Sartorius Ag · XETR:SRT
Sartorius — Investor Day (May 2024)
43 slides from Sartorius's investor day presentation, May 16, 2024
Slide 1: Sartorius and Sartorius Stedim Biotech Capital Markets Day 2024
Sartorius and Sartorius Stedim Biotech Capital Markets Day 2024 May 16, 2024
Slide 2: On the agenda today
On the agenda today Group vision & strategy | Joachim Kreuzburg 10:00 Financial perspective | Florian Funck 11:30 Coffee 11:40 Deep dive Lab Products & Services division | Alexandra Gatzemeyer, Fiona Coats 12:40 Lunch Deep dive Bioprocess Solutions division | Sartorius Stedim Biotech 13:30 René Fábe
Slide 3: Introducing today's speakers
Introducing today‘s speakers Dr. Joachim Dr. René Dr. Florian Dr. Alexandra Kreuzburg Fáber Funck Gatzemeyer Head of BPS Head of LPS CEO Division & CFO Division CEO SSB Dr. Fiona Jonas Michaela Dr. Oscar- Coats Møller Pischke Werner Reif Head of Advan- Head of Head of ced Therapy Separation CTO Mark
Slide 4: Note
Note This presentation contains statements concerning the future performance of the Sartorius Group and Sartorius Stedim Biotech. 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
Slide 5: Group Vision & Strategy
Group Vision & Strategy Dr. Joachim Kreuzburg, CEO
Slide 6: Our path to further growth and value creation
Our path to further growth and value creation 6
Slide 7: Sustainability at the core of our business: Good health and well-being
Sustainability at the core of our business: “Good health and well-being” Sartorius mission We empower scientists and engineers to simplify and accelerate progress in life science and bioprocessing, enabling the development of new and better therapies and more affordable medicine. 7 Capital Markets D
Slide 8: Health is one of the most relevant global topics
Health is one of the most relevant global topics Growing and aging population Biologics gaining importance2 Significant market growth3 ~44% ~39% 9.5bn CAGR biopharma market ~21% World population in 20501 Over 65 years 2013-2022 ~0.6bn ~0.8bn >1.6bn 2013 2023 2028 ~10% 2013 2023 2050 2022-2027 Revenu
Slide 9: Both Sartorius divisions with a clear focus on the life science industry
Both Sartorius divisions with a clear focus on the life science industry; increasing cross-divisional growth synergies Sales revenue Bioprocess Solutions €3.4bn x8.3 Focus Bioproduction €414m Sales revenue w/ Lab Products & Services life science customers Focus ~35% ~35% x20 ~85% Life Sciences Resea
Slide 10: Mission-critical portfolio supports customers in all stages
Mission-critical portfolio supports customers in all stages Bioprocess Solutions Division Cultivation, scale up, Filtration & Fill & Cloning Cell banking Media & reagents manufacture purification finish Seed business Win the spec Scale up Molecule Cell line Process Clinical trials Commercial product
Slide 11: Track record of profitable sales growth above market
Track record of profitable sales growth above market Sales CAGR Increase share of wallet by +17% addressing critical steps at customers ~€3.40bn ▪ Increase share of wallet by ▪ Solution offering addressing building critical stepson atdeep application customers Sales CAGR know how ▪ Strong focus on r
Slide 12: Fundamental trends strong and transparent
Fundamental trends strong and transparent 12
Slide 13: Strong market fundamentals, additional dynamics from new modalities
Strong market fundamentals, additional dynamics from new modalities ~23,100 biologics in development; Pillars of growth CAGRs 2022–20273 increasingly innovative and diverse pipeline 1 Pharma market ~3-6% Lab equipment & consumables ~5% ~70% ~30% Biopharma market ~10% Other Advanced biologics therapi
Slide 14: The life science industry is in a highly innovative phase
The life science industry is in a highly innovative phase Breakthroughs at an ever-increasing pace offer hope for patients1 1796 1818 1982 1986 2012 / 2017 2020 2023 Blood Recombinant Monoclonal Cell & gene mRNA CRISPR Vaccines products proteins antibodies therapies vaccines gene therapy 19mn 400mn
Slide 15: Integration of innovative technologies is a Sartorius core competency
Integration of innovative technologies is a Sartorius core competency Acquisitions Cooperations Own product development1 of complementary and with customers, research institutes, start- in areas of core competencies differentiating technologies ups, and industry-leading experts 10 1,440 Acquisitions
Slide 16: Consistent M&A strategy focusing on three defined areas
Consistent M&A strategy focusing on three defined areas Build-up of Unique portfolio for Intensified technologies BioAnalytics portfolio Advanced Therapies for downstream processing Intellicyt Essen BioScience Biological BIA Separations CellGenix WaterSep Danaher chromatography (2016) (2017) Industr
Slide 17: China-for-China strategy to balance opportunities and challenges
China-for-China strategy to balance opportunities and challenges Limited sales 7 sites | ~900 employees Challenges exposure1 ▪ Geopolitical tensions ▪ Shanghai: Commercial hub & ▪ Group: ~8% operations ▪ Rise of local competitors ▪ LPS: ~15% ▪ Beijing: Operations hub ▪ Stricter drug price regulation
Slide 18: Numerous initiatives regarding carbon footprint and material consumption
Numerous initiatives regarding carbon footprint and material consumption plus further sustainability initiatives in implementation 2030 2045 ~10% p.a. Zero 100% Net zero ∅ reduction of CO2eq avoidable emissions2 electricity from emission intensity1 scopes 1-3 in scope 1 and 2 renewable sources emiss
Slide 19: An industry-leading team of ~14,000 people with strong customer focus
An industry-leading team of ⁓14,000 people with strong customer focus Powerful purpose and strategy, ~40% 70% 31% 69% "room to move" for the individual With Non- Women on Leadership academic German 1st | 2nd roles filled ▪ Significant talent influx via M&A | cooperations over the past decade backgro
Slide 20: Ambitious medium-term targets
Ambitious medium- term targets 20
Slide 21: Capitalizing on opportunities while managing temporary challenges and external risks
Capitalizing on opportunities while managing temporary challenges and external risks Challenges Strengths and Benefits Opportunities Strong integrated, scalable solution Robust risk profile of Life Science Changing order patterns of customers offering Tools segment within biopharma Customer-focused
Slide 22: Midterm outlook to 2028: Expect to continue outgrowing the market
Midterm outlook to 2028: Expect to continue outgrowing the market BPS LPS Sartorius Group Sales revenue CAGR Low to mid- Mid to high Low-teens % to 2028 teens % single-digit % Underlying EBITDA margin ~36% ~28% ~34% in 2028 ▪ ~1/5 of sales revenue growth to come from acquisitions in both divisions a
Slide 23: Key takeaways: Sartorius is well positioned to continue its profitable growth journey
Key takeaways: Sartorius is well positioned to continue its profitable growth journey Life Science Tools industry one of the Strong focus on innovation most attractive market segments in leadership in relevant application biopharma areas Support customers to decarbonize Clear strategy, focused execu
Slide 24: Financial Perspective
Financial Perspective Dr. Florian Funck, CFO
Slide 25: Dr. Florian Funck: New CFO since April 2024
Dr. Florian Funck: New CFO since April 2024 Personal Information Educational Background Year of birth: 1971 Dr. rer. pol., Business Administration, University of Münster, Germany Nationality: German Professional Profile 2011-2024 Franz Haniel & Cie. GmbH – CFO 2004-2011 TAKKT AG – Management Board M
Slide 26: Profitability on robust level despite high business volatility
Profitability on robust level despite high business volatility 26
Slide 27: Four years of high volatility and limited visibility
Four years of high volatility and limited visibility; positive trends expected to improve gradually Fluctuation order intake +89% Q1 2021 vs. Q1 2020 -34% Q2 2023 vs. Q2 2022 Sales revenue ex Covid Covid-19 related sales Order intake Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 201
Slide 28: Market snapshot: This is what we see
Market snapshot: This is what we see Normalization continues; visibility remains Order intake currently no reliable clouded after Corona dynamics forward-looking indicator, particularly in quarterly perspective Changed customer behavior: smaller Healthy customer project pipeline equals orders in con
Slide 29: Guidance 2024 recap: Profitable growth with stronger H2 2024
Guidance 2024 recap: Profitable growth with stronger H2 2024 Sartorius Stedim BPS LPS Sartorius Biotech Sales revenue Mid to high SD % Low SD % Mid to high SD % Mid to high SD % growth in cc ul. EBITDA >31% ~ prior-year level Slightly > 30% > 30% margin (2023: 25.1%) Capex ratio ~13% ~13% Net debt /
Slide 30: Expecting positive revenue growth from Q2 onwards
Expecting positive revenue growth from Q2 onwards H1 2023 H2 2023 Q1 2024 H1 2024e H2 2024e Revenue growth + low to in cc yoy - 15.4% - 17.8% - 7.6% - low SD high teens Book-to-bill 0.84 0.97 1.01 ~0.95 ~1.0 ul. EBITDA margin 29.8% 26.9% 28.6% ~28% >31% Revenue growth assumptions Book-to-bill assump
Slide 31: Focus on a robust and agile position for future growth
Focus on a robust and agile position for future growth in a competitive environment During the pandemic After the pandemic Focus on delivery ability Focus on efficiency and innovation Innovations for accelerated drug development Rapid capacity expansion and efficient bioproduction Significant increa
Slide 32: Margin peak in 2021 driven by artificially low costs
Margin peak in 2021 driven by artificially low costs; volume, mix and adjusted cost base to contribute to further margin expansion Share of cost positions Expected contribution 2013 2021 2023 2024e 2028e Sales 100% 100% 100% Cost of sales -52% -45% -49% Positive contribution S&D -22% -16% -17% Sligh
Slide 33: Efficiency program to right-size organization and improve 2024 margins
Efficiency program to right-size organization and improve 2024 margins Expected sustainable cost reductions and contributors Contributors Reorganization & efficiency ▪ Right-sizing of structures Other functional costs ▪ Process improvements Manufacturing-related Direct & indirect procurement ~100mn
Slide 34: Further margin expansion until 2028 driven by economies of scale and mix effects
Further margin expansion until 2028 driven by economies of scale and mix effects Economies of scale Product mix effects ▪ On average higher gross margins of consumables ▪ Invest projects that lead to significant cash- compared to equipment outflows in past years now ready to operate ▪ Gross margins
Slide 35: Resilient and scalable growth platforms
Resilient and scalable growth platforms 35
Slide 36: Global digital growth platforms in place to further drive efficiency
Global digital growth platforms in place to further drive efficiency S4/HANA Salesforce Workday State-of-the-art ERP CRM, increase Digitalisation and system for global processes productivity & project harmonization of ▪ Part of Sartorius’ investment visibility HR processes program over the past 10 y
Slide 37: Capacity investments and resilient global setup to support organic growth
Capacity investments and resilient global setup to support organic growth Global resilience Ann Arbor, Michigan, USA Songdo, South Korea Freiburg, Germany Redundant capacities Operational excellence Customer proximity Göttingen, Germany Aubagne, France Yauco, Puerto Rico 37 Capital Markets Day 2024
Slide 38: Current infrastructure plus ongoing expansion projects to support growth until 2028
Current infrastructure plus ongoing expansion projects to support growth until 2028 Capex Capex composition in millions of €; ratio in % 560 523 407 Major projects ~x% 226 240 Capitalized R&D ~2% 16.5 12.3 11.8 12.5 ~13 Regular expansion ~3% 10.3 Maintenance ~3% 2019 2020 2021 2022 2023 2024e Capex
Slide 39: Fast deleveraging post M&A enabled by healthy cashflows
Fast deleveraging post M&A enabled by healthy cashflows Net debt / underlying EBITDA Operating cashflow DHR Novasep Polyplus LS assets Chroma. CAGR WaterSep Albumedix ~+27% BIA ALS Essen Bio CellGenix Biological Umetrics Industries Xell 2017 2018 2019 2020 2021 2022 2023 2024 2017 2018 2019 2020 202
Slide 40: Diversified and long-term debt financing
Diversified and long-term debt financing Credit rating Duration profile of debt financing Solid investment grade rating confirmed: without synd. revolving credit facility BBB (stable) from S&P 2024 Debt financing instruments in place 2025 >90% of financing 2026 in billion € instruments at fixed 2027
Slide 41: Considerable debt and equity financing options to fund growth
Considerable debt and equity financing options to fund growth Short-term liquidity potential >€1.3bn Equity ~€9bn ~€1.7bn ~€7.0bn €0.8bn ~€0.5bn1 SAG treasury shares SSB shares Undrawn credit facility Cash position Common shares: 3,209,072 Issuance of up to 30,000,000 Pref. shares: 2,632,732 new sha
Slide 42: Key takeaways: Our growth ambition is based on strong financials
Key takeaways: Our growth ambition is based on strong financials Margin ambition mainly driven by Right-sizing of the organization in efficiency measures (2024) dedicated areas; focus on process and economies of scale (2028) improvements to reduce NWC Investments in resilient infrastructure Strong i
Slide 43: Q&A
Q&A SARTORI