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 | Q1 2022 Results
- Figures for the first quarter of 2022: Sales revenue up 25.4 percent in constant currencies, underlying EBITDA up 32.4 percent, underlying EBITDA margin 34.1 percent
- Healthy demand situation; normalization of pandemic-related effects and development of order intake, as expected; extensive investment program on schedule
- Positioning of both divisions strengthened by one acquisition each
- Outlook for 2022 confirmed: Sales revenue expected to rise by 15 to 19 percent and underlying EBITDA margin projected to be about 34 percent
- Global political and economic uncertainties substantially increased
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.
In 2018, management presented its strategy and long-term targets up to 2025. The consolidated sales revenue target was again significantly raised at the beginning of 2021 and so was the profitability target at the start of 2022. Accordingly, Sartorius plans to increase consolidated sales revenue to about €5 billion by 2025 and to reach an underlying EBITDA margin of around 34% (previously around 32%). The company intends to achieve this sales revenue increase in both divisions primarily through organic growth and additionally by acquisitions. For 2025, company management projects sales revenue of about €3.8 billion with an underlying EBITDA margin of around 36% (previously around 34%) for the Bioprocess Solutions Division; for the same period, sales revenue of around €1.2 billion and an underlying EBITDA margin at about 28% (previously about 25%) are targeted for the Lab Products & Services Division.
The mid-term targets for 2025 still do not include any pandemic-related business as management currently considers such estimates to be too uncertain.
The margin targets already include expenses for measures to reduce the company’s CO2 emission intensity. Sartorius aims to reduce its CO2 emission intensity by around 10% annually on average until 2030, spending over time around 1% of its sales revenue annually for corresponding measures. Moreover, these projections assume that, on average, the margins of future acquisitions will initially be somewhat below the levels of the Group’s existing businesses and, after integration, at levels comparable to these, and that there will be no relevant changes in the key currency exchange rates.
Management points out that the dynamics and volatilities in the life science and biopharma sectors have increased over the past years and the coronavirus pandemic has further amplified these trends so that forecasts currently show even higher uncertainties than usual.
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.
- Order intake: all customer orders contractually concluded and booked during the respective reporting period
- Relevant / underlying EBITDA: earnings before interest, taxes, depreciation and amortization and adjusted for extraordinary items
- 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 the normalized tax rate
- Ratio of net debt to underlying EBITDA: quotient of net debt and underlying EBITDA over the past 12 months, including the pro forma amount contributed by acquisitions for this period
- CAPEX ratio: investment payments in relation to sales revenue for the same period
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
Due to exceptionally strong organic growth, Sartorius invested considerably in building up production capacities in the reporting year, and therefore moved already planned expansion projects ahead of schedule as well as accelerated and extended these. In 2021, capital expenditures totaled about €400 million and were used for planning or expanding sites in Germany, Puerto Rico, China and South Korea, among others.
North America and Asia are the key focal areas of our regional growth strategy. The USA is the world's largest market for bioprocess equipment and laboratory products. Yet because it is home to the main competitors for both company divisions, Sartorius formerly had lower market share in this region than in Europe and Asia. Over the past years, we have gained market share in the USA by strengthening our sales and service capacities and see further development potential.
A further strategic focus is on China. This market has sizable growth potential owing to rising private and public healthcare expenditures and the rapid development of regional biopharmaceutical plants. To benefit from the dynamic development of this market, Sartorius has already been investing heavily in expanding its production capacities. This especially applies to South Korea that offers strong growth prospects in this region, given its dynamically growing biopharma market. For that reason, Sartorius planned a new production facility on which construction is scheduled to begin in the current fiscal year.
Sartorius expects dynamic performance in 2022 as well, with consolidated sales revenue projected to increase by 15% to 19%. The acquisitions closed or agreed upon in 2021 are forecasted to contribute about 2 percentage points of non-organic growth to this increase. Following the jump in profitability in 2021, the company expects its underlying EBITDA margin to reach a figure at the high prior‑year level of about 34%.
Regarding pandemic-related business, company management projects sales revenue for 2022 at the previous year’s level of around €500 million.
For the Bioprocess Solutions Division, management forecasts sales revenue growth of about 17% to 21% and an underlying EBITDA margin of around 36%. Lab Products & Services is projected to achieve revenue growth of about 6% to 10% and an underlying EBITDA margin of about 26%. For Bioprocess Solutions, Sartorius expects that acquisitions will contribute non-organic growth of about 2 percentage points; for Lab Products & Services, about 1 percentage point.
The margin targets include expenses for measures to reduce the company’s CO2 emission intensity; these expenses will account for about 0.5% of consolidated sales revenue in 2022.
Against the backdrop of strong organic growth, Sartorius is currently expanding its capacities considerably in all regions. Accordingly, capital expenditures in relation to sales revenue, the CAPEX ratio, is estimated to be about 14%.
The ratio of net debt to underlying EBITDA is expected to be about 1.1 at year-end. Possible further acquisitions are not included in these projections.
All forecasted figures are based on constant currencies, as in the past years. In addition, this guidance assumes that the global economy as well as supply chains will remain stable.
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.
First-Quarter Results January to March 2022
April 21, 2022