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2018 annual

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Interview with Sébastien Huron
Chairman of the executive board of the Virbac group

We strive to provide best in class care
to preserve the bond
between humans and animals.


A fresh start

2018, a special year?

Yes, on two fronts. First, because we celebrated Virbac’s 50th anniversary. Two days spent in a friendly, intercultural atmosphere, sharing a 50-year collective adventure in the service of animal health. In 2018, the Group also celebrated its return to growth. On behalf of the executive board, I wish to thank all Virbac teams around the world for their unfailing engagement, team spirit and camaraderie.

Where is this growth coming from?

From every region of the world. From emerging countries, of course, with increases of more than 20% in China and Brazil and more than 10% in India. Nearly half of our subsidiaries are also experiencing growth between 10% and 24% in Europe, Asia, Latin America and the Pacific region. These results are a testimony of the rigorous execution of our strategy, which is also paying off in the United States (+7.4% growth in sales to distribution for veterinary clinics). Only Southern Europe suffered in 2018, with the stoppage of the tenders for rabies products in Greece and the decline in sales of two products in Spain.

And regarding species?

Revenue for companion animals is showing 3.9% growth (+6.5% at constant exchange rates), due in particular to the petfood and dental ranges, specialties and vaccines, whose significant increases offset the decline in parasiticide sales. For food producing animals, performance is a bit different (-3.1% at actual rates). Excluding the effects of exchange rates (+2.2%), situations are contrasted, with strong growth in the bovine sector (+7.1%), bolstered by ruminant vaccines and nutritional products, and relative stability in the industrial sector (swine and poultry). Aquaculture shows a decline of 17.3%, due in large part to the situation in Chile, where this year Virbac faced fierce competition in antibiotics and decreasing sales in oral vaccines. However, aquaculture, which is the world’s number one source of animal protein worldwide, remains a key activity to “feed the planet”.

How does Virbac contribute in this area?

In Asia, where nearly 60% of the world’s swine production is concentrated, one challenge is finding solutions that maintain animals raising productivity while reducing the use of antibiotics. This is why Virbac has made a progestogen available to Taiwanese farmers for improved management of reproduction. In India, we are mobilizing to improve cattle farming performance, thanks to the Target 150 program, which links key health indicators with the introduction of preventive protocols. Animal welfare is also at the heart of our concerns. Virbac was granted a European Marketing authorization variation in 2018 for a single injection as opposed to two of our vaccines for neonatal diarrhea in calves, thus contributing to the easing of the primo-vaccination protocol.

How does Virbac’s mission apply to companion animals?

We strive to provide best in class care to preserve the bond between humans and animals. First in new countries, thanks to geo-extension programs for our implant inducing temporary infertility in male dogs (an alternative to surgical castration) and our petfood range (adapted to the nutritional needs of carnivores). And also with new health solutions: the innovative Fr3sh technology that that targets both the oral and digestive causes of bad breath in dogs, the Marketing authorization in Europe for an antimicrobial oral solution for gastro-intestinal, dental and urinary disorders in dogs or the new, very palatable galenic form of our flagship parasiticide for dirofilariasis, a fatal disease. Lastly we are also looking for testing and developping new distribution models.

What does this mean?

Today, digital media contributes indirectly to improving companion animal health by making our products more accessible. In 2018, several portals were created for the Veterinary HPM range (Italy, Poland, Germany, Japan, Scandinavia, etc.) to organize home delivery in partnership with veterinarians. More globally, our digital initiatives help increase awareness among animal owners about health issues. By intensifying social media presence, Virbac can quickly adapt to global changes.

How are things looking in 2019?

Quite well. The outlook is good in the United States and in the European, Asia-Pacific and Latin America areas. In Chile, aquaculture activity should stabilize. On the industrial front, after a good 2018 (successful technology transfers, a drop in backorders and destruction, better control of our industrial procedures), we are going to launch a competitiveness study across all of our production sites while continuing to guarantee the highest quality standards to those who care for animals. On the financial front, our operational profitability rate should gain around one point at constant exchange rates. Vigilance related to our investments and our changing working capital requirements should provide the Group with continued debt relief.

And on the industrial front?

We transferred the production of our Sentinel Spectrum parasiticide to the American plant in St. Louis, which should provide improved mitigation of certain fixed plant-related costs. The Biology plan, which has been in place in France since June 2017, aims to increase our level of vaccine industrial process proficiency, against a backdrop of ever-tightening regulatory requirements.

How are things looking in 2018?

We expect moderate growth in our business. Outlook remains good in Europe and promising in the Asia-Pacific and Latin America areas, especially in developing countries. In the United States, the launch of the Iverhart Max soft chews, a palatable parasiticide tablet solution to canine heartworm disease, and the return of several products by the end of 2018 should generate a higher volume of business compared to 2017. On the financial front, our operational profitability rate should gain about half a point, at constant exchange rates. Vigilance related to our investments and our changing working capital requirements should allow the Group to enjoy continued debt relief at constant exchange rates.

And for the longer term?

We are confident in our ability to further contribute to animal health, particularly in emerging countries where the needs are the greatest (Brazil, India, China and Asia) and in terms of food producing animals, where we are present in fewer than 50% of markets worldwide only. In an active sector like ours, innovation is key. Thanks to our innovation ecosystem, we will continue to generate new, valuable solutions for veterinarians, farmers and pet owners all around the world. Innovating also means making products designed for daily use available, like the Virbac-patented Smart Cap, which earned a Pharmapack award in 2018 for its ergonomics and safe use. The growth of our company continues to align with our values, which consider employee engagement to be essential to the company’s successes.

Is there more?

What sets us apart from our competition is our corporate culture and the quality of human relationships. Above all, Virbac is a family, a community of men and women from various backgrounds with a deep attachment to the company. The strength of this collaboration is a key asset for the sustainability of the Group. Therefore, continually offering opportunities to develop and grow is essential. The results of the latest Great Place to Work internal survey conducted in 2018 will help us implement action plans at the corporate level and continue to experience a unique human adventure in the service of animal health. Because caring for the health and welfare of animals is caring for life. And it is our duty to contribute to the collective effort in this field by making responsible choices for a sustainable future.

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869 M

Sales split by geographical area

Répartition CA mondialSales split by geographical areaEuropeLatin AmericaNorth AmericaAsiaPacificAfrica-Middle East

Finance: debt under control

Habib Ramdani
Habib Ramdani,
Group chief financial officer

There is no doubt about it, 2018 is a pivotal year for the Group. In particular, Virbac’s organic growth (+4.5% at constant exchange rates) is one of the most significant of the past four years.

The companion animal activity, a historical pillar for the Group, contributes considerably to this strong performance, with growth of 6.5% at constant exchange rates. Several of our ranges, including vaccines, experienced two-digit growth after a 2017 marked by limitations to our production capacities.

Our petfood ranges, which comply with the natural diet of carnivores thanks to a formulation rich in animal proteins, continue to grow vigorously, as do dental products and specialties such as our uniquely positioned implant for the induction of temporary infertility.

Except for aquaculture, which had a difficult year, food producing animal activity (+5.6% at constant exchange rates) benefitted tremendously from growth in our vaccines and the momentum of the latest launches: Bovigen Scour in Europe, Grofactor in Africa and Porcistart in Asia.

Lastly, 2018 is also an important year with regard to debt. The Group’s funding was not only safeguarded, but also strengthened. First, by extending the maturity of Virbac’s debt by two years, which pushed our refinancing horizon back to 2022. Secondly, by returning, for the first time in five years, to a net debt level on Ebitda below 3.75 (upper limit authorized by our lenders as part of the funding contract negotiated in 2015). This double good news enables the Group to look towards the future with even more confidence.

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Innovating in clinics, in farms, in homes

Jean-Pascal Marc
Jean-Pascal Marc,
Corporate Product Innovation director

For more than 50 years, we have been promoting practical innovation that simplifies, secures and spurs veterinary medicine. Listening closely to a changing society, we hear concerns related to preserving the human-animal bond and sustainable farming conditions. Equally attentive to the needs of veterinarians, farmers and animal owners, we strive to create innovative solutions that meet today’s expectations, and to anticipate those of tomorrow. Rather than theoretical innovation, we prefer ingenious solutions born of the careful observation of veterinary practices.

These principles, coupled with our expertise in formulation and pharmacokinetics, account for our commitment to tackling the key issue of product administration modalities, for example. Because in this area, strictly respecting dosages and general compliance is fundamental and becomes a science at times! In biology, we are continuing our commitment to preventive medicine through vaccines and include no fewer than five innovative vaccination technological platforms in our various projects.

To meet these challenges, Virbac teams around the world work together while developing external partnerships with biotech companies, universities, and research laboratories. Through alliances with other companies, we are also pursuing an active business development policy. Altogether, it makes for a complete innovation ecosystem for the benefit of veterinary medicine.

Smart Cap: a new Pharmapack award

With four trophies, Virbac tied first place in the number of Pharmapack awards received (European reference for pharmaceutical industry packaging solutions and delivery systems). The latest award to date: the “all-in-one” Smart Cap in 2018. Also a winner at the ADF Paris Awards in 2019, this smart cap, which required five years of research and development, is used in the extraction of liquid products. Simply connect the syringe directly to the cap to safely extract the exact dose. An innovation that is already finding applications in human medicine.

Innovating in immersion

First came the observation of a daily difficulty: the use of metronidazole for gastro-intestinal, dental and urinary problems in dogs requires a precise dose and therefore a simple delivery method. In light of this observation, Virbac teams accompanied veterinarians for several days, observed their practices and added discussions with owners of domestic carnivores. The result: a 2018 Virbac innovation which is a practical oral suspension (to be placed directly in the mouth or on food), easy for animal owners to dose (up to a tenth of a ml), enabling better compliance.

Companion animals: for a more flexible vaccination

For the immunization of dogs (distemper, infectious viral hepatitis, parvovirus) and cats (leukemia), Virbac teams worked to obtain Marketing authorization modifications to extend the duration of immunity to three years for several vaccines. In line with the recommendations of the World Small animal veterinary association (WSAVA), these changes allow veterinarians to adapt vaccination protocols based on the animal, disease characteristics and local epidemiology. Greater flexibility that should encourage owners to have their animal vaccinated, thus reducing the risk of exposure in dogs and cats to infectious diseases.

A changing industrial system

Marc Bistuer
Marc Bistuer,
head of Industrial Operations
& Corporate Quality Assurance

Today more than ever, we are striving to make animal health solutions even more accessible to veterinarians, farmers and animal owners around the world. Our aim is to ensure the competitiveness of our production sites while keeping the human dimension and the expertise of Virbac teams at the center of our industrial policy.

With this in mind, we are continuing the in-depth optimization of our industrial processes. This approach, which allows us to increase both production capacity and the reliability of our production processes, requires human commitment in the field. Because beyond regulatory principles and technical protocols, a mastery of production processes entails an actual, extended, and integrated experience in critical operational parameters.

In 2019, a pilot project will be launched in France as part of a vast program to transform our production sites. Covering five dimensions (safety and environment, IT, expert and communications systems, management, quality and performance), it will subsequently be expanded to the international scale to continue ensuring, on a global level, the highest quality standards to those who care for animals.

United States: a successful industrial transfer

During the summer of 2018, the Food and drug administration (FDA) gave final approval to the transfer of production to the American site in St. Louis of the Group’s first extruded parasiticide for dogs. The complexity of the industrial extrusion process drew the attention of all local and Group teams. For nearly three years, they traveled to the original site, meeting with the men and women who had mastered this production. The following is a story of sharing and trust, strengthening Virbac’s technical expertise in the production of this extruded product, a dosage form of the future for animal health.

Australia: doubled production capacity

At the Australian Macquarie Park site, where an implant that induces temporary infertility in male dogs is produced, Virbac teams had great success in 2018, doubling the production capacity of this solution which is a reversible alternative to surgical castration. Launched in 2017, this project was aimed at simplifying production processes, required very little financial investment, but all the ingenuity and analysis abilities of local and Group industrial teams. An optimization that will allow for the worldwide expansion of this key product for managing reproduction and unwanted behaviors.

MSAT: units dedicated to industrial performance

Following the 2017 establishment of MSAT (Manufacturing science and technology) units in several subsidiaries for biologicals, pharma-regulated and non pharma-regulated products, the preliminary results are in. In addition to supporting new industrial projects, Virbac teams lent their support to existing activities in 2018. Thanks to this support, production processes increased their efficiency in Carros, for example, with a 30% increase in production capacity for the rabies vaccine. Beyond improving results, these new units help to strengthen control of industrial processes and therefore the quality of Virbac products.

For a sustainable relationship between humans and animals

Nathalie Pollet
Nathalie Pollet,
Global Marketing &
Business Optimization director

Awareness of animal sentience is in our genes. Today, this awareness is growing in society, making us more committed than ever to taking animal well-being into account as we shape the future of animal health. For example, the issue of improving the living conditions of food producing animals while maintaining the productivity needed to meet growing food demands. In developed countries, end consumers are paying increased attention to each link in the chain, spurring our actions in favor of quality livestock production, particularly with regard to the responsible use of antibiotics. This is why we, at Virbac, embrace our mission of guiding veterinarians and farmers toward more responsible approaches to production, in order to foster a sustainable world.

For companion animals, the sentient revolution began many years ago in veterinary clinics. But there are still lots of changes that can be made. For example, by optimizing the screening of diseases, via analyzers, that allow for a diagnosis within 15 minutes. By offering alternatives to castration, thanks to reversible solutions that induce temporary infertility in male dogs. Or even with the handling of dental health in dogs and cats, for more complicity.

All around the world, veterinary medicine can count on Virbac teams to develop partnerships that simply and specifically meet the needs of veterinarians and farmers.

Chewing, it’s good for a dog’s health

80% of dogs over the age of two suffer from periodontal problems. Although it is still the best option to brush, chewing is an additional, simple and effective action to take as part of regular dental hygiene. In 2018, true to its pragmatic approach, Virbac introduced the first chews to include Fr3sh technology. This combination of three ingredients (grenada pomegranates, erythritol and inulin) targets the oral causes of bad breath while helping to re-establish intestinal balance. Available in North America, the United Kingdom, France, Spain, and Japan, Veggiedent Fr3sh chews will be available in the rest of the world in 2019.

Swine production: better reproductive management

Reducing the use of antibiotics without lowering production levels is one of the major issues facing the swine channel in Asia. To confront it, in 2018, Virbac made a treatment available to Vietnamese farmers that had already proved successful in several other countries. This solution, which synchronizes the cycles of gilts (future breeders), helps to standardize their heat cycles, parturition and weaning, thus reducing the spread of infectious agents between animals of different ages. More generally, Virbac supports veterinarians and farmers through training on farming practices that foster prevention and rely on better management of reproduction.

Piglet mortality is no longer a given

More than one piglet out of ten dies prematurely, between zero and ten days, most often due to nutritional deficiencies during suckling. After several years of research and development, a gel-textured formulation of 33 highly palatable and digestible ingredients is now available to complete the mother’s natural feeding. In addition to fostering rapid weight gain in piglets, it permanently prepares their intestines for post-weaning dietary diversification. Following Southeast Asia in 2018, Mexico and China will be the next to enjoy this innovation in the service of farm performance.

Building tomorrow with employees

Francesca Cortella
Francesca Cortella,
head of Corporate Human Resources

Working together to create solutions in the service of animal health involves listening closely to employees’ expectations in order to establish improvement plans that will make our company a great place to work. It is with this in mind that in 2018 Virbac adopted the Great Place to Work approach, which highlights global companies that provide their employees with the best working conditions. The resulting internal survey is a unique opportunity to move our Group forward and to share a corporate culture in which pleasure and performance combine on a daily basis.

A family controlled company since its inception, Virbac is built on deeply rooted values. The engagement, boldness and creativity of its employees are the pillars upon which the company’s success is built. With this in mind, all around the world, we place particular emphasis on employee fulfillment through HR policies that promote skills development, a personalized work environment and internal mobility. We believe that nurturing the vitality of Virbac teams means being aware of the richness of the men and women who make up this company, that richness allows us to contribute, day after day, to shape the future of animal health.

Quality of work life: choosing transparency

Against a global backdrop in which less than 30% of employees (in 2016) said that they were completely satisfied with their work, Virbac adopted a new internal opinion survey at the end of 2018. The selected model? Great Place to Work, for its alignment with our Group values. It lists employee trust as one of the tenets of companies that are great places to work. Out of the 90% who responded, 79% are proud to tell others that they work at Virbac. The company stands out especially for its work environment and the autonomy granted to its employees. The first improvements will be carried out in 2019, optimizing collaboration between teams, among other things.

Online learning: boosting training

People are a major distinguishing feature for a company of Virbac’s size. In a constantly changing environment and in a life sciences sector in which innovation is key, employee development is a major objective. To support them, in addition to an online training platform, Virbac added a mobile application in 2018 that provides employees with the tools needed for a good understanding of products and HR processes, for example. In a fun, interactive course, everyone is asked to develop their knowledge at their own speed, with regular testing. In one year, online learning increased by 10%.

Paying attention to everyone

All around the world, Virbac supports various initiatives that contribute to strengthening employees’ quality of life and well-being. Caring for employees means watching over Mexican teams’ balanced nutrition at their company restaurant. It also means offering a day devoted to well-being in South Africa, where health professionals provide advice on nutrition, stress management and work station ergonomics. In France, the attention paid to employees resulted in a 2018 remote working agreement that already benefits nearly 20% of employees.

A 50-year human adventure in the service of animal health

Sandrine Brunel
Sandrine Brunel,
head of Corporate Communications

In 2018, we celebrated Virbac's 50th anniversary. In early September, close to 3,000 people gathered around the family of its founder, Pierre-Richard Dick, in the Nice region for two days of festivities. And, for the first time, an online application made it possible for employees around the world to come together and experience this extraordinary event.

Extraordinary for its intensity and the positive energy generated by all of the participants, both happy and proud to belong to a Group that has become a key player in the animal health industry. Extraordinary for the bold journey pursued by a company that, since its inception, has been able to detect future trends when it comes to the place of animals in society and has continuously endeavored to ensure their health and welfare. Finally, extraordinary in terms of sharing common values that Virbac has upheld despite its rapid and international expansion.

Each and every day, we draw our commitment from the quality of human relationships, from the freedom we are able to enjoy, as well as from the awareness that animal health is a key undertaking at the core of much greater societal challenges. And it is undoubtedly the driving force that will continue to propel Virbac for the next 50 years.

A warm evening among family

That evening, a family gathered behind the walls of the Villefranche-sur-Mer citadel. The entire Dick family and more than 2,000 employees in attendance got together for an uplifting tribute to the founding father. With almost 40 countries represented, many cultures and paths intersected at the heart of the citadel; a symbol of the characteristic resilience of Virbac teams, all of them mindful of the fact that the greatest causes are those that sustainably unite and strengthen. An evening “filled with gratitude, sharing and the joy of being together” that resulted in the Virbac teams leaving more united and energized than ever.

Sharing the corporate culture

Close to 500 employees from around the world were in attendance at the National Theatre of Nice to relive a unique 50-year adventure, from the past to the present. A celebration of the commitment to animal health and the camaraderie amongst Virbac teams, this meeting was quite uplifting. Looking back on the journey, from our beginnings in a small apartment in Nice to the world’s 7th largest laboratory, it was a reminder of the power of entrepreneurial spirit. With developments on the horizon, it inspired an impetus for looking ahead toward the exploration of new frontiers. The torch of Virbac values has been passed from former to current members.

An infectious energy

Much like the trilingual speech of the 3rd Dick family generation, Virbac was bursting with many colors at this special event dedicated to its employees and their families. Through the cultural specificities shared by each international subsidiary via their booth, representatives from the institutions and authorities involved in the city’s opening ceremonies, including Christian Estrosi, mayor of Nice and president of the Nice-Côte d'Azur metropolitan area, could see how far Virbac's roots in Nice have spread worldwide. As a tribute to this powerful and lasting enthusiasm, the Dick family presented the headquarters with a sculpture by Nice-born sculptor Sacha Sosno, with a replica of this work also offered to all of Virbac's international commercial entities.

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