Successful business year 2014: Sartorius achieves sales and earnings targets – positive outlook for 2015
Posted: 28 January 2015 | Sartorius
Sartorius, a leading international laboratory and pharmaceutical equipment supplier, successfully closed fiscal 2014 according to its preliminary figures, and even slightly exceeded its sales revenue and earnings targets. In addition, the Group is set to further sharpen its strategic profile based on the sale of its smallest division, Industrial Technologies, which was announced this past December. For the year 2015 as well, Sartorius expects significant growth and a further increase in profitability.
- Group sales revenue +12.6%, order intake +13.4%, underlying EBITDA +15.1%
- Dynamic growth in the Bioprocess Solutions Division; positive trend for the Lab Products & Services Division
- Sartorius expects significant increases in sales and earnings for 2015 as well
“Overall, 2014 was a highly successful year for Sartorius,” commented Group CEO Joachim Kreuzburg. “Our largest division, Bioprocess Solutions, reported double-digit gains for the fourth year in succession and again proved to be the key growth driver for our company’s sales and earnings. The results for Lab Products & Services were still impacted by portfolio cleaning, as expected, but with the start of the new year, this is now behind us. The sale of Industrial Technologies announced at year-end represents an important component of our long-term strategy. Once this transaction is closed, we will concentrate fully on the further development of our two core activities.”
In line with the international financial reporting standards, IFRS, the Industrial Technologies Division is required to be reported separately as a discontinued operation based on its announced sale. Therefore, the development of the continuing Group operations described in the following does not include Industrial Technologies for the reporting year and the prior reporting period. For the purpose of additional transparency, however, a summary of the Group’s target achievements is presented at this point according to the structure reported so far: At 11.3%, Group sales growth in constant currencies would have been marginally higher than the forecasted corridor of 8% to 10%, and the Group’s underlying EBITDA margin would have likewise increased slightly more than expected to 20.2% (forecast: around 20.0%). The individual divisions have each achieved or, in part, exceeded their forecasts.
Double-digit Gains in Order Intake and Sales Revenue
Business development at Sartorius in 2014 was again dynamic, with order intake and sales revenue growing at double-digit rates. According to preliminary figures, order intake rose 13.4% to 929.2 million euros in constant currencies. Sales revenue also grew significantly by 12.6%, attaining 891.2 million euros after 791.6 million euros in the reporting period a year ago.
In view of the divisions, Bioprocess Solutions showed outstanding performance yet again. This division, which focuses on single-use products for the manufacture of biopharmaceuticals, reported considerable gains across all product segments. In addition to excellent organic growth, the two acquisitions of TAP Biosystems and cell culture media business provided further impulses for expansion. Both acquisitions developed under the Sartorius umbrella more strongly than expected. Order intake climbed 18.3% to 652.7 million euros. Consolidated sales revenue surged 18.5%, attaining 615.6 million euros.
For the Lab Products & Services Division, which supplies premium laboratory instruments and lab consumables, order intake rose 3.2% to 276.5 million euros in constant currencies. Its sales revenue was up 1.4% to 275.5 million euros. The phase-out of a few non-strategic product lines from its portfolio thus continued to have a noticeable impact of around two percentage points on the division’s sales revenue, while this effect was only minor on the development of its order intake.
Dynamic growth of the Sartorius Group was driven by all regions. Business in North America increased at the highest rate, with sales revenue up 32.0% in constant currencies. Here, the newly acquired operations had an especially positive effect. Sales increased 10.9% in Asia and 6.6% in Europe. While North America and Europe benefited from the recent acquisitions, the latter played only a subordinate role for Asia.
Profitability Further on the Rise
The Sartorius Group increased its underlying EBITDA by 15.1% to 186.8 million euros. Its corresponding margin was 21.0% relative to 20.5% a year ago. Earnings contributed by the Bioprocess Solutions Division climbed to 145.6 million euros; its respective margin rose from 23.0% in the year-earlier period to 23.7% as of the reporting date. The Lab Products & Services Division reported an underlying EBITDA of 41.2 million euros after 43.4 million euros in the prior year. This equates to a margin of 15.0% (FY 2013: 15.9%).
For fiscal 2014, earnings per ordinary share amount to 4.31 euros (FY 2013: 3.79 euros) and per preference share to 4.33 euros (FY 2013: 3.81 euros).
Positive Outlook for Fiscal 2015
Sartorius forecasts significant, profitable growth for the current year as well. Therefore, the company expects sales to grow approximately 4% to 7% in constant currencies. Its underlying EBITDA margin is projected to further increase to about 21.5%. Sartorius plans to maintain its investments at approximately the prior-year level of around 10% of sales.
In view of the two divisions, management anticipates that sales for Bioprocess Solutions will grow 5% to 8% and that its underlying EBITDA margin will rise to approximately 24.5%.
For the Lab Products & Services Division, Sartorius expects that sales will expand by 2% to 5%. The lab division’s underlying EBITDA margin is projected to rise to around 15.5%.
(All figures currency-adjusted)
“Our business is driven by stable trends, primarily in Bioprocess Solutions, and we are therefore confident about our development in the current year,” stated Kreuzburg. “The forecast for our lab business that partially depends on economic cycles is more uncertain, as
it is difficult at present to predict how some important markets will develop, above all in the European Union, China and Russia.”