Ad hoc announcement pursuant to Art. 53 LR
Galderma Group AG, the pure-play dermatology category leader,
today announced its financial results for the first half of
2024.
- Record net sales of 2.2 billion USD in the first half of
2024, with net sales growth of 10.8% on a constant currency
basis1, predominantly driven by volume growth complemented by
favorable mix
- Broad-based growth across all product categories, with
constant currency year-on-year growth of 13.4% for Injectable
Aesthetics, 11.8% for Dermatological Skincare, and 2.2% for
Therapeutic Dermatology
- Growth across geographies, especially in International
markets with continued growth momentum, including in China
- Progress updates on its two biologic candidates with
blockbuster potential, with RelabotulinumtoxinA’s (QM-1114)
first marketing authorization in Australia under the brand name
RelfydessTM and nemolizumab’s launch readiness after filing
acceptances
- Profitability improvement in the first half of 2024,
with Core EBITDA2 of 514 million USD, a 23.4% margin, up 30 basis
points (up 40 basis points at constant currency) compared to the
2023 full year Core EBITDA margin
- Leverage3 reduced to 2.6x by end of June 2024 and 100
million USD of debt repaid early post-IPO, resulting in an
expected interest cash expense of approximately 120 million USD for
the second half of 2024, with interest rate on gross debt down
approximately 50 basis points
- 2024 full year guidance updated on net sales, towards
the upper end of the previously communicated growth range of 7-10%
at constant currency, while confirming Core EBITDA margin guidance,
in line with 2023 at constant currency
“Galderma delivered a strong
first half of the year with excellent sales, profit and cash
generation results, underscoring the benefits of our unique and
growth focused integrated business model. Dermatology continues to
be an attractive market despite some slowdown in a few segments
which we have been able to overcompensate via market share gains
and continued global expansion. We are also progressing our
late-stage pipeline with two potential blockbusters on track to
start contributing to the overall company performance as early as
2025. We remain confident in delivering strong 2024 full year
results and are well set up for continued future growth.”
FLEMMING ØRNSKOV, M.D.,
MPH CHIEF EXECUTIVE OFFICER GALDERMA
Commercial performance
Galderma achieved record net sales of 2.2 billion USD for the
first half of 2024, representing 10.8% year-on-year net sales
growth on a constant currency basis, predominantly driven by volume
complemented by favorable mix.
Performance in the first half of the year was underpinned by
continued execution of Galderma’s growth-focused integrated
dermatology strategy and its three strategic pillars, including new
launches and progress on its two biologic candidates with
blockbuster potential, focus on commercial execution, and delivery
of market-leading education and services.
Net sales growth was widespread across product categories and
geographies. All product categories grew, with notably strong
performance in Injectable Aesthetics and Dermatological Skincare.
Across International markets, there was continued double-digit
growth momentum fueled by strong performance in major markets in
Asia, Europe and Latin America. Notably, in China, Galderma
maintained a robust double-digit growth trajectory in both
Injectable Aesthetics and Dermatological Skincare. The U.S.
continued to deliver growth despite a softer market
environment.
Injectable Aesthetics
Injectable Aesthetics net sales for the first half of 2024 were
1,139 million USD, with year-on-year growth of 13.4% on a constant
currency basis. Growth was rebalanced after the phasing impact of
the first quarter of the year, while driving quarter-on-quarter
growth.
Both Injectable Aesthetics sub-categories performed strongly.
For the first six months of 2024, Neuromodulators net sales were
622 million USD, with year-on-year growth of 16.6% on a constant
currency basis, and Fillers and Biostimulators net sales were 517
million USD, with year-on-year growth of 9.8% on a constant
currency basis.
Growth was driven by strong brand performance and scaling
execution across its Injectable Aesthetics portfolio, along with
increasing penetration in terms of geographic reach, portfolio
breadth as well as healthcare professional education and
training.
Commercial highlights for the past quarter included sales force
expansion in China to reach additional cities, broad activation in
Thailand with city banners to support the continued strong uptake
from its recent Sculptra launch, and celebrating key milestones in
the U.S. such as Dysport’s 15-year anniversary, coinciding with the
25th anniversary of Sculptra globally. Galderma also continued to
demonstrate its commitment to healthcare professional education and
training, with leading presence at major medical congresses,
including Vegas Cosmetic Surgery (VCS), and local Galderma
Aesthetic Injector Network (GAIN) events, covering market-shaping
topics such as the treatment with Restylane and Sculptra for
patients experiencing rapid weight loss.
Innovation highlights for the past quarter include launching
Restylane VOLYME™ in China, designed for contouring and
volumization of the mid-face region, as well as regulatory and
manufacturing updates for RelabotulinumtoxinA (QM-1114). Restylane
SHAYPE™, launched in Canada in the first quarter, as the first
filler with ‘bone-mimicking’ properties using NASHA HD™ technology
for temporary augmentation of the chin region, also continues to
perform well.
In terms of RelabotulinumtoxinA, Galderma’s next generation
neuromodulator, Galderma received its first marketing authorization
from Australia’s Therapeutic Goods Administration for the treatment
of both frown lines and crow’s feet under the brand name
RelfydessTM. Galderma expects first launches in its International
markets could take place in the first half of 2025 subject to
additional regulatory approvals to gain relevant production scale.
Galderma’s Uppsala site already received license updates from the
Swedish Medical Products Agency authorizing the future manufacture
of the first and only ready-to-use liquid neuromodulator created
with Galderma’s proprietary PEARL™ Technology, which provides
sustained results for six months and fast onset of action as early
as day one. Results from the phase III READY-1 study were recently
published in the Aesthetic Surgery Journal4.
Dermatological Skincare
Dermatological Skincare net sales for the first half of 2024
were 675 million USD, with year-on-year growth of 11.8% on a
constant currency basis. Growth in the U.S. was rebalanced after
the first quarter phasing impact in Cetaphil.
Cetaphil in International markets and Alastin both grew
double-digits, more than offsetting the skincare market softness in
the U.S.. Galderma continued to drive tailored strategies in key
markets to deliver growth, such as Brazil, Canada, China, India,
the Philippines, and the U.K. & Ireland.
Growth was based on focused execution behind science-based
flagship brands, with an emphasis on detailing, sampling, as well
as notable digital and e-commerce activation, all underpinned by
targeted innovation and scientific engagement.
Commercial highlights for the past quarter included increasing
Cetaphil digital- and influencer-first efforts to activate viral
campaigns and drive e-commerce growth. Building on the first
quarter success of its ‘Face of Cetaphil’ and ‘Game Time Glow’
campaigns in the U.S., Cetaphil recently went viral in India, for
example, and became one of the top trending topics in the country
by capitalizing on local trends with men’s skincare. E-commerce
remained Cetaphil’s fastest-growing channel, whether in the U.S.
with continued growth momentum at Amazon or in China with growth
boosted by the recent ‘618’ shopping event performance. Leveraging
the science behind the brand, Galderma continued to engage
consumers and healthcare professionals through sales force
detailing, healthcare professional education, and its Galderma
Sensitive Skincare Faculty (GSSF). Alastin momentum also remained
strong in the U.S. while continuing to expand internationally.
Innovation highlights for the past quarter ensured a consistent
flow of targeted new Cetaphil launches designed for sensitive skin,
particularly supporting our face range and relevant line expansions
globally. Recent launches for Cetaphil included two high potency
face serums in the U.S. and its Baby line expansion in Asia,
including a tailored product specifically designed for China.
Meanwhile, the recently launched Alastin C-Radical Defense
Antioxidant Serum continued its robust market uptake, based on
strong clinical differentiation and external recognition, with
awards as a top performing Vitamin C serum.
Therapeutic Dermatology
Therapeutic Dermatology net sales for the first half of 2024
were 388 million USD, with year-on-year growth of 2.2% on a
constant currency basis. The growth was mainly driven by
International markets, more than offsetting anticipated lower
volumes and ongoing market genericization in the U.S.
The main highlight is the progress on launch preparations for
nemolizumab in prurigo nodularis and atopic dermatitis. In addition
to the filing acceptances announced for the U.S., including
priority review for prurigo nodularis, Europe, Australia, the U.K.,
Singapore and Switzerland, filing acceptance has also been received
for Canada. Focus in relevant markets has been on launch readiness,
first and foremost in the U.S., where the required infrastructure
is in place, including commercial, medical and market access teams
with extensive biologic launch expertise. In key International
markets, launch teams are also in place, including experienced
market access and medical affairs teams. Galderma remains focused
on disease education for prurigo nodularis and atopic dermatitis at
medical congresses. In terms of data dissemination, detailed
results from the phase III ARCADIA 1 and 2 trials evaluating the
safety and efficacy of nemolizumab in atopic dermatitis were just
published for the first time in The Lancet. Data from this robust
phase III program demonstrate the potential of nemolizumab (in
combination with background therapy) to improve skin lesions, itch,
and sleep disturbance in adolescent and adult patients with
moderate-to-severe atopic dermatitis.
Meanwhile, a phase II proof-of-concept dose-finding study for
the reduction of itch intensity in adult patients with advanced
chronic kidney disease associated pruritus (CKD-aP) reinforced the
potential for nemolizumab in other indications to be explored. The
study demonstrated rapid onset of action in itch as well as a
favorable safety and tolerability profile, aligned with previous
phase III clinical trial results in prurigo nodularis and atopic
dermatitis, with no safety signals identified. Given the multiple
potential indications for nemolizumab, along with the existing
CKD-aP treatment landscape, Galderma has decided to deprioritize
the CKD-aP program and explore additional dermatological
indications with significant unmet treatment needs to have the
greatest impact for patients.
Financial scorecard
Galderma delivered 514 million USD in Core EBITDA for the first
half of 2024, representing a 17.7% year-on-year growth at constant
currency and a 23.4% Core EBITDA margin. Core EBITDA margin at
constant currency was 23.4%, an increase of 30 basis points (an
increase of 40 basis points at constant currency) compared to a
23.1% Core EBITDA margin for the full year 2023.
Core EBITDA growth was driven by sales growth and benefits from
a scalable platform driving operating leverage, along with positive
phasing impact from nemolizumab costs which are expected to ramp-up
in the second half of 2024. Beyond an increase in underlying
profitability in the first six months of 2024, spend for
nemolizumab was of 95 million USD, representing 38% of the expected
spend for the year.
Galderma also progressed on its deleveraging trajectory, with
leverage reduced to 2.6x by end of June 2024. Net debt was reduced
to 2,589 million USD, including early debt repayment of 100 million
USD behind confidence in cash generation. Debt repayment after the
IPO was possible despite 108 million USD payments in the first half
of 2024 for two out of the three expected milestones and earn-out
payments planned for the year. For the full year, leverage is
expected to be towards the lower end of the previously communicated
2.25-2.50x range. In addition, the second half of the year will
benefit from an improvement of approximately 50 basis points in the
interest run-rate expense on gross debt, resulting in an expected
interest cash expense of approximately 120 million USD for the
second half of the year.
Galderma also continues to advance its ESG agenda, having
published its 2023 Environmental, Social and Governance (ESG)
update, developed based on the Task Force on Climate-Related
Financial Disclosures (TCFD) framework. Galderma remains committed
to advancing its ESG agenda and progressively increasing the
disclosed ESG metrics which are already tracked internally and
linked to the compensation of its senior leaders.
Full year guidance
Based on a strong first half year, Galderma is updating its 2024
full year guidance on net sales, towards the upper end of the
previously communicated growth range of 7-10% at constant currency,
and is confirming guidance on Core EBITDA margin, in line with 2023
at constant currency. With better visibility following the IPO,
Galderma also updated select modeling metrics for the year, with
details available in the Appendix.
Webcast details
Galderma will host its financial results call today at 12:30
CEST to discuss first half 2024 results and respond to questions
from financial analysts. Investors and the public may access the
webcast by registering on the Galderma Investor Relations website
at https://investors.galderma.com/events-presentations.
Appendix
Net sales by product category and
geography
First half net sales
Year-on-year growth
In million USD
2023
2024
Constant currency
Reported
Group total
2,003
2,202
10.8%
9.9%
By product category
Injectable Aesthetics
1,014
1,139
13.4%
12.2%
Neuromodulators
536
622
16.6%
16.0%
Fillers & Biostimulators
479
517
9.8%
8.0%
Dermatological Skincare
608
675
11.8%
11.1%
Therapeutic Dermatology
381
388
2.2%
1.8%
By geography
International
1,119
1,277
15.7%
14.1%
U.S.
884
925
4.7%
4.7%
Reconciliation of H1 2024 P&L from
IFRS to Core reporting
In million USD
IFRS - as reported
Exceptional &
transformation related items
Amortization
Depreciation
Core reporting
% Net Sales based on Core
reporting
Net Sales
2,202
-
-
-
2,202
Other revenue
14
-
-
-
14
Cost of goods sold
(667)
-
89
9
(569)
Gross profit
1,549
-
89
9
1,647
74.8%
Research and development
(135)
-
-
1
(134)
6.1%
Sales and marketing
(701)
-
-
5
(695)
31.6%
General and administrative
(287)
57
22
15
(194)
8.8%
Medical and regulatory
(45)
-
-
-
(45)
2.0%
Distribution
(65)
-
-
1
(65)
2.9%
Other income / (expenses)
(2)
2
-
-
-
-
Operating profit as reported
313
Total adjustments
59
112
30
Core EBITDA
514
23.4%
Reconciliation of H1 2024 of Core EBITDA
to IFRS Net Income
In million USD
H1 2023
H1 2024
Core EBITDA
450
514
% margin
22.5%
23.4%
Exceptional and transformation related
adjustments
(23)
(57)
Other income / (expenses)
(18)
(2)
Total EBITDA adjustments5
(40)
(59)
EBITDA
410
455
% margin
20.5%
20.7%
Depreciation
(25)
(30)
Amortization
(107)
(112)
Operating profit
278
313
Net interest expenses incl. VCB
revaluation
(278)
(206)
Foreign exchange loss on financing
activities
(18)
(30)
Income / (loss) before tax
(17)
77
Income taxes
21
(30)
Net income
4
47
Reconciliation of H1 2024 from IFRS Net
Income to Core Net Income6
In million USD
H1 2023
H1 2024
Net income
4
47
Total EBITDA adjustments5
40
59
VCB financing revaluation
(19)
(28)
Amortization
107
112
Foreign exchange loss on financing
activities
18
30
Income taxes on above items
(18)
(10)
Core Net Income
131
210
H1 2024 Total Net Indebtedness
In million USD
Dec 31 2023
June 30 2024
Total Indebtedness7
5,001
2,974
Cash and Cash Equivalents
(368)
(385)
Total Net Indebtedness
4,633
2,589
Latest additional modeling metrics for
full year 2024
Modelling metrics at
IPO
Latest modelling
metrics
Transformation costs8
~30 million USD
Slightly below 30 million USD
Milestone and earnouts9
~175 million USD
~175 million USD
Core CAPEX10
3-4% of net sales
3-4% of net sales
Effective tax rate
~27%
~30%, with the 2024 tax rate
impacted by one-off IPO items
Leverage
2.25 – 2.50x11
Towards the lower end of 2.25 –
2.50x11
Interest (post IPO expected Run
Rate)
~8.5%12 average interest rate;
~250 M USD interest expense
~120 M USD in interest cash
expenses in H2, corresponding to ~50 bps improvement of the yearly
interest run-rate13 on gross debt as of H2
Notes and references
- Constant currency year-on-year growth is defined as the annual
growth rate of net sales excluding the impact of exchange rates
movements and excluding hyperinflation economies. The impact of
changes in foreign exchange rates are excluded by translating all
reported revenues during the two periods at average exchange rates
in effect during the previous year.
- Core EBITDA is defined as EBITDA excluding the following items
that are deemed exceptional, including acquisition and disposal,
integration and carve-out related income and expenses, onerous
contracts, business disposal gains and losses, restructuring and
reorganization related items, litigation related items, impairment
of PPE and software, IPO related incentive plans as well as other
income and expense items that management deems exceptional and that
are expected to accumulate within the year to be over 1 M USD
threshold. These include transformation, carve-out and build-up
related project costs as well as post-acquisition related
accounting impacts
- Leverage is defined as Total Net Indebtedness divided by Core
EBITDA on a twelve-months rolling basis
-
https://academic.oup.com/asj/advance-article/doi/10.1093/asj/sjae131/7697878?utm_source=advanceaccess&utm_campaign=asj&utm_medium=email&login=true
- 2023 EBITDA adjustments include 13 million USD for platform
transformation costs, 10 million USD for VCB bonus, 11 million USD
litigation and onerous items, 3 million USD for IPO, 1 million USD
for operating FX, 3 million USD on Restructuring and Others. 2024
adjustments include 48 million USD for IPO related incentive plans,
5 million USD for platform transformation costs, 4 million USD for
VCB bonus, 2 million USD for IPO
- Core Net Income is defined as net income / (loss) from
continuing operations adjusted for the same items that are treated
as exceptional for purposes of defining Core EBITDA, as well as
amortization of intangible assets, foreign exchange gains and
losses on financing activities. Taxes on the adjustments between
IFRS net income and Core Net Income take into account, for each
individual item included in the adjustment, the tax rate that will
finally be applicable to the item based on the jurisdiction where
the adjustment will finally have a tax impact
- Indebtedness includes financial debt and lease liabilities
- In addition, assuming ~20 M 'other income & expenses',
e.g., litigation and onerous items, excluding 48 M USD costs in
relation to the ‘IPO Incentive Plans’ and the ‘IPO Cash Bonus’
described in the Offering prospectus, recognized at fair value, 38
M of which were settled non-cash, in restricted existing shares
funded and delivered by the Selling Shareholders upon completion of
the offering. The ‘IPO Incentive Plans’ were inversely related to
the final offer price, i.e., the higher the final offer price, the
lower the amount of the awards under the ‘IPO Incentive Plans’. The
purpose of the ‘IPO Incentive Plans’ was to align the interests of
the members of the Board of Directors and the Executive Committee,
management and selected employees of the Group with the interests
of the new shareholders at the time of the offering by limiting the
impact of the final offer price on the amount of the awards payable
to the Board of Directors and the Executive Committee, management
and selected employees of the Group as a result of the completion
of the offering
- Year-end metric, relates to nemolizumab, Alastin and other
products
- Core CAPEX is defined as the capital expenditures (Property,
plant and equipment as well as Intangible assets) excluding
transformation related investments and acquisitions of IP and
operating rights
- Based on 2024 expected Core EBITDA. Includes ~175 M USD
milestones and earnouts
- Based on 3M SOFR + 2.75% subject to hedging strategy
- Based on 3M SOFR + 2.25% subject to hedging strategy
Forward-looking statements
Certain statements in this announcement are forward-looking
statements. Forward-looking statements are statements that are not
historical facts and may be identified by words such as "plans",
"targets", "aims", " believes", "expects", "anticipates",
"intends", "estimates", "will", "may", "continues", "should" and
similar expressions. These forward-looking statements reflect, at
the time, Galderma's beliefs, intentions and current targets/ aims
concerning, among other things, Galderma's results of operations,
financial condition, industry, liquidity, prospects, growth and
strategies and are subject to change. The estimated financial
information is based on management's current expectations and is
subject to change. By their nature, forward-looking statements
involve a number of risks, uncertainties and assumptions that could
cause actual results or events to differ materially from those
expressed or implied by the forward-looking statements. These
risks, uncertainties and assumptions could adversely affect the
outcome and financial consequences of the plans and events
described herein. Actual results may differ from those set forth in
the forward-looking statements as a result of various factors
(including, but not limited to, future global economic conditions,
changed market conditions, intense competition in the markets in
which Galderma operates, costs of compliance with applicable laws,
regulations and standards, diverse political, legal, economic and
other conditions affecting Galderma’s markets, and other factors
beyond the control of Galderma). Neither Galderma nor any of their
respective shareholders (as applicable), directors, officers,
employees, advisors, or any other person is under any obligation to
update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise. You should
not place undue reliance on forward-looking statements, which speak
of the date of this announcement. Statements contained in this
announcement regarding past trends or events should not be taken as
a representation that such trends or events will continue in the
future. Some of the information presented herein is based on
statements by third parties, and no representation or warranty,
express or implied, is made as to, and no reliance should be placed
on, the fairness, reasonableness, accuracy, completeness or
correctness of this information or any other information or
opinions contained herein, for any purpose whatsoever. Except as
required by applicable law, Galderma has no intention or obligation
to update, keep updated or revise this announcement or any parts
thereof.
About Galderma
Galderma (SIX: GALD) is the pure-play dermatology category
leader, present in approximately 90 countries. We deliver an
innovative, science-based portfolio of premium brands and services
that span the full spectrum of the fast-growing dermatology market
through Injectable Aesthetics, Dermatological Skincare and
Therapeutic Dermatology. Since our foundation in 1981, we have
dedicated our focus and passion to the human body’s largest organ –
the skin – meeting individual consumer and patient needs with
superior outcomes in partnership with healthcare professionals.
Because we understand that the skin we are in shapes our lives, we
are advancing dermatology for every skin story. Galderma’s
portfolio of flagship brands includes Restylane, Dysport, Azzalure,
Alluzience and Sculptra in Injectable Aesthetics; Cetaphil and
Alastin in Dermatological Skincare; and Soolantra, Epiduo,
Differin, Aklief, Epsolay, Twyneo, Oracea, Metvix, Benzac and
Loceryl in Therapeutic Dermatology. For more information:
www.galderma.com.
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version on businesswire.com: https://www.businesswire.com/news/home/20240724852501/en/
For further information:
Media Christian Marcoux, M.Sc. Chief Communications
Officer christian.marcoux@galderma.com +41 76 315 26 50
Sébastien Cros Corporate Communications Director
sebastien.cros@galderma.com +41 79 529 59 85
Investors Emil Ivanov Head of Strategy, Investor
Relations and ESG emil.ivanov@galderma.com +41 21 642 78 12
Jessica Cohen Investor Relations and Strategy Director
jessica.cohen@galderma.com +41 21 642 76 43