«Products & Care» segment

The «Retail» business area comprises the two sectors «Local Pharmacies» (POS) and «Pharmacies at Home» (mail-order and home care), while the «Professionals» business area comprises the «Products & Brands» and «Services for Professionals» sectors.

These activities focus on developing and marketing healthcare services and products via different sales channels: On the one hand, directly to end customers (B2C) through a strong presence with its own bricks-and-mortar pharmacies or at home with home-care services, mail-order pharmacies and e-shops. On the other hand, as an effective partner of service providers (B2B) in the healthcare sector, such as pharmacies, drug stores, doctors, care homes, home-care organisations and hospitals.

Key figures «Products & Care» segment

The «Products & Care» segment achieved net sales of CHF 1,908.1 million (+13.4%) in the financial year 2021.

Of this, CHF 1,720.0 million (+13.3%) was accounted for by the «Retail» business area (B2C), with the «Local Pharmacies» sector contributing CHF 1,261.5 million (+8.5%, excluding Coop Vitality) and the «Pharmacies at Home» sector contributing CHF 458.8 million (+29.2%).

The «Professionals» (B2B) business area increased sales to CHF 194.0 million (+11.9%), with the «Products & Brands» sector contributing CHF 131.6 million (+17.8%) and the «Services for Professionals» sector contributing CHF 62.4 million (+1.4%).

The adjusted¹ operating result (EBIT), i.e. excluding the effects of the IFRS 16 (Leases) accounting standard, increased by 24.4% to CHF 154.5 million in financial year 2021 and the adjusted¹ return on sales (ROS) increased from 7.4% to 8.1%. This strong growth was generated in particular by the one-off additional sales from offers to combat the COVID-19 pandemic of an estimated EBIT contribution of CHF 19 million.

Investments in the «Products & Care» segment totalled CHF 23.5 million (previous year: CHF 26.0 million). These were mainly used for pharmacy renovations and the development of digital infrastructure as part of the «Omni-channel» programme.

¹⁾ Excluding the effects of IFRS 16. See chapter «Alternative performance measures».

«Retail» business area (B2C)

Local Pharmacies

In the financial year 2021, the «Local Pharmacies» sector achieved net sales of CHF 1,261.5 million (+8.5%, excluding Coop Vitality). The main drivers of this growth were the various offers to combat the COVID-19 pandemic, which had a significant impact in the first half of the year in particular. Excluding the extraordinary additional sales from COVID-19 initiatives, sales growth amounted to 2.9%, mainly thanks to a positive expansion effect of 2.2%.

The loss in sales of «Local Pharmacies» in the first half of 2021 – due to the lack of a flu epidemic in the winter of 2020/2021 – was offset overall by the strong sales growth of cold and flu medicines in the fourth quarter of 2021.

By contrast, at the end of the year, sales in pharmacies at high frequency locations without sales from COVID-19 initiatives were still around 20% below the pre-pandemic level of 2019, while this shortfall was around 35% at the beginning of 2021.

In addition, government-ordered price reductions led to a decline in revenue of -1.0% in 2021. Without this effect, net sales in the «Local Pharmacies» sector would have increased by 9.5%.

By way of comparison, sales of medications from bricks-and-mortar pharmacies in Switzerland (prescription [Rx] and OTC products) grew by 3.5% in the reporting year (IQVIA, Pharmaceutical Market Switzerland, 2021).

In the year under review, pharmacies were also able to strengthen their position as the first point of contact for health issues. At the end of 2021, the offerings and services in the Primary Care segment comprised 28 indications with accompanying advice. The major advantage for patients is that they do not have to make an appointment in advance, but can go directly to the pharmacy for simple medical examinations and treatment recommendations on six to seven days a week.

Physical points of sale are becoming more modern

Despite the development of the online and home care offers, physical points of sale remain an important element of the sales structure. For this reason, Galenica continued to invest in bricks-and-mortar pharmacy locations in the financial year 2021. Thus, since the second half of 2021, the store layout of the Sun Store pharmacies has been undergoing a gradual modernisation process based on a new concept. In addition, the pharmacy locations of all formats are being constantly modernised and adapted to current requirements, for example with rooms for vaccinations and health advice services.

Further optimisation of the pharmacy network

In 2021, five pharmacies were acquired, and three new locations opened. At the same time, six locations were closed as part of optimisation measures. At the end of 2021, the Galenica own pharmacy network comprised a total of 368 pharmacies (+2).

Apodoc in Zurich has been part of the Galenica pharmacy network since July 2021. Apodoc is considered a pioneer in integrated patient care and has its own medical practice on its premises. With a view to further developing Galenica’s strategy of offering added value to customers, Apodoc will enable Galenica to gain valuable experience in integrated care and collaboration between doctors and pharmacies.

Stronger link between online and offline offers

As part of the strategic «Omni-Channel» programme, Galenica further expanded the online and offline offerings of its pharmacy formats and linked them more closely. All pharmacy formats now also offer a mail-order pharmacy service: Patients can order their prescription medications online and have them delivered to their home. In addition, the service offerings in the Amavita, Sun Store and Coop Vitality web shops were further expanded, for example by giving patients the option to book online appointments for flu and COVID-19 vaccinations as well as antigen, PCR and antibody tests.

Mediservice: consistent strategy implementation bears fruit

The specialty pharmacy Mediservice, which looks after people with chronic and rare diseases, contributed significantly to the strong growth of the «Pharmacies at Home» sector. At the end of 2021, Mediservice had the expertise to professionally treat more than 50 indications. Mediservice was also able to expand its home care offering to cover more than 80 highly complex therapies in the year under review. This included not only treating patients at home and via telephone but also video consultations with the advisory service provided by Mediservice. As a result, Mediservice can make a significant contribution to increasing patients’ independence and improving their quality of life.

Bichsel shows strong growth in the home care sector

The growing demand for home care services is also reflected in the offerings of Bichsel, particularly in connection with intravenous therapies. Thus, the demand for parenteral nutrition and for antibiotic therapies produced specifically for individual patients increased.

Thanks to the acquisition of Spagyros Ltd. in September 2021, Verfora will not only be able to meet the growing demand for phytotherapy and complementary medicines through its own products but will also strengthen the position of pharmacies and drugstores with a range of products that require intensive consultation.

The acquisition of the Hedoga Group in 2020, the partnership with Angelini Pharma, which was also expanded in 2020, and the new distribution agreement with Institut Allergosan also had a positive impact on the 2021 financial year. The probiotic portfolio of Allergosan, in particular Omni-Biotic^®, recorded pleasing growth in 2021. Through the acquisition of Hedoga, Verfora has not only become the clear market leader in the Swiss lemon balm spirit market, but has also strengthened its export business in selected European markets.

«Professionals» business area (B2B)

Services for Professionals

The «Services for Professionals» sector generated sales of CHF 62.4 million (+1.4%) in financial year 2021. Growth was generated in particular by the acquisition of Lifestage Solutions Ltd. in July 2021.

The COVID-19-related decline in sales at Winconcept and the lower year-on-year sales with the productions at Laboratorium Bichsel were only partially offset by the strong sales growth at Medifilm. Winconcept supports 150 partner pharmacies at the end of 2021 (previous year: 151).

Greater range of services for home care organisations and care homes

As part of the strategic «Professionals» (B2B) and «Care» (B2C) programmes, Galenica acquired Lifestage Solutions Ltd. at the end of July 2021.

Lifestage Solutions develops and operates an innovative digital trading platform for home care organisations and care homes, enabling them to order medical consumables, care products and services fully automatically. As a result, Lifestage Solutions simplifies the daily routines of its customers, allowing them to concentrate on their core task of care while also saving them money.

Furthermore, thanks to the synergies with Bichsel Homecare, Mediservice and Medifilm, it will also be possible to increase the services for home care patients. With its expanded offering, Galenica is making an important contribution to the health, well-being, safety and independence of patients in need of care.

Bichsel increases production capacities and efficiency

In the reporting year, production capacities for liquid solutions in plastic bottles were increased as the result of a new, modern filling plant. The installation of the new PPB (polypropylene bottle) filling plant focused on automation, product and patient safety, and employee protection. The new plant will allow Bichsel to produce a larger number of solutions in plastic bottles in accordance with regulatory compliance requirements. At the same time, the sachet line was repositioned in the production department and connected to the automation system, which also led to efficiency gains.