HSBC s 13th Equity Conference. Paris March 31, 2015

Transcription

1 HSBC s 13th Equity Conference Paris March 31, 2015

2 Disclaimer This presentation contains statements concerning the Sartorius Group s future performance. These statements are based on assumptions and estimates. Although we are convinced that these forwardlooking 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 1 FY 2014 Results Guidance Company Overview 3 4 Bioprocess Solutions Lab Products & Services 5 Growth Prospects and Projects 6 Appendix

4 Divestment of Intec Division Led to Change in Reporting Industrial Technologies Division sold to Minebea; transaction closed early-february 2015 Cash proceeds totaled ~ 90m Industrial Technologies Division accordingly reported as discontinued operation Continued Operations Discontinued Operation Bioprocess Solutions Lab Products & Services Industrial Technologies 4

5 Double-digit Growth in Order Intake, Sales and Profits Sartorius Group 1) in million (unless otherwise specified) FY 2013 FY 2014 Change Change in cc 2) Order intake % 13.4% Sales revenue % 12.6% Underlying EBITDA % Underlying EBITDA margin 20.5% 21.0% + 50bps Underlying EPS (ord.) 3) in % Underlying EPS (pref.) 3) in % Total Group underlying earnings per share 3) Ordinary shares: 4.31 vs in 2013 Preference shares: 4.33 vs in ) Continued operations 2) cc = constant currencies 3) Underlying EPS = based on net profit after non-controlling interest, adjusted for extraordinary items, amortization and fair value adjustments of hedging instruments 5

6 Double-Digit Growth in North America & Asia; Europe Robust North America Sales 1) in million Europe Sales 1) in million Asia Pacific Sales 1) in million Other Markets Sales 1) in million Sales 1) by Regions in % Europe ~ 47% North America ~ 27% FY13 FY14 FY13 Growth in constant currencies FY14 FY13 FY FY % + 6.6% % % FY mn Other Markets ~ 3% Asia Pacific ~ 23 % Healthy organic growth in NA driven by both divisions; considerable contribution from recent acquisitions BPS division fueled growth in Europe Performance in Asia influenced by soft business environment for LPS in ) According to customers location 6

7 Bioprocess Solutions: Performing Ahead of Expectations Order Intake in million Sales Revenue in million Underlying EBITDA & Margin in million % 23.7% FY 2013 FY 2014 FY 2013 FY 2014 FY 2013 FY % % cc % % cc % Order intake: high growth despite high base Sales revenue: organic growth of ~ 10% fueled by all product lines; both organic and non-organic performance better than expected Underlying EBITDA margin increased by 70 bps driven by economies of scale 7

8 Lab Products & Services: Solid FY 2014 Despite Different Headwinds Order Intake in million Sales Revenue in million Underlying EBITDA & Margin in million % 15.0% FY 2013 FY 2014 FY 2013 FY 2014 FY 2013 FY % + 3.2% cc + 0.6% + 1.4% cc - 5.1% Order intake: robust performance led by North America Sales revenue: ~ 2 percentage points effect from phase-out of non-strategic products; business in Asia continues to stabilize Underlying EBITDA margin development influenced by moderate volumes as expected 8

9 Financial Result Influenced by Non-cash Items Sartorius Group in million FY 2013 FY 2014 Change Underlying 1) EBITDA % Extraordinary items % Financial result % Financial Result significantly influenced by derivatives relating to debt refinancing mainly non-cash effective Reported net profit additionally impacted by onetime tax charge Underlying 1)2) net profit 3) % Reported net profit 3) % 1) Excluding extraordinary items 2) Excluding non-cash amortization and fair value adjustments of hedging instruments 3) Total Group; after non-controlling interest 9

10 Strong Cash Flow Performance Sartorius Group in million (unless otherwise specified) FY 2013 FY 2014 Net cash flow from operating activities Net cash flow from investing activities 1) Net cash flow from financing activities Operating cash flow driven by strong earnings development Thereof discont. op. 4.0 ( 6.3) mn Cash flow from investing activities below last year as planned Thereof discont. op (- 2.2) mn Cash flow from financing activities reflects, inter alia, the reduction of debt 1) Including cash outflows related to acquisitions 10

11 All Key Financial Indicators Broadly Stable Key Financial Indicators Net Debt to Underlying EBITDA 1) Sartorius Group 1) Dec Dec Equity ratio in % Net debt in million Net debt to underlying EBITDA Q1-Q Q1-Q Q1-Q Q1-Q Q1-Q Net debt in million n (lhs) Net debt to underlying EBITDA (rhs) New syndicated loan agreement of 400 mn concluded in December 2014; consolidation of credit lines within the Group Cash proceeds of ~ 90 mn for sale of Intec Division on February 6, ) Sartorius Group including Industrial Technologies Division 11

12 Dividend Set to Further Increase Dividend per Preference Share in Dividend per Ordinary Share in ) ) Total profit distributed would increase from 17.2 mn to 18.2 mn Dividend payout ratio based on the underlying net profit 2) would be 24.7% (26.6% in the prior year) Dividend payout ratio based on the reported net profit would increase from 32.8% to 37.6% 1) Amounts suggested by the Supervisory Board and the Executive Board of Sartorius AG 2) Excluding extraordinary items, non-cash amortization and fair value adjustments of hedging instruments 12

13 Guidance 2015 FY 2014 Guidance ) Sales revenue growth 2) Underlying EBITDA margin Sales revenue growth Underlying EBITDA margin Sartorius Group 12.6% 21.0% ~ 4% - 7% ~ 21.5% Bioprocess Solutions 18.5% 23.7% ~ 5% - 8% ~ 24.5% Lab Products & Services 1.4% 15.0% ~ 2% - 5% ~ 15.5% Capex ratio expected to be ~ 10% 1) In constant currencies 13

14 Agenda 1 FY 2014 Results Guidance Company Overview 3 4 Bioprocess Solutions Lab Products & Services 5 Growth Prospects and Projects 6 Appendix

15 Sartorius in Brief Founded 1870 Sales revenue EBITDA 1) EBITDA 1) margin ~ 891 mn ~ 187 mn 21.0% Employees ~ 5,600 Market cap. ~ 2.1 bn Listed since 1990, Part of German TecDAX Sales by Region 2) North America ~ 27% Europe ~ 47% Other Markets ~ 3% Asia ~ 23% FY 2014 data 1) Underlying = excluding extraordinary items 2) Acc. to customers location 15

16 Operational Setup Sartorius Group Bioprocess Solutions Lab Products & Services 69% 78% 31% 22% of Sales of EBITDA 1) of Sales of EBITDA 1) Innovative single-use products and equip- ment for the production of biologics Premium lab instruments, consumables and services for R&D, QA and QC 1) Share of Group EBITDA based on underlying EBITDA (excluding extraordinary items) 16

17 Portfolio Focused and Enhanced In-Line with Long-term Strategy ~ 891 mn ~ 733 mn Lab Products & Services Biohit Liquid Handling Lab Products & Services Bioprocess Solutions Industrial Technologies FY 2011 Sales Revenue AllPure Technologies TAP Biosystems Lonza Cell Culture Media Industrial Technologies Bioprocess Solutions FY 2014 Sales Revenue 17

18 Significant Capacity Available to Finance Non-organic Growth Debt capacity Free cash flow generation Use of Sartorius AG treasury shares Capital increase at subsidiary level Net debt underlying EBITDA at 1.7x 1) Covenants allow for net debt underlying EBITDA of >3x Average free cash flow of more than 40 mn p.a. expected for the next five years Treasury stock of ~ 9% acquired in 2001 Current value of ~ 180 mn Additional equity funding potential via listing of Sartorius Stedim Biotech S.A. 1) FY 2014 including Industrial Technologies Division 18

19 Bioprocess Solutions Key Division Figures 2014 Sales Revenue mn Europe 45% NA 32% Asia 21% Underlying EBITDA margin 23.7 % Employees 3,527 Locations 30

20 Solution Provider for Biomanufacturing Supplier of key production technologies to the biopharma industry Product quality and supply security key success factors; high regulatory requirements; validated processes Paradigm shift towards single-use solutions Sartorius with broadest product portfolio in the industry, with a clear focus on single-use Single-use ~ 75 % Equipment ~ 25 % ~ 616 mn FY 2014 data 20

21 The Widest Product Portfolio Across the Biopharma Process Chain Upstream Bioprocessing Downstream Bioprocessing Media Preparation Seed Fermentation Production Fermentation Cell Removal Clarification Capture Polishing Viral Clearance Formulation Final Fill Services Evaluation & Optimization Engineering & Design Implementation & Technical Services 21

22 Multiple Drivers Fuel Significant Growth of the Biopharma Market Growing & aging population World population to grow to ~ 9bn by 2050; ~ 2bn people will be 60 or older by 2050 Increasing access to healthcare Increasing income available for healthcare in emerging countries $ CAGR 6% - 8% Strong R&D pipelines Biologics >40% of all drugs in development Biosimilar market Emerging industry, especially in Asia Evaluate Pharma: World Preview ; June

23 Clear Trend Towards Single-use Products Main Drivers Time to market Cost savings Risk management Improved titers Past Present 23

24 Leading Positions in Key Technology Platforms BPS Millipore Pall Thermo GE Top 3 Players Filtration Fluid Management Fermentation Purification Cell Culture Media Circles indicate completeness of product offering; Announced acquisition of Sigma-Aldrich by Merck KGaA not yet considered 1. Pall 2. Millipore 3. Sartorius 1. Sartorius 2. Thermo Fisher 3. Millipore 1. Sartorius 2. Thermo Fisher 3. GE 1. GE 2. Millipore 3. Pall 1. Thermo Fisher 2. Sigma 3. GE 24

25 Lab Products & Services Key Division Figures 2014 Sales Revenue mn Europe 53% NA 16% Asia 27% Underlying EBITDA margin 15.0 % Employees 2,084 Locations 32

26 Premium Lab Portfolio for Sample Prep. in R&D and QA Integration of three independent lab businesses since 2012 Phase-out of certain product lines to focus portfolio on core laboratory applications Overall phase-out effect on sales revenue of ~ 2 pct. points in 2014 Lab Instruments Lab Consumables & Service ~ 60% of Revenue ~ 40% of Revenue Pharma Biotech Academia Cl. Diagnostics Chemicals Food & Beverage 26

27 Three-channel Sales Approach to Address Broad Customer Base Lab Distributors Direct Sales e-commerce Streamline and focus Expand Build up 27

28 Global Lab Market Provides Significant Growth Potential Global Laboratory Products Market 1) LPS Sales by Region North America ~ 42% Europe ~ 40% North America ~ 15% Others ~ 4% Europe ~ 53% ~ $39 bn ~ 276 mn Others ~ 4% Asia ~ 13% Asia Pacific ~ 28% Targeted market of > $3 bn Average global market share of > 10% Significant growth potential especially in the U.S. and Asia 1) Frost & Sullivan, 2014 Half-year Update 28

29 Strong Positions in Key Categories Lab balances #2 Pipettes #4 Consumables #3 Lab water systems #4 Competitive Landscape Mettler Toledo Eppendorf EMD Millipore EMD Millipore Mettler Toledo Pall Elga Thermo Fisher GE Whatman Thermo Fisher Gilson 29

30 Service Is an Integral Part of the LPS Product Portfolio Premium service offering by more than 50 local service centers Provides valuable insight into customer needs Excellent vehicle for lead generation Important factor for differentiation Increases customer satisfaction & loyalty 30

31 Agenda 1 FY 2014 Results Guidance Company Overview 3 4 Bioprocess Solutions Lab Products & Services 5 Growth Prospects and Projects 6 Appendix

32 Ambitious 2020 Targets Supported by Growth Initiatives Strategic Initiatives Regional North America: Gain market share China India: Leverage strong market growth Portfolio Expansion through alliances and acquisitions Own product development Divestiture of Industrial Technologies Infrastructure New global ERP system Expansion of production capacity 2020 Ambition ~ 2 bn Sales Revenue ~ 2/3 Organic ~ 1/3 Acquisitions ~ 23% EBITDA margin 1) 1) Excluding extraordinary items 32

33 Continuous Market Share Gains in North America Share of Sales 1) Sales Development Footprint CAGR 2) ~ 18% Mississauga, Canada ~ 27% New Oxford, USA Bohemia, USA Wilmington, USA Mexico City, Mexico Yauco, Puerto Rico ) 2014 North America the biggest single market for biopharma and lab products Sartorius NA market shares in both divisions historically lower than in Europe Go-to-market initiative successfully executed; continuous market share gains Low double-digit organic growth rates targeted for the next years Figures in million; 1) FY ) Constant currencies 3) Excluding Industrial Technologies Division Sales Production 33

34 Growth Initiative Asia: Leverage Strong Market Growth Share of Sales 1) Sales Development Footprint ~ 23% 100% 75% 50% 25% Other India Japan South Korea China CAGR 2) ~ 13% Peking, China Seoul, Korea Suzhou, China Tokyo, Shanghai, China Japan Hanoi, Vietnam Hongkong, China Bangalore, India Bangkok, Thailand Kuala Lumpur, Malaysia Singapore, Singapore 0% ) 2014 Sales Production China and India among the strongest growing pharma and lab markets globally Biosimilars industry and increasing regulations drive market growth Continued double-digit organic growth projected for the next few years Melbourne, Australia Figures in million; 1) FY ) Constant currencies 3) Excluding Industrial Technologies Division 34

35 Emerging Biosimilars Market Offers Additional Growth Opportunities Expanding healthcare systems and private spending Asia is the center for global biosimilars development Double-digit market growth projected Biosimilars market growth > 20% (CAGR) ~$ 2.5bn Strong biosimilars pipeline driven by patent expiries 2012 ~$ 11-25bn 2020 Biologics (all others) Biosimilars Non-original biologics Source: IMS MIDAS, 06/2013, IMS patent focus; Copaxone may see a conventional generic copy, not a biosimilar 35

36 Execution of Our M&A Strategy: Example TAP Biosystems Process Development Production Acquisition Focus Products and Technologies which complement the BPS or LPS portfolio Generally decent market position required Strong position in the US market appreciated 36

37 High Level of Investments to Enable Future Growth Capex ratio in % of sales revenue Konzern ~ 10 1) e 2) Ongoing expansion of production capacity worldwide Global roll-out of a new ERP system Multi-year program to consolidate and expand operations at Goettingen headquarters Capex ratio projected at ~ 10% for 2015; expected to remain at this level for the next few years 1) Continued operations 2) Based on 2015 guidance 37

38 Agenda 1 FY 2014 Results Guidance Company Overview 3 4 Bioprocess Solutions Lab Products & Services 5 Growth Prospects and Projects 6 Appendix

39 Legal and Shareholder Structure ~50 ~9 Ord. in % ~2 ~5 ~34 Adm. by executor Bio-Rad Laboratories Inc. Free float Treasury shares Family owned ~9 Prf. in % ~91 Sartorius AG Stock market listed in Germany - SRT / SRT3 ~74% Sartorius Stedim Biotech S.A. + Subsidiaries Stock market listed in France DIM FP ~100% Other Sartorius Subsidiaries ~74 in % ~26 Sartorius AG Free float 39

40 Key Account Business With Limited Dependence on Individual Accounts Sales to Top 50 customers in 2014, in million ~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 2014 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 2% of BPS sales revenue 40

41 Extension of BPS s Portfolio by Acquisition of AllPure Technologies Majority stake acquired in U.S. start-up AllPure Technologies in April 2014 Allpure specializes in single-use components for biotech applications, e.g. aseptic sampling techniques 2013 revenue of ~ U.S. $3 mn.; based in New Oxford, Pennsylvania, USA Excellent growth opportunities for AllPure products based on BPS s global reach, esp. in Europe and Asia 41

42 European Home Market; North America and Asia Gaining Significance Herlev Mexico City Share of Sales North America ~ 27% Mississauga New Oxford Wilmington Epsom Bohemia Yauco Dublin Madrid Rotterdam Vilvoorde Royston Stonehouse Tagelswangen Aubagne Lourdes Milan Kajaani Helsinki St. Petersburg Goettingen Guxhagen M Hamdia Share of Sales Europe ~ 47% Budapest Florence Poznan Vienna Bangalore Moscow Share of Sales Asia ~ 23% Beijing Hanoi Bangkok Suzhou Seoul Tokyo Shanghai Hong Kong Kuala Lumpur Singapore São Paulo Global Presence: > 30 sales and 16 manufacturing sites FY 2014 data Buenos Aires Sales Production Production and Sales Melbourne 42 Page 1

43 Portfolio Bioprocess Solutions Filtration Purification 43

44 Portfolio Bioprocess Solutions Fluid Management Fermentation & Cell Culture Media 44

45 Portfolio Lab Products & Services Lab Balances Pipettes 45

46 Portfolio Lab Products & Services Moisture Analyser Mass comparators NucleoCounter Lab Water Systems Further Lab Instruments 46

47 Portfolio Lab Products & Services Lab Filtration Microbiological Quality Control 47

48 Executive Board of Sartorius AG Joachim Kreuzburg, CEO since 2003 Corporate Strategy, Operations, Legal Affairs, Compliance, Corporate Communications Jörg Pfirrmann, CFO since 2009 Finance, Human Resources, IT, General Administration Reinhard Vogt since 2009 Marketing, Sales & Services 48

49 Financial Calendar April 9, 2015 Annual Shareholders Meeting in Goettingen Germany April 20, 2015 Publication of first quarter 2015 figures July 22, 2015 Publication of half-year 2015 figures October 20, 2015 Publication of nine-month 2015 figures November 23, 2015 German Equity Forum in Frankfurt Main Germany 49

50 Contacts Petra Kirchhoff Vice President Corporate Communications & IR Phone: Andreas Theisen Director Investor Relations Phone: Sartorius Corporate Administration GmbH Weender Landstrasse Goettingen, Germany 50