Gerresheimer AG

Thank you, operator. First of all, I would like to impress a thank you, a very big thank you for your continuous support of Becker Refrainer. We have not had an earnings call for quite some time that we fully focused on completing our investigations and ensuring clean, robust, and especially compliant set of 2025 financials. This was accomplished today and we were able to publish our audited 2025 annual report. Our management board will explain our results in more detail. First on the disclaimer. Please let me remind you that the disclaimer you can find in our full year 2025 slide deck will apply throughout this earnings call and we assume your consent to this. I will therefore not read it out loud. Please allow me some selected clarification. Due to rounding, numbers presented throughout this report may not add up precisely to the totals indicated and percentages may not precisely reflect the absolute figures for the same. Organic revenue and organic adjusted EVGA include the revenues and adjusted EVGA of Bormioli Pharma in both 2024 and 2025, which we acquired in December 10, 2024 and fully consolidate from the beginning of the financial year 2025. Translated at the budgeted exchange rates for the financial year 2025. Thank you. And now let me introduce today's speakers on page. I'm glad that we have all three members of the new management board with us today. Our CEO, Uwe Röhrhoff, our CFO, Wolf Uwe Lehmann, and Achim Schalk, the third member of our executive board. Our new management board is setting the tone from the top with a clear focus on governance, disciplined execution, and Transformation. Please note that the Q&A session will be opened at the end of the presentation. Now let me turn over to Uwe Röhrhoff, CEO of Gelsheimer, who returned to Gelsheimer in November of last year. Uwe?

Thank you, Guido. Good afternoon, everybody. Please turn to page four of the presentation. I can only echo what Guido mentioned. As the new management board, Our main focus, right from day one, has been on governance, cleaning up and driving transformation. It took quite some time and resources to complete all compliance investigations very thoroughly, whether on bill and hold or various investigations on different compliance controllership concerns, including extensive forensic investigations. We shared progress transparently as acquired along the way in our ad hocs. Please note, all findings have also been shared transparently with our auditors, KPMG, as well as with the authorities, BaFin. All investigations are now completed, fully booked and reflected in the financials we filed earlier today. Our banks, our creditors recognized We needed some extra time. They clearly acknowledged our efforts and supported us broadly. They have given us time up to Q4 26 before the leverage covenant becomes effective again. We are using this time rigorously to sell Centaur and refinance the debt of the company. We are on track to sign and close Centaur in our financial year 2026, latest by November 26. On the refinancing, we are working together with our advisor Lazar and of course our supporting banking partners. Selling Centaur and refinancing goes hand in hand and it's vital to improve our capital structure. So far, We have a dedicated page coming up. Let me turn it over to Wolf to tell you more about the findings and corresponding corrections.

Thank you, Uwe. Let's turn to page 5 on the corrections of 2024, our 2024 restatement. All corrections have a net impact on 2024 restated revenue of minus 2%, or 45 million euros, and EBITDA of minus 7%, or 31 million euros. This is slightly higher impact compared to the prior announced interim status update of 35 million revenue and 24 million EBITDA impact back on 10th of February. Findings from all investigations are included. Bill and Hol supported with external specialists, various investigations also including forensic investigation as well as our own findings. Similarly, We had already communicated we would impair selected assets for around 220 to 240 million, mainly stemming from impairing certain development projects of Sensile Medical AG, that is our business unit advanced technologies, as well as assets of our Chicago plant. The final amount is 258 million Euro, also a slightly higher final amount as we completed the analysis. Note for parts of this complex impairment analysis, especially around Sensile, we hired an external accounting expert to get an appraisal to ensure we state the accounts correctly. We truly took matters seriously, invested time and resources to get matters right. On the BaFin investigation, we continue to fully cooperate with the authorities. We work very transparently and have shared and are sharing the results of the now completed investigations and our final accounts. We have received three requests from BaFin for information around year end 2024 and one on first half 25 so far. Yet to expect a fourth and second request respectively, which makes sense to us to push progress towards closure. Again, we fully and transparently cooperate with the BaFin authorities. Next to correcting 2024, We focus on ensuring 2025 is correct and we provide our annual accounts to the highest standards. Please move to page six, the corrected as reported numbers for 2024 as well as 2025. Please remember, Bormioli was acquired in December 2024, the month of financial year 2025. Remember, we are one month ahead, which means 2024 is shown excluding Bomioli and 2025 including the acquisition. Also, numbers are shown with the foreign exchange assets, actual. On revenues, as reported, we grew sales to 2.3 billion euros, up by around 330 million. The top-line growth is net-net driven by the acquisition of Bomioli. The organic growth was approximately flat, up 0.3%. The growth by segment varied. Organic growth of up plus 5% in plastics and devices was largely offset through around 6% lower revenues in primary packaging glass, The positive revenue trend did not fall through to EBITDA. The results, including the acquisition, was approximately flat year-over-year, slightly down 4 million. In primary packaging glass, molded glass volumes were down. At our Chicago plant, we had operational issues running the furnace. As you know, This year, 2026, we made the decision to close the plant at Chicago Heights. Also, at our largest class plant at Lohr, we faced challenges during the ramp-up period for the new furnace, causing inefficiencies. In plastics and devices, EBITDA in most business units was flattish, yet syringe sales increased, including GLP-1-related sales that were offset by primary packaging plastics with a decrease two to lower oral liquid volumes, which we have explained before. These downsides, mainly at primary packaging glass, offset the roughly 60 million contribution coming from the addition of Bormioli. Let's move onto page eight with the pro forma 2024 numbers, including Bormioli already in 2024, to get closer to an apples to apples view similar to the basis for our guidance. Upfront, let me cover how results came in versus our last guidance for 2025. Organic revenue growth, we expected negative 2 to negative 4%. We came in quite flat, up 0.3% organically, thus on a normalized F-planned FX rate basis. Adjusted EBITDA margin we guided towards 16.5% to 13.5%. And our final results are 16.8% within the range. On earnings per share, EPS, we had estimated high double-digit decline or negative earnings per share. And finally, we are at a negative 1.65 earnings per share. On the next two pages, we will go in more details referring the revenue on Evita drivers by segment. Yet quickly, on the overall company. Revenue reduced from approximately 2,340,000,000 to 2,320,000,000, with plastics and devices up around 50,000,000 and primary packaging glass down around 70,000,000. for a net decrease of around 20 million. EBITDA year-over-year pro forma, primary packaging glass down 56 million, and plastics and devices and gas combined down 10 million year-over-year. For transparency, as 2025 is the first year of the acquisition of Bomioli Pharma, We show the year-over-year trend of Bomioli pro forma marked in the dotted line area. Revenue decreased for Bomioli pharma pro forma from 349 to 331 million, down 18 million, mainly on the plastics packaging side. EBITDA quite flat from 62 to 61 adjusted EBITDA. Please note, Omioli is split up and fully integrated into our segments as such. We show this one time for transparency reasons, but we won't do this going forward. Let's talk about the results by section.

Let's move on to page 9, showing the results of the plastics and devices segment. Just to remind you, this includes syringes, medical devices, center and primary packaging plastics. Overall, plastics and devices grew year over year by around 50 million euro to just under 1.35 billion euro. Yet, the revenue growth did not fall through and EBITDA came in slightly down by minus 5 million euro and ended with 350 million euro. EBITDA margin reduced to 23.5%, yet still a decent level of profitability. This reflects the mixed performance across the segments. By business unit syringes, the 32 million Euro year-over-year revenue fell through to EBITDA and yielded plus 8 million Euro. Medical devices delivered year-over-year 25 million Euro growth from major projects like auto-injectors and tents, yet as we ramped up, especially our USP3 facility, and are fully staffed, we have not yet seen sufficient incremental plant loading and revenue to fully cover the incremental year-over-year costs, resulting net in year-over-year 2 million Euro less EBITDA. Primary packaging plastics, year-over-year revenue was down by 8 million, driven mostly by oral liquids and EBITDA by 10 million, since next to less revenue falling through also reducing inventory and therefore production, as well as unfavorable mix impacted earnings. Finally, Centaur finished with pretty stable year-over-year trends. Uwe, would you mind covering the packaging glass segment, please?

Yes. Let's move on to page 10. The results of primary packaging glass segment. For the old segmentation, primary packaging glass is molded glass and tubular glass. Overall, year over year, in primary packaging glass, 24 to 25, we recorded about minus 70 million less sales, down to 983 million euros, and less EBITDA of 56 million year over year, down to 126 million, Subsequently adjusted EBITDA margin reduced to 13%. Clearly, PPG performance is not at an acceptable level. Looking at the drivers by view. Moldecraft reduced revenues by around 52 million, driven by declines mainly in cosmetics and oral liquids. The EBITDA The EBTA effect was even slightly higher with minus 54 million. Next to the lower sales and earnings falling through, significant operational issues at the U.S. plant at Chicago Heights, as well as ramp-up challenges at the largest glass plant in Loher, resulted in meaningful inefficiencies and lower EBTA. In tubular glass, lower revenues with standard ampules, vials and cartridges were not fully compensated by growth with higher value products. However, the favorable product mix helped to keep the EBITDA flat year over year despite the revenue decline. Let me hand it back over to Wolf to walk you through cash flow.

Let's move on to page 11, the usual EBITDA to cash flow walk. from Euro 384 million adjusted EBITDA down to operating cash flow at Euro 210 million, a 55% conversion rate. The main drivers in this walk are the just over 70 million adjustments or exceptionals and 101 million interest paid. Under adjustments, we grouped items that are so-called exceptional items on a run rate basis view. Main drivers are A roughly 80 million restructuring and reorganization, mainly the closure of our site at Bad Königshofen. 27 million plant and furnace ramp-up costs, capturing mainly peachtree and lower ramp-ups. Also around 12 million M&A and refinancing costs, mostly around the acquisition of Formioli. Networking capital with up 22 million and taxes Down 31 as well as others up 7, more or less offset each other. Leaving 101 million interest to get down to operating cash flow of 210 million as mentioned. CapEx stood at 295 million. We show the split between base and growth of around 1 third base, 2 third growth. And also for the two main segments, plastics and devices and primary packaging glass. resulting in negative 86 million free cash flow for M&A. On the next page, we review how the financial results, including cash flow, impacted our capital structure and financing status. Please turn to page 12. On the left side, you see our usual update on financial debt and our adjusted EBITDA leverage. shown in the left lower corner stood at year end at 4.95. The adjusted EBITDA leverage covenant is no longer applicable up to and including third quarter 2026, yet we would have been compliant at year end. Looking on the right side of the page, we show the upcoming maturities over the next quarters and years. As explained earlier, we're working on improving our capital structure In our next chapter, we would like to review the latest guidance with you, talk about our transformation initiative and various housekeeping items before Uwe Röehrhoff closes with a summary and next steps. Please turn to page 14, our latest guidance. As you know, we closed last year at around 2.3 billion and 16.8% EBITDA margin. Due to the challenging economic environment, some project delays on the part of our customers and operational challenges, among others those related to production ramp-ups, we now expect revenues to be in the lower half of the 2.3 to 2.4 billion range. An adjusted EBITDA margin of approximately 17 to 18% and taking into account amongst others a reduced factoring volume, free cash flow before M&A between negative 50 to negative 100 million euros. During the last six months, our focus has been on cash generation and this is going to be our priority number one for this year. We expect to deliver an acceleration of revenue growth and margin improvement during the second half of the year with first contributions of our transformation initiative, our GTO initiative. Our customers have continued to support us during this phase of challenging news and uncertainty and we like to use this opportunity to thank all of them. Next, we want to give you an update on our transformation initiative, GTO. Achim, please. Please turn to page 15. We had to refocus the program on fast payback and cash conversion until the sale of Centaur and our targeted refinancing is completed.

With this focus, we expect to yield 10 to 20 million euro EBITDA, equaling 50 to 100 basis points EBITDA margin improvement during this year. This is an important first step, however, with significantly larger potential mid-term. Overall, the project covers five work streams, of which four are focused on profitability improvement.

A few examples. For operations,

Optimizing our global footprint is part of this workstream. Fewer sites in the right locations. The Bad Königshofen site was already closed last year. The Chicago close is announced for this year. And we are currently analyzing additional measures. Having the right staffing levels at our sites, but also as addressed in Workstream 2 for SG&A, and our administrative functions will drive cost-efficiency. In procurement, immediate focus is the bundling of our purchases across our segments and business units, which we have not leveraged enough in the past. Our transformation partner BCG Inverto brings valuable expertise in this field. Finally, on Workstream 5, cash optimization, immediate focus is on strict capital discipline as more capex rigor is key. In addition, classic work with a short-term focus on collections, adequate supplier terms, as well as reducing slow-moving inventory, which is tying up cash. We have fully staffed our GTO initiative and are executing. The program will accompany us through the entire next year 27 and also into 28. On page 16, the new segmentation Since 1st of December 25, our start of the financial year 2026. Starting on the left with our largest segment, containment and delivery systems, covering currently around 50% of sales. Included are primary packaging plastics, medical device systems, advanced technologies, and Centaur. As we are selling Centaur, After the divestiture, the segment still represents a bit over 40% of the total sales of Gerasheimer. Primary injectable solutions covering syringes and tubular glass represent around 20% of our sales, focusing on serving our customers through high-quality glass-based drug delivery solutions. Finally, molded glass we separated and run as our third segment. We have not yet decided on the timing of the announced divestiture, yet are progressing on forming a standalone multi-class business. We have refreshed and upgraded the leadership team significantly and have hired a commercial leader, a new CIO, and just this month our new business unit CEO Daniel Winkler started. Our first quarter 26 reporting will follow the new segmentation. Talking about next reporting timelines, I hand it back to Wolf with page 17. Let's please go to the next page.

Thank you, Achim. On page 17, on the left is our financial calendar, and on the right, selected investor conferences we plan to attend. Q1, we estimate earliest July or rather August publications. The challenge is to ensure all findings and corrections in 2025 get properly accounted for by quarter. First half, we estimate for September or October. And third quarter for October might be a bit tight, but hopefully then back at our usual reporting rhythm. Our annual general meeting we have currently planned for 1st September. Details to follow. Referring to the investor conferences, you see selected ones we plan to attend on the right side of the page. We sincerely apologize for various translations of participations at conferences over the last months, yet we have to fully focus on getting all investigations done and obtain audited financials. Let me turn it back to our CEO, Uwe Röhrhoff, for closing remarks and next steps.

Yes, please turn to page 18. So, we have cleaned up. We have completed all investigations transparently, and that is why we have achieved an unqualified audit opinion for 2025. Nevertheless, it is very clear As written in the auditor's report, a so-called emphasis of matter, we have two must-do's. Sell Centaur and refinance our debt. We are laser focused on those two. Both go hand in hand and both we want to get done this year. On GTO we are getting first impacts coming through in the second half of 26th. Supporting our margin improvement year over year with much more potential inside to get Gerritsheimer performance back to the levels of the top performers in the industry. And beyond selling center and molder class on a total portfolio level, we are continuing our strategic review process and dialogue, including our supervisory board. I would like to again thank you for your support of GERASIMO during these demanding times. Guido, please open the call for Q&A.

Thank you, Uwe. Thank you, gentlemen. Before we open the Q&A session, we would like to ask you to limit the number of your questions to two in order to allow everyone to ask a question. Thank you very much. Operator, please open the Q&A session with the instructions. Operator?

The first question is from Olivier Calvé from UBS. Sorry.

No worries. Thanks. Hi, Wolf, Uwe.

It's connected. I continue with the next question. Please try again. I don't know what happened. The next question is from Oliver Reinberg. Kapler, Shaw, Chevro.

Yeah, hi, good afternoon. Can you hear me?

Yes. Please go ahead.

That's perfect. Two questions on my side. One on free cash flow. With the free cash flow guidance for 2026, can you just provide any kind of color, like what is the contribution here from the center that is still embedded in this kind of guidance and also any kind of color when you expect to turn free cash flow positive? Checking on the Boston investigation, is there any kind of insights you can share with us? And thirdly, on a potential righteous issue, would you still rule out any kind of use of equity going forward? Thank you.

Okay, can you hear us again? Yeah, I can hear you.

Back to your question on free cash flow. So currently we have the negative 50 to negative 100 is excluding proceeds of Centaur. And as we mentioned, we assumed Centaur signing closing in this year towards the end of the year or so.

Does it include the cash flow from Centaur or not? Independent, I'm not talking about the divestment gains, I'm just talking about the...

It includes the operational cash flow of Center, but it does not include the proceeds from Silent Center. Correct.

And what contribution do you expect from Center, because that's going to go, I mean, are we talking 50 million, roughly? Say that again, Oliver? Can you just give us any kind of color what would be the kind of cash flow contribution from the center just to get the kind of feeling where cash flow would be without the center?

No, Oliver, as you know, we don't provide financials down to the BU level. We stay on the segment level. Okay, thank you. Then your second question on BaFin, as I mentioned in the discussion, we fully cooperate with BaFin. and we're making great progress and we take it from there and we continue to do so. All, I can only repeat, we are completely done with our investigations, whether it is our external investigations, whether it's on Bill and Hold, various other matters, as well as our internal investigations, we're entirely done. All of those findings are reflected in the And your third question was around rights issuance. As mentioned, currently we're looking at a debt refinancing where we have mandated Lazar to support us. And that's our focus. Thank you, Oliver.

Can I just ask, in terms of when do you expect free cash flow? Positive? Any kind of free cash flow? Any kind of color on that?

That's fair. I think we had our last guidance for 2026 that was for this year. I would say if it weren't for the Thank you. Thank you, Oliver.

Gentlemen, if you would like to ask a question, please press star, nine and pound key on your telephone keypad. I repeat, to ask a question, please press star, nine and pound key. You can also use the dial-in function in the webcast and raise your hand if you would like to ask a question by phone. I repeat, to ask a question... Please press star, nine, and pound key on your telephone keypad. You can also use the dial-in function in the webcast and raise your hand if you would like to ask a question by phone. The next question is from Olivier Calvet from UBS. The floor is yours, Olivier.

Yeah, thanks. Hopefully, I think that works better. Yeah, just could you highlight specific areas of weakness that were the additional driver to the 2026 guidance cut? And then I just wanted to also come back on the free cash flow guidance. I think your EBITDA guidance at the midpoint means about 30 million cut. You mentioned less factoring. The capex you didn't really touch on, but for the full year you have talked to, I think the base capex of close to Thank you very much, Olivier.

Good to talk to you again. I think in terms of guidance, I think we have mentioned that due to what we saw so far in the first half of the year, a challenging economic environment, and also some project delays with our customers and some operational challenges that had to do with finalizing the ramp-ups. That is why we now lowered the guidance to the lower half of the range that we mentioned before. This is on revenue. And then you had mentioned cash flow also. Cash flow, the reason for changing the guidance is Very much and mainly driven by our latest expectations on factoring. And factoring goes one-to-one against working capital, and that impacts the cash flow. On the rest, if you say on CapEx, no, on CapEx, we have a very strict capital discipline that we've much improved, and there we rather spend less than previously planned.

Any sort of ballpark level you're looking to spend this year on CapEx?

No, we don't provide guidance on that right now.

Okay, and just on the revenue side of things, could you perhaps specify, I mean, you changed the segments, just a question on what is kind of deteriorating? Is it within... Thank you very much.

Thank you, Ueli.

Operator, next question now.

Question, it's for Mr. Richardson from Jefferies. Mr. Richardson, the floor is yours.

Hello, just checking you can hear me?

Are you coming? Can you hear me okay?

Oh yeah.

Yep, okay. Super, thank you. Maybe just two from my end if that's okay. Indiana reported details that the covenants, while suspended for the rest of this financial year, should have a target of 4.75 times. I was just wondering whether this is an upper limit and what management's attitude is to how far below this target you hope to decrease the leverage? And just a second question, the decline in the PPG business margin was quite significant despite the Borneoli portion of that business increasing its margin from 14% to 18%, which implied the underlying business declined significantly. Thank you, Chris. Let me take the first question. I hope I got it right. The voice was a little low, but I think your question was that

By your end, we mentioned that we should have an EBITDA-leveraged covenant at 4.75 and how far below we would be against that. So, good question. Now, it's a very theoretic question, quite frankly, Chris, because as we mentioned multiple times, our current focus is we're going to sell center. and we're going to do a full some debt refinancing and as such it's a very theoretic question as to where we're going to be those prior applicable debt covenants so as I mentioned we were that even if we were under the old covenants who were compliant at year end of 25. As such, that's a very theoretic question. Again, our full focus is on selling center, and then that would be a big step forward for the capitalist structure, and then we'll do a fulsome debt refinancing where I think we see very good opportunities in the institutional market as well as on the private side, and we will keep you posted on progress. and then I believe there was a second question on PPG. Maybe I'll hand it over to Uwe to answer that one.

Yes. Thanks for the question. I think that was a very good observation. Obviously, the businesses in the legacy PPP businesses are the ones that cause us the largest amount of headache and therefore those businesses are also in the focus of our restructuring activities. We made a very quick The decision on shutting down the Chicago plant that still operates for a significant part of this year but it is clear that this plant has had a negative contribution on our performance. Secondly, we have a very strong focus on inventory reduction in our businesses that have led us, in combination with our cash focus, you know, to tighten the production policy to address, you know, the inventory part. But where the margin needs to be, we have taken, you know, significant steps in the restructuring. First of those will hit in the second half of this year. and mainly then also in 27, you know, to bring the margin of the tubular glass legacy business and particularly the molded glass business was the main driver, you know, back to respectable levels. But that is going to take a bit.

Super. Thank you very much.

Ladies and gentlemen, As a reminder, if you would like to ask a question, please press star, nine and pound key on your telephone keypad. I repeat, please press star, nine and pound key on your telephone keypad. Also, you can call in function in the webcast and raise your hand if you would like to ask a question by phone. I repeat, press star, and Pound Key on your telephone to ask a question. The next question is from Falk Svins from Finance.

Yeah, hello. Yeah, hello. My name is Saik Sintz from Finance Magazine. I have two questions for the sale of Center. How much do you hope to raise from the sale of Center? And do you have a plan B in case the sale doesn't generate the desired proceeds? Thank you very much. Thank you.

I think Mr. Richardson has a follow-up question.

Would you still rule out any kind of use of equity going forward? Thank you.

Okay. Can you hear us again?

Yeah, I can hear.

Okay.

Okay, so back to your question on free cash flow. So currently we have the negative 50 to negative 100 is excluding proceeds of Centaur. And as we mentioned, we assumed Centaur signing closing in this year towards the end of the year or so. Then BaFin...

Does it include the cash flow from center or not? Independent, I'm not talking about the divestment gains, I'm just talking about the...

It includes the operational cash flow of center, but it does not include the proceeds from selling center. Correct.

And what contribution you expect from center, because that's going to go, I mean, are we talking 50 million, roughly?

Say that again, Oliver?

Can you just give us any kind of color what would be the kind of cash flow contribution from the center just to get a kind of feeling where cash flow would be without the center?

No, Oliver, as you know, we don't provide financials down to the BU level. We stay on the segment level. Okay, thank you. Then your second question on BaFin, as I mentioned in the discussion, we fully cooperate with BaFin. and we're making great progress and we take it from there and we continue to do so. All I can only repeat, we are completely done with our investigations, whether it is our external investigations, whether it is on bill and hold, various other matters, as well as our internal investigations, we're entirely done. All of those findings are reflected in the and all the findings we have very, very transparently shared with BAF and with the authorities. And your third question was around rights issuance. As mentioned, currently we're looking at a debt refinancing where we have mandated Lazar to support us. And that's our focus. Thank you, Oliver.

Can I just ask, in terms of when you expect free cash flow, positive, any kind of break-even cash flow, any kind of cut-out on that?

That's fair. I think we had our last guidance for 2026 that was for this year. I would say if it weren't for the low or