18.07.2024 18:30:51

Half-year results 2024 of SartoriusStedimBiotech

Sartorius Stedim Biotech SA / Key word(s): Half Year Results
Half-year results 2024 of SartoriusStedimBiotech

18-Jul-2024 / 18:30 CET/CEST

Aubagne, France | July 19, 2024

Half-year results 2024 of Sartorius Stedim Biotech
 
  • Sales revenue of 1,373 million euros, organic decline of 3.8 percent in constant currencies1 and 1.2 percent including acquisitions2(reported: - 2.0 percent); 4.7 percent revenue growth in constant currencies in the second quarter
  • Underlying EBITDA1 at 387 million euros, resulting margin at 28.2 percent; net profit1 of 104 million euros
  • Deliberately more cautious outlook: Expectations for 2024 adjusted due to persistently high volatility and limited predictability
  • Long-term trends in life sciences and biopharma remain positive

In a continuously very challenging and volatile market environment for the life science sector, Sartorius Stedim Biotech, a leading partner of the biopharmaceutical industry, closed the first half of the fiscal year with a positive trend in sales revenue development.

“We achieved our targets for the first six months of the year, with sales revenue growing in the mid-single digits and robust profitability in the second quarter. Still, the dynamics vary across our portfolio. While parts of our consumables business as well as our solutions for cell and gene therapies show positive momentum, customer demand for other product groups remains muted, as do market dynamics in China. Faced with the continued high volatility and limited predictability, we decided to de-risk our outlook for the rest of the year and now expect sales revenue to be roughly at prior-year level,” said René Fáber, CEO of Sartorius Stedim Biotech. “However, the fundamental trends in our industry remain very positive as we can see from the high number of new approvals and the strong product pipelines for biopharmaceuticals, especially cell and gene therapies. Our comprehensive portfolio, designed to support customer needs across all modalities and process steps, will enable us to leverage and shape this market potential.”

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 half of the fiscal year, the company recorded sales revenue of 1,373 million euros, which corresponds to a slight decline of 1.2 percent in constant currencies (organic: - 3.8 percent; reported: - 2.0 percent). This includes a growth contribution from acquisitions2 of 2.6 percentage points. On a quarterly basis, sales revenue increased by 4.7 percent between April and June compared to the prior-year quarter. In view of advanced inventory reductions on the part of customers, order intake1 rose by 11.2 percent in constant currencies (reported: 10.4 percent) to 1,261 million euros in the first six months, while the increasing demand in the consumables business was dampened by the continuing reluctance to invest across the industry.

In the regions, business performance showed a mixed picture: While EMEA3 recorded an upturn in sales revenue of 4.4 percent in constant currencies, in the Americas region, sales revenue declined by 6.2 percent compared to the prior-year period and in Asia/Pacific the continued market weakness in China led to a slight decrease of 2.4 percent in constant currencies.

Underlying EBITDA declined 6.8 percent to 387 million euros in the first six months mainly due to volume and product mix effects. The respective margin stood at a robust level of 28.2 percent (prior- year period: 29.7 percent).

Underlying net profit1 was 165 million euros, compared with 242 million euros in the first half of 2023. Net profit amounted to 104 million euros after 244 million euros in the prior-year period. Underlying earnings per share stood at 1.71 euros (prior-year period: 2.62 euros) and earnings per share at 1.08 euros (prior-year period: 2.65 euros).

As of June 30, 2024, Sartorius Stedim Biotech employed 10,382 people worldwide, after 11,135 in the prior-year period (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 robust level. Equity was 3,924 million euros as of June 30, 2024, while the equity ratio1 increased to 48.6 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 stood at 272 million euros compared with 312 million euros in the prior-year period. Investments to support future growth through global capacity expansions remained high in the first six months at 189 million euros and in line with planning, however, below the previous year (262 million euros). The ratio of capital expenditures (capex) to sales revenue was 13.8 percent compared to 18.7 percent in the prior-year period. At the same time, measures to reduce working capital significantly increased cash flow. As a result, gross debt decreased to 2,919 million euros (December 31, 2023: 3,682 million euros), net debt to 2,465 million euros and the ratio of net debt to underlying EBITDA1 to 3.3 (December 31, 2023: 3,565 million euros and 4.5).

Outlook for fiscal 2024 de-risked
The life science industry continues to show a mixed picture with no stable positive momentum. While demand normalization for some products has progressed, customers are continuing to reduce inventories in other product groups or remain reluctant to invest. Despite having achieved the targets for the first half of 2024, company management is deliberately taking a conservative and cautious approach to the outlook of the remainder of the year and does not expect an increase in demand until the final quarter.  
 
Against the backdrop of continuing subdued demand, Sartorius Stedim Biotech now expects sales for fiscal year 2024 to be at prior-year level, with a bandwidth of low single-digit negative to low single-digit positive sales development (previously: sales growth in the mid to high single-digit percentage range). The Polyplus acquisition is forecast to contribute around 2 percentage points to non-organic sales growth. 
 
In terms of profitability, the company anticipates increasingly positive effects from its cost-cutting program in the amount of over 85 million euros as the year progresses, although these will not fully offset the impact of the lower volume expectations. In addition, the measures to reduce own inventories should lead to an additional dilution of EBITDA due to lower production capacity utilization. 
 
Against this backdrop, Sartorius Stedim Biotech now projects an underlying EBITDA margin of 27 to 29 percent (previously: above 30 percent) for the full year 2024. 
 
Following adjustments to its capex plans in line with the current business development, the ratio of capital expenditure in relation to sales revenue is now forecast to be around 12 percent (previously: around 13 percent) in 2024 while the ratio of net debt to underlying EBITDA should be approximately 2.5 to 3.0 (previously: slightly below 2.5).
 
The actual mixed and volatile business development following the pandemic and the resulting limited predictability of short-term business development have no impact on the fundamentally positive growth drivers of the life science and biopharmaceutical markets. This is also underlined by latest data on market approvals and clinical pipelines which are very positive, particularly in the field of modern therapies such as cell and gene therapeutics. Accordingly, the company is currently not changing its medium-term targets up to 2028. 
 
Management points out that the 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. 
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 half-year results with analysts and investors in a conference call at 7.45 p.m. CEST on July 18, 2024.
Register here: https://sar.to/H1_ConferenceCall
Financial calendar
October 17, 2024            Publication of nine-month results (January to September 2024)


Key Performance Indicators for the First Half of 2024
 
In millions of €
unless otherwise specified 		6 months
2024		 6 months
2023		 ∆ in %      Reported ∆ in %                 cc1
Order Intake and Sales Revenue        
Order intake² 1,260.5 1,142.3 10.4 11.2
Sales revenue 1,373.2 1,401.8 -2.0 -1.2
  • EMEA³
 574.5 551.4 4.2 4.4
  • Americas³
 492.4 525.6 -6.3 -6.2
  • Asia | Pacific³
 306.4 324.9 -5.7 -2.4
Results        
EBITDA4 387.3 415.7 -6.8  
EBITDA margin4 in % 28.2 29.7    
Underlying net profit5 164.8 241.5 -31.8  
Underlying earnings per share5 in € 1.71 2.62 -34.7  
Net profit6 104.0 244.2 -57.4  
Earnings per share⁶ in €  1.08 2.65 -59.2  

1 cc = constant currency: 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
2 All customer orders contractually concluded and booked during the respective reporting period
3 According to customer location
4 Underlying EBITDA = earnings before interest, taxes, depreciation and amortization, and adjusted for extraordinary items
5 Relevant / underlying net profit = net profit after non-controlling interest; adjusted for extraordinary items and
    amortization, and based on a normalized financial result and normalized tax rate
6 After non-controlling interest

Reconciliation between EBIT and underlying EBITDA
In millions of €
unless otherwise specified		 6 months
2024		 6 months
2023
EBIT (operating result) 214.8 266.6
Extraordinary items 27.5 50.0
Depreciation and amortization 144.9 99.0
Underlying EBITDA 387.3 415.7

Reconciliation
In millions of €,
unless otherwise specified		 6 months
2024		 6 months
2023
EBIT (operating result) 214.8 266.6
Extraordinary items 27.5 50.0
Amortization | IFRS 3 58.7 33.7
Normalized financial result1 -75.8 -23.5
Normalized income tax (26%)2 -58.6 -85.0
Underlying net result after taxes 166.7 241.9
Non-controlling interest -1.9 -0.4
Underlying net result after taxes and non-controlling interest 164.8 241.5
Underlying earnings per share (in €) 1.71 2.62

1 Financial result excluding fair value adjustments of hedging instruments and currency effects relating to financing activities and change in valuation of earn-out liability
2 Normalized income tax based on the underlying profit before taxes and amortization

Ratio of net debt to underlying EBITDA
in millions of €
unless otherwise specified		 6 months
2024		 6 months
2023
Gross debt 2,919.0 1,358.5
-  Cash and cash equivalents 454.1 110.0
Net debt 2,464.9 1,248.5
     
Underlying EBITDA (12 months) 757.0 1,030.1
+ Pro forma EBITDA from acquisitions (12 months) 0.0 3.6
Pro forma underlying EBITDA (12 months) 757.0 1,033.8
Ratio of net debt to underlying EBITDA 3.3 1.2

Capital expenditures
In millions of €
unless otherwise specified		 6 months
2024		 6 months
2023
Sales revenue 1,373.2 1,401.8
Capital expenditures 189.4 261.9
Capital expenditures as % of sales revenue 13.8 18.7



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.

Visit our newsroom and follow Sartorius Stedim Biotech on LinkedIn.
Contact
Petra Kirchhoff
Head of Corporate Communications & Investor Relations
+49 (0)551 308 1686
petra.kirchhoff@sartorius.com

Attachment

File: 240718_SSB_Media Release_H1_Results_2024

Dissemination of a Financial Wire News, transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.
Language: English
Issuer: Sartorius Stedim Biotech SA
Avenue de Jouques
13781 Aubagne
France
Phone: +33 44 284 5600
E-mail: sartorius.presse@sartorius.com
Internet: www.sartorius-stedim.com
ISIN: FR0013154002
EQS News ID: 1949515

 
End of Announcement - EQS News Service

1949515  18-Jul-2024 CET/CEST

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