- Revenues in second quarter of 2017 down 2.2% to EUR 339.5m as expected
- Adjusted EBITDA margin 22.3%, versus 23.2% in prior-year quarter
- Slight increase in Adjusted EBITDA leverage to 2.7 due to dividend payout and bond interest
- More specific guidance for the financial year 2017
After a moderate second quarter, Gerresheimer AG expects revenues to recover in the second half of the year. “Revenues decreased slightly in the second quarter as anticipated. We expect that our business will visibly pick up again, especially in the fourth quarter,” said Uwe Röhrhoff, CEO of Gerresheimer AG.
In the second quarter of the financial year 2017 (March 1, 2017 to May 31, 2017), Gerresheimer generated revenues of EUR 339.5m, 2.2% lower than the EUR 347.3m recorded in the prior-year quarter. On an organic basis – meaning at constant exchange rates and adjusted for acquisitions and divestments – revenues decreased by 3.7%. In line with expectations, there was lower demand for medical plastic systems from a number of pharma customers where Gerresheimer is the sole supplier. This effect was amplified by postponements of customer orders in the inhalation business from the first to the second half-year. Engineering and tooling for medical plastic systems also generated lower revenues in the second quarter than in the prior-year quarter. Temporary intra-year fluctuations are normal and essentially track the billing of large-scale customer projects. Sales of plastic packaging for solid and liquid drugs, on the other hand, grew positively. Second-quarter revenues with primary packaging glass virtually matched the prior-year figure. Revenues here were down in North America, where the current uncer-tainty led to reticence among a number of pharma customers to place orders. Outside of North America, revenues with primary packaging glass increased slightly as expected.
As a consequence of the revenue performance, adjusted EBITDA decreased from EUR 80.7m in the prior-year quarter to EUR 75.8m in the second quarter of 2017. Adjusted EBITDA on a constant exchange rate basis similarly stood at EUR 75.8m. The adjusted EBITDA margin was 22.3% in the second quarter, down on the 23.2% margin in the comparative prior-year period. The margin in Plastics & Devices mirrored the prior-year level of 27%, despite significantly lower revenues. In primary packaging glass, the margin came down to 20.4%, 2.3 percentage points lower than the strong margin a year earlier on account of the deliberately reduced production capacity utilization due to lower revenues in the USA. Gerresheimer reported net income from continuing operations of EUR 25.1m in the second quarter, compared with EUR 28.9m a year earlier. Adjusted net income from continuing operations after non-controlling interests was EUR 30.4m, compared with EUR 34.2m in the prior-year quarter. Adjusted earnings per share from continuing operations after non-controlling interests consequently came to EUR 0.97 in the second quarter of 2017, as against EUR 1.08 in the prior-year quarter.
Gerresheimer incurred EUR 35.4m in capital expenditure in the first half of 2017, compared with EUR 35.0m in the first half of the prior year. Capital expenditure focused on additional production capacity for plastic packaging in the USA, a furnace repair at the Belgian cosmetic glass plant, and new vial and cartridge machinery as part of global standardization.
Measured as net financial debt to adjusted EBITDA, the Adjusted EBITDA leverage was 2.7 as of May 31, 2017. As at this time every year, the increase relative to the 2016 year-end primarily reflected the dividend payout and the bond interest payment.