DKSH FY21_2022

DKSH Reports Strong Full-Year 2021 Results Based on Disciplined Strategy Execution

09 Feb 2022

Net sales increase of 5.4%¹
EBIT growth of 10.5% to CHF 284.6 million
Profit after tax 39.6% higher than 2020³
Free Cash Flow grows by 24.5% to CHF 261.6 million
Consistent with progressive dividend policy, dividend 5.1% higher at CHF 2.05 per share⁴

Key Figures Group (CHF million)	2021	2020	△ in % CHF	△ in % CER¹
Net sales	11,106.3	10,742.2	3.4%	5.4%
Core operating profit (EBIT)²	283.4	257.5	10.1%	12.5%
Operating profit (EBIT)	284.6	257.5	10.5%	13.0%
Profit after tax³	230.1	164.8	39.6%	43.1%
Free Cash Flow	261.6	210.2	24.5%	-
RONOC (in %)	19.8	18.1	-	-
Dividend (in CHF)	2.05⁴	1.95	5.1%	-

1 Constant exchange rates (CER): 2021 figures converted at 2020 exchange rates
2 Excl. gain on sale to aCommerce (CHF 10.3 million) and non-recurring share of loss in associate (CHF -9.1 million).
3 Incl. revaluation gain of aCommerce (2021: CHF 34.8 million; 2020: CHF 9.6 million). Excl. these items, profit after tax grew by 25.1% to CHF 194.1 million
4 Proposal of the Board of Directors

Zurich, Switzerland, February 9, 2022 – DKSH posted strong full-year 2021 results. Net sales grew by 5.4% at constant exchange rates and EBIT as well as Free Cash Flow increased double digit. Business Unit Performance Materials continued its growth track record and Business Unit Consumer Goods posted a strong EBIT increase for the third consecutive year.

DKSH CEO Stefan P. Butz said: “Given the challenging market environment and lockdowns seen in the third quarter, I am pleased with our 2021 results including double-digit EBIT growth and strong cash generation. We continued being the trusted partner for our stakeholders and reliably supplying essential products and services through and in response to the pandemic. In addition, we completed seven acquisitions and increased eCommerce sales double digit. While visibility on external factors remains limited, we are confident that we will continue building a better company with EBIT growth in 2022.”

DKSH Group
DKSH Group net sales grew by 3.4% to CHF 11.1 billion in 2021. Organic growth contributed the most with 4.6%, while acquisitions added 0.8% and exchange rates -2.0%.

EBIT reached CHF 284.6 million, 10.5% higher than 2020. The EBIT margin reached 2.6% versus 2.4% in 2020. The EBIT includes a gain on sale to aCommerce (CHF 10.3 million) and a non-recurring share of loss in associate (CHF -9.1 million). Profit after tax was CHF 230.1 million from CHF 164.8 million in 2020. In 2021, profit after tax includes, on top of the one-time impacts mentioned above, a CHF 34.8 million revaluation gain in aCommerce.

Free Cash Flow reached CHF 261.6 million compared to CHF 210.2 million in 2020, due to strong EBIT growth combined with working capital optimization.

Business Unit Healthcare
Business Unit Healthcare delivered results ahead of last year's levels with an acceleration of performance during the second half. Despite the impact of COVID-19 on the healthcare industry in Asia, the lockdowns seen in the third quarter, and the situation in Myanmar, DKSH expanded its outsourcing services as well as business development, and successfully closed the acquisitions of MedWorkz (Singapore) and Hahn Healthcare (Australia). Importantly, DKSH delivered vaccines and testing equipment in several markets in Asia.

Healthcare (in CHF million)	2021	2020	△ in % CHF	△ in % CER¹
Net sales	5,586.3	5,424.1	3.0%	5.3%
Operating profit (EBIT)	130.9	129.8	0.8%	5.2%

1 Constant exchange rates (CER): 2021 figures converted at 2020 exchange rates

Business Unit Consumer Goods
Business Unit Consumer Goods improved profitability strongly, with EBIT margins reaching the 2.2% mark again. The transformation of the Fast Moving Consumer Goods segment is well on track. EBIT increased double digit for the third consecutive year, benefitting from a leaner and more agile structure, the ongoing product portfolio rationalization, and consistent strategy execution across markets. The Swiss watch brand Maurice Lacroix further improved results.

Consumer Goods (in CHF million)	2021	2020	△ in % CHF	△ in % CER¹
Net sales	3,808.3	3,827.6	(0.5%)	1.8%
Operating profit (EBIT)2	84.0	64.6	30.0%	30.2%

1 Constant exchange rates (CER): 2021 figures converted at 2020 exchange rates
2 Includes gain on sale to aCommerce (CHF 10.3 million) and a non-recurring share of loss in associate (CHF -9.1 million)

Business Unit Performance Materials
Business Unit Performance Materials posted double-digit sales and EBIT growth. The strong technical expertise, value-added services, wide market coverage, and focus on digital marketing helped overcome supply chain constraints. The industrial business increased sharply and the life sciences business (Food & Beverage, Personal Care, and Pharmaceutical) performed well across key markets. In addition, DKSH closed the acquisitions of SACOA (Australia) and HTBA (Spain), as well as signed the acquisition of Right Base Chemicals (China), thereby taking further steps toward consolidating the specialty chemicals distribution industry in Asia Pacific and Europe. A scalable business model, strong business development, and consolidation potential provide future growth opportunities.

Performance Materials (in CHF million)	2021	2020	△ in % CHF	△ in % CER¹
Net sales	1,281.4	1,108.0	15.6%	15.9%
Operating profit (EBIT)	115.4	91.7	25.8%	27.3%

1 Constant exchange rates (CER): 2021 figures converted at 2020 exchange rates

Business Unit Technology
Business Unit Technology grew sales organically and through the Bosung acquisition in Korea. The EBIT of CHF 21.1 million was slightly behind last year as pandemic-related movement restrictions impacted the service business and resulted in product mix shifts. The Business Unit is on track with implementing its focus strategy and digital transformation.

Technology (in CHF million)	2021	2020	△ in % CHF	△ in % CER¹
Net sales	430.3	382.5	12.5%	13.3%
Operating profit (EBIT)	21.1	21.8	(3.2%)	(2.8%)

1 Constant exchange rates (CER): 2021 figures converted at 2020 exchange rates

Changes in the Board of Directors
Dr. Frank Ch. Gulich, who joined the Board of Directors in 2001 (in a predecessor company), will not stand for reelection at the next Ordinary General Meeting to take place on March 17, 2022. The Board of Directors thanks Dr. Frank Ch. Gulich warmly for his longstanding and valuable contributions and wishes him all the best in his future endeavors. The Board of Directors will propose Dr. Hans Christoph Tanner, who is already a member of DKSH's Board of Directors, to join the Nomination and Compensation Committee.

Outlook
DKSH expects EBIT growth in 2022. The outlook assumes economic growth in Asia Pacific, exchange rates at current levels, and barring unforeseen events. A robust business model, large share of daily consumption items, and strong balance sheet provide resilience and offer growth opportunities. The Group will continue developing its business through diligent strategy implementation, digitalization, sustainability, and M&As, while focusing on operational excellence and cost discipline. DKSH is confident about Asia's long-term potential and is well-positioned to benefit from favorable market, industry, and consolidation trends.

Further Information
The media conference will take place today at 9:30 a.m. CET and the investor call at 11:30 a.m. CET. The Full-Year Report 2021 and recording of the investor webcast will be available on the DKSH website.

Appendix: Net Sales Growth Components

(in CHF million)	2021	2020	% CHF	% Organic	% M&A	% FX
DKSH Group	11,106.3	10,742.2	3.4%	4.6%	0.8%	(2.0%)
Healthcare	5,586.3	5,424.1	3.0%	5.0%	0.3%	(2.3%)
Consumer Goods	3,808.3	3,827.6	(0.5%)	1.6%	0.2%	(2.3%)
Performance Materials	1,281.4	1,108.0	15.6%	13.6%	2.3%	(0.3%)
Technology	430.3	382.5	12.5%	4.2%	9.1%	(0.8%)