Sartorius AG · XETR:SRT

Sartorius — Investor Presentation (November 2018)

48 slides from Sartorius's investor presentation, November 2018

  1. Slide 1: Investors Presentation

    Investors Presentation November 2018

  2. Slide 2: Disclaimer

    Disclaimer This presentation contains statements concerning the future performance of the Sartorius Group. These statements are based on assumptions and estimates. Although we are convinced that these forward-looking statements are realistic, we cannot guarantee that they will actually materialize.

  3. Slide 3: Agenda

    Agenda Overview and Strategy Bioprocess Solutions Division Lab Products & Services Division FY 2018 Guidance | 9M 2018 Results

  4. Slide 4: Sartorius at a glance

    Overview and Strategy Sartorius at a glance Industry A leading partner of the ~ €1.4bn focus biopharma industry Sales revenue Clear Making R&D and production processes ~13% Clear mission Sales CAGR1) 2012-2017 mission of innovative biologics more efficient Attractive Biopharma market fueled by stron

  5. Slide 5: Strategic focus on the biopharma market

    Overview and Strategy Strategic focus on the biopharma market Bioprocess Solutions Division Cell line and Production Molecule development process development upstream & downstream Quality | Testing | Validation Lab Products & Services Division 5

  6. Slide 6: Strong market fundamentals

    Overview and Strategy Strong market fundamentals Favorable demographics Increasing healthcare spending 9bn +6.5% people by 2050; CAGR >2bn 60 yrs or worldwide older prescription drug sales 2017-2022 ~8% CAGR biopharma market Strong R&D pipeline; advances in Rise of biosimilars gene and cell therapy

  7. Slide 7: Sales revenue more than doubled over the last 6 years

    Overview and Strategy Sales revenue more than doubled over the last 6 years Sales CAGR ~ +13% EBITDA1) margin +5.4pp +9.3% +18.2% +16.0% €1.4bn 30 400 +12.6% 29 200 +8.8% 28 +13.6% 27 000 26 25 800 €733m 25.0 25.1 24 23.6 23 ~ €650m 600 22 400 21 21.0 20 200 20.1 20.5 19.7 19 0 18 2011 2012 2013 201

  8. Slide 8: Regional balance better reflecting end-markets

    Overview and Strategy Regional balance better reflecting end-markets Sales by region 2011 Sales by region 2017 Global pharmaceutical market ~ €650m CAGR ~ €1.4bn ~ €1.1tn ~ +16% Asia | Pacific ~ 22% Asia | Pacific ~ 25% Asia | Pacific ~ 26% ~ +15% Americas ~ 25% Americas ~ 32% Americas ~ 51% ~ +11%

  9. Slide 9: M&A strategy – adding innovation, enhancing focus

    Overview and Strategy M&A strategy – adding innovation, enhancing focus Divestment Intec Division IntelliCyt ViroCyt Essen BioScience 2011 2018 Lonza Cell TAP Biosystems AllPure BioOutsource Cellca kSep Umetrics Culture Media Technologies Portfolio: Complementary products or technologies Acquisition

  10. Slide 10: Infrastructure prepared for further organic growth

    Overview and Strategy Infrastructure prepared for further organic growth Capex ratio Capex composition 2018 in % 14.9 ~15 14 11.7 12 10.1 10 8.8 9.1 10 7.7 8 ~x% ~7% Major projects 6 4 ~3% Regular expansion 2 0 ~2% Cap. R&D 20121) 2013 2012 20131) 2014 2015 2016 2017 2018 20182) 2019 1) Incl. discon

  11. Slide 11: Sartorius 2025 targets and initiatives

    Overview and Strategy Sartorius 2025 targets and initiatives Strategic initiatives 2025 targets Regional  Participate in strong Chinese market growth ~ €4 bn 1  Continue to outperform the important U.S. market Sales revenue Portfolio  Add high-impact innovation, e.g. digital tools ~ 2|3 ~ 1|3  E

  12. Slide 12: Sartorius 2025 ambition per division

    Overview and Strategy Sartorius 2025 ambition per division SSB | BPS LPS Sartorius Group ~€2.8bn ~€1.2bn ~ €4 bn 1 Sales revenue Sales revenue Sales revenue ~30% ~25% ~ 28% EBITDA margin EBITDA margin EBITDA margin 12

  13. Slide 13: Agenda

    Agenda Overview and Strategy Bioprocess Solutions Division Lab Products & Services Division FY 2018 Guidance | 9M 2018 Results

  14. Slide 14: Snapshot of the Bioprocess Solutions Division

    Bioprocess Solutions Snapshot of the Bioprocess Solutions Division Total solution provider for Global footprint biomanufacturing Americas ~ 35% Asia | Pacific ~ 24% EMEA ~ 41% Division sales by region Track record of dynamic growth High share of recurring revenues +14.2% +16.5% 36 1150 CAGR 1050 p.a

  15. Slide 15: Covering most steps of the biopharma process chain

    Bioprocess Solutions Covering most steps of the biopharma process chain Fermentation Scale-up Clarification Culture media Seed cultivation Centrifugation preparation Sterile filtration Ultra-| Diafiltration Final filling Viral clearance Cryopreservation Polishing Sterile filtration Virus removal Con

  16. Slide 16: Leading positions in key technology platforms

    Bioprocess Solutions Leading positions in key technology platforms Sartorius Merck | Danaher | Thermo GE Top 3 Players Millipore Pall Fisher 1. Merck | Millipore Filtration 2. Danaher | Pall 3. Sartorius 1. Sartorius Fluid 2. Thermo Fisher Management 3. Merck | Millipore 1. Sartorius Fermentation 2.

  17. Slide 17: U.S. remains most important market; China with highest growth rates

    Bioprocess Solutions U.S. remains most important market; China with highest growth rates Biologics market growth forecast CAGR 2018 to 2022, $ in billions U.S. U.S. ~ 115 ~ 163 Europe ~ +9% U.S. Europe ~ 50 ~ 65 China ~ +7% Europe China ~ 33 ~ $250bn ~ $345bn ~ 60 ROW ~ +16% China ROW ~ 51 ~ 57  Bi

  18. Slide 18: The biopharma market is not yet mature, but is maturing

    Bioprocess Solutions The biopharma market is not yet mature, but is maturing ... not mature because Cumulative investment and absolute  Underpenetrated global market survival rate in drug development Cumulative investmt (€ in millions) 100 1,500  Strong flow of innovation Absolute survival rate %

  19. Slide 19: Digitalization is arriving in biopharma

    Bioprocess Solutions Digitalization is arriving in biopharma Collect data Sartorius offers the leading software Improve Monitor & process control for bioprocess data analytics  Enhanced process control and robustness Analyze  Improved product quality  Predictive process control  Powerful solutio

  20. Slide 20: Biosimilars: Strong growth, big opportunities

    Bioprocess Solutions Biosimilars: Strong growth, big opportunities Biosimilars will outperform the biologics market € in billions ~ +25% CAGR ~ 58  Major blockbuster biologics are going off patent  Lower prices will lead to higher production volumes ~ 10 ~ 402  Time-to-market is key as only the f

  21. Slide 21: Leader in the growing single-use technology market

    Bioprocess Solutions Leader in the growing single-use technology market Single use products offer advantages over conventional stainless-steel devices  Capex|Opex reduction over entire lifecycle -25-35%  Reduced risk of cross-contamination -30-50%  Higher flexibility; advantageous for biosimilars

  22. Slide 22: Limited dependence on individual accounts

    Bioprocess Solutions Limited dependence on individual accounts Sales to Top 50 customers in 2017, € in millions 300 ~ 50% ~ 55% 250 ~ 45% ~ 40% 200 Cumulative share ~ 25% 150 100 50 0 Top 10 11 to 20 21 to 30 31 to 40 41 to 50 Long-term business relationships with Limited dependence on individual ac

  23. Slide 23: Four strong pillars drive above-average growth

    Bioprocess Solutions Four strong pillars drive above-average growth Pharma market CAGR 4-7% ~ +11% Organic CAGR1) Biopharma market CAGR ~8% Single-use penetration Double-digit growth 0 2) Market share gains Esp. in North America 2013 2014 2015 2016 2017 2018 1) CAGR 2013 to 2018e, excluding FX effec

  24. Slide 24: Agenda

    Agenda Overview and Strategy Bioprocess Solutions Division Lab Products & Services Division FY 2018 Guidance | 9M 2018 Results

  25. Slide 25: Snapshot of the Lab Products & Services Division

    Lab Products & Services Snapshot of the Lab Products & Services Division Premium vendor for laboratories Global footprint Americas ~ 25% Asia | Pacific ~ 27% EMEA ~ 48% Division sales by region Division in transition to a new growth and profitability profile 500 35 500 ~ +8-10% 35 +22.0% 450 +7.9% 4

  26. Slide 26: Our ambition: Reduce costly trial & error in drug discovery

    Lab Products & Services Our ambition: Reduce costly trial & error in drug discovery Drug discovery 4 ½ years Testing & improving 1 year Clinical trials Drug approval 5 ½ years 1 ½ years €490m €110m €640m €60m ~10 years 1 in 10,000 From drug discovery Chance for a candidate to approval ~€500m to make

  27. Slide 27: Innovative platforms to increase biopharma R&D efficiency

    Lab Products & Services Innovative platforms to increase biopharma R&D efficiency  Acquisition of U.S. companies IntelliCyt (2016) and Essen BioScience (2017)  Solutions for high-throughput and real-time quantitative cell analysis  Automatization, acceleration and improvement of basic research st

  28. Slide 28: Bioanalytics portfolio with little competition and high value added

    Lab Products & Services Bioanalytics portfolio with little competition and high value added  IntelliCyt processes thousands of plates and generates large amounts of data for rapid and clear target identification High content Microscopy  IncuCyte delivers video-based Richness of data imaging1) Inte

  29. Slide 29: Bioanalytics increases addressable market and changes growth profile

    Lab Products & Services Bioanalytics increases addressable market and changes growth profile Addressable market of LPS € in billions +10.0% CAGR ~ 1.4  Different growth rate of bioanalytics due to high ~ 0.8 exposure to biopharmaceutical R&D +3.5%  By 2025, two-thirds of the addressable market gro

  30. Slide 30: Strong market position in key product categories

    Lab Products & Services Strong market position in key product categories  Leading positions in laboratory products used for research and quality control  Average global market share of > 10%  High gross margins offer potential for economies of scale  Growth potential especially in the U.S. and A

  31. Slide 31: Scalable business with considerable growth and margin potential

    Lab Products & Services Scalable business with considerable growth and margin potential Well established sample prep. portfolio  Premium instruments and consumables offering with strong global positions  Market share opportunities in certain regions to be addressed primarily by direct sales force

  32. Slide 32: Agenda

    Agenda Overview and Strategy Bioprocess Solutions Division Lab Products & Services Division FY 2018 Guidance | 9M 2018 Results

  33. Slide 33: Outlook confirmed for Group, adjusted for divisions

    Financials Outlook confirmed for Group, adjusted for divisions FY 2018 Guidance1) Previous New Sales revenue Underlying Sales revenue Underlying growth EBITDA margin growth EBITDA margin ~ +0.5pp Sartorius Group ~ 12% - 15% ~ 12% - 15% ~ +0.5pp vs. FY17: 25.1% ~ +0.5pp Upper range Bioprocess Solutio

  34. Slide 34: Strong top-line growth; earnings margin enhanced

    Financials Strong top-line growth; earnings margin enhanced Sartorius Group in millions of € unless otherwise specified 9M 20171) 9M 2018 in % in % cc 2) Sales revenue 1,040.4 1,153.7 +10.9 +13.4 Order intake 1,096.4 1,215.2 +10.8 +13.3 Underlying EBITDA3) 255.8 294.2 +15.0 Underlying EBITDA3) margi

  35. Slide 35: Growth in all regions; the Americas record strongest increase

    Financials Growth in all regions; the Americas record strongest increase Americas EMEA Asia|Pacific Sales by Region € in millions € in millions € in millions in % 484.1 387.9 448.9 EMEA ~ 42% 335.1 281.7 256.5 Americas ~ 34% ~ €1,153.7m Asia|Pacific ~ 24% 9M 17 9M 18 9M 17 9M 18 9M 17 9M 18 +20.1 %

  36. Slide 36: BPS: Dynamic development against moderate comps

    Financials BPS: Dynamic development against moderate comps Order Intake Sales Revenue Underlying EBITDA & Margin € in millions € in millions € in millions +15.0% cc +14.8% cc +16.5% +12.5% +12.2% 901.8 802.0 843.0 239.1 751.1 205.3 28.4% 27.3% 9M 17 9M 18 9M 17 9M 18 9M 17 9M 18  Continuing double-

  37. Slide 37: LPS: Softer economic environment weighs on growth

    Financials LPS: Softer economic environment weighs on growth Order Intake Sales Revenue Underlying EBITDA & Margin € in millions € in millions € in millions +8.7% cc +9.7% cc +9.0% +6.4% +7.4% 294.4 313.4 310.7 55.0 289.3 50.5 17.5% 17.7% 9M 17 9M 18 9M 17 9M 18 9M 17 9M 18  Sales and order growth

  38. Slide 38: Cash flow enhanced by higher earnings

    Financials Cash flow enhanced by higher earnings Sartorius Group € in millions unless otherwise specified 9M 20171) 9M 2018 in %  Net operating cash flow enhanced by higher earnings Underlying EBITDA 255.8 294.2 +15.0  Net investing cash flow in Extraordinary items -24.3 -19.1 +21.5 previous year

  39. Slide 39: Key financial indicators remain at robust levels

    Financials Key financial indicators remain at robust levels Key Financial Indicators Net Debt and Net Debt to Underlying EBITDA Sartorius Group Dec. 31, 2017 Sep. 30, 2018 1000 3.0 Equity ratio in % 35.1 35.6 800 2.4 600 1.8 Net debt in millions of € 895.5 940.5 400 1.2 Net debt | underlying EBITDA

  40. Slide 40: Appendix

    “EE: sartorius Appendix

  41. Slide 41: Sartorius shares – an attractive investment

    Appendix Sartorius shares – an attractive investment Biopharma market fueled by Leading market positions in Global presence with strong long-term growth drivers key technologies and high base in growth regions brand awareness High entry barriers, low price- Diversified revenue base and Proven growth

  42. Slide 42: Sartorius legal & operational structure

    Appendix Sartorius legal & operational structure Sartorius Group Legal Setup  > 50% Administered by executor  ~ 91% Free float Preference shares Ordinary shares  ~ 34% Bio-Rad Laboratories  ~ 9% Treasury shares Sartorius AG  ~ 9% Treasury shares Stock market listed in Germany1)  ~ 5% Family ow

  43. Slide 43: Share price performance

    Appendix Share price performance 300% 250% Sartorius (prefs.) 200% Sartorius (ord.) Sartorius Stedim Biotech 150% DAX TecDAX 100% NASDAQ Biotech 50% Oct-15 Aug-16 Oct-16 Aug-17 Oct-17 Aug-18 Apr-16 Apr-17 Apr-18 Dec-15 Dec-16 Dec-17 Feb-16 Jun-16 Feb-17 Jun-17 Feb-18 Jun-18 Share key facts ISIN DE00

  44. Slide 44: Extract of the Bioprocess Solutions' product portfolio

    Appendix Extract of the Bioprocess Solutions’ product portfolio Filtration Purification Fluid Management Fermentation & Cell Culture Media 44

  45. Slide 45: Extract of the Lab Products & Services' product portfolio

    Appendix Extract of the Lab Products & Services’ product portfolio Lab Balances | Lab Water Systems Bioanalytics Filtration | Lab Filtration Pipettes 45

  46. Slide 46: Recap 2020 targets and initiatives

    Appendix Recap 2020 targets and initiatives Strategic initiatives 2020 targets Regional  Gain share in North America ~ €2 bn  Leverage strong market growth in Asia Sales revenue Portfolio  Complementary extensions through alliances ~ 3|4 ~ 1|4 and acquisitions Organic Acquisitions  Own product d

  47. Slide 47: Executive Board of Sartorius AG

    Appendix Executive Board of Sartorius AG Joachim Kreuzburg, CEO Rainer Lehmann, CFO Reinhard Vogt since 2003 since 2017 since 2009 Corporate Strategy, Legal & Compliance, Finance, IT, Business Processes Marketing, Sales & Services Operations, Communications, Human Resources 47

  48. Slide 48: Financial calendar and contacts

    Appendix Financial calendar and contacts  October 31, 2018 Petra Kirchhoff Société Générale Roadshow | Paris Head of  November 12, 2018 Corporate Communications & IR HSBC Healthcare Day | Frankfurt Phone: +49.551.308.1686  November 15, 2018 E-mail: Jefferies Healthcare Conference | London petra.k

Sartorius — Investor Presentation (November 2018) on 6ix