SKAN Group demonstrates operational strength
22. August 2023 – EQS-Ad-hoc: SKAN Group demonstrates operational strength
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SKAN AG / Key word(s): Half Year Results Ad hoc announcement pursuant to Art. 53 LR SKAN Group demonstrates operational strength
The SKAN Group reports an order intake of CHF 175.3 million for the first half of 2023 (H1 2022: CHF 263.3 million). After a strong catch-up effect was felt in the equipment business in the previous year – as customers increasingly invested in equipment for drugs that were put on hold during the Covid pandemic – order intake normalized at a continued high level in the first six months of 2023. Overall, the order pipeline remains well-filled. The order backlog has again increased to a record CHF 384.6 million (31.12.2022: CHF 360.1 million). This gives SKAN planning security in the equipment business for the next two years. Net sales increased by 16 percent to CHF 139.7 million in the first half of 2023 (H1 2022: CHF 120.9 million). Earnings before interest, taxes, depreciation and amortization (EBITDA) reached CHF 18.6 million in the first half of 2023, corresponding to an EBITDA margin of 13 percent (H1 2022: CHF 10.7 million, 9 percent). The imbalance between projects in the design phase, which still generate relatively low billable value added, and projects in value-intensive production was significantly less pronounced than in the previous year. However, the SKAN Group again expects a stronger second half of the year in 2023 in terms of value added and thus also in terms of net sales and profitability. The most important cost factors in the reporting period were the planned continued increase in personnel by almost 100 employees and expenses for standardization, which will have a positive impact on profitability in the coming years. Earnings before interest and taxes (EBIT) for the first half of 2023 amounted to CHF 12.4 million, which is more than double the CHF 5.9 million in the same period of the previous year. Profit amounted to CHF 8.7 million (H1 2022: CHF 1.1 million).
The Equipment & Solutions segment recorded order intake of CHF 128.2 million in the first half of 2023 (H1 2022: CHF 226.3 million). In addition to the good order intake for isolator solutions, an important major order in the traditional trading business with laboratory equipment is also worth mentioning. Net sales increased by 14 percent to CHF 103.1 million (H1 2022: CHF 90.2 million). The Equipment & Solutions segment thus accounted for 74 percent of the SKAN Group’s total revenue. At 1.2, the book-to-bill ratio in the reporting period was still above 1, but below the previous year’s value of 2.5. The development of sales is thus keeping better pace with incoming orders, which means that delivery times for customers are not getting any longer. This is not least due to the fact that customers are increasingly ordering similarly designed systems, which reduces production times. The bottlenecks in the supply chain eased noticeably in the first half of 2023. Although delivery times remain unusually long, certain critical components are now more readily available again and agreed delivery deadlines are generally being met. Segment EBITDA roughly doubled in the first half of 2023, from CHF 4.8 million in the prior-year period to CHF 9.5 million, resulting in an EBITDA margin of 9 percent. The margin improvement is in particular due to the more balanced distribution of projects across the various project phases. SKAN again spent a significant amount, around 7 percent of Group sales, on its strategic initiatives in the area of integrated process systems and standardization, as well as on general research and development activities. For the standardization initiative, the SKAN Group has assigned a dedicated team. Both projects are developing according to plan.
The Services & Consumables segment achieved a 27 percent increase in order intake to CHF 47.1 million in the first half of 2023. Net sales increased by 20 percent to CHF 36.7 million and EBITDA amounted to CHF 9.1 million, corresponding to an EBITDA margin of 25 percent. In addition to the steady expansion of the installed base of SKAN equipment, which requires regular maintenance, requalification and spare parts, the increase was driven by higher sales of AT-Closed Vials®. There are now five drugs on the market that are filled using the automated closed vial process solutions of the Belgian subsidiary Aseptic Technologies. The expectation that the commercialization of new drugs will increase the consumption of AT-Closed Vials® and thus the volume in the Services & Consumables segment has been confirmed. The development pipeline of drugs to be filled in AT-Closed Vials® is in the range of approximately 400 active ingredients. Accordingly, the sales volume is likely to increase further in the future. Against this background, the SKAN Group increased its stake in Aseptic Technologies by 5 percent to 85 percent as planned at the beginning of May 2023. According to the contractual agreement with the co-owner Wallonie Entreprendre, SKAN will take over a further tranche of 5 percent by 2026 at the latest. The SKAN Group made good progress in the first half of 2023 with its pre-approved services project, which will also contribute to the expansion of the services business in the future.
The Pre-Approved Services project was also a focus of investments, which totaled CHF 10.2 million in the first half of 2023 (H1 2022: CHF 15.7 million). Cash flow was negative at CHF -13.1 million, particularly as loans were repaid and the dividend distributed. In addition, inventories of critical components continued to be held at a higher level than usual in order to avoid supply shortages. Due to the improved situation in the supply chain, inventories are expected to normalize over time. SKAN Group’s equity amounted to CHF 162.0 million as of June 30, 2023, which corresponds to a very solid equity ratio of 41% (31.12.2022: CHF 165.6 million, 43%).
The SKAN Group assumes that demand momentum in its market will continue at a high level. The underlying growth of the global (bio)pharmaceutical market and the reinforcing trend towards injectable drugs will continue. An analysis of the customers’ research pipelines shows that three quarters of the drugs in development are now designed for an injectable dosage form. Other market drivers include the shift from traditional cleanrooms to the state-of-the-art isolator technology and the reshoring of pharmaceutical production. Against this backdrop, demand for SKAN’s equipment, services and consumables will continue, as evidenced by the well-filled order pipeline. To accommodate the strong growth, SKAN Group will – besides North America – further expand production capacity at the existing sites in Switzerland and Germany. SKAN Group expects the second half of 2023 to be even stronger than the first half in terms of net sales and profitability. Accordingly, the SKAN Group confirms its targets for the current year: At net sales level, an increase in the mid to upper teens is expected, with both the Equipment & Solutions and Services & Consumables segments likely to grow at a similar rate. The EBITDA margin is expected between 13 and 15 percent.
Consolidated key figures
Conference Call and Audio Webcast Thomas Huber, CEO, and Burim Maraj, CFO, will explain the 2023 half-year results and provide an outlook for the current financial year in two conference calls and audio webcasts today. Afterwards, they will be available for questions. One conference call and one audio webcast will be held in German and English respectively:
Tuesday, 22 August 2023, 10:00 a.m. (CEST) To participate in the conference call, you can register here. After registration you will receive a confirmation e-mail with individual dial-in data. As a participant in the telephone conference, 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 replay will be available at the same link.
Tuesday, 22 August 2023, 2:00 p.m. (CEST) To participate in the conference call, you can register here. After registration you will receive a confirmation e-mail with individual dial-in data. As a participant in the telephone conference, 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 replay will be available at the same link. For questions about the conference call or the audio webcast, or if you have any problems with the link, please contact Thomas Balmer, ir@skan.com, +41 79 703 87 28.
>> Presentation Half-Year Results 2023
Contacts: Thomas Balmer, ir@skan.com, +41 79 703 87 28 Alexandre Müller, ir@skan.com, +41 79 635 64 13 Financial calendar:
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 organization make SKAN an important partner for the pharmaceutical and biotech industry, CMOs (Contract Manufacturing Organizations) and research laboratories worldwide. Founded in 1968, SKAN today employs over 1170 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. End of Inside Information |
| 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: | 1708183 |
| End of Announcement | EQS News Service |