Release Date: April 16, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Sartorius Stedim Biotech SA (SDMHF, Financial) reported a strong start to 2025 with a 10% increase in sales revenue for Bioprocess Solutions, driven by double-digit growth in consumables.
- The company achieved a sales revenue growth of 6.5% in constant currencies, with a book-to-bill ratio above 1, indicating healthy demand.
- Underlying EBITDA grew by 12.2% to EUR 263 million, with a margin increase of 120 basis points to 29.8%, driven by positive volume and product mix effects.
- The acquisition of MatTek aligns with Sartorius Stedim Biotech SA (SDMHF)'s innovation strategy, enhancing its portfolio with advanced cell models and AI analytics.
- Strong cash flow allowed the company to reduce its leverage ratio as planned, indicating improved financial health.
Negative Points
- The equipment business remains muted, particularly affecting the Lab Products & Services division, due to customer reluctance to make larger investments.
- Sales in the Lab Products & Services division declined by 5.5% in constant currencies, reflecting challenges in the non-recurring and CapEx-driven business.
- The company faces potential impacts from tariffs, although it does not expect these to affect its 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 ongoing 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 there was no significant pull forward of orders in Q1. The growth in the Americas was not higher than expected and was consistent with previous trends, with no underlying trend indicating otherwise.
Q: Can you provide more details on the discussions about instruments despite the pressure on revenue? Where is the most activity occurring?
A: Rene Faber, Head of Bioprocess Solutions Division, explained that there is ongoing high activity in preparing for equipment purchases, with more expansion projects emerging. However, this has not yet resulted in increased orders, but there is optimism for recovery in equipment demand this year.
Q: Is the book-to-bill ratio doing better than historical trends, and was there any pent-up demand or blanket orders in Q1?
A: Joachim Kreuzburg, CEO, noted that the book-to-bill ratio is moving upwards, with a moving annual total above 1. There was no significant pent-up demand or blanket orders impacting Q1, and the trends are moving in a positive direction.
Q: How are you thinking about seasonality in Bioprocess and LPS divisions given the strong Q1 results?
A: Rene Faber, Head of Bioprocess Solutions Division, stated that no significant seasonal differences are expected compared to previous years, with Q4 typically being the strongest. For LPS, Alexandra Gatzemeyer, Head of Lab Products & Services Division, mentioned that new product launches and historical seasonality suggest a stronger second half of the year.
Q: Regarding tariffs, do you think customers will absorb higher prices due to their importance in therapeutic manufacturing?
A: Joachim Kreuzburg, CEO, emphasized that only additional costs from tariffs will be passed to customers, and transparency will be maintained. Customers are expected to accept these costs due to the essential nature of the products.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
