Galenica on track with sales growth
Ad hoc announcement pursuant to Art. 53 LR, Thursday, 23 May 2024
The Galenica Group made a good start to the new year with sales growth of 4.8% to CHF 1,255.5 million in the first four months of 2024. All Service Units performed well and contributed to the good sales performance. The sales growth is based on a positive development of the pharmaceutical market with growth of 4.0% (IQVIA, Pharmaceutical Market Switzerland, YTD April 2024). Compared to the prior-year period, the first four months of 2024 included an additional day of sales, with an estimated positive impact of around 1% on sales growth. Significantly increased sales of generics and biosimilars dampened growth. This development was driven by the measures for the promotion of generics and biosimilars that entered into force on 1 January 2024, including an increase in the deductible if patients prefer a more expensive original medicine. Galenica pharmacies increased the generic substitution rate from 75.2% at the end of 2023 to 80.5% in the first four months of 2024, thus making a significant contribution to curbing rising healthcare costs.
2024 outlook confirmed
Galenica confirms its outlook 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 equal to the previous year’s level.
Net sales of the Galenica Group January–April 2024:
| (in million CHF) | Apr2024 | Apr2023 | Change |
|---|---|---|---|
| Products & Care segment | 542.6 | 519.1 | +4.5% |
| Retail (B2C) | 455.9 | 437.8 | +4.2% |
| Local Pharmacies | 430.2 | 412.5 | +4.3% |
| Pharmacies at Home | 25.8 | 25.3 | +2.1% |
| Professionals (B2B) | 91.2 | 85.2 | +7.1% |
| Products & Brands | 63.8 | 60.7 | +5.2% |
| Services for Professionals | 27.4 | 24.5 | +11.7% |
| Logistics & IT segment | 1,036.1 | 981.1 | +5.6% |
| Wholesale | 991.6 | 940.5 | +5.4% |
| Logistics & IT Services | 52.2 | 46.8 | +11.6% |
| Corporate and eliminations | -323.2 | -302.2 | |
| Galenica Group | 1,255.5 | 1,198.0 | +4.8% |
1 Adjusted, excluding the effects of IFRS 16 and IAS 19
“PRODUCTS & CARE” SEGMENT
The “Products & Care” segment generated net sales of CHF 542.6 million (+4.5%) in the first four months of the 2024 financial year. Of this, CHF 455.9 million (+4.2%) was attributable to the “Retail” business area (B2C), with the “Local Pharmacies” sector contributing CHF 430.2 million (+4.3%, excluding Coop Vitality) and the “Pharmacies at Home” sector contributing CHF 25.8 million (+2.1%, excluding Mediservice).
The “Professionals” (B2B) business area increased net sales to CHF 91.2 million (+7.1%), with the “Products & Brands” sector contributing CHF 63.8 million (+5.2%) and the “Services for Professionals” sector contributing CHF 27.4 million (+11.7%).
“Retail” business area (B2C)
- The pharmacy network (excluding Coop Vitality) continued to develop dynamically since the beginning of the year: five new pharmacies were acquired, one new pharmacy was opened and one pharmacy was closed. The expansion effect on sales growth in the “Local Pharmacies” sector therefore amounted to +1.0%.
- Adjusted for this expansion effect, the Galenica pharmacies grew organically by +3.3%, thanks to high demand for medication sales and slightly higher demand for the rest of the range.
- The “Pharmacies at Home“ sector grew by a pleasing 2.1% despite various adjustments of the offerings. The growth drivers were Bichsel Homecare in the clinical nutrition at home business and the Amavita and Sun Store web shops. Compared to the same period last year, demand for vaccinations in Galenica pharmacies increased by 43% (excluding COVID-19 vaccinations).
- Around 62,000 customers made use of the healthcare services and advice offered by Galenica pharmacies in the first four months of 2024, an increase of 31% compared to the prior-year period.
By way of comparison:
- Drug sales from bricks-and-mortar pharmacies in Switzerland (prescription [Rx] and OTC products) grew by 3.7% in the reporting period (IQVIA, Pharmaceutical Market Switzerland, YTD April 2024).
- Sales of medications from mail-order pharmacies in Switzerland (prescription [Rx] and OTC products) increased slightly year on year by +0.4% (IQVIA, Pharmaceutical Market Switzerland, YTD April 2024).
- The non-medications segment of the consumer healthcare market developed in the reporting period slightly positive with +1.1% (IQVIA, Consumer Health Market Switzerland, YTD April 2024, Nutrition, Personal Care, Patient Care, excluding COVID-19 self-tests, excluding OTC).
“Professionals” business area (B2B)
- Verfora continued to grow in the first four months and was able to expand its market position. Organic growth in the “Products & Brands” sector, excluding the expansion effect (+1.8%) due to the acquisition of Padma in 2023, amounted to a pleasing 3.4%.
- Verfora's export business developed very positively with growth of 19.5%. This pleasing result was driven by higher demand for Verfora products, such as Perskindol® in Asia, as well as earlier product deliveries abroad compared to the previous year.
- Due to destocking in the market, Verfora's Swiss business declined slightly in organic terms by -0.5%. By contrast, market sales of Verfora products in pharmacies and drugstores grew faster than the market as a whole at 6.9% (IQVIA, Consumer Health Market Switzerland, YTD April 2024), enabling further market share gains.
- Growth drivers in the “Services for Professionals” sector (+11.7%) were once again Lifestage Solutions and Medifilm in the business with nursing homes and home care organisations.
By way of comparison:
- The consumer healthcare market grew by 1.9% year on year (IQVIA, Consumer Health Market Switzerland, YTD April 2024, excluding COVID-19 self-tests).
“LOGISTICS & IT” SEGMENT
The “Logistics & IT” segment achieved net sales of CHF 1,036.1 million (+5.6%) in the first four months of the 2024 financial year. Of this, CHF 991.6 million (+5.4%) was attributable to the “Wholesale” sector and CHF 52.2 million (+11.6%) to the “Logistics & IT Services” sector.
“Wholesale” sector
- The pharmacy customer segment recorded growth of 4.5% and was thus above market growth.
- At 9.4%, the highest growth was achieved in the physicians segment, which enabled market shares to be gained.
By way of comparison:
- The overall pharmaceutical market grew by 4.0% (IQVIA, Pharmaceutical Market Switzerland, YTD April 2024).
- The physicians segment grew by 7.0% (IQVIA, Pharmaceutical Market Switzerland, YTD April 2024).
- The pharmacy segment grew by 3.4% (IQVIA, Pharmaceutical Market Switzerland, YTD April 2024).
“Logistics & IT Services” sector
- Alloga further expanded its business in the first quarter. In addition, all customers were migrated to the new ERP solution, thus completing the project.
- HCI Solutions also performed well. As of the end of April, around114 million CDS checks had been performed (+23%), an important contribution to patient safety.
Additional information on sales figures and further information can be found in the sales presentation.