2020. With me together is Wolfgang Wienand, our CEO, and Reto Suter, our CFO, who will guide you through the slides that you find on internet, or if you join us by laptop, you also can see my desktop. We will put you on mute during the speeches of Wolfgang Wienand and Reto Suter. At the end, we open the Q&A session. Then the channels will be open. May I ask Wolfgang to commence?
Yeah. Thank you, Peter. Also a warm welcome from my side and thank you for joining. As always, we try to condense our key messages into a telling title for our presentation when talking to you. Today, for obvious reasons, we of course need to relate to the coronavirus pandemic, which posed and will continue to pose extraordinary challenges to all of us as private persons, as professionals, and as companies. However, it's not doomsday. We are happy, and while not giving up on humbleness, a bit proud that we at Siegfried have been able to resist and continued to grow against that background of challenge and uncertainty also in the first half of 2020. Now let's move on and start with the inevitable.
Please note our safe harbor statement with regard to forward-looking statements that I myself or Reto or Peter will make during the course of this presentation and the Q&A afterwards. Let's have a brief look at the agenda. We start with an executive summary on status and outlook by myself. I will hand over to Reto, our CFO, who will talk about specific facts and figures. I will take over again, talk about strategy, and provide some further reflections on the situation and the state of the company before we will open the channels for you to ask questions and for us to answer these questions. Now we move to the executive summary, in which I will essentially point towards all main messages and contents on which we will touch upon in more detail later in the presentation.
Siegfried coped well with COVID-19 and managed to be continuously operational with some minor interruptions, and I will talk to that later. Siegfried has been able to maintain its growth momentum. However, top-line growth, and as a consequence of that, profitability didn't reach our pre-COVID-19 expectations. Net sales amounted to CHF 388.1 million, which is a growth of 2.2% in local currencies and a - 1.5% in CHF. Core EBITDA achieved the level of CHF 58.1 million at a core EBITDA margin of 15%. I think a strong message and an important achievement in times of crisis is the increase of our free cash flow up to CHF 17.1 million, which is more than 50% more compared to previous year. Some initial reflections on the COVID-19 challenge to Siegfried. Maybe let's start with markets and demand. What did we experience there?
In the end, affecting and influencing our top line. While overall robust and growing, which I think is an important key message, we of course saw increased volatility in demand of specific product groups. We have products which are used in the direct treatment of COVID-19 patients, which obviously significantly increased in demand to a point that we couldn't actually serve the whole demand. We also saw other product groups for not life-saving, not essential therapies, treatments, for example, ophthalmology, where it's clear that the related treatments and therapies were postponed to give preference to the acute care of COVID-19 patients. As a consequence, our customers didn't have patient access, and needed less volumes of these kind of products. Overall, robust and growing. However, significantly increased volatility. That was, let's say, the outside world. Now let's briefly look at Siegfried, ourselves, and what we do.
We are a manufacturing company. We need our people on-site. We need our facilities up and running, sweating. Also here, we saw for obvious reasons, and I will share some insights in a minute, an increased volatility in technical operations and thus in production output. Coronavirus pandemic is a kind of a test of the Siegfried machine. The Siegfried machine consisting of nine global sites, essentially in all regions. Roughly 2,700 people working for Siegfried hands-on, doing stuff, managing complex processes. As I said before, looking at our ability to deliver growth against all odds, I think it's fair to say that the Siegfried machine actually passed the test. However, what did affect our performance in the first half of 2020, first of all, some delays in the supply chain, so availability of raw materials due to lockdown measures in the regions where the specific supplier is located.
Reduced availability of workforce from increased absentee rates as a consequence of, in not so many cases, actual infections. We had some, but not so many, but very strict quarantine measures. It was important and will also be our guiding principle going forward. We need to keep our people safe, and we need to be sure and always have the ability, to the degree possible, to contain an infection and not create a hotspot, so that we can actually keep our sites up and running. We also saw delays in some maintenance repairs by third-party providers because their experts, their technicians couldn't travel. I have two specific instances in mind where actually important bottleneck equipment has been affected and was down for a longer period of time than usual. Furthermore, we took a slight hit in this regard.
Selectively, we saw increased raw material prices from temporary shortages. It's the obvious candidates here, ethanol and isopropanol, which are used to manufacture disinfectants, and acetonitrile, quite a popular solvent. It's a co- product related to the polymer industry, also saw shortages leading to significantly increased prices. That's as a short snapshot on the COVID challenge to Siegfried. Let's move on to the next slide. I want to start with a brief statement with regards to our business model, and we will further elaborate on that later in the presentation. Long story short, our business model has proven to be intact. Also, based on that finding, based on that conviction, we continue to have a generally positive outlook for our company. As a result of that, it was our decision to, of course, not change or cut our short-term CapEx plans.
In times of crisis, you will be aware of liquidity, of course. We will come to that later as well. Considering cut-off CapEx is an obvious possibility. However, we didn't do that for good reasons, which is business model fully intact. We see growing demand over time. We need technologies and capacities ready to serve this growing demand. What did it mean specifically for 2020 first half? What will it mean going forward in 2020? In August, we kicked off our leadership development program as a key part of the Siegfried Academy, an initiative that we launched a year ago, which is investing into the skills of our people. They are one of the most important assets that we have. We are convinced that it makes sense to continue to invest into our people at any time.
We also invested in brick and mortar and steel. The micronization facility in Evionnaz is essentially ready and will become operational in the second half of 2020 and will add a large-scale, commercial-scale technology for the treatment of Drug Substances materials. We also took into operation early in 2020, a high-pressure hydrogenation facility in Zofingen. It's a pretty rare technology, and something which will be very attractive for certain products, certain processes of our customers. On the Drug Products part, we decided to actually install new aseptic filling lines in Hameln and Irvine at the end of 2020 and in Irvine within 2021, because that's an important growth segment in our portfolio, which we decided to and will continue to strengthen in the future.
We also decided and started a stepwise increase of our overall oral solid dosage form capacity in Malta to really provide more capacity for the increasing demand of our customers, and what we continuously invested into de-bottlenecking investments, essentially on all our Drug Substances sites. Besides these short-term CapEx initiatives, we also went through an almost one-year-long process of a strategic site master planning for the entire network with the outcome that Siegfried will continue to invest into new plants, new technologies, and people in order to prepare our company for continued growth mid to long term. Having said all that, I briefly summarize our guidance, which is despite uncertain macro environment and with obviously significantly limited predictability due to COVID-19, the outlook for full year 2020 is unchanged. Low single-digit growth of sales in local currencies and a slight expansion of the core EBITDA margin.
The midterm outlook is confirmed. Profitable organic growth in line with the market, again, local currencies, with the ambition to outgrow including selective and value-accretive M&A. That is the point in time when I hand over to my colleague, Reto, who will take you through our financial figures.
Thank you very much, Wolfgang. Let's dive into slide number seven for this facts and figures part. Again, all of us are really happy to report that the Siegfried Group has grown again in this first half of 2020 by 2.2% in local currencies and a - 1.5% in CHF. As you're aware, there was a strong currency headwind in this first half of this year. The EUR has depreciated against the CHF by almost 6%. Also, the second important currency for us, the USD, has depreciated against the CHF by more than 3% from parity in the first half of 2019 to 0.966 in H1 2020. As you know, we usually do about half of our sales in the EUR and about 20% in the USD, and this explains the strong currency headwind of -3.7%.
We're always eager, obviously, to minimize the currency impact on our margin. We do this by applying a natural hedge, so balancing revenues and cost in each of the important currencies. We have managed to do that quite well in this first six month of 2020. When going to the two business lines and adjusting for the 3.7% currency headwind, you will see that both the Drug Products as well as the Drug Substances segment have shown growth in local currencies. Growth was slower in Drug Substances, which has been somewhat expected as this is the segment, the line of business which had been more affected by COVID with the extended Nantong shutdown, and as just mentioned and illustrated by Wolfgang, the delays and other factors in the supply chains.
However, the Drug Products business has shown a strong growth, 6.7%, fueled mainly by the aseptic and sterile fill and finish operations. A question I got a lot over the past few weeks and months was, well, how would 2020 have looked like for Siegfried without COVID and its impact? When answering that question, I always referred back to prior annual guidances, which used to be at least mid-single digit or the midterm guidance, growing with the market, obviously with the ambition to outgrow. When we apply this thinking to H1 2020 and adjust for adverse FX effects, we end up with lost sales somewhere in the region of CHF 10 million-CHF 20 million. I will refer back to that number again when I will discuss the COVID effects to the core income statement. Let's move to the next slide number eight.
This is the standard core framework slide, which should help you to understand the adjustments that we have applied to core in the first half of 2020. These adjustments have been very minimal, as you can see. On the core EBITDA level, we have only adjusted for the current net interest on foreign pension obligations, which means that we have taken out CHF 0.5 million out of operating expenses and adding them back to the financial result where we think they should actually be allocated to. On the net profit level, the adjustments to core net profit, we have reversed a portion of the tax effect, which came as a result from valuation step-up that we have consumed in 2019 as a result of a change in Swiss tax legislation.
We have adjusted the full tax benefit when we calculated the core net profit 2019, and we are now steadily reversing exactly that effect over the course of the next five years. This adjustment will come back every six months. To the consolidated core income statement, I'm now on slide nine of the presentation. The overall picture. Overall, we report a reduced gross profit and also lower non-product-related cost elements, so the SG&A. In combination, the savings that we made in SG&A have compensated for about half of the reduction in gross profit. This is the fact pattern. Let me try to illustrate the COVID impacts on this set of numbers. We have already done that on the sales side, where a loss of production time, delays in the supply chain, amongst other factors, have led to a lower growth than originally expected.
However, the cost of goods sold, so the cost side of the P&L, has been impacted by COVID as well. Obviously, in preparation for a much stronger 2020 also for the first half, we have been laying the foundation, meaning hiring the people, preparing the infrastructure for a larger business volume, which, due to COVID, did not materialize. These additional costs have not been absorbed and ended up as idle costs, non-productive costs, which are also part of the COGS. You will see them there. As mentioned by Wolfgang, we also have incurred higher procurement costs for some materials. However, these price increases really have been significant.
On the overall cost element in COGS, there was not much flexibility for us to act upon, because when you have high absentee rates and very strong expectation of a strong H2 2020, you require, and will still require, the full workforce on board. Not timely to make any changes. Now let me try to put some numbers to the effects just described. The CHF 10 million-CHF 20 million of lost sales, we have established that number already earlier. Now, as we had the people and the machines basically in place, accounted for as idle cost, already sitting in COGS, already there. Larger part of the CHF 10 million-CHF 20 million actually drops down directly to the profit line, so EBIT, EBITDA, without incurring any incremental cost.
Obviously, we would then have to take out the higher procurement cost and obviously add back some cost elements which we did not incur due to COVID, so less travel. On that basis, with everything else unchanged, we would have arrived at a core EBITDA margin somewhere north of 17%, so higher than last year. Now, next to the COVID effects, let me quickly point out three details on that slide which are important. Firstly, as indicated in March this year already, the R&D costs have normalized to a shade under 4% now of sales. Secondly, important for us as well, the core financial expenses are trending down, which is a direct result of us concluding the new syndicated loan facility. Thirdly, the depreciation line non -cash element is ticking up a little, a result, obviously, of past investment activities.
Slide number 10 summarizes these effects as just described. Again, a good result overall with gross profit at CHF 72.2 million, core EBITDA at CHF 58.1 million, core EBIT at CHF 31.3 million, and net profit at CHF 21.5 million. An important slide is obviously the cash flow statement. As you can imagine, we have been monitoring cash generation and obviously associated with that working capital even more closely than we usually do in normal years. I'm really happy to report an increase in that important metric, cash generation, despite the challenging environment. Operating cash flow has grown to CHF 45 million, which is a plus of 8.4% to the prior period. As you saw, I'm sure, the main contributor to this positive development has been the positive development in net working capital.
Within net working capital, it has been mainly the inventory position, which has, as we have already indicated already in March, when we presented the 2019 numbers, has normalized after a build-up, especially of semi-finished goods at the end of year 2019. You also see that the cash flow from investing activities accounted for CHF 27.9 million, so pretty much on track tracking the last year. As a consequence, also the free cash flow has grown to CHF 17.1 million. If you analyze the cash flow from financing, this is obviously affected by the fact that we have not been paying a dividend in H1 2020, but rather did a repayment of capital, which has occurred in July 2020, so in the second half. That you will find then in the cash flow statement for year-end 2020.
Important here, if we analyze these numbers, it's also worth noting that there also have been instances during COVID where we have intentionally increased inventory position during this first half of 2020, and I will illustrate that matter on the next slide, so slide number 12. Just a brief overview on our activities related to supply chain and procurement. It's worth noting that we have in these functions and the COVID crisis quite well prepared. We have started to assess and act upon single sourcing risks already two years ago, back then as a response to sourced from China, already established a second source when COVID hit us, this has helped us tremendously mastering this current crisis. In early March, we have then begun to assess the sourcing risk that we had in a very disciplined and structured format.
This was a significant effort, which has taken a lot of time and effort as Siegfried sources is between 1,000 and 2,000 materials per year. The assessment was done by applying value criteria, and we ultimately decided for only a few selected raw materials to either purchase them early, which is well-suited to reduce the sourcing risk as you basically account for delays. We even purchase safety stock, which then eliminates the sourcing risks completely. The overall effect on net working capital in H1 is somewhere in a single-digit CHF number, which might increase for the full year of 2020 when we continue exactly what we have done. However, from an organizational development point of view, this is one of the examples, and we have others within the firm, where actually the COVID situation served well as a catalyst for high impact organizational development.
The last slide in my section refers to our capital structure. Slide number 13. As you know, the first call date of our first tranche of hybrid bond, this is the 3.5% bond, is coming to a first call date on October 26. It will not come as a surprise to you that we still have the intention to exercise our call right and to redeem that tranche, that hybrid bond, funded by a further drawdown on the new and extended syndicated loan facility. There are a few effects, obviously, from that, when we implement that. The first one is a very positive one. We will have a significant cash saving. The hybrid coupon is CHF 3.5 million per year. The interest on this syndicated loan will be much lower, so more in the 100 basis point range.
You have to consider that the CHF 3.5 million so far have not been part of financial expenses. Hybrid bond has been accounted for as equity instrument, the additional syndicated loan portion obviously will be. For the same reason and with the same risk metrics applied and unchanged, we will observe an optical small increase in the leverage ratio, calculate as net debt divided by EBITDA. Let's take some easy numbers for year-end. Let's assume CHF 200 million of net debt and CHF 150 million of EBITDA. We derive at a leverage ratio of 1.3, up from the 0.7 that we currently observe. Now to preempt the question, which obviously is an important one, will this move have an impact on our ability to fund future acquisition?
You know, this is unchanged, speaking to investors, I understand that a leverage ratio of between 3.5 and four for a limited period of time seems acceptable. If you use the same EBITDA number for year-end, the CHF 150, not taking account any acquired EBITDA, and applying the ratio of 3.5, we arrive at a non-dilutive funding capacity of a shade more than CHF 500 million. Deducting the CHF 200 that we mentioned of anticipated net debt at year-end, we arrive at CHF 325 million free non-dilutive funding capacity. This is a number which obviously will increase over time as net debt will decrease due to positive cash generation and EBITDA will increase as a part of our operational leverage. To cut a long story short, yes, that move will not impact our ability to fund future acquisitions. These have been my remarks on facts and figures.
Now handing back to Wolfgang.
Thank you, Reto. I promised a few reflections on COVID-19. What did we experience so far? What do we expect going forward? Also put these experiences into context when it comes to business model strategy and so on. We'll briefly talk about strategy later on as well. Let me start with the slide 15. Actually, these have been challenging times, interesting times as well, because, at least myself, and I think nobody else really experienced that kind of crisis before. While having hard work to do and had hard work to do in the first half, we also have been encouraged a lot by the support of our different stakeholders. I will briefly guide you through what we did as a company and what we plan to do going forward to be safe and at the same time keep Siegfried on track.
In these times, and even more than usual, having clarity about the core values, which are the mental framework for our actions. Having clarity about the mission. The why, what are we good for as a company and as a team? Clarity about the ultimate goal, the target, where we want to develop into, our company, are extremely useful and have turned out to be useful when navigating through this crisis. Let's start with the values. We have five core values, and we could easily incredibly relate to one of them, which is integrity. Translated into specific action, we act responsibly and reliably. Meaning protecting ourselves, protecting our people.
Specifically, what we did, we could initiate an existing pandemic crisis plan already in January, which was established in 2003 during the first SARS crisis and, also further polished and amended in 2009 during the swine flu crisis, and had a pretty good guiding principle document at hand, and immediately established a corporate crisis team at the headquarters here in Zofingen, using external medical experts for advice and also installed local corona crisis subteams who in the end managed on the sites. We also implemented strict guidelines on hygiene, physical distancing, quarantining, home office for administrative functions, tracing in case of infections, and very early on testing. That all helped, not to completely avoid infections, because that's just not possible. In all known cases, and to the degree we could prove it afterwards, have been carried into the company but didn't spread within the company.
This is an important learning also for the second half, which of course still poses a challenge to us. However, we believe that as long as the coronavirus pandemic stays somewhere close to where it is today, which means seemingly under control, that we do have the means and the mentality and the processes installed to be able to also navigate through these ongoing challenges in the second half. What we also did as a company, based on our self-conception, is that we supported the public health sector and public institution with disinfectants manufactured at the Siegfried facilities free of charge. We also distributed these disinfectants to our employees and their families.
That is probably the point in time to say again, a great thank you to the whole global Siegfried team for the dedication of our employees and for their hard work also in this time of uncertainty, going to work every day, keeping our plants up and running to the degree possible. This performance, this attitude actually made this good first half result possible. We also got support from public authorities. In almost all legislations, Siegfried has been granted exempt status as a systemically relevant company to the healthcare system, which was a prerequisite for us to continue our operations also during periods of shutdown.
As I said before, the vast majority of our people actually came to work every day and continued to support us as a company to live up to our mission, which is we continue to manufacture safe drugs for patients worldwide, not only in normal times, but also in times of pressure and challenge. Coming to the vision. We remain determined to be successful now and in the future as well based on a healthy business model, and I alluded to that as a standard exercise in times of challenge and crisis. The CEO and the CFO sit together and look at reasonable worst-case scenarios on what these scenarios would do to our liquidity and availability of cash. Here I can say that Siegfried, in all of these reasonable worst-case scenarios, remained financially robust and stable.
I think this analysis is ex post reinforced by the fact that we have been able to generate increasing amount of cash in the first half of 2020. There was more encouragement from another group of stakeholders of Siegfried, which are our customers. Despite the general slowdown in the business environment, because customers have been very busy with themselves, too. Their access to patients to execute clinical trials was limited due to lockdown measures. Ability to travel and meet face-to-face and negotiate contracts and visit sites, having a look at our equipment was limited, too. Despite this slowdown, Siegfried was able to win attractive new business and initiate a potential new strategic partnership with an attractive customer.
As kind of an upside from the COVID-19 crisis, we are currently in discussion with a number of pharmaceutical companies for a cooperation to manufacture aseptic COVID-19 vaccine Drug Products, which are currently still in clinical phase. Which, of course, again, serves our mission. I mean, that's what we are here for, and that's what we want to do. We want to contribute to fight this coronavirus pandemic. Of course, if we are successful in these discussions, that would also be economically attractive to Siegfried. Let's move on with some further reflections on the COVID-19 challenge to Siegfried and answer some fundamental questions which probably are important for you as investors and people following the company from a business case perspective. We have chosen five dimensions to briefly comment on. First one is markets and demand. Obviously important.
I mean, what do we expect COVID-19 to do to our target industry, pharmaceuticals, and their demand for CDMO services? We briefly discuss about our operations and our general course of business in the context of the crisis, touch upon financials, which in the end will be more general statements in line with what Reto just discussed before, using the detailed figures. Very fundamentally, briefly commenting on our business model and our strategy, and in the end, sharing some thoughts on potential regulatory and political measures. Let's start with the first one, markets and demand. I would kind of divide it into the short-term impact, as you see on the right-hand side of the slide, and our expected long-term impact of COVID on this dimension.
Here you see, and that is in line with what we experienced in the first half, for the reasons discussed, of course, a slight slowdown in growth. We're still growing, not at the pace at which we would have grown without COVID-19. Will that continue forever? Is the general growth potential of Siegfried, of the CDMO industry, of the pharmaceuticals industry, negatively affected by COVID-19? Here, our answer is no. The demand and our expectation will continue to be healthy and will continue to grow. Operations and general course of business of Siegfried, again, we alluded to that already. It's just tough to have hiccups in your supply chain. It's just tough to have absentee rates for a certain period of times, indirect labor for certain sites of 15% or more.
You see that in your production output, and we saw it in our P&L statement for the first half. On the other hand, while there's still much to be learned about the coronavirus, and we are actually not smarter than the scientists doing hard research on it, our belief is that we have implemented the right measures to manage the level of the coronavirus pandemic as it is today going forward and keep our operations largely up and running and keep our people safe. In the long run, here the same applies, with markets and demand being healthy and solutions available to actually create a safe work environment. We don't expect that our production output will be affected negatively by COVID-19 in the long run.
Financials with the specific dimensions of sales, profitability, capital efficiency, I won't spend too much time on, because in the end, Reto has discussed it using the specific figures of the first half. Sales, negatively affected in a way of us not being able to fully exploit our growth potential. Profitability, negatively affected in the short term based on idle costs from resources that we had on board for a higher growth and that we wanted to keep on board for the expected strong second half of 2020. Capital efficiency will slightly be impacted, and we just discussed buildup of safety stock, which in the end for me is kind of an insurance premium in order to be sufficiently clear about our ability to actually manufacture and provide products to our customers. Short-term impact, as we saw, slightly negative.
The long-term impact, according to what we discussed before on markets and demand and operations, in our view, not impacted. The more fundamental question is on business model and strategy. Do we have to change, completely change, or are we even threatened as a company because our business model might be outdated due to changes from COVID-19? We all know that many companies, many industries are faced with that specific question. In our case, luckily, we perceive that as a privilege, we feel that our business model is even more enforced and its viability confirmed. As a consequence of that, with risk being one of the criteria, one of the competitive advantages that we wanted to strengthen and realize by our strategic actions, I come to that later.
We feel that both the business model and our strategy to further expand and build out our company are not negatively affected short-term or long-term, but that we as a company are on the right track with and without COVID-19. Last but not least, what is our expectations and what are our thoughts on regulatory and political measures? We see in all experience a lot of discussions by politicians, by experts, in different countries, all aiming or targeting the question: How can we increase security of supply of essential pharmaceutical products? You can actually see anything from the one extreme being, let's take the whole production back from Asia and become fully self-sufficient as a nation or as a region. To do nothing, globalization unchanged. What is our take here?
We believe that with the pharmaceutical industry being a global industry and well-developed value creation chains, well-distributed over the globe, in order to actually create economies of scale and allocate manufacturing products to the most suitable place is a plus, leading to more competitive, lower-cost products, which is a good thing to the healthcare system. There obviously is risk in the system, but we are convinced that there are ways to actually manage these risks without taking back production to Switzerland or Germany or the U.S.
Looking at Siegfried, we with our global network, being able to provide dual sourcing, we with our expertise in procurement and sourcing, being able to establish dual or third sources for our own supply, we believe that there is a good way to balance the benefits of global supply chains on the one hand side, but at the same time mitigate and reduce risk. When it comes to public interventions, I think that the part of the discussion which calls for strengthening the industrial foundation of a country or of a region probably makes sense. There are smart ways to do that, from direct subsidies so that investments become more attractive in certain countries to regulatory mechanisms like local content requirements for public tenders for generics. These are things of which we believe certain imbalances can be reduced, and Siegfried would support these kind of measures.
We will not build our business model on public subsidies, which is why we gave it these upward arrows, but not at the same level upward as the others. These are our reflections on some of the most important dimensions which might be impacted or have been impacted by COVID-19. In case that there is more interest, in case that there are more questions afterwards, we will be happy to answer them in the Q&A section. Slide 17. The most important part of that slide is actually the first four words, which is Siegfried's strategy EVOLVE unchanged. I kind of gave the background of that statement on the previous slide. We believe that this strategy was a good one before coronavirus and holds true also considering potential impact by coronavirus.
Those of you who follow us for a longer period of time know these three areas of strategic activity. The first one being continuous investments in our technology base and our existing network, which means strengthening our small molecule manufacturing, organic expansion by own investments into large molecules, i.e. biologics, which means investing into aseptic finish capacities. You might remember that this is exactly what I explained in the executive summary as one of our CapEx initiatives in 2020. This is kind of the organic part of our corporate strategy EVOLVE+. There are also these two acquisitive areas of activity. The first one, and actually, if I could wish for a sequence of events, the preferred one, acquisitions in Drug Products. Looking at the distribution of our sales, roughly 25% Drug Products, 75% Drug Substances, there's a clear imbalance.
While we probably have one of the most competitive small molecule Drug Substances network in the CDMO space, this is not yet the case for Drug Products. That we want to change. We continue to invest organically, but making a significant step by M&A would be very attractive to us as a company. The last part is potential acquisitions in the Drug Substances space. While I said before, we do have a very strong network already, we would be ready anytime to acquire an attractive asset also in the small molecule Drug Substances space. Furthermore, and depending on opportunity, we would also be ready to acquire small-scale biologics, Drug Substances, manufacturing assets. While this is the plan, what we want to do, the question is what did we do so far? Here the answer is somewhat unchanged. We continuously talk to people about their assets.
We continuously identify by our own, potentially attractive targets to us. We would be ready, with or without COVID-19, to make a smart and a good acquisition at any time. What we saw in the market is, of course, also a slowdown in M&A processes, just fewer targets becoming available, M&A processes being stopped or delayed for obvious reasons. With travel restrictions, it's kind of tough to do on-site due diligence. I think that's a fair observation, which we also saw ourselves. We don't take this or COVID-19 as a reason not to further pursue our targets in the field of M&A. Let's move on to slide 18. Again, the first three words in the headline being the important one, Siegfried's ambition unchanged, which is consistently deliver robust organic growth and execute value-accretive M&A to outgrow the market. Again, many of you might know the slide.
I still think it's pretty useful. Left-hand side, where we are today or have been in 2019. Right-hand side, where we want to go as a company, mid to long-term. In the middle, you kind of see the division of our investment case, how at least I see it and we see it. The base case being consistently delivering robust organic growth in line with the CDMO market. On the way, expanding step-by-step our core EBITDA margin up to the 20% corridor. Continue to do selective investments in technologies, as I outlined at the very beginning of the presentation. Continue to invest into incremental capacity, as outlined at the beginning of the presentation. The continuation of the integration of the entire site network.
On top of that attractive base case, we want to accelerate our growth through M&A, value-accretive acquisitions in our core areas, and acquisitive entries to new areas within the business model. That all leads to the guidance outlook for the full year 2020, despite macro uncertainty and with clearly limited predictability. I think we need to be clear about that. Low single-digit percentage sales growth in local currencies with slight expansion of our core EBITDA margin. Midterm outlook confirmed. That is what we prepared for you, and we will now be happy to take questions and provide answers.