Galderma Earnings: Solid Delivery Overshadowed by Market Weakness and US Demand Softening

Narrow-moat Galderma reported strong first-half 2024 results that were largely in line with our expectations for the full year, and we're leaving our fair value estimate unchanged. Net sales grew by 10.8% on a constant currency basis, primarily driven by solid volume development and a positive portfolio mix contribution. The core EBITDA margin was 23.4%, 90 basis points ahead of the same period of last year. For full-year 2024, management now expects net sales growth at the upper end of the previously communicated 7%-10% range and confirmed the core EBITDA margin guidance of flat compared with 2023. Shares opened around 1% higher but quickly moved into the red, which we attribute to widespread market weakness and some signs of demand softening across key markets, including the US.