Duesseldorf, February 11, 2016—Gerresheimer AG, one of the leading partners to the pharma and healthcare industry worldwide, brought financial year 2015 to a successful close and sees strong growth prospects for the years ahead. “2015 was not only a successful but also an important year for us. In Centor, we successfully acquired a market-leading and profitable company in the USA. Similarly important was the sale of the glass tubing production activities, with which we further sharpened our focus on pharmaceutical packaging and made our business less capital-intensive. We are successfully implementing our strategy, and I look forward with great confidence to the years ahead,” said Uwe Röhrhoff, CEO of Gerresheimer AG.
Pharmaceutical packaging manufacturer Gerresheimer boosted reve-nues by 6.8% to EUR 1,377.2m in financial year 2015 (December 1, 2014 to November 30, 2015). On an organic basis, revenues increased by 1.5%, within the 1% to 3% target corridor. Notable revenue growth was generated with pharmaceutical plastic packaging as well as products for safe and simple drug delivery such as insulin pens, skin-prick aids for diabetics and asthma inhalers. Business with pharmaceutical primary packaging glass picked up in the course of the year after a slow start in the USA. The market for premium cosmetic glass packaging developed well, largely driven by the trend toward elaborate design and the associated finishing processes. Revenues with laboratory glassware, which is primarily sold in the USA, increased solely as a result of exchange rate changes. At constant exchange rates revenues showed a slight decrease.
Adjusted EBITDA went up in financial year 2015 to EUR 277.9m, or EUR 271.9m on a constant exchange rate basis. Excluding the Centor acquisition, adjusted EBITDA was EUR 262.4m, squarely within the target corridor of EUR 255m to EUR 265m. Compared with a prior-year figure of 19.6%, the adjusted EBITDA margin was above the 20% mark, at 20.2%. Backed by improved operating earnings power and the proceeds from the sale of the glass tubing business, net income grew by 54.6% to EUR 112.7m. Adjusted earnings per share rose 18.0% to EUR 3.41 compared with a 2014 figure of EUR 2.89.
Gerresheimer successfully completed two key transactions in financial year 2015. With the acquisition of Centor, the Company realized its long-term goal of occupying a stronger presence in the plastic pharmaceutical packaging segment in the USA. Centor is the market leader in plastic containers used by American pharmacies to package prescription tablets. In addition, Gerresheimer sold its glass tubing production activities, entered into a long-term supply contract for this intermediary product and established a joint venture for future innovation in the pharmaceutical glass segment. Prior to the two transactions, the overall financing arrangement from 2011 was replaced in June 2015 with a EUR 450m revolving credit facility. The Centor acquisition was primarily funded out of the successful EUR 425m debt issue in November 2015. Leverage—the ratio of net financial debt to adjusted EBITDA—stood at 2.9 as of the end of November 2015 compared with a prior-year figure of 1.7. The Company aims to bring leverage back down as soon as possible.
Gerresheimer’s capital expenditure in financial year 2015 was EUR 125.8m (2014: EUR 126.6m), or 9.0% of revenues at constant exchange rates and excluding Centor. The target for capital expenditure was 9% to 10% of revenues. Gerresheimer is further expanding production capacity for drug delivery systems such as insulin pens and asthma inhalers, especially in the USA and Czech Republic. Late summer 2015 brought an expansion and improvements at the moulded glass plant in Chicago, USA. The global program of modernizing and standardizing injection vial production machinery was successfully continued. A new production building for injection vials and ampoules was completed in India. Production there is set to start up at the end of 2016.
Gerresheimer’s expectations for financial year 2016 are set out in the following, in each case based on constant exchange rates. For the US dollar—which has the largest currency impact on the Group currency and will now account for about a third of Group revenues in 2016—Gerresheimer has assumed an exchange rate of approximately USD 1.12 to EUR 1.00.
In financial year 2016, the Company anticipates Group revenues of around EUR 1.5bn (plus or minus EUR 25m) on a constant exchange rate basis. The Group revenues of EUR 1.5bn correspond to revenue growth of about 9% at constant exchange rates compared with revenues in financial year 2015, and organic revenue growth of between 4% and 5%. Gerresheimer expects adjusted EBITDA to increase to approximately EUR 320m (plus or minus EUR 10m) in financial year 2016. Capital expenditure in financial year 2016 is anticipated to be no more than roughly 8% of revenues at constant exchange rates, and thus at the lower end of the previous guidance for financial years 2016 to 2018 of between 8.0% and 9.0% of revenues at constant exchange rates.
Major steps were taken in 2015 to make the business less capital intensive. With the sale of the glass tubing business and the permanent closure of the moulded glass plant in Millville Gerresheimer significantly reduced the number of furnaces operated by a total of eight to thirteen. At the same time, the Company anticipates a decrease in the ratio of net working capital to revenues because, among other factors, buying finished glass tubes in line with requirements following the sale of the glass tubing business means that less inventory has to be held overall. Average net working capital is forecast to improve in 2016 by about two percentage points to around 17% of revenues at constant exchange rates.
In addition, the Company confirms its indication for the financial years 2016 to 2018, in each case stated at constant exchange rates and assuming a US dollar exchange rate of USD 1.12 to EUR 1.00. Gerresheimer is aiming for average annual organic revenue growth of 4% to 5% for the period from 2016 to 2018. For the adjusted EBITDA margin, the Group has set a target of approximately 22% for financial year 2018. In order to meet these targets, Gerresheimer will in all probability require significantly lower annual capital expenditure of the order of only about 8% of revenues at constant exchange rates.
At the Annual General Meeting on April 28, 2016, the Management Board and Supervisory Board will be jointly proposing that a dividend of EUR 0.85 per share be paid out for financial year 2015. This represents an increase of 13% against the prior-year dividend. The dividend ratio amounts to 25% of adjusted net income after non-controlling interests.
The Annual Report is available here:
Gerresheimer is a leading global partner to the pharma and healthcare industry. With specialty glass and plastic products, the Company contributes to health and well-being. Gerresheimer has worldwide operations and its 11,000 employees manufacture products in local markets, close to its customers. With over 40 plants in Europe, North America, South America and Asia, Gerresheimer generates revenues of around EUR 1.4bn. The comprehensive product portfolio includes pharmaceutical packaging and products for the safe, simple administration of medicines: insulin pens, inhalers, prefillable syringes, injection vials, ampoules, bottles and containers for liquid and solid medicines with closure and safety systems as well as packaging for the cosmetics industry.