First-quarter results of Sartorius Stedim Biotech
Aubagne, April 21, 2021
- Sales revenue up 61.1 percent to 655 million euros; underlying EBITDA margin 35.4 percent
- A good 23 percentage points of growth contributed by the coronavirus pandemic
- Accelerated expansion of production capacities in all regions on track as planned
Sartorius Stedim Biotech, a leading partner of the biopharma industry, had an exceptionally strong start to fiscal 2021 and grew substantially in order intake1, sales revenue and earnings. This was fueled by strong fundamental growth, additional business from vaccine manufacturers, and acquisitions.
“Many of our products play an essential role in helping to overcome the pandemic. In addition to a very positive general business performance in the first quarter, we accordingly experienced strong demand for our products and technologies used in the production of vaccines and achieved a sharp increase in sales. The substantial rise in the company’s profit margin was also supported by underproportionate development of costs, such as the low number of business trips as well as fewer new hires in non-production areas. These effects are expected to decrease as the year progresses. In many areas, we are working at the limits of our capacity and are therefore continuing to move ahead with accelerating the expansion of our production facilities and are hiring additional employees,” said Joachim Kreuzburg, Chairman of the Board of Directors and CEO. In the first three months of the current year, Sartorius Stedim Biotech has already created some 600 new jobs; the Group now employs around 8,200 people in total.
Group sales revenue surged by 61.1 percent to around 655 million euros in constant currencies (reported: +55.2 percent), benefiting from the ramp-up in coronavirus vaccine production by many manufacturers. The comparative base for these high growth figures, though, is the relatively low prior-year quarter, which did not yet include any pandemic‑related business or an acquisition that was consolidated as of May 2020. In the first quarter, acquisitions2 contributed about 8 percentage points to growth while the contribution attributable to businesses related to the coronavirus pandemic was a good 23 percentage points. Order intake1 grew even more dynamically than sales revenue, almost doubling to 1,004 million euros (in constant currencies: +95.9 percent of which a good 37 percentage points were related to the coronavirus; reported: +87.8 percent). Part of this high order intake is due to the changed ordering patterns of some customers who in the current situation have been placing their orders further in advance than usual. Underlying EBITDA1 climbed to 232 million euros, up from 127 million euros a year earlier (+82.8 percent). The corresponding margin rose to 35.4 percent (Q1 2020: 30.0 percent). Economies of scale as well as the pandemic-related underproportionate cost development contributed to this rise in profitability. Relevant net profit1 for the Group soared by 87.4 percent to 151 million euros; underlying earnings per share1 were 1.64 euros (Q1 2020: 0.88 euros).
Business development in the regions
Sartorius Stedim Biotech increased its revenues very significantly in all three geographies. Sales in the EMEA3 region surged by 70.8 percent to 284 million euros, particularly benefitting from additional demand from coronavirus vaccine manufacturers and acquisitions. Revenue in the Asia | Pacific region totaled 167 million euros, a gain of 68.5 percent. Sales in the Americas amounted to 204 million euros, equating to 45.2 percent growth. (All figures in sales revenue growth in constant currencies)
Key financial indicators
The Sartorius Stedim Biotech Group has a very sound balance sheet and financial key figures. Its equity ratio stood at 47.0 percent at the end of the quarter (December 31, 2020: 48.3 percent). Net debt to underlying EBITDA1 was 0.6 on the reporting date, relative to 0.8 at year-end 2020. The ratio of capital expenditures (CAPEX)1 to sales revenue increased as expected to 9.5 percent due to the Group’s extensive investment program (Q1 2020: 6.0 percent).
Forecast raised for the full year of 2021 confirmed
Management confirmed its growth forecast for fiscal 2021, which had been raised in mid-March based on very strong order intake and high demand anticipated to continue in the further course of the year. Accordingly, management projects consolidated sales growth of around 38 percent (of which 5.5 percentage points are expected to be contributed by acquisitions and about 18 percentage points by business related to the coronavirus pandemic). Regarding profitability, an underlying EBITDA1 margin of about 33 percent is forecasted for the Group. Management points out that in the currently very dynamic and volatile situation, forecasts are subject to higher‑than‑average uncertainties.
The CAPEX1 ratio for the Group is projected at about 14 percent. Sartorius Stedim Biotech’s investment program especially covers the partly extended and accelerated expansion of production capacities, primarily at sites in Germany, Puerto Rico, China, and South Korea. Net debt to underlying EBITDA1 is expected to be about 0.6 at year-end. Possible acquisitions are not included in these projections.
Mid-range targets updated in January 2021 remain unchanged and assume that by 2025, consolidated sales revenue will increase to around 4 billion euros at an underlying EBITDA margin of around 33 percent.
All forecasts are based on constant currencies, as in the past years. In addition, the company assumes that the global economy will increasingly recover as the current year progresses and that supply chains will remain stable.
Financial indicators of the comparative period partly restated due to the finalized purchase price allocation of Biological Industries
1 Sartorius Stedim Biotech 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 and booked during the respective reporting period
- Relevant / underlying net profit: profit for the period after non-controlling interest; adjusted for extraordinary items and non-cash amortization, as well as based on a normalized financial result and a normalized tax rate
- Underlying earnings per share: relevant / underlying net profit for the period divided by the number of shares outstanding
- 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
2 Acquisitions of selected life science businesses from Danaher Corporation as well as of BIA Separations and WaterSep BioSeparations
3 EMEA = Europe, Middle East, Africa
This press release contains forward-looking statements about the future development of the Sartorius Stedim Biotech Group. Forward-looking statements are subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied by such statements. Sartorius Stedim Biotech assumes no liability for updating such statements in light of new information or future events.
This is a translation of the original French-language press release. Sartorius Stedim Biotech shall not assume any liability for the correctness of this translation. The original French press release is the legally binding version.