The Siegfried Group reported a good result for the 2018 financial year, the best in its corporate history. Sales amounted to 794.3 million Swiss francs, corresponding to a growth of 5.8 percent. Earnings before interest, taxes, depreciation and amortization (EBITDA) grew by 14.5% to 127.4 million Swiss francs, corresponding to an EBITDA margin of 16.0 percent (2017: 14.8 percent). Earnings, therefore, again grew faster than sales. Siegfried achieved a significantly higher net profit of 57.5 million Swiss francs (2017: 40.8 million Swiss francs), an increase of 40.9%.
The Board of Directors recommends to the Annual Meeting a higher distribution to shareholders of 2.60 Swiss francs per registered share, structured as a distribution from capital contribution reserves (previous year: 2.40 Swiss francs).
Higher Operating Cashflow
For 2018, Siegfried reports an operating cashflow after change in net working capital of 106.0 million Swiss francs (2017: CHF 84.6 million), corresponding to an increase of 25.2%. Investments in tangible and intangible fixed assets amounted to 60.1 million Swiss francs (2017: CHF 52.8 million).
Drug substances and corresponding intermediates represent about three quarters of Siegfried’s sales, and drug products about one quarter. The growth of approximately six percent (4.5% adjusted for currencies) is robust. Siegfried showed a slight growth in drug substances and a strong growth in sterile filling of liquids (vials, ampoules, cartridges and others) and solid dosage forms (tablets and capsules). Siegfried’s business with drug substances, for the first time, includes sales from products manufactured at the Nantong site.
Siegfried will Continue to Invest
As an answer to the increasing demands from Siegfried’s customers and to take the best possible advantage of the opportunities provided by a growing market, the Siegfried Group continues to strengthen its technological capabilities and further integrates its production activities across the entire network of manufacturing sites. Therefore, in the year under review, Siegfried invested in research & development and in additional production capacity. In Zofingen, some 40 new laboratory workplaces were put into operation in November 2018 and are now gradually being occupied according to market needs. The Hameln site is currently developing additional capabilities and capacity that will be used for the aseptic filling of biological drug substances. Corresponding customer contracts have been signed. In St. Vulbas, near Lyon, Siegfried invested in the adjustment and expansion of production facilities to process a large customer order. The product was formerly produced at our production site in Pennsville only. In addition, Siegfried invested in optimizing internal business processes. In early 2018, the company took into operation a new packaging and warehouse building in Irvine. In October 2018, a new logistics center was inaugurated in Zofingen which will simplify processes at the site. In the course of the fourth quarter, the Hameln site was successfully integrated into Siegfried’s worldwide SAP network.
For the current year, in order to meet the requirements of the intended growth, Siegfried is planning to make additional investments in its technological capability, optimization of business processes and additional production capacity.
Focus on Further Growth
Consolidation in the CDMO market will continue to proceed considering that today the ten leading CDMO companies have a market share of below 20 percent and size in this industry represents competitive advantage. Consequently, for Siegfried, achieving and continuing to expand critical size remains a core element of its corporate strategy to assert and further expand its position at the forefront of the segment. It is Siegfried’s target to profitably grow organically in line with the market, with the ambition to outgrow it including selective and value-accretive M&A. As defined in its current “Evolve” strategy, Siegfried aims to make acquisitions in the field of both, drug substances and drug products. It remains a primary goal to offer both services – chemical and pharmaceutical development and large-scale production – as an integrated offering from a single source and thereby simplifying our customers’ supply chains and making them more efficient.
For the current financial year, at constant currencies, the Siegfried Group expects to grow sales at least in the mid single-digit range and to continue to improve the operating earnings margin (EBITDA).
Peter Gehler, Chief Communications Officer
Tel. +41 62 746 11 48
Mob. +41 79 416 41 16
Contact Financial Analysts:
Chief Financial Officer
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Siegfried Holding AG
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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 2018, Siegfried reported annual sales of CHF 794.3 million and employs at the time being approximately 2350 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 aseptic 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.