The Consumer Health Care division increased its second-quarter total revenues by 9.4% to EUR 114 million in spite of negative currency effects of 2.6%. The division’s only major market to show a decline in organic sales was the United Kingdom, where a fire in May destroyed a warehouse for Seven Seas® nutritional supplements.
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Consumer Health Care | Key figures |
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XLS | |
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EUR million |
2nd quarter |
Change |
Jan.–June |
Change |
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Total revenues |
113.9 |
9.4 |
221.5 |
4.6 |
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Gross margin |
78.4 |
10.2 |
151.3 |
4.6 |
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Research and development |
–6.1 |
44.5 |
–10.9 |
27.8 |
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Operating result |
–5.4 |
– |
–3.9 |
– |
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Exceptional items |
– |
– |
– |
– |
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Free cash flow |
1.1 |
–92.4 |
–1.4 |
– |
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Underlying free cash flow |
1.1 |
–92.4 |
–1.4 |
– |
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ROS in % |
–4.8 |
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–1.8 |
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Global sales of Femibion®, the vitamins and minerals supplement for pregnant women and nursing mothers, jumped 35% compared to the year-ago quarter, boosted by high demand in France and Germany.
Sales of Bion®3 probiotic multivitamins rose 20%, driven by demand in Mexico, Chile and France. Global sales of the mobility products such as Seven Seas® supplements, Kytta® and Flexagil® rose 13% during the second quarter. The vitamin C products marketed under the Cebion® brand recorded a 16% drop in sales, mostly due to currency issues in Venezuela.
Russian demand, in particular, drove sales of Nasivin® nasal spray during the second quarter, leading to a 24% sales increase over the year-ago period.
Consumer Health Care | Sales by region – Q2
Despite higher production costs including the effects of the currency devaluation in Venezuela, the division’s gross margin rose 10% to EUR 78 million in the second quarter from EUR 71 million in the year-ago quarter. Marketing and selling costs, as well as research and development spending, rose again in the second quarter as the division continued to implement its strategy of driving growth via strategic brands. These brand-name products, such as Seven Seas®, Kytta®, Kidabion®, Nasivin® and Cebion®, excluding the mail-order business, now account for 54% of the division’s sales.
The division’s second-quarter operating result at EUR –5.4 million reflects the continued heavy marketing and selling investment in the quarter and higher R&D costs, a fire at the Seven Seas® warehouse in the U.K., and the continuing impact of the Venezuelan devaluation. For the first half of 2010, the operating result was down EUR 22.2 million to EUR –3.9 million. The second-quarter ROS dropped to –4.8% compared to 10% in the year-ago quarter of 2009. Free cash flow for the second quarter was EUR 1.1 million compared to EUR 14.6 million in the year-ago quarter; for the first half, EUR –1.4 million compared to EUR 17.7 million.