Annual results of the Galenica Group 2018
Tuesday, 12 March 2019
Galenica 2018: results guidance exceeded – dividend increased
In a challenging market environment, the Galenica Group increased its consolidated net sales by 0.8% to CHF 3,165.0 million in 2018. Both organic growth in all Business sectors and the expansion of the pharmacy network contributed to this solid performance. However, growth was hampered significantly by additional and higher than originally announced price reduction measures for medications by the authorities.
EBIT increased and profitability sustainably improved
Thanks to targeted acquisitions, new products and sustainable measures to improve efficiency, Galenica was able to surpass its announced results for 2018:
the operating result (EBIT) excluding the effects of IAS 19 rose by 3.9% to CHF 154.1 million. Excluding one-off effects from 2017 (CHF 7.0 million), EBIT even rose by 9.1% on a comparable basis. Return on sales (ROS) improved from 4.7% to 4.9%.
The reported net profit of the Galenica Group is CHF 147.7 million, an increase of 24.2%. This includes two one-off, non-cash effects in connection with the new Galenica Pension Fund and the release of provisions for deferred taxes that are no longer required. Excluding these one-off effects, net profit would be CHF 124.7 million, corresponding to an increase of 0.2%. On a comparable basis, i.e. excluding the one-off effects in the previous year (CHF 10.6 million), the increase would even be 9.5%.
Accordingly, the Board of Directors of the Galenica Group will propose a 3% higher dividend than the prior year of CHF 1.70 per share to the Annual General Meeting on 2 May 2019 (previous year: CHF 1.65).
Key figures for the Galenica Group 2018
(in million CHF)
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Net profit adjusted3)4)5)
1) 2017 adjusted due to restatement IFRS 15
2) 2017 including one-off effects of CHF 7.0 million
3) Excluding the effects of IAS 19
4) 2017 including one-off effects of CHF 10.6 million
5) 2018 excluding one-off effect of CHF 56.2 million from the release of provisions for deferred taxes
Despite the announced further significant price reductions on medications, Galenica expects consolidated net sales in 2019 to be at least at prior-year level, with sales growth of 1% to 3% in the Health & Beauty segment and sales at around prior-year-level in the Services segment.
At the same time, Galenica aims to further increase its comparable operating result EBIT (excluding the effects of IAS 19 and IFRS 16) by between 2% and 5%, and expects to propose a dividend of at least at prior-year level to the 2020 Annual General Meeting.