Galenica : 2019 annual results of the Galenica Group

Significantly stronger growth than the market

The Galenica Group increased consolidated net sales by 4.3% to CHF 3,301.0 million in 2019, clearly outperforming the market in all Business sectors despite the fact that sales continued to be negatively impacted by the federal price reduction measures implemented in 2018 and 2019 (market: +2.8%, IQVIA, Pharmaceutical Market Switzerland 2019).

EBIT increased and profitability further enhanced

Thanks to targeted expansion activity and acquisitions, the introduction of new products and services, and measures to increase efficiency across the Group, Galenica has significantly improved its 2019 result:
The operating result (EBIT) was increased by 50.0% to CHF 169.5 million. On a comparable basis, that is excluding the effects of the new lease accounting standard IFRS 16 and of IAS 19 (Employee Benefits), the adjusted operating result was CHF 166.9 million (8.3% more than in the previous year). Adjusted return on sales (ROS) was increased from 4.9% in 2018 to 5.1%.

Net profit declined year-on-year by 15.1% to CHF 125.3 million due to one-off effects. Excluding the one-off effects of changes in the provisions for deferred taxes, and excluding the effects of the new lease accounting standard IFRS 16 and of IAS 19 (Employee Benefits), net profit would have improved on a comparable basis by 7.7% to CHF 134.2 million.

Accordingly, the Board of Directors of the Galenica Group will propose a dividend of CHF 1.80 per share to the Annual General Meeting on 19 May 2020, a 5.9% increase on the previous year (CHF 1.70).

2019 key figures for the Galenica Group

(in CHF million)	2019	2018	Change
Net sales Health & Beauty segment - Retail - Products & Brands Services segment Corporate and eliminations Galenica Group	1,620.8 1,515.7 102.1 2,441.0 (760.8) 3,301.0	1,524.8 1,430.5 91.7 2,372.3 (732.1) 3,165.0	+6.3% +6.0% +11.3% +2.9% +4.3%
EBIT adjusted1) Health & Beauty segment1) Services segment1) Corporate and eliminations Galenica Group1)	123.7 44.7 (1.5) 166.9	110.4 44.2 (0.5) 154.1	+12.1% +1.1% +8.3%
Net profit comparable2)	134.2	124.7	+7.7%

^{1) Excluding the effects of IFRS 16 and of IAS 19 (details of the adjusted key figures from page 92 onwards in the full version of the Annual report 2019)
2) Adjusted net profit, excluding the effects of IFRS 16 and IAS 19 (details of the adjusted key figures from page 92 onwards in the full version of the Annual report 2019) and excluding one-off effects from changes in the provisions for deferred taxes of CHF +56.2 million in 2018 and CHF -8.4 million in 2019 due to the Swiss Tax Reform}

Outlook for 2020

Galenica expects consolidated net sales to grow by 1% to 3% in 2020.
At the same time, Galenica aims to further increase adjusted operating result EBIT (excluding the effects of IFRS 16 and IAS 19) by between 3% and 6%, and plans to propose a dividend of at least the prior-year level to the 2021 Annual General Meeting.