Structure and Management of the Group

Group Legal Structure

Sartorius is a globally operating company with subsidiaries in more than 30 countries. The parent company of the Sartorius Group is Sartorius AG, which, as a holding company, controls the Group's affiliates. Sartorius AG is headquartered in Goettingen, Germany, and is listed on the German Stock Exchange.

We manage our bioprocess business as a subgroup under the umbrella of Sartorius Stedim Biotech S.A., which is listed in Euronext Paris. As of December 31, 2015, Sartorius AG held around 74% of the shares in Sartorius Stedim Biotech S.A.

The Group’s lab business is legally combined under Sartorius Lab Holding GmbH, in which Sartorius AG holds 100% of shares.

The consolidated financial statements include the parent company Sartorius AG and all major affiliates in which Sartorius AG has a controlling interest pursuant to IFRS 10.

Changes in the Group Portfolio

In the reporting year, Sartorius through its subgroup Sartorius Stedim Biotech acquired the companies BioOutsource Ltd. and Cellca GmbH in April 2015 and July 2015, respectively.

Headquartered in Glasgow, Scotland, BioOutsource Ltd. specializes in contract testing services in bioanalytics and biosafety. Most recently before being acquired, BioOutsource Ltd. generated annual sales of approximately €9 million. Cellca GmbH, based in Laupheim, Germany, offers biopharmaceutical companies services in product development. Its annual sales revenue amounted to around €6 million. Both acquisitions provide complementary products and services to the portfolio of the Bioprocess Solutions Division and were each initially consolidated as of the transaction date.

The sale of the Industrial Technologies Division announced in December 2014 was completed on February 6, 2015, with economic effect as of January 1, 2015. The net cash inflow as a result of the divestment of this business was around €90 million.

Organization and Management of the Group

The Sartorius Group conducts its operating business in two divisions: Bioprocess Solutions and Lab Products & Services. The divisions each combine their respective businesses for the same fields of application and customer groups, and share part of the infrastructure and central services. Based on the organization described, Sartorius has suitable structures in place that meet the prerequisites for the flexible and successful further development of the Group.

The Group’s central management entity is the Sartorius Group Executive Committee (GEC), which currently has a membership of six: the members of the Executive Board of Sartorius AG, the executive members of the Board of Directors of Sartorius Stedim Biotech S.A. and one further senior manager with cross-divisional responsibility.

The Sartorius Group is consistently organized by function worldwide. Accordingly, the respective management responsibilities, including the senior management tiers immediately beneath the GEC, are performed across all sites and regions. Implementing the Group’s various strategies and projects at the local level is the responsibility of the national affiliates. The management bodies of the local companies manage their organizations in accordance with the applicable statutory provisions, articles of association and rules of procedure and in keeping with the principles of corporate governance that apply throughout the Sartorius Group worldwide.

Financial Controlling and Key Performance Indicators

The Sartorius Group is managed using a number of key performance indicators, which are also decisive for the determination of the variable remuneration component for the Executive Board and managers.

A key management parameter that Sartorius uses to measure the development of its volume is currency-adjusted growth of sales revenue.

The key profitability measure is EBITDA adjusted for extraordinary items, i.e. underlying EBITDA.

Regarding the debt financing potential of the Sartorius Group, a further key indicator is the ratio of net debt to underlying EBITDA for the last twelve months.

Furthermore, the capex ratio, i.e., capital expenditures in proportion to sales revenue, represents a key control parameter.

In addition, the following financial and non-financial indicators are reported on a regular basis:

  • Order intake
  • Relevant net profit | Earnings per share
  • Annual net profit | Earnings per share
  • Equity ratio
  • Net working capital
  • Net cash flow from operating activities
  • Number of employees

As a rule, the annual financial forecast that is published by management at the beginning of a fiscal year for the Group and the divisions refers to the development of sales revenue and of underlying EBITDA. The expected capex ratio as well as a directional forecast for the ratio of net debt to underlying EBITDA is additionally indicated for the Group. Sales revenue and order intake are mostly at a similar level at Sartorius due to its structure, but generally do not show any considerable timing differences and are subject to similar growth assumptions. For this reason, order intake is usually not budgeted separately and is not a component of the financial forecast.