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Management%u2019s Discussion & Analysis DKSH Annual Report 2023 51restrictions in 2023 which were still in place for some parts of 2022. Net sales in Malaysia and Singapore grew mid single-digit. The Rest of Asia Pacific grew low single-digit, and the Rest of the World grew double digit driven by M&A contributions in Business Unit Performance Materials.Cash Flow GenerationThe Free cash flow increased to CHF 282.3 million due to efficient net working capital management, representing a Cash conversion1 of 137.0% compared to 100.5% in 2022.DKSH operates an asset-light business model where distribution centers are typically leased and most of the transportation is outsourced to third parties. Accordingly, Capital expenditures (Capex) remained at a low level of CHF 37.5 million (0.3% of Net sales) in 2023, a similar rate as in 2022 (CHF 45.6 million or 0.4% of Net sales).Core return on equity (ROE) reached 11.7% (11.5% in 2022) and Core return on net operating capital (RONOC) was 18.7% (19.2% in 2022).Continued Strong Balance SheetDKSH operates an asset-light business model that enables strong Free cash flow generation. In 2023, DKSH used its cash flow primarily to fund three acquisitions and to distribute CHF 139.6 million as dividend payment. Accordingly, the Net cash position by the end of 2023 stood at CHF 6.5 million, compared to a slight Net debt position of CHF 42.3 million at the end of 2022.OutlookDKSH is committed to deliver GDP+2 sales growth (at CER) and expects Core EBIT (at CER) in 2024 to be higher than in 2023 based on its resilient business model, successful strategy execution, and strong balance sheet. This outlook assumes economic growth in Asia Pacific, exchange rates at current levels, and barring any unforeseen events. The Group remains confident about Asia%u2019s long-term potential and is well-positioned to benefit from favorable market, industry, and M&A consolidation trends.1 For the definition of Alternative Performance Measures, please refer to DKSH Annual Report 2023, page 51 onwards.2 Weighted GDP calculation based on DKSH 2023 Net sales market split.Definitions and Financial DetailsIn the Annual Report, media releases, and other communication to external stakeholders, DKSH uses financial performance measures which are not defined by IFRS Accounting Standards. These measures are used by management to assess the performance of the Group. Some of these measures, like Operating profit (EBIT), are defined by a reconciliation in the sections of the Annual Report where they appear. The other main alternative performance measures used by DKSH are defined and/or reconciled below.Organic GrowthOrganic growth is the difference between current and previous reporting period excluding Mergers & Acquisitions (M&A) and Foreign exchange effects (FX). Mergers & AcquisitionsM&A includes the impact of the businesses acquired in the current and previous reporting period.Foreign Exchange EffectsFX is the difference between current period reported figures at current versus previous period exchange rates.