Virbac Navigates Headwinds with Strong Growth and Strategic Bets

CARROS, FRANCE – March 17, 2026 – Global animal health specialist Virbac demonstrated significant resilience in its 2025 fiscal year, posting robust growth and maintaining strong profitability despite facing operational challenges and a volatile global market. The company reported annual revenue of €1.46 billion, marking a 7.9% increase in organic growth at constant rates and scope (CERS), and delivered a consolidated net income of €150.5 million, up 3.2% from the previous year.

The performance, announced under the new leadership of CEO Paul Martingell who took the helm in September 2025, underscores the company's ability to execute its strategic plan. This involved navigating production interruptions, managing inventory, and making calculated investments in acquisitions and innovation. Looking ahead, Virbac issued confident guidance for 2026, projecting continued growth and improved profitability.

"Our 2025 performance perfectly illustrates the resilience and agility of the Virbac teams and model," stated CEO Paul Martingell in the company's announcement. "This financial strength, characterized by a strong cash generation power and low debt, has allowed us to accelerate our strategic investments."

Operational Excellence Under Pressure

A key narrative of Virbac's 2025 results is its ability to sustain profitability in the face of significant operational headwinds. The company's adjusted EBIT margin stood at a robust 16.3% (CERS), even as its gross margin declined by 0.7 percentage points.

This decline was primarily attributed to two main factors: a temporary, albeit longer-than-expected, shutdown of a key antigen production site for facility maintenance, and a higher level of inventory write-offs compared to 2024. The production restart delay alone had a temporary impact of 0.5 points of profit.

However, the company successfully mitigated these pressures through a combination of strategic pricing, a favorable product mix weighted toward higher-margin items, and disciplined control over operating expenses. The ratio of operating expenses to revenue actually improved, shrinking by 0.2 points, demonstrating efficient management across the organization. This operational agility allowed Virbac to absorb the temporary shocks without derailing its overall financial health.

A Tale of Diverse Regional Growth

Virbac's global footprint revealed a varied landscape of performance, with exceptional strength in some markets offsetting challenges in others. North America was the standout performer, posting remarkable growth of 14.7% (CERS). This surge was fueled by the companion animal segment, which leaped by 24.2%, driven by the successful launches of new products like Ursolyx for canine muscle health and Zenifel for feline stress, alongside strong sales in its core dental and dermatology ranges. The North American results also reflected a significant distributor stocking effect in the third quarter, which balanced out earlier destocking activities.

In contrast, the Pacific region remained flat (+0.1% CERS), with Australia recording a slight decline (-1.6%) due to increased competition and distributor destocking. However, a recovery was noted in the second half of the year. The Far East Asia region (+3.3% CERS) saw growth in most countries, but performance was hampered in Vietnam. The country has been battling a severe outbreak of African Swine Fever (ASF), which saw the number of outbreaks triple in just two weeks during July 2025, severely impacting the nation's livestock industry and, consequently, Virbac's farm animal product sales in the market.

Europe delivered solid growth of 7.5% (CERS), buoyed by demand for its companion animal products and a response to the bluetongue virus epidemic in the farm animal sector. Latin America also showed strong momentum, growing by 7.4% (CERS) on the back of excellent performance in Mexico and Colombia.

Betting on the Future: R&D and Strategic Acquisitions

A cornerstone of Virbac's 2025 strategy was its aggressive investment in future growth drivers. The company reached "record levels in R&D," with spending remaining stable at approximately 7.9% of revenue despite strong sales growth. These investments are funneled into developing differentiated solutions in key areas like infectious diseases, parasitology, and preventative care, with a focus on the rational use of antibiotics.

This commitment to innovation was matched by a "programmatic M&A" strategy designed to fill strategic portfolio gaps. The most significant move was the €107.8 million acquisition of Thyronorm, a specialty product for treating feline hyperthyroidism. This acquisition is particularly astute, as it positions Virbac in a growing market projected to reach nearly $278 million by 2033. Feline hyperthyroidism affects over 10% of older cats, representing a significant and previously unmet need in the company's portfolio. The acquisition is expected to be immediately accretive to sales and margins.

Virbac's capital expenditure also ramped up, with €102 million invested in its industrial transformation. A key project is the construction of a new "Bio 5" facility in Carros, France, which will serve as a center of excellence for companion animal vaccines. Furthermore, the company is strategically increasing its local production capabilities in the United States. This move is designed to de-risk its supply chain and mitigate the impact of potential customs tariffs, with a goal of having nearly 80% of its U.S. revenue generated from local production by the end of 2026.

A Confident Outlook

Buoyed by its strong 2025 performance and strategic initiatives, Virbac has set an optimistic course for 2026. The company forecasts revenue growth between 5.5% and 7.5% (CERS) and expects its adjusted EBIT ratio to improve to around 17%. This guidance already incorporates the anticipated contribution from the Thyronorm acquisition, which is expected to add approximately one percentage point to growth.

The company's financial foundation remains solid. Strong cash generation of €93 million in 2025 allowed Virbac to fund the Thyronorm acquisition while keeping its net debt remarkably stable at €172.8 million. This financial discipline and strong cash flow provide the flexibility to continue pursuing both organic growth and targeted acquisitions. As a final sign of confidence in its sustained performance and future prospects, the company's Board of Directors will propose a net dividend of €1.45 per share for the 2025 fiscal year at its next shareholders' meeting.