Ladies and gentlemen, welcome to the pre-presentation of our full year results 2022. With me on stage is Reto Suter, our CFO, and Wolfgang Wienand, our CEO. We'll first start with a short introduction by Wolfgang, then Reto will give us deep dive into the numbers, and then Wolfgang will talk about the outlook and the priorities ahead of us. If you have any questions, you can right away type them into the text field below the webcast field. Later on, during the Q&A, you can also press the Audio Q&A button and ask a question via audio or video directly. With that, without further ado, I would like to hand over to Wolfgang.
Yeah. Thank you very much, Peter. Also a very warm welcome from my side to approximately 40 ladies and gentlemen here in the room. After three years actually, during which we couldn't have these kind of meetings physically, I'm the more happy that we are now being together here and actually can talk about what Siegfried did in the last year, 2022, and also, the reference is on the slide already, and you have seen it in the video, what Siegfried did in the last 150 years. I make that short, promise. Also, a warm welcome to those ladies and gentlemen who can't join and are just with us virtually. Of course, it's great to have you here. It's approximately 100 people.
A lot of brain here together and let's have a great discussion on Siegfried, our business model, what we did in the past and what we are going to do in the future. As always, we try to already indicate on our first slide, where actually our discussions, our presentations, over the next one or one and a half hours might go. On the move since 150 years. We at Siegfried actually look back proudly, all of us, on this heritage. We see it as an obligation to take care of our company and continue on our successful path going forward. That is more a reference to what we did specifically and what we as a global team achieved specifically in 2022. The second part, Siegfried significantly increased sales and profits in 2022.
Before I go into more details and before Reto will actually take you through the financial data, let's briefly look together at the safe harbor statement. Please take note, be aware, and feel bound to it when it comes to forward-looking statements that either Peter, Reto, or myself will make during the presentation. We will actually touch upon each and every tile on that slide. That's the agenda for today. The light blue parts, I mean, they relate very much to financial figures. It will be Reto talking about that. The rest is actually on me.
I mean, looking back where we are coming from, what actually is special about Siegfried, and what makes us a leading CDMO in the world, and why are we so confident when it comes to future opportunities and to where we wanna take and will take our company in the years to come. I would start with the executive summary. And I can tell you, 2022 has been a very successful year for us at Siegfried. The global team actually stood up to quite a number of challenges, of which we are all aware. Just to name a few. First of all, we still, in a complex manufacturing process like ours, we still saw interruptions, hiccups in the global supply chains in the aftermath of the coronavirus pandemic. Important topic, a lot of attention going into it.
Second of all, inflation at a level unheard of for three decades and something which, of course, called for us to protect our company, to protect our financial performance, and to protect our ability to actually create the funds, earn the cash that we need to invest into our future. Third, of course, energy crisis as a result of the war in Ukraine. Not only significantly steeply rising in 2022 and also, 2023, but for a certain period, even uncertainty if there will be energy, electricity available at all. Last but not least, availability of workforce, new colleagues joining the company so that we actually have the hands on deck that we need to actually respond to the significant demand of our customers, and be able to actually provide the services in need and manufacture the volumes in need.
That is especially true for Switzerland and the U.S. I think the good news is, Siegfried, the global team of Siegfried has been able to fulfill its core mission, which is the development and manufacturing of safe drugs for our customers and eventually millions of patients worldwide. How did all that and our ability to actually stand up as a team against those challenges and essentially being able to mitigate, all of them, how does that translate into financial figures?
Let's have a look at the net sales, which are up in 2022 to CHF 1.23 billion, which is a plus of more than 15% in local currencies as compared to the previous year, 2021. We have not only been able to grow, but also profitably grow, which means we have been able to translate this growth into profit and increasing profits. A core EBITDA margin of above CHF 270 million in 2022 as compared to slightly above CHF 200 million in the previous year, which leads to an expanded core EBITDA margin for the full year of 22.2%. Core net profit benefited from that with almost CHF 130 million as compared to less than CHF 100 million in 2021.
Overall, that was actually the basis for this very positive developments that we saw in 2022. The basis for all that was a very good development of our overall business. Important products have been won and grew over the period, including vaccines. We have been able to acquire very attractive new business. We, as we have to, and we will talk about that later in more detail, and we continued to actually actively manage our portfolio. Based on those figures, our board of directors will propose to the annual general meeting in April an increase of the payout per share by CHF 0.20 to CHF 3.40 as compared to CHF 3.20 last year.
Based on the opportunities that we have created in the past and that we see in the near and also in the mid to long-term future, we expect for 2023 a growth of low to mid-single digit % in local currencies in the top line with a core EBITDA margin at 20% or higher, and we confirm our positive midterm outlook beyond 2023. With that, I hand over to Reto so that he can take you through the details of our financial statements.
Thank you very much, Wolfgang, welcome to all of you here in Zurich. Also to the people abroad. I'm very happy to add some more color here on the financial numbers for 2022. Let's start with the sales figure, CHF 1.229 billion. In local currencies, this represents a growth of 15.6%. You see that there's quite a gap between the growth in the local currencies and the growth in the Swiss franc, which is our accounting currencies, so strong currency headwinds, which is explained by the fact that the euro has depreciated quite a bit against the Swiss franc in the last year. The dollar appreciated a bit. However, as we do 55% of our revenue in the euro and only about 15% in the dollar.
Obviously, the effect of the euro devaluation was much stronger and added that currency headwind to the Group. You also see that both drug substances as well as drug products have contributed to that growth. The number that you see here are the numbers in Swiss francs. In local currency, drug product actually grew by 14%, 1 4, and the drug substances grew by 16.5%, which is explained by the fact that we have a much larger euro exposure on the drug product side as compared to the Group and specifically also against the drug substances part. In local currency, drug substances and drug products growth was almost equal in local currencies. On a Group perspective, that brings us to 39% of our business being recorded in drug products and 61% of our business recorded in the drug substances part.
As all of you are aware, diversification and also spreading risks across larger portfolio is very important for our business model. It's certainly interesting to have a closer look on the risks associated with these sales in terms of diversification. In terms of customers, we do have Novartis as a large significant customer, the number one customer, representing 10%-20% of our total sales. Please remember, this comes from the Novartis transaction at the beginning of 2021, this specific customer relationship is governed by a very long-term manufacturing and supply agreement. The rest, customers 2 to 10, represent an additional 38% of revenue, quite evenly spread. On the product side, the top 10 products account for 35% of revenue, with the largest product only a bit higher than 5%.
No significant concentration risk, neither on the customer side nor on the client side. You will have seen in the financial report that the reported number, so the EBITDA reported and derived under our accounting framework, Swiss GAAP FER, is significantly larger this year than the core EBITDA, which we use for internal purposes. Let me explain you briefly what the main adjustments have been, deriving core EBITDA. Two of the adjustments relate to our foreign pension plans, the unfunded ones, mostly in Germany, and one relates to restructuring costs. I'm sure you're aware that not only the currencies were quite volatile during 2022, but we have also been observing rising interest rates during that period. Of course, that had an impact on the value of our foreign pension plans.
The higher interest rates led to higher technical interest rates that we use to derive the value of these foreign pension obligations. As the interest rates have increased, the value of these pension obligations have decreased. Became much smaller. The gap was CHF 47 million. Under my accounting framework, Swiss GAAP FER, I have to recognize these CHF 47 million actually as negative personal expenses, making my result much, much, much better. As we did since 2019, we have compensated for that. We have not included that specific gain when deriving the core EBITDA. The second adjustment, also relating to foreign pension plans, is a reclassification. We reclassified, as in every year, the current net interest, CHF 1.2 million, down to the financial expenses. The third one relate to restructuring costs.
CHF 6 million of restructuring costs that we used for performance enhancement projects on many sides, not in Spain, were taken out of the core EBITDA. On further to your right, on the adjustments to core net profit, you will see again the current net interest on the plus side on foreign pension plans, and we have neutralized the tax effect which related to income not being part of the core EBITDA. That brings you to the core net profit of CHF 127.8 million. Obviously, the strong growth of sales obviously led also to a further expansion on profit margins on all level, despite the higher costs of doing business. We faced macro challenges, as mentioned by Wolfgang, and I will elude on that in just a few minutes as well.
Despite this high cost of doing business, we have been able to increase the profit margins. Core Gross Profit grew to CHF 319 million, representing a margin of 25.9%. core EBITDA grew to CHF 272.5 million, representing a margin of 22.2%, exactly the same as in H1 2022. Also Core EBIT and Core Net Profit grew significantly, both in absolute terms as well as in relative terms to sales. For the first one, since many years, the Siegfried Group of companies operated at a Core Net Profit margin higher than 10%. Let me make one technical remark. Obviously, inflation compresses margins. Even if you pass on the full price increases to your customers, that depresses your margins. Let's, for one second, assume a 10% inflation environment.
Obviously, your core EBITDA margin, just as an example, would be exactly 10% higher, so 24.4%. This effect has to be considered specifically if you do time series analysis. This is my core P&L for this year. We spoke about the net sales, 1.229 billion CHF. Let's briefly touch upon the core cost of goods sold. As mentioned, we had continued macro challenges during 2022. We had inflation, we had an energy crisis here in Europe, and we had further supply chain disruptions in 2022. However, the team has stood up to these challenges and managed them actually well. How did we do that? Firstly, we implemented strict cost control measures. Across all the sites, across all the functions, no one was spared. It also included energy saving measures with some tangible results.
Secondly, on the supply chain disruptions, we have been monitoring the risk associated with our supply chain down to the last purchase order in a very regular basis. We took decisive actions on de-risking our supply chain in order to be able to manufacture and to produce for all of our customers. Last but not least, we also have spoken very regularly with our customers and have been able to find really good solutions. With these measures combined, we have been able to protect the interests of our customers, the interests of us as a company, and also the interests of all the stakeholders. Important next to these defensive measures, let's call them like this, we also have been benefiting from good developments in our business portfolio. We acquired good new products. We acquired good new projects, including the vaccines business.
As introduced to you a year ago, we have been continuing to manage our portfolio well. In addition, in combination, all of these measures have then led to the increased core EBITDA margin of significantly above 20%. SG&A, as a percentage of sales, were constant this year as compared to last, 10.4%. core Marketing and Sales cost and other operating income bang on, same as last year. We had a bit less of core research and development costs at 3.5% of sales. Which is a bit of a timing issue, and we had a bit more core administration and general overhead costs at 5.8% of sales, specifically due to higher provisions for the STI and higher share-based compensation for the LTI. That will normalize over time again.
Core EBIT at 190.8 million CHF. Core financial result, 8.9 million CHF reflect the increase of interest rates in Switzerland. Please be aware that is only true for parts of my funding package. Significant parts, the senior bonds, the convertible hybrid bonds, which don't show up here in the P&L, still pay fixed rates at 0.2%, respectively 0.65% or 1.15%. Core income taxes, higher this year due to the fact that we made a lot of profit in higher tax environment, mainly in Germany. This ultimately leads to a Core Net Profit of 127.8 million CHF. Important statement for us, the cash flow statement. This is the basis for our future.
What's great to see here is that the operating cash flow prior to changes in the net working capital has significantly increased to CHF 276 million. We gave back a bit less than half of that by investing it back into the net working capital. The good news about that is that much of this investment will revert back into cash quite quickly. We had a very strong December 2022 revenue quantum, and this will of course, during the next 60 days, convert back into cash quickly. On inventories, we have invested less into safety stock than we did last year, about CHF 50 million, CHF 10 million less, but still inventories and the investments into the inventories has increased also in 2022. Again, also this will come back. Which leads us to an operating cash flow of CHF 142 million.
Purchase of PP&E and intangibles, the CapEx at CHF 115, slightly higher than last year, slightly below the guidance. You see a positive cash flow from acquisitions, which is nothing less, but the finalization of the closing accounts with Novartis anticipated has been included in last year's acquisition note already. Nothing out of the ordinary. Which brings us to a free cash flow of CHF 27.2 million. Cash flow from financing includes the dividend, the payout to shareholders, includes some purchase of treasury shares and a little bit of an increase in the revolving credit facility.
The payout proposal to the AGM will be CHF 3.40 per share, will be again done by means of reduction of capital, which is tax-free for the larger parts of the shareholding pattern of Siegfried as a company. Capital allocation framework. We start by investing into growth. We have done so in the past, which creates the opportunity set for value creation for our shareholders, for all of you going forward. This will result in a strong top-line growth. We will do that profitably. By expanding the margin, which in turn will lead to cash generation, which we use again to invest into further growth. Money that we don't need for investments, we put back to deliver our company. As of today, we have substantial non-dilutive funding capacity available.
I'm currently at a leverage ratio of 1.5, so net debt divided by core EBITDA, which gives me substantial room for additional non-dilutive funding to support our strategy evolve. With this important statement, I hand back to Wolfgang.
Thank you very much, Reto. Actually, we will come back to cash and funds and why they are important. Cash is king not only in the rest of the world, but of course also at Siegfried. Let's start with a brief look back, spanning a time of 150 years and where our company is coming from, what we did in the past, and what we learn, and what you might take from that proven track record for your prediction expectations for the future. I mean, 150 years means the company has been founded in the year 1873 by Samuel Benoni Siegfried, who actually ran a pharmacy in Zofingen, and we're taking care of the medications of the citizens in Zofingen.
Zofingen is the place where still our headquarters of our now globally operating company is located. There's a longer time period which I actually don't really oversee and can't really comment on. The Siegfried founding family, through generations, through the ages, has been able to continuously grow and build a true pharmaceutical company, which went public in the year 1973, at that time, still in Basel. Another fast-forward to 2007. Which is when Siegfried actually launched its first manufacturing capacities in the area of drug product and became a fully integrated drug substances and drug product pharmaceutical company. 2010, a significant number of changes and implementation of a new corporate strategy transform, which actually led to significant organic investments and acquisitions over a period of 5 to 6 years.
With the first one taking place in the year 2012, AMP in California, followed by actually 2014, the acquisition of the Hameln site. The site where over the past two years we actually developed and manufactured COVID-19 vaccines, from which we expect for the years to come, attractive, significant growth, not only there, but also in Hameln. In between 2013, we actually made a move to China to optimize and expand our drug substances manufacturing network and invested into a brownfield, drug substances, GMP manufacturing site in Nantong. A regular, great, strong member of our overall six manufacturing sites in the area of drug substances. Just seven months after the closing of the Hameln deal, end of November 2014, in May 2015, we made
At the time, the largest move acquired the significant CDMO business from BASF with three manufacturing sites, 900 new colleagues and CHF 300 million revenues. By that, and the further growth investments in the following years, have built the strongest small molecule drug substances manufacturing CDMO in the world. 2020, we have been able to actually enter into contracts and to work together with BioNTech and Novavax to develop and manufacture their innovative COVID-19 vaccines. A great project in any respect, which actually helped our company to prove what we are capable of technologically, but also in terms of reacting fast, light speed, and implementing significant commercial capacities within an extremely short, record short time period of eight months only.
2021, the second big move in terms of M&A, the acquisition of the two drug product manufacturing sites in Barcelona from Novartis, adding significant capacities, very attractive technologies, a very strong team. 40% of new people, new family members to now 3,600 ladies and gentlemen, working for the purpose of Siegfried. 2022 is the year that we are talking about. I actually myself, I mean, the essence of what we have seen here over 150 years for myself is that there must have been two key traits at work over that period of time, one and a half centuries. The first one being sustainability. The ability and willingness to actually take sustainable decisions and build a company that not only survives, that not only lasts, but that also thrives for 150 years.
The second key trait that I take from these milestones. There are of course many more. In the 1980s, the company actually made the daring move to Taiwan already, when other multinationals, multi-billion dollar companies were still hesitating and asking themselves if China really will be an attractive market in the future to come. The second key trait that I take from that history is a strong entrepreneurial, daring mindset. For the rest of the presentation, we will actually talk about those two key traits and how we carry them forward into the future and how we will apply them, and are actually applying them to actually continue to deliver profitable growth for our company. Sustainability. What did we do in this regard in 2022 with sustainability being one of our five core values besides excellence, passion, integrity, and quality?
We actually take a broader view on the term sustainability. For us, it is of course also about ESG, and I will talk about that in a bit. We actually really think about it in a broader sense, which is making sustainable decisions, which are not only providing benefit tomorrow or in the near-term future, but of which we can expect, reasonably expect, that they will also hold true and carry us forward in the long run. Sustainability, we do not only think about tomorrow, but far beyond. Specifically, what did we achieve? What did the global team at Siegfried achieve in 2022? First of all, we actually have been able to reduce our CO2 equivalent footprint as compared to the previous year by more than 15%.
We also have been able to increase the amount of electricity that comes from renewable energy sources to now way beyond 70% last year. All that in the end, will cater into our ability to deliver upon our promise to actually reduce the CO2 equivalent footprint of our company until 2030 by 50% as compared to what the company had as a footprint in 2020, normalized for sales.
The next achievement of last year actually is, something that will also be carried forward into the future and demonstrates another perspective that we at Siegfried take on the topic of sustainability, which is a reduction of energy consumption. I mean, as a response also to the challenges that we had last year with steeply rising energy prices and driven by our mindset of actually reducing our footprint, the team actually has been able, within month, to come up with specific actions, measures, projects, and actually implemented them. That already, in 2022, led to a reduction of our energy consumption as compared to what has been budgeted by 4%. We will carry that forward, 'cause that's the best way to actually, operate a company in a sustainable way.
For 2023, our ambition, not only ambition, it is supported by specific measures, actions already being implemented. 60 projects coming from all the sites. We will actually further reduce, despite increasing volumes, despite increasing sales, we will further reduce our energy consumption as compared to 2022 by another 10%. When Reto was talking about that we as a company, before we actually can start to talk to our customers to find solutions for significantly increasing input costs, price increases, we have to do our homework. That is part of the homework. We will continue to do that homework. These internal efforts are real, and they have been recognized by independent agency. Once again, in 2022, we have received the prime level of ISS.
We have, for the second time, been included in the Dow Jones Sustainability Index Europe, we again received a double A rating of MSCI, and all our sites also performed well in the EcoVadis assessment. That's the sustainability part. Let's talk about the entrepreneurial part. What did we do to not only deliver a strong year 2022, but also to prepare ourselves, our global team, our network for future growth? I mean, the short version of the year 2022 from me is that we delivered upon the opportunities at hand, but at the same time have been able to lay the foundation, to lay the ground for continued growth. A few examples here. Minden, the construction start for a new large-scale world-class drug substances manufacturing site in Minden took place in August last year.
That will add high value, very attractive capacity to our network and will eventually cost us up to CHF 100 million. We will actually, based on the growth opportunities that we see, we will need this capacity, because otherwise we wouldn't be able to continue to grow. Barcelona, we acquired two great sites with two great teams and very attractive technologies and have been able, as we did in the past, based on our strong execution record in M&A integration, to actually carve out both sites from a pretty complex organization of Novartis and became fully independent after only 18 months with no further transitional services necessary. Also, we have been able to acquire the first new business opportunities for both sites and actually executed them already in 2022.
An activity which of course will continue and will gain additional momentum with more significant business coming into the sites in 2023 and 2024 onwards. We also invested into our development capabilities in Barcelona to be able to provide world-class pharmaceutical development services. The new center of excellence in Barcelona, with a total investment of up to CHF 15 million, is going well and will be taking operation early March in a few weeks from now and will further increase the attractiveness of our integrated offering in the CDMO space.
In Hameln, we based on the success and also with the proven additional capabilities in the area of very complex large molecules and their aseptic filling and finishing, we actually added additional capacity, an additional aseptic filling line in order to be ready to actually further grow this very attractive business segment in our overall portfolio. In 2022, we decided together with Novavax to extend our strong cooperation for development and manufacturing of their protein-based vaccine beyond 2022. The original date for the contract to end until the end of 2023 and will continue to provide Novavax with our services also this year.
In Evionnaz, we actually prepared for and started this year with the construction of a new center of excellence for small molecule drug substances services, even as one of our flagship sites when it comes to high-value development services and high-value drug substances manufacturing. That is an investment of up to 25 million Swiss francs. These additional capacities will become available for our customers in 2025. I've been talking a lot about brick and mortar and steel. Last but not least, we also continue to invest into the global team of Siegfried, because this is in the end how we make things happen.
These people actually in the end take on new business, develop attractive, efficient processes, and actually manufacture safe drugs for our customers and for millions of patients worldwide. In May, we had our first global leadership conference in Basel with the 150 top leaders of Siegfried coming together for a few days and discussing how we want to take our company further. I mean, going through our strategy, defining the vision for 2030. Apart from hard work and, I mean, very content-rich discussions, also having fun. While this leadership conference was, of course, about me and the executive team putting energy into the group of people. I mean, I left the conference. I actually felt that I took a lot of energy from that team as well. That actually was a great experience.
I think the tagline for the conference, not only for myself, but also I think for the whole team, was we're gonna make it happen whatever it takes. Our investments into our people, the leadership program, LEAP, the Siegfried Academy, accessible for each and every Siegfried employee, a great place to work initiatives, Glint surveys, so that we can really feel the pulse in individual parts of our company, go on. Tomorrow we will actually hand over the five global value awards to the teams who have been selected based on their achievements in the year 2022. That is actually what we did in 2022, and I've been talking a lot about, I mean, opportunities available for us at Siegfried to actually fuel future profitable growth. What do I mean specifically with opportunities?
Let's have a look at, I mean, what defines the space of opportunities for a leading CDMO like Siegfried. That in the end is the pharmaceutical universe and the development pipeline of the global pharmaceutical industry in innovating and developing new chemical or new biological entities, and bring them through clinical phases, and in the end approve them in the market. On the left-hand side, we actually see a snapshot, I think of February 2023, so this month, the current state of the global pharmaceutical pipeline in terms of different development candidates being in the different development stages. In dark blue we see all those development candidates being small molecule opportunities. In light blue we see development candidates with a biological nature.
I think what quickly becomes clear is that actually both areas are very attractive and that small molecules actually still dominate in certain development stages the pharmaceutical universe. I think the short message here is it's great to be the leading small molecule drug substances CDMO and being one of the leading integrated CDMOs in the world because small molecule place is a great place to be. This snapshot, of course, is kind of a prediction of how the future over the next year might look like in terms of launched and marketed new drugs. On the right-hand side, we actually see what materialized in the sense of new approvals over the last 12 years. Again here, the color code is dark blue, small molecules, and light blue biologics.
What becomes clear is that the overall approval numbers are actually attractive, always somewhere between 20 and maybe 60. I think the fluctuation is essentially typical, and we will continue to see significant numbers of new commercial opportunities reaching the market. What also becomes clear that again, small molecules are very successful. They dominate the approval figures also in the past and also in 2022. Again, reassurance and confirmation of our optimism when it comes to opportunities to create growth for us at Siegfried, which can happen in the small molecules space. We already reached out into the biologic space when it comes to drug product manufacturing because that space, obviously, is very attractive as well. While this is, let's say, the overarching universe defining the space, I mean, what does it mean specifically for a company like Siegfried?
How do we translate this universe into specific opportunities which are operational in our development labs and in our manufacturing sites? Well, it's a kind of a funnel in the end. If you throw in, I mean, to the funnel, into the funnel, something like 10,000 or if you actually do the math on the previous slide, it's even more. It's probably even 15,000 small molecule opportunities that enter the funnel. What is interesting to see here, also strategically, is that the share of new chemical entities, new small molecule opportunities being innovated, being developed by small or midsize pharmaceutical company is increasing over time. Why is that good news for a CDMO like Siegfried? Those companies, by default, need outsourcing partners, need specialists like Siegfried for the development and the manufacture of their drugs.
While the larger pharmaceutical companies, typically, in many cases at least, still do that in-house, but they also tend to more and more outsource their opportunities. A healthy development, attractive to a leading CDMO like Siegfried. What is our technology strategy? Is it a niche strategy focusing on some special technologies or is it broad? I mean, the answer I think is obvious. It's broad. In order to be able to capture and cover as many opportunities of these 10, 15 thousand opportunities entering the funnel, you need to be able to offer an as broad as possible technological portfolio to be able to actually offer and make an offering for as many as possible opportunities. That's exactly what we are doing, continuing to invest into technology to create an as broad as possible technology portfolio.
What does it mean specifically for what our people, our ladies and gentlemen in the labs and in the pilot plants are doing at Siegfried? Any given point in time, there are well above 100 live projects on individual opportunities, spanning from earlier phase developments, phase two, phase three, to commercial launch volumes. These are, of course, the opportunities which will carry us through in the future and actually will support the profitable growth trajectory that we are traveling on. Why are we successful? Have been successful in the past, also in 2022, and why are we so confident that we will also be successful in the future in translating these available opportunities into tangible, specific business at Siegfried? This is based on our special positioning as a company.
For a pharmaceutical company, it is very important to work together with a stable partner, a partner of which they know will be there not only next year or three years, but in five, 10, 20, 50 years. Because the product cycles in the pharmaceutical world are five, 10, 20 years. Based on our 150 years, we of course create great credibility with regard to our ability to sustainably develop our business. We are able, based on the attractive offering of Siegfried, of our scope and scale in our global network, to actually qualify as a strategic partner to pharmaceutical customers as compared to rather transactional relationships.
That of course, at least for those products, services, for those customers where we have been able to create this kind of a true strategic partnership, means we can actually quote on any opportunity coming out of this partner. The willingness to pay is higher because people appreciate our capabilities and also our reliability. In the end, it is the attractiveness of our integrated offering which will actually carry us forward into a successful growth story. I've been talking about, I mean, big picture opportunities and how they translate into specific opportunities and what we need to do to, I mean, be able to address as many as possible of them. Specifically, what does it mean what does it mean for our everyday operations and also for our strategy going forward?
The organic investments I talked about, we need to do that. We need to prepare ourselves to be ready to really exploit those opportunities, Minden, Barcelona, Hameln, and Evionnaz. That's gonna continue going forward. We will continue to organically invest into our people, into our technologies, and into our capacities. M&A, I will talk about in a minute, but the middle part, portfolio management, is also very important. I mean, what we shouldn't do is to just put additional business into our network. That would mean that we would have to continuously invest, that we do anyway, but of course, invest even more. I think it's an obligation for us as managers to really constantly look at our portfolio and ask ourselves, I mean, do we have the right products? Do we allocate our valuable capacity to the right products?
Do we need to actually change the individual situation of individual products, which can be, I mean, reducing costs because margin profitability is not sufficient to generate the cash that we need to be able to continue to invest into our future. This can be about pricing as well, commercial excellence. It can also be about asking ourselves if, for example, sourcing or even high-value capacities are still the right places for those products. If we have to transfer them, for example, to France or to China even, or maybe even to exit a certain product, I mean, together with the customer and making sure that security of supply is maintained.
Very important activity in terms of making sure that we make the best use of our funds, of our cash, and that we create an as attractive business portfolio as possible and support our future possible growth to provide capacities and make sure that the profitability is increasing. M&A has been part of our last 12 years and was driven by adding capacity, by adding capabilities, by adding technologies. We will actually continue on that path because there are also, in this area, many opportunities available to us because the CDMO market is still very fragmented. We will continue to actually look out for attractive assets, high-quality assets, attractive teams, attractive technologies, attractive businesses, also in the future, to further support our growth ambitions. Where do we do that?
Where do we invest, either organically, or where do we prepare to execute M&A? That is the outlook slide when it comes to how do we want to further prepare our company to be able to continuously grow also in the next years to come. First of all, I mean, on the time horizons, probably the closest is that we are interested to continue to either organically invest or acquire capacities in the areas where we are already strong, our core. That can be in drug substances, small molecule. That can be also drug products operations. That can be sterile liquid drug product operations. We also invested, and I will talk about an example a bit later, we also organically invested into data analytics, specifically, we call it chemometrics.
We are also ready, probably with regard to timing a bit with far out, we are also ready to add adjacencies. to round up our portfolio of technologies and partially have made great progress there already. For example, formulation and aseptic fill finishing of large molecules, biologics is something that we started to actually take care of and prepare ourselves for in 2017 in Hameln. That actually made us ready to take on the very challenging projects from BioNTech and Novavax in 2020 and 2021. That is going to continue because that's a very attractive market segment, and we have proven by the vaccine projects our capabilities.
We know that actually for customers, these kind of assets, capabilities and capacities are rare, and we expect this to be one of the sources of future growth over the next years. Particle technology, micronization, lyophilization is something that we organically invested in Irvine just recently. Where we could also imagine to acquire additional operations in case they become available. Drug product delivery systems can be attractive to us, also ADCs, antibody-drug conjugates. Maybe a bit further out, we don't know that. In the end, we will always act upon opportunities, and we, our M&A team continuously looks at all those areas. Maybe a bit further out is potential entry of Siegfried into new areas based on the CDMO business model, which actually we are able and have shown to be able to operate in a very successful way.
That might be antibodies, monoclonal antibodies, biologics, drug substances. In the drug product part, we already do that. Cell and gene therapy, viral vectors. I mean, new modalities which will stay with us and offer great potential for medications and therapies in the future, and where we believe that a CDMO business model could work quite well and provide for additional growth opportunities for a leading CDMO like Siegfried. Bioengineered vaccines and also different kind of data analytics, probably driven by machine learning, which could provide for a different angle of looking at our big process data. Pushing digital technologies, I kind of briefly related to that, and I will make it short on this slide.
With Barberà del Vallès being one of the two sites in Barcelona and being carved out of Novartis, we have actually taken on the site on SAP S/4 last August as the first site that was in the Siegfried network. We will continue to roll out these activities, and until the end of 2025, each of our 11 manufacturing sites will actually be managed and will run on SAP S/4. Chemometrics, a very attractive topic, and I think a good example where we can display our capabilities and the effectiveness of our offering to solve difficult problems of our customers. I will go through an example on the next slide, which also provides a certain view, our perspective or one perspective at least on sustainability.
Because for us, we continuously look for opportunities where sustainability efforts, ambitions work hand in hand with ambitions with regard to cost efficiency, i.e. profitability. Because sustainability offers opportunities to reduce costs as well. Let's have a look what it specifically means at Siegfried. We apply in our development labs quite a number of digital technologies that we summarize under the term of chemometrics. Actually in the video at the very beginning of our meeting, you saw real colleagues of Siegfried working with digital technologies. One example is digital twins of large scale manufacturing assets in order to simulate and create downscale model which are as close as possible to the real-life world in our large reactors, where we can actually simulate mixing specific conditions in the, in the reactor, energy transfers, which is pretty complex stuff, but cool stuff.
What we see as an example is a hypersurface of potential reaction path of a chemical mixture. I mean, it's mind-blowing. Actually the reaction can take any path, but essentially only one path is the desired one, leading at a sufficient yield, at sufficient purity to the desired product. Looking for it is of course, I mean, if you want to do each and every possible experiment, it takes years, and it actually uses a lot of resources. By applying digital twins, downscale models and other mathematical statistical tools, we are actually able to find this path quite fast and improve processes in terms of process yield, space-time yield. In the end, be faster and actually operate with a much smaller footprint.
That actually is what then happens with the things that we learned in our digital models when we redesign synthesis, make them shorter, apply new process technologies, apply green chemistry principles, which is essentially a checklist for our development chemist to make sure that they actually make use of chemicals which are as little harmful as possible. In the end, the outcome for us at Siegfried, also for our customers, is that actually we are able to shorten development time and decrease the time to market for our customers, which in the end for them is a lot of value. We also lower the environmental impact from less raw materials, less energy, less waste, and are able to reduce costs.
For those things, and that's a mindset at Siegfried, we continuously experience that actually our sustainability efforts and our efficiency efforts, our profitability efforts really go hand in hand. What I, and Reto, what we try to do is to explain to you, first of all, why there are many opportunities available for a leading CDMO like Siegfried. We also explain to you what we do to prepare ourselves, to prepare our global team to be ready, to really translate those theoretical opportunities into tangible real-life business in the past. We explain to you what we are going to do in the future to ensure that this journey of profitable growth can continue.
I think the shortest summary is the Siegfried journey of profitable growth over the last decade probably goes on. We are committed to constantly deliver profitable growth by investing in the global network and executing value adding M&A. Specifically, top-line growth at least in line with the CDMO market. Active portfolio management. We talked about that. A key activity to make sure that we actually have a mindful use of our funds, of our resources. Operational and commercial excellence. Investments in our network, M&A. Based on those activities, we actually want to and have the vision to further evolve as a global leader in the CDMO space, be the strongest team running the most competitive network, have critical size in all the segments that we are operating in, and be the most trusted partner of the pharmaceutical industry.
For 2023, that means we expect low to mid-single digit sales growth in local currencies with a core EBITDA margin at 20% or higher. The positive midterm outlook is confirmed.