Siegfried Annual Report 2009

Consolidated Financial Statements Siegfried Holding AG
Editorial
Sales increase in core business despite
difficult market conditions
In 2009 Siegfried achieved sales of CHF 283.0 million, a
2.6% increase over 2008 base business (CHF 275.8 million),
or a 3.8% increase in local currencies. Compared to the
industry, this is a favorable result for the year. Overall Group
sales declined by 2.2% in CHF, in local currencies by 1.1%;
this includes the one-time license payment of CHF 13.5 million
for a bio-generic product in 2008.
Sales for the Siegfried Actives Division posted a strong
increase of 15.3% to CHF 220.9 million. However, the
Siegfried Generics Division showed a decline of 26.2%
(base business), or 36.4% when including the 2008 license
payment for a bio-generic. This drop is due mainly to the
changes in the Germany generics market. The shortfall
was clearly reduced during the second half of 2009, when
the sales decline was only 3.9%.
When comparing the first half of the year with the second
half, income of CHF 121.0 million for the first six months
rose to CHF 162.0 million for the last six months, corresponding
to a 17.2% drop in the base business for the first half,
then a 25.0% jump during the second half. Particularly the
Siegfried Actives Division turned in a strong second half performance,
increasing income by 34.8% over the same previous
year period.
Operating results
The EBITDA before special effects was CHF 25.3 million,
or 8.9% of sales. EBITDA was CHF 21.0 million with special
effects (incl. one-time costs for the “Deliver” reorganization
project). Excluding the investments in the inhaler (CHF 11.9
million), EBITDA for the core business is CHF 37.1 million
(before special effects), corresponding to a 13.1% EBITDA
margin. These results show the EBITDA and EBITDA margin
to be slightly lower than the previous year. All inhaler development
costs were booked against earnings.
For 2009, the Siegfried Actives Division achieved an EBITDA
of CHF 25.9 million and an 11.7% EBITDA margin, while
Siegfried Generics (excl. inhaler) contributed an EBITDA of
CHF 14.8 million to the Group results, with a 23.9% EBITDA
margin. EBITDA is CHF 3.0 million when inhaler costs are
included.
The Siegfried base business posted 2009 an operative profit
(EBIT) of CHF 6.1 million. In 2009, adjustments of CHF 16.2
million were made to the activated development costs after
a review of the earnings potential. This revaluation included
and costs of project “Deliver” as well, an operating loss of
CHF 14.4 million resulted. Including the inhaler development
costs of CHF 13.4 million, the operating loss amounted to
CHF 27.7 million.
The “Deliver” project surpassed expectations with savings of
about CHF 10 million achieved already for 2009. Further savings
of approximately CHF 10 million are expected for 2010.
These savings will have a sustainable effect on our results.
Costs of CHF 235.5 million for products sold, or 83.2% of
sales, resulted in a gross profit of CHF 47.5 million for 2009,
which translates to a 16.8% gross profit margin.
Marketing and distribution costs for 2009 were CHF 9.5 million,
about CHF 2 million less than the previous year. R&D
costs decreased from CHF 40.3 to CHF 31.5 million. The special
effect (activated development costs) noted above is separately
disclosed as impairment costs. Administrative costs
increased to CHF 22.5 million and include the one-time costs
66 Financial Statements Siegfried Group