At this time, it's my pleasure to hand over to Till Leisner, Head of Media Relations. Please go ahead, sir.
Thank you, Sandra, and good morning, everybody. It's a pleasure to welcome you all on behalf of DKSH. As Sandra said, my name is, Till, I'm Head of Investor Relations, and I'm very happy to have with me today, Ido Wallach, our CFO, and Stefan Butz, our CEO. Before we start, please have a look at the disclaimer of the presentation regarding forward-looking statements, and for those who do not have the presentation in front of them, you will find them on the web under the Investor Relations section at dksh.com. With that short intro, I'd like to hand over to Stefan. Thank you very much.
Thanks, Till. Good morning, and welcome everyone to the presentation of our half year results, 2024. Thank you for joining us today as we review the highlights and progress our company has achieved during the first half of this year. Today's agenda foresees a recap of the highlights of the first half of 2024. Following that, I will go into detail about the progress we have seen in our four business units. After that, Ido will follow up with a financial update. To conclude, I will provide an outlook before we open the Q&A session. We are very pleased to report that the successful and diligent execution of our strategy delivered a track record of growth, margin expansion, and strong cash conversion in the first half of 2024.
The results reaffirm our consistent track record of creating value in Asia and beyond on the back of our resilient as well as scalable business model. Now, let's please look at the results of the first half in 2024 in more detail. In a challenging external environment, with ongoing headwinds from different currencies, net sales grew by 3.3% at constant exchange rate to CHF 5.4 billion. In terms of profitability, we can report the highest ever core EBIT in the first half of 2024. Core EBIT increased by 8.2% to CHF 163.6 million. This corresponds to a margin of 3% and thus an increase of 10 basis points.
These results go hand in hand with our consistent track record, as core EBIT increased at constant exchange rates by 14% on average since 2019, which corresponds to 100 basis points. Core profit after tax was CHF 118.2 million, 16.7% higher than in 2023 at constant exchange rates. With a free cash flow of CHF 160.8 million, corresponding to a cash conversion of 136%, we continue to drive our cash conversion. This high cash efficiency gives us the opportunity to continue pursuing our progressive dividend policy and a targeted M&A approach. Let me now focus on the highlights of the first half of 2024, which underlines DKSH's purpose of helping business to deliver growth in Asia and beyond.
Our consistent effort led to various highlights in the first half of the year across different areas. We have continued to enlarge our portfolio in several markets. This includes existing and new clients such as Alkem, dsm-firmenich, Haleon, Glenmark, and Kimberly-Clark. These new partnerships demonstrate that we are the preferred partner for our clients across many markets and create a stronger pipeline for DKSH. We are also very pleased to welcome Medi-Pharm and Elite Organic, who joined the DKSH family. Medi-Pharm in Brunei, in our business unit, Healthcare, and Elite Organic in Malaysia, in our business unit, Performance Materials, are two bolt-on acquisitions, which we closed in the first half of 2024. We have taken further steps to continuously improve our high-performance culture within DKSH.
We have been awarded with a Great Place to Work certification in nine markets, improved our employee engagement survey, employed 34% of women in senior leadership, and achieved a higher rate of promotions from our internal talent pool to almost 60%. We also remain dedicated to operational excellence in the area of digital and sustainability. We further productivity. We continue to digitize our distribution centers and expect that we will have upgraded 12 distribution centers by the end of the year. We also improved the agility and efficiency of our supply chain by enhancing cost per case and case fill rates. Furthermore, we remain committed to sustainability. For example, we installed solar panels and implemented electric vehicles in Thailand. That we are on the right track with such sustainability efforts is reflected in the most recent updated MSCI ESG rating, where we received Grade A.
All in all, in the first half of 2024, we continued fulfilling our purpose of enriching people's lives in the markets we operate. In the past years, DKSH continued to focus on higher profitable business. We have expanded our overall profitability through active portfolio management. We have closed 26 acquisitions since 2019. If we look at them in detail, we can clearly see that the allocated capital has flowed into higher margin business units and business lines. To be more precise, we allocated around 80% of our invested capital into business with above-average margins. Through these transactions, we extended our presence across regions, broadened our supplier as well as customer base, and enhanced our value-added services.
Accordingly, we entered the second half of the year with a solid M&A track record, as well as a strong balance sheet, and trust that we can further accelerate the most recent acquisition speed, especially since multiples are more realistic again. Let me now please continue with an update on our business units, starting with healthcare. Our biggest business unit has again delivered very strong results. Driven by attractive market fundamentals and the expansion with existing as well as new clients in Thailand, Malaysia, Taiwan, and others, net sales reached CHF 2.8 billion, an increase of 5.8% at constant exchange rates. So we achieved above GDP growth and market share gains in key markets. By successfully integrating M&A and expanding our full agency services as well as own brands business, we successfully focus on higher added value segments and services.
For example, we just launched a project in Thailand where we deliver quality healthcare services, such as blood collection or other basic treatments to patients' homes. Consequently, our core EBIT margin further increased after an already strong first half in 2023 from 2.8% to 3%. Moving on to consumer goods. When we started optimizing our consumer goods business, our core EBIT margin was 1.6% in the first half of 2019. We are pleased to report that in the first half of 2024, we achieved our midterm core EBIT margin target of 2.5%. Net sales reached CHF 1.7 billion, an increase of 2% at constant exchange rate. Core EBIT grew by 17% at constant exchange rate to CHF 42.1 million.
By improving our sales force effectiveness, accelerating business development, optimizing outlet, as well as product mix, and by increasing data and KPI-based performance management, we positioned our consumer goods business for further profitable growth. At our Capital Market Day in November, we will continue, we will outline our strategy for profitable in our Business Unit Consumer Goods in more detail. Stay tuned. Moving on to Business Unit Performance Materials, we aim to strengthen our leading position in specialty chemicals and ingredients distribution. Net sales here must be viewed against the declining and therefore challenging macroeconomic environment in the first half of the year. Under these circumstances, net sales held up and will also benchmark well. The performance in the first half of 2024 was sequentially stronger compared to the second half 2023.
The quarter-by-quarter progress, the better momentum across all regions, and the proved M&A pipeline make us cautiously optimistic for the second half of the year. We will continue to optimize our cost structure very cautiously and increase gross margin. With disciplined pricing and inventory management, we have already managed to reduce our inventory by around 7% comparing to 2023. With the core EBITDA of CHF 63.3 million, that means before amortization, we managed to deliver an increased margin of 8.9%, already very close to our short-term objective of 9%. Ending with our business unit review, with technology. We achieved 3.3% net sales growth at constant exchange rates, which is supported by our recent acquisition in Australia. We continued investments in scientific solutions, precision machinery, and semiconductor industries in Asia.
Furthermore, it is pleasing to see that we have a very good integration of the acquired company Bio-Strategy. Core EBIT was CHF 8.6 million, which compares to an exceptionally strong first half of 2023 and an unusually strong service business. Looking ahead, we will see further consolidation potential and expect a stronger second half, backed by some projects which have been moved into the second half of 2024. So now I will hand over to our CFO, Ido, who will guide you through our financial results of the first half, 2024, in more detail. Thank you.
Thank you, Stefan, and welcome also from my side. I'm happy to provide you with further details of our 2024 first half results. As always, to ensure the best possible comparability of our operating performance, I will also focus on our results at constant exchange rates. We are very pleased with the achievements made in the first half, as they are reflected in our key financial metrics. Net sales grew by 3.3% at constant exchange rates. Core EBIT increased by more than twice the rate of net sales, at 8.2% in constant exchange rates. Core EBIT margin increased by more than ten basis points. This marks the fifth consecutive year in which we deliver core EBIT and core EBIT margin growth in the first half. Core profit after tax to 16.7% higher than in 2023.
We generated CHF 160.8 million in free cash flow, representing a cash conversion rate of 136%. This conversion rate exceeds our long-term target of 90%. These results reaffirm, once again, our track record of top and bottom line growth, coupled with margin expansion and strong cash generation. Let us now take a closer look at our net sales and core EBIT development. We grew our net sales organically by 2.3%. M&A contributed 1% to our growth in the first half. Combining organic and M&A, our net sales growth at constant exchange rates was 3.3%. This is in line with GDP growth in Asia. Similarly to many other Swiss companies with significant business in Asia, our net sales have been affected by a 6.5% FX impact following the strengthening of the Swiss franc.
The strengthening has eased slightly since the peak in late 2023, but has not yet fully anniversarized into our first half results. As we explained in the past, the FX impact on our results is mainly transitional. When we convert our results from local market currencies into Swiss francs for reporting and consolidation purposes. From our transactional perspective, our sales and cost structure are primarily executed in the same currency. When they are not, the rate exposure is hedged. Moving now to the development of our core EBIT. We are very pleased with our continued core EBIT growth. Our core EBIT grew organically by 5.1%, ahead of our organic net sales growth. M&A added 3.1% to core EBIT growth, also ahead of its contribution to top line growth.
Net sales growth, combined with continued strong focus on operational excellence and resource optimization, deliver an overall core EBIT margin improvement of more than 10 basis points. Similar to net sales, the translational FX effect had a meaningful negative impact on our core EBIT, measuring -7.6%. The investor materials that we published on our website today include details on the items that we consider non-operationals or for one-off nature, or in short, non-core. There are two items that fall into this category in H1 2024 EBIT. The first includes a fair value adjustment of CHF 1.2 million, which relates to employee share-based options in one of our associate companies. The second non-core item amounts to CHF 1.8 million, and results from a settlement of a customs matter that is more than a decade old.
All in all, core EBIT amounted to CHF 163.6 million, which in effect is the highest ever achieved by DKSH in the first half. Core EBIT margin increased by more than 10 basis points and reached a threshold of 3.0% of net sales. As we have already done with you on a few occasions, let us take a moment to review our first half results in a longer-term context. An exercise that allows us to ensure that our strategy execution measures up in consistently strong long-term performance. Over the past five years, we have achieved continuous growth in our key financial metrics. Since 2019, the year before COVID and the subsequent inflationary and geopolitical turmoils, at constant exchange rates, our net sales grew at a compound annual growth rate of 3.7%.
At the same time, our core conversion margin, defined as core EBIT as a percent of gross profit, increased sequentially. In 2024, it exceeded the 20% mark, the highest value since 2019. Our core EBIT followed a similar upwards journey, growing at a 14% CAGR. A similar sequential increase is evident in our core EBIT margin, increasing overall by 100 basis points over five years and reaching 3.0% in H1 2024. As you're all aware, a key component of our resilience and agility is our low risk asset light business model. We typically lease our offices, our distribution centers, and our transportation fleets. This is evident in our long-term capital expenditure, which has ranged between 0.2%-0.5% of net sales over the past five years.
In the first half of 2024, it maintained a low level of 0.3% of net sales. We also made significant and consistent improvements to our working capital over the past few years. In the first half of 2024, the ratio of working capital as percent of our annualized H1 net sales reached a new all-time low of 7.8%. Subsequently, over the same period, we delivered increasingly solid free cash flow, exceeding 100% conversion in this half year and in total in three of the past four full year periods. Let us now move on to our balance sheet. It remains very solid and in many respects, even stronger than a year ago, as evidenced by our higher return metrics and improved balance sheet ratios.
Timing collection and just-in-time inventory management are the foundations of the distribution and market expansion business. At the close of H1 2024, our trade receivables remain very lean compared to multiple years average. Inventory at 11.6% of annualized sales for 50 days, is particularly low. Similarly, our trade payables are also at a comparable multi-year low, leading to an overall cash cycle of 23 days, the fastest we have achieved in the past 5 years. With that, we further improve our return metrics. Core RONOC reached 19.1% and core ROE 13.4%. We operate a low risk asset-light business model that enables a high and consistent free cash flow. In the first half, we used our cash flow primarily to fund 2 acquisitions and to distribute a higher ordinary dividend.
Accordingly, our net debt position by the end of the first half of 2024 stood at CHF 10.2 million. This compared to a slightly larger net debt position of CHF 20.7 million at the same time in 2023. With a strong equity ratio of 32%, we have significant leverage headroom to further grow our platform for industry consolidation. We continue to carefully assess deals and only acquire if we find them value accretive, scalable, and available for a reasonable price. Let me also provide you with some additional financial indications before we return to Stefan to elaborate on our future prospects. In terms of M&A, we estimate that our recent acquisitions will contribute around 1% to net sales in 2024, based on acquisitions we have closed until now. New deals will naturally provide further growth upside.
We expect the FX headwinds to ease. Assuming that current rates prevail for the remainder of the year, we expect a full year FX impact of -4% to -5%, notably less than in the first half of 2024. Tax rates, we estimate to remain within the mid-term range of 27%-29%. Capital expenditure is expected to remain between 0.3%-0.4% of net sales for the full year. With that, I would like to thank you again for your attention and hand over back to Stefan.
Thank you, Ido, for the commentary on our financials. To conclude, let us move to the outlook, please. Regarding the current macroeconomic landscape in Asia, we determined that most economies will sustain their growth momentum. This is driven by robust domestic demand, a recovery in exports, and stronger tourism numbers. Additionally, inflation is expected to stay at a moderate level in Asia. Furthermore, the stimulus plans in Thailand and China, which are currently under discussion, could provide additional upside to the economic growth. Coming to our prospects for the rest of this year, let me emphasize that we remain committed to delivering GDP plus sales growth. Furthermore, we reiterate our guidance of core EBIT growth in 2024 at constant exchange rate and see good potential for further M&A consolidation.
As we broaden our reach and reinforce our market position, we pursue opportunities for strategic partnerships and acquisitions, which will reinforce our capabilities and create new paths for growth. I'm also happy to announce that our Capital Market Day and dinner will take place on November eighteenth in London. During this day, all our business unit heads, as well as Ido and I, will be on site and showcase DKSH's expertise across all four business units and functions. The Capital Market Day will start at 12:30 P.M. in London, and the dinner with our management team will start at 6:00 P.M. The invitation will be sent out in the next couple of weeks, and we really look forward to welcoming many of you in London in November.
To sum it up, DKSH is well positioned to benefit from favorable long-term market, industry, and consolidation trends in Asia Pacific, and we will continue to deliver our consistent track record of value creation. With that, I thank you all for your attention and invite you now to address your questions in the Q&A session. Thank you very much.
We will now begin the question and answer session. Anyone who wishes to ask a question or make a comment may press star and one on the touch-tone telephone. You will hear a tone to confirm that you have entered the queue. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to only answer while asking a question. Anyone with a question may press star and one at this time. Our first question comes from Gian Marco Werro from ZKB. Please go ahead.
Morning, everyone. Thank you for the opportunity and congrats to the strong and very sturdy results, in my view. So first question on Performance Materials: Can you give us an update there on the development, also with Terra Firma, any key changes also to the housing market and to demand, and how much of the volume and price split of the revenue development has been for the first half year? Second question on your own healthcare brands, have they grown stronger than what we saw for the whole segment? And are you still seeing an EBIT margin of around or over 20% in this sub-segment? And then last is the question also on net working capital.
You could show us the significant improvement, but has there also been some FX tailwinds, and can you quantify them roughly? Thank you.
Thank you very much, Gian Marco, for your questions. And, you know, let me start with the first one, and then the net working capital one, I will hand over to, you know, to Ido. So first of all, let me start with the Performance Materials overall. You know, across the globe, we have seen an improvement in growth rate quarter by quarter. I think at the full year results, we shared with you that, you know, Q4 in 2023 was better than Q3. Q1 was better than Q4 2023, and Q2 was now slightly better, and for the first time, very slightly positive versus Q1 2024.
So that is overall, making us cautiously optimistic that things are moving in the right direction, you know, despite a few headlines, I guess we were all picking up about the chemical industry, you know, most recently. If we break it down, technically, we have seen more or less all the same across all three regions, Asia, Europe, and in the U.S., while in the U.S., probably the progress is the slowest. So the housing market in the U.S., very slightly, it's getting better. I think you can see that also in some Home Depot numbers. But it's, you know, it's far from being good.
Coming back to your question regarding volume versus price, we have seen a small uptick in volume, but working against this in a few areas, you know, slight decreases in terms of, you know, pricing. For the, for the, healthcare own brands, yes, we will continue to see, you know, growth, and we will also continue to see a margin, you know, above 20%. Actually, that business is, you know, is growing very nicely, as also you can see, you know, healthcare overall. And then I would hand over to Ido for the last question.
Sure. Thank you, Stefan, and thank you, Gian Marco, for your kind words earlier. Yeah, we're pleased that we continue to operate the business with a very lean working capital, which helps also our results in terms of storage costs and the receivable management. We actually see the effect of FX easing versus last year. Our cash statement is reported in quarter exchange rates, and you can see that last year we had a negative impact of CHF 50 million, but this year, year to date, is going on the positive side of CHF 3.5 million. So we don't know what half two will look like. There is U.S. elections, there is central banks that still consider increasing or decreasing the rates.
Overall, I think that, short-term, the worst is behind us in terms of FX headwinds.
Thank you.
The next question comes from Nicole Manion, from UBS. Please go ahead.
Hi, good morning, everyone. Thanks for taking my question. Just one on consumer for me. It's obviously a strong margin performance there in H1 with the 2.5% target being met, but obviously the top line are still under a bit of pressure. Could you maybe walk us through the drivers there a little bit? I know you've had some impacts in the past, for instance, from the SKU rationalization. So if you could just walk us through what you see as those top-line drivers and sort of the setup therefore, and the exit rate into H2. Thanks.
Hi, Nicole. Good morning. Good to have you on the call. Maybe I'll take this question. First of all, we do want to pause and appreciate the achievement. It's been a few years that we were targeting the 2.5%, and we don't take this achievement for granted. And as you pointed out, that took several strategic moves that we have done over the years from SKU rationalizations to overall client portfolio rationalizations, and clearing non-operating assets in the CG portfolio. We have done this despite some headwinds for the growth, which we see in the overall market.
The latest Nielsen data that we have for Q1 2024 indicates that the market is growing 1.5% overall. That's very close to our organic growth of 1.1%. Of course, the Nielsen data that I provided includes markets where we don't operate significantly, like India. So we know we're not losing market share, but of course, that we want more than that. We still see a volume effect impacting the pricing effect. Overall, we increased price by net pricing by 1%, but we saw volume taking us down by about half a percent back, and new business development took us half a percent upward again.
We operate in some difficult conditions for consumers, and we believe that as soon as those clear out, we will show you a higher growth.
And, Nicole, maybe I can add that, organically, we have seen a better Q2 than a Q1 this year.
Great. Thank you. That's very helpful.
The next question comes from Jon Cox from Kepler Cheuvreux. Please go ahead.
Yes, hello, good morning, guys, and congrats. The market has obviously taken the figures very well indeed. I had some troubles listening in. Just if you can just comment on the free cash flow figure, double, double what it was a year ago. You know, what are your thoughts for the full year? You keep saying you can't continue to generate as much free cash flow as you do. You know, what are your thoughts going forward? Are we pretty much getting to the end of this great free cash flow? Then just some questions below the line, and again, my apologies if you've already mentioned this on the call. Interest charges looked a lot lower than expected, and as did the taxes.
Just wondering what your thoughts on there. It's a substantial EPS beat, of course. It looks like consensus estimates have come up pretty substantially, if we see that lower finance charge continue into the second half of the year. And then just the last one, just on that performance materials. You know, do you think it will go positive this year? Is that what you're seeing with orders? I'm not talking about maybe for the whole of H1, but do you assume that maybe towards the end of the year in terms of Q4, that unit should go positive? Thanks very much.
Thank you, Jon. Maybe I'll start with the questions that are more financial nature. Indeed, we continue to operate with strong cash conversion and efficiency. Effectively, our conversion growth versus last year, last year at this time, were at 168%, this year 136%. It's still above our target, which we maintain for the full year. And yes, that sometimes also relates to phasing of our business and the inventory peaks, quarter by quarter. Overall, we don't expect the cash flow and the working capital efficiency to significantly improve going forward. We are currently at 7.8% of annual net sales, be very, very difficult to operate with lower than that.
On the financial charges, interest charges, the thing that you mentioned, we have a few effects there. First of all, we do now receive a higher return on our cash deposits, and which was not there in the past. We've also, you can see, at the report, that we have decreased our debt versus last year by about CHF 160 million, so we pay less interest expenses as well. And we also have there, as I mentioned before in Gian Marco's question, some tailwinds from easing exchange rates that help us to have some FX-related income. The tax rate is now at 28.1%, and we remain with the guidance of 27%-29% for the full year.
Good. Regarding your performance materials question, John, as I was saying before, so we have seen in terms of organic growth rate, some consistent improvement, you know, Q4 over Q3, Q2 over Q1 over Q4, and then Q2 over Q1 this year, as I mentioned before, you know, with Nicole. And we do expect that the second half of the year in Performance Materials will be better than the second half last year. So despite a few headlines out there in the market, we are cautiously optimistic that things will continue to move in the right direction.
And then, when you mention better than last year, are you talking about profitability or, or the sales as well?
Uh, profitability.
Profitability, but not—
Technically, technically, yeah. But as I mentioned before, I mean, for the first time in Q2, we have seen a very slight organic top line growth. So,
Yeah.
Again, cautiously optimistic, but most likely it will be both top line and bottom line.
Okay. I'm gonna just ask one more question if I can. On the healthcare t he profitability improved there. That business continues to surprise us, I think. And I guess a lot of that's to do with, you know, the own brands, you know, growing pretty strongly. What are your thoughts on that, healthcare? You know, how have you managed to get to this 3%, and, you know, where do you think you can go? I think historically, you said, you know, you can't go much higher, but you seem to be delivering every, you know, every reporting period.
Yeah. We are not as much surprised as you are because it's a lot of work, and we work on this, you know, day by day together with the team. And you are right. I mean, you know, the success in own brands, which we continue to, you know, penetrate different markets, you know, roll the own brands into new markets, is definitely, you know, one driver of the enhanced profitability, but also the expansion of our full service business. Because that is, you know, the second it's around 20% in the overall portfolio, and continuously we expand it. We are signing, you know, some, you know, very nice contracts there and expanding our market share. So, yeah, the 3% is not the end of it.
Stay tuned, some good news will come out soon.
Great. Thank you very much, and well done again.
As a reminder, if you wish to register for a question, please press star followed by one. The next question comes from Michael Foeth from Vontobel. Please go ahead.
Yes, thank you. Good morning, everyone. 3 questions from my side. The first one is tying back on what you just talked about in terms of margin improvement. You have also mentioned that you increased the digitalization in your distribution centers 12 by the end of the year, I think. Where, how many distribution centers do you have there, and what impact on productivity and profitability does that have? That would be my first question. The second one is on M&A. You mentioned that the market conditions are improving. I think we've seen quite a lot of M&A activity in the space in total, so, but not so much from you yet.
Can you elaborate a little bit more on the pipeline and what has held your activity back so far? And then the third question would be if you can elaborate more on the opportunities by region. I think you mentioned Thailand and China, with some uplift opportunities, if you can go into a little bit more detail on where you see the best opportunities in different markets. Thank you.
Okay. Thank you, Michael. This is Ido here. I'll maybe start with the supply chain and the DC questions that you had. Stefan will continue with the M&A. Yeah, I think it's something we mentioned in the past. We have some good opportunity to visualize the end-to-end of our distribution centers. Some of them are still operating with the labor manual management of inbound and outbound.
We have taken a very aggressive, intentionally at least, approach to ensure that every box that comes in, all the way throughout the DC, until it leaves the DC, is fully digitalized by scanning and no manual intervention. At the moment, we are with 11 DCs, major ones that are fully digitalized. Some of them are fully automated as well. The machines do the sorting. We're targeting close to 20 by the end of this year, which will bring us to almost 50% of all the cases that ship in the company to be fully digitalized. That's of course the low-hanging fruits.
The remainder will be we have several other dozens of DCs that start to be smaller, but our intention is to digitalize them as well over the next 2-3 years. And in terms of P&L impact, I believe it will overall give us something between 50-60 basis points improvement of our margin.
Okay. Let me then move on to your M&A question. Look, while overall, I think we are very happy with our, you know, long-term M&A track record since 2019. Indeed, the first half of the year with only two closed transactions was a little bit short of expectations. But be rest assured, you know, the team is working very hard to identify, you know, all opportunities out there in the market. We have a strong pipeline. We are moving into, you know, the second half of the year. Unfortunately, M&A is hard to plan, right? Sometimes you have deals, they fall apart. Sometimes you enter a deal and then due diligence results are not, you know, holding up.
But be rest assured that we are pushing hard to put the balance sheet to work. But we will always only make deals, you know, which make strategically and operationally sense for us, and also stay relatively conservative in terms of evaluation. So, we are optimistic that the second half of the year will be better than the, you know, first half of the year and then also the outlook going into 2025. In terms of the opportunities in the market, I mean, you know, good guidance is first of all always how the markets are developing.
I think if you look at the GDP growth rates across Asia, clearly Vietnam expected this year with a 6% growth, and also Malaysia is standing out. And these are clearly some markets where, you know, the economic environment is quite supportive, and we have a strong market position to capture further market share. But also in our largest market, even the GDP forecast for this year is only around, you know, 2.5%. We are making some, you know, very good progress. Our business model is, you know, very scalable, and right now, we deliver more growth than the 2.6% there. These are probably the three core markets where currently we have the biggest opportunity.
As we disclosed before, we are also, you know, entering the Philippines with our healthcare business unit. And, you know, and also there, I think we will see some pretty good progress, you know, over the next, you know, coming, coming months. And overall, I mean, the region in general, maybe let me close with that. Whereas we see in Europe, 1% GDP growth rate, in the U.S., probably 2.5, across Asia, I think we can expect around 3.5 for this year. We are quite optimistic that, you know, overall the economic environment is lightening up further and then accelerating our top line, top line growth, you know, also driven by the measures Ido disclosed before, especially on the consumer goods side.
Very helpful. Thank you. Thank you very much, and congrats from my side as well. Thank you.
Okay. Thank you for your question, Michael.
Ladies and gentlemen, that was the last question. I would now like to turn the conference back over to the management for any closing remarks.
Thank you very much, everybody, for dialing in today. It was a pleasure, talking to you and providing you answers to your questions. We very much wish you a good summer season and look forward to seeing you in London on the eighteenth of November. Thank you very much, and have a good rest of the summer.
Yeah. Thank you very much also from my side, and I think, we will see many of you also during this week on the roadshow. I look forward to it. Thank you.
Thank you.
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