Sartorius grows in order intake, sales revenue and earnings
Sartorius, a leading international laboratory and pharmaceutical equipment supplier, successfully closed the first nine months of 2014 with substantial gains.
Consolidated order intake grew 10.1% in constant currencies; Group sales revenue rose 9.6%. Operating Profit1) for the Group also climbed 10.7%; its respective margin after nine months was 19.6%. Based on the strong results of the past three quarters, Sartorius confirms its forecast for the full year of 2014, which projects currency-adjusted growth in sales of 8% to 10% and an increase in its EBITDA margin to around 20%.
“The Group and its divisions are on track to achieve our full-year targets,” said CEO Joachim Kreuzburg. “Our largest division, Bioprocess Solutions, continues to show the highest growth momentum. Besides its core product segments, the most recent acquisitions in this division have shown excellent performance. Business in Lab Products & Services has picked up, while its figures are still impacted by the phase-out of a few non-strategic product lines from its portfolio. The positive development trend of the second quarter has also continued on into the reporting period for our third division, Industrial Technologies.”
Significant Gains in Order Intake and Sales Revenue
Sartorius increased its order intake in the first nine months by 10.1% (reported: +9.0%) to 730.0 million euros. Sales revenue also grew significantly at 9.6% (reported: +8.4%), attaining 712.7 million euros compared with 657.3 million euros in the year-earlier period.
The Bioprocess Solutions Division primarily contributed to the Group’s strong business performance, recording double-digit growth rates. Its order intake rose 14.6% (reported: +13.7%) to 460.3 million euros. The division’s sales revenue surged 17.2% (reported: +16.3%) and was 444.7 million euros. Excellent development of the most recent company acquisitions in cell culture media and mini-bioreactors and strong business with single-use products fueled the division’s growth.
For the Lab Products & Services Division, order intake rose 2.3% (reported: +0.7%) to 192.7 million euros. At 195.7 million euros, its sales revenue approximately reached the prior-year level (cc: -0.1%; reported: -1.7%). As expected, the phase-out of a few non-strategic products continued to have a noticeable impact on sales.
Following a weak start into the year, business for the smallest Group division, Industrial Technologies, was robust on the whole. Its order intake thus rose 5.9% (reported: +4.7%) to 77.0 million euros. At 72.4 million euros, the division’s nine-month sales revenue in 2014 was still below the year-earlier figure, down 3.5% (reported: -4.6%).
Regionally, North America again showed the highest growth, reporting a sharp increase of 28.2%. Here, the consolidation of acquisitions played a substantial role. Sales with customers in Asia were up 5.8%, and sales in Europe rose 5.7%. (All regional figures currency-adjusted)
Further Increase in Consolidated Profit
The Sartorius Group increased its underlying EBITDA by 10.7% to 139.5 million euros. Its corresponding margin was 19.6% relative to 19.2% a year ago. Earnings contributed by the Bioprocess Solutions Division climbed 19.4% to 103.6 million euros; its respective margin rose from 22.7% in the year-earlier period to 23.3% as of the reporting date. The Lab Products & Services Division reported an underlying EBITDA of 28.5 million euros relative to 32.4 million euros a year ago, which equates to a margin of 14.6% (9M 2013: 16.3%). Underlying EBITDA for the Industrial Technologies Division rose from 6.7 million euros a year earlier to 7.3 million euros; its respective margin was up year over year, from 8.9% to 10.1%.
Group EBIT, including extraordinary items of -5.6 million euros (9M 2013: -4.8 million euros), depreciation and amortization, was 94.4 million euros, up 9.5%. The Group’s corresponding margin was 13.2% compared with 13.1% a year ago. Relevant net Profit2) for the Group totaled 50.5 million euros (9M 2013: 47.0 million euros). Its respective earnings per ordinary share were 2.96 euros (9M 2013: 2.75) and per preference share, 2.98 euros (9M 2013: 2.77 euros).
Full-year Outlook Confirmed for the Group and Its Divisions
Based on the results of the first nine months of 2014, management confirmed its sales and earnings forecast for the Group and its divisions. Sartorius therefore continues to project that in constant currencies, sales will grow from 8% to 10% and its underlying EBITDA margin will increase year over year from 19.5% to around 20.0% for the full year.
In view of the three divisions, the company continues to expect that Bioprocess Solutions will reach the upper end of the 12% to 15% range in sales growth. Regarding profitability, Bioprocess Solutions’ underlying EBITDA margin is forecasted to rise to about 23.5% (previous year: 23.0%). For Lab Products & Services, Sartorius projects that sales revenue will increase at the lower end of its growth corridor of 1% to 4% and that the division’s underlying EBITDA margin will be around 15.0%. Industrial Technologies also projects that its sales revenue will attain the lower end of the 1% to 4% growth range and that its underlying EBITDA margin will increase to around 10.5%, up from 10.1% a year ago. (All forecasted figures currency-adjusted)
- Sartorius uses underlying EBITDA (earnings before interest, taxes, depreciation and amortization and adjusted for extraordinary items) as the key profitability indicator.
- 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.