Gerresheimer reports strong second quarter

Gerresheimer AG closed the second quarter of the financial year 2019 (March 1, 2019 to May 31, 2019) with strong revenue growth

Dietmar Siemssen, CEO of Gerresheimer AG, commented, “We had a successful second quarter. Our business retains its strong momentum. All divisions contributed to the good revenue growth. I am confident that we will meet all of our targets for 2019. Sensile Medical’s micro pump for Parkinson’s treatment is successfully in use in the European market and is progressing positively. The groundwork is also now being laid in a highly promising new project for the treatment of heart failure.”

  • Revenues up 7.2 percent on the prior-year quarter to 356.5 million EUR
  • Adjusted EBITDA at 74.2 million EUR in second quarter of 2019 (Q2 2018: 71.1 million EUR), excluding 26.2 million EUR from derecognition of contingent purchase price components in connection with Sensile Medical acquisition
  • Revenue guidance confirmed without change; guidance on adjusted EBITDA at constant exchange rates for the financial year 2019 approximately 295 million EUR (plus or minus 5 million EUR), excluding 118.5 million EUR from derecognition of contingent purchase price components from Sensile Medical acquisition in the first half year
  • Adjusted earnings per share increased to 1.87 EUR
  • New project at Sensile Medical: micro pump for treatment of heart failure

Gerresheimer increased revenues by 7.2 percent to 356.5 million EUR in the second quarter of the financial year 2019, up from 332.6 million EUR in the prior-year quarter. The syringe business performed well in the second quarter of 2019. Revenues with plastic primary pharmaceutical packaging also grew. The medical plastic systems business was stable. Moulded glass primary packaging revenues increased, mainly due to a rise in demand from cosmetics customers. The injection vial, ampoule and cartridge business did particularly well in Europe and Asia.

Gerresheimer is pursuing a large number of projects for profitable growth and enhanced productivity. These projects are being systematically implemented and are well on schedule. They include the expansion of syringe production at the plant in Buende, Germany, and expansion of the pharmaceutical primary plastic packaging plant in Anapolis, Brazil. The moulded glass plant in Essen, Germany, is to undergo a furnace overhaul in conjunction with capacity expansion and further automation.

In figures, capital expenditure of 28.6 million EUR was incurred in the second quarter of 2019. This was mainly directed at the continued expansion of inhaler production capacity at the Horsovsky Tyn plant in the Czech Republic together with other additions to production capacity and to the product portfolio. Other capital expenditure in the quarter under review related to the prepayments for the furnace overhaul in Essen, Germany, as well as production plant modernization and automation at various plants.

Subsidiary Sensile Medical also made progress: the wearable micro infusion pump specially developed by Sensile Medical for EVER Pharma has already been commercialized for Parkinson’s treatment in several European countries. The micro pump allows Parkinson’s sufferers greater independence in their daily lives. The broad application range of the micro pump and of its modular standard engineering is demonstrated by a highly promising new project with great market potential. The micro pump is to be used in the treatment of heart failure. At present, the groundwork for this new project is being laid.

Adjusted EBITDA increased from 71.1 million EUR in the prior-year quarter to 74.2 million EUR in the second quarter of 2019. This does not include the 26.2 million EUR relating to the derecognition of contingent purchase price components from the Sensile Medical acquisition.

Net income in the second quarter of 2019 was 47.1 million EUR, compared to 19.3 million EUR in the prior-year quarter. Adjusted net income after non-controlling interests amounted to 58.7 million EUR, compared to a prior-year figure of EUR 26.0m. The figure for the second quarter of 2019 was influenced by the positive effect from the derecognition of contingent purchase price components. Adjusted earnings per share after non-controlling interests came to 1.87 EUR in the second quarter of 2019, compared to a prior-year figure of 0.83 EUR.

Adjusted EBITDA leverage (net financial debt to adjusted EBITDA over the last twelve months) temporarily decreased to 2.3x. The decrease relates to the higher adjusted EBITDA.

Outlook
Gerresheimer’s expectations for the financial year 2019 are as set out in the following, in each case based on constant exchange rates.

  • Revenues are expected to be in the range of approximately 1.4 billion EUR to 1.45 billion EUR in the financial year 2019.
  • For adjusted EBITDA, the Company expects a figure of approximately 295 million EUR in the financial year 2019 (plus or minus 5 million EUR), versus a comparative figure of 289.1 million EUR in the financial year 2018. This does not include 118.5 million EUR in other operating income already recognized in the first half of 2019 due to derecognition of contingent purchase price components from the Sensile Medical acquisition.
  • Capital expenditure as a percentage of revenues will be approximately 12 percent in 2019.

The medium-term indications published on February 14, 2019 remain unchanged.
The full quarterly report is available here.

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