Consumer Health

Market growth unchanged

In 2017, growth of the global Consumer Health market came in at slightly below 4% (2016: 4%). Important growth drivers included steady demand for self-care products and a strong cold season in Europe. In contrast, a weaker allergy season, pricing pressure in the e-commerce distribution channel, and intensified competition weighed on growth.

Sales decline slightly against the previous year

Sales of Consumer Health fell by 1.7% (Fx & portfolio adj.) in 2017 to €5,862 million. This was attributable to persistently weak business development in the United States. Furthermore, the Chinese authorities changed the legal status of two of our medicated skincare brands from OTC schließen OTC (over-the-counter) designates the business with nonprescription medicines. to prescription, which led to sales declines of around €70 million in the fourth quarter of 2017. Sales in Latin America came in at the prior-year level (Fx adj.). By contrast, business expanded slightly in Europe / Middle East / Africa, and particularly in Germany.

Sales by product

• Sales of the antihistamine Claritin™ were down slightly against the previous year, in which we benefited from a product line extension in the United States. The main reason for this was intensified competition in the United States and Japan. Sales developed positively in China.
• We posted slight growth for our analgesic Aspirin™ that resulted primarily from a positive business performance in North America and Europe / Middle East / Africa. Including business with Aspirin™ Cardio, which is reported under Pharmaceuticals, sales climbed by 6.5% (Fx adj.) to €1,043 million (2016: €1,001 million).
• Business with our Bepanthen™ / Bepanthol™ wound and skin care products expanded. We achieved gratifying sales gains particularly in Europe / Middle East / Africa, and especially in Germany.
• Sales of our analgesic Aleve™ fell sharply compared with the previous year, which benefited from a product line extension. The primary reason for the sales decline in 2017 was intense competition in the United States.
• We achieved sales growth with our Canesten™ skin and intimate health products, in a development that was mainly attributable to a positive business performance in China and the United Kingdom.
• Sales of our Alka-Seltzer™ product family to treat gastric complaints and cold symptoms declined slightly against the previous year. Sales declines in Latin America were partly offset by gains in the United States that resulted mainly from a strong cold season.
• Sales of our One A Day™ vitamin product advanced further on a currency-adjusted basis, especially in the United States, where we benefited from the expansion of our regular and e-commerce distribution channels.
• Sales of our Dr. Scholl’s™ foot care products declined markedly, particularly in the United States, due to the repositioning of the brand. The success that followed this move was not sufficient to fully offset the associated inventory reduction.
• Sales of our sunscreen product Coppertone™ were lower, primarily as a result of intensified competition in the United States and Brazil.
• Business with our prenatal vitamin Elevit™ developed well, due mainly to steady demand in Asia / Pacific.

Earnings

In 2017, EBITDA before special items declined by a substantial 12.8% to €1,231 million. Adjusted for negative currency effects of €25 million, earnings were down 11.0%. This decline was largely due to lower volumes, in part as a consequence of the reverse switch in China and the associated effect of around €50 million, as well as a higher cost of goods sold, primarily as a result of inventory impairments. Earnings were also held back by higher selling expenses. Positive contributions came from one-time gains of around €80 million, predominantly relating to the divestment of noncore brands.

EBIT of Consumer Health receded by 25.5% to €518 million, after special charges of €300 million (2016: €292 million). These comprised €202 million for impairment losses on intangible assets and €98 million for restructuring measures.