Sartorius Stedim Biotech publishes unaudited results for the first nine months of 2024 – Biotech Investments

Sartorius Stedim Biotech publishes unaudited results for the first nine months of 2024
 

• Sales revenue of 2,029 million euros, organic decline of 3.0 percent in constant currencies¹ (reported: – 1.9 percent)

• Underlying EBITDA¹ at 565 million euros, resulting margin at 27.8 percent; net profit¹ of 129 million euros

• Significant growth in order intake for consumables overcompensates for low equipment investments by customers
• Advanced Therapy Solutions business well on track with above-average growth

• Outlook for 2024 confirmed

Sartorius Stedim Biotech, a leading partner of the biopharmaceutical industry, closed the first nine months of the fiscal year as expected, with a positive trend in demand and a robust underlying profit margin. The company confirms its full year outlook.

“Over the past months, we have seen a stabilizing business environment: Most customers are about to complete their destocking, leading to an increase in order intake on our side, especially for consumables. We are also encouraged by the above-average performance of our portfolio for advanced therapies. At the same time, many customers are still cautious about investing, which is impacting our equipment business. In terms of profitability, we see a very robust profit margin and expect the highest contribution from our ongoing efficiency program in the fourth quarter,” said René Fáber, CEO of Sartorius Stedim Biotech. “Based on the development of the first nine months, we are confident that we will meet our full-year guidance for 2024 and are optimistic for the future. With the high number of drug approvals and the increasing number of drug candidates entering our customers’ pipelines, Sartorius Stedim Biotech remains well-positioned for long-term growth, offering key solutions to support new therapies for patients worldwide.”

Business development¹
Sartorius Stedim Biotech offers a wide range of innovative technologies for the manufacture of biopharmaceuticals such as monoclonal antibodies, vaccines, and cell and gene therapeutics. In the first nine months of the fiscal year, the company recorded sales revenue of 2,029 million euros, which corresponds to a slight decline of 1.3 percent in constant currencies (reported: – 1.9 percent; organic: – 3.0 percent in constant currencies). Sales revenue includes a contribution of 2.5 percent from acquisitions². As most customers are well progressing with their destocking programs, order intake¹ increased by 8.5 percent in constant currencies (reported: +7.7 percent) to 1,895 million euros, with growing demand in the consumables business more than compensating for the still muted equipment business.

Regionally, business performance varied: While in the Americas, sales revenue declined by 9.7 percent against strong prior year comparables and due to the soft equipment business, sales revenue grew by 5.9 percent in EMEA^3. and also picked up in Asia Pacific by 1.3 percent, despite a still weak Chinese market.

Underlying EBITDA was down by 4.9 percent to 565 million euros in the first nine months of 2024, mainly due to volume and product mix effects. The respective margin reached a robust 27.8 percent after 28.7 percent in the same period of 2023. Underlying net profit¹ was 238 million euros, compared to 320 million euros in the first nine months of 2023. Net profit amounted to 129 million euros after 279 million euros in the prior-year period. Underlying earnings per share stood at 2.46 euros (PY: 3.47 euros) and earnings per share at 1.34 euros (PY: 3.02 euros).

As of September 30, 2024, Sartorius Stedim Biotech employed 10,082 people worldwide, after 10,849 in September 2023 (December 31, 2023: 10,662 people). The reduction resulted primarily from the expiry of fixed-term employment contracts and regular attrition.

Key financial indicators
Sartorius Stedim Biotech’s key financial indicators remain at a highly robust level. Equity was 3,939 million euros as of September 30, 2024, while the equity ratio¹ was 49.3 percent (December 31, 2023: 2,674 million euros and 34,6 percent), mainly as a result of the equity measures successfully completed at the beginning of February 2024.

Net operating cash flow increased significantly to 530 million euros compared to 410 million euros in the prior-year period, particularly due to the reduction in working capital. Investments in research and the company’s global production infrastructure amounted to 260 million euros (PY: 371 million euros). The ratio of capital expenditures (capex) to sales revenue was 12.8 percent (PY: 17.9 percent). Gross debt decreased to 2,832 million euros (December 31, 2023: 3,682 million euros), net debt to 2,349 million euros and the ratio of net debt to underlying EBITDA¹ to 3.1 as planned (December 31, 2023: 3,565 million euros and 4.5).

Outlook for fiscal 2024 confirmed
Based on the company’s nine-month results, management confirms its guidance for the full year 2024: Sartorius Stedim Biotech continues to expect sales revenue to be at prior-year level, with a bandwidth of low single-digit negative to low single-digit positive development in sales revenue. Acquisitions should contribute around 2 percent to sales revenue. 

In terms of profitability, the underlying EBITDA margin is expected to reach 27 to 29 percent, with a slightly positive effect from the above-average profitability of the Polyplus business. The ongoing efficiency program will contribute more than 85 million euros, while volume effects and the company’s own inventory reduction will have a temporary dilutive effect. The ratio of capital expenditure in relation to sales revenue is forecast to be around 12 percent for the full year, while the ratio of net debt to underlying EBITDA should be approximately 2.5 to 3.0.

Forecasts have been prepared based on historical information and are consistent with accounting policies. All forecast figures are based on constant currencies, as in past years. Management points out that 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.

1 Sartorius Stedim Biotech publishes alternative performance measures that are not defined by international accounting standards. These are determined with the aim of improving the comparability of business performance over time and within the industry.
 

• Constant currencies: figures given in constant currencies eliminate the impact of changes in exchange rates by applying the same exchange rate for the current and the previous period
• Organic: organic growth figures exclude the impact from changes in exchange rates and changes in the scope of consolidation
• Order intake: all customer orders contractually concluded and booked during the respective reporting period
• Underlying EBITDA: earnings before interest, taxes, depreciation and amortization and adjusted for extraordinary items
• Underlying net profit: profit for the period after non-controlling interest, adjusted for extraordinary items and amortization, and based on the normalized financial result and the normalized tax rate
• Equity ratio: equity in relation to the balance sheet total
• Ratio of net debt to underlying EBITDA: quotient of net debt and underlying EBITDA over the past 12 months, including the pro forma amount contributed by acquisitions for this period

2 Acquisition of Polyplus
3 EMEA = Europe, Middle East, Africa

This media release contains forward-looking statements about the future development of the Sartorius Stedim Biotech Group. Forward-looking statements are subject to known and unknown risks, uncertainties, and other factors that could cause actual results to differ materially from those expressed or implied by such statements. Sartorius Stedim Biotech assumes no liability for updating such statements in light of new information or future events. Sartorius Stedim Biotech shall not assume any liability for the correctness of this release. The original French press release is the legally binding version.

Conference call
Dr. René Fáber, CEO of the Sartorius Stedim Biotech Group, will discuss the company’s 9-month results with analysts and investors in a conference call at 1.00 p.m. CEST on October 17, 2024.
Register here: https://sar.to/9M_2024

Key Performance Indicators for the first nine months of 2024
 

Key Performance Indicators for Q3 2024

1 The previous year’s figures have been revised due to finalization of the purchase price allocation for the acquisition of Polyplus.
2 cc = Constant currencies: Figures given in constant currencies eliminate the impact of changes in exchange rates by applying the same exchange rate for the current and the previous period
3 All customer orders contractually concluded and booked during the respective reporting period.
4 Acc. to the customer’s location
5 Earnings before interest, taxes, depreciation and amortization, and adjusted for extraordinary items.
6 Profit for the period after non-controlling interest, adjusted for extraordinary items, and amortization, as well as based on the normalized financial result and the normalized tax rate.
7 After non-controlling interest
Figures are not audited nor reviewed.
 

Reconciliation of alternative performance measures

Reconciliation between EBIT and underlying EBITDA

1 The previous year’s figures have been revised due to finalization of the purchase price allocation for the acquisition of Polyplus
2 Financial result excluding fair value adjustments of hedging instruments and currency effects relating to financing activities and change in valuation of earn-out liability
3 Normalized income tax based on the underlying profit before taxes and amortization
Figures are not audited nor reviewed.

Calculation of net debt and ratio of net debt to underlying EBITDA

1 The previous year’s figures have been revised due to finalization of the purchase price allocation for the acquisition of Polyplus
Figures are not audited nor reviewed

Calculation of the capital expenditures ratio

1 The previous year’s figures have been revised due to finalization of the purchase price allocation for the acquisition of Polyplus
Figures are not audited nor reviewed.

A profile of Sartorius Stedim Biotech
Sartorius Stedim Biotech is a leading international partner of the biopharmaceutical industry. As a provider of innovative solutions, the company based in Aubagne, France, helps its customers to manufacture biotech medications, such as cell and gene therapies, safely, rapidly, and economically. The shares of Sartorius Stedim Biotech S.A. are quoted on the Euronext Paris. The company has a strong global reach with manufacturing and R&D sites as well as sales entities in Europe, North America, and Asia. Sartorius Stedim Biotech regularly expands its portfolio through acquisitions of complementary technologies. In 2023, the company generated sales revenue of around 2.8 billion euros. By the end of 2023, more than 10,600 employees were working for customers around the globe.

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Contact
Petra Kirchhoff
Head of Corporate Communications & Investor Relations
+49 (0)551 308 1686
petra.kirchhoff@sartorius.com