Annual report 2018

Galenica annual report 2018 | 7 At the same time, we have increased our busi­ ness activities in the area of e-commerce, for example by significantly expanding the online offering of all three pharmacy formats. We have also acquired a stake in Puresense, one of the leading online shops for natural cosmetics in Switzerland. This move not only strengthens Galenicare’s presence in the growing market for natural cosmetics; Puresense’s knowledge will also support us in the further development of e-commerce activities. Innovations in all areas Mediservice further strengthened its leading position as a specialty pharmacy for the care and support of patients with chronic or rare diseases through its new distance healthcare offering. Under this therapy support service, chronically ill patients are alternatively provided not only with personal home visits but also with care from spe­ cially trained professionals via telephone, video­ phone or e-mail. The registration of our e-Medication solution Documedis ® as a Class I medical device was confirmed by the Swiss Agency for Therapeutic Products, Swissmedic, at the start of 2018; Documedis ® is already used in various hospitals and care homes and is fully integrated into our Triapharm ® pharmacy software. Key figures for the Galenica Group, 2018 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. 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 from the sale of rights of the medical practice soft­ ware Triamed ® and a non-operational building in Schönbühl), EBIT even rose by 9.1% on a comparable basis. Return on sales (ROS) improved from 4.7% to 4.9%. The reorganisation of the Group pension fund results in a one-off, non-cash effect on EBIT of CHF –41.0 million in the 2018 financial statements. Accordingly, reported EBIT is CHF 113.0 million. Although all pension plans of the Galenica Pension Fund are pure defined contribution plans, under international accounting standard IAS 19, they must be taken into account in the consolidated finan­ cial statements as defined benefit plans, which resulted in this effect. 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: on the one hand, the aforementioned influence in connection with the new Galenica Pension Fund – amounting to CHF –33.2 million at net profit level – and, on the other hand, the release of provisions for deferred taxes that are no longer required of CHF 56.2 million. Excluding these one-off effects, net profit would be CHF 124.7 mil­ lion, corresponding to an increase of 0.2%. On a comparable basis, i.e. excluding the one-off effect in the previous year (CHF 10.6 mil­ lion), the increase would even be 9.5%. Investments in tangible and intangible assets totalled CHF 50.0 million (previous year: CHF 55.8 million including acquisition of the Merfen ® and Vita-Merfen ® brands). They were made, among other projects, in the new ERP system in the Services Business sector and the renovation and construction of pharmacies. Despite brisk acquisition activity and the payment of a dividend for the first time in financial year 2018, net debt in relation to EBITDA (excluding the effects of IAS 19) was reduced from 1.6 to 1.5. Foreword 9.1% EBIT growth (on a comparable basis) Galenica