Sartorius Group 2012 Annual Report Order Intake and Sales Revenue EBITDA and EBITA in millions in millions 611.6 602.1 659.3 733.1 845.7 80.1 85.1 110.2 136.6 163.6 609.8 615.1 681.1 749.5 866.8 56.8 60.9 85.5 112.2 135.0 875 170 800 140 725 110 650 80 575 50 2008 2009 2010 2011 2012 2008 20091) 20101) 20111) 20121) QSales Revenue QEBITDA QOrder Intake QEBITA Key Figures All figures are given in millions of according to the IFRS, 20127) 20117) 20107) 20097) 2008 unless otherwise specified Order intake, sales revenue and earnings Order intake 866.81) 749.57) 681.17) 615.17) 609.8 Sales revenue 845.71) 733.17) 659.37) 602.17) 611.6 EBITDA 163.61) 136.61) 110.21) 85.11) 80.1 EBITDA as a % of sales revenue 19.31) 18.61) 16.71) 14.11) 13.1 EBITA 135.01) 112.21) 85.51) 60.91) 56.8 EBITA as a % of sales revenue 16.01) 15.31) 13.01) 10.11) 9.3 Net profit after non-controlling interest 48.51) 41.67) 31.07) –7.37) 12.4 Net profit after non-controlling interest2) 63.01) 52.81) 39.01) 20.81) 18.2 Research and development costs 48.11) 44.37) 42.67) 40.27) 43.9 Financial data per share Earnings per share2) Per ordinary share (in ) 3.691) 3.091) 2.281) 1.211) 1.06 Per preference share (in ) 3.711) 3.111) 2.301) 1.231) 1.08 Dividends Per ordinary share (in ) 0.943) 0.807) 0.607) 0.407) 0.40 Per preference share (in ) 0.963) 0.827) 0.627) 0.427) 0.42 Balance sheet Balance sheet total 1,071.01) 960.27) 807.77) 820.47) 865.0 Equity 403.81) 366.17) 327.27) 319.27) 333.4 Equity ratio (in %) 37.71) 38.17) 40.57) 38.97) 38.5 Gearing ratio 0.81) 0.77) 0.67) 0.77) 0.7 Financials Capital expenditures (excluding financial assets and goodwill) 74.21) 51.87) 24.47) 23.97) 33.7 As a % of sales revenue 8.81) 7.17) 3.77) 4.07) 5.5 Depreciation and amortization (excluding financial assets and goodwill) 40.61) 32.87) 31.97) 33.47) 29.6 Net cash flow from operating activities 53.21) 79.07) 96.07) 143.47) 53.0 Net debt 303.81) 264.87) 196.97) 224.77) 217.6 Ratio of net debt to EBITDA 1.91) 1.91) 1.81) 2.61) 2.7 Total number of employees as of December 31 5,4911) 4,8874) 4,5157) 4,3237) 4,660 1) Underlying 2) Excluding non-cash amortization and, for 2011 and 2012, effects from fair value adjustments of hedging instruments, as well as excluding non-cash interest expenses for share price warrants in 2008 and 2009 3) Amounts suggested by the Supervisory Board and the Executive Board of Sartorius AG 4) Excluding Biohit Liquid Handling Profitable Growth In fiscal 2012, Sartorius grew dynamically again and New Division Structure Successfully Implemented earned consolidated sales revenue of 845.7 million, a gain of more than 15 percent. Growth was driven primarily by Since the beginning of 2012, Sartorius has been single-use products for biopharmaceutical manufacture, conducting its operating business in three divisions: such as filters and aseptic bags, and by initial consolidation Bioprocess Solutions, Lab Products & Services and of the Biohit Liquid Handling business acquired at the end Industrial Weighing. These divisions each combine their of 2011. Regionally, business saw the strongest expansion respective businesses for the same customer groups and in North America. Despite high investments in new produc- thus more clearly reflect the major markets of Sartorius. tion capacity and the extension of its sales organization, Bioprocess Solutions concentrates on bioprocess business. Sartorius also lifted its profitability. Underlying Group The new lab division covers the entire portfolio of earnings rose by one fifth to 135 million; its respective laboratory products, including the Biohit Liquid Handling margin reached 16 percent. business. The Industrial Weighing Division focuses on industrial weighing and control technologies. Sartorius Preference Shares New in the TecDax In June 2012, Sartorius preference shares were admitted to the German index of technology stocks, TecDax. With a year-over-year gain of nearly 90 percent, this stock was the top performer in the TecDax. At the end of 2012, Deutsche Börse’s free-float analysis ranked Sartorius shares 13th in market capitalization and 24th in stock-exchange turnover. 2012 – Sartorius Continues to Grow Product Portfolio Extended by Cell Culture Media In fiscal 2012, Sartorius reinforced its product portfolio in the Bioprocess Solutions Division by adding cell culture media. Similar to bags, filters or bioreactors, cell culture media are single-use products and are required in every cell cultivation process. Therefore, these media are an ideal fit with the company’s current array of products. The respective cooperation agreement was signed with the Swiss life science group Lonza in December 2012. Many New Products Launched Investments for Further Growth Again in 2012, Sartorius unveiled numerous product innovations. For example, the Bioprocess Solutions Division Sartorius invested heavily in 2012 to enable further presented the sterilizing-grade filter Sartopore Platinum, growth in the future as well. A key project was the which, thanks to its outstanding performance specifications, expansion of its manufacture of aseptic bags as well as significantly increases the cost-effectiveness of biopharma- filters at its site in Yauco, Puerto Rico, which entailed ceutical manufacturing processes. With its alliance partner relocation of bag manufacture from Concord, California, G-Con, Sartorius showcased its mobile cleanroom facility to Yauco. Moreover, membrane production was signifi- FlexMoSys. Its modular cleanroom pods enable fast and cantly expanded in Goettingen, Germany, and operations flexible manufacture of relatively small quantities of active with added capacity were started up for equipment manu- pharmaceutical ingredients. Among the key product facture in Guxhagen, also in Germany. A new, globally innovations of the Lab Products & Services Division were standardized ERP system was implemented in October the Secura laboratory balance and the Picus pipette. As the 2012 at the company’s Goettingen site and will be rolled smallest and most accurate electronic pipette on the market, out throughout the Group beginning in 2013. Based on it sets new standards in ergonomics and reliability. this system, Sartorius also created a business-process and IT platform for sustainable and profitable growth. Our Mission Sartorius is a leading international laboratory and process technology provider for the biotech, pharma- ceutical and food industries. As partners, we help our customers all over the globe to implement com- plex and quality-critical laboratory and production processes in a time- and cost-efficient way. Our inno- vative products, solutions and services therefore focus on the key value-creating segments of our target markets. Strongly rooted in the scientific and research communities and closely allied with customers and technology partners, we are dedicated to our philoso- phy of “turning science into solutions” on a daily basis. In the future as well, we will further seek to systemat- ically expand our position as an application-oriented technology group. Based on our clear-cut strategy, we will continue to sustainably create value for customers and shareholders alike and translate our growth into high profitability. 01 To Our Shareholders 6 Report of the Executive Board 8 Sartorius Group Executive Committee 10 Report of the Supervisory Board 13 Sartorius Shares This annual report contains statements concerning the Sartorius Group’s 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 apply. 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. This is a translation of the original German-language annual report. Sartorius shall not assume any liability for the correctness of this translation. The original German annual report is the legally binding version. Furthermore, Sartorius reserves the right not to be responsible for the topicality, correctness, completeness or quality of the information provided. Liability claims regarding damage caused by the use of any informa- tion provided, including any kind of information which is incomplete or incorrect, will therefore be rejected. Throughout the Annual Report, differences may be apparent as a result of rounding during addition. Contents 02 Group Management Report 04 Consolidated Financial Statements and Notes 20 Structure and Management of the Group 21 Macroeconomic Environment and 82 Statement of Financial Position Conditions in the Sectors 84 Income Statement 24 Group Business Development 85 Statement of Cash Flows 30 Business Development of the 86 Statement of Changes in Equity Bioprocess Solutions Division 88 Segment Reports 37 Business Development of the Lab Products & Services Division 90 Notes to the Consolidated Financial Statements 41 Business Development of the 133 Independent Auditors’ Report Industrial Weighing Division 134 Executive Board and Supervisory Board 45 Net Worth and Financial Position 48 Annual Financial Statements of Sartorius AG 50 Forecast Report 53 Report on Material Events 05 Supplementary Information 54 Risk and Opportunities Report 140 Glossary 58 Description of the Key Features of the Internal Control and Risk Management System 142 Index 60 Explanatory Report of the Executive Board 144 A Local Presence Worldwide 61 Corporate Governance Report 146 Addresses 64 Remuneration Report 03 Sustainability Report 73 Sustainable Corporate Management 76 Ecological Sustainability 79 Contributing to Society To Our Shareholders Report of the Executive Board Ladies and Gentlemen, I am pleased to report that 2012 was another very At the beginning of the year, we implemented the new successful business year for Sartorius.