Sat. Jan 18th, 2020

News Recap: Sartorius

34 min read

Sartorius, a leading international partner of biopharmaceutical research and the industry, performed dynamically in the third quarter as well, achieving double-digit growth rates in sales revenue, order intake and earnings in the first nine months.

The Group raised its sales revenue in the first nine months by 15.5 percent in constant currencies (stated: +17.5 percent) to 1,355.8M euros; order intake grew 16.1 percent (stated: +18.1 percent) to 1,435.0M euros.1)

Underlying EBITDA1) rose over proportionately relative to sales by 22.7 percent to 361.1M euros. The respective margin was 26.6 percent after 25.5 percent in the year-earlier period, with slightly less than one percentage point of this increase attributable, as expected, to the IFRS 16 Standard to be applied for the first time in 2019.2) Relevant net profit1) for the first nine months of 2019 totaled 153.2M euros, which equates to a year-over-year increase of 21.2 percent. This yielded earnings per ordinary share of 2.23 euros (9M 2K18: 1.84 euros) and earnings per preference share of 2.24 euros (9M 2K18: 1.85 euros).1)

Business development in the regions

In the reporting period, Sartorius grew in all regions, with Asia | Pacific showing the highest dynamics, recording a sales gain of 21.50 percent to 348.10M euros. The Americas region achieved a 14.70 percent increase in sales revenue to 461.70M euros against high prior-year comparables. EMEA (Europe, Middle East, and Africa), which continues to account for the leading share of Group sales, also developed positively, increasing its revenue by 12.70 percent to 546.10M euros.

(All growth rates for the regions are in constant currencies.)

Key financial indicators

The Sartorius Group has a very sound balance sheet and financial base. Its ratio of net debt to underlying EBITDA1) was 2.10 relative to 2.40 at year-end 2K18. Sartorius’ equity ratio raised slightly from 38.50 percent as of December 31, 2K18, to 38.7 percent because of the company’s strong earnings position, despite the dampening effects resulting from a change in an accounting rule.2) The ratio of capital expenditures (CAPEX) to sales revenue1) further reduced, as projected, to 12.50 percent (9M 2K18: 13.30 percent) after several large expansion projects had been accomplished.

Business development of the divisions

The Bioprocess Solutions Division that offers a wide array of innovative technologies for the manufacture of biopharmaceuticals sustained its high momentum seen in the first half, increasing its sales by 19.40 percent (stated: +21.60 percent) to 1,025.00M euros. This gain was fueled by ongoing strong demand across all product categories, particularly in project business in Asia. Order intake for Bioprocess Solutions rose to 1,100.00M euros, which also equates to a substantial increase of 19.90 percent (stated: +22.00 percent) against strong comparables.

The division’s underlying EBITDA was up 25.70 percent from the previous year’s level, attaining 300.60M euros. Its earnings margin rose from 28.40 percent to 29.30 percent because of economies of scale and as a result of the change in an accounting rule.2)

The Lab Products & Services Division that specializes in technologies and products for laboratories in the pharma sector and in life science research, in addition to in a few other segments, achieved sales growth of 4.90 percent (stated: +6.50 percent) to 330.80M euros in a partly challenging economic environment. Order intake for the division was robust, up 5.30 percent (stated: +6.90 percent) to 335.00M euros.

The division’s underlying EBITDA rose year over year by 9.90 percent to 60.50M euros. The corresponding margin was 18.30 percent, up from the previous year’s level of 17.70 percent, and was positively affected by the change in an accounting rule.2)

(All growth rates for sales revenue and order intake are given in constant currencies.)

Full-year guidance for 2019 specified

Based on the Sartorius Group’s business performance in the first nine months and ongoing high demand for Bioprocess Solutions, administration specifies its financial guidance for the full year of 2019 as follows:

The Group’s sales revenue growth in constant currencies for the full year is now expected to reach the upper end of the bandwidth of about 10.00 percent to 14.00 percent. Regarding profitability, administration continues to forecast that the company’s underlying EBITDA margin will rise to slightly more than 27.00 percent, with the operating gain projected to amount to about half a percentage point and the remaining increase expected to result from changes in an accounting rule.2)

The ratio of capital expenditures (CAPEX) to sales revenue remains projected to be around 12.00 percent, down from the year-earlier figure of 15.20 percent.1)

For the Bioprocess Solutions Division, administration now anticipates that the upper end of its sales guidance of about 13.00 percent to 17.00 percent will be reached. Administration’s forecast for the division’s underlying EBITDA margin remains unchanged, which is projected to increase to slightly more than 29.5 percent in contrast with the prior-year figure of 28.60 percent. The operating gain of this increase is expected to account for around half a percentage point.2)

For the Lab Products & Services Division, Sartorius continues to anticipate that because of the softer economic environment, the lower range of the division’s sales forecast of about 5.00 percent to 9.00 percent will be reached. The division’s underlying EBITDA margin is still expected to be slightly below 20.00 percent, with the operating increase accounting for about half a percentage point.2)


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