Tuesday, 26 March 2024 Reading time : 2 minutes

The IPO of dermatology specialist Galderma was a success: The shares climbed by around 20% to a closing price of CHF 64.00 on their first trading day on Friday and remain at this level at the beginning of the week. The issue price was CHF 53.00. This was the largest going public in Switzerland since 2017, according to the Swiss stock exchange SIX.

The IPO gives Galderma a market capitalisation of around CHF 15 billion. This puts the company in the range of the twenty largest Swiss shares, which are included in the SMI. By comparison, Logitech, the second smallest stock in the SMI, currently has a market capitalisation of just under CHF 13 billion. Nevertheless, Galderma shares are currently only part of the broad-based Swiss Performance Index. This is due to the low free float, as only 20% of the shares are currently tradable on the stock exchange. The remaining shares are currently held by the consortium led by Swedish private equity group EQT, which acquired Galderma from Nestlé in 2019. However, it is likely that some of these investors will sell their shares at the end of the 180-day lock-up period, increasing the free float.

Founded in 1981 as a joint venture between Nestlé and L'Oréal, Galderma today offers a wide range of skin care products, including prescription medicines for the treatment of skin conditions such as acne, psoriasis, and skin cancer. The company also produces cosmetic dermatology products, such as the Daylong sunscreen line and the Cetaphil skincare brand. In addition, the group is active in aesthetic treatments, offering the Botox product Azzalure, which is used for skin rejuvenation. 

Galderma faces stiff competition in each of its business areas. For example, the US pharmaceutical company AbbVie is one of the leaders in the Botox market. The French cosmetics group L'Oréal produces so-called cosmoceuticals, which combine cosmetic and pharmaceutical ingredients (Skinceuticals). In the premium skin care segment, Galderma competes with US beauty giant Estée Lauder, while consumer goods companies Beiersdorf (Nivea, Eucerin) and Unilever (Dove) are represented with products in the mid-price segment.

Unlike its competitors, however, Galderma focuses exclusively on skin care products. Accordingly, the group describes itself as a pure-play dermatology company.

Investment solution
The reverse convertible on Galderma allows investors to build up exposure to the newcomer. If the share price is higher or equal to the strike level of 95% at the final fixing, investors receive the invested capital and the coupon. If the share price is below the strike level at maturity, Galderma shares are delivered, with the purchase price being 95% of the initial fixing. The coupon is guaranteed and is paid in every scenario.

Reverse Convertible on Galderma
Coupon: 7.50% p.a.
Strike: 95%
Term: 6 months
Valor: 132 912 000
Termsheet

Indicative terms

 

Disclaimer
This communication is for marketing purposes. It is neither an offer nor an invitation to submit an offer, to purchase or to subscribe to securities and does not constitute investment advice. You should consult your advisors before making an investment decision.
Forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, financial condition, development or performance of the issuer to be materially different from any future results, financial condition, development or performance expressed or implied by such statements.
The present document has not been drawn up by the research department as defined in the rules of the “Directives on the Independence of Financial Research” published by the Swiss Bankers Association, hence these rules do not apply to this document.
If securities are mentioned in the communication, the base prospectus, the final terms and any key information document may be obtained free of charge from Zürcher Kantonalbank, Bahnhofstrasse 9, 8001 Zurich, VRIS, and from www.zkb.ch/finanzinformationen.