14 July 2025

ECO Animal Health Group plc

("ECO" or the "Company")

Results for the year ended 31 March 2025

ECO Animal Health (AIM: EAH), a rapidly growing global animal health company with a portfolio of marketed veterinary products and a maturing proprietary R&D pipeline, announces its audited results for the year ended 31 March 2025.

HIGHLIGHTS

Financial

·    Revenue in-line and adjusted EBITDA in-line with revised market expectations following strong second half to the year

·    Group sales of £79.6m (2024: £89.4m)

o  North America revenue growth of 16%, contributing a growing share of Group revenues

·    Constant currency revenue £81.6m (2024: £89.4m)

·    Gross margin increased to 45% (2024: 42%), due to disciplined cost control and pricing, and geographical mix favouring high margin markets

·    Adjusted EBITDA of £7.3m (2024: £8.0m), in line with consensus

·    Adjusted EBITDA margin improved to 9.2% (2024: 9.0%)

·    Research and development expenditure increased to £8.6m (2024: £8.3m), as planned

·    Profit before tax increased to £4.0m (2024: £3.0m), driven in part by disposals of non-core assets

·    Earnings per share increased by 61% to 2.49p (2024: 1.55p)

·    Net cash at the end of the period £25.0m (2024: £22.4m), reinforcing the Group's strong balance sheet with 40% of cash held outside China (2024: 36%)

·    RCF facility (£10m) and overdraft (£5m) available and undrawn

Operational

·    Aivlosin® demand continues to be robust in key markets, with particular growth in North America

·    Regulatory dossier for mycoplasma poultry vaccine ECOVAXXIN® MS submitted to EMA, with further submissions expected in next 12 months

·    Broader progress across R&D pipeline, with up to 9 products expected to receive US and EU approval in the next 5 - 6 years

 Post-year end highlights

·    Revenue in USA and China out performing budgets

·    Gross margins strengthening

·    South East Asia strong recovery with order book supporting outlook

·    Continuing operational improvement including further ERP system roll-out across subsidiaries

·    Launch of share buy-back to support future employee share incentives vesting

David Hallas, Chief Executive Officer of ECO Animal Health Group plc, commented: "We are pleased to report another robust financial year for ECO Animal Health, with favourable pricing, geographic mix and disciplined cost control driving an improvement in gross margin and continued cash generation. We've achieved this despite unusually challenging trading and market conditions, including lower disease incidence in some regions, currency headwinds and macroeconomic and political uncertainty."

"ECO is focused on advancing its R&D pipeline and the Company has continued to make targeted investment to position this as the engine of future growth. We are delighted to have submitted the dossier for Mycoplasma poultry vaccine ECOVAXXIN® MS, with further submissions expected in the next 12 months. This lays the foundations for multiple planned vaccine launches from 2026 onwards, which we believe will underpin the next phase of growth from our pipeline, and we look forward to updating the market on progress."

The information contained within this announcement is deemed by the Group to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ("MAR") as it forms part of United Kingdom domestic law by virtue of the European Union (Withdrawal) Act 2018. Upon the publication of this announcement via a Regulatory Information Service ("RIS"), this inside information is now considered to be in the public domain.

Forward-Looking Statements

This announcement contains certain forward-looking statements. The forward-looking statements reflect the knowledge and information available to the Company and Group during preparation and up to the publication of this announcement. By their very nature, these statements depend upon circumstances and relate to events that may occur in the future and thereby involving a degree of uncertainty. Therefore, nothing in this announcement should be construed as a profit forecast by the Company or Group.

Contacts

CHAIRMAN AND CHIEF EXECUTIVE OFFICER'S COMBINED STATEMENT

FOR THE YEAR ENDED 31 MARCH 2025

ECO strives to provide best in class, scientifically validated, ethical solutions to optimise the health, productivity and wellbeing of pigs and poultry.

Overview

We are pleased to update on another positive year for ECO, with continued investment in the Group's late-stage pipeline and further progress across our core commercial operations. This has been achieved despite challenging trading and market conditions, including lower disease incidence in some regions and currency headwinds.

We are particularly pleased to have advanced our regulatory and commercial readiness for our next generation of products. In particular, we were pleased to submit our first poultry vaccine Marketing Authorisation Application to the European Medicines Agency. This is an important milestone in our journey to advance our late-stage product pipeline to commercialisation, which we are targeting from 2026 and we believe will deliver significant long-term value to investors.

Strong product sales and robust profitability

Total revenues for the period were £79.6m (2024: £89.4m), reflecting a strong performance in the second half and momentum in key growth markets. Aivlosin®, the Group's patented antimicrobial used under veterinary prescription for respiratory and gastrointestinal disease in pigs and poultry, remains our flagship product and it has continued to grow in North America, Latin America and India. We secured new and renewed marketing authorisations in a number of geographies and saw a stabilisation of pork prices in major markets.

Sales of Aivlosin® were £72.9m (2024: £82.4m. Ecomectin® and all other non-core products contributed £6.7m (2024: £7.0m).

Gross margin was 45.1% (2024: 42.1%). Adjusted EBITDA was £7.3m (2024: £8.0m). The Group remained cash generative, maintaining a strong cash position across core regions.

The North America market grew by 18% at constant exchange rates, demonstrating another strong year of growth, and the strength of our market proposition in that region.

China had a subdued start but recovered with the six months to 31 March 2025 3% ahead of the prior year on a constant currency basis, benefitting from both strong disease demand and PRRSv eradication programmes.

South and South East Asia was down due to the loss of a major customer in Thailand. However we saw good growth in the nascent markets of Bangladesh, Philippines and Pakistan as we continue to expand our sales to new geographies.

Research and development pipeline and regulatory progress

We continued to make progress across our proprietary pipeline during the year, with R&D spend of £8.6m (2024: £8.3m), reflecting sustained investment in late-stage vaccine assets.

In March 2025, ECO submitted its first EU Marketing Authorisation Application to the European Medicines Agency for ECOVAXXIN® MS, a poultry vaccine targeting Mycoplasma synoviae. This represents a significant milestone for the Group, with commercial launch targeted for 2026. The submission complements our ongoing regulatory work in the US and Europe for ECOVAXXIN® MG, the sister vaccine against Mycoplasma gallisepticum.

We were pleased to host an R&D Day on March 13^th 2025, where the leadership team presented a detailed update on the Group's innovation strategy and progress across the vaccine pipeline. Details can be found at: https://ecoanimalhealth.com/investors/reports-presentations/

Disposal of non-core assets

As part of our ongoing focus on core species and geographies, the Group completed the divestment of a number of non-core product lines. These included the equine product Ecomectin® Horsepaste, sold to ACME Drugs S.r.l. for €1.3m (£1.1m) in April 2024, as well as parasite treatment licences for sheep and cattle in Southern Africa, sold for a total of £0.5m in February 2025.

These disposals have allowed ECO to continue streamlining its focus and reinvesting proceeds into its R&D pipeline and share buyback programme to cover the potential vesting of employee share incentives.

People

On behalf of the Board, we would like to thank our global team for their continued dedication, professionalism and hard work during the year. Our people remain at the heart of ECO's success, and we were pleased to see a second year of improved results in our global engagement survey, reflecting the positive impact of new wellbeing, training and workplace initiatives.

We were also proud to again receive the highest Environment, Social and Governance (ESG) rating from Integrum ESG, a provider of independent ESG ratings. This underlines our commitment to continually improving our governance and prioritising social and environmental concerns in all aspects of the business.

During the period, we further strengthened the Group through targeted hires across science, development and commercial functions.

Governance and leadership transition

On 31 March 2025, Dr Andrew Jones retired as Chairman after six years in the role. We would like to thank Andrew for his leadership and his significant contributions to ECO's development and growth.

Following a planned succession process, we are pleased to confirm that Dr Joachim Hasenmaier has now assumed the role of Chairman. Joachim brings over two decades of international experience in animal health and has already made a strong contribution to the Board since joining in February 2024.

Dividend

ECO's current investment strategy is to reinvest to support its extensive and deep R&D pipeline, which the Board believes will deliver significant revenue and profit growth and long-term shareholder value. As such no dividend is recommended in respect of the year ended 31 March 2025.

Outlook

Aivlosin® continues to perform well in high-growth territories, and the Group remains well positioned to take market share in North America and Latin America. Trading continues to follow a seasonal pattern and remains second-half weighted. We are encouraged by improving market conditions in China.

The Group is focused on executing its commercial and R&D strategies, with multiple vaccine launches targeted from 2026. We look forward to updating shareholders as we continue to build a global leader in sustainable animal health.

As of the end of our financial year, the global macroeconomic environment was in a state of flux due to the evolving geopolitical and tariff landscape. This has had no material impact on our financial results. International trade tariffs in veterinary pharmaceuticals have been less affected than other sectors, at least at the time of writing. Post-year end we altered our pricing, which is expected to mitigate the current tariff impacts in North America. We remain vigilant to potential changes and continue to assess any implications on our pricing and global customer relationships. The Group will take appropriate action should the situation change and is actively exploring all possible solutions to mitigate any future disruption.

Dr Joachim Hasenmaier                                                          David Hallas,

Chairman                                                                                   Chief Executive Officer

REPORT OF THE CHIEF FINANCIAL OFFICER

FOR THE YEAR ENDED 31 MARCH 2025

Introduction

I am pleased to report a strong year with improving profits. Operationally the business' margins improved substantially and this translated into a significantly stronger cash balance at the end of the year.

The improving margins and resulting cashflow allowed strong progress to be made with the Group's new product developments and a significant milestone was reached during the year with the submission of the first vaccine for marketing approval.

The finance function led the implementation of a new ERP system during the year; the NetSuite project was delivered on time, within budget and without interruption to the normal routines in the business and financial reporting. Efficiencies have been delivered during this first year and more improvements are expected. This is something I am very proud of and demonstrates the Group's values in action.

Trading

Previous years have seen a pattern of stronger trading in the second half of the year. This is associated with disease prevalence in pigs during the northern hemisphere winter. This pattern of trading has continued in the year ended 31 March 2025 with the second half accounting for 58% (2024: 57%) of the annual revenue. The main contributors to the second half weight this year were China/Japan with a 64% H2 weight and North America also with a 60% H2 weight.

The geographical analysis of revenue corresponding to the Group's operating segments is as follows:

Overall all markets showed revenue declines year on year except for North America which has continued to grow strongly. As noted in our interim report, the exchange rates in the first half proved to be a headwind; in the second half of our financial year the exchange rates were more consistent with the prior year. The geographical analysis of revenue on a constant currency basis is as follows:

China revenue on a constant currency basis declined by 8% (£1.6m) but this decline was compensated by strong trading in Japan, an increase of 19% (£0.5m) year on year. However, China showed signs of improved performance in the second half being 3% ahead of prior year for the 6 months to 31 March 2025 on a constant currency basis. China's second half performance was strong driven by disease demand for Aivlosin in swine production - porcine reproductive and respiratory disease syndrome virus ("PRRSv") control and eradication programmes. This demand has continued since the year end.

At £21.4m (constant currency £21.9m), North America again grew strongly exceeding its previous highest revenue of £18.5m in the year ended 31 March 2024. The strength in this market was also disease driven - PRRSv as well as enteric disease resulted in demand for Aivlosin reaching record levels.

South and South East Asia revenue declined 30% on a constant currency basis. This was principally due to the loss of a major customer in Thailand and a slowdown in India and Vietnam. However, the year saw good growth in the nascent markets of Bangladesh, Indonesia, Malaysia, Philippines and Pakistan as we seek to access new markets and re-enter markets where previous marketing authorisations had expired and been re-issued.

Latin America comprises Brazil and Mexico (where the Group operates through wholly owned subsidiaries) and a group of other countries in South America where trade is conducted through exclusive distribution arrangements. Brazil on a constant currency basis was broadly flat year on year. Mexico performed poorly during the year; excess stock levels in the distribution channels and generic price pressure created some difficulties. Colombia had a poor year resulting from some rearrangement of the distribution arrangements which have now been resolved. Argentina
at £2m represented a 39% increase in revenue.

The European market segment is dominated by sales into Spain - £1.5m (2024: £1.8m) and Poland - £1.3m (2024: £1.3m). Spain accepted the resumption of sales of Aivlosin® Pre-Mix formulation in the period, reversing a hiatus in sales of this product in the year ended 31 March 2024. Sales in the UK at £1.1m (2024: £0.9m) is consistent with prior year.

Gross margins were 45.1% in the year ended 31 March 2025 (2024: 42.1%). This improvement in gross margins arose despite the foreign exchange impact of Sterling compared with the US Dollar and the Chinese Yuan. As noted above, on a constant currency basis the revenues for the year are £81.6m; recalculating the gross margin based on constant currency revenue would provide a gross margin of 46.2%. As anticipated in our interim report for the six months ended 30 September 2024, there was a strong recovery in the gross margins in the second half of the financial year - this was driven by the second half weighting and geographical mix favouring high margin markets.

The Group hedges its largest currency exposures through a layering of four forward contracts covering the four successive financial quarters and a portion of the anticipated US Dollar generation. On a quarterly basis these forward contracts are supplemented by additional layers, thus providing an averaging effect to the US Dollar- Sterling exchange rate. The hedging policy provides protection to net profit, earnings per share and cash but has no effect on gross profit or gross margin because the gains and losses are accounted for in finance costs.

Administrative expenses, at £28.7m (2024: £29.4m), show a 2% improvement; personnel costs reduced by 10% as a consequence of lower financial performance related bonus accruals.

All R&D programmes progressed well during the year, and the milestone of dossier submission to the regulatory authorities for our first mycoplasma poultry vaccine was reached - ECOvaxxin® MS. The group expects further submissions in the next and following years supporting the targeted investment in innovative vaccine technology. The strong market potential and technical success supports the capitalisation of late stage R&D expenditure which showed no indications of impairment. At the current time the Group capitalises expenditure on ECOVaxxin® MG and ECOVaxxin® MS as well as a long acting Florfenicol based anti-infective, ECOFlor, for swine respiratory disease.

Total cash expenditure on R&D (inclusive of that amount capitalised) in the year was £8.6m (2024: £8.3m). The total expenditure on R&D can be analysed as follows:

Overall R&D expenditure in the year was 4% higher than the prior year, reflecting increased spending on clinical stage assets. Expenditure on late stage assets (capitalised items) was 53% of total expenditure compared with 49% in the prior year. This R&D programme continues to be funded from the Group's cashflow and is 11% of revenue (2024 - 9%) expenditure ensures that all programmes (late, mid and early stage) receive the required funding to advance them according to plan. The R&D programme was described in some detail during the Group's R&D day held in March 2025.

More details of this presentation, as well as a video recording of the meeting are available on the Group's website.

EBITDA is a key performance measure for the Group; the removal of amortisation, depreciation and other non-cash charges to profit provides a good indication of the underlying cash trading performance of the business. The charge for amortisation of intangible assets in the year was £1.2m (2024: £1.2m). The adjusted EBITDA, operating profit excluding exceptional items, share based payments, depreciation, amortisation and foreign exchange gains and losses, at £7.3m (2024: £8.0m) was slightly above market expectations and was achieved despite challenging trading conditions and higher R&D expense by tight overhead costs control and strongly improved gross margins. Furthermore, the adjusted EBITDA margin, excluding foreign exchange movements and expressed as a percentage of revenue in the period, was 9.2% in the year ended 31 March 2025 compared with 9.0% in the year ended 31 March 2024.

Profit before income tax was higher in the year ended 31 March 2025 at £4.0m (2024: £3.0m). An important contributor to this increase was the exceptional gain during the year.

The exceptional items were profits on disposal of the non-core product line Ecomectin horse paste to an Italian distributor and parasite treatment licences for Southern Africa.

The Group's effective tax rate was 34% for the year ended 31 March 2025 (2024: 32%). Factors causing the effective rate to be greater than the headline UK rate of 25% are the withholding tax suffered on intragroup dividends received from China and the Group's policy of not recognising a deferred tax asset in respect of losses in the Group's parent company. The 2 percentage-point increase to 34% from 32% in the prior year is due to the more-restrictive R&D tax credit arrangements now in effect in the UK.

Earnings per share (EPS) has improved from 1.55 pence in the year ended 31 March 2024 to 2.49 pence per share in the year ended 31 March 2025 and diluted EPS has improved strongly from 1.52 pence in the year ended 31 March 2024 to 2.43 pence per share in the year ended 31 March 2025, due to improved gross margins, good cost control, and the exceptional gain described earlier.

Operating cash inflow before movements in working capital was £7.6m (2024: £7.7m). Continuing close management of working capital - in particular inventories and receivables - has resulted in operating cash flow of £12.1m (2024: £10.5m). Jurisdiction of cash balances were as follows:

The Group repatriates cash from China by annual dividend declaration; this is subject to withholding taxes of 5% and is paid according to the relevant shareholdings. On a day-to-day basis, the Board considers the cash held in the Group's joint venture subsidiary in China to be unavailable to the Group outside of China; accordingly, treasury management decisions and funds available for investment in R&D are based upon the cash balances outside of China.

During June 2024, two dividends totalling £2.8m (post withholding tax) were received from China. In addition, during June 2025, two dividends totalling £3.4m (post withholding tax) were received from China.

The Group's committed banking facilities remain at £15.0m, being a £5.0m overdraft facility and a £10m revolving credit facility. These facilities expire on
30 June 2026 and were undrawn as at 31 March 2025.

The Group's inventory balance reduced to £14.6m on 31 March 2025 from £17.0m on 31 March 2024. This reduction was principally in finished goods and reflected the strong end to the year in China and the USA. Overall inventory days the annual cost of sales were steady at 122 days against 120 days for the prior year.

Trade receivables decreased from £32.2m at 31 March 2024 to £28.5m on 31 March 2025 with average debtor days (expressed as an average of the annual revenue) steady at 131 days (prior year: 131 days).

Simplified presentation of the Group

In response to certain stakeholder requests to provide a simplified description of the Group's performance we present the following analysis.  The ECO Group can be thought of in three components, the first, a core trading business which manufactures and sells its products worldwide through wholly owned subsidiaries or direct to market.  This applies to all territories except China where ECO operates through a 51% owned subsidiary. Cash returns from this China subsidiary is by way of a dividend.

Accordingly, the second component to this analysis of the Group is an investment in a China business that pays the Group an annual dividend.  The third component of this analysis is an R&D business which employs a team of people undertakes studies and trials through third parties and has developed a body of intellectual property with rich potential for high future returns. 

With these three components in mind one can disaggregate the Group results using already disclosed information, as follows:

ECO Animal Health Group plc - Disaggregation analysis continued

*The Group owns 51% of ECO Biok with 49% owned by a minority shareholder. Details of ECO Biok are disclosed in note 15.

By performing this analysis for prior years the following comparative performance for the core group can be set out as follows:

As disclosed previously the dividend from the China 51% subsidiary in respect of the year ended 31 December 2024 has been received at a value of £2.6m. The dividend received in the financial year ended 31 March 2025 was comparatively lower than prior years and the subsequent year because it reflected the year in which the new factory in China was built.

In summary the Group can be described as a core trading business which has delivered consistent (and rising) profitability in the last three years approaching £10m, rising cash generation and cash balances and which receives a consistent annual dividend of £2m - £3m and from which a new product development programme is being funded.

Christopher Wilks

Chief Financial Officer

CONSOLIDATED INCOME STATEMENT

FOR THE YEAR ENDED 31 MARCH 2025

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 MARCH 2025