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Net sales
833.5
million Swiss francs
Change over previous year:
+4.9% (+6.9% in LC)
Change 
Core EBITDA
140.7
million Swiss francs
Change over previos year:
+11.3 %
Change 
Core EBIT
89.2
million Swiss francs
Change over previous year:
+16%
Change 
Core net profit
65.7
million Swiss francs
Change over previous year:
+18.5%
Change 
Cashflow
65.6
million Swiss francs
Change over previous year:
-38.1%
Change 
Employees
2486
 
Change over previous year:
+122 people
Change 

Positive growth and higher margins

Siegfried sales reported for 2019 at 833.5 Mio Swiss Francs demonstrate continued strong growth. This is in spite of adverse headwinds from a foreign exchange rate movement in the Euro. Sales growth in local currencies is 6.9% and 4.9% in Swiss Francs; Gross Profit 172.7 Mio Swiss Francs has grown ahead of the top line sales by 10.3%.  

Siegfried has introduced the core Metrics with the presentation of the half year results in 2019. The core results exclude extraordinary expenses and income. We believe that the disclosure of core results enables market participants a better understanding of the company and allows a better comparison across periods. We use the core results in addition to Swiss GAAP FER as important indicators for the internal assessment of the performance of the group. In the current year 2019, the reported results are corrected for technical and non-cash effects from an interest rate change effect on the value of pension obligations from foreign pension plans and extraordinary effects from changes in the Swiss tax law.

Core EBITDA (CHF 140.7 Mio., +11.3%), core EBIT (CHF 89.2 Mio., +16.0%) and core Net Profit (CHF 65.7 Mio., +18.5%) all demonstrate positive growth above the relative increase in sales over the prior reporting period. This has led to a core EBITDA margin of 16.9% (prior year 15.9%). Additionally both core EBIT and core Net Profit show growth against prior year of 10.7% and 7.9% respectively.

Strong Growth of core EBITDA

The reported Sales at 833.5 Mio. Swiss Francs consists of 638.6 Mio Swiss France Drug Substances and 194.9 Mio. Swiss Francs Drug Product sales. Drug Substances grew strongly by 7.2% on a consolidated Swiss Franc basis (+9.0% in local currencies). In the reporting year Drug Products grew by 0.5% on a local currency basis (–2.0% consolidated). Since 2015 Drug Products sales have grown on average 7.5% per year from 147.4 Mio Swiss Francs to their current level 194.9 Mio Swiss Francs.  

Gross Profit has correspondingly grown by 10.3% to 172.7 Mio Swiss Francs and Gross Profit Margin has increased by 1% point to 20.7%.

Marketing and Sales costs remain practically unchanged from the previous year at 16.6 Mio Swiss Francs. For Siegfried Research and Development remains an important aspect of our business, this is reflected in the increased spend in 2019 of 33.3 Mio Swiss Francs, +5.8 Mio Swiss Francs versus prior year. Administration and other overhead costs within the core results are 38.1 Mio Swiss Francs, this is significantly lower than prior year driven amongst other things by Exchange rates. Other Income is 4.5 Mio Swiss Francs which is a slight reduction versus prior year (6.7 Mio Swiss Francs).

In total, the above delivers a strong core EBITDA of 140.7 Mio Swiss Francs, core EBITDA Margin at 16.9% is +11.3% growth over the prior year.

Lower Financing Costs help drive a higher Net Profit

Core Financing costs and charges in total were 5.2 Mio Swiss Francs. This is lower than in the prior year, despite a higher utilization of the Syndicated Loan Facility, namely for the financing of purchases of treasury shares. In relation to the core Net Profit, the tax charges remain unchanged against prior year at an effective tax rate of 20%. The result is that core Net Profit at 65.7 Mio Swiss Francs shows significant growth +18.5% versus prior year. 

Cashflow and Reduction of Net Working Capital

Operating Cash flow before change in Net Working Capital is 135.6 Mio Swiss Francs, identical to prior year. Change in Networking Capital shows a temporary increase in Inventories of 34.5 Mio Swiss Francs driven by Semi Finished Goods, i.e. work in process which will be converted to sales in the coming reporting periods. 

In a mid term view, the focus of the Siegfried Group for the last three years has been to significantly reduce working capital relative to sales. Above all, two components of net working capital contributed to this development: The inventory days (the average length of stay in the warehouse) decreased from 171 days in 2017 to 167 days in the reporting year. The days payables outstanding finally rose from 41 days in 2017 to 47 in the reporting year.

Capital investments in tangible and intangibles assets are approximately equal to the prior reporting period at 61.9 Mio Swiss Francs. 

A total of 23.0 Mio Swiss Francs (net) was spent on the purchase of treasury shares in 2019. At the end of the year, Siegfried held 199 586 treasury shares at an average price of 368.20 Swiss Francs per share. Owned treasury shares at year end have a market value of 93.6 Mio Swiss Francs at a share price of 469.00 Swiss Francs. 

At the year end 2019 Siegfried had 25.4 Mio Swiss Francs in Cash and Cash Equivalents. Outstanding credit / loan arrangements amounted to 135 Mio Swiss Francs, this results in a Net Debt position of 109.6 Mio Swiss Francs. Net Debt to core EBITDA ratio is 0.78. With a Equity ratio of 59.2% Siegfried is in a healthy position to take on more debt as required to fund growth as needed. 

At the Annual General Meeting on April 17, 2020, the Board of Directors will propose to reduce the par value from 27.00 Swiss Francs per share by 2.80 to 24.20 Swiss Francs per share and to distribute the amount of the par value reduction of 2.80 Swiss Francs per share instead of a dividend.

Consolidated Balance Sheet

In 1000 CHF (as of December 31)

2019

2018

Assets

Non-current assets

Property, plant and equipment

518 379

520 597

Intangible assets

8 467

10 625

Investments in associated companies and joint ventures

378

416

Financial and other non-current assets

595

579

Employer contribution reserves

9 362

8 617

Deferred tax assets

41 539

28 402

Total non-current assets

578 720

569 236

Current assets

Inventories

256 958

227 546

Trade receivables

245 415

217 009

Other current assets

48 555

38 566

Accrued income and prepaid expenses

7 522

6 373

Current income taxes

5 342

3 992

Securities

30

30

Derivative financial instruments

726

477

Cash and cash equivalents

25 443

39 880

Total current assets

589 991

533 873

Total assets

1 168 711

1 103 109

Liabilities and equity

Equity

Share capital

116 262

8 514

Treasury shares

– 77 005

– 56 139

Capital reserves

48 818

79 668

Hybrid capital

255 985

255 985

Retained earnings

347 619

390 749

Total equity

691 679

678 777

Non-current liabilities

Non-current financial liabilities

110 000

Non-current provisions

14 972

28 917

Deferred tax liabilities

11 959

8 559

Other non-current liabilities

1 783

1 576

Non-current pension liabilities

146 790

123 986

Total non-current liabilities

175 504

273 038

Current liabilities

Trade payables

78 915

69 344

Other current liabilities

43 743

31 887

Accrued expenses and deferred income

31 052

34 548

Other current financial liabilities

135 000

Current pension liabilities

506

499

Current provisions

9 503

10 598

Current income tax liabilities

2 809

4 418

Total current liabilities

301 528

151 294

Total liabilities

477 032

424 332

Total liabilities and equity

1 168 711

1 103 109

In 1000 CHF (for the years ended December 31)

2019

2018

Net sales

833 514

794 297

Cost of goods sold

– 660 791

– 637 768

Gross profit

172 723

156 528

Marketing and sales costs

– 16 644

– 16 122

Research and development costs

– 33 297

– 27 471

Administration and general overhead costs

– 70 216

– 43 350

Other operating income

4 504

6 733

Income of associated companies

– 27

– 38

Operating result

57 042

76 280

Financial income

29

74

Financial expenses

– 3 153

– 3 661

Exchange rate differences

– 2 485

– 2 529

Profit before income taxes

51 433

70 164

Income taxes

1 713

– 13 854

Net profit

53 147

56 310

Non-diluted earnings per share (CHF)

12.85

13.52

Diluted earnings per share (CHF)

12.53

13.10

Consolidated Figures

2019

2018

20171

20162

20152

Net sales

CHF million

833.5

794.3

750.5

717.7

480.6

Growth in CHF

in %

4.9

5.8

4.6

49.3

52.4

Growth in LC

in %

6.9

4.4

3.8

47.3

57.9

Core EBITDA

CHF million

140.7

126.5

111.3

104.2

80.1

Growth

in %

11.3

13.6

6.8

30.1

36.2

Core EBITDA margin

in %

16.9

15.9

14.8

14.5

16.7

Core operating profit (EBIT)

CHF million

89.2

76.9

61.9

54.2

46.4

Growth

in %

16.0

24.2

14.2

16.8

36.5

Core operating margin

in %

10.7

9.7

8.2

7.6

9.7

Core net profit

CHF million

65.7

55.4

40.8

33.4

34.1

Core net profit margin

in %

7.9

7.0

5.4

4.7

7.1

Net net debt

CHF million

109.6

70.1

65.9

59.5

177.3

Net debt / Core EBITDA

– 0.8

– 0.6

– 0.6

– 0.6

– 2.2

Net Working Capital3

CHF million

419.7

373.0

365.1

342.3

314.2

As % of net sales

50.4

47.0

48.6

47.7

40.5

Total assets

CHF million

1 168.7

1 103.1

1 071.0

1 021.4

1 003.9

Equity

CHF million

691.7

678.8

667.8

660.7

492.7

Equity ratio

in %

59.2

61.5

62.4

64.7

49.1

Average capital employed4

CHF million

895.9

880.5

833.9

818.0

562.0

Return on capital employed (average) ROCE5

in %

15.7

14.4

13.3

12.7

14.3

Cash flow from operating activities

CHF million

65.6

106.0

84.6

57.1

23.1

As % of net sales

7.9

13.3

11.3

8.0

4.8

Free cash flow

CHF million

3.8

46.0

32.3

– 11.1

– 66.3

Investments in PPE and intangible assets

CHF million

61.9

60.1

52.8

68.4

95.0

As % of net sales

7.4

7.6

7.0

9.5

19.8

Employees (number of FTEs)6

Number

2 407

2 294

2 260

2 315

2 238

1 Restatement – Employee benefits.

2 Results before special charges as core results.

3 Calculation of Net Working Capital: Trade Receivables + inventories – Trade Payables – Custormer Prepayments.

4 Calculation of Capital Employed over twelve months: PPE + Intangible Assets + Net Working Capital.

5 Calculation ROCE: Core EBITDA in relation to average capital employed over twelve months.

6 Year-end values.