Dechra Pharmaceuticals PLC

Annual Report and Accounts for the year ended 30 June 2021

Company Number: 3369634

Improving Global Animal

Health and Welfare

Welcome to our 2021 Annual Report

About Dechra

Our purpose is the sustainable improvement of animal health and welfare globally.

We are a global specialist veterinary pharmaceuticals and related products business. Our expertise is in the development, manufacture, marketing and sales of high quality products to improve animal welfare, exclusively for veterinarians worldwide.

A Snapshot of Our Year

a b c

Revenue

Underlying

Growth

EBIT Growth

• Increase of 21.0%

• Increase of 29.2% to

to £608.0 million

£162.2 million

• Existing revenue

• COVID-19 related cost

growth of 16.2%

savings

Portfolio

Focus

  • All product categories delivering growth, CAP and Equine performance exceptional
  • Strong organic growth in all key markets

View our online

Annual Report at:

dechra.annualreport2021.com

Overview

Inside this report

Overview

Welcome to Dechra's 2021 Annual Report

IFC

Highlights

02

Our Key Strengths

03

Our Purpose, Strategy, Values and Culture

04

Dechra at a Glance

06

Chairman's View

08

COVID-19 Update

09

Strategic Report

Our Marketplace

12

Our Business Model

16

Creating Value for Our Stakeholders

19

Delivering Our Strategy

20

Chief Executive Officer's Statement

24

Financial Review

28

Key Performance Indicators

36

Strategy in Action

38

Product Development

42

Global Product Offering

46

Section 172 Statement

48

Non-Financial Information Statement

51

Corporate Social Responsibility

52

How the Business Manages Risk

76

Understanding Our Key Risks

79

Viability Statement

83

Governance

Letter from the Chairman on Governance

86

Board of Directors and Senior Executive Team

88

Board Leadership and Company Purpose

92

Division of Responsibilities

99

Composition, Succession and Evaluation

103

Audit, Risk and Internal Control

112

Directors' Remuneration Report

119

Directors' Report - Other Disclosures

147

Statement of Directors' Responsibilities

149

Financial Statements

Independent Auditors' Report

152

Consolidated Income Statement

161

Consolidated Statement of Comprehensive Income

162

Consolidated Statement of Financial Position

163

Consolidated Statement of Changes in Shareholders' Equity

164

Consolidated Statement of Cash Flows

165

Notes to the Consolidated Financial Statements

166

Company Statement of Financial Position

210

Company Statement of Changes in Shareholders' Equity

211

Notes to the Company Financial Statements

212

Financial History

221

Additional Information

Glossary

224

Shareholder Information

226

Advisers

IBC

Forward-Looking Statements

This document contains certain forward-looking statements. The forward- looking statements reflect the knowledge and information available to the Company during preparation and up to the publication of this document.

By their very nature, these statements depend upon circumstances and relate to events that may occur in the future and thereby involve a degree of uncertainty. Therefore, nothing in this document should be construed as a profit forecast by the Company.

Stock Code: DPH

01

Overview

Highlights

Total Revenue

Underlying Operating Profit

£608.0m

£162.2m

AER: +18.0% CER: +21.0%

AER: +26.4% CER: +29.2%

2021

£608.0m

2021

£162.2m

2020

£515.1m

2020

£128.3m

2019

£481.8m

2019

£127.4m

2018

£407.1m

2018

£99.2m

2017

£359.3m

2017

£81.3m

Underlying Diluted Earnings Per Share

Dividend Per Share

108.14p

40.50p

AER: +17.3% CER: +19.4%

AER: +18.1% CER: +18.1%

2021

108.14p

2021

40.50p

2020

92.19p

2020

34.29p

2019

90.01p

2019

31.60p

2018

76.45p

2018

25.50p

2017

64.33p

2017

21.44p

Reported Operating Profit

Reported Diluted Earnings Per Share

£84.0m

51.03p

AER: +60.9% CER: +63.0%

AER: +55.8% CER: +56.1%

2021

£84.0m

2021

51.03p

2020

£52.2m

2020

32.76p

2019

£39.0m

2019

30.07p

2018

£34.1m

2018

37.04p

2017

£33.2m

2017

27.93p

Strategic Progress

  • All product categories delivering growth, CAP and Equine performance exceptional.
  • Strong organic growth in all key markets.
  • Good progress continues to be made on product pipeline.
  • Mirataz® and Osurnia® both performing well

Financial Performance

  • Revenue growth of 21.0% to £608.0 million.
  • Underlying operating profit increased by 29.2% to £162.2 million.
  • Underlying EBIT margin increased by 170 bps to 26.7%.
  • Underlying diluted EPS increased by 19.4% to 108.14 pence.
  • Reported operating profit growth of 63.0%.
  • Full year dividend increased by 18.1% to 40.50 pence.

Our Product Pipeline

A key strategic priority for the Group is the delivery and strength of the pipeline. We currently have 33 projects in the product development process:

Read more about our

Feasibility

Research

Development

Registration

Product Development

12

3

13

5

on pages 42 to 45.

02

Dechra Pharmaceuticals PLC Annual Report and Accounts for the year ended 30 June 2021

www.dechra.com

Overview

Our Key Strengths

As well as our ability to improve the animal health and welfare industry globally with our breadth of products and strong and innovative product pipeline, we have a key set of strengths, summarised below:

1

2

3

4

5

Well

Recognised

Brand

We are recognised as a global animal healthcare company with a strong and growing reputation as a provider of high quality, specialist veterinary medicines and related products.

Balance Sheet Strength

The Group targets strong cash generation which allows us to pay down debt quickly, resulting in a robust balance sheet which enables us to fund internally many of our strategic opportunities.

Successful

Acquisition

History

In January 2008 we made our first major acquisition which, at the time, was transformational to our EU Pharmaceuticals business. We have successfully replicated the model since then on several occasions and have consistently delivered pre-acquisition strategic and financial expectations on significant transactions.

Manufacturing Capabilities

Our manufacturing sites offer a wide range of dosage forms and packaging capabilities which can be produced in small to large-scale production batches. This flexibility is a key requirement in producing our varied product portfolio.

Skilled

People

We have attracted and retained a qualified and skilled workforce throughout the organisation. This stable and motivated team has many years' experience within the markets we serve. Our people strategy is underpinned by our Dechra Values.

6

7

8

9

10

Our

Purpose

Dechra's purpose is the sustainable improvement of animal health and welfare globally and this is intrinsic in our Values, the way we do business and in the decisions we make when developing and implementing our Environmental, Social and Governance (ESG) framework.

Our Breadth

of Breadth of

Products

We are a global leader in veterinary endocrinology and topical dermatology, have a broad portfolio of analgesia, anaesthetics and products for the prevention and treatment of pain, and we are also recognised as innovators in other specialisations such as the treatment of equine lameness, nutrition and differentiated generics (generic plus).

Our Growing

Global

Footprint

Dechra's origins lie in the companion animal markets of Western Europe and North America. We have built on this platform, extending our footprint globally through greenfield sites and acquisitions.

Further international expansion is one of our four strategic growth drivers.

Our Strong

and Innovative

Product

Development

Pipeline

We have a strong pipeline of novel, generic and generic plus pharmaceuticals, vaccines and a specialist nutrition range. We have

a track record of pipeline delivery.

We are proactive and innovative in recognising new development opportunities to extend our portfolio.

Our High

Quality

Expertise

We support our customers in our key therapeutic areas with technical helplines, continuing education through online learning, webinars and lectures

by key opinion leaders.

Our sales approach relies on strong partnerships with practice groups and individual veterinarians, strengthened by key opinion leaders and distribution partners.

Stock Code: DPH

03

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Dechra Pharmaceuticals plc published this content on 07 September 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 20 September 2021 15:51:03 UTC.