Annual Financial Statements of Sartorius AG

The retained profit of Sartorius AG is the key reference value for the payment of dividends to our shareholders. Whereas the Sartorius Group financial statements are drawn up according to the International Financial Reporting Standards (IFRS), the annual financial statements for Sartorius AG are prepared by applying the rules and regulations of the German Commercial Code (HGB).

The Management Report of Sartorius AG and the Group Management Report for fiscal 2015 are combined. The HGB annual financial statements of Sartorius AG and the combined management report are published simultaneously in the German Federal Gazette (Bundesanzeiger).

Business Operations, Corporate Strategy, Corporate Management and Oversight, Overview of Business Development

Sartorius AG has exercised only the functions of the strategic, group-leading management holding entity for the Sartorius Group since the beginning of fiscal 2011, and we refer in this connection to the explanatory remarks concerning business operations, corporate strategy, corporate management and oversight, as well as the overview of business development, presented on pages of the combined management report of Sartorius AG and the Group.

Earnings

Sales revenue of Sartorius AG essentially consists of cost transfers to affiliated companies within the Group for management services rendered.

Other operating income principally discloses the gain on disposal resulting from the sale of the Industrial Weighing Technology Division.

The other operating expenses reported indicate the expenses of €6.5 million resulting from the agreement concluded with Minebea, among other expense items.

Income from investments of €12.7 million relative to €16.0 million a year ago essentially concerns dividends paid out for the French subsidiary Sartorius Stedim Biotech S.A. The profit and loss transfer agreements with Sartorius Corporate Administration GmbH resulted in the receipt of a profit of €0.4 million and acceptance of a loss of €16.2 million transferred from Sartorius Lab Holding GmbH, compared with a profit of €9.6 million transferred in 2014.

Net Worth and Financial Position

The balance sheet total of Sartorius AG rose by €11.1 million in the reporting year to €702.9 million. This increase can primarily be attributed to the conclusion of a new syndicated loan agreement. As part of this agreement, Sartorius AG has now taken over financing for the entire Group. Since this transaction, borrowed funds are also transferred to the companies of the Sartorius Stedim Biotech subgroup by internal Group loan agreements or by cash pooling accounts.

The balance sheet structure for Sartorius AG reflects its function as the management holding entity for the Sartorius Group. Fixed assets consist essentially of financial assets and, in the reporting year, amounted to €441.6 million (previous year: €468.5 million). Accordingly, fixed assets account for 65.6% of the balance sheet total (previous year: 69.8%). The equity ratio was 46.2% relative to 38.8% a year earlier.

Statement of Profit and Loss of Sartorius AG

Based on the total cost accounting method according to Section 275, Subsection 2, of HGB1)

€ in K 2015 2014
1.  Sales revenue 6,747 4,285
2.  Other operating income 92,727 1,726
99,474 6,011
3.  Employee benefits expense –6,077 –3,746
4.  Depreciation and amortization –598 –262
5.  Other operating expenses  –12,673 –58,663
6.  Income from investments 12,740 16,013
7.  Profit received under a profit
   and loss transfer agreement
0 9,604
8.  Loss accepted under a profit
   and loss transfer agreement
–15,800 0
–22,407 12,946
9.  Earnings before interest and taxes 77,067 18,957
10. Interest and similar income 4,479 507
11. Interest and similar expenses –8,364 –9,933
–3,885 9,426
12. Profit before tax 73,182 9,531
13. Income tax expense 55 837
14. Other taxes –23 – 24
32 813
15. Net profit for the period 73,214 10,344
16. Profit brought forward 121,130 129,027
17. Retained profits incl. net profit for the period 194,344 139,371

1) HGB = German Commercial Code

Balance Sheet of Sartorius AG

According to HGB1), € in K

Assets Dec. 31, 2015 Dec. 31, 2014
A. Fixed Assets
I. Property, plant and equipment 19,122 14,527
II. Financial assets 441,622 468,510
  460,744 483,037
B. Current Assets
I. Trade and other receivables 239,954 206,120
II. Cash on hand, deposits in banks 417 689
240,371 206,809
C. Prepaid Expenses 1,737 1,905
702,852 691,751
Equity and Liabilities Dec. 31, 2015 Dec. 31, 2014
A. Equity
I. Subscribed capital 18,720 18,720
  Nominal value of treasury shares –1,623 –1,673
  Issued capital 17,097 17,047
II. Capital reservese 102,759 101,453
III. Earnings reserves 10,867 10,867
IV. Retained profits incl. net
   profit for the period
194,344 139,370
325,067 268,737
B. Provisions 32,283 26,941
C. Liabilities 345,502 396,073
D. Deferred Tax Liabilities 0 0
  702,852 691,751

1) HGB = German Commercial Code

Proposal for Appropriation of Profits

The Executive Board will submit a proposal to the Annual Shareholders’ Meeting to appropriate the retained profit of €194,343,770.48 reported by Sartorius AG for the year ended December 31, 2015, as follows:

in €
Payment of a dividend of €1.50 per
ordinary share
12,829,584.00
Payment of a dividend of €1.52 per
preference share
12,986,905.84
Unappropriated profit carried forward168,527,280.64
194,343,770.48

Research and Development

Detailed information about the research and development activities of the Sartorius Group and of its divisions is given on pages Business Development of Bioprocess Solutions and Business Development of Lab Products & Services.

Employees

Sartorius AG does not employ any staff to be disclosed pursuant to Section 285, No. 7, of HGB.

Risks and Opportunities

The opportunities and risks affecting the business development of Sartorius AG as the management holding entity are essentially equivalent to those of the Sartorius Group. Sartorius AG shares in the risks to which its investments and subsidiaries are exposed in proportion to the extent of its investment. Where expedient and feasible, we adopted countermeasures and | or arranged for balance sheet measures during the reporting year to cover all discernible risks within Sartorius AG that had the potential to damage our net worth, financial position and profitability.

A detailed Opportunity and Risk Report for the Sartorius Group is provided here; a description of the internal control and risk management system, here.

Report on Material Events

Please refer here to read the Report on Material Events for Sartorius AG and the Sartorius Group.

Forecast Report

Earnings trends for Sartorius AG depend substantially on the progress of its subsidiaries and, hence, on the Sartorius Group. The development of the Sartorius Group's business is discussed in the Forecast Report.