(News Bulletin 247) – The veterinary laboratory confirms its objectives for this year, after revealing significantly higher half-year results. Virbac, which is doing much better than its competitor Vetoquinol, is starting the week on the podium of the SBF 120.

In mid-July, Virbac confirmed that it was in good health in the first half of the year. The veterinary laboratory revealed “exceptional business dynamics” with sales up 15.1% based on reported data, (+16.2% at constant exchange rates) between January and the end of June, reaching 703.1 million euros.

Virbac had then reported that the integration of the recently acquired companies Globion in India and Sasaeah in Japan – both specializing in vaccines – had contributed 4.8 percentage points to the growth of the group from the Alpes-Maritimes. The veterinary laboratory had also announced that it benefited from a favorable base effect, thanks to the increase in its production capacity for vaccines for dogs and cats.

A “record” operating margin

The company revealed the rest of its financial performance for the first half of the year on Friday evening after the market close. And like the turnover, the other lines of the income statement are also doing well.

Current operating income before depreciation of assets from acquisitions amounted to 150.4 million euros, a net increase of 36.9% compared to the first half of the previous financial year.

The current operating profit ratio before depreciation of assets from acquisitions (adjusted EBIT margin) thus stands at 21.4%, up 3.4 percentage points over one year. It reaches a “record” level, compared to the 18% margin generated last year, and 19% two years earlier, recalls Sarah Thirion, head of equities at TP ICAP Midcap.

“It should be noted that achieving an operating margin of more than 21% in the first half of the year gives credence to the 2030 ambition (20%)”, the specialist continues.

A little further down in the accounts, Virbac’s net profit attributable to the group jumped by 26.9% over one year, reaching 94.9 million euros compared to 74.8 million euros a year earlier.

2024 outlook renewed

Virbac confirms its outlook for 2024, first raised last July. The company expects revenue growth at constant rates and scope of between 7% and 9%.

Still for 2024, Virbac is also counting on a ratio of “current operating income before depreciation of assets from acquisitions” (adjusted EBIT) to turnover of around 16% at constant exchange rates.

The contribution of recent external growth operations is expected to be around 5.5 percentage points on turnover growth with, Virbac specifies, a slightly positive impact on its profitability. Thus, turnover growth is expected to be between 12.5% ​​and 14.5% at real scope and constant exchange rates.

Virbac is also optimistic about its cash position, which should improve by 60 million euros by the end of December 2024. This objective is excluding acquisitions.

The company also confirmed the departure at the end of this month of Sébastien Huron, its executive general manager, and will be replaced on an interim basis by Habib Ramdani, the current financial director. This resignation was first announced last July, on the sidelines of the publication of its half-yearly sales.

On the Paris Stock Exchange, Virbac’s publication was very well received. The veterinary laboratory’s share price jumped 6.1%, the second biggest increase in the SBF 120 behind electrical products distribution specialist Rexel (+9.8%), which rejected the takeover offer from the American QXO.

Virbac’s half-yearly copy is all the more appreciated since its competitor Vetoquinol had fallen by more than 7% at the end of last week, in reaction to a dull first half, and accompanied by unclear prospects. The other veterinary laboratory listed on the Stock Exchange had revealed disappointing results for the first half, reporting a sharp drop in profits, due in particular to losses of market share in the United States.