Demand increases only slowly
Sartorius cuts already lowered forecast – investors nervous
October 13, 2023, 11:11 a.m
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Full warehouses and cautious customers are forcing pharmaceutical supplier Sartorius to lower its forecast for the second time in just a few months. Investors throw the papers onto the market. The price falls to the level of the early phase of Corona. Other stocks in the industry cannot escape the downward pull.
Laboratory supplier Sartorius has scared investors by cutting its annual forecast. Demand is recovering only hesitantly, and customers from China and the USA in particular are reluctant to invest, said the Göttingen DAX group. A currency-adjusted decline in sales of around 17 percent and an operating return (Ebitda margin) of just over 28 percent are now expected for 2023. In addition, CEO Joachim Kreuzburg put the medium-term goals to the test and wants to update them in January.
The business development was met with disapproval on the stock exchange. The shares collapsed by almost 14 percent on the Frankfurt Stock Exchange and were at their lowest level since the beginning of the corona pandemic in spring 2020. The bad news also weighed on some other DAX stocks from the healthcare industry: Merck, Qiagen and Siemens Healthineers gave sometimes by more than four percent.
Analysts at Jefferies said investors were already expecting the medium-term outlook to be downgraded. The share price is likely to remain under pressure for the time being. If the forecasts for 2025 are adjusted downwards in January 2024, investor sentiment could change again. Berenberg experts said they expect more confident statements from Sartorius and other companies in the industry in the future. Once the destocking is complete, the fundamentals will come back into focus.
Overall, the fluctuations in the industry have increased significantly in recent years, and there are also uncertainties due to the geopolitical situation, explained the management. Kreuzburg only lowered its forecast in June due to weaker demand and recently forecast a decline in sales of around 10 to 15 percent and a margin of around 30 (previous year: 33.8) percent.
In the first nine months, annual sales fell by 18 percent to 2.5 billion euros, a decline of around 16 percent after adjusting for currency effects. According to preliminary figures, the operating result (Ebitda) fell from almost 1.1 billion to 733 million euros. The margin was around 29 (same period last year: 33.8) percent.