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Investing.com -- Siegfried Holding AG (SIX:SFZN) on Thursday reported weaker-than-expected revenue in its Drug Products division for the first half of 2025, missing consensus estimates by 3% and weighing on profitability, even as overall results tracked broadly in line with market expectations.
The Swiss pharmaceutical services company posted CHF206 million in Drug Products sales, below the CHF212 million expected, in what analysts described as a key driver of both top-line growth and margins.
Total (EPA:TTEF) group revenue reached CHF620 million, just under the CHF625 million forecast, reflecting 1.6% growth at constant exchange rates. Drug Substances contributed CHF414 million, in line with projections.
Adjusted EBITDA was CHF134 million, matching consensus, with a margin of 21.6% compared with expectations of 21.4%. Net profit came in at CHF65.7 million, short of the CHF72 million anticipated.
The company confirmed its 2025 full-year guidance, reiterating expectations for mid-single-digit constant exchange rate revenue growth and an adjusted EBITDA margin above 22%.
Medium-term guidance for “continued profitable above market growth” with “stepwise expanding profitability” was also maintained.
Siegfried said first-half performance was affected by around CHF10 million of destocking and a stronger-than-expected currency headwind.
The company noted that these impacts made results more heavily weighted toward the second half of the year, compared with CHF20 million to CHF30 million in destocking recorded in 2024.
Despite those pressures, margins improved, supported by stable selling, general and administrative expenses, including the Siegfried Acceleration Hub.
“We note this despite the underperformance in the Drug Products division we note as being materially higher margin vs Drug Sunstance and is hence a margin driver,” said analysts at Jefferies in a note.
The company reported a CHF35 million release in net working capital, despite higher inventory levels, which are expected to be converted into revenues later in the year.
Siegfried also highlighted plans to expand in ophthalmics, citing increasing demand for sterile eye drops.
Capacity for sterile eye care ointments is scheduled to come online in 2026, while spray drying capability at the Barberà del Vallès site is expected to begin generating revenue in 2027.
At Hameln, two new lines for pre-filled syringes and cartridges are under construction, with one due to start revenue contribution in 2026 and the second in 2027.