Sartorius Shares Decline as Full-Year Targets are Downgraded

Shares in Sartorius experienced a significant drop after the company revised its full-year targets and reported lower preliminary sales and earnings for the first nine months of 2023.

At 0754 GMT, Sartorius's shares fell by 12% to EUR282.20, while shares in its subsidiary, Sartorius Stedim Biotech, also saw a decline of 13%.

The German life-sciences group now expects sales to decrease by approximately 17%, compared to its previous forecast of a decline in the low to mid-teens percentage range. Additionally, it estimates the underlying earnings before interest, taxes, depreciation, and amortization (EBITDA) margin to be slightly above 28%, down from the prior forecast of around 30%. The company stated that its mid-term guidance is currently being reviewed.

Although the outlook cut aligns with expectations, it did little to boost investor sentiment ahead of Sartorius's third-quarter results, according to Citi analyst Vineet Agrawal. The stock is expected to remain volatile until trends stabilize and there is more clarity. However, Jefferies analyst James Vane-Tempest noted that the mid- and long-term growth trends of the industry remain intact.

Sartorius disclosed that consolidated revenue for the first nine months of the year decreased by approximately 16% to 2.5 million euros ($2.6 million) when adjusted for constant currencies. Furthermore, the underlying EBITDA dropped from EUR1.05 billion last year to EUR733 million, as stated by Sartorius.

While the decline in the bioprocess-solutions division appears to be leveling off, Citi mentioned that the miss in the lab-products-and-services segment may have been larger than anticipated.