Galderma Group AG, a prominent player in the dermatology sector, has revealed plans to carry out an Initial Public Offering (IPO) on the SIX Swiss Exchange.
“Today marks the next step in our growth journey as the global dermatology category leader. With a proven strategy and track record of strong financial performance, Galderma aims to maintain consistent above-market growth and attractive margin expansion in the mid-term, as we continue to drive penetration and expansion of our portfolio for the patients, consumers, and healthcare professionals we serve,” said Chief Executive Flemming Ornskov.
Goldman Sachs, Morgan Stanley, and UBS are acting as Joint Global Coordinators and Joint Bookrunners for the planned IPO. BNP Paribas, Bank of America, Citi, and Jefferies are acting as Joint Bookrunners. Lazard is acting as an independent financial advisor.
Galderma aims to raise approximately USD 2.3 billion through equity and plans to utilize the proceeds to bolster its financial position by repaying and refinancing debt. With the anticipated equity raise and projected Core EBITDA growth, the company foresees its leverage ratio to be between 2.25x and 2.50x by the end of 2024, progressing towards its medium-term target of below 2x leverage.
The Offering is anticipated to primarily consist of a primary tranche involving newly issued registered shares by Galderma, along with a smaller secondary tranche comprising existing registered shares sold by the company’s current shareholders, Sunshine SwissCo AG (EQT). EQT, alongside certain other shareholders, is expected to grant a customary secondary over-allotment option.
For yet another consecutive year, Galderma has met its full-year targets, maintaining its growth trend since becoming an independent entity in October 2019. In the fiscal year ending December 31, 2023, Galderma achieved record net sales of $4,082 million, marking an 8.5% year-on-year increase on a constant currency basis. This performance aligns with the higher end of its 6-9% FY 2023 net sales guidance. Over the period from 2019 to 2023, Galderma’s net sales experienced a compound annual growth rate (CAGR) of 11.9% in constant currency terms, outpacing the approximately 7% growth rate seen in the dermatology market, which had a market size of around USD 87 billion in 2023.
The leading brands in Dermatological Skincare, namely Cetaphil and Alastin, significantly contributed to growth, outperforming the market. This was propelled by ongoing geographical and product portfolio expansion efforts, such as the introduction of Cetaphil Healthy Renew, Alastin ReSURFACE Skin Polish, and the C-RADICAL Defense Antioxidant Serum.
As for business segments, Injectable Aesthetics achieved a 6.5% year-on-year increase in net sales when adjusted for currency fluctuations, fueled by significant growth in neuromodulators, which experienced double-digit growth and gained market share in all major markets. Fillers and bio stimulators also gained market share in international markets and contended for the top position in the U.S. despite a subdued filler market after the post-COVID rebound normalization, with notable growth observed particularly in Sculptra.
In 2023, Cetaphil achieved a remarkable milestone, surpassing $1 billion in net sales. With a rich history spanning over 75 years in sensitive skincare, Cetaphil continued to innovate its product range to cater to diverse sensitive skin needs. For instance, they introduced Cetaphil Healthy Renew, a pioneering healthy-aging skincare line available in Brazil and the U.S., offering a retinol alternative suitable for sensitive skin and enriched with purified peptides to combat visible signs of aging.
Furthermore, Cetaphil prioritized its omnichannel strategy, particularly in rapidly expanding markets, by enhancing its salesforce, expanding retailer partnerships, and strengthening its e-commerce and digital presence. Among the noteworthy digital initiatives launched in 2023 was the Cetaphil AI Skin Analysis tool. This advanced skin analyzer provides personalized skin assessments and recommends tailored skincare regimens. By simply uploading a selfie, users receive a comprehensive report based on a diverse database of 70,000 skin images, offering insights into their skin type, concerns, and susceptibility to various conditions.
Dermatological Skincare maintained its strong performance, achieving a 12.1% year-on-year increase in net sales when adjusted for currency fluctuations. This growth was primarily driven by the momentum of Cetaphil® and saw particularly robust performance in Asia and Latin America. Additionally, Alastin® sustained strong growth, benefiting from synergies with Injectable Aesthetics and bolstered by new product launches.
Operating in over 90 countries, Galderma states that the company strategically targets lucrative and consumer-oriented segments within the dermatology market, characterized by strong growth and enduring fundamentals. With its top seven markets contributing to over 70% of net sales, Galderma has ample expansion opportunities, particularly by further penetrating rapidly growing regions and leveraging its flagship brands. The company’s global presence is reinforced through comprehensive omni-channel strategies, including a specialized salesforce comprising more than 1,900 personnel engaging with over 110,000 healthcare professionals. Additionally, Galderma’s network spans more than 270,000 retailers, retail stores, and pharmacies.
Since the beginning of 2024, as the capital markets have rebounded, IPO transactions that were nearly halted due to high-interest rates and economic uncertainty have gradually picked up steam. Some significant beauty companies are seeking to go public in the first half of the year.
Spanish beauty conglomerate Puig began seeking an IPO as early as September last year. Puig is expected to go public before the summer. In addition, German perfume retailer Douglas announced its IPO plan, aiming to debut on the Frankfurt Stock Exchange as early as this month.
