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Investors‘ Presentation Jefferies Global Healthcare Conference London| November 19, 2014

Investors‘ Presentation - Jefferies - The Global … 0800 3...Cell removal and clarification filters Crossflow systems and Consumables Configurable solutions Bag tanks Storage bags

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Page 1: Investors‘ Presentation - Jefferies - The Global … 0800 3...Cell removal and clarification filters Crossflow systems and Consumables Configurable solutions Bag tanks Storage bags

Investors‘ Presentation Jefferies Global Healthcare Conference

London| November 19, 2014

Page 2: Investors‘ Presentation - Jefferies - The Global … 0800 3...Cell removal and clarification filters Crossflow systems and Consumables Configurable solutions Bag tanks Storage bags

Disclaimer

This presentation contains statements concerning the Sartorius Groups’ future performance. 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.

Page 3: Investors‘ Presentation - Jefferies - The Global … 0800 3...Cell removal and clarification filters Crossflow systems and Consumables Configurable solutions Bag tanks Storage bags

Company Overview

Agenda

3

1

4

5 9M 2014 Results | Guidance 2014

Lab Products & Services

Growth Prospects and Projects

2 Bioprocess Solutions

Page 4: Investors‘ Presentation - Jefferies - The Global … 0800 3...Cell removal and clarification filters Crossflow systems and Consumables Configurable solutions Bag tanks Storage bags

Operational Setup

Share of Group sales based on 2013 figures 1) Share of Group EBITDA based on underlying EBITDA (excluding extraordinary items) 4 4

Sartorius Group

Sartorius Intec Bioprocess Solutions

Innovative single-use products and equip- ment for the production of biologics

Industrial weighing and control technologies

2013 € 887mn

Lab Products & Services

Premium lab instruments, consumables and services for R&D, QA and QC

30% 25% of Sales of EBITDA1)

12% 6% of Sales of EBITDA1)

58% 69% of Sales of EBITDA1)

Page 5: Investors‘ Presentation - Jefferies - The Global … 0800 3...Cell removal and clarification filters Crossflow systems and Consumables Configurable solutions Bag tanks Storage bags

Sales Revenue €517.8 mn Europe 47% NA 28% Asia 21%

EBITDA1) margin 23.0 % Employees 3,217 Locations 27

Key Division Figures 2013

Bioprocess Solutions

1) Underlying (excluding extraordinary items)

Page 6: Investors‘ Presentation - Jefferies - The Global … 0800 3...Cell removal and clarification filters Crossflow systems and Consumables Configurable solutions Bag tanks Storage bags

Solution Provider for Biomanufacturing

Supplier of key production technologies to the biopharma industry

Product quality and supply security key success factors; high regulatory requirements; validated processes

Paradigm shift towards single-use solutions

Sartorius with broadest product portfolio in the industry, with a clear focus on single-use

6

~ €518 mn

Equipment ~ 25 %

Single-use ~ 75 %

Page 7: Investors‘ Presentation - Jefferies - The Global … 0800 3...Cell removal and clarification filters Crossflow systems and Consumables Configurable solutions Bag tanks Storage bags

The Widest Product Portfolio Across the Biopharma Process Chain

7

Cell removal and clarification filters

Crossflow systems and Consumables

Configurable solutions

Bag tanks

Storage bags

Virus inactivation technologies

Buffers

Freeze-thaw technologies

Membrane chromatography

Cell culture media

Prefilled bags

SU mixing systems

Sterile filters

Bioreactors for process development

Production bioreactors

Monitoring and control technologies

Upstream Bioprocessing Downstream Bioprocessing

Media Process Dev.

Fermentation Cell Removal |

Clarification Capturing Polishing

Virus Cleanrance

Prep. of Bulk Drug Subst.

Page 8: Investors‘ Presentation - Jefferies - The Global … 0800 3...Cell removal and clarification filters Crossflow systems and Consumables Configurable solutions Bag tanks Storage bags

Multiple Drivers Fuel Significant Growth of the Biopharma Market

IMS Institute of Healthcare Informatics. The Global Use of Medicine: Outlook Through 2016|17 8

Growing & aging population World population to grow to ~ 9bn by 2050; ~ 2bn people will be 60 or older by 2050

Strong R&D pipelines Biologics >40% of all drugs in development

Increasing access to healthcare Increasing income available for healthcare in emerging countries $

CAGR 6% - 8%

Biosimilar market Emerging industry, especially in Asia

Page 9: Investors‘ Presentation - Jefferies - The Global … 0800 3...Cell removal and clarification filters Crossflow systems and Consumables Configurable solutions Bag tanks Storage bags

Clear Trend Towards Single-use Products

9

Past Present

Time to market

Cost savings

Risk management

Improved titers

Main Drivers

Page 10: Investors‘ Presentation - Jefferies - The Global … 0800 3...Cell removal and clarification filters Crossflow systems and Consumables Configurable solutions Bag tanks Storage bags

Leading Positions in Key Technology Platforms

10

BPS Millipore Pall Thermo GE Top 3 Players

Filtration 1. Pall 2. Millipore 3. Sartorius

Fluid Management 1. Sartorius 2. Thermo Fisher 3. Millipore

Fermentation 1. Sartorius 2. Thermo Fisher 3. GE

Purification 1. GE 2. Millipore 3. Pall

Cell Culture Media 1. Thermo Fisher 2. Sigma 3. GE

Circles indicate completeness of product offering; Announced acquisition of Sigma-Aldrich by Merck KGaA not yet considered

Page 11: Investors‘ Presentation - Jefferies - The Global … 0800 3...Cell removal and clarification filters Crossflow systems and Consumables Configurable solutions Bag tanks Storage bags

Lab Products & Services

Sales Revenue €267.4 mn Europe 53% NA 15% Asia 28%

EBITDA1) margin 16.0 % Employees 1,893 Locations 32

Key Division Figures 2013

1) Underlying (excluding extraordinary items)

Page 12: Investors‘ Presentation - Jefferies - The Global … 0800 3...Cell removal and clarification filters Crossflow systems and Consumables Configurable solutions Bag tanks Storage bags

Premium Lab Portfolio for Sample Prep. in R&D and QA Created

12

60-65% of Revenue

Lab Instruments Lab Consumables & Service

35-40% of Revenue

Lab Balances Part of former

Mechatronics Division

Biohit Liquid Handling

Acquisition Dec. 2011

Lab Consumables Part of former

Biotechnology Division

Page 13: Investors‘ Presentation - Jefferies - The Global … 0800 3...Cell removal and clarification filters Crossflow systems and Consumables Configurable solutions Bag tanks Storage bags

Three-channel Sales Approach to Address Broad Customer Base

13

Direct Sales Lab Distributors

e-commerce

Pharma | Biotech Academia Cl. Diagnostics |

Chemicals Food & Beverage

Page 14: Investors‘ Presentation - Jefferies - The Global … 0800 3...Cell removal and clarification filters Crossflow systems and Consumables Configurable solutions Bag tanks Storage bags

Global Lab Market Provides Significant Growth Potential

14

~ $39 bn

Asia 13%

North America 42%

Others 4%

Europe 40%

~ €267 mn

Global Laboratory Products Market1)

1) Frost & Sullivan, 2014 Half-year Update 2) FY 2013

Targeted market of > $3 bn

Average global market share of > 10%

Significant growth potential especially in the U.S. and Asia

LPS Sales by Region2)

North America 15%

Others 4% Europe 53%

Asia | Pacific 28%

Page 15: Investors‘ Presentation - Jefferies - The Global … 0800 3...Cell removal and clarification filters Crossflow systems and Consumables Configurable solutions Bag tanks Storage bags

Strong Positions in Key Categories

15

Mettler Toledo

Eppendorf Mettler Toledo Thermo Fisher Gilson

EMD Millipore Elga Thermo Fisher

#4

EMD Millipore Pall GE Whatman

#3 Lab water systems Pipettes Lab balances Consumables

#2 #4

Competitive Landscape

Page 16: Investors‘ Presentation - Jefferies - The Global … 0800 3...Cell removal and clarification filters Crossflow systems and Consumables Configurable solutions Bag tanks Storage bags

16

Service Is an Integral Part of the LPS Product Portfolio

Premium service offering by more than 50 local service centers

Provides valuable insight into customer needs

Excellent vehicle for lead generation

Important factor for differentiation

Increases customer satisfaction & loyalty

Page 17: Investors‘ Presentation - Jefferies - The Global … 0800 3...Cell removal and clarification filters Crossflow systems and Consumables Configurable solutions Bag tanks Storage bags

Company Overview

Agenda

3

1

4

5 9M 2014 Results | Guidance 2014

Lab Products & Services

Growth Prospects and Projects

2 Bioprocess Solutions

Page 18: Investors‘ Presentation - Jefferies - The Global … 0800 3...Cell removal and clarification filters Crossflow systems and Consumables Configurable solutions Bag tanks Storage bags

1) Excluding extraordinary items 2) Restated 18

85.1

110.2

136.6

161.1 172.6

14.1

16.7

18.6 19.0

19.5

Sales Revenue in € million

845.7

733.1 659.3

602.1

Strong Track Record of Profitable Growth

Earnings EBITDA & margin1)

2009 2011 2010 2013 20122)

CAGR ~19%

2009 2011 2010 2013 2012

887.3

CAGR ~10%

Page 19: Investors‘ Presentation - Jefferies - The Global … 0800 3...Cell removal and clarification filters Crossflow systems and Consumables Configurable solutions Bag tanks Storage bags

Regional

North America: Gain market share China | India: Leverage strong market growth

Ambitious 2020 Targets Supported by Growth Inititatives

1) Excluding extraordinary items 19

Strategic Initiatives 2020 Ambition

Portfolio

Expansion through alliances and acquisitions Own product development Potential divestiture of Industrial Weighing

Infrastructure

New global ERP system Expansion of production capacity

~ €2 bn Sales Revenue

~ 23% EBITDA margin1)

~ 2/3 Organic

~ 1/3 Acquisitions

Page 20: Investors‘ Presentation - Jefferies - The Global … 0800 3...Cell removal and clarification filters Crossflow systems and Consumables Configurable solutions Bag tanks Storage bags

Gain Market Share in North America; Leverage Strong Market Growth in Asia

20

Sales Revenue North America

2013

2012

2010

2011

Sales Shares

North America

CAGR ~10% Asia

Sales Revenue Asia

2013

2012

2010

2011

€887 mn

+2.6% +10.3%

+18.9%

+6.2%

+11.0%

+13.0%

+23.2%

+17.6%

In constant currencies In constant currencies

North America is the largest single market for biopharma and lab products; organic growth: low double-digit range targeted

China and India among the strongest-growing pharma and lab markets globally; continued double-digit organic growth projected for the next few years

21%

24% CAGR ~16%

FY 2013 data

Page 21: Investors‘ Presentation - Jefferies - The Global … 0800 3...Cell removal and clarification filters Crossflow systems and Consumables Configurable solutions Bag tanks Storage bags

Strong Execution on Acquisitions and Alliances

21

Acquisitions (2011-2014)

Alliances (2013-2014)

Biohit Liquid Handling

Lonza Cell Culture Media TAP Biosystems

> €200 mn sales potential

by 2020

Single-use sensors for biomass measurement

Sensors for oxygen and carbon dioxide measurement

Ready-to-use, prefilled media products for micro-biological applications

Significant expansion of technology portfolio

AllPure Technologies

Page 22: Investors‘ Presentation - Jefferies - The Global … 0800 3...Cell removal and clarification filters Crossflow systems and Consumables Configurable solutions Bag tanks Storage bags

InTec: Creation of Separate Subgroup Completed

22

Tank & Hopper solutions

Industrial Scales

Checkweigher

Supplier of premium weighing and control technologies for industrial applications

> 70% of sales generated from global TOP 4 positions; robust gross margins

Relatively small as a global stand-alone business

Non-core activity: long-term target to sell the business

Carve out including separate ERP system completed; reduced complexity in a divestment process

Page 23: Investors‘ Presentation - Jefferies - The Global … 0800 3...Cell removal and clarification filters Crossflow systems and Consumables Configurable solutions Bag tanks Storage bags

Further Investment Projects

Global roll-out of the new ERP system

Continued expansion of production capacity worldwide to accommodate growth

Capex ratio projected at ~ 8% - 10% for 2014; expected to remain in this corridor for the next few years

1) Based on 2014 guidance 23

Konzern

Capex ratio in % of sales revenue

4.0

7.1

3.7

2013 2011 2010 2009

8.8

2012

7.1 ~ 8-10

2014e1)

Page 24: Investors‘ Presentation - Jefferies - The Global … 0800 3...Cell removal and clarification filters Crossflow systems and Consumables Configurable solutions Bag tanks Storage bags

Company Overview

Agenda

3

1

4

5 9M 2014 Results | Guidance 2014

Lab Products & Services

Growth Prospects and Projects

2 Bioprocess Solutions

Page 25: Investors‘ Presentation - Jefferies - The Global … 0800 3...Cell removal and clarification filters Crossflow systems and Consumables Configurable solutions Bag tanks Storage bags

Strong Order Intake, Sales and Earnings Performance

25 1) In constant currencies 2) Excluding extraordinary items

Bioprocess Solutions in € million

Lab Products & Services in € million

Industrial Technologies in € million Sartorius Group

Bioprocess Solutions

Lab Products & Services

Industrial Technologies

Order intake + 10.1% in cc1)

+ 9.0% + 14.6% in cc1)

+ 13.7% + 2.3% in cc1)

+ 0.7% + 5.9% in cc1)

+ 4.7%

Sales revenue + 9.6% in cc1)

+ 8.4% + 17.2% in cc1)

+ 16.3% - 0.1% in cc1)

- 1.7% - 3.5% in cc1)

- 4.6%

Underlying2)

EBITDA margin1) 19.6%

(+ 40bps) 23.3%

(+ 60bps) 14.6%

(- 170bps) 10.1%

(+ 120bps)

Page 26: Investors‘ Presentation - Jefferies - The Global … 0800 3...Cell removal and clarification filters Crossflow systems and Consumables Configurable solutions Bag tanks Storage bags

Guidance Confirmed

1) In constant currencies 2) Excluding extraordinary items 26

2014 Guidance

Sales revenue growth1)

Underlying EBITDA margin1)2)

Sartorius Group 8% - 10% ~20.0%

Bioprocess Solutions ~12% - 15% Upper end of range

~23.5%

Lab Products & Services ~1% - 4%

Lower end of range ~15.0%

Industrial Technologies ~1% - 4%

Lower end of range ~10.5%

Economic uncertainty has increased, however no major impact on 2014 figures expected

Capex ratio expected to be around 8% - 10%

Page 27: Investors‘ Presentation - Jefferies - The Global … 0800 3...Cell removal and clarification filters Crossflow systems and Consumables Configurable solutions Bag tanks Storage bags

27

Thank you very much for your attention

Page 28: Investors‘ Presentation - Jefferies - The Global … 0800 3...Cell removal and clarification filters Crossflow systems and Consumables Configurable solutions Bag tanks Storage bags

Legal And Shareholder Structure

28

Sartorius AG Stock market listed in Germany - SRT / SRT3

Bio-Rad Laboratories Inc.

Treasury shares

Adm. by executor

Free float

91

9

Ord. in %

Prf. in %

Free float Sartorius AG

100% 74%

Other Sartorius Subsidiaries

Family owned

Sartorius Stedim Biotech S.A.

+ Subsidiaries

Stock market listed in France – DIM FP

~34

9

~5

50

~2

74

26

in %

Page 29: Investors‘ Presentation - Jefferies - The Global … 0800 3...Cell removal and clarification filters Crossflow systems and Consumables Configurable solutions Bag tanks Storage bags

Change Of Divisional Setup Since FY 2012

29

Schematic diagram

Bioprocess Biolab Industrial Weighing1) Lab Instruments

Mechatronics Biotechnology

Bioprocess Solutions Industrial Weighing1)

Previous Divisions

New Divisions

Jan. 2012

Biohit LH

Lab Products & Services

1) As of January 1, 2014: Industrial Technologies

Page 30: Investors‘ Presentation - Jefferies - The Global … 0800 3...Cell removal and clarification filters Crossflow systems and Consumables Configurable solutions Bag tanks Storage bags

Key Account Business With Limited Dependence on Individual Accounts

30

Approx. half of 2013 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 2% of BPS sales revenue

Long term business relationships with leading global (bio-)pharma companies

Limited dependence on individual accounts

0

50

100

150

200

Sales to Top 50 customers in 2013, in € mn

Top 10 11 to 20 21 to 30 31 to 40 41 to 50

Cumulative Share ~30%

~40% ~45% ~50% ~55%

Page 31: Investors‘ Presentation - Jefferies - The Global … 0800 3...Cell removal and clarification filters Crossflow systems and Consumables Configurable solutions Bag tanks Storage bags

Extension of BPS‘s Portfolio by Acquisition of AllPure Technologies

31

Majority stake acquired in U.S. start-up AllPure Technologies in April 2014

Allpure specializes in single-use components for biotech applications, e.g. aseptic sampling techniques

2013 revenue of ~ U.S. $3 mn.; based in New Oxford, Pennsylvania, USA

Excellent growth opportunities for AllPure products based on BPS‘s global reach, esp. in Europe and Asia

Page 32: Investors‘ Presentation - Jefferies - The Global … 0800 3...Cell removal and clarification filters Crossflow systems and Consumables Configurable solutions Bag tanks Storage bags

Most Recent Acquisitions Strengthen Bioprocess Portfolio

32

Leading supplier of small scale, multi-parallel single-use bioreactors

Sales revenue of ~ €26 mn, thereof ~ 50% in the U.S.

Scale-up with BPS technology

TAP Biosystems in December 2013

Strong first-year performance Gradual business transition into BPS

now completed Joint development of new

cell culture media well underway

Cell culture media in December 2012

Page 33: Investors‘ Presentation - Jefferies - The Global … 0800 3...Cell removal and clarification filters Crossflow systems and Consumables Configurable solutions Bag tanks Storage bags

Page 1

Singapore Kuala Lumpur

Bangalore

Hanoi

Tokyo Beijing Seoul

Hong Kong

Makati City Bangkok

Shanghai Suzhou

Mississauga

Mexico City Yauco

Bohemia

São Paulo

Buenos Aires Melbourne

Kajaani Helsinki

St. Petersburg Moscow

Goettingen Hamburg

Aachen Herlev

Poznan Guxhagen

Lourdes

M’Hamdia Milan

Florence

Tagelswangen Vienna Budapest

Madrid

Vilvoorde

Paris

Epsom

Stonehouse Dublin

Share of Sales North America

~ 21%

Share of Sales Europe ~ 51%

Share of Sales Asia

~ 24%

Global Presence: >30 sales and 18 manufacturing sites

33 Sales Production | Production and Sales

Royston

Wilmington

Rotterdam

European Home Market; North America and Asia Gaining Significance

Aubagne

New Oxford

Page 34: Investors‘ Presentation - Jefferies - The Global … 0800 3...Cell removal and clarification filters Crossflow systems and Consumables Configurable solutions Bag tanks Storage bags

34

Filtration Purification

Portfolio Bioprocess Solutions

Page 35: Investors‘ Presentation - Jefferies - The Global … 0800 3...Cell removal and clarification filters Crossflow systems and Consumables Configurable solutions Bag tanks Storage bags

35

Fluid Management Fermentation & Cell Culture Media

Portfolio Bioprocess Solutions

Page 36: Investors‘ Presentation - Jefferies - The Global … 0800 3...Cell removal and clarification filters Crossflow systems and Consumables Configurable solutions Bag tanks Storage bags

36

Lab Balances Pipettes

Portfolio Lab Products & Services

Page 37: Investors‘ Presentation - Jefferies - The Global … 0800 3...Cell removal and clarification filters Crossflow systems and Consumables Configurable solutions Bag tanks Storage bags

37

Mass comparators

Moisture Analyser

NucleoCounter

Lab Water Systems Further Lab Instruments

Portfolio Lab Products & Services

Page 38: Investors‘ Presentation - Jefferies - The Global … 0800 3...Cell removal and clarification filters Crossflow systems and Consumables Configurable solutions Bag tanks Storage bags

38

Lab Filtration Microbiological Quality Control

Portfolio Lab Products & Services

Page 39: Investors‘ Presentation - Jefferies - The Global … 0800 3...Cell removal and clarification filters Crossflow systems and Consumables Configurable solutions Bag tanks Storage bags

Executive Board of Sartorius AG

39

Jörg Pfirrmann, CFO since 2009

Finance, Human Resources, IT, General Administration

Joachim Kreuzburg, CEO since 2003

Corporate Strategy, Operations, Legal Affairs, Compliance, Corporate Communications

Reinhard Vogt since 2007

Marketing, Sales & Services

Page 40: Investors‘ Presentation - Jefferies - The Global … 0800 3...Cell removal and clarification filters Crossflow systems and Consumables Configurable solutions Bag tanks Storage bags

Financial Calendar

November 25, 2014 German Equity Forum, Frankfurt Main | Germany

January 27, 2015 Publication of preliminary figures for fiscal 2014

February 22, 2015 Annual Press Conference in Goettingen | Germany

April 9, 2015 Annual Shareholders‘ Meeting in Goettingen | Germany

April 20, 2015 Publication of first quarter 2014 figures

40

Page 41: Investors‘ Presentation - Jefferies - The Global … 0800 3...Cell removal and clarification filters Crossflow systems and Consumables Configurable solutions Bag tanks Storage bags

Contacts

41

Petra Kirchhoff Vice President Corporate Communications & IR Phone: +49.551.308.1686 E-mail: [email protected]

Sartorius Corporate Administration GmbH Weender Landstrasse 94-108 37075 Goettingen, Germany www.sartorius.com

Andreas Theisen Director Investor Relations Phone: +49.551.308.1668 E-mail: [email protected]