Siegfried (SFZN) H2 2023 earnings summary

Executive summary

• FY 2023 net sales rose 6.3% in local currencies (LC); growth of the underlying business more than offset the phase-out of the BioNTech vaccines business. Adjusting for BioNTech, growth was in the low teens.

• Core EBITDA increased to CHF 273.3m from CHF 272.5m, while core EBITDA margin declined to 21.5% from 22.2%; core net profit was CHF 128.1m.

• EVOLVE strategy advanced through investment in existing capacity and capabilities and the acquisition of DINAMIQS, establishing a platform in cell and gene therapy.

Financial highlights

• Net sales were CHF 1,271.5m versus CHF 1,229.5m, up 3.4% reported and 6.3% in LC; FX was a strong headwind across currencies.

• Core gross profit was CHF 320.4m versus CHF 318.9m; core EBIT was CHF 191.9m versus CHF 190.8m.

• Core net profit was CHF 128.1m in the headline results and CHF 128.2m in the rounded reconciliation; FY 2022 was CHF 127.8m.

• Operating cash flow increased to CHF 208.6m from CHF 142.3m; free cash flow rose to CHF 71.8m from CHF 27.2m.

Outlook and guidance

• FY 2024 sales growth expected in the low single-digit percentage range in LC, with core EBITDA margin at or above FY 2023, implying underlying growth at or above market.

• Excluding the Novavax impact, FY 2024 underlying sales growth is expected at or above market; outlook includes currency headwinds and stronger H2 than H1.

• Portfolio optimization is expected to sacrifice mid-teens millions of sales from tail-end products to improve profitability.

• FY 2024 capital expenditures are expected to be elevated at a mid-teens percentage of sales, driven by projects in Minden, Evionnaz and DINAMIQS.