DKSH (DKSH) H2 2024 earnings summary

Executive summary

• Net sales grew 4.0% at constant exchange rates (CER) to CHF 11.1 billion in 2024, outpacing GDP growth in core markets, with organic growth contributing 3.1% and acquisitions 0.9%.

• Core EBIT rose 8.4% at CER to CHF 343.1 million, with margin expansion to 3.1% (+10 bps), marking the fourth consecutive year of margin improvement.

• Free cash flow was CHF 256.5 million, with cash conversion at 113.6%, and a proposed 12th consecutive dividend increase to CHF 2.35 per share (+4.4%).

• All business units contributed to net sales and Core EBIT growth despite challenging macroeconomic and geopolitical conditions.

• Four acquisitions completed in 2024, supporting growth and margin expansion, and sustainability initiatives advanced, including a 55% reduction in Scope 1 and 2 CO2 emissions since 2020.

Financial highlights

• Net sales: CHF 11,093.6 million (+4.0% CER); Core EBIT: CHF 343.1 million (+8.4% CER); Core EBIT margin: 3.1% (+10 bps YoY).

• Core profit after tax increased 13.9% at CER to CHF 225.7 million; profit after tax up 20.4% at CER to CHF 220.9 million.

• Free cash flow of CHF 256.5 million, representing 113.6% cash conversion.

• Working capital at 8.6% of annualized net sales, at the low end of historical range; capex at 0.3% of net sales.

• Improved net cash position to CHF 48.1 million and equity ratio to 32.1%, maintaining leverage headroom.

Outlook and guidance

• Expects Core EBIT in 2025 to be higher than in 2024, reaffirming the mid-term roadmap, assuming stable economic growth and FX rates in Asia Pacific.

• M&A pipeline remains strong, with recent acquisitions expected to add 0.3% to net sales in 2025.

• Capital expenditure to remain between 0.3%-0.5% of net sales.

• Effective tax rate guided at upper end of 27%-29% range for 2025.

• Anticipates slightly positive FX translation impact if current rates persist.