Vetoquinol (VETO) H1 2024 earnings summary

Executive summary

• Group sales reached €264.4m in H1 2024, up 3.2% year-over-year, driven mainly by organic growth and strong performance in Essential products.

• Essentials sales grew 5.8%–6.0% at constant exchange rates, now 61% of total sales, while Complementary products saw further portfolio simplification.

• Sales declined in the United States after several years of strong growth, with wholesaler inventories down and supply chain tensions for a top product.

• Voluntary increases in R&D (+21%) and marketing expenditures impacted profitability.

• Net income was €23.8m, representing 9.0% of sales, down 26.1% compared to H1 2023.

Financial highlights

• EBITDA was €45.0m (17.0% of sales), down 24.6% year-over-year, impacted by higher R&D/marketing spend and a US sales decline; H1 2023 included a €6.1m non-recurring gain from Brazil.

• EBIT before depreciation of acquired assets was €38.5m (14.6% of sales), down 15.1% year-over-year; EBIT was €32.0m (12.1% of sales), down 17.5%.

• Free cash flow reached €27.3m, with cash flow from operating activities at €27.3m and net cash position at €142m as of June 2024, up €12m in H1 2024.

• Income tax expense rose to €11.2m, with the tax rate increasing to 32.0%.

• Net income margin was 9.0% (down from 12.6% in H1 2023).

Outlook and guidance

• Focus on continued development and ramp-up of Essential products, with new launches and territory extensions planned.

• Renewed growth expected in all territories outside the USA, with sustained operating profitability and cash generation.

• Pursuit of external growth and further strengthening in the US market, including sales force expansion.

• Fundamentals remain strong, supporting continued development and external growth ambitions.

• Next financial update scheduled for Q3 2024 sales on October 30, 2024.