Release Date: April 11, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Gerresheimer AG (GRRMF, Financial) reported a significant revenue increase due to the acquisition of Bormioli Pharma, marking the largest acquisition in the company's history.
- The integration of Bormioli Pharma is expected to create a global moulded glass powerhouse, enhancing Gerresheimer's position in the pharma and biotech industry.
- The company projects sustainable profitable growth of 8% to 10% in the midterm, supported by new product lines and a shift to high-value products.
- Gerresheimer AG (GRRMF) is making significant investments in eco-friendly technology, such as the new hybrid furnace in Lohr, Germany, which reduces carbon emissions by 40%.
- The company has a strong order book and expects to return to organic growth from Q2 onwards, supporting its 2025 guidance.
Negative Points
- Gerresheimer AG (GRRMF) experienced an organic revenue decline of 6.5% and an EBITDA decline of 9.3% in Q1 2025.
- The company faced softer demand in its moulded glass business, particularly in the cosmetics market.
- The Morganton facility in the US is still recovering from flooding, impacting production capacity.
- The adjusted EPS declined by 36.6% on an FX-neutral basis, reflecting challenges in the current financial environment.
- Free cash flow was negative in Q1, and the company expects to end the year with a free cash flow figure between minus EUR50 million and 0.
Q & A Highlights
Q: Can you provide an indication of Bormioli's profitability in Q1 and its contribution to your full-year margin of around 22%?
A: Bernd Metzner, CFO: We don't comment on subsegment performance, but Bormioli's profitability slightly increased in Q1. We expect a positive contribution to margin accretion in the coming quarters.
Q: How should we think about potential tariffs with your global production network?
A: Dietmar Siemssen, CEO: Our strategy to produce and source in-region mitigates tariff impacts. Products shipped from Mexico to the US are covered by USMCA, so tariffs have no real negative impact on us.
Q: Could you update us on the ongoing strategic review and any potential private equity interest?
A: Dietmar Siemssen, CEO: We are working on the strategic review and integration of Bormioli. Talks are ongoing, but there's no change to the information previously provided to the market.
Q: What is the outlook for organic growth phasing in Q2 to Q4, and any updates on GLP-1 contracts?
A: Bernd Metzner, CFO: We expect strong growth in the second half of the year, with positive growth in Q2. For GLP-1 contracts, we anticipate EUR300 million in related revenues this year, with a significant step-up next year.
Q: Can you confirm if you expect double-digit growth in Q2, and quantify the order growth in Q1?
A: Dietmar Siemssen, CEO: We expect positive growth in Q2, with stronger growth in the second half. We don't disclose specific order intake figures, but it was much higher compared to the previous year.
Q: Could you provide more color on the order strength supporting Q2 sales and any pre-tariff-related stocking?
A: Dietmar Siemssen, CEO: Order intake is strong, especially for high-value products like vials and cartridges. We haven't seen significant pre-tariff-related stocking.
Q: How is the moulded glass business expected to perform in the second half of 2025?
A: Dietmar Siemssen, CEO: The pharma segment is stable, and the new furnace in Lohr will positively impact the second half. The cosmetic market remains soft, and we remain prudent in our outlook.
Q: Can you discuss the impact of Bormioli's integration on operating efficiency and costs for this year?
A: Dietmar Siemssen, CEO: Integration is ongoing, focusing on high-value plastic solutions and moulded glass. We are progressing well with cost synergies in headquarters and functions.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
