in euros +4.4% organic growth : − +7.5% in companion animals : new products in Europe, market share gains in the US − +2.0% in food producing animals : emerging markets +1.4% impact of Schering-Plough products acquired in mid-2008 • EBIT : +6.9% /
Slide 4: Key points on 2009 financials (2/2)
Key points on 2009 financials (2/2) • Net profit : +9.6% decrease of interest expenses due to cash generation and lower interest rates currency volatility impact limited through hedging policy • Financial structure : 14.5% debt/equity ratio record generation of cash flow, based on : − profitability
Slide 5: Consolidated sales
Consolidated sales 31.12.2009 Million euros 2009 2008 Var. % Consolidated sales 467.4 443.4 +5.4% - exchange rate impact vs. 2008 1.5 - Consolidated sales at constant rates 468.9 443.4 +5.8% - change of perimeter (7.5) (1.6) Consolidated sales, pro-forma at constant exchange rates 461.4 441.8 +4.4%
Slide 6: 2009 quarterly growth of sales
2009 quarterly growth of sales* +8.0% 8% 6% 12 months : +4.4% 4% +3.3% +3.0% +3.4% 2% * Pro forma sales, excluding impact of exchange rates and 109.0 M€ 116.5 M€ 122.2 M€ 119.7 M€ acquisitions 0% Q1 Q2 Q3 Q4 6
Slide 7: Breakdown of sales growth in 2009
Breakdown of sales growth in 2009 (million euros) +2.4% +10.9 +5.4% +1.7% 470 467.4 +7.5 -7.1 +3.2% - 1.5 460 +14.2 -1.6% -0.3% 450 443.4 440 430 420 410 400 2008 2009 New products Full year impact Base Activities & Pdts Exchange (launched in 09) of 2008 acquisitions Business discontinued Rates 7
Slide 8: 2009 consolidated sales Geographical breakdown
2009 consolidated sales Geographical breakdown Constant Million euros 2009 2008 % Variation exch. rates France 98.0 98.0 0.0% 0.0% Europe outside France 166.0 153.1 8.4% 9.8% North America 66.9 62.7 6.7% 0.7% Latin America 29.4 28.0 5.2% 15.1% Africa-Middle East 26.0 23.1 12.4% 8.6% Asia 52.7 48.0 9
Slide 9: Growth by segment 2009
Growth by segment 2009 At constant exchange rates of which organic growth Growth at constant rates Net Revenue Businesses / Ranges - 5% à 0% à + +5% à +10% à 0% à + +5% à 2009 (M€) > - 5% > 15% 5% +10% 0% 5% +10% +15% Companion Animals 290,0 7,5% 7,4% Parasiticides 68,7 10,4% Vaccines 51,7 6,3% Anti
Slide 10: 2009 Profit & Loss statement
2009 Profit & Loss statement Million euros 2009 % 2008 % % Var. Net sales 467.4 100 443.4 100 +5.4% Gross margin on material cost 315.9 67.6 298.3 67.3 +5.9% External costs 109.8 23.5 106.1 23.9 +3.5% Employees costs 124.1 26.5 117.0 26.4 +6.0% Other net costs, taxes, Research tax credit 8.9 2.0 7.7
Slide 11: Breakdown of EBIT growth in 2009
Breakdown of EBIT growth in 2009 (million euros) 70 +1.8 +10.7 -1.9 60 58.3 -5.3 - 1.5 54.5 50 2008 2009 Net Acquisitions R&D Sales & Other margin in full year Marketing expenses 11
Slide 12: Evolution of cash-flow
Evolution of cash-flow (million euros) 80 74.8 +8,4% 69.1 70 58.8 +12,6% 60 52.2 50 45.7 40 30 Operating 20 Cash-flow (EBIT DA) 10 Net Cash-flow 0 2008 2009 12
Slide 13: 2009 Cash-flow statement
2009 Cash-flow statement (million euros) Sources of funds Uses of funds Cash-flow 58.8 Tangible assets 19.8 Sale of assets 0.6 Intangible assets 2.4 Net sale of treasury shares 1.4 Acquisitions - Dividends 11.2 Decrease in working capital (1.3) Other assets and liabilities (1.7) Total Sources 60.8 T
Slide 14: Evolution of cash-flows in 2009
Evolution of cash-flows in 2009 Total 58.8 cash-flow generated 52.2 19.2 1 9 ,1 Working capital and Capex uses 3 2 ,9 32.9 39, 6 39.6 Free cash-flow 119.3 9,3 2008 2009 14
Slide 15: Balance Sheet analysis
Balance Sheet analysis (million euros) 289.5 289.5 281.3 281.3 Working Capital 39.1 44.3 Shareholder ’s 198.4 233.6 equity Fixed assets 242.2 245.2 16.0 Minority interests + LT reserves 22.1 66.9 Net financial 33.8 debt 2008 2009 2008 2009 INVESTED CAPITAL CAPITAL EMPLOYED 15
Slide 16: Balance Sheet - financial ratios
Balance Sheet - financial ratios 2007 2008 2009 33.7% Net debt / Shareholder’s equity 26.0 % 14.5 % Net debt / Total equity + L.T. reserves 31.2% 23.9 % 13.2 % Net debt / Cash-flow 1.04 1.28 0.58 Net debt / EBIT DA 0.73 0.97 0.45 16
Slide 17: Shareholding
Shareholding Number of shares : 8 714 352 Breakdown at 31 December 2009 Treasury shares Employees savings plan Employees 0,5% 1,2% savings plan 0,9% 30,9% Others 44,9% 47,7% Others Dick Family 63,9% 4,0% Threadneedle Dick Family Threadneedle 6,0% In shares In voting rights 17
Slide 18: Agenda
Agenda • 2009 results • The world wide veterinary market • The new competitive landscape • Virbac’s growth levers 18
Slide 19: Worldwide animal health market in 2009
Worldwide animal health market in 2009 $ 18.6 billion NORTH AMERICA EUROPE 32,9% 32,5% West 4,6% East 30% REST OF THE WORLD Source : Vetnosis, Virbac estimates
Slide 20: North American market in 2009
North American market in 2009 $ 6.1 billion Food producing Companion animals animals • % growth • 9% decline - 1st half : +0.3% - livestock -10% - 2nd half : +3.6% 48% 52% •Virbac : •Virbac absent - 2.9% market share - +12.4% growth Source : Vetnosis, Virbac analysis 20
Slide 21: European market in 2009
European market in 2009 $ 6.9 billion Food producing Companion animals animals • 4.3% decline in 2009 • livestock : -5% . pigs : +12%, poultry flat • Growth in 2009 : • France : - 9.3% (-3.3% - 1st half : -0.2% first half -14.8% 2nd half) - 2nd half : +6.3% •Virbac • 4.4% market share 53% 47% •Virba
Slide 22: Rest of the world
Rest of the world $ 5.6 billion in 2009 EMERGING MARKETS DEVELOPPED MARKETS(1) LATIN AMERICA Dominantly FPA markets (Brazil CA and FPA markets (CA : Japan 45%, Australia 40%) 75%, Mexico 80%) FPA majors : Brazil : n°2 market worldwide 33% 28% Japan, Korea : pigs Mexico 1/4th of Brazil Australia, New
Slide 23: Worldwide animal health market: companion animals
Worldwide animal health market Therapeutic classes Companion animals Market Virbac 100 % Anti-infectious 5% 10 % Vaccines 20 % Vaccine Leishmaniosis project 16 % 18 % Internal 21 % Iverhart / Equimax / Milteforan parasiticides External 13 % Effipro 27 % parasiticides 07/08/09 launches : • Cortavance
Slide 24: Worldwide animal health market: food producing animals
Worldwide animal health market Therapeutic classes Food producing animals Market Virbac 100 % 20% Anti-infectious 49% 18% Parasiticides 28% Acquisition of Pfizer (ex Wyeth) Vaccines 21% product portfolio in Australia 1% Position in Santa-Elena in Uruguay 35% Feed additives 29% and specialties Source
Slide 25: Agenda
Agenda • 2009 results • The world wide veterinary market • The new competitive landscape • Virbac’s growth levers 25
Slide 26: Estimates of market shares when Merial/Intervet merger completed
Estimates of market shares when Merial/Intervet merger completed All others 16% Merial / Intervet (1) Assets to be divested by Merial / Intervet 25.7% 2.9% Vétoquinol 1.8% Alpharma 1.9% CEVA 2.9% VIRBAC 3.6% 18.7% Boehringer 5.6% Pfizer 6.1% Novartis 7.2% 7.4% Lilly Bayer (1) : Assumption : -10% of
Slide 27: The future competitive landscape
The future competitive landscape • TOP TWO LEADERS : will differ in 2 areas : Governance Post merger integration • OTHER BIG PHARMA : double or quit ? • Virbac : A future even without major merger : Short term opportunities : products, people, Room for small players in all industries Customer’s supp
Slide 28: Agenda
Agenda • 2009 results • The world wide veterinary market • The new competitive landscape • Virbac’s growth levers 28
Slide 29: Effipro / Fiproline
Effipro / Fiproline • Europe Launch, in almost all European countries in June 2009, with good results on both spray and spot-on Full year of commercialization in all European countries in 2010, without any new fipronil based competitive product up to now • United States : Launch in 2012, possibly in
Slide 30: Canileish vaccine
Canileish vaccine • Clinical studies : positive results of 24 months field trial : proven efficacy • Marketing Authorization dossier filed on March 2nd, 2010 (European centralized procedure) • Marketing at European level is conceivable in 2011, depending on the date of the Marketing Authorization an
Slide 31: Entry in the food producing animal vaccines market
Entry in the food producing animal vaccines market • Current presence in Germany, South Africa, New Zealand (through licensing deals) and Australia (pig vaccine) through the Pfizer acquisition. Total turnover of 7m€ • New important step in January 2010 : acquisition of 30% of SANTA- ELENA, an Urugua
Slide 32: Europe
Europe • Companion animals two major growth drivers : - Effipro : 1st full year of commercialization across all Europe in 2010 - Canileish : opportunity for southern Europe rest of the portfolio expected to continue growing at market rate, around 4% in 2010 • Food producing animals further decrease
Slide 33: United States
United States • $ 93m sales in 2009 @ 85% in the veterinary channel • Continued growth expected from the Iverhart franchise in 2010 23% growth in 2009 (28m$, 8.7% estimated market share) growth potential from Iverhart Max (differentiated product) increased distribution (growing Virbac sales force +
Slide 34: Emerging markets
Emerging markets • 2009 performance in main countries sales in m€ Growth at constant rates India : 29 +19% South Africa : 21.5 +11% Mexico : 14 +15% Brazil : 10 +17% • Growth drivers for 2010, in addition to the natural market growth : India : roll out of the « Bottom of Pyramid » approach in India
Slide 35: Australia
Australia • Divestment of Wyeth assets required by the anti-trust authorities : Product portfolio with a turnover of 37m AUD in 2009 (24m€) - parasiticides for ruminants : 80% - Cattle vaccine : 20% Manufacturing site close to Sydney Around 120 people retained by Virbac • Acquisition completed end o
Slide 36: Summary of acquisitions projects
Summary of acquisitions projects • Completed Wyeth portfolio in Australia in January 2010 : turnover : 24m€ Santa Elena in Uruguay in January 2010 (30%) : turnover : 5m€ • Advanced projects A portfolio of six SP Intervet products in Brazil : turnover : 1m€ Two projects : one in Latin America, one in
Slide 37: 2010 financial perspective
2010 financial perspective • Sales Organic growth in the 5% to 7% range • EBIT 50 basis points improvement target maintained 37
Slide 38: Thank you for your attention
Thank you for your attention 38