Galenica again achieves strong sales growth

Ad hoc announcement pursuant to Art. 53 LR, Thursday, 18 January 2024

Galenica Group sales performed well in 2023, growing by 4.4% to CHF 3,746.0 million. As expected, sales growth of 3.3% in the second half of 2023 was lower than the +5.5% recorded in the first half due to the exceptionally strong comparative period in the second half of 2022, when there was a strong seasonal flu epidemic and COVID-19 infections.

In particular, the “Logistics & IT” segment posted strong growth of 4.9%. The “Products & Care” segment also performed well with sales growth of 3.3%, supported by the strong performance of 12.3% of the “Products & Brands” sector.

The strong performance of the overall pharmaceutical market, with growth of 4.9%, particularly contributed to the sales growth. This development was driven by increased sales of high-priced medications, with sales volumes declining by 0.2%.

Earnings outlook confirmed

Galenica confirms its guidance for the 2023 financial year, with EBIT1 at roughly the same level as the previous year2, and the outlook for the 2023 dividend at least at the same level as the previous year.

Net sales of the Galenica Group 2023:

(in million CHF)

2023

20222

Change

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%

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)

“PRODUCTS & CARE” SEGMENT

The “Products & Care” segment achieved net sales of CHF 1,635.6 million (+3.3%) in financial year 2023. The Retail business area (B2C) accounted for CHF 1,385.6 million (+1.8%), with the “Local Pharmacies” sector contributing CHF 1,306.9 million (+1.6% excluding Coop Vitality) and the “Pharmacies at Home” sector CHF 78.9 million (+6.6%, without Mediservice). Adjusted for the extraordinary additional sales in connection with COVID-19 the previous year, sales growth for “Local Pharmacies” amounted to +2.7%.

The “Professionals” (B2B) business area increased sales to CHF 256.1 million (+11.9%), with the “Products & Brands” sector contributing CHF 177.1 million (+12.3%) and the “Services for Professionals” sector contributing CHF 78.9 million (+11.0%).

“Retail” business area (B2C)

  • The 2.7% growth of "Local Pharmacies" adjusted for COVID-19 is in line with the market trend.
  • As expected, sales growth in the second half of 2023 was lower than in the first half due to the exceptionally strong comparative period in the second half of 2022, when there was a strong seasonal flu epidemic and COVID-19 infections.
  • Compared to the previous year, demand for vaccinations in Galenica pharmacies increased by 18% (without COVID-19 vaccinations).
  • Around 138,000 customers made use of the health services and advice offered by Galenica pharmacies in 2023, 14% more than in the previous year.
  • Together with Redcare Pharmacy, Galenica established Switzerland’s leading online pharmacy, adding a pure online pharmacy to its offering.

By way of comparison:

  • Drug sales from bricks-and-mortar pharmacies in Switzerland (prescription [Rx] and OTC products) grew by 4.4% in the reporting year (IQVIA, Pharmaceutical Market Switzerland, 2023).
  • Sales of medications from mail-order pharmacies in Switzerland (prescription [Rx] and OTC products) grew by 1.7% in the reporting year (IQVIA, Pharmaceutical Market Switzerland, 2023).
  • The non-medication segment of the consumer healthcare market declined by 1.3% in the reporting year (IQVIA, Consumer Health Market Switzerland, 2023, Nutrition, Personal Care, Patient Care, excluding COVID-19 self-tests, excluding OTC).

“Professionals” business area (B2B)

  • With the acquisition of Padma, Verfora further expanded its complementary medicine offering, increasing its market share in the Swiss consumer healthcare market to 10.3%.
  • Verfora’s export sales showed very positive growth, with an increase of 33.6%. This pleasing result was driven by a recovery in demand for products such as travel and cold products, among other things, as well as the expansion of storage capacity abroad, for Perskindol® for instance, due to a regulatory change that will soon come into effect.
  • The Galenica network’s home care services performed very successfully, with growth well above the previous year.

By way of comparison:

  • The consumer healthcare market grew by 0.7% year-on-year (IQVIA, Consumer Health Market Switzerland, 2023, excluding COVID-19 self-tests).

“LOGISTICS & IT” SEGMENT

The “Logistics & IT” segment achieved net sales of CHF 3,077.0 million (+4.9%) in the 2023 financial year. CHF 2,952.7 million (+4.7%) of this was generated by the “Wholesale” sector and CHF 144.0 million (+10.1%) by the “Logistics & IT Services” sector.

“Wholesale” sector

  • The pharmacy customer segment recorded growth of 5.4%. Adjusted for additional sales related to COVID-19, which were still high in the previous year, sales growth amounted to 6.3%. Further market share was gained with third-party pharmacies.
  • The physicians segment also did well in the year, growing 3.6%.
  • With the “Safety Stock” initiative Galexis is actively committed to improving the security of supply in Switzerland.

By way of comparison:

  • The overall pharmaceutical market grew by 4.9% (IQVIA, Pharmaceutical Market Switzerland, 2023).
  • The physicians segment grew by 7.8% (IQVIA, Pharmaceutical Market Switzerland, 2023).
  • The pharmacy segment grew by 4.1% (IQVIA, Pharmaceutical Market Switzerland, 2023).


“Logistics & IT Services” sector

  • In addition to its robust basic business, Alloga was able to take over distribution from a leading manufacturer of vaccines.
  • The Documedis® physicians and pharmacy software continued to develop technically in the year under review. In 2023, over 270 million “Clinical Decision Support Checks” (CDS) were carried out on the basis of Documedis® solutions.

Additional information on sales figures and further information can be found in our investor presentation.

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