Sartorius surges to lead the DAX index; downbeat forecast ahead
Sartorius' Swelling Fortunes in the Biotech Sector
Sartorius, a pharmaceutical equipment supplier and lab stalwart, has reported resilient business figures amidst the tumultuous current year. The company, listed on DAX, has seen a revenue and earnings surge due to the COVID-19 pandemic. Although this growth pace might decrease moving forward, Sartorius has raised its mid-term targets. Consequently, the company's shares are skyrocketing.
Leveraging preliminary calculations, Sartorius has boosted its revenues by a whopping 21 percent year-on-year, reaching a staggering 4.2 billion euros. This figure is a 15 percent increase after adjusting for exchange rates. The company has grown across all sectors and regions, despite a challenging environment, according to CEO Joachim Kreuzburg. The adjusted EBITDA surged by a fifth to around 1.4 billion euros. The adjusted operating margin, however, decreased slightly to 33.8 percent from 34.1 percent in the previous year [1][4][5].
The adjusted consolidated net income reached 655 million euros, a remarkable 18 percent increase compared to the previous year. The company is set to publish its final figures on February 17 in the annual report.
Adjusting to Rising Costs and Market Normalization
Sartorius has countered rising costs and inflation with price increases and at the same time raised its revenue target for 2025 from around 5 to 5.5 billion euros. The adjusted operating margin (adjusted EBITDA margin) has remained constant at around 34 percent [1][4][5].
After enjoying two exceptional pandemic years, demand has returned to normal, and COVID-related business has significantly diminished. Consequently, the order intake in 2022 decreased by around six percent to roughly 4 billion euros. During the pandemic, Sartorius benefited from changed customer ordering behavior, with customers placing larger orders and ordering further in advance than usual.
Bioprocess Solutions Division: The Growth Engine
The Biotech division, primarily operated through the French subsidiary, Sartorius Stedim Biotech, was a pandemic powerhouse. Although it was negatively impacted by the lower orders, this segment has been able to increase its revenue and earnings by double digits in 2022. The laboratory division has also excelled, with the order intake surging compared to the larger Biotech segment [1][4][5].
The business with bioanalytical instruments has grown notably stronger, as displayed in the statements. Management, including Kreuzburg, anticipates the laboratory division to outgrow the Biotech business in the new year.
Sartorius Preferred Shares: A DAX Front-Runner
Following the optimistic mid-term vision, Sartorius preferred shares are currently storming the DAX. The shares of the laboratory equipment supplier are temporarily surging by more than eight percent to 441.50 euros, attaining a four and a half month peak.
With its robust portfolio and strategic focus, Sartorius is primed for substantial growth in the biotech sector through the Bioprocess Solutions division. The company's resilient business model and strategic investments will bolster its market position, making it a promising long-term investment.
- Sartorius has raised its mid-term targets, attempting to maintain a consistent adjusted operating margin even with increasing costs and market normalization.
- The Bioanalytical Instruments business within Sartorius has grown notably stronger, with management predicting it to surpass the Biotech segment in growth for the new year.
- Despite a decrease in order intake due to a return to normal demand, Sartorius' preferred shares are experiencing a surge in value on DAX, bolstered by the company's robust portfolio and strategic focus in the Bioprocess Solutions division.
