DOTTIKON ES : Annual Report 2014, 15: Higher Sales and Net Income

DOTTIKON ES - Higher Sales and Net Income

Dottikon, Switzerland, May 29, 2015 - SIX-listed DOTTIKON ES HOLDING AG closed its business year 2014/15 on March 31, 2015.

1. Net sales of DOTTIKON ES Group once again increased by 7% to CHF 96.5 million in com­parison with the previous year
2. After four years, DOTTIKON ES Group again reports a net income of CHF 1.3 million with a net income margin of 1.4% (previous year: -2.9%)
3. The operating cash flow was CHF 11.4 million, an increase of approximately 36%
4. Cash and cash equivalents amount to CHF 29.1 million at the end of the reporting year. The equity ratio remains at 86.4%
5. DOTTIKON ES plans a significant increase in investments in the coming three years in order to achieve the expected net sales growth in the medium term
6. Therefore, the Board of Directors of DOTTIKON ES HOLDING AG will propose to this year's An­nual General Meeting that no dividend be paid and that the entire retained earnings be carried forward to new account
7. All members of the Board of Directors and of the remuneration committee will stand for reelec­tion: Dr. Markus Blocher as Chairman, Dr. Thomas Früh as Deputy Chairman, and Dr. Alfred Scheidegger as member
8. To emphasize the importance of the technical vocational education, DOTTIKON ES dedicates this year's Condensed Annual Report to its production employees

Assessment of situation

Despite a moderate recovery of the global economy, uncertainties persist. Economic, fiscal and military conflicts have increased around the world, resulting in a surge of migration and in signif­icant changes in cultural values. In addition, the long-term impact of the expansive fiscal policy and its approaching end remain largely unforeseeable. With the rise of regionalization, values such as trust, reliability, and sustainability - along with cultural and regional proximity - become increasingly important.

The demographic trend ensures long-term volume growth in the pharmaceutical market. Aging populations based on rising life expectancies, population growth, and an increase in wealth result in an increase in chronic illnesses and the respective demand for effective treatments. Governments around the globe strive to contain the inevitable increase in health costs. In their efforts, they apply measures to boost the market penetration of generics, followed by price cuts through benchmarking and tendering procedures, as well as the demand for efficiency improve­ments and evidence of effectiveness. Government-driven competitive and price pressures have resulted in intensified cost and innovation pressure among pharmaceutical companies and have changed the existing demand and supply structures. The effect can be seen when the averages of expected annual growth rates are compared to the clearly lower expected growth rates for the coming five years in Europe, Japan, and - albeit at a higher level in a global comparison - China. The United States are the exception to the rule. So far, apart from the governmental Medicare and Medicaid programs, they have not regulated the drug prices. As a result, drug expenditures in the United States have risen by 13 percent in 2014.