Galenica increases sales growth in the third quarter

Galenica AG / Key word(s): Quarter Results

24-Oct-2024 / 06:45 CET/CEST
Release of an ad hoc announcement pursuant to Art. 53 LR
The issuer is solely responsible for the content of this announcement.

Press release
Ad hoc announcement pursuant to Art. 53 LR

Following solid sales growth of 2.6% in the first half of 2024, Galenica grew more strongly again in the third quarter and generated net sales of CHF 2,864.8 million to the end of September 2024. With growth of 4.1%, Galenica outperformed the growth of the overall pharmaceutical market (+2.9%, IQVIA, pharmaceutical market Switzerland, YTD September 2024). 

The strong performance in the third quarter was further supported by widespread colds. The negative impact of the missing sales day at the end of June which was estimated to be -0.8% compared with the prior-year period, has been offset by the end of September. Significant additional sales of generics and biosimilars continued to dampen growth. The generic substitution rate of Galenica pharmacies stabilised at a high 80.3% at the end of September compared to the middle of the year (80.8% at the end of June 2024). The revised distribution share for prescription drugs that entered into force on 1 July 2024 had no significant impact on Galenica’s sales development to the end of September.

2024 outlook confirmed

Galenica confirms its outlook for the 2024 financial year with sales growth of between 3% and 5%, EBIT¹ growth of between 8% and 11% and a dividend at least equal to the previous year’s level.

Net sales of the Galenica Group January – September 2024:

(in million CHF)

09/2024

09/2023

Change

Products & Care segment

Retail (B2C)

Professionals (B2B)

Logistics & IT segment

Galenica Group

¹ Adjusted, excluding the effects of IFRS 16 and IAS 19

PRODUCTS & CARE SEGMENT

The Products & Care segment generated net sales of CHF 1,242.6 million (+4.0%) in the first nine months of the 2024 financial year. Of this, CHF 1,046.2 million (+3.8%) was accounted for by Retail (B2C), with Local Pharmacies contributing CHF 989.2 million (+4.1%, excluding Coop Vitality) and Pharmacies at Home accounting for CHF 57.2 million (-1.4%).

Professionals (B2B) increased sales to CHF 204.1 million (+5.8%), with Products & Brands contributing CHF 141.9 million (+5.4%) and Services for Professionals CHF 62.2 million (+6.8%).

Retail (B2C)

• The pharmacy network (excluding Coop Vitality) continued its dynamic performance: 11 pharmacies were acquired, 1 new pharmacy was opened and 3 were closed or merged with other locations. The expansion effect on sales growth in Local Pharmacies therefore amounted to +1.5%.
• Adjusted for this expansion effect, Galenica pharmacies grew by 2.6% organically thanks to high demand for drug sales.
• Compared to the same period of the previous year, demand for vaccinations in Galenica pharmacies increased by 40% (excluding COVID-19 vaccinations).
• Around 53,000 customers made use of the healthcare services and advice offered by Galenica pharmacies in the first nine months of 2024, 35% more than in the same period the previous year.
• Pharmacies at Home declined by 1.4% due to the streamlining of various services. The largest business area, Bichsel HomeCare, continued to grow pleasingly.
  
  By way of comparison:
• Drug sales from bricks-and-mortar pharmacies in Switzerland (prescription [Rx] and OTC products) grew 3.0% in the reporting period (IQVIA, Pharmaceutical market Switzerland, YTD September 2024).
• Sales of medications from mail-order pharmacies in Switzerland (prescription [Rx] and OTC products) declined year-on-year by 2.8% (IQVIA, Pharmaceutical market Switzerland, YTD September 2024).
• The non-drugs segment of the Consumer Healthcare market also contracted by 0.7% in the period under review (IQVIA, Consumer Health Market Switzerland, YTD September 2024, nutrition, personal care, patient care, excluding COVID-19 self-tests, excluding OTC).

Professionals (B2B)

• Verfora continued to grow in the first nine months and expanded its market position. Organic growth in Products & Brands, excluding the expansion effect (+0.9%) due to the acquisition of Padma in 2023, amounted to a pleasing 4.5%.
• Verfora’s export sales showed very positive growth, with an increase of 19.8%. This pleasing result was driven by higher demand for Verfora products such as Perskindol^® in Asia, and earlier product deliveries abroad compared to the previous year.
• Despite a reduction in inventories in the market, Verfora’s Swiss business saw an organic growth of 1%. By contrast, sales of Verfora products in the pharmacy and drugstore market grew faster than the overall market at 5.6% (IQVIA, Consumer Health Market Switzerland, YTD September 2024), which enabled further market share to be gained.
• The growth drivers in Services for Professionals (+6.8%) were once again Lifestage Solutions and Medifilm in the business with care homes and home care organisations.
  
  By way of comparison:
• The consumer healthcare market grew by 1.5% year on year (IQVIA, Consumer Health Market Switzerland, YTD September 2024, excluding COVID-19 self-tests).

LOGISTICS & IT SEGMENT

The Logistics & IT segment generated net sales of CHF 2,362.5 million (+4.5%) in the first nine months of the 2024 financial year. Of this, CHF 2,262.8 million (+4.3%) was attributable to the Wholesale and CHF 116.7 million (+10.6%) to Logistics & IT Services.

Highlights:

• The pharmacy customer segment recorded growth of 3.3%, outperforming the market.
• At 6.7%, the greatest growth was achieved in the physicians segment, which enabled market share to be gained.
• HCI Solutions also performed well. By the end of September, around 264 million CDS checks had been carried out (+32%), an important contribution to patient safety.

By way of comparison:

• The overall pharmaceutical market grew by 2.9% (IQVIA, Pharmaceutical Market Switzerland, YTD September 2024).
• The physicians segment grew by 5.2% (IQVIA, pharmaceutical market Switzerland, YTD September 2024).
• The pharmacy segment grew by 2.4% (IQVIA, pharmaceutical market Switzerland, YTD September 2024).

Additional information on sales and further information can be found in the sales presentation Sales presentation.

Dates for the diary

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Welcome to the Galenica network!
Our ambition is to meet the needs of patients and customers in the Swiss healthcare market in a seamless, efficient and personalised way. To achieve this, we operate the Galenica network with over 20 Business Units, the strongest partners in the Swiss healthcare market. We offer fully inte-grated solutions both for customers and patients as well as for pharmacies, drugstores, medical practices, hospitals, retirement and nursing homes, home care providers, wholesalers, pharma-ceutical companies, health insurance funds and other partners.
Galenica is listed on the Swiss Stock Exchange (SIX Swiss Exchange, GALE, security number 36,067,446). Additional information concerning Galenica can be found at www.galenica.com.