Akzo Nobel BV to separate Pharma from its Chemicals/Coatings businesses

THE NETHERLANDS – Akzo Nobel NV has announced today that it intends to separate its pharmaceutical activities from its chemicals and coatings businesses. The aim is to create two independent companies that are each a platform for growth in their own segments.
calendar icon 14 February 2006
clock icon 4 minute read
‘The separation of the human and animal healthcare businesses of our company – Organon, Intervet and Nobilon - will put us into a strong position building on our expertise in both fields’, emphasized Ruurd Stolp, President of Intervet International bv. The strategic initiatives pursued by Intervet in recent years began to pay dividends in 2005, contributing to a strong set of results, and create an excellent basis for the intended new pharma business.

Intervet sales increased by 7% to EUR 1,094 million, with volume growth the main contributor to higher revenues. Intervet delivered an EBIT of EUR 238 million – up by 29%, and equivalent to an operating income margin of 21.8%. The definitive decision on the separation into two companies is subject to approval by an (extraordinary) meeting of shareholders and consultation with relevant employee representative bodies.

Intervet continues to sharpen the strategic focus on major food and companion animal species markets, and expects to deliver similarly positive results beyond 2005, when the fruits of the extensive research and development programs will enhance the company’s existing portfolio.

Stronger growth was delivered in spite of recent divestments in non-core areas. During 2005, Intervet completed the sale of larger parts of the feed additive business and Vetstream, a provider of clinical information services in the veterinary market; activities which no longer fit with the core business operations.

During the year, Intervet benefited from efficiency improvements in manufacturing with a major investment program at the multifunctional sites in the Netherlands, UK, India and Australia.

Intervet further expanded the strong market position in Europe, due to improved supplies and strong growth of Cobactan®, the innovative range of anti-infective formulations, based on the proprietary molecule cefquinome. Intervet generates more than 50% of its sales in Europe. In 2005, the company’s development in North America was characterized by growth in key segments. The region contributes with 16% to Intervet sales. Sales in North America grew substantially, driven by new product introductions in the companion animal segment, including Vetsulin® (the first insulin to treat diabetes in dogs) and Continuum® (combination vaccine with long-lasting immunity), and in the cattle segment, where the recently introduced cattle bio line Vista® received very positive response. Intervet’s vaccine segment covers around 50% of total sales, which underlines the company’s leading position. Sales in Latin America were boosted by substantial growth in Brazil in various product segments and Chile mainly by increased sales of fish vaccines. The region contributes with 13% to the company’s sales. Although large parts of Asia are still severely affected by avian influenza outbreaks, business is improving. The acquisition of AgVax Developments Ltd. in New Zealand will further boost the strong growth in Oceania. During 2005 sales growth could be realized in all species segments. Intervet’s ruminant product range covers with around 40% the largest share. The strong performance underlines the company’s leading position which Intervet is holding in various markets and species or product segments.

In September the Dutch Ministry signed a contract with Intervet about a vaccine bank for emergency vaccination with Porcilis® Pesti, Intervet's marker vaccine against Classical Swine Fever. End of 2005 marketing authorization for a range of Intervet’s Nobilis® Influenza vaccines has been granted to Intervet UK by the UK authorities. The vaccine range is for the active immunization of chickens, ducks and other avian species as an aid in the control of outbreaks of Avian Influenza type A, subtype H5 (the type causing the current outbreak), and also subtypes H7 and H9. Intervet interprets these developments as a signal within Europe making vaccination part of the preparedness plan of countries against highly infectious diseases.
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