Virbac Sa Unsp/Adr

Good afternoon. We are very pleased to welcome you to the Wehrbach24 half-year results webcast. Hosting the call today is Sandrine Brunel. I am head of corporate communications for Wehrbach. And Sébastien Huron, our chief executive officer. And Abhi Brahmdani, our chief financial officer. Before we begin, I remind you that the slides and additional financial materials are available on the Investor section of our corporate website. The replay of the meeting will be available at the conclusion of the meeting. You will be able to post your question by using the chat section on the bottom right-hand corner of your screen. All the questions will be answered during the Q&A session. Or afterwards, if time does not allow us to answer them all immediately. It is now my pleasure to turn the floor to Abhi Brahmdani and then Sébastien Hiron.

Good morning, good afternoon, good evening to all of you. It is our pleasure with Sébastien to share with you some updates regarding our financial performance, that will be the first part, and then our more strategic performance that Sébastien, as usual, is going to cover. So let me start by a brief summary of what we have accomplished during this first semester. First, we have, as you've seen, a very strong organic growth of 11.3% at constant exchange rate and scope. which is reflecting the exceptional momentum that we are having in a context of favorable dynamics on the market. But we are still taking shares. Sébastien will cover that later on. We have had some very solid performance in all geographies, and we are very proud of that, with one exception, which is the Pacific region. It was expected, and we're going to comment that a little bit later. There is also a very strong demand across all segments within our companion animal segments, but also within our farm animal segments. And in addition to the demand, which has driven a very strong volume effect during this semester of more than 7%, we also have a positive price effect of around 3.5% during the semester. And obviously, on top of that, we have had a very strong contribution of our two recent merger and acquisitions operations, i.e. Globion, the Indian poultry vaccine acquisition that we made last year, as well as Sasaea, the Japanese acquisition that we made earlier this year. So those two acquisitions are contributing, delivering around five points of additional top-line growth during the first semester. From an EBIT adjusted standpoint, we have had an increase of around 40 million euros, which is close to 40% growth at constant exchange rates. That's extremely solid. And that enabled us to reach an all-time high in terms of EBIT adjusted ratio to revenue of 21.3%. This has been made essentially with the contribution of our gross margin, which have increased by three points. On the back of volume, volume increase, we are absorbing much more fixed costs thanks to the very strong volume increase that we have had during this semester. A favorable mix as well, with some vaccines, a strong rebound on our vaccines activities on companion animal, as well as pricing, as I mentioned earlier on. The operating expenses have slightly grown, but at a slower pace than our top line, and the ratio to revenue has reached 44.1% versus 44.7% last year, so slight improvement. We have had a further acceleration on R&D investments. It's part of our strategic intent to invest more on R&D. So R&D investments have increased by 15% year on year. But still, given the acquisition, as well as the very dynamic volume that we had on the top line, as well as a specific phasing of those investments where it's going to further further accelerate during the second part of the year, we have more or less maintained a stable ratio of R&D investment on revenue when we compare with the first semester of 2023. M&A has been accretive on our profitability by half a point. This is a positive contribution of Globio and Sasaya. And all of that enabled us to significantly uplift our EBIT adjusted ratio before R&D, which has moved from 24.6% in 2023 to 27.9%. So let me cover briefly the Forex impact. The impact has been quite limited for this semester with around €6 million unfavorable impact on sales and a sort of no impact on EBITDA, which is linked to our sort of natural hedging that we have overall. If we continue to go down our profit and loss statements, the operating profits have increased by 35%. We have had an increase of our financial expenses linked to two elements. The first one is higher financial debt linked to the increase, obviously, of our debt. And the second one is exchange rates impact during this semester, essentially on CRP. It was positive in the first semester of 2023. and its negative exchange rate impact on CLP for this semester. So all in all, our net profit is on the rise, reaching slightly below 100 million euros versus around 75 million euros in 2023. Let me finish this summary by sharing with you the NetDev situation, which obviously has been impacted by the acquisition of Sasaya in Japan. I remember all of you that the deal has been closed on the 1st of April 2024. So we are now with a net debt of 254 million euros versus a net debt situation of minus 52 million euros last at the end of December 2023. This also, to a lesser extent, the net debt has been impacted by the Globion. We have entirely closed the transaction. You remember that we still had a second part for the acquisition to have 100% of Globion, which has been done during the first semester of 2023. So at the end of June, the net debt on EBITDA ratio is below one. So we continue to have a very favorable financial situation. And we have also renegotiated our syndicated loan facility. And we have a line with a potential of going up to 450 million euros. So we continue to be very well positioned to potentially renegotiate finalize some further M&A operation. So let me move to the sales first, and then we'll go through the P&L. And I'm going to share a little bit more details on the balance sheet and cash flow statement as well later on. So as I've shared, an extremely solid performance. i can say an exceptional performance for this semester with 16 percent growth or 15.1 percent growth on a published growth and at constant perimeter and scope so excluding the benefit of globio As well as SASEA, we have also had a very, very strong performance, double-digit growth of 11.3%. So this growth is coming from, I mentioned it earlier, all of our regions, Europe, North America and the rest of the world. As you can see, Europe has done fantastically well with 12.3% growth. The main affiliate in terms of contribution to the growth in absolute value is UK. The export zone of Europe in Eastern Europe has done very well as well. And this is the case also for France and Spain, which have contributed also significantly to the growth. But all of our affiliates in Europe have posted a positive development during this semester. And I'm going to cover the different segments, but this has been fueled by all of our strategic segments, including the specialty product, the pet food, pet care, and a strong rebound, obviously, on the vaccines as well. Companion animals vaccines in Europe. North America, 22.2% growth is very significant. We mentioned when we shared that earlier that we have had a base effect, a positive base effect linked to what happened last year where some of the distributors have decreased their stock. But even if we restate for that positive base effect that we have recorded, we continue to to have a very strong performance, double-digit growth, around 14% in market performance in the US, driven there as well by our strategic segments. The rest, 50 million euros, so around half of the growth is coming from the rest of the world, which is made now by four main regions for us. Latin America, as you can see, 11% growth with two affiliates driving this performance, Mexico and Chile. Both of them have had a very, very strong performance. Chile, Sébastien is going to talk about that with a rebound for some of our products, including a parasiticides product, which has driven the growth during the second part of last year already and continued to fuel the growth of our aquaculture activities during this semester. And Mexico has done very well as well. If we look at the next region on the slide from the left to the right, India, Middle East and Africa has done very, very well. 19% growth. Obviously, we have the positive contribution of Globion. in India, but even outside of Globion, which, by the way, is doing very well from a performance and we are progressing also very nicely on the integration. Sebastian is going to cover that later on. But even beyond Globion, the performance in India for this semester has been very, very good. And India has contributed quite significantly to the growth of the of the group. Nice rebound on the Far East Asia region. You remember probably that we had a difficult 2023 years in this region with some of our countries there that have seen sales decrease. We have recorded a very nice rebound with affiliates such as china vietnam korea that have grown during the this semester and that contributed to the growth of the group we are recording in that region as you can see obviously the positive impact of sasaya as well Last but not least, Pacific. So Pacific is the only region that is negative. You see slightly negative, which is quite a very good performance when you take into account the dynamic of the market, which has been quite difficult during this semester. And again, here, Sébastien will cover that later on. Let me move to the sales by segments. I will be very brief there. The split between farm animals and companion animals has not fundamentally changed 40%, 60%. What is noticeable nonetheless is the increased weight of swine and poultry linked to the acquisition of Globion and the development of our swine activity as well on vaccine. Let me cover now the sales growth by segment. So we are presenting on that slide the different segments of our companion animals pillars with on the top of the slide our 2023 revenue, on the bottom of the slide the 2024 revenue, and you see the contribution of all of the segments what is remarkable is the fact that all of our segments are positive with the double digit growth in many of them the dental equine business is growing double digit with a strong contribution of Our dental product, a pet care product that is part of our Virbac Buster. The specialty is doing well with Supralorin, Zoletil, some of our key products that are part of that segment and that really are contributing to the continuous growth and development of that segment, the pet food segment. As well, one of our strategic product range, we have continued to grow double digit with 12%. It has added 7 million euro. Parasiticides, antibiotics have grown as well. And finally, a word on our vaccines activity, which has increased significantly. You remember that we have had some difficulties last year, especially on the first semester. And we have seen a very nice rebound, which has had an impact as well on our gross margin, as this activity is essentially made of fixed costs. So let me move to the second pillar, farm animals. Here, it's also remarkable to see only green. All of the segments making farm animals activities within VRBAC have grown during this semester. The antibiotics, even if it's a very limited growth, we have seen a contrasted dynamic with some decrease on our cattle antibiotics business and some increase on swine and poultry and also a decrease in Europe and some increase in other region. And all in all, we managed to keep it slightly increasing during this semester. Parasiticide has done quite well. Nutritional as well, with a strong contribution of India. You see the very positive dynamic of vaccines with Europe that is contributing to this growth with some products like Bovigenskur, as well as the Latin America region, and to a lesser extent, Pacific. And finally, a quick word on aquaculture. You see the positive development of our aquaculture sales with 40% growth and 7 million euros more sales essentially on our parasiticides product. and on Vetérine as well, an antibiotics product that has done quite well during this semester. And again, we are going to provide you with a little bit more color during the second part of this presentation. So if we look at the breakdown by region and segment, you see the arrows that are pointing to the top, all of them. So all of our sub-segments are growing with the exception of the other developed countries, including the impact in Australia and New Zealand of our companion animals business and farm animals business that is quite limited in terms of growth. So let me move then to a couple of words on our profit and loss statement. So first, again, extremely positive dynamic on our net sales with a 15% growth when we look at the published figures of 2023 and 2024 with a positive impact of the acquisition of Globion and Sasaya on the top line, obviously. The gross margin on purchasing costs have benefited from that very positive development of our sales. As you can see, we have increased the ratio to sales of our gross margin on purchasing costs. Net expenses, I mentioned it earlier, we have continued to invest. It's growing double digits, but nevertheless, slightly below our top line, which enable us to increase slightly the ratio, moving from 44.7% to 44.1%. of our ratio of net expenses on net sales. And we have continued to invest in R&D, as I mentioned, in our marketing and commercial activities as well. So our current operating profit before depreciation of assets arising from acquisitions, the EBIT adjusted, has moved in ratio to net sales from 16% to 21.4%, so a significant increase versus last year. It's the same for the operating profit from ordinary activities. We have some limited other non-current income and expenses, which is made essentially of two elements. We have had some expenses, one-off expenses linked to the acquisition of Sasaya, notably. And this has been compensated slightly by the sale of an asset that we had. I commented earlier on the net financial expenses, you remember, made of negative exchange rate impact, as well as increased cost of debt. And finally, income tax expenses has increased, but in line with the increase of our profit and the effective tax rate has not materially changed versus what we had at the end of 2023. So all in all, we've been able to increase our net results moving from 75 million euros to close to 95 million euros, so quite a significant increase. So let me come back a couple of seconds on the EBIT adjusted evolution. So you see here the EBIT adjusted from 2023, slightly more than 100 million, moving to 150 million euros in 2024 with the exchange rate impact, which is quite limited. And we see the positive contribution of all of our region, fueled obviously by the top line growth in Europe, North America, and the rest of the world. And this has been compensated slightly by the additional R&D investment that we have made during the period in line with our strategic objective. So this very good performance has translated nicely into operating cash flow increase as well as net cash flow increase. We have had a 30% improvement of our operating cash flow and the same percentage increase for the net cash flow. So let me cover now how we have used this free cash flow or net cash flow generation during the semester, which translated into the net free cash flow that you can see on the slide. And we are comparing What happened during the first semester 2024 with what happened during the first semester 2023. So you see first the net cash flow increase moving from 92 to 116. CapEx investment, which have increased, we expect to have an acceleration during the second part of the year in line with all of the big projects that we have. The working capital requirement has remained more or less stable, I would say, when we compare the two periods, especially given the increase of our activity. And this amount is essentially explained by the seasonality of our free cash flow generation. We have some significant cash expenses during the first semester linked to end of year rebates, for instance, that are heavily weighted on the first semester. And typically, we are generating cash during the second semester. And this is a usual pattern that we see every year. It has been slightly also negatively impacted by one-off elements for this semester, especially on account receivables. And it's linked to the activities that we have had in May and June that has been quite strong, which waited temporarily on our accounts receivables. But all in all, we continue to expect to have a very strong cash generation during the second part of the year at constant scope, obviously outside of any M&A acquisitions. And Sébastien will cover that as well, but we expect now this cash flow generation to be around 60 million euros for the full year. So you see that we have had quite around zero net free cash flow during this first semester. So the cash generation will happen during the second part of the year. Net debt evolution, the only thing added on that picture or the main thing that has been added on that picture versus the previous one is obviously acquisitions. You see at the center of this slide, around 300 million euros spent for acquisition, which is a combination of Sasaya acquisition and the remaining shares of Globion. And this explains the evolution of our net debt moving from negative 52. So we're cash positive at the end, net cash positive at the end of December 2023. And we have a net debt of 255 million euros at the end of June 2024. So very briefly on the condensed balance sheet, I'm not going to cover all of the dimensions. Maybe just a comment on the net debt on operating cash flow ratio that you see at the bottom of the slide. We are negative. We are slightly positive, 0.7. But it's still an extremely favorable financial situation in which we are. Shareholding structure as of June 30th, 2024, nothing has materially changed. The Dick family continues to remain the majority shareholders and having around 66% of the voting rights. It's now time to give the microphone to Sébastien, who will cover the remaining of the presentation.

thank you thank you very much abby it works yes thank you very much i'm very pleased to present you excellent results i don't wish to say exceptional results because i think you may be used to that over the last few years and hopefully it will continue but excellent results I'm not going to cover again what Abib explained, but we have a very significant growth. In fact, what maybe matters the most is we keep gaining market share and we keep outperforming the market, probably around two times the speed of the market growth. And what is remarkable is this is happening in all the region. We have a very strong organic growth across all the geography, double digit in North America, double digit in Europe and Latin America with the comeback of Chile. And the only exception, as Habib explained, was Pacific, but Pacific has a very strong rebound. in the second quarter after a very weak first quarter and we know the market is extremely weak. So even there, we are gaining market share and the situation is much better than the one of our competitors. So we could be very proud of the teams all over the world. And this is also good because we see the performance in the key product of VRBAC. You know that we talk about the VRBAC buster, trying to develop certain franchises, certain products to a level of sales above 50 million euros. And we have products like Vegidant, Zoletil, Movoflex, of course, Milpro, Supralorin, Isotic. All of them are going quite strongly. Some of them above 30%, some above 10%, but all of them performing extremely well. So we are very happy to gain market share. And as we explained in the past, when the sales are going quickly, there is a leverage effect on the profitability. And of course, with the current performance, we have now generated the highest level of EBITDA before R&D in all the time, all the history of year back. We are close to 28% now at constant rate. So it's an improvement of around three points. And that is to me extremely important because it means that the performance is sustainable. We have not improved profitability based on cutting OPEX, cutting expenses. Our OPEX are going up 10%. So to support the growth, we are growing sustainably through improvement of the gross margin of our products and of the EBITDA. And the recurring EBIT is at 21.2%. So a very good situation for the company. And as Abib explained, We have a very low level of net debt, which allows us to keep going on with our programmatic M&A. I will cover that later, but after Globion and SASEA, we are still looking at some dossier, and we will keep on with M&A activity. More on the programmatic side, which is a smaller acquisition, as we explained before, but we'll keep doing that. In terms of geography, we wanted to cover the three large countries which have been performing very well and the one which is also a large country for us, but that has been performing less well. So USA, 22% growth at constant rate. It's growing all over the category, dermatology, dental, speciality. So many of the products are performing well. The only exception is a bit parasiticide. As you know, we have a kind of all parasiticide. And as you also know, we have increased R&D spending for four years now, increasing very significantly our R&D spending in order to develop new products. Especially in parasiticide and to come once the patent will expire with many new parasiticide products which will be quite innovative. But all the other categories are going quite nicely and we have an expectation for the full year of a double digit growth. In Chile, a very strong comeback with our parasiticide product, which is being widely used now, that is supporting the growth. In terms of vaccine cells, they are more or less flat, but the parasiticides are doing extremely well. You also know that we have a case against a distributor that cut the distribution of one of the products. This is ongoing in the Washington court, and we hope we'll have positive results. But this is not accounting here because this is without this product, of course, which we are not selling for the last 18 months. In the UK, we wanted to highlight the performance in the UK because over the last maybe five or six years, we have said that we were having too much of a low market share in the UK in comparison to other markets like France and Germany. And so we put a huge level of focus on UK and the team has done a fantastic job. And we have been going constantly above European rates across all of our geography in Europe. And so UK has been a top performer for many years. And we decided to speak about it now because it's one of the biggest markets in the world. And we are pleased that this year with 23.5% growth at Concentrate, we passed number five in the local market. We passed Decra, in fact, in the local market. And we are quite happy. And this is coming from all the very diversified portfolio we have. As we have Supralorin, we have the microchip, we have the vaccines and the parasiticide. Australia, very, very complicated first quarter with a very unfavorable base effect linked to the very good performance of the last two years. We had a double-digit growth in Australia over the last two years. The first quarter was very weak for the market, and we have suffered a quite strong comeback in the second quarter. So we are minus 0.3, if I'm flat, more or less, at the end of June. We expect that the market starts to... show some sign of rebound, some sign of improvement. So we expect this to improve. But here again, despite the performance, we are outperforming the market, especially on vaccines for livestock and with the new products we have launched. In terms of acquisition, just a quick update on Globion and Sasea. So Globion, as Abib explained, is going extremely well. The team locally has done a fantastic job. We are number one in India in animal health. You know that. We have more than 1,000 people. We are extremely well equipped. But we see now that we managed to add the poultry vaccine to our current product line, and we perform extremely well. The two most important elements for me are the third-party customer, which is a market outside of Suguna. Suguna has been the company who divested this activity. We have a contract with them, so they are obliged in one way to buy a certain level of vaccines, so that could catch up during the year. So we have a minimum level of purchase guaranteed by contract with them. So it's not the most important point. What is important is how well this activity develops outside of Suguna. And here we have a 53% of increase in the third party customer in India. So it's extremely a good sign for us, a very dynamic growth. And in terms of export, which is outside of India, this is also something we wanted to develop. This will take more time because we need to have registration dossier approvals and things like this. But already we have 22% improvement of the activity. In Japan, The process will be a bit longer because to the opposite of India, we were much smaller in Japan. Then there is, of course, the language barrier. But we have sent among our best performer in Japan to manage the company locally. And the integration roadmap is fully completed in terms of design. And we are now trying to find the main opportunity that we have acquired through the acquisition, for instance, of the manufacturing site. We have increased capacity in a tremendous way. We have many opportunities to leverage this on the manufacturing site. There are many things we could do in Japan in terms of vaccine production that will probably allow us to reduce capex and investment in other parts of the world. We even consider to find synergies by closing some sites to reduce OPEX and transferring some of the product there. So there are many opportunities to explore, even if these will take time, of course, because, you know, in pharmaceuticals, the manufacturing transfer takes some years. But today, the current performance is quite good. The affiliate is growing 6% at constant scope and rate. And with SSCA, of course, the growth is 328%, which is a very significant transformation locally. So all that extremely positive and in line with expectation. As you know, because of my resignation, we decided to make just a quick focus on what has been achieved over the last six and a half years. So just because sometimes we look at quarter after quarter, but what really matters for Virbac is very long-term and sustainable performance. So 2017, the company was heavily indebted. We had 460 million in debt on a turnover of 362. uh there was a low product margin and so very limited room for maneuver and the r d expenditure were of 69 million okay and the ebitda of nine percent with 58 million euro of ebit uh and the net income of 29 million the share price was around 123 and there were 4 800 employees around the world in 2024 beerback has very little debt in fact following the acquisition of sasea Last year, we finished with 52 million cash at the end of 23, but with the acquisition, we still have a debt to EBITDA ratio below one, inferior to one, and therefore, we still have considerable room for maneuver. And you will probably see in the coming months or years that we keep executing our programmatic M&A approach because we have an intention to keep remaining very active in M&A. We expect sales above 1.4 billion euros this year. So it's quite significant when we recall that we divested Sentinel. Sentinel was around 70 million euros. So we have a very significant growth over the last six and a half years. Double digit expected this year. And we will improve margin seven point above the level of 27. When I say margin, I'm talking about product margin. which is a part which makes it very sustainable because it's linked to the quality of the product, the price positioning, and the product mix. And we saw that we have been able to improve that line very, very much. And it was not just by managing expenses and OPEX. And so we have an EBITDA ratio expected to be around 16% for this year. And as you know, it's 21.4% at the end of June. And we have more than 6,000 employees today, which means that the company has really grown very nicely over the last six years. What is probably more important than this figure is the fact that we have gained market share constantly, year after year. Every year we gain market share, and over the last six and a half years, I think we have the number one in terms of organic growth, if we look just at the organic growth. In all the market data, we can find most of the time pet food is not recorded, but if you consider pet food, which is a significant part of our growth, we have the strongest organic growth of the animal health market all over the world over the last six and a half years. We have gained market share in every species, despite the huge innovation we have seen in companion animals with monoclonal antibodies, new class of parasiticide, it has been a bit more difficult for us over the last few years. We still have increased from 4.6 to 4.8 and we expect, and this is without pet food again, because pet food is most of the time not tracked into this kind of statistic. So we move from 4.6% to 4.8% market share, and that is before the arrival of all the new products we will have in the coming years with the launch of all our new parasiticides and all the innovation we have put in the pipeline over the last few years. So we will probably see even better performance in companion animals moving ahead. In cattle and ruminants, we moved from 4.4 to 6.9% market share. So that is a really great performance across almost all geography. And even swine, Abib mentioned it, we have started to increase from 2 to 2.5. But now we see an acceleration in swine vaccines over the last 18 months, two years. And we are entering the poultry vaccine segment with a global acquisition, and that is a very dynamic market. So that should also help us very much in the coming years. In terms of country, most of them we gain market share. This is a list of countries where we have gained market share significantly. You have small countries like New Zealand, Vietnam, but you have also very large countries like the USA. and many countries in Europe, France, Germany, Spain, and all the regions of Latin America, because whether it's Brazil or Mexico or Colombia, in every country we have gained market share. And in terms of segment, you have the list below. I will not look at it if I read it, but it goes from parasiticide, endoparasiticide, not ecto. As you know, in ecto, we have lacked the innovation of the isoxazoline that we will have in a few years, but not yet. And all the other segments, we have been outperforming. It's not just about gaining market share and financial performance. To us, as we are very much invested in the long term, in a sustainable performance, we also look very carefully at the social and ethical performance. Great Place to Work has been something we launched in 2018. And we have improved more than 11 points over the period. And despite the COVID, despite the inflation, the war in Ukraine, where the mood of the people could have been touched in 23, 24 with inflation, we have seen a significant improvement in almost all dimensions. in particular with management, which has been perceived as being walking the talk and representing the culture of the company, or whether it's on the business conduct. And with more than 14 countries, we have been certified a great place to work. So we are quite proud of this social performance and the fact that the people are really strongly engaged and really highly committed to the company. We have also improved in diversity, nine points, with trying to become more international and with a better representation of women. This is true in the management bodies. And we have moved from a group executive committee, which now is close to 40% of women, versus a board or executive board that were made only of men back in 2017. The professional inequality index has also improved. The accident frequency rate reduced. And so we have tried to maintain a very social approach in VRBAC over the last few years with the crisis, with inflation, with all we know. And that has paid. As I mentioned before, the team are really engaged. We do that for the people, but we have also to take into account the planet and the environmental performance. We have also performed over the last five years with 16% reduction in the CO2 emission, with energy down 13%, the water consumption 23%, And we have created a department just in charge of all that, setting up a new direction, new objective for 2027 and 2030. And last but not least, with my departure, I wanted to insist that the governance of the company is very strong. When I took over the job back in December 2017, sorry, December 2017, We have created what we call a board office. We created a group executive committee, of course, that was made of three people. We moved to eight people, so it's much more diverse, much stronger, with a better reputation and more competency within the team. We have also created a board office to help us in the execution of the strategic plan and that has probably helped us a lot in being very rigorous and very good in discipline for execution and in speed. And we have a global network team which is made of the top 90 people of the group all over the world with all the country managers and all the main functions represented. And this allows a very rapid, very quick and very strong alignment on any strategic plan we want to implement or on any remediation action or any plan we need to put to push in a short period of time. So this alignment of all these people we meet once a quarter allows us to have a much, more rapid and much stronger execution. And I believe that with this in place, the governance is extremely strong and will keep delivering results in the coming years. With that, back to what we intend to do. So I'm going to go quick because this roadmap to 2030, we will keep presenting it every semester, I guess. Just a quick update, so great place to work. We explained that we have improved on all these I mentioned. What I would like to remind you is what we intend to do in a very few sentences. Number one, over the last three years, we have increased the R&D spending very significantly. Remember, we have increased R&D spending by more or less 40 million per year. That was the intention to move from 6.5% of R&D after tax credit, 7.5% before, 6.5% after, back in 2021 to 8.5% this year. That was the plan. But the intention behind that is to have a full pipeline of new products. Some of them will come next year, and a big quantity of product will start to come in 2027 with large product, in particular in the field of parasiticide. And so this innovation was the best way for us to invest our money, and so we have now a pipeline extremely rich. The second one was to have a programmatic M&A, not to buy a huge company and make it very transformational and complicated to digest and shock of culture. No, this is not the ambition. The ambition is to make many small acquisitions that we can digest easily, that will not slow us down, that will not occupy too much of our resources, but to the opposite, that will add product, add competency, and help us grow faster in the strategic dimension where we want to grow. And Globion is a good example. SASEA is a bit bigger than what we would have targeted, but of course it's a question of offer and demand. And we have many projects at the moment we are looking at, and I believe some of them will come through. Competitiveness is the last pillar. The first two are really engaged. Innovation is really engaged. Acquisition is really engaged. Competitiveness is also truly engaged. But some of the execution remains to be done. So we have a new logistic and warehouse center that is being built in Caroz now. We have a new plant for pet food in Nîmes, which is currently being submitted the building permit and the different administrative dossier to get the authorization to do it. We have the transfer of supralurin, which is one of our big products from Australia to Caroz. That would be very good because it will absorb fixed cost. And we have the intention to do a new site for biology and vaccines because if you follow VR back since 2020, We have missed many opportunity of growing during the COVID period and now recently because of the vaccine due to capacity and due to the fact that our manufacturing site becomes a bit old and that we need now to increase with a new site, more capacity, but also more technology to produce at the lower cost of wood with more productivity. So that's what we'll try to do in the coming years. In terms of country, where to play? USA, I mentioned it, we have gained market share recently. We are now going to launch a new product. The therapeutic pet food will be a key element to track and to follow. Because when we launch only the physiological range, it is difficult to penetrate. But as soon as you have the therapeutical pet food range, which is what vets, veterinarians, are used to sell, it should accelerate the penetration of the pet food market. So that is something that will have to be tracked. It will be planned for the end of next year. Farm animal entry, same thing. The big products are coming next year. So that is something that we have to track in the coming two to three years. But we keep developing, unfolding the roadmap to grow and develop more in the U.S. China, very good news. We launched the parasiticide 18 months ago. The pet food was launched late, late November 23, but as a pilot to test the right approach, it is being expanded this year very aggressively. We have extended the pet food launch to many more cities, and we have just obtained this quarter The dog vaccine registration. So we are among the top three companies with a dog vaccine in China. And now that we have the three legs, parasiticide, pet food and vaccines, we have a complete range, complete portfolio to be able to accelerate our growth and market share in China. In term of segment, products and pipeline, I will not comment too much again. The VeerBank Buster and the key products are growing very nicely. Pet food around 14%, specialty 21%. Vaccines, 46%. That's probably the most important part, the vaccines. That is outside of aquaculture. But aquaculture is growing, you see in the growth venture at the bottom of the slide, 55%. The swine vaccine is growing 52%, constant scope versus last year. And if we add the poultry vaccine from Globion, of course, it goes to 128. All that to say that we mentioned that vaccines and pet food, pet care, but vaccines is one of the key dimension, key element of the strategy, and we are executing it very well with all that. In terms of processes, just to let you know, we have the successful deployment of our ERP, MES, LIMS, and EPIMS in France at the beginning of this year. And so now we are expecting the rollout in the other country in 2025. But this has happened nicely without any disruption. And so we could be quite happy with that. And the digital business transformation is ongoing with 51% growth of the e-commerce in 2024, more or less in line with what we did last year. I think we are coming to the end. We presented this roadmap in March, the part in gray. At that time, we had a guidance of 15% EBITDA. So we say we need five points to move from 15% to 20% before 2030. So we had presented three source of profit improvement. Two points coming from R&D spending normalization that we explained. Two points coming from the margin rate expansion and two points coming from the OPEX. Two plus two plus two, six points versus the five points we said we had to go for. We see that this year we will outperform the guidance and what was expected at the beginning of this year. So now we have only four points to go to reach a 20% EBITDA. Only four points to go. We will adjust this slide by next year to see whether some of it has already come from the R&D spending or from the margin expansion, but we are very confident that with this free level of performance, we have enough room to guarantee or ensure the reach of the 20% before 2030. And so the guidance, which we have reaffirmed at the moment, is net revenue growth at constant rate and scope from 7% to 9%. Of course, with the acquisition of Globion and SASEA, it will be between 12.5% and 14.5%. EBITDA ratio is 16%, same thing, constant rate and scope. We have said that the acquisition will be slightly relative, accretive, bringing a bit more EBITDA. in terms of ratio, and the net debt evolution would be a cash generation of 60 million, which is above the previous guidance. And with that, we can open the Q&A session. Thank you very much.