Strategy and Goals

Sartorius Group business is organized according to two divisions: Bioprocess Solutions and Lab Products & Services. The division setup and strategy are as follows:

Bioprocess Solutions

With its Bioprocess Solutions Division, Sartorius is a leading international supplier of products and technologies for the manufacture of medications and vaccines on a biological basis, so-called biopharmaceuticals.

As part of our strategy as a total solutions provider, we offer the biopharmaceutical industry a product portfolio that covers virtually all steps of their production processes and increasingly their process development. These encompass cell culture media for seed fermentation and cultivation in various bioreactor sizes for cell propagation, as well as a range of technologies and equipment, such as filters and aseptic bags, for cell harvesting, purification and concentration, all the way to final filling.

In this business, Sartorius focuses in particular on single-use products, which represent around three quarters of the division's sales revenue. For our customers, single-use products are an innovative alternative to conventional reusable stainless steel systems: they provide considerable cost and time savings and reduce the risk of contamination. Sartorius has the most extensive portfolio of single-use technologies in the industry.

With its products, the division addresses an attractive market with above-average growth rates. Its sales and distribution activities are carried out globally by its own field force. As our customers' manufacturing processes are validated by the respective authorities, product quality and assurance of supply are essential.

We see the leading market positions of the division in process filtration, fluid management, fermentation and membrane chromatography as good stepping stones for sustained dynamic and profitable growth in the future. Besides realizing its organic growth potential, the division also plans to continue expanding through complementary acquisitions and alliances.

Lab Products & Services

The Lab Products & Services Division focuses on research and quality assurance laboratories in pharmaceutical and biopharmaceutical companies and on academic research institutes. The division additionally serves customers in the chemical and food industries. Its product portfolio covers instruments and consumables that laboratories require, for instance, in sample preparation, or use in other standard applications. Laboratory instruments, such as lab balances, pipettes and laboratory water systems, contribute around 60% to the division’s sales revenue, and consumables such as products for microbiological tests, pipette tips and services account for 40% of its total sales.

Lab Products & Services sells its products through three distribution channels: specialized dealers and distributors, direct sales and e-business. While the distributor channel has long been well-established, its direct sales and e-business channels are being further expanded to strengthen the division's market position.

Sartorius is a well-known laboratory brand in the premium segment and has a strong market share on the whole. Based on the company's history, its market positions differ quite considerably depending on the region and product group. Against this background, we see significant potential for the Lab Products & Services Division to continue to grow organically. Due to economies of scale, this growth is projected to be accompanied by a further increase in margins. Beyond these targets, the division aims to expand its offering by complementary laboratory products, both through alliances and acquisitions.

Sartorius 2020 Strategy

In 2011, Sartorius defined its strategy and long-term targets for 2020 to achieve profitable growth. Assessment of Sartorius’ performance nearly at the midpoint of this trajectory is positive. The company updated its financial plan for the first time at the beginning of 2016, raising its profitability forecast for 2020.

In view of revenue, Sartorius further projects that it will reach its sales target of €2 billion in constant currencies for the full year of 2020. Regarding the company's continued strong organic growth and its relatively small acquisitions, the increase in sales contributed by organic growth is expected to be higher from today's stance than had been projected in 2011, and the share of revenue generated by acquisitions is anticipated to be slightly lower.

In view of its profitability, Sartorius has already reached an EBITDA margin of about 23% in the reporting year, even though it had initially forecasted this figure for 2020. Sartorius thus achieved this target much earlier than originally expected. The reasons for this were higher economies of scale, an enhanced product portfolio and positive currency effects. On the basis of constant currencies, the company's underlying EBITDA margin is now expected to reach about 26% to 27% in 2020 instead of 23% formerly projected. This is assuming that the profitability of any future acquisitions would be at a level comparable to that of the existing business.

Sartorius' 2020 strategic plan is being implemented by various growth initiatives with the following areas of focus:

Regional Growth Initiatives

Regionally, North America and selected countries in Asia are at the focus of Sartorius' growth strategy.

North America is the world’s largest market for the manufacture of biopharmaceuticals and laboratory products. Because North America is home to the main competitors for both company divisions, Sartorius has historically lower market share in this region than in Europe and Asia. Accordingly, the company is striving to gain market share, primarily by strengthening its sales and service capacities and reorganizing its sales and distribution processes.

Our second regional focus is on Asia, especially on China, South Korea and India. These markets have tremendous potential and, by international comparison, are growing at higher-than-average rates. To participate in this momentum in the best possible way, Sartorius invested substantially in its Asian sales infrastructure as well.

Expansion of Product Portfolio

Concerning the further development of our portfolio, the 2020 strategy also provides for making acquisitions for both Group divisions besides conducting our own R&D activities and entering into cooperative alliances. Such acquisitions will be primarily focused on adding complementary technologies and products that make the company's portfolio even more attractive from a customer perspective. We have strengthened our portfolio by six small- and medium-sized acquisitions since 2011.

Infrastructure

Efficient business processes, a powerful IT infrastructure and sufficient production capacities are to constitute the backbone of our projected growth. Based on standardized business processes worldwide, Sartorius is globally rolling out a new ERP system as part of its multi-year project. In addition, the company is considerably extending its production capacities at various locations and combining its sites still located in separate areas at its headquarters in Goettingen into one location in this city.