September 19, 2022 presentation about Animal Health Landscape- by Andras Bolcskei, Executive Vice President & Global Commercial Lead, CEVA Sante Animal Health. Three part agenda covers Global macroeconomic outlook, Animal Health industry trends, Implication on the Animal Health industry. Inflation Growth and Unemployment Costs. China’s consumer Inflation. CASH- Cost and availability of cash is changing which means that there is again a cost associated to taking risk = investors start being more selective. ATTRACTIVITY- In this context, attractivity of the AH sector is increased, especially in Pets, given the track record of resilience of the sector vs. other investment opportunities. We will continue to see M&A activity and R&D investment in the sector. CORPORATIZATION- Despite the increased cost of money, the predictability and history of AH and veterinary business in the last financial crises and the early stage of vet clinics consolidations in many markets are strong drivers for continued, fast-paced corporatization to continue. PET PARENT AND CONSUMER POWER- It will continue to increase in the AH, with megatrends like online 24/7 availability omnichannel, pet as family member, steady increase of pet plans / pet insurance / data driven personalization. This creates value in the market for agile companies. Transactional Customers- Know what they want, Treat you as commodity, Digital interaction, Cost focus, Buy on price, Short term. Consultative Customers- Share problems, Value your value add, Digital & analogue interaction, Advice focus, Buy on expertise and trust, Long term. Vet Landscape Evolution 2022-2025. Market consolidation. Independent Vet clinics. Companion Animals. Corporates. GPOs. Corporate landscape in Europe (data Q2 2022)- A number of large, well capitalized veterinary strategic accounts are expanding. Global trends in pet population. There are currently billions of pets worldwide. Pet ownership is rising globally, particularly in millennial households. Expanding middle class is driving pet population growth in emerging markets. Pet ownership leads to improved human health outcomes for people including better heart health, lower levels of depression and anxiety, etc. Brands & blockbusters. Increasing brand value. Zoetis, Elanco (and BI indirectly through their sales reporting) qualify blocbkusters as products > $100m – 25 brands. One Heath Concept. Sustainability. Technology innovation. Veterinary / Nurse shortage. Farms, trades, on-line shop, independent. More customers are moving to the extremes. More want deeper consultative relationships. More buy transactionally

1. Animal Health Landscape
Andras Bolcskei DVM

2. Global macroeconomical outlook
AH industry trends
Implication on AH industry
AGENDA
1
2
3

3. Global macroeconomical outlook

4. Impacts on Animal Health Industry
Currency & energy prices
War in Ukraine weakens €
Europe’s gas and oil = risk of
recession
Outlook
Dip briefly below parity and to
rally in the next 18 month at
1,02 to 1,08
Consensus
Lower oil price strating from
autumn-end 22 and for the Brent
price to decline $90-95 in 23 and
lower $85-90 in 24
The US dollar is greatly
exagerated
Interest rates are rising faster in
the US = More appealing
Stronger US growth -> increased
invest in the US  increased
demand for dollars
The mid term
PUSH FOR GREENIFICATION
AND RENEWABLES

5. Impacts on Animal Health Industry
Inflation Growth Unemployment Costs
Recessionary
figures
Lower
growth
(ELAN-)
High demand
labour =War
fot Talent
One-off
bonuses
Rising
Inflation
Producers/Inputs costs is
rising
Growth margins squeezed
Costumers
overall want
value for
money
High single digit
price increase
in 2023

6. China’s consumer Inflation

7. Impacts on Animal Health Industry
Implications
CORPORATIZATION
PET PARENT AND
CONSUMER POWER
ATTRACTIVITY
CASH
Cost and availability of
cash is changing which
means that there is again
a cost associated to
taking risk = investors
start being more
selective
In this context,
attractivity of the AH
sector is increased,
especially in Pets, given
the track record of
resilience of the sector
vs. other investment
opportunities. We will
continue to see M&A
activity and R&D
investment in the sector.
It will continue to
increase in the AH, with
megatrends like online
24/7 availability
omnichannel, pet as
family member, steady
increase of pet plans /
pet insurance / data
driven personalization.
This creates value in the
market for agile
companies.
Despite the increased
cost of money, the
predictability and history
of AH and veterinary
business in the last
financial crises and the
early stage of vet clinics
consolidations in many
markets are strong
drivers for continued,
fast-paced
corporatization to
continue.

8. Animal health industry trends

9. Consultative
Customers
Transactional
Customers
Know what they want
Treat you as commodity
Digital interaction
Cost focus
Buy on price
Short term
Farms, trades, on-line
shop, independent, etc.
Share problems
Value your value
add
Digital & analogue
interaction
Advice focus
Buy on expertise
and trust
Long term
IL / CA Corporates
& GPOs
DECADE AGO
10% of customers were
one or the other, with the
vast majority somewhere
in the middle, willing to
pay a little extra for some
advice more want deeper
consultative
relationships
more buy
transactionally
TODAY
The middle is going away
as more customers are
moving to the extremes
Customers’ mindset change

10. Vet Landscape Evolution 2022-2025
Independent
Vet clinics
GPO’s
Corporates
 Companion Animals +++
 Equine consolidating ++
Market consolidation
UK >65%
Netherlands >50%
Germany; Belgium; France >25%
Spain - Poland - Czech
Success factor
aggregating demand
for smaller individual clinics to
stay competitive

11. Corporate landscape in Europe (data Q2 2022)
A number of large, well capitalized veterinary strategic accounts are expanding
Founded 2011 1999 2001 2015 2011 1987 2000
Ownership
EQT (Silverlake and
Nestlé)
Public Pets At Home BC Partners
Mars
Banfield/VCA
CVC Capital
Partners
Vimian
Surgeries
>2.200
(>900 UK)
>500 >440
>260 in UK &
250 outside UK
450 (+100 in UK) 374
4500 incl
1100 USA
Direct to
Pet owner
PDOL and
MyFamilyVet
Developing online
shop
Yes
VetUK eshop,
hired Amazon
managers
Pilot eshop in
Sweden
Highland
GER
Geographi
Presence
19 countries
Global player
UK, Netherlands,
Republic of
Ireland
UK only
UK, Australia,
New Zealand,
Italy, France
14 countries
Global player
UK only
9 countries
Global player
Planned
geo-
expansion
US, Portugal, Pol,
Czech
Spain, probably
Germany
Eastern Europe
Spain,
Germany
Poland,
Czech

12. Global trends in pet population
There are currently billions of pets worldwide
Families in the U.S., Brazil, EU and China alone account
for nearly 1 billion pets.
Pet ownership is rising globally, particularly in
millennial households, which tend to be smaller families
and have children later in life.
Expanding middle class is driving pet population
growth in emerging markets.
Pet ownership leads to improved human health
outcomes for people including better heart health, lower
levels of depression and anxiety, etc.

13. Brands & blockbusters Increasing brand value
 Limited market visibility below 50m€
 High competition density in all classes, in categories where in the
past there were small products only :
 Swine Vaccines : 22 brands > 10 m€ and several brands > 100m€
 Avian Vaccines: 38 brands > 10 m€ and several brands > 50m€
Blockbusters > $100m:
Zoetis, Elanco (and BI indirectly through their sales reporting)
qualify blocbkusters as products > $100m – 25 brands
 Zoetis : 8 (Apoquel, Simparica, Cytopoint, Draxxin, Revolution, Convenia,
Cerenia, Proheart)
 Merck : 2 (Bravecto, Porcilis PCV)
 Boehringer : 6 (Nexgard, Heartgard, Circoflex, Frontline, Ingelvac
PRRS, Vetmedin)
 Elanco : 8 (Seresto, Rumensin, Trifexis, Maxiban, Interceptor, Advantix,
Advantage, Galliprant)
700
170
20 6 2
1350
400
50 24 12
2+ m€ 10+ m€ 50+ m€ 100+ m€ 200+ m€
2008
2021
Number of brands
by category of revenue (Ceesa 2021)

14. Big trends in Animal Health
One Heath Concept
RUMA
Zoonozis
Feed the globe
Animal welfare
Compliance
Pet-humanization
Sustainability
Green Initiatives
Green sourcing
Cattle CO2 emission
Excrement environment
impact NL, DK, D
Technology innovation
Increased use of
telemedicine
Diagnostics
Tech. Devices
OnLine shops / e-commerc
PIMS
Inventory Management
Veterinary/Nurse
shortage
Automatized solutions
Retain employees
Increased cost

15. It is not the strongest of the
species that survives, nor
the most intelligent that
survives. It is the one that is
most adaptable to change.
Charles Darwin

16. Questions
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