Lloydspharmacy restructure affects Celesio profits

Lloydspharmacy restructure affects Celesio profits
Lloydspharmacy has announced a number of new changes to its business this year, which has impacted on parent firm Celesio's bottom line

By Ben Sillitoe - 09:49AM - Fri 11th November 2011

Realignment of the Lloydspharmacy business in the UK held back profits at the high street pharmacy’s German parent company Celesio in the first nine months of 2011, results published yesterday show.

The British chain, which operates around 1,650 pharmacies across the UK, has experienced a number of structural changes in the year to date, with new mobile apps, a click & collect service and a website being unveiled in recent months.

Having appointed a new management team at the start of the year, it also acquired online medical service Drthom.com in March.

Celesio’s operating profit (EBITDA) for the nine months to the end of September fell by 18.7 per cent year-on-year to €413.6 million (£354 million), while revenue declined by 1.1 per cent to €17.2 billion.

The business area in which Lloydspharmacy operates, Patient & Consumer Solutions, reported revenues and EBITDA of €2.6 billion and €160 million, representing annual declines of 2.2 per cent and 31.2 per cent respectively.

Celesio is currently following a group-wide realignment strategy, which is set to see further expansion outside of Europe and the continuation of a scheme enabling the business to be more competitive globally.

But despite its profits decline in 2011 so far, the board said yesterday that it is confident of reaching its earnings forecast of €575 million EBITDA before one-off effects.

Markus Pinger, Chairman of the Celesio management board and group CEO, said: “With the strategic realignment of Celesio, flanked by an Operational Excellence Programme, we are convinced that we have set the right course to stabilise the earnings development in the short term and turn this back into the positive.

“In the long term, we will bring Celesio back onto the route of sustainable and profitable growth.

“We will therefore focus in a strategically consistent way on the still healthy core business in the areas of wholesale and pharmacies. Standing at the forefront are the improvement of competitiveness and strategic further development through innovations, co-operations and acquisitions.”

Lloydspharmacy is one of the largest retailers in the UK, with a high street presence nationwide.

In February the company unveiled former Asda and Woolworths director Tony Page as its new Managing Director, and ex-Carphone Warehouse senior manager Jeff Wemyss as its Head of Retail.

Commenting at the time of his arrival, Page said: “We’re entering a new healthcare landscape and there are significant opportunities for a business like Lloydspharmacy which places the needs of all its customers at its heart.

“I look forward to leading the business as we embark on the next phase of our growth.”

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