Sartorius AG Investor Relations
A Trusted Partner for the Biopharmaceutical Industry and Laboratories
Sartorius is a leading international partner for the biopharma sector. Our solutions are supporting our customers to develop and produce drugs safely, timely and economically. The Group has been annually growing by double digits on average and has been regularly expanding its portfolio by acquisitions of complementary technologies.
Seven reasons to invest
- Clear focus on the attractive biopharma sector
- Long-term growth drivers and significant market entrance barriers
- Market leading position in key technologies and recognized brand
- High share of recurring revenue as well as diversified earnings base
- Strong presence in growth regions
- Proven track record with alliances and acquisitions
- High continuity with respect to customer base, employees and management
Sartorius Group | Half-Year 2020 Results
- Successful first half: Order intake up 27.5 percent, Group sales revenue up 17.9 percent, underlying EBITDA margin reaches 27.8 percent
- Stronger growth and higher profitability expected for the Bioprocess Solutions Division and the entire Group; outlook for the Lab Products & Services Division unchanged
Strategy and Targets for 2025
Sartorius’ goal is to continue its profitable growth and systematically expand its position as a leading international partner for biopharmaceutical research and the industry. We are pursuing various strategic initiatives to grow sustainably up to 2025 – and beyond.
- Achieve consolidated sales revenue of around 4 billion euros with about two-thirds of this growth to be generated organically and about one third by acquisitions
- Increase underlying EBITDA margin1) to around 28%
- Expand sales in the Bioprocess Solutions Division to about 2.8 billion euros; increase the division’s underlying EBITDA margin to around 30%
- Grow sales in the Lab Products & Services Division to about 1.2 billion euros; increase the division’s underlying EBITDA margin to around 25%
1) Sartorius uses underlying EBITDA (earnings before interest, taxes, depreciation and amortization; adjusted for extraordinary items) as the key profitability indicator.
We focus in both divisions on the attractive biopharmaceutical market characterized by long‑term and stable growth trends.
Key Growth Drivers
- Growing world population
- Increasing incomes and better access to healthcare services in emerging economies
- Aging population and rise in age-related diseases in industrialized countries
Medical progress is also fueling growth, resulting in the ongoing development and approval of new biopharmaceuticals and in the improvement or expansion of indications for already existing active pharmaceutical ingredients. Therefore, a growing number of biotech medications are being approved for treatment of rare diseases considered incurable until now, and innovative cell and gene therapies are projected to further drive growth in the biopharma sector.
Sartorius has leading market positions in core technologies and is continuously expanding its portfolio by new, complementary technologies that help our biopharma customers develop and manufacture medications faster and more easily. Our strength in selecting suitable partners or acquisition candidates is based upon our in-depth understanding of applications. We are thoroughly familiar with our customers’ requirements and their entire value-added chains, and particularly understand the interactivity of the systems they use. Our innovation strategy is based on three pillars:
- Integration of innovations through acquisitions
- Alliances with partners
- Own product development
North America and selected countries in Asia are at the focus of our growth strategy.
North America is the world’s largest market for both the development and the manufacture of biopharmaceuticals. Because North America is home to the main competitors for both company divisions, Sartorius has historically lower market shares in this region than in Europe and Asia. Accordingly, the company is striving to gain market share, primarily by strengthening its sales and service capacities.
Our second regional focus is on Asia, especially on China, South Korea and India. These markets have tremendous growth potential due to their increased healthcare spending by private households and governments. In these regions, Sartorius has invested in its sales infrastructure and is planning to expand its production capacities.
Moreover, Sartorius is investing in the digitalization of its processes. In addition, it has substantially expanded its production capacities, above all for filter and bag products.
Guidance for the full year of 2020 raised
Management now expects consolidated sales revenue to increase by 22% to 26% (previously 15% to 19%) and the Group’s underlying EBITDA margin1 to reach around 28.5% (previously about 27.5%). Compared with the previous forecast, a significant part of the additionally expected business is attributable to the current coronavirus pandemic as Sartorius products are used for development and manufacturing of both vaccines and antiviral medications. As projected so far, initial consolidation of Biological Industries is expected to contribute close to 1.5 percentage points and inclusion of the portfolio acquired from Danaher a good five percentage points to sales growth. The ratio of capital expenditures (CAPEX) to sales revenue continues to be forecasted at around 10 percent (previous year: 12.3 percent). Net debt to underlying EBITDA1 is expected to be slightly below 2.75 by year-end 2020 (previously around 2.75; 2019: 2.0).
Outlook for the divisions
For the Bioprocess Solutions Division, management now forecasts sales growth of 26 percent to 30 percent (previously 17 percent to 21 percent). As projected so far, consolidation of Biological Industries is expected to contribute around one percentage point and that of the Danaher portfolio around 3.5 percentage points. The division’s underlying EBITDA margin is projected to be approximately 31 percent (previously around 30 percent), which includes slightly dilutive effects due to consolidation of the acquisitions.
The outlook for Lab Products & Services remains unchanged as well, with sales revenue expected to grow by 10 percent to 14 percent at an underlying EBITDA1 margin of approximately 20 percent. Consolidation of Biological Industries continues to be forecasted to contribute 2.5 percentage points and that of the Danaher portfolio around 10 percentage points to growth. While consolidation of the Danaher portfolio is likely to increase the division’s margin by 1.5 percentage points, consolidation of Biological Industries is anticipated to result in slight dilution of the division’s margin.
Due to the ongoing pandemic, this guidance is subject to greater uncertainty than usual. In particular, these updated projections are based on the assumptions that logistics chains will continue to be stable and production lines remain in operation. All forecasts are based on constant currencies, as in the past years.
Medium-term forecast unchanged
Despite the currently increased demand, Sartorius does not see any need to adjust its medium-term forecast up to 2025 at the moment. The company continues to expect to achieve sales revenue of around 4 billion euros at an underlying EBITDA1 margin of about 28 percent in 2025. This is based on the fact that the medium-term fundamentals of the biopharmaceutical industry have remained unchanged. Therefore, it is currently not foreseeable whether the current additional demand for vaccines and antiviral drugs will lead to a sustained increase in demand in these areas. In addition, signs are becoming apparent that the market approval of some biopharmaceuticals could be delayed due to postponed clinical test series as a result of the pandemic. It is currently not possible to quantify the impact of these various effects concerning monetary amounts or timing.
1 Sartorius publishes alternative performance measures that are not defined by international accounting standards. These are determined with the aim of improving the comparability of business performance over time and within the industry.
- Underlying EBITDA: earnings before interest, taxes, depreciation and amortization and adjusted for extraordinary items
- Order intake: all customer orders contractually concluded during the respective reporting period
- Relevant net profit: profit for the period after non-controlling interest, adjusted for extraordinary items and non-cash amortization, as well as based on the normalized financial result and corresponding tax effects
Sartorius is a globally operating company with two separately listed entities: Sartorius AG and Sartorius Stedim Biotech S.A.
Sartorius AG is the parent company of the Sartorius Group. It is headquartered in Göttingen, Germany, and listed on the Frankfurt Stock Exchange with preference and ordinary shares.
Sartorius AG holds approximately 74% of the share capital and around 85% of the voting rights of Sartorius Stedim Biotech S.A. Sartorius Stedim Biotech S.A is headquartered in Aubagne, France, and listed on the Euronext Paris. It is the parent company of the Group’s bioprocessing business.
In addition, Sartorius AG holds a 100% stake in Sartorius Lab Holding GmbH, which is the parent corporation of the subgroup comprising the Group’s lab Business.
Half-Year Report January to June 2020
July 21, 2020
First-Quarter Results January to March 2020
April 21, 2020