Financial Performance Group

Strong sales development

Sales of the Galenica Group performed very pleasingly in 2024, with growth of 4.7% to CHF 3,921.1 million. The main growth driver was the “Logistics & IT” segment, which achieved sales growth of 5.3% thanks to market share gains in the wholesale business with doctors and pharmacies. The “Products & Care” segment also recorded a favourable performance with sales growth of 3.9%, supported by strong growth in prescription-only medications and the acquisition of new pharmacies.

Following a solid 2.6% increase in sales in the first half of 2024, growth accelerated to 6.7% in the second half of the year. The strong growth was boosted by two additional days of sales in the second half of the year, which had a positive impact on growth in this period of an estimated 1.6%. Over the full year 2024, Galenica benefited from an additional day of sales due to the leap year, amounting to a one-off additional growth effect of around 0.4%. A mild flu season and low prevalence of colds dampened sales growth in the fourth quarter of 2024. In addition, a slightly higher impact of the annual price reduction round as well as strong additional sales of generics and biosimilars reduced the growth momentum. A key factor in this development was the measures to promote generics and biosimilars that came into force on 1 January 2024, including the increase in the co-payment from 20% to 40% if patients prefer certain products. In light of this, Galenica pharmacies increased the generic substitution rate by 4.0% on average to a high 79.2% in 2024 (75.2% at the end of December 2023). By way of comparison, the Swiss pharmaceutical market grew by 3.5% in the reporting year (IQVIA, Pharmaceutical Market Switzerland, 2024). Sales volumes rose by 0.5%.

EBIT growth in line with strong sales performance

The reported EBIT increased by 7.6% to CHF 214.4 million. The adjusted¹⁾ operating result (EBIT), adjusted for the effects of the IFRS 16 (Leases) and IAS 19 (Employee Benefits) accounting standards, increased significantly year-on-year by 10.3% to CHF 211.0 million. Excluding the one-off special factors in the previous year of CHF 9.8 million, the adjusted¹⁾ operating result (EBIT) would have grown by 4.9%. The adjusted¹⁾ return on sales (ROS) improved year-on-year from 5.1% to 5.4%.

The revised distribution share for reimbursable medications that entered into force on 1 July 2024 had essentially no impact on earnings for the Galenica Group.

The adjusted¹⁾ net profit from continuing business activities increased by a strong 13.4% to CHF 183.2 million (previous year: CHF 161.6 million). Reported net profit from continuing business activities was CHF 183.7 million (previous year: CHF 165.7 million, +10.9%). Net profit was bolstered by the extraordinary value adjustment of earn-out obligations from acquisitions of CHF 10.6 million (previous year: CHF 10.1 million) and an exceptionally low tax rate of 14.4% due to the effect of the amortisation of investments in companies on tax liability.

Balance sheet remains strong

The Galenica Group’s balance sheet has remained strong. Consolidated shareholders’ equity increased by CHF 76.6 million to CHF 1,551.8 million, thanks in particular to the annual profit. The equity ratio increased by 1.2% points to 50.5%.

Adjusted¹⁾ net debt, adjusted for lease liabilities, increased by CHF 62.0 million compared to the end of December 2023 to CHF 424.1 million, amounting to 1.6 times the adjusted¹⁾ EBITDA. This increase is primarily attributable to the increase in the strategic investment in Redcare Pharmacy amounting to CHF 61.2 million, giving Galenica a shareholding of 10.3% at the end of the year. Investments in fixed and intangible assets in the 2024 financial year totalled CHF 72.8 million (previous year: CHF 78.8 million). They were primarily related to the introduction of the new ERP (Enterprise Resource Planning) system at Galexis, the rebuilding and renovation of pharmacies and other operational sites, and investments in the expansion of the digital infrastructure. The year-on-year decrease in investments is attributable to normalised investment activity in pharmacy renovations and the modernisation of the distribution centre in Lausanne-Ecublens, which was completed in 2023.

In the 2024 financial year, at CHF 212.1 million, adjusted¹⁾ operating cash flow was well above the previous year’s level (CHF 173.5 million). Free cash flow after acquisitions also improved significantly to CHF 61.0 million (previous year: CHF 49.3 million), despite the further increase in the strategic investment in Redcare Pharmacy. The positive development in cash flow was due to a combination of a higher operating cash flow and a strong focus on net working capital management.

¹⁾ Excluding the effects of IAS 19 and IFRS 16. See chapter “Alternative performance measures”.