Bad news for biotech firm
has not been a great year for the German biotechnology group.
Third-quarter earnings have been negatively affected by the
impending insolvency of the group's minority stake in Diessel.
Recently published sales figures from Sartorius indicate that 2003 has not been a great year for the German biotechnology group. Third-quarter earnings have been negatively affected by the impending insolvency of the group's minority stake in Diessel, and things are unlikely to improve in the near future.
During the first nine months of fiscal 2003, the group's sales revenue fell 6.5 per cent to €324.8 million from €347.3 million reported for the year-earlier period.
The firm's biotechnology division posted a 9.4 per cent drop in sales revenue to €166.1 million from €183.4 million the year before. Adjusted for the impact of foreign currencies, the decline in sales revenue was 3.2 per cent. In addition, sales revenue from the mechatronics division slipped 3.2 per cent to €158.7 million, from €163.9 million a year ago.
Overall, group order intake dropped 8.5 per cent to €318.6 million from a year ago. Order intake for the biotechnology division fell from €179.3 million to €160.7 million, while that of the mechatronics division slipped from €168.9 million to €157.9 million.
There was some good news. The company significantly increased its net cash flow in the first nine months from €1.6 million posted for the year-earlier period to €26.6 million, which enabled the firm to reduce its net debt from €133.1 million to €110.7 million.
In addition, the company believes that demand for both the biotechnology and mechatronics divisions will pick up. Cost reduction measures have been put in place, which will hopefully contribute to this planned improvement in earnings. However, because of the negative impact on earnings accumulated so far during the fiscal year, it will be extremely difficult to increase EBIT against that of the previous year.
Sartorius is a global process technology supplier covering the segments of biotechnology and mechatronics. In 2002, the technology group earned sales revenue of €476.5 million. The Goettingen-based company's biotechnology segment focuses on filtration and separation applications, fermenters and proteomics. Key customers include the pharmaceutical, chemical and food and beverage industries.
Sartorius has its own production facilities in Europe, Asia and America as well as sales subsidiaries and local commercial agencies in more than 110 countries.
