Media Coverage

Ceva lays down marker for big year as H1 witnesses 20% growth

Jul 25, 2017 - Animal Pharm
By Joseph Harvey
Animal Pharm
July 24, 2017 

The company has benefited from its recent international acquisitions, which have allowed it to outperform last year's financial results. Libourne-based Ceva posted first-half revenues of €546 million ($636 million), which also represented 7% growth at constant exchange rates.

The firm's sales grew across all of its geographic zones despite significant negative currency impact, especially in Africa, Middle East, Eastern Europe, Russia and Turkey (+14% on a constant currency basis). Ceva also noted a strong H1 showing in Latin America (+87%), Asia (+40%), North America Pacific (+13%) and Europe (+10%).

The strength of Ceva's performance in developing nations can be attributed to its targeted acquisition strategy, which has recently seen it pick up firms in Brazil and India.

Products across a range of species are also showing healthy increases in sales. The standout performer was the firm's swine business (+45%), while ruminant (+36%), poultry (+11%) and companion animals (+16%) also showed double-digit growth.

Ceva stated: "The group delivered an operational result ahead of its budgeted objective and continued to make significant investments in R&D and production sites around the world."

Ceva has Bayer in its sights

The company's goal is to become a top five player among the manufacturers of pharmaceuticals and vaccines for animals by 2020. Ceva is hoping to achieve this goal through a mix of acquisitions and organic growth. Over the course of last year, the firm made six purchases. These deals mean Ceva has acquired more than 30 companies since it was founded in 2000.

Last year, the firm said it will be pursuing its international ambitions. This will most likely see it make more acquisitions, with the Asian market a key target.

Should Ceva replicate this performance in the second half of 2017, it would be placed around $400-$500m behind Bayer Animal Health in fifth position in the Animal Pharm industry rankings. This gap could be closed following two years of major growth from Ceva – coupled with flat years from Bayer – or with one medium-sized acquisition from Ceva. However, to date, most of Ceva's M&A deals have been smaller bolt-on purchases for geographic growth or for portfolio expansion.

Bayer began 2017 with a strong performance in the first quarter, recording an 8% improvement in sales year-on-year.

Ceva is currently eighth in the standings and will automatically climb to seventh this year due to Boehringer Ingelheim Animal Health's merger with Merial.

Veterinary diagnostics leader IDEXX Laboratories is in sixth place. However, IDEXX does not sell pharmaceuticals and is not a target for Ceva to leapfrog.

Reprinted with permission of Animal Pharm News




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