Siegfried Holding Ag · SIX:SFZN
Siegfried — FY2019 Earnings Presentation
32 slides from Siegfried's earnings presentation, Mar 4, 2020
Slide 1: Siegfried with robust sales growth and higher margins in 2019
Building a leading fully integrated CDMO player: Siegfried with robust sales growth and higher margins in 2019 Media and analyst conference on full year 2019 Zurich – 04 March 2020
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 & outlook Looking back: 2019 in facts & figures Looking ahead: 2020 and beyond › The playing field › Size matters › Outlook Q&A Media & Analyst Conference – 04 March 2020 3
Slide 4: Successful as a global team: Higher sales and Core EBITDA in 2019
Successful as a global team: Higher sales and Core EBITDA in 2019 – still positive outlook for 2020 despite uncertain macro environment › Robust growth of net sales to CHF 833.5m (+4.9% and +6.9% in LC) › Increased Core EBITDA of CHF 140.7m (+11.3%) at a margin of 16.9%; core net profit CHF 65.7m ›
Slide 5: Agenda
Agenda Executive summary: Status & outlook Looking back: 2019 in facts & figures Looking ahead: 2020 and beyond › The playing field › Size matters › Outlook Q&A Media & Analyst Conference – 04 March 2020 5
Slide 6: Robust growth in net sales
Robust growth in net sales CHF million 2019 2018 Change Drug Substances 638.6 595.5 +7.2% (+9.0 in LC) Drug Products 194.9 198.8 -2.0% (+0.5% in LC) Total 833.5 794.3 +4.9% (+6.9% in LC) Net sales split 2019 › Net sales grew by +6.9% in local currencies (LC) › Drug Substances accounted for approx. 7
Slide 7: Swiss GAAP FER to core results: Reconciliation for 2019
Swiss GAAP FER to core results: Reconciliation for 2019 CHF million Core adjustments 30.1 140.7 Swiss GAAP FER figures 108.6 2.0 89.1 1.7 -51.6 -5.6 -2.0 -9.0 65.7 -8.5 EBITDA Current Discount Core Depreciation Core Financial Current Taxes Tax effect Step up Core Swiss net rate EBITDA EBIT result ne
Slide 8: Another year of profitable growth: Increased sales and profits, on all levels
Another year of profitable growth: Increased sales and profits, on all levels 2018 2019 % % = Margin in % CHF million 850 833.5 800 794.3 172.7 156.5 150 140.7 126.5 100 89.1 76.9 65.7 55.4 50 19.7% 20.7% 15.9% 16.9% 9.7% 10.7% 7.0% 7.9% 0 Net sales Gross profit Core EBITDA1 Core EBIT1 Core Net prof
Slide 9: Robust profitable growth in 2019: Increased sales, core EBITDA, core EBIT and core net profit
Robust profitable growth in 2019: Increased sales, core EBITDA, core EBIT and core net profit CHF million 2019 2018 Core results Net sales 833.5 794.3 Cost of goods sold -660.8 -637.8 Gross profit 172.7 156.5 Marketing and sales costs -16.6 -16.1 Research and development costs -33.3 -27.5 Core admin
Slide 10: Continued high operating cash flow of CHF 135.6m before changes in NWC
Continued high operating cash flow of CHF 135.6m before changes in NWC CHF million 2019 2018 Operating cash flow before changes in NWC 135.6 134.9 Change in NWC -70.0 -28.9 Operating cash flow 65.6 106.0 Purchase of PPE and intangibles (net) -61.9 -60.0 Other investing activities, acquisitions - -1.
Slide 11: Siegfried's capital allocation follows a clear set of priorities
Siegfried’s capital allocation follows a clear set of priorities to provide funds for strategy execution Growth Pay-out to shareholders › Disciplined M&A in line with EVOLVE › Moderate pay-out ratio in general strategy › Committed dividend program › Organic investments › Pay-outs expected to grow st
Slide 12: Pay-out proposal to the AGM on 17 April 2020: Increase by 20 cent to CHF 2.80 per share
Pay-out proposal to the AGM on 17 April 2020: Increase by 20 cent to CHF 2.80 per share › Siegfried’s Board of Directors proposes to the Annual General Meeting in April 2020: » Reduction of the par value from CHF 27.00 per share by CHF 2.80 to CHF 24.20 per share » Distribution of the amount of the
Slide 13: Agenda
Agenda Executive summary: Status & outlook Looking back: 2019 in facts & figures Looking ahead: 2020 and beyond › The playing field › Size matters › Outlook Q&A Media & Analyst Conference – 04 March 2020 13
Slide 14: Siegfried does matter to customers, patients and society
Siegfried does matter to customers, patients and society – every day, everywhere Siegfried API › Approx. 1.500 APIs are contained in pharma products portfolio 200 approved by the US-FDA 1,300 › Thereof Siegfried supplies approx. 200 APIs – acting as a Other significant source ensuring patients’ ther
Slide 15: A global team working for a joint goal: mission, vision, values
A global team working for a joint goal: A strong mission supported by a shared vision and a strong set of values as basis for our success Mission “With mastery of science and technology, we take the precious innovations of our pharmaceutical customers to industrial scale and manufacture safe drugs f
Slide 16: Agenda
Agenda Executive summary: Status & outlook Looking back: 2019 in facts & figures Looking ahead: 2020 and beyond › The playing field › Size matters › Outlook Q&A Media & Analyst Conference – 04 March 2020 16
Slide 17: CDMO market: Key highlights
CDMO market: Key highlights 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 investment cycles and lifetime of pharmaceutical products c.20
Slide 18: Siegfried is among the few leading CDMO recognised as strategic partners
Siegfried today is among the few leading CDMO that are recognised as strategic partners to the pharmaceutical industry Market share of top players1 Key facts Sales (US$m) Listed pure-play CDMOs › Despite a considerable number of transactions, the CDMO market remains very fragmented 532 Company 10
Slide 19: Agenda
Agenda Executive summary: Status & outlook Looking back: 2019 in facts & figures Looking ahead: 2020 and beyond › The playing field › Size matters › The investment case Q&A Media & Analyst Conference – 04 March 2020 19
Slide 20: Siegfried's strategy: Pharmaceutical industry changing, favourable trends for CDMOs
Siegfried’s strategy: The pharmaceutical industry is changing, leading to a convergence of favourable trends for CDMOs › Focus of investments on key value drivers: Innovation, marketing / distribution Focus on R&D and 1 marketing & distribution › Increasingly less focus on in-house process developme
Slide 21: The big picture: Well executed growth strategies translate into higher profitability
The big picture: Well executed growth strategies translate into higher profitability for CDMO Key facts Scale and profitability › CDMO business model offers significant economies of scale 40 » Larger players generate higher EBITDA margins 35 » Sales growth often translates Company I into increasing
Slide 22: Critical size: Actively managed operations and product portfolio
Critical size: Actively managed operations and product portfolio allows for new business intake and continued investments into growth Critical size allows for margin expansion via ... and Siegfried has proven to grow growth … profitably in the past Invest into new Optimize Critical size capacity and
Slide 23: DS network setup: Efficient division of competences along all sites
DS network setup: Efficient division of competences along all sites to best address customer needs and process requirements New Process R&D centre Large-scale manufacturing with business with pilot plant process excellence group Focus on launch Focus on run & › Synthetic route of newly developed del
Slide 24: Strategy EVOLVE drives organic and external growth agenda
Strategy EVOLVE drives Siegfried’s organic and external growth agenda based on a set of independent strategic options Investments in › Strengthening technology base in small molecule manufacturing technology base › Organic expansion into large molecules: Aseptic fill & finish as well as and existing
Slide 25: Agenda
Agenda Executive summary: Status & outlook Looking back: 2019 in facts & figures Looking ahead: 2020 and beyond › The playing field › Size matters › Outlook Q&A Media & Analyst Conference – 04 March 2020 25
Slide 26: Siegfried has a clear agenda for value creation
Siegfried has a clear agenda for value creation Siegfried’s agenda for value creation Strong top line growth › Well positioned to capitalize on the growth dynamics of the CDMO market based on its unique value proposition to customers as well as organic and inorganic growth opportunities › Expanding
Slide 27: Siegfried's pure-play CDMO model is diversified across different layers
Siegfried’s pure-play CDMO model is diversified across different layers Focused… Research & Discovery Distribution Development Manufacturing Other services Other services › Challenging business model › Development and manufacturing is the DNA of Siegfried › Less attractive CDMO › Integrated
Slide 28: Highly diversified business portfolio with low dependency on a single customer or product
Highly diversified business portfolio across products and customers with low dependency on a single customer or a single product Customer concentration 2019 Product concentration 2019 63% 69% 100% 100% 3% 3% 3% 3% 2% 2% 2% 3% 4% 3% 2% 2% 4% 4% 4% 4% 5% 4% 6% 5% A B C D E F G H I J OtherTotal AA BB C
Slide 29: Cornerstones to expand EBITDA margin into 20% margin corridor
Cornerstones to expand EBITDA margin into 20% margin corridor 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% 20% 25% 8 0% 23% Used Profitability Capacity 8 0% 77% 75% Used Fre
Slide 30: Siegfried's ambition: robust organic growth and value accretive M&A
Siegfried’s ambition: Consistently deliver robust organic growth and execute value accretive M&A to outgrow market and competition Siegfried 2019 Siegfried vision Accelerated growth through M&A › Value accretive acquisitions Be a global leader in the in our core areas CDMO space › Acquisitive entr
Slide 31: Agenda
Agenda Executive summary: Status & outlook Looking back: 2019 in facts & figures Looking ahead: 2020 and beyond › The playing field › Size matters › Outlook Q&A Media & Analyst Conference – 04 March 2020 31
Slide 32: Siegfried | expect more
Siegfried | expect more