Gerresheimer Raises Earnings per Share in First Quarter Due to US Tax Reform

DÜSSELDORF, Germany, April 12, 2018 /PRNewswire/ --

• Revenues at constant exchange rates EUR 299.2m in first quarter of 2018, as expected, stable relative to prior-year period; organic revenue growth 0.4% 
• Adjusted EBITDA at constant exchange rates EUR 54.9m, as budgeted below the EUR 59.0m prior-year figure 
• Development of US dollar against EUR led to 4.1% decrease in revenues to EUR 290.4m and in adjusted EBITDA to EUR 52.6m 
• Adjusted earnings per share increased to EUR 1.85, compared with EUR 0.60 in prior-year quarter, primarily due to effects of US tax reform 
• Guidance for 2018 confirmed 
• Call option for acquisition of remaining 25% of shares in Triveni Polymer Private Ltd. exercised on April 9, P 
• 2018 

Gerresheimer AG completed the first quarter of the financial year 2018 (December 1, 2017 to February 28, 2018) as budgeted with revenues at constant exchange rates stable relative to the prior year and adjusted EBITDA at constant exchange rates below the prior-year figure. "The first quarter went as expected. I would particularly like to emphasize the rise in adjusted earnings per share, which is a one-time effect in this quarter, notably due to the US tax reform. Our shareholders will also benefit from this in the dividend next year. And to further advance our regional expansion, we have decided to take over in its entirety our Indian subsidiary for pharmaceutical plastic packaging by acquiring the remaining 25%," said Rainer Beaujean, Management Board Spokesperson and Chief Financial Officer.

The Gerresheimer Group increased revenues at constant exchange rates from EUR 298.0m in the prior-year quarter to EUR 299.2m in the first quarter of 2018. On an organic basis-meaning adjusted for exchange rate effects, acquisitions and divestments-revenues consequently went up by 0.4% on the prior-year quarter. Revenues from tooling were down in the quarter as budgeted. There was good sales performance in medical plastic systems. The inhaler project in North America is performing especially well. It more than made up for lower demand from other medical plastic systems with a number of customers for whom Gerresheimer is the sole supplier. Pharmaceutical plastic packaging revenues picked up in Brazil and India significantly. Due among other factors to the severe influenza season, there was also fairly strong demand for plastic vials for prescription drugs in the USA. By contrast, revenues from primary packaging glass in North America were once again down. The relatively pronounced reticence on the part of a number of large pharma customers there continues and the situation is improving only gradually. However, good revenue performance with glass primary packaging in all other regions was able to fully compensate for this, notably as a result of good sales of cosmetic glass in Europe and pharma glass in China. Due mainly to the change in the USD exchange rate, reported revenues fell in the same period from EUR 302.8m to EUR 290.4m.

Adjusted EBITDA at constant exchange rates decreased as expected from EUR 59.0m in the prior-year quarter to EUR 54.9m in the first quarter of 2018. The revenue performance in the engineering and tooling business had a slight negative impact on adjusted EBITDA here. Adjusted EBITDA was also adversely affected by higher costs of plastic granulate, which Gerresheimer can only pass on to customers with a time lag of several months. In the sales of Primary Packaging Glass Division, lower revenues in the North America region with the attended lower utilization of installed capacity were a key factor behind a decrease in adjusted EBITDA. As in the prior-year quarter, there was also a scheduled furnace overhaul. Adjusted EBITDA after exchange rate effects came to EUR 52.6m, compared with EUR 59.9m in the first quarter of 2017. Consequently, at 18.1%, the adjusted EBITDA margin is thus likewise below the 19.8% recorded in the prior-year quarter.

Adjusted net income after non-controlling interests was EUR 58.1m and thus increased by EUR 39.4m compared to the prior-year figure of EUR 18.7m, mainly as a result of the US tax reform. Accordingly, adjusted earnings per share after non-controlling interests came to EUR 1.85 in the first quarter of 2018, compared with a prior-year figure of EUR 0.60.

Net financial debt increased slightly by EUR 14.2m to EUR 726.9m as of February 28, 2018. Calculated as the ratio of net financial debt to adjusted EBITDA over the last twelve months, adjusted EBITDA leverage stood at 2.4 times, which is below the medium-term target of 2.5 times.

Capital expenditure totaled EUR 10.8m in the first quarter of 2018, as against EUR 15.1m in the prior-year quarter. One substantial focus of capital expenditure was on the expansion of inhaler production in the USA and additions to the product portfolio. Other capital expenditure related to a scheduled furnace overhaul.

On April 9, 2018, Gerresheimer exercised the call option to acquire the remaining 25% of shares in Triveni Polymers Private Ltd., New Delhi (India). The purchase price for this share is expected to be in the low double-digit million euro range.

Outlook 

Gerresheimer's expectations for the financial year 2018 remain as set out in the following, in each case based on constant exchange rates. The figures are calculated using actual average exchange rates in the financial year 2017. For the US dollar-which is expected to have the largest currency impact on the Group currency, accounting for about a third of Group revenues budgeted for the financial year 2018 or about 40% of adjusted EBITDA- the Company has assumed an exchange rate of approximately USD 1.12 to EUR 1.00. As before, a rise or fall in the US dollar against the euro by about one cent has an impact of around EUR 4m on revenues and EUR 1m on adjusted EBITDA. Given the production locations in the USA and financial debt in US dollars, fluctuations in the US dollar/euro exchange rate have no material effect on Group earnings performance and essentially only lead to translation effects.

• In terms of revenues, Gerresheimer anticipates the lower end of the range to correspond with the figure for the financial year 2017. At the upper end, the Company expects revenues at constant exchange rates of up to around EUR 1.4bn.
• For adjusted EBITDA at constant exchange rates, Gerresheimer projects a range of between EUR 305m and EUR 315m.
• Capital expenditure in 2018 will amount to around 8% of revenues at constant exchange rates.
• For the long term, the Company targets Gx ROCE to be around 15%.

The full quarterly report is available at:
http://www.gerresheimer.com/en/investor-relations/reports

For further information: http://www.presseportal.de/nr/9072/dokument?langid=2

Media Contact:
Gerresheimer AG
Klaus-Bungert-Strasse 4
40468 Düsseldorf
Germany

Jens Kürten
Group Senior Director Communication & Marketing
Phone: +49-211-6181-250
Telefax: +49-211-6181-241
E-Mail j.kuerten@gerresheimer.com
Internet: http://www.gerresheimer.com