The Consumer Health division reported sales of € 108 million in the first quarter, a 7.4% decline compared to € 116 million in the first quarter of 2011. This performance reflected an organic sales decline of 7.7% and a 0.3% positive benefit from changes in foreign exchange rates. The weak performance in the first quarter of 2012 was primarily related to weakness in Europe, which represents approximately 70% of the division’s sales. In Europe, sales decreased 10.5% organically due to one-time supply chain issues in France, a sluggish UK market, and weak performance of the division’s Joint Care range. Sales in the Emerging Markets were mainly driven by higher sales in Venezuela and also benefited from momentum in India due to the relaunch of the Seven Seas brand.
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Consumer Health | Key figures – Q1 | |||
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€ million |
Q1 – 2012 |
Q1 – 2011 |
Change |
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Total revenues |
108.0 |
116.6 |
–7.4% |
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Sales |
107.6 |
116.2 |
–7.4% |
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Operating result (EBIT) |
4.9 |
7.9 |
–38.5% |
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Margin (% of sales) |
4.5% |
6.8% |
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EBITDA |
7.9 |
10.6 |
–25.8% |
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Margin (% of sales) |
7.3% |
9.1% |
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EBITDA pre one-time items |
8.6 |
10.6 |
–19.0% |
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Margin (% of sales) |
8.0% |
9.1% |
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The division’s first-quarter 2012 gross profit decreased to € 71 million (Q1 2011: € 82 million) due to inventory valuation combined with lower sales.
Consumer Health is highly focused on improving its profitability over the next three years and driving better operational performance. The initial results of this effort are reflected in the division’s selling, general and administration (SG&A) costs, which declined by 12% and reflected a reduction and reprioritization of its sales promotion and marketing spending.
The operating result (EBIT) fell 39% to € 5 million as the lower sales were only partially offset by decreased spending. The operating result was also lowered by € 0.7 million in one-time restructuring costs.
The division’s EBITDA pre for the first quarter of 2012 was € 8.6 million, or 8.0% of sales, compared to € 10.6 million, or 9.1% of sales, in the first quarter of 2011.
Consumer Health | Sales by region – Q1
The division’s portfolio consists of scientifically based brands that consumers trust. It specializes in Women’s and Children’s Health (Femibion® and Kidabion® / Haliborange®), Cough and Cold (Nasivin®), as well as products to support Everyday Health (Bion® / Multibionta®, Cebion® and Diabion®) and agility (Flexagil®, Seven Seas® and Kytta®).
The division is in the process of a global reorganization and is narrowing its marketing efforts on strategic brands and geographic regions in order to bring profitability levels more in line with peers within the consumer health industry.
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Consumer Health | Growth components by region – Q1 | |||||
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€ million/change in % |
Sales |
Organic growth |
Exchange rate effects |
Acquisitions/ |
Reported |
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Europe |
75.1 |
–10.5% |
– |
– |
–10.5% |
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North America |
0.4 |
–22.2% |
1.1% |
– |
–21.1% |
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Emerging Markets |
28.4 |
2.3% |
2.1% |
– |
4.4% |
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Rest of World |
3.6 |
–16.0% |
–3.6% |
– |
–19.6% |