Simplifying Progress
Sartorius Stedim Biotech Investors PresentationFull-Year 2020 Results
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
Agenda
3
Overview | Strategy
Mid-term Growth Prospects
FY 2020 Results | FY 2021 Guidance
Appendix
Sartorius Stedim Biotech
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.
The United Nations’ sustainability goal ‘Good Health and Well-Being’ is thus an integral part of our core business.
Sartorius Stedim Biotech
Sartorius Stedim Biotech at a glance
5 Overview | Strategy
Sartorius Stedim Biotech
1 In constant currencies 2 Excluding extraordinary items
~€1.9bn Sales revenue 2020
~16.5%Sales CAGR1 2015-2020
~31.7%EBITDA margin2 2020
> 7,500Employees
>20countries, headquartered in Aubagne, France
Pharmamarket
Biopharmamarket
Single-usepenetration
Market share gains
CAGR 4-7%
CAGR ~10%
Double-digit growth
Esp. in North America
Four strong pillars drive above-average growth
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Virus clearance & filtration
Chroma-tography
Cryo-preservation
Concen-tration
Sterile filtration
Culture mediapreparation
FermentationSeedcultivation
Scale-up
Clarification & centrifugation
Covering most steps of the biopharmaceutical manufacturing process
UPSTREAM
DOWNSTREAM
Finalfilling
Differentiated by the rangeand completeness of the portfolio
Excellent positioning in key single-use technologies
Internationally recognized supplier enabling innovation in bioprocessing through own R&D and partnerships
Sartorius Stedim Biotech
Overview | Strategy
7
Generating revenue throughout the lifecycle of a biopharma drug
Stage
Scale
Wide product range of equipment and consumables for all stages (from pre-commercial to large-scale manufacturing); optimal scalability
Engineering support with excellent application knowhow and understanding of the entire bio-production process
Production process of each individual drug is subject to validation by health authorities (e.g. FDA, EMA) and part of the drug approval
Process development Proof of concept - pilot Large
Preclinical (1 year)
Clinical(4-7 years)
Commercial(15+ years)
Sartorius Stedim Biotech
Overview | Strategy
8
Integrated services and technologies for all types of biopharmaceuticals
Vaccines
Engineered tissue
Bioconjugates
mAbs Regenerative medicine
~ 95% of revenue generated with bio/pharma customers
Antibodies are most relevant; strong position in vaccines as well
SSB provides solutions for the development and production of all biotechnologically derived drugs and cell derivatives
These also include new modalities such as cell and gene therapies and viral vectors
Sartorius Stedim Biotech
Overview | Strategy
~10% CAGR for biopharmamarket 2020–2025
9
Attractive market environment with strong growth opportunities
Favorabledemographics
9bn people by 2050; >2bn 60 yrs or older
Rise ofbiosimilars
~30% CAGR for biosimilar sales 2020–2025
Strong R&D pipeline; advances in gene and cell therapy
>40% share of biologics in pharma R&D pipeline
Sartorius Stedim Biotech
Overview | Strategy
10
Sales revenue more than doubled over the last 5 yearsSartorius Stedim Biotech
20.9 21.523.0 23.5
26.227.5 27.3 28.2 29.3
31.7
18.019.020.021.022.023.024.025.026.027.028.029.030.031.032.033.034.035.036.037.038.039.040.0
0
200
400
600
800
1000
1200
1400
1600
1800
2000
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
~€884m
Sales CAGR ~+15.5%EBITDA1 margin +10.8pp
+15.9%+19.4%
+20.4%+4.1%
+10.8%
~€1.9bn
+10.3%
+13.7%+18.8%
Sales revenue EBITDA1 margin in %
Sales growth and CAGR in constant currencies 1 Excluding extraordinary items
+34.6%
Overview | Strategy
~€477m
11
Acquisition criteria
Portfolio: Complementary products or technologiesMarket position: Either among the Top 3 or unique selling pointIntegration: Management capacity; cultural fitPrice: Fair valuation; reach Sartorius‘ profitability level in 2-3 years
Overview | Strategy
M&A strategy – adding innovation, enhancing focus
2015 2016 2017 20202018
CellcaBioOutsource
kSep Biological Industries
BIA Separations
2019
Umetrics
2021
Sartorius Stedim Biotech
WaterSepLife Science assets1
1 Acquired from Danaher
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Recent acquisitions strengthen portfolio…
May 2020 Date of consolidation
~$100m Sales revenue in 2019
+ 100 Employees
~$275m Purchase price
Acquisition of selected life science assets from Danaher
Portfolio of upstream and downstream technologies
Overview | Strategy
Acquisition of BIA Separations
Technology for purification in advanced therapy processes
Nov. 2020 Date of consolidation
~€25m Sales revenue in 2020e
+ 120 Employees
€360mn Purchase price1
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…especially in downstream
Dec. 2020
~$2.5m + 15
Acquisition of WaterSep BioSeparations
Innovative hollow fiber crossflow filtration units
Purchase price $27mn plus earn-out
Sales revenue in 2020e
Employees Date of consolidation
Agreement to acquire chromatography processequipment division from Novasep
Resin-based batch and intensified chromatography systems
Purchase price not disclosed
H1 2021~€37m + 100
Sales revenue in 2020e
Employees Closing expected
Overview | Strategy
14
Acquisition of selected Danaher life science assets strengthens chromatography portfolio
Assets include chromatography systems, columns and resins; indispensable for the purification of biologics
Well-established technologies and innovative solutions in the high-growth areas of single-use and intensified purification
Complement existing membrane-based solutions enabling SSB to support purification strategies at all scales
Systems ResinsColumns
Sartorius Stedim Biotech
Overview | Strategy
15
Recent acquisitions also strengthen offering in other key technologies
Cell culture media2
Extensive portfolio of cell culture media with focus on advanced therapies (e.g. cell and gene therapies)
Gives Sartorius Stedim Biotech own production and development capabilities
Access to customers in an increasingly important and fast-growing market
Microcarriers1
Tangential flow filtration systems1
To support growth of adherent cell cultures
Closing last gaps in TFF portfolio
Highly competitive product portfolio
1 Part of the selected life since assets acquired from Danaher in Q1 2020; 2 Product portfolio of Biological Industries acquired in Q4 2019
Sartorius Stedim Biotech
Overview | Strategy
16
BIA Separations - Bioprocessing innovator, addressing bottlenecks in advanced therapies
Ajdovščina, Slovenia
~120 employees
Quadrupling production capacity till end 2021
Monolithic columns
Portfolio
Pre-packed monolithic columns optimized for purification in advanced therapy processes (e.g. viruses, plasmids, exosomes)
Provides significantly higher yield by avoiding shearing effects which occur in traditional purification processes, e.g. in chromatography
Positioning
Monoliths already used in production of first commercialized advanced therapeutics
Strong presence in (pre-) clinical projects
Overview | Strategy
Sartorius Stedim Biotech
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WaterSep BioSeparations – Further broadening our filtration portfolio
Marlborough, USA
~15 employees
R&D and production of membranes and cartridges
Hollow fiber cartridges
Portfolio
Hollow-fiber membrane devices and pre-sterilized assemblies for crossflow filtration applications in upstream and downstream
Addresses customer needs for cost- and time-saving solutions
Stategic fit
Complements offering for cell and gene therapy applications, cell harvesting and various solutions for intensified bioprocessing
Overview | Strategy
Sartorius Stedim Biotech
18
Competitive portfolio across our relevant end-markets
Pie charts indicate completeness of product offering
SSB Merck | Millipore Pall Cytiva1
ThermoFisher
Top 3 Players
Filtration1. Merck | Millipore2. Danaher | Pall3. Sartorius Stedim Biotech
Fluid Management
1. Sartorius Stedim Biotech2. Thermo Fisher3. Merck | Millipore
Fermentation1. Sartorius Stedim Biotech2. Thermo Fisher3. Danaher | Cytiva
Purification1. Danaher | Cytiva2. Merck | Millipore3. Sartorius Stedim Biotech
Cell Culture Media
1. Thermo Fisher2. Merck | Millipore3. Danaher | Cytiva
1 Formerly GE Biopharma
Sartorius Stedim Biotech
Overview | Strategy
Danaher
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-25-35%
-55-65%-65-75%
Construction cost Energy cost Water cost
-30-50%
Time-to-market
ReferenceSingle-use
Pioneer and leader in the growing single-use technology market
Single-use market penetration expected to increase from ~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
Overview | Strategy
Sartorius Stedim Biotech
20
Construction of stainless-steel based facilities takes longer and is more complex compared to single-use
Therefore, investment in stainless-steel facilities has to start in early clinical phase II
The construction of single-use facilities may start in clinical phase III, reducing investment risks of our clients
Single-use allows manufacturers to mitigate investment risks
Clinical Phase IIClinical Phase I Clinical Phase III
Probability that candidate advances to next stage
Probability of approval
~ 60%
~ 10%
~ 30%
~ 15 %
~ 50%
~ 50%
Data based on: Wong et al. (2018): Estimation of clinical trial success rates and related parameters
Overview | Strategy
Sartorius Stedim Biotech
21
More than half of 2020 SSB sales were generated with the Top 50 customers
No individual customer accounts for more than 5% of BPS sales revenue
0100200300400500
Sales to Top 50 customersin 2020, € in millions
Top 10 11 to 20 21 to 30 31 to 40 41 to 50
Cumulative share
~28%~40% ~48% ~53% ~57%
Limited dependence on individual accountsLong-term business relationships with leading global (bio-) pharma companies
Limited dependence on individual accounts
Overview | Strategy
Sartorius Stedim Biotech
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Our products are widely used in the development and production of biologics against COVID-19
180+ companies developing corona
vaccines
The majority work with SSB products
Pandemic effects in 2020
Pandemic-related net effect of a good ~12pp on sales revenue and close to ~19pp on orderintake growth; consisting of investments in vaccine and therapeutic research and manufacturing, also inventory build-up
Overview | Strategy
Sartorius Stedim Biotech
Agenda
23
Overview | Strategy
Mid-term Growth Prospects
FY 2020 Results | FY 2021 Guidance
Appendix
Sartorius Stedim Biotech
Sartorius Stedim Biotech
2025 targets are based on 2020 currency exchange rates; EBITDA excluding extraordinary items
24
2025 ambition – increased baseline and organic growth
€4bnpreviously ~€2.8bn
~33%previously ~30%
Sales revenue
EBITDA margin
Initial 2025 group sales revenue targets were basedon an estimated 2020 group revenue of €1.5 to1.6bn, based on the mid-term guidance of 2012
Actual 2020 Group revenue was approx. €1.9bn
New mid-term target reflects both the elevatedbaseline and future growth prospects
Continued strategy is to achieve the targets primarily through organic growth; acquisition to contribute underproportionally
The increase in the profitability outlook is due to economies of scale and also reflects the assumption of acquisitions to be initially dilutive
Mid-term Growth Prospects
Sartorius Stedim Biotech
25
Biologics market growth forecast
U.S.~167
China~67~€365bn
Europe~58
ROW~72
U.S.~119
China~38 ~€250bn
ROW~47
Europe~46
~+15% China
~+9% U.S.
~+6% Europe
U.S. remains most important market; China with highest growth rates
2020 2024
CAGR
Mid-term Growth Prospects
Sartorius Stedim Biotech
Huge market potential due to population size and growing average demand
Biopharma market development priority for China
Currently a CDMO/biosimilar-driven market; with an increasing number of originators across all biopharma modalities
Sartorius with long-standing local presence (production in Shanghai and Beijing); further expansion planned
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Dynamic increase in new biopharma companies in China in the past years
2650
79
141
0
60
120
180
240
300
Before 1990 1990-2000 2000-2010 2010-2020
111
179
269228
0
60
120
180
240
300
Before 1990 1990-2000 2000-2010 2010-2020
3155 69
39
0
60
120
180
240
300
Before 1990 1990-2000 2000-2010 2010-2020
China U.S. Europe
Sartorius Stedim Biotech
Mid-term Growth Prospects
27
Regional balance better reflecting end-markets
Mid-term Growth Prospects
CAGR for continued operations, in constant currencies
53%
27%
20%
2011
~€477m
40%
35%
25%
2019
~€1.9bn
22%
50%
28%
2019
~€250bnCAGR
~+16%
~+18%
~+11%
Asia | Pacific
Americas
EMEA
Global biopharma market2019
Sales by region 2011
Sales by region 2020
Sartorius Stedim Biotech
28
0 03 1
7
22 2015 16
2012 2013 2014 2015 2016 2017 2018 2019 2020
Growing number of biosimilar approvalsE.U. and U.S.
Biosimilars will outperform the biologics market€ in billions
~235.5 ~323.5
2020 2024
~14.5~41.5
BiosimilarsOther 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
Mid-term Growth Prospects
Sartorius Stedim Biotech
29
High innovation dynamics in Biopharma
Development of new drugs and vaccines must be accelerated, e.g. through more automation
Increased efficiency possible in the production of 'classic' biopharmaceuticals and biosimilars
New tools and methods required e.g. for novel cell and gene therapies
Future drug manufacturing is more automated, intensified and scalable
Sartorius Stedim Biotech
Mid-term Growth Prospects
30
Analytical technologies to improve process economics and safety
Bioprocess sensors, analyzers and software
Collect, monitor and control quality-critical parameters
Analyze data to obtain a better process understanding
Use knowledge for process development, optimization and automation
Allows customers to increase time-to-market, to reduce COGS, to improve process robustness and product quality
Intention to upgrade Umetrics software suite with advanced analytics technologies such as AI and machine learning
Data analytics just at the beginning in biomanufacturing with high potential
Mid-term Growth Prospects
Sartorius Stedim Biotech
Agenda
31
Overview | Strategy
Mid-term Growth Prospects
FY 2020 Results | FY 2021 Guidance
Appendix
Sartorius Stedim Biotech
32
Sartorius Stedim Biotech Group in millions of € unless otherwise specified
2019 2020 in % in % cc1
Sales revenue 1,440.6 1,910.1 +32.6 +34.6
Order intake 1,543.5 2,381.0 +54.3 +56.7
Underlying EBITDA2 421.5 604.7 +43.5
Underlying EBITDA2 margin in % 29.3 31.7 +2.4pp
Underlying EPS3 in € 2.85 4.16 +45.9
Exceptionally strong growth in 2020
Strong organic development; pandemic-driven effects a good 12pp (majority of that from demand related to coronavirus vaccines and therapeutics), acquisitions accounted for close to 6pp of growth
Pandemic-related effects on order inatke growth close to 19pp Underl. EBITDA margin up with economies of scale, lower costs due to pandemic; slight FX dilution, M&A with neutral effect
1 Constant currencies 2 Underlying = excluding extraordinary items 3 Underlying EPS = based on net profit after non-controlling interest; adjusted for extraordinaryitems as well as amortization and based on a normalized financial result and normalized tax rate
Sartorius Stedim Biotech
FY 2020 Results | FY 2021 Guidance
353.8478.9
2019 2020
33
Double-digit sales growth in all geographiesSartorius Stedim Biotech
575.1
761.0
2019 2020
+33.0%
EMEA€ in millions
Americas€ in millions
+34.0% +38.3%
Asia|Pacific~ 25%
Americas~ 35%
EMEA ~ 40%
€1,910.1m
Sales by Regionin %
Asia|Pacific€ in millions
511.6
670.2
2019 2020
Acc. to customers‘ location; growth in constant currencies
Especially EMEA and Americas benefited from additional demand in connection with the development and manufacture of coronavirus vaccines and Covid-19 therapeutics
Asia|Pacific with the highest momentum, fueled by larger project business orders in H1
FY 2020 Results | FY 2021 Guidance
34
Sartorius Stedim Biotech Group in millions of € unless otherwise specified
2019 2020 in %
Underlying EBITDA 421.5 604.7 +43.5
Extraordinary items -16.8 -32.0 n.m.
Financial result -14.4 10.8 n.m.
Underlying net profit1,2 263.0 383.8 +45.9
Reported net profit2 234.5 357.8 +52.6
Operating cash flow 310.1 416.9 +34.4
Investing cash flow3 -184.4 -621.1 n.m.
CAPEX ratio (in %) 9.4 8.3 -1.1pp
Net operating cash flow mostly driven by higher earnings and factoring program (~€76m)
Extraordinary items influenced primarily by M&A
Financial result includes the valuation effect related to the earn-out from the acquisition of BIA Separations
Tax rate at 25.3%; excluding earn-out effect tax rate would be 27.1%
Investing cash flow driven by acquisitions
Operating cash flow rises significantly
2019 numbers partly adjusted due to final PPA of BI 1 Underlying net profit = net profit adjusted for extraordinary items, amortization and based on a normalized financial result and normalized tax rate2 After non-controlling interest 3 Net cash flow from investing activities and acquisitions
Sartorius Stedim Biotech
FY 2020 Results | FY 2021 Guidance
35
Financial indicators remain on very solid levelSartorius Stedim Biotech
Key Financial Indicators
Sartorius Stedim BiotechDec. 31,
2019Dec. 31,
2020
Equity ratio in % 64.4 48.3
Net debt in millions of € 110.4 527.0
Net debt | underlyingEBITDA1 0.3 0.8
Equity ratio influenced by increase in balance sheet sum due to the recent acquisitions and higher cash position
Net Debt and Net Debt to Underlying EBITDA
Q1-Q42014
Q1-Q42015
Q1-Q42016
Q1-Q42017
Q1-Q42018
Q1-Q42019
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
0
100
200
300
400
500
600
Q1-Q42020
1 Includes underlying pro forma EBITDA of acquisitions completed in 2020
FY 2020 Results | FY 2021 Guidance
36
Strong outlook for 2021, uncertainties remain highSartorius Stedim Biotech
1 In constant currencies
FY 2021 Guidance1 Sales revenue growth Underlying EBITDA margin
2020 2021 2020 2021
Sartorius Stedim Biotech 34.6% ~ 20-26% 31.7% ~ 32.0%- growth by acquisitions | Corona demand close to 6pp | good 12pp ~5.5pp | up to 7pp
Growth rates expected to be significantly pronounced in H1 due to last years acquisition and strong order book CAPEX ratio ~15% (FY 2020: 8.3%); increase due to acceleration and extension of capacity expansions across the entire
production network, especially in Germany, Puerto Rico and China Net debt to underlying EBITDA is projected at around 0.75 (2020: 0.8)
FY 2020 Results | FY 2021 Guidance
Agenda
37
Overview | Strategy
Mid-term Growth Prospects
FY 2020 Results | FY 2021 Guidance
Appendix
Sartorius Stedim Biotech
To Sartorius Stedim Biotech, sustainability means operating responsibly over the long term – with respect to business partners, employees and society as well as to natural resources. Learn more about our commitment:
Please click below for further financial information:
Annual Report 2020
Earnings Release 9M 2020
Half-Year Report H1 2020
Earnings Release Q1 2020
38
Corporate responsibility & further financial information
Appendix
SRI Presentation
Sartorius Stedim Biotech
39 Appendix
Sartorius Stedim Biotech shares – an attractive investment
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 ~17% over
the last five years
12 3
Sartorius Stedim Biotech
40 Appendix
Share price performance
ISIN FR0013154002
Ticker DIM
Number of share 92,180,190
Indices SBF 120 | CAC Next 20 | CAC Large 60 | CAC All-Tradable | CAC All Shares |CAC Healthcare | MSCI Europe | STOXX Europe 600
Market cap. €37.9bn (as of February 16, 2021)
Sartorius Stedim Biotech
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Sartorius (prefs.)
Sartorius (ord.)
Sartorius Stedim Biotech
MSCI Europe
SBF 120
41 Appendix
A sampling of the product portfolio
Fluid management
PurificationFiltration
Fermentation
Sartorius Stedim Biotech
42 Appendix
On track to meet 2020 targets
2020 targetsStrategic initiatives
Regional Further grow sales force effectiveness Gain share in North America Leverage market growth in Asia
Portfolio Alliances and acquisitions Own product development
Operations Continued capacity expansion Drive digitalization and roll-out of efficient IT systems
~ 29-30% EBITDA margin
~ 1/5 Acquisitions
~ 4/5Organic
~€1.5-1.6bnSales 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
Sartorius Stedim Biotech
43
Petra Kirchhoff
Head of Corporate Communications & IR
Phone: +49.551.308.1686E-mail: [email protected]
Sartorius Corporate Administration GmbHOtto-Brenner-Straße 2037079 Göttingen, Germany
March 26, 2021 Annual Shareholders' Meeting | Göttingen
April 21, 2021 Publication First-Quarter Results 2021 | Göttingen
Ben Orzelek
Head of Investor Relations
Phone: +49.551.308.1668E-mail: [email protected]
Appendix
Financial calendar and contactsSartorius Stedim Biotech
Visit our IR website or click here.