Simplifying Progress SRI Presentation Sartorius Stedim Biotech, - PowerPoint PPT Presentation

Simplifying Progress SRI Presentation Sartorius Stedim Biotech, 2019

Disclaimer This presentation contains statements concerning the future performance of the Sartorius Stedim Biotech 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. 2

Agenda Company ny Overview and Strateg tegy Responsibility Overview ESG Performance 3

Overview and Strategy Sartorius Stedim Biotech at a glance Industry stry A leading partner of the ~ € 1.21 bn focus biopharma industry Sales revenue Clear r Making R&D and production processes ~15% missi sion on of innovative biologics more efficient Sales CAGR 1) 2013-2018 Attra tracti tive e Biopharma market fueled by strong 28.2% market ket long-term growth drivers EBITDA margin 2) Strong ong Double-digit market share in key >20 positi tion oning ing technologies Countries Stable le Diversified revenue base and high >5,600 business ness share of recurring revenues Employees 4

Overview and Strategy Covering most steps of the biopharma process chain Production process • design is inalterable for the lifetime of most drugs Culture media Seed Scale-up Fermentation Individually • preparation cultivation customized UPSTR TREAM EAM production process required for all DOWNSTR STREAM EAM drugs Decisions for • process design, and thus supplier Final Cryo- Sterile Concen- Virus Polishing Viral Clarification & selection, are filling preservation filtration tration filtration clearance centrifugation typically made during clinical trials 5

Overview and Strategy Attractive market environment with strong growth opportunities 9bn people by 2050; Favorable demographics >2bn 60 yrs or older ~8 ~8% % ~30% 0% CAGR for biosimilar Rise of biosimilars sales 2018 – 2022 CAGR for biopharma market 2018 – 2025 Strong R&D pipeline; >4 >40% % share of biologics in advances in gene and the pharma R&D pipeline cell therapy 6

Overview and Strategy Sales revenue more than doubled over the last 6 years ~+14% 14% Sales CAGR +13.7% +4.1% EBITDA 1) margin +6.3pp 3pp € 1.21bn +20.4 1200 33,0 +19.4% % 32,0 +15.9% 31,0 +10.8% 1000 30,0 +10.3% 29,0 800 28,0 28,2 27,0 27,5 27,3 600 26,0 € 477m 26,2 25,0 24,0 400 23,0 23,5 23,0 22,0 200 21,9 21,0 21,5 20,0 0 19,0 2011 2012 2013 2014 2015 2016 2017 2018 EBITDA 1) marginin % Sales revenue Sales growth and CAGR in constant currencies 1) Excluding extraordinary items 7

Overview and Strategy M&A strategy – adding innovation, enhancing focus 2011 11 2019 19 AllPure TAP Biosystems BioOutsource Cellca kSep Umetrics Technologies Portfolio: Complementary products or technologies Market position: Either among the Top 3 or unique selling point Acquisiti tion criteria ria Integration: Management capacity; cultural fit Price: Fair valuation; reach Sartorius‘ profitability level in 2 – 3 years 8

Overview and Strategy Infrastructure prepared for further organic growth CAPEX ratio CAPEX compos osition on 2019 14.6 in % 12.6 ~11 ~X% Major projects 9.2 7.6 6.5 6.2 5.8 ~3% Regular expansion ~2% Capitalized R&D ~3% Maintenance 2012 2013 2014 2015 2016 2017 2018 2019 1) Yauc uco, , Pue uert rto Rico co Gött tting ingen, n, Germany rmany Aub ubagn agne, , France ance Group-wid ide Fluid management and Consolidation of two sites; Extension of bag production and New IT systems for more efficient filter capacities doubled significant capacity expansion logistics capacities business processes 9

Overview and Strategy Leading positions in key technology platforms Sartorius Merck | Danaher| Thermo GE Top 3 Players Millipore Pall 2) 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 1) 3. GE Pie charts indicate completeness of product offering 1) As of 2019, reduced scope due to changes to sales alliance in cell culture media with Lonza 2) Danaher announced acquisition of GE Biopharma; transaction is expected to be completed in Q4 2019 10

Overview and Strategy Limited dependence on individual accounts Long-term business relationships with leading global Limited dependence on individual accounts (bio-) pharma companies Sales s to to Top 50 customer omers in 2019, € in millions 350 ~55% ~50% 300 ~45% ~40% 250 Cumulative ~25% 200 share 150 100 50 0 Top 10 11 to 20 21 to 30 31 to 40 41 to 50  More than half of 2018 BPS sales were generated with the Top 50 customers  No individual customer accounts for more than 5% of BPS sales revenue  No single drug accounts for more than 3% of BPS sales revenue 11

Overview and Strategy Sartorius 2025 targets and initiatives Strategic initiatives 2025 targets Regiona onal ~ € 4bn 4bn  Participate in strong Chinese market growth  Continue to outperform the important U.S. market Sales revenue Portf tfoli olio  Add high-impact innovations, e.g. digital tools ~2/3 ~1/3 3  Enhance process development capabilities Organic Acquisitions  Expand into adjacent applications ~28% Opera rati tion ons  Accelerate workflows across the organization through digitalization EBITDA margin  Extend manufacturing base in Asia 12

Agenda Company Overview and Strategy Responsibility ty Overview ESG Performance 13

Responsibility Strong company values as the basis of all our activities Sustai ainabi abili lity ty Openness ess Enjoyment nt Growing profitably and acting Driving change and progress Working in an energetic and responsibly towards all stakeholders internally and externally rewarding environment 14

Responsibility Our corporate responsibility endorsements Sartorius is a signatory of the United Sartorius is a member of econsense, Nations Global Compact and is the Forum for Sustainable Development committed to sustainable global of German Business. business. 15

Responsibility Our corporate responsibility basics Environ ronment ment Social Governa rnanc nce • Environmental Policy • Policy on Labor Practices • Anti-Corruption Code Policy on Occupational Safety Sustainable Supply Chain • • Management Human Rights Strategy • ESG Risk Reporting • Code of Conduct • Corporate Responsibility Steering • Committee 16

Responsibility Transparency Non-financial group Overall rating: 49 of 100 Overall rating SSB: A Overall rating: C statement published in Environment: 60 Overall rating Group: AA Social governance: C+ our annual report and Labor: 50 Environmental rating: C- externally audited Fair business practices: 50 Staff and suppliers: C Sustainable Society and product procurement: 30 responsibility: C Products and services: D Corporate governance and business ethics: B- Eco-efficiency: A+ 17

Responsibility Our ESG core topic: Better health for more people We empower scientists and engineers to simplify and accelerate progress in life sciences Anticipate clients needs Time savings in drug • • discovery Accelerate innovation • Cost savings in drug • Collaborate • production Bring experts together • Reduced risk of cross- • contamination Higher flexibility • New and better ter ther erapi apies es and more re afford ordabl ble e medici dicine ne 18

Responsibility Sartorius’ contribution to SDGs Three-step materiality analysis to determine which SDGs are related to Sartorius business activities Identification of the SDGs that are significant for Sartorius 1. Examination of the relevance of each topic to our business, as well as the potential impacts on people and 2. the environment Determination of whether the impacts are positive or negative and to which degree 3. Eight ht SDGs were define ned d as materi rial al in relati tion n to the busine ness activiti ties es of Sartorius rius 19

Responsibility Next steps 1. 1. Policy / / Strat ategy egy / Target ets 2. Measur ures es / Manage gemen ent t Approach ch • Sustainable Supply Chain Management • Endorsement • Non-Financial Risk Management Aspects 3. Resul ults ts / Commun unication cation • Environmental Policy • Policy on Labor Practices • Non-Financial Group Statement • Policy on Occupational Safety • GRI Report • Human Rights Strategy • UN Communication on Progress • Climate Strategy • ESG Ratings • Investor Meetings • Plastics Strategy • Home Page • ESG Audits • CDP • Daily / Intranet 20