Sartorius Stedim Biotech S.A. | Investor Relations

We focus 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 Stedim Biotech 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 Stedim Biotech invested considerably in building up production capacities in the reporting year. Capital expenditures totaled approximately €430 million in 2022 and were used to expand sites in Germany, France, Puerto Rico, the USA, South Korea, and China, among other countries.

North America and Asia are the key focal areas of the regional growth strategy. The USA is the world’s largest market for bioprocess equipment. Yet because it is home to the main competitors, Sartorius Stedim Biotech formerly had lower market share in this region than in Europe and Asia. By systematically strengthening its sales and service capacities, Sartorius Stedim Biotech has gained market share in the USA in recent years.

In Asia, one focus is on expanding production capacity in China, particularly for the Chinese market, which offers significant growth potential due to rising private and government health-care spending and the rapid establishment of regional biopharmaceutical plants. In South Korea, which offers excellent growth prospects with its dynamically expanding biopharma market, Sartorius Stedim Biotech started initial work to build a new production facility at the beginning of 2023.

Repeat business with sterile single-use products accounts for around three-quarters of the company’s sales revenue. These offer customers cost advantages, flexibility, and less resource usage, and thus a better ecological footprint compared with conventional processes employing reusable stainless-steel components.

The high share of recurring revenues is also bolstered by the strict regulatory requirements on the part of the customers. Because health authorities validate production processes as an integral part of an application for approval of a new medical drug, the components initially validated can be replaced only at considerable expense once they have been approved.

Beyond this, the company’s broad and stable customer base that is primarily addressed directly through a specialized sales force also contributes to this favorable risk profile.

The bioprocess technology market is characterized by relatively high entry barriers arising in part from the biopharmaceutical industry’s strong degree of regulation and its technological complexity.

Acquisitions that are complementary to or extend the company’s strengths appropriately have been and will remain part of our portfolio strategy. Due to high innovation dynamics, the company considers further additions to be possible on an ongoing basis across the entire breadth of the product portfolio.

Acquisition Criteria

• Complementarity of technologies to our existing portfolio
• Strong market positioning, for example, through innovative products with unique selling propositions
• Integration capability
• Appropriate valuation
• Growth and profitability profile

For many years, we have firmly embedded sustainability at many levels in our business. To us, it means operating responsibly and nurturing long term relationships – with respect to customers, employees, investors, business partners and society as a whole.

Based on the slight demand recovery since the end of the third quarter of 2023 and the market outlook forecast by industry observers, Sartorius Stedim Biotech expects profitable growth for 2024 and beyond. However, as inventory optimization measures of customers have not yet been fully completed the company projects business momentum to increase only gradually over the course of the year leading to a moderate first half of 2024. In addition, business performance could also be affected by increasing geopolitical tensions going forward.

Against this backdrop of still somewhat unstable market trends and therefore limited visibility, management forecasts an increase in Group sales revenue in the mid to high single-digit percentage range, including a contribution of acquired businesses of around 2 percentage points. In terms of profitability, management expects the underlying EBITDA margin to rise to more than 30 percent compared to the previous year’s figure of 28.3 percent. The above-average profitability of the Polyplus business will have a slightly positive effect on the margin development. The capex ratio is projected to be around 13 percent, below the prior-year figure of 17.1 percent. Excluding potential acquisitions the ratio of net debt to underlying EBITDA is expected to be slightly below  2.5.

Forecasts have been prepared based on historical information and are consistent with accounting policies. All forecast figures are based on constant currencies, as in the past years. Management points out that the dynamics and volatilities in the industry have increased significantly in recent years. In addition, uncertainties due to the changed geopolitical situation, such as the emerging decoupling tendencies of various countries, are playing a greater role. This results in higher uncertainty when forecasting business figures.

Sartorius Stedim Biotech intends to continue its profitable growth course in the long term and expects to grow faster than the market. According to the new medium-term targets, the Group plans to achieve average annual growth in the low- to mid-teens percentage range over the five-year period to 2028 of which acquisitions are anticipated to contribute around a fifth. The underlying EBITDA margin is also expected to increase and reach above 35 percent in 2028. The margin target includes expenses of around 1 percent of Group sales revenue for measures to reduce the company’s CO2 emission intensity.

“Our goals remain ambitious as we anticipate ever-increasing demand for biopharmaceuticals and vaccines due to a growing and aging population, improved access to medicines in emerging markets, as well as rapidly expanding markets for biosimilars and cell and gene therapies. At the same time, there is a need for continuous innovation, not only to help bring the promises of new therapies to life, but to also support our customers’ sustainability efforts. With our broad portfolio we see ourselves excellently positioned to support our customers in their endeavors and to continue to outgrow the market,“ commented Fáber.

Forecasts have been prepared based on historical information and are consistent with accounting policies. All forecast figures are based on constant currencies, as in the past years. Management points out that the dynamics and volatilities in the industry have increased significantly in recent years. In addition, uncertainties due to the changed geopolitical situation, such as the emerging decoupling tendencies of various countries, are playing a greater role. This results in higher uncertainty when forecasting business figures

Sartorius Stedim Biotech is a globally operating company with subsidiaries in more than 25 countries and more than 10,600 employees worldwide. The parent company of the Sartorius Stedim Biotech Group is Sartorius Stedim Biotech S.A., headquartered in Aubagne, France.

Sartorius Stedim Biotech S.A. is listed on the Euronext stock exchange in Paris. Approximately 72% of the share capital and around 83% of the voting rights of Sartorius Stedim Biotech S.A. are held by Sartorius AG.

Sartorius AG is an international leading partner for life science research and the biopharmaceutical industry and is headquartered in Göttingen, Germany. It is listed on the German Stock Exchange and operates two divisions: the bioprocess business as a subgroup under its parent corporation Sartorius Stedim Biotech S.A., and the laboratory business as a further subgroup.

Below you will find the legal structure of Sartorius AG, the parent company of Sartorius Stedim Biotech S.A.