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Ceva breaks €1bn as acquisitions provide platform for 21% annual growth

Feb 08, 2018 - Animal Pharm
By Joseph Harvey
Animal Pharm
February 8, 2018

Ceva Santé Animale has recorded revenues in excess of €1 billion ($1.2 billion) for the first time, as it takes the mantle of France's largest animal health business. 

With Merial now part of Boehringer Ingelheim, Ceva has outgrown Virbac and Vetoquinol in recent years to top the standings among French firms.

The Libourne-headquartered company reported revenues of €1.1bn for fiscal 2017, which represents 21% year-on-year growth. Ceva is now the sixth-largest veterinary medicines company globally and the seventh-biggest in the wider animal health industry behind diagnostics specialist IDEXX Laboratories.

Acquisitions and their integration have provided Ceva with a platform for growth over the past year. The firm has sealed a number of deals that have helped it expand geographically (Hertape and Inova in Brazil, Ebvac in China and Polchem in India) and add to its product portfolio (ex-Merial products and Biovac in France).

However, Ceva also showed strong organic growth. The company posted a 9% organic improvement in annuals sales at constant scope and exchange rates. This rate was helped by the performance of new products such as Feliscratch by Feliway, Zeleris and Smartvac.

Ceva's swine business contributed the biggets leap in revenues. Swine sales grew 66% year-on-year and now represent 16% of Ceva's annual turnover (around €176 million). This growth was largely due to the acquisition of four ex-Merial vaccines.

The company's sales of ruminant products were up 40% and represent 20% of turnover (€220m) – driven by its recent Brazilian purchases. The companion animal division grew 12% to €319m (around 29% of sales), while the poultry unit's revenues climbed 8% to €385m (35% of turnover).

Ceva said its performance was strong across all geographical regions. While Europe remains the company's largest market with 34% (€374m) of sales, Africa/Middle East/Eastern Europe/Turkey accounts for 19% (€209m), North America/Pacific 16% (€176m), Latin America 15% (€165m) and Asia 13% (€143m).

This year's financial performance eclipses 2016's figures, which were by no means slack at 6% annual growth.

Major projects set for completion

Over the course of 2018, Ceva will be working on three major projects in France under its 'Factory of the Future' initiative.

In Laval, the firm will complete construction of a global center for expertise in companion animals. Between 2014 and 2020, Ceva will have invested €25m in its Ceva Sogeval campus. Around €7.5m of this will go towards the construction of this ultramodern 1,500m2 building for the companion animal sector, which is due to open in the second quarter of 2018.

In the third quarter of the year, Ceva aims to open a 2,000m2 building in Loudéac. Ceva has invested €7.1m in turning this industrial site into its main production facility for non-sterile liquids. In addition to its Feliway and Adaptil ranges, the new site will produce the Douxo dermatology range for the European market. Ceva is aiming to become a world leader in topical dermatology products by 2020.

In addition, Ceva is in the midst of building a 2600m2 industrial building at its Libourne headquarters. The firm is investing €8.5m in this particular project, which it hopes will increase storage capacity for vaccines and improve logistics. Ceva is also beginning a project this year to start reorganizing the entire Libourne site "with the aim of improving the work environment and encouraging exchange between different services".

'Rapid global change'

Ceva chairman and chief executive Marc Prikazsky said: "In these times of rapid global change, we need to make the most of our agility to quickly integrate the new orientations of research in areas such as artificial intelligence, connected agriculture, robotization, digitalization, big data, etc.

"The challenge for the future will be how to integrate these new technologies into our business model. This is a challenge for the agricultural community as a whole, both in France and around the world. In all these areas, once again, Ceva wants to become a first-line reference."

2020 target gets closer

Ceva is a step closer to its target of becoming a global top five player in the animal health sector by 2020.

However, between now and 2020, the firm still needs to climb one more place. This would require $500m extra sales (depending on Bayer Animal Health's full-year 2017 performance, which is yet to be published) or another mega-merger between the big players.

An increase of around $500m might be difficult over the next two years. It took Ceva six years to record it last increase of $500m in annual sales. In 2011, it reported turnover of $737.2m.

The chart below illustrates Ceva's consistent growth over recent years. In euros, the company has recorded double-digit growth in seven of the last 11 years. Annual turnover has more than doubled in the last six years. 

Reprinted with permission of Animal Pharm News




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