2020 half year results of the Galenica Group

The Galenica Group generated consolidated net sales of CHF 1,690.4 million in the first half of 2020.
The growth of 5.6% was driven in particular by the Services Business sector, at +7.9%, but positive contributions were also made by the Retail and Products & Brands Business sectors, up 2.9% and 1.0% respectively. This was achieved despite lower sales triggered by the nationwide lockdown, which had a particularly adverse effect on pharmacies in high-frequency locations, as well as the temporary closure of perfumery departments mandated by the authorities.
By way of comparison, the Swiss pharmaceutical market as a whole increased by 2.9% in the first half of 2020 (IQVIA, Pharmaceutical Market Switzerland, first half of 2020).

Galenica posted a solid result in spite of the additional expenses associated with COVID-19.
The operating result (EBIT) of CHF 82.3 million reached practically the same level as the previous year's period (CHF 82.8 million). On a comparable basis, that is excluding the effects of accounting standards IFRS 16 (Leases) and IAS 19 (Employee Benefits), the adjusted operating result improved by 3.0% year-on-year to CHF 83.6 million.
Adjusted return on sales (ROS) decreased slightly to 4.9% (prior year period: 5.1%), driven by strong sales growth recorded in the Services Business sector with lower margins and COVID-19 impacts.
Net profit improved by 2.2%, from CHF 64.9 million to CHF 66.3 million.

^{1) Excluding the effects of IAS 19 and IFRS 16. Details on the adjusted key figures are provided in the half year report 2020 of the Galenica Group from page 27 onwards.}

Based on developments since mid-May 2020, Galenica expects that the situation at high-frequency locations such as airports and train stations will only slowly return to normal in the months ahead. At the same time, Galenica expects the positive development in the Services Business sector to continue, while the recent acquisitions made in the Products & Brands Business sector and the expansion planned in Retail will also support sales in the second half of the year. Based on these considerations, Galenica is raising its sales forecast for financial year 2020 to +2% to +5%.

In view of the results achieved in the first half of the year and the ongoing COVID-19 impacts, the Group now expects an adjusted operating result (EBIT, excluding the effects of IFRS 16 and IAS 19) approximately on prior year level.

Meanwhile, Galenica reaffirms its intention to propose a dividend to the 2021 Annual General Meeting that is at least equal to the prior year level.