Sartorius Reviews Fiscal 2007 Results

Thursday March 13 9:42 PM

"We created the prerequisites for continuing strong and profitable growth in both divisions in a strategically and operationally focused way," said Dr. Kreuzburg. "Even after making the largest acquisition so far and despite the negative exchange rate impact, we achieved our sales revenue and profit targets adjusted in October 2007 and increased our operating profitability." In every respect, the Group put the guiding principle of its current development phase, acceleration, into action in the reporting year, according to Dr. Kreuzburg.

Summary of the Key Figures on the Progress of Business in 2007

Sales Revenue \ Order Intake \ Earnings

In pro forma terms -i.e. full-year consolidation of Stedim and full-year deconsolidation of the hydrodynamic bearings business- consolidated sales revenue was EUR 622.7 million, 3.3% up from the comparable pro forma figure of EUR 602.6 million for 2006. This marks a new level. On the basis of constant currencies, the increase in sales revenue was 5.9%. Development of sales revenue was based, in particular, on the company's successful business with disposables for biotech applications and with industrial weighing equipment. If full-year sales revenue of around EUR 15 million from the hydrodynamic bearings business had been included, the company's accordingly defined target of more than EUR 630 million was clearly reached.

Looking at the regions on a pro forma basis, we achieved the highest growth rates in Asia at a currency-adjusted 10.5%. Growth in Europe was also at a good level, attaining a currency-adjusted rate of 5.8%. Development in North America was more restrained. It increased 2.3% on the basis of constant currencies, which could be primarily attributed to weaker second-half demand from a number of key customers for the Biotechnology Division as a result of delayed or restricted approvals of medications. The Group also posted gains in order intake: on a pro forma basis, it grew from EUR 602.4 million in fiscal 2006 to EUR 616.7 million in fiscal 2007 (up 2.4%; currency-adjusted: up 5.0%).

Pro forma underlying earnings before interest, taxes and amortization was at EUR 71.1 million, up from 67.2 million a year earlier. Thus, the corresponding EBITA margin rose to 11.4% from 11.1% a year ago and was on target within the forecasted corridor of 11.0% to 11.5%. If this figure had been calculated based on the exchange rates of the previous year, Sartorius would have increased the year-on-year profitability of the Group by one solid percentage point. Pro forma underlying EBITDA of the Sartorius Group was EUR 95.1 million, up from EUR 89.5 million a year earlier. Calculated as the pro forma underlying annual net profit after minority interest and excluding non-cash amortization, the relevant net profit was EUR 30.4 million. The corresponding earnings per share were EUR 1.78.

Business Development of the Biotechnology Division

The Biotechnology Division posted currency-adjusted growth in sales revenue of 5.6%, achieving EUR 375.9 million. The high growth momentum originally forecasted slackened in the second half of the year as a result of the unfavorable exchange rate development and weakened demand from individual key biopharmaceutical customers in North America. Pro forma underlying EBITA was EUR 49.7 million, up from EUR 46.1 million a year ago. The corresponding EBITA margin rose to 13.2% from 12.6% in 2006. As a result, the Group achieved its target range of 13.0% to 13.5% that was adjusted in October 2007. If this figure had been calculated based on the exchange rates of the previous year, Sartorius would have increased the year-on-year pro forma underlying EBITA margin by more than one solid percentage point, especially due to economies of scale in its disposables business. Pro forma order intake for the Biotechnology Division grew 0.8% (currency-adjusted: up 3.5%). This comparably low rate of increase resulted from the fluctuations in equipment business. Also, business with filters and additional single-use products showed strong gains in order intake.

Business Development for the Mechatronics Division

The Mechatronics Division attained a pro forma underlying EBITA of EUR 21.3 million (2006: EUR 21.1 million), with currency-adjusted sales revenue up 6.4% at EUR 246.8 million.

Its corresponding EBITA margin was at 8.6% (2006: 8.9%) and thus reached the target range of 8.5% to 9.0% that had been adjusted in October 2007. Above all, the further improved profitability of the company's industrial weighing business would have resulted in a year-on-year increase in its pro forma underlying EBITA margin by approximately half of a percentage point, if the previous year's exchange rates had been applied. Pro forma order intake grew 4.8% (currency-adjusted: up 7.2%) from EUR 238.3 million to EUR 249.6 million.

Key Balance Sheet Figures and Financials

Even after the Stedim transaction, the Sartorius Group reports very robust key figures on the balance sheet. For instance, the equity ratio of the Sartorius Group is at 42.6% (previous year: 44.8%) and the ratio of net debt to pro forma underlying EBITDA was 2.0 (previous year: 0.6).

Increase in the Number of Employees

As of December 31, 2007, the Sartorius Group employed 4,518 persons, 769 more than in the previous year (3,749). This sharp increase of nearly 21% is primarily due to the acquisition of Toha Plast GmbH and the merger of the Biotechnology Division with Stedim S.A. For 2007, the group-wide increase in the workforce was effectively 5.7% on a pro forma basis, i.e., considering the 533 Stedim employees and the 81 Toha Plast staff who were added to the workforce as well as the 89 employees who left when the hydrodynamics bearings business was sold. In the Asia\Pacific region, the number of employees grew substantially by a good 15% to 826; in Europe, the number edged up by about 5% to 2,989 and in North America, by approximately 1% to 612 persons.

Research and Development Strengthened

In fiscal 2007, Sartorius significantly intensified its R&D activities, increasing related expenses on a pro forma basis by 13.1% to EUR 43.2 million (2006: EUR 38.2 million). This rise in R&D costs can be essentially attributed to staff recruitment in this area and the expansion of the company's R&D infrastructure. For instance, Sartorius completed and commissioned a new laboratory building for the Biotechnology Division in the reporting year, expanding R&D capacity by more than 50%.

Dividends to Increase Yet Again

The Supervisory Board and the Executive Board will submit a proposal to the Annual Shareholders' Meeting on April 23, 2008, to raise dividends again to EUR 0.68 per preference share and EUR 0.66 per ordinary share. If approved, the total profit distributed would thus rise by 6.3% to EUR 11.4 million for the reporting year. For fiscal 2006, dividends were EUR 0.64 and EUR 0.62, respectively; the total profit distributed was EUR 10.7 million.

Positive Outlook for 2008

For fiscal 2008, the Group is targeting an increase in sales revenue by more than 9% in constant currencies, relative to the pro forma sales revenue posted for fiscal 2007. In this context, the company expects that its businesses with disposables and industrial weighing equipment will generate the strongest growth momentum. Basing this sales forecast on an average USD/EUR exchange rate of 1.40, we anticipate that the Group EBITA margin will rise to about 12%.

Upcoming Financial Dates:

April 2008 Publication of first-half figures for 2008

April 23, 2008 Annual Shareholders' Meeting in Goettingen, Germany

Current Image Files:

Dr. Joachim Kreuzburg, Sartorius CEO and Executive Board Chairman

http://www.sartorius.com/media/content/press/support/Dr_Kreuzburg. jpg

New laboratory building in Goettingen, Germany:

http://www.sartorius.com/media/content/press/support/Laborgebaeude _AR_08.jpg

Sartorius Stedim Biotech:

http://www.sartorius.com/media/content/press/support/SSB_1_AR_08.j pg

Sartorius Mechatronics:

http://www.sartorius.com/media/content/press/support/Mechatronics_ 2_ AR_08.jpg

(Due to their length, the above URL's may need to be copied/pasted into your Internet browser's address field. Remove the extra space if one exists)

This press release contains statements about the future development of the Sartorius Group.

We cannot guarantee that the content of these statements will actually apply because these statements are based upon assumptions and estimates that harbor certain risks and uncertainties.

This is a translation of the original German-language press release. Sartorius shall not assume any liability for the correctness of this translation. The original German press release is the legally binding version. Furthermore, Sartorius reserves the right not to be responsible for the topicality, correctness, completeness or quality of the information provided. Liability claims regarding damage caused by the use of any information provided, including any kind of information which is incomplete or incorrect, will therefore be rejected.

A profile of Sartorius

The Sartorius Group is an internationally leading laboratory and process technology provider covering the segments of biotechnology and mechatronics. In 2007, the technology group earned pro forma sales revenue of 622.7 million euros. Founded in 1870, the Goettingen-based company currently employs approximately 4,500 persons. The major areas of activity in its biotechnology segment focus on fermentation, filtration, purification, fluid management and laboratory applications. In the mechatronics segment, the company primarily manufactures equipment and systems featuring weighing, measurement and automation technology for laboratory and industrial applications. Key Sartorius customers are from the pharmaceutical, chemical and food and beverage industries and from numerous research and educational institutes of the public sector. Sartorius has its own production facilities in Europe, Asia and America as well as sales subsidiaries and local commercial agencies in more than 110 countries.

Contact:

Sartorius Group
Dominic Grone, Elke Schild
Group Corporate Communications
Phone: +49 (0)551/ 308-3324, -3684
Fax: +49 (0)551/ 308-3410
dominic.grone@sartorius.com
or
Andreas Wiederhold
Investor Relations
Phone: +49 (0)551/ 308-1668
Fax: +49 (0)551/ 308-3410
andreas.wiederhold@sartorius.com
http://www.sartorius.com

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