Sartorius Stedim Biotech SA: First-quarter results 2023 of Sartorius Stedim Biotech
Sartorius Stedim Biotech SA
/ Key word(s): Quarter Results
First-quarter results 2023 of Sartorius Stedim Biotech
After the Covid-19-related business and inventory buildup by customers had triggered strong additional growth momentum in previous years, demand normalization at Sartorius Stedim Biotech continued throughout the first quarter of 2023, as expected, and led to a decline in sales revenue and earnings in the first three months of the year. For the full year, company management continues to expect moderate growth in sales revenue and a profit margin around the high prior-year level.
”Given the volatile environment and challenging comparisons, the first three months of the year were intense. As expected, destocking activities by customers continued and the Covid-19-related business has become marginal. While we adjusted our short-term capacities to current demand and have a strict eye on cost, our expectation remains unchanged that the normalization effects will play no significant role in the second half of the year. We therefore confirm our outlook for the full year 2023 though the economic environment also in our sector is currently highly uncertain,” said René Fáber, CEO of Sartorius Stedim Biotech. “At the same time, we initiated an important acquisition in the first quarter with the proposed takeover of the French company Polyplus, and continued with our ambitious investment program, underlying our confidence in the strong fundamentals of the biopharma market. Innovative therapies are gaining traction, customers’ pipelines are healthy, and we are well positioned to support them in their efforts to bring novel medications to market.”
As expected, normalization of demand, which has been ongoing since the third quarter of 2022, continued in the first quarter of 2023 in all regions, while Covid-19-related sales revenue almost declined entirely. In the first three months, Sartorius Stedim Biotech generated sales revenue of 726 million euros, which corresponds to a decrease of 17.2 percent in constant currencies (organic: -18.4 percent; reported: - 15.8 percent) compared with the exceptionally high level of the prior-year period. Excluding the Covid-19-related business, the decline was in the upper single-digit percentage range.
Following an exceptionally strong prior-year period, order intake1 reached 601 million euros (in constant currencies: -37.5 percent, reported: -36.7 percent), mainly due to the reduction of inventories that customers had built up during the pandemic.
Underlying EBITDA decreased by 27.5 percent to 220 million euros in the first three months of the year as a result of the sales revenue drop and a higher cost base. The resulting margin was 30.3 percent, compared with 35.2 percent in prior-year period. Price effects on the procurement and customer sides largely offset each other.
Relevant net profit1 was 131 million euros, compared with 203 million euros in the first quarter of 2022. Underlying earnings per share stood at 1.43 euros (prior-year period: 2.21 euros). The number of employees worldwide was 11,581 on March 31, 2023, compared with 11,934 at the end of 2022.
Key financial indicators
Sartorius Stedim Biotech continues to have a very sound balance sheet and financial base. Equity was 2,454 million euros as of March 31, 2023, corresponding to an equity ratio1 of 48.2 percent (December 31, 2022: 2,514 million euros and 49.6 percent, respectively), and gross debt was 1,307 million euros (December 31, 2022: 1,136 million euros). Net debt stood at 1,213 million euros, resulting in a ratio of net debt to underlying EBITDA1 of 1.1 (December 31, 2022: 1,029 million euros and 0.8, respectively). Cash flow from investing activities was -116 million euros, compared with -77 million euros in the first quarter of 2022. The ratio of capital expenditures (CAPEX) to sales revenue was 16.0 percent (prior-year period: 8.9 percent).
Outlook for fiscal 2023
The management confirms its outlook for the current fiscal year. Accordingly, consolidated sales revenue is expected to increase by an amount in the low single-digit percentage range. Excluding the Covid-19-related business, the increase would be in the mid to high single-digit percentage range. Acquisitions are anticipated to contribute around 1 percentage point to growth, with the proposed purchase of Polyplus not being included in the projection. The Group’s underlying EBITDA margin should be around the level of the prior year (35.0 percent).
The company is continuing its comprehensive mid-term capacity expansion program. In 2023, the CAPEX ratio should be at roughly 12.5 percent and the ratio of net debt to underlying EBITDA at about 0.5. Possible acquisitions, including the proposed acquisition of Polyplus, are not included in this projection.
All forecasts are based on constant currencies, as in the past years. In addition, management points out that the dynamics and volatilities in the life science and biopharma sectors have significantly increased over the past years. Moreover, the forecasts are based on the assumption of no deterioration in the geopolitical and global economic situation, particularly with regard to supply chains and trade barriers. Accordingly, current forecasts show higher uncertainties than usual.
1 Sartorius Stedim Biotech publishes alternative performance measures that are not defined by international accounting standards. These are determined with the aim of improving the comparability of business performance over time and within the industry.
This press release contains forward-looking statements about the future development of the Sartorius Stedim Biotech Group. Forward-looking statements are subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied by such statements. Sartorius Stedim Biotech assumes no liability for updating such statements in light of new information or future events. Sartorius Stedim Biotech shall not assume any liability for the correctness of this release. The original French press release is the legally binding version.
René Fáber, CEO of the Sartorius Stedim Biotech Group, will discuss the company’s business results with analysts and investors in a conference call at 3.30 p.m. CEST on April 20, 2023. You may register by clicking on the following link: https://media.choruscall.eu/mediaframe/webcast.html?webcastid=yQc2mAvc
July 21, 2023: Publication of the first-half figures (January to June 2023)
October 19, 2023: Publication of nine-month figures (January to September 2023)
A profile of Sartorius Stedim Biotech
Sartorius Stedim Biotech is a leading international partner of the biopharmaceutical industry. As a provider of innovative solutions, the company based in Aubagne, France, helps its customers to manufacture biotech medications safely, rapidly and economically. The shares of Sartorius Stedim Biotech S.A. are quoted on the Euronext Paris. The company has a strong global reach with manufacturing and R&D sites as well as sales entities in Europe, North America and Asia. Sartorius Stedim Biotech delivers significant organic growth and regularly expands its portfolio through acquisitions of complementary technologies. In fiscal 2022, the company generated sales revenue of around 3.5 billion euros. At the end of 2022, around 12,000 employees were working for customers around the globe.
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File: First-quarter results 2023 of Sartorius Stedim Biotech
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