Perrigo's Omega Pharma Struggles In 2018 As It Continues To Restructure And Divest
Executive SummaryPerrigo's Europe-focused consumer health business Omega Pharma found sales growth hard to come by in 2018 as the group worked hard to right size the organization. While it still has a way to go to completely turnaround Omega, Perrigo is starting to see these interventions pay off, with profits up for the 12 months.
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President and CEO Murray Kessler attempts to temper expectations before investor day on May 9 saying Perrigo's turnaround under strategy implemented after he joined firm in November is in its early days. Private label leader, however, will report another step in its move to return to being consumer product-focused: agreement to sell its animal health business to PetIQ for $185m cash.
IRS tax assessment for 2013, the year Perrigo acquired Dublin-based Elan, adds another cloud to OTC private label giant's outlook as it prepares to present plans for accelerating growth for its long-slumping consumer health business in the US and Europe at a March 9 investor day conference. Perrigo shares dropped more than 9% in early trading after IRS notice became known to investors before inching upward and ending at $47.92, down 6.8% from the previous day's close.
As "market leader" in OTC nicotine replacement treatments, Perrigo should "be the one that's doing a lot of innovation," says CEO Murray Kessler. He discussed Perrigo's problems and potential sales drivers as it reported 2018 net sales of $4.7bn, down 4% , and Q4 net sales of $1.2bn, down 7%. Global consumer health product sales for year were flat at $3.9bn and Q4 sales were down 4% at $973m.