Skin care company Galderma's shares soar on market debut

By Dave Graham and John Revill

ZURICH (Reuters) -Galderma's shares surged as much as 18% on Friday after the maker of cosmetic fillers and medical creams completed what could be one of the biggest flotations in Europe this year.

The skincare company's shares raced to 62.68 Swiss francs in early trading on the SIX Swiss Exchange, up from the final price for its initial public offering (IPO) of 53 francs per share

The high gave Galderma - originally set up as a joint venture between Nestle and L'Oreal before being bought by group of investors in 2019 - a market value of 14.9 billion francs ($16.6 billion).

The IPO could be a signal for other big flotations to go ahead as rising equity markets and the prospect of lower interest rates stoke investor interest after a barren spell for European new issues.

"Investors are clamouring for offerings promising growth at a reasonable price," said Philipp Buchli, managing partner at Hindsight Capital. "Near term we see this as stock price supportive."

Galderma CEO Flemming Ornskov rang a giant cow bell as the opening price was announced at an event held at business centre at Zurich airport.

The Danish executive said investors from "all around the world" had snapped up the company's stock.

"You have a significant portion in the U.S., you have Europe, you have Switzerland," he told Reuters, noting there had also been demand from Asia and the Middle East.

Ornskov declined to say when more Galderma stock could be offered, noting that Swedish private equity firm EQT, the company's main shareholder, was in a six-month lock-up period

With an initial 2 billion francs raised, which could rise to 2.3 billion francs if an over-allotment option is fully exercised, the IPO is the biggest in Switzerland since smart meter maker Landis + Gyr raised a similar sum in 2017.

Galderma sells Cetaphil, a product for damaged and sensitive skin, as well as sunscreen, anti-aging products, and medicines for acne, psoriasis and skin cancer.

Proceeds from the IPO, which consisted mainly of new shares, will be used to pay down debt.

The owners, which as well as EQT include Singapore's GIC and the Abu Dhabi Investment Authority (ADIA), say they will remain invested in Galderma.

Galderma's debut contrasts with that of German perfume and cosmetics retailer Douglas, whose shares dropped 12% on their return to the stock market on Thursday.

Galderma, which employs around 6,500 people, increased sales by an average of 11.9% annually between 2019 and 2023, topping $4 billion last year.

The company will give guidance for 2025 later in the year, Ornskov said.

"I think the growth profile is very strong, both on top and bottom line," he said.

($1 = 0.8991 Swiss francs)

(Reporting by John Revill and Dave Graham, additional reporting by Oliver Hirt, editing by MIranda Murray and Mark Potter)