Galenica achieves solid growth in a challenging market environment
Galenica AG / Key word(s): Half Year Results Press release Galenica Group sales grew by 2.6% to CHF 1,900.0 million in the first half of 2024. Both the “Products Care” segment and the “Logistics IT” segment contributed to the sales growth, with growth of 3.1% and 3.0% respectively. As a result, Galenica Group sales developed more dynamically than the market. Compared with the pharmaceutical market, which grew by 1.7% (IQVIA, Pharmaceutical market Switzerland, first half of 2024) and the Consumer Healthcare market, which declined by 0.2% (IQVIA, Consumer Health Market Switzerland, first half of 2024), the Galenica Group gained market share with growth of 2.6%.
Following the 4.8% increase in Galenica Group sales at the end of April 2024, growth slowed sharply in the months of May, and particularly June 2024. While the constellation of sales days at the end of April was favourable compared to the same period of the previous year, with an estimated positive impact of around 1% on sales growth, at the end of June 2024 this effect was negative compared to the previous year, which dampened growth accordingly. By the end of the year, this effect will be positive again.
A cold and rainy early summer also meant that demand for seasonal products such as sunscreen, outdoor and allergy products was exceptionally low in May and June 2024. In addition, significantly increased sales of generics and biosimilars dampened growth. This development was driven in particular by the increase in the deductible from 20% to 40%, which came into force on 1 January 2024, if patients prefer another medicine that is more than 10% more expensive for the same active ingredient. In the first half of 2024, Galenica pharmacies increased the generic substitution rate from 75.2% at the end of 2023 to 80.8%, thus making a significant contribution to curbing rising healthcare costs.
Reported EBIT increased by 10.7% to CHF 102.4 million. The adjusted1 EBIT of the Galenica Group, i.e. excluding the effects of the IFRS 16 (Leases) and IAS 19 (Employee benefits) accounting standards, increased by 9.9% to CHF 99.1 million. In the previous year, earnings were negatively impacted by special factors in the amount of CHF 9.8 million. Adjusted for these special factors, EBIT would have declined slightly in the first half of 2024 by 0.9%. The flat EBIT development was due in particular to the lower-than-expected sales growth. In addition, higher expenses in connection with the further expansion of the IT infrastructure to implement the “Omni-Channel” strategy as well as temporary efficiency losses and additional burdens due to the modular introduction of the new ERP (enterprise resource planning) system at Galexis that started at the beginning of the year had a negative impact on the result.
2024 Guidance confirmedGalenica expects significantly stronger growth in the second half of 2024 than in the first half of the year. Galenica therefore confirms its guidance for the 2024 financial year with sales growth of between 3% and 5%, EBIT1 growth of between 8% and 11% and a dividend at least at the previous year’s level.
Highlights of the first half of 2024
Key figures of the Galenica Group in the first half of 2024
Detailed information in the half year report 2024:
1) Excluding the effects of IFRS 16 and IAS 19 (details of the adjusted key figures in the half year report 2024)
Further information can be found in the Galenica Group half year report 2024.
Dates for the diary
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Language: | English |
Company: | Galenica AG |
Untermattweg 8 | |
3027 Bern | |
Switzerland | |
Phone: | +41 058 852 81 11 |
E-mail: | info@galenica.com |
Internet: | https://www.galenica.com |
ISIN: | CH0360674466 |
Listed: | SIX Swiss Exchange |
EQS News ID: | 1961109 |
End of Announcement | EQS News Service |
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1961109 06-Aug-2024 CET/CEST