Half Year Report 2015

Siegfried with sales growth and continued high earning power

>Media Release

  • With sales of CHF 200.7 million for the first six months of 2015, Siegfried Group (SIX: SFZN) reported the highest half-year sales result in over ten years. The result exceeds that of the previous year by CHF 35.6 million, representing a 21.5% increase in Swiss francs or 25.0% in local currencies.
  • Profitability remained stable at a high level with an EBITDA of CHF 34.6 million (+ 21.8%) and an EBITDA margin of 17.2% (previous year: 17.2%).
  • Net profit amounts to CHF 20.1 million (2014: CHF 18.8 million).
  • The new production facility in Nantong has been inaugurated.
  • The acquisition announced in May 2015 of significant segments of BASF’s pharmaceutical supply business and connected three locations is progressing according to schedule.
  • With total sales of over CHF 600 million and EBITDA in the range of CHF 100 million, Siegfried will achieve the necessary size to be the leading and comprehensive supplier in the pharmaceutical CMO field.


Growth in active pharmaceutical ingredients and finished dosage forms

The actual growth driver of sales in the active pharmaceutical ingredients segment in the first six months of 2015 proved to be exclusive synthesis, which grew by 28%. Overall, sales of active pharmaceutical ingredients grew by 3.3%. Business with finished dosage forms grew by 81%. The increase is due mainly to the acquisition of Hameln Pharma end of 2014.

Continued good profitability

Both the EBIT margin and the EBITDA margin remained relatively constant in the period under review, although the Hameln Pharma profitability is still diluting the margin. The Siegfried Group’s EBIT reached CHF 20.5 million, compared to CHF 16.6 million in the comparable period of 2014. The EBIT margin therefore increased from 10.1% to 10.2%.

Successful management of currency influences

Despite the currency turbulences surrounding the Swiss franc, the Siegfried Group’s sales adjusted for acquisitions remained stable, and earnings were influenced only insignificantly.

New site in Nantong, China, operational

In October 2014, the pilot plant in Nantong, China, commenced operation; in May 2015, the entire facility was completed, and all necessary approvals and licenses have been obtained. Nantong represents an important part of Siegfried’s market offer, which is growing significantly more attractive and denotes a vital element of Siegfried Group’s future growth.

Integration of Hameln Pharma soon to be completed

The first half of 2015 was characterized by the post-merger integration of Hameln Pharma. Revocation of the warning letter issued by the US regulatory authority was an important milestone. Today, Hameln Pharma operates in the market under the Siegfried brand. The company has been fully integrated into the Siegfried Group’s functional management structure. The integration was quick and smooth and is nearly completed.

Acquisition of significant segments of BASF’s CMO business on schedule

The acquisition of significant parts of BASF’s supplier business and three production sites is on schedule in every respect. Similar to Siegfried, the BASF business unit concerned supplies the worldwide pharmaceutical industry and produces active pharmaceutical ingredients and intermediates, thus ideally complementing Siegfried’s range. The transaction comprises sites in Minden (Germany), Saint-Vulbas (France) and Evionnaz (Switzerland), making Siegfried the leading supplier in this field. The combination of Siegfried and BASF’s pharmaceutical supply business represents an attractive base for sustained profitable growth.

Robust financing

Siegfried Group continues to be soundly financed. Financing of the BASF transaction is secured by two Swiss banks. As announced earlier, RAG-Stiftung Beteiligungsgesellschaft mbH based in Essen (Germany) will participate in a convertible hybrid bond in the amount of CHF 60 million which will be implemented toward partly financing the acquisition. The bond entitles RAG-Stiftung to convert the amount within 5 years into Siegfried Holding AG shares. 

Implementation of Transform Strategy

The acquisition of significant parts of BASF’s supply business and connected chemical-pharmaceutical production units and putting into operation the Nantong plant complete implementation of the Transform Strategy as defined in 2010. In terms of the strategy, AMP in California and Hameln Pharma were acquired previously. Additionally, in Zofingen and in Malta, suites for the production of highly effective drugs were established and a state-of-the-art, high-efficiency spray dryer installed in Pennsville. In Zofingen, a new production facility was built to be commissioned in the current financial year. In August 2015, a new administration building in Zofingen meeting the latest trends in office cooperation was inaugurated.   

Comparable sales expected for second half-year

In the second half of 2015 – before inclusion of BASF’s production and supply business sales – the Siegfried Group expects comparable sales in local currencies as in the first half-year and a continued stable performance. 

Siegfried envisages dividend pay-out for the 2015 financial year to be higher than that of the previous year.

 

For further information:

Media:                                                             Financial Analysts:

Peter Gehler, Chief Communications Officer        Michael Hüsler, CFO

peter.gehler@siegfried.ch                                   michael.huesler@siegfried.ch
Phone +41 (0)62 746 11 48                              Phone +41 (0)62 746 11 35
Mobile +41 (0)79 416 41 16                              Mobile +41 (0)79 279 94 52

Siegfried Holding AG
Untere Brühlstrasse 4
CH-4800 Zofingen
Tel. +41 (0)62 746 11 11
Fax +41 (0)62 746 11 03
www.siegfried.ch

 

About Siegfried

The Siegfried Group is active worldwide in the field of Life Sciences with production facilities located in Switzerland, Germany, China, Malta and in the USA. At the end of 2014, Siegfried reported annual sales of CHF 315 million and employs at the time being approximately 1400 employees. Siegfried Holding AG is listed on the Swiss Exchange (SIX: SFZN).

Siegfried is active in both the primary and secondary production of drugs. The company develops and manufactures active pharmaceutical ingredients for the research-based pharmaceutical industry as well as the corresponding intermediate steps and controlled substances, and provides development and production services for drugs in finished dosage forms including sterile filling.

Cautionary Statements Regarding Forward-looking Statements

This press release may contain forward-looking statements based on current assumptions and forecasts made by Siegfried Group management and other information currently available to the Siegfried Group. Various known and unknown risks, uncertainties and other factors could lead to material differences between the actual future results, financial situation, development or performance of the company and the estimates given here. Siegfried Holding AG does not intend, and does not assume any liability whatsoever, to update these forward-looking statements or to conform them to future events or developments. 

Contact:

Siegfried AG
Peter A. Gehler
Chief Communication Officer
Untere Bruehlstrasse 4
4800 Zofingen
Switzerland

Phone +41 62 746 1148
peter.gehler@siegfried.ch

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