Galenica : half-year results 2019

Significantly stronger growth than the market

The Galenica Group increased consolidated net sales by 2.2% to CHF 1,600.4 million in the first half of 2019. Although sales growth continued to be affected by the ongoing effects of the federal price reduction measures from 2018, Galenica posted significantly stronger growth than the market (+0.9%, IQVIA, Pharmaceutical Market Switzerland, first half of 2019), thanks, among other things, to strong expansion. All Business sectors contributed to this development.

Improvement of profitability and earnings

The operating result (EBIT) increased by 18.1% to CHF 82.8 million. On a comparable basis, that is excluding the impact of the new lease accounting standard IFRS 16 and of IAS 19 (Pension Fund), adjusted EBIT increased by 8.3% to CHF 81.1 million.
Adjusted return on sales (ROS) improved from 4.8% to 5.1%, and adjusted net profit rose by 7.6% to CHF 65.0 million.
Details on the adjusted key figures are provided in the half-year report of the Galenica Group from page 17 onwards.

Key figures for the Galenica Group, first half of 2019

(in million CHF)	1st half-year 2019	1st half-year 2018	Change
Net sales Health & Beauty Segment - Retail - Products & Brands Services Segment Corporate and eliminations Galenica Group	781.4 726.1 54.1 1,192.4 (373.4) 1,600.4	745.7 695.8 48.7 1,177.1 (356.7) 1,566.1	+4.8% +4.3% +11.1% +1.3% +2.2%
EBIT adjusted1) Health & Beauty Segment Services Segment Corporate and eliminations Galenica Group	60.3 22.6 (1.8) 81.1	54.3 22.3 (1.7) 74.9	+11.0% +1.2% +8.3%
Net profit adjusted1)	65.0	60.4	+7.6%

^{1) Excluding the effects of IAS 19 and IFRS 16. Details on the adjusted key figures are provided in the half-year report of the Galenica Group from page 17 onwards.}

2019 forecast slightly raised

Due to the good half-year results, the sales and earnings forecast for the current financial year 2019 as a whole has been raised slightly: Galenica expects consolidated net sales for the Group as a whole to grow by between +1% and +3%, with sales growth of between +4% to +6% in the Health & Beauty segment and at the prior-year level up to +2% in the Services segment. The adjusted operating result (EBIT; excluding the effects of IAS 19 and IFRS 16) should increase by +5% to +7%. Due to the application of the new lease accounting standard IFRS 16, Galenica expects an additional increase in EBIT of CHF 2 million to 3 million. Proposal of a dividend of at least the same level as the prior year (CHF 1.70 per share) to the 2020 Annual General Meeting is planned.