Alliance Boots provided a mid-year update covering the six months ended Sept. 30, 2011. The company reported a revenue increase of 31.3%, with the internationalization of its product brands accelerating around the globe. The company is also reportedly investigating the possibility of locations in the U.S., provided it finds the right partner, as well as doing more science-based research and development for new skin care products, aiming to compete with multinational beauty companies.
Of its financial update, Stefano Pessina, Alliance Boots executive chairman, commented, “We performed strongly in the first half of the year, despite subdued consumer demand and governmental action across Europe to contain growth in health care expenditure, and are on track to deliver our 2011/12 targets. Boots delivered a good performance, taking into account the difficult U.K. consumer environment and governmental measures to curb health care spending. This was a result of its ongoing focus on value, customer care, innovation and costs. Our pharmaceutical wholesale division continues to grow rapidly, its results benefiting from last year’s acquisitions and a strong focus on service and costs.”
Specifically in its health and beauty division, the company recorded a revenue increase of 0.4%, to £3,652 million. Key product categories that performed well versus the first half of last year included positive health care products such as vitamins, premium beauty, self-selection cosmetics, fragrances, indulgent bathing, hair products and baby care. The company was particularly pleased to increase market share in its key beauty category, assisted by a strong brand offer, including leading skin care brand No7. In August, Boots launched a high-profile brand positioning campaign designed to celebrate the ‘ta dah!’ beauty moments that No7 products create for British women. This highlights that No7 anti-aging skin care products are tailored for different ages. No7 beauty consultants provide advice as to which products are most suitable for a particular person’s skin.
In countries outside the U.K., total revenue increased by 8.6% on the first half of last year. On a constant currency basis, revenue increased by 3.9% in total. Like-for-like revenue decreased by 0.3%, mainly due to the weak Irish economy. A net 20 new stores were opened during the period outside the U.K., of which nine were in Thailand, where the company expects to open its 200th store later this financial year. In The Netherlands, Boots increased the number of “Boots apotheek” pharmacies to 16, with more rebrandings being planned for the coming months. In addition, its No7 brand continues to perform strongly in the U.S., benefiting from recent product awards.
The company also has an ongoing focus on corporate development in support of its strategy to enter new geographical markets and to expand its presence in existing markets through acquisitions and strategic partnerships. Increasingly this includes the international development of its product brands. Following the successful launch in Italy of the Boots Laboratories beauty range last year in partnership with Procter & Gamble, the company is extending this partnership to sell Boots Laboratories through pharmacies in Germany, Austria and Switzerland from January 2012. Following these launches, the Boots Laboratories brand will be available in pharmacies across seven European countries.
