Simplifying Progress Sartorius Stedim Biotech Investors - - PowerPoint PPT Presentation

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Simplifying Progress Sartorius Stedim Biotech Investors Presentation H1 2020 Results Disclaimer This presentation contains statements concerning the future performance of the Sartorius Stedim Biotech Group. These statements are based on

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Simplifying Progress Sartorius Stedim Biotech Investors Presentation

H1 2020 Results

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This presentation contains statements concerning the future performance of the Sartorius Stedim Biotech Group. 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.

Disclaimer

2

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Agenda

3

Overview ew | Strateg tegy Mid-term Growth Prospects FY 2020 Guidance | H1 2020 Results Appendix

Sartor toriu ius s Stedim dim Biote tech

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A leading partner of the biopharma industry

4 Overview | Strategy

We empower scientists and engineers to simplify and accelerate progress in life science and bioprocessing, enabling the development of new and better therapies and more affordable medicine.

Sartor toriu ius s Stedim dim Biote tech

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Sartorius Stedim Biotech at a glance

5 Overview | Strategy

Sartor toriu ius s Stedim dim Biote tech

Based on FY 2019 figures 1 In constant currencies 2 Excluding extraordinary items

~€1.4bn .4bn

Sales revenue

~15%

Sales CAGR1 2014-2019

29.3%

EBITDA margin2

6,203 203

Employees

>20 20

countries, headquartered in Aubagne, France Pharma ma market ket Biopha harm rma market ket Singl gle-use use penetr etrati tion

  • n

Market et share gains CAGR 4-7% CAGR ~8% Double-digit growth

  • Esp. in North

America Four r strong ng pillars ars drive e above-avera verage ge growth th

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Covering most steps of the biopharma process chain

6 Overview | Strategy

Sartor toriu ius s Stedim dim Biote tech

  • Production process

design is inalterable for the lifetime of most drugs

  • Individually customized

production process required for all drugs

  • Decisions for process

design, and thus supplier selection, are typically made during clinical trials

Virus filtration Viral clearance Chromato- graphy Final filling Cryo- preservation Concen- tration Sterile filtration Culture media preparation Fermentation Seed cultivation Scale-up Clarification & centrifugation

UPSTR TREAM EAM DOWNSTR STREAM EAM

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7

Strong market fundamentals

Overview | Strategy

Sartor toriu ius s Stedim dim Biote tech

~8% CAGR

for biopharma market 2019–2025 Favorable demographics

9bn people by 2050;

>2bn 60 yrs or older Rise of biosimilars

~30% CAGR for biosimilar

sales 2019–2022 Strong R&D pipeline; advances in gene and cell therapy

>40% share of biologics in

pharma R&D pipeline

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8

Sales revenue more than doubled over the last 6 years

Overview | Strategy

Sartor toriu ius s Stedim dim Biote tech

20.9 21.5 23.0 23.5 26.2 27.5 27.3 28.2 29.3

19.0 20.0 21.0 22.0 23.0 24.0 25.0 26.0 27.0 28.0 29.0 30.0 31.0 32.0 33.0 200 400 600 800 1000 1200 1400 1600

2011 2012 2013 2014 2015 2016 2017 2018 2019

€477m Sales CAGR

~+14%

EBITDA-margin1 +8.4pp +15.9% +19.4% +20.4% +4.1% +10.8% €1.4bn +10.3% +13.7% +18.8%

Sales revenue EBITDA1 margin in % Sales growth and CAGR in constant currencies 1 Excluding extraordinary items

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9

Acquisiti sition

  • n criter

eria Portfolio: Complementary products or technologies Market position: Either among the Top 3 or unique selling point Integration: Management capacity; cultural fit Price: Fair valuation; reach Sartorius‘ profitability level in 2-3 years

Overview | Strategy

M&A strategy – adding innovation, enhancing focus

Sartor toriu ius s Stedim dim Biote tech

TAP Biosystems Bio Outsource Cellca kSep Umetrics AllPure Technologies 2013 2014 2015 2016 2017 2020 2018 2019 Biological Industries Life Science assets from Danaher

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  • Developer and manufacturer of cell culture media
  • Specializes in media for advanced therapies (cell and gene therapies)
  • ~130 employees; headquartered in Beit Haemek, near Haifa (Israel)
  • 2019 revenue €20m to €25m with healthy growth profile; slightly dilutive EBITDA margin
  • Fully consolidated in Sartorius Stedim Biotech
  • Closing of transaction in Dec. 2019, total purchase price of approx. €45m for just over 50% of the shares

10 Overview | Strategy

Acquisition of Biological Industries in Q4 2019

Sartor toriu ius s Stedim dim Biote tech

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  • Portfolio of upstream and downstream technologies with a strong complementary fit, especially in chromatography/purification
  • Combined 2019 sales amounted to c. $100m with strong double-digit but slightly dilutive EBITDA margin
  • ~100 employees with production sites in the U.S., EMEA and China
  • Transaction part of a broader deal of Sartorius AG; of the total purchase price of $825m, approx. one third to be allocated to SSB
  • Announced in Q4 2019, deal closed after all regulatory approvals were received; consolidation in May 2020

11 Overview | Strategy

Acquisition of selected life science assets from Danaher

Sartor toriu ius s Stedim dim Biote tech

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12

Leading positions in key technology platforms

Pie charts indicate completeness of product offering Sartorius1 Merck | Millipore Pall Cytiva2 Thermo Fisher Top 3 Players Filtration

  • 1. Merck | Millipore
  • 2. Danaher | Pall
  • 3. Sartorius

Fluid Management

  • 1. Sartorius
  • 2. Thermo Fisher
  • 3. Merck | Millipore

Fermentation

  • 1. Sartorius
  • 2. Thermo Fisher
  • 3. Danaher | Cytiva

Purification

  • 1. Danaher | Cytiva
  • 2. Merck | Millipore
  • 3. Sartorius

Cell Culture Media

  • 1. Thermo Fisher
  • 2. Merck | Millipore
  • 3. Danaher | Cytiva

1 Sartorius with strengthened portfolio after acquisition of selected life science assets from Danaher; 2 Formerly GE Biopharma

Danaher

Sartor toriu ius s Stedim dim Biote tech

Overview | Strategy

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13

Singl gle-use use market ket penetr etrati tion

  • n expected

ted to increa ease se from

  • m ~35% to ~75%

Single-use products offer advantages over conventional stainless-steel devices

  • Capex|Opex reduction over entire lifecycle
  • Reduced risk of cross-contamination
  • Higher flexibility; advantageous for biosimilars
  • 25-35%
  • 55-65%
  • 65-75%

Construction cost Energy cost Water cost

  • 30-50%

Time-to-market

Reference Single-use

Leader in the growing single-use technology market

Overview | Strategy

Sartor toriu ius s Stedim dim Biote tech

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14

  • More than half of 2019 SSB sales were generated with the Top 50 customers
  • No individual customer accounts for more than 5% of SSB sales revenue
  • No single drug accounts for more than 3% of SSB sales revenue

50 100 150 200 250 300 350

Sales s to to Top 50 customer

  • mers

in 2019, € in millions Top 10 11 to 20 21 to 30 31 to 40 41 to 50

Cumulative share ~25% ~35% ~45% ~50% ~55%

Limited dependence on individual accounts Long-term business relationships with leading global (bio-) pharma companies

Limited dependence on individual accounts

Overview | Strategy

Sartor toriu ius s Stedim dim Biote tech

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Agenda

15

Overview | Strategy Mid-term erm Growth th Prospects cts FY 2020 Guidance | H1 2020 Results Appendix

Sartor toriu ius s Stedim dim Biote tech

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16

Sartorius 2025 targets and initiatives

2025 targets Strategic initiatives

Regiona

  • nal
  • Participate in strong Chinese market growth
  • Continue to outperform the important U.S. market

Portf tfoli

  • lio
  • Add high-impact innovation, e.g. digital tools
  • Enhance process development capabilities
  • Expand into adjacent applications

Opera rati tion

  • ns
  • Accelerate workflows across the organization through digitalization
  • Extend manufacturing base in Asia

Mid-term Growth Prospects

Sartor toriu ius s Stedim dim Biote tech

~30% 30%

EBITDA margin

~€2.8bn 2.8bn

Sales revenue

2025 targets are based on 2017 currency exchange rates; non-organic revenue growth is accounted for companies acquired from 2018 and onwards; EBITDA excluding extraordinary items

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17

Biologics gics ma market ket growth wth foreca cast st

CAGR 2019 to 2023, € in billions U.S. ~155 China ~62

~€335bn

Europe ~61 ROW ~57 U.S. ~110 China ~35

~€240bn

ROW ~47 Europe ~48

~+15% China ~+9% U.S. ~+6% Europe

  • Biologics market in China is at an early stage, but has strong growth potential
  • Supportive regulatory environment and solid industry foundation; biopharma considered a priority sector
  • Growth of fermentation capacity in China of 80% (2018 to 2022)

U.S. remains most important market; China with highest growth rates

Sartor toriu ius s Stedim dim Biote tech

Mid-term Growth Prospects

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18

Regional balance better reflecting end-markets

Sartor toriu ius s Stedim dim Biote tech

Mid-term Growth Prospects CAGR for continued operations, in constant currencies

53% 27% 20 %

2011

~€477m 477m

40% 35% 25%

2019

~€1.4 1.4bn bn

22% 51% 27%

2019

~€240 240bn bn

CAGR ~+16% ~+18% ~+11%

Asia | Pacific Americas EMEA

Global biopharma market 2019 Sales by region 2011 Sales by region 2019

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19

3 1 7 22 20 15

2012 2013 2014 2015 2016 2017 2018 2019

Growing ng numb mber er of biosim similar ar appro rova vals ls

E.U. and U.S.

Biosimi milars ars will outperfo erform rm the biologic

  • gics

s marke rket

€ in billions

~231 ~311

2019 2023

~9 ~24

Biosimilars Other biologics

~+30%

CAGR

  • Major blockbuster biologics are going off-patent
  • Time-to-market is key as only the first providers are most likely profitable
  • Several approvals in Asia and Europe; U.S. at the beginning
  • For now, relatively small market but with strong growth
  • Single-use is the preferred platform for biosimilars

Biosimilars: Strong growth, big opportunities

Sartor toriu ius s Stedim dim Biote tech

Mid-term Growth Prospects

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... not mature because

  • Underpenetrated global market
  • Strong flow of innovation
  • Time-consuming product

development ... but maturing because

  • Increasing importance of product

costs and time to market

  • Robustness and ease of use of tools

are becoming more important

  • Companies invest in market

consolidation

Data adopted from: Paul (2010) Nature Rev DD & Association of the British Pharmaceutical Industry (2017)

Cumulative investment and absolute survival rate in drug development

300 600 900 1200 1500 20 40 60 80 100 Target Target to lead lead Pr Precl eclin inical ical Ph Phase 1 ase 1 Ph Phase 2 ase 2 Ph Phase 3 ase 3 Regis Registr tration ation Cumulat lative ive invest estmen ment (€ in millions; lions; rhs rhs) >10+ years ars Absolu solute te surviva val l rate te (in %; lhs)

The biopharma market is not yet mature, but is maturing

Sartor toriu ius s Stedim dim Biote tech

Mid-term Growth Prospects

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Sartorius Stedim Biotech offers the leading software for bioprocess data analytics

 Enhanced process control and robustness  Improved product quality  Predictive process control

  • Powerful solutions for modeling and optimizing

development and manufacturing

  • Help to gain insights from complex data sets
  • Data analytics just at the beginning in

biomanufacturing and shows high potential

21

Monitoring and control Data aggregation Data evaluation Process

  • ptimization

Digitalization is arriving in biopharma

Sartor toriu ius s Stedim dim Biote tech

Mid-term Growth Prospects

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Agenda

22

Overview | Strategy Mid-term Growth Prospects FY 2020 Guidan ance ce | H1 2020 Results lts Appendix

Sartor toriu ius s Stedim dim Biote tech

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23

Sartor

  • rius

us Stedi dim Biotec ech h Group up

in millions of € unless otherwise specified

H1 2019 H1 2020 in % in % cc1 Sales revenue 709.3 869.1 +22.5 +22.0 Order intake 778.1 1,048.7 .7 +34.8 +34.1 Underlying EBITDA2 205.3 262.3 +27.8 Underlying EBITDA2 margin in % 28.9 30.2 +1.3pp Underlying EPS3 1.42 1.82 +27.7

Significant double-digit growth in sales revenue, order intake and profit

  • Strong demand across all product categories; order intake positively impacted by additional demand for COVID-19 medicines

and project business

  • Consolidation of Biological Industries and the Danaher portfolio accounted for close to 3pp of growth
  • Underlying EBITDA margin rose due to economies of scale; FX slightly dilutive (close to -0.5pp) and dilution from acquisitions

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

Sartor toriu ius s Stedim dim Biote tech Grou

  • up

FY 2020 Guidance | H1 2020 Results

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169.6 216.2

H1 2019 H1 2020

24

Double-digit growth in all geographies

Sartor toriu ius s Stedim dim Biote tech Grou

  • up

288.0 340.3

H1 2019 H1 2020

+18.3%

EMEA EMEA

€ in millions

Americas cas

€ in millions

+21.9% +28.5%

Asia|Pacific

~25%

Americas

~36% 36%

EMEA

~39% 39% €869.1m

Sales by by Region

in %

As Asia|Paci Pacific fic

€ in millions

251.8 312.6

H1 2019 H1 2020

  • Asia|Pacific: Highest momentum with dynamic project business
  • Acc. to customers‘ location; growth in constant currencies

FY 2020 Guidance | H1 2020 Results

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25

Sartor

  • rius

us Stedi dim Biotec ech h Group up

in millions of € unless otherwise specified

H1 2019 H1 2020 in % Underlying EBITDA 205.3 262.3 +27.8 Extraordinary items

  • 6.0
  • 11.7

.7 n.m. Financial result

  • 2.8
  • 10.5

n.m. Underlying net profit1,2 131.1 167.4 +27.7 Reported net profit2 120.9 142.1 +17.5 Opera rati ting ng cash flow 140.0 195.3 +39.5 Investi sting ng cash flow3

  • 63.8
  • 296.4

n.m. CAPEX ratio (in %) 9.0 5.8

  • 3.2pp
  • Net operating cash flow mostly driven by

higher earnings and factoring program (~€83m)

  • Extraordinary items influenced by M&A

expenses, among others

  • Investing cash flow impacted by closing of

acquisition of Danaher portfolio

  • Tax rate at 27.5% (+1.5pp vs. PY) due to

accounting of tax risks; not cash-effective in H1

Operating cash flow rises significantly

1 Underlying net profit = net profit adjusted for extraordinary items, amortization and based on a normalized financial result and tax rate 2 After non-controlling interest 3 Net cash flow from investing activities and acquisitions

Sartor toriu ius s Stedim dim Biote tech Grou

  • up

FY 2020 Guidance | H1 2020 Results

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26

Financial position remains strong

Sartor toriu ius s Stedim dim Biote tech Grou

  • up

Key Financi cial al Indica cators tors

Sartor

  • rius

us Stedi dim Biotec ech

  • Dec. 31,

2019 June e 30, 2020

Equity ratio in %

64.4 57.9

Net debt in millions of €

11 110.4 24 243.2 2

Net debt | underlying EBITDA

0.3 0.5

  • Balance sheet influenced by the recent acquisitions

Net Debt and Net Debt to Underlying ng EBITDA TDA

Q1-Q4 2014 Q1-Q4 2015 Q1-Q4 2016 Q1-Q4 2017 Q1-Q4 2018 Q1-Q4 2019

Net debt in millions of € (lhs) Net debt to underlying EBITDA (rhs) 0.0 0.3 0.6 0.9 1.2 1.5 1.8 50 100 150 200 250 300

Q1-Q2 2020

FY 2020 Guidance | H1 2020 Results

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Outlook for 2020 increased

Sartor toriu ius s Stedim dim Biote tech Grou

  • up
  • CAPEX ratio ~8% (FY 2019: 9.4%); net debt to underlying EBITDA projected at slightly below 0.5 (previously

around 0.5; FY 2019: 0.3)

  • FY 2020 tax rate expected at 27.5% (+1.9pp vs. PY) due to accounting of tax risks
  • Guidance based on the assumption that supply chains are stable and production lines remain in operation
  • Mid-term guidance up to 2025 unchanged

1 In constant currencies

FY 2020 Guidance nce1 [change ge vs. previ vious

  • us guidance

nce]

Sales revenue growth Underlying EBITDA margin

Sartor

  • rius

us Stedi dim Biotec ech ~ 2 26% - 30% [+9pp] ~ 3 31.0% [+1pp] pp]

  • thereof Biological Industries

2pp slightly dilutive

  • thereof Danaher portfolio

3pp

  • 0.5pp

FY 2020 Guidance | H1 2020 Results

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Agenda

28

Overview | Strategy Mid-term Growth Prospects FY 2020 Guidance | H1 2020 Results Ap Appendix

Sartor toriu ius s Stedim dim Biote tech

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29 Appendix

Sartorius Stedim Biotech shares – an attractive investment

Sartor toriu ius s Stedim dim Biote tech

High entry barriers, low price- sensitivity and consolidated competitive landscape Biopharma market fueled by long-term growth drivers Leading market positions in key technologies and high brand awareness Global presence with strong base in growth regions Diversified revenue base and high share of recurring revenues provide low volatility Proven growth track record: Sales CAGR of ~15% over the last five years

1 2 3

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30 Appendix

Share price performance

Sartor toriu ius s Stedim dim Biote tech

Share e key key facts

ISIN FR0013154002 Ticker cker DIM Number ber of

  • f share

92,180,190 Indices ices SBF 120 | CAC All-Tradable | CAC All Shares | CAC Mid & Small 190 | CAC Healthcare | MSCI France |STOXX Europe 600 Marke ket t cap.1 €26.2bn

1 As of July 21, 2020

0% 100% 200% 300% 400% 500% 600% Jan-16 Mar-16 May-16 Jul-16 Sep-16 Nov-16 Jan-17 Mar-17 May-17 Jul-17 Sep-17 Nov-17 Jan-18 Mar-18 May-18 Jul-18 Sep-18 Nov-18 Jan-19 Mar-19 May-19 Jul-19 Sep-19 Nov-19 Jan-20 Mar-20 May-20 Jul-20 Sartorius (prefs.) Sartorius (ord.) Sartorius Stedim Biotech NASDAQ Biotech CAC Mid & Small SBF 120

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31 Appendix

A sampling of the product portfolio

Sartor toriu ius s Stedim dim Biote tech

Fluid management Purification Filtration Fermentation

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32 Appendix

On track to meet 2020 targets

Sartor toriu ius s Stedim dim Biote tech

2020 targets Strategic initiatives

Regiona

  • nal
  • Further grow sales force effectiveness
  • Gain share in North America
  • Leverage market growth in Asia

Portf tfoli

  • lio
  • Alliances and acquisitions
  • Own product development

Opera rati tion

  • ns
  • Continued capacity expansion
  • Drive digitalization and roll-out of efficient IT systems

~ 29-30 30% %

EBITDA margin

~ 1/5

Acquisitions

~ 4/5

Organic

~€1.5 1.5-1.6 1.6bn bn

Sales revenue

2025 targets are based on 2017 currency exchange rates; non-organic revenue growth is accounted for companies acquired from 2018 and onwards; EBITDA excluding extraordinary items

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Petra ra Kirchhof hoff Head of Corporate Communications & IR Phone: +49.551.308.1686 E-mail: petra.kirchhoff@sartorius.com Sartorius Corporate Administration GmbH Otto-Brenner-Straße 20 37079 Göttingen, Germany

  • October

ber 20, 2020 Publication Nine-Month Results 2020 | Göttingen Ben Orzel elek ek Head of Investor Relations Phone: +49.551.308.1668 E-mail: ben.orzelek@sartorius.com

Appendix

Financial calendar and contacts

Sartor toriu ius s Stedim dim Biote tech

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Visit our IR website