- Sales in the Second Quarter up by 12.8% to EUR276.3m (First
Half: up by 15.2% to EUR515.4m)
- Adjusted Group Results in the Second Quarter Tripled From
EUR6.3m to EUR17.6m
- CEO Dr. Axel Herberg Confirms the Prospects for 2008
Gerresheimer AG again increased its sales and results in the second quarter of 2008. Compared with the second quarter of 2007, sales improved by 12.8%, or 16.5% on a like-for-like exchange-rate basis, to EUR276.3m. Operating results (Adjusted EBITDA) rose by 20.2% to EUR53.6m (second quarter of 2007: EUR44.6m). In the second quarter of 2008 Gerresheimer therefore achieved an adjusted EBITDA margin of 19.4% (second quarter of 2007: 18.2%). Contributions to this gratifying development were made by the positive sales trend in the market segments of pharmaceutics and cosmetics and by the latest acquisitions. Overall, Gerresheimer therefore continued the improvement in its earnings position in the second quarter and thus the first half of 2008 as a whole. Adjusted Group results increased in the second quarter of 2008 to EUR17.6m and in the first half to EUR27.5m. This means a three-fold rise and means adjusted earnings per share of EUR0.53 in the second quarter and EUR0.82 for the first half of 2008.
"Following our record year in 2007 we have again increased our sales and profit in the first half of 2008," says Dr. Axel Herberg, CEO of Gerresheimer AG. "We expect further growth in all divisions during the course of the year and will consistently continue to focus on pharma & life science."
Just recently, Gerresheimer's discontinuation of peripheral operations such as consumer health care confirmed this concentration on pharmaceutics and life science.
Thanks to the positive development in the second quarter a marked improvement in results has also been achieved for the first half of 2008 as a whole. Sales rose by 15.2%, or 18.9% on a like-for-like exchange-rate basis, to EUR515.4m (first half of 2007: EUR447.3m). Operating results (Adjusted EBITDA) increased by 20.3% from EUR80.3m (first half of 2007) to EUR96.6m. This positive development was supported by good performance by all the divisions.
Positive development of all divisions
The Tubular Glass Division improved its sales in the second quarter of 2008 by 10.3 % to EUR78.0m (second quarter of 2007: EUR70.7m). The main contributor was increased demand in the segment of RTF syringe systems. Production capacity here is already fully utilised, so a further RTF facility is therefore being constructed and is to commence production in early 2009. A further contribution to growth was made by the high level of demand for pharmaceutical vials in the USA, marked expansion in the Chinese market and the pharma glass business of Comar Inc. which was acquired in March 2007. Operating results (Adjusted EBITDA) improved by 22.8 % to EUR19.4m.
Sales by the Plastic Systems Division rose to EUR93.6m (second quarter of 2007: EUR79.6m). This is equivalent to an increase of 17.6 %. The high-margin segment of medical plastic systems developed particularly positively. Here sales of inhalers and diabetes-care products and the segment of molecular diagnostics grew substantially. Through the sale of the consumer health care business at the start of the third quarter, Gerresheimer has in addition further focussed the business of the Plastic Systems Division on the pharma and life-science market. Operating results (Adjusted EBITDA) rose by 21.8 % from EUR14.7m (second quarter of 2007) to EUR17.9m.
Sales by the Moulded Glass Division in the second quarter of 2008 totalled EUR85.6m. This is equivalent to an increase of 6.1 % in comparison with the prior year (second quarter of 2007: EUR80.7m), well ahead of the market average. The growth was attributable to higher sales of pharmaceutical vials in the USA and Europe and of cosmetics products. Thanks to targeted investments in productivity improvements and continued high capacity utilisation, Gerresheimer achieved a substantial margin improvement in the Moulded Glass Division. Compared with the prior year (second quarter of 2007: EUR16.7m), operating results (Adjusted EBITDA) increased by 11.4 % to EUR18.6m.
Sales by the Life Science Research Division in the second quarter of 2008 totalled EUR22.6m, an increase of 51.7 % (second quarter of 2007: EUR14.9m). This growth was largely attributable to the life-science research business of Thermo Fisher Scientific which was contributed to the Kimble Chase joint venture in July 2007 and successfully integrated. Major contributions to the positive results were also made by the Division's Chinese operations and cost savings through production relocations. Operating results (Adjusted EBITDA) improved from EUR1.5m (second quarter of 2007) to EUR2.7m in the second quarter of 2008.
Gerresheimer confirms the future prospects
Despite continuing turbulence in the worldwide finance markets and dramatically rising energy costs, Gerresheimer expects a sustained positive trend in the markets in which it operates. Thanks to the positioning of its product portfolio, Gerresheimer will enjoy above-average participation in this. Assuming an exchange rate of USD 1.55 : EUR 1.00, sales growth of 9% to 11% is expected for the current financial year. This is equivalent to a growth rate of 14% to 16% on a like-for-like exchange-rate basis for the businesses which have been continued.
Thanks to the sales growth and productivity increases, Gerresheimer continues to expect that operating results (Adjusted EBITDA) for the financial year 2008 will mean an improvement in the adjusted EBITDA margin to around 19.5 %.
The sound balance sheet structure and equity ratio combined with the significant reduction in financial liabilities after the IPO in 2007 plus the cash flow generated will in the future enable Gerresheimer to achieve further organic growth and successfully continue its strategy of selective acquisitions. The funds available will be invested primarily in the field of pharmaceutics and life science.
Gerresheimer employs more than 10,300 people in 40 locations in Europe, America and Asia. In the financial year 2007, worldwide sales totalled around EUR958m. The product portfolio ranges from pharmaceutical vials made of glass and plastic through to complex drug-delivery systems for the pharma & life science industry. These include sterile syringes, inhalers and other system-based approaches for safe dosage and application of medications. The Group enjoys a leading position in markets which are characterised by high technical and regulatory barriers.