Sartorius Aktiengesellschaft Q2 Earnings Call Highlights

Key Points

• Sartorius reported solid first-half growth, with constant-currency sales up 7.7% and underlying EBITDA rising 3.9% as margins improved to 30.3%. Management said demand in bioprocessing and lab products remains intact, and it confirmed full-year guidance.
• Bioprocess Solutions led performance, growing 8.3% in constant currencies as consumables drove growth and equipment stabilized slightly. Management highlighted strong biologics demand, though advanced-therapy orders were delayed by two customers and could shift revenue into 2027.
• Tariff refunds and accounting effects distorted reported results, but management said they did not change the underlying business trend. The company booked €26 million in customer compensation related to tariffs, while operating cash flow and free cash flow both improved sharply in the first half.

Sartorius Aktiengesellschaft ETR: SRT reported higher first-half sales, improved profitability and stronger cash generation, while management said underlying demand in its bioprocessing and laboratory businesses remains intact despite tariff-related accounting effects and some delayed orders in advanced therapies.

Chief Executive Officer Michael Grosse described the first six months of 2026 as “encouraging” and said Sartorius continued its “profitable growth trajectory.” On an operational basis in constant currencies, group sales revenue rose 7.7% in the first half, supported by demand across both divisions. Recurring business increased slightly more than 9%, while equipment grew around 2%.

Grosse said the recurring business remained the main growth driver and pointed to customer demand for single-use products, reagents and technologies that improve productivity and total cost of ownership. He also said customer interest in AI-enabled tools for drug discovery, bioprocessing and laboratory workflows is increasing.

Bioprocessing Leads Growth as Equipment Stabilizes

In the Bioprocess Solutions division, sales grew 8.3% on an operational basis in constant currencies. Grosse said consumables continued to drive the division’s performance, while equipment “stabilized and even returned to slight growth” in the first half, which he called “an important milestone” supporting management’s view that the bottom is behind the business.

René Fáber, head of Bioprocess Solutions and CEO of Sartorius Stedim Biotech, said demand for biologics remains robust and is supporting consumables growth, especially in monoclonal antibody manufacturing. He said core product categories delivered double-digit growth on top of a strong prior-year comparison.

Management also noted volatility in advanced modalities, tied to delayed orders from two major customers and project timing effects. Fáber said the issue affected recurring revenue growth in the first half and would also have some impact on the full year, but emphasized that Sartorius remains constructive on the long-term market for cell and gene therapies.

During the question-and-answer session, analysts asked whether the delays were connected to issues reported elsewhere in the sector. Grosse said Sartorius did not see a broader issue in classical protein-based therapies and described the delays as isolated to two customers in advanced therapy. He said the company expects the orders to return around the end of the year or early 2027, with revenue likely to be recognized mostly in 2027.

Lab Products Returns to Growth

The Lab Products & Services division posted operational sales growth of 5.3% in constant currencies. The MatTek acquisition contributed 2.8 percentage points to first-half growth, and management said the division benefited from gradually improving end markets. Florian Funck, chief financial officer, said Lab Products & Services reached sales of €335 million on a reported basis, up 0.9%.

Grosse highlighted several product launches and innovation milestones, including the launch of the final Pionic modules, Pionic Quad and Cross, enabling a fully integrated continuous downstream process. He also cited a new vessel for the Ambr 250 bioreactor platform, the Cubis III premium laboratory balance platform and continued adoption of the Incucyte AI image analysis tool, including by three new top 10 pharma customers this year.

Tariff Refunds Affect Reported Sales Growth

Management spent significant time explaining the impact of U.S. tariffs and related refunds. Funck said the company received refunds from the U.S. Treasury shortly before the end of the second quarter after tariffs previously paid were found not to be in line with existing law. Sartorius recognized intended customer compensation for tariff surcharges of €26 million in short-term financial liabilities as of June 30, reducing both revenue and cost of sales by the same amount.

As a result, customer compensation reduced constant-currency sales growth by 1.5 percentage points in the first half and almost 3 percentage points in the second quarter, Funck said. Including the tariff refund-related impact, group sales revenue increased 6.2% in constant currencies and 2.5% on a reported basis.

Grosse said the tariff effects did not change the underlying economics of the business. “Operationally, our business continues to perform well and is absolutely in line with our expectations from the beginning of this year,” he said.

Sartorius has applied for €40 million in refunds to compensate customers for tariff surcharges, of which €26 million was received in the first half. About €14 million remains outstanding, though Grosse said the timing and outcome remain uncertain. For Sartorius Stedim Biotech, Fáber said €35 million in refunds had been applied for, with €22 million received and about €13 million outstanding.

Margins, Cash Flow and Balance Sheet Improve

Group underlying EBITDA rose 3.9% to €548 million, and the underlying EBITDA margin improved by 50 basis points to 30.3%. Funck said higher volumes and economies of scale more than offset an unfavorable product mix and investments in future growth initiatives in Lab Products & Services. He said tariff effects had a negligible net impact on the first-half margin because of offsetting accounting effects.

Bioprocess Solutions underlying EBITDA increased to €477 million, with the margin improving 70 basis points to 32.3%. Lab Products & Services generated underlying EBITDA of €71 million and a margin of 21.2%.

Underlying net profit increased 2% to €172 million, while reported net profit rose almost 51% to €122 million, helped by extraordinary items falling by more than 60% from the prior year. Underlying earnings per share were €2.49 per ordinary share and €2.50 per preference share.

Operating cash flow increased almost 26% to €364 million, supported by higher EBITDA, lower tax payments and the U.S. tariff refund. Free cash flow rose more than 70% to €208 million. The CapEx ratio was 8.9%, with capital expenditures of €161 million, broadly in line with the prior-year period.

Funck said the company continues to expect a full-year CapEx ratio of around 12.5% of sales, including scheduled payments in the second half for the Songdo project. Sartorius ended the first half with net debt of €3.76 billion and improved its leverage ratio to 3.51 times underlying EBITDA from 3.55 times at the end of 2025.

Guidance Confirmed for 2026

Sartorius confirmed its full-year guidance, expecting group sales revenue growth of 5% to 9% in constant currencies and an underlying EBITDA margin slightly above 30%. The company continues to expect Bioprocess Solutions sales growth of 6% to 10% and Lab Products & Services growth of 2% to 6%.

Grosse said Sartorius is comfortable “broadly around the midpoint” of the group and Bioprocess Solutions guidance ranges on an operational basis, excluding customer tariff compensation, while Lab Products & Services is expected to be in the upper half of its range. Including customer tariff compensation, growth in constant currencies is expected to trend in the lower half of the ranges for the group and Bioprocess Solutions and around the midpoint for Lab Products & Services.

Management said second-half growth should continue to be supported by recurring business and the recovery in equipment and instruments. However, Grosse noted that MatTek’s contribution will roll off from July and that lower tariff rates are expected to turn tariff surcharges from a first-half tailwind into a second-half headwind.

Foreign exchange is expected to reduce reported revenue growth by about two percentage points for the full year, though management said it expects a slight tailwind in the third and fourth quarters. The company also reaffirmed expectations for year-end leverage to be slightly above 3 times net debt to underlying EBITDA.

About Sartorius Aktiengesellschaft (ETR:SRT)

Sartorius Aktiengesellschaft provides bioprocess solutions and lab products and services in the United States and internationally. The company offers multi-parallel, benchtop, single-use, stainless steel, cell culture, rocking motion, and microbial bioreactors, and software apps for bioreactors and cell culture shake flask; fermenters; cell culture media products; cellcelector flex, incubator flowbox, nanowell arrays, and capillaries and tips; fluid management products; microbiology products; and Ultrafiltration membrane filters, glass and quartz microfiber filters, clarification, syringeless and in-line filters, lab chromatography, and filters and blotting papers.

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