The company has experienced a near 50% growth in their first year after buying three BASF sites.

Swiss contract development and manufacturing organization (CDMO) Siegfried has announced results that show 2016 to have been a record year. This followed the acquisition of three API manufacturing sites from BASF in Germany, France and Switzerland that were consolidated in the results for the first time. 

Sales were up 49.3% to CHF 717.7 million, while EBITDA before integration and consolidation costs of CHF 7.5 million, grew by 30.1% to CHF 104.2 million francs, giving a slightly reduced margin of 14.5%. These integration costs, plus significantly higher tax and financial expenses after a year where the company had benefitted from tax credits, meant that net profit fell from CHF 39.1 million to CHF 27.9 million.

“The consolidation process in the industry has by no means been completed,” commented Siegfried CEO Dr. Rudolf Hanko. “We shall remain active in the change process in order to protect our leading position in the CMO market. As well as welcome additional size and connected flexibility, we aim to achieve, especially deepening and expansion of our technical expertise”.

The company also achieved the important milestone of receiving a final operating license from the Chinese authorities for large-scale production at its Nantong plant after a major inspection. Inaugurated in 2015, this facility is modelled on the headquarters facility at Zofingen, Switzerland. Several products are already being developed and produced there.

“Thus Siegfried is now in a position to take full advantage of this essential cornerstone of its production network and significantly improve its competitiveness. The fact that an important supplier company operates a production plant in China is being positively recognized by the market,” the company stated.

A new plant with a technical design comparable to that in Nantong, started commercial production at Zofingen itself last year. During 2017, Siegfried will expand its R&D capacity to meet customer requests faster. About 40 new laboratory work stations are being set up and construction will start shortly on a new logistics building comprising some 5,000 pallet positions.

Siegfried revealed also that its customer base in the U.S., its largest market, “grew significantly” in 2015-16 and that it now has “the necessary critical size to flexibly meet customer requests and needs.” Sales of both drug substance and drug product grew organically. These accounted for about 75% and 25% respectively of business. The Business Development & Sales team set a new record for project orders.

For 2017, Siegfried said that it “expects to achieve a robust result”. High single-digit sales growth is anticipated, allowing for unpredictable currency developments. This will be the basis on which the company hopes to increase profit distribution to shareholders. The 2016 dividend was CHF 2/share.

Siegfried subsequently announced that CFO Michael Hüsler is leaving in April and that Dr. Reto Suter, most recently CEO and CIO at Lonrho will be replacing him. Another senior change is the appointment of Dr. Wolfgang Wienand to head global R&D activities, in addition to his role of Head of Strategy for M&A, Legal, IP and Regulatory Affairs.

Wienand replaces Dr. René Imwinkelried, who will continue to manage the Global Technical Operations department. Both appointments begin from May 1st. All three will be part of the six-strong Executive Committee along with Hanko, Marianne Späne, Head of Business Development & Sales, and Arnoud Middel, Head of Global Human Resources.