Gerresheimer delivered profitable growth in its core business in the third quarter of 2020 and confirmed its guidance for 2020 despite temporarily lower demand for high-quality perfume flacons due to Covid-19. “We are working together with vaccine manufacturers to prepare for the global Covid-19 vaccination campaigns. For this purpose, we are building additional capacity for the production of injection vials. Beyond this, there are numerous growth opportunities for us. And we are consequently implementing our strategy for profitable and sustainable growth. We are investing in our company’s future, growing profitably and expect a strong fourth quarter,” said Dietmar Siemssen, chief executive officer of Gerresheimer.
Based on 2.1% organic growth in its core business, Gerresheimer generated revenues of EUR 349 million (approximately Rs 3,000 crore) in the third quarter of the financial year 2020 ( 1 June to 31 August 2020). Gerresheimer achieved profitable growth with its glass and plastic primary packaging for liquid and solid drugs, syringes, and drug delivery devices such as insulin pens and asthma inhalers. The injection vials produced by Gerresheimer will be an essential part of the forthcoming Covid-19 vaccination campaigns, for which Gerresheimer is preparing together with vaccine manufacturers. Gerresheimer continues to invest in additional capacity in this side of the business. Demand for high-quality perfume flacons was down in the last few quarters relative to the prior year due to Covid-19. In the latest quarter, Gerresheimer has been able to offset the lower revenues from cosmetics packaging with higher revenues from drug packaging and drug delivery devices.
The third quarter of 2020 saw an increase in the adjusted EBITDA by 4.1% to EUR 75 million (approximately Rs 650 crore). The adjusted EBITDA margin stood at 21.5%. Adjusted net income came to EUR 31 million (approximately Rs 270 crore) in the third quarter of 2020. Third-quarter 2020 adjusted earnings per share after non-controlling interests amounted to EUR 0.97 (approximately Rs 84). The third quarter’s free cash flow was strong, amounting to EUR 38 million (approximately Rs 330 crore). Adjusted EBITDA leverage was unchanged at 3.2x as of the end of the third quarter of 2020. At the beginning of October, Gerresheimer signed an agreement for a EUR 325 million (approximately Rs 2800 crore) promissory loan on attractive terms. The funds are mainly being used to refinance the five-year promissory loan from 2015. Completion is scheduled for 10 November 2020.
Guidance for 2020
Gerresheimer’s forecast for the financial year 2020 is unchanged:
- Revenue growth in the mid-single-digit percentage range
- Adjusted EBITDA margin of around 21%
- Capital expenditure amounting to roughly 12% of revenues
- Indications for subsequent years
- Annual organic revenue growth in the mid-single-digit percentage range
- Targeted medium-term adjusted EBITDA margin of 23%
- Annual capital expenditure of between 8% and 10% of revenues
The quarterly statement for the third quarter of 2020 is available here.
Group Key Figures (IFRS; Financial Year end November 30)
Headquartered in Düsseldorf in Germany, the manufacturer of primary glass and plastic packaging products for medication and drug delivery kept its customers supplied globally amid the coronavirus crisis. With special products made of glass and plastic, the company contributes to health and well-being. Gerresheimer is represented worldwide, and with around 10,000 employees, produces where its customers and markets are and have packaging manufacturing plants in Europe, America, and Asia (including India as well).