Investors Presentation October 2018 Disclaimer This presentation - PowerPoint PPT Presentation

Investors Presentation October 2018

Disclaimer This presentation contains statements concerning the future performance of the Sartorius Group. These statements are based on assumptions and estimates. Although we are convinced that these forward-looking statements are realistic, we cannot guarantee that they will actually materialize. This is because our assumptions harbor risks and uncertainties that could lead to actual results diverging substantially from the expected ones. It is not planned to update our forward-looking statements. Throughout this presentation, differences may be apparent as a result of rounding during addition.

Agenda Overvie rview w and Strate tegy gy Bioprocess Solutions Division Lab Products & Services Division FY 2018 Guidance | H1 2018 Results

Sartorius at a glance ~ € 1.4bn Industry A leading partner of the Sales revenue focus biopharma industry ~13% Clear Making R&D and production processes Clear mission Sales CAGR 1) 2012-2017 mission of innovative biologics more efficient 25.1% Attractive Biopharma market fueled by strong market EBITDA margin 2) long-term growth drivers 30 Strong Double-digit market share in Countries positioning key technologies >7,500 Stable Diversified revenue base and Employees business model high share of recurring revenues Based on FY 2017 figures 1) For continued operations, in constant currencies 2) Excluding extraordinary items 4

Strategic focus on the biopharma market Bioprocess Solutions Division Cell line and Production Molecule development process development upstream & downstream Quality | Testing | Validation Lab Products & Services Division 5

Strong market fundamentals Favorable demographics Increasing healthcare spending +6.5% 9bn CAGR people by 2050; >2bn 60 yrs or worldwide prescription drug older sales 2017-2022 ~8% CAGR Strong R&D pipeline; advances in biopharma market Rise of biosimilars gene and cell therapy 2017-2025 ~25% >50% CAGR Share of biologics biosimilar sales in pharma R&D 2017-2025 pipeline 6

Sales revenue more than doubled over the last 6 years ~ +13% Sales CAGR EBITDA 1) margin +5.4pp +9.3% +18.2% € 1.4bn +16.0% 30 +12.6% 1400 29 +8.8% 28 1200 +13.6% 27 1000 26 25 € 733m 25.1 25.0 800 24 23.6 23 ~ € 650m 600 22 400 21 21.0 20 20.5 200 20.1 19.7 19 0 18 2011 2012 2013 2014 2015 2016 2017 EBITDA 1) margin in % Sales revenue Intec Division; divested in 2|2015 Sales growth and CAGR for continued operations, in constant currencies 1) Excluding extraordinary items 7

Regional balance better reflecting end-markets Sales by region 2017 Global pharmaceutical market Sales by region 2011 ~ € 650m ~ € 1.4bn ~ € 1.1tn CAGR ~ +16% Asia | Pacific ~ 26% Asia | Pacific ~ 22% Asia | Pacific ~ 25% ~ +15% Americas ~ 25% Americas ~ 32% Americas ~ 51% ~ +11% EMEA ~ 53% EMEA ~ 43% EMEA ~ 23% 2011 2017 2017 CAGR for continued operations, in constant currencies 8

M&A strategy – adding innovation, enhancing focus Divestment IntelliCyt ViroCyt Essen BioScience Intec Division 2018 2011 Umetrics Cellca kSep Lonza Cell TAP Biosystems BioOutsource AllPure Culture Media Technologies Portfolio: Complementary products or technologies Market Position: Either among the Top 3 or unique selling point Acquisition criteria Integration: Management capacity; cultural fit Price: Fair valuation; reach Sartorius‘ profitability level in 2 -3 years 9

Infrastructure prepared for further organic growth Capex ratio Capex composition 2018 in % 14.9 ~15 14 11.7 12 10.1 10 9.1 8.8 10 7.7 ~x % 8 ~7% Major projects 6 4 Regular expansion ~3% 2 0 ~2% Cap. R&D 2012 2013 1) 2013 2014 2015 2016 2017 2018 2) 2018 2019 2012 1) Maintenance ~3% 1) Incl. discontinued operation 2) Based on 2018 guidance Yauco, o, Puerto to Rico Goetti tingen, ngen, Germany many Auba bagne gne, Franc nce Doubling of fluid management Extension of headquarters Capacity extension New ERP and extension of and filter capacities of bag production global IT infrastructure 10

Sartorius 2025 targets and initiatives Strategic initiatives 2025 targets Regiona ional ~ € 4bn 1  Participate in strong Chinese market growth  Continue to outperform the important U.S. market Sales revenue Portf tfolio io  Add high-impact innovation, e.g. digital tools ~2|3 ~1|3  Enhance process development capabilities Organic Acquisitions  Expand into adjacent applications Operation ions ~28%  Accelerate workflows across the organization through digitalization EBITDA margin  Extend manufacturing base in Asia 2025 targets are based on 2017 currency exchange rates; non-organic revenue growth is accounted for companies acquired from 2018 and onwards; EBITDA excluding extraordinary items 11

Sartorius 2025 ambition per division SSB | BPS LPS Sartorius Group ~ € 4bn ~ € 1.2bn 1 ~ € 2.8bn Sales revenue Sales revenue Sales revenue ~30% ~25% ~28% EBITDA margin EBITDA margin EBITDA margin 12

Agenda Overview and Strategy Bioproc rocess ss Soluti utions ons Divi vision sion Lab Products & Services Division FY 2018 Guidance | H1 2018 Results

Snapshot of the Bioprocess Solutions Division Total solution provider for Global footprint biomanufacturing Americas ~ 35% Asia | Pacific ~ 24% EMEA ~ 41% Division sales by region Track record of dynamic growth High share of recurring revenues +14.2% .2% +16.5% 36 CAGR p.a. 1150 Single-use products ~ 75% 1,010.3 +14.2 .2% 34 1050 CAGR 950 32 850 30 28.0 750 28 650 517.8 550 Equipment ~ 25% 26 450 23.0 24 350 250 22 2013 2014 2015 2016 2017 Sales revenue, € in millions; EBITDA margin 1) in % Division sales by category Based on FY 2017 figures; sales CAGR in constant currencies 1) Excluding extraordinary items 14

Covering all steps of the biopharma process chain Process development Upstream processing Downstream processing Quality | Testing | Validation 15

Leading positions in key technology platforms Sartorius Merck | Danaher| Thermo GE Top 3 Players Millipore Pall Fisher 1. Merck | Millipore Filtration 2. Danaher | Pall 3. Sartorius 1. Sartorius Fluid 2. Thermo Fisher Management 3. Merck | Millipore 1. Sartorius Fermentation 2. Thermo Fisher 3. GE 1. GE Purification 2. Merck | Millipore 3. Danaher | Pall 1. Thermo Fisher Cell Culture 2. Merck | Millipore Media 3. GE Pie charts indicate completeness of product offering 16

The biopharma market is not yet mature, but is maturing ... not mature because Cumulative investment and absolute survival rate in drug development  Underpenetrated global market Cumulative investmt ( € in millions) 100 1,500  Strong flow of innovation Absolute survival rate % 80  Time-consuming product development 1,000 60 ... but maturing because 40 500  Increasing importance of product costs and 20 time to market 0 0 Target to lead Preclinical Phase 1 Phase 2 Phase 3 Registration  Robustness and ease of use of tools are becoming more important  Companies invest in market consolidation >10 10+ year ars Data adopted from: Paul (2010) Nature Rev DD & Association of the British Pharmaceutical Industry (2017) 17

Digitalization is arriving in biopharma Collect data Sartorius offers the leading software Monitor & Improve for bioprocess data analytics control process  Enhanced process control and robustness  Improved product quality Analyze  Predictive process control  Powerful solutions for modeling and optimizing development and manufacturing  Help to gain insights from complex data sets  Data analytics just at the beginning in biomanufacturing and shows high potential 18

U.S. remains most important market; China with highest growth rates Biologics market growth forecast CAGR 2018 to 2022, $ in billions U.S. U.S. ~ 163 ~ 115 ~ +16% China Europe Europe ~ 50 ~ 65 ~ +9% U.S. China China ~ $345bn ~ $250bn ~ 60 ~ 33 ~ +7% Europe ROW ROW ~ 51 ~ 57  Biologic market in China is at an early stage, but has strong growth potential  Supportive regulatory environment and solid industry foundation; biopharma considered a priority sector  Manufacturing capacity in China to triple by 2020 19

Biosimilars: Strong growth, big opportunities Biosimilars will outperform the biologics market € in billions ~ +25% CAGR ~ 58  Major blockbuster biologics are going off patent  Lower prices will lead to higher production volumes ~ 10  Time-to-market is key as only the first few ~ 402 biosimilar providers are most likely to be profitable  APAC penetration relatively high; U.S. at the beginning ~ 230 2017 2025 Other biologics Biosimilars 20

Leader in the growing single-use technology market Single use products offer advantages over conventional stainless-steel devices  Capex|Opex reduction over entire lifecycle -25-35%  Reduced risk of cross-contamination -30-50%  Higher flexibility; advantageous for biosimilars -55-65% -65-75% Single-use market penetration expected Construction Time-to- Energy Water cost cost market cost to increase from ~35% to ~75% Reference SU Reference Reference SU SU Reference SU 21