Sartorius : Conference CallPreliminary Full-Year 2020 Results Presentation

Conference Call

Preliminary Full-Year 2020 Results

Joachim Kreuzburg, Rainer Lehmann

Sartorius | Sartorius Stedim Biotech

January 27, 2021

Disclaimer

This presentation contains statements concerning the future performance of the Sartorius and the Sartorius Stedim Biotech Groups. 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 forward-looking statements.

Throughout this presentation, differences may be apparent as a result of rounding during addition.

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Highlights

• Strong finish to the year in both Group divisions
• 2020 preliminary figures show double digit growth across the board
• Bioprocess Solutions Division: Continued high underlying demand; plays a key role as a provider for vaccine technologies
• Lab Products & Services Division: First half significantly impacted by the pandemic; progressive rebound since Q3
• Successful closing of strategically important acquisitions, one more recently announced
• Outlook for 2021: Significant sales revenue growth projected on all levels
• 2025 targets updated and raised

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Agenda

Sartorius Group

FY 2020 results | FY 2021 guidance | 2025 ambition

Sartorius Stedim Biotech Group

FY 2020 results | FY 2021 guidance | 2025 ambition

Questions & Answers

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Strong profitable growth

Sartorius Group	2019	2020	in %	in % cc1
in millions of € unless otherwise specified
Sales revenue	1,827.0	2,335.7	+27.8	+30.2
Order intake	1,939.5	2,836.3	+46.2	+49.0
Underlying EBITDA2	495.8	692.2	+39.6
Underlying EBITDA2 margin in %	27.1	29.6	+2.5pp
Underlying EPS3 (ord.) in €	3.06	4.37	+43.0
Underlying EPS3 (pref.) in €	3.07	4.38	+42.9

• Acquisitions contribute a good 7pp to sales growth; net effect from pandemic a good 8pp / close to 14pp for order intake
• Underlying EBITDA margin driven by economies of scale and underproportionate development of costs in some areas due to pandemic; acquisitions with slightly positive effect; slightly dilutive effect from currencies

1 Constant currencies 2 Underlying = excluding extraordinary items 3 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

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Double-digit sales growth in all geographies

Americas

€ in millions

+32.8%
	812.2
629.9
2019	2020

EMEA

€ in millions

+28.4%
	935.1
733.4
2019	2020

Asia|Pacific	Sales by Region
€ in millions	in %

+29.6%	EMEA
		~ 40%	Americas
	588.4		~ 35%
463.7
		€2,335.7m
			Asia|Pacific
2019	2020		~ 25%

• Americas: BPS benefits from demand in connection with the development of corona vaccines; LPS with larger acquisition impact
• EMEA: BPS with tailwinds from vaccine developers; solid performance of LPS considering economic challenges
• Asia|Pacific: BPS with the highest order momentum; LPS demand improved after lockdown lifted in China with catch-up effects

Acc. to customers' location; growth in constant currencies

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BPS: Dynamic growth across all product categories and regions

Order Intake

€ in millions

+56.4% cc
+53.5%
	2,238.1
1,457.6
2019 1	2020

Sales Revenue

€ in millions

+ 34.4% cc +32.0%

1,350.5	1,782.6
2019 1	2020

Underlying EBITDA & Margin

€ in millions

+46.5%

	575.9
393.1
29.1%	32.3%
2019 1	2020

• Strong organic growth; pandemic-driven effects presumably around 12pp (majority of that from demand related to coronavirus vaccines and therapeutics but also related to inventory build-up), acquisitions accounted for close to 5pp of growth
• Pandemic-relatedeffects estimated at around 17pp of order intake growth
• Underlying EBITDA margin rose due to economies of scale and reduced costs in some areas due to pandemic; slight FX dilution

1 2019 figures reported: Order intake €1,479.3m, sales €1,372.1m, underlying EBITDA €406.8m

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LPS: Rebound and catch-up effects after challenging first half

Order Intake

€ in millions

+26.4% cc
+24.1%
481.9	598.2
20191	2020

Sales Revenue		Underlying EBITDA & Margin
€ in millions		€ in millions
+18.1% cc	+13.2%
+16.1%
476.5	553.0
	102.7	116.3
		21.6%	21.0%
20191	2020	20191	2020

• In particular, high demand for products used in the context of coronavirus testing
• Acquisitions contribute around 15pp to sales growth; net effect from pandemic approx. -1pp
• Underlying EBITDA margin influenced by lower capacity utilization due to pandemic; acquisitions accretive by a good 2pp

1 2019 figures reported: Order intake €460.3m, sales €454.9m, underlying EBITDA €89.0m

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Operating cash flow increases significantly

Sartorius Group	2019	2020	in %
in millions of € unless otherwise specified
Underlying EBITDA	495.8	692.2	+39.6
Extraordinary items	-28.5	-57.0	n.m.
Financial result	-32.5	-9.4	n.m.
Underlying net profit1,2	209.4	299.3	+42.9
Reported net profit2	156.7	226.3	+44.4
Operating cash flow	377.2	519.7	+37.8
Investing cash flow3	-268.7	-1,278.7	n.m.
CAPEX ratio (in %)	12.3	10.3	-2.0pp

• Net operating cash flow mostly driven by higher earnings and factoring program (~€89m)
• Extraordinary items influenced primarily by M&A
• Financial result includes the valuation effect related to the earn-out from the acquisition of BIA Separations
• Tax rate at 28.0%; excluding earn-out effect tax rate would be 30.2%
• Investing cash flow driven by acquisitions

2019 numbers partly adjusted due to final PPA of BI 1 Underlying net profit = net profit adjusted for extraordinary items, amortization and based on a normalized financial result and normalized tax rate 2 After non-controlling interest 3 Net cash flow from investing activities and acquisitions

9

Financial indicators remain on very solid level

Key Financial Indicators

Sartorius Group	Dec. 31,	Dec. 31,
2019	2020
Equity ratio in %	38.1	29.9
Net debt in millions of €	1,014.0	1,883.6
Net debt | underlying	2.0	2.6
EBITDA1

• Equity ratio influenced by increase in balance sheet sum due to the recent acquisitions and higher cash position

1 Includes underlying pro forma EBITDA of acquisitions completed in 2020

Net Debt and Net Debt to Underlying EBITDA

2,000	4.0
1,500	3.0
1,000	2.0
500	1.0
0	0.0

Q1-Q4	Q1-Q4Q1-Q4Q1-Q4Q1-Q4	Q1-Q4Q1-Q4
2014	2015	2016	2017	2018	2019	2020
Net debt in millions of € (lhs)		Net debt to underlying EBITDA (rhs)

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Most recent acquisitions broadening the downstream portfolio

Acquisition of WaterSep BioSeparations

	~$2.5m		+ 15		Dec.
			2020
Sales revenue	Employees		Date of
	in 2020e		consolidation

• Innovative hollow fiber crossflow filtration units
• Consolidated in BPS division
• Purchase price $27mn plus earn-out

Agreement to acquire chromatography process equipment division from Novasep

	~€37m		+ 100		H1 2021
Sales revenue	Employees	Closing
	in 2020e			expected

• Resin-basedbatch and intensified chromatography systems
• Consolidated in BPS division
• Purchase price not disclosed

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Strong outlook for 2021, uncertainties remain high

	2020		2021 Guidance 1
	Sales Revenue	Underlying	Sales Revenue	Underlying
	Growth	EBITDA Margin	Growth	EBITDA Margin
Sartorius Group	+30.2%	29.6%	~ 19% - 25%	~ 30.5%
- growth by acquisitions | Corona demand	good 7pp | good 8pp		~5.5pp | up to 6pp
Bioprocess Solutions	+34.4%	32.3%	~ 22% - 28%	~ 33.0%
- growth by acquisitions | Corona demand	close to 5pp | ~12pp		~6pp | up to 8pp
Lab Products & Services	+18.1%	21.0%	~ 10% - 16%	~ 23.0%
- growth by acquisitions | Corona demand	~15pp | -1pp		~5pp | no net impact

• Growth rates expected to be significantly pronounced in H1 due to last years acquisition and strong order book
• In 2021, acquisitions projected with no significant profitability effect on the Group and BPS, plus ~0.5pp for LPS
• CAPEX ratio ~15% (FY 2020: 10.3%); accelerate and extend capacity expansion especially in BPS due to growth expectations
• Net debt to underlying EBITDA is projected at slightly below 2.5 (2020: 2.6)

1 In constant currencies

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2025 ambition - increased baseline and organic growth

• Initial 2025 group sales revenue targets were based on an estimated 2020 group revenue of €2bn, based on the mid-term guidance of 2012
• Expectation was to double the revenue target to €4bn within 5 years
• Actual 2020 Group revenue was approx. €2.3bn; with the overachievement being mainly driven by BPS
• The new mid-term target of €5bn in revenue reflects both the elevated baseline and future growth prospects
• Continued strategy is to achieve the targets primarily through organic growth; acquisition to contribute underproportionally
• The increase in the profitability outlook is due to economies of scale and also reflects the assumption of acquisitions to be initially dilutive

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Updated 2025 ambition

	BPS		LPS		Sartorius Group
Sales	~€3.8bn		~€1.2bn		€5bn
revenue	previously ~€2.8bn		unchanged		previously ~€4bn
EBITDA	~34%	~25%	~32%
margin	previously ~30%		unchanged		previously ~28%

2025 targets are based on 2020 currency exchange rates; EBITDA excluding extraordinary items

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Agenda

Sartorius Group

FY 2020 results | FY 2021 guidance | 2025 ambition

Sartorius Stedim Biotech Group

FY 2020 results | FY 2021 guidance | 2025 ambition

Questions & Answers

15

Sartorius Stedim Biotech Group

Exceptionally strong growth in 2020

Sartorius Stedim Biotech Group	2019	2020	in %	in % cc1
in millions of € unless otherwise specified
Sales revenue	1,440.6	1,910.1	+32.6	+34.6
Order intake	1,543.5	2,381.0	+54.3	+56.7
Underlying EBITDA2	421.5	604.7	+43.5
Underlying EBITDA2 margin in %	29.3	31.7	+2.4pp
Underlying EPS3 in €	2.85	4.16	+45.9

• Strong organic development; pandemic-driven effects a good 12pp (majority of that from demand related to coronavirus vaccines and therapeutics), acquisitions accounted for close to 6pp of growth
• Pandemic-relatedeffects on order inatke growth close to 19pp
• Underl. EBITDA margin up with economies of scale, lower costs due to pandemic; slight FX dilution, M&A with neutral effect

1 Constant currencies 2 Underlying = excluding extraordinary items 3 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

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Sartorius Stedim Biotech Group

Double-digit sales growth in all geographies

Americas

€ in millions

+34.0%
	670.2
511.6
2019	2020

EMEA

€ in millions

+33.0%
	761.0
575.1
2019	2020

Asia|Pacific	Sales by Region
€ in millions	in %

+38.3%	EMEA
		~40%	Americas
			~35%
353.8	478.9		€1,910.1m
			Asia|Pacific
2019	2020		~25%

• Especially EMEA and Americas benefited from additional demand in connection with the development and manufacture of coronavirus vaccines and Covid-19 therapeutics
• Asia|Pacific with the highest momentum, fueled by larger project business orders in H1

Acc. to customers' location; growth in constant currencies

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Sartorius Stedim Biotech Group

Operating cash flow rises significantly

Sartorius Stedim Biotech Group	2019	2020	in %
in millions of € unless otherwise specified
Underlying EBITDA	421.5	604.7	+43.5
Extraordinary items	-16.8	-32.0	n.m.
Financial result	-14.4	10.8	n.m.
Underlying net profit1,2	263.0	383.8	+45.9
Reported net profit2	234.5	357.8	+52.6
Operating cash flow	310.1	416.9	+34.4
Investing cash flow3	-184.4	-621.1	n.m.
CAPEX ratio (in %)	9.4	8.3	-1.1pp

• Net operating cash flow mostly driven by higher earnings and factoring program (~€76m)
• Extraordinary items influenced primarily by M&A
• Financial result includes the valuation effect related to the earn-out from the acquisition of BIA Separations
• Tax rate at 25.3%; excluding earn-out effect tax rate would be 27.1%
• Investing cash flow driven by acquisitions

2019 numbers partly adjusted due to final PPA of BI 1 Underlying net profit = net profit adjusted for extraordinary items, amortization and based on a normalized financial result and normalized tax rate 2 After non-controlling interest 3 Net cash flow from investing activities and acquisitions

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Sartorius Stedim Biotech Group

Financial indicators remain on very solid level

Key Financial Indicators

Sartorius Stedim Biotech	Dec. 31,	Dec. 31,
2019	2020
Equity ratio in %	64.4	48.3
Net debt in millions of €	110.4	527.0
Net debt | underlying	0.3	0.8
EBITDA1

• Equity ratio influenced by increase in balance sheet sum due to the recent acquisitions and higher cash position

1 Includes underlying pro forma EBITDA of acquisitions completed in 2020

Net Debt and Net Debt to Underlying EBITDA

600	1.8
500	1.5
400	1.2
300	0.9
200	0.6
100	0.3
0	0.0

Q1-Q4Q1-Q4	Q1-Q4Q1-Q4Q1-Q4Q1-Q4	Q1-Q4
2014	2015	2016	2017	2018	2019	2020
Net debt in millions of € (lhs)		Net debt to underlying EBITDA (rhs)

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Sartorius Stedim Biotech Group

Strong outlook for 2021, uncertainties remain high

FY 2021 Guidance1	Sales revenue growth	Underlying EBITDA margin
	2020	2021	2020	2021
Sartorius Stedim Biotech	34.6%	~ 20-26%	31.7%	~ 32.0%
- growth by acquisitions | Corona demand	close to 6pp | good 12pp	~5.5pp | up to 7pp

• Growth rates expected to be significantly pronounced in H1 due to last years acquisition and strong order book
• CAPEX ratio ~15% (FY 2020: 8.3%); increase due to acceleration and extension of capacity expansions across the entire production network, especially in Germany, Puerto Rico and China
• Net debt to underlying EBITDA is projected at around 0.75 (2020: 0.8)

1 In constant currencies

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2025 ambition - increased baseline and organic growth

• Initial 2025 group sales revenue targets were based on an estimated 2020 group revenue of €1.5 to 1.6bn, based on the mid-term guidance of 2012
• Actual 2020 Group revenue was approx. €1.9bn
• New mid-term target reflects both the elevated baseline and future growth prospects
• Continued strategy is to achieve the targets primarily through organic growth; acquisition to contribute underproportionally
• The increase in the profitability outlook is due to economies of scale and also reflects the assumption of acquisitions to be initially dilutive

	Sartorius Stedim Biotech
Sales	€4bn
revenue	previously ~€2.8bn
EBITDA	~33%
margin	previously ~30%

2025 targets are based on 2020 currency exchange rates; EBITDA excluding extraordinary items

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Questions & Answers

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