Vetoquinol (VETO) H1 2024 earnings summary

Executive summary

• Group sales reached €264.4m in H1 2024, up 3.2% year-over-year, driven by Essential products and strong performance in Europe and Asia-Pacific, while US sales declined due to inventory reductions and supply chain issues.

• Net income fell 26.1% to €23.8m, impacted by higher R&D and marketing spend, increased tax rate, and the absence of prior year non-recurring gains.

• EBITDA was €45.0m (17.0% margin), down from H1 2023, reflecting increased costs and no non-recurring gains.

• The group maintained a strong net cash position, increasing to €142m as of June 2024.

Financial highlights

• Essential products sales rose 6.0% to €160.2m, now 61% of total sales.

• Gross margin improved to 72.3%, aided by product mix and price increases, offsetting higher input costs.

• Operating income recurring was €32.0m (12.1% of sales); EBIT before acquired asset amortization was €38.5m (14.6% of sales).

• Free cash flow and operating cash flow were €27.3m, with net cash position at €142m.

• Earnings per share were €2.01, down from €2.72 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.

• The group remains cautious due to ongoing economic, regulatory, and geopolitical uncertainties.