Boots sets eye on emerging markets
Wednesday 11 June 2008
The health and beauty specialist Alliance Boots is to target the world's largest emerging markets after revealing soaring profits for the year in which it was taken private in an £11.1bn private equity deal.
Alliance Boots' executive chairman, Stefano Pessina, said: "We are looking at Asia and Latin America. We are also looking at other countries in Europe but what we want to focus on are the big countries."
Mr Pessina said the company was talking to "several" partners to enter the burgeoning Indian market, but said a deal was not imminent. However, he ruled out launching in the United States. His comments came as Alliance Boots posted trading profits before one-off items, goodwill and associates, up 20.3 per cent to £771m for the year to 31 March.
Total revenues grew by 4.8 per cent to £15.3bn. Mr Pessina said: "We knew at the time of the acquisition that a lot could be done with the company."
Last June, Alliance Boots was taken private by Mr Pessina and the private equity firm Kohlberg Kravis Roberts. It was was Europe's largest leveraged buy-out at the time. In the UK, Alliance Boots' health and beauty division grew its total sales by 3.3 per cent to £6.2bn and its like-for-like sales jumped by 3.6 per cent.
Mr Pessina said it was "possible" that consumer downturn may have an impact on its UK retail arm this financial year, but he expects its pharmaceutical wholesale business to remain unscathed. "[In the UK], we are mostly selling medicine and healthcare products and these will not see any impact because for most of them the final payer is the government," said Mr Pessina.
He said Alliance Boots – formed by the merger of pharmacy and beauty chain Boots and the drugs distributor Alliance Unichem in 2006 – delivered £68m of cost savings during the year.
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