06-02-2012: Sartorius grew dynamically yet again in 2011 and significantly expanded its profitability. Both Group divisions reported highs in sales revenue and earnings. The financial targets that the company had raised twice before year-end were fully achieved. Sartorius expects positive business development for the current financial year as well.
“Fiscal 2011 was an especially successful year for Sartorius, and not just in financial performance,” commented Group CEO Dr. Joachim Kreuzburg. “Beyond our financials, we set the stage for the sustainable further development of the Sartorius Group within the next decade. In order to propel our business forward in an even more focused and flexible way, we have put a new division structure in place at the outset of 2012. For the current year, we also expect dynamic and profitable growth.”
Dynamic growth of sales revenue and order intake
According to preliminary figures, Sartorius generated consolidated sales revenue of 733.1 million euros in fiscal 2011, up from 659.3 million euros a year ago. This equates to an increase of 11.2% (in constant currencies: 12.2%). The gain in order intake reached a similarly strong level: it jumped 10.0% (in constant currencies: 11.0%) to 749.5 million euros.
Both Group divisions contributed to this dynamic top-line performance. Sales revenue for the Biotechnology Division rose by 10.2% (in constant currencies: 11.5%) to 476.9 million euros; order intake, by 13.0% (in constant currencies: 14.3%) to 499.8 million euros. Again, business with single-use products for the biopharmaceutical industry drove this growth. Equipment business with biotechnological production systems and instruments also added positive momentum, especially due to the strong demand from Asia. The Mechatronics Division posted a gain of 13.0% (in constant currencies: 13.5%) in sales revenue, which rose to 256.2 million euros, with both businesses for laboratory instruments and industrial weighing and control products expanding at double-digit rates. The division’s high growth was buoyed up by the reduction in its year-earlier order backlog and by the strong upswing in the first half. The Mechatronics Division’s increase in order intake of 4.6% (in constant currencies: 5.0%) to 249.7 million euros was accordingly below the rate of sales growth.
Regionally, Sartorius again saw the highest growth rates in the Asia | Pacific region. There, sales revenue surged on the whole by 23.2%. In Europe as well, the company posted substantial gains, with sales up 10.7%. In North America, Sartorius increased its sales revenue overall by 6.2%, with the Biotechnology Division posting strong gains and the Mechatronics Division only slight increases (all figures currency-adjusted).
Overproportionate earnings development
Excellent development of sales revenue was accompanied by overproportionate gains in operating earnings and in the operating margin. In the reporting period, the Group’s operating EBITA surged 31.2% to 112.2 million euros from 85.5 million euros a year ago. Its respective margin climbed by 2.3 percentage points from 13.0% to 15.3% and thus reached a new high.
Both Group divisions contributed to this positive development of earnings. The Biotechnology Division increased its operating earnings by 18.7% from 70.2 million euros to 83.3 million euros, thus contributing just under 75% to operating earnings for the entire Group. The division’s operating EBITA margin improved from 16.2% to 17.5%. Essentially, the reasons for this increase were sales growth induced economies of scale. The Mechatronics Division posted an even higher gain in profit. Reporting an operating EBITA of 28.9 million euros for 2011, this division nearly doubled its earnings from 15.3 million euros posted for the previous fiscal year. The division’s respective margin also rose significantly from 6.8% to 11.3%. This considerable jump in earnings was primarily due to economies of scale and a cost base that was substantially enhanced relative to the previous years.
Extraordinary items stood at -11.3 million euros compared with the previous year’s figure of ‑6.3 million euros and were predominantly expenses related to acquisitions, measures for optimizing sites and to Group projects. Including these extraordinary items, consolidated EBITA amounted to 100.9 million euros, up from 79.2 million euros a year earlier, and its respective margin was at 13.8%, up from 12.0% a year ago.
The Group’s relevant net profit surged 32.2% from 39.0 million euros in 2010 to 51.5 million euros in 2011. The corresponding earnings per share are at 3.02 euros, up year on year from 2.29 euros.
In 2011, operating cash flow was at 77.1 million euros (previous year: 96.0 million euros) and was used, inter alia, for financing relatively large investments to expand capacity. Net debt for the Sartorius Group rose year on year from 196.9 million euros to 266.8 million euros, primarily due to the acquisition of the Biohit liquid handling business in December 2011. The key debt figure, the ratio of net debt to underlying EBITDA, was at 2.0 at year-end relative to 1.8 in the previous year and thus continues to remain at a comfortable level.
Positive outlook for fiscal 2012
Sartorius expects significantly profitable growth for the year 2012 as well. The company anticipates that full-year sales will grow by about 10% in constant currencies. Around 5 percentage points of this rate is forecasted to be generated by initial consolidation of the Biohit liquid handling business that was acquired at the end of 2011. Management continues to project that operating earnings will likewise increase by around 10%. “Our business is largely driven by stable trends so we are confident about its development in 2012,” commented Dr. Kreuzburg. “However, we also see that uncertainty over the economy has mounted during the past few weeks.”
New division structure starting January 2012
As of January 1, 2012, Sartorius reorganized its division structure, which until then consisted of the two divisions Biotechnology and Mechatronics. From the first quarter of 2012 onwards, the company will report its business figures according to three segments: Bioprocess Solutions, Lab Products & Services and Industrial Weighing. The new divisions each combine their respective businesses for the same customer groups and fields of application and thus more clearly reflect, and focus on, Sartorius's major markets. Moreover, they enhance transparency for investors and increase the company’s flexibility for further development of the Sartorius Group.
The three new segments at a glance are the following
Under the new name of Bioprocess Solutions, the Biotechnology Division will concentrate more strongly on its operating and strategic core activities, the bioprocess business for the pharmaceutical industry. The smaller laboratory business activity of the former Biotechnology Division has been a part of the new laboratory division since the outset of the year.
The new Lab Products & Services Division combines all Sartorius lab product lines into one entire offering. Its largest unit today is laboratory weighing equipment. Besides further laboratory instruments, especially the Biohit liquid handling business that Sartorius acquired in December 2011, a wide range of consumables also belongs to this division.
Business with industrial weighing and control equipment has been conducted since January 1, 2012, by the new Industrial Weighing Division. Concerning this business, Sartorius is exploring various strategic options, including a medium-term divestiture of this division.