Galenica continues to grow in the 2023 financial year
Ad hoc announcement pursuant to Art. 53 LR, Tuesday, 12 March 2024
The Galenica Group achieved strong growth with an increase in sales of 4.4% in the 2023 financial year and generated consolidated net sales of CHF 3,746.0 million. Adjusted for the extraordinary sales related to COVID-19 (self-tests, COVID-19 vaccinations and rapid tests) in the prior-year period, growth amounted to a substantial 5.0%. Adjusted1 EBIT increased by 0.4% to CHF 191.3 million, despite special factors in the amount of CHF 9.8 million. Without these special factors, adjusted1 EBIT would have increased by 5.5% to CHF 201.1 million. Thanks to this solid result, the Board of Directors will propose to the Annual General Meeting a dividend at the previous year’s level (CHF 2.20 per share). Galenica expects sales growth of between 3% and 5% for the 2024 financial year. Galenica expects adjusted1 EBIT to increase by between 8% and 11%. Adjusted for the special factors in the 2023 financial year in the amount of CHF 9.8 million, this results in a stable development of the adjusted1 EBIT margin (ROS) at 5.4%. Galenica strives for strong yet sustainable dividend growth and plans a dividend for 2024 at least at the previous year’s level. Detailed information in the Annual report 2023: Outlook for 2024
Highlights of the 2023 financial year:
- Around 138,000 customers made use of the healthcare services and consultations offered by Galenica pharmacies in 2023, 14% more than in the previous year.
- Compared to the previous year, demand for vaccinations in Galenica pharmacies increased by 18% (excluding COVID-19 vaccinations).
- Together with Redcare Pharmacy, Galenica established Switzerland’s leading online pharmacy, adding a pure only pharmacy to its offering.
- After more than three years of renovation work, the Amavita Bahnhof Apotheke opened its new retail premises at Zurich’s main station in November 2023.
- With the acquisition of Padma, Verfora further expanded its complementary medicine offering, thereby increasing its overall market share in the Swiss consumer healthcare market to 10.3%.
- The home care offerings in the Galenica network, in particular those of Lifestage Solutions, Bichsel and Medifilm, were linked more closely in the year under review and performed very successfully, with demand significantly higher than in the previous year.
- Galexis actively contributed to improving security of supply of medicines in Switzerland through its “Safety Stock” initiative.
- The Documedis® medical and pharmacy software was technically further developed in the reporting year. In 2023, over 270 million "Clinical Decision Support Checks" (CDS) were carried out on the basis of Documedis® solutions, 145% more than in the previous year.
Key figures of the Galenica Group 2023:
| (in million CHF) | 2023 | 20222 | Change |
|---|---|---|---|
| Net sales | |||
| Products & Care segment | 1,635.6 | 1,584.0 | +3.3% |
| Retail (B2C) | 1,385.6 | 1,360.7 | +1.8% |
| Local Pharmacies | 1,306.9 | 1,286.9 | +1.6% |
| Pharmacies at Home | 78.9 | 74.0 | +6.6% |
| Professionals (B2B) | 256.1 | 228.8 | +11.9% |
| Products & Brands | 177.1 | 157.7 | +12.3% |
| Services for Professionals | 78.9 | 71.1 | +11.0% |
| Logistics & IT segment | 3,077.0 | 2,933.3 | +4.9% |
| Wholesale | 2,952.7 | 2,820.4 | +4.7% |
| Logistics & IT Services | 144.0 | 130.7 | +10.1% |
| Corporate and eliminations | -966.6 | -928.8 | |
| Galenica Group | 3,746.0 | 3,588.5 | +4.4% |
| EBIT adjusted1 | |||
| Products & Care segment1 | 152.3 | 143.3 | +6.3% |
| Logistics & IT segment1 | 42.3 | 49.2 | -14.2% |
| Corporate and eliminations | -3.3 | -1.9 | |
| Galenica Group1 | 191.3 | 190.6 | +0.4% |
| Net profit from ongoing business activities adjusted1 | 161.6 | 157.2 | +2.8% |
1 Excluding the effects of IFRS 16 and IAS 19
2 Adjusted prior-year figures due to joint venture with Redcare Pharmacy (formerly Shop Apotheke Europe)
Added value for customers – offline and online
Galenica aims to offer customers the best experience across all channels, anytime and anywhere – online and offline. With its Amavita, Sun Store and the joint venture Coop Vitality bricks-and-mortar pharmacy formats and associated online shops, the new pure online pharmacy Mediservice in a joint venture with Redcare Pharmacy and a comprehensive portfolio of products and services, Galenica offers a range of products to meet a wide range of customer needs – from personal advice to online ordering.
In 2023, Galenica further expanded the range of advice and healthcare services in its pharmacies. In total, around 138,000 consultations and healthcare services were provided in pharmacies, an increase of 14% over the previous year.
Demand for vaccination services in pharmacies is also high. A total of 44,000 vaccine doses were administered in 2023, mainly against influenza and TBE, an increase of 18% (excluding COVID-19 vaccinations). These low-threshold offers not only meet customer needs, but also help to curb the rising cost pressure in the healthcare sector. This is also recognised by other service providers in the healthcare system – in 2023, for example, further health insurers added pharmacy services to their supplementary models and are offering reimbursement for them.
Healthcare services and consultations at Galenica
Galenica made further progress both offline and online in 2023. For example, the beta version of Amavita’s online shop, which is based on new technology, was launched. In line with Galenica’s Omni-Channel strategy, the online presence complements bricks-and-mortar points of sale and, above all, serves as a digital gateway to the Galenica network.
Focus 2024
The pharmacy network is being continuously optimised and expanded, also through investments in the shopfitting and consulting concept at physical points of sale. The online shops of the Galenica pharmacies are undergoing technical and qualitative improvements by gradually switching to a new technological platform and expanding the online offerings.
Strong partnerships create a broader offering and greater efficiency
In order to provide its customers with the best possible online offering, Galenica founded a joint venture with Redcare Pharmacy (formerly Shop Apotheke Europe) in spring 2023. This joint venture combines the business activities of the specialty pharmacy Mediservice and shop-apotheke.ch. The result is Switzerland’s leading online pharmacy. By partnering with Redcare Pharmacy, Galenica has teamed up with a strong international partner, enabling Galenica to build up a comprehensive, online-only offer.
In the area of logistics, Galenica also took another major step towards efficiency and sustainability in 2023. Together with Planzer, Galenica founded the joint venture Health Supply, which will bundle all transport services already provided by Planzer and other transport service providers on behalf of the Galenica Group. This will make it possible to reduce the complexity that has arisen so far from working with various transport service providers.
Focus 2024
Synergies will be exploited in a targeted manner in the joint venture Mediservice with Redcare Pharmacy to further drive growth. The joint venture Health Supply will in future develop, test and implement sustainable transport solutions, for example in the area of alternative propulsion systems for delivery vehicles. Galenica will also continue to pursue its strategy of connecting with strong and competent partners in the healthcare system, thereby creating added value for customers.
Home care offers make life easier for patients and relatives
Galenica also expanded its offerings in the home care sector in 2023. Also for economic reasons, service providers in the healthcare sector will have to ensure that patients are cared for at home for longer or can return home more quickly after a hospital stay in the coming years. This will reduce rising healthcare costs and improve patients’ quality of life in the long term.
The Home Care Coordination Service, which was set up at the start of 2023 by Mediservice, established itself and continued to develop during the financial year. The current focus is on people with Parkinson’s disease. This service helps patients and relatives to organise their treatment and to procure products and medical aids. Galenica gained initial positive experiences with established partnerships in 2023: this coordination service is a welcome relief for patients, relatives and the caring therapy network.
Focus 2024
In the home care sector, the collaboration between Bichsel, Lifestage Solutions, Mediservice, Medifilm and Emeda will be further expanded so that customers can benefit fully from the added value and new offerings, while also attracting new customers. In addition, the applications and platforms customers are familiar with will be bundled into a central digital platform. As of January 2024, Galenica acquired a 33% stake in Farmadomo Home Care Provider SA, the leading home care organisation in the field of clinical nutrition and blister packaging of medicines in the canton of Ticino. Galenica is thus also significantly expanding its home care offerings in Ticino.
Sustainability as a central pillar of entrepreneurial action
In 2023, Galenica made significant progress in achieving its sustainability goals. For example, the use of Clinical Decision Support Checks increased by 145% to an impressive 270 million in the reporting year. This is an important aspect in the area of patient safety.
Last year, a photovoltaic system was installed on the roof of the distribution centre in Niederbipp, which can cover up to a third of the centre’s electricity needs. This is an important step towards achieving the goals of reducing the greenhouse gas emissions of Galenica sites and promoting the use of renewable electricity sources.
Today more than ever, sustainability has become a central pillar of business activity. In a world of constant change, Galenica takes responsibility for its impact on the environment, society and the economy. What Galenica is doing in the area of sustainability and the specific successes it was able to achieve in 2023 can be found in the GRI Report and the Report on Non-Financial Matters (Art. 964a et seq. CO).
Focus 2024
Galenica will continue to prioritise the measures it has defined to achieve its sustainability goals. For example, further pilot projects will be launched with alternative propulsion systems for delivery vehicles, such as hydrogen, and the necessary charging infrastructure for company vehicles will be set up at relevant locations.
Further information can be found in the 2023 Annual Report.
Media and analyst conference at 10.30 a.m.Galenica will host its media and analyst conference on the 2023 annual results today, Tuesday, 12 March 2024, at 10.30 a.m. (Central European Time, CET). The conference will be held as a hybrid event. If you are unable to attend in person, you have the option of following the conference via webcast in German or English. Live webcast (code: 3620) Questions can also be asked via the webcast. The conference will be held in German. The documentation will be available on the websitefrom 10 a.m. on 12 March 2024. The recording will be available at http://www.galenica.com after the conference. |