For the 2017 financial year, the Siegfried Group reported a very sound result. Sales amounted to 750.5 million Swiss francs, corresponding to a growth of 4.6%. Following years of significant acquisitions, Siegfried achieved robust organic growth. Earnings before interest, taxes and amortization (EBITDA) grew significantly by 17.8% to 114.0 million francs, corresponding to an EBITDA margin of 15.2%. The margin is within the targeted range of 15 - 20%. Siegfried achieved net profit of 39.7 million francs, which is clearly above that reported the previous year (27.9 million francs), representing a growth of 42.4%.
Increase of the dividend
Based on the gratifying annual result, the Board of Directors will recommend to the Annual General Meeting a higher dividend (distribution to shareholders) of 2.40 francs per share from the capital contribution reserves (previous year: 2.00 francs).
Significant increase of operating cash flow
Siegfried reports operating cash flow for 2017 after change in net current assets of CHF 84.4 million (2016: CHF 57.1 million). This corresponds to a significant increase of 47.8%. Investments in tangible and intangible fixed assets were lower than for the previous year and amounted to CHF 52.8 million (2016: CHF 68.4 million). Following heavy investments in previous years, investment activity in 2017 has returned to normal.
Critical size remains strategic focus
In the past three years, with three acquisitions, the Siegfried Group achieved the critical size required in the pharmaceutical supplier industry. At the same time, the company completed its entrance into sterile filling and significantly increased the competitiveness of its production network thanks to the new production plant in Nantong (China). Siegfried’s production network today comprises nine sites, of which six are active in the area of drug substance and three in drug product. By means of the “Evolve” strategy, the Siegfried Group is sharpening its strategic orientation and giving it a concrete form in order to launch the next chapter in the company’s development.
Given the ongoing consolidation in the CDMO market, the supplier market to the worldwide pharmaceutical industry, critical size will remain a major topic. Consequently, in addition to continuous organic growth, Siegfried is actively evaluating potential acquisitions to meet the demands of customers. In addition, the “Evolve” strategy strengthens the continued technological expansion of the nine sites worldwide. A significant milestone has been achieved in the year under review by means of developing and expanding capabilities in sterile filling of biologically produced drug products and the corresponding investments in Irvine and Hameln. The close cooperation with Symphogen, a Danish biotechnology company, represents an initial success in this market segment.
Further growth in the current financial year, mid-term guidance confirmed
Siegfried anticipates sales to continue growing. At constant exchange rates, sales are expected to grow at a mid-single-digit percentage rate in the current financial year. The operating margin (EBITDA) is also expected to continue to improve significantly. The company confirms its expectations: sales of CHF 900 million and EBITDA margin of about 20% in the medium term. We aim to further increase the dividend payout.
Peter Gehler, Chief Communications Officer
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The Siegfried Group is active worldwide in the field of Life Sciences with production facilities located in Switzerland, the USA, Malta, China, Germany and France. At the end of 2017, Siegfried reported annual sales of CHF 751 million and employs at the time being approximately 2300 employees at nine locations on three continents. 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 manufactures active pharmaceutical ingredients for the research-based pharmaceutical industry as well as the corresponding intermediates and controlled substances, and provides development and production services for 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.