Sartorius lowers 2023 forecast as COVID hangover drags on

Sales and margins will be lower than expected due to post-pandemic reductions in inventories, but Sartorius believes this a temporary blip in the highly positive biopharma space.

It was October 2022 when bioprocess vendor Sartorius warned of a sales growth comedown after demand during the COVID-19 pandemic drove two years of unprecedented growth.

And while the realization of a “swift normalization of demand” was factored into the firm’s 2023 forecasts, six months in and Sartorius has lowered its expectations for the year.

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According to a statement, the factors behind this are “the longer-than-expected lasting reduction in inventories among biopharma customers following the Covid-19 pandemic as well as the relatively low investment activities of customers due to available production capacities.”

Specifically, management says the firm is set to see a percentage decline in the low to mid-teens for both its group and Bioprocess Solutions division. Previously, Sartorius had expected revenue growth in the low single-digit percentage range.

Expected EBITDA margin is also expected to drop to around 30% from the forecasted 33.8%.

“Sartorius views the current demand normalization after the pandemic as a phase that only temporarily overshadows the highly positive growth drivers of the life science and biopharma markets. Accordingly, the company does not change its medium-term targets until 2025.”

Sartorius is not alone among vendors in feeling the post-pandemic hangover. Danaher Corporation, which owns bioprocess peer Cytiva, has seen drops as high as 20% in orders coming out of COVID and has spoken of destocking issues within the industry. Thermo Fisher, meanwhile, has claimed to have been insulated from much of the industry trend but has attributed cut jobs across several bioprocess sites citing “macro-economic conditions.”