47 - Ceva Asia · the leader in salmonella control in the USA. Ceva is working to extend this...

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strategy business developMent

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strategy business developMent

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biology

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dr. Marc prikazsky Chairman & Ceo.

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One year ago, I expressed my satisfaction at our excellent 2010 results, “the best performance in our history”: sales up 18%, margin of 59.5% up 24.6% and an operating profit of €66 million, way ahead of budget.

This year, I cannot speak too highly of our results that outperformed even those of last year: sales are up 13.9% but more importantly, our gross margin has rea-ched 62.3%, up 25%, and our operating profit is €82.5 million, up 25%. Our ratio EBIDTA/sales has risen from 16.5% to 17.7%.

While last year we were making progress in a positive environment, this year, although the market has remained buoyant, we can legitimately put this fine per-formance down to our teams’ dynamism and cohesion, motivated by our three values of innovation, entrepreneurial spirit and solidarity.

2011, a year totally in line with our vision and ambition to contribute further to the planet’s well-being

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We owe these results first of all to the efficien-cy of our “internal motor” powered by a high level of investment – 9.4% of sales for R&D – enabling us to enhance our strategic concen-tration by regularly bringing new products to the market.

Our “strategic products” now represent 60.2% of sales, against 54% last year. The top 15 pro-ducts now making up 33% of sales, against 29% last year, up 20%.

This organic growth is based on real expertise and is therefore sustainable:

• Ceva is a major player in poultry vaccination. Today, we are capable of meeting all the needs of our clients by providing them with innova-tive solutions – products, services and equip-ment. The result is that we now rank among the world leaders: N°1 producer of vector and immune complex vaccines, world leader in IBD vaccines to control Gumboro disease and the leader in salmonella control in the USA. Ceva is working to extend this expertise in poultry biology into the other species.

• In the pharmaceutical sector, in companion animals particularly, Ceva excels in beha-vior, antiparasitics and cardiology, with ma-jor products such as Feliway®, Vectra® and Prilactone®.

• In the production animal sector, our growth is driven by the development of innovative generic products such as our range of anti-infective injectables in CLAS® vials, which are more practical to use.

But we also owe this growth to our “external motor” of acquisitions.

Last year, I was pleased to announce two new additions: Summit VetPharm providing a springboard for our entry into external com-panion animal parasiticides and Nature Vet to boost our position in Australia.

In 2011, we continued our expansion with the acquisition of 4 companies which consolidated our positions in a number of markets and seg-ments:

• In China, the Ceva Huadu joint venture will focus on biology.

• In Canada, with the acquisition of Vetech, offering us the opportunity to complete our range of poultry vaccines (coccidiosis vac-cines), and Centaur, a distribution network.

• In Argentina, with the acquisition of Instituto Sanidad Ganadera, a company that produces vaccines for ruminants.

This growth is perfectly in line with our vision and our ambition.

• Our ambition is to double our size over the next five years and reach sales of €1 billion in 2016 with an EBITDA to sales ratio of 20% allowing us to invest €100 million in R&D each year. These good results show that this is within reach.

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all in all, 2011 was a rich and productive year where, once again, our growth strategy driven by the talent,

motivation, responsiveness and solidarity of our staff, was focused on our relationship with our partners, to meet their expectations and strengthen the trust

they have placed in us.

Organizing oneself does not mean becoming more rigid or losing our creative spirit. On the contrary, thinking of new ways of working together accelerates the flow of information allowing us to better understand and serve our customers and internally to give responsibility to and then motivate our teams.

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• Our vision, summarized in a single phrase – “Together, we are building a new reference to create value beyond animal health” –, puts emphasis on our desire to play a major role in ensuring the well-being of our planet: secu-ring animal protein supplies, guaranteeing good-quality food supplies, working to pre-vent zoonoses and acting to promote the benefits of people and their companion ani-mals living together in an increasingly urba-nized world.

Our results prove that this is realistic: • In biology, where we are focused very stron-

gly on poultry, which will be the most widely-consumed meat around the world tomor-row. Vaccination is also the major weapon in the fight against zoonoses (Q fever, avian influenza, salmonella…). Avian biology is, for Ceva, often the pioneer. We have to be able to extend our knowledge to two other species, swine and ruminants.

• In pharmaceuticals, where our companion animal product ranges contribute to impro-ving the psychological and emotional welfare of human beings.

• In the ruminant market, our investment in the neglected fields of trypanocides remains a priority to protect both animal and human populations, in Africa first, but also in some Asian and South-American countries.

2011 also saw the introduction of a new orga-nization.

Growing is one thing, but if you look back through history, conquerors who fail to conso-lidate and structure their conquests build only short-lived empires.

Our flexibility and responsiveness have contri-buted to our success. But our project to conti-nue growing, become a major player in society and contribute to general well-being, demands that we give ourselves the means at an organi-zational level to always have more anticipation and fluidity in the way we function. Our major challenge will be, in a much bigger Ceva, how to keep the autonomy and motivation of our teams.

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Ceva introduces a new organization, in line with its vision, values and determination to better serve its customers

Ceva is growing quickly, as evidenced by the excellent figures for 2011. These good results were achieved whilst maintaining a high level of investment, keeping us on target to achieve our ambition: becoming a major group by

2016 with sales of €1 billion and a €100 million yearly investment in R&D.

But figures are not everything. Any company needs to project itself into the future and give meaning to its efforts. In other words, it needs a vision. Ceva has taken a fresh look at its own vision – “Together, we are building a new reference to create value beyond animal health” – to place the accent on its determination:

• As a company with a human dimension built around solidarity both internally and with its partners and customers; expressed in the word “Together”.

• To be recognized as a “new reference”.• To play a role in society, at the service of the planet’s well-being, that is the mea-

ning of “beyond animal health”.

It is to take up this dual challenge of becoming a major group while remaining a company with a human dimension, proud of its three values and attentive to its clients, that Ceva has decided to roll out a new organization to guarantee fluidity, rapidity and effectiveness.

In effect an organization should not be confused with an organizational chart or a bureaucratic system. Creating an organization means designing a system of relationships between different functions to achieve objectives and roll out a strategy that takes account of all environmental data. Given that the ambition and vision of Ceva has evolved, it was only normal to create a new way of operating that takes better account of all parts of the company to guarantee greater creativity and efficiency.

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The new organization comprises 6 divisions.Four of them, shown vertically on the diagram opposite, are directly at the service of our strategy, while the other two, shown horizontally, provide the indispensable links to ensure the coherence and excellence in the deployment of our strategy.

Two Business Units, Pharmaceutical and Biology, to boost organic growth.Their role is to meet the needs of our custo-mers in all their diversity, by designing and producing innovative products packaged with sets of services and equipment.– This is why they bring together all the depart-

ments involved in preparing these solutions. – This is why we have created franchises (see

p. 12), for each species within the Business Units, multidisciplinary teams with skills from different departments responsible for devising business models.

A Strategy and Business Development division responsible for our external growth.This division is particularly important when you know that Ceva acquired 4 companies in 2011 alone! Given the importance of these compa-ny and license acquisitions to Ceva’s growth model, this division has a proactive role to identify, assess and negotiate external growth operations in line with our vision and our ambi-tions. This is why the Public Health – Zoonoses and Food Safety project (see p. 29) – falls under its responsibility.

Global Operations division now comprising 6 zones:Western Europe, Central and Eastern Europe plus Turkey, Africa, the Middle East and Lapro-vet, North America, Latin America and Asia Pacific. If we aim to take better account of our customers and their specific needs, we need to achieve closer coverage of markets and their economic, regulatory and cultural dimensions. We expect this division to ensure that, in each country, the objectives set for operating profit, WCR and strategic product sales are realised in line with the budget and the business plan. We also expect it to pass on to the franchises and SBD all relevant information about markets, clients and potential acquisitions.

Support division, created to guarantee the same level of excellence throughout the Group. The activities within it – Supply Chain, Phar-maceutical Production, Finance and Taxation, Management Control, Industrial Performance and IT all have expertise that gives them the legitimacy to define best practice. For their respective fields, they supply the methods to enable us to work effectively in teams with in-creased efficiency and harmony.

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Human Resources division that must take on a greater dimension.If we are to grow yet remain a human com-pany, the HR function becomes even more cri-tical. Their role is to guarantee commitment and cohesion in line with Ceva’s vision, ambi-tion and values, while fostering harmonious careers and path developments in a multicul-tural environment.

Two departments report directly to the Chief Executive Officer:– The Communication Department, whose

purpose is to promote and manage the image of Ceva externally and to ensure that internally our employees share examples of best practice surrounding the deployment of our values and vision.

– The Legal Department responsible for defen-ding the assets of the Ceva Group. In addition to the normal remit of such a department, it focuses its efforts on supporting the M&A process and protecting and defending the Ceva brand and its industrial property.

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CHairMan & CeoM. PRIkAzSky

legal departmentvalerie Mazeaud

Communication departmentMartin Mitchell

strategy & business

development (sbd)

bernard emery

operationsgabriel rshaid

bu biologyarnaud bourgeois

bu pharmacypascal raoul

4 species Franchises: poultry / swine / Companion animal / ruminant

Human resources: Hervé balmes

Finance and support Functions: pierre revel-Mouroz

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Ceva has created a new concept, the franchise, in order to more efficiently respond to its cus-tomers expectations. Gone are the days when a company simply needed to offer its products at the best possible price to satisfy client needs. Customers now need holistic solutions which bring together products, services, equipment and they want these to be available at the right time.

In this respect, it is clear that meeting custo-mer needs necessitates strong teamwork that brings together a large numbers of depart-ments working in synergy: Corporate Marke-ting, Science and Technical services, Licensing, Operations and Supply Chain…The franchise is therefore a multi-disciplinary team, headed by a manager whose role is simi-lar to that of an orchestra conductor who has to make talented soloists play together in an “en-semble” to produce coherent business models.

If a franchise designs a business model, it must also consider the conditions under which these will be implemented at the zone level. It must, for example, make available a whole set of directives such as marketing plans mat-ched to key performance indicators (KPI’s) allowing them to be put properly into action. To guarantee the coherence and alignment of the various BUs and zones, the new organiza-tion includes the establishment of a new posi-tion: the Marketing Director – Franchise zone Coordinator. The latter’s mission is to represent the various zones within the franchise. In this regard, they participate in the elaboration and implementation of the business models, ensu-ring that information flows freely between the zones and the other departments represented in the franchise.

Since our customers are split into 4 species – Poultry, Swine, Ruminant, and Companion Animals – we have established 4 corresponding franchises bearing those names.

Franchises, to understand and respond to the needs of our customers more efficiently

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“in biology, the franchise is the necessary relay between our campuses which have r&d

and production together on one site, our subsidiaries, which sell our vaccines

and implement our service programs and corporate marketing. because today, everything depends

on the speed of flow of both products and information.”

A. Bourgeois, Director of the Biology BU.

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"2011 was a good year in terms of acquisitions. We strengthened our position in the growing

Chinese market, entered the ruminants segment in the argentinean market and with

the acquisition of a Canadian company, we completed our avian vaccine portfolio with the addition of coccidiosis products…

all in all, strategic acquisitions reinforced both our geographical position and our biological range…"

Ceva continues its geographical expansion and broadens its range of innovative products

sbd

bernard emery, global strategy and business development director.

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sbd

I n 2011, the Ceva Group made four acquisitions, the most notable being the Chinese joint venture agreement between Huadu Group Beijing and Ceva. By partnering with Huadu, Ceva will benefit from its position within this very signi-

ficant and rapidly expanding market, its strong industrial base and good relations with the livestock sector. Together, Ceva Huadu will not only be able to distribute se-veral of our technically advanced vaccines, but also to develop new products, thanks to international partnerships with local universities.

Ceva has also acquired three other companies:

• Instituto Sanidad Ganadera, Argentina, establishes Ceva in this particularly im-portant market for the ruminant sector, with a bovine vaccine product line. At the same time, Ceva will take back the distribution of its range of avian vaccines.

• Vetech, Canada, allows Ceva to complete its range of poultry vaccines by entering the coccidiosis market.

• Centaur, Canada, a distribution company specialized in the companion animal market sector, gives Ceva its own sales force and a base to expand with the addi-tion of new products.

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“in order to succeed, we need to learn to work together, and to do so we will need to change our

habits together. We will need to learn how to work patiently to find the right balance to

build a harmonious relationship. and in this long process, which will not always be easy,

it will be our friendship that will sustain us,” as a wise Chinese man once said.

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sbd

Marc prikazsky, Chairman & Ceo Ceva santé animale.

she Feng, director of Capital agribusiness group (Cag).

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Ceva partners with Huadu Group Beijing and establishes itself in the biggest agribusiness market on the planetChina is the nation with the most remarkable economic dynamic in the world, especially in light of its demographic stature. The OECD’s economic outlook credits it with a strong GDP growth rate, which it estimates at between 8 to 10% for the 2012-2016 period.

Consumption by Chinese households, which previously only accounted for 35% of the country’s GDP, compared to 60 to 70% in the ma-jority of OECD countries, is currently exploding: wages are going up, and the Chinese people are showing a growing infatuation for consumer goods. The consumption of food products is also increasing, especially meat products.

With consumption of more than 82 million tons in 2011, which is 28% of total world consump-tion, China is the world’s leading consumer of meat products (cattle, sheep, pigs, poultry), ahead of the United States and Europe, which respectively consumed more than 36 and 43 million tons of meat products in 2011. Indivi-dual consumption of meat products in China amounts to 61 kg and is constantly growing; in the United States that amount comes to more than 116 kg, and in the European Union to 86 kg. This indicates huge potential for growth.Today, China accounts for over 50% of all swine breeding operations; it has the highest popula-tion of laying hens on the planet (4 times higher than the USA) and will soon have the largest population of broiler chickens.In light of these conditions, animal healthcare is nearly a 1.5 Billion-Euro market and can only grow.

Since space and water resources are limited, the Chinese authorities have encouraged the development of industrial swine and poultry production, which in 2015 will account for over 40% of the total production.Since it is essential to secure the production of animal proteins, the Chinese authorities have made the biology sector an area of strategic focus. Ceva, with its unique expertise in biolo-gy, therefore has an oppurtunity to build strong partnerships.

Huadu Group, the partner chosen by Ceva, is a subsidiary of CAG (Capital Agribusiness Group) which developed an activity specializing in avian and swine vaccination (Huadu Bio).This partnership will derive great benefit from Huadu’s presence in China, the strength of its industrial resources, its reputation among its clients, and its good relations with government authorities.From Ceva, it will have the support of the group’s technology and experience, its knowledge of quality control processes, and its approach to its combined customer offer of products, ser-vices, and equipment.This partnership will also result in important R&D investments, the creation of an institute of research and development with Chinese uni-versities and their research centers.

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sbd

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In August 2011, Ceva Santé Animale acquired Instituto Sanidad Ganadera (ISG), a company founded in 1940 by Dr Oscar Enrique Argento, which develops and markets high quality vac-cines to prevent respiratory problems, clos-tridium, tuberculosis and abortive diseases in ruminants.

This acquisition will simultaneously allow Ceva to penetrate an important market, the rumi-nant vaccines market, which Vetnosis estima-ted at $48M in 2011 for Argentina.

Instituto Sanidad Ganadera and Ceva share the same beliefs and values, as shown by the comments made by Dr Enrique Argento: “Instituto Sanidad Ganadera has always been dedicated to serving the veterinary profession, and has focused its efforts on the develop-ment of new technologies to keep up with the constantly evolving field of animal health. And so we believe strongly in this new journey we are embarking upon with Ceva Santé Animale, because we share the same philosophy.”

sbd

With ISG, Ceva strengthens its expertise in biology and its presence on the South American market

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In October 2011, Ceva Santé Animale acquired Vetech Laboratories Inc., a Canadian manu-facturer of poultry vaccines specialized in the production of live vaccines for the control of coccidiosis in poultry.

The importance of this acquisition in terms of Ceva’s commitment to global health must also be underlined. Meat consumption is constantly growing, especially in developing countries and particularly poultry meat consumption be-cause it is an affordable source of protein, free of religious taboo, that fits into a viable ecolo-gical model.

Coccidiosis is a serious digestive parasitic poultry disease that causes high morbidity rates and decreased feed conversion efficiency. Until recently, it was treated by chemotherapy, but vaccination has now emerged as the preferred solution.

Ceva offers a broad, innovative range of poultry vaccines: it is a leader in immune complex and vector vaccines, the world leader in IBD vaccines to control Gumboro disease, and a global leader in salmonella control in the USA.

But Ceva needed more expertise in the field of intestinal health. The acquisition of Vetech completes Ceva’s range of vaccines and rein-forces its product offer to major customers.

Immucox® vaccines for breeders, laying hens, broiler chickens and turkeys will now be avai-lable in more than 40 countries around the world.

“From coccidiosis to Marek’s and Gumboro disease, we strive through our innovative vac-cines to help our partners and their customers to provide consumers poultry products that are both healthy and safe.” Comments Craig Wallace, Ceva Director for North America.

From now on, the Immucox range of vaccines for laying hens, broilers and turkeys will be available in over 40 countries.

sbd

With the acquisition of Vetech in Canada, Ceva completes its range of poultry vaccine products and strengthens its ambition to become world leader in the sector

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October was a productive month for Ceva, which acquired CentaurVA Animal Health, also based in Canada, a subsidiary of Centaur Phar-maceuticals Inc. specializing in the manufactu-ring and distribution of products for veterinary practitioners caring for animals of all sizes.

“Canada plays an important role on the world economic stage – we happen to have strong his-toric ties there. It was therefore essential that we were directly present in the country”, says Marc Prikazsky, CEO of Ceva Santé Animale, who adds: “This integration of two companies will give us the critical size to grow in this country.”The significance of this acquisition, which will allow Ceva to reinforce its presence in North

America, is very clear. CentaurVA Animal Health not only has experienced personnel, but also offers a broad range of products, which notably includes nutraceuticals, treatments for joint disorders, and infection prevention products. It represents an excellent vehicle to launch other Ceva products that are in their final phase of registration.

sbd

Ceva makes its entrance into the Canadian market,and consolidates its position on the North American continent

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“We stand today on the edge of a new frontier… A frontier of opportunities and perils, a frontier of unfulfilled hopes and threats. Beyond that frontier are the uncharted areas…”

These words, spoken by US President John F. Kennedy in July 1960 in looking forward to the future decade, could equally be applied to the issue of zoonoses.

Zoonoses are diseases that are transmitted from animals to human beings. In our pre-vious annual reports we have highlighted their significance, the risks they present to human health, and their economic impact: salmonel-losis, Q fever, trypanosomiasis, avian flu, bru-cellosis are all diseases which pose a conside-rable threat to global health today.

sbd

Zoonoses, Ceva journeys towards the “new frontier”

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It is not an easy decision for a private actor to enter the battle against zoonoses because to do so means stepping outside of the “conventional domain: which involves taking into consideration demand, feasibility, return on investment, and following that logic, creates a value chain, which develops profit competencies adapted to that”, points out Dr Pierre-Marie Borne, in charge of a pilot project focusing on zoonoses.

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Companies know how to manage risk by minimizing it and spreading it to optimize the chances of success. But when it comes to zoonoses, they are dealing not so much with a risk in the classic sense, but with what might be called an unexplored territory, which demands that they cross a certain boundary to be actively engaged “beyond animal health.”

To understand this, we have to go back to the problem of zoonoses. In fact, there are seve-ral types of pathologies which, from the hu-man and economic point of view, do not pose the same level of risk to private companies in terms of their uncertainty.

• Case 1 – Existing perennial pathologies, such as salmonellosis, whose impact can be quantified. In the USA every year, salmonel-losis affects 1.4 million people, giving rise to 168,000 doctors’ visits, 15,000 hospitalizations and 580 deaths. The total cost of these infec-tions is estimated at 3 billion dollars a year. This type of zoonosis does not pose particular difficulties from a pharmaco-economic pers-pective, as the intensity of the problem and its recurring nature have created a well-defined “market", one in which Ceva has emerged as a leader in the USA, with Layermune® SE.

• Case 2 – Perennial pathologies that occur in regions of the world which do not have sufficient means of controlling them. This is what is called uncertain access. A good example is African trypanosomiasis, which

affects approximately 36 countries and is a potential threat to 60 million people in countries where animal production is a significant part of the economy, contribu-ting directly to the health of the population (as a source of protein, energy, and reve-nue). Brucellosis would also fall into this category, it affects the whole world, but is predominantly found in the Mediterranean basin, Asia, the Middle East, South America, Central America and Africa. The WHO esti-mates the incidence of this disease world-wide at 500,000 cases per year. In developed nations such as the European Union, a rigo-rous prevention and screening policy has allowed for member states to control the disease and its economic and health impact. But in a number of countries, where sanitary control policies are insufficient because of a lack of resources, only the development of new vaccines will permit the control of the disease. Unfortunately in this case, the pri-vate sector’s specific interest does not coin-cide with the general interest as there is little financial return to be gained in develo-ping and marketing such products. Thus the economic equation needs to be rethought so that this contradiction can be resolved, and intervention by the private sector can be implemented in a sustainable way.

• Case 3 – Emerging or migratory diseases – avian flu, Rift Valley Fever – characterized by their novelty, their unpredictability, or their spatiotemporal dynamic. The nature of these pathologies makes it difficult to evaluate their risk in terms of human health, or even in terms of economic impact. It is thus necessary to create innovative mechanisms to resolve this uncertainty of nature.

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sbd

Ceva, a company fighting on the front lines against Zoonoses, going “beyond animal health…”

- leader in the usa in salmonellosis control…

- an actor in the prevention of Q fever with Coxevac®.

- a pioneer on the front lines of the struggle against avian flu with vectormune® Hvt-aiv, which has proven its efficacy

in protecting poultry from the H5n1 virus.

- pioneering in the fight against trypanosomiasis.

Though in the first case the involvement of pri-vate companies poses no particular difficulty, in the two other cases it is up to the entities concerned – private health companies, political authorities, NGOs, etc. – to be innovative and to take responsibility jointly for creating a new economic model, appropriate for guaranteeing lasting investment by the private sector. Wit-hout this the private sector’s ability to act will always remain limited, as to handle the pro-blem alone clearly goes far beyond its abilities.

It is for this reason that Ceva has created a new pilot project, focused on zoonoses.Ceva has solid expertise when it comes to vac-cination. But to act effectively, a new business model needs to be created to allow the different players to unite their efforts, overhaul the value chain, and rethink how each of them contributes.

This basically means redefining the problem:

• To bring an appropriate medical response to bear upon a need that has been identified and contextually relocated,

• While simultaneously establishing the proper economic equation to permit the various par-tners to get involved under fair conditions.

It is with this in mind that Ceva, which has sound expertise in this area, has decided to assume its responsibility, to be a driver of change in inter-national forums and events, such as the EFAS (European Food and Agribusiness Seminar), so as to propose an original business model, ca-pable of contributing to the prevention of these diseases.

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Biology: new acquisitions and a new form of organization allowing our customers to benefit from our expertise and motivation

biology

“over the last 20 years we have built up a high level of expertise in poultry vaccines. We are now officially

ranked third in the world for sales in this sector and we are determined to reach the top spot, by making sure we are viewed as a partner

of excellence by our clients and all the stakeholders with whom we work.”

arnaud bourgeois, director of biology business unit.

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in 2011, the biology business unit benefited from three major acquisitions. it also fine-tuned its organizational mode with the creation of the ‘networked campus’ concept. these changes will further develop the teams expertise, with the ultimate objective of being seen as a “new reference” in the eyes of its customers

and partners.

Ceva made 3 key acquisitions in biology in 2011:

• In China we signed a joint venture with the Huadu Group. The newly created company, Ceva Huadu Biological Co. Ltd, has the ulti-mate ambition of becoming the leading sup-plier of vaccines to the production animal market in China. To achieve this it will offer a full range of vaccine solutions (vaccines, equipment and services).

• In Canada we acquired the company Vetech, allowing us to add coccidiosis vaccines and offer our customers an even more complete range of avian vaccines.

• In Argentina we purchased ISG which deve-lops and markets a full range of vaccines for ruminants.

The Biology Business Unit (BU) employs almost 900 people, spread over 6 departments: Poultry Marketing, Swine Marketing, Innovation Stra-tegy, Customer Services and Equipment, R&D and Regulatory Affairs, Campus Management and Industrial Directorate.

In other words, the Biology BU brings together all the specialists working on vaccine design and production, as well as the services and equip-ment programmes designed to guarantee the best possible administration of these vaccines.

Biology is a different business to pharmaceuti-cals. Unlike pharmacy, which works on mole-cules, biology focuses on viruses and bacteria, which are living and perpetually evolving…

Two different worlds, that come together with the same preoccupation to serve ‘One Health’ at the service of the same customers, whose expectations the Biology and Pharmacy BU’s strive to better understand and satisfy.

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With these acquisitions, we are not only broadening our range of products but we are once again strengthening our geographical

presence in promising markets.

It was also from this perspective that the Bio-logy BU was re-organized:

• To extend our expertise in vaccines from poultry into other species, we made vacci-nation one of the key priorities for the swine franchise.

• Conscious that our customers expect us to supply not only efficient vaccines but also services and equipment – we set up a depart-ment dedicated to this purpose.

• In order to be more responsive and inno-vative and therefore meet our customers needs more closely, we created the campus

concept. The aim of which is to bring R&D, industrial facilities, and ‘the field’ closer to-gether on all our sites - Ceva Phylaxia, Ceva Biomune, Ceva Campinas, Ceva Desvac, Ceva Cuernavaca and soon Ceva Huadu and Ceva Vetech. This form of organization strengthens our internal integration, allowing us not only to produce a more pertinent product offer, but also to shorten lead times in the value chain between R&D and our customers. It is im-portant to note that the individual campuses operate as a global network so that all our teams can genuinely share their experience.

“i think that with this new organization, reinforced by our new acquisitions and, of course, the confidence i have in the talent

and motivation of our teams, we will be able to offer to our customers, in a constant way, the most

innovative vaccines with the best possible lead times, this remains our major objective.” a.bourgeois

biology

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To contribute to the food balance of the planet, Ceva long ago made the choice of placing its expertise at the service of poultry producers. Consumption of poultry meat has grown spec-tacularly because it is inexpensive and free of any taboos, and fits into a viable ecological model.

To take up this challenge, the Biology BU has succeeded in developing a wide range of in-novative vaccines whilst making significant investments in vaccination support including both equipment and services.

In 2011, Ceva continued with its twofold objec-tive: on the one hand completing its range of vaccines, and on the other creating a Services and Equipment Department to provide more efficient support for poultry producers.

In 2011, Ceva extended its range of vaccines to combat all major poultry deseases.

2011 saw Transmune®, an immune-complex vaccine designed to prevent Infectious Bursal Disease, continue to gain market share and grow at the sustained rate of 30% over the year.

But the big new story was incontestably the introduction worldwide – wherever Newcastle disease is to be found, such as Mexico, Thai-land, the Philippines, etc. – of Vectormune® HVT-NDV, which was launched on the North American market in 2007.

As it is possible to combine Transmune® with Vectormune® HVT-NDV, Ceva has become the only veterinary pharmaceutical company in the world to offer protection in the hatchery, in a single injection, against the three major diseases: Infectious Bursal, Newcastle, and Marek’s.

Another point to note is that with the acquisi-tion of Vetech in Canada, Ceva has completed its range of poultry vaccines with the addition of coccidiosis products.

Lastly, with Layermune® 3 and Layermune® SE, Ceva confirmed its position as leader in the USA in the prevention of salmonella in laying and breeding hens.

Ceva’s successes demonstrate that the com-pany has been very quick to respond to the concerns of its clients, as Sylvain Comte, Poultry Marketing Director, summarises: “In 2011, producers confirmed their interest in new products and innovations which could optimise their disease control processes: single-injection hatchery vaccines and combi-nation action vaccines in which Ceva has made extensive R&D investments for years, so as to provide an original, complete product offering.”

2011, from expertise to excellence: Ceva pursues its undertaking to poultry producers

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biology

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In vaccination, product innovation alone is no longer sufficient to meet the requirements of customers. They increasingly need vaccina-tion assistance and equipment.

This is why Ceva, which had already adopted this approach (C.H.I.C.K. Program, vaccina-tion equipment supply companies Desvac and Ecat In Ovo), decided to strengthen its action by setting up a dedicated department with the purpose of:

• Devising equipment and services in close collaboration with the Marketing and Inno-vation Strategy departments which, in the framework of business models, will provide clients with innovative solutions and create value added in the Ceva offering.

• Maintaining the level of service excellence, ensuring they are implemented and moni-tored consistenly to all customers around the world.

The new department has its own dedicated Campus, Ceva Desvac, in Angers. The Ceva Desvac Campus forms an ‘innovation and tech-nical support’ platform which will provide the franchises with all material means required for the development and implementation of Ceva’s services to clients’ strategy.

It also encompasses the Ecat In Ovo activity, which Ceva is using to develop in-ovo vaccina-tion machines.

In 2011, the new department continued its de-ployment of the C.H.I.C.K. Program, which sup-ports vaccination in the hatchery, and launched the Eggs Program, which uses the same logic and provides our clients with assistance in the vaccination of layer hens.

The new director of the Services and Equipment Department, Pascal Anjot, is a vet with more than 20 years’ experience in managing a French veterinary network in which he developed ser-vices, training courses, consultancy, analyses and the distribution of products for animal pro-duction, particularly poultry.

biology

A new Customer Services and Equipment department

Pascal Anjot, Director of Services and Equipment Department, and customers

in field training.

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One of the original features and great strengths of the Ceva vaccine production process is in-contestably its organization as a network.

The industrial network of the Biology BU includes 7 Production sites – Ceva Phy-laxia (Hungary), Ceva Biomune (USA), Ceva Campinas (Brazil), Ceva Cuernavaca (Mexico), ISG (Argentina), Ceva Huadu (China) and Ceva Vetech (Canada) – which operate in a network and permanently exchange products, technolo-gies and manpower.

This organizational mode allows the Biology BU to:

• Keep production tools close to the markets, and hence the clients, whilst complying with regulatory requirements.

• Create the conditions for the fruitful pooling of experience, allowing Ceva to bring the pro-duction facility up to the highest standard and guaranteeing Ceva clients, products of the same quality irrespective of the production location.

• Lastly, secure the global level of production, since peaks in demand can be serviced on several sites.

Vaccine production has seen spectacular growth, as illustrated by Thierry Le Flohic, Director of Biology Campuses and Industrial Operations:

“Our pioneering Ceva Phylaxia site is in its hundredth year of existence: a century of scientific innovation led by some of the great names in veterinary biological research: Au-jeszky, Marek, Derzsy, Bartha… Over the last two decades annual production has been multiplied by 1000, now standing at 30 billion doses. We have stepped up from the experi-mental and small-scale to the industrial scale.”

Networked vaccine production to guarantee excellence whilst remaining close to customers

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development of swine vaccinesOn the strength of its expertise in poultry, Ceva in 2011 continued to follow an invest-ment plan designed to strengthen our position in the biology sector. Pork consump-tion is continuing to grow, notably in the emerging countries, and breeders, concerned about the risks of antimicrobial resistance, are moving towards prevention. Nowadays vaccines account for more than 35% of all sales of swine veterinary products.

Following on from its first successes on this market with Coglapix® (against swine pleu-ropneumonia), Coglapest® (against classical swine fever) and Auphyl® Plus (against Aujeszky’s disease), Ceva mobilised its teams in 2011 and invested heavily to accelerate the development of vaccines and associated services in order to respond to the expec-tations of the world swine industry.

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Thanks to their innovative biotechnological conception, vector vaccines offer increasingly efficient protection against the major poultry pathologies. However, Ceva is continuing its research efforts in order to gain a better un-derstanding of their effects on the immune mechanisms, because biology – which works on ‘living’ organisms – is constantly faced with changes in diseases.

This is why, since 2006, Ceva has supported research works in partnership with the Brus-sels Veterinary and Agrochemical Research Centre (Coda-Cerva). Yannick Gardin, Director of the Innovation Strategy Department, em-phasises what is at stake in this research par-tnership: “It is important for relations to be fol-lowed through in research collaborations. This helps us understand each other better, be fully aware of the tools used, and develop common references.”

This collaboration has turned out to be parti-cularly fruitful, as attested to by the Mucovac project conducted from 2007 to end 2011, which facilitated the identification and analysis of the immunological mechanisms triggered when vaccines are administered.

This research gave us a better understanding of how our Vectormune® vaccines work; they were developed from the HVT virus and induce a far more complete, extensive and wide-ranging immunity than was imagined at the outset. So it is easy to understand why these

vaccines have heralded a veritable revolution and aroused enthusiasm among vets and bree-ders alike.

These first successes have encouraged Ceva and Coda-Cerva to continue their partnership in order to explore this new world of vector vaccines, most notably to get a better grasp of the questions of vaccine compatibility.

Ceva’s Investigation and Scientific Support Unit, or how to innovate more by monitoring vaccines in the field.

One of the factors behind Ceva’s success in poultry vaccination is the company’s tireless efforts in monitoring its vaccines throughout their in-situ administration. Indeed, while it is essential for Ceva to have perfect knowledge of its vector and immune-complex vaccines in the laboratory, it is also crucial to understand their effects when applied in the field.

It was with this in mind that the Biology BU set up the Investigation and Scientific Support Units which work to understand in-situ vacci-nal mechanisms, in collaboration with exter-nal research structures such as AviServe LLC of the Delaware Technology Park in the USA, the CRESA in Barcelona, the Vienna Veterinary School in Austria and Deventer Animal Health Service in the Netherlands.Less systematically, in order to respond to specific poultry vaccine issues, in 2011 Ceva

Ceva and its partners seek a better understanding of immunity mechanisms

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worked with other research structures. For vaccination against avian flu for example, Ceva collaborated with the National Laboratory for Quality Control of avian products (NLQP) in Egypt and with the Pertanian Institute of Bogor (IPB) attached to the Agriculture University of Bogor in Indonesia. For vaccination against Newcastle Disease, Ceva developed comple-mentary studies in Mexico and Thailand with public and private institutes. Thanks to increasingly in-depth knowledge of its vaccines, notably through the attentive

monitoring of application in the field, Ceva can offer its clients full vaccination programmes which guarantee producers efficient products and an ever more involved support process.

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Pharmaceuticals: at the dawn of a new era

T he Pharmaceutical Business Unit comprises 5 main departments: Compa-nion Animal Marketing, Ruminant Marketing, R&D, Regulatory Affairs and Pharmaceutical Projects.

“our primary mission for the two focus species, companion animals and ruminants, is to constantly innovate and therefore add dynamism to our range of products and services: identifying tomorrow’s candidate molecules, transforming them into efficacious, safe, reliable products,

registering them and finally launching, monitoring and updating them.”

pHarMaCeutiCals

pascal raoul, pharmaceutical business unit director.

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Our new organization has the key objective of getting all departments to work together in synergy. In identifying candidate products, developing and registering new products, proposing a range of services to optimize their use or tracking their life cycles… each has their contribution to make.

“It is the role of the franchises to orchestrate all this. As multidisciplinary teams (including other departments as well as those directly in the Pharmacy BU), their role is to focus ener-gies on objectives that are shared by all: desi-gning new customer segmentation, introducing innovative new products with corresponding ranges of services to meet customer needs more comprehensively, while ensuring that they are approved quickly in target countries. Not to forget our existing products, which must be worked on constantly to give them the bene-fit of new innovations.”Pascal Raoul, Phamaceutical BU Director

The franchises must therefore get departments to work together, with the projects depart-ment co-ordinating the processes which drive the conception of the product offer through to launch. In parallel, certain departments have been re-organized in order that they contribute more effectively to this whole process.

In this respect, R&D created a Research and Innovation Department to help the franchises identify new product opportunities and run ini-tial trials for proof of concept.

It was also with this same objective that regu-latory affairs was reorganized to become a genuine “professional community” capable of speeding up the registration of strategic pro-ducts in major markets and defending and up-grading our existing registrations.

As Pascal Raoul concludes:

“We have everything to gain from this reorgani-zation which is an opportunity to:

• Extend companion animal and ruminant pro-duct ranges.

• Roll them out over a much broader geogra-phical area: many of them were initially in-tended only for Europe and we are going to extend them to the USA, Australia and Latin America… At the same time, we are going to work on developing some of our R&D Centers outside Europe.

• Continue developing services for our clients to help them understand certain pathologies better, I think of “Cardio-Academy”, and other initiatives that ensure that our customers make best use of our products. That is why we launched “Cevolution”, a toolbox of ser-vices and guidelines on the effective use of antibiotics to combat the threat of antibiotic resistance.

These are all major steps forward and I am proud of our teams who work on them…”

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In 2011, Ceva achieved a major success when it was awarded the highest score from the Eu-ropean Commission for the quality of its first European centralized electronic submissions for Cardalis®, a new “first intention” product for dogs with heart disorders.

2011 also undelined the Pharmaceutical BU’s intention to develop on three fronts:

• Completing its product ranges. • Linking them with client support programs. • Marketing them over a wider geographical

area: many of those distributed in Europe will gradually be launched in the USA, Australia and then in Latin America and Asia.

For Companion Animals:

• In Antiparasitics, Ceva already had Vectra®, a highly innovative, broad-spectrum antipara-sitic. The Pharmaceutical BU has decided to enlarge this range.

• In Behavior, and more particularly for stressed animals living in urban environments, the Pharmacy BU will be extending the Feliway® range, proposing new, ever-more innovative products thanks to its longstanding par-tnership with the IRSEA (Institute for Re-search in Semiochemistry and Applied Etho-logy).

• In Cardiology, as mentioned above, Cardalis® was submitted for registration and approval should be received in 2012. And other innova-tions should follow.

In Ruminants:

• A European registration was granted for Cevaxel® RTU injectable antibiotic which will be rolled out quickly around Europe.

• The new Prid Delta® was launched, an in-tra-vaginal device to enhance fertility, set to outperform the former version with its en-hanced efficacy.

New products, new markets

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pHarMaCeutiCals

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Ceva develops R&D partnerships in Aquitaine

To ensure its future growth, Ceva Santé Ani-male spends close to 10% of its turnover on the research and development of new products. This investment has been supported by Ceva’s home region of Aquitaine in France for three years, through a development partnership with Oseo and Innovalis Aquitaine. It’s aim is to firmly an-chor industrial and research partnerships in the economic fabric of the Aquitaine region.

While the public enterprise Oseo specifically tar-gets the financing of innovation, Innovalis Aqui-taine, the regional innovation agency, is more specifically focused on R&D, bringing its help to the engineering of projects of innovation. This support has notably allowed the Ceva Group to gain more knowledge about the academic fabric and the network of businesses which serve in-dustry based in Aquitaine with a view to forging partnerships.

“At Bordeaux University, we are lucky to have LabEx (Laboratories for Excellence) inter- disciplinary research projects which benefit

from future investment financing” explains Vassilios Kaltsatos, Director of Pharmaceuti-cal Research and Development. This is the case with the neurosciences LabEx, BRAIN, and the imaging LabEx, TRAIL, sectors for which Bordeaux is already at the cutting edge. Thanks to renowned researchers and strong teams, very interesting opportunities are being opened up for Ceva.

In 2011 Innovalis worked closely with Ceva on several innovation and R&D projects in the fileds of biotechnology, cardiology, imagery and infectiology. Four collaboration projects, which mobilize the skills and expertise of public and private regional laboratories, are currently being set up.

The expected outcomes are new products, regis-trations, and an increased gain in competitivity in the growing market for veterinary drugs and vaccines.

Alain Rousset, Chairman of the Conseil Régional d’Aquitaine and Marc Prikazsky.

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Second human and veterinary cardiology symposium confirms Ceva’s commitment

to a “One Health” approach

Dialogue between human and veterinary medi-cine is very limited. Ceva showed itself to be a leader in promoting One Health principles, by organizing the first human and animal cardio-logy symposium in October 2009. It was a great success with the guest experts and practitio-ners appreciating the opportunity to compare their results and ongoing work in order to fur-ther cardiology research. Additionally, many joint research projects were conceived there. Ceva followed up this partnership by orga-nizing a second symposium in October 2011 which brought together around one hundred world experts in human and veterinary car-diology. This second global event perfectly mirrored the group’s slogan “Together, beyond animal health”. Indeed, over a period of several years, the “one health” concept has been trying to tackle health from a global perspective, relating animal and human health issues to environmental challenges. Ceva is deeply in-volved in this collaborative approach, applied here to the cardiology sector, one of its areas of

expertise. Far from remaining theoretical, the “one health” concept is finding a very concrete application through this approach, in so far as it allows us to compare notes between human and veterinary medicine.

As in 2009, the second symposium brought about a profound depth of discussion and fruitful approach, which once again genera-ted many new ideas. It inspired Bertram Pitt, Emeritus Professor of Cardiology at University of Michigan Medical School, one of the leaders in human clinical cardiology in the US to say:

“I think this symposium is very useful in terms of sharing ideas. In this case, human medi-cine stimulated animal medicine, which is now re-stimulating human medicine!”

Reflecting the real enthusiasm for the event, as in 2009 the participants restated their desire to continue down this path, calling on Ceva to organize another event in 2013.

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Adaptil® and Ceva’s commitment to training guide-dogs for the visually impaired

The Adaptil® collars that Ceva has developed offer owners and trainers an easy and effec-tive way to reassure puppies so that they can easily adapt to new people, new situations and new places. The development of this product therefore fits perfectly with Ceva’s vision to act “beyond animal health”, by contributing to help create a more harmonious human-animal relationship. It is within this context that Ceva formed a partnership with Leader Dogs for the Blind, which trains guide dogs for the blind and visually impaired in order to improve their mo-bility, independence and quality of life.

Dr DePorter, a vet specialised in behaviour, said the Leader Dogs for the Blind puppies that wore a collar diffusing Dog Appeasing Pheromone (Adaptil®) during their training after success-fully passed all of their tests.

“We were drawn by Ceva’s conviction that there is a special link between humans and animals. This is in perfect accordance with Leader Dog for the Blind’s values and Ceva’s underta-king, which consists of exercising a positive influence on animal health, which, in turn, will have a positive effect on owners of the compa-nion animals.”

To mark its commitment to this cause, Ceva is sponsoring a puppy called “Ceva”, a young black Labrador who is currently undergoing training to become a guide dog for the visually impaired and who accompanies Dr DePorter on all of her business trips, thereby experien-cing new situations and new environments. In other words, she is living proof by example. We would like to wish the young “Ceva” every success and happiness in her future training.

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Vectra® continues to grow in a competitive US market environment

Ceva Animal Health’s Vectra® range of parasi-ticides continues to offer protection and safety to pets in a highly competitive U.S. market. Last year saw the introduction of generic Frontline® (fipronil) products, which are also available outside of the veterinary channel. Against this trend of the market to encourage sales of pro-ducts outside of the professional channel, Ceva has reinforced its strategic partnership with veterinarians.

“These trends strengthen the Ceva story”, said Steve Hoffman, Director of Companion Animal Marketing in the U.S. “Vectra® products keep animal health where it should be: in the hands of licensed veterinarians. They have the educa-tion and experience to ensure the protection and safety of our cats and dogs.”

Our message of veterinary exclusivity and com-mitment to pet safety resonated with both dis-tributors and veterinarians : Vectra® sales grew 24% over the prior year, and Vectra®’s market share rose by 28%.

Last year, Ceva also began a partnership with VCA Animal Hospitals, the largest network of independant full-service animal hospi-tals in the US. VCA created its own brand of “Vethical” (a contraction of the words veterinian and ethical) products to grow sales within its 550 hospitals. The launch of Vethical Simple-Guard® (VCA’s brand name for Vectra®) created new opportunities for growth. SimpleGuard® is now promoted as VCA’s preferred flea and tick topical product, and is always offered first to all VCA customers.

In 2011, Ceva continued to stand behind veteri-narians in our commitment to maintaining the client/patient relationship. We strongly believe the role of the veterinarian is essential to ef-fectively managing pet health, and our Vectra® brand reinforces that message while offering safe and effective flea and tick control to pet owners.

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Developing innovative products is not enough in itself to make an effective contribution to global health. That is why Ceva has committed itself in both the Pharmaceutical and Biology sectors to de-veloping support programs for its partners and end clients.In Pharmacy, these service programs meet two kinds of readers:• Providing vets with the benefit of Ceva’s scien-

tific expertise,• Contributing to promoting better product use.The initiatives presented below are examples of this.

Cardio Academy: e-training in cardiology for the veterinarian

In 2011, Ceva created and rolled out a web-site offering practicing vets regular training sessions with international experts.

The initiative was driven by the idea that it was fundamental for practicing vets to keep their training up to date, but that they are often short on time.

Ceva’s aim was to provide cutting-edge trai-ning courses designed by the company teams and illustrated by worldwide experts in canine cardiology, invited to share their knowledge.

If Ceva has succeeded in sharing this know-ledge with its veterinary clients, it was thanks to the company’s marketing and scientific staff moving quickly to bring together top experts in animal and human cardiology. A symposium

was organized in October 2009 with human and animal cardiology researchers, a fruitful event for all participants in that it highlighted the key role of aldosterone in heart failure.

In 2011, twelve sessions went online at a frequency of one a month. They cover the develop-ment and consequences of heart disease in dogs, key stages in clinical examination, complementary examinations to be performed to refine diagno-sis, the available drugs and their uses, and tips to get the acceptance of owners and good treat-ment compliance.

The initiative has earned unanimous praise from those participating, as explained by Vincent Lafue, a vet in Bègles (Gironde, France): “I find the Cardio Academy website really well designed. It contains all the essential informa-tion and provides an excellent update on car-diology, to catch up in just a few clicks.”

Prid Delta® launch: support and training

Ceva launched Prid Delta® in 2011, an intra-vaginal hormone-based device for cows, which enhances overall herd fertility by treating cer-tain pathologies such as anoestrus and optimi-zing cow insemination processes.

Ceva had already drawn on feedback from ori-ginal Prid users in order to design the new pro-duct and understand how best to implant Prid Delta® to achieve the highest levels of tolerance in cows.

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In addition to meeting cattle owners to unders-tand their needs, Ceva teams also provide sup-port to vets, by demonstrating the most appro-priate techniques and providing more general support by handing out a guide to the latest strategies in bovine fertility and pathologies.

Ceva also supports vets by offering training courses in reproduction that are innovative, interactive and fun (using elctronic voting handsets), based on real-life cases. Philippe Camuset, a Normandy vet, has taken part in the training sessions and found them: “a clever,

attractive concept that provides a way of lear-ning, which keep high attention levels to get the message across.”

Always keen to do more than just offer products in order to share its technical expertise, Ceva also launched Reprology.com to share infor-mation on physiology and pathology in livestock reproduction.

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gabriel rshaid, global operations director.

Ceva outperforms the market in a difficult context while also creating a solid base for 2012

“our success is due to the tremendous commitment and talent in our teams all over the world. While

our commercial groups are expected to deliver – and they did – our support staff were just as vital.

Corporate marketing, production, finance, commu-nications… the support of these functions enable our field to build relationships, service customers, and generate sales. i like to say that while operations is responsible for playing the ball, without the support staff it’s impossible to win the match. unmatched

commitment, talent and motivation by our entire team enabled Ceva to not only survive a challenging year,

but also to thrive and grow.”

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operations

In 2011 Ceva once again produced an excellent performance thanks to its capacity to put its customers and business partners at the center of its strategy.

Ceva performed well throughout its 6 zones which make up the Global Operations division, not only through overcoming difficulties of dif-fering origins, but by ensuring the creation of a solid base for 2012.

We can therefore legitimately congratulate ourselves on the performance of this new division, which posted an increase in sales of 14%, especially taking into account the difficult global context they faced:

• The monetary context: currencies continued to fluctuate and with Ceva realizing 90% of its sales outside its home market, this is always a difficult challenge.

• The world economy: the price of commodities – wheat and soya in particular – flew out of control and badly affected poultry and swine producers, many experienced severe finan-cial losses.

• On the political stage: the "Arab Spring” disrupted the Africa and Middle East zone.

• At an environmental level: Thailand expe-rienced severe flooding.

This performance was also achieved against a background where Ceva completely changed its mode of organization, a change which saw the move from 3 to 6 global “zones”, grouped together as the Global Operations Division.

At the origin of this restructuring was Ceva’s desire to take more account of the economic and cultural specificities of the various regions of the world, in order to better respond to the expectations of our customers.

But the re-organization was not simply limited to a geographical restructuring; it also introduced a new way of working more effec-tively "together”, by creating the franchises – transversal teams, which allow the Biology and Pharmaceutical business units to work in synergy with the zones. Their role is to make sure that information circulates quickly up and down the business units and zones.

This is certainly a step forwards, creating more fluidity in the value chain and allowing us to meet more effectively the needs of our customers.

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soutH aMeriCa

4 countries2 centers r&d5 production sites

aFriCa / Middle east

6 countries1 center r&d4 production sites

Around the World… 6 Zones

nortH aMeriCa


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eastern & Central europe / turkey

8 countries1 center r&d1 production site

asia / paCiFiC


Western europe


Headquarters Ceva sante animale

operations

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Our 6 zones faced many storms of different ma-gnitude in 2011, collapse of markets in Europe, severe monetary devaluations in Turkey and in Russia, natural disasters in Asia… They also had, for 2 of them at least, to inte-grate 3 acquisitions referred to at the beginning of this report.None of this prevented them from posting re-sults corresponding to or exceeding our budge-ted expectations. The Asia-Pacific zone perfor-med particularly well, exceeding its budget by 50% and showing 30% growth.

Western EuropeWestern Europe outperformed the market recording one of the best results in its history. This growth was particularly impressive given the unstable economic situation and the low rate of growth in European markets generally. The zone is well positioned for further success in coming years.

Central and Eastern Europe and TurkeyThe zone Central and Eastern Europe and Turkey was confronted with significant mone-tary devaluations in Turkey and Russia. The local businesses reacted to these difficulties with a simple, but certainly not easy to imple-ment solution: the commercial teams sold more to compensate for the devaluation!

Africa, the Middle East and LaprovetThe zone Africa, the Middle East and Laprovet crossed a big storm during the first half of 2011: shortages of products, outstanding orders and monetary devaluation. The team remained committed and never lost sight of its objective. A remarkable performance during the second half-year returned a good final result, which was over budget. It was a year which ended well thanks to the exceptionally hard work of those involved.

Asia-PacificAsia-Pacific area recorded the best perfor-mance of all our zones: the team exceeded its objective by 50% and registered a 30% growth over the previous year. Thailand, in particular, delivered very impressive figures, considering the natural disasters which the country had to face. In Australia where Ceva had in 2010 made the Nature Vet acquisition, the company rea-ched its objectives: strengthening its position in a market experiencing strong expansion.

Latin AmericaThe Latin American zone benefited from the acquisition of the Instituto Sanidad Ganadera (ISG), a family company specialized in the deve-lopment and the production of biological pro-ducts for ruminants. We expect a promising future for this Zone with its considerable mar-ket potential. In Mexico, the results showed clear improvement over the previous year. Mexico and Brazil also saw the launch of Vectormune® HVT NDV, our innovative vac-cine that protects against both Newcastle and Marek’s disease with one vaccination (in the hatchery) for life.

A world tour of Ceva, through the 6 zones.

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North America In 2010 Ceva purchased Summit VetPharm which, with its Vectra® range, gave the company a strong position in the companion animal parasiticides sector. In 2011, Ceva became a major player in the very competitive companion animal market in the United States, placing strong support behind our veterinarian customers. The choice to conti-nue to support the veterinarian seemed to pay off: sales of Vectra® into distributors increased by 15% with a 25% increase in sales out (distributors to clinics). On the avian market, Ceva purchased Vetech Laboratories Inc., a Canadian poultry vaccine manufacturer who markets live vaccines against coccidiosis. The move allows Ceva to add Vetech’s live coccidiosis vaccine Immucox to the portfolio, expanding our poultry vaccine range from respi-ratory to also include intestinal health.

Ceva also acquired Centaur Animal Health, which became the company’s base to create a new or-ganization in Canada. Centaur is a companion animal company with a solid distribution network across the country.

In conclusion, 2011 was a difficult but rich year which made all our zones better prepared for 2012. Ceva’s Global Operations teams will profit from a performance orientated organization, which internally has better communication between the different divisions allowing us to better respond to the needs of our customers in the field.Of course, 2012 like all years will doubtless bring us its share of satisfaction and difficulties, but our culture and business model, which never stop strengthening, now gives us the confidence to remain calm in the face of any challenge.

“the bottom line is that we are seeding our field by improving processes, people, and products. We are committed to improve by

preparing for and sustaining the growth of Ceva worldwide. given the outstanding results of 2011, i am confident that

we have the tools in place to deliver our goals in 2012 despite the continuing uncertain economic context.”

gabriel rshaid, global operations director.

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Ceva boosts its support functions to provide a solid basis for growth…

T o grow and become a leader, it’s not enough just to boost internal and exter-nal growth. One must also improve efficiency, meaning that we guarantee the same level of excellence throughout the Group, ensuring that daily

working relations make overall operations seamless, rapid and above all efficient.

“We certainly will reach the 1 billion euro mark in sales, and will surely then go on to 2 billion, the question is whether we do this with a lawnmower

engine straining at 6,000 rpM or with a smooth, silent rolls royce engine…”

support

pierre revel-Mouroz, global Finance and support Functions director.

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This Division encompasses a series of activities with a transversal nature: Finance and Mana-gement Control, IT, Supply Chain, Industrial Performance and Pharmaceutical Industrial Management.

These professions all have expertise that gives them the legitimacy to define best practice.

In their respective fields, they must supply the methods to enable us to work effectively in teams with increased efficiency and harmony.

To provide the close monitoring required for efficiency and progress, they define and roll out relevant key performance indicators (KPI’s) that are shared by all and used to construct the scorecards that the General Management need to make informed decisions.

The last Annual Report (2010) presented the contributions of the Finance and IT teams, this year, we have chosen to focus on another of these support functions: industrial perfor-mance…

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support

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“Lean Manufacturing” is first of all a state of mind, a desire to respond as efficiently as possible to customer expectations quality and service, while optimizing company resources to reduce waste.

It is also a know-how, based on solid metho-dologies and principles, that define the most appropriate form of organization, the pro-cesses and their indicators, which will ensure the highest industrial standards.

To succeed in this area, one must first have a triple focus:• Focus on the customer, to prove oneself ca-

pable of understanding and formalizing client needs.

• Focus on waste reduction, as this tires people and consumes lots of internal resource.

• Focus on self-organization, to create an envi-ronment where we constantly challenge our-selves to do better.

To achieve this we have to be capable of re-thinking our processes, integrating all depart-ments involved behind the strategy to improve industrial performance. Understanding that value added ultimately is not simply the sum of the parts at each level in the value chain and the excellence of the professional work at an individual level, but above all the combination of the whole.

Ceva began to take this approach in 2008, by focusing effort on optimizing its 4 major facto-ries: Libourne, Loudeac, Lenexa and Budapest.

The process started by a definition of the upstream priorities of the Directors of the Busi-nesses Units and those in charge of the indus-trial sites. The project team then used a par-ticipative approach to create the right climate necessary for a good deployment of a process of continuous improvement. It above all placed importance on the need for all employees to take responsibility and fall solidly behind any decisions taken on behalf of the group.

We then set up workshops to improve produc-tivity, reliability, and flexibility in our facilities.

Today the company can take pride from this initiative. This new “state of mind” has chan-ged the quality of our operations, which are now better controlled, and our factories pro-ductivity has improved by at least 5% every year.

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support

“the lean Manufacturing approach contributes to improving our industrial performance in several ways: an increase in ove-rall productivity that allowed us to reduce our cost of goods…

We now achieve service levels which improved by 8 points between 2010 and 2011. lean manufacturing is really at the

heart of what we do now on a daily basis.”J. p. anais, general Manager, loudeac plant, France.

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Ceva continues to make major investment in its production plants…

In 2011, Ceva invested almost 27 million euros in its production plants. The aim of these in-vestments was:• Not only to increase production capacity so as

to cope with the marked increase in demand, • But also to provide the company with a pro-

duction tool that is constantly improving and which meets the most stringent quality stan-dards.

Our vaccine business has enjoyed double-di-git growth for several years, and has received almost 15 million euros in investment:

On 3rd May 2011, in Lenexa (USA), Ceva Biomune opened its new production faci-lity, called BUMP (Biomune Unit for More Production). This new facility has a surface area of 4,800 m2, allowing Ceva to increase vector vaccine production 8-fold while intro-ducing innovative concepts in line with our "continuous improvement" strategy to optimize output and improve process quality.

In Hungary, Ceva Phylaxia has embarked on an expansion policy which concerns all types of vaccines produced by the Hungarian centre:• Work has begun on building a new unit, which

will enable us to increase our live vaccine production capacity by 60%,

• A second bacterial vaccine production line is to be opened, which will double output,

• Extensions to the facilities manufacturing inactivated vaccines will mean that produc-tion can be increased by 25%,

• Finally, with the creation of two new laborato-ries we will double output of tissue vaccines and manufacture vector vaccines for the Eu-ropean Union market.

In the Pharmaceutical sector, our two major production plants in France have had a com-plete overhaul.

In Libourne, the packaging line for injectables has been renovated to ensure operational ex-cellence and support the ongoing process to continually improve the quality of our products.

In Loudeac, with the renovation of the granu-lation, compression, powder and sachet pac-kaging areas, we have improved the working environment and controls over the conditions of production.

These investments in both our Biology and Pharmaceutical plants demonstrate Ceva’s commitment to achieve the highest levels of industrial excellence necessary to meet our customers’ expectations to supply them on time with products of impeccable quality…

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support

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From left to right:

• Pierre Revel-Mouroz, Global Finance and Support Functions Director

• Dr Gabriel Rshaid, Global Operations Director

• Dr Marc Prikazsky, Chairman & CEO

• Dr Arnaud Bourgeois, Director of Biology Business Unit

• Bernard Emery, Global Strategy and Business Development Director

• Dr Pascal Raoul, Pharmaceutical Business Unit Director

Executive committee

Together, beyond animal health

Ceva Santé Animale - 10, avenue de la Ballastière - 33 500 Libourne - FranceTél. : 33 (0)5 57 55 40 40 - Fax : 33 (0)5 57 55 41 98 - www.ceva.com - [email protected]

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47 - Ceva Asia · the leader in salmonella control in the USA. Ceva is working to extend this...

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Transcript of 47 - Ceva Asia · the leader in salmonella control in the USA. Ceva is working to extend this...