LONDON — Alliance Boots, the pharmaceuticals, health and beauty firm, on Thursday reported a 32.4 percent climb in net profits to 936 million pounds, or $1.48 billion, in the year to March 31.
Dollar figures have been calculated at average exchange rates for the periods to which they refer.
Stefano Pessina, executive chairman of Boots, attributed the profit rise to the firm’s “ability to adapt to meet new challenges in a financially disciplined way.” Pessina noted that the company had achieved “strong” earnings growth against the backdrop of markets that were “significantly more challenging than I have experienced for a very long time.”
The company also said that its joint synergy program with Walgreens, following Walgreen Co.’s acquisition of a 45 percent stake in Alliance Boots in 2012, is providing the company with “significant financial benefits,” and said that the synergies achieved between the two companies are “ahead of target.” They include the Walgreens Boots Alliance Development in Switzerland, which was established in late 2012 to lead global relationships with pharmaceutical suppliers, along with a joint own-brand sourcing program that employs the Alliance Boots hub in Asia and the roll-out of select Boots brands across Walgreens’ store network.
Alliance Boots’ revenues rose 4.3 percent to 23.4 billion pounds, or $37.2 billion.
Sales at Alliance Boots’ health and beauty division grew 2.5 percent during the year to 7.66 billion pounds, or $12.2 billion, while the division’s trading profit was up 2.4 percent to 886 million pounds, or $1.41 billion. The company said the division registered “good retail revenue growth, during an increasingly competitive and promotion-led trading environment,” and noted that it grew market share in the U.K. thanks to its omni-channel retail offer. The division’s trading margin was flat at 11.6 percent.
In the U.K., revenues in Alliance Boots’ beauty and toiletries category rose 3.4 percent to 2.25 billion pounds, or $3.58 billion, with sales of Boots’ No7 skin care brand climbing during the year, the company said.
Alliance Boots also said that retail sales of its Boots products by U.S. wholesale customers stood at $120 million for the year, thanks to its products being sold in a more locations, including more Walgreens stores.
Looking ahead, the company said it expects to see “some improvement” to the overall trading environment “particularly in the latter part of the coming year.” The company also noted that in February, the six-month window opens during which Walgreens can exercise its option to fully merge with Alliance Boots, by acquiring the remaining 55 percent of the company.