Gerresheimer AG

Good morning, everyone, and welcome to our presentation of our preliminary Q3 2025 results. With us today are our CEO, Dietmar Siemsen, and our new CFO, Wolf Lehmann, who will lead you through our Q3 development and the financials. The slide deck is available on our website. At the end of the presentation, we will be available for Q&As. But now, let's start, and I hand over to Dietmar Siemsen. Dietmar?

Yeah, thank you, Peter. Thank you, Guido, and welcome, everybody, and thank you for joining us for this call. Yeah, you have all seen the news, and they are not positive. We unfortunately had to revise our guidance for 2025. Yeah, Q3 came in lower than expected. The organic revenues were 1.2% below the previous year's quarter, and the adjusted EBITDA was 9.4% below. The adjusted EBDR margin was 18.8 and thus 1.7% lower than in the previous year's period. We won't be able to compensate this until the end of the year, even though we expect Q4 to be stronger than the third quarter. And we did not expect this development. It is disappointing to say at least and we clearly have to increase our measures to get back on track. We will, and also Wolf will elaborate on this later. Our performance in the first nine months of this financial year is clearly below our expectations, and we can't sugarcoat this. Yes, there have been a number of market, there have been a number of market influences, but the development in total is disappointing. On a reported base, Our revenues grew in the first nine months by 14.6%. Our EBITDA grew by 7.2%. Both increases due to the first time consolidation of Borgioli Pharma. On an organic basis, however, revenues declined by 1.8% and adjusted EBITDA by 7.5% compared to the previous years pro forma figures. We had expected An earlier market recovery of the cosmetic and also the oral liquid market. Instead, the weakness of the markets prevailed. Overall, operative performance in Q3 lagged clearly behind. On a positive note, our focus on being more selective with Carpex is beginning to pay off. We recorded positive free cash flow of 21 million euros in the third quarter. and we expect a stronger fourth quarter in comparison to Q3 2025 with the ramp up of new lines for drug delivery systems. The disappointing operative performance in the first nine months and Q3 is particular or in particular does not change the strategic rationale behind our growth investments or the Bomioli Pharma acquisition. We are still convinced that broadening our portfolio with new high-value solutions, particularly for the growing biologic market, has been the right strategic decision. The Bomioli Pharma acquisition brought Gerritshammer to a new level in terms of revenues and EBITDA and is strengthening our market position. It was also a prerequisite for building a strong multi-class powerhouse and being able to take the next steps to separate it and initiate a sales process afterwards. But looking at the pure numbers, we understand we need to act, and we already have, by initiating measures to reduce costs and improve our performance, as you can see from our restructuring costs in our third quarter report. We will leave no stone unturned to recover our margins and get back on a profitable growth path. With this, I will now hand over to our new CFO, Wolf Lehmann, for a closer look on our financials. Wolf.

Thank you, Dietmar. Following up on the revenue and EBITDA driver year over year on Q3, more detail. We show the numbers in the prior year perform adjusted for the Bomiolo Pharma acquisition. Numbers are not adjusted for FX. On revenue left side, Year over year, the anticipated market recovery after the first half and growth did not happen. Instead, net, we're down 18 million from 579 to 561 million, with a mixed picture between the segments. Plastics and devices slightly up 3 million, and primary packaging glass down 20 million. Let me turn to the segments. Within plastics and devices, net up 3 million is a mixed bag. Medical devices, we grew around 13 million. Slower growth, and not as much as we would have liked, but at least initial growth in devices such as autoinjectors. This is partly offset through plastics packaging down 5 million, driven by continued less oral liquid containment demand. In addition, negative 6 million from foreign exchange, mainly the unfavorable U.S. dollar to euro exchange rates impacting our U.S. business. On the primary packaging glass segment, TPG side, revenue is down 20 million, mainly driven by around 13 million decline in molded glass, with again disappointing weak cosmetic and oral liquid markets. also around 2 million decline in tubular class here standard products are down yet higher value products up finally also negative around 5 million from foreign exchange again mainly us dollar to euro exchange on ebitda in the middle chart year over year ebitda is down 14 million from 117 to 103. now EBITDA down 14 million on a revenue down 18 million obviously is a high unfavorable fall through. Let me explain the main drivers. On plastics and devices, P&D, EBITDA is down 7 million on sales up 3 million. Main impacts are medical devices did have growth in revenue up 13 million as explained. But EBITDA is down 4 million, since especially our new assets, like at our Peachtree site in the US, are partly up, partly still in ramp up, but underutilized or insufficiently loaded to cover all the additional costs as we invested ahead of demand. Plastics packaging is down 1 million year over year, which is simply less volume falling through. The rest is some impact from FX of around negative 1 million. Turning to EBITDA primary packaging glass. EBITDA is down 8 million on sales down 20 million. Also in PPG, the sales to EBITDA fall through dynamics vary. Molded glass is down 9 million in EBITDA on 30 million less sales, a high fall through. This is A, the volume effect, but also B, our side at lower, Germany, coming back into production after the significant furnace renewal and step-by-step gaining back productivity. Tubular class shows a very different picture. As on lower sales, we get around 2 million higher EBITDA. Amongst others, our focus on high-value product growth comes through. On adjusted earnings per share, on the right-hand side, This will be easier to follow, quite frankly, when we publish the full and final financials tomorrow, Friday morning. Still already as a heads up, the decline from 1 euro 20 to 77 cents adjusted EBITDA is negatively impacted by the EBITDA falling through after taxes to EPS. And in addition, higher depreciation and certainly higher interest expense, mainly stemming from the financing of the Bongioli Pharma acquisitions. This explained the main drivers in third quarter, very similar dynamics are impacting our nine months results year-over-year. Please turn to the next page, page seven. Overall revenue is down year-over-year by 47 million, 17 to eight to 168 million euros. EBITDA is down 27 million, 341 to 314 euros. So it's overall, a high fall through of 27 million EBITDA versus 47 revenue. In the interest of time, I'll focus on the fall through sales to EBITDA. Plastics and devices, similar to Q3, positive sales growth on the left of 50 million, yet a negative year over year EBITDA growth of 18. Medical devices with sales up 36, driven by our growth projects, example given in pens and auto-injectors, yet delivering no EBITDA growth, yet as new assets are still underutilized. Plastics packaging sales down 12 million year-over-year due to the mentioned oil and liquids market downside. This is falling through to EBITDA with a high around 8 million impact. These partly highly automated plants producing our high-value plastics packaging parts are sensitive to a suboptimal capacity loading level. On primary packaging glass, PPG, molded glass is as explained for third quarter, mostly sales decline of 44 million from cosmetics or liquids, et cetera, falling through at a to be expected around 11 million EBITDA. Tubular glass, the sales degrees of 11 million does not show up in EBITDA mostly due to less standard and more high value growth focus, like ready to fill vials. On the right, adjusted earnings per share. Similar, we can explain more on Friday, tomorrow, after providing the final and closing financials. Some heads up again, as in Q3, EBITDA decline falls through after tax and impact from higher depreciation and interest, mainly driven by the Borneoli Pharma acquisition. In summary, before we talk guidance, to the three main issues one more market decline and continued longer market softness softness with those expectations and two growth projects starting to deliver but clearly slower and this leads to three sub-optimal capacity utilization levels with new assets post or still in the middle of ramp up and similar post renewal of old assets like the glass furnace renewal mentioned And those issues do clearly impact profitability levels. We first talk guidance on the next page, and then we share some thoughts on initiatives to deal with issues. Guidance. Our revised guidance is clearly impacted by the much lower than expected Q3. The guidance is done on an organic growth level, meaning prior year performer, including Bonioli Pharma, and normalized for foreign exchange. Our last or old guidance is from July. We estimated flat 0% to 2% growth for the full year, around 20% margin, and a low double-digit decline adjusted EPS. Thus, on the lower end, no growth versus our 2.4 billion sales in 2024, or midpoint 1% equal to around 24 million growth year over year. This was after delivering a first half of around 25 million decline year over year. So as we estimated and targeted against the midpoint offsetting 25 million year over year first half decline with 50 million growths in the second half to yield net 1% growth for the full year midpoint. To yield the midpoint requiring both, A, market demand recovering cosmetic on the glass side or liquid both on the glass and plastic side, and B, growth projects, new assets being loaded with demand quickly. Thus midpoint, we expected round numbers, 50 million second half growth roughly half and half, 25 million Q3 year over year and 25 million in Q4 year over year to come out at the midpoint. Now we have one more quarter behind us, the third quarter. And in hindsight, we overestimated both the market recovery and also ramping up and loading our new asset with customer demand. So looking at Q3, Q3 did not bring around 25 million growth year-over-year, but rather close to 10 million decline year-over-year. Thus, round numbers, we are against the midpoint last guidance around 35 million behind, down 10 versus expected up 25 million. So our last guidance on revenue, take the slower growth into consideration. The midpoint, or negative 3%, is around 70 million year-over-year decline. Half of this already happened and the other portion we estimate in Q4, assuming very little recovery on the market side and growth projects delivering but clearly slower. Or another triangulation we can provide is the midpoint or negative 3% year-over-year on 2.4 billion sales requires fourth quarter to come in around roughly 50 million higher versus the last quarter versus Q3. Thus around 50 million quarter over quarter growth. Again, this assuming very little market recovery and slower progress on the growth projects. And maybe also a touch of more conservative planning still to be seen. On adjusted EBITDA guidance, the first nine months we are at 18.8% adjusted EBITDA margin. We are estimating to be around 18 and a half to 19%, so very similar to the current profitability levels. On adjusted earnings per share, it is handing down the EBITDA guidance adjustment post taxes to earnings per share, which gets us rather into the mid double digit decline versus low double digit So before I turn to our last initiatives or latest initiatives to counteract some of the issues we face, please note that midterm guidance, we are not providing any new midterm guidance for 2026 and beyond as we are still in the middle of our budget planning for next year, for 2026. So it does not make sense to cover midterm guidance right now. Let's go to the next page, please, and cover leadership team changes to accelerate our initiatives. Starting from the right, Norbert Topp joined us in August. He is in charge of carving out the combined molded glass operations. Gerritsheimer Legacy and Bomioli Pharma integrating the two businesses and carving it out. Consequently, we would like to sell molded glass. Moldy glass will be a new segment within Gerritsheimer. We take the opportunity and we plan to transfer to a new segmentation for the start of the new year. Achim Schalk joins us in November and will play a vital role in this new segmentation. We just went through the financials still in the old segmentation, yet we know many of you brought forward to take the opportunity towards a revised segmentation. So as we're working on this for the start of our new year from 1st of December onwards. Finally, myself as new CFO, next to finance, I can help to accelerate our transformation, addressing key issues mentioned around growth, cost, as well as cash when explaining our financial results. In operational excellence, example given with focus, focuses on A, sourcing efficiently, where we rather have a decentralized approach currently And B, cost of non-quality, where we still have quite some room against best in class. In commercial excellence, A, we drive price reader and segment the portfolio thoroughly by customer, product, region to improve profitability. B, we chase volume to fill existing capacity to improve utilization. Preferring footprint consolidation, we drive a classic grow, fix, close, or sell approach. We also consider external help, both particularly in commercial and sourcing to start with. Timing wise, this is not just a quarter or two. This will be a focus for us for the next two years at least to start with to improve our run rate step by step. Organizationally, we implement a transformation office reporting to the CFO, myself, to have a focal point and board level and resolve bottlenecks. Also, we ensure to approach the highest paybacks first. Thank you. Back to Dietmar.