2009 Financials

and Strategic Update

March 2010

2

Agenda

• 2009 results

• The world wide veterinary market

• The new competitive landscape

• Virbac’s growth levers

3

• Sales : +5.4% in euros

� +4.4% organic growth :

− +7.5% in companion animals : new products in Europe, market share gains in the US

− +2.0% in food producing animals : emerging markets

� +1.4% impact of Schering-Plough products acquired in mid-2008

• EBIT : +6.9% / + 0.2 point

� improvement of growth margin continued, still driven by recent products and reduction of low margin activities in the USA

� Selective increase of expenses : R&D and commercial

Key points on 2009 financials (1/2)

4

• Net profit : +9.6%

� decrease of interest expenses due to cash generation and lower interest rates

� currency volatility impact limited through hedging policy

• Financial structure : 14.5% debt/equity ratio

� record generation of cash flow, based on :

− profitability increase (Ebit DA +8.4%)

− decrease of interest expense

− very tight control of working capital

Key points on 2009 financials (2/2)

5

Consolidated sales31.12.2009

Consolidated sales 467.4 443.4 +5.4%

- exchange rate impact vs. 2008 1.5 -

Consolidated sales at constant rates 468.9 443.4 +5.8%

- change of perimeter (7.5) (1.6)

Consolidated sales, pro-formaat constant exchange rates 461.4 441.8 +4.4%

2008 Var. %2009Million euros

6

2009 quarterly growth of sales*

* Pro forma sales, excluding impact of exchange rates and acquisitions

6%

2%

0%

12 months :+4.4%

Q1 Q2

+3.3% +3.0%

4%

109.0 M€ 116.5 M€

8%

Q3

+3.4%

122.2 M€ 119.7 M€

+8.0%

Q4

7

Breakdown of sales growth in 2009

470

460

450

440

430

420

410

4002008

443.4

2009

467.4

ExchangeRates

(million euros)

+14.2

New products(launched in 09)

Full year impactof 2008 acquisitions

Base Business

Activities & Pdtsdiscontinued

+7.5

+10.9

-7.1 - 1.5+3.2%

+1.7%

+2.4%

-1.6% -0.3%

+5.4%

8

2009 consolidated salesGeographical breakdown

France 98.0 98.0 0.0% 0.0%Europe outside France 166.0 153.1 8.4% 9.8%North America 66.9 62.7 6.7% 0.7%Latin America 29.4 28.0 5.2% 15.1%Africa-Middle East 26.0 23.1 12.4% 8.6%Asia 52.7 48.0 9.9% 11.3%Pacific 28.4 30.5 -6.9% -4.8%

TOTAL 467.4 443.4 5.4% 5.8%

2008 % Variation2009Constantexch. ratesMillion euros

9

Growth by segment 2009At constant exchange rates

> - 5%- 5% à 0%

0% à + 5%

+5% à +10%

+10% à +15%

> 15%

Companion Animals 290,0 7,5%

Parasiticides 68,7 10,4%

Vaccines 51,7 6,3%

Antibiotics/Dermatology 46,5 11,9%

Specialties 56,8 10,1%

Horses 23,6 -11,6%

Petfood 20,2 14,3%

Others 22,4 6,3%

Food producing animals 168,6 6,2%

Bovine parasiticides 25,6 8,0%

Other Bovine products 93,1 8,7%

Antibiotics swine/poultry 39,0 -0,9%

Others 10,9 9,3%

Other businesses 8,8 -36,0%

TOTAL 467,4 5,8%

Businesses / RangesGrowth at constant rates

Net Revenue 2009 (M€)

0% à + 5%

+5% à +10%

7,4%

2,0%

1.0%

4,4%

of which organic growth

10

2009 Profit & Loss statement

Net sales 467.4 100 443.4 100 +5.4%

Gross margin on material cost 315.9 67.6 298.3 67.3 +5.9%

External costs 109.8 23.5 106.1 23.9 +3.5%

Employees costs 124.1 26.5 117.0 26.4 +6.0%

Other net costs, taxes, Research tax credit 8.9 2.0 7.7 1.7 +15.7%

Depreciation and amortisation 14.6 3.1 13.8 3.1 +6.1%

Net provisions (excluding inventories) 0.2 - (0.7) (0.2) -

Operating Profit from ordinary activities 58.3 12.5 54.5 12.3 +6.9%

Non recurring expenses - 0.1

Operating profit after non-recurring expenses 58.3 12.5 54.4 12.3 +7.1%

Net financial expenses 1.9 0.4 4.0 0.9 -52%

Income before tax 56.4 12.1 50.4 11.4 +11.9%

Income tax expense 16.7 14.0 +19.3%

Group’s (profit) or loss in joint ventures - 0.1

Net profit of consolidated entities 39.7 8.5 36.3 8.2 +9.3%

Minority interests 0.9 0.8 -

Net profit - Group’s Share 38.8 8.3 35.4 8.0 +9.6%

2008 %%Million euros % Var.2009

11

Breakdown of EBIT growth in 2009

70

60

502008

54.5

2009

58.3

Otherexpenses

(million euros)

+10.7

Netmargin

Acquisitionsin full year

R&D Sales & Marketing

+1.8

-5.3- 1.5

-1.9

12

+12,6%

+8,4%

60

2008

50

40

30

20

10

0

2009

70

(million euros)Evolution of cash-flow

OperatingCash-flow(EBIT DA)

Net Cash-flow

69.1

74.8

45.7

80

52.2

58.8

13

2009 Cash-flow statement

Cash-flow 58.8 Tangible assets 19.8

Sale of assets 0.6 Intangible assets 2.4

Net sale of treasury shares 1.4 Acquisitions -

Dividends 11.2

Decrease in working capital (1.3)

Other assets and liabilities (1.7)

Total Sources 60.8 Total Uses 30.4

Decrease of net debt(average exchange rates) 30.4

Sources of funds Uses of funds

(million euros)

14

Evolution of cash-flows in 2009

Free cash-flow

Total

cash-flow generated

1 9 , 3

3 9 , 6

3 2 ,9

1 9 ,1

2008 2009

19.3

32.9

39.6

19.2

52.2

58.8

Working capital

and Capex uses

15

2008 2009 2008 2009

INVESTED CAPITAL CAPITAL EMPLOYED

281.3289.5

Shareholder ’s equity

Minority interests + LT reserves

Net financial debt

Working Capital

Fixed assets

281.3289.5

Balance Sheet analysis

39.1

245.2242.2

198.4

16.0

66.9

233.6

22.1

33.8

44.3

(million euros)

16

2007 2008 2009

33.7%

31.2%

1.28

Net debt / Shareholder’s equity

Net debt / Total equity + L.T. reserves

Net debt / Cash-flow

14.5 %

0.58

Net debt / EBIT DA

0.97 0.45

13.2 %

26.0 %

23.9 %

1.04

0.73

Balance Sheet - financial ratios

17

47,7%

6,0%

44,9%

0,9%

0,5%

Shareholding

63,9%4,0%

30,9%

1,2%

Number of shares : 8 714 352Breakdown at 31 December 2009

In shares In voting rights

Dick Family

Others

Treasury shares Employees savings plan

Dick FamilyOthers

Employees savings plan

Threadneedle

Threadneedle

18

Agenda

• 2009 results

• The world wide veterinary market

• The new competitive landscape

• Virbac’s growth levers

32,5%32,9%

Worldwide animal health market in 2009$ 18.6 billion

EUROPE

REST OF THE WORLD

NORTH AMERICA

4,6%30%

West

East

Source : Vetnosis, Virbac estimates

20

North American market in 2009$ 6.1 billion

Food producing

animals

Companion

animals

• 9% decline

- livestock -10%

•Virbac absent

•% growth

- 1st half : +0.3%

- 2nd half : +3.6%

•Virbac :

- 2.9% market share

- +12.4% growth

48% 52%

Source : Vetnosis, Virbac analysis

21

European market in 2009$ 6.9 billion

Food producing

animals

Companion

animals

• 4.3% decline in 2009

• livestock : -5% . pigs : +12%, poultry flat

• France : - 9.3% (-3.3% first half -14.8% 2nd half)

•Virbac

• 4.4% market share

• +4.9% growth

-8% in France, -1.3% elsewhere,

+8.6% from acquisitions

53% 47%

• Growth in 2009 :

- 1st half : -0.2%

- 2nd half : +6.3%

•Virbac :

- 8.4% market share

- 6.8% growth

Source : Vetnosis, Virbac analysis

22

Rest of the world$ 5.6 billion in 2009

EMERGING MARKETS

LATIN AMERICADEVELOPPED MARKETS(1)

OTHER EMERGING MARKETS

� Dominantly FPA markets (Brazil 75%, Mexico 80%)

� Brazil : n°2 market worldwide

� Mexico 1/4th of Brazil

� Strong growth

� Virbac positions : 7% ms in Mexico, 4% ms in CA Brazil

� CA and FPA markets (CA : Japan 45%, Australia 40%)

� FPA majors :

� Japan, Korea : pigs

� Australia, New Zealand : cattle and sheep

� Moderate growth (decline in Australia in 09)

� Virbac positions : - N°2 in Australia

- 4% m.s in CA in Japan (12% ms)

� Food producing animal markets. China n°4, worldwide

� pigs (China, Thailand)

� bovines (India, South Africa)

� poultry (China, India, Thailand)

� Strong growth

� Virbac positions : n°2 in India (10% ms),n°3 in South Africa (13% ms)

33% 28%

39%

(1) Japan, Korea, Australia, New Zealand

Source : Vetnosis, Virbacanalysis

23

100 %Market Virbac

Anti-infectious

Vaccines

Internalparasiticides

Externalparasiticides

Specialties And other

Vaccine Leishmaniosis project

Iverhart / Equimax / Milteforan

Effipro

10 %

16 %

18 %

27 %

5 %

20 %

21 %

13 %

9 % 7 %Pet Food VB Nutrition

Companion animals

Therapeutic classes

29 %41 %

07/08/09 launches :• Cortavance• Ypozane• Suprelorin• Easotic

Source : Vetnosis, Virbac

Worldwide animal health market

24

Market Virbac

Anti-infectious

Vaccines

Parasiticides

Feed additivesand specialties

Position in Santa-Elena in Uruguay

20%

18%

28%

49%

21%

1%

100 %

Food producing animals

Source : Vetnosis, Virbac

35%29%

Worldwide animal health market

Acquisition of Pfizer (ex Wyeth)product portfolio in Australia

Therapeutic classes

25

• 2009 results

• The world wide veterinary market

• The new competitive landscape

• Virbac’s growth levers

Agenda

26

1.8%

Estimates of market shares when

Merial/Intervet merger completed

All others

Merial / Intervet (1)

Pfizer

BayerLilly

Novartis

Boehringer

VIRBAC

CEVA

Assets to be divested by Merial / Intervet

VétoquinolAlpharma

(1) : Assumption : -10% of global sales divested

25.7%

18.7%

7.4%7.2%

6.1%

5.6%

3.6%

2.9%

1.9%

16%

2.9%

Source : Vetnosis, Virbac analysis

27

• TOP TWO LEADERS : will differ in 2 areas :

� Governance

� Post merger integration

• OTHER BIG PHARMA : double or quit ?

• Virbac : A future even without major merger :

� Short term opportunities : products, people,

� Room for small players in all industries

� Customer’s support

� Distribution opportunities (US)

� Attractive niches

� Proven track record of business model : innovation + marketing drive

• OTHER PLAYERS : ?

The future competitive landscape

28

• 2009 results

• The world wide veterinary market

• The new competitive landscape

• Virbac’s growth levers

Agenda

29

Effipro / Fiproline

• Europe

� Launch, in almost all European countries in June 2009, with good results on both spray and spot-on

� Full year of commercialization in all European countries in 2010, without any new fipronil based competitive product up to now

• United States :� Launch in 2012, possibly in 2011 (marketing authorization expected end of 2010 at federal level)

• Sales target :� 2010 : 15 to 20 million €

30

Canileish vaccine

• Clinical studies :

� positive results of 24 months field trial : proven efficacy

• Marketing Authorization dossier filed on March 2nd, 2010 (European centralized procedure)

• Marketing at European level is conceivable in 2011, depending on the date of the Marketing Authorization and the scale up of production capacities

• Sales potential : 25 to 30 million € in year 3

31

Entry in the food producing animal

vaccines market

• Current presence in Germany, South Africa, New Zealand (through licensing deals) and Australia (pig vaccine) through the Pfizer acquisition. Total turnover of 7m€

• New important step in January 2010 : acquisition of 30% of SANTA-ELENA, an Uruguayan company specialized in biology, with a call for the remaining 70% :

- excellent skills in biology (ex FMD leader)

- growth potential in emerging markets (especially Brazil) and possibly Europe

- current turnover : 7m$

32

Europe

• Companion animals

� two major growth drivers :

- Effipro : 1st full year of commercialization across all Europe in 2010

- Canileish : opportunity for southern Europe

� rest of the portfolio expected to continue growing at market rate, around 4% in 2010

• Food producing animals

� further decrease expected

• Acquisition opportunities : Eastern Europe, ISP / Merial divestments

33

United States

• $ 93m sales in 2009 @ 85% in the veterinary channel

• Continued growth expected from the Iverhart franchise in 2010� 23% growth in 2009 (28m$, 8.7% estimated market share)� growth potential from Iverhart Max (differentiated product)

� increased distribution (growing Virbac sales force + listing by a new major distributor in january 2010)

• Growth acceleration in 2011 and 2012, through :� Effipro (federal registration expected end of 2010, state registrations during 2011)

� Two important innovations in the dermatological range (registrations expected end of 2010)

� Further opening of currently « locked » distributors for Virbac

• Acquisition opportunities : ISP / Merial divestments

34

Emerging markets

• 2009 performance in main countriessales in m€ Growth at constant rates

India : 29 +19%South Africa : 21.5 +11%Mexico : 14 +15%Brazil : 10 +17%

• Growth drivers for 2010, in addition to the natural market growth :� India : roll out of the « Bottom of Pyramid » approach in India + creation of the companion animal market

� South Africa : local innovation + superior sales management

� Brazil, Mexico : strong franchise in companion animals

+ entry in new food producing animal segments (Brazil)

+ local innovation in food producing animals (Mexico)

• China� Virbac currently #3 of the still minute companion animal market

� Several alternatives investigated to address the food producing animal market

35

Australia

• Divestment of Wyeth assets required by the anti-trust authorities :� Product portfolio with a turnover of 37m AUD in 2009 (24m€)

- parasiticides for ruminants : 80%

- Cattle vaccine : 20%

� Manufacturing site close to Sydney

� Around 120 people retained by Virbac

• Acquisition completed end of January for 13m AUD. Will be profitable as soon as 2010 and will generate a badwill in 1st half financials

• Virbac’s position in the Australian market� n°2 overall (13% market share)

� n°1 in livestock (24% market share)

� n°1 in equine (25% market share)

� n°5 in companion animals (5.6% market share)

36

Summary of acquisitions projects

• Completed

� Wyeth portfolio in Australia in January 2010 : turnover : 24m€

� Santa Elena in Uruguay in January 2010 (30%) : turnover : 5m€

• Advanced projects

� A portfolio of six SP Intervet products in Brazil : turnover : 1m€

� Two projects : one in Latin America, one in Eastern Europe (turnover of around 5m€ each)

• Upcoming opportunities

� ISP / Merial divestments

• Financing capabilities with a gearing of 1 : around 200m€

37

2010 financial perspective

• Sales

� Organic growth in the 5% to 7% range

• EBIT

� 50 basis points improvement target maintained

38

Thank you for your attention