Release Date: July 25, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Galderma Group AG (GDERF, Financial) reported record net sales of $2.2 billion for the first half of 2024, reflecting a strong growth momentum with a 10.8% year-on-year increase at constant currency.
- The company demonstrated broad-based growth across product categories and geographies, with Injectable Aesthetics showing a 13.4% year-on-year growth and Dermatological Skincare achieving an 11.8% increase.
- Galderma Group AG (GDERF) improved its underlying profitability, with a core EBITDA margin of 23.4%, driven by operating leverage and efficiencies from its integrated dermatology platform.
- The company successfully reduced its leverage to 2.6 turns by the end of June, reflecting significant progress in de-leveraging post-IPO.
- Galderma Group AG (GDERF) updated its full-year guidance, expecting net sales growth towards the upper end of the previously communicated range of 7% to 10% at constant currency.
Negative Points
- The US market for fillers experienced some softening, with increased pricing pressure and competition affecting growth dynamics.
- Despite ongoing genericization, Therapeutic Dermatology showed only a modest growth of 2.2% year-on-year, mainly driven by international markets.
- The launch of nemolizumab is anticipated to have a meaningful impact on growth only in 2025, with current preparations and regulatory processes still underway.
- The company faced tighter price competition in Injectable Aesthetics and Dermatological Skincare, impacting gross profit margins.
- Galderma Group AG (GDERF) had to make price concessions in some segments to gain market share, indicating competitive pressures in certain areas.
Q & A Highlights
Q: How is the market growth for injectables and Dermatological Skincare playing out this year compared to your midterm market growth expectations?
A: Flemming Ornskov, Independent Director, noted that while there is some slowdown in the US aesthetic market, particularly in fillers, international markets like China and Thailand are still at the beginning of their growth trajectory. Galderma is focusing on market share gains and new product introductions, such as Relfydess, to drive growth.
Q: Can you comment on injectable pricing in the US and how you expect it to evolve?
A: Flemming Ornskov explained that while there is pricing pressure in the US filler market, Galderma has been able to compensate by shifting focus to biostimulatory products and neuromodulators. Thomas Dittrich, CFO, added that Galderma is not a discounter and focuses on innovation to drive market share gains.
Q: What is the timeline for nemolizumab's launch in the US?
A: Flemming Ornskov confirmed that the review for nemolizumab in the US is progressing well, with marketing authorization expected first for prurigo nodularis. However, meaningful sales impact is anticipated in 2025 due to necessary post-approval preparations.
Q: How is Galderma handling competition and pricing dynamics in the Injectable Aesthetics market?
A: Flemming Ornskov stated that while there is some pricing pressure in the US, particularly in fillers, Galderma's broad portfolio allows them to focus on biostimulatory products and neuromodulators. The company is also preparing for significant product launches in 2025.
Q: What is Galderma's strategy for QM-1114 once approved in major markets?
A: Flemming Ornskov mentioned that QM-1114 will be an addition to Galderma's portfolio, likely launching in Europe before the US. The product offers fast onset and a six-month duration, enhancing Galderma's neuromodulator offerings.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
