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January 25, 2017

China, Saudi weighs on Abbott nutrition sales

US pharma group Abbott Laboratories saw sales from its nutrition business - which includes infant formula - fall in 2016, with the decline accelerating in the fourth quarter amid challenges in China and Saudi Arabia.

By Dean Best

US pharma group Abbott Laboratories saw sales from its nutrition business – which includes infant formula – fall in 2016, with the decline accelerating in the fourth quarter amid challenges in China and Saudi Arabia.

The company booked a 1.1% decrease in sales from its nutrition arm to US$6.9bn in 2016. Exchange rates hit the results; on an operational basis, which excludes fluctuations in currency, Abbott’s nutrition sales increased 1.2%.

Abbott’s nutrition arm saw sales in the US rise 3.5% in 2016 but international sales slid 4.3%, dampened by exchange rates. On an operational basis, Abbott’s international nutrition sales dipped 0.5% in 2016 year-on-year.

On a reported basis, sales from Abbott’s paediatric nutrition unit, which includes the Similac infant formula brand, fell 2.2% to $3.88bn in 2016. Stripping out the impact of exchange rates from the numbers, the division’s sales were flat year-on-year.

The strength of Abbott’s paediatric nutrition business in 2016 was in the US. The group’s domestic paediatric nutrition sales climbed 5.3% in 2016. However, international sales were down 7.2%, or by 3.5% when excluding currency.

In the fourth quarter, Abbott’s total nutrition sales fell 3.7%, or by 2.6% excluding currency, with falling sales overseas offsetting growth in the US. International nutrition sales dropped 8.1% in the fourth quarter, or by 6.3% when stripping out the impact of exchange rates. In the US, Abbott’s nutrition sales increased 2.7% in the fourth quarter. 

Abbott’s paediatric nutrition arm reported a 5.4% decline in fourth-quarter sales – or a 4.3% fall excluding currency.

On a reported basis, Abbott’s international paediatric nutrition sales dropped 13.1% in the fourth quarter. Excluding currency, sales were down 11.2%.

The company said “challenging market conditions” in China and “market softness” in Saudi Arabia offset “continued strong performance in Latin America and south-east Asia”. 

However, Abbott’s US paediatric nutrition sales climbed 6.2% in the fourth quarter.

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