Sartorius Raises Guidance Following Strong First Half

Earnings rise by one-fourth

26-Jul-2012

Sartorius successfully closed the first six months of 2012, with substantial gains in order intake, sales revenue and earnings. The Bioprocess Solutions Division that primarily specializes in single-use products for pharmaceutical drug manufacture performed especially well. Furthermore, initial consolidation of the Biohit Liquid Handling business considerably boosted growth for the Laboratory Products & Services Division. Based on the company’s strong first-half results, management lifted its guidance for the full year of 2012. Accordingly, Sartorius now expects its sales to grow by about 11% in constant currencies (former guidance: +10%). In addition, provided that currency exchange rates remain favorable as in the first half, adjusted earnings (operating EBITA) are projected to increase by around 15% (former guidance: +10%).

Dynamic Growth of Sales Revenue and Order Intake

In the first half of 2012, Sartorius increased its sales revenue year over year by 19.3%, or 15.6% in constant currencies, to 422.1 million euros. The Biohit Liquid Handling business acquired at the end of 2011 added approximately six percentage points to this gain. In the same period, order intake rose 15.3%, or 11.7% in constant currencies, to 434.2 million euros.

All three Group divisions fueled this dynamic business performance. Accounting for more than half of consolidated revenue, the Bioprocess Solutions Division continued on the growth track of the past quarters: it posted solid organic sales growth of 237.4 million euros, up 21.2%, or 17.3% in constant currencies. Order intake for this division also rose significantly by 12.2%, or 8.5% in constant currencies, to 243.4 million euros. Demand was strong, especially for single-use products for the manufacture of biopharmaceuticals, such as specialty filters and aseptic bags and tanks.
The Lab Products & Services Division, which provides premium laboratory instruments and consumables, boosted its first-half sales revenue by 20.2%, or 16.1% in constant currencies, to 133.0 million euros, seeing an uptick in order intake of 29.0%, or 24.7% in constant currencies, to 139.7 million euros. Initial consolidation of the Biohit Liquid Handling business acquired at the end of 2011 contributed around 18 percentage points, based on constant currencies, to growth for this division. Sales revenue for the company’s smallest division, Industrial Weighing, improved, also when seen against the backdrop of a moderate year-earlier revenue base, by 9.5%, or 7.3% in constant currencies, to 51.8 million euros, while its order intake at 51.1 million euros was nearly at the previous year’s level of 51.4 million (currency-adjusted:  2.6%).

Regional analysis shows that North America posted the highest growth, up 30.2%. In Asia, business expanded by 14.9%; Europe saw gains of 10.8% (all regional figures in constant currencies).

Significant Increase in Earnings

Based on its dynamic sales performance, Sartorius further increased its first-half earnings year over year. The Group's operating earnings surged by around one-fourth (+24.6%) from 51.1 million euros to 63.6 million euros; the respective margin for the Group climbed from 14.4% to 15.1%. In the same period, the Bioprocess Solutions Division boosted its earnings 28.7% to 42.9 million euros; its margin rose from 17.0% to 18.1%. The Lab Division lifted its operating earnings by nearly 9% to 16.5 million euros from 15.2 million euros, with a margin of 12.4%, relative to 13.7% a year earlier. Following a comparatively moderate first half in 2011 (2.5 million euros), the Industrial Weighing Division achieved operating earnings of
4.2 million euros. Accordingly, its operating margin improved significantly from 5.4% to 8.1%.

Group EBITA rose year on year by 27.3% to 56.5 million euros, up from 44.4 million euros. This figure includes extraordinary items of -7.1 million euros (1st half 2011: -6.7 million euros), which were essentially related to integration of the Biohit Liquid Handling business, preparations for the transfer of single-use bag manufacture from the USA to Puerto Rico and to various cross-divisional projects. The corresponding EBITA margin was at 13.4%, compared with 12.5% a year ago. The Group’s relevant net profit soared 24.5% from 23.7 million euros a year earlier to 29.5 million euros. The Group’s respective earnings per share are at
1.73 euros, up from 1.39 euros in the previous year.

Full-year Guidance Raised

Based on the company’s strong business performance in the first half, management raised its sales and earnings guidance for the full year of 2012. Sartorius now anticipates that full-year sales revenue will grow by about 11% (former guidance: about 10%) in constant currencies. Around five percentage points of this gain are forecast to be generated by the initial consolidation of the Biohit Liquid Handling business. In addition, provided that currency exchange rates remain favorable as in the first half of 2012, management projects that operating EBITA will increase by around 15% (former guidance: around 10%).

In view of the three divisions, Sartorius anticipates that currency-adjusted sales revenue for Bioprocess Solutions will grow approximately 10% (former guidance: 6% to 8%). Operating EBITA is expected to increase by around 15% (former guidance: 6% to 8%) compared to the previous year.

For the Lab Products & Services Division, management's forecast has remained unchanged: sales revenue is projected to expand by approximately 16% to 20% in constant currencies, primarily due to initial consolidation of the Biohit Liquid Handling business. The division's operating EBITA is forecasted to increase in fiscal 2012 by around 20% to 24% (former guidance: 16% to 20%).

The growth and earnings forecast for the Industrial Weighing Division is confirmed: currency-adjusted sales revenue and operating EBITA are expected to show stable development relative to the previous year.

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