Media Release Feb 22, 2023
On the move since 150 years: Siegfried significantly increases sales and profits in 2022
Net sales up to CHF 1.229 billion (+15.6% increase versus prior year in local currencies). Core EBITDA of CHF 272.5 million (prior year CHF 207.2 million) at an expanded margin of 22.2% (prior year 18.8%).
In a year of macroeconomic uncertainties, Siegfried demonstrated its resilience and delivered a strong performance for the full year 2022. Net sales reached 1.229 billion Swiss francs (CHF), an increase of 15.6 percent in local currencies (2021: CHF 1.102 billion), supported by both, Drug Substances and Drug Products. Core EBITDA grew from CHF 207.2 million to now CHF 272.5 million, 31.5 percent higher than 2021. This resulted in a core EBITDA margin of 22.2 percent (2021: 18.8 percent), exceeding the 20 percent mark for the first time on a full2 year basis. Core net profit grew by 34.1 percent to CHF 127.8 million (2021: CHF 95.3 million). Net profit according to Swiss GAAP FER was higher than the core net profit and amounted to CHF 156.5 million. The Board of Directors will propose to the Annual General Meeting an increase of the payout to the shareholders to 3.40 Swiss francs per share (2021: CHF 3.20). As in the previous year, the payout will be made by reducing the nominal value of the shares by way of a capital reduction.
At CHF 142.3 million, the Siegfried Group delivered a strong result for cash flow from operating activities after changes in net working capital (2021: CHF 119.7 million). Free cash flow amounted to CHF 27.2 million (2021: CHF 6.5 million).
At year-end, Siegfried had cash and cash equivalents of CHF 91.5 million (2021: CHF 72.6 million). Net debt amounted to CHF 418.5 million, a ratio of 1.54 to core EBITDA, and the equity ratio was 44.1 percent. Siegfried is well capitalized and has sufficient capacity to fund further organic and acquisitive growth.
Wolfgang Wienand, Chief Executive Officer: “In 2022, our global team has again taken important steps to further strengthen our position as a global leader in the CDMO space. While we look back at a successful year, I am equally excited for the years to come – including 2023, which marks Siegfried’s 150th anniversary. We are committed to further build on what the many generations before us have created and to go ahead with the same entrepreneurial spirit. And we will continue to invest in our people and in our network in order to deliver long-term profitable growth also in the future.”
Integration of the two Spanish Drug Product Sites successfully completed
The two pharmaceutical manufacturing sites acquired from Novartis at the beginning of 2021, Barberà del Vallès and El Masnou, have been fully integrated into the Siegfried network in the year under review and contributed to the substantial profitable growth in the reporting period. For both sites, Siegfried was successful in acquiring new projects and products in 2022 and expects further intake of new business in 2023 and 2024.
Expanding our capabilities and capacities to support long-term profitable growth
In 2022, Siegfried continued to invest in its global network to further strengthen its innovation and technological capabilities and capacities, enhance flexibility and become even more relevant to its customers. In Minden, we started the construction of a new world-class largescale production plant for innovative Drug Substances, a total investment of up to CHF 100 million. At the same time, we further strengthened our footprint in the biologic fill & finish market segment by launching an additional filling line in Hameln. In Barcelona, the installation of our new Center of Excellence for pharmaceutical formulation development has been completed and will be inaugurated in the first half of 2023. Here, Siegfried will offer its customers a wide range of development services and differentiating pharmaceutical production technologies in state-of-the-art laboratories and flexible pilot capacities. Also in 2023, we will start the construction of our new Center of Excellence for Drug Substances in Evionnaz.
On track in a challenging environment
Macroeconomic challenges such as Russia’s attack on Ukraine, the energy crisis in Europe and ongoing supply chain disruptions have put a burden also on Siegfried. However, with a steady focus on operational and commercial excellence, we were able to respond to them by closely managing our supply chains, applying strict cost discipline including broad energy saving measures and to find solutions together with our customers. As a result, we have been able 3 to protect the interests of our customers as well as of our company and of our other stakeholders. In addition to the benefit from these defensive measures, the positive development of our overall business including vaccines plus the active management of our entire product portfolio contributed to the increase in profitability to well above 20 percent core EBITDA margin.
Strong commitment to sustainability
Sustainability represents one of our five corporate values and is at the core of our business. With our expertise in process optimization, we help our customers to develop greener production processes for their products and to achieve ambitious sustainability targets. We introduce second-generation processes, apply green chemistry, and continuously search for opportunities to apply new sustainable technologies. With these efforts, we reduce energy consumption, produce less waste, and, at the same time, often save costs and increase the safety of our products. Our efforts and initiatives have been recognized by external parties and independent institutions: In 2022, we were again rated positively by ISS ESG, MSCI ESG and Sustainalytics, and were for the second time included in the Dow Jones Sustainability Index Europe. All our sites also scored well in the EcoVadis Rating.
Change in the Board of Directors
In October 2022, Siegfried announced that, after 10 years of service, board member Colin Bond has decided not to stand for re-election at the 2023 Annual General Meeting. We thank him for his valuable contribution to the positive development of the company in recent years and wish him all the best for his future endeavors. The Board of Directors has nominated Elodie Cingari as a new member for election. Elodie Cingari has been holding the position as Chief Financial Officer of the Landis+Gyr Group since 2020 and will bring extensive professional experience and a profound knowledge to the team.
Continuing to deliver long-term profitable growth
Siegfried’s business model is well proven, and we have consistently and effectively implemented our strategy over the last years. Based on this, we expect to deliver continuous profitable growth in the years to come through the continued introduction of attractive new business from existing and new customers, the active management of our portfolio of projects and products and by execution of organic investments in our network as well as value-adding M&A. Through these activities, we will continue to expand our capabilities and capacities and play an active role in the further consolidation of the CDMO industry.
Outlook for 2023
Siegfried expects a sales growth in the low to mid single-digit percentage range at constant exchange rates for the current year. In addition, Siegfried expects the core EBITDA margin to be at 20 percent or above, subject to unforeseen geopolitical and macroeconomic events or trends. In the medium-term, Siegfried expects a further increase in sales and profitability. Over the cycle, the company plans for average annual capital expenditures in low teens percentages of sales.
Together with its financial results, Siegfried also published its Annual Reports 2022.
Cautionary Statements Regarding Forward-Looking Statements
This media release includes statements concerning the future. They are based on assumptions and expectations that may prove to be wrong. They should be considered with due caution as, by definition, they contain known and unknown risks, insecurities and other factors which could result in a difference in the actual results, financial situation, developments or the success of Siegfried Holding AG or Siegfried Group from the explicit or implicit assumptions made in these statements.