“Our third quarter went as expected. Business with prefillable syringes and pharmaceutical plastic packaging in particular performed well. We continue on our growth trajectory with a focus on innovation, quality, digitalization and capacity expansion. In late September, we opened an innovation centre in the US. There we pool our experts and expertise in glass and drive innovation in pharmaceutical glass,” commented Dietmar Siemssen, CEO of Gerresheimer AG.
Gerresheimer increased revenues by 1.4 percent to 358.6 million EUR in the third quarter of the financial year 2019, up from 353.7 million EUR in the prior-year quarter. The syringe business performed well in the third quarter of 2019. Revenues with primary pharmaceutical plastic packaging also grew. Additionally, the medical plastic systems business did well, notably due to engineering and tooling revenues. Revenues from glass primary packaging once again showed healthy growth in Asia. In Europe they were stable. The positive market trend in North America continues. Demand from a major customer there has temporarily decreased due to his operational problems. In the cosmetics packaging business, the Company is increasingly targeting sustainable solutions, primarily through increased use of recycled glass and recycled plastic resin.
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. At the end of September, a Glass Innovation and Technology Center in Vineland (New Jersey, USA) was opened at a major customer event. The centre’s purpose is to pool expertise in glass as well as drive innovation in pharmaceutical glass and related processes, including increased digitalization. Located directly adjacent to a Gerresheimer production plant for injection vials and cartridges, the newly built, ultra-modern innovation centre allows joint development on site with global pharma customers.
In figures, capital expenditure of 45.5 million EUR was incurred in the third quarter of 2019. This was mainly directed at the continued expansion of inhaler production capacity at the Horsovsky Tyn plant in the Czech Republic coupled with further additions to production capacity and to the product portfolio. Other capital expenditure in the quarter under review related to the planned furnace overhaul in Essen, Germany, as well as production line upgrading and automation at various plants.
Third quarter adjusted EBITDA at constant exchange rates came to EUR 71.1m, compared to 69.8 million EUR adjusted for one-off effects a year earlier. Adjusted net income in the third quarter of 2019 stood at 30.7 million EUR, versus 28.6 million EUR excluding also one-off effects in the prior-year quarter. Adjusted earnings per share after non-controlling interests were 0.96 EUR in the third quarter of 2019, compared to a prior-year figure of 0.89 EUR excluding one-off effects. There was a temporary decrease in adjusted EBITDA leverage (net financial debt to adjusted EBITDA over the last twelve months) to 2.4x.
Gerresheimer has negotiated its refinancing on improved conditions. Based on the good business results, the syndicated loan—in the form of a revolving credit facility—was increased by another 100.0 million EUR, from 450.0 million EUR to 550.0 million EUR. Gerresheimer expects a long-term reduction in financing costs by some 1 million EUR per year.
Outlook
Gerresheimer’s expectations for the financial year 2019 remain unchanged. They are 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: www.gerresheimer.com/en/investor-relations/reports