- Revenue: Grew from EUR500 million to EUR502 million, organic revenue growth of 4.7%.
- Adjusted EBITDA: Remained at prior year's level of EUR107 million, organic adjusted EBITDA growth of 4.8%.
- Adjusted EBITDA Margin: Unchanged at 21.6%.
- Adjusted EPS: Declined from EUR130 to EUR124, organic adjusted EPS decline of 3.1%.
- Plastic & Devices Revenue: Grew from EUR265 million to EUR283 million, organic revenue growth of 6.7%.
- Plastic & Devices Adjusted EBITDA: Grew from EUR69 million to EUR79 million, organic adjusted EBITDA growth of 12.4%.
- Plastic & Devices Adjusted EBITDA Margin: Increased from 26.3% to 27.7%.
- Primary Packaging Glass Revenue: Declined from EUR234 million to EUR218 million, organic revenue decline of 6.6%.
- Primary Packaging Glass Adjusted EBITDA: Declined from EUR49 million to EUR39 million, organic adjusted EBITDA decline of 17.4%.
- Primary Packaging Glass Adjusted EBITDA Margin: Decreased from 21.2% to 18.7%.
- Advanced Technologies Revenue: Remained at prior year's level of EUR2 million.
- Advanced Technologies Adjusted EBITDA: Unchanged at minus EUR3 million.
- Free Cash Flow: Adjusted EBITDA remained unchanged at EUR107 million, net working capital cash outflow of EUR50 million.
- Net Financial Debt: Slightly above EUR1 billion, adjusted EBITDA leverage increased from 2.4 times to 2.5 times.
- 2024 Revenue Growth Guidance: Expected to be 5% to 10%, around the low end of the range due to destocking effects.
- 2024 Adjusted EBITDA Guidance: Expected to be between EUR430 million and EUR450 million.
- 2024 Adjusted EPS Growth Guidance: Expected to grow between 8% and 12%.
Release Date: July 11, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Gerresheimer AG (GRRMY, Financial) reported an organic revenue growth of 4.7% in Q2 2024, with revenues increasing from EUR500 million to EUR502 million.
- The Plastic & Devices division showed strong performance with an organic revenue growth of 6.7% and an adjusted EBITDA growth of 12.4%.
- The company is expanding its production capacities globally, including new lines and projects, which are expected to drive strong performance in the second half of 2024.
- Gerresheimer AG (GRRMY) confirmed its guidance for 2024 and 2025, expecting revenue growth of 5% to 10% and adjusted EBITDA between EUR430 million and EUR450 million.
- The planned acquisition of Bormioli Pharma is expected to be highly complementary and accretive, enhancing the company's portfolio in both glass and plastic containment solutions.
Negative Points
- The Primary Packaging Glass division experienced a revenue decline of 6.6% due to temporary destocking effects, impacting overall performance.
- Adjusted earnings per share (EPS) declined by 3.1% organically, primarily due to the dilutive effect of the capital increase in April 2023.
- Free cash flow was negatively impacted by a cash outflow of EUR50 million in Q2, more pronounced than the previous year's Q2 outflow of EUR21 million.
- The Advanced Technologies division remained stagnant with revenues at prior year's level and an adjusted EBITDA of minus EUR3 million.
- The company anticipates that revenue growth for 2024 will be at the lower end of the guidance range due to ongoing destocking effects.
Q & A Highlights
Q: Can you explain the destocking effects and which product categories are impacted?
A: The destocking primarily affects vials and pipelines. We see this as a temporary effect and expect it to fade out, with signals from the market indicating improvement. (Dietmar Siemssen, CEO)
Q: What are the expected financial impacts of the Bormioli acquisition?
A: We expect more than 10% EPS accretion from Bormioli in the first year, with robust margin expansion of 50-100 basis points, including synergies. (Bernd Metzner, CFO)
Q: How is the GLP-1 market contributing to your growth?
A: The GLP-1 market is in a ramp-up phase, with stronger sales expected quarter by quarter and year by year. We anticipate significant contributions in the second half of 2024 and beyond. (Dietmar Siemssen, CEO)
Q: What is the status of your Advanced Technologies business and FDA product submissions?
A: We are awaiting FDA approval for our pump, expected within this year. Preparations for production are ongoing. (Dietmar Siemssen, CEO)
Q: Can you provide details on the ramp-up of new production lines?
A: Ramp-ups are ongoing in multiple locations, including Peachtree and Morganton. The impact on sales will be more visible in the fourth quarter of 2024. (Dietmar Siemssen, CEO)
Q: How are you managing the impact of resin prices?
A: We do not see a significant impact from resin prices in Q2 2024. (Bernd Metzner, CFO)
Q: What are your expectations for destocking effects in the second half of 2024?
A: We expect destocking effects to improve quarter by quarter, with a significant upturn in the fourth quarter. (Bernd Metzner, CFO)
Q: How do you plan to leverage the Bormioli acquisition for high-value plastic solutions?
A: The acquisition will allow us to broaden our portfolio with high-value plastic solutions, including integrated systems for both plastic and glass containers. (Dietmar Siemssen, CEO)
Q: What is your outlook for revenue and EBITDA growth in 2024?
A: We expect revenue growth at the lower end of our 5-10% guidance range, with adjusted EBITDA between EUR 430 million and EUR 450 million. (Dietmar Siemssen, CEO)
Q: How confident are you that destocking will be resolved by the end of 2024?
A: We are confident that destocking will fade out by the end of 2024, based on current market signals and order intake. (Dietmar Siemssen, CEO)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
