Welcome to the presentation of Sartorius and Sartorius Stedim Biotech on the Preliminary Results 2025. Please note that the call is being recorded and streamed on Sartorius' website. Your participation in this implies you consent with this. A replay will be available shortly after the call. I would now like to turn the conference over to Petra Müller, Head of Investor Relations of Sartorius.
Thank you, Operator. Hello and a warm welcome from my side. I'm joined today by our CEO, Michael Grosse, by Florian Funck, our CFO, by René Fáber, Head of our Bioprocessing Division and CEO of Sartorius Stedim Biotech, and by Alexandra Gatzemeyer, Head of our Lab Products and Services Division. As always, we will start with prepared remarks followed by the Q&A session. As the call is scheduled to run over, please limit your question to one so that as many participants as possible can take part. Please note that management comments during this call will include forward-looking statements that involve risks and uncertainties. For discussion of risk factors, I encourage you to review the safe harbor statement contained in today's press release and presentation. With that, I'm pleased to hand over to Michael Grosse, CEO of Sartorius. Michael, please go ahead.
Thank you very much, Petra, and a warm welcome also from my side. Thank you all for joining us today for our Preliminary Full Year 2025 results. Before we begin, I would like to sincerely thank all of our colleagues across Sartorius for their commitment and dedication over the past year. Their passion, professionalism, and strong focus on execution are clearly reflected in our results we are presenting today. I would also like to personally thank everyone who's made it such a smooth and rewarding experience for me to step into my role as a CEO. Particular thanks as well to my colleagues here, Alexandra, René, and Florian from the executive team. It's been really a great journey up to now, fantastic work on the strategy, and great things to come.
I don't want to miss out as well on saying thank you to the team here from Investor Relations, Communications, and Finance because I think the workload over the last couple of weeks and days has been tremendous in order to get us all prepared and get our reporting in place. Thank you all for that. Now, let me briefly summarize key messages that we would like to share with you today. First of all, 2025 was characterized by a return to normal demand behavior for consumables and continued cautious investment activities by our customers. Combined with an active operational management in a still challenging environment, we delivered improved operational and financial performance. Am I on the right? Okay. All right. Supported by the improving demand trends, mainly on the consumable side and the operating leverage inherent in our model, Sartorius achieved considerable profitable growth.
For the full year, we delivered results slightly ahead of our upgraded full year 2025 sales guidance. Profitability landed in the upper half of our initial guidance from April and exceeded our October EBITDA target with a margin of 29.7%. This performance reflects growing volumes, operating leverage, and strong execution. Now, growth was once again driven by our recurring business across both divisions. In Bioprocess Solutions, strong double-digit growth in recurring revenue more than offset continued softness in equipment, which however stabilized over the year. In Lab Products and Services, performance improved gradually as expected. Growth in H2 was driven by recurring business, while instruments showed positive momentum, also supported by product launches in bioanalytics. Our operating performance allowed us to further reduce our leverage ratio, underscoring our commitment to financial discipline and a strong balance sheet. Overall, in 2025, we laid a solid foundation for the year 2026.
For the group, we expected sales growth of around 5%-9% with an underlying EBITDA margin slightly above 30%. Let me now turn to action we are taking to enable future growth. Let's talk about innovation and partnerships. We have made tangible progress in two key areas: innovation and the expansion of our resilient global R&D and production capacity. We launched several new solutions across both divisions. In bioprocessing, we made progress in more sustainable product design with the launch of Sartopore Evo, a PFAS-free filtration solution which addresses growing regulatory and customer expectations around the elimination of persistent substances while maintaining the high performance and reliability our customers require. We also launched the Sartocon cassette, further strengthening our offering for efficient and scalable downstream processing, particularly for viral vector purification.
Now, on the equipment side, we introduced the uncertain Continuous Bioprocessing Platform developed with Sanofi, which faces high customer interest. This platform supports the industry's transition from traditional batch production to continuous processes, enabling faster, more efficient, and more sustainable manufacturing workflows. And our teams advanced our bioanalytical portfolio, including the only live cell imaging system with confocal microscopy inside an incubator, a really important step forward for the work with complex 3D cell models. We further strengthened this area also through the acquisition of MatTek, expanding our portfolio of advanced 3D cell models that more closely mimic human tissue, deliver more predictive and reproducible results, and help reduce the need for animal testing. And we entered into a partnership with Nanotein Technologies, enhancing our capabilities in cell expansion and activation to support next-generation biologics. In parallel, we continue to invest in a resilient global manufacturing footprint.
We completed the expansion in Albania and progressed with the expansion in Germany, as well as with the construction of our greenfield site in Songdo, South Korea, ensuring scalability, supply reliability, and proximity to our customers. Taken together, these actions strengthen our ability to support customers as markets normalize and position for Sartorius for sustainable innovation-led growth over the coming years. With this, let's take a closer look into our numbers. Florian.
Yeah, thank you, Michael. And a warm welcome also from my side to everybody out there. I'm happy to take you through our numbers that reflect, in my perspective, a consistently strong performance in the year 2025. So let's start with top-line performance. Our sales revenue increased by 7.6% in constant currencies and 4.7% in reported currencies, reaching slightly more than EUR 3.5 billion. This positive development was driven by mid-teens growth in our recurring business in 2025, which represents by far the largest part of our business, as you know. Our non-recurring business remained soft on a full-year basis but clearly stabilized in H2 and was above H1 in absolute numbers as expected. The difference between constant currency and reported growth was primarily driven by US dollar weakness, which represents a headwind of almost 300 basis points to reported sales growth in fiscal year 2025.
Our full-year performance was also influenced by US tariffs. The successful implementation of tariff surcharges contributed approximately 1 percentage point to sales revenue growth. Order intake developed strongly, growing faster than sales. And as a result, our 12-month rolling book-to-bill ratio remained consistently above 1 throughout the year 2025, although, as expected and also communicated in our last quarterly call, it declined slightly sequentially in Q4 due to a very strong prior-year comparison. In absolute terms, order intake in Q4 was roughly on par with the exceptionally strong Q4 2024, you remember that above EUR 1 billion figure that we posted there, and thus was the quarter with the highest absolute order intake in 2025. And therefore, we entered 2026 on the back of a strong order book. Looking at our divisions in more detail, Bioprocess Solutions delivered another strong quarter, bringing full-year sales revenue growth to 9.5% in constant currency.
Growth was driven by mid-teens growth in consumables throughout the year, while equipment remained soft, as Michael already mentioned, but was clearly stabilizing with H2 2025 sales being double-digit percentage above H1 2025 sales. Lab Products and Services delivered a resilient performance in a challenging market environment. Sales were essentially flat at 0.2% in constant currencies plus, supported by solid momentum in consumables and services. The acquisition of MatTek contributed slightly more than 1 percentage point to growth. Instrument sales were impacted by constrained CapEx spending in life science research and markets. However, we are seeing encouraging signs of stabilization, supported by positive momentum in bioanalytics in the second half, driven in part also by the launch of several updated instruments in that market space. Let me also quickly elaborate on our regional performance. EMEA sales performance remained robust, with growth of almost 6% in 2025.
As a reminder, the recovery in EMEA started earlier than in other regions and therefore faces higher base effects compared to the Americas or APEC. The Americas outperformed, growing by 8.9% like APEC, which also grew by 8.9%. In APEC, China continued to stabilize with early signs of improvement. Excluding China, the APEC region delivered low double-digit growth in the year 2025. Let's now turn to our profitability. In addition to robust growth momentum, we achieved a strong improvement in profitability over the past 12 months. Underlying EBITDA increased overproportionately by 11.2% to EUR 1.052 billion—I'm sorry—with the margin expanding by 170 basis points to 29.7%. This margin improvement was driven by positive volume and product mix effects, as well as economies of scale, further underpinned by cost discipline, more than offsetting FX and tariff-related headwinds of around 1 percentage point.
Looking at the divisional profit distribution, profitability in our BPS division developed strongly. Underlying EBITDA increased by 15.2% to EUR 907 million, and the margin improved by 240 basis points to 31.7% based on the effects just mentioned, also for the group. In LPS, margin declined year-on-year to 21.5%, roughly 50/50, reflecting an unfavorable product mix on the one-hand side as well as FX and tariff-related impacts on the other-hand side. Now, let's take a look at the performance below underlying EBITDA, where both net profit and cash flow developed well. The strong increase in underlying EBITDA of 11% translated into overproportional growth in underlying net profit of 18% and reported net profits of 84%. As a result, underlying EPS also grew at a very strong 18%.
Turning to cash-related items, operating cash flow amounted to EUR 837 million, below the exceptionally strong prior-year level of EUR 976 million, which was positively impacted by significant one-off inventory reduction measures in the year 2024. While business volume improved strongly in 2025, working capital remained largely unchanged. Going forward, we remain committed to keeping net working capital growth below our sales growth. Free cash flow amounted to EUR 390 million, reflecting the development of our operating cash flow. In addition, free cash flow is also reflecting the slightly increased CapEx spending from EUR 410 million to EUR 441 million. Accordingly, the CapEx ratio was 12.5%, which is exactly in line with our guidance throughout the year. To conclude our section on 2025 financials, let us now look at the development of the balance sheet-related key figures. We see a strong equity ratio of 39.8%.
The increase versus year in 2024 is mainly due to some repayments on financial instruments using our strong cash position and therefore tightening the balance sheet total. Net debt remained largely unchanged, while gross debt has been reduced by EUR 277 million, and despite payouts of the acquisition of MatTek in summer 2025 of EUR 70 million. The leverage ratio defined as net debt to underlying EBITDA improved as expected from 3.96 times to 3.55 times in 2025, despite the acquisition of MatTek, which added approximately 0.1 turns to the ratio. So we are well underway on our planned deleveraging path. And as you can see in the title, we stay committed to our investment-grade rating. With that, I would like to hand back over to Michael.
Thank you, Florian. So overall, we are very pleased with the strong performance Sartorius delivered in 2025, supported by improving demand trends, mainly on the consumable side. In addition, the results demonstrate the resilience of our business model and confirm the attractive long-term opportunities in the biopharma and life science markets. We will remain focused on disciplined execution, targeted investments in innovation and capacity, and operational excellence. Looking at 2026, it is clear that our industry is back on track but has not yet fully reached its long-term growth level, especially in terms of demand for equipment and instruments. Since the year is still young, we have deliberately set a broad guidance range to account for continued hype, macroeconomics, and industry-specific volatility. The lower end of the range reflects a cautious scenario in which market conditions weaken.
However, we currently expect market dynamics to continue normalizing and positive trends to continue. For 2026, we expect to continue our profitable growth trajectory with a continued positive development in the Bioprocess Solutions division and a recovery in the Lab Products and Services division. For the group, we expect sales growth in constant currencies of around 5%-9%, including a positive effect from the MatTek acquisition and U.S. tariff-related surcharges totaling approximately 1 percentage point. For the underlying EBITDA margin, we expect an increase to slightly above 30%, in which a tactical margin dilution of around 50 basis points from tariff surcharges is already reflected. In Bioprocess Solutions, we anticipate sales growth of around 6%-10%, mainly driven by the recurring business, while we expect equipment business to remain at least stable. The underlying EBITDA margin should be slightly above 32%.
In Lab Products and Services, sales growth is expected at around 2%-6%, including a growth contribution of 1.5 percentage points from MatTek. This reflects a continued growth recurring business and an at least stable instrument business. We expect underlying EBITDA margin to be slightly below 21%, mainly influenced by deliberate investments in advanced cell models, with additional headwinds from unfavorable mix, Forex, and the dilutive effect of the existing tariffs. CapEx ratio should be around the prior-year level as we will continue to invest selectively and with discipline in expanding our global research and manufacturing footprint. Net debt to underlying EBITDA should decrease to slightly above 3 times at year-end. As usual, we will provide some additional information for modeling purpose.
As you can see, with the Euro/US rate of 1.2, there would be a headwind of around 2 percentage points on the reported versus constant currency growth in full year 2026. In Q1, the headwind would be around 4 percentage points at a Euro/US rate of 1.2. Taken together, we are confident that Sartorius is well positioned to benefit from continued recovery. With that, I would now like to hand over to René, who will walk us through the financials of Sartorius Stedim Biotech in more detail. René, over to you.
Thank you very much, Michael. Also, from my side, welcome, and thank you for joining us on the call today. In 2025, Sartorius Stedim Biotech achieved considerable profitable growth driven by improving demand, particularly for consumables and operating leverage. This allowed us not only to achieve our updated October 2025 guidance but also to exceed our top-line expectations. Overall, we are very pleased with the results and would like to sincerely thank all our colleagues across Sartorius Stedim Biotech for the commitment, dedication, and really hard work in making 2025 a success. Looking at the numbers, sales for the Sartorius Stedim Biotech group increased by 9.6% in constant currencies, reaching nearly EUR 3 billion. Growth in reported currencies was 6.7%, primarily due to the weaker US dollar, which represented a headwind of almost 300 basis points. The successful implementation of tariff surcharges contributed approximately 1% to sales revenue.
Our high-margin recurring consumables business remained very strong, delivering mid-teens growth, more than offsetting the soft but increasingly stabilizing equipment business. Order intake grew faster than sales, keeping our 12-month rolling book-to-bill ratio consistently above 1. While the ratio declined slightly sequentially in Q4, as Florian explained due to a very strong prior-year comparison, Q4 order intake was roughly on par with the exceptional Q4 2024, making it the highest absolute order intake quarter in 2025. We therefore entered 2026 with a strong order book. Underlying EBITDA increased by 17% to EUR 914 million, driven by volume, product mix, and economies of scale. Consequently, the underlying EBITDA margin improved significantly to 30.8%, an increase of 2.8 percentage points compared to the previous year. Looking at the top-line performance from a regional perspective, EMEA maintained a solid momentum, delivering 7.3% growth.
This robust performance came despite a higher comparison base resulting from an earlier recovery cycle. The Americas grew by almost 12%, followed by Asia-Pacific, growing almost 11%. In APEC, China stabilized and was only slightly diluted to the overall growth. Excluding China and the growth, the region delivered was in the low double-digit range for 2025. I'm also quite pleased with the more recent developments in China. Beyond stabilization as the year progressed, we are now seeing really early signs of recovery. Looking at the net profit and cash flow, underlying EBITDA growth of the strong 17% translated into an overproportional increase in underlying net profit of 26.7% to EUR 428 million and reporting net profit of nearly 52% to EUR 266 million. Underlying EPS rose by 26% to EUR 4.4.
Operating cash flow remained solid at EUR 692 million, although below the high level recorded in the prior year, which was positively influenced by the pooling of inventory that Florian already touched upon. Free cash flow stood at EUR 295 million, and the CapEx as percentage of sales came in at 13.3%. A quick look at our balance sheet metrics. Our equity ratio improved to 51.7% in the end of 2025, with the increase being driven by some repayments of financial liabilities and therefore tightening the balance sheet total. Net debt decreased by EUR 18 million versus year-end 2024, and due to gross debt reduction. Deleveraging is progressing as planned, with the net debt to underlying EBITDA ratio improving to 2.38 by the end of 2025. So we are very well on track on our deleveraging path.
Now, before we move into the Q&A, let me also quickly elaborate on our full-year guidance for the Sartorius Stedim Biotech group. As mentioned earlier, we are very pleased with the strong performance of Sartorius Stedim Biotech, which has delivered across all key financial dimensions. The 2025 results demonstrate the resilience of our business model and confirm the attractive long-term opportunity in the biopharma market. We will remain focused on disciplined execution, targeted investments in innovation and capacity and operational excellence. Looking in 2026, the same is true for Sartorius Stedim Biotech as for Sartorius AG when it comes to the overall environment and industry trends. Therefore, we also have deliberately set a broad guidance range with the lower end of the range reflecting a cautious scenario in which market conditions weaken. However, we currently expect market dynamics to continue normalizing and positive trends to continue.
We expect to stay on our profitable growth path and for 2026, sales revenue growth in the range of around 6%-10% in constant currencies, including a 1 percentage point contribution from the U.S. tariff surcharges. Growth will be mainly driven by the recurring business but against high comps, while the equipment business should remain at least stable. The underlying EBITDA margin should increase to slightly above 31%, in which a technical margin dilution of around 50 basis points from tariff surcharges is reflected. Our CapEx ratio is expected to stay around previous-year level at around 13%, reflecting our ongoing investments into research and resilient production footprint. Our commitment to deleveraging remains unchanged. We anticipate the leverage ratio, the net debt to underlying EBITDA to decrease to slightly above 2 at year-end. Our modeling assumptions, Michael already explained, expected headwinds from acquisitions on Sartorius AG level.
Same is true for Sartorius Stedim Biotech. With this, I will hand over to the operator to begin our Q&A session.
We will now begin the question-and-answer session. Anyone who wishes to ask a question may press Star and 1 on their telephone. You will hear a tone to confirm that you have entered the queue. If you wish to remove yourself from the question queue, you may press Star and 2. Questioners on the phone are requested to disable the loudspeaker mode and eventually turn off the volume from the webcast while asking a question. Anyone who has a question may press Star and 1 at this time. The first question comes from Subbu Nambi from Guggenheim. Please go ahead.
Hey, guys. Good afternoon. Thank you for taking my questions. What does your guidance assume in terms of U.S. onshoring buildouts in 2026? What could drive upside to these expectations?
Yeah. So I'll take that. Subu, thanks for the question. I mean, right now, as we've been seeing that there's lots of plans, some of them really committed, some of them still a bit on the horizon. As we see as well the lead times for order, particularly on the equipment and on the larger system side for Greenfield or for larger expansions, we think that an impact from relevant reshoring activities will most likely not contribute with revenue in 2026. So we've not baked anything of that in our current expectation and assumptions. This would rather be for the year 2027 and beyond where this may have a larger impact. However, we are very closely connected, of course, with all our customers, supporting them on their plans, discussing opportunities as we move forward.
Excluded are from this, of course, very short near-term activities on brownfields and expansions of existing capacity.
Perfect. And a quick follow-up. How did equipment orders for BPS and LPS respectively trend for the quarter, for Q4? And are you starting to see any early signs of recovery? You spoke about comparison and orders, but I was just trying to figure out what about equipment orders separately for LPS and BPS? Thank you so much.
So thank you for the question, although we are not giving further information on that very detailed level. But what I can tell you is, on the one hand side, we have been talking about H2 sales being much stronger than H1 sales. And the same holds true when we look at order intake, where the order intake in H2 was also well within double digits above H1, which, of course, then speaks to the quality of the order book and therefore our cautiously optimistic outlook then also into 2026.
Perfect. Thank you so much, guys.
Next question comes from Richard Vosser from J.P. Morgan. Please go ahead.
Hi. Thanks for taking my question. One question, please. So you've talked about market conditions not fully back to normal for equipment. So just a little bit of elaboration on changes of customer sentiment here. You've talked a little bit just now about equipment orders suggesting improvement. So just thinking about, first, that your confidence in the stabilization of equipment revenues, what's underpinning that in 2026? But also, when do you think equipment could move more back to normal levels? We've seen that happen for consumables in 2025. What's your thinking there? Thank you very much.
Yeah. Thank you for the question. I take it. Let me first get back to 2025. You will remember when we talked about stabilization of equipment. In Q3, we said for H2, 2025, we expect to be in revenues with equipment at least on the levels of H1, maybe slightly above. And you could hear from Florian that H2 came out as stronger, so confirmed the stabilization stronger compared to the H1. So I think that's a clear, yeah, kind of confirmation of our view and expectations and the visibility and the discussions with our customers that the equipment is stabilizing. And now looking, of course, into 2026, we continue to see the positive discussions and have positive discussions with customers. There are tangible projects, sizable projects on the horizon. The order book is healthy, as we mentioned a few minutes ago.
So as Florian put it, a cautiously optimistic looking into the 2026. We believe that the portfolio we have is well-positioned to help customers quickly adjust their capacities. Single-use technologies are designed to provide that flexibility. So yeah, very encouraged about the current sentiment as well as our position and discussions we have with our clients. Yeah. I would like to expand even that from René's perspective. I think the similar situation is true as well for LPS division on the basis of equally, I would say, strong development interest levels in leads and opportunities, particularly on the bioanalytical instrument side, as well as trends that we've seen in the second half, particularly in Q4, coming and resulting into a good level of contribution in both sales and order intake. And again, so same sentiment for us.
But again, I think it will take for sure the full quarter, Q1, for us to have simply better visibility, better understanding the continuation of the order intake trade in order to have a better view whether this requires then a further refinement of our perspective for the full year at that point in time.
Super helpful. Thank you very much.
The next question.
Thank you, Richard.
Pardon. The next question comes from Doug Schenkel from Wolfe Research. Please go ahead.
Hi, everybody. It's Doug Schenkel from Wolfe. Thank you for taking my questions. I'm going to try to do three really quickly. One, I just want to confirm based on your responses to the earlier questions that your 2026 guidance does not currently assume an improvement in bioprocessing equipment demand. So that's the first one.
The second is, can you please bridge to your margin guidance for the year? Specifically, what would be helpful is what's the impact of foreign exchange, tariffs, mix, and operating efficiencies as you incorporate those into your guidance? And then third, Schenkel, many companies in your peer group have taken a more conservative approach to guidance than had been the norm given market challenges over the past several years and given ongoing policy uncertainty. With that in mind and also recognizing that this is issuance as CEO, how would you describe your initial guidance philosophy? Thank you.
Maybe I start to give a little bit more perspective on the margin guidance here. What we know as of now, of course, is roughly the impact of the tariffs on the year 2026, which is to be around 50 basis points. What we do not know is the full FX impact. The weaker the US dollar, the higher this impact might be, although we think we are in a good position to a certain extent also to compensate certain headwinds on the FX side in the margin. Let's say gross improvement in margin that we are seeing if we are taking out tariff and FX impact is definitely a three-digit basis point number, so above 100 basis points, and should be driven to a majority from ongoing operational leverage that we're seeing.
Yeah. Maybe to add to Florian's points there, just because you may have really in mind as well our fantastic margin contribution that we delivered in 2025. Of course, there are other effects that I think are relevant in my mind to keep in mind there. Of course, on the operating leverage, since we are now already throughout the last year on a different level, the effect of this is, of course, diminishing to a point. Keep as well in mind that when it gets to our activities that we launched in the year even before on our cost reduction programs, that the main effect there as well was visible, particularly in 2024 and 2025, still continues in 2026 but less so.
So with this and as well the bit of the question mark how much the equipment will be there in the year 2026, if that is a higher degree of recovery, of course, the margin mix, the mixed effect that we have seen in 2025 was probably as well a bit more favorable compared to 2024 than it may be in 2026 compared to 2025. Then you talked as well a bit about the guidance philosophy. Yeah. I think we tried to express that in our wording already. On the one hand side, it's early in the year. We felt like, okay, we're feeling confident enough in order to quantify our guidance.
But given the fact that it's early in the year, given still the level of uncertainty that we have there in terms of macroeconomic and geopolitical aspects, as you mentioned, I think we want to as well, therefore, be prepared for this and the lack of full visibility for the full year on the basis of order intake and the book-to-bill and the market trends. We felt the philosophy is indeed that we have decided for a wide range with the four percentage points we have there. We don't feel that we are neither overaggressive nor overconservative with what we put out there. However, we feel that we will not celebrate if we achieve only a 6% growth for 2026. That's equally clear.
At the same time, the level where we will lend on versus the mid or even beyond the midpoint is so much dependent now on what will happen. So I think we will be in a better position after the first quarter to give more clarity as the year progresses. And that is why I think the philosophy remains, I would say, remains balanced, remains balanced.
Thank you very much.
The next question.
Thank you, Doug.
The next question comes from Harry Sephton from UBS. Please go ahead.
Brilliant. Thank you very much for taking my question. I do want to ask the consumables piece. So we're seeing a more comfortable high single-digit to low double-digit growth across the big players in the industry on the consumable side. Based on your guidance, it would seem that you're expecting to be more in line with market growth. So what do you see in terms of potential upside or downside risk to market share in the near term on the consumable side? Thank you.
Yeah. I take it. So question on consumables. As you will know, the consumables is very much the majority represents the majority of our revenues for the. I'm talking for the bioprocess division. You will know that most of that recurring revenues, consumables revenues, are linked to commercial manufacturing and consumption of our customers of the products in making commercial drugs. Adding late-stage clinical material production, it comes to around 80% of the consumables revenue are linked to that late-stage plus commercial manufacturing. And that more or less kind of also gives you an idea about what dictates the growth of consumables looking forward. It's very much about the volumes, manufacturing volumes of our customers. We can do little about that, of course. But then once new drugs are being approved or enter these late-stage clinical phases, yeah, that drives additional volumes for these consumables.
So looking forward, I think we have been working consistently over the years with the teams in all regions to make sure we are early with customers and place these consumables spec in, validate when the decisions are made and validations are done, and also working hard with customers to convert wherever possible in ongoing and existing processes towards our products. The highlight of that was, of course, during the pandemic where mainly due to our ability to supply and the customers, we gained market shares and kept or were able also to protect roughly a third of this gain moving forward. So we are, I think, on a very healthy and successful track record to drive that above-market, above-drug volume growth of our consumable revenues. Of course, as we mentioned in presenting our 2025 results, we have seen a strong mid-teens growth of our consumables in 2025.
So, COMS are higher now, looking in 2026. But we are very confident that these fundamentals and the volumes driving the growth of consumables are there, are intact, and are positive about the outlook in 2026 and beyond. Hi, Gary.
The next question comes from James Quigley from Goldman Sachs. Please go ahead.
Great. Thanks for taking my question. I've got one on China, please. So you said in the slides and in the comments that China's starting to show some encouraging signs of growth. I think some of your peers at a recent conference still sounded a bit muted on China growth. So what are you seeing here in the region that's driving those encouraging comments from you across the BPS and the LPS divisions? Thank you.
Yep. So I mean, can get started a little bit. I mean, high-level perspective, again, I think China has really a few years back that I think we've seen a really difficult market environment with as well a very strong level of guided preference with regard to local players for local production. We feel now that a little bit this notion of rebaselining the market has come to an end. We feel now that we are able to right now keep market shares in China and take and benefit from probably the still modest level of the growth that the China market demonstrates. Same time, there's, of course, a lot of innovation activities that we are part of and want to equally, I think, and being asked by customers to be part of their rollout of outlicensing and bringing some of their pipeline development into other regions and markets.
Our expectation for the market, however, overall, is still a rather flatish or rather very modest level of degree of growth expectation given as well the prior year performance that we've seen. So we don't see and we don't expect naturally a big turnaround of that momentum. And it's still probably there to come later. At the same time, there's a big overhang and a high-capacity buildup on the equipment side. So particularly on the equipment side, we feel as well that China will in the year 2026 be a rather muted market. But on consumables, we think it will be part of the game. And yeah, as we said, we have modest expectations here on the market.
Excellent. Thank you.
Thank you so much, James.
The next question comes from Charles Pitman-King from Barclays. Please go ahead.
Hi, guys. Thanks very much for taking my questions. Quick question, please, on just the guidance again. Just trying to relate the kind of two separate statements of the low end of your guidance range reflecting kind of deteriorating market outlooks, but also your commentary around the strong order book and equipment being at least stable. Can you confirm, therefore, that the low end of your guidance range reflects equipment being stable supported by your existing backlog and other market deteriorations impacting consumables?
And then just a quick clarification on margins. Just wondering why you're only providing a kind of bottom end of that range. Is it the implication that at the top end of the range, you have rising equipment which will offset the margin such that you're only competent to provide at that bottom end of the range? I'm just trying to yeah, just thinking about how you're setting this up. Thank you.
So first part, yeah, I mean.
First part of the question, just. Charles, you broke up a little here technically. That's why we are a little puzzled. Could you repeat?
The first part of the question.
Sorry. My question relates to trying to triangulate the two guidance commentaries, one being that your sales could be at the low end of the range upon worsening market conditions, but that you separately expect equipment to be at least stable. I'm just wanting to confirm that your order book means that you have this confidence in your equipment being at least stable and that in the scenario where you hit the low end of the range, that's driven by consumable deterioration more so than any downside to your equipment outlook.
Okay. So I mean, yeah, I mean, again, I think on the lower end of our guidance, as we try to express, we see some level of, I would say, market deterioration overall. So we would see that there is no impact, no positive contribution there from the equipment and possibly as well a slight deterioration even on the consumable side. We see the total mix. So it depends on how you see the two elements of this coming together. But as we say, I mean, if we see the momentum that we've seen right now based on, as you said, the order intake generating equipment and at least stable situation plus the continuation of the current trajectory of the consumables, that would be slightly above the bottom part of the guidance. So we would assume some level of deterioration of that condition. Then I think the other question.
Was on the margin? Was on the margin. Yeah. While we have not given a range for the margin, we have said that we want to reach slightly above. So this is, in a way, open to one side. Now, let's assume we would be on the lower end of our guidance range, the 5% for the group. We would definitely aim to see margin improvement against prior year, but we might not fully reach that. So the margin corridor that we are indicating to with slightly above the 30% was more towards the midpoint of the guidance. If we then come to the upper part of the guidance corridor on top line, of course, there's way more potential on the back of more operational leverage.
Thank you very much.
Thank you, Charles.
The next question comes from Charlie Haywood from Bank of America. Please go ahead.
Charlie Haywood, Bank of America. Thanks for taking the questions. Two. So first one in 2026, is it fair to expect typical seasonality on the bioprocessing side? So I think you've previously commented to Q4, Q1, Q2, Q3. Or given equipment phasing and what looks like a strong fourth quarter for those orders and a 6-12-month order book, might that distort to possibly fueling a stronger second half? And then the second question's just a bit more on midterm. Now that you've spent a bit of time in the business, you'd previously sort of commented to Merck's 9%-10% market outlook, not far from your thinking. I guess how are you currently seeing the bioprocess midterm market growth and the end markets there? Thank you.
Thanks for the question. So I think we can maybe kick off a little bit on the basis that I think, as you know, we don't really break down and guide on the basis of quarterly perspective. So I think in this case, we would like to leave a little bit the breadth of the way of how we look at the year to come in more the total perspective. So we will not provide any specifics as we see the quarters moving forward. Again, I think it is probably more in the nature of the business. If you think about and it's probably a similar pattern that we've seen during the last year. Given the lead times of equipment orders, particularly, we now see that, okay, we generated the order intake in the second half of the year in Q4.
So things with a lead time 6-12 months on the bioprocess side, of course, then we would expect sales realization and all these orders to rather hit the second half of the year than the first half of the year. So that's natural by the lead time of those orders. Yeah. And then in terms of the I mean, the market, yeah, I think we hold to that. I mean, we basically took a look at the market. We'll get back as well a bit more interesting insights on the market analysis that we've done for the capital market that we will provide and bring up in March. However, as we said, we think that the assumption there for the market to be around a 9% growth, I think, is something that's very much in line with our views and with our analysis.
Again, depending a little bit so on this pharma market segment and then the exposure to the market segments. But that corridor is as well in line with our analysis that we've done. And that is well what we'll believe that in our minds, we will measure us against from a mid- and long-term perspective.
Thank you.
You're welcome. Thanks, Charlie.
The next question comes from James Vane-Tempest from Jefferies. Please go ahead.
Yes, hi. Thanks for taking my questions. Just on LPS, actually. You mentioned in the presentation that the rolling book to bill is now more than one, but now you specifically state in both divisions. So I was just kind of curious whether the LPS book to bill turned in Q4 to be above one. And if so, where you're seeing accelerating orders from either certain customer or product groups. And then related to LPS, I mean, the guidance which you've given marks the fourth year of margin decline in a row. I know we're going to hear more in March, but conceptually, how realistic is it from here to get back to levels seen a few years ago, and what would it take to get there? Thank you.
Okay. First part of the question was about the book-to-bill. Sorry, you want to take that?
Yes and no.
Yes and no. If you don't want to take it.
Yeah, exactly.
You want to take it but not answer it, probably.
Yeah, yeah. James, as you know, we would not like to go specifically into that. But let me put it that way. We were quite pleased with what we had seen then in Q4. Let us leave it on that level.
The other one was related to profitability?
No. Growth.
LPS margins, yes, in terms of the fourth year of decline and just thinking about what it would take to get back to where it was.
Yeah. I think this is a question that we should discuss more in detail around the capital markets day if you don't mind.
Okay. No, that's fine. One quick follow-up if I can. And that is just the business play within BPS. Historically, you've kind of alluded to consumables, equipment normalized being 75, 25 approximately. And I know at 9 months, I think you sort of said it was around 85, 15. So just as an approximation, I was just kind of curious where that sort of number set sat at for a year. Thank you.
Okay. Just maybe a short point of clarification. So I think, let's say, the numbers you're referring to on the 75-25 would be on the group level. If we look at BPS, I think we see the rough proportion over the last half year. We'd more talk about 80-20 on that ratio. And again, I think, yeah, that is where we see the talent staying. We don't necessarily believe as well, given the discussion that earlier, that that would be as well roughly the level that we will see as we continue into the year 2026 now.
That's great. Thank you.
You're welcome. Thank you.
The next question comes from Charles Weston from RBC Capital Markets. Please go ahead.
Hello. Thanks for taking the question. You've talked about Europe being ahead or EMEA being ahead in terms of the recovery curve. Does that also mean it's ahead in terms of the equipment order recovery curve? So have you got sort of proof of those orders turning into that interest turning into orders and revenue in Europe? And just a clarification question. You said you have good discussions with your customers to understand their CapEx plans. Can you give us any insight into whether the big investments that they're making is more about them shifting CapEx from other parts of the world into the U.S. or whether they are genuinely adding additional capacity into the U.S. over and above what they would be normally planning?
No, thanks for the question. On EMEA, I think the situation is not that we see any difference here. Yes, the recovery overall happened earlier there, but we cannot now say that we have data that suggests on the equipment recovery that EMEA is ahead of the other regions. So that's not really the case.
Yeah. In the discussions we have with customers on the equipment, they are mostly not today related to the onshoring or reshoring in terms of tangible projects, investments, either replacing old instruments or adding capacities. The discussions around onshoring is more about understanding really what is relevant of the what has been published from the headlines from our customers. What is of relevance for us, of course, you will see a lot of R&D investments being included in these headlines. You will see also investment in classical pharma facilities, final fill drug product facilities. So all less relevant for us. So trying to understand what's really enforceable and then also trying to understand then really what the timing will be and when the discussions about the equipment providers will start. So this is more about where the onshoring discussions are today.
The very, very tangible projects are still less related to that topic.
Thank you.
Next question comes from Odysseas Manesiotis from BNP Paribas. Please go ahead.
Hi. Thanks for taking my questions. Firstly, to better understand the growth deceleration in Q4, I have EMEA around 4% CER for Stedim. Could you give us a feeling of how that's different between equipment consumables or just whether that's the growth we should be expecting for the region as the new normal? Secondly, in order to have a better feeling of the conservative business embedded in your guide, is it fair to say that your book-to-bill for the entirety of the year was pretty much close to your pre-pandemic average of around 1.05? Last quick one. Biotech funding has been quite strong. What's the usual lag that you see between a biotech funding recovery and a pickup in your order intake? Thank you.
So let me maybe start with the growth regarding BPS recurring versus non-recurring in H2 because I think really looking only at one quarter doesn't make sense. Even looking at a semester is already really short-term. But just to give you a feeling, the growth that we've seen in the non-recurring business was very similar to the growth that we've seen also in the consumable business in H2. So this is also a reason besides the effects that we've seen in the order intake why we are taking that confident stance toward 2026. When it comes to book-to-bill, we are not communicating on the level of book-to-bill. Sorry.
In the interest of time, please limit yourself to one question only. The next question comes from Thibault Boutherin from Morgan Stanley. Please go ahead.
Yes. Thank you for taking my question. It's just to come back, can you hear me?
Yes. Yeah, it's okay. Thanks, Thibault.
Yeah. Just to come back on the topic of onshoring and the large CapEx plan that has been announced, there's a question that comes back often from investors, which is, "Is there a risk that because we see CapEx being skewed toward the U.S. in the next few years to see an imbalance between you and your competitor?" So I think the idea from some investors is maybe U.S. peers would be better positioned to benefit from CapEx being skewed to the U.S. So just wanted to know if you could comment on your competitiveness in the U.S., the market share relative to other regions, and give an answer of how a shift of investments to the U.S. in terms of equipment and CapEx for biopharma would impact you.
Yeah. So I take that question. Look, in our industry, and I think it's been always the case, still is the case, the main decision criteria is the technology and the performance. There are customers who don't make really compromises when it comes to how they equip their facilities, if it's for preclinical, small-scale manufacturing, or even commercial. So I think there we and this is where we really see ourselves being ahead with a lot of focus on innovation. So I think for us, the positioning to benefit and participate in the potential onshoring wave is very strong. We have a facility to assemble equipment in the U.S. in the Boston area and Marlborough as well to be close to customers in case of the factory acceptance test and so on for more complex equipment. So I think, yeah, we are ready to take all the opportunities.
The feedback from customers is strong, so positive about the outlook here.
Thank you.
Thank you, Thibault.
Next question comes from Oliver Metzger from Oddo BHF. Please go ahead.
Good afternoon. Thanks for taking my question. It's one more structural question on equipment. So we know from the past, normally, equipment and consumables should grow at a similar rate over the cycle. So we now see consumable demand healthy for a while while equipment is at least lagging behind. Can you comment about the reasons for this reluctance? Is it more still an overhang from, let's say, the time during the pandemic or post-pandemic, or could it be that there is a more structural change as higher-quality consumables might have increased the efficiency or the tightness of a production process, and therefore, some structural lower or slower demand for equipment might be the case for a quite longer period of time before we see more expansion or new manufacturing facilities? So that's to say, certainly upgrades and lower expansion.
Yeah. Thank you for the question. I tried to kind of, yeah, give you more color to think about why this reluctance to invest. You addressed or you ask how much of that is coming with kind of a post-pandemic, we'd call microeconomic cash-driven impact or development. I think that's very much more on that side plus the overcapacities which have been built during the pandemic in some areas versus how you call it, kind of a structural change in a way that by technologies improving, it would require less of this equipment. Actually, here, over years and decades, we have seen exactly the opposite. The better the technology gets, the more of it will be used, especially in single-use manufacturing. The cake of what you can address with single-use increases or growth, the better the technology, the higher the titers, the better the yields are.
I think that's very much a positive and ongoing trend with these improvements. So again, back to your question, I think it's very much on the cash post-pandemic microeconomic impact rather than any different structural technology-related.
Okay. Thank you very much.
Development. Yeah.
Thank you, Oliver.
The next question comes from Falco Friedrichs from Deutsche Bank. Please go ahead.
Thank you. My question is on the LPS margin. When do you expect these investments in advanced cell models to begin contributing positively to the margin of the segment again? And then just a very quick housekeeping one. Is a 27% tax rate a fair assumption again for the Sartorius Group in 2026? Thank you.
Yeah. Let me start with the housekeeping question. We currently think that the 27% is still okay for the year 2026. And on the margin, as I said, it's connected a lot, of course, to our engagement in advanced cell models, which is an emerging business but should not be impacting on a sales side very soon. But rather, we are building up with a more long-term perspective more to elaborate on at our capital markets stage.
Okay. Thank you.
Next question comes from Harry Gillis from Berenberg. Please go ahead.
Hi. Thank you very much for taking the questions. I have one clarification regarding an earlier question on guidance. And sorry, I didn't quite catch this. Does the 6% guidance at the low end of your BPS for BPS growth, does that assume a further decline in equipment sales, sorry, or does your expectation for at least stable equipment hold here and its deterioration in growth in consumables? And secondly, could I just ask you, you expect your CapEx ratio to remain stable at around 12.5% for 2026. How should we think about that over the midterm as some of your larger projects start to roll off? Thank you.
Should I start with the last question on the CapEx rate? So of course, you are asking more of the midterm perspective, but I think we have always quite consistently communicated that we should see from the year 2027 onwards an overall reduction in our CapEx ratio. 2026 is therefore the last year where, especially also driven by our expansion projects in Korea, we are seeing elevated levels of our CapEx ratio to then come down afterwards. More on the capital markets stage.
Then again, on the guidance, just repeat, we said at least flat, so we are not considering any decrease in equipment revenues for 2026 in our guidance.
Very clear. Thank you.
Next question comes from Shubhangi Gupta from HSBC. Please go ahead.
Hi. Thanks for taking my question. So just a clarification for your guidance. So the upper end of your sales growth, does it assume recovery in equipment sales? And if yes, what is the timeline? And how should we think about the freezing of growth in 2026 given H2 has stuff come, especially from strong growth in consumables?
Yeah. Again, so now the question is about the upper range of the guidance. Here, as we said, of course, in that case, we would expect the contribution of both consumables, continued healthy growth as knowing and considering the higher comms coming from 2025, as well as at least a moderate growth in equipment revenues. So that's kind of our current thinking. And again, very positive what we have seen so far, the order book, the trends we see. So quite confident. We are heading there. But as Michael said in the introduction, still early in the year and more to come with our Q1 results.
Yeah. Give us a bit more time on that, please. So on that, however, I think just to add on, I mean, as we said at the other stage, given a bit as well, if we think that one of the contributing or deciding factors towards the upper end will indeed be a more strong recovery and growth contribution as well from the equipment instrument side, again, on the lead times that are there, of course, assumption is probably fair to say that this is something that happens rather later in the year than earlier. So it's something that we would expect to rather beyond Q1 to happen if it happens in the degree that we may hope for, but we don't know.
Just a quick follow-up, can I put a comment on the utilization trend?
I'm sorry to interrupt you, but we have still three more people in the queue. I'm sorry. We have to head on because we are overtime already. Sorry about that. Happy to take your question afterwards.
The next question comes from Anna Snopkowski from KeyBanc . Please go ahead.
Hi. Thanks for taking my question. This is Anna on for Paul Knight. I just was wondering, you mentioned on your last call you were having some early conversations with small CDMO customers. How has this progressed in the quarter, and are those early conversations around equipment broad-based or concentrated in any customer group or certain types of equipment like those that help your customers reduce costs? Thank you.
Yeah. Yeah. Thank you for the question. So yes, absolutely. That was kind of an ongoing development we've seen in 2025. Towards the second half, we've seen the smaller CDMOs also becoming more and more active. We've seen their pipelines filling, their projects coming, and discussions started. And it's both really. It's equipment and consumables. So preparing for delivering on the projects, it's all about getting ready to make the batches, preparing to get and ordering consumables to have them on to build inventories as well as where needed at equipment to prepare the capacity as well. So that's been the development we've seen with them. And it didn't change so far, so also kind of contributes to our positive outlook.
Thank you, Anna.
The next question comes from Naresh Chouhan from Intron Health. Please go ahead.
Hi there. Thanks for taking my question. Just on BPS, when you talk about double-digit consumable growth, can I confirm that this is more like low teens if we exclude China just to give us a sense of where underlying demand is in Western market and the kind of state of the Western market recovery? Thank you.
Yeah. So consumables kind of, yeah, low teens is a fair assumption in a positive outlook, right? And yeah, that's how we are looking forward, not only 2026 but ahead as well. Yeah. So you are right.
Thank you very much.
Thank you, Naresh.
The last question comes from Delphine Le Louët from Versailles. Please go ahead.
Yes. Hi. Thank you very much. I'm sorry because I really don't understand the guidance regarding LPS when it comes to the margin. And so I know when you're trying to push back about the CMD and probably you're right, but that makes me think, is there anything, and especially when we look at the Q4 where we had the margin gain versus the Q3, is there anything more structural that you're planning?
And this is a new way where probably we should think about the division in the future, meaning a complete reorg internally of the LPS division that could justify not having any execution gain coming over the sales growth, even at the midpoint of 4%, which is quite nice for that division, by the way. So any more clarity on that? How should we think about that margin in the context of a back-to-growth and a scenario which is not that bad at the end?
So Delphine, maybe I start and then Michael, especially, to add on on that. But first of all, we definitely think that the LPS business is a 20%+ margin business going forward. On the other hand side, on the current position that we are at, at a margin of 21.5%, knowing that the tariff impact overall in the group is roughly 50 basis points in 2026, knowing that there are unknowns on the FX side, and knowing that we are ramping up our investments through the P&L into ACM, we thought it is appropriate to guide them for the year 2026 with it slightly below 2021.
Yeah. And over and about what Florian said, of course, we want to give you an incentive to join the Capital Markets Day here. Very clearly, any strategic type of consideration about how we see the business, the divisions as we move forward, you're welcome in March to our Capital Markets Day.
Thank you.
You're welcome, Delphine.
There are no more questions from the phone. I would now like to turn the conference back over to Petra Müller, Head of Investor Relations.
Yeah. Thank you very much, Valentina. This concludes today's call. Please reach out to the investor relations team in case of any open questions. We thank you for joining us, and wish you a blessed rest of the day. Take care and see you next time. Thank you. Goodbye.
Thank you. Bye-bye all. Many thanks.
Thanks. Bye.