Siegfried Holding AG: Downgrade to Neutral as upside deferred

Research evidence excerpt

Siegfried Holding AG: Downgrade to Neutral as upside deferred

ted) (CHF)

(-2.8% in CHF) despite a muted base and broadly stable EBITDA margins at 21.5%.

From To % ch Cons.

Given uncertainty around the demand recovery of the top 10 products plus commentary 12/26E 4.30 4.11 -4 4.01

of overcapacities in the sterile filling market, we cut our organic CAGR (to 6.5% in FY26- 12/27E 5.16 4.73 -8 4.58

30E) and projected margin expansion. Turning more constructive would require 12/28E 5.85 5.43 -7 5.13

improving visibility on the pending large customer order, evidence of faster capacity

uptake in Spain and Hameln in Drug Products, which underpin our CHF124/sh upside Tanya Hansalik

valuation, while delayed capacity utilisation and weakness in Drug Product demand or Analyst

tanya.hansalik@ubs.com

integration challenges would drive downside towards our CHF58 scenario.

+41-44-239-2053

Margin expansion intact Patrick Rafaisz, CFA, FRM

Analyst

Despite low demand from 1 customer product, the FY26 profitability is insulated by patrick.rafaisz@ubs.com

customer payments. We expect FY26 EBITDA margin of 23.9% (+90bps y/y vs. adj.), in +41-44-239 90 66

line with the mid-term margin guidance for 60-100bps p.a. increase, and supported the

US Drug Substance acquisition (UBSe 6% EBITDA accretion/9% annualized). Supported

by an improving portfolio mix and capacity utilisation, we forecast FY26-30E c70bps

average p.a. EBITDA margin uplift to 26.5%. As capex declines to low teens (vs. 16% in

FY25) and NWC to ~40% of sales, we estimate positive FCFs from FY27E.

Valuation: New DCF-derived PT of CHF80 (prev. CHF120)

At ~12x 26E EV/EBITDA, Siegfried trades at a discount to European peers (~18x), though

we view this as justified given its lower growth and margin profile. Reflecting our lower