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Annual Report
2018

Following distinct growth in previous years, Siegfried reports again a sound result for 2018: sales of 794.3 million francs set a new record.

Net sales
794.3
million Swiss francs
Change over previous year:
+5.8%
Change 
EBITDA
127.4
million Swiss francs
Change over previous year:
+14.5%.
Change 
EBIT
77.8
million Swiss francs
Change over previous year:
+25.7%
Change 
Net profit
57.5
million Swiss francs
Change over previous year:
+40.9%
Change 
Cashflow
60.1
million Swiss francs
Change over previous year:
+25.2%
Change 
Employees
2364
 
Change over previous year:
+33 people
Change 

Following distinct growth in previous years, Siegfried reports again a sound result for 2018: sales of 794.3 million francs set a new record.

Siegfried reports higher sales for the 2018 financial year of CHF 794.3 million (2017: CHF 750.5 million, +5.8% in CHF or +4.4% in local currencies). Gross profit grew faster than sales (CHF 156.5 million) owing to higher utilization, portfolio effects and price increases.

EBITDA¹ (CHF 127.4 million), EBIT¹ (CHF 77.8 million) and Net Income¹ (CHF 57.5 million) were reported clearly higher than for the previous year. Sustained growth is reflected in increased margins at all levels: EBITDA margin¹ amounted to 16.0% (2017: 14.8%²), EBIT margin¹ (9.8%, 2017: 8.3%²) and Net Income margin¹ (7.2%, 2017: 5.4%²) improved significantly.

Cash Flow from Operating Activity for the first time exceeded the CHF 100 million mark; in the year under review it amounted to CHF 106.0 million. Deduction of Net Investments in Property, Plant and Equipment and Intangible Assets resulted in a Free Cash Flow of CHF 46.0 million.

Robust, Disproportionately High EBITDA Growth

Sales of CHF 794.3 million comprises CHF 595.5 million derived from Drug Substances and CHF 198.8 million from Drug Products. While Gross Profit grew by 12.8% to CHF 156.5 million, the Gross Profit margin increased by 1.2% to 19.7%.

Marketing and distribution costs in the year under review of CHF 16.1 million remained practically constant despite higher sales. Research & Development costs reflect the significance of this department and rose slightly to CHF 27.5 million. Administration and general costs increased to CHF 43.4 million.

This resulted in EBITDA¹ of CHF 127.4 million, a distinct increase of 14.5%.

Lower Financing Cost, ­ Significantly Higher Net Profit

The financial result of CHF –6.1 million is reported higher than for the previous year (2017: CHF –4.1 million²). This is due to higher currency differences (CHF –2.5 million, 2017: CHF –0.1 million). Expenses for interest on borrowed capital and fees of CHF 3.5 million were reported slightly lower than for the previous year (2017: CHF 3.7 million²). The financial result was influenced by a correction concerning interest effects from pension obligations. The previous year’s values were restated accordingly.

Tax expense for 2018 amounted to CHF 13.9 million, resulting in higher net profit¹ of CHF 57.5 million, or 40.9% above that of the previous year. Undiluted earnings per share (EPS)¹ amounted to CHF 13.81, diluted earnings per share¹ CHF 13.38 (2017: EPS² CHF 10.28, diluted EPS² CHF 9.97).

Substantial Increase in Operating Cash Flow and Free Cash Flow

In 2018, Siegfried reported operating cash flow after changes of net current assets of CHF 106.0 million (2017: CHF 84.6 million), representing substantial growth of 25.2 percent. Worth mentioning is a stock reduction (CHF –19.8 million) and the lower increase in trade receivables, loans and other receivables compared to the previous year (CHF +27.3 million; 2017: CHF +33.7 million). As in 2017, high sales were recognized in the last quarter of the year which resulted in above-average accounts receivables at year-end.

Investments in tangibles and intangibles of CHF 60.1 million are reported slightly above the previous year’s level (2017: CHF 52.8 million).

In 2018, the net amount of CHF 29.4 million was expended for the acquisition of treasury shares. Interest paid and bank charges amounted to CHF 10.4 million in 2018. Dividend distribution from capital ­reserves to shareholders implemented in April 2018 amounted to CHF 10.0 million.

At year-end, Siegfried had at its disposal more than CHF 39.9 million in liquid assets. Outstanding loans amounted to gross CHF 110.0 million. Consequently, net debt at the end of 2018 amounted to CHF 70.1 million, thereof CHF 56.1 treasury shares. Net debt in relation to EBITDA at year end was ­reported at 0.56 and the level of equity ­financing at 61.5 percent. Siegfried therefore has at its disposal necessary debt ­capacity to finance further growth steps.

The Board of Directors proposes to the General Meeting to be held on 17 April 2019 the distribution out of the capital contribution reserve of CHF 2.60 per share which, based on the number of shares entitled to a dividend, will result in a distribution of approximately CHF 10.7 million.

Consolidated Balance Sheet

In 1000 CHF (as of December 31)

2018

2017

Assets

Non-current assets

Property, plant and equipment

520 597

500 209

Intangible assets

10 625

9 425

Investments in associated companies and joint ventures

416

475

Financial and other non-current assets

579

3 483

Employer contribution reserves

8 617

9 222

Deferred tax assets

28 402

34 645

Total non-current assets

569 236

557 459

Current assets

Inventories

227 546

248 294

Trade receivables

217 009

189 160

Other current assets

38 566

35 403

Accrued income and prepaid expenses

6 373

6 034

Current income taxes

3 992

192

Securities

30

30

Derivative financial instruments

477

296

Cash and cash equivalents

39 880

34 137

Total current assets

533 873

513 546

Total assets

1 103 109

1 071 005

Liabilities and equity

Equity

Share capital

8 514

8 422

Treasury shares

– 56 139

– 21 601

Capital reserves

79 668

74 193

Hybrid capital

255 985

255 985

Retained earnings

390 749

350 789

Total equity

678 777

667 787

Non-current liabilities

Non-current financial liabilities

110 000

100 000

Non-current provisions

28 917

16 951

Deferred tax liabilities

8 559

6 948

Other non-current liabilities

1 576

1 392

Non-current pension liabilities

123 986

130 197

Total non-current liabilities

273 038

255 488

Current liabilities

Trade payables

69 344

71 316

Other current liabilities

31 887

19 221

Accrued expenses and deferred income

34 548

44 874

Derivative financial instruments

97

Current pension liabilities

499

406

Current provisions

10 598

6 917

Current income tax liabilities

4 418

4 899

Total current liabilities

151 294

147 730

Total liabilities

424 332

403 218

Total liabilities and equity

1 103 109

1 071 005

In 1000 CHF (for the years ended December 31)

2018

2017

Net sales

794 297

750 468

Cost of goods sold

– 637 769

– 611 657

Gross profit

156 528

138 811

Marketing and sales costs

– 16 122

– 16 228

Research and development costs

– 27 471

– 25 631

Administration and general overhead costs

– 43 350

– 41 290

Other operating income

6 733

6 264

Income of associated companies

– 38

– 8

Operating result

76 280

61 918

Financial income

74

35

Financial expenses

– 3 661

– 3 994

Exchange rate differences

– 2 529

– 96

Profit before income taxes

70 164

57 863

Income taxes

– 13 854

– 17 041

Net profit

56 310

40 822

Non-diluted earnings per share (CHF)

13.52

10.28

Diluted earnings per share (CHF)

13.10

9.97

2018

2017

 

2016

2015

2014

Net sales

CHF million

794.3

750.5

717.7

480.6

315.3

Growth

in %

5.8

4.6

49.4

52.4

– 15.9

EBITDA

CHF million

125.9

111.3

96.7

77.1

58.8

Growth

in %

13.1

15.1

25.5

31.1

– 10.4

EBITDA margin

in %

15.8

14.8

13.5

16.0

18.6

Operating profit (EBIT)

CHF million

76.3

61.9

46.7

43.4

34.0

Growth

in %

23.2

32.6

7.6

27.6

– 16.7

Operating margin

in %

9.6

8.3

6.5

9.0

10.8

Annual result

CHF million

56.3

40.8

27.9

39.1

38.6

Net profit margin

in %

7.1

5.4

3.9

8.1

12.2

Net cash/(net debt)

CHF million

– 70.1

– 65.9

– 59.5

– 177.3

– 85.2

Net Working Capital1

CHF million

373.0

365.1

342.3

314.2

147.9

As % of net sales

47.0

48.7

47.7

40.5

41.6

Total assets

CHF million

1 103.1

1 071.0

1 021.4

1 003.9

629.6

Equity

CHF million

678.8

667.8

660.7

492.7

382.8

Equity ratio

in %

61.5

62.4

64.7

49.1

60.8

Market capitalization2

CHF million

1 383.0

1 342.0

826.0

769.0

650.0

Average capital employed3

CHF million

880.5

833.9

818.0

562.0

384.7

Return on capital employed (average) ROCE4

in %

14.3

13.3

11.8

13.7

15.3

Cash flow from operating activities

CHF million

106.0

84.6

57.1

23.1

24.6

As % of net sales

13.3

11.3

8.0

4.8

7.8

Free cash flow

CHF million

46.0

32.3

– 11.1

– 66.3

– 57.3

As % of net sales

5.8

4.3

– 1.5

– 13.8

– 18.2

Investments in PPE and intangible assets

CHF million

60.1

52.8

68.4

95.0

82.0

As % of net sales

7.6

7.0

9.5

19.8

26.0

Depreciation and amortization/impairment

CHF million

49.6

49.4

50.0

33.7

24.8

As % of net sales

6.2

6.6

7.0

7.0

7.9

Employees (number of FTEs)5

Number

2 294

2 260

2 315

2 238

1 374

Change vs. previous year

in %

1.5

– 2.4

3.4

62.9

49.8

Sales per employee

CHF

346 189

332 065

310 034

291 600

316 500

Change vs. previous year

in %

4.3

7.1

6.3

– 7.9

– 22.6