Release Date: April 16, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Sartorius AG (SARTF, Financial) reported a strong start to 2025 with a 6.5% sales revenue growth in constant currencies.
- The Bioprocess Solutions division experienced a 10% increase in sales revenue, driven by strong double-digit growth in consumables.
- The company achieved a substantial margin expansion, with underlying EBITDA growing by 12.2% to EUR263 million.
- The acquisition of MatTek is expected to enhance Sartorius AG's portfolio, aligning with their innovation strategy and reducing reliance on animal testing.
- Strong cash flow and reduced leverage ratio were reported, indicating financial stability and effective management of resources.
Negative Points
- The Lab Products & Services (LPS) division faced challenges with a 5.5% decline in sales in constant currencies due to a soft equipment business.
- There is a continued reluctance from customers to make larger investments in equipment, impacting the LPS division.
- The company faces potential impacts from tariffs, although they do not expect it to affect their competitive positioning.
- China's business performance was slightly below the previous year, indicating regional challenges.
- The guidance for 2025 includes a cautious outlook with a sales revenue growth expectation of approximately 6%, reflecting market volatilities.
Q & A Highlights
Q: Was there any pull forward of orders observed in the quarter due to tariff dynamics or macro uncertainty, particularly in the Americas?
A: Joachim Kreuzburg, CEO, stated that they did not see any pull forward of orders playing a relevant role during Q1. The growth in the Americas was not higher than expected and was attributed to temporary effects rather than an underlying trend.
Q: Could you provide more details on the discussions about instruments despite the pressure on revenue? Where is the most activity seen, and what type of customers and instruments are involved?
A: Rene Faber, Head of Bioprocess Solutions Division, noted ongoing high activity levels with customers preparing for equipment purchases, particularly for expansion projects. However, this has not yet resulted in increased order levels, though they are optimistic about recovery starting this year.
Q: Can you comment on the order intake and whether the book-to-bill ratio is better than historical trends?
A: Joachim Kreuzburg, CEO, explained that while the book-to-bill ratio is moving upwards, it is important to consider it on an annual basis rather than quarterly. The moving annual total book-to-bill ratio has been above 1 for more than a quarter, indicating positive trends.
Q: How are you thinking about the seasonality in Bioprocess Solutions given the strong Q1 growth?
A: Rene Faber, Head of Bioprocess Solutions Division, stated that they expect no significant differences in seasonality compared to previous years, with Q4 typically being the strongest quarter followed by Q1.
Q: Regarding tariffs, do you think customers will absorb higher prices due to the importance of your products in therapeutic manufacturing?
A: Joachim Kreuzburg, CEO, emphasized that they plan to pass on only the additional costs from tariffs to customers transparently, and they believe customers will accept this due to the essential nature of their products.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
