Sartorius, a leading international laboratory and pharmaceutical equipment provider, grew dynamically again in fiscal 2012 and further increased its profitability. This summarizes the preliminary figures for 2012 that the company released today. According to these results, the Bioprocess Solutions Division that primarily specializes in single-use products for pharmaceutical drug manufacture performed highly successfully. In addition, initial consolidation of the Biohit Liquid Handling business substantially boosted growth for the Lab Products & Services Division. The company slightly outperformed its financial targets that it had already raised twice during 2012.
CEO Dr. Joachim Kreuzburg was satisfied with the results of the past fiscal year: “Our bioprocess business has performed excellently over the last years. In 2012, we grew again at double-digit rates, more strongly than the market and also at a slightly faster pace than we ourselves expected. Especially in the USA, we have gained market share. Our newly realigned Lab Products & Services Division also showed positive development and is well positioned for further growth. The Industrial Weighing Division has held its own quite well in its markets and fully met our expectations in fiscal 2012. Despite high investments in additional manufacturing capacity, new products and in the expansion of our sales organization, our considerable growth has enabled us to increase our bottom-line earnings more strongly than expected at the outset of the year and to further lift our profit margin.“
Company management projects significant growth in sales revenue and a continued rise profitability for 2013 as well.
Dynamic growth of sales revenue and order intake
According to preliminary figures, Sartorius generated consolidated sales revenue of 845.7 million euros in fiscal 2012, up from 733.1 million euros a year ago. This equates to an increase of 15.4%, or 11.7% in constant currencies. The Biohit Liquid Handling business acquired at the end of 2011 added approximately six percentage points to this expansion of sales revenue. The gain in order intake reached a similarly strong level: it jumped 15.7%, or 12.0% in constant currencies, to 866.8 million euros.
Accounting for more than half of consolidated revenue, the Bioprocess Solutions Division continued on track, extending its success of the previous year: It reported strong organic sales growth of 15.6%, or 11.8% in constant currencies, to 474.2 million euros and an increase in order intake of 11.0%, or 7.3% in constant currencies, to 479.5 million euros. Demand was especially high for single-use products for biopharmaceutical manufacture, and the division posted solid growth for its equipment business with biotech production systems, above all in North America.
The Lab Products & Services Division, a supplier of premium laboratory instruments and lab consumables, reported a significant gain of 21.1%, or 17.1% based on constant currencies, in sales revenue, which soared to 268.9 million euros. Compared with sales, order intake rose at a slightly sharper rate, 30.5%, or 26.2% in constant currencies, to 282.0 million euros. Initial consolidation of the Biohit Liquid Handling business contributed around 19.0 percentage points in constant currencies to this growth.
The smallest Group division, Industrial Weighing, showed stable development, as projected. Its sales revenue of 102.7 million euros reached the good level reported for the previous year (+1.8%; currency-adjusted: -0.2%). Its order intake moved up 3.9%, or 1.9% in constant currencies, to 105.4 million euros.
Regionally, Sartorius reported the highest dynamics in North America, with sales revenue up 18.9%. The key growth driver in this region was the excellent performance of both its laboratory and bioprocess businesses. The company’s business saw double-digit growth, at 13.0%, in Asia as well. In Europe, where the economic environment was weaker on the whole, Sartorius expanded its business at 8.6% (all regional figures in constant currencies).
Substantial increase in earnings
Despite the heavy investments made in new production capacity and the expansion of its sales structures as planned, Sartorius further increased its profitability in the reporting year. Based on dynamic sales growth, the Group’s operating earnings surged 20.3% from 112.2 million euros in the previous year to 135.0 million euros. The respective margin for the Group rose from 15.3% a year earlier to 16.0% and, therefore, marks a new high. Besides the expansion of sales volume, the favorable currency environment contributed to positive development of consolidated earnings.
In view of the divisions, the Bioprocess Solutions Division, in particular, significantly expanded its operating earnings at a growth rate of 22.9%, from 71.6 million euros a year ago to 88.0 million euros. The operating profit margin for this division climbed from 17.5% to 18.6%. The Lab Products & Services Division reported operating earnings of 36.9 million euros, up from 30.7 million euros in the year before. This equates to an increase of 20.1% and an approximately constant margin of 13.7% (previous year: 13.8%). The Industrial Weighing Division posted earnings of 10.1 million euros and a margin of 9.9%, up from 9.9 million euros and 9.8%, respectively, a year earlier.
Including extraordinary items of -13.9 million euros (previous year: -11.3 million euros), Group EBITA rose year on year from 100.9 million euros to 121.1 million euros and its respective margin increased from 13.8% to 14.3%. These extraordinary expenses primarily were related to the transfer of single-use bag manufacture from California, USA, to Puerto Rico, the integration of the Biohit Liquid Handling business, and to further Group projects.
The Group’s relevant net profit totaled 62.9 million euros, up from 52.8 million euros a year ago. Its respective earnings per ordinary share are at 3.68 euros, up from 3.09 euros a year earlier, and per preference share, at 3.70 euros, up from 3.11 euros a year ago.
In 2012, net operating cash flow was at 53.2 million euros (previous year: 79.0 million euros) and was used, inter alia, for financing investments to substantially expand capacity levels. The key financial indicator, the ratio of net debt to underlying EBITDA, remained constant at 1.9 (previous year: 1.9) in spite of the high investments made, and thus continues to remain at a comfortable level.
Positive outlook for fiscal 2013
Sartorius is set to further grow its business in the current year: For 2013, the company projects that sales revenue on the basis of constant currencies will increase by approximately 6% to 9%. Along with growth in sales, profitability is forecasted to rise again. Without any currency effects considered, the operating EBITA margin at Group level is expected to increase to about 16.5%.
In view of the three divisions, company management anticipates that sales for Bioprocess Solutions will grow approximately 9% to 12%. Cooperation in cell culture media, based on the agreement signed in December 2012 with the Swiss life science group Lonza, is projected to contribute around three to four percentage points to this growth. Management forecasts that the division’s operating EBITA margin will increase to approximately 19%.
For the Lab Products & Services Division, the company expects sales to grow by approximately 3% to 6% and its operating EBITA margin to increase to around 14%.
The Industrial Weighing Division projects sales revenue to rise by approximately 0% to 3% and its operating EBITA margin to reach approximately 10%. (All figures currency-adjusted)
“The majority of our business areas are driven by stable and long-term trends; this is why we have set ambitious targets for the new fiscal year“, commented Dr. Kreuzburg about the forecast. For part of our business, however, further economic development will play a role, especially in Europe.”
* Sartorius uses earnings before interest, taxes and amortization (EBITA) as the key profitability measure. To enable a more meaningful comparison with the year-earlier figures, the company reports earnings adjusted for extraordinary items (= operating EBITA or operating earnings) in addition to EBITA.
Conference Call and Webcast:
Dr. Joachim Kreuzburg, CEO and Executive Board Chairman of Sartorius, will discuss the preliminary figures for 2012 with analysts and investors on Tuesday, January 29, 2013, at 3:30 pm. Central European Time (CET), in a teleconference. You may dial into the teleconference starting at 3:20 pm. CET at the following numbers:
Germany: +49 (0)69 2222 34066
France: +33 (0)1 70 48 01 63
UK: +44 (0)20 3450 9571
USA: +1646 254 3387
The dial-in code is 3225124
This press release contains statements about the future development of the Sartorius Group (sartorius-stedim.com). The content of these statements cannot be guaranteed as they are based on assumptions and estimates that harbor certain risks and uncertainties.
This is a translation of the original German-language press release. Sartorius shall not assume any liability for the correctness of this translation. The original German press release is the legally binding version. Furthermore, Sartorius reserves the right not to be responsible for the topicality, correctness, completeness or quality of the information provided. Liability claims regarding damage caused by the use of any information provided, including any kind of information which is incomplete or incorrect, will therefore be rejected