Sartorius (0NIQ) ((DE:SRT)) has held its Q4 earnings call. Read on for the main highlights of the call.
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Sartorius Presents Mixed Sentiment in Latest Earnings Call
The recent earnings call from Sartorius (0NIQ) painted a mixed picture for the company. While there was significant growth in order intake and a doubling of free cash flow, challenges in the equipment business and the Chinese market were also evident. Despite these challenges, the company maintained robust profitability levels, albeit with slight declines compared to the previous year.
Order Intake Growth
Sartorius reported a notable increase in order intake for its Bioprocess Solutions, which rose by approximately 13% in constant currencies, reaching €2.7 billion. This growth was particularly strong in the fourth quarter, driven by high demand for consumables.
Healthy Free Cash Flow
The company successfully doubled its free cash flow from €271 million to €550 million. This impressive improvement was attributed to effective working capital initiatives and tighter management of capital expenditures.
Regional Growth in EMEA
The EMEA region showed strong performance, with an overall growth of 5.5%, largely driven by recurring business activities. This regional growth was a positive highlight in Sartorius’ financial performance.
Biosimilars and Cell and Gene Therapy Growth
Looking ahead, Sartorius expects advanced therapies and biosimilars to experience even higher growth rates within the biopharma market, positioning these areas as key contributors to the company’s future growth.
Equipment Business Weakness
The equipment business faced significant challenges, experiencing negative double-digit growth in 2024. This was primarily due to a continued reluctance from customers to invest in new equipment.
Soft Market in China
The Chinese market remained very soft, which had a notable impact on the performance of Sartorius’ LPS division. This softness in China represents a significant hurdle for the company’s growth in the region.
Margin Pressure
The underlying EBITDA margin for Sartorius’ LPS division decreased to 22.9%, due to mix effects and lower production volumes from inventory reduction programs. This margin pressure reflects the challenges faced by the company in maintaining its profitability.
Overall Profitability Slightly Below Previous Year
Despite maintaining robust profitability levels, Sartorius’ overall profitability was slightly below that of 2023. This was influenced by lower capacity utilization and ongoing inventory reduction efforts.
Guidance and Future Outlook
Looking forward, Sartorius provided guidance that included a modest 0.1% increase in sales to €3.4 billion in constant currencies, and an underlying EBITDA margin of 28%. The company anticipates moderate profitable growth above market rates in 2025, with cautious optimism regarding market recovery dynamics.
In conclusion, Sartorius’ latest earnings call reveals a company navigating a mixed landscape of growth opportunities and market challenges. While order intake and free cash flow are on the rise, issues in the equipment business and the Chinese market present hurdles. Nevertheless, Sartorius remains committed to pursuing growth in advanced therapies and biosimilars, with a cautious yet optimistic outlook for the future.
