Ares-Serono Faces "Two Tough Years"

The Swiss-based drugs producer Ares-Serono faces two tough years ahead, according to the company's finance director Hannes Thierstein. Sales in 1994 are set to fall further below the 1993 level ($755.2 million) to about $650 million. The company has still to recover from the downturn in volume sales in its two key markets, Italy and Spain, in the wake of national health care cost-cutting reforms.

In addition, Ares-Serono was affected by exchange rate variations in its dollar-based accounts. Group sales fell 11.6% last year and profits contracted 32.7% to $72.5 million. First-half 1994 sales dropped a further 5.1% to $314.7 million (Marketletter September 12).

The forecast for 1994 takes into account Ares-Serono's mid-year hiving-off of its diagnostics division, which represented sales of over $54 million. Mr Thierstein said the company faced both the current price pressures affecting the entire drug industry and relatively high costs of introducing new products next year. However, he said the company was set to return to double-digit growth in sales and profits in 1996.