Siegfried Annual Report 2009

elated to the Deliver project. In addition, the previous
year figure included a positive effect from changes to the
pension scheme.
Non-operative results
The financial results include the interest costs for the bank
loan of CHF 4.9 million. In this figure, the costs for the
re-negotiation are included as well. Further, the value of our
Arena shares was adjusted downward by CHF 6.9 million.
Siegfried received these shares in 2008 as part of the sales
price for production equipment in Zofingen. Despite positive
clinical results published last fall by Arena, the share price
continued to go down and the value of our stock holdings
reached CHF 5.5 million by end 2009. The shares are locked
until the end of 2010. Further, a biotech fund investment
made some time ago was impaired by CHF 0.5 million.
In addition, financial income of CHF 0.9 million and foreign
currency losses of CHF 0.8 million are booked in the
financial result.
Siegfried holds a minority share in SCI Pharmtech, Inc.
This company continues to prosper, resulting in CHF 0.9 million
result from associated companies for 2009.
Because pre-tax income remains negative, there was a tax
income for 2009 of CHF 5.1 million.
Overall, the sum of these effects led to a net loss of
CHF 35.3 million for 2009. Despite the negative results,
our equity ratio grew somewhat to 68% (2008: 65%).
Balance sheet – cash flow
For 2009, Siegfried focused on net working capital management,
which was reduced by CHF 39.4 million (from
CHF 172.3 million to CHF 132.9 million) – a reduction of
more than 20%. (Net working capital includes trade
accounts receivable, inventory, and trade accounts payable.)
The “Focused Factories” and “Joint Analytics” initiatives of
our “Deliver” program enabled substantial progress through
optimized processes in production and analytics. Tighter
control of overdue receivables also contributed notably to
the reduction in net working capital. By the end of 2009, net
working capital was 47.0% of sales and we expect further
improvements for 2010. The positive cash flow from operating
activities of CHF 45.5 million for 2009, an increase of
69.4% over the previous year, is in large part a result of the
clearly reduced level of net working capital. However, this
reduction also led to a drop in operating results because of
reduced absorption of fixed costs.
Cash flow from investing activities was CHF 32.3 million for
2009, including capitalized development costs of CHF 12.4
million and capital expenditure of CHF 20.8 million. CHF 4.1
million was dedicated towards new production equipment in
Pennsville and CHF 1.6 million was distributed among our
remaining facilities. CHF 15.1 million relate to Zofingen. The
new lab building, inaugurated in September 2009, represents
our single largest investment.
In 2009, net debt was reduced by CHF 7.9 million to
CHF 63.3 million, thanks to strong operating cash flow
and reduced investment activities. Ultimately, a dividend of
CHF 5.7 million (CHF 2.10 per share) was paid out in 2009
for the 2008 financial year. Due to the capital increase and
the current earnings situation, the Board of Directors proposes
to the Annual General Meeting of Shareholders to
renounce paying a dividend for the business year 2009.
Michael Hüsler, CFO
Financial Statements Siegfried Group
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