Gerresheimer reports strong second quarter

2019-07-11, Gerresheimer AG

Revenues up 7.2% on the prior-year quarter to EUR 356.5m
Adjusted EBITDA at EUR 74.2m in second quarter of 2019 (Q2 2018: EUR 71.1m), excluding EUR 26.2m from derecognition of contingent purchase price compo- nents 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 EUR 295m (plus or minus EUR 5m), excluding EUR 118.5m from derecognition of contingent purchase price components from Sensile Medical acquisition in the first half year
Adjusted earnings per share increased to EUR 1.87
New project at Sensile Medical: micro pump for treatment of heart failure

Gerresheimer AG closed the second quarter of the financial year 2019 (March 1, 2019 to May 31, 2019) with strong revenue growth. “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 treat- ment is successfully in use in the European market and is progress- ing positively.

The groundwork is also now being laid in a highly promising new project for the treatment of heart failure,” said Dietmar Siemssen, CEO of Gerresheimer AG.

Gerresheimer increased revenues by 7.2% to EUR 356.5m in the second quarter of the financial year 2019, up from EUR 332.6m 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 EUR 28.6m 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 Sensil 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 EUR 71.1m in the prior-year quarter to EUR 74.2m in the second quarter of 2019. This does not include the EUR 26.2m relating to the derecognition of contingent purchase price compo- nents from the Sensile Medical acquisition. Net income in the second quarter of 2019 was EUR 47.1m, compared to EUR 19.3m in the prior-year quarter.

Adjusted net income after non- controlling interests amounted to EUR 58.7m, compared to a prior-year figure of EUR 26.0m. The figure for the second quarter of 2019 was influ- enced by the positive effect from the derecognition of contingent purchase price components. Adjusted earnings per share after non-controlling interests came to EUR 1.87 in the second quarter of 2019, compared to a prior-year figure of EUR 0.83. 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 EUR 1.4bn to EUR 1.45bn in the financial year 2019.
For adjusted EBITDA, the Company expects a figure of approxi- mately EUR 295m in the financial year 2019 (plus or minus EUR 5m), versus a comparative figure of EUR 289.1m in the financial year 2018. This does not include EUR 118.5m 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 approxi- mately 12% in 2019.

The medium-term indications published on February 14, 2019 remain unchanged.