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Gerresheimer confirms guidance despite moderate start to the year

, Gerresheimer AG
  • Revenues down 5.4% in first quarter of 2017 to EUR 302.8m
  • Adjusted EBITDA margin at 19.8%, as in prior year
  • EBITDA leverage unchanged at 2.6
  • Guidance for financial year 2017 confirmed, with consolidated revenues initially at lower end of range

 Group Key Figures (IFRS; Financial Year end November 30)

Gerresheimer AG made a moderate start to financial year 2017, as expected. With revenues slightly down, the adjusted EBITDA margin was held level with the prioryear period. “We had expected a weaker start to the year. As in many other sectors, there has been increased uncertainty notably with regard to North America, as reflected in the current reticence among a number of our pharma customers to place orders. Nonetheless, we continue to see good growth opportunities for us in the years ahead. While systematically working at continuous productivity and quality improvements, we are adding to our product portfolio for very demanding applications,” said Uwe Röhrhoff, CEO of Gerresheimer AG.

Gerresheimer generated revenues of EUR 302.8m in the first quarter of financial year 2017 (December 1, 2016 to February 28, 2017), marking a reduction of 5.4% on the prior-year quarter. On an organic basis— meaning at constant exchange rates and adjusted for acquisitions and divestments—revenues decreased by 6.2%. The main reason for the lower revenues relates to medical systems such as insulin pens, lancets for diabetics and asthma inhalers. Engineering and tooling revenues in this business were down on the prior year. Temporary intra-year fluctuations are normal here and essentially track the billing of largescale customer projects. Alongside this, there was an expected decrease in demand from a number of pharma customers where Gerresheimer is the sole supplier. Revenues with pharma bottles, injection vials, ampoules and cartridges were slightly reduced compared with the prior year. This was largely due to a drop in revenues in the North America region, where greater uncertainty with regard to the new US government triggered a relatively pronounced reticence among a number of large pharma customers to place orders. The cosmetic glass business in Europe increased revenues in the first quarter.

Adjusted EBITDA went down in the first quarter from EUR 63.5m to EUR 59.9m. At constant exchange rates, adjusted EBITDA came to EUR 59.8m. Despite the lower revenues, the adjusted EBITDA margin was held steady at 19.8%, which is a record level for a first quarter. The Gerresheimer Group reported net income from continuing operations of EUR 13.3m for the first three months, EUR 2.9m below the prior-year figure. Adjusted net income from continuing operations was EUR 19.2m, compared with EUR 23.3m in the prior-year quarter. Adjusted earnings from continuing operations per share after non-controlling interests was EUR 0.60 in the first quarter, as against EUR 0.72 in the prior-year period.  

Gerresheimer incurred EUR 15.1m in capital expenditure in the first quarter, compared with EUR 13.7m in the prior-year quarter. The Company has also continued to invest in its quality and productivity initiatives. In addition, it will be increasing capacity in a business unit in the USA and has completed a projected furnace overhaul at its Belgian glass plant. 

Measured as net financial debt to adjusted EBITDA, the leverage of 2.6 showed no change relative to November 30, 2016.


Gerresheimer’s expectations for financial year 2017 remain unchanged. They are set out in the following, in each case based on constant exchange rates. For the US dollar—which is expected to have the largest currency impact on the Group currency, accounting for about one third of Group revenues in 2017—Gerresheimer has assumed an exchange rate of approximately USD 1.10 to EUR 1.00.

On current information, Gerresheimer’s expectation for consolidated revenues at constant exchange rates in financial year 2017 is—for the time being—at the lower end of the guidance range of approximately EUR 1.405bn to EUR 1.455bn, compared with a prior-year figure of EUR 1,375.5m. Adjusted EBITDA is anticipated to increase from EUR 308m in 2016 to some EUR 320m (plus or minus EUR 10m) in financial year 2017. Based on the improvement in adjusted EBITDA, adjusted earnings per share after non-controlling interests—the basis of Gerresheimer AG’s dividend policy—is projected to rise to a figure ranging between EUR 4.20 per share and EUR 4.55 per share (2016 adjusted for the discontinued operation comprising the Life Science Research Division: EUR 4.07 per share).

Largely due to the favorable growth prospects and driven by initiatives to boost productivity and quality, capital expenditure in financial year 2017 is forecast to total around 8% of revenues at constant exchange rates.

The Company’s expectations through to the end of 2018 are as follows:

  • Gerresheimer aims for average organic revenue growth of between 4% and 5%.
  • For the adjusted EBITDA margin, the Group’s target is some 23% for financial year 2018.
  • In order to meet these targets, Gerresheimer will in all probability have to incur annual capital expenditure amounting to around 8% of revenues at constant exchange rates.
  • The Group’s net working capital profile improved significantly. Among other factors, this was the result of not only the operating measures but also the sale of the glass tubing business and the Life Science Research Division as well as the acquisition of Centor. Going forward, the Company therefore anticipates that average net working capital as a percentage of revenues will be approximately 16% (previously around 17%).
  • Gerresheimer expects that its operating cash flow margin will continue to be around 13%. 

The Group’s long-term target is as follows:

  • As before, attainment of at least 12% ROCE.
  • Gerresheimer considers a net financial debt to adjusted EBITDA ratio of around 2.5 to be appropriate, with temporary variation above or below this tolerated because expedient M&A activity cannot be planned in detail.

The quarterly report is available here:

, Gerresheimer AG

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