Sartorius Stedim profit decline masks growing biz

By Emilie Reymond

- Last updated on GMT

Related tags: Biopharmaceutical

Recently formed Sartorius Stedim Biotech has recorded rising sales
and new business but a slight decrease in profit in the first half
of the year, as it finalises its merger.

Sartorius Stedim is a result of a merger between Sartorius' biotech division with French biotech firm Stedim, which was completed at the end of June. During the first six months of 2007, business development for the new company was thriving with orders received totalling €198.3m - a 10 per cent increase compared to the pro forma 2006 figure. The company said growth was fuelled by business with disposable products, such a filters and aseptic bags, and by a large order for equipment in Europe. The contract biomanufacturer recorded pro forma sales of €186.6m in the period, a 3 per cent rise from €181.7m in the same period last year. Although sales revenue grew at a more "moderate"​ pace than did order intakes, it was in line with the delivery expectations of its customers, said Sartorius Stedim in a statement today. In terms of geography, sales rose around 12 per cent in both North America and Asia-Pacific while revenue in Europe only increased 1.3 per cent. This lack of performance in Europe was attributed to the company's equipment business. However, pro forma EBITA fell during the period to €21.3m, a 4.5 per cent decrease from the first half of 2006, leading to a decrease of EBITA margin from 12.3 per cent last year to 11.4 per cent in this year's period. Sartorius said the decrease in margin was due to "currency effects and the targeted reduction of stock levels in the former Stedim group"​ - in the first half of this year, Stedim recorded €3.2m in expenses before the completion of the merger. Furthermore, due to the "unfavourable"​ development of the exchange rates, the company lowered its pro forma sales forecast for the full year to €390m-€410m - versus the €400-€420m bracket previously estimated - and expects a pro forma operating EBITA margin of approximately 14 per cent. In addition, the company estimates expenses related to the Stedim transaction and integration will total about €10m in the 2007 full-year financial results. Sartorius Stedim Biotech, headquartered in France, provides equipment and services for the development, quality assurance (QA) and production processes of the biopharmaceutical industry and focuses on single-use technologies.

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