SRI Presentation March 2019 March 2019
Disclaimer This presentation contains statements concerning the future performance of the Sartorius 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.
Agenda Compan pany Overvie rview; w; Figure ures and nd Strategy tegy Responsibility Overview ESG Performance Contribution to the UN Sustainable Development Goals
Overview and Strategy Sartorius at a glance ~ € 1.6bn 6bn Industry A leading partner of the Sales revenue focus biopharma industry ~14% Clear Making R&D and production processes Clear mission Sales CAGR 1) 2013-2018 mission of innovative biologics more efficient 25.9% 9% Attractive Biopharma market fueled by strong market EBITDA margin 2) long-term growth drivers 30 30 Strong Double-digit market share in Countries positioning key technologies >8,100 100 Stable Diversified revenue base and Employees business model high share of recurring revenues Based on FY 2018 figures 1) For continued operations, in constant currencies 2) Excluding extraordinary items 4
Overview and Strategy Strategic focus on the biopharma market Biop oproc ocess ss Solutio tions s Divisio sion Molecu cule le Cell line and Produ duct ction ion developm lopmen ent proce cess ss developme lopment upst strea eam m & downst strea eam Quality | Testing | Validation Lab b Prod oduct cts s & Services s Divisio sion 5
Overview and Strategy Strong market fundamentals Favorable Strong R&D pipeline; Increasing Rise of demographics advances in gene and healthcare spending biosimilars cell therapy 9bn 9bn +6.4% 4% ~30% >40% % People by 2050; CAGR worldwide CAGR for biosimilar Share of biologics in >2bn n 60 yrs for prescription drug sales 2018 – 2022 pharma R&D sales 2018 – 2025 pipeline or older ~8% ~8 CAGR biopharma market 2018 – 2025 6
Overview and Strategy Sales revenue more than doubled over the last 6 years ~+13% 13% Sales CAGR +13.2% EBITDA 1) margin +6.2pp 2pp +9.3% ~ € 1.6bn +18.2% +16.0% +12.6% +8.8% 25.9 +13.6% 25.1 25.0 23.6 € 733m ~ € 650m 21.0 20.5 20.1 19.7 2011 2012 2013 2014 2015 2016 2017 2018 EBITDA 1) margin in % Sales revenue Intec Division; divested in 2|2015 Sales growth and CAGR for continued operations, in constant currencies 1) Excluding extraordinary items 7
Overview and Strategy M&A strategy – adding innovation, enhancing focus Divestment IntelliCyt ViroCyt Essen BioScience Intec Division 2011 2019 Umetrics Cellca kSep Lonza Cell TAP Biosystems BioOutsource AllPure Culture Media Technologies Portfolio: Complementary products or technologies Market position: Either among the Top 3 or unique selling point Acquisition criteria Integration: Management capacity; cultural fit Price: Fair valuation; reach Sartorius‘ profitability level in 2 -3 years 8
Overview and Strategy Infrastructure prepared for further organic growth CAPEX ratio CAPEX composition 2019 in % 15.2 14.9 16 ~12.0 ~X% Major projects 14 11.7 12 10.1 9.1 8.8 10 7.7 8 3% Regular expansion 6 4 2 2% Cap. R&D 0 2012 1) 2012 2013 1) 2013 2014 2015 2016 2017 2018 2019 2) 2019 Maintenance 3% 1) Incl. discontinued operation 2) Based on 2019 guidance Yauco, o, Puerto to Rico Goetti tingen, ngen, Germany many Auba bagne gne, Franc nce Doubling of fluid management Extension of headquarters Capacity extension New ERP and extension of and filter capacities of bag production global IT infrastructure 9
Overview and Strategy Sartorius 2025 targets and initiatives Strategic initiatives 2025 targets Regiona ional ~ € 4bn 1 • Participate in strong Chinese market growth • Continue to outperform the important U.S. market Sales revenue Portf tfolio io • Add high-impact innovation, e.g. digital tools ~2|3 ~1|3 • Enhance process development capabilities Organic Acquisitions • Expand into adjacent applications Operation ions ~28% • Accelerate workflows across the organization through digitalization EBITDA margin • Extend manufacturing base in Asia 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 10
Overview and Strategy Sartorius 2025 ambition per division SSB | BPS LPS Sartorius Group ~ € 4bn ~ € 1.2bn 1 ~ € 2.8bn Sales revenue Sales revenue Sales revenue ~30% ~25% ~28% EBITDA margin EBITDA margin EBITDA margin 11
Bioprocess Solutions Snapshot of the Bioprocess Solutions Division Total solutions provider for Global footprint biomanufacturing Americas ~36% Asia | Pacific ~23% EMEA ~41% Division sales by region Track record of dynamic growth High share of recurring revenues +14.2% .2% +16.1% CAGR p.a. 1,143.1 Single-use products ~75% 36 +14.2 .2% 1150 34 CAGR 1050 950 32 850 28.6 30 750 Equipment ~25% 28 650 517.8 550 26 450 23.0 24 350 250 22 2013 2014 2015 2016 2017 2018 Sales revenue, € in millions; EBITDA margin 1) in % Division sales by category Based on FY 2018 figures; sales CAGR in constant currencies 1) Excluding extraordinary items 12
Bioprocess Solutions Covering most steps of the biopharma process chain Upst strea eam Culture media Seed cultivation Scale-up Fermentation preparation Downst strea eam Final Cryopreservation Sterile Concentration Virus removal Polishing Viral Clarification & filling filtration filtration clearance centrifugation • Production process design is fixed for the lifetime of most drugs • Unique and customized production process required for any drug • Decisions for process design, and thus supplier selection, are typically made during clinical trials 13
Bioprocess Solutions Leading positions in key technology platforms Sartorius Merck | Danaher| Thermo GE Top 3 Players Millipore Pall 2) Fisher 1. Merck | Millipore Filtration 2. Danaher | Pall 3. Sartorius 1. Sartorius Fluid 2. Thermo Fisher Management 3. Merck | Millipore 1. Sartorius Fermentation 2. Thermo Fisher 3. GE 1. GE Purification 2. Merck | Millipore 3. Danaher | Pall 1. Thermo Fisher Cell Culture 2. Merck | Millipore Media 1) 3. GE Pie charts indicate completeness of product offering 1) As of 2019, reduced scope due to changes to sales alliance in cell culture media with Lonza 14 2) Danaher announced acquisition of GE Biopharma; transaction is expected to be completed in Q4 2019
Bioprocess Solutions Limited dependence on individual accounts Sales to Top 50 customers in 2018, € in millions 350 ~55% ~50% 300 ~45% ~40% 250 Cumulativeshare ~25% 200 150 100 50 0 Top 10 11 to 20 21 to 30 31 to 40 41 to 50 Long-term business relationships with Limited dependence on individual accounts leading global (bio-)pharma companies • More than half of 2018 BPS sales was generated with the Top 50 customers • No individual customer accounts for more than 5% of BPS sales revenue • No single drug accounts for more than 3% of BPS sales revenue 15
Lab Products & Services Snapshot of the Lab Products & Services Division Premium vendor for laboratories Global footprint Americas ~26% Asia | Pacific ~28% EMEA ~46% Division sales by region Division in transition to a new growth and profitability profile +9.1% +22.0% 500 500 35 35 +7.9% 423.0 +5.0% 30 30 400 400 +1.4% 25 25 273.8 300 300 18.5 Build-up of 20 20 16.0 15.9 bioanalytics portfolio 16.0 200 200 15 since 2016 15 100 100 10 10 2013 2014 2015 2016 2017 2018 Sales revenue, € in millions; EBITDA margin 1) in % Based on FY 2018 figures; sales growth and CAGR in constant currencies 1) Excluding extraordinary items 16
Lab Products & Services Our ambition: Reduce costly trial & error in drug discovery Drug ug dis isco cove very Testing ing & Clinical inical tria ials Drug ug appro roval val impro rovin ving 4 ½ years 5 ½ years 1 ½ years € 490m 490m € 640m 640m € 60m 60m 1 year € 110m 110m ~10 10 years rs 1 in 10,0 ,000 00 From drug discovery to approval Chance for a candidate ~ € 500 500m to make it to market Average costs of drug discovery Facilitate digitalization and automatization Lower likelihood of failure Our approach Facilitate digitalization Lower likelihood Reduce time and costs OUR R APPROAC ACH Reduce time and costs in molecule and automatization of failure in molecule development development 17 Schematic example of biologic drug discovery with data from Association of the British Pharmaceutical Industry
Lab Products & Services Innovative platforms to increase biopharma R&D efficiency • Acquisition of U.S. companies IntelliCyt (2016) and Essen BioScience (2017) • Solutions for high-throughput and real-time quantitative cell analysis • Automatization, acceleration and improvement of basic research steps • Reduction of costs in drug discovery phase and clinical trials IncuCyte: Real-time cell analysis IntelliCyt: Innovative cell screening 18
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