Sartorius grows

Expansion of Bioprocess Solutions stronger than expected yet again

21-Oct-2015 - Germany

Sartorius closed the first nine months of 2015 with significant double-digit gains in order intake, sales revenue and earnings. Group order intake rose 19.9%, excluding currency effects, to 856.6 million euros; the reported figure surged 30.2%. Its sales revenue climbed 18.5% in constant currencies to 830.3 million euros (reported: 28.6%). Up 46.9%, operating profit1 grew even more strongly than sales revenue; the Group's respective underlying EBITDA margin was 23.3% after nine months. Based on the company’s excellent nine-month results, management raised its forecast again for the full year of 2015.

"The very strong growth of Bioprocess Solutions, our largest division, continued, which was due on the one hand to the excellent and better-than-expected market environment and, on the other hand, to our ongoing gains in market share," commented Group CEO Dr. Joachim Kreuzburg on the company's nine-month results. "Our Lab Products & Services Division has also been recording solid growth. For the final quarter, we continue to expect high business performance. In our full-year forecast, we are now projecting a gain of approximately 15% in Group sales and a consolidated underlying EBITDA margin of around 23% in constant currencies."

Business Development of the Divisions and Regions

In view of the divisions, the Bioprocess Solutions Division that supplies products for the manufacture of biopharmaceuticals again proved to be the growth engine. The division's order intake rose sharply by 26.5% in constant currencies (reported: 38.4%) to 637.2 million euros, while its sales revenue increased 24.2% (reported: 35.9%) to 604.3 million euros. All product segments contributed to the division's strong growth; demand for single-use product solutions was especially high. BioOutsource Ltd. and Cellca GmbH acquired in the reporting year also performed very well and contributed around one percentage point in constant currencies to the division's sales expansion.

For the Lab Products & Services Division, which supplies premium laboratory instruments and lab consumables, order intake in constant currencies rose 4.6% (reported: 11.0%) to 219.5 million euros. Its sales revenue was up 6.0% to 226.0 million euros (reported: 12.5%).

All regions contributed significant double-digit gains in sales revenue to the dynamic development of the Group. Business in the Americas increased at the highest rates, with an uptick in sales of 24.2%. Sales revenue with customers in the EMEA2 region rose 16.8%, and in the Asia | Pacific region, 14.7%. (All regional figures in constant currencies)

Substantial Gain in Profitability

The Sartorius Group increased its underlying EBITDA overproportionately relative to sales revenue, by 46.9% to 193.8 million euros. One major reason for this was economies of scale; the favorable currency environment additionally had a positive effect. The Group's corresponding margin was 23.3%, up from 20.4% a year ago. Earnings contributed by the Bioprocess Solutions Division climbed to 158.7 million euros; its respective margin rose year over year from 23.2% to 26.3%. The Lab Products & Sales Division also continued to improve its profitability, reporting an underlying EBITDA of 35.1 million euros following on 29.0 million euros in the previous year. This equates to a margin of 15.5%, up from 14.4% in the respective prior-year period.

Group EBIT, including extraordinary items of -6.7 million euros (9M 2014: -4.0 million euros), depreciation and amortization, was 146.6 million euros, reflecting a gain of 62.6%. The corresponding earnings margin rose from 14.0% in the year-earlier period to 17.7%. Relevant net profit3 for the Group jumped from 46.6 million euros to 78.9 million euros. Consolidated earnings per ordinary share were 4.62 euros (9M 2014: 2.73 euros), and per preference share, 4.64 euros (9M 2014: 2.75 euros).

Forecast Raised

Based on the company's excellent performance in the first nine months, management raised its sales and earnings forecast for the full year of 2015. For the Group, the company now expects sales to grow approx. 15% in constant currencies (previous guidance: approx. 12%). This sales figure includes around one percentage point projected to be contributed by the acquisitions of BioOutsource and Cellca. The company's underlying EBITDA margin is forecasted to reach around 23% in constant currencies; previously, around 22.5% was anticipated. Sartorius continues to plan on investing around 10% of its sales revenue.

In view of the two divisions, Sartorius anticipates that currency-adjusted sales revenue for Bioprocess Solutions will grow approx. 20% (previous guidance: approx.15%). Of this percentage, around 1.5 percentage points are forecast to be contributed by the two acquisitions. The underlying EBITDA margin of Bioprocess Solutions is projected to attain around 26% (previous guidance: around 25.5%).

For the Lab Products & Services Division, the company continues to forecast approx. 5% sales growth and an underlying EBITDA margin of around 15.5%.

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