Investors Presentation. March 2017

Transcription

1 Investors Presentation March 2017

2 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. This is because our assumptions harbor risks and uncertainties that could lead to actual results diverging substantially from the expected ones. It is not planned to update our forward-looking statements. Throughout this presentation, differences may be apparent as a result of rounding during addition.

3 Agenda 01 FY 2016 Results FY 2017 Guidance 02 Business Model 03 Growth Prospects 04 Appendix

4 Continued Strong Growth Momentum Sartorius Group in millions of unless otherwise specified FY 2015 FY 2016 in % in % cc 1 Sales revenue 1, , Order intake 1, , Underlying EBITDA Underlying EBITDA 2 margin in % Underlying EPS 3,4 (ord.) in Underlying EPS 3,4 (pref.) in Capex ratio in % Constant currencies 2 Underlying = excluding extraordinary items 3 Underlying EPS = based on net profit after non-controlling interest, adjusted for extraordinary items, amortization and based on a normalized financial result and tax rate; FY 2015 continued operations 4 FY 2015 adjusted for stock split; rounded values 5

5 Broad-based Business Expansion Americas in millions EMEA in millions Asia Pacific in millions Sales by Region in % ~ 1.3bn EMEA ~ 44% Americas ~ 34% Asia Pacific ~ 22% FY 15 FY 16 FY 15 FY 16 FY 15 FY % % Acc. to customers location; growth in constant currencies % Excellent organic performance in the Americas driven by both divisions; overproportionate contribution to growth by recent acquisitions Double-digit growth in EMEA region mainly fueled by BPS Momentum in Asia Pacific supported by some larger equipment projects of BPS division 6

6 BPS: Excellent Performance in Line with Upgraded Expectations Order Intake in millions Sales Revenue in millions Underlying EBITDA & Margin in millions +17.2% cc +22.1% cc +27.5% +15.7% +20.5% , % 26.5% FY 15 FY 16 FY 15 FY 16 FY 15 FY 16 Double-digit growth across the entire portfolio in a continued dynamic market environment Further market shares gains, esp. in the Americas Recent acquisitions contribute around 2 pp to sales growth Underlying EBITDA margin expansion of 1.5 pp driven by economies of scale 7

7 LPS: Positive Business Development in Line with Expectations Order Intake in millions Sales Revenue in millions Underlying EBITDA & Margin in millions +9.9% cc +7.9% cc +6.5% +8.4% +6.5% % 16.0% FY 15 FY 16 FY 15 FY 16 FY 15 FY 16 Robust organic growth driven by all regions, led by the Americas IntelliCyt and ViroCyt contribute around 3 pp to sales growth Underlying EBITDA margin at prior-year level due to temporary dilutive effects from recent acquisitions; excluding this dilution, EBITDA-margin would be ~1 pp higher 8

8 Healthy Cash Flow Development Sartorius Group in millions FY 2015 FY 2016 in % Underlying EBITDA Extraordinary items Financial result Underlying net profit 1, Reported net profit Net operating cash flow Net investing cash flow Extraordinary items reflect various cross-divisional projects and expenditures related to the recent acquisitions Reported prior-year net profit includes gain from Intec divestiture Net operating cash flow influenced by an increase in working capital and higher tax payments; discontinuation of factoring weighed on 2015 figure Net investing cash flow reflects capex step up, payments related to acquisitions and the proceeds of the Intec divestiture in Underlying net profit = net profit adjusted for extraordinary items, amortization and based on a normalized financial result and tax rate; continued operations for FY After non-controlling interest 3 Net cash flow from investing activities and acquisitions disposals 9

9 Financial Position Remains Strong Despite Recent Acquisitions Key Financial Indicators Net Debt to Underlying EBITDA Sartorius Group Dec. 31, 2015 Dec. 31, Equity ratio in % , ,8 Net debt in millions of ,2 Net debt underlying EBITDA Q1-Q Q1-Q Q1-Q Q1- Q ,6 0 Net debt in m (lhs) Net debt to underlying EBITDA (rhs) 10

10 Seventh Dividend Increase in Succession Dividend per Preference Share in Dividend per Ordinary Share in Total profit distributed would increase by 20.5% from 25.8mn to 31.1mn Payout ratio 2 of 23.5% pursuant to SAG s dividend policy approx. at the prior-year levels (2015: 24.0%) Dividends 2012 to 2015 adjusted for stock split; rounded values 1 Amounts suggested by the Supervisory Board and the Executive Board of Sartorius AG 2 Relative to underlying net profit 11

11 Outlook for 2017 Will be Updated Post Closing of Essen Acquisition 1 In constant currencies Sales Revenue Growth 1 FY 2016 FY 2017 Guidance 1 Underlying EBITDA Margin Sales Revenue Growth Underlying EBITDA Margin Sartorius Group 18.2% 25.0% ~ 8% - 12% ~ +0.5pp Bioprocess Solutions 22.1% 28.0% ~ 9% - 13% ~ +0.5pp Lab Products & Services 7.9% 16.0% ~ 6% - 10% ~ +1.0pp LPS sales guidance includes approx. 3 pp of non-organic growth expected to be contributed by recent acquisitions Capex ratio ~ 12% - 15% (FY 2016: 11.7%) 12

12 Agenda 01 FY 2016 Results FY 2017 Guidance 02 Business Model 03 Growth Prospects 04 Appendix

13 Sartorius at a Glance International leading Bioprocess and Laboratory Technologies Provider Sales Revenue EBITDA 1 Margin ~ 1.3bn 25.0% ~34% Americas ~44% EMEA ~22% Asia Pacific Employees Market Cap. 2 > ~ 4.9bn Well-balanced revenue base Global sales and service network Production sites in all regions Based on FY 2016 figures; 1 Excluding extraordinary items 2 As of Dec. 31,

14 Strategic Focus on Biopharma Market ~ 75% of Group Sales Bioprocess Solutions Division Molecule Development Process Development Quality Quality and & Testing Production Upstream & Downstream Lab Products & Services Division ~ 25% of Group Sales 15

15 Biopharma Market Growth Driven by Strong Long-term Trends Growing and aging world population World population to grow to ~ 9bn by 2050 Increasing access to healthcare Especially in the emerging markets Strong R&D Pipelines Biologics account for > 40% of all drug candidates Biosimilars Market Emerging industry, capacity build-up esp. in Asia Strong Biopharma Market Growth High Level of BLA Approvals 2 Ø 8 p.a % % ~ +9% CAGR 1 Ø 4 p.a Evaluate Pharma: World Preview 2016, Outlook to 2022; Sept 2016; Frost & Sullivan; CAGR 2016 to FDA.gov 16

16 Bioprocess Solutions Unique Position in an Attractive Market Solution Provider for Biomanufacturing Highly regulated environment validated processes Broadest portfolio in the industry; ii~ 75% recurring revenues Figures based on FY 2106 results; 1 Excluding extraordinary items Sales revenue ~ 975mn EBITDA 1 margin 28.0% 17

17 Bioprocess Solutions The Widest Product Portfolio Across the Biopharma Process Chain Process Development Upstream Processing Downstream Processing Media Media Preparation Seed Seed Fermentation Production Fermentation Cell Removal Cell Removal Capture Polishing Virus Viral Clarification Clarification Clearance Clearance y y y y y y y y y y y y y y y y y y y y y y Vaccines, monoclonal antibodies,... Cell culture media Cell y Antibodies Contaminents such as viruses Simplified diagram 18

18 Bioprocess Solutions Leading Market Positions in Key Technology Platforms Filtration TOP 3 Fluid Management #1 Fermentation #1 More than 85 % of sales generated from a TOP 1-3 position Strong double-digit market shares in most technology platforms 19

19 Bioprocess Solutions Four Strong Pillars Drive Above-Average Growth 1 Pharma market CAGR 4-7% 2 3 Biopharma market Single-use penetration CAGR 8-9% Double-digit growth ~ +13.5% Organic CAGR 1 4 Market share gains Esp. in North America 1 CAGR 2011 to 2016, excluding fx effects and acquisitions 20

20 Lab Products & Services Strong Laboratory Business Platform Created Since 2012 Premium Lab Portfolio for R&D and QA Expert in sample prep.; Unique bioanalytics offering Global sales & service infrastructure established Figures based on FY 2106 results; 1 Excluding extraordinary items Sales revenue ~ 325mn EBITDA 1 margin 16.0% 21

21 Lab Products & Services Sound Market Position in Key Categories for Sample Prep. Lab Balances #2 Pipettes #4 Lab Filtration #3 Microb. Analysis #2 Average global market share of > 10% Significant growth potential, especially in U.S. and Asia (membrane based) 22

22 Lab Products & Services Unique Bioanalytics Offering Recently Added to LPS Portfolio Closing of acquisition expected end-q Acquired in June 2016 Acquired in July 2016 Unrivalled real-time cell analysis platform Award-winning technology for cell screening Innovative platform for rapid virus quantification Innovative and unique bioanalytical platforms added to existing sample prep. offering Strengthens LPS position with customers from pharma/biotech and academia Excellent fit between the acquired companies and with existing LPS portfolio 23

23 Lab Products & Services - Pioneer and Leader in Real-time Cell Analysis Rapidly growing and highly profitable provider of solutions for real-time quantitative analysis of living cells Annual sales of ~$60m expected for 2017; profitability broadly at Group levels Purchase price of $320m; closing expected by end of Q Essen ideally complements IntelliCyt offering Both businesses address the same customers and follow a solution strategy by combining instruments, reagents and analytical software Combination of high throughput, high content analysis of suspension cells (IntelliCyt) with the real-time quantitative analysis of living cells and cell aggregates (Essen) 24

24 Sales Channels Lab Products & Services Enhance Direct Sales Activities to Drive Market Share Gains Distributors optimize Field force expand ebusiness build Pharma Biotech Academia Others 25

25 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 Significant market share opportunities in certain regions to be addressed primarily by direct sales force Unique bioanalytics portfolio established Innovative and unrivalled technologies added through recent acquisitions Combination with Sartorius global reach provides significant growth potential 26

26 Agenda 01 FY 2016 Results FY 2017 Guidance 02 Business Model 03 Growth Prospects 04 Appendix

27 Strong Track Record Sales CAGR ~ +14% EBITDA 1 Margin +5.3pp ~ 733m +13.6% +8.8% +12.6% +16.0% % ~ 1.3bn Sales revenue EBITDA 1 margin in % Intec Division; divested in Sales growth and CAGR for continued operations, in constant currencies 1 Excluding extraordinary items 28

28 Well on Track to Reach the 2020 Targets 2020 Targets Strategic Initiatives ~ 2 bn 1 Sales revenue ~ 3 4 Organic ~ 1 4 Acquisitions ~ 26-27% 1 EBITDA 2 margin Regional Upgrade and reorganisation of sales & service force New application & training labs Portfolio 9 acquisitions executed since 2011 Intec division divested Infrastructure Continuous expansion of existing global production network Roll out of new ERP and additional IT systems Capex ratio at above-average levels until 2018 Executed Ongoing Ongoing 1 Based on 2015 fx rates 2 Excluding extraordinary items 29

29 Regional Initiatives Gain Market Share in North America; Leverage Strong Market Growth in Asia ~ +18% CAGR 1 Americas Sales Share ~ +14% CAGR 1 Asia Pacific Mississauga Bohemia Ann Arbor Albuquerque New Oxford Mexico City Yauco Asia Pacific ~ 22% Americas ~ 34% ~ 1.3bn Bangalore Beijing Seoul Suzhou Tokyo Shanghai Hanoi Bangkok Hong Kong Kuala Lumpur Singapore Production Sales Sales Production Sales Sales North America: the largest market for biopharma and lab products Asia: the strongest growing pharma and lab market 1 CAGR 2011 to 2016, in constant currencies 30

30 Portfolio Expansion Continuous Portfolio Expansion in Line with Strategy Acquisition Criteria Portfolio: Complementary products or technologies Market Position: Either among the Top 3 or unique position Integration: Management capacity; cultural fit Price: Fair valuation; reach Sartorius profitability level in 2-3 years ksep Systems TAP Biosystems AllPure Technologies ViroCyt Essen Bioscience 1 Biohit Liquid Handling Lonza Cell Culture Media Industrial Technologies Division IntelliCyt Acquisition expected to close by end of Q

31 Infrastructure Investments Strong Organic Growth Requires Accelerated Capacity Expansion Capex Ratio in % ~ e 2 Expansion Production facility in Yauco Puerto Rico Significant expansion of production capacities initiated in 2016; earlier and to a greater extent than initially planned Capacities at Yauco plant for single-use bags and filters will be more than doubled Expansion of operations at headquarters in Goettingen, e.g. additional membrane capacities Further investments into digitalization (ERP, CRM, etc) Capex ratio expected to peak in 2017 and to remain above long-term average in Incl. discontinued operation 2 Based on FY 2017 guidance 32

32 Agenda 01 FY 2016 Results FY 2017 Guidance 02 Business Model 03 Growth Prospects 04 Appendix

33 Ordinary shares Preference shares Sartorius Legal & Operational Structure Sartorius Group Legal Setup Sartorius AG Stock market listed in Germany ~ 50% Administered by executor ~ 34% Bio-Rad Laboratories ~ 9% Treasury shares ~ 5% Family owned ~ 2% Free float ~ 91% Free float ~ 9% Treasury shares ~ 74% ~ 100% Sartorius Stedim Biotech S.A. Stock market listed in France ~ 74% Sartorius AG ~ 26% Free float Other Sartorius Subsidiaries Sartorius Group Operational Setup Bioprocess Solutions Division Lab Products & Services Division 34

34 Acquisition Complements BPS Single-use Portfolio Unique single-use centrifugation systems for cell harvest in bioproduction Annual sales of around $7m with a strong EBITDA margin expected for 2016 Perfect fit with BPS s broad range of single-use products Acquired end of July; purchase price of ~ $28m Process Development Upstream Processing Downstream Processing Media Preparation Seed Fermentation Production Fermentation Cell Removal Clarification Capture Polishing Virus Clearance Simplified diagram 35

35 Key Account Business With Limited Dependence on Individual Accounts Sales to Top 50 customers in 2016, in millions ~30% ~40% ~45% ~50% ~55% Cumulative share Top to to to to 50 Long term business relationships with leading global (bio-)pharma companies Limited dependence on individual accounts More than half of 2016 BPS sales were generated with the Top 50 customers No individual customer accounts for more than 5% of BPS sales revenue No single drug accounts for more than 3% of BPS sales revenue 36

36 Multiple Drivers Fuel Significant Market Growth Strong growth of the biopharma market Growing & aging population Increasing access to healthcare Strong R&D pipelines % % ~ 9% CAGR 1 Emerging biosimilars market Conventional Unclassified Biotechnology Technology shift towards single use Cost savings of around 15 to 40% 2 Time to market Reduced risk of cross contamination Improved titers Market Penetration of Single-use Products % % % Past Present Future 1 Evaluate Pharma: World Preview 2016, Outlook to 2022; Sept 2016; Frost & Sullivan; CAGR 2016 to Pharmaceutical Technology Europe Vol. 22 No. 10, Oct Own estimates 37

37 Leading Positions in Key Technology Platforms Sartorius Merck Millipore Danaher Pall Thermo Fisher GE Top 3 Players Filtration 1. Merck Millipore 2. Danaher Pall 3. Sartorius Fluid Management 1. Sartorius 2. Thermo Fisher 3. Merck Millipore Fermentation 1. Sartorius 2. Thermo Fisher 3. GE Purification 1. GE 2. Merck Millipore 3. Danaher Pall Cell Culture Media 1. Thermo Fisher 2. Merck Millipore 3. GE Pie charts indicate completeness of product offering 38

38 European Home Market; Americas and Asia Gaining Significance ~ 34% Share of Sales Americas Albuquerque Mexico City Mississauga Ann Arbor Epsom Bohemia New Oxford Yauco Dublin São Paulo Rotterdam Vilvoorde Royston Glasgow Stonehouse Laupheim Tagelswangen Aubagne Lourdes Madrid Milan Kajaani Helsinki St. Petersburg Goettingen Guxhagen M Hamdia ~ 44% Share of Sales EMEA Budapest Florence Poznan Vienna Bangalore Moscow Beijing Hanoi Bangkok Kuala Lumpur Global Presence: > 30 sales and 20 manufacturing sites Suzhou ~ 22% Share of Sales Asia Pacific Singapore Seoul Tokyo Shanghai Hong Kong Buenos Aires Sales Production Production and Sales Melbourne 39 Page 1

39 Extract of the Bioprocess Solutions Product Portfolio Filtration Purification Fluid Management Fermentation & Cell Culture Media 40

40 Extract of the Lab Products & Services Product Portfolio Lab Balances Lab Water Systems Bioanalytics Filtration Lab Filtration Pipettes 41

41 Executive Board of Sartorius AG Joachim Kreuzburg, CEO since 2003 Corporate Strategy, Legal & Compliance, Operations, Communications, Human Resources Rainer Lehmann, CFO since March 2017 Finance, IT, Business Processes Reinhard Vogt since 2009 Marketing, Sales & Services 42

42 Financial Calendar and Contacts April 6, 2017 Annual Shareholders' Meeting Goettingen April 24, 2017 Publication of First-quarter 2017 Results May 3, 2017 Deutsche Bank HC Conference Boston July 25, 2017 Publication of First-half 2017 Results October 24, 2017 Publication of Nine-month 2017 Results Petra Kirchhoff Vice President Corporate Communications & IR Phone: Andreas Theisen Director Investor Relations Phone: Sartorius Corporate Administration GmbH Weender Landstrasse Goettingen, Germany