Annual report 2018

Galenica annual report 2018 | 15 Always focused on the customer The Health & Beauty segment comprises the Retail and Products & Brands Business sectors. In the Retail Business sector, Galenica operates the largest pharmacy network in Switzerland, giving it an excellent distribution network that offers unique potential for the sale of own, exclusive and partner brands. In the Products & Brands Business sector, Galenica develops and markets its own brands and products as well as exclusive brands and products of its business partners. Net sales and operating result The Health & Beauty segment increased net sales in 2018 by 3.1% to CHF 1,524.8 million, CHF 1,430.5 million of which was accounted for by the Retail Business sector and CHF 91.7 million by the Products & Brands Business sector. In addition to organic growth, this performance was primarily attributable to the expansion of the pharmacy network. The operating result (EBIT) of the Health & Beauty segment improved by 10.7% to CHF 110.4 million, while return on sales (ROS) rose markedly by 0.5 percentage points to 7.2% (previous year: 6.7%). This is an impressive result that demonstrates the further improvement in efficiency. Vari- ous measures and projects that were launched in recent years are now having a full effect on profitability. These include, for example, the switch to direct invoicing to health insurers, the consolidation of the central functions in the Retail Business sector and the continuing strengthening and optimisation of the pharmacy network. Investments in the Health & Beauty segment totalled CHF 14.1 million (previous year: CHF 28.9 million including acquisition of the Merfen ® and Vita-Merfen ® brands) and were principally used for the development and launch of new products and services, and for the rebuilding and reno- vation of pharmacies. The Retail and Products & Brands Business sectors stepped up their collaboration further in the year under review, also with the aim of getting even closer to the customer. For example, Verfora in close collaboration with Galenicare continued to expand the range of complementary medicines in its pharmacies: following the successful new partnership with Adler Pharma with its Schüssler mineral salts, which started in 2017, Galenica has acquired a small minority stake in the Swiss company Spagyros in 2018, and began to increase sales through specialist staff in the pharmacies that receive ongoing intensive training to provide the relevant advice. Collaboration within Retail was also improved, among other things in the course of the acquisition of Careproduct. The pharmacy formats can now also procure their customers medical aids such as walking frames that they themselves do not have in stock via Careproduct and have these deliv- ered directly to customers’ homes. “The complementary medicine offering in pharmacies was further expanded with the range of Swiss company Spagyros.” 1,524.8 110.4 Galenica Group CHF 3,165.0 million Galenica Group CHF 154.1 million (adjusted) Key figures 2018 – Net sales: CHF 1,524.8 million – EBIT: CHF 110.4 million – ROS: 7.2% – Investments: CHF 14.1 million – Employees: 4,872 (3,685 full-time equivalents) EBIT in million CHF Net sales in million CHF Health & Beauty Segment Health & Beauty