Gerresheimer AG: Gerresheimer back on growth path
DGAP-News: Gerresheimer AG / Key word(s): Annual Results
Gerresheimer back on growth path
- Revenues at constant exchange rates up 4.3% in the financial year 2018 to EUR 1,406.7m
- Adjusted EBITDA at constant exchange rates at EUR 307.5m, excluding the Advanced Technologies Division and other one-off effects, and despite substantially negative energy costs and resin prices
- Strong adjusted net income after non-controlling interests at EUR 178.0m (prior year: EUR 127.5m)
- Sensile Medical acquired in July 2018 and successfully integrated; new Advanced Technologies Division established
- Further increase in proposed dividend to EUR 1.15 per share (prior year: EUR 1.10)
- Medium-term indication: expecting 4% to 7% average revenue growth at constant exchange rates
Duesseldorf, February 14, 2019 - Gerresheimer AG closed the financial year 2018 (December 1, 2017 to November 30, 2018) with good growth. "2018 was a successful year. We attained our goals. Gerresheimer has excellently paved the way for profitable future growth. On top of growth in our core business of pharmaceutical primary packaging, drug delivery devices and cosmetics packaging, we will develop additional growth momentum in the medium and long term. We will be helped in this by our good innovation pipeline and the new Advanced Technologies Division," said Dietmar Siemssen, CEO of Gerresheimer AG.
Thanks in particular to a strong fourth quarter, Gerresheimer increased revenues at constant exchange rates by 4.3% from EUR 1,348.3m to EUR 1,406.7m in the financial year 2018. Reported revenues, meaning after exchange rate changes and acquisitions, grew in the financial year 2018 by 1.4% to EUR 1,367.7m. Organically-that is, adjusted for exchange rate effects, acquisitions and divestments-revenues were up 3.4% on the prior year.
The business with injection vials, ampoules and cartridges in the US saw a clear recovery in 2018. Molded glass also progressed well, with cosmetic glass products experiencing especially strong demand. Plastic vials for prescription drugs sold well in the US in 2018, as did plastic pharmaceutical packaging in India and South America. In Europe, plastic pharmaceutical products did slightly better than in the prior year. Syringe sales were also slightly up on the prior-year figure. Medical plastics systems showed only marginal growth as Gerresheimer had lost a contract for inhalers in Europe. As a result, the Company decided to close the affected plant in Kuessnacht, Switzerland, and implement further reorganization measures in that business. Inhaler production performed very well in the USA, on the basis of which Gerresheimer won a follow-up order for its plant in Horsovsky Tyn, Czech Republic.
Adjusted EBITDA at constant exchange rates was EUR 308.0m in the financial year 2018 compared with EUR 310.8m in the prior year. Three one-off effects compared with the prior year have to be taken into account here. Firstly, an expense of EUR 1.4m was recognized in the financial year 2018 for negative impacts in connection with the exemption from network charges granted to large electricity-consuming enterprises. Secondly, final fair value measurement of the put option for acquisition of the remaining 25% of shares in Triveni resulted in recognition of an expense of EUR 1.1m after an income of EUR 3.6m in the prior year. Thirdly, at constant exchange rates, adjusted EBITDA for the new Advanced Technologies Division is EUR 3.0m for the financial year 2018. Excluding these three one-off effects, adjusted EBITDA at constant exchange rates would have been EUR 307.5m and thus at the same level as in the prior year. Reported adjusted EBITDA in the financial year under review amounts to EUR 298.6m for an adjusted EBITDA margin of 21.8%.
Net income, at EUR 131.1m in 2018, was significantly up on the EUR 103.1m prior-year figure. Adjusted net income after non-controlling interests came to EUR 178.0m, compared with EUR 127.5m in the prior year. These improvements are mainly attributable to the positive impacts of the US tax reform.
In July 2018, Gerresheimer acquired Sensile Medical, a Swiss technology company. Sensile Medical is a leader in the field of micro pump technology. Gerresheimer incorporated Sensile Medical into the newly established Advanced Technologies Division. The focus of this division is on the development and manufacture of smart drug delivery systems.
Net financial debt increased due to the acquisition of Sensile Medical and amounted to EUR 886.4m as of November 30, 2018, compared with EUR 712.7m as of the prior-year reporting date. Adjusted EBITDA leverage (net financial debt to adjusted EBITDA) temporarily rose to 3.1x. Gerresheimer return on capital employed (Gx ROCE), an important long-term performance indicator, was negatively impacted in the short term during the financial year 2018-notably due to the Sensile Medical acquisition-and came to 10.7%, compared with 12.9% a year earlier.
The Company set the course for further productivity gains and growth in 2018 with EUR 114.7m in capital expenditure. Capital expenditure in the Plastics and Devices Division focused on expansion of inhaler production in the USA and the Czech Republic, additions to the product portfolio and enlargement of production capacity. In the Primary Packaging Glass Division, capital expenditure mainly related to scheduled furnace repairs in the US and Germany, production plant modernization and automation, and expansion of finishing capabilities at the German cosmetic glass plant in Tettau.
"We have a sound plan for 2019, which entails building up further growth impetus in the medium and long term. At the same time, we will continue to strive for excellence, sharpen our customer focus and foster our workforce. In addition to our strong core business, we will identify new projects and areas, which will drive sustainable, profitable growth, making Gerresheimer even more successful," Dietmar Siemssen added.
- Revenues are expected to be in the range of approximately EUR 1.4bn to EUR 1.45bn in the financial year 2019.
- Gerresheimer projects adjusted EBITDA of approximately EUR 295m in the financial year 2019 (plus or minus EUR 5m).
- In addition, there is other operating income of roughly EUR 90m in the first quarter of the financial year 2019 due to the derecognition of contingent consideration from the Sensile Medical acquisition. This results from a customer's announcement after the balance sheet date that he will not continue a project with Sensile Medical. Gerresheimer hedged this risk economically by agreeing to a contingent purchase price.
- Capital expenditure as a percentage of revenues will be approximately 12% in 2019.
Indicative medium-term guidance:
- For the years 2020 to 2022, average annual growth in revenues at constant exchange rates is expected to be in the 4% to 7% range.
- The Group is targeting an adjusted EBITDA margin of 21% in 2020 and 23% in 2021 and 2022.
- Capital expenditure will be around 12% of revenues in 2020-as in 2019-before returning to about 8% from 2021.
The long-term targets continue to apply, with Gx ROCE of around 15% and adjusted EBITDA leverage of 2.5x.
The full Annual Report is available at:
Investor Relations contact
Group Key Figures (IFRS; Financial Year end November 30)
1 Excluding exchange rate effects: Revenues at constant exchange rates for the financial year 2018 were, for a better comparability, translated at the budget rates 2018, which are equivalent to the average rates of the financial year 2017 and can be found in the consolidated financial statements.
2 Adjusted for exchange rate effects and acquisitions.
3 Adjusted EBITDA: Net income before income taxes, net finance expense, amortization of fair value adjustments, depreciation and amortization, impairment losses, restructuring expenses and one-off income and expenses.
4 Adjusted EBITDA at constant exchange rates: Net income before income taxes, net finance expense, amortization of fair value adjustments, depreciation and amortization, impairment losses, restructuring expenses, and one-off income and expenses, translated at the budget rates for the year 2018.
5 The cost due to the decision by the European Commission regarding the exemption from electricity network charges granted to large electricity-consuming enterprises in 2012 and 2013 was EUR 1.4m. The negative effect of the final fair value measurement of the Triveni put option on the purchase of the remaining 25% of Triveni Polymers Private Ltd. (New Delhi/India) was EUR 1.1m in the financial year 2018 after an income of EUR 3.6m in the financial year 2017. The adjusted EBITDA at constant exchange rates for the Advanced Technologies division unit was EUR 3.0m in the financial year 2018.
6 Adjusted net income after non-controlling interests: Net income after non-controlling interests before non-cash amortization of fair value adjustments, non-recurring effects of restructuring expenses, portfolio adjustments and the balance of one-off income and expenses (including significant non-cash expenses) and related tax effects.
7 Adjusted earnings per share after non-controlling interests, divided by 31.4m shares.
8 Proposed appropriation of retained earnings.
9 The change has been calculated on a EUR k basis.
14.02.2019 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG.
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