At its meeting on March 14, 2018, the Vetoquinol S.A. Board of Directors reviewed the Group results and approved the audited 2017 financial statements.
EBIT amounted to €46.0 million, up 9.4%; net income Group share came to €34.8 million, up 25.2%.
The modest increase in 2017 sales resulted from a combination of diverging trends. Essentials products performed well, with sales up 7.6% like-for-like. These products accounted for 47.0% (€165.4 million) of 2017 fullyear sales, up from 44.1% in 2016. This increase was offset by a decline in sales of complementary products and the impact of streamlining unprofitable products.
Essentials sales growth contributed to a 1.5 percentage point rise in the Group gross margin for 2017.
The Americas and Asia Pacific region performed strongly, posting respective like-for-like growth of 3.8% and 6.9%. European sales, down 2.7% like-for-like, continued to be hit by the decline in antibiotics prescriptions. Antibiotics sales accounted for 32% of total Group sales, versus 33% in 2016. Sales of companion animal products rose 1.7% like-for-like. Livestock sales showed little change, mainly due to measures aimed at restricting the use of antibiotics in the animal health sector. The breakdown of sales between the two market segments was more or less evenly balanced between 55% (companion animals) and 45% (livestock) of total Group sales.
EBIT rose 9.4% from €42.1 million in 2016 to €46.0 million or 13.1% of sales (up 100 basis points). The 1.5 percentage point increase in gross margin on purchases was driven by price increases applied in 2017, the positive impact of the streamlining program, currency gains on purchases and the growth in Essentials sales. Other purchases and external expenses stayed flat, while staff costs rose 5.4% mainly due to rising salaries and the expansion of the US sales force. R&D expenditure increased to €25.2 million or 7.2% of sales, versus 6.9% in 2016.
Net financial expense increased from €0.2 million in 2016 to €2.3 million due to negative currency impacts mainly related to the weakening of the US dollar and the knock-on effect on USD denominated cash on hand.
The sharp €3.4 million fall in income tax expense includes the impact of the reduction of US federal tax to 21% (€2.7 million impact in 2017).
EBITDA came to €57.4 million or 16.3% of sales.
Net income Group share amounted to €34.8 million, up 25.2%.
As of December 31, 2017, Vetoquinol held net cash of €97.5 million, up €19.4 million from the previous year-end.
The Board of Directors will propose a dividend of €0.46 per share, up from €0.43 the previous year, to the shareholders’ general meeting on May 29, 2018. Vetoquinol CEO Matthieu Frechin said: “Our strong performance in 2017 confirms the merits of our strategy of focusing on Essentials products. As announced at our Investor Day on September 27, 2017, we are pursuing our multi-specialist strategy geared towards 4 target species and 6 therapeutic domains. Strengthened fundamentals and a robust financial structure give us the confidence to target strong growth driven by in-house innovation, acquisitions and strategic partnerships.”
Vetoquinol has confirmed its eligibility for the French PEA-PME personal equity plan, in accordance with Decree no. 2014-283 of March 4, 2014 implementing Article 70 of the 2014 Finance Act no. 2013-1278 of December 29, 2013, which established the conditions for companies’ eligibility for the plan.
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