Release Date: July 18, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Sartorius AG (SARTF, Financial) achieved its H1 targets for sales and underlying EBITDA margin as communicated at the Capital Markets Day.
- Order intake for the Bioprocess Solutions (BPS) division was up 12% in constant currencies, indicating strong demand in this segment.
- The company is seeing significant growth in advanced therapies, which is a promising area for future expansion.
- Sartorius AG (SARTF) is benefiting from its efficiency program, which is expected to contribute more than EUR100 million on a full-year basis.
- The company maintains a robust equity ratio of 38.3%, supported by a capital increase in Q1 2024.
Negative Points
- Overall demand has not gained substantial momentum, with sales for the Lab Products & Services (LPS) division still below the previous year.
- The company is experiencing muted investment appetite from customers regarding equipment, affecting sales growth.
- Sartorius AG (SARTF) has revised its full-year guidance to reflect low recovery momentum and limited predictability.
- The Asian market, particularly China, remains soft, impacting the company's regional performance.
- The underlying EBITDA margin is slightly down due to lower sales and negative effects from mix and lower production outputs.
Q & A Highlights
Q: Could you provide details on the development of the Bioprocess Solutions (BPS) order intake during the second quarter, particularly the mix between consumables and equipment? Did consumables show growth?
A: Order intake in Q2 was up high single digits, with recurring business, including consumables, growing in the teens. However, equipment orders have been less dynamic, reflecting a cautious investment approach by customers.
Q: How are you managing the order backlog, and what is the outlook for the rest of 2024?
A: Sales have been supported by the backlog, but as we progress through the year, the impact of backlog sales will gradually diminish. We expect some effects from the backlog to continue, but they will decrease over time.
Q: Can you elaborate on the factors affecting your margin, aside from operating leverage and utilization? Is there any unexpected pricing pressure or competition?
A: There is no significant pricing pressure affecting margins. The main factors influencing margins are volume effects, capacity utilization, and our efficiency program. Product mix effects are present but not substantial enough to highlight.
Q: Regarding your lowered full-year guidance, is it primarily due to a reduced outlook for consumables or equipment?
A: The guidance adjustment reflects less dynamic activity in both consumables and equipment. However, we see more positive dynamics in consumables, which could influence where we land at the year's end.
Q: How do you view the potential for M&A activity, especially considering the CEO transition in 2025?
A: M&A will continue to play a role in our strategy. We have no specific plans for 2025, but we expect to have opportunities that align with our strong portfolio. The CEO transition will not impact our M&A strategy.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
