Big beauty IPO snapshot: Galderma’s shares climb at market debut, Douglas dips in Frankfurt comeback

25 Mar 2024 --- Investor confidence in a beauty-led resurgence of Europe’s IPO ecosystem has eyes on the market debuts of Swiss skin care brand Galderma and the perfumery and cosmetics retailer Douglas.

Douglas’ stock fell more than 12% upon its return to the Frankfurt Stock Exchange after ten years, while Galderma saw more promising gains on the SIX Swiss Exchange, with shares leaping 20.75% on its first day of trading.

While each beauty player is distinct in their own activities, both have set out an agenda to pay down critical debt loads tied to private equity ownership.

Galderma’s buoyant float
Galderma’s float — only a day after Douglas went public in Frankfurt — raised approximately CHF 2 billion (US$2.2 billion) “as planned” last Friday.

With an implied placement valuation of up to CHF 2.3 billion (US$2.6 billion), EQT Partners-owned Galderma is considered Switzerland’s largest IPO placement volume since 2017.

Galderma, which owns the Cetaphil brand, raised approximately CHF 2 billion (US$2.2 billion) last Friday (Image credit: Cetaphil).Last year, the company saw sales cross US$3 billion in the first three quarters, its highest recorded. Net sales jumped 8.9% year-over-year in the first nine months, with noticeable growth in international markets like Latin America and Asia, including China, India and Mexico.

Galderma’s brand portfolio includes Restylane, Dysport, Azzalure, Alluzience and Sculptra in injectable aesthetics; Cetaphil and Alastin in dermatological skin care and Soolantra, Epiduo, Differin, Aklief, Epsolay, Twyneo, Oracea, Metvix, Benzac and Loceryl in therapeutic dermatology.

Douglas driven down
While Galderma’s strong stock performance fuels speculation that Europe’s IPO market is finally rebounding after two lackluster years, Germany’s Douglas had a less satisfactory outcome on its float on the Frankfurt Stock Exchange.

Douglas’ shares dropped 4.7% last Thursday from an opening price of €25.50 (US$27.63) per share.

The German chain announced its plans to go public at the beginning of the month with efforts to raise €1.1 billion (US$1.2 billion) to reduce debt.

Douglas will earn €850 million (US$967 million) from the IPO with a market capitalization of €2.8 billion euros (US$3.05 billion).

The retailer operates a strategy, “Let it Bloom – Douglas 2026,” comprising a four-year growth plan across all business activities. It aims to increase group net sales to €5 billion (US$5.3 billion) by 2026. 

Big beauty goes public
Bullish equity markets and attractive interest rates are turning eyes on IPOs. In Spain, fragrance and fashion brand Puig sees a public offering as a potential future growth strategy.

Brazil’s Natura & Co. has also alluded to a possible split from its Avon brand into a distinct publicly traded company.

Last year, total IPO proceeds from the Europe, Middle East, India and Africa region dropped 39% from the previous year, according to EY’s Global IPO Trends 2023 report. The Americas region conversely enjoyed a 155% surge in total IPO proceeds in 2023, with about 132 deals closed on US exchanges.

By Benjamin Ferrer