VIRBAC: current operating income before R&D slightly improving throughout first half of 2023 in percentage of revenue
28 Septembre 2023 - 5:45PM
VIRBAC: current operating income before R&D slightly improving
throughout first half of 2023 in percentage of revenue
CONSOLIDATED FIGURES AS AT JUNE 30in € million |
|
2023 |
2022 restated5 |
2023/2022 change |
|
Revenue |
610.5 |
616.4 |
-1.0% |
|
Change at constant exchange rates |
|
|
+0.4% |
|
Change at constant exchange rates and scope1 |
|
|
+0.4% |
|
Current operating income, before depreciation of assets
from acquisitions2 |
109.9 |
117.4 |
-6.4% |
|
as a % of revenue - before R&D and at constant rates |
25.0% |
24.6% |
|
|
as a % of revenueas a % of revenue at constant rates |
18.0%18.4% |
19.0% |
|
|
Operating income |
108.5 |
115.5 |
-6.0% |
|
Consolidated net income |
74.8 |
77.6 |
-3.6% |
|
Including net income - Group share |
75.0 |
77.5 |
|
|
Shareholders’ equity - Group Share |
898.5 |
820.0 |
+9.6% |
|
Net cash3 |
51.6 |
19.6 |
163.0% |
|
Operating cash flow before interest and
taxes4 |
132.4 |
138.3 |
-4.3% |
|
1 change at constant exchange rates and scope
corresponds to the organic growth of sales, excluding exchange rate
variations, 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
one from the previous financial year), and excluding change in
scope, by calculating the indicator for the financial year in
question on the basis of the scope of consolidation for the
previous financial year2 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 transactions3 net cash
corresponds to current (€72.8 million) and non-current (€62.0
million) financial liabilities as well as a lease obligation
related to the application of IFRS 16 (€34.7 million), less the
cash position and cash equivalents (€221.0 million) as published in
the statement of financial position4 Operating cash flow
corresponds to operating income before depreciation of assets from
acquisitions (€109.9 million) restated for asset depreciation and
impairments (€21.0 million) as well as items having no impact on
the cash position (€1.4 million)5 non-material impact of
restatement linked to IAS 12 amendment relating to deferred tax
assets and liabilities - see full note in the half-year financial
report
The accounts were audited by the statutory
auditors and reviewed by the board of directors on September 26,
2023. The report of the statutory auditors is in the process of
being issued. The statements and detailed presentation of the
half-year results will be available on the corporate site at
corporate.virbac.com on October 6.
As of the end of June, our turnover
amounted to €610.5 million compared to €616.4 million in
2022, an overall change of -1.0%. Excluding currency effects, sales
remained stable at +0.4%, favorably impacted by price increases
(estimated effect of around +5%) offsetting the drop in volumes
already observed and which reflects the animal health market trend
witnessed for almost twelve months.
Across geographies, dynamics are contrasted with
first of all Europe where activity increased by +2.7% at constant
exchange rates, mainly thanks to the contribution of France as well
as South Europe’s countries and despite declining sales of dogs and
cats vaccines arising from temporary limitations in our production
capacities during the first semester. In Asia-Pacific (+2.2% at
constant rates), our products for farm animals continue to fuel our
growth in Australia and New Zealand, while our activity in India
remains relatively stable compared to 2022, a year which saw very
strong growth. Sales in China were down, penalized by weak sales in
the first quarter. The Latin America zone is declining (-7.0% at
constant rates), penalized by the significant drop in activity of
our subsidiary in Chile (-33.4% at constant rates) in particular on
the antibiotic and parasiticide ranges which suffer from a base
effect linked to the interruption of our main parasiticide product
commercialization in July 2022. Excluding Chile and at constant
exchange rates, the change in activity is positive at +3.7%,
supported by Mexico, Brazil and the countries of Central America,
despite the decline in dogs and cats vaccines’ sales following
temporary limitations in our production capacities. Finally, the
activity of our subsidiary in North America is down slightly over
the period, mainly explained by a base effect and distributors’
destocking in the first half of 2023.
The Current operating income before
depreciation of assets resulting from acquisitions amounts
to €109.9 million, down compared to the first half of 2022 (€117.4
million), i.e. a drop of 1 point of “current operating income
before depreciation of assets resulting from acquisitions” ratio to
“revenue” which stands at 18.0%. After restatement for the
unfavorable exchange rate impact, this same ratio stands at 18.4%,
a slight erosion of -0.6 point compared to 2022. This erosion is
mainly explained by an increase in our R&D expenses (+ €6.4
million or +1.0 point compared to revenue) in connection with our
previous communications disclosing our ambitions to accelerate our
investments in this area. At constant exchange rates and before
R&D, current operating income before depreciation of assets
resulting from acquisitions is therefore improved by approximately
+0.4 points over the period, despite animal health market declining
volumes, a one-off unfavorable effect on our companion animal
vaccines’ production capacities, as well as the consequences of the
cyberattack of June 2023. Apart from R&D effects, our price
increases allow us to compensate for a slight unfavorable mix
effect and thus improve our gross margin on material costs in
relative value. Over the period, we also observed a drop in
transport costs as well as, to a lesser extent, a decrease of
external marketing expenses linked to products launches phasing.
These elements allow us to offset an increase in personnel costs
which can be explained by the impact of salary increases and the
strengthening of our workforce in both industrial and commercial
functions.
Consolidated net income stood
at €74.8 million, down by -3.6% compared to the first half of 2022
(€77.6 million). As explained above, this drop is mainly explained
by the decrease in operating profit subsequent to both, sales
decline and additional efforts deployed in R&D. In addition,
our financial result is positive at €0.9 million, a strong increase
compared to the first half of 2022 (loss of -€8.1 million linked
mainly to the depreciation of the Chilean peso over the period).
Over the first half of 2023, the profit generated by the
appreciation of the Chilean peso against the US dollar is offset by
the depreciation of the euro on certain currencies such as the
Mexican peso.
Net income - Group
share amounted to €75.0 million, a decrease of -3.2%
compared to the first half of the previous year (€77.5
million).
On the financial side, our net
cash amounts to €51.6 million at the end of June 2022, compared to
€79.4 million at the end of December 2022. This deterioration over
the first six months of the year is, as with every year, mainly due
to the cyclical nature of our cash generation model, with cash
generation occurring mostly in the second half of the year. This
situation was amplified over the period with one-off reduction of
the amount of factored accounts receivables as well as an overall
reduction of accounts payables.It should be noted that in September
2023, Virbac unanimously obtained from its banks a one-year
extension of the maturity of its €200 million syndicated financing
contract, which is now fixed at October 2028.
OutlookIn line with our press
release of July 3, 2023, we confirm our revised forecasts with
revenue growth at constant rates and scope expected in a range
between 0% and 4% and a ratio of “current operating income before
amortization of assets from acquisitions” on “turnover” which
should consolidate between 12% and 13% at constant exchange
rates.
ANALYSTS’ PRESENTATION -
VIRBAC
We will hold a virtual
analyst meeting on Monday, October 9, 2023 at 2:15 p.m. (Paris time
- CEST).
Information for
participants:
Webcast access link:
https://bit.ly/44bXlbiThis 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.
A lifelong commitment to animal
healthAt 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 us to diagnose, prevent and treat the
majority of pathologies. Every day, we are committed to improving
the quality of life of animals and to shaping the future of animal
health together.
Virbac: Euronext Paris - Compartment A - ISIN
code: FR0000031577 / MNEMO: VIRPFinancial Affairs department: tel.
+33 4 92 08 71 32 - email: finances@virbac.com - Website:
corporate.virbac.com
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