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Together, beyond animal health

Annual report 2015

2 CEVA ANNUAL REPORT 2015

SUMMARYEDITORIAL

CEVA IN 2015

TOGETHER, BEYOND ANIMAL HEALTH

FINANCIAL REPORT

041258

70

CEVA ANNUAL REPORT 2015 3


EDITORIAL

Of course the world is changing, and nothing is guaranteed to last. Given the uncertainties of the future, however, we can only push ahead and continue to open up new possibilities, proud of working hard for our customers, and with respect for animals.

Marc Prikazsky, CEO Ceva Santé Animale


2015 was a very good year once again, with 12% growth in turnover, 27% in avian biology alone. Today, 13 products exceed sales of €10 million and account for 32% of sales. We continue to intensify our strategic focus, meanwhile, with our top 15 products growing by 20%.

Our success is based first and foremost on the relevance of our vision - “Together, we are building a new reference to create value beyond animal health" and our determination to protect the well-being of the global population by ensuring the better health of animals. By developing veterinary products, equipment and services, we safeguard the quantity and quality of protein sources and protect against the spread of zoonotic diseases which, with the increase in population and trade, expose us to the risk of harmful epidemics.

Our commitment to our vision also, and indeed above all, inspires us to treat animals with the greatest respect. They have the right to be cared for with every possible consideration. In the case of almost half of the pets that are abandoned, it is as a result of improper care.

At the heart of our vision is also our intention to “become a reference for our customers”. This “passion for the customer” is the result of all of our values coming together: “entrepre-neurial spirit, innovation and solidarity”. It is this empathy for our customers that drives our teams to offer not only

innovative products, whose effectiveness is increasingly recognized, but also equipment and a range of services, and even to provide help in setting up health management systems in their farms or clinics. Helping them to diagnose the diseases found in their own specific environment, to choose the right protocols, to monitor the effects of treatment, to put corrective measures in place, and to set up appropriate training schemes, all of these factors are becoming more and more important.

Finally, our model is based on our determination to support all forms of agriculture. We are working to support sustainable intensive farming because our planet is faced with a food challenge: 800 million people do not have enough to eat. Our work also helps improve living conditions for animals while helping to preserve the environment. When we vaccinate in a hatchery, we protect birds earlier, without causing them stress. However, this commitment does not prevent us from supporting traditional agriculture in all its forms, which in different regions of the world, provide viable economic alternatives and even preserve social fabric and cultural identities. Agro-biodiversity is also an essential step towards protecting our ecosystem. It is diversity that makes ecosystems robust: more than half of all medicines are derived from natural substances – plants, marine organisms, micro-organisms – which offer incredible molecular diversity.

2015 DEMONSTRATED THE STRENGTH OF OUR VISION AND BUSINESS MODEL: PUTTING OUR “PASSION FOR THE CUSTOMER” INTO PRACTICE AND ENSURING THE HEALTH AND WELL-BEING OF BOTH HUMANS AND ANIMAL

SALES

SALES OF POULTRY VACCINES

GROWTH TOP 15 PRODUCTS

+12%

+27%

+20%


EDITORIAL

By considering our work from this perspective, we have no option but to work “Together”: “Together” with our customers, who keep us informed about the changing world; “Together” with research centers, our suppliers, international, national and regional institutions and associations, as all of their goals are directed towards the welfare of people and animals.

This annual report demonstrates how our convictions translate into reality as our teams put them into action in the field consistently and on a daily basis.

It confirms the effectiveness of the actions we carry out to meet the expectations of our customers and earn their trust. This desire to become a “reference” for our customers has made us the 7th largest veterinary pharmaceutical company worldwide by turnover, and the 3rd

in avian biology. Through further hard work and commitment, we aim to see Ceva break into the global top 5 in animal health by 2020.

The success of our products, reflected in an ever more comprehensive range of services, is the key marker of our ability to innovate.

In the field of avian biology, Ceva has seen growth of 30%. In just a few years, chicken will become the most consumed meat globally: it is free of any taboo, relatively inexpensive and its’ production exerts little pressure on the environment. Our vaccines – Transmune®, Vectormune®ND, Vectormune® FP-LT, Vectormune® AI, CEVAC® IBird® - are particularly effective new-generation products. Our Ceva Devac® and Ceva Ecat® campuses design innovative vaccination machines and equipment for hatcheries,. The C.H.I.C.K Program includes a range of services providing support for farmers throughout the vaccination process.

Not to be outdone, the “Swine Franchise” addresses the needs of a major species in terms of food resources. With Hyogen® and Coglapix® both registered in Europe in 2015, for the first time we entered the second-largest world market in this segment . The “Swine Franchise” has also developed the Ceva Lung Program which, like the C.H.I.C.K Program, serves to optimize vaccination protocols and measure their effects. The latest application , Respinomics, is able to calculate the economic consequences

of these diseases and the benefits that can be had from vaccination operations and/or changes in breeding management methods. Producers can therefore better protect the health of their animals while at the same time measure the economic impacts.

The “Ruminant Franchise” has benefited from the talents of our teams in R&D and Regulatory Affairs for their excellent performance in registering Velactis® in Europe.


Our success is based first and foremost on the relevance of our vision - “Together, beyond animal health”.


Velactis® is without doubt the most significant innovation in dairy production. It is the first product designed to facilitate the management of dry-off, improve udder health, and support farmers, while making an effective contribution to the welfare of dairy cows.

As Velactis® is now registered in Latin America and Europe, the doors are now open to major interna-tional success across other markets.

We have another major first in the area of companion animals with AMODIP®, the first treatment for feline hypertension to have obtained a market authorization (MA). Feline hypertension is a chronic illness that can produce serious lesions in the kidneys that require treatment for life. After several successful years in the canine cardiology market, Ceva has now extended its area of expertise to cats. The success of the Douxo range, which we owe to the dynamism of the Ceva Sogeval campus,

TURKEY, KARAISALI REGIONCEVA CUSTOMER AND HIS FLOCK OF SHEEP


is proof that we have become the specialist in topics related to dermatology for dogs and cats.

To measure up to our ambition and meet all of our challenges, to stimulate innovation and continue to earn the trust of our customers, we must have an efficient organization.

The aim of our our new organizational structure is to remain customer-focused, agile and manageable, to encourage innovation and local dynamics (our notion of campus), bringing all these elements together to achieve perfect execution. Our organization must also ensure that the conditions are in place for individuals to enjoy the expression of their talents. To continue to steer our business successfully, the executive committee has expanded to welcome 3 new members. Among its 9 members, there will now be 5 veterinarians, reflecting our desire to give our veterinary profession its rightful place in the decision-making process for our business.

In addition, to provide our customers with a guarantee that products will be available, and will meet the highest standards of quality, at the right price and the right time, we need to strengthen our industrial base and our supply chain. Success brings responsibilities. It is for these reasons that we must continue to invest in these areas just as much as in R&D, which will represent almost €100 million in 2016.

In 2015, we had a visit from the French Prime Minister, who praised Ceva as a company “at the forefront of innovation”. This recognition follows on from the 4 awards that we have received this year and which pay tribute to our entrepreneurial spirit. It is also in line with other forms of recognition that we have received. The USDA (United States Department of Agriculture) selected Vectormune AI to be part of a vaccine bank it has established as a precaution against a future outbreak of avian influenza , and the Bill and Melinda Gates Foundation signed a partnership agreement with us for 3 projects in Bangladesh, Nigeria and Burkina Faso.


At the heart of our model there also lies our intention to “become a reference for our customers”.

EDITORIAL

POULTRY FARMING, KURSK, RUSSIA

Greece has been in a difficult economic situation since 2010.

GDP shrunk by 32% between 2010 and 2013. Despite some signs of recovery in 2014, 2015 proved to be the hardest year with the rate of unemployment exceeding 26% in the second quarter. The banks closed in July; according to Crédit Suisse, the Greeks lost 12% of their wealth in one year (between June 2014 and June 2015). Needless to say, this bad news fuelled a severe wave of pessimism.

The Greek animal health market weathered this situation relatively well. While it had lost 23% of its value between 2009 and 2012, it recovered at the end of 2015, limiting its decline to 10%.

In this particularly negative context, Ceva Hellas announced a contingency plan and an unprecedented drive to preserve its position, which more than paid off. At the end of the year our Greek subsidiary reported growth which is exceptional:

Sales and operating income rose respectively by 20% and 36%.

In the poultry sector, Ceva Hellas has a leading position in Gumboro disease control and infectious bronchitis management, with market shares 80% and 60% respectively.

In the companion animal field, and more specifically the external parasite control range, Vectra 3D® established a position for itself at the very top, 15 months after its introduction.

In the ruminant sector, we control 30% of the market.

All these achievements allowed Ceva Hellas to join the ranks of the top 4 largest firms in the Greek market in 2015.

This success is explained by the fact that in this adverse climate, our subsidiary has been able to set itself particularly clear and relevant priorities:

Minimise the risks

Support the most loyal customers

Focus on strategic products by proving their added value

Finally and above all keeping our employees motivated, not an easy task for our Subsidiary Manager.

The 2015 results are the real-life reflection of our ability to remain faithful to our model, even in the most difficult times: to keep our vision “Together, beyond animal health” alive and to move further in our ambition to become a “reference for our customers”, while ensuring respect for animals remains our primary concern.

GREECE CEVA HELLAS IS ACHIEVING GREAT FEATS IN A CHALLENGING CLIMATE IN GREECE..…

SALES PROFITABILITY MARKET SHARE GUMBORO

MARKET SHARE INFECTIOUS BRONCHITIS

+ 20% + 36% 80% 60%



EXECUTIVE COMMITTEE

DR. JÉRÔME-ANDRÉ GAUTHIERSTRATEGY AND BUSINESS DEVELOPMENT DIRECTOR

VALÉRIE MAZEAUDLEGAL DIRECTOR

DR. MARC PRIKAZSKYCHAIRMAN & CEO

THIERRY LE-FLOHICBIOLOGY UNIT DIRECTOR

ALAIN DE WOILLEMONTCFO


DR. GABRIEL RSHAIDCOMMERCIAL OPERATIONS AND MARKETING DIRECTOR

DAVID DERAINGROUP HUMAN RESOURCES DIRECTOR

DR. PASCAL ANJOTPHARMACY UNIT DIRECTOR

THIERRY LE-FLOHICBIOLOGY UNIT DIRECTOR

DR. STEVE CHUCHIEF SCIENTIFIC ADVISOR

(NOT IN PHOTO)

CEVA I N 2015


CALENDAR 2015

FRENCH PRIME MINISTER'S VISIT

CEVA RECOGNISED IN PRESTIGIOUS AWARDS

POULTRY

SWINE

COMPANION ANIMAL

RUMINANT

14

16

20

22

36

46

52

CEVA I N 2015



2015 - A YEAR IN THE LIFE OF CEVA

CENTRE DE R&D DE LIBOURNE

APRIL “Breathe Easy” - focus on improved swine respiratory health at ESPHM (European Symposium of Porcine Health Management) Nantes, France

JANUARYVelactis® is registered in Brazil and Mexico

FEBRUARY 300 managers gather in Lisbon, Portugal for the Ceva Global Convention – “Building the Future together”

CALENDAR 2015


JULY French Prime Minister, Manuel Valls visits Ceva Head Office in Libourne

SEPTEMBER / OCTOBER WVPA, (World Veterinary Poultry Association) Congress in Cape Town, South Africa – Ceva runs highly successful Avian Influenza seminar.

Following month – USDA awards Ceva contract to supply 100 million doses of Vectormune® AI vaccine for avian influenza vaccine bank

NOVEMBERCeva’s Asia Distributors Conference in Guilin China

DECEMBER Partnership with Australia’s wildlife vets to help protect Australia’s koala population.


THE FRENCH PRIME MINISTER, MANUEL VALLS VISITS CEVA AND THE AQUITAINE CLUB FOR MEDIUM-SIZED INDUSTRY AND CALLS FOR RECOGNITION OF THE SPEARHEADS OF FRENCH INDUSTRY

Medium-sized enterprises are spearheading French industry. While these companies may be few in number, accounting for just 6% of French companies, they represent 25% of added value and 25% of R&D investment, while over 33% of their sales are generated overseas. Some 70% of these companies have increased staff numbers in recent years and on the whole have weathered the global economic crisis well. They do not however benefit from the same rules and support from public bodies as French SMEs, and also suffer from a chronic lack of recognition of their success and contribution, attributed to a “communi-cation gap” with institutions and the general public.

This is the rationale behind the creation of the Aquitaine medium-sized business club, a public-private partnership, which allows business leaders to meet each other and with experts to debate and create proposals for economic growth in the region. Marc Prikazsky, CEO of Ceva Santé Animale, is President of the Club.

Manuel Valls was accompanied during his visit to Ceva by a large delegation headed by the President of the Aquitaine Region, Alain Rousset. The Prime Minister praised Ceva as an example of a successful and highly innovative company which devotes close to 10% of turnover to R&D, bringing a number of new products to the market every year. He visited the new pharmaceutical production site in Libourne, which has recently seen an investment of €18 million to create a state-of-the-art facility. “I would like to thank you, Marc Prikazsky, for your warm welcome here, for an extraordinary visit to your company, Ceva Santé Animale, at the cutting edge of innovation,” declared Manuel Valls.

For Marc Prikazsky, this visit by the French Prime Minister signified wider recognition of the dynamism of the French veterinary sector, which represents 20% of the world market. Ceva in particular stands out in this field because of its unique business model, both with its shareholding structure, which brings together investment funds and employees, and its business strategy, which is based on an excellent synergy between internal and external growth. Marc Prikazsky added, “We wanted to prove that it is possible to grow and do business internationally while continuing to invest heavily in France. I believe in our country’s industrial future because we have many highly-trained people and all the skills necessary to succeed, provided that we invest in state of the art production tools to remain competitive.”

The facts certainly bear this out.

Today, Ceva is the 7th biopharmaceutical company worldwide, and 3rd in avian biology. Driven by its 43 subsidiaries, 21 production sites and 13 R&D centers, Ceva has been one of the fastest-growing companies in the market since its creation. With its focus on its Together, beyond animal health vision, on its values: customer passion, entrepreneurial spirit, innovation and solidarity”and its ambition to become a reference for our customers, the company intends to carve out a place in the global top 5 in the sector by 2020.

While 90% of turnover comes from international sales, a third of the 3,800 employees work in France. Around 36% of the Group’s sales (80% of pharmaceutical products) come from the 5 French factories in Libourne, Loudéac, Laval, Landivisiau and Saint Barthélémy d’Anjou. As for the French subsidiary,

On 23 July 2015, Prime Minister Manuel Valls came to meet the medium-sized businesses of Aquitaine, (Ceva’s home region of France) at the initiative of the Regional Council. He took the opportunity to visit Ceva Santé Animale, which he acknowledged to be a company at the forefront of innovation.


it is consolidating the position of Ceva Santé Animale as a leader in the French market, following the recent acquisition of Sogeval.

Ceva’s success proves that globalization can sit comfortably alongside regionalization. It is by working within robust ecosystems that bring together customers, industrial and institutional partners, private and academic research centers, that we can put down the roots that will allow us to innovate and spread our wings worldwide.

I would like to thank you, Marc Prikazsky, for your warm welcome here, for an extraordinary visit to your company, Ceva Santé Animale, at the cutting edge of innovation.

Marc Prikazsky, Chairman & CEO, Ceva Santé Animale

Manuel VALLS, French Prime Minister


OF SALES DEDICATED TO R&D

SALES GROWTH BETWEEN 1999 AND 2015

VETERINARY BIOPHARMACEUTICAL COMPANY WORLDWIDE

NEW PRODUCTS LAUNCHED ON AVERAGE EACH YEAR

GLOBAL AVIAN BIOLOGY COMPANY

10%X 7

6


7 TH 3RD


INCREASE IN WORKFORCE BETWEEN 1999 AND 2015

EUROS INVESTED IN LIBOURNE'S NEW PRODUCTION SITE

SUBSIDIARIES

EMPLOYEES WORLDWIDE

R&D CENTERSPRODUCTION SITES

X318 million

44

3 800

1321


MEETING WITH THE MEDIUM-SIZED BUSINESSES OF AQUITAINE


CEVA’S ENTREPRENEURIAL SPIRIT RECOGNISED AND CELEBRATED WITH FOUR PRESTIGIOUS AWARDS IN FRANCE

JULY 2015Winner of the Grand Prix des Entreprises de Croissance 2015 in the “Health, Pharmaceuticals & Medical Technology category - turnover €100 million to €1 billion”.

Organised by Décideurs magazine published by Leaders League, and in collaboration with the Ministry for the Economy and Finance, for the second year running this prize celebrates companies of all sizes and from all sectors of activity that have experienced strong growth while being innovative, creating jobs, and developing social and environmental actions.

SEPTEMBER 2015Winner of the Prize for Entrepreneur of the Year, South-West France (Dr Marc Prikazsky, Chairman & CEO, Ceva)

Created by EY and L’Express-L’Expansion, the 23rd edition of the prize for “Entrepreneur of the Year” rewards “Champions of the enterprise spirit” who, through their talent and daring, participate actively in the dynamism of the French economy.

R&D CENTER, LIBOURNE

CEVA RECOGNISED IN PRESTIGIOUS AWARDS


NOVEMBER 2015Winner of the Ambitions d’Entrepreneurs trophy, international category, awarded by the Banque Palatine and iTELE

SEPTEMBER 2015"Champion du Made in France" with "Des Usines et des Hommes"

Ceva Santé Animale was selected as one of the 35 companies that are examples of "Champions of Made in France"

Devised by the movement for medium-sized enterprises in collaboration with business magazine L’Usine Nouvelle and photographer Thierry Bouët, the "Des Usines et des Hommes" (Of Factories and Men) exhibition provides an insight into 35 French intermediate-sized businesses, all at the cutting edge of innovation, leaders in their field, successful in international markets and powerhouses of the French economy. The focus is on the men and women who work for these companies and especially on their know-how, which contributes to making French industry resolutely modern and innovative.

CEVA PAULINIA, BRAZIL

CEVA LIBOURNE, FRANCE

POULTRY


POULTRY

AVIAN VACCINES CEVA AIMS TO BECOME A NEW REFERENCE FOR ITS CUSTOMERS AND POSTS 30% GROWTH IN 2015

According to the FAO, some 315 million tonnes of meat were consumed around the world in 2014. This consumption has risen by 2.3% a year over the past 10 years, an increase which should continue at a constant rate, driven by the rise in overall living standards and also because levels of consumption in some countries are currently very low.Today an African person consumes on average 10 times less than someone in North America. Chicken is currently the second most consumed meat after pork, and is set to take the top spot. According to the FAO, 73% of additional meat consumption between now and 2023 will be chicken. There are multiple advantages to chicken meat and eggs, given that they are not the subject of any religious taboo and are relatively inexpensive. The number of large poultry farming operations is constantly increasing, as they offer considerable economic advantages when it comes to feeding an ever growing world population, of which nearly one quarter suffers from malnutrition. Their animal health management is also becoming more sophisticated, as the risk of an epidemic increases with the size of the farming operation.

To allow large poultry farming operations to take charge of their health management we cannot simply supply them with effective pharmaceutical and biological products. Vaccine administration now uses quite complex technology and is becoming automated. The very process of vaccination requires a holistic approach encompassing diagnosis, definition of a vaccination protocol tailored to the context of the disease, supply of equipment follow-up after vaccination, and all these processes require staff to be trained to increasingly high levels.


GROWTH IN 2015 LESS GREENHOUSE GAS EMISSIONS TO PRODUCE 1KG OF CHICKEN THAN TO PRODUCE 1KG OF BEEF

30% 7 X



OUR AIM IS TO BECOME A NEW REFERENCE FOR OUR CLUSTOMERS, BY BETTER UNDERSTANDING THEIR NEEDS AND EXPECTATIONS.

Ceva was quick to start working in avian biology, guided by its intuition of the role that this meat would have to play in feeding the global population.

Very early on, Ceva also demonstrated its determination to take this new reality for farmers into account, in order to provide them with a comprehensive solution.

The first thing that was needed was the products. Thanks to strength of all the links in the value chain between Ceva Phylaxia (Hungary), Ceva Biomune (USA) R&D centres, the Strategic business development team whose work allowed us to broaden our expertise and gain access to new markets and the Marketing and Sales teams in the Poultry Franchise, Ceva has created a unique range of new generation vaccinations, renowned all over the world for their effectiveness.

It was also necessary, however, to meet producers’ equipment needs, leading Ceva to acquire Desvac in 2007 and Ecat In Ovo in 2009, followed by the whole of Ecat in 2013. Ceva Desvac and Ceva Ecat have become two campuses specialising in the design and manufacturing of vaccination equipment and, in the case of Ecat, hatchery automation.

Last but not least, we needed to provide services to ensure proper use of the tools and offer our clients “bespoke” support

guaranteeing the effectiveness and quality of vaccination administration. The C.H.I.C.K Programme was born.

THE RESULTS WERE QUICK TO COME TO FRUITION:

one in four broiler chicks across the world are vaccinated by our teams

growth in avian biology reached a record rate in 2015.

Ceva has established itself as the leader for broilers in the USA, Brazil and AMEET (Africa, Middle-East, Russia and Turkey) zones

Ceva is also confirming its position as a leader in Argentina, Peru, the Philippines and South Africa.

POULTRY


KEY VACCINES TO ERADICATE CHICKEN DISEASES

CEVAC® TRANSMUNE IBD To fight Infectious Bursal Disease

(IBD) in 2015, Ceva vaccinated

10 billion birds with CEVAC®

Transmune IBD, posting record

growth once again. IBD is a

particularly contagious and

recurring infection that affects

birds all over the world.

It has considerable economic

impact across the globe because

of the virus’s exceptional resistance

meaning that birds are systema-

tically exposed to it.

The reasons for the vaccine’s

success over the years lies in the

quality of the coordination

between the veterinary, marketing

and sales teams who have gone

out into the field and shown that

the vaccine corresponds perfectly

to the requirements of the poultry

industry. One of the advantages

that makes Transmune stand out is

its ability to block the cycle of

replication and spreading of the

virus. Our vaccine is able not only

to protect vaccinated birds, but

also to reduce the viral load in the

environment where they are raised.

In 2015, Ceva’s main avian vaccines convincingly demonstrated that they met our clients’ requirements. They offer the unique feature of protecting not only the birds that have been vaccinated but also, and above all, of reducing the viral load of farms by blocking the cycle of replication and spreading of viruses. These advantages make for very innovative vaccines.


VECTORMUNE® FP-LTLaryngotracheitis is an extremely contagious viral disease which is increasingly affecting broiler rearing operations. It causes severe lesions of the respiratory system, in particular the trachea, among contaminated birds.

The introduction of Vectormune® FP-LT in China was extremely successful and proved our vaccine’s ability to protect against outbreaks of Laryngotracheitis.

This success has been driven by the originality of our vaccine solution concept which takes account of the whole vaccination environment and guarantees success thanks to hatchery administration. The success is a reward for two years of hard work in difficult field conditions by our Chinese team, who have worked hard to meet our customers expectations. The result is that 200 million birds were vaccinated in 2015: a good start that was well managed.

VECTORMUNE® NDAlso saw strong growth in 2015: 5 billion birds were vaccinated by Ceva to reduce their exposure to the impact of Newcastle disease and Marek’s disease viruses. With the same ability as Transmune to block the cycle of replication and spreading of the virus, Vectormune ND is now considered to be the leading product for preventing epidemics of Newcastle disease and avoiding increases in mortality and the heavy economic losses they imply.

In 2015, our key accounts used Vectormune® ND and CEVAC® Transmune IBD as the backbone of their vaccination programmes.

Even in countries little affected by these viruses, farmers are increasingly beginning to use this vaccine because, contrary to conventional attenuated live vaccines, it provokes very few post-vaccination reactions. By reducing losses and use of antibiotics, Vectormune® ND proves that “prevention is better than a cure”.

VECTORMUNE® AIOn 21 April 2014, the US Department of Agriculture (USDA) announced that a severe epizootic of avian flu had hit seven north-eastern States and was affecting more than 50 million turkeys and laying hens, which were going to have to be slaughtered over the course of 2015. As a result, American egg production fell and prices soared (+60%). Repercussions spread as far as Europe, which took advantage of this misfortune to export to the US and its historic clients. Until this outbreak, the USDA had been reluctant to consider the idea of vaccination, but now changed its strategy.

As a result, Vectormune® AI was chosen alongside an American vaccine to build a buffer stock, a necessary step for effective action in the event of another outbreak of the influenza virus.

Vectormune® AI has outstanding properties, notably its ability to work effectively against all the strains of the H5N1 virus, making it very flexible.

Based on the strength of these qualities, over the past three years the vaccine has been launched successfully in Mexico, Egypt, Bangladesh and Vietnam within the framework of “national” avian influenza control campaigns.

POULTRY


BIRDS VACCINATED WITH VECTORMUNE® GLOBALLY IN 2015

BIRDS VACCINATED WITH VECTORMUNE® FP-LT IN CHINA IN 2015

5 billion 200 million

CEVAC IBIRD

In 2015, CEVAC IBird reinforced its presence in Europe and Russia and confirmed why it is an important vaccine for fighting infectious bronchitis. The key to this success resided once again in our teams ability to take account of producers concerns.

CEVAC IBird offers the advantage of effective protection against the multiple variants of bronchitis, with a single vaccination covering the whole growth period. This accomplishment is the result of a concept rather than a product, since it entails vaccinating all the chicks in the hatchery on the same day with

a combination of Cevac IBird and a classic Massa-chusetts vaccine.

Technically, it also meant that Ceva had to be able to provide the right machine to go with it: the Desvac In-Line Spray.

Desvac In-Line Spray is without a doubt the “smartest” sprayer yet designed. This particularly innovative device can be adapted to all hatchery configurations. Its flat spray technology allows for perfect spray coverage which helps greatly improve vaccination quality.


EQUIPMENT FOR RAPID, HIGH-QUALITY VACCINATIONS

Ceva’s determination to support producers at every level led the company to address the need for high quality, revolutionaryvaccination equipment.

This desire became a reality in 2007 with the acquisition of Desvac, now the Ceva Desvac Campus.

The Ceva Desvac Campus designs and produces vaccination devices.These include machines for subcutaneous or intramuscular injection and spray vaccination for day old chicks in the hatchery, chickens, layers and breeders.

In 2009 Ceva broadened its offering through its merger with Ecat which became the Ceva Ecat Campus in 2015. The Campus designs and produces in-ovo vaccination machines which allow chicks to be vaccinated directly in the egg, a few days before hatching. This is a major

advantage in terms of vaccination precision and the well-being of chicks, with less need to handle them through the growing period.

However, the campus’s activity is much broader than that: it also develops and produces a particularly extensive and high performance range of machines designed to automate hatcheries by optimizing all flows and handling of eggs and chicks.

Innovation is a continuous process at Ceva, driven by the feedback from our marketing and sales teams who listen to our customers and then the work of our R&D teams who then work to s to translate these expectations into new solutions.

In 2015 our two campuses launched 2 new products:

- Ceva Ecat Mirage Laser Life

- Ceva Desvac Duo Spray & Gel

At Ceva Ecat, the Mirage Laser Life is a technology which detects fertilized, from unfertilized eggs. The advantages of this valuable tool earned it the InnovSpace 2015 award.

At Ceva, a campus is defined as a skills cluster which brings together, on a single site, the human and industrial expertise required for research, production and rapid delivery of innovative products, in line with the needs of the group’s markets and strategy.

CHICKEN FARMPERU

POULTRY


Ceva has become a leader in the field of automatic laser candling for embryonated eggs.

Several Laser Life machines were supplied in 2015, notably two in Indonesia, to the great satisfaction of customers who previously had no way of detecting dead embryos.

In 2015 sales of Ceva Ecat Campus machines increased all over the world:

Numerous Egginject in-ovo vaccination machines were supplied throughout the world. The Ceva Russia team also signed contracts for two machines with an annual capacity of more than 200 million chicks. There was also a breakthrough for the team in Thailand with the supply of a first machine and a second currently being delivered. Last but not least, we have installed our first Egginject in France.

In hatchery automation, 2015 saw some impressive developments with, for example, the installation of two full hatcheries in Indonesia (hatcheries of 80 million chicks), the opening of several facilities in Algeria, and the signing of contracts in China, including a hatchery that

processes over 100 million chicks per year with full automation.

Ceva Desvac is doing just as well as Ceva Ecat: in 2015, after the success of its flagship In Line Sprayer, IMVAC and DOVAC equipment, Ceva Desvac will supply its first “Desvac Duo Spray & Gel” to the USA.

Thanks to this equipment which combines originality and advanced design, chicks are not only vaccinated, but also fed and watered. This innovation is due to the collaboration between the team of engineers, innovation and development technicians, and the field teams based in the USA. Thanks to the latter, the equipment has been adapted to meet the needs in the field of the client, so that they experience the best possible outcome.

Ceva Ecat and Ceva Desvac are proof of the relevance of our campus concept. The campuses are “powerhouses” which stimulate other parts of the group along new paths of innovation. Success can only be achieved “together”.

MIRAGE LASER LIFECeva has become a leader in the field of automatic laser candling for embryonated eggs.

CEVA ECAT


THE C.H.I.C.K. PROGRAM, A DEFINING MOMENT

AN INTEGRATED CUSTOMER APPROACH COMBINED WITH STRONG VETERINARY SUPPORT

The C.H.I.C.K. Program aims to cover the whole vaccination process. It is a set of services and training which includes selecting the best-suited vaccination equipment and integrating it perfectly into hatchery routines. Given the increasing sophistication of these

machines, their use requires regular, specific training for operators on the implementation of procedures - adjustment, cleaning the needles etc. – as well as the maintenance of operations with periodic controls and, if necessary, repairs.

The aim of all these steps taken by Ceva is to offer farmers an integrated approach – products, equipment and services - in order to support them effectively throughout the vaccination process. Given the strength of their field knowledge, the Ceva veterinary teams also offer support for managing health in poultry farms, via dedicated managers.

The first phase of support starts by gaining a full understanding of the particular health problem they are facing. Effective vaccination requires good quality diagnosis and biological expertise in order to define the vaccine protocol that is best suited to the reality of the disease challenge. Choosing the correct vaccine, determining the vaccination period, administering the correct dose at the right time etc. are all vitally important. In order to meet these biological demands, Ceva has created SSIU (Scientific Investigation and Support Units).

To guarantee the level of excellence of their

expertise, our two Ceva-Phylaxia and Ceva Biomune

laboratories collaborate with specialised external

research structures located all over the world to take

action wherever diseases strike.

The second phase consists of us putting in place

vaccination monitoring, either systematically

or by sampling, in order to measure the effects

of vaccination and, if necessary, decide on any

corrective measures. It is also an opportunity for

the Ceva teams, including the SSIU, to gather

information alongside our clients which will enable

them to improve their health management.

New electronic management of audits in 2015

supported the automation of data and analysis

management, which improveded the sharing of

this information with the stakeholders concerned.

POULTRY


In order to conduct these different phases correctly, an ever more highly qualified team is required. For this reason, Ceva offers its clients training modules either in-house or in collaboration with the OIE or GD Deventer.

This extensive support offered by Ceva enables our teams to build increasingly in-depth knowledge of the health challenges faced by farms, above and beyond the different environments in which they develop.

This is what has enabled all the players in the corporate value chain – R&D, Regulatory Affairs, Marketing, Veterinarians, Vaccination, Sales – to continuously improve our products, equipment and services, in partnership of course with universities and public and private laboratories, as well as national and international health authorities.

HATCHERY IN TURKEY

This integrated approach illustrates the virtues of working together in an “ecosystem”, offering our clients customized treatment tailored to their need for heightened overall efficiency.

It also guarantees consumers access to high-quality protein and protection against zoonoses.


CEVA BRINGS A LARGE POULTRY FARM BACK TO LIFE IN LEBANON. TESTIMONIAL FROM RAWAD MAKARY

I was born in Akhar in the north of Lebanon, in the mountains on the border with Syria. It is an arid and rocky land where pine trees are the only things that can grow. My father Elias built the first building for housing chickens from scratch in 1980. After that everything moved very quickly, with new buildings for broiler chickens, a hatchery, our own batches of breeders as well as a feed factory and annual production of 5 million chickens. After leaving the University of Balamand I worked with my father to develop his business. My aim was to improve the quality of our products and our production capacity, and to build a real distribution network. I threw everything I had into it. My father gradually delegated the daily management of the company to my brother and I, and in particular responsibility for the personnel: 100 or so people (workers, technicians, engineers etc.).

In 2012 a deadly epidemic hit our farms one after the other, with death rates of 50% and more, and as if that wasn’t enough, the price of feed rose dramatically. Makary chicken’s accounts were in the red.

The culprit was identified to be Newcastle disease which was striking throughout Lebanon, Syria and Jordan. We launched a vaccination programme, which was successful at first,the situation seemed to improve, but then the disease returned with the first cold winds of winter. Instead of dying at three weeks old, our chickens were now dying at 30 days. Economically speaking it was even more serious because they were fed for five extra days with no end income. By the end of 2012 we were on the edge of bankruptcy. I could no longer pay our employees and our region was like an economic desert. I was depressed.

I couldn’t stand to see chickens, or even eat them. One morning I had a terrible discussion with my father. I told him that we had to stop everything, destroy the work he had spent his life building.

It was against this backdrop that I met the Ceva teams, who proposed a different vector vaccine, and above all, an all-encompassing solution (good vaccination, quality products and regular on-site monitoring). I listened to them somewhat doubtfully, but they were keen and we had nothing to lose.

So we implemented their programme for vaccination in the hatchery with their flagship product, Vectormune® ND. During the first injections the Ceva team worked on site with their distributor well into the night. With the first hatchings there was new equipment and new ways of working. It was as though the attempt was our last chance. At two weeks old the chicks were doing well. At 20 days there was still no signs of illness. At 25 days the disease was in neighbouring buildings but not the trial flock. At 30 days old everything was fine. At 40 days the chickens were slaughtered, in good health and at a normal weight of 2.3kg. It was the first time in months that, that had happened. It was all the more impressive given the other buildings with the normal vaccination programmes had again suffered major losses.

It was then that Newcastle disease reappeared in just 3 of our buildings. The Ceva team was there once again, with audits of the vaccination, visits to the farm, autopsies, samples and laboratory analysis etc. Clinically speaking, it was definitely Newcastle disease, but the overall aspect was different. Ceva’s investigations revealed the presence of a surprise guest: a hyper-virulent strain of Infectious Bursal Disease (IBD) capable of immunocompromising the chickens and weakening them. We proceeded with a new vaccination programme for IBD, with CEVAC® Transmune IBD injected in the hatchery. And it worked, we finally returned to a less than 5% mortality rate.

We have been working with Ceva for two years now. Makary chickens is back in profit and has major investment plans: a new hatchery has already been built and is shared with our neighbour, a slaughterhouse which will become operational in less than 5 months, and very likely a machine for in-ovo vaccination.

With Ceva still part of the project we are confident everything is going to turn out well.

30 September 2015, RAWAD MAKARY

TESTIMONIAL

RAWAD MAKARY (RIGHT) AND HIS FATHER ELIAS

POULTRY


THE QUALITY OF OUR PRODUCTS AND THE COMMITMENT OF OUR TEAMS CONTRIBUTE TO CREATING A RELATIONSHIP OF TRUST WITH ONE OF OUR MAJOR CUSTOMERS IN SAUDI ARABIA

Less than two years ago, Gumboro Disease was not an identified problem for the overwhelming majority of Saudi producers. Following many operations conducted in the field by our teams, a picture appeared that was distinctly different from that which had prevailed until then: a large part of the Kingdom was affected by a variant virus of Gumboro Disease, christened ‘Virulent IBD’ by our Ceva Phylaxia laboratory.

This discovery caused some concern. So it was that we were contacted by one of our major customers, asking us to rapidly establish a diagnosis, then to carry out a trial with CEVAC® Transmune IBD , the vaccine we have designed to combat this disease.

This process was conducted as a partnership between our customers' and our own teams, including those at the Ceva Phylaxia SSIU (Scientific Support and Investigation Unit). It rapidly confirmed, on the one hand that there was a high level of contamination in the locations where the trial was conducted, and on the other hand, that vaccination with CEVAC® Transmune IBD enabled satisfactory results to be obtained in terms of health and economic outcomes.

With these promising results as our starting point, we defined an action plan with our customer, with the purpose of testing the validity of the initial conclusions, on 30 million chickens, to assess:

the extent of the contamination,

the age of the animals when they were infected,

the efficacy of vaccination with CEVAC® Transmune IBD .

A few months later, our Ceva Phylaxia laboratory confirmed the virulence of the Gumboro Disease variant virus and the appropriateness of using CEVAC® Transmune IBD to protect livestock against this virus.

This cooperative operation convinced our customer of the value of CEVAC® Transmune IBD as a first-line vaccine, and also and above all of the competence and availability of our teams. These acknowledgements encouraged our customer to renew confidence in us and to appoint us to run preventive vaccination campaigns against Newcastle Disease with Vectormune® ND.

POULTRY FARM IN THE KAYNARCA REGION,AMEET ZONE (AFRICA, MIDDLE-EAST, TURKEY, EASTERN EUROPE)

SWINE


SWINE

WITH HYOGEN®, COGLAPIX® AND THE LUNG PROGRAM, CEVA SHOWS THE DIFFERENCE, TO IMPROVE THE PRODUCTIVITY OF ITS CUSTOMERS

Pork is the world’s primary source of meat, representing 37% of world production (source FAO, 2014). It is widely consumed in Europe and Asia, where it represents 45% and 49% of consumption respectively (Source Agrimer, 2011). While consumption continues to grow or is levelling out in some countries in Europe, there is still great growth potential in China and Russia. The Chinese are the world’s largest consumers of pork and their consumption is likely to increase rapidly with the expansion of middle class purchasing power. It is estimated that by 2020,

China will represent half of worldwide demand. Although pork represents only a small proportion of trade (only 4% of pork is globally traded. Source: Agrimer), the issues for the animal health industry are therefore of considerable importance and Ceva has made swine vaccination a key focus of its growth strategy.

In this respect, the European launches in 2015 of Hyogen® and Coglapix®, two innovative vaccines to prevent respiratory disease, offer Ceva an opportunity to make a significant breakthrough in one of the major zones for pork production and export.


The Chinese are the world’s largest consumers of pork and their consumption is likely to increase rapidly with the expansion of middle class purchasing power

ESPHM 2015, EUROPEAN LAUNCH OF HYOGEN® AND COGLAPIX® PROFESSOR DOMINIEK MAES, UNIVERSITY OF GHENT, BELGIUM



HYOGEN® WHEN OUR R&D DEMONSTRATES ITS MASTERY

Enzootic pneumonia in swine is a respiratory disease caused by Mycoplasma hyopneumoniae. The symptoms of the disease are very subtle, but it weakens the animal and enables other pathogens to attack in a combination that can be very difficult to combat.

The disease is present all over the world and causes substantial economic losses.

Ceva has developed Hyogen®, an innovative vaccine that is particularly effective and was registered in Europe in spring 2015. The best indicators of its efficacy are the early immune response it triggers (3 weeks) and the lasting protection it offers the animals (26 weeks). A single injection can therefore cover the whole of the fattening period (24 weeks).

Hyogen® owes its efficacy to two factors: its antigen from the BA 2940-99 strain and its adjuvant, Imuvant.

It’s here where Ceva’s Hungarian R&D team really demonstrated their skills:

Ceva chose not to turn to the widely-used J strain, preferring to focus on field research into finding a strain with higher immunological response and our colleagues at Ceva Phylaxia succeeded in isolating: the BA 2940-99 strain. This was quite a feat, as this strain is not easily reproduced under laboratory conditions. The decision has been duly rewarded as the use of this strain provides particularly powerful stimulation of the immune system.

Our teams also conceived a new adjuvant, Imuvant, which stimulates both the innate and specific immune response. This cascade stimulation of the various components of the immune system triggers particularly strong immune responses.

R&D LABORATORY,CEVA PHYLAXIA CAMPUS, HUNGARY

SWINE


COGLAPIX®CEVA STAYS THE COURSE

Pleuropneumonia is another common and contagious pulmonary disease that hits swine farming operations and causes considerable losses via its impact on zootechnical performance (higher mortality rates, slower growth, delayed slaughtering).

The difficulty of eradicating this disease resides in the fact that the agent that causes it, AP, has a great number of serotypes. 15 AP serotypes have been identified to date and they differ greatly among themselves by their potential virulence. This means that some forms of pleuropneumonia often go unnoticed, although the animals are still contagious, others are acute and fatal. The prevalence of the different serotypes within the swine population tends to vary from one country to another.

And that is the advantage of Ceva’s new Coglapix® vaccine registered in Europe in autumn 2015. A single injection protects animals against all the serotypes, with very few secondary effects.

The launch of this effective vaccine will allow the use of antibiotics to be limited in sick animals, a far from negligible factor given the global need to restrict antibiotic use in animals to a minimum.

ESPHM 2015, EUROPEAN LAUNCH OF HYOGEN® AND COGLAPIX®


THE CEVA LUNG PROGRAM INNOVATION IN SERVICES

The “Ceva Lung Program” is a program designed by our swine franchise teams to optimize swine vaccination protocols and measure their results.

Ceva initially proposed an application available for iPad and Android which allows direct scoring in the abattoir of the pulmonary lesions against which Ceva has developed Hyogen® and Coglapix®.

The application automatically calculates lesion prevalence and severity indicators, thereby making it possible to measure the geographical scope, peak periods of prevalence and the types of farming operation that are affected by these diseases.

Most importantly, it enables the farmer to assess his herd in relation to a number of reference groups.

More recently Ceva introduced a new application, Respinomics, which calculates the economic impacts of these diseases and the benefits of vaccination and/or changes in livestock management methods. The benefits are assessed on the basis of the reduction in mortality and gains in growth, among other factors, allowing the farmer to make a quick assessment of the return on investment.

The Ceva Lung Program was awarded the Innov’Space Prize at the SPACE 2014, Rennes, France and another innovation prize at VIV Russia, Moscow in 2015.

Growing success for greater efficiency - The Ceva Lung Program has been quick to win over Ceva customers. In 2015, no fewer than 70,000 lungs were analyzed around the world and there is now a French project planning to examine 100,000 lungs.

Ceva initially proposed an application available for iPad and Android which allows direct scoring in the abattoir of the pulmonary lesions against which Ceva has developed Hyogen® and Coglapix®.

SWINE


By providing better knowledge of these diseases, of the efficacy of vaccination protocols, and herd health management, it is easy to see that the more widely this program is used by farmers, the more effective it will become.

The Ceva Lung Program aligns perfectly with Ceva’s determination to take account of all its customers’ concerns: firstly by providing them with innovative products, and secondly by supplying services to address these diseases with treatment in their own specific environments.

Ultimately, the goal is to offer customers “vaccination solutions” which enable a more comprehensive approach to managing the health of their livestock.

ZNAMENSKY,COMPANY BASED IN OREL,RUSSIA

HYOGEN® EARNS SWINE PRODUCERS TRUST IN RUSSIAIn 2012, Ceva launched Hyogen® (Mycoplasma hyopneumoniae vaccine) in Russia. After the success of the launch, Ceva posted strong growth, reaching market share of 6% in 2014 when a number of large swine producers included Hyogen® in their programs. This breakthrough was possible for three reasons:

The exceptional properties of the product, Hyogen®

Our original approach based on comprehensive upstream diagnosis of respiratory problems.

The commitment of our teams in rolling out the Ceva Lung Program and providing unfailing technical field support.

2015 confirmed the success of Hyogen® with other leading market players switching to the vaccine pushing our market share up to 15%. The future is therefore promising for Hyogen® in this fast-growing sector of the Russian market.

The confidence of our customers is a great reward and is making Ceva a name that is becoming one of the most recognized in animal health in Russia.

ZNAMENSKY,COMPANY BASED IN OREL, RUSSIA


RUSSIA

SWINE


BENELUX FAST-TRACKED LAUNCH OF COGLAPIX® IN BENELUX TO MEET URGENT MARKET NEEDS

In late 2014, the teams of Ceva Benelux were keenly awaiting the European marketing approval for Coglapix®, aware of the great interest in the vaccine for the prevention of Actinobacillosis in swine. At that time, farmers lacked a genuinely effective vaccine with minimal side-effects and it was becoming increasingly difficult to turn to antibiotics to treat sick animals in a context where their use is being radically reduced.

This lack of an effective treatment led Ceva Benelux to make an early submission of the Coglapix® registration file and after a number of exchanges, the product was granted temporary approval. The local team drew up a stage-by-stage launch plan with the most loyal

customers contacted first to run field studies, the results of which showed that the adminis-tration of the vaccine did not cause any fever, loss of appetite or weight loss, which is rare for a vaccine against Actinobacillosis.

Ceva Benelux received active support from R&D at Ceva Phylaxia and from marketing and veterinary services teams in Libourne. The availability and rapid responses of all involved proved to be of vital importance.

The qualities of our vaccine combined with the ready support given to producers resulted in rapid success and compensation for these efforts. Coglapix® is becoming a reference product in both these highly efficient swine producing markets.

CEVA LIBOURNE FRANCE

COMPANION ANIMAL



AMODIP®CEVA ADDRESSES HYPERTENSION IN CATS WITH AMODIP®

AMODIP® is the first treatment to be awarded an MA (Marketing Authorization) for high blood pressure in cats, a chronic disease that can cause severe lesions in the kidneys, eyes or heart of elderly cats and requires treatment for life.

AMODIP® represents a genuine step forward in feline medicine. Prior to its launch, there were no veterinary treatments at all for hypertension, and vets had no choice but to prescribe products for human medicine, dividing the doses by 8 for cats!

AMODIP® is an appetizing tablet that has been designed specifically with a chicken flavor that is easily accepted by 80% of cats. Its dosage form is therefore conducive to ensuring good compliance with the

prescribed treatment. AMODIP® is set to be a flagship product in Ceva’s cardio-nephrology range in Europe and elsewhere.

The European launch took place in September 2015 during the ECVIM-CA Congress in Lisbon – a symposium organized by Ceva for some 100 specialists in cardiology, nephrology and internal medicine from all over Europe.

During the symposium on feline hypertension, Professor Jonathan Elliott of the Royal Veterinary College in London presented the latest data on prevalence of the disease in cats and its links with other pathologies such as chronic kidney failure.

1 in 8 cats over 9 years old suffers from hypertension.

After several years of success in the canine cardiology market, Ceva is now extending its expertise to cats, with its original AMODIP® product launched by our teams in Europe in September 2015.

VETERINARY CLINIC, USA

CATS OVER 9 YEARS OLD SUFFERS FROM HYPERTENSION

1in8

COMPANION ANIMAL


A keenly-awaited product among our customers

Ceva has always prided itself not only on developing effective products, but also on providing support for profes-sionals in their daily practice. In order to familiarize vets with hypertension in cats and help them detect it, our teams therefore asked a panel of cat specialists – the International Society of Feline Medicine – to develop a series of videos and documents to help vets measure blood pressure in cats. These very practical videos are distributed by Ceva personnel in the field and are also available on the new website:

www.vetintermed.ceva.com

ISFM was absolutely delighted to learn that Ceva was going to market an amlodipine-based drug for cats. For our group of specialists, amlodipine has long been at the top of our wish list of drugs to be developed for cats. We now have at our disposal a veterinary formula that is adapted to use in cats, thanks to Ceva. We are looking forward to seeing more cats examined properly for hypertension and to seeing those cats that do have high blood pressure treated with a suitable product.

Five European countries launched AMODIP in 2015 and others will be following in 2016. The Cardio-Nephrology teams in the Ceva franchises and subsidiaries are currently working together to provide vets with new tools and services. As feline hypertension was underdiagnosed until now and therefore undertreated, there is a great need to train vets and communicate with cat owners on the subject.

1in8

Dr. Andrew Sparkes, Veterinary Director of the International Society of Feline Medicine:


OR HOW OUR DYNAMIC CEVA SOGEVAL CAMPUS HAS MADE CEVA A KEY PLAYER IN DERMATOLOGY.

It is for these reasons that our Ceva Sogeval Campus teams decided to look into a therapeutic approach to preserve easy relations between humans and their animals.

They developed a unique range that takes account of the fact that each companion animal is an individual. DOUXO® offers shampoos, and also innovative solutions that require no rinsing, are easy to use and “soothe like a caress”: foams, sprays (Micro-Emulsion), medicated pads and “Spot-on” pipettes.

Skin diseases are very frequent, especially in dogs (the second most common reason for going to see a vet). Pet owners are highly sensitive to such diseases because healthy fur is a sign of good health. Skin problems (itching, redness, loss of hair…) can have a negative impact on the relationship between humans and their companion animals, and therefore on the quality of life in the family.

Success came quickly and DOUXO® has become a worldwide brand present in 30 countries. In 2015, DOUXO® was launched successfully in Brazil and the UK and re-launched by the Ceva teams in Europe. DOUXO® enjoys the support of the leading veterinary dermatologists and is already the leader in France and the United States.

DOUXO®

COMPANION ANIMAL


DOUXO® protects a fragile ecosystem: the cutaneous barrier.

The cutaneous barrier is essential to protect the body from microbes, allergens and toxins getting in. It also retains water inside the body.

To be effective, this barrier comprises three components that interact with each other: a mechanical barrier, an immunological barrier and a bacteriological barrier or flora. This balance is fragile and must be protected.

The DOUXO® formulae contain Phytosphingosine, a patented ingredient, combined with complementary ingredients selected with care by the Research & Development Department to provide compre-hensive protection of the cutaneous barrier ecosystem in cats and dogs. Our pets’ skin is different from our own and requires specific know-how. DOUXO® soothes and moisturizes sensitive skin, helps limit the penetration of allergens and maintains the balance of skin flora.

DOUXO® is a comprehensive range of products to be applied to the skin and ears of cats and dogs, which controls the majority of skin disorders and can also be used for regular hygiene of the skin and ears.

The DOUXO® range comprises the following four lines:

The Pyo line helps restore the balance of skin flora

The Calm line soothes sensitive skins

The Seb line regulates seborrhea and controls any unpleasant smells

The Care line allows frequent cleaning of the skin and ears

We have made animal welfare one of our main concerns and listening to our customers one of our guiding principles. The DOUXO® range is the perfect expression of this and there can be no doubt that it will continue to win the confidence of our customers.

The DOUXO® comprehensive line of dermatological therapeutics are the most convenient and essential product line in the effective treatment of the broad spectrum of companion animal skin pathological issues that we face every day. I believe that DOUXO® products, and their attention to protect and restore the skin barrier ecosystem, are an industry leader in Veterinary Dermatology today.

Brian A. Scott, DVM, DACVD, USA

RUMINANT



VELACTIS®WHERE EVERYTHING STARTS…

In 2015 we proudly launched Velactis® to the world, redefining a crucial period of dairy cow management with a revolutionary new approach.

Velactis® is the first and only injectable dry-off facilitator for dairy cattle. In a single treatment at dry-off, it immediately reduces milk production, minimising the risk of milk leakage and new infections and improving cow comfort. Ultimately, all these factors combine to optimize the quantity and quality of future milk production.

Up until now, the dry-off process could be managed in two ways, either abruptly or gradually. The abrupt dry-off method is is easier to manage but has implications for both udder health and welfare due to excessive udder engorgement that may lead to milk leakage after dry-off. The gradual dry-off, as the names implies, reduces milk production over a number of days or weeks before dry-off. With this method, the risk of milk leakage and udder engorgement are reduced but it has a negative economic impact due to loss in productivity and associated higher labor costs. Neither of these methods satisfies the needs of today’s dairy cows and producers.

The launch of Velactis® therefore provides producers with a significant new tool offering benefits across 3 parameters during the crucial dry-off period: management, udder health and welfare.

Lorraine Sordillo, Professor of Large Animal Clinical Sciences at Michigan State University, (US), summarised this well during the Velactis® launch, when she said: “We’ve been struggling with this issue for decades; farmers want to maximise the amount of milk they get from cows, but the problem is to get them to stop producing at dry-off. The innovation of dry-off facilitators has been needed since we started milking cows, because we know that the amount of milk being produced at dry-off is directly related to the cow’s ability to optimise milk in the next lactation, as well as optimising her immune system.”

Velactis® marks a significant step in helping Ceva to become a global force in dairy, as a first- in-category product that is set to revolutionise a crucial part of the dairy management process.

In December 2015, the efforts of our R&D and regulatory affairs teams were rewarded for their efforts when Velactis® was granted marketing

RUMINANT


approval by the European Commission. This success came soon after Brazil and Mexico’s health authorities fast-tracked approval of our product in 2014 on account of its exceptionally innovative benefits.

Some of the most renowned dairy experts from across the world, together with our internal teams were responsible for taking this product from a concept to a fully-approved medicine for dairy cattle.

Speaking of the significance of the dry-off, Andrew Bradley, from Quality Milk Management Services, UK, one of the key opinion leaders who have played an important role in the development of Velactis® explains: “Drying-off is a farmer’s best opportunity to set a cow up for a productive subsequent lactation, and to manage intramammary infections. It is the single biggest investment most farmers will make in udder health during the entire dairy production cycle.”

The success of this innovative launch was the result of the combined passion and solidarity that exists across our business. From the outset, the registration of Velactis® demanded exemplary

co-ordination between our Marketing, R&D and Regulatory Affairs teams at both the corporate and local levels. In the space of just 7 years, we were able to translate the demand of our customers from a wish to serve an unmet need, all the way through to a functioning product. By keeping the dairy producer at the centre of our

product development, we were able to create a truly innovative product which fulfils a very real need and offers the industry a better way to approach dry-off.

“For a long time, vets and farmers have had to live with the negative management, health and welfare consequences of either the abrupt and gradual dry-off methods, but Velactis® has changed that.”

CEVA MEXICO OFFICE

where everything starts

The launch of Velactis® is a proud moment for Ceva, and a significant milestone on our journey towards becoming an industry leader in dairy.


reprodAction

One of the major elements of our “Together, beyond animal health” vision is to help “feed the world through ensuring sufficient and safe food resources.”

Often, such ambitious ideals can seem a long way from the reality of our customer’s everyday challenges. But in reality, it is by concentrating on the day to day pressures that confront our customers that we trigger the thought processes that drive innovation.

reprodAction is a contraction of Reproductive management in Action. It has long been recognised that one of the major factors

determining the profitability of any livestock

operation is the ability to manage fertility.

Ensuring excellent reproductive health

involves managing many different parameters

not least the genetic potential and nutritional

status of animals, as well as their overall health.

That’s why, since its launch in 2012,

the reprodAction programme has brought

together experts with with different skills from

all around the world, to pass on their

knowledge to the field veterinarians who then

put this into action. Our belief is that

innovation is nothing without implementation.

OF DAIRY COWS NOW SHOW SIGNS OF ANOESTRUS

2 SIMPLE IDEAS FUSED TO CREATE A NEW DYNAMIC IN ANIMAL PRODUCTION.

DAIRY FARMER, MEXICO

20%RUMINANT


This more holistic approach to innovation, contained in reprodAction, has 3 main pillars:

An innovative, wide range of products with PRID® Delta the flagship

The scientific protocols that determine how and when these products should be used for optimum reproductive efficiency

Expertise of the veterinarians supervising the reproductive programmes

We live in a fast shifting world where animals, like their humans counterparts are finding increasing difficulty in falling pregnant.

More than 20% of dairy cows now show signs of anoestrus

Finding solutions that work to overcome fertility difficulties is not simply about developing new products but then conducting

field trials under different farming conditions to ensure that these solutions work in practice, time and time again.

The work of Ceva’s ruminant teams in passing on their expert knowledge of reproductive management therefore plays a hugely important role not only in ensuring the profitability of livestock enterprises but contributing to their sustainability.

Animals, which are not producing consume rather than transform natural resources, reprodAction is proof in action, that small steps together can make one giant leap.

Ceva has always shown its commitment to serve all forms of agriculture, together with a diversified number of innovative partnerships.


TOGETHER, BEYOND ANIMAL HE ALTH

PUBLIC HEALTH AND ZOONOSES

AGRO-BIODIVERSITY

HUMAN-ANIMAL INTERACTION

60

64

66


TOGETHER, BEYOND ANIMAL HE ALTH



SUPPORTING AGRICULTURE IN ALL ITS FORMS:

CEVA IN PARTNERSHIP WITH THE BILL & MELINDA GATES FOUNDATION

Ceva has always built its “Together, beyond animal health” vision around developing comprehensive expertise in veterinary products and services in order to contribute to human well-being.

It is in pursuit of this goal that the company takes an interest in all the different forms of agriculture, ranging from the most highly-integrated, intensive farming systems to the more traditional forms that continue to dominate in many parts of the world.

This explains why Ceva is one of the very few veterinary pharmaceutical companies in the world top 10 to have carried on and boosted its activity in Sub-Saharan Africa over the past 20 years.

Through its action in the field, Ceva is helping to develop local skills by supporting private and public sector players in animal health, working in traditional rearing of ruminants and in the emerging activity of commercial poultry farming.

Ceva is also active in certain countries in Southeast Asia that suffer from a shortage of good-quality technical support for livestock production. In 2015 in Myanmar, for example, Ceva joined forces with the Alfort National Veterinary School, Paris, France and Nay Pyi Taw Veterinary Science Faculty to create a training course for poultry vets. More than 30 vets benefited from this practical training and will

now pass on the benefits of these skills to the thousands of small, independent farmers they support.

Following on from these initiatives, Ceva has started working with the Bill & Melinda Gates Foundation, the world's largest philanthropic organization. The foundation is committed to helping all people lead healthy, productive lives and focuses on innovation and scaling solutions to problems that have a major impact on the lives of people in developing countries but get too little attention and funding.

In 2015, Ceva and the Bill & Melinda Gates Foundation launched a partnership to roll out three targeted development projects corresponding to Ceva's area of expertise and the foundation's strategy to make smallholder crops and livestock more productive, improve nutrition and empower women farmers.

CEVA IN PARTNERSHIP WITH THE BILL & MELINDA GATES FOUNDATION

INCREASE IN FOOD PRODUCTION WILL BE NEEDED TO FEED THE WORLD

POPULATION LIVING IN MEGA-CITIES

OF ALL EMERGING INFECTIOUS HUMAN DISEASES COME FROM ANIMALS

70% 75% 50 to 60%



BURKINA FASOBOOSTING THE POTENTIAL OF LOCAL CHICKEN PRODUCTION

The economic performance of Burkina Faso is largely driven by the country’s agricultural output which represents approximately 34% of GDP. 86% of the population is still employed in the rural sector.

Livestock makes a large contribution to this, made up mainly of ruminants and of village-raised broiler chickens that are renowned for their quality. Poultry farming is of strategic importance to the country. Chickens are much more than a mere foodstuff; they are also a part of the traditional rituals that are still a feature of community life, and poultry production remains largely the same as it has done for many years.

Poultry therefore goes a long way towards satisfying the meat requirements of the population locally and in neighbouring countries.

For the farmers, it is also a reliable and easily-accessible source of income thanks to an efficient distribution network providing access to a profitable market. The poulet bicyclette (bicycle chicken), named after the form of transport used to get the products to local markets, has become a brand name in its own right.

The development of the sector remains fragile, however, for two reasons:

Chick production is limited by an exclusive reliance on natural reproduction (30 chicks a year on average)

Rearing operations live under the threat of infectious diseases, such as Newcastle disease.

To overcome these two key issues, Ceva contacted SASSO, a poultry selection company based in south-west France and the world leader in the genetics of slow-growing broilers, to set up a project.

The aim of this partnership between Ceva, SASSO, a farmers’ association and a Burkinabe hatchery is to cross male chickens of local breeds with females from slow-growing (but still highly efficient) SASSO selected breeds. The subsequent chickens will offer the same characteristics as the poulets-bicyclettes, while providing farmers with birds that are adapted and resilient to local conditions. The partnership with a local hatchery will allow more controlled, larger-scale production of chicks which will be vaccinated in the hatchery and distributed to rural and peri-urban producers.

The project will take place over five consecutive years beginning in early 2016.

BANGLADESHTRAINING VETS TO REVOLUTIONISE POULTRY FARMING

In Bangladesh, poultry production is in the throes of change. As the main source of animal protein, it must take up the challenge of meeting growing demand in a difficult epidemiological environment. Although the upstream (reproduction) part of the sector is well organized, production is mainly in the hands of small, independent farmers who have only limited access to the field veterinary skills required to improve the sanitary levels and performance of their operations.

Ceva is therefore working on setting up a partnership with Alfort National Veterinary School, France and a local university to provide a training course to local vets. The objective of the course is to enhance the intervention capacities of the vets working with the small farmers.

Ceva is accompanied and supported in this process by ACI, its commercial partner for over 18 years. ACI is a leading company in the agricultural sector which has placed Ceva’s poultry vaccines among its flagship product ranges.

The first training course is set to be held before the end of 2016 and will then be repeated twice.



TRADITIONAL FARMING, NIGER

NIGERIA BOOSTING DAIRY PRODUCTION TO REDUCE THE FOOD DEFICIT

Nigeria has a population of almost 180 million and is continuing to grow at a fast pace. Between 1960 and 2014, the population quadrupled. The very high fertility rate of 6 children per woman and the fact that 44% of the population is under the age of 15 raises the prospect of spectacular further growth which is likely to project Nigeria third in the world population by 2050, behind only China and India. So it no surprise the authorities are faced with a huge challenge when it comes to feeding the population.

Milk occupies an important place in Nigeria, which is Africa’s biggest importer, with 1.45 billion litres in 2013. The country’s self-sufficiency rate is very low, at just under 5%, and the Federal State is introducing incentives to encourage local milk production.

These measures cover a very broad spectrum, seeking not only to support the creation of large dairy farms, but also to boost traditional livestock rearing.

Structural and financial issues aside, however, the genetics of the local breeds also impose their own limits: the average milk production capacity of local breeds is no more than 150 litres per animal/per year, despite the fact that these breeds are adapted to local conditions.

Ceva has developed world-renowned expertise in managing bovine reproduction. The company’s worldwide coverage has given it extensive knowledge of different types of farming and of the different conditions in which they have evolved.

It is on the strength of this experience that Ceva is currently assessing how to make its contribution to a programme of genetic improvement of local breeds, drawing on international advances in genetics.

The aim is to carry out cross-breeding in order to optimise dairy production capacity, while keeping the indigenous breed’s ability to adapt to local conditions. This programme will open up the possibility of increasing milk production among traditional livestock farmers with the aim of enhancing food self-sufficiency and reducing imports.

DRAWING ON OUR VETERINARY HERITAGE TO SATISFY THE DIVERSE NEEDS OF OUR CUSTOMERS

The three Bill & Melinda Gates Foundation projects discussed in this section share common themes that lie at the heart of Ceva’s vision: to strive to improve both human and animal well-being globally by using the veterinary expertise we have built up, together with our partners to deliver innovative health solutions.

Innovation is not just a question of product development. It draws not only on science, but also from a pragmatic approach to and understanding of global health issues.


CEVA, THE FRENCH MINISTRY OF AGRICULTURE AND THE FONDATION DU PATRIMOINE JOIN TOGETHER TO AWARD THE 3RD EDITION OF THE PRIZE FOR ANIMAL AGRO-BIODIVERSITY

The 3rd (2014/2015) National Prize for Animal Agro-Biodiversity was given during the a Paris International Agricultural Show on February 26, 2015.

The first prize of €10,000 was awarded to Gilles Delas who rears Bearnaise cows in Hérrère. The second prize went to the National Association for the Protection of the Gascon Pig and third prize to the Conservatory of Aquitaine Breeds.

The “Fondation du Patrimoine” National Prize for Animal Agro-Biodiversity was created to reward farmers who are committed to the conservation of a domestic animal breed whose numbers are low and thus contribute to the economic development of their local area. The prize was co-founded in 2012 by the Fondation du Patrimoine and Ceva Santé Animale, and was organized once again this year under the

patronage of the Ministry for Agriculture. The prize is awarded on the basis of three criteria:

The economic value of the project

The social and environmental impact of the project

Activities undertaken to preserve the selected breed.

Ceva has always been firmly committed to supporting agriculture in all its forms in line with its “Together, beyond animal health” vision.

If our company has developed expertise in intensive farming of all kinds and is recognized worldwide for the quality of its products and services, it is because we have a responsibility, as a veterinary pharmaceutical company,

AGRO-BIODIVERSITY

NATIONAL PRIZE FOR ANIMALAGRO-BIODIVERSITY, PARIS INTERNATIONAL AGRICULTURAL SHOW IN FEBRUARY 2015


to secure protein supplies for a world that cannot yet feed its whole population and where 800 million people are suffering from malnutrition. In addition to this, diseases that can be transmitted from animals to humans and vice versa, that pose serious health threats to the population, especially in these times of increasing global mobility.

We also need to preserve biodiversity, and do our utmost to protect our genetic heritage, for it is this genetic variety that provides the most effective protection for our ecosystem. The richer a system is, in terms of its components, interactions and self-regulation systems, the more robust it will be and the more capable of coping with disruptions caused by changes of all kinds.

For the local territory, agrobiodiversity can boost economic development and maintain social ties in rural areas that often face economic and social difficulties today. This can for example be seen in the large number of products that carry a “protected designation of origin” label, in the development of rural tourism as an alternative to mass tourism, and in the role of eco-pasture in maintaining local land.

Finally, the support we provide to all forms of agriculture helps to enrich our experience and expertise in health. It is this diversity that is the most effective driver of innovation, rather than over-specialization which Ceva believes will always leave humanity poorer in the long term.

Our human society is experiencing very rapid economic changes.

Some domestic breeds have been shaped since the Neolithic era. It is our responsibility to preserve this extraordinary wealth and biodiversity.

The Gascon black pig is a very good example: it almost became extinct. But today, it is currently booming, cherished by our great chefs. It will take an important place in the economy of our region.

We thank Ceva for its contribution to the preservation of biodiversity. The Gascon pig has benefited through their partnership with Fondation du Patrimoine and the Conservatoire des races d'Aquitaine (conservatory of Aquitaine breeds).

We, producers, are very happy and grateful for the commitment.

Mathieu TournéPresident of the National association for the Gascon pig preservation

2nd Prize of the National Prize for Animal Agro-Biodiversity

CAT WELL-BEINGCEVA RENEWS ITS PARTNERSHIP WITH THE AAFP (AMERICAN ASSOCIATION OF FELINE PRACTITIONERS)

The AAFP is a professional organisation of veterinarians who are passionate about cat treatment and have decided to work together to improve feline health and well-being. To achieve this, the association has carried out in-depth work in order to develop a high standard in feline medicine, surgery and scientific research and to raise awareness among practitioners and owners about the conditions for well-being in cats. It has also made a commitment to communicate extensively with:

Vets, providing them with the results of its work, while organising training courses among other activities.

Animal owners, teaching them cat-friendly practices and encouraging them to contact vets for more effective treatment of their animals

It was therefore natural for Ceva to decide to support the AAFP since 2012. Indeed, our vision “Together, beyond animal health” has 3 components:

To help guarantee the quantity and quality of protein supplies

To protect people from zoonotic diseases

To enable people and companion animals to live together in increasingly urbanised societies.

The third concern prompted teams from the Companion Animals Franchise to develop core treatment priorities very early on, in order to facilitate the relationship between people and their companions:

Behaviour with the famous Feliway® range which offers a unique solution to prevent animal stress.

Cardiology with Cardalis and the recent launch of Amodip (see article p.48).

Dermatology with Douxo®, a successful alternative to shampoos (see article p.50)

Parasite control with Vectra® which has unparalleled properties: ultra-fast action - 95% of fleas are killed in under 6 hrs - and long-lasting protection preventing reinfestation.

And of course our “délicaments”, palatable antibiotics.




The partnership with the AAFP is fully in line with our action in support of companion animals, for the combined well-being of owners and their companions.

The Ceva - AAFP partnership is not the only one entered into by our teams.

They are actively involved with organisations working for the well-being of companion animals. These range from the Alienor Centre which trains guide dogs in Aquitaine to TOLFA (Tree Of Life For Animals), which treats and vaccinates sick needy animals in India.

“LOOKING AFTER YOUR CAT’S WELL-BEING, IN PARTNERSHIP WITH THE AAFP.”

We have been insisting for a long time that animals have the right to be properly cared for and treated with dignity.

That is why Ceva supports vets, who are the only people trained and certified to prescribe appropriate treatments. Our stance is in the best interests of the animal and the owner. Far too many pets don't receive the healthcare they should and their behaviors are after misunderstood by their owners. These shortcomings are the reason for nearly half of cat relinquishments.

We share and encourage the stance of the AAFP whose initiatives are directed towards the same ends:

Encouraging visits to the vet for the reasons just mentioned.

Taking into account the cat’s individual level of stress during treatment procedures, while encouraging

clinics to provide specific services to reduce animal stress during periods of treatment. It should be noted that a cat’s natural reactions to stress at the clinic is a major obstacle to the delivery of treatment. Feliway® was created for such purposes, like Douxo® for dermatology (See article on page 50-51).

Finally, designation of clinics as “Cat Friendly Practices”. To be designated, they must fulfill a number of criteria which benefit the cats being treated there such as: separate cattery and kennels, separate recovery rooms for dogs and cats, use of Feliway® in consultation rooms, decreasing stress in the waiting areas, prescription medicines tailored to cats, etc.

Clinics are encouraged to share their good practices. The AAFP has developed a large number of materials for this purpose: posters, leaflets, tips such as how to transport your cat with Feliway®, websites, etc.

GROWING SUCCESS DEMONSTRATING THE IMPORTANCE OF AN ACCURATE ASSESSMENT OF CAT OWNERS’ NEEDS

There has been a continual increase in the number of AAFP members, almost doubling since 2011. So far over 1000 clinics have already been accredited and 630 are currently seeking accreditation.

This shows a growing interest in feline medicine among vets. The AAFP programme has played and continues to play a significant role in raising awareness among owners and practitioners.

Vets who join are happy with the programme and are pleased to be a member, as the testimonials below show:



I think (the program) has taught the staff more than anything. They no longer treat cats like small dogs. They see that the cats respond to gentle handling and make their job easier. I am hearing less and less about cats being too stressed to visit us.

Clients seem impressed that we cared enough to initiate a change in handling techniques for the benefit of their pet, which helps bond them to the practice. We have seen an increase in cat patient visits during a period of a small decline in dog visits! I have to attribute that to the CFP!

Our staff is trained to "think more like a cat". They are more aware of what triggers stress in our feline patient and they pass that knowledge on to our clients. Our clients really appreciate our extra care and handling when they bring their cats to see us. The use of pheromone therapy has really improved compliance. Our clients see more value in what we do.

As for our teams from the Companion Animals Franchise, they welcome this highly successful collaboration. By working with the AAFP, we continue to learn about the expectations of owners and practitioners. We can measure the effectiveness of our products and services and continue to improve them to satisfy our clients. We are excited by the welcome extended to us by the AAFP and we are therefore particularly pleased to have been invited to take part in the forthcoming AAFP Congress in 2016 covering various feline behaviour topics.

CLINICS REGISTERED AS "CAT FRIENDLY PRACTICES"

ARE BEING REGISTERED

1000 630

FINAN CIALREPOR TAnother year of strong performance confirms a virtuous circle of sustainable growth for Ceva.


FINAN CIALREPOR T


FINANCIAL REPORT


Growth of 9% in our operating result above 2014 was perfectly in line with our budget, confirming, once again, the capacity of our company to meet its commitments.

Alain de Woillemont, CFO

CEVA STAYS ON COURSE TO ACHIEVE ITS 2020 AMBITIONIn an economic context that remains uncertain, Ceva has stayed on course and posted strong growth. Turnover was up 12% on 2014 on a like-for-like basis, and up 10.4% at constant exchange rates.

The Group's operating income was up 9% on 2014 and is perfectly in line with our budget, once again demonstrating our ability to meet our commitments.

This continuing growth in revenues confirms the soundness of Ceva’s business model. Our presence on every continent and ranges of both pharma-ceutical and biological products for 4 animal species, as well as our flexibility, enable us to continue on our way in an

increasingly complex and unpredictable environment.

There were no significant business acquisitions during 2015, although a number of possibilities were studied, two of which were finalized at the very start of 2016, in France and India. The Group continues to pursue its internal and external growth strategy, while remaining extremely cautious and selective in its targets.

The Group remains agile and able to mobilize its forces and adapt to face new challenges in order to achieve our ambition: to become the reference for our clients and pursue our virtuous circle of profitable growth.


KEY FIGURES* (M€)

Turnover for the year was €856.4 million in 2015, against €765.3 million in 2014, up 12%. On a constant consolidation scope and exchange rate basis, the rise in turnover was 10.4%.

Operating profit showed an increase of 9.1% to €129.6 million, against €118.8 million in 2014. On a constant consolidation scope and exchange rate basis, Group operating profit was up by 13.5%.

FINANCIAL REPORT


16.1% I 7.2%

18.6% I 7.3%9.6% I 8.9%

100.7 M€

116.3 M€

15.5% I 17.9%

18.0% I 18.4%9.2% I 17.9%

118.8 M€

137.8 M€

129.6 M€

150 M€

2013 2014 2015

Property, Plant and Equipment Investments 32.4 36.0 38.8

Intangible Investments 16.9 8.6 21.1

Financial 85.9 1.0 7.3

Total investments 135.2 45.6 67.3

For all key figures: Consolidated Profit & Loss account Senior Mendel and Chopin for 2013 / Consolidated Balance sheet Ceva

INVESTMENTS (M€)

2013

2013

2.7%623.9 M€

59.6 M€

2014

2014

22.7%765.3 M€

70.3 M€

2015

2015

11.9%856.4 M€

77.8 M€

SALESSales I Sales annual increase in%

RESEARCH AND DEVELOPMENTR&D/Sales I Growth in R&D spend

2013

2013

2014

2014

2015

2015

OPERATING PROFITOperating profit/% of Sale I Operating profit growth

EBITDAEBITDA/Sales I EBITDA Growth

15.1% I 9.1%

17.5% I 8.9%9.1% I 10.7%



FINANCIAL STRUCTURE

CAPITAL EXPENDITURES (M€)

2013 462.5 M€

2014 496.6 M€

2015 520.0 M€

2013 119.2 M€

2014 120.9 M€

2015 146.6 M€

2013 581.7 M€

2014 617.5 M€

2015 666.7 M€

FIXED ASSET WCR-(WORKING CAPITAL REQUIREMENT) – OTHER CURRENT

TOTAL EXPENDITURE

COMPTE DE RÉSULTAT CONSOLIDÉ SENIOR MENDEL POUR 2014 ET CHOPIN POUR LES ANNÉES PRÉCÉDENTES / BILAN CONSOLIDÉ CEVAFor all key figures: Consolidated Profit & Loss Account Senior Mendel for 2013/Consolidated Balance sheet Ceva

FINANCIAL REPORT

FINANCING (M€)

2013 176.7 M€

2014 226.0 M€

2015 256.1 M€

2013 373.5 M€

2014 348.8 M€

2015 367.4 M€

STOCKHOLDERS’ EQUITY, GROUP SHARE

NET DEBT

MINORITY SHAREHOLDERS AND OTHER LONG TERM LIABILITY

TOTAL FINANCING

2013 201331.5 M€ 581.7 M€

2014 201442.7 M€ 617.5 M€

2015 201543.2 M€ 666.7 M€

176.7 M€




SALES AND OPERATIONS ACTIVITY PER ZONE

EMPLOYEES BY SERVICE

(M€) 2015 % 2014 % Variation % 2015/14

Zone Europe 311.2 36% 304.8 40% 6.4 2.1%

Zone Africa, Middle-East, Eastern Europe and Turkey 189.7 22% 168.2 22% 21.5 12.8%

Zone Asia 82.9 10% 63.4 8% 19.6 30.9%

Zone Latin America 92.7 11% 80.1 10% 12.6 15.8%

Zone North America - Pacific 158.1 18% 124.8 16% 33.3 26.7%

Sub-total Zones 834.7 97% 741.2 97% 93.4 12.6%

Other activities (inc. trade, toll manufacturing) 21.7 3% 24.1 3% -2.4 -9.9%

Consolidated total 856.4 100% 765.3 100% 91.0 11.9%

2013 2014 2015

Industry / Supply Chain 1 290 1 279 1326

Sales / Marketing 1 286 1 358 1482

Administrative 427 453 457

Research & Development 480 504 514

TOTAL EMPLOYEES

2013 3 483

2014 3 594

2015 3 779For all key figures: Consolidated Profit & Loss account Senior Mendel and Chopin for 2013 / Consolidated Balance sheet Ceva

FINANCIAL REPORT

KEY PRODUCTS PERFORMANCE2015 was marked by strong growth in the Poultry segment (+21%, of which +27% for vaccines) in all geographical zones: Europe (+15%), North America – Pacific (+29%), other zones (+21%).

Sales in the Companion Animals sector grew by 6%, with particularly strong performances being posted by the “Dermatology” (+47%) and “Parasiticide” ranges (+24%).

Sales in the Ruminants sector were stable, while Swine sales increased by 5% overall, posting a 40% increase in vaccines and anti-infectives in Asia.

Sales growth was driven mainly by products included in our strategic development focus, with these strategic products now representing 65% of total sales.


GROSS PROFIT

61.8% I 1.7%

60.4% I 19.9%

2013 385.7 M€

2014 462.6 M€

2015 513.8 M€

GP I GP Growth

60.0% I 11.1%

The published gross margin ratio was down 0.4 points to 60.0% of net turnover. This slight decline was mainly due to the negative impact of the US Dollar on raw materials purchases and production costs, which was almost offset by the positive impact of sale prices.


FINANCIAL REPORT


EXPENSESDISTRIBUTION EXPENSESDistribution expenses as a proportion of turnover represented 4.4% of net turnover in 2015, against 3.9% in 2014. This increase was driven by sharp growth in heat-sensitive vaccines and by the large number of delivery points.

The Group has set up a project group in order to rein in this increase.

MARKETING EXPENSESIn 2015, the Group boosted its sales force, placing the emphasis on veterinary services. It should be noted that the Group succeeded in keeping the level of marketing expenses as a proportion of turnover stable against 2014, at 24.4%.

RESEARCH AND DEVELOPMENT COSTSR&D expenditure represented 9.1% of net turnover in 2015 with €77.8 million for the year, up €7.6 million on 2014.

In Europe, Ceva Santé Animale stepped up its presence with VELACTIS®, a major innovation for managing dry-off in dairy cows, offering benefits not only for animal well-being, but also for farmers

by cutting back use of antibiotics and ensuring a better resumption of lactation. Also in 2015 in the dairy cow sector, Eprecis Inj®, the first injectable Eprinomectin, and Eprecis® Pour-On were awarded their MAs and marketed in the Europe Zone.

Ceva Santé Animale reinforced its presence in parasiticides for Companion Animals with the registrations of VECTRA 3D® in Brazil and Vectra Cat Tick in the USA.

The range of Cardiology products was also extended with the launch of Amodip® for the treatment of arterial hypertension in cats.

Mention should also be made of the registration of Altresyn® in the USA for heat synchronization in sows.

The Group continued to extend its geographical reach with the registration of a large number of products in the International Zone (outside Europe and the USA), mainly with products from its “Douxo®” range, “Injectable Anti-infectives” and “Reproduction” products, as well as the registration of Vectormune® ND in many European countries.

A major innovation should be noted in Biology: the first registration in Latin America of the vaccine for swine castration.



OTHER EXPENSES AND INCOME

CONSOLIDATED PRE-TAX PROFITM€ 2013 2014 2015

Sales 623.9 765.3 856.4

Gross margin 385.7 462.6 513.8

% sales 61.8% 60.4% 60.0%

Distribution expenses (24.2) (29.6) (37.4)

% sales -3.9% -3.9% -4.4%

Commercial expenses (156.7) (187.1) (209.2)

% sales -25.1% -24.4% -24.4%

Administrative & general expenses (47.9) (56.6) (60.8)

Research & Development expenses (59.6) (70.3) (77.8)

Operating profit 97.3 119.1 128.6

% sales 15.6% 15.6% 15.0%

Other income and expenses 3.4 (0.3) 1.0

Operating profit 100.7 118.8 129.6

% sales 16.1% 15.5% 15.1%

Amortizations, depreciations, provision for intangible assets (4.3) (5.7) (9.2)

Operating result before taxes and financial expense 96.5 113.0 120.5

Other expenses and income showed income of €1.0 million for the period, against an expense of €0.3 million in 2014.


FINANCIAL REPORT

CONSOLIDATED CASH FLOWM€ 2013 2014 2015

EBITDA 116.3 137.8 150.0

Cash Flow from Operating Activities 78.4 103.5 83.1

Cash Flow from Investing Activities* -133.6 -43.3 -66.3

Free cash flow -55.3 60.2 16.9

Cash Flow from Financing Activities 68.5 -60.0 55.0

Effect of exchange rate changes -1.6 -3.9 -3.0

Changes in Cash Position 11.6 -3.7 68.9

Cash at beginning of period 63.8 75.4 71.7

Cash at end of period 75.4 71.7 140.6

Analysis of the enclosed consolidated cash flow tables shows the following points:

EBITDA was €150.0 million, an increase of €12.2 million, up 9% on 2014,

Cash flow from operations stood at €83.1 million.

Total investments in 2015 (net of financial leases) came to €67.3 million, of which €60 million for acquisitions of tangible and intangible fixed assets.

The tangible fixed asset acquisitions were made up of investments in the Group’s main industrial sites: Ceva Santé Animale, Biomune and Ceva Phylaxia.

In 2015, the Group invested in the acquisition of technology licenses and patents for an amount of almost €19.7 million. These investments were made for the purpose of driving new product design.

On 31 December 2015, gross free cash flow and investments amounted to €140.6 million, against €71.7 million at the end of the previous year.

* Net from transfer of long-term assets


CONSOLIDATED BALANCE SHEETM€ 2013 2014 2015

Intangible Assets 286.8 294.0 292.1

Property, Plant and Equipment 166.4 189.3 208.9

Financial Investments 9.3 13.4 19.1

Total fixed assets 462.5 496.6 520.0

Working Capital 119.2 120.9 146.6

Total Assets 581.7 617.5 666.7

Stockholders' Equity 176.7 226.0 256.1

Minority Interests 1.2 1.3 1.2

Other long-term Assets Liabilities 30.2 41.4 42.0

Net Financial Debt 373.5 348.8 367.4

Total Liabilities 581.7 617.5 666.7

FINANCIAL REPORT


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Ceva Santé Animale 10, avenue de la Ballastière33500 Libourne - France

[email protected]

annual report 2015 - ceva santé animale · ceva annual report 2015 7 velactis® is without doubt...

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