Sartorius (FWB:SRT), a leading international laboratory and
process equipment provider, increased its operating profit in 2009
despite the difficult macroeconomic climate and achieved operating
earnings of 60.9 million euros, up from 56.8 million euros a year
earlier. “As a result, we are among the companies that were able to
close the 2009 year of crisis with a positive development of
operating earnings,” commented CEO Dr. Joachim Kreuzburg on the
company’s full-year results at the annual press conference in
Goettingen, Germany.
Both divisions of the Group contributed very differently to
consolidated earnings. The Biotechnology Division, which
predominantly manufactures consumables for the biopharmaceutical
industry and contributes approximately two thirds to consolidated
sales, reported dynamic growth and attained a new level in
operating profit. By contrast, the Mechatronics Division, which
manufactures primarily weighing and control equipment, i.e.,
capital goods and is thus much more dependent on economic cycles,
saw its development of business and earnings severely impacted by
the global downturn. Nevertheless, this division achieved a
turnaround as a result of extensive restructuring measures during
the course of the year and closed 2009 with positive operating
earnings.
For 2010, Dr. Kreuzburg expects growth in sales revenue and
profit for both divisions. “I assume that the Biotechnology
Division can maintain its strong growth. Production technology in
our key customer segment, the biopharmaceutical industry, is
undergoing rapid change. Pharmaceutical manufacturers are
increasingly switching from stationarily installed stainless steel
equipment to flexibly deployable single-use products made of
plastic. This is exactly the direction in which we have been
strategically heading and propelling developments in the
Biotechnology Division right from a very early stage. Meanwhile, we
offer the widest and best integrated portfolio in the industry for
the manufacture of pharmaceuticals using single-use systems. We
will be launching highly attractive new products in this market
segment in 2010 as well."Referring to the Mechatronics Division,
Dr. Kreuzburg mentioned the considerable unknowns still surrounding
the current business cycle, but for the division expects the
economy to recover slightly. “On the cost side, we are in a
substantially improved position thanks to our extensive
restructuring program. Moreover, in 2009 we initiated a strategic
realignment of the Mechatronics Division. Building on our strong
market position in weighing equipment, we will transform our
company from being a technology specialist into an applications
expert. Through strategic alliances and our own developments, we
will be adding new technologies to our array of products,
technologies that help our customers enhance their production
processes in terms of cost, quality, safety and reliability. In the
process, we are focusing even more strongly on the food and the
pharmaceutical industries, both of which are sectors with excellent
mid- and long-term growth prospects."
In view of strong consolidated cash flow and highly robust key
balance sheet ratios and financials, Dr. Kreuzburg sees the
Sartorius Group in a capable position to take further growth steps.
“In addition to our strong focus on our operating results,
strategic acquisitions will again be an issue as of 2010, but we
are in no hurry in this regard.”
Essential Figures on the Business Development of the
Divisions and of the Group
Sartorius Stedim Biotech
The Biotechnology Division, which operates under the name of
Sartorius Stedim Biotech (SSB), looks back upon a successful fiscal
2009 and increased its sales revenue 9.4% from 366.0 million euros
to 400.4 million euros (currency-adjusted: 8.3%). Order intake also
considerably jumped 11.5% from 367.1 million euros to 409.2 million
euros (currency-adjusted: 10.3%). Again, double-digit growth rates
generated by the company’s business with single-use products for
the biopharmaceutical industry substantially fueled this growth. In
addition, SSB benefited in the reporting year from the high demand
driven by vaccine manufacturers who required considerable
quantities of single-use bags and filters used in the production of
the vaccine against the H1N1 virus. This effect contributed around
two percentage points to growth. As expected, business with
large-scale bioreactor systems slightly declined, by contrast, but
saw positive momentum as of the second half of the year.
Regarding regional distribution of sales revenue, all business
regions with their significantly positive growth rates contributed
to the successful development of sales. North America achieved the
highest growth, where sales were up 18.1% (currency-adjusted:
11.6%), followed by Asia|Pacific, with sales up 7.8%
(currency-adjusted: 4.7%), and Europe, up 5.1% (currency-adjusted:
6.5%).
This strong sales development is also reflected by the
Biotechnology Division’s earnings. Its earnings before interest,
taxes and amortization, which were adjusted for special items
(underlying EBITA or operating earnings), grew overproportionately
by 51.5% to 60.2 million euros from 39.7 euros a year earlier. The
corresponding EBITA margin rose from 10.9% to 15.0% and thus marks
a new level. Besides the uplift in sales volume, the division’s
enhanced product mix and stringent cost management were decisive
for this boost in profitability.
Sartorius Mechatronics
Amid a climate of pronounced reluctance to invest shared by
nearly all customer sectors, the Mechatronics Division reported a
steep decline in demand for its products in the reporting year.
This impacted its business with industrial weighing and control
equipment slightly more than its business with laboratory
instruments. By contrast, service business proved to be robust.
Compared with a year ago, the division’s sales revenue dropped
17.9% from 245.6 million euros to 201.7 million euros
(currency-adjusted: -19.3%). At 205.9 million euros, order intake
was also down 15.2% from 242.7 million euros a year earlier
(currency-adjusted: -16.6%). Following an especially steep plunge
in first-half demand, business indicated initial signs of recovery
at year-end.
The regional pattern shows that the division’s decline in
revenue was somewhat less pronounced in Asia|Pacific at a minus of
8.2% (currency-adjusted: -12.7%) than in the regions of North
America (-14.4%; currency-adjusted: -19.1%) and Europe (-22.4%;
currency-adjusted -21.7%).
Despite the drop in sales, the Mechatronics Division posted
slightly positive operating earnings of 0.7 million euros, up from
17.1 million euros a year ago. This increase was due to an
extensive restructuring program, which was implemented in the
reporting year to adapt the division’s structures to the changed
market conditions and which reduced its annual cost base by a good
30 million euros. The division’s underlying EBITA margin was 0.4%
compared with 7.0% for the year-earlier period.
Business Development of the Sartorius Group
At Group level, the excellent development of the Biotechnology
Division's business compensated for the recession-induced losses in
the Mechatronics Division for the most part. Consolidated sales
revenue in 2009 was 602.1 million euros compared with 611.6 million
euros a year ago, and therefore eased only slightly by 1.6%
(currency-adjusted: -2.7%) relative to the previous reporting
period. At 615.1 million euros, order intake was slightly above the
year-earlier figure of 609.8 million euros (0.9%;
currency-adjusted: -0.4%).
On account of the Biotechnology Division’s significant rise in
profitability, consolidated operating earnings rose 7.2% from 56.8
million euros to 60.9 million euros. The corresponding earnings
margin climbed from 9.3% to 10.1%. Extraordinary expenses, which
are predominantly comprised of provisions for the restructuring
program in the Mechatronics Division, totaled 30.0 million euros.
Unadjusted consolidated EBITA was 30.9 million euros (previous
year: 56.8 million euros).
The Group’s relevant net profit – underlying consolidated net
profit after minority interest without the two non-cash items of
amortization and interest for share price warrants – was also
slightly up from 18.2 million euros a year ago, at 20.8
million euros; this equates to earnings per share of 1.22 euros, up
from 1.07 euros in the previous year. In particular, due to the
significant restructuring charges in the Mechatronics Division, the
unadjusted consolidated net profit after minority interest amounts
to -7.3 million euros (12.4 million euros).
Key Balance Sheet Ratios and Financials at an Improved, Solid
Level
A particular focus of the reporting year was on strengthening
cash flow. Because of strong operating profit, stringent management
of working capital and the factoring program implemented in middle
of the reporting year, operating cash flow surged from 53.0 million
euros to 143.4 million euros. Accordingly, the key balance sheet
ratios and financials were at an overall improved, solid level: the
equity ratio was 38.9% (Dec. 31, 2008: 38.5%) and the ratio of net
debt to EBITDA was 2.6 (previous year: 2.7).
Research and Development Adapted to Accommodate Market
Conditions
In fiscal 2009, Sartorius spent 40.2 million euros on research
and development, down from 43.9 million euros a year ago; at 6.7%,
its ratio of R&D costs to sales revenue eased slightly from a
year earlier. While R&D costs in the Biotechnology Division
remained at a constantly high level, R&D spending in the
Mechatronics Division was adapted to accommodate the changed market
conditions. As in the Biotechnology Division, Sartorius plans to
extend its product portfolio in the Mechatronics Division through
targeted alliances with external partners from science and
industry.
Workforce Reduced by Restructuring in the Mechatronics
Division
As of December 31, 2009, the Sartorius Group employed 4,323
people, 337 persons, or -7.2%, fewer than in the previous year.
This decrease essentially resulted from the adjustment of personnel
capacity in the Mechatronics Division in line with its lower
business volume. Together with employee representatives, the
company agreed on socially responsible arrangements as far as
possible in making the unavoidable cuts in staff costs. The number
of employees in the Mechatronics Division dropped from 2,298 to
1,942. In contrast, the Biotechnology Division slightly increased
its number of staff 0.8% from 2,362 to 2,381 by the end of
2009.
Dividends Proposed at the Year-Earlier Level
The Supervisory Board and the Executive Board of Sartorius AG
will submit a proposal to the Annual General Shareholders’ Meeting
on April 21, 2010, to pay the dividends in the same amounts as in
the previous year: 0.42 euro per preference share and 0.40 euro per
ordinary share. As a result, the total profit distributed would be
7.0 million euros as in 2008. This dividend proposal mirrors the
operating profitability of the past fiscal year and the positive
future prospects of the company.
Positive Outlook for Both Group Divisions
For the Biotechnology Division, management expects
currency-adjusted sales growth in the upper single-digit range for
2010. This increase is forecasted to comprise strong gains for
single-use products and moderate gains for its equipment business.
As in 2010 extra business with the vaccine industry is not
anticipated and equipment business is likely to contribute a
relatively high percentage to sales growth, the division’s
operating EBITA margin is expected to rise rather slightly.
For the Mechatronics Division, which is more strongly dependent
upon business cycles, management assumes that despite the
persistent uncertainty about economic development, there will be a
slight upturn. Against this backdrop, currency-adjusted sales
growth is expected in the lower single-digit percentage range.
Given the division’s significantly reduced cost base as a result of
extensive restructuring measures, its operating EBITA margin should
attain around 5%.
For the entire Group, management accordingly expects sales
growth in constant currencies to be slightly above 5% and its
operating EBITA margin to continue to improve by one to two
percentage points. Furthermore, management anticipates a
significantly positive operating cash flow.
Current Image Files:
Dr. Joachim Kreuzburg, CEO and Executive Board Chairman of
Sartorius:
http://www.sartorius.com/media/content/press/support/Dr_Kreuzburg_4.jpg
Sartorius Stedim Biotech delivers innovative systems and
solutions for the manufacture of biopharmaceutical medications:
http://www.sartorius.com/media/content/press/support/SSB_Integrated_Solutions.jpg
Sartorius Mechatronics produces weighing and control equipment
for laboratory and industrial applications in the food and
pharmaceutical industries:
http://www.sartorius.com/media/content/press/support/Sartorius_Kontrolltechnik.jpg
Upcoming Financial Dates:
April 21, 2010 Annual General Shareholders’ Meeting in
Goettingen, Germany
April 2010 Publication of first-quarter figures (Jan. – March
2010)
This press release contains statements about the future
development of the Sartorius Group. The content of these statements
cannot be guaranteed as they are based on assumptions and estimates
that harbor certain risks and uncertainties.
A Profile of Sartorius
The Sartorius Group is a leading international laboratory and
process technology provider covering the segments of biotechnology
and mechatronics. In 2009, the technology group earned sales
revenue of 602.1 million euros. Founded in 1870, the
Goettingen-based company currently employs approximately 4,350
persons. The major areas of activity in its biotechnology segment
focus on fermentation, filtration, purification, fluid management
and laboratory applications. In the mechatronics segment, the
company primarily manufactures equipment and systems featuring
weighing, measurement and automation technology for laboratory and
industrial applications. Key Sartorius customers are from the
pharmaceutical, chemical and food and beverage industries and from
numerous research and educational institutes of the public sector.
Sartorius has its own production facilities in Europe, Asia and
America as well as sales subsidiaries and local commercial agencies
in more than 110 countries.
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