How Much Can Johnson & Johnson’s Consumer Healthcare Revenue Grow Over The Next Three Years?

by Trefis Team
+12.72%
Upside
130
Market
147
Trefis
JNJ
Johnson & Johnson
Rate   |   votes   |   Share

Johnson & Johnson’s (NYSE:JNJ) consumer healthcare revenue could grow at a CAGR of 1.6% from $13.8 billion in 2018 to $14.5 billion in 2021, according to Trefis estimates. This growth will likely be led by portfolio changes, including the impact of the Ci:z Holdings Co. acquisition, and the baby care relaunch. Consumer healthcare is relatively a smaller business for J&J, with 17% contribution to the top line in 2018. In this analysis, we compare J&J’s growth in consumer healthcare vis-à-vis its primary competitors and provide an outlook of the future course of business. You can view our interactive dashboard analysis ~ How Much Can Johnson & Johnson’s Consumer Healthcare Revenue Grow Over The Next Three Years? ~ for more details.  In addition, you can see more of our data for Healthcare companies here.

How Much Has Johnson & Johnson’s Consumer Healthcare Revenue Grown Over The Last 5 Years?

  • Johnson & Johnson’s Consumer Healthcare sales have declined from $14.5 billion in 2014 to around $13.8 billion in 2018.
  • This represents a 1.1% average annual decline in revenues (2014-2018).
  • This can primarily be attributed to currency headwinds, along with some divestitures, including Tucks and Splenda.

What Will Drive The Growth Over The Next 3 Years?

  • J&J’s Consumer Health sales could grow from $13.85 billion in 2018 to $14.52 billion in 2021.
  • The sales growth will likely be led by steady growth across its Beauty, Baby, OTC, and Other products.
  • Baby Care was relaunched in the U.S. recently, and the company intends to relaunch its range in the international markets this year.
  • Beauty products are seeing higher sales of Neutrogena, Aveeno, and Dr. CI Labo, which was recently acquired by the company. These brands should continue to drive beauty sales growth in the near term.
  • OTC products growth can partly be attributed to the Zarbee’s acquisition, and continued growth in sales of digestive health products.

What Are The Risks That Could Hamper The Growth?

  • Pfizer and GlaxoSmithKline have agreed to merge their consumer health businesses to form a new company, which could garner higher growth with associated synergies.
  • Johnson & Johnson’s talc products, in particular, have been in the limelight of late, with several lawsuits regarding the presence of asbestos. This could result in weaker demand for the company’s talc products.
  • Bayer’s increased focus on portfolio changes in Consumer Health could result in market share gains. Bayer is targeting accelerated sales for its Consumer Health business, with growth gradually increasing to 3% to 4% by 2022, as compared to 1% in 2019 (in local currency).

How Does Johnson & Johnson’s Growth In Consumer Healthcare Compare To Its Peers?

  • Johnson & Johnson’s Consumer Healthcare sales have declined at an average annual rate of 1.1%, while its peers have seen growth during the same period.
  • Bayer’s Consumer business sales grew at a CAGR of 3.7% from $5.6 billion in 2014 to $6.4 billion in 2018, and they could grow in low single-digits on average over the next few years.
  • GlaxoSmithKline’s Consumer Healthcare sales grew at a CAGR of 10.4% from $7.1 billion in 2014 to $10.4 billion in 2018, and they could also grow in low single-digits over the next few years, not considering the impact of Pfizer’s consumer health business merger with that of GlaxoSmithKline.

How Big Is The Consumer Health Business For Johnson & Johnson?

  • Johnson & Johnson’s Consumer Healthcare sales accounted for 19.5% of the company’s total revenues in 2014.
  • The figure declined to 17.0% in 2018, and we expect the figure to be around 18.0% in 2021, as the company sees lower contribution from Pharmaceuticals, amid risk of competition from biosimilars to its drugs.

 

 

What’s behind Trefis? See How it’s Powering New Collaboration and What-Ifs

For CFOs and Finance Teams | Product, R&D, and Marketing Teams

All Trefis Data

Like our charts? Explore example interactive dashboards and create your own.

Rate   |   votes   |   Share

Comments

Name (Required)
Email (Required, but never displayed)
Be the first to comment!