Release Date: August 22, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Siegfried Holding AG (XSWX:SFZN, Financial) reported a 3.5% increase in net sales in local currencies for the first half of 2024.
- The company achieved a 60 basis point increase in core EBITDA margin, reaching 21.3%.
- Core net profit rose by over 20% to CHF 71.7 million, demonstrating strong profitability growth.
- Siegfried Holding AG successfully acquired an early-phase CDMO in the US, expanding its capabilities and market reach.
- The company maintained a strong operating cash flow, supporting further investment in growth opportunities.
Negative Points
- Siegfried Holding AG faced significant headwinds, including the phasing out of a major vaccines business.
- The company experienced a mid-double-digit destocking effect, impacting sales for 2023 and 2024.
- Currency headwinds are expected to slightly impact the full-year results, estimated to be below 1%.
- Portfolio optimization efforts led to a conscious sacrifice of mid-teens million Swiss francs in sales from tail-end products.
- The company anticipates continued destocking effects into the second half of 2024 and possibly early 2025.
Q & A Highlights
Q: Can you elaborate on the impact of the phasing out of the vaccines business and how it affects your financial outlook?
A: Reto Suter, CFO, explained that the phasing out of the vaccines business was a significant headwind in 2023, but it will no longer impact financials after 2024. The company expects this effect to wash through, allowing for a clearer growth trajectory starting in 2025.
Q: How is Siegfried addressing the destocking effect, and what is the expected timeline for its resolution?
A: Reto Suter noted that the destocking effect is expected to persist into the second half of 2024, with some volume potentially carrying over into early 2025. The company has been managing this effect as part of its broader portfolio optimization efforts.
Q: What are the strategic priorities for Siegfried's new CEO, Marcel, and how will they impact the company's growth strategy?
A: Reto Suter mentioned that Marcel will focus on the EVOLVE Plus strategy, which will be detailed at the Capital Markets Day in October. This strategy will continue to emphasize profitable growth through both organic investments and M&A activities.
Q: Can you provide more details on the recent acquisition of the early-phase CDMO in the US and its strategic importance?
A: Reto Suter highlighted that the acquisition of the CDMO in Grafton, Wisconsin, will serve as the Siegfried Acceleration Hub, allowing the company to offer early-phase development services. This expands Siegfried's capabilities and positions it to tap into new client opportunities, particularly among small- and medium-sized pharma companies.
Q: How is Siegfried managing currency headwinds, and what is the expected impact on financial performance?
A: Reto Suter stated that the currency headwind for the full year is estimated to be slightly below 1%. Despite this, the company expects significant growth in its underlying business, outpacing market averages.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
