Investors Presentation. September 2018

Transcription

1 Investors Presentation September 2018

2 Disclaimer This presentation contains statements concerning Sartorius Stedim Biotech Group s future performance. 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 forwardlooking statements. Throughout this presentation, differences may be apparent as a result of rounding during addition.

3 Agenda Overview and Strategy Mid-term Growth Prospects FY 2018 Guidance H Results Appendix

4 Sartorius at a glance Industry focus Clear mission Attractive market Strong positioning Stable business model A leading partner of the biopharma industry Making R&D and production processes Clear mission of innovative biologics more efficient Biopharma market fueled by strong long-term growth drivers Double-digit market share in key technologies Diversified revenue base and high share of recurring revenues ~ 1.1bn Sales revenue ~14% Sales CAGR 1) % EBITDA margin 2) >20 Countries ~5,100 Employees Based on FY 2017 figures 1) In constant currencies 2) Excluding extraordinary items 4

5 Strategic focus on the biopharma market Process development Upstream processing Downstream processing Quality Testing Validation 5

6 Strong market fundamentals Favorable demographics 9bn people by 2050; >2bn 60 yrs or older Rise of biosimilars ~25% CAGR biosimilar sales ~8% CAGR biopharma market Increasing healthcare spending +6.5% CAGR worldwide prescription drug sales Strong R&D pipeline; advances in gene and cell therapy >50% Share of biologics in pharma R&D pipeline 6

7 Sales revenue more than doubled over the last 6 years Sales CAGR ~ +14% EBITDA 1) margin +6.4pp +10.8% +10.3% +15.9% +19.4% +20.4% +4.1% 1.08bn m Sales revenue EBITDA 1) margin in % Sales growth and CAGR in constant currencies 1) Excluding extraordinary items 7

8 M&A strategy adding innovation, enhancing focus Lonza Cell TAP Biosystems Culture Media AllPure Technologies BioOutsource Cellca ksep Umetrics Acquisition criteria Portfolio: Complementary products or technologies Market Position: Either among the Top 3 or unique selling point Integration: Management capacity; cultural fit Price: Fair valuation; reach Sartorius profitability level in 2-3 years 8

9 Strong 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 9

10 Leader in the growing single-use technology market Single use products offer advantages over conventional stainless-steel devices Capex Opex reduction over entire lifecycle Reduced risk of cross-contamination Higher flexibility; advantageous for biosimilars Single-use market penetration expected to increase from ~35% to ~75% % Construction cost Reference SU Reference % Time-tomarket SU Reference % Energy cost SU Reference % Water cost SU 10

11 Limited dependence on individual accounts Sales to Top 50 customers in 2017, in millions ~ 25% ~ 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 2017 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 11

12 Agenda Overview and Strategy Mid-term Growth Prospects FY 2018 Guidance H Results Appendix 12

13 Sartorius 2025 targets and initiatives Strategic initiatives Regional Participate in strong Chinese market growth Continue to outperform the important U.S. market Portfolio Add high-impact innovation, e.g. digital tools Enhance process development capabilities Expand into adjacent applications Operations Accelerate workflows across the organization through digitalization Extend manufacturing base in Asia 2025 targets ~ 2.8bn 1 Sales revenue ~30% EBITDA margin 2025 targets are based on 2017 currency exchange rates; non-organic revenue growth is accounted for companies acquired from 2018 and onwards; EBITDA excluding extraordinary items 13

14 U.S. remains most important market; China with highest growth rates Biologics market growth forecast CAGR 2018 to 2022, $ in billions U.S. ~ 115 U.S. ~ 163 Europe ~ 50 ~ +16% China Europe ~ 65 China ~ 33 ~ $250bn ~ +9% U.S. ~ $345bn China ~ 60 ROW ~ 51 ~ +7% Europe ROW ~ 57 Biologic market in China is at an early stage, but has strong growth potential Supportive regulatory environment and solid industry foundation; biopharma considered a priority sector Manufacturing capacity in China to triple by

15 Continuous market share gains in the Americas Sales growth Americas ~ +15% CAGR 1) Footprint New Oxford Bohemia Sales share America 2017: 34% 2011: 27% Mexico City Yauco ) In constant currencies Production Sales Sales Key initiatives: U.S. sales organization established Investment into optimized go-to-market approach Portfolio enhanced through 6 acquisitions Process development lab opened in Boston 15

16 Business development in Asia in line with strong market growth Sales growth Asia Footprint Sales share Asia Pacific ~ +17% CAGR 1) Beijing Hanoi Seoul Tokyo Shanghai 2017: 23% 2011: 20% Bangalore 95.1 Kuala Lumpur Singapore Production Sales Sales 1) In constant currencies Key initiatives: Investment into optimized go-to-market approach New sales and marketing headquarter in Shanghai Application and validation lab established Ambition to extend manufacturing base in Asia 16

17 Biosimilars: Strong growth, big opportunities Biosimilars will outperform the biologics market in billions ~ +25% CAGR ~ 58 ~ 10 ~ 230 ~ 431 Major blockbuster biologics are going off patent Lower prices will lead to higher production volumes Time-to-market is key as only the first few biosimilar provider are profitable APAC penetration relatively high; U.S. at the beginning Other biologics Biosimilars 17

18 Target to lead Preclinical Phase 1 Phase 2 Phase 3 Registration Absolute survival rate % Cumulative investmt ( in millions) The biopharma market is not yet mature, but is maturing... not mature because Underpenetrated global market Strong flow of innovation Time-consuming product development Cumulative investment and absolute survival rate in drug development ,500 1, but maturing because Increasing importance of product costs and time to market Robustness and ease of use of tools are becoming more important Companies invest in market consolidation >10+ years Data adopted from: Paul (2010) Nature Rev DD & Association of the British Pharmaceutical Industry (2017) 18

19 Digitalization is arriving in biopharma Collect data Improve process Monitor & control Sartorius offers the leading software for bioprocess data analytics Analyze Enhanced process control and robustness Improved product quality Predictive process control Powerful solutions for modeling and optimizing development and manufacturing Help to gain insights from complex data sets Data analytics just at the beginning in biomanufacturing and shows high potential 19

20 Four strong pillars drive above-average growth Pharma market CAGR 4-7% ~ +11% Organic CAGR 1) Biopharma market CAGR ~8% Single-use penetration Double-digit growth Market share gains Esp. in North America ) 1) CAGR 2013 to 2018e, excluding FX effects and acquisitions 2) Midpoint of 2018 guidance 20

21 Agenda Overview and Strategy Mid-term Growth Prospects FY 2018 Guidance H Results Appendix 21

22 Higher revenue growth expected for FY 2018 FY 2018 Guidance 1) Previous New Sales revenue growth 7% - 10% ~ 11% - 14% Underlying EBITDA margin ~ +0.5pp vs. FY17: 27.3% 28.0% CAPEX ratio ~ 15% ~ 15% 1) In constant currencies Growth guidance includes non-organic contribution by recent acquisition of ~ 0.5pp Due to the U.S. tax reform, SSB s tax rate is expected to decrease from 2018 onwards by 2pp to around 26% 22

23 Double-digit growth in sales and profit Sartorius Stedim Biotech Group in millions unless otherwise specified H ) H in % in % cc 2) Sales revenue Order intake Underlying EBITDA 3) Underlying EBITDA 3) margin in % pp Underlying EPS 4) per share in Substantial revenue growth with single-use products; cell culture media business picking up; several larger equipment projects in Q2 order intake Underlying EBITDA margin increases despite currency headwinds 1) Restated after PPA finalization 2) Constant currencies 3) Underlying = excluding extraordinary items 4) Underlying EPS = based on net profit after non-controlling interest; adjusted for extraordinary items as well as amortization and based on a normalized financial result and tax rate 23

24 Growth in all regions, Americas with highest momentum Americas in millions EMEA in millions Asia Pacific in millions Sales by Regions in % EMEA ~ 43% Americas ~ 34% ~ 586m H117 H118 H1 17 H % +9.1% H % H118 Asia Pacific ~ 23% Acc. to customers location; growth in constant currencies Americas: High momentum against moderate comps EMEA: Robust growth in sales revenue and dynamic order intake Asia Pacific: Strong sales growth versus high comps 24

25 Significant increase in operating cash flow Sartorius Stedim Biotech Group in millions unless otherwise specified H ) H in % Underlying EBITDA Extraordinary items Financial result Underlying net profit 2),3) Reported net profit 3) Net operating cash flow Net operating cash flow driven by higher earnings Net investing cash flow reflects execution of CAPEX program (IT investments; capacity additions in Yauco and Goettingen) Acquisition of software-related assets from Sartorius AG led to temporary peak in SSB s CAPEX; ratio is expected to decrease to projected levels in H2 Net investing cash flow 4) CAPEX ratio (in %) pp 1) Restated after PPA finalization 2) Underlying net profit = net profit adjusted for extraordinary items, amortization and based on a normalized financial result and tax rate 3) After non-controlling interest 4) Net cash flow from investing activities and acquisitions 25

26 Financial position remains strong Key Financial Indicators Net Debt and Net Debt to Underlying EBITDA Sartorius Stedim Biotech Dec. 31, 2017 Jun. 30, Equity ratio in % Net debt in millions of Net debt underlying EBITDA Q1-Q Q1-Q Q1- Q Q1-Q Q Net debt in millions of (lhs) Net debt to underlying EBITDA (rhs) 26

27 Infrastructure prepared for further organic growth Capex ratio in % ) ) ) Incl. discontinued operation 2) Based on 2018 guidance 10 Capex composition 2018 ~x% ~7% ~3% ~2% ~3% Major projects Regular expansion Cap. R&D Maintenance Yauco, Puerto Rico Doubling of fluid management and filter capacities Goettingen, Germany Extension of filter capacities Aubagne, France Capacity extension of bag production New ERP and extension of global IT infrastructure 27

28 Appendix 28

29 Strong worldwide presence Rotterdam Vilvoorde Royston Epsom Malmö Mexico City New Oxford Bohemia Yauco Glasgow Stonehouse Dublin Laupheim Tagelswangen Lourdes Madrid Aubagne Helsinki Goettingen Guxhagen Budapest Vienna Florence M Hamdia Poznan Hanoi Beijing Seoul Shanghai Tokyo Bangalore Kuala Lumpur Singapore São Paulo Buenos Aires Melbourne Sales Production Production and Sales 29

30 Extract of the product portfolio Filtration Purification Fluid Management Fermentation & Cell Culture Media 30

31 On track to meet 2020 targets Strategic initiatives Strategic Initiatives Regional Further grow sales force effectiveness Gain share in North America Leverage market growth in Asia 2020 Targets 2020 targets ~ bn Sales revenue Portfolio Alliances and acquisitions Own product development ~ 4 5 Organic ~ 1 5 Acquisitions Infrastructure Continued capacity expansion Drive digitalization and roll-out of efficient IT systems ~29-30% EBITDA margin 2020 targets are based on 2015 currency exchange rates; EBITDA excluding extraordinary items 31

32 Sartorius Stedim Biotech Group Executive Committee Joachim Kreuzburg, CEO since 2007 Volker Niebel since 2007 Oscar-Werner Reif since 2009 Reinhard Vogt since 2007 Finance, Legal & Compliance, Communications, Human Resources Production, Business Processes, Supply Chain Management, IT Research & Development Marketing, Sales & Services 32

33 Financial calendar and contacts September 04, 2018 M.M. Warburg Roadshow Edinburgh September 05, 2018 Metzler Roadshow London September 06, 2018 Goldman Sachs European Medtech Conf. London September 12, 2018 Commerzbank Roadshow Chicago September 13, 2018 Morgan Stanley Global HC Conf. New York September 17-18, 2018 Mainfirst Roadshow Helsinki, Oslo, Copenhagen September 25, 2018 Berenberg German Corporate Conf. Munich Petra Kirchhoff Head of Corporate Communications & IR Phone: Ben Orzelek Head of Investor Relations Phone: Sartorius Corporate Administration GmbH Otto-Brenner-Straße Goettingen, Germany 33