Ian Page
The Group has delivered another strong performance throughout the financial year. We have continued to outperform in almost all markets in which we operate and strategically it has also been an excellent year.

Ian Page

Chief Executive Officer

I am pleased to report that the Group has delivered another strong performance throughout the financial year (the Period). Financially we have continued to outperform in almost all markets in which we operate, especially in the USA where we have delivered another year of exceptional organic growth. Strategically it has also been an excellent year; our pipeline has delivered new products and has been significantly enhanced with new technology; geographically we have extended our footprint through the acquisition of Laboratorios Vencofarma do Brasil Ltda (Venco) and we have successfully integrated the acquisitions completed in the previous financial year.

Portfolio Focus

EU Pharmaceuticals Segment

In the Period our European (EU) Pharmaceuticals Segment reported revenues increased by 18.7% at CER (17.5% at AER). Excluding third party contract manufacturing and acquisitions, revenues increased by 7.8% at CER (6.9% at AER). This growth was partly offset by the ongoing decline in non-core business, such as agrochemicals. Although market growth in European countries has been very slow or flat, all of Dechra's major markets outperformed and delivered solid growth on the previous year.

International Business

Our Australian, New Zealand and recently acquired Brazilian businesses are outperforming our expectations. Sales through third party marketing partners have been marginally slower than expected; clearly demonstrating our ability to drive products under our control and under the Dechra brand to a higher level. This supports our international expansion strategy which can be demonstrated through the acquisitions in Australia, New Zealand and Brazil over the last few years.

NA Pharmaceuticals Segment

Total North America (NA) Pharmaceuticals Segment revenues increased by 15.4% at CER (19.8% at AER). This strong performance was driven by further market penetration of our key, unique brands such as Vetoryl and Zycortal and also by increased market share of our generics portfolio. We continue to benefit from the full year effect of the sales team that was significantly enlarged in the prior financial year. As the team is now the correct scale relative to our size, new headcount will only be added commensurate to growth. The USA is the main driver of this sales growth; however, we have also had a solid performance in Canada. Whilst not material to the Group, the strategic restructuring and repositioning of our Mexican business is behind schedule; however, at the end of the period we were beginning to see real traction from new, core product introductions and from the additional expertise added through the recently appointed, experienced management team.

Product Group Performance

In the commentary which follows, all references will be to CER movement unless otherwise stated.


Companion Animal Products (CAP), which represent 70.7% of Group turnover, grew by 23.1% (14.6% organically) in the Period with all therapeutic categories performing well. We have developed a broad portfolio, especially in internal medicine and critical care products such as anaesthesia and analgesia, where we have a wide range providing the veterinarian with an optimal solution for every case. We recently developed a mobile application by which a veterinarian can evaluate the optimum anaesthetic or analgesic protocol for many species of animals in numerous clinical conditions.


Food producing Animal Products (FAP), which represent 11.9% of Group turnover, grew by 19.1% (4.2% organically). This growth was driven by a strong organic performance in our EU business (as we are not in the FAP sector in NA) and by the acquisition of Venco, whose product portfolio is mainly FAP vaccines. Whilst the overall market in Europe is still seeing a decline in antibiotic usage, we are no longer being affected as our range is aligned to best prescribing practice.




Revenue Growth in NA



Revenue Growth in EU




Equine, which represents 7.1% of Group turnover, grew by 21.1% (3.1% organically). This growth was mainly driven by the EU and by acquisition. Performance in NA was a little disappointing, predominantly due to some concerns about the risk of bisphosphonates (Osphos) when administered incorrectly and off-label. We have reinforced the need to use medicines as directed and have run an extensive marketing campaign and believe we have now addressed all concerns.


Nutrition represents 6.0% of Group turnover. Sales on the year were flat; however, we have arrested the decline seen last year and in the first half of this financial year. We have changed the management structure of this business unit to provide better focus. Following on from the launch of the refreshed cat diets, the dog diets are about to be relaunched in improved livery, new pack sizes and improved formulations.

Product Development


We have restructured the global clinical department with a new organisational strategy into which we have integrated the vaccine development team and the regulatory control of the recent acquisitions: AST Farma, Le Vet and Venco.

We have implemented and rolled out a new project management software platform utilising Microsoft Project Server which will improve transparency, planning and delivery of our product pipeline.

Product Approvals

There have been numerous marketing authorisations received throughout the year, which included:

  • Carbifusion® Solution for Infusion, an electrolyte solution for cattle and horses, approved in four EU territories;
  • Cardisure Liquid, a cardiovascular treatment for dogs, approved in 23 EU territories;
  • Clindabactin® Flavoured Tablets, an antibiotic for dogs and cats, approved in 28 EU territories;
  • Cyclosporine Soft Gel Capsules, for allergic dermatitis in dogs, approved in the US;
  • Dormazolam® Injection, a sedative for horses, approved in 18 EU territories;
  • Equibactin® Oral Powder, an antibiotic for horses, approved in 20 EU territories;
  • EquiShield® EHV Vaccine, a herpes virus vaccine for horses, approved in 15 EU territories;
  • Intubeaze® Oromucosal Spray, an anaesthetic pre-treatment for cats, approved in 14 additional EU territories;
  • Laxatract® Syrup, a laxative for cats and dogs, approved in 28 EU territories;
  • Rominervin Injection, a sedative for horses, approved in 27 EU territories;
  • Solacyl® Powder, an antibiotic for cattle and pigs, approved in six additional EU territories;
  • Solupam® Solution, for the management of convulsion disorders and skeletal muscle spasm or sedation for dogs and cats, approved in 28 EU territories;
  • Sympagesic® Injection, an analgesic and for the treatment of smooth muscle spasms in horses, cattle, pigs and dogs, approved in 28 EU territories;
  • Domidine® Solution, a sedative for horses, approved in Canada;
  • Sedator® Solution and Atipam® Solution, a sedative and a reversal agent for dogs, Domidine, a sedative for horses, HY-50® for equine lameness and Felimazole® for hyperthyroidism, approved in Mexico; and
  • Panapex Ear Ointment for dogs, Intubeaze Oromucosal Spray an anaesthetic pre-treatment for cats, Meloxicam Oral Suspension an anti-inflammatory for dogs and Pimobendan Oral Solution a cardiovascular treatment for dogs, approved in Australia.

Also, the International Regulatory Affairs team achieved 43 product registrations across Israel, South Korea, Macau, Macedonia, Malaysia, Malta, Namibia, Serbia, Ukraine, United Arab Emirates, and Zambia.

Filling the Pipeline

We consider that it is important to our market position, as an innovative company, that we retain a balance of both novel and generic products in our portfolio and are conscious that as a consequence of the acquisitions we have made over the last two years, the balance of our pipeline has a greater generic and generic plus weighting than we have had historically. We have therefore increased resources and placed greater emphasis into screening opportunities, and have subsequently secured numerous development agreements for new technologies, the most significant of which are detailed below:

  • Post year-end we are delighted to have completed a significant agreement with Akston Biosciences who have developed a unique version of insulin with a sustained duration of activity;
  • We have entered into three agreements to evaluate two products for equine lameness and one product for equine gastric ulcers;
  • We have signed a licensing agreement with Vetcare Ltd for a combination, novel canine sedative; and
  • We have also entered into multiple agreements to evaluate new vaccine technologies against viral and bacterial diseases in pigs; proof of concept studies are commencing with these vaccines.


AST Farma B.V. and Le Vet Beheer B.V.

AST Farma B.V. and Le Vet Beheer B.V., which were acquired in the previous financial year, are both performing well. AST Farma has significantly increased our presence in the Dutch market where we now offer a wider range of products, both existing Dechra and AST Farma, on a direct to vet basis. The commercial teams and product ranges of both Dechra and AST Farma have been combined with both businesses benefiting from the leverage of the enlarged company. Le Vet has started to deliver significant growth to Dechra in the second half of the financial year following the disintermediation of their previous distribution agreements which were held by a number of Dechra's competitors. Significant synergies are now being realised as Dechra branded products are sold through our own sales and marketing organisations which provide a better focus on sales and we capture the full margin chain. To date we have terminated approximately two thirds of these distribution agreements where there were change of ownership clauses; synergies from the remaining third are expected to be delivered over the next two years.

Caledonian Holdings Ltd

In October 2018 we acquired the trade and assets of a small bolt-on business, Caledonian Holdings Ltd (Caledonian) for a cash consideration of £4.4 million. The business, which had sales of £1.8 million to the end of June 2017, was entirely equine products, which are sold across Australia and New Zealand and also in Hong Kong. The acquisition was made to strengthen our market position in the equine sector in these territories and to complement our existing equine product portfolio and pipeline.

Laboratorios Vencofarma do Brasil Ltda

In December 2018 we acquired Laboratorios Vencofarma do Brasil Ltda (Venco) for a consideration of £34.8 million. This acquisition gives us a foothold within the third largest FAP market in the world, Brazil. It is also an important expansion to our FAP vaccine portfolio, the fastest growth sector of the global market. As with all of our acquisitions, we had a clear vision and strategic plan of how to integrate the business into Dechra which we shared with the management team on the first day of ownership. We have subsequently strengthened the team with a new Finance Director, a new HR Manager and a new Regulatory Manager. The team have integrated well with our culture and Values and to date have outperformed our expectations. Over the next two years we will invest in the manufacturing facility and in new product registrations to extend our presence in Brazil and will look at opportunities to increase further our presence in the wider South American market.

Animal Ethics Pty Ltd

Post the year end we acquired an additional 15% of the shares of Medical Ethics Pty Ltd, the parent company of Animal Ethics Pty Ltd, for a consideration of AUD$13.5 million (£8.0 million). Following the acquisition of 33% for AUD$18 million in 2017 this takes our total holding to 48%. The strong progress made on the global development of Tri-Solfen® for pigs, cattle and sheep and the ongoing trials for its application for debriding of venous leg ulcers in humans has resulted in separate independent valuations of the business, both in excess of AUD$100 million. Following recent trials in South-East Asia, Tri-Solfen® has also been found to be highly effective in alleviating the clinical signs of Foot and Mouth Disease in cattle. Given the effectiveness in the trials and the catastrophic problem that this disease causes, the government in Laos has already approved the product for use in their country. We anticipate that other countries in South-East Asia will shortly follow suit. This could represent a significant revenue opportunity as the disease is endemic in many parts of the world and affects millions of cattle annually.

Strategic Enablers

Manufacturing and Supply Chain

At the half-year we announced the appointment of Simon Francis, formerly of Novartis, as our new Director of Manufacturing and Supply Chain. Simon immediately undertook and completed a full review of our facilities and capabilities to make improvements, including the strengthening of the Manufacturing and Supply Chain management team. The improvements needed to be implemented as we were experiencing a number of supply issues from our own sites and contract manufacturers. These issues are now in the process of being mitigated.

As planned within our strategic capital expenditure programme we have made infrastructure improvements at our three main European sites. In Skipton, UK, we have completely upgraded the packaging, manufacturing and washing facilities. In Zagreb, Croatia, we have built and commissioned a new solid dose facility and in Bladel, Netherlands, we are close to completing an upgrade of our sterile facility hopefully to achieve FDA status in 2020. In conjunction with grants from the Croatian government, we have implemented the largest green solar energy installation in the country at our Zagreb facility which will provide the site with 30% of its energy requirements from this natural resource.


Following the successful roll out of Oracle across DVP EU in May 2018, we have subsequently implemented and completed phase two of the project which deals with new legislation changes, improved reporting and post go-live system efficiencies. We have commenced a number of development projects and interfaces to deal with recent logistics changes to Oracle in the USA.

The IT team has also implemented numerous other IT developments, including improvements to the Group network, overseeing the installation of the project management software in Product Development, a regulatory information system for Regulatory Affairs, the deployment of a new AI-based cyber defence solution and the support of a pilot for a new cash management solution for our Treasury Department. Our Digital team has also been very productive with new modules in the Dechra Academy for veterinarians and veterinary nurses, new training courses in Delta, the in-house educational programme, and an upgrade and relaunch of Insite, the Group's intranet.


In April 2019 we announced the resignation of Richard Cotton, Group Chief Financial Officer. The process to identify a suitable replacement is continuing. Since April, Paul Sandland, who has been with the Group for nine years, and has demonstrated strong financial and commercial skills as both Group Financial Controller and DVP EU Finance Director, has been Acting Chief Financial Officer.

In February 2019 we announced the appointment of Lisa Bright as a new Non-Executive Director to complement the strong skills already in existence on the Board. Lisa's appointment strengthens the Board through her strategic and operational leadership knowledge in pharmaceutical and biotechnology companies; her experience and strong interpersonal skills will be invaluable in our international expansion strategy and the development of our employee engagement programme.

Operationally we have developed a pilot for a new approach to performance management that is currently being trialled in North America.

For a number of years we have offered a Save As You Earn scheme in the UK which has proved very successful in providing additional reward and retention of UK employees. We will soon be rolling out similar schemes across the Group, with the first launch being in North America in 2019 prior to further roll out in 2020.

On behalf of the Board I would like to thank all employees for their hard work, determination, skill and ambition. They are the main driving force behind Dechra's success.


In preparation for a potential hard Brexit, we have changed the ownership of all UK marketing authorisations to a newly established subsidiary in the Netherlands. We have also transferred all the analytical testing methods for products manufactured at our Skipton site to a new laboratory in Zagreb, Croatia, and to our existing laboratory at our Bladel manufacturing site; this will allow us to perform batch release within the EU in the likely event that there will be no mutual recognition of quality standards. We have increased inventory in the supply chain to mitigate the potential delays at ports. We do not expect any material effect from the potential import or export tariffs.


The Board is proposing a final dividend of 22.10 pence per share (2018: 18.17 pence per share). Added to the interim dividend of 9.50 pence per share, this brings the total dividend for the financial year ended 30 June 2019 to 31.60 per share, representing 23.9% growth over the previous year.

Subject to shareholder approval at the Annual General Meeting to be held on 18 October 2019, the final dividend will be paid on 15 November 2019 to shareholders on the Register at 25 October 2019. The shares will become ex-dividend on 24 October 2019.


Our strong growth, both organic and through acquisition, and our broadening product portfolio and increasing geographic reach positions us well for continued growth in this new financial year and beyond. Despite the challenges from the supply chain issues, outlined earlier in this report, the outlook for the year ahead remains in line with management expectations. We continue to identify and deliver opportunities for growth in line with our strategy and remain confident in our current and future prospects.

Ian Page
Chief Executive Officer

2 September 2019


Terms used within this section:

CER: Constant Exchange Rates

AER: Actual Exchange Rates

CAP: Companion Animal Products

ERP: Enterprise Resource Planning

EU Pharmaceuticals: European Pharmaceuticals Segment comprising DVP EU, DVP International and Dechra Pharmaceuticals Manufacturing

FAP: Food producing Animal Products

NA Pharmaceuticals: North American Pharmaceuticals Segment comprising DVP US, Canada and Dechra-Brovel