Animal health industry rankings 2020


Many companies could be forgiven for suffering a decline in sales during the last fiscal year. With the impact of COVID19 ravaging many sectors around the world, including the food industry, animal health companies willhave started the year with great trepidation. IHS Markit’s head of animal health Joseph Harvey looks at why thesefears were misplaced.

Rewind 12 months and the plight of the animal health industry’s leading businesses may have been uncertain. With employee safety and product supply at the forefront of their minds, companies began postponing financial guidance and adjusting to a new working climate.

At the time, top line growth may have seemed trivial with many people around the world suffering great stress and disruption. Nevertheless, come the end of the fiscal year, the animal health sector has not only displayed resilience to the pandemic but has also shown its ability to prosper despite times of economic hardship.

Naturally, sales struggled to grow in the food animal health sector. The main driver for the industry in 2020 was the companion animal segment, which thrived as veterinary clinics around the world were deemed ‘essential’ and stayed open. E- commerce channels were further utilized by companies and consumers alike to fuel sales growth of pet medicines.

In fact, fiscal 2020 proved to be a better year for top-line growth than its predecessor. The top 20 businesses averaged an annual increase in revenues of 9.8% – almost four times greater than the average growth of 2.5% in 2019, when African swine fever (ASF) was the main obstacle to animal health companies. Without the declines recorded by China's top animal health firms, the average was closer to 6% in 2019.

In 2018, the average annual growth among the top 20 firms was 6% and in 2017 it was 18%. The latter figure was largely due to the Boehringer Ingelheim/Merial transaction and, without the impact of this transaction, the average dropped to 10% – a figure more in line with the latest average figure.

The combined revenues of the top 20 firms came to $30 billion in 2020. This was up by about $500 million compared to last year – the joint lowest annual increase in total top 20 sales since 2015. While many firms experienced significant growth in their local currency, the IHS Markit Animal Health rankings are ordered by US dollars. When converted, many of the local currency increases are not as high.

The average growth rate for the top 20 animal health companies for the five years since 2015 is around 53%. This represents growth of 10.6% per year. Boehringer Ingelheim's purchase of Merial had a significant impact on its five-year growth figure (indicated in the infographic below). Dechra Pharmaceuticals, Huvepharma, Hipra and IDEXX Laboratories have also seen notable increases over the past five years, while Phibro Animal Health, Elanco and Norbrook Laboratories have seen less than 10% growth.

Chinese recovery

For fiscal 2020, IHS Markit Animal Health has received an earlier and greater insight into the annual sales of the leading Chinese firms.

While many Chinese firms suffered in 2019 from the ramifications of ASF on the domestic pork industry, they swung back into form in the latest year. Half of the top 10 Chinese animal health companies reported a decline in revenues during 2019. This time around, they have all recorded a substantial improvement in sales. The average growth rate for the top 10 animal health firms in China for 2020 was around 30%.

China Animal Husbandry Industry Company recovered from a poor 2019 and saw its revenues improve 25% in the most recent year, consolidating the firm’s position as the top Chinese animal health business. Qingdao Yebio Bioengineering

scored a 15% upturn in sales, while Tianjin Ringpu recorded a 34% increase in turnover. Jinyu Group also rebounded from a decline in 2019 by posting 41% year-on-year sales growth.

Growth leaders

Out of the top 20 animal health businesses, 14 registered growth of 6% or more in 2020. Many companies moved up one place in the league table, as Bayer Animal Health became the latest firm to disappear from the rankings due to industry consolidation.

Aside from the Chinese leaders, the only other companies to secure a double-digit increase in revenues during 2020 were Hipra and IDEXX Laboratories.

Veterinary vaccine specialist Hipra told IHS Markit Animal Health its turnover improved by 15%. This performance helped the business climb two positions in the standings to 13th, making Hipra the seventh largest European animal health company. Five years ago, Hipra was 18th in the industry rankings.

The strong growth trends in the companion animal sector helped IDEXX secure a 12% hike in revenues . The company witnessed the highest increase in revenues among the top 10 animal health businesses. In fact, IDEXX has secured sales growth of 8% or more for the last eight years. In that time period, the firm’s animal health sales have more than doubled.

Ceva Santé Animale did not publish its financial results for 2020. According to an IHS Markit Animal Health estimate, the firm’s sales climbed by just over 8%. The company has taken sixth position in the rankings, following the acquisition of Bayer Animal Health by Elanco.

Vetoquinol hit an 8% upturn in sales for 2020, which was the company’s best performance since 2015. The firm benefited from the addition of the Drontal and Profender antiparasitic product families from Elanco.

Merck Animal Health posted a muscular 2020  with both its companion animal division and livestock unit fueling a prosperous year of 8% sales growth. The company is putting the pressure on Boehringer Ingelheim  in second position. The last time Merck held the second spot in the league table was in 2016.

Huvepharma told IHS Markit Animal Health its revenues climbed by around 7% in the latest year. The firm continues to push its international horizons, especially in the US. Huvepharma has overtaken Dechra Pharmaceuticals in the latest rankings, with the two firms matching each other’s recent high growth rates over the past few years. The Huvepharma figure used in the standings is solely from the company’s animal health business, which makes up around 95% of the group’s total turnover.

Dechra Pharmaceuticals also recorded around 7% top-line growth for 2020. While it was the firm’s lowest annual sales increase in five years, Dechra has seen its revenues more than double in this time period. The UK company has also gained five positions in the league table over the past five years.

According to an IHS Markit Animal Health estimate, Bimeda grew its sales by around 7% in 2020. Like Huvepharma and Dechra, Bimeda’s performance is partly due to its broadening product portfolio in the US. In 2020, Zoetis and Elanco both secured 6.6% annual sales growth.

Zoetis extended its position as the industry leader, with a buffer of almost $2bn separating itself and second place. The firm recorded its fourth consecutive year  of growth over 5%, as its new companion animal products provided a boost. Zoetis has predicted 2021  could result in its first double-digit upturn in sales since 2011.

Aher a difficult first nine months, Elanco’s substantially higher fourth-quarter revenues helped it swing to a positive 2020. Last year represented Elanco’s best annual sales growth since 2015 – a year that benefited from the acquisitions of Novartis Animal Health and Lohmann Animal Health. The big change in its ranking could come in 2021, with the impact from its capture of Bayer Animal Health expected to make a major top-line difference.

2-4% increase in revenues

Boehringer Ingelheim Animal Health posted an increase in revenues of 2.3%  for 2020. Challenges caused by the COVID-19 pandemic and currency fluctuations impacted the German business, which recorded the least growth among the top five animal health companies.

Japan’s top two animal health firms both reported an annual improvement in revenues of around 4%. Kyoritsu Seiyaku has yet to publish its 2020 results. However, the company told IHS Markit Animal Health it predicts 4% growth across the latest year. The firm remains the largest animal health business headquartered in Asia. Nippon Zenyaku Kogyo posted its sixth consecutive year of sales growth, with its companion animal division being a key driver.

Yearly decline in sales

Virbac tripped to a slight decline in annual revenues, partly due to currency depreciation (/master-viewer/show/phoenix/3871397?connectPath=AnimalHealthLandingPage&searchSessionId=01c3f953-740f-41e8-abc9-f626ce25fb77) in the fourth quarter. Despite the drop in annual sales, Virbac has benefitted from Bayer Animal Health’s absence and moved up to seventh position. It has also become the third largest animal health business based in Europe. Virbac is in a transitional phase that will last into 2022, as it aims to work its way back to sustainable growth.

Phibro Animal Health experienced a 3.4% downturn in sales during 2020 – the firm’s worst performance in seven years. The company’s focus on the food animal sector leh it exposed to the unprecedented impact of COVID-19. At the time of its 2020 results, Phibro said the worst of the pandemic’s influence on its sales was over. The company is already well into its fiscal 2021 and revenues are currently flat.

Norbrook Laboratories saw its sales tumble 11% due to manufacturing and supply chain issues. This was the

second year in a row  the Northern Irish business posted a double-digit drop in turnover, as it fell three positions in the league table in two years.

Outside the top 20

Neogen posted a 3% improvement in animal safety sales, while Heska took another step towards the top 20 as it recorded a huge upturn in annual revenues via an acquisition and organic gains.

Shandong Lukang is the fihh largest Chinese animal health business. Its 2020 sales climbed 49% to CNY1,354m ($196m).

A new entry to the animal health rankings is PetIQ. While the US firm obtains the majority of its revenues from retail of third-party products, IHS Markit Animal Health estimates about $180m of its sales come from its own branded generics such as Capstar and the products it previously purchased from Perrigo.

Argentina’s Biogénesis Bagó became the leading animal health company based in Latin America during 2020, as

revenues went up 21% . Alivira Animal Health is India’s top animal health company – its revenues increased 13.5% in 2020 . Brazilian leader Ouro Fino Saúde Animal posted its best growth in five years, with sales going up 18% . Japan’s Dainippon Sumitomo Pharma Animal Health recorded an

11% drop in turnover aher discounting its pet food division. Other companies just outside the industry’s 25-30 include Chanelle, Fatro, ECO Animal Health, Orion Animal Health, Animalcare and Pulike Biological Engineering.