The Sartorius Group, the German process and laboratory technology provider, looks back on a successful 2005.
The Sartorius Group, the German process and laboratory technology provider, looks back on a successful 2005.
At the annual press conference of the company in Goettingen, Dr Joachim Kreuzburg highlighted the considerable improvements in the key earnings and balance sheet ratios, which were attained in the reporting year and in the three-year period before that.
"Since 2002, we have more than tripled our EBIT, more than quintupled net profit and more than halved net debt." As a result, the company successfully completed its consolidation phase," said Dr Kreuzburg.
He says that the company created considerable financial leeway for future growth.
"Besides investing higher sums in organic growth, we also have the option of making acquisitions a part of our strategy.
However, whatever measures we take, our overriding target remains to achieve sustained, profitable growth".
The company's plans for the financial year of 2006 include expanding various Group locations, among others.
At the Goettingen-based headquarters, research and development for the Biotechnology Division is to be extended, and the production operations in the Mechatronics Division are to be further enhanced through infrastructure measures.
In Beijing, China, capacity levels for manufacturing additional product lines will be increased by building a new plant.
Moreover, various Sartorius locations in Bangalore, India, are to be combined at a central site in this city, while creating higher capacity levels there.
Dr Kreuzburg said: "We will double our investments in 2006 and increase our RandD spending by another 10%".
The financial targets of the company for the current fiscal year are to augment sales revenue by more than 5% in constant currencies.
Sartorius will strive to further increase earnings and to raise EBIT to approximately 10% of sales revenue.
Beyond these targets, the company expects to achieve a substantially positive operating cash flow.
In 2005, Sartorius boosted its earnings before interest and taxes by 34.3% to 43.7 million euros, up from 32.5 million euros a year earlier.
As a result, the EBIT margin rose to 9.0% from 7.0% a year ago.
At 62.5 million euros, earnings before interest, taxes, depreciation and amortisation (EBITDA) were 14.1% higher than the year-earlier figure of 54.8 million euros.
Net profit for the year was 22.1 million euros, up from 15.2 million euros the year before (+45.1%); earnings per share grew from 0.89 euro to 1.30 euros.
Decisive factors for the increases in earnings were sales revenue growth, a favourable product mix and the cost base that improved over the past years.
In addition, as goodwill amortisation ceased to apply according to the IFRS, this also had a positive impact on the company's earnings, while expenses for currency hedging transactions had a negative impact on earnings in nearly the same amount.
Group sales revenue was 484.3 million euros in the reporting year, up from 467.6 million euros in 2004.
This corresponded to an increase of 3.6% (currency-adjusted: 3.5%).
The strongest regional impulses for growth were generated again by Asia; within the product segments, the filter business developed highly successfully.
With both divisions contributing gains, Sartorius substantially increased its order intake by 7.7% from 461.6 million euros to 497.0 million euros (currency-adjusted: +7.7%).
The Biotechnology Division raised its sales revenue 4.3% to 249.8 million euros from 239.4 million euros a year ago; its currency-adjusted sales revenue was up 4.3%.
Reporting an EBIT gain of 38.7% from 17.5 million euros to 24.3 million euros, the division boosted its earnings over-proportionately.
Its EBIT margin rose to 9.7% from 7.3% a year earlier.
Within the division, business for biopharmaceutical applications in particular proved to be the engine that propelled growth and earnings.
Therefore, this more than compensated for the decline in sales revenue and earnings for the fermenter and bioreactor business in North America.
Order intake showed a highly positive development across all business areas and regions.
It jumped 9.4% to 257.3 million euros from 235.3 million euros the year before.
The Mechatronics Division grew 2.8% and earned sales revenue of 234.5 million euros, up from 228.1 million euros a year ago; calculated in constant currencies, this gain in sales revenue was 2.7%.
All business areas and regions reported growth, with the highest increases in volume attained in the business with industrial weighing and process control technology.
The division significantly boosted its EBIT by 29.1% from 15.0 million euros posted for the year-earlier period to 19.4 million euros in 2005, and thus achieved an EBIT margin of 8.3%, up from 6.6% a year ago.
As in the previous year, the largest share of earnings in the Mechatronics Division was contributed by the lab instruments business.
The division's industrial weighing equipment business, which had reported earnings for the first time in 2004, also increased its profitability.
Order intake for the Mechatronics Division grew considerably by 5.9% from 226.3 million euros to 239.7 million euros.
Key balance sheet ratios and financials further improved in the reporting year.
The equity ratio climbed from 37.6% to 40.5%.
Net cash flow, which at 32.1 million was substantially positive again (previous year: 36.3 million euros), was predominantly used by the company to further cut back debt.
Net debt dropped from 78.9 million euros to 60.7 million euros.
In fiscal 2005, Sartorius increased its research and development spending by 18.5% to 32.7 million euros from 27.6 million euros in the previous year.
The ratio of R and D costs to sales revenue was 6.8%, up from 5.9% in 2004.
As of 31 December 2005, the Sartorius Group employed 3,606 persons, 37 more than in the year earlier.
The number of employees in the Asia-Pacific region rose 15.7% to 641 persons, whereas in the North American region, the number dropped slightly by 3.6% to 430 employees.
At 2535, the workforce in Europe remained approximately constant (-1.3%).
The supervisory board and the executive board will suggest at the annual shareholders' meeting on 26 April 2006, to increase dividends again, and pay 0.52 euro per preference share and 0.50 euro per ordinary share.
If approved, this means that the total of distributed profits would increase 24.4% to 8.7 million euros from 7.0 million euros a year ago.
In 2004, dividends of 0.42 euro and 0.40 euro were paid for each class of share, respectively.
In the reporting year, market capitalisation of Sartorius shares (excluding treasury shares) jumped 95.6 million euros and, at year-end in 2005, was 361.8 million euros, up from 266.3 million euros a year earlier (+35.9%).
Sartorius share prices continued their encouraging bullish trend of the year before, and again considerably outperformed the German share indexes DAX and TecDAX (preference shares +34.2%; ordinary shares, +37.5%).
Therefore, from the beginning of 2003 to the end of 2005, the company's market capitalisation more than quadrupled.
