SKAN with higher sales and margin in 2023

SKAN AG / Key word(s): Annual Results
SKAN with higher sales and margin in 2023

26-March-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.

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Ad hoc announcement pursuant to Art. 53 LR

SKAN with higher sales and margin in 2023

  * Net sales up 15.5% to CHF 320.0 million; double-digit growth in both
    business segments.

  * EBITDA improved by 24.9% to CHF 50.1 million; with an EBITDA margin of
    15.7%, the communicated margin target was exceeded.

  * Order intake normalised at a healthy level of CHF 295.1 million; order
    backlog of CHF 312.1 million offers planning security for more than a
    year.

* Dividend of CHF 0.35 per share proposed for the 2023 financial year.

  * Strategic initiatives for integrated process systems and a higher degree
    of standardisation in the Equipment & Solutions business as well as for
    pre-approved services are on track.

  * Gert Thoenen will not stand for re-election after 19 years in office;
    Beat Lüthi proposed as new Chairman of the Board of Directors of the
    SKAN Group.

  * Confident outlook: Broad-based market growth, a high order backlog and a
    full project pipeline should ensure a good financial year 2024.

Allschwil, 26 March 2024 - The SKAN Group AG, world market leader for
high-quality isolator systems for aseptic production processes in the
(bio-)pharmaceutical industry, continued its growth trajectory in the 2023
financial year. The successful business performance was driven by the
continued strong market development. The trend towards injectable drugs
continues unabated. The number of approvals for biotech active ingredients
is constantly increasing, including in oncology, an important area of
application for customers. In addition, there are reinforcing growth drivers
such as the current GLP-1 drugs against obesity and the Covid vaccines in
previous years. These factors ensure encouragingly robust market growth and
high demand for process solutions for the aseptic filling of
biopharmaceutical active ingredients.

According to its own estimates, the SKAN Group once again grew faster than
the market. The success rate for offers was around 50%, which is primarily
due to the qualitative and technological superiority of the SKAN systems and
the process expertise. As a result, SKAN was able to maintain its number one
position in the high-end segment of the isolator market.


Above-average increase in profitability

The SKAN Group increased net sales by 15.5% to CHF 320.0 million; adjusted
for currency effects, growth even amounted to 19.2%. Earnings before
interest, taxes, depreciation and amortisation (EBITDA) increased by 24.9%
to CHF 50.1 million, which corresponds to an EBITDA margin of 15.7%. The
SKAN Group has thus achieved the communicated financial targets for net
sales growth and exceeded them for the EBITDA margin. The significant
increase at the EBITDA level is primarily due to the profitable growth of
the Services & Consumables segment.

After the exceptionally strong previous year, incoming orders stabilised at
the healthy level of CHF 295.1 million. The order backlog of CHF 312.1
million ensures that the SKAN Group can continue to plan ahead for more than
a year in the Equipment & Solutions segment. At the same time, the
normalised order intake has the positive effect of shortening delivery times
and making SKAN Group more attractive to customers again.

In order to cope with growth, the SKAN Group once again invested heavily in
the recruitment of specialised staff in the reporting year. A total of over
200 new employees were hired. In line with the decentralisation strategy the
ramp-up, in relative figures, mainly took place in the subsidiaries.
Accordingly, personnel expenses also increased slightly more than net sales.
In contrast, the cost of materials increased at a slower rate than net sales
due to a higher level of in-house production, while other operating costs
increased in line with net sales.

Profit for the 2023 financial year amounted to CHF 27.9 million, compared to
CHF 21.4 million in the previous year. The Board of Directors proposes to
the Annual General Meeting of SKAN Group AG on May 7, 2024, to distribute a
dividend of CHF 0.35 per share.


Equipment & Solutions segment on track with strategic initiatives

The Equipment & Solutions segment reported an order intake of CHF 213.3
million for the 2023 financial year. Net sales increased by 14.2% to CHF
237.1 million. The segment thus contributed 74% to the SKAN Group's total
sales. Segment EBITDA rose by 16.7% to CHF 26.8 million, resulting in an
EBITDA margin of 11.3%.

In the reporting year, incoming orders were evenly split between high-speed
systems with
e-beam technology and systems for smaller production volumes. Due to
customer delays, the completion of some projects was postponed until 2024.
Nevertheless, over 70 projects were completed in the reporting year,
bringing the number of SKAN isolators installed to around 1,100. In
addition, there are around 450 systems from Aseptic Technologies installed
worldwide. The expansion of the installed base increases the potential for
the future service and spare parts business.

The Equipment & Solutions segment made progress as planned with its
strategic initiatives in the areas of integrated process systems and
standardisation. The SKAN Group has once again invested a significant
amount, around 7% of net sales, in this area and in general research and
development activities, which has been directly charged to the income
statement.


Services & Consumables segment significantly increases profitability

The Services & Consumables segment achieved an order intake of CHF 81.8
million and 19.6% higher net sales of CHF 82.9 million in the 2023 financial
year. EBITDA of CHF 23.3 million reflects an increase in the EBITDA margin
to 28.1%.

Growth in the service business was driven by the steady expansion of the
installed base of SKAN systems. These require regular maintenance, periodic
requalification as required by regulations, and spare parts. The retrofit
business, the renewal of technical equipment and software for older
isolators, also developed positively in the reporting year.

The consumables business proved to be a key driver of sales and margin
growth in the Services & Consumables segment in the 2023 financial year. The
automated process solutions for closed vials from the Belgian subsidiary
Aseptic Technologies were in particularly high demand. There are currently
seven drugs sold in the AT-Closed Vial® that have been approved by six
leading health authorities, including the FDA (Food and Drug
Administration), MHRA (Medicines and Healthcare products Regulatory Agency)
and EMA (European Medicines Agency), in a total of 14 countries. As at
mid-2023, there were five drugs in nine countries. Based on the sales of AT
filling machines and filling kits, the development pipeline of drugs filled
in the AT-Closed Vial® is likely to be in the region of 450 active
ingredients. Accordingly, the sales volume of the AT-Closed Vial® is likely
to increase further in the future.

The SKAN Group is well on track with the project for pre-approved services,
which will also contribute to the expansion of the Services & Consumables
segment in the future.


Investing in future growth

The expansion of pre-approved services also accounted for the majority of
investments, totalling CHF 35.3 million in the 2023 financial year. The
remaining funds were used to expand capacity in Switzerland and Belgium. At
CHF 8.7 million, operating cash flow was significantly lower than in the
previous year, which is attributable to the lower order intake and the
associated lower volume of advance payments from customers. Equity at the
end of 2023 amounted to CHF 176.4 million, corresponding to an equity ratio
of 47.2%.


Beat Lüthi proposed as new Chairman of the Board of Directors of the SKAN
Group

Chairman of the Board of Directors Gert Thoenen has decided not to stand for
re-election at the upcoming Annual General Meeting of SKAN Group AG on May
7, 2024. Gert Thoenen (*1957) has been a member of the Board of Directors of
SKAN Holding AG since 2005 and its Chairman since 2019. Since 2021, he has
served as Chairman of the Board of Directors of the holding company SKAN
Group AG, which was newly established in the course of the IPO. During his
19 years on the Board of Directors, the SKAN Group has become the global
market leader in its field. The successful IPO on the Swiss stock exchange
in October 2021 also took place under his leadership. The Board of Directors
and the SKAN Group would like to thank Gert Thoenen for his successful work
and his long loyalty to the company and wish him all the best for the
future.

Beat Lüthi (*1962) will be proposed to the Annual General Meeting as his
successor. Beat Lüthi is a Swiss citizen and holds a master in electrical
engineering and a PhD in software technology management from ETH Zurich.
Since 2008, he has been CEO of the Basellandschaft-based company CTC
Analytics, which produces liquid handling robots for laboratory
applications. Beat Lüthi has been Chairman of the Board of Directors of the
SIX-listed INFICON Group since 2012 and a member of the SKAN Group Board of
Directors since 2022 as head of the Nomination and Compensation Committee.
The Board of Directors of SKAN Group AG is convinced that Beat Lüthi is
ideally suited to drive forward growth and strategic development of the
company.


Outlook and guidance

The SKAN Group is focused on a market that benefits from structural growth.
The medical application areas that our customers target with their medicines
will continue to grow. The trend towards injectable drugs will continue, as
will the increasing importance of biotechnologically produced active
ingredients. Accordingly, customer demand for process solutions for aseptic
filling and for the associated services and consumables will also remain
high. The SKAN Group will continue to consistently implement its strategy in
order to participate over-proportionally in market growth.

Against this background, the Board of Directors and management of the SKAN
Group are also optimistic about 2024. The start to the current year has been
pleasing, and the order backlog and full project pipeline should ensure a
good course of business. The Board of Directors and management are confident
that the SKAN Group will once again reach its growth targets. In terms of
net sales, an increase in the mid- to upper ten percent range is expected in
2024, with the Services & Consumables segment once again likely to grow more
strongly than Equipment & Solutions. The EBITDA margin should range between
13 and 15%.

Consolidated key figures

in thousand CHF 2023 in % of 2022 in % of change net sales net sales in %

  SKAN
  Financial key figures

Order intake 295'12- 411'69- -28.3% 5 6
Order backlog 312'14- 360'08- -13.3% 3 6
Net sales 320'02- 276'95- 15.5% 0 5
EBITDA 50'144 15.7% 40'154 14.5% 24.9% EBIT 37'750 11.8% 29'461 10.6% 28.1% Profit for the period 27'898 8.7% 21'446 7.7% 30.1%
Net working capital -5'885 -12'80- 54.1% (NWC) 8
Return on capital 19.7% 15.3% 29.0% employed (ROCE)
Investments 35'298 28'865 22.3% Equity 176'36- 165'59- 6.5% 2 5
Equity ratio 47.2% 42.6% 10.8%
Cash flow from 8'700 61'483 -85.8% operating activities
Cash flow from -17'34- -76'41- -77.3% investing activities 6 8
Cash flow from -15'80- -4'846 not financing activities 1 meaningf- ul
Headcount 1'388 1'172 18.4%

  Segment key figures
  Equipment & Solutions

Order intake 213'27- 336'58- -36.6% 7 2
Order backlog 289'88- 332'74- -12.9% 5 8
Net sales 237'10- 207'65- 14.2% 6 7
EBITDA 26'843 11.3% 22'993 11.1% 16.7% Service & Consumables
Order intake 81'848 75'114 9.0% Order backlog 22'257 27'338 -18.6% Net sales 82'914 69'298 19.6% EBITDA 23'301 28.1% 17'161 24.8% 35.8% Stock key figures
Registered shares 22'483- 22'483- 0.0% '524 '524
Earnings per share 1.17 0.84 38.6% (in CHF)
Dividends per share 0.35 0.25 40.0% (in CHF)
Conference Call and Audio Webcast (in English)

Thomas Huber, CEO, and Burim Maraj, CFO, will guide you through the results
for the financial year 2023 and provide an outlook for the current financial
year in a conference call and audio webcast. Afterwards, they will be
available for questions.

Tuesday, March 26, 2024
2:30 to 3:30 p.m. (CEST)

To participate in the conference call, please register via this link. You
will then receive a confirmation e-mail with individual dial-in data. As a
participant in the conference call, you can follow the presentation here.

The presentation will be broadcast as a live audio webcast. To access,
please use this link. Questions can be asked via the chat function. A
recording will subsequently be available under the same link.

For questions about the conference call or audio webcast, or if you have
problems with the link, please contact ir@skan.com, +41 79 703 87 28.


Download Links:

>> Annual Report 2023

>> Presentation Financial Year 2023

Contacts:

Thomas Balmer, ir@skan.com, +41 79 703 87 28

Alexandre Müller, ir@skan.com, +41 79 635 64 13


Financial calendar:

         7 May 2024                  Annual General Meeting 2024
     20 August 2024    Publication of the half-year results 2024

SKAN - together always one step ahead

SKAN is a pioneer in the field of aseptic and aseptic-toxic manufacturing
processes for the (bio)pharmaceutical industry. The company is the market
and technology leader for high-quality, process-critical isolator systems
for filling drugs according to strict sterility standards. In addition, the
company offers its customers process support, services and consumables.
Innovative solutions and an efficient life-cycle support organisation make
SKAN an important partner for the pharmaceutical and biotech industry, CMOs
(Contract Manufacturing Organisations) and research laboratories worldwide.
Founded in 1968, SKAN today employs approximately 1400 people. More than
half of them work at the Allschwil headquarters in the Life Sciences Hub of
the Basel region. The other employees are located among the subsidiaries in
Switzerland, Germany, Belgium, Japan and the USA.


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End of Inside Information

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   Language:       English
   Company:        SKAN AG
                   Kreuzstrasse 5
                   4123 Allschwil
                   Switzerland
   Phone:          +41 43 268 32 32
   E-mail:         info@skan.com
   ISIN:           CH0013396012
   Valor:          1339601
   Listed:         SIX Swiss Exchange
   EQS News ID:    1866857

End of Announcement EQS News Service
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1866857 26-March-2024 CET/CEST