Research Dynamics
/ Key word(s): Research Update
CPH Group sharpens focus on high-growth At its Investors' Day on 16 September 2025, the CPH Group outlined its strategic and financial objectives. Following the spin-off of its Paper business, the Group has been sharpening its focus on innovation, expansion into high-value niche markets, and operational excellence. CPH maintains a strong global footprint through its two flagship brands-Zeochem (Chemistry) and Perlen Packaging (Packaging)-both of which rank among the top three players in their respective niche markets worldwide. The company is pursuing a balanced strategic approach across its two core divisions, outlining distinct growth drivers and operational priorities for each. Management is actively positioning both segments to benefit from long-term global megatrends, including advances in healthcare, demographic shifts such as ageing populations, and the accelerating transition to sustainable energy. This strategic alignment reflects a deliberate effort to harness secular tailwinds, signalling a pivot towards resilient, innovation-led growth rather than reliance on short-term market cycles. Packaging division: Strategic focus on the pharmaceutical sector The division remains focused on the pharmaceutical market and has established a global presence with seven production sites. With the recent acquisition of LOG Pharma (in February 2025), the division has expanded its portfolio to include pharmaceutical bottles and gained entry into the Israeli and Hungarian markets. The division holds a strong market position and is the number one supplier worldwide for high-barrier blisters. The global market for pharmaceutical blister packaging is estimated at CHF 2 billion and is expected to grow by 3%-6% annually. The larger CHF 8 billion pharmaceutical bottle market is projected to grow at a similar rate of 3%-6% per year. Packaging division: A track record of consistent growth The segment has achieved consistent growth over the past five years, evidenced by a sales Compound Annual Growth Rate (CAGR) of 6.1%. The division has maintained attractive profitability, reporting an EBITDA margin of 16.1% on sales of CHF 236 million in 2024. Given the solid outlook for the pharmaceutical market, the division is well-positioned for continued growth. Chemistry division: Growth in high-value niches The Chemistry division is a leading global player, holding a top-three market position in molecular sieves and deuterated products. The division is strongly aligned with resilient, high-growth sectors, with 71% of its sales derived from the health and energy markets. Growth is being accelerated by strategic acquisitions, including Sorbchem in India and SiliCycle in Canada, to expand market share and add high-value products like chromatography gels. The division operates in attractive segments with strong growth, such as deuterated products (10% annual growth) and chromatography gels (5%-10% annual growth). Chemistry division: A record of strong and profitable growth The segment has achieved solid growth, resulting in a five-year sales CAGR of 12.5% and a notable five-year EBITDA CAGR of 24.6%. This performance underscores a strong increase in profitability, with the division reporting an EBITDA margin of 19.5% on sales of CHF 117 million in 2024. M&A Strategy to drive the growth CPH also outlined its disciplined M&A strategy to augment organic growth and create shareholder value. The company takes a systematic and global approach, with ongoing market screening to identify targets that offer a strong strategic fit and a clear path to value-enhancing ROCE. This strategic approach is designed to ensure the company remains agile and well-positioned for sustainable growth. Valuation and conclusion The Packaging and Chemistry divisions offer a favourable long-term outlook, and the operating results of these divisions are expected to remain resilient. Apart from a supportive outlook, the cost optimisation efforts are expected to result in margin improvement for the EBITDA margins to remain in the 16-18% range going forward, which should lead to solid earnings growth. We value CPH using DCF and relative valuation techniques. Our intrinsic value of CHF 92.5 per share implies an upside of 23.9% 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 8.6x (FY2025e), a 21.0% discount to the weighted average multiple of division peers. End of Media Release |
2199944 18.09.2025 CET/CEST
