Together, beyond animal health Annual report 2016 CEVA ANNUAL REPORT 2016 1 WALL PAINTINGS FROM THE LASCAUX CAVES 2 CEVA ANNUAL REPORT 2016 CEVA ART “STREET ART” WORKSHOP IN BORDEAUX, FRANCE, FOR CEVA EMPLOYEES Ceva’s vision “Together, beyond animal health” focuses on the essential link between animals, people and our environment captured in Art throughout time. Today, veterinary science and art are often seen as polar opposites but nowhere is the history of this ancestral relationship better recorded than in Art. From the 20,000-year-old cave paintings found in Lascaux, close to our head office in South West France, to the spray painted street art (see cover) realized by our Directors Committee in 2016 – art is the best record we have of our ever-evolving relationship with animals. We encourage Ceva employees to interpret our vision through art. The results may not parallel Picasso but we are proud to share some of them with you in the pages of this report. CEVA ANNUAL REPORT 2016 3 4 CEVA ANNUAL REPORT 2016 CEVA ART PAINTING WORKSHOP FOR CEVA BIOVAC EMPLOYEES IN ANGERS, FRANCE Summary 6 Editorial 36 Ceva in 2016 83 Together, beyond animal health 103 Financial report CEVA ANNUAL REPORT 2016 5 Editorial 2016 was a very good year that saw Ceva grow on all fronts, becoming the leading French veterinary company 2016: now ranked sixth in the world As in previous years, the 2016 financial year was a to grow on all continents and in all countries: in good one, exceeding our forecasts. At €912 million, Europe, Africa, the Americas and Asia. Our most rapid our sales grew by 10%, at constant scope and progress can be observed in Asia (+25%) and in Latin exchange rates. 2017 should therefore see us pass America (+19%). These two zones each account for the symbolic €1 billion mark. 10% of our overall sales. Now ranked sixth in the world, Ceva is not just another As well as being strong in all continents, our growth animal health company. We are today, the leading is also evenly divided between sectors. Livestock French-based animal health company and as such production, which is essential to meet the world’s assume a responsibility to represent the strong growing nutrition challenges, accounts for 70% of tradition of veterinary medicine, which originated our sales. Companion animals, meanwhile, account with the founding of the world’s first veterinary school for 30% of sales and are progressing in line with our in Lyon more than 250 years ago. Ambition 2020 business plan, particularly in high growth sectors, such as external antiparasitic Ceva is proud to have inherited this weighty responsi- products, cardiology and dermatology. bility. Our company, with its international outlook, has every intention of continuing to promote this Ceva’s 5,000 employees are therefore proud to present expertise all over the world. The company continues these excellent results to you. 6 CEVA ANNUAL REPORT 2016 CEVACEVA ANNUALANNUAL REPORTREPORT 20162016 7 Substantial investment to move up to fifth in the world In order to prepare for this future, the company Substantial investments have been made across invested heavily: €70 million in its industrial our 3 pharmaceutical facilities in France. One sites during 2016, a figure that will rise to over of the major projects being the development €90 million in 2017. of the Ceva Sogeval campus in Laval, with the aim of achieving approval of the US authorities These investments are evenly divided between (FDA) for the manufacture of oral medicines. the biology and pharmaceutical businesses. In biology, Ceva invested massively in its Ceva The Loudéac site is also benefiting from an Biomune site in the US in 2014, and in 2016 it investment of €6 million, to relocate the was the turn of Ceva Phylaxia, our European manufacture of dermatology products from campus in Budapest, Hungary. Laval. 8 CEVA ANNUAL REPORT 2016 A 50/50 split between our pharmaceutical and vaccines business Our research and development budget (R&D) to develop new treatments to prevent their represented 8.5% of turnover in 2016, a similar suffering. In practice, it is better to do both. ratio to those of the world’s largest interna- Our responsibility is to continue to develop tional animal health companies. The aim is both preventative programmes to avoid that R&D will eventually be split 50/50 animals becoming sick and treatments to between our two growth drivers: vaccines cure those that unfortunately do. In 2016, and pharmaceuticals. both our business units continued to innovate, striving to meet the expectations of our In an ideal world, properly vaccinated animals customers through helping to ensure the never fall ill, which would make it unnecessary health of their animals. CEVA ANNUAL REPORT 2016 9 HERTAPE-INOVA, BRAZIL 2016 confirmed the dynamism of our pharmacy and biology teams In pharmaceuticals, 2016 highlighted the vitality of our of how to use antibiotics «as little as possible, only as much companion animal business. In antiparasitics, where we were as necessary». already present with Vectra® 3D for dogs and Vectra® FELIS for In a different segment but with the same overall objective, cats, Ceva expanded its range with the launch of Strectis®, Ceva and Sanders, a leading French animal nutrition company, offering long lasting protection for cats against fleas and ticks. joined forces to develop and market Indic@Vet, a new tool In July 2016, in London, the charity International Cat Care to control the use of antibiotics in livestock. Over the first nine (ICC) awarded our teams two prizes: the ICC «Easy to Give» months of use, to September 2016, use of antibiotics on farms prize for Amodip®, the first product for treating cats with high using Indic@Vet fell by 23% for poultry and 49% for swine. blood pressure, and the «Cat Friendly» prize for Feliway® Friends, which extends the benefits of Feliway to homes with several Our Biology business also continues to make strong progress, cats. In another therapeutic area, the 8th World Congress of rising to 3rd place globally in avian biology (number 1 in Brazil Veterinary Dermatology, which was held in our home area and number 2 in the USA). Our aim is to become the leader of Bordeaux, demonstrated the high level of expertise that in this market by 2020. I am confident we will succeed, given we have achieved in this field. the quality of our products - Transmune®, Vectormune® ND, Vectormune® FP-LT, Vectormune® AI, CEVAC IBird® - and our Still in the pharmaceutical sector and in a particularly important hatchery vaccination programs. Accordingly, it is significant area, given the globally significant problem of rapidly to see that the Poultry Franchise achieved a first in the animal developing resistance to antibiotics, Ceva strengthened its health sector, by obtaining Bureau Veritas quality certification commitment, together with the respective health authorities, for its international hatchery vaccination services C.H.I.C.K. to promote the responsible use of this class of drugs. Antibiotics program. are hugely important products that for over 80 years have protected and improved the lives of our families and animals. The Swine Franchise meanwhile made considerable progress That is why all our species teams have worked hard for several extending the successful launch of two vaccines, Hyogen® years now to develop responsible use programs. and Coglapix®, across several new markets but particularly in Europe. Accordingly, Ceva launched the 2nd edition of GRAM «Guidance for the Rational use of Antibiotics» for companion animals. The range will be once more significantly expanded in This practical guide, which is both comprehensive and 2017, particularly through the acquisition of Circovac (see easy-to-use, aims to help professionals make the best decisions below). 10 CEVA ANNUAL REPORT 2016 CEVA SANTÉ ANIMALE REINFORCES ITS POSITION IN CHINA THROUGH THE CREATION OF A NEW JOINT-VENTURE WITH EBVAC CEVA ANNUAL REPORT 2016 11 Six acquisitions Since our inception in 1999, Ceva has acquired over is the largest milk producer in the world, with production 40 animal health companies, always with the agreement equivalent to that of the entire European Union. India is of their managements, who in turn have assisted us with also a major beef exporter and the fifth-largest producer our development. We would like to thank them here for of chicken meat. Although India is a giant in livestock their contribution on the road we have travelled together. production, it ranks only thirteenth in the animal health These companies have opened up international markets market. There is therefore great potential for growth. Polchem for us, and enriched our ranges, expertise and corporate is a well respected name in both the dairy industry and culture. poultry farming and we are delighted to welcome them to the Ceva family. 2016 was a special year, with acquisitions which expanded our geographic horizons, particularly in India and Brazil, Brazil is another particularly important strategic market. our skills and our product portfolio, particularly in the field It is the world’s second beef producer behind the USA, and of vaccines. the third largest poultry producer behind the USA and China. Ceva already had a major presence there but the end In France, 2016 began with the takeover of iD Projects. of 2016 was marked by two new acquisitions, Hertape and Ceva is now emerging as one of the world leaders in hatchery Inova, to further strengthen our position in the country. automation and in-ovo vaccination. This form of adminis- We have now become the fifth largest veterinary biophar- tration is being developed in close synergy with marketing maceutical company in Brazil and a major player in bovine, of our avian vaccines.