Virbac cuts its 2023 growth and adjusted EBIT guidance ($VIRP)

Virbac is lowering its 2023 guidance: revenue growth is cut from 4-6% to 0-4%, and the adjusted EBIT ratio from 13-14% to 12-13%. Three causes: a market slowdown in Q1, vaccine production capacity constraints, and the cyberattack of 19 June 2023.

Press release of 03/07/2023

Several factors are currently affecting Virbac’s business and are leading the group to revise its guidance for the 2023 financial year. As a reminder, at constant exchange rates and scope, initial guidance stood in a range between 4% and 6% for revenue growth and between 13% and 14% for the adjusted EBIT ratio.

Virbac now expects revenue growth at constant exchange rates and scope in a range between 0% and 4%. The adjusted EBIT ratio is expected to settle in a range between 12% and 13% at constant exchange rates.

2023 guidance: before and after the revision

Indicator	Initial guidance	Revised guidance
Revenue growth (constant rates and scope)	4% to 6%	0% to 4%
Adjusted EBIT ratio (constant exchange rates)	13% to 14%	12% to 13%
Guidance out to 2030	—	Unchanged

Why did Virbac lower its 2023 guidance?

Three factors explain this profit warning:

Market slowdown in Q1 2023, with volumes down across many regions compared with 2022.
Vaccine production capacity constraints for dogs and cats, temporary but larger than expected in the first half. This weighs on fixed cost absorption and on sales, given low vaccine inventories.
The cyberattack of 19 June, whose full consequences cannot yet be measured at this stage. Teams remain mobilised to ensure business continuity and implement remediation plans.

Taken together, these factors make a recovery before year-end unlikely. Momentum nevertheless remains positive in many regions, and Virbac says it is confident in its guidance out to 2030, which remains unchanged.

Virbac works for animal health in more than 100 countries, covering more than 50 species with a range of products and services to diagnose, prevent and treat the majority of pathologies.
Virbac — Euronext Paris, compartment A — ISIN: FR0000031577 / ticker: VIRP

Technical analysis

Monthly timeframe

On the monthly chart, Virbac has printed a sharp decline since the start of 2022. Financially, the stock had risen strongly in 2021 despite a margin down 4 points, to 10%.

The monthly trend will remain bearish long term below €360
First resistance level between €301 and €327
First downside target: below €200

Virbac $VIRP monthly chart — July 2023 — $VIRP monthly chart (July 2023)

Weekly timeframe

On the weekly chart, the long-term downtrend is confirmed, with a bearish reversal at the monthly resistance level.

Trend bearish below €307
No reaction expected before the first support at €240-252 (a support that is unresponsive within a downtrend)
Downside targets: below €215 then below €200

Virbac $VIRP weekly chart — July 2023 — $VIRP weekly chart (July 2023)

Daily timeframe

On the daily chart, the resumption of the downtrend has been confirmed since May 2023, with a final rally in early June rejected at resistance between €300-310.

A first liquidity grab has just taken place below €266
The trend remains bearish below €300
The decline should continue towards the weekly and monthly targets

Virbac $VIRP daily chart — July 2023 — $VIRP daily chart (July 2023)

Summary of $VIRP technical levels (July 2023)

Timeframe	Trend	Pivot level	Resistance	Downside target
Monthly	Bearish long term	Below €360	€301 – €327	Below €200
Weekly	Bearish	Below €307	—	Below €215 then below €200
Daily	Bearish	Below €300	€300 – €310	Weekly and monthly targets

First weekly support identified at €240-252, considered unresponsive within a downtrend.

Frequently asked questions

Why did Virbac issue a profit warning in 2023?

For three combined reasons: a market slowdown in the first quarter of 2023 with volumes down, temporary constraints on dog and cat vaccine production capacity that were larger than expected, and the cyberattack suffered on 19 June 2023.

What is adjusted EBIT?

Adjusted EBIT is current operating income restated for non-recurring items. Expressed as a ratio of revenue, it measures the operating profitability of the business. For Virbac it was expected between 13% and 14% in 2023, revised to 12-13%.

What is the ISIN code for Virbac shares?

Virbac is listed on Euronext Paris, compartment A, under ISIN code FR0000031577 and ticker VIRP. The group specialises in animal health and operates in more than 100 countries, across more than 50 species.

Does a cyberattack have a lasting impact on a share price?

The immediate impact is mainly operational — business continuity, remediation costs — and its scale is often not measurable in the following weeks. In Virbac’s case, management indicated in early July 2023 that the full consequences could not yet be assessed.

Does a profit warning call long-term prospects into question?

Not necessarily. Virbac revised its 2023 guidance while leaving its guidance out to 2030 unchanged. Distinguishing a cyclical difficulty from a structural deterioration is precisely what has to be settled before investing.

The analyses published on EliteProfit are provided for information purposes and do not constitute investment advice. All stock market investments carry a risk of capital loss. The technical levels mentioned correspond to the situation in July 2023.