Double-digit profit gains for Alliance Boots

Global health trends bode well for Alliance Boots future, executive chairman says

BERN, Switzerland — Alliance Boots on Wednesday reported a double-digit profit gain for its year ended March 31. Underlying profit after tax was up 12.7% to $1.2 billion, though revenue was down slightly by 2.6% to $34.2 billion. 

“2012-2013 has been a transformational year for Alliance Boots, putting us on a path to become the clear global leader in our industry," Stefano Pessina, Alliance Boots executive chairman said during a webcast presentation. "Against the background of major corporate activity … and the continuing challenging market conditions prevalent across the world, Alliance Boots has again delivered double-digit growth in underlying profit after tax," he said. "Any way you look at it, this was a strong performance, given the continuing economic difficulties across the globe."

"Looking forward, we expect the economic environment to remain difficult with ongoing pressure on both consumer and governmental expenditure," commented George Fairweather, Alliance Boots group finance director. "Despite this, we continue to be confident about our prospects and ability to pursue profitable growth." That profit will be generated organically from existing businesses, increasing profits from the joint synergy program and future acquisitions, Fairweather said.

Indeed, underlying trends in global healthcare support continued growth ahead, Pessina noted. "Demographic and social pressures continue to drive demand for health care and medicines while payers attempt to constrain overall cost. These trends increase demands for generic medicines and for high-quality services delivered in local communities, both of which we are ideally placed to meet."

In the U.K. market, where Alliance Boots operates 2,386 Boots pharmacies, the company extended its health services through a 49% stake in Sonova's U.K. subsidiary. Sonova operates around 390 practices providing hearing healthcare solutions, mainly trading as Boots hearing care within Boots stores and Boots Opticians practices. "Through this … investment, we now have a leading position in the U.K. hearing care market," Fairweather said. And the company's synergistic Boots Opticians division realized a 2.7% gain. 

Alliance Boots has also recast its No7 beauty brand in the past year into the global market, launching its first U.S.-based No7 boutique at the Walgreens flagship store in Hollywood. "[This builds] on No7's established position in over 1,770 Target stores across America," Fairweather said. "And in Asia, we've commenced a trial with Dairy Farm, selling Boots products, including No7, in a select number of Mannings Health and Beauty stores in Hong Kong."

"One of our key strengths is our ability to deliver the benefits of our international scale to each and every customer — patient, pharmacist or suppliers — in a way that is personalized and relevant to them in their local market," Pessina concluded. "We are in a unique position to partner with both branded and selected generic pharmaceutical manufacturers across the globe, to develop their business for our mutual benefit. … No other group has the international management expertise, scale and dimension to replicate this." 

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