Vetoquinol (Euronext Paris: VETO) reported a 22% year-on-year rise in net income to €30.5 million for the first half of fiscal year 2026, driven by strong growth in its largest market, the United States, and a favorable product mix shift toward higher-margin Essentials products.

The Board of Directors approved the financial statements on September 9, 2026, following a limited review by statutory auditors as of June 30, 2026.

Revenue and Segment Performance

Total sales reached €259.3 million, representing a modest 0.7% increase on a reported basis but a 3.4% growth at constant exchange rates. Excluding a €7.1 million unfavorable foreign exchange impact and a €3.0 million hit from simplifying complementary product lines, underlying business growth stood at 4.8%.

The Essentials segment, which now accounts for two-thirds of total sales, grew by 3.7% at constant exchange rates to €169.0 million. This segment’s expansion was pivotal in offsetting declines in other regions.

The U.S. market delivered robust performance with sales rising 13.1% in USD terms. Conversely, the Asia-Pacific and Rest of the World region saw a 4.2% decline at constant exchange rates.

Profitability and Margins

Gross margin expanded to 77.1% from 75.8% in H1 2025, aided by price increases exceeding 2.5% and the higher share of Essentials products. This improvement more than offset rising external expenses linked to industrial plans and R&D activities.

Research and development expenses increased to 8.7% of sales from 7.8% previously, reflecting continued investment in innovation. Personnel costs rose by €3.4 million due to higher payroll and headcount adjustments, bringing the workforce to 2,526 employees.

EBIT before amortization of acquired assets climbed 7.2% to €44.8 million (17.3% of sales). Reported EBIT grew 12.5% to €39.2 million, while EBITDA reached €53.9 million, marking a margin expansion to 20.8% from 20.4% in the prior period.

What the Numbers Show

A key divergence exists between top-line momentum and bottom-line acceleration. While total sales grew only 0.7% on a reported basis, net income surged 22%. This disproportionate profit growth is primarily structural, driven by the gross margin expansion of 130 basis points and the operational leverage inherent in the Essentials product mix, rather than pure volume growth across all geographies.

Balance Sheet and Cash Flow

Strong cash flow generation enabled Vetoquinol to strengthen its financial position. Cash flow from operations totaled €58.6 million, significantly higher than the €50.7 million recorded in H1 2025.

The company maintained a net cash position of €223 million as of June 30, 2026, an increase of €17 million since the start of the fiscal year after accounting for dividends, capital expenditures, and share buybacks. Shareholders’ equity stood at €609 million.

Vetoquinol is scheduled to release Q3 2026 sales figures on October 28, 2026.