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Zurich, Switzerland, July 18, 2023 – DKSH’s first-half 2023 results are marked by above GDP growth, further margin expansion, and effective cash management. Net sales reached CHF 5.6 billion (7.2% at CER), Core EBIT grew double digit to CHF 162.6 million (15.5% at CER), and Free Cash Flow reached CHF 179.0 million (168.2% cash conversion).

DKSH CEO, Stefan P. Butz, said: “I am pleased to report that, after a strong year in 2022, DKSH delivered above GDP growth and further margin expansion in the first half of 2023. Capitalizing on diligent strategy execution and resilient business models, our valued employees across all Business Units contributed to the result. Based on our good first half results, we confirm our outlook for 2023.”

DKSH Group

DKSH Group net sales increased by 0.5% to CHF 5.6 billion in the first half of 2023 and 7.2% at constant exchange rates (CER). Organic growth contributed the most with 4.3%, acquisitions added 2.9%, and exchange rates -6.7% due to the strong appreciation of the Swiss franc.

The Group Core EBIT reached CHF 162.6 million, 15.5% higher than in H1 2022 (at CER). Core EBIT margin increased from 2.7% to 2.9%. Core profit after tax was CHF 106.4 million. The difference between Core EBIT and EBIT (CHF -4.1 million) as well as Core profit after tax and profit after tax (CHF +0.7 million) is mainly due to the share of result in associates in which DKSH’s ownership is below 50% and which are not consolidated under any of the four Business Units. Free Cash Flow reached CHF 179.0 million. Cash conversion improved from 68.5% in the first half of 2022 to 168.2%.

1 Constant exchange rates (CER): 2023 figures converted at 2022 exchange rates.

* For the definition of Alternative Performance Measures (APM), see Half-Year Report 2023.

Business Unit Healthcare

Business Unit Healthcare accelerated net sales growth (6.7% at CER) in the first half of 2023. The key driver was business expansion with existing and new clients in Thailand, Malaysia, and Vietnam. With a focus on growing its higher added-value segments and services, such as the Own Brands and Medical Devices businesses, Core EBIT margin further increased after a strong first-half 2022 from 2.6% to 2.8%. Backed by attractive market fundamentals, the Business Unit will continue expanding its position and driving into higher-value segments and services.

Business Unit Consumer Goods

The gradual shift towards topline acceleration in Business Unit Consumer Goods drove a modest net sales growth (2.0% at CER) to CHF 1.8 billion due to client wins and expansions. Portfolio optimization resulted in another half year of Core EBIT growth (at CER) and margin increase from 2.1% to 2.2%. The successful transformation of the Unit over the last four years has resulted in a doubling of Core EBIT and margin. The Unit will continue capitalizing on its position in Asia Pacific, now amplified by a stronger market reputation, to drive growth and profitability under the leadership of the new Business Unit Head.

Business Unit Performance Materials

Business Unit Performance Materials delivered M&A-driven net sales growth of 14.6% (at CER). Results must be viewed against a strong performance in the previous year as well as industry slowdowns due to the challenging macroeconomic environment and temporary destocking. Core EBIT in the first half of 2023 was CHF 62.3 million, which includes amortizations of CHF 4.9 million, almost entirely related to M&A. Excluding amortizations, the Core EBIT margin of 8.8% remained around last year’s level. The Business Unit's second-quarter results show a sequential improvement versus the first quarter and year-on-year growth.

Business Unit Technology

Business Unit Technology reported very strong results. Net sales and Core EBIT increased double digit. The business benefitted from increased investments in the scientific instrumentation, precision machinery, and semiconductor industries across Asia Pacific. At the same time, the Unit diligently executed its strategy by further focusing its Business Lines and expanding its consumables and service portfolio. The Business Unit is determined to solidify its position in key industries in Asia Pacific, build further resilience, focus on higher-margin segments and services, and play a leading role in market consolidation.

Outlook

DKSH is committed to deliver GDP+ sales growth and expects Core EBIT in 2023 to be higher than in 2022 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.

Further Information

The conference and webcast for media and investors will take place today at 10:00 a.m. CEST. The Half-Year Report 2023 and recording of the webcast will be available on the DKSH website.

Appendix:

Net Sales Growth Components

EBIT to Core EBIT – H1 2023

Profit after tax to Core profit after tax