Dechra Pharmaceuticals PLC Annual Report and Accounts for the year ended 30 June 2017 20 Years of Strategic Growth ® Stock Code: DPH Annual Report and Accounts for the year ended 30 June 2017 Company Number: 3369634 slugline Dechra Annual Report 2017 - Front.indd 3 slugline 9/14/2017 8:32:51 AM Welcome to Dechra Pharmaceuticals PLC Dechra is an international specialist veterinary pharmaceuticals and related products business. Our expertise is in the development, manufacture, and sales and marketing of high quality products exclusively for veterinarians worldwide. Getting Around the Report Forward-Looking Statements Icons are used within the Report to assist the reader to identify This document contains certain forward-looking statements. links to other relevant sections of interest. Below is a selection The forward-looking statements reflect the knowledge and of icons you will see used within this Report: information available to the Company during preparation and up to the publication of this document. By their very nature, For more information see further pages these statements depend upon circumstances and relate to within the Report events that may occur in the future and thereby involve a degree of uncertainty. Therefore, nothing in this document should be construed as a profit forecast by the Company. More information online at: www.dechra.com Glossary Terms used within this section Open the flaps to view Our History Dechra Annual Report 2017 - Front.indd 4 slugline 04/09/2017 13:58:27 Delivering Consistently for Our Shareholders Dechra is a company that has consistently delivered on its strategic objectives resulting in a strong track record of growth. Share Price 178.50p Dividend per Share 3.44p† 1 July 1996 to 30 June 1997 1 July 1997 to 30 June 1998 1 July 1998 to 30 June 1999 1 July 1999 to 30 June 2000 1 July 2000 to 30 June 2001 1 July 2001 to 30 June 2002 Underlying Profit Underlying Profit Underlying Profit Underlying Profit Before Taxation Before Taxation Before Taxation Before Taxation Underlying Profit Before Taxation £0.1m £0.7m £2.1m £5.8m £7.5m Market Market Capitalisation Capitalisation £88.9m £62.0m June 1997 September 2000 December 2001 Management buyout Dechra listed on the Vetoryl® launched in from Lloyds Chemist plc London Stock Exchange at the UK. supported by Mercury and 120 pence per share, with a Bank of Scotland. market capitalisation of £60.0 million. April 2002 Acquired North Western Laboratories and Cambridge Specialist Laboratory Services for a consideration of £2.75 million, enabling Dechra to extend its service offering to Our History the veterinary profession. April 2002 Felimazole® launched in the UK. The Company was incorporated in May 1997 to effect the management buyout from Lloyds Chemist plc. Three years later, in 2000, the issued ordinary share capital of Dechra was listed May 2002 on the London Stock Exchange. Since 2000, the Company has grown strongly through a Acquired Anglian Pharma combination of innovation, organic growth and acquisition. Plc for a consideration of £2.5 million which more than doubled Dechra’s contract manufacturing revenues. Underlying Profit Before Taxation is defined as operating profit excluding amortisation of acquired intangibles and impairment of acquired intangibles, impairment of investments, acquisition expenses, fair value uplift of inventory acquired through business combinations, rationalisation costs, loss on extinguishment of debt, and fair value and other movements on deferred and contingent consideration Dechra Annual Report 2017 - Front.indd 5 slugline 04/09/2017 13:58:27 Share Price 348.00p Share Price Share Price 240.00p 211.50p Dividend Share Price per Share Share Price Share Price Dividend 178.50p 6.89p† 123.00p Share Price 149.50p Dividend per Share 87.50p per Share 5.73p† Dividend 4.78p† per Share Dividend Dividend Dividend 3.44p† per Share per Share 3.78p† per Share 4.32p† 3.78p† 1 July 2001 to 30 June 2002 1 July 2002 to 30 June 2003 1 July 2003 to 30 June 2004 1 July 2004 to 30 June 2005 1 July 2005 to 30 June 2006 1 July 2006 to 30 June 2007 Underlying Profit Underlying Profit Underlying Profit Underlying Profit Underlying Profit Underlying Profit Before Taxation Before Taxation Before Taxation Before Taxation Before Taxation Before Taxation £7.5m £6.7m £8.1m £9.7m £11.0m £12.7m Market Market Market Market Market Market Capitalisation Capitalisation Capitalisation Capitalisation Capitalisation Capitalisation £62.0m £44.6m £76.2m £108.1m £124.6m £183.7m December 2001 April 2003 December 2003 November 2004 July 2005 December 2006 Vetoryl® launched in North Western Laboratories Entered into a European Granted a full EU licence for Received approval to market Acquired the intellectual the UK. rebranded to NationWide marketing agreement with Felimazole and granted a Vetoryl in 19 major European property for Equidone® Gel. Laboratories. Janssen Animal Health, UK licence for a new 2.5mg countries. allowing Janssen full marketing Felimazole tablet. April 2002 and distribution rights to April 2007 May 2003 June 2006 Acquired North Western Felimazole and Vetoryl in Acquired Leeds Veterinary Entered into a sub-licence April 2005 Signed a development and Laboratories and Cambridge mainland Europe. Laboratories for £0.75 million. Specialist Laboratory Services agreement with Bioenvision Inc. Granted a range extension for a marketing agreement for for a consideration of to develop Vetoryl for future 30mg Vetoryl capsule. Vetoryl in Japan with Kyoritsu £2.75 million, enabling Dechra marketing in the US Seiyaku. May 2007 to extend its service offering to and Canada. Secured a long term the veterinary profession. April 2005 trademark licence and Opened a US operation based marketing agreement with in Kansas City. Pharmaderm Animal Health April 2002 for a consideration of Felimazole® launched in US$5.0 million, to supply the UK. April 2005 a range of dermatological, Acquired Vetivex®, a licensed ophthalmic and optic veterinary fluid therapy product May 2002 products to the US veterinary for £0.8 million. Acquired Anglian Pharma market. Plc for a consideration of £2.5 million which more than doubled Dechra’s contract manufacturing revenues. Dechra Annual Report 2017 - Front.indd 6 slugline 04/09/2017 13:58:29 slugline Share Price 690.00p Share Price 486.00p Dividend Share Price per Share Share Price 14.00p 385.00p 490.75p Dividend Share Price per Share 12.27p† 422.50p Dividend Dividend Share Price per Share per Share 11.12p† 420.00p Dividend 9.64p† 20,420,517 per Share New shares 8.36p† issued Dividend per Share 7.58p† 12,438,210 New shares issued 1 July 2007 to 30 June 2008 1 July 2008 to 30 June 2009 1 July 2009 to 30 June 2010 1 July 2010 to 30 June 2011 1 July 2011 to 30 June 2012 1 July 2012 to 30 June 2013 1 July 2013 to 30 June 2014 Underlying Profit Underlying Profit Underlying Profit Underlying Profit Underlying Profit Underlying Profit Underlying Profit Before Taxation Before Taxation Before Taxation Before Taxation Before Taxation Before Taxation Before Taxation £16.9m £23.4m £26.1m £30.1m £33.0m £44.6m £39.8m Market Market Market Market Market Market Market Capitalisation Capitalisation Capitalisation Capitalisation Capitalisation Capitalisation Capitalisation £274.0m £276.9m £254.4m £326.1m £422.1m £601.3m £634.6m January 2008 December 2008 November 2009 October 2010 January 2012 May 2013 August 2013 Acquired VetXX Holding A/S, VetXX integrated and Achieved mutual recognition Acquired DermaPet® Acquired the worldwide Skipton and Bladel Divested Services Segment a leading developer, producer rebranded Dechra Veterinary of Malaseb® in 17 European Inc., a Florida based rights (excluding Canada) sites renamed Dechra to Patterson Companies, and marketer of companion Products. countries. dermatological business, to HY-50® for a cash Manufacturing. Announced Inc. for £87.5 million, animal products, for a total for a total consideration consideration of the closure of our creating a pure veterinary consideration of £61.7 million. of US$64.0 million. The CAD 8.03 million. manufacturing site in Uldum, pharmaceuticals and related December 2008 February 2010 acquisition strengthened Denmark. products business. Received FDA approval for DVP UK’s logistics and finance Dechra’s position as a leader May 2012 Vetoryl in the USA. function integrated into an in the worldwide veterinary Acquired Eurovet® Animal March 2014 European central logistic and dermatological market. Health B.V., an expert in Commenced trading shared service centre in Uldum, May 2009 developing, registering, in Italy. New therapeutic canine diet Denmark. December 2010 producing and marketing developed and marketed to added value, companion Acquired Genitrix Limited, a May 2014 aid treatment of osteoarthritis and farm animal veterinary privately owned veterinary Acquired business and in dogs, known as Specific®. pharmaceutical products, for company with a range of assets of PSPC, Inc. for a a total cash consideration of products complementary consideration of up to €135 million. June 2009 to Dechra’s, for a total US$10 million. Received approval to market consideration of Felimazole in the US. £6.4 million. † Adjusted for the bonus element of the Rights Issue. Dechra Annual Report 2017 - Front.indd 1 slugline 04/09/2017 13:58:30 Share Price 1700.0p Dividend per Share 21.44p Share Price 1172.00p Share Price 983.00p Dividend per Share 18.46p Dividend per Share 16.94p 4,775,835 New shares Share Price issued Share Price 723.50p 690.00p Dividend Dividend per Share per Share 15.40p