Gerresheimer Holds its own in Difficult Environment
Published: Jul 15, 2009
In the first half of 2009, Gerresheimer AG achieved sales at the prior year level despite the continuing worldwide economic crisis. This result was mainly attributable to sales growth for pharmaceutical packaging and systems, with which Gerresheimer today makes more than 70% of Group sales. In contrast, sales declines were recorded in the more cyclical segments of cosmetics and laboratory glassware. In comparison with the prior year, sales in the second quarter of 2009 declined by 4.3% on a nominal basis to EUR 264.4m and, excluding the Technical Plastics business just sold, by 2.2% to EUR 251.6m. The operating margin (adjusted EBITDA margin) excluding the business just sold reached a high level in the second quarter of 2009 at 18.9%. For the year as a whole, Gerresheimer expects the sales trend excluding Technical Plastics to be +1% to -3% with an adjusted EBITDA margin of 18.0% to 18.5%.
In the course of its continued focus on the markets of pharma & life science the sale of the Technical Plastics business was successfully completed as per July 1, 2009. The transaction price including debts taken over was around EUR 12m.
"Growth in our core markets of pharma & life science has been and remains the basis of our profitable business development. This applies all the more at a time of economic crisis," says Dr. Axel Herberg, CEO of Gerresheimer AG. "With the successful sale of the peripheral business of Technical Plastics we have taken another important step in focusing the business," Herberg adds.
Growth for pharmaceutical products
Regardless of the continued trend towards inventory reductions by some pharma companies, Gerresheimer achieved sales growth with products for the pharma industry once again in the second quarter of 2009. Major contributions were made by Medical Plastic Systems, which continue to be a particular growth generator, and good sales of pharmaceutical primary packaging such as ampoules and vials in Europe and China. Installation of the third RTF(R) syringe line was completed according to plan so that customer-specific validaA tions could be commenced.
As in the first quarter, however, continuing weak demand in the cosmetics segment led to a decline in sales of cosmetic packaging. A similar situation applies for laboratory glassware products, where a temporary sales decline was experienced because of invenA tory reductions and purchasing cautiousness by customers.
Outlook for 2009
Despite the imponderable factors with regard to further world economic development Gerresheimer continues to expect growth in the field of pharmaceutical packaging and systems. In the more cyclical segments cosmetics and laboratory glassware, Gerresheimer experienced a marked decline in demand in the first half year. ForeA casts for the further course of the financial year are difficult. Gerresheimer AG does not however assume any short-term recovery of these markets. The sound balance sheet and long term financA ing structure as well as a good operating performance will enable Gerresheimer to continue the growth strategy in the pharma & life science segment going forward.
Gerresheimer employs around 10,000 people in 40 locations in Europe, America and Asia. In the financial year 2008, worldwide sales totaled EUR 1.06bn. The product portfolio ranges from pharmaA ceuA tical 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 characterized by high technical and regulatory barriers.
(1) Net sales of the recently divested Technical Plastics business (sold with effect from July 1, 2009) include the sales of the Technical Plastics tool business and amounted to EUR 74.2m in FY 2008
(2) Adjusted EBITDA: Earnings before income taxes, financial result, amortization of fair value adjustments, extraordinary depreciation, depreciation and amortization, restructuring expenses and one-off income and expenses
(3) The adjusted EBITDA of the Technical Plastic Systems business of the comparative prior year period is not available due to the fact that the divestment was carried out in the course of the financial year and is therefore included in the Plastic Systems segment
(4) Adjusted net income: Consolidated profit before non-cash amortization of fair value adjustments, special effects from restructuring expenses, extraordinary depreciation, the balance of one-off income and expenses (including significant non-cash expenses) and the related tax effects
SOURCE Gerresheimer AG
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