Sartorius (SRT) Q2 2024 earnings summary

Executive summary

• H1 2024 sales revenue declined 2.2% year-over-year to €1,680 million, with Q2 sales up 3.6% and Bioprocess division sales stable, but Lab division revenue declined due to weak demand, especially in China.

• Underlying EBITDA margin remained robust at 28.1%, though underlying EBITDA fell 8.8% to €471 million, impacted by lower volumes and capacity utilization.

• Order intake rose 8.5% year-over-year to €1,558 million, driven by recovery in consumables and cell/gene therapy segments.

• Efficiency and cost programs are delivering positive effects, targeting over €100 million in annual savings, with greater impact expected in H2.

• Market fundamentals and long-term growth drivers remain intact, with strong product pipelines and significant new drug approvals, but volatility and low visibility persist.

Financial highlights

• H1 2024 group sales revenue: €1,680 million (–2.2% constant currencies), with Q2 sales up 3.6% after a Q1 decline.

• Underlying EBITDA: €471 million (–8.8%), margin 28.1% (down 1.7pp year-over-year).

• Net profit: €92 million (–63.6%), underlying net profit: €148 million (–26.7%), EPS (ordinary): €2.15.

• Free cash flow increased to €108 million, mainly from reduced capex; capex ratio down to 13.6%.

• Equity ratio improved to 38.3% (from 28.3% at year-end 2023); net debt reduced to €4,033 million, net debt/EBITDA at 4.4.

Outlook and guidance

• Full-year 2024 sales revenue now expected to remain at prior-year level, with a range from low single-digit negative to low single-digit positive growth.

• Underlying EBITDA margin guidance: group 27–29%, BPS 28–30%, LPS 22–24%.

• Capex-to-sales ratio forecast at around 12–13.6%; net debt to EBITDA expected around 4.

• Polyplus expected to contribute 1.5–2 percentage points to group/divisional sales.

• Demand recovery anticipated only in the final quarter of 2024.