First-Half 2013 Business Figures: Sartorius Continues on Track
Sartorius, a leading international laboratory and pharmaceutical equipment provider, successfully closed the first half of 2013 with considerable gains in order intake, sales revenue and earnings. At the same time, figures contributed by the individual divisions varied substantially. Bioprocess Solutions, the largest division that primarily specializes in single-use products for pharmaceutical drug manufacture, performed especially well. Following a relatively weak start into the year, business for the divisions of Lab Products & Services and Industrial Weighing picked up in the second quarter. Based on the Group’s first-half business performance, management confirmed and specified its targets for the full year.
Substantial Growth in Sales Revenue and Order Intake
Sartorius increased its order intake in the first half of 2013 over the year-earlier period by 5.5%, or 7.0% in constant currencies, to 458.1 million euros. Group sales revenue rose 4.5%, or 6.1% in constant currencies, to 441.3 million euros.
The Bioprocess Solutions Division primarily contributed to the Group's strong business performance. Order intake for the division rose sharply by 14.5%, or 15.9% in constant currencies, to 278.7 million euros. This increase was driven by strong demand for single-use products used in biopharmaceutical manufacture as well as by special growth impulses, particularly from large equipment orders in the first quarter. The division’s sales revenue significantly rose 7.8%, or 9.2% in constant currencies, to 255.9 million euros, in spite of the comparably strong revenue base in the prior year.
As non-strategic product lines were phased out and demand temporarily eased in a few markets, order intake at 130.4 million euros for the Lab Products & Services Division was 6.6%, or -5.0% in constant currencies, below the year-earlier level. However, as the second quarter progressed, demand accelerated considerably. In the first six months, the division’s sales revenue rose 1.9%, or 3.6% in constant currencies, to 135.4 million euros, with all of the division's product categories contributing to this growth.
For the smallest Group division, Industrial Weighing, order intake at 49.0 million euros and sales revenue at 49.9 million euros were each slightly below the year-earlier levels (-4.1%; currency-adj. -2.2% and -3.6%; currency-adj. -1.6%, resp.), while as the second quarter progressed, business picked up for this division, too.
From a regional perspective, Sartorius recorded the highest sales growth in Asia, at 8.7%, followed by Europe, which gained 8.1%. At -3.2%, sales revenue in North America was still slightly below the exceptionally strong revenue base in the previous year, as expected. However, order intake rose significantly in this region. (All regional figures given in constant currencies.)
Overproportionate Increase in Profit
In the first half of 2013, the Sartorius Group further expanded its profitability considerably. Its underlying EBITDA1) increased 11.8% to 84.8 million euros, and its respective margin rose from 18.0% to 19.2%. Driven by economies of scale and product mix effects, earnings contributed by the Bioprocess Solutions Division jumped 15.5% to 58.1 million euros. The division’s underlying EBITDA margin was at 22.7%, up from 21.2% a year ago. The Lab Products & Services Division increased its underlying EBITDA 11.0% to 22.7 million euros; its margin climbed from 15.4% to 16.8%. At 4.0 million euros, earnings for the Industrial Weighing Division were below the previous year's level; its underlying EBITDA margin was 8.0% relative to 9.7% in the comparable period.
Including extraordinary items of -3.2 million euros (H1 2012: -7.1 million euros), depreciation and amortization, the Group’s EBIT rose from 49.2 million euros to 59.1 million euros. The respective EBIT margin was at 13.4% relative to 11.7% a year ago. Relevant net profit2) for the Group increased 8.8% to 32.3 million euros. Earnings per ordinary share amounted to 1.88 euros, up from 1.73 a year earlier, and earnings per preference share were at 1.90, up from 1.75 in the previous year.
Full-year Targets Confirmed and Specified
Based on its strong first-half performance, management confirmed and specified its sales and earnings forecast for the current fiscal year. On the basis of constant currencies and an overall stable economic environment, Sartorius expects that sales revenue will reach the upper half of its growth corridor of 6% to 9% already forecasted. Assuming that exchange rates remain unchanged, management continues to aim at achieving an underlying EBITDA margin of around 19.5% (previous year: 19.0%).
In view of the three divisions, the company anticipates that Bioprocess Solutions will reach, or slightly exceed, the upper end of the range of 9% to 12% in sales growth. The division's underlying EBITDA margin is projected to rise to 22.5% to 23.0% (former guidance: around 22.5%; previous year: 21.8%).
For Lab Products & Services, Sartorius forecasts that sales revenue in constant currencies will increase at the lower limit of the growth corridor of 3% to 6% communicated earlier. The division's underlying EBITDA margin is expected to be at 17.0% to 17.5% for fiscal 2013 (former guidance: around 17.5%; previous year: 17.1%).
Currency-adjusted sales revenue for the Industrial Weighing Division is also projected to attain the lower end of the growth range from 0% to 3%. Its underlying EBITDA margin is forecasted to be around 10.0% in 2013 (former guidance: around 11.5%; previous year:
For the last two divisions that are more dependent on economic activity, there is major uncertainty in their respective forecasts in view of the high volatility in individual markets.
1) Sartorius uses underlying EBITDA (earnings before interest, taxes, depreciation and amortization and adjusted for extraordinary items) as the key profitability measure.
2) Relevant net profit for the Group is calculated by adjusting for extraordinary items, eliminating non-cash amortization and fair value adjustments of hedging instruments, including the corresponding tax effects for each of these items, as well as by taking non-controlling interest into account.
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