Sales guidance exceeded – stable earnings outlook

Ad hoc, Thursday, 21 January 2021

The Galenica Group generated consolidated net sales of CHF 3,479.8 million in financial year 2020, constituting strong sales growth of 5.4% year-on-year. Galenica therefore slightly exceeded the communicated sales guidance of +2% to +5%.

Strong sales growth despite COVID-19

The Services Business sector made a particularly high contribution to the strong sales growth, at +7.8%, influenced by both extraordinarily high volumes in the spring due to COVID-19 and market share gains in wholesale.

Sales in the Retail Business sector were heavily affected by the national lockdown and further measures ordered by the authorities in the course of the year: pharmacies at high-frequency locations in particular suffered at times massive declines in sales. However, thanks to dynamic expansion, sales rose 2.7%.

Development of sales in the Products & Brands Business sector varied widely year-on-year: sales in the cold and beauty product categories as well as travel-related and ibuprofen products were very negatively impacted by COVID-19. Additional sales from hygiene and prevention products only partially compensated for these losses. The sales growth of +9.4% is based in particular on new distribution agreements and the successful expansion of the product portfolio.

At the same time, Galenica was able to increase its very high generic substitution rate of around 70% to 72%. The Galenica Group’s pharmacies therefore contributed more than CHF 63 million1) to reducing healthcare costs in 2020.

Stable earnings outlook

Despite the negative effects of COVID-19, thanks to pleasing sales growth, Galenica is confi-dent of achieving an adjusted operating result (EBIT, excluding the effects of IFRS 16 and IAS 19) in 2020 that is approximately at prior year level, as previously announced. Consequently, the outlook regarding proposal of a dividend of at least at the same level as the prior year (CHF 1.80 per share) to the 2021 Annual General Meeting remains unchanged.

Net sales of the Galenica Group 2020:

 
 

(in million CHF)

2020

2019

Change

Segment Health & Beauty
- Retail
- Products & Brands


1,671.4
1,556.1
111.7

1,620.8
1,515.7
102.1

+3.1%
+2.7%
+9.4%

Segment Services

2,631.7

2,441.0

+7.8%

Corporate and eliminations

(823.3)

(760.8)


Galenica Group

3,479.8

3,301.0

+5.4%

1) Calculated based on an average price difference between original and generic of 29.3% according to the study “Effizienzbeitrag der Generika” (Efficiency contribution of generics), 2020 edition, bwa Consulting Bern

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Tel. +41 58 852 85 29
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