Sartorius with first-quarter uptick in sales and earnings

11 May 2021 | Tuesday | News

Order intake up 89.2 percent; sales revenue up 61.6 percent;underlying EBITDA margin 33.3 percent

  • 20 percentage points of sales growth influenced by the coronavirus pandemic
  • Accelerated expansion of production capacities in all regions on track as planned

The life science group Sartorius had an exceptionally strong start in fiscal 2021 and grew substantially in order intake1, sales revenue and earnings. Businesses related to the coronavirus pandemic additionally fueled this growth.

“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 development and production of vaccines as well as of coronavirus tests 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 Executive Board Chairman and CEO Joachim Kreuzburg. In the first three months of the current year, Sartorius has already created some 640 new jobs; the Group now employs around 11,300 people in total.

Business development of the Group

Group sales revenue surged by 61.6 percent to around 791 million euros in constant currencies (reported: +55.1 percent). The comparative base for these high growth figures, though, is the relatively low prior-year quarter, which was impacted in the Lab Products & Services Division by the lockdown in China due to the pandemic and overall did not yet include an acquisition that was consolidated as of May 2020. In the first quarter, acquisitions2 contributed overall about 12 percentage points to growth while the contribution attributable to businesses related to the coronavirus pandemic was about 20 percentage points. Order intake1 grew even more dynamically than sales revenue, rising to 1,139 million euros (in constant currencies: +89.2 percent, of which a good 30 percentage points were related to the coronavirus; reported: +80.9 percent). Underlying EBITDA1 climbed, due to economies of scale and underproportionate cost development, to 264 million euros, up from 138 million euros a year earlier (+91.2 percent). The corresponding margin rose to 33.3 percent (Q1 2020: 27.0 percent). Relevant net profit1 for the Group soared by 111.8 percent to 122 million euros; earnings per ordinary share were 1.77 euros (Q1 2020: 0.83 euros); earnings per preference share, 1.78 euros (Q1 2020: 0.84 euros).

Business development in the regions

Sartorius increased its revenues very significantly in all three geographies. Sales in the Asia | Pacific region surged by 71.1 percent to 204 million euros. Revenue in the EMEA3 region totaled 334 million euros, a gain of 63.1 percent. Sales in the Americas amounted to 253 million euros, equating to 53.4 percent growth. (All figures in sales revenue growth in constant currencies)

Key financial indicators

The Sartorius Group has a very sound balance sheet and financial key figures. Its equity ratio stood at 29.7 percent at the end of the quarter (December 31, 2020: 29.9 percent). Net debt to underlying EBITDA1 was 2.2 on the reporting date, relative to 2.6 at year-end 2020. The ratio of capital expenditures (CAPEX) to sales revenue increased as expected to 10.2 percent due to the Group’s extensive investment program (Q1 2020: 8.8 percent).

Business development of the divisions

The Bioprocess Solutions Division that offers a wide array of innovative technologies for manufacturing biopharmaceuticals expanded in the reporting year at an exceptionally dynamic rate by 61.4 percent in constant currencies to 611 million euros (reported: +54.9 percent), benefiting from the ramp-up in coronavirus vaccine production by many manufacturers. The latter contributed a good 23 percentage points to this increase. Non-organic growth contributed by the acquisitions closed in the prior year was around 9 percentage points. The division’s order intake1 increased even more strongly than its sales revenue, soaring 97.1 percent in constant currencies to 953 million euros (reported: +88.3 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 of the Bioprocess Solutions Division was 217 million euros, up 81.1 percent, also very significantly above the prior-year figure of 120 million euros. The division’s respective margin climbed year over year from 30.4 percent to 35.6 percent. Economies of scale as well as a cost base that increased only slowly due to the pandemic contributed to this rise in profitability.

The Lab Products & Services Division specializing in equipment and technologies for life science research and pharmaceutical laboratories grew just as strongly as the Bioprocess Solutions Division in the first quarter, also against weaker prior-year comparables as described above, by 62.3 percent in constant currencies to 180 million euros (reported: +56.0 percent). While non-organic growth accounted for about 23 percentage points, organic growth was a good 39 percentage points of which around 9 percentage points were impacted by high demand for components used in coronavirus test kits. Order intake1 rose sharply by 56.8 percent (reported: +50.5 percent) to 186 million euros.

Underlying EBITDA of the Lab Products & Services Division jumped by 157.9 percent to 46 million euros (Q1 2020: 18 million euros); the division’s respective margin reached 25.7 percent (Q1 2020: 15.6 percent). This very substantial margin expansion was based on economies of scale, positive development of the product mix and cost development that was underproportionate due to the pandemic.

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