Performance Materials BU of DKSH shows highest Sales Growth of all Divisions
Market expansion services provider (an speciality chemicals and ingredients distributor) DKSH AG (Zurich, Switzerland) yesterday reported its financial results for 2018. Sales for the group increased by 3.1% (1.1% at constant exchange rates / “CER”) to CHF 11’344 mn (11.344 bn). This includes the impact of both, acquistions and divestments and reflects organic growth of 3.6%. Operating profit (EBIT) fell back 11.2% (12.9% at CER) below 2017 to CHF 263.6 mn. This include one-time adverse effects of CHF 12.6 mn and CHF 8.1 mn in the BUs Consumer Goods and Healthcare, respectively. Profit after Tax increased by 22.0 (19.1% at CER) to CHF 260.3 mn, including the one-time gain of CHF 75.2 mn from the divestment of the Healthcare business in China. Excluding this transction, Profit after Tax was CHF 204.8 mn or ca. 4% below the level of 2017.
The Performance Materials BU (i.e. the specialty chemicals and ingredients business) managed to expand contracts with international clients and to develop new business. This had the effect to increase net sales a level of CHF 960.4 mn, 7.4% above 2017 (+ 6.5 % at CER). EBIT increased much slower to CHF 75.1 mn (+2.6% as reported, +1.8% at CER). DKSH did not give further explantion for this discrepancy.
DKSH also announced changes to its Board of Directors. As per a previous announcement last October, current Chairman (and former CEO) Dr. Joerg Wolle will step down an the Annual General Meeting (“AGM”) 2019. In addition, Board Members David Kamenetzky, Robert Peugeot and Theo Siegert will not stand for re-election to the Board of Directors. DKSH said that the proposals for replacement candidates and also the new Chairman will be published with the invitation to the AGM.
According to a report in Swiss financial paper Finanz & Wirtschaft, Stefan P. Butz, CEO is quoted saying that the company has a “well filled” acquisition pipeline. He did not elaborate which BU has preference for add-ons. Net of the consideration for an acquisition in the Consumer Goods BU (Auric Pacific’s distribution business in Singapore and Malysia, announced last December) of CHF 160 mn, the group has availble net liquidity of ca. CHF 310 mn.
Source: DKSH press release; Finanz & Wirtschaft
HGE / DCG – 08.02.2019