DKSH thrives in Asia

GOING TO PLAN

RESULTS • ANOTHER SOLID YEAR FOR ASIA-FOCUSED DKSH REFLECTS ITS ROBUST BUSINESS MODEL AND THE BREADTH OF ITS PRODUCT COVERAGE

SWITZERLAND-BASED DISTRIBUTOR DKSH has posted what it calls “strong” results for the full year 2021. Net sales grew by 5.4 per cent at constant exchange rates, with operating profit up by 13 per cent. That growth was concentrated in its Consumer Goods and Performance Materials business units, both of which delivered double-digit profit improvements.

“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,” says CEO Stefan P Butz. “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.” Net sales came in at CFr 11.1bn ($11.2bn) in 2021, ahead by 3.4 per cent. Of that, organic growth contributed 4.6 per cent and acquisitions 0.8 per cent, though this was tempered by a 2.0 per cent negative effect from currency exchange movements. Operating profit was CFr 284.6m, up from CFr 257.5m last time, with a slight increase in margin from 2.4 per cent to 2.6 per cent. After-tax profit rose strongly from CFr 164.8m in 2020 to CFr 230.1m, though that included a one-time revaluation gain of CFr 34.8m.

DKSH has a strong focus on operations in Asia, so its results for 2021 were affected by supply chain issues as well as the ongoing effects of the Covid-19 pandemic. Perhaps surprisingly, its Healthcare business unit – the largest division in the group - did not see any major growth, with net sales ahead by only 3.0 per cent at CFr 5.59bn. 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).

INDUSTRIAL ACTIVITY DKSH’s Performance Materials business unit performed much better, with net sales up 15.6 per cent at CFr 1.28bn and operating profit ahead by 25.8 per cent at CFr 115.4m. “The strong technical expertise, value-added services, wide market coverage, and focus on digital marketing helped overcome supply chain constraints,” the company says. The industrial business increased sharply and the life sciences business performed well across key markets, it adds. DKSH also closed the acquisitions of SACOA (Australia) and HTBA (Spain), and signed the acquisition of Right Base Chemicals (China), taking further steps toward consolidating the specialty chemicals distribution industry in Asia Pacific and Europe.

DKSH now expects further growth this year, assuming 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 company says. “The group will continue developing its business through diligent strategy implementation, digitalisation, 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 favourable market, industry, and consolidation trends.” www.dksh.com

WITH A BROAD RANGE OF OPERATIONS ACROSS ASIA, DKSH