Galenica expects further growth after a solid 2023
Published: Tuesday, Mar 12th 2024, 08:40
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The pharmacy group Galenica is aiming for stronger profit growth in the current year than in 2023. However, last year's result was negatively impacted by one-off effects. The dividend is to remain at least at the previous year's level.
After the pharmacy and healthcare group had already presented its sales figures in January, Tuesday's press release focuses primarily on profit and the outlook. The adjusted operating result (EBIT) for 2023 came in at 191.3 million Swiss francs, roughly at the previous year's level.
Galenica had already warned in the summer that special factors amounting to CHF 9.8 million would have a negative impact on operating profit. These factors include a ruling by the Competition Commission (ComCo) from 2017 and extraordinary value adjustments on customer receivables, particularly in the wholesale business with doctors.
More net profit than expected
The bottom line for 2023 was a profit of CHF 161.6 million, which is 2.8% higher than the previous year's figure. While EBIT is roughly in line with analysts' expectations, net profit is above the experts' forecast range. Galenica intends to pay shareholders a stable dividend of CHF 2.20 per share.
The Group is forecasting further growth for 2024. The Group expects turnover to increase by between 3% and 5%. Adjusted EBIT is expected to increase slightly more strongly by 8 to 11% in 2024. The dividend is again expected to be at least at the previous year's level.
Focus on future trends
Galenica expects continued strong growth of around 5 percent in the Swiss pharmaceutical market in the coming years, not least due to demographic trends and innovation with many new, high-priced medicines. According to the Group's presentation, the hospital channel is likely to show the strongest growth. Pharmacies and doctors' surgeries, on the other hand, are likely to achieve average growth of between 3 and 5 percent.
In contrast, business with non-drug products is likely to stagnate, not least due to increasing competition from other retailers. Against this backdrop, Galenica expects market growth of between 1 and 3 percent for the average local pharmacy, excluding high-priced medicines.
Together with the financial targets for 2024, the Group is also confirming its medium-term targets, which it had adjusted upwards at the Investor Day at the end of October. In addition to continued sales growth of between 3% and 5%, these targets also include an adjusted EBIT of more than CHF 250 million by 2027.
The numerous strategic decisions and programs are intended to help the company achieve these goals. For example, Galenica has set itself the goal of offering customers a comprehensive online and offline offering with its pharmacies. This is ultimately intended to respond to megatrends such as changing customer needs. The Group is also taking account of the ageing population with its range of patient care services at home.
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