SRI Presentation March 2019 March 2019 Disclaimer This - - PowerPoint PPT Presentation

March 2019

SRI Presentation

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

ESG Performance Responsibility Overview Contribution to the UN Sustainable Development Goals

Sartorius at a glance

4

Clear mission A leading partner of the biopharma industry Making R&D and production processes

• f innovative biologics more efficient

Biopharma market fueled by strong long-term growth drivers Double-digit market share in key technologies Diversified revenue base and high share of recurring revenues Industry focus Clear mission Strong positioning Attractive market Stable business model

>8,100 100

Employees

~€1.6bn 6bn

Sales revenue

25.9% 9%

EBITDA margin2)

~14%

Sales CAGR1) 2013-2018

30 30

Countries

Based on FY 2018 figures 1) For continued operations, in constant currencies 2) Excluding extraordinary items

Overview and Strategy

Strategic focus on the biopharma market

5

Biop

• proc
• cess

ss Solutio tions s Divisio sion Produ duct ction ion upst strea eam m & downst strea eam

Quality | Testing | Validation

Molecu cule le developm lopmen ent Cell line and proce cess ss developme lopment Lab b Prod

• duct

cts s & Services s Divisio sion

Overview and Strategy

Strong market fundamentals

6

~8 ~8%

CAGR biopharma market 2018–2025 Strong R&D pipeline; advances in gene and cell therapy Favorable demographics

+6.4% 4%

CAGR worldwide for prescription drug sales 2018–2025

~30%

CAGR for biosimilar sales 2018–2022

>40% %

Share of biologics in pharma R&D pipeline

9bn 9bn

People by 2050;

>2bn n 60 yrs

• r older

Rise of biosimilars Increasing healthcare spending Overview and Strategy

7

19.7 20.1 20.5 21.0 23.6 25.0 25.1 25.9 2011 2012 2013 2014 2015 2016 2017 2018

Sales revenue more than doubled over the last 6 years

Sales revenue EBITDA1) margin in % Intec Division; divested in 2|2015

+12.6% +16.0% +18.2% +9.3% +8.8%

Sales CAGR

~+13% 13%

EBITDA1) margin

+6.2pp 2pp

~€1.6bn €733m ~ €650m

Sales growth and CAGR for continued operations, in constant currencies 1) Excluding extraordinary items

+13.6%

Overview and Strategy

+13.2%

M&A strategy – adding innovation, enhancing focus

8 2011 2019

Lonza Cell Culture Media TAP Biosystems AllPure Technologies BioOutsource Cellca kSep Umetrics IntelliCyt ViroCyt Essen BioScience Divestment Intec Division

Acquisition criteria

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 and Strategy

3% 2% 3% ~X%

Infrastructure prepared for further organic growth

9

New ERP and extension of global IT infrastructure Yauco,

• , Puerto

to Rico Doubling of fluid management and filter capacities Goetti tingen, ngen, Germany many Extension of headquarters Auba bagne gne, Franc nce Capacity extension

• f bag production

8.8 7.7 9.1 10.1 11.7 14.9 15.2 ~12.0 2 4 6 8 10 12 14 16 2012 2013 2014 2015 2016 2017 2018 2019

CAPEX ratio

in %

Major projects Regular expansion

• Cap. R&D

Maintenance CAPEX composition 2019

20121) 20192)

1) Incl. discontinued operation 2) Based on 2019 guidance

20131)

Overview and Strategy

Sartorius 2025 targets and initiatives

~28%

EBITDA margin

~2|3 Organic ~1|3 Acquisitions

Portf tfolio io

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

Regiona ional

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

Operation ions

• Accelerate workflows across the organization

through digitalization

• Extend manufacturing base in Asia

10

Strategic initiatives 2025 targets

~€4bn

1

Sales revenue

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

• nwards; EBITDA excluding extraordinary items

Overview and Strategy

Sartorius 2025 ambition per division

11

SSB | BPS

~€2.8bn

Sales revenue

~30%

EBITDA margin

~€1.2bn

Sales revenue

~25%

EBITDA margin

~28%

EBITDA margin

Sartorius Group LPS

~€4bn

1

Sales revenue

Overview and Strategy

517.8 1,143.1 23.0 28.6

22 24 26 28 30 32 34 36 250 350 450 550 650 750 850 950 1050 1150

2013 2014 2015 2016 2017 2018

+14.2% .2% p.a. Total solutions provider for biomanufacturing

12

Global footprint High share of recurring revenues Track record of dynamic growth

Asia | Pacific ~23% Americas ~36% EMEA ~41%

+14.2 .2% CAGR

Single-use products ~75% Equipment ~25% +16.1% CAGR

Sales revenue, € in millions; EBITDA margin1) in % Division sales by region Division sales by category Based on FY 2018 figures; sales CAGR in constant currencies 1) Excluding extraordinary items

Snapshot of the Bioprocess Solutions Division

Bioprocess Solutions

Covering most steps of the biopharma process chain

13

Virus removal filtration Viral clearance Polishing Final filling Cryopreservation Concentration Sterile filtration Culture media preparation Fermentation Seed cultivation Scale-up Clarification & centrifugation

Upst strea eam Downst strea eam

• 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

Bioprocess Solutions

Leading positions in key technology platforms

Sartorius Merck | Millipore Danaher| Pall2) Thermo Fisher GE 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. GE

Purification

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

Cell Culture Media1)

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

Pie charts indicate completeness of product offering 14 Bioprocess Solutions

1) As of 2019, reduced scope due to changes to sales alliance in cell culture media with Lonza 2) Danaher announced acquisition of GE Biopharma; transaction is expected to be completed in Q4 2019

50 100 150 200 250 300 350

Limited dependence on individual accounts

• 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

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

Sales to Top 50 customers

in 2018, € in millions

Top 10 11 to 20 21 to 30 31 to 40 41 to 50

Cumulativeshare

~25% ~40% ~45% ~50% ~55%

15 Bioprocess Solutions

273.8 15.9 16.0 10 15 20 25 30 35 100 200 300 400 500 2013 2014 2015

Snapshot of the Lab Products & Services Division

16

Global footprint Premium vendor for laboratories

423.0 16.0 18.5

10 15 20 25 30 35

100 200 300 400 500 2016 2017 2018

Division in transition to a new growth and profitability profile

+1.4% +5.0%

Based on FY 2018 figures; sales growth and CAGR in constant currencies 1) Excluding extraordinary items

+7.9% +22.0% +9.1%

Build-up of bioanalytics portfolio since 2016

Sales revenue, € in millions; EBITDA margin1) in %

Asia | Pacific ~28% Americas ~26% EMEA ~46%

Division sales by region

Lab Products & Services

Our ambition: Reduce costly trial & error in drug discovery

Drug ug dis isco cove very Testing ing & impro rovin ving Clinical inical tria ials Drug ug appro roval val

1 ½ years

€60m 60m

1 year

€110m 110m

5 ½ years

€640m 640m

4 ½ years

€490m 490m

Facilitate digitalization and automatization OUR R APPROAC ACH 17 Lower likelihood

• f failure

Reduce time and costs in molecule development

Schematic example of biologic drug discovery with data from Association of the British Pharmaceutical Industry

1 in 10,0 ,000 00

Chance for a candidate to make it to market

~€500 500m

Average costs of drug discovery

~10 10 years rs

From drug discovery to approval

Facilitate digitalization and automatization Lower likelihood of failure Reduce time and costs in molecule development

Our approach

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 Lab Products & Services

Plate readers3)

Bioanalytics portfolio with little competition and high value added

19 Richness of data Sample throughput per plate

Works on cells in suspension Works on cells on 2D surface Independent of cell attachment

1) Becton Dickinson, Merck Millipore, PerkinElmer, Thermo Fisher 2) Beckman Coulter, Becton Dickinson, Merck Millipore, Thermo Fisher 3) Agilent Technologies, Danaher, Merck Millipore, PerkinElmer

• IntelliCyt processes thousands of

plates and generates large amounts of data for rapid and clear target identification

• IncuCyte delivers video-based

insights and improved workflows for real-time quantitative analysis

• f living cells

Microscopy High content imaging1) Flow cytometry2)

IntelliCyt IncuCyte

Plate readers3) Lab Products & Services

Strong market position in key product categories

• Leading positions in laboratory products used for research and quality control
• Average global market share of >10%
• High gross margins offer potential for economies of scale
• Growth potential especially in the U.S. and Asia

Lab Balances #2

#2

Pipettes #4

#4

Lab Filtration #3

#3

• Microb. Analysis #2

#2

(membrane based)

20 Lab Products & Services

Scalable business with considerable growth and margin potential

21

Well-es establish tablished ed sa sample ple prep p portfolio tfolio

• Premium instruments and consumables offering with strong global positions
• Market share opportunities in certain regions to be addressed primarily by direct sales force

Unique e bioa

• analyt

nalytics cs portf tfolio

• lio est

stablis blished ed

• Innovative technologies added through recent acquisitions
• Combination with Sartorius’ global reach provides significant growth potential

Lab Products & Services

Agenda

Company Overview; Figures and Strategy ESG Performance

Responsi

• nsibil

bilit ity y Overvi rview ew

Contribution to the UN Sustainable Development Goals

Strong company values

23

Sustain tainabi bili lity ty

Growing profitably and acting responsibly.

Openn nness ess

Driving change and progress internally and externally.

Enjoyment yment

Working in an energetic and rewarding environment. Responsibility

Our corporate responsibility basics

Princi nciples ples of our corpor rporate te social ial responsi

• nsibil

bilit ity

Responsibility

• Environmental Policy
• Anti-Corruption Code
• Supplier Code of Conduct
• Implementation of ESG Risk

Reporting

• Corporate Responsibility

Steering Committee

• Policy on Labor Practices
• Policy on Occupational Safety
• Human Rights Strategy
• Code of Conduct

Sartorius is a signatory of the United Nations Global Compact and is committed to sustainable global business. Sartorius is a member of econsense, the Forum for Sustainable Development of German Business.

Environment Social Governance

24

25 Overall rating: 49 of 100 Environment: 60 Labor: 50 Fair business practices: 50 Sustainable procurement: 30

Transparency

Responsibility Overall rating: A Non-financial group statement published in

• ur annual report and

externally audited Overall rating: C Social governance: C+ Environmental rating: C- Staff and suppliers: C Society and product responsibility: C Products and services: D Corporate governance and business ethics: B- Eco-efficiency: A+

Our ESG core topic: Better health for more people

We empower scientists and engineers to simplify and accelerate progress in life science

• Time savings in drug discovery
• Cost savings in drug production
• Reduced risk of cross-contamination
• Higher flexibility

26 Responsibility

• Anticipate clients needs
• Accelerate innovation
• Collaborate
• Bring experts together

New and better ter therap rapies ies and more re afford rdab able e med edicin icine

Agenda

Company Overview; Figures and Strategy

ESG Perform

• rmance

nce

Responsibility Overview Contribution to the UN Sustainable Development Goals

28

 Energy efficiency  Water management  Waste management Responsible management and long-term value creation

ESG Performance

 Occupational health & safety  Employee development  Labor practices  Compliance  Diversity  Management remuneration

Environmental performance Social performance Governance performance Economic performance

Long-term term value creation tion

Certifications

29

IS ISO 9001 IS ISO 14001 01 ISO ISO 50001 01 OHSA OHSAS S 18001 01

14 production sites = 89% of employees in production 6 production sites = 59% of employees in production 4 German companies = 43% of employees in production Beijing

ESG Performance

Yauco, Puerto to Rico Goetti tingen, ngen, Germany many Auba bagne gne, Franc nce Beijing, jing, China na

Companies that are not yet certified are managed according to the same high standards.

30

Energy consumption GHG emissions

Primary energy ~43% Electricity ~57%

+14.2 .2% CAGR

Scope 1 emissions ~65% Scope 2 emissions ~35%

GHG emissions in relation to revenue; t/million €

Energy consumption and emissions

ESG Performance 33.7 .7 27.7 .7 25.1 .1 25.5 .5 24.7 .7

10 20 30 40 50 2014 2015 2016 2017 2018

• Emissions caused by direct operations are

comparably low

• Target: Keep GHG1) emissions at

underproportionate levels with respect to revenue growth

• Primary energy sources include oil and

natural gas

Development of GHG emissions

1) GHG = Greenhouse Gas Protocol

31

Water management

ESG Performance

• Most water is used for rinsing in the

manufacture of filter membranes acc. to the precipitation bath method in Göttingen

• Water purchased mainly from public supply
• Target: Reduce water consumption in

relation to revenue

• Sartorius takes care to reduce water

consumption and soil sealing, particularly at plants in baseline water risk areas according to the Aqueduct Water Risk Atlas (Yauco, Bangalore, Beijing)

• Additional system for rainwater use in

Yauco

+14.2 .2 % CAGR Water consumption in relation to revenue; t/million €

371.4 .4 322.4 .4 316.0 .0 306.4 .4 276.5 .5

100 200 300 400 500 2014 2015 2016 2017 2018

Water consumption

2018 2017 Water consumption 432,971 430,608 Water consumption / employees 74.7 81.4

32

Recycling Hazardous waste

Non hazardous waste ~76% Hazardous waste ~24%

Classification of waste in Germany

Waste management

Waste for recycling ~51% Waste for disposal ~49%

Recycling: global

ESG Performance

+14.2 .2% CAGR Waste in relation to revenue; t/million €

4.1 3.7 3.5 4.2 3.8

2 4 6 8 10 2014 2015 2016 2017 2018

• Target: Reduce waste in relation to revenue /

increase recycling quota

• Hazardous waste mainly from membrane

production (evaporation method)

• 3 of 4 evaporation machines in Göttingen
• Organic solvents are recovered and recycled

Waste development

Single-use technology

Single-use products offer advantages over conventional stainless steel devices Social ial persp spect ctiv ive

• SU products enable manufacturing processes

that are safe as cross contamination is avoided

• Processes are scalable and thus flexible and

economical Environ

• nme

menta ntal l persp spec ecti tive ve

• Eco-friendly as no energy intensive steam

sterilization and chemical cleaning between batches required

• Ecological footprint considered over whole

product lifecycle

• All materials can be safely incinerated and

used as energy

• 25–35%

SU Reference SU

• 55–65%

Reference Reference SU

• 65–75%

Cons nstr truc ucti tion

• n

cos

• st

Energy gy cos

• st

Water ter cos

• st
• 30–50%

Reference SU

Time me-to to- market et

33 ESG Performance

Single-use technology - Materials

Material of constructions of single-use bags are carefully selected

• To minimize the toxicity impact on human

and environment

• With low additives amount
• Compliant with pharmacopeia’s whenever

technically possible

• Films are mainly constituted by standard

polymers such as polyethylene and ethylene vinyl acetate, which are well known to be recyclable

34 ESG Performance

35

Employees

+14.2 4.2% CAGR Average seniority in years

9.8 9.5 8.9 8.8 8.3

6 7 8 9 10 11 2014 2015 2016 2017 2018

• More than 1,000 new hires per year
• 60,428 hours of education and training;

~11.8 hours per employee

• Annual performance reviews
• Flextime, part-time, home office

Average seniority

2018 2017 Number of redundancies 77 78 Attrition rate excl. expired fixed-term contracts, in % 8.7 8.3 Attrition rate excl. expired fixed-term contracts, in % 10.2 10.5

Type of contract

Unlimited 91.2% Limited 8.8%

Fluctuation

ESG Performance

>61 years 4% 51-60 years 18% 41-50 years 24%

36

Women in overall management roles

Diversity

Men 70% Women 30%

ESG Performance

• People from 77 nations;

46 nations at headquarters

• 70% of 831 managers are non-German
• 62.4% of the Group’s staff are employed
• utside Germany
• Target 2022: women in the first and second

management tiers >30% Employees by age

+14.2 .2 % CAGR

Employees by region

31-40 years 31% 16-20 years 1% 21-30 years 22% EMEA 70% Asia|Pacific 14% Americas 16%

37

Health & safety

ESG Performance

+14.2 .2 % CAGR Without long-term illness, parental leave, sabbaticals, unapaid leave

3.6 3.7 3.6 3.7 3.8

2 4 6 2014 2015 2016 2017 2018

• Risk assessments of workplaces and tailored

training

• Work-related accidents up due to the

tighter notification and reporting requirements in the Fermentation unit

• Severity rate down due to improved

training, equipment and procedures Absenteeism rate

2018 2017 Work accidents 135 67 Frequency rate 10.0 5.4 Severity rate 128.5 205.4

• Corporate health management policy

addresses physical as well as psycho-social elements of health

• Mandatory in-house medical service
• External provider offers psychological help

for work-related or personal matters Accident statistics

Sartorius legal & operational structure

100% ~74%

Other Sartorius Subsidiaries

Lab Products & Services Division Bioprocess Solutions Division Sartorius Group Operational Setup

• ~74% Sartorius AG
• ~26% free float

Sartorius AG

Stock market listed in Germany1)

Sartorius Stedim Biotech S.A.

Stock market listed in France

• >50% Administered by executor
• ~34% Bio-Rad Laboratories
• ~9% Treasury shares
• ~5% Family-owned
• ~2% Free float

Ordinar nary shar hares

• ~91% Free float
• ~9% Treasury shares

Preference sh shares

Sartorius Group Legal Setup

38

1) Information on shareholdings and shares in free float pursuant to Sections 33 et seq. of the German Securities Trading Act (WpHG).

Reporting obligations refer only to ordinary shares and not to non-voting preference shares.

ESG Performance

Executive ive Board Superv rvisory sory Board

Sartorius‘ dual board structure

39

• Shareholder representatives are elected

by the AGM; employee representatives, by employees

• Share of >30% women according to German law
• Dr. Joachim

him Kreuzburg, uzburg, CEO Joined Sartorius in 1999 Board member since 2003 Rainer ner Lehmann, mann, CFO Joined Sartorius in 2005 Board member since 2017 Gerry Mackay ay Joined Sartorius in 2015 Board member since 2019

• Dr. René

né Fáber er Joined Sartorius in 2002 Board member since 2019

• Exec. Task

Committee Audit Committee Nomination Committee Mediation Committee 12 members: 6 shareholder representatives, of which 5 independent; 6 employee representatives 4 members ESG Performance

• Executive Board members are appointed

by the Supervisory Board

• Manages all business activities along functions

and supports decision-making at board level

Risk and opportunities management and compliance

40 Risk Reporting Compliance Internal Auditing

Executiv utive e Board Supervis isor

• ry Board

Global Risk Mgmt. Guidelines (Based on the COSO Standard) Other Guidelines (Articles of Association, Rules of Procedure) Risk and Opportunities Identification and Management by Operating Functions Local & Global Operating Procedures ESG Performance

Management remuneration system

41 ESG Performance 50% 50%

100% 0%

Budget remuneration Varia riable le, , long ng-te term a) Consolidated net profit1) b) Phantom stock plan2) Varia riable le, , annu nual al2)

2)

a) Revenue / Order intake b) Underlying EBITDA c) Net debt to EBITDA

~ max. . 120% 0%

Maximum remuneration

~50%

Fixed remuneration

1) Caps at 120% for each KPI 2) The amount to be paid out is capped at a maixmum of 2.5 times the share price at the time the phantom stock was assigned

Further remuneration components include fringe benefits and pension commitments

Agenda

Company Overview; Figures and Strategy ESG Performance Responsibility Overview

Contr tributi bution

• n to the UN Sustai

taina nable ble Develop lopme ment nt Goals

43

Three-step materiality analysis to determine which SDGs are related to Sartorius business activities

• 1. Identification of the SDGs that are significant for Sartorius
• 2. Examination of the relevance of each topic to our business, as well as the potential

impacts on people and the environment

• 3. Determination of whether the impacts are positive or negative and to which degree

Sartorius Contribution to the SDGs

Contribution to SDGs

Eight t SDGs Gs were define ned d as material rial in relation

• n to the busine

ness ss activi iviti ties s of Sartorius.

• rius.

Appendix

Share price performance

45

Key facts on shar hares ISIN DE0007165607 (preference share) | DE0007165631 (ordinary share) Ticker SRT (preference share) | SRT3 (ordinary share) Number of shares 74,880,000 – of which ordinary shares: 37,440,000 | preference shares: 37,440,000 Indices MDAX | TecDAX | MSCI Germany Index | CDAX | Prime All Share-Index | Technology All Share- Index | STOXX Europe 600 Market cap.1) €8.4bn

1) As of February 1, 2019

Appendix

50% 100% 150% 200% 250% 300% 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 Sartorius (prefs.) Sartorius (ord.) Sartorius Stedim Biotech DAX TecDAX NASDAQ Biotech

Fermentation & Cell Culture Media

Extract of the Bioprocess Solutions’ product portfolio

Filtration Purification Fluid Management

46 Appendix

Pipettes

Extract of the Lab Products & Services’ product portfolio

Filtration | Lab Filtration Lab Balances | Lab Water Systems Bioanalytics

47 Appendix

Recap of 2020 targets and initiatives

~€2bn

Sales revenue

~3|4 Organic ~1|4 Acquisitions

Portf tfolio io

• Complementary extensions through alliances

and acquisitions

• Own product development

Regiona ional

• Gain share in North America
• Leverage strong market growth in Asia

Infras astr truct cture ure

• Expansion of production capacity
• Significant investments in IT infrastructure

48

Strategic initiatives 2020 targets

~26-27%

EBITDA margin

2020 targets are based on 2015 currency exchange rates; EBITDA excluding extraordinary items

Appendix

Petra Kirchhof hoff

Head of Corporate Communications & IR Phone: +49.551.308.1686 Email: petra.kirchhoff@sartorius.com Sartorius Corporate Administration GmbH Otto-Brenner-Straße 20 37079 Goettingen, Germany www.sartorius.com

Contacts

49

Ben Orzelek

Head of Investor Relations Phone: +49.551.308.1668 Email: ben.orzelek@sartorius.com Appendix

Katha tharin ina Tillma mann nns-Pe Pelzer zer

Corporate Responsibility Phone: +49.551.308.2893 Email: katharina.tillmanns@sartorius.com