Q3 Results Round-up: C&D and Prestige

In this week’s blog, we look at the latest quarterly results of two Top 20 global CHC marketers, starting with Church & Dwight, which reported net sales of US$1.3bn in Q3 2021, up 3.7%. Online sales grew by 2.2% (on top of 102% growth in Q3 2020), accounting for 14.2% of total sales.

  • Consumer Domestic net sales were US$998.1mn, up 4.6% driven by household and personal care sales growth and acquisitions. Organic sales increased by 2.8%, owing to higher price and product mix (+6%), partially offset by lower volume (-3.2%). Vitafusion gummy vitamins were among the growth drivers
  • Consumer International net sales were US$227.0mn, a 6.3% increase, mainly driven by European organic sales performance (+8.8%), Global Markets Group organic growth (+6.9%) and currency gains. Despite continued lockdowns, organic sales increased by 2.3%, primarily owing to higher volume. Growth was driven by Waterpik oral care products and Sterimar nasal spray in Europe and Sterimar, Femfresh intimate wash, Vitafusion and L’il Critters gummy vitamins in the Global Markets Group

Comment: Reflecting ongoing trends, CEO Matthew Farrell noted during an earnings call that “Vitafusion gummy vitamins saw huge consumption growth in Q3, up 24%. Consumers have made health & wellness a priority. It appears that the new consumers that came into the category are staying, because if we look at the last year, Vitafusion household penetration is up almost 10%.”

Vitafusion remains a huge growth driver for C&D

As for Prestige Consumer Healthcare, revenues grew by 16.3% (+10.5% on an organic basis) in fiscal Q2 2022 (Jul-Sep 2021) to a record US$276.2mn.

  • North America OTC Healthcare sales were US$251.7mn vs US$216.6mn in the comparable quarter. This was driven by a strong performance across a majority of key brands vs their respective categories and increased demand in certain Covid-impacted categories such as motion sickness and travel-related channels
  • International OTC Healthcare sales totalled US$24.5mn vs US$20.8mn. The increase related primarily to a rise in consumer activity in Australia, which drove a sharp spike in demand for Hydralyte and other Covid-impacted brands, along with a foreign currency benefit of US$0.5mn

Comment from CEO, Ron Lombardi: Our record Q2 built on the strong results delivered in Q1 as our leading brands and business strategies enabled us to benefit from a higher-than-anticipated rebound in Covid-impacted areas, as well as strong consumer demand. The strong performance is broad-based with market share gains, revenue and earnings growth and is a testament to our focused execution in the current environment. Furthermore, TheraTears [acquired from Akorn on 1st July 2021] added incrementally to our strong results and we were pleased with the quick and seamless integration that is now complete.

Save the Date! We are delighted to announce that we will be heading to Athens on 4-6 May 2022 for our 32nd European CHC Conference & Action Workshop! Contact elizabeth.bernos@NicholasHall.com to reserve your space today!

Q4 2020 results round-up

Early signs from quarterly results published last week by CHC marketers, with both a global (P&G) and European (Galenica, Alliance Pharma) focus, indicate that consumer healthcare growth continued to be robust in the final quarter of 2020. There are some warning signs on the dashboard, notably P&G’s reference to a “historically slow start” to the cough, cold & flu season – which inevitably will impact its key CHC brand and global No.1 Vicks – but the strong performance of the former Merck KGaA OTC products that P&G acquired in 2018, including various VMS brands (Neurobion, Seven Seas, etc) which produced growth in the “high teens” in Q4, point to the importance of a strong portfolio mix.

In its January 2021 investor presentation, Swiss-based Galenica said it has slightly exceeded its sales guidance (+2-5%), generating a 5.4% rise in net sales in 2020 to CHF3.5bn (US$4bn). Health & Beauty recorded net sales of CHF1.7bn (US$1.9bn, +3.1%); Retail accounted for CHF1.5bn (US$1.7bn, +2.7%); and Products & Brands CHF111.7mn (US$126mn, +9.4%). Cold, beauty, travel-related and ibuprofen products were very negatively impacted by Covid-19, with additional sales from hygiene and prevention products only partially compensating for this. Growth was driven by expansion activities such as acquisitions in the pharmacy network and product portfolio. In its facts & figures for 2020 (see below), Galenica pointed to several CHC trends, such as the sharp decline of cough products and the rise of antiseptics & disinfectants like Septo Clean.

Source: Galenica

According to an unaudited trading update for the year ended 31st December 2020, UK-based Alliance Pharma said that “see-through” revenues (including underlying sales from Nizoral anti-dandruff shampoo) for 2020 were down 5% on the prior year at £137.5mn (US$188mn), both on a reported and constant currency basis. The company noted this reflects the impact of Covid-19. Consumer Healthcare revenues were up 1% to £93.0mn (US$127mn). Scar treatment Kelo-cote revenues rose by 12% to £34.7mn (US$47mn) and Nizoral was 4% ahead at £21.0mn (US$29mn). The recent acquisition of US-based Biogix, which brought Amberen – a fast-growing brand for the relief of menopause symptoms – into the group, is expected to be earnings-enhancing in FY 2021 and significantly earnings-enhancing from FY 2022.

Alliance Pharma CEO, Peter Butterfield, said: “The group continued to deliver a robust operational and financial performance in H2 2020, despite the ongoing challenges of the pandemic. While topline revenue growth has been constrained overall, our Consumer Healthcare business has performed well given the market backdrop and we have seen some strong performances from a number of our brands, in particular Kelo-cote.”

We have just announced a full schedule of webinars to take you through 2021. Exploring a range of trends and issues impacting the industry, we are kicking off with regional overviews of the Sleep, Memory & Mood markets. You can sign up for either the Asia-Pacific Hot Topic Webinar on 24 February, or the North America & Latin America Hot Topic Webinar on 3 March. Find out about the rest of our online events for 2021, by contacting elizabeth.bernos@NicholasHall.com.