Release Date: March 06, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Galderma Group AG (XSWX:GALD) achieved record net sales of $4.4 billion in 2024, marking a 9.3% year-on-year growth at constant currency.
• The company set a new profitability record with core EBITDA exceeding $1 billion for the first time, with a margin of 23.4%.
• Galderma's injectable aesthetics and dermatological skincare categories delivered particularly strong performance, contributing significantly to overall growth.
• The company expanded its sales force by more than 40% compared to 2023, supporting the launch of new products and growth in emerging markets.
• Galderma's e-commerce sales grew over 30% year-on-year, with strong digital engagement reaching billions of consumers globally.

Negative Points

• The US market faced challenges with softer consumer demand and increased competitive pricing, particularly affecting filler demand.
• Galderma anticipates the biggest adverse P&L impact from investments in Nemolizumab in 2025, which may affect profitability.
• The company faces ongoing pricing pressures on gross margin due to a competitive landscape and some softer consumer demand in the US.
• There are concerns about the impact of tariffs on the company's manufacturing footprint and potential price increases for aesthetics consumers.
• The US mature therapeutic dermatology portfolio experienced a decline, not yet fully offset by new product sales.

Q & A Highlights

• Warning! GuruFocus has detected 2 Warning Sign with GMS.

Q: How should we think about the performance of injectable aesthetics in 2025 compared to the medium-term guidance? A: Unidentified_3 (CEO): We expect strong international growth in injectable aesthetics, driven by further penetration with neuromodulators and the introduction of sculpture in new markets. The US market is expected to ramp up throughout the year, with initial strong performance internationally. Unidentified_4 (CFO) added that the US market is expected to accelerate in aesthetics as the year progresses, with international markets being a key growth driver.

Q: Can you clarify the timing of the refiling for Realfodi in the US and discuss the US market dynamics for fillers? A: Unidentified_3 (CEO): We plan to refile Realfodi with the FDA by the end of 2025, with a six-month review time. The US market for fillers has shown some softness, but we see stabilization and positive growth compared to last year. We are focusing on international growth and leveraging our differentiated products to drive growth.

Q: How competitive were the discussions for securing access for Namluvio in the US, and what is the progress in Europe? A: Unidentified_3 (CEO): In the US, we have secured 40% of covered lives for Namluvio, with positive feedback from physicians and patients. In Europe, the feedback is similarly positive, and we are working on securing reimbursement in various countries. The product is well-received, and we are expanding our sales force to support its growth.

Q: How are tariffs impacting your business, and what adjustments are you considering for your manufacturing footprint? A: Unidentified_3 (CEO): We are adapting to the situation by considering more manufacturing in the US. Some products, like Nemluvio, already have part of their manufacturing process in the US. We are exploring options to mitigate tariff impacts while maintaining efficient manufacturing operations. Unidentified_4 (CFO) added that these factors are included in their guidance.

Q: Can you provide an update on Namluvio's operating costs and break-even expectations, and what are your M&A priorities? A: Unidentified_3 (CEO): We expect Namluvio to break even by 2027, with a billion-dollar sales run rate. We are open to M&A opportunities, particularly in dermatological skincare, but are currently focused on launching Namluvio and Realfodi. Unidentified_4 (CFO) confirmed that the break-even timeline remains unchanged, and investments are paying off with strong market penetration.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.