2023/03/23 - Financial public releases
2022 annual results
Thanks to the Virbac teams’ constant dedication to animal health, we posted revenue for the year of €1,216.2 million, an increase of +14.3% compared to 2021. Adjusted for the favorable impact of exchange rates, revenue shows growth of +9.6%, despite the slowdown in the market. Excellent execution of our strategic plan allowed us to reinforce our annual organic growth in all geographic areas. In Asia-Pacific, growth at real exchange rates came to +18.5% (+13.8% at constant exchange rates); India and Australia continue to drive growth in the area, thanks to products for cattle, representing approximately 80% of this growth. In Europe, revenue is growing at +6.3% at real rates (+5.9% at constant rates). The main contributors to this performance are the United Kingdom, France, Italy, and Spain. The area is supported by the strong dynamism of the companion animal ranges (in particular petfood, specialties, and vaccines), which compensated for the decline in the antibiotic ranges for farm animals. In the United States, business grew by +30.2% (+15.7% at constant exchange rates). It benefited from sustained sales for new products launched in 2021 (Clomicalm and Itrafungol) and those launched in early 2022 (petfood, and Tulissin for the farm animals segment), as well as good performance in the dental, specialties (Movoflex, Stelfonta), and dermatology ranges. Finally, in Latin America, business grew by +17.1% at real rates (+5.6% at constant exchange rates), thanks in particular to the contribution of Mexico and Brazil, which offset the downturn in Chile. It should be noted that the effect of the increase in average prices recorded in 2022 compared to 2021 represents approximately five percentage points of growth.
The current operating income before depreciation of assets arising from acquisitions amounts to €186.6 million, significantly up compared to 2021 (€173.2 million). This improvement in performance is mainly due to the growth in our revenue, driven by strong performance in all areas despite a market slowdown. This was partially offset by a relative deterioration in the margin due to the impacts of inflation on raw material costs and operating expenses such as transport and energy. Our commercial expenses have increased (travel expenses, seminars, etc.), post Covid-19 period. Similarly, our R&D expenses are up significantly, following our desire to increase the number of projects in our portfolio. After normalizing R&D (+1 percentage point at constant exchange rates), our ratio of “current operating income, before depreciation of assets arising from acquisitions” to “revenue” at the end of December 2022 is slightly increased compared to the same period for 2021 (16.4% in 2022 vs. 16.3% in 2021) at constant rates.
Consolidated net income was €121.3 million, up 4.9% compared to the same period for 2021. This improvement in our net income is explained by the reasons given above, especially the growth of our business and good control of our operating expenses, which remain relatively contained as a proportion of our revenue, despite the inflationary pressure observed in 2022. The consolidated net income is also impacted by a non-current and non-cash charge of €3.3 million corresponding to an impairment loss for brands that are no longer used. Lastly, it should be noted that our operating income includes a charge of €3.1 million, which is significantly down compared to the end of December 2021 (charge of €8.5 million). This is due to the decrease in the cost of gross financial debt of €2.3 million mainly related to the maturity of rate derivatives, and the sharp increase in cash instruments (+€2.5 million), following the increase in our investments and remuneration rates from June 2022.
Net income - Group share amounted to €122.0 million in 2022, an increase compared to the previous year (€113.2 million), which is explained by the elements detailed above.
From a financial standpoint, our net financial cash amounts to €79.4 million at the end of December 2022, compared to €73.8 million at the end of December 2021. This positive change in our cash position over the year is mainly due to strong cash generation, which enabled the financing of more sustained capital expenditures (Capex), higher working capital requirements in 2022 given the strong increase in our revenue, and finally the payment of dividends with respect to the 2021 profit.
In 2023, we expect a ratio of “current operating income before depreciation of assets resulting from acquisitions” to “revenue” that should be between 13% and 14% at constant exchange rates, with growth in revenue at constant rates and scope estimated at this stage to be between 4% and 6%. This deterioration in our adjusted EBIT ratio is primarily the result of our deliberate acceleration in R&D investment to revenue since early 2022 (~+2 percentage points in 2023 compared to 2021 and +~1 point compared to 2022), and the expected effects of inflation in 2023.
In addition, our cash position is expected to remain constant at the end of 2023 compared to the end of 2022, given the expected investments over the period, estimated to be around €100 million, from the acceleration of R&D, and excluding any acquisitions.
Ultimately, at the next general meeting of shareholders, a net dividend of €1.32 per share will be recommended for distribution for the 2022 fiscal year, in evolution compared to €1.25 in 2021.
ANALYSTS’ PRESENTATION – VIRBAC