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16.02.2024 07:00:51 - dpa-AFX: EQS-Adhoc: DKSH Delivers Growth1 and Margin Expansion Alongside Strong Cash Conversion in Full-Year 2023 (english)
DKSH Delivers Growth1 and Margin Expansion Alongside Strong Cash Conversion
in Full-Year 2023
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Ad hoc announcement pursuant to Art. 53 LR
* Net sales reached CHF 11.1 billion (5.3% at CER1)
* Core EBIT grew to CHF 329.9 million (12.6% at CER1)
* Core EBIT margin expanded by >15 basis points to 3.0%
* Free Cash Flow of CHF 282.3 million (cash conversion at 137.0%)
* Dividend proposal of CHF 2.25 per share (+4.7%)2
* Capital Markets Day planned in H2 2024
Zurich, Switzerland, February 16, 2024 - DKSH's full-year 2023 results are
marked by above GDP3 growth at CER1, further margin expansion, and effective
cash generation. Net sales reached CHF 11.1 billion (5.3% at CER), Core EBIT
grew to CHF 329.9 million (12.6% at CER), and Free Cash Flow reached CHF
282.3 million (137.0% cash conversion). All Business Units recorded Core
EBIT growth at CER and higher Core EBIT margins.
DKSH CEO, Stefan P. Butz, said: "I am pleased to report that DKSH delivered
a strong operational performance of GDP+3 growth (at CER) and double-digit
Core EBIT growth (+12.6% at CER) including further margin expansion in 2023
despite a challenging macro environment. These results add to our consistent
track record of achieving +10.1% Core EBIT growth per year (at CER) and +60
basis points margin expansion since 2019 (pre-covid). The exceptionally
strong appreciation of the Swiss franc resulted in a negative currency
effect of 9.2% on Core EBIT. Capitalizing on diligent strategy execution and
our resilient business model, our valued employees across the Group
delivered these solid results. We continue to be the trusted partner for our
clients and customers, making good progress towards meeting our long-term
sustainability targets, and fulfilling our purpose of enriching people's
lives. In 2024, we will continue to grow Core EBIT (at CER)."
DKSH Group
DKSH Group reported a net sales decrease by 2.2% to CHF 11.1 billion in 2023
and increase by 5.3% at CER. Organic growth contributed the most with 3.2%,
acquisitions added 2.1%, and exchange rates -7.5% due to the strong
appreciation of the Swiss franc.
Group Core EBIT reached CHF 329.9 million, 12.6% above 2022 levels (at CER).
Core EBIT margin increased from 2.8% in the previous year to 3.0%. Core
profit after tax was CHF 206.0 million. The difference between Core EBIT and
EBIT (CHF -24.0 million) as well as Core profit after tax and profit after
tax (CHF -16.1 million) are predominately non-cash and mainly due to the
discontinuation of the non-profitable and non-core fashion retail business
as well as from the share of non-operational loss in associates following
fair value adjustments. Free Cash Flow reached CHF 282.3 million compared to
CHF 209.5 million in 2022, with an improved cash conversion at 137.0%.
Business Unit Healthcare
Business Unit Healthcare accelerated net sales growth (6.5% at CER) in 2023
and further increased Core EBIT margin from 2.6% to 2.8%. A key driver for
these excellent results was business development with existing and new
clients in Thailand, Malaysia, and Vietnam as well as the strong underlying
market. The continued focus on value-added segments and services, such as
the Own Brands and Medical Device businesses, as well as Full Agency
services also contributed to the Business Unit's strong year. With the two
acquisitions of Partizan in Australia as well as Medipharm in Brunei (early
2024), Business Unit Healthcare further strengthened its market presence and
is well positioned for future profitable growth.
Business Unit Consumer Goods
The focus of Business Unit Consumer Goods on its core activities resulted in
net sales growth (2.2% at CER) to CHF 3.5 billion. Core EBIT grew (at CER)
and the Core EBIT margin was 2.3%. Following a detailed analysis of the
portfolio, the strategic direction has evolved to an even stronger focus on
the FMCG (Fast Moving Consumer Goods) business. Subsequently, DKSH decided
to discontinue the non-profitable and non-core fashion retail business,
which is already fully reflected in the 2023 results. With these steps, the
Unit will continue capitalizing on its position in Asia Pacific and driving
growth and profitability in its core business under the leadership of the
new Business Unit Head.
Business Unit Performance Materials
Business Unit Performance Materials delivered net sales growth of 6.1% (at
CER) in a very challenging market environment. Driven by gross margin
expansion and strong cost control, Core EBIT in 2023 was CHF 116.0 million
and grew double-digit at CER with a strong Core EBIT margin increase of 40
basis points to 8.1%. To provide additional disclosure and enhance industry
comparability: DKSH increased Core EBITA from CHF 115.7 million to CHF 125.6
million (+17.4% at CER) and expanded the Core EBITA margin from 7.9% to 8.7%
(+80 basis points), with positive contributions by all regions. At the same
time, the Unit successfully reduced inventory levels and improved working
capital days.
In Asia Pacific and Europe, the Unit benefited from robust demand across the
life science sector (food and beverages, pharma, personal care). A scalable
and global business model, its business development pipeline, and further
industry consolidation potential provide future growth opportunities.
Business Unit Technology
Business Unit Technology again achieved remarkably strong results in 2023.
Both net sales and Core EBIT increased double-digit (at CER), resulting in a
higher Core EBIT margin of 6.8%. Business Unit Technology continued to grow
key areas such as scientific instrumentation, precision machinery, and
equipment for the semiconductor industry. The consumables and service
segments continued to be important growth drivers. With the acquisition of
Bio-Strategy in Australia and New Zealand, Business Unit Technology
strengthened its leading position in the scientific instrumentation space in
Asia Pacific. With further market consolidation potential ahead, the
Business Unit will keep fostering its position in key industries and higher
margin segments and services.
Sustainability
DKSH also published its Sustainability Report 2023 today, highlighting the
good progress made on its Sustainability Strategy based on four objectives
People, Value Chain, Climate, and Local Impact. DKSH increased the
percentage of women in senior leadership positions to 34%, which benchmarks
strongly in its industry and region. Bringing it closer to its target of
climate neutrality by 2030, DKSH achieved a 50% reduction of Scope 1+2
greenhouse gas emissions compared to its 2020 baseline. DKSH launched a
Social Impact Strategy and organized 94 local community projects. All
efforts resulted in receiving the second EcoVadis Gold rating with an
increased score.
Outlook
DKSH is committed to deliver GDP+1 sales growth (at CER) and expects Core
EBIT (at CER) in 2024 to be higher than in 2023 based on its resilient
business model, successful strategy execution, and strong balance sheet.
This outlook assumes economic growth in Asia Pacific, exchange rates at
current levels, and barring any unforeseen events. The Group remains
confident about Asia's long-term potential and is well-positioned to benefit
from favorable market, industry, and M&A consolidation trends.
Capital Markets Day 2024
DKSH is delighted to announce that its Capital Markets Day 2024 will be held
in London in the second half of 2024. Further information on the date and
location of the event will be announced at a later stage.
Further Information
The conference and webcast for media and investors will take place today at
11:00 a.m. CET. The Annual Report 2023, the Sustainability Report 2023, and
the recording will be available on the DKSH website.
1 Constant exchange rates (CER): 2023 figures converted at 2022 exchange
rates.
2 Proposal of the Board of Directors.
3 Weighted GDP calculation based on DKSH 2023 Net sales market split.
* For the definition of Alternative Performance Measures (APM), see Annual
Report 2023.
1 Weighted GDP calculation based on DKSH 2023 Net sales market split.
Appendix*:
Net Sales Growth Components
EBIT to Core EBIT - 2023
Profit after tax to Core profit after tax
* For the definition of Alternative Performance Measures (APM), see Annual
Report 2023.
About DKSH
DKSH's purpose is to enrich people's lives. For almost 160 years, DKSH has
been delivering growth for companies in Asia and beyond across its Business
Units Healthcare, Consumer Goods, Performance Materials, and Technology. As
a leading Market Expansion Services provider, DKSH offers sourcing, market
insights, marketing and sales, eCommerce, distribution and logistics as well
as after-sales services. DKSH is a participant of the United Nations Global
Compact and adheres to its principles-based approach to responsible
business. Listed on the SIX Swiss Exchange, DKSH operates in 35 markets with
29,040 specialists, generating net sales of CHF 11.1 billion in 2023.
www.dksh.com
For further information, please contact:
DKSH Holding Ltd.
Till Leisner
Head, Investor & Media Relations, Sustainability
Phone +41 44 386 7315
till.leisner@dksh.com
Melanie Grüter
Manager, Group Media Relations
Phone +41 44 386 7211
melanie.grueter@dksh.com
____________________________________________________________
1838581 16-Feb-2024 CET/CEST
in Full-Year 2023
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DKSH Management Ltd. / Key word(s): Annual Results
DKSH Delivers Growth1 and Margin Expansion Alongside Strong Cash
Conversion in Full-Year 2023
16-Feb-2024 / 07:00 CET/CEST
Release of an ad hoc announcement pursuant to Art. 53 LR
The issuer is solely responsible for the content of this
announcement.
____________________________________________________________
Ad hoc announcement pursuant to Art. 53 LR
* Net sales reached CHF 11.1 billion (5.3% at CER1)
* Core EBIT grew to CHF 329.9 million (12.6% at CER1)
* Core EBIT margin expanded by >15 basis points to 3.0%
* Free Cash Flow of CHF 282.3 million (cash conversion at 137.0%)
* Dividend proposal of CHF 2.25 per share (+4.7%)2
* Capital Markets Day planned in H2 2024
Key Figures Group (CHF 2023 2022 in % in %
million) CHF CER¹
Net sales 11,066.0 11,320.2 (2.2) 5.3
Core operating profit (Core 329.9 319.2 3.4 12.6
EBIT)
Core EBIT margin 3.0% 2.8% - -
Operating profit (EBIT) 305.9 319.2 (4.2) 5.1
Core profit after tax 206.0 208.4 (1.2) 5.8
Profit after tax 189.9 207.6 (8.5) (1.5)
Free Cash Flow 282.3 209.5 34.7 -
Dividend (in CHF) 2.252 2.15 4.7 -
Zurich, Switzerland, February 16, 2024 - DKSH's full-year 2023 results are
marked by above GDP3 growth at CER1, further margin expansion, and effective
cash generation. Net sales reached CHF 11.1 billion (5.3% at CER), Core EBIT
grew to CHF 329.9 million (12.6% at CER), and Free Cash Flow reached CHF
282.3 million (137.0% cash conversion). All Business Units recorded Core
EBIT growth at CER and higher Core EBIT margins.
DKSH CEO, Stefan P. Butz, said: "I am pleased to report that DKSH delivered
a strong operational performance of GDP+3 growth (at CER) and double-digit
Core EBIT growth (+12.6% at CER) including further margin expansion in 2023
despite a challenging macro environment. These results add to our consistent
track record of achieving +10.1% Core EBIT growth per year (at CER) and +60
basis points margin expansion since 2019 (pre-covid). The exceptionally
strong appreciation of the Swiss franc resulted in a negative currency
effect of 9.2% on Core EBIT. Capitalizing on diligent strategy execution and
our resilient business model, our valued employees across the Group
delivered these solid results. We continue to be the trusted partner for our
clients and customers, making good progress towards meeting our long-term
sustainability targets, and fulfilling our purpose of enriching people's
lives. In 2024, we will continue to grow Core EBIT (at CER)."
DKSH Group
DKSH Group reported a net sales decrease by 2.2% to CHF 11.1 billion in 2023
and increase by 5.3% at CER. Organic growth contributed the most with 3.2%,
acquisitions added 2.1%, and exchange rates -7.5% due to the strong
appreciation of the Swiss franc.
Group Core EBIT reached CHF 329.9 million, 12.6% above 2022 levels (at CER).
Core EBIT margin increased from 2.8% in the previous year to 3.0%. Core
profit after tax was CHF 206.0 million. The difference between Core EBIT and
EBIT (CHF -24.0 million) as well as Core profit after tax and profit after
tax (CHF -16.1 million) are predominately non-cash and mainly due to the
discontinuation of the non-profitable and non-core fashion retail business
as well as from the share of non-operational loss in associates following
fair value adjustments. Free Cash Flow reached CHF 282.3 million compared to
CHF 209.5 million in 2022, with an improved cash conversion at 137.0%.
Business Unit Healthcare
Business Unit Healthcare accelerated net sales growth (6.5% at CER) in 2023
and further increased Core EBIT margin from 2.6% to 2.8%. A key driver for
these excellent results was business development with existing and new
clients in Thailand, Malaysia, and Vietnam as well as the strong underlying
market. The continued focus on value-added segments and services, such as
the Own Brands and Medical Device businesses, as well as Full Agency
services also contributed to the Business Unit's strong year. With the two
acquisitions of Partizan in Australia as well as Medipharm in Brunei (early
2024), Business Unit Healthcare further strengthened its market presence and
is well positioned for future profitable growth.
Healthcare (in CHF million) 2023 2022 in % CHF in % CER
Net sales 5,578.2 5,636.9 (1.0) 6.5
Core EBIT 155.9 146.2 6.6 14.5
EBIT 155.9 146.2 6.6 14.5
Business Unit Consumer Goods
The focus of Business Unit Consumer Goods on its core activities resulted in
net sales growth (2.2% at CER) to CHF 3.5 billion. Core EBIT grew (at CER)
and the Core EBIT margin was 2.3%. Following a detailed analysis of the
portfolio, the strategic direction has evolved to an even stronger focus on
the FMCG (Fast Moving Consumer Goods) business. Subsequently, DKSH decided
to discontinue the non-profitable and non-core fashion retail business,
which is already fully reflected in the 2023 results. With these steps, the
Unit will continue capitalizing on its position in Asia Pacific and driving
growth and profitability in its core business under the leadership of the
new Business Unit Head.
Consumer Goods (in CHF million) 2023 2022 in % CHF in % CER Net sales 3,515.5 3,708.7 (5.2) 2.2 Core EBIT 82.5 86.9 (5.1) 2.2 EBIT 66.9 86.9 (23.0) (15.8)
Business Unit Performance Materials
Business Unit Performance Materials delivered net sales growth of 6.1% (at
CER) in a very challenging market environment. Driven by gross margin
expansion and strong cost control, Core EBIT in 2023 was CHF 116.0 million
and grew double-digit at CER with a strong Core EBIT margin increase of 40
basis points to 8.1%. To provide additional disclosure and enhance industry
comparability: DKSH increased Core EBITA from CHF 115.7 million to CHF 125.6
million (+17.4% at CER) and expanded the Core EBITA margin from 7.9% to 8.7%
(+80 basis points), with positive contributions by all regions. At the same
time, the Unit successfully reduced inventory levels and improved working
capital days.
In Asia Pacific and Europe, the Unit benefited from robust demand across the
life science sector (food and beverages, pharma, personal care). A scalable
and global business model, its business development pipeline, and further
industry consolidation potential provide future growth opportunities.
Performance Materials (in CHF 2023 2022 in % in %
million) CHF CER
Net sales 1,439.7 1,461.4 (1.5) 6.1
Core EBIT 116.0 112.2 3.4 12.1
EBIT 116.0 112.2 3.4 12.1
Business Unit Technology
Business Unit Technology again achieved remarkably strong results in 2023.
Both net sales and Core EBIT increased double-digit (at CER), resulting in a
higher Core EBIT margin of 6.8%. Business Unit Technology continued to grow
key areas such as scientific instrumentation, precision machinery, and
equipment for the semiconductor industry. The consumables and service
segments continued to be important growth drivers. With the acquisition of
Bio-Strategy in Australia and New Zealand, Business Unit Technology
strengthened its leading position in the scientific instrumentation space in
Asia Pacific. With further market consolidation potential ahead, the
Business Unit will keep fostering its position in key industries and higher
margin segments and services.
Technology (in CHF million) 2023 2022 in % CHF in % CER
Net sales 532.6 513.2 3.8 12.5
Core EBIT 36.0 33.2 8.4 17.8
EBIT 36.0 33.2 8.4 17.8
Sustainability
DKSH also published its Sustainability Report 2023 today, highlighting the
good progress made on its Sustainability Strategy based on four objectives
People, Value Chain, Climate, and Local Impact. DKSH increased the
percentage of women in senior leadership positions to 34%, which benchmarks
strongly in its industry and region. Bringing it closer to its target of
climate neutrality by 2030, DKSH achieved a 50% reduction of Scope 1+2
greenhouse gas emissions compared to its 2020 baseline. DKSH launched a
Social Impact Strategy and organized 94 local community projects. All
efforts resulted in receiving the second EcoVadis Gold rating with an
increased score.
Outlook
DKSH is committed to deliver GDP+1 sales growth (at CER) and expects Core
EBIT (at CER) in 2024 to be higher than in 2023 based on its resilient
business model, successful strategy execution, and strong balance sheet.
This outlook assumes economic growth in Asia Pacific, exchange rates at
current levels, and barring any unforeseen events. The Group remains
confident about Asia's long-term potential and is well-positioned to benefit
from favorable market, industry, and M&A consolidation trends.
Capital Markets Day 2024
DKSH is delighted to announce that its Capital Markets Day 2024 will be held
in London in the second half of 2024. Further information on the date and
location of the event will be announced at a later stage.
Further Information
The conference and webcast for media and investors will take place today at
11:00 a.m. CET. The Annual Report 2023, the Sustainability Report 2023, and
the recording will be available on the DKSH website.
1 Constant exchange rates (CER): 2023 figures converted at 2022 exchange
rates.
2 Proposal of the Board of Directors.
3 Weighted GDP calculation based on DKSH 2023 Net sales market split.
* For the definition of Alternative Performance Measures (APM), see Annual
Report 2023.
1 Weighted GDP calculation based on DKSH 2023 Net sales market split.
Appendix*:
Net Sales Growth Components
(in CHF million) 2023 2022 % CHF % Organic % M&A % FX Healthcare 5,578.2 5,636.9 (1.0) 6.2 0.3 (7.5) Consumer Goods 3,515.5 3,708.7 (5.2) 1.9 0.3 (7.4) Performance Materials 1,439.7 1,461.4 (1.5) (6.7) 12.8 (7.6) Technology 532.6 513.2 3.8 7.6 4.9 (8.7) DKSH Group 11,066.0 11,320.2 (2.2) 3.2 2.1 (7.5)
EBIT to Core EBIT - 2023
(in CHF Operat- Discontinua- Goodw- Fair value Share Core
million) ing tion of ill adjustment of operating
profit fashion impai- related to result profit
(EBIT) retail rment employee in (Core
business benefit associa- EBIT)
expenses tes
Healthca- 155.9 - - - - 155.9
re
Consumer 66.9 11.7 3.9 - - 82.5
Goods
Performa- 116.0 - - - - 116.0
nce
Material-
s
Technolo- 36.0 - - - - 36.0
gy
Other/El- (68.9) - - 0.9 7.5 (60.5)
iminatio-
n
Group 305.9 11.7 3.9 0.9 7.5 329.9
Total
Profit after tax to Core profit after tax
(in CHF million) 2023 2022
Profit after tax 189.9 207.6
Discontinuation of fashion retail business 9.8 -
Goodwill impairment 3.9 -
Fair value adjustment related to employee benefit 0.9 -
expenses
Share of results in associates 7.5 -
Loss on sale of subsidiaries 2.0 0.1
Expense/(Income) from financial instruments (8.0) 0.7
Core profit after tax 206.0 208.4
* For the definition of Alternative Performance Measures (APM), see Annual
Report 2023.
About DKSH
DKSH's purpose is to enrich people's lives. For almost 160 years, DKSH has
been delivering growth for companies in Asia and beyond across its Business
Units Healthcare, Consumer Goods, Performance Materials, and Technology. As
a leading Market Expansion Services provider, DKSH offers sourcing, market
insights, marketing and sales, eCommerce, distribution and logistics as well
as after-sales services. DKSH is a participant of the United Nations Global
Compact and adheres to its principles-based approach to responsible
business. Listed on the SIX Swiss Exchange, DKSH operates in 35 markets with
29,040 specialists, generating net sales of CHF 11.1 billion in 2023.
www.dksh.com
For further information, please contact:
DKSH Holding Ltd.
Till Leisner
Head, Investor & Media Relations, Sustainability
Phone +41 44 386 7315
till.leisner@dksh.com
Melanie Grüter
Manager, Group Media Relations
Phone +41 44 386 7211
melanie.grueter@dksh.com
____________________________________________________________
End of Inside Information
____________________________________________________________
Language: English
Company: DKSH Management Ltd.
Wiesenstrasse 8
8008 Zurich
Switzerland
Phone: 044 386 72 72
E-mail: media@dksh.com
Internet: www.dksh.com
ISIN: CH0126673539
Valor: 12667353
Listed: SIX Swiss Exchange
EQS News ID: 1838581
End of Announcement EQS News Service
____________________________________________________________
1838581 16-Feb-2024 CET/CEST
