In the business year 2008 the Bachem
Group achieved sales of CHF195 million. Compared with the previous year,
this corresponds to a 2% sales growth in local currencies or a 1.7% sales decline in CHF.
The negative foreign currency impact is due in particular to the weaker US dollar, which lost
an annual average of 8.3% of its value compared with 2007. On average, however, the Euro
was also 3.7% lower than in the previous year. Turnover was negatively affected by loss of
sales in the USA resulting from a customer’s high stock levels of an important product, which
meant that deliveries had to be postponed. Thanks to our diversified portfolio, however, we
could compensate for this shortfall. If this effect is excluded, the sales growth is calculated to
be 7.7% in local currencies. Sales reached CHF96.3 million in the second half of 2008, an
increase of 3.5% in local currencies and 0.9% in CHF compared to the second half of 2007.
In 2008, sales in the active pharmaceutical ingredients (APIs) business grew by 0.5% in local
currencies, but fell by 2.5% in CHF. Generics showed a very gratifying development, with
growth of 13.3% in local currencies and 10.4% in CHF. Peptide-based generics were a major
contributor to this increase in sales with a growth of 16.2%, while the non-peptide-based generics
grew by 2.1% (in local currencies). In the case of NCEs, however, we saw a decline of
28.7% in local currencies or 31.6% in CHF. While sales of NCEs in Europe increased by almost
70%, the significant decrease in sales overall was caused by the delay of a major customer
in the USA in demanding deliveries of an important product. Research chemicals
showed a very positive development with an increase of 8.6% in local currencies and 1.8% in
CHF. A marked double-digit growth again in custom synthesis contrasted with low growth in
In 2008, sales in Europe increased by 9.2% in local currencies and by 7.8% in CHF. This
region thus increased its share of sales to 66.3%. By contrast, sales in North America fell by
8.5% in local currencies and by 16.1% in CHF, mainly as a result of the above-mentioned
shortfall in sales to a major customer. Markedly higher deliveries of substances produced in
Switzerland for the US market partly offset the loss of sales with active ingredients produced
in the USA. As a result, the proportion of total sales accounted for by the US business fell to
Looking back on a successful year
Dr Rolf Nyfeler, CEO of the Bachem Group, commented, “Once again we can look back on
a successful year. The underlying momentum of our business has been sustained in a difficult
environment. Positive news predominated in all areas apart from new chemical entities in the USA. Market trends and also our own achievements confirm us in our conviction that
our strategic focus as a leading technological producer of complex active pharmaceutical
ingredients continues to offer sustainable growth opportunities.”
In the past year, Bachem achieved an operating income of CHF69.7 million. This corresponds
to an EBIT margin of 35.7% compared with 36.5% the previous year. As a result of
the slight sales decline in CHF and the slightly lower margin, the EBIT was 3.8% lower than
in the previous year. If the negative currency influence is excluded, an unchanged operating
margin of 36.5% and a 1.8% increase in EBIT are calculated.
Only slight shifts in the various cost blocks occurred in 2008. The cost of goods sold (COGS)
amounted to 45.1% of sales (2007: 44.6%). Despite the shortfall in turnover of a major sales
driver in the USA and the resulting substantial shift in the product mix, the gross margin was
thus approximately maintained at 54.9% (2007: 55.4%). The share of marketing and sales
costs fell slightly to 5.5% (2007: 6.0%) while research and development cost as well as general
administrative cost slightly increased to 3.1% (2007: 2.7%) and 10.8% (2007: 10.1%) of
In 2008, Bachem increased the number of its employees by 65 to 722 full-time equivalents
(FTEs). In Switzerland, 48 new jobs were created in Bubendorf and 18 at Sochinaz in Vionnaz,
while one new job was added in the UK. By contrast, the number of employees in the
USA fell by two FTEs. The number of full-time positions in the group thus increased by
9.9%. The growth in personnel was above-average compared with sales growth. However,
the increase in staff continues to be selective and is concentrated on the two Swiss sites,
which achieved good sales growth in 2008 and whose prospects for the coming year are also
regarded as very positive. Personnel costs consequently increased by 6.4% and amounted
to CHF73.1 million, which corresponds to 37.5% of sales.
The good operating margin also led to a continued very good net profit margin in 2008 of
30.1%. Compared with the previous year, however, net income fell by 8.2% to CHF58.7 million,
with the tax expense – which was relatively low thanks to a lower tax rate – being offset
by the loss of the positive one-off effect from the previous year at our associated companies
and also a lower financial result. Earnings per share (EPS) likewise fell as a consequence
and amounted to CHF4.38 compared with CHF4.81 in the previous year.
As a result of the continuing dynamic growth in demand, with the exception of the special
effect in the USA, investments in property, plant and equipment, and intangible assets in
2008 again stood at a high level totalling CHF54.0 million. This corresponds to 27.7% of
sales. However, this total includes CHF5.1 million for the currently unused adjacent property
in Bubendorf, which is required for the further growth at this site. Bachem in Bubendorf
accounted for most of the capital expenditures in 2008, amounting to a total of CHF39.1 million.
Investments at Sochinaz in Vionnaz amounted to CHF10.9 million, while CHF3.5 million was invested in the USA and CHF0.5 million in the UK.
The board of directors has decided to propose an increase in dividend from CHF3.00 to
CHF3.20 for approval by the annual general meeting. This is in line with the dividend policy
of granting shareholders the funds that are not needed in operational terms.
Also in the current year, Bachem shall continue to follow its growth course with care. The
planned investments will be constantly monitored and adapted to circumstances. The underlying
momentum of its business, the high level of capacity utilisation in Switzerland and an
expected jump in sales at Sochinaz give the company grounds for assuming that, in spite of
the more difficult situation in the USA, the growth in sales will start to accelerate again this
year. The five-year forecast of average sales growth between 8% and 12% in local currencies
and an EBIT-margin between 30% and 35% remains unchanged.
The annual general meeting of Bachem Holding for the business year 2008 takes place
on 22 April 2009. The comprehensive Bachem Annual Report 2008 is available from the company’s website.