Research Dynamics- Report on CPH: FY2025 earnings update

Continued Growth Amid Strategic Expansion

Sales growth driven by acquisitions

The CPH Group (CPH) reported net sales of CHF 334.1 mn, corresponding to a 3.3% increase year-on-year (YoY). This growth was driven primarily by acquisitions (+8.1%), while currency effects (-3.8%) and organic factors (-1.0%) were a drag. EBITDA for the group amounted to CHF 50.3 mn, a 6.5% decline YoY. The corresponding margin dropped to 15.0% (FY24: 16.6%). Group EBIT came in at CHF 32.8 mn, while the corresponding margin declined to 9.8% (FY24: 12.1%). The net result declined to CHF 23.4 mn compared to CHF 34.4 mn in FY24, impacted by the elimination of one-time financial and non-operating income that benefitted the prior-year figures and higher financial expenses due to acquisitions. Cash flow from operating activities amounted to CHF 34.1 mn (FY24: CHF 53.3 mn) and free cash flow declined by 53.1% to CHF 16.4 mn, primarily due to an increase in net working capital of CHF 8.4 mn.

Segmental performance

Zeochem: Net sales decreased by 2.2% to CHF 114.7 mn (FY24: CHF 117.3 mn), impacted by lower raw material costs passed on to customers, particularly for lithium-based products. Despite the sales dip, EBITDA reached a new record of CHF 23.9 mn, marking a 4.5% increase YoY, with the corresponding margin expanding to 20.8% (FY24: 19.5%). This margin expansion was driven by growth in high-value products such as deuterated compounds and chromatography gels, supported by the acquisitions of Sorbchem India in 2024 and SiliCycle in 2025. EBIT amounted to CHF 15.1 mn, a 1.6% increase YoY, resulting in an EBIT margin of 13.2% (FY24: 12.7%).

Perlen Packaging: Net sales stood at CHF 219.4 mn, an increase of 6.5% YoY, driven by the acquisition of LOG Pharma. Adjusted for currency and acquisitions, sales declined by 1.5% due to lower raw material prices and a shift in product mix towards monoblisters. The division faced headwinds from temporary overcapacities, which generated volume and price pressure  and a sluggish economic environment in Europe. EBITDA declined by 22.2% to CHF 25.9 mn with a corresponding margin of 11.8% (FY24: 16.1%). The decline was attributed to tariffs, exchange rate effects, and a slightly higher cost base following the paper division spin-off. EBIT decreased by 35.7% to CHF 17.1 mn, with the corresponding margin compressing to 7.8% (FY24: 12.9%).

Outlook for FY2026

The global economic landscape for 2026 remains characterized by volatility and geopolitical uncertainties, which continue to influence customer behaviour. While trade tariffs and regional conflicts present ongoing headwinds, CPH Group remains confident in the structural resilience of its end markets. The long-term global megatrends of health & demography and energy, which serve as the group’s primary value drivers, remain fully intact. CPH Group anticipates a positive trend in demand and net sales as it leverages its expanded global footprint and stronger portfolio in high-value specialties.

Group: CPH Group expects to return to a trajectory of profitable growth in 2026. Management forecasts that sales, EBITDA, EBIT, and net result will all exceed the figures reported in 2025. The group’s strategic focus will be on the integration of recent acquisitions and the rigorous exploitation of synergies, particularly within the pharmaceutical packaging segment.

Zeochem: In the Zeochem division, management expects both net sales and EBITDA to come in above the previous year’s levels. A key operational priority will be the complete integration of SiliCycle, which was acquired in July 2025. This acquisition significantly strengthens Zeochem’s position in the high-value chromatography gels market and complements its existing portfolio of molecular sieves and deuterated products. The division will continue to focus on advancing its strategy in specialized applications across global niche markets.

Perlen Packaging: For Perlen Packaging, CPH also projects sales and EBITDA to exceed 2025 levels. The division will focus on the completion of the integration of LOG Pharma, acquired in early 2025, to fully leverage the expanded product range comprising films, vials, and containers. In response to the margin pressures seen in 2025, the division has initiated a cost reduction program and further process optimizations, which are expected to support profitability in 2026. The recovery in volumes, supported by the normalization of customer inventories, is anticipated to further drive growth.

Mid-term Outlook:

CPH has reaffirmed its mid-term financial targets, which support its strategy of expanding its geographic and product footprints and augmenting its product mix. The company expects annual net sales growth of 5-8%, an EBITDA margin of 16-18%, and a free cash flow margin of 8-10% (before acquisitions). The company aims to maintain an equity ratio of over 50% and a dividend payout ratio of 25-50%.  

Valuation and conclusion

The reaffirmation of mid-term financial targets supports the long-term investment case, while the integration of strategic acquisitions should drive a recovery in earnings. Both Chemistry and Packaging division benefit from strong structural trends in health and energy, providing a resilient outlook despite market volatility. Furthermore, the realization of synergies from recent M&A and active cost management programs are expected to support margin expansion, moving back EBITDA margin in the 16–18% target range. This structural progress positions the group for renewed profitable growth.

We value CPH using DCF and relative valuation techniques. Factoring in the guidance, our intrinsic value stands at CHF 87.4 per share implying an upside of 35.3% from current levels. For relative valuation, since the Group operates in two entirely different divisions, we compare CPH’s divisions with various sets of relevant industry peers. We have employed three parameters – EV/EBITDA, P/S, and P/E – to analyse the relative valuation of the Group. CPH currently trades at an EV/EBITDA multiple of 8.2x (FY2026e), a 1.2% premium to the weighted average multiple of division peers.