Virbac consolidated revenue in the fourth quarter reached 225.7 M€, a significant +9.2% growth compared to the same period of last year and a +8.6% increase at constant scope. Growth was driven primarily by sales in the United States of historical ranges, including internal parasiticdes (lverhart Plus and Iverhart Max reintroduction), as well as dentals and dermatology ranges. Good performances in Italy, Spain, Australia, and China also contributed to growth.It should also be noted that the United States benefited from a storage effect in distributors in 2016, with a return to the market for certain products at the end of the year, in particular Iverhart Max, as well as a gradual recovery of sales to clinics of reintroduced products.

Total 2016 annual sales reached 871.9 M€ compared to 852.6 M€ last year, a +2.3% overall growth, of which +4.5% excluding unfavorable exchange rates impact. All regions show positive developments with the exception of Chile. In the United States, historical ranges, including dentals and dermatology, continued to grow. The Iverhart Plus and Iverhart Max range of internal parasiticides benefited from a favorable base effect over the year and showed a good increase compared to the same period of 2015, while being below the prospects due to a return on the market slower than expected. The Sentinel line is down because of increased competition in the internal parasiticides segment, which is also in a slight decline. Europe was up by 4.6% at comparable rates, notably as a result of sustained activity in France thanks to recent launches of parasiticides products and a favorable base effect due to low sales of antibiotics in 2015, as well as the performance of the United Kingdom, Italy, Greece and Spain. In the other regions, emerging countries contributed strongly to organic growth thanks to the dynamism of India on ruminant ranges, including nutritional supplements, parasiticides and antibiotics, from China with good performance on companion animals products (Zoletil, Epiotic, Rilexine) and on the industrial range, in Brazil and Mexico, notably on antibiotics for ruminants (Multibio, Shotapen, Fortius)

In terms of species, revenue in the companion animals segment increased by +6.2% and +7.7% at constant parities. This good performance is due to the gradual recovery of sales of historical products in the United States and the ramp-up of new products launched recently in Europe, notably the Effitix and Milpro parasiticides and the new nutrition range. The dentals, dermatology, hygiene and specialities lines also contribute to this level of sustained growth.  The food producing animals segment shows a negative evolution: -2.8%, of which +0.3% at constant scope. The segment is strongly impacted by the situation in Chile, which is down 18%. Outside of aquaculture, the two bovine and industrial sectors (pigs and poultry) showed contrasting performances at constant rates and perimeter respectively of + 6.2% and -0.7%. Growth was driven mostly by emerging countries, mainly India, Brazil and China, as well as by New Zealand, while activity in Europe was down in the industrial sector (pigs and poultry).

Perspectives

In the United States, the US subsidiary was finally notified by the FDA on 16 December of the lifting of the warning letter received in December 2015, enabling the St. Louis site to recover its compliance status with Good Manufacturing Practice (cGMP) and thereby the ability to file new registration and variation files with the FDA, and to ensure the continued transfer of production from Sentinel Spectrum to St. Louis as initially planned. 
The Group current operating profit - adjusted is expected to exceed 10% at constant exchange rates, while deleveraging has continued in the second half of the year, which should lead to an annual decline in net debt of around € 50 million. The Group's net debt to EBITDA ratio is expected to be around 4.5 at constant exchange rates. It should, however, be above 4.5 at real rates. In view of these factors, Virbac obtained from its pool of banks an easing of the covenant clause at the end of 2016. The net debt to EBITDA ratio must now be below 5.5 at actual rates versus 4.5 before. The discussion continues with private investors (Schuldschein), representing approximately 15% of Virbac SA's financing. Virbac also obtained from its pool of banks an easing of the covenant clause for 2017 in the same proportions as in 2016.