Sartorius Stedim Biotech Attempts a Modest Rebound After Plunge

Sartorius Stedim Biotech attempts a modest rebound of 0.9% to 148 euros this Monday after its 16% plunge on Friday.

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Sartorius Stedim Biotech Faces Challenging Market Conditions

In a market environment that remains very challenging and volatile for the life sciences sector, Sartorius Stedim Biotech concluded the first half of the year with positive revenue growth.

During the first half, Sartorius Stedim achieved a revenue of 1.373 billion euros, a slight decrease of 1.2% at constant exchange rates (organic decline: -3.8%; reported decline: -2%).

Current EBITDA decreased by 6.8% to 387 million euros in the first half, mainly due to volume and product mix effects. The corresponding margin remained at a high level of 28.2% (same period last year: 29.7%).

The current net profit for Sartorius Stedim amounted to 165 million euros (242 million euros in the first half of 2023). The net profit was 104 million euros (244 million euros in the same period last year), while current net profit per share amounted to 1.71 euros (previous year: 2.62 euros) and net profit per share was 1.08 euros (2.65 euros in the previous year).

Sartorius Stedim Biotech Maintains Cautious Outlook for the Future

Given the high volatility and limited predictability, Sartorius Stedim Biotech is issuing more cautious guidance for the second half and has adjusted its forecasts for the fiscal year 2024.

In the context of continued moderate demand, Sartorius Stedim Biotech now expects revenue for the 2024 fiscal year to remain at the level of the previous year, with a range of revenue growth between a low single-digit negative percentage and a low single-digit positive percentage (previously: mid to high single-digit revenue growth). The acquisition of Polyplus by Sartorius Stedim Biotech is expected to contribute approximately 2 percentage points to non-organic sales growth.

In terms of profitability, Sartorius Stedim Biotech expects its cost reduction program to have increasingly positive effects, amounting to more than 85 million euros as the year progresses, although these effects will not fully offset the impact of lower volume forecasts. Additionally, measures to reduce inventory are expected to result in further dilution of EBITDA due to lower utilization of production capacities.

Adjusted Margin Expectations

In this context, Sartorius Stedim Biotech now anticipates a current EBITDA margin of 27 to 29% (previously: over 30%) for the entire year of 2024.

Following adjustments to its investment plans in light of current business developments, the ratio of capital expenditures to revenue is now expected to be around 12% (approximately 13% previously) in 2024, while the ratio of net debt to current EBITDA is expected to be around 2.5 to 3 (a bit less than 2.5 previously). Consequently, Sartorius Stedim Biotech has not altered its medium-term targets through 2028.

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(Featured image by Testalize.me via Unsplash)

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First published in Boursier. A third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.

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