2005 Annual report - Virbac

3
Éric Marée
Chairman of the Executive board of Virbac
acquisitions should help boost this growth rate. A series of initiatives undertaken
over the past two years to control costs and optimise their impact are continuing;
the lean manufacturing project in French plants, which will subsequently be
expanded to other sites, the systematic rolling out of the purchasing project, the
project to optimise marketing and sales effectiveness in Europe, the gradual rollout
to the whole Group of IT systems making it possible to improve the
management of the company’s major processes.
The most recent strategic initiative, announced at the very end of 2005, namely
our proposal to buy the 40% of Virbac Corp. not held by the Group, obviously
designed to definitively protect us from the risks associated with being listed on
the US stock market, but also to avoid the costs, prohibitive for a small company,
and above all to enable the implementation of a global strategy in all the
company’s key functions.
2006, a transitional year for global expansion
2006 is expected to be a transitional year for the Group’s expansion. We expect
the above-mentioned bid in the US to be accepted, but also the completion of the
acquisition of the Glaxo veterinary business in India, a deal that will propel Virbac
to leadership position in a market that is expected to grow significantly over the
coming years and decades. Two deals affecting the Group’s medium-term growth,
which we hope to speed up in America and in Asia.
Independently of these planned acquisitions, we expect growth in 2006 to match,
if not slightly exceed, that in 2005 and operating profitability in line with that in
2005 as a percentage of sales, since we intend to invest the expected operating
gains in increasing R&D budgets, in particular in the US, to propel future growth.