Sartorius Releases Figures for the First Half of 2010

27-Jul-2010 - Germany

Sartorius published its first-half results for 2010. Both the biotechnology Division and the Mechatronics Division reported substantial gains in order intake and sales revenue. The two divisions expanded their business in all regions.

Business Development of the Group Divisions

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The Biotechnology Division, which operates under the name of Sartorius Stedim Biotech, achieved further growth in sales revenue and profit in the first six months of fiscal 2010. Thus, its order intake rose 8.8% (constant currencies: +7.4%) to 221.4 million euros, up from 203.5 million euros a year ago. As expected, the order volume for its equipment business comprised of bioreactors increased in particular. First-half sales revenue for the division grew 5.7% (constant currencies: +4.6%) from 197.8 million euros to 209.1 million euros. Primarily the Asia|Pacific region, and also North America, substantially contributed to the growth in the division’s revenue, whereas in line with the company’s expectations, development in Europe was flat due to the phase out of extraordinary business with producers of H1N1 vaccines.

The Biotechnology Division increased its first-half operating earnings (earnings before interest, taxes and amortization and adjusted for extraordinary expenses = underlying EBITA) from 28.0 million euros a year ago to 31.5 million euros. Its respective margin thus improved from 14.2% to 15.0%. “We are excellently positioned in the Biotechnology Division with our innovative product portfolio. At the moment, there is an especially high demand in Asia where many biopharmaceutical companies are currently investing in relatively large production systems in which our equipment and technologies are much sought after," stated Sartorius CEO Dr. Joachim Kreuzburg.

Sartorius Mechatronics

In the first half of 2010, the Mechatronics Division received orders valued at 115.1 million euros, thus considerably boosting its order intake by 11.8% (constant currencies: +10.4%) over its year-earlier figure of 102.9 million euros. Primarily the demand for lab products continued to rise briskly, and orders for industrial weighing and control products rebounded compared with the previous year. The Mechatronics Division increased its sales revenue 7.5% (constant currencies: +6.1%) to 106.1 million euros from 98.7 million euros a year ago, achieving the highest rates of growth in the Asia | Pacific region.

At 4.8 million euros, the division generated positive operating earnings (underlying EBITA) during the first six months of 2010 following an operating loss of 3.4 million euros in the year-earlier period. The division’s respective margin surged to 4.5% compared with -3.4% a year ago. “In the Mechatronics Division, we are continuing to feel the effects of economic recovery, but are not yet operating back at the level of the years before the economic crisis. Profitable growth in Asia and the mostly completed implementation of extensive restructuring and cost-reduction measures last year especially contributed to this positive development. For the future, continued stringent cost management and productivity increases as well as ongoing strategic realignment of the Mechatronics Division will remain on the agenda,” commented Dr. Kreuzburg.

Business Development of the Sartorius Group

On the whole, the Group received orders valued at 336.4 million euros in the first half of 2010, up from 306.4 million euros a year earlier. This equates to a gain of 9.8% (constant currencies: +8.4%). Consolidated first-half sales revenue rose 6.3% (constant currencies: +5.1%) to 315.2 million euros, up from 296.5 million euros reported in the same period a year ago. From January to June, the Group’s operating earnings (=underlying EBITA) surged just shy of 50%, from 24.7 million euros to 36.3 million euros. Accordingly, its corresponding margin improved substantially from 8.3% a year earlier to 11.5%.

First-half extraordinary expenses stand at 1.9 million euros compared with the previous year’s figure of 16.3 million euros, which was particularly due to restructuring of Mechatronics. Including first-half extraordinary expenses, consolidated EBITA amounts to 34.4 million euros, up from 8.4 million euros a year ago. The Group’s respective EBITA margin is at 10.9%, up from 2.8% in the year before. The Group’s relevant net profit is 15.9 million euros, significantly up from 6.4 million euros a year earlier. This profit is calculated by excluding extraordinary expenses, as well as non-cash amortization of 3.5 million euros (same figure as in the previous year: 3.5 million euros). The corresponding earnings per share are 0.93 euro, well up from 0.37 euro a year ago.

“It is encouraging that following the highly divergent business pattern of the past year, both divisions are now reporting positive development and have contributed to the strong increase in the Group’s profit. Based on our first-half results and order backlog, we see that we are well on the way toward reaching our targets for 2010," commented the CEO of Sartorius.

Outlook

For the Biotechnology Division, management expects that in constant currencies, sales will be within the upper single-digit percentage range and the operating EBITA margin will slightly increase. For the Mechatronics Division, management anticipates that currency-adjusted sales revenue will be in the lower single-digit percentage range and the operating EBITA margin is likely to be around 5%. For the entire Group, management forecasts that sales growth in constant currencies will be slightly above 5%, its operating EBITA margin will increase by one to two percentage points and that operating cash flow will be significantly positive.

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