Siegfried Holding Ag · SIX:SFZN
Siegfried — FY2020 Earnings Presentation
32 slides from Siegfried's earnings presentation, Feb 24, 2021
Slide 1: Siegfried rises to the next level
Evolving in challenging times: Siegfried rises to the next level Virtual media and analyst conference on full year 2020 Zofingen – 24 February 2021
Slide 2: Safe harbor statement
Safe harbor statement This document is solely for use in connection with the presentation held by Siegfried Holding AG. It is furnished to you for your information and you may not reproduce it or redistribute to any other person. No representation or warranty, express or implied, is made to, and no
Slide 3: Agenda
Agenda Executive summary: Status and outlook Looking back: Facts and figures of 2020 Looking ahead: Strategy for 2021 and beyond Q&A Virtual Media & Analyst Conference – 24 February 2021 3
Slide 4: Successful as a global team in challenging times
Successful as a global team in challenging times: Continuing on our path of profitable growth and executing our strategic ambitions Siegfried has shown a high degree of resilience in 2020 and delivered both, growth and higher margins: › Robust organic growth: Net sales up to CHF 845.1m (+1.4% and +4
Slide 5: Siegfried's global team lived up to its mission
Despite challenging circumstances, Siegfried’s global team was able to live up to its mission – and to further advance towards its vision › Mission: Mastery in science and technology for the manufacture of WHY safe drugs for patients worldwide Mission and Vision › Vision: Be a global leader by havin
Slide 6: Agenda
Agenda Executive summary: Status and outlook Looking back: Facts and figures of 2020 Looking ahead: Strategy for 2021 and beyond Q&A Virtual Media & Analyst Conference – 24 February 2021 6
Slide 7: Robust growth despite Coronavirus impact
Despite some negative impact by the Coronavirus pandemic, we have been able to deliver robust growth CHF million 2020 2019 Change Drug Substances 647.8 638.6 +1.4% Drug Products 197.2 194.9 +1.2% Total 845.1 833.5 +1.4% (+4.5% in LC) Net sales split 2020 › Significant currency headwind, both EUR and
Slide 8: Highly diversified business portfolio across products and customers
Highly diversified business portfolio across products and customers with low single exposures Customer concentration 2020 Product concentration 2020 63% 69% 100% 100% 3% 3% 3% 3% 2% 2% 2% 3% 2% 4% 4% 3% 3% 4% 3% 5% 4% 4% 6% 5% A B C D E F G H I J OtherTotal AA BB CC DD EE FF GG HH II JJ OtherTotal E
Slide 9: Reconciliation for 2020: From Swiss GAAP FER to core results
Reconciliation for 2020: From Swiss GAAP FER to core results CHF million Core adjustments 9.9 3.9 149.4 Swiss GAAP FER figures 134.5 1.1 94.3 -55.1 -5.4 --1.1 72.5 --13.2 --3.8 1.7 EBITDA Current Discount Covid-19 Core Depreciation Core Financial Current Taxes Tax effect Step-up Core Swiss net rate
Slide 10: Further expanded profit margins on all levels
Despite higher costs of doing business, we have been able to further expand profit margins on all levels – reduced funding costs CHF million 850 845.1 833.5 172.7 177.5 149.4 150 140.7 100 89.2 94.3 65.7 72.5 50 20.7% 21.0% 16.9% 17.7% 10.7% 11.2% 7.9% 8.6% 0 Net sales Core Gross profit Core EBITDA
Slide 11: Robust financials in 2020 at a glance
Robust financials in 2020 at a glance: Margin expansion despite higher costs of doing business at reduced funding cost CHF million 2020 2019 Core results Net sales 845.1 833.5 Core Cost of goods sold -667.5 -660.8 Core Gross profit 177.5 172.7 Core Marketing and sales costs -15.6 -16.6 Core Research
Slide 12: Significant improvement in operating cash flow and free cash flow
Significant improvement in operating cash flow and free cash flow – laying the foundations for investments into further growth CHF million 2020 2019 Operating cash flow before changes in NWC 153.4 135.6 Change in NWC -38.6 -70.0 Operating cash flow 114.8 65.6 Purchase of PPE and intangibles (net) -6
Slide 13: Capital allocation framework
Capital allocation framework: A strong balance sheet provides the financial flexibility required to execute our strategy EVOLVE 1 2 3 4 Re-invest in organic M&A – Deleverage and growth – Pay-out policy in line with strategy optimize funding cost in line with strategy › Maintenance CapEx › Hybrid bon
Slide 14: Pay-out proposal to the AGM: CHF 3.00 per share
Pay-out proposal to the AGM on 22 April 2021: Increase by 20 cent to CHF 3.00 per share › Siegfried’s Board of Directors will propose to the Annual General Meeting in April 2021: Reduction of the par value from CHF 24.20 per share by CHF 3.00 to CHF 21.20 per share Distribution of the amount of
Slide 15: Agenda
Agenda Executive summary: Status and outlook Looking back: Facts and figures of 2020 Looking ahead: Strategy for 2021 and beyond Q&A Virtual Media & Analyst Conference – 24 February 2021 15
Slide 16: CDMO business model benefits from attractive growth dynamics
The CDMO business model benefits from attractive growth dynamics with a low risk profile Low cyclicality Spending on pharma › Non-discretionary nature of pharmaceutical industry remains stable at 11 › Stable in changing economic environments c.1.4% of global GDP over 20 years Low volatility › Long i
Slide 17: Corporate strategy builds on favourable pharmaceutical industry trends
Siegfried’s corporate strategy builds on favourable trends resulting from fundamental changes in the pharmaceutical industry Focus on R&D and › Focus of investments on key value drivers: Innovation, marketing / distribution 1 marketing & distribution › Increasingly less focus on in-house process dev
Slide 18: Size matters: Growth strategies translate into higher profitability
Size matters: Well executed growth strategies translate into higher profitability for CDMOs Key features Scale and profitability › CDMO business model offers significant economies of scale 40 Larger players generate higher EBITDA margins 35 Company I Sales growth often translates 30 Company A in
Slide 19: Drivers to expand Core EBITDA margin towards 20 percent
Drivers to expand Core EBITDA margin towards target range of around 20 percent Portfolio mix Network and Economies of scale Critical size effects product allocation Fixed cost of free capacity: EBITDA Sales growth > growth Small Large CDMO > CDMO 20% 23% Used Profitability Capacity Used 80% 77% Free
Slide 20: Strategy EVOLVE continues to drive organic and external growth
Strategy EVOLVE will continue to drive Siegfried’s organic and external growth agenda based on a set of independent options › Strengthening technology base in both areas, DS and DP Investments in › Organic expansion into large molecules: Aseptic fill & finish as well as technology base formulation d
Slide 21: Executing on EVOLVE: Acquiring two Novartis sites in Spain
Executing on our strategy EVOLVE: Another important step to build a globally leading and fully integrated CDMO player › Signing of binding agreements to acquire two pharmaceutical manufacturing sites from Novartis in Spain (Barberà des Vallès, El Masnou) with approx. 1’000 employees on 28 Scope of S
Slide 22: New global footprint: eleven sites in seven countries
New global footprint: Siegfried operates a network of eleven sites in seven countries on three continents with around 3’500 employees 1 Zofingen (Switzerland) 3 DS Development & Manufacturing 4 Employees: approx. 550 1 2 Evionnaz (Switzerland) 5 2 DS Manufacturing Employees: approx. 300 10 11 3 Mind
Slide 23: The two new members of the Siegfried network
The two new members to the Siegfried network: Barberà del Vallès for solid dosage forms and El Masnou for sterile ophthalmics › Location: Barberà del Vallès (~20 km from › Location: El Masnou (~20 km from Barcelona city) Barcelona city) › Employees: approx. 400 › Employees: approx. 600 › Activities:
Slide 24: First success story: Smooth Day-1 after signing
First success story: Smooth “Day-1” only three months after signing with no business interruptions – thanks to great global teamwork Next steps: Day-1 readiness three … and hundred of tasks Carve-out, integration and months after signing… addressed by the team transformation › Joint teams across man
Slide 25: Impressions of Day 1 in January 2021 (1/2)
Impressions of “Day 1” in January 2021 (1/2): Successful start of the integration and transformation by joint teams in a great spirit Barberà del Vallès Virtual Media & Analyst Conference – 24 February 2021 25
Slide 26: Impressions of Day 1 in January 2021 (2/2)
Impressions of “Day 1” in January 2021 (2/2): Successful start of the integration and transformation by joint teams in a great spirit El Masnou Virtual Media & Analyst Conference – 24 February 2021 26
Slide 27: Drug substances network as blueprint for integrated drug products network
Siegfried’s drug substances network serves as the blueprint to create a strong integrated network for drug products with the new Spanish sites Siegfried will fully integrate the new Spanish sites and build an integrated network similar to its drug substances set-up to address customer needs efficien
Slide 28: Advancing to the top tier of the CDMO industry
With this acquisition, Siegfried advances to the top tier of the CDMO industry with expected sales beyond CHF 1 billion in 2021 Revenues USD Role in the consolidation game EVOLVE > 1b 2018+ Breakaway Group 1b TRANSFORM Chasing Pack 2012-2017 500m Peloton 250m 100m … any at all? Source: Siegfried ana
Slide 29: Critical size allows for profitable growth
Critical size: Well managed operations and portfolios allow for profitable growth – which provides the funds for investments into further growth Critical size allows for margin expansion via ... and Siegfried has proven to grow growth … profitably in the past Critical size Invest into new Optimize a
Slide 30: Ambition: profitable organic growth and value accretive M&A
Siegfried’s ambition: Consistently deliver profitable organic growth and execute value accretive M&A to outgrow market and competition Siegfried 2020 Strategy EVOLVE Siegfried vision Accelerated growth through M&A › Value accretive acquisitions in core Be a global leader in the areas › Acquisitive e
Slide 31: Agenda
Agenda Executive summary: Status and outlook Looking back: Facts and figures of 2020 Looking ahead: Strategy for 2021 and beyond Q&A Virtual Media & Analyst Conference – 24 February 2021 31
Slide 32: Siegfried
Siegfried | inden » ~ FF. Evionnaz Saint-Vulb. Pennsville 7 Barbera Irvine Ps EI Masni aa expect more