Sartorius AG

Ladies and gentlemen, welcome to the Sartorius and Sartorius Ted in Biotech conference call on the first quarter 2025. I would like to remind you that all participants will be in listen-only mode and the conference has been recorded. This call is scheduled for 60 minutes. The presentation will be followed by Q&A session. In order to give all participants the opportunity to ask their question, we ask that the number of questions per person be limited to two. In addition, and in the interest of all participants, questions with the same content will only be answered once. You can register for questions at any time by pressing star and one. At this time, it's my pleasure to hand over to Dr. Joachim Kretschburg. Please go ahead, sir.

Thank you very much for the introduction, and hello and welcome to our conference call on the Q1 results of Sartorius AG as well as Sartorius State in Biotech. Today, I'm together with Florian Funk, our CFO, as well as with René Faber, the president of our bioprocessing division, as well as the CEO of Sartorius State in Biotech, and also Alexandra Gatzemeier, the president of our lab division as she will walk you through the slide on the most recently announced acquisition of MATEC. So let me start with walking you through the highlights of the first quarter of 2025. We think we are off to a good start, a very good start into the year 2025. Pretty much development has been as expected. That means very much driven by a very healthy business with consumables in both divisions, but particularly in bioprocess solutions, where sales revenue is up in total by 10%, but strong double-digit growth in consumables, whereas the business with equipment remains rather muted as expected. And this has a stronger impact, of course, on the left division because this is a more general situation that we see in the industry that there is still a reluctance of customers to make larger investments into instruments, into equipment across the board, even though we have quite a lot of encouraging discussions with customers that are considering to make such investments. On a group's level, We therefore have achieved a sales revenue growth of 6.5% in constant currencies. Book-to-bill ratio has been clearly above one for both divisions and therefore also for the group. The top line growth has been translated into a substantial margin expansion driven by scale effect but also by product mix as our consumer business has been particularly strong as just said. and also previous year's efficiency program has contributed to this margin expansion. Also very positive, you will see that later, is the strong cash flow, and therefore also that the leverage ratio could be reduced as planned. We also will do publish today then our quantitative guidance for the year 2025. We announced this end of January of this year that we will do this alongside of our Q1 publication and we are expecting a sales revenue growth for the group of approximately 6%. For now, we would flag that or attach a plus minus 2% bandwidth to this as still volatilities in the market globally are relatively high. For the underlying EBITDA margin, we expect 29 to 30% more details at the end of our presentation. And with this, I would like to hand over to Alexandra to talk about the MATEC acquisition.

Thank you very much, Joachim, and welcome from my side to the Sartoris conference call. I will give you some more details on the signed agreement between Sartoris and BiCo to acquire one of BiCo operating company, MATEC. MATIC is a leading provider of human cell-based microtissues and 3D models for in vitro testing to accelerate preclinical drug development processes and to reduce or replace animal testing. The portfolio of the company consists of several types of microtissues like skin, respiratory, eyes, and some others. It's also culture, wear, and media, as well as some in-house testing services, and these are provided to biopharma and cosmetics companies. Plan acquisition is well in line with our innovation strategy, focused on advanced cell models, along with new modalities, data management, and AI analytics. MAD-X leading portfolio of 3D microtissue models will help our customer to speed up in vitro testing of drug candidates and reduce animal testing and preclinical drug development and also providing new insights. The importance of advanced cell models even further increased after the recent announcement by FDA last week. on significant policy shift aimed to reducing its reliance on animal testing for drug development and incorporating new approach methodologies. According to FDA, the animal testing requirement will be reduced, refined, or potentially replaced using a range of approaches, including AI-based computational models of toxicity and cell lines and organoid toxicity testing in laboratory setting. And FDA also said that they will initially focus on monoclonal antibodies and other biologics for safety and efficacy evaluations. We see that MATIC solutions are highly compatible with our LPS offering in biologic instruments, reagents, and software, and will make Sartoris provider of comprehensive portfolio consist of the cell model, cell analysis instrument, consumables, and AI-supported data models. We also see that the coverage of customers is kind of very good between both companies. Matic was founded in 1985 and employs more than 80 people. It's headquartered in North America in Auslan, Massachusetts, and they also have a production site in Bratislava, Slovakia. The business will become part of our LPS division and 2024 generated sales revenue of more than 20 million US dollars with profitability margin very similar to LPS division. The agreed purchase price is 80 million US dollars, which is approximately 72 million euro. Transaction is subject to customary closing conditions, including regulatory approval, and we expect closing during the second quarter of 2025. Major focus after closing will be on expanding commercial geographical coverage and as well accelerating roadmap execution and synergy built on our product offering. And with this, I will give a word to Florian.