Gerresheimer AG

Ladies and gentlemen, welcome to the publication preliminary Q1 2026 results Veröffentlichung vorläufige Ergebnisse erstes Quartal 2026 conference call. I am Mathilde, the chorus call operator. I would like to remind you that all participants will be in listen-only mode and the conference is being recorded. The presentation will be followed by a Q&A session. You can register for questions at any time by pressing star and one on your telephone. For operator assistance, please press star and zero. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Mr. Guido Pickert, Vice President Corporate Investor Relations. Please go ahead.

Thank you, operator. This earnings call is based on preliminary figures for our first quarter 2026. Wolf Lehmann and Achim Schalk will explain the Q1 2026 performance to you and will give you an update on the company development. On page one of the presentation, please let me remind you that the disclaimer you can find there will apply throughout this earnings call and we assume your consent to this. I will therefore not read it out loud. You can download the slide deck from our website under presentations at our investor relations section. Now let me hand you over to Wolf Lehmann, our CFO. Wolf?

Thank you, Guido. Before we discuss the quarter, a few comments upfront. With me today is my board colleague, Achim Schalk, who will present to you our focus and progress towards high-value primary packaging and drug delivery solutions, including the sale of our business unit center and primary packaging plastics. As announced earlier this week, Uwe Röhrhoff has stepped down from his position as interim CEO for personal reasons. A few weeks earlier, as maybe you anticipated. We sincerely thank him for his leadership and contributions during an important period for Gersheimer. Comparing when he joined in November last year to today, we achieved significant progress, which we will walk you through. The management board remains fully focused on the priorities we have communicated. One, completing the announced portfolio transactions, the sale of center and primary packaging plastics. Two, reduce debt, strengthening our balance sheet, including a complete refinancing. Three, deliver the operational transformation and restoring sustainable, profitable growth. I would like to reemphasize that integrity, compliance, and strong financial controllership remain non-negotiable priorities for Gelsan. We're completing the additional review procedures required for the final Q1 financial statements, including, amongst others, A, the presentation and disclosure of so-called discontinued operations related to the sale of the two business unit center and primary packaging plastics, and B, The regular quarterly assessment of potential impairment indicators with any such adjustment would be non-cash relevant. These procedures are supported by external advisors and are part of our commitment to maintaining the highest standards of financial reporting. We expect to publish the final Q1 financials in September and focus today on the key financial KPIs, which we do not expect to change anymore. Thank you for your patience and please turn to page 3 with selected recent company highlights. We have signed the sale of our business unit center and primary packaging plastics to Apex. We expect the closing of the center sale by November 2026 and the closing of the PPP sale in the first half of 2027. Once both processes have closed, We reduce our debt significantly and expect to have deleveraged to below three times net debt to EBITDA ratio on a sustainable basis. We are working on a full refinancing of our debt and expect that to be finalized once we have closed the sales processes. I want to stress again that this marks a key turning point for Gelson. Our portfolio strategy is clear and we are driving progress using a classic grow, fix, sell approach. On grow, we will continue to grow our business units, medical device systems, syringe systems and tubular glass North America. Our gross investments are paying off and are delivering results. On fix, contrary to tubular glass North America, which is profitable and growing, Tubular Glass Europe needs a full turnaround and restructuring. In addition, we are right-sizing our SG&A footprint and processes to A, match the new reduced-size Gerasheimer poster sale of center and PPP, and B, align with top-tier competitors. On sell, we focus on fixing, carving out, and selling molded glass. We remain committed to execute the divestiture. However, we still have quite some work to do improving operations. On our GTO transformation, we're executing and are targeting an improvement in EBITDA totaling 50 to 70 million euros. About half of the underlying run rate savings we expect to execute in 2026 and the other half in 2027. By 2028, We target the full benefit in our financials. As expected, Q1 is our lowest quarter in 2026. In our first quarter of this year, we deliberately prioritized cash and working capital discipline. We materially reduced capital expenditures and limited the seasonal inventory built. The associated production adjustments temporarily reduced asset utilization and EBITDA, particularly in molded glass. This was a conscious near-term trade-off to strengthen cash flow. For the remaining quarters of the year, we expect result improvements, supporting a stronger second versus first half of the year. Before we cover first quarter in more detail, please turn to page four with the corrections of Q1 last year. In Q1 2025, the impact of the restatement and other corrections summed up to 1 million revenue reduction from 520 to 590 million euros and 10 million EBITDA reduction from 91 to 81 million. Just like at our last earnings call for the full year, we split the corrections into bill and hold related adjustments and other corrections on the right. The Baffin investigation is ongoing. Unfortunately, we cannot comment on the timing, yet we continue to fully cooperate with the authorities to ensure transparency, support the process, and drive progress towards closure. We will continue to ensure that our 2026 accounts are correct and that we provide those to the highest standards. Even if this takes more time than usual, I will take you later in the presentation through the latest targeted reporting timeline of our quarterly financials. Now turn to page five, please, for a deeper look at our first quarter performance. In first quarter 2026, as promised, we very much focused on cash. We halved capex spending and we reduced our inventory buildup significantly compared to last year's first quarter. We managed production volume carefully, including prolonged temporary production halts at some of our production sites to avoid inventory buildup and related cash consumption. This was a conscious choice and came at the price of lower capacity utilization, resulting in lower EBITDA generation. As a result, revenues in the first quarter of 2026 grew slightly by 5 million euros, while EBITDA went down by 15 million euros. However, free cash flow before M&A improved significantly by almost 110 million euros year on year to minus 32 million euros. Again, this was mainly driven by an inventory build-up of just 5 million, which was 41 million euros lower than first quarter 25, and a sizable reduction of net capex to 56 million euros Thank you, Wolf.