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.

Please turn to page 7 for an overview of our portfolio measures. As highlighted, we have signed an agreement to sell our business unit Centaur and primary packaging plastics to an affiliate or fund advised by APEX partners. Under the terms of the agreement, APEX funds will acquire a total of 15 production sites from primary packaging plastics in 9 countries The purchasing price is based on an enterprise value of approximately 1.5 billion euros. This is a great step towards deleveraging, targeting a sustainable leverage of below three times EBITDA. In addition to that, we will continue to target the sale of our molded glass segments. The future portfolio of Gareth Heimer will be concentrated on high-value primary packaging and drug delivery solutions where technological expertise, regulatory requirements, and long-term customer partnerships create meaningful differentiation and barriers to entry. Medical device systems and syringe systems provide attractive growth opportunities. While the transformation of tubular glass is intended to improve profitability and its competitiveness. Combined with lower leverage and a leaner cost base, this should support a more resilient margin and cash flow profile over time. Let me take you through the results of our new segments on page 8. Containment and delivery systems achieved organic revenue growth of 8.8%. Therefore, revenue increased to 296 million euros in Q1 2026 from 281 million euros in Q1 2025. The main driver of the revenue growth was the performance of our business unit medical device systems with the ramp up in Peachtree, contributing positively. In addition, we saw a very positive performance of our Eastern European plants. The business unit primary packaging plastics, or PPP, as well as Cento, were approximately flat year over year. In Q1, 2026, the adjusted EBITDA of the whole segment grew to 61 million euros from 51 million euros the year before. This reflects the contribution from higher medical device system volumes and the benefit of resource reductions implemented in advanced technologies. PPP and Centaur were broadly stable year on year, while cash and inventory measures also temporarily affected PPP earnings. With that, let's move to slide nine and our segment report on primary injectable solutions. In primary injectable solutions, or PIS, strong growth in syringe systems more than offset lower revenues in tubular glass Europe and Asia at the top-line level. Total revenue of the segment grew to €101 million from €94 million with 14.2% organically. Adjusted EBITDA declined by €1 million to €6 million reflecting the lower contribution from tubular glass Europe and Asia. We have changed the divisional leadership and initiated a restructuring plan focused on footprint optimization, operational excellence, and SG&A savings as part of the GTO program in tubular glass Europe. Now let's move to our third and final segment, molded glass on slide 10. For this, I hand over back to Wolf.

Thank you, Achim. In molded glass, lower revenues resulting mainly from the furnace repair in Chicago Heights and lower revenues from pharma containers or liquids in combination with weak market demand in the area of cosmetics. This led to a decline of revenues to 144 million euros in the quarter, down from 160 million euros the year before. Adjusted EBITDA in first quarter 26 declined overproportionately to 6 million euros from 32 million euros in Q1 2025. As explained upfront, this was mainly driven by our strong focus on cash, achieving a much lower inventory buildup through rigorous production volume management, including extended temporary production halls, which combined with low revenue led to a underutilization of assets in Q1 2025. With a high fall through to adjusted EBITDA. To improve our performance in this space, amongst others, we have initiated the closure of the Chicago Heights plant in first quarter, which we target to complete in the fourth quarter of this year. The qualification of our U.S. customers for delivery from our Type 1 plants in Italy and India will carry on. Furthermore, we have a comprehensive set of transformation GTO measures in molded glass to improve operational performance. We have upgraded our molded glass leadership team with our new molded glass CEO, Daniel Winkler, to drive and accelerate the transformation. Let's take a look at the overall cash flow for the company on the next page. Page 12, please. The main drivers for the development from the 66 million euros of preliminary EBITDA in the first quarter of 2026 to an operating cash flow of 25 million euros were the changes in networking capital and our interest payments. On networking capital, as explained, we successfully managed to limit our inventory build-up to 5 million euros compared to 46 million euros in first quarter 25. Our payables went down by €54 million, around half driven by less reverse factoring lines available to us due to our lower credit rating at the beginning of this year. Collections worked well with €46 million receivables reduction. On interest, on average we paid around 4.4% interest on our gross debt of €2.2 billion, resulting in a net Interest payment of around 60 million euros for the quarter. On capex, as mentioned earlier, we significantly cut capex in half to 57 million euros from 130 million euros in the first quarter of 25. Please note that despite our better and very rigorous capital allocation, we spent 37 million or two-thirds of the 57 million euros total capex for growth projects. The operating cash flow of 25 million less the capex spent resulted in a negative free cash flow before M&A of 32 million euros. As mentioned, the best first quarter cash flow results since 2019 and more than 100 million euros better versus first quarter last year. Our cash focus paid off. On page 13, I'll give you an update on our capital structure and financing status. On the left-hand side, you see our net financial debt of close to 2 billion euros and our liquidity of 342 million euros. This very solid liquidity level is fully sufficient and compliant with the covenants agreed with our banks under our stabilization agreement. On the right-hand side, you can see our maturity profile. Maturities at the end of this as well as at the end of next year will be more than covered by the expected proceeds from the divestitures of our business unit center and PPP. This gives us a very solid base for our debt refinancing which we are executing with the support of our financial advisor Lazar and of course with the continued strong support of our current group of banks and debt holders. Please turn to page 14 for an overview of our upcoming events. On Tuesday of next week, we will be holding our annual general meeting. In September, we target to publish our final Q1 financials. In November, we expect to publish our half year results as well as our Q3 report. On the right hand side of the page, we show selected investor relations events. And during September, we hope to meet you in person at one or the other of the listed investor conferences.

We will deliver the operational transformation, including the targeted 50 to 70 million euros annualized EBITDA improvement with implementation across 2026 and 2027 and the full run rate impact expected from 2028. Third, we will continue to reshape the portfolio with the preparation of molded glass for divestiture. However, as Wolf mentioned, Thank you, Achim.

Operator, please open the floor for the Q&A session.

We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on their touchtone telephone. You will hear a tone to confirm that you have entered the queue. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use only handsets while asking a question. Anyone who has a question, we press star and one at this time. The first question comes from the line of Oliver Reinberg from Kepler-Chevreux. Please go ahead.

Oh yeah, good afternoon and thanks very much. Three questions from my side. First, on this transformation savings of 50 to 70 million, can you just talk to, is there any change to that? Because when you talked about earlier 200 to 400 basis points overall, I thought it's a bit more like 50-200 million to just get things in color. Has anything changed? Secondly, can you just provide some kind of details what actually happened in tubular glass, what these issues are? And thirdly, I wonder if you can provide any kind of sneak preview of the future of Gerasheimer. I mean, you will basically sell down half of the kind of business. What is actually the next step beyond that? And can you provide any kind of comment on the search for a new CEO? Thank you.

Thank you very much, Ulrich. Oliver, for the three questions, I'll take the first one. Transformation savings. Yes, quite frankly, nothing has changed here. The 50 to 70 million that we are referring to indeed are somewhere worth around 200 to 400 to 50 to 400 base points margin improvement. Nevertheless, here we're taking into consideration that Centaur and PPP are divested. As such, you need to take the 50 to 70 rather to a reduced portfolio of roughly 1.8 billion of sales. And then that margin improvement points range that you quoted, Oliver, is correct. Two bill of glass, maybe I hand it over to Achim. That's in his basket.

Thanks, Wolf. Thanks, Oliver, for the question. On tubular glass, specifically in Europe, obviously we have a comparably complex footprint of smaller plants. While the business is largely successful in the US and North America, as well as in China, there is necessity of restructuring and reshaping the footprint, as well as refocusing the portfolio within Europe.

Great. And then maybe I take or start with the third question, which was on strategy, future of Gerasheimer, etc. I think we can only reiterate that both the divestiture of center and PPP, as well as what we mentioned in terms of molar class, preparing Carvel, preparing a divestiture is still lots to do, to be very frank, lots to do, but still strategically divestiture of molar class. will continue to drive the focus on high-value primary packaging solutions as well as truck delivery solutions. That's where Gerasheimer is going. That's where all our strategic work is aiming for, and that's the future of Gerasheimer.

And on the CEO search?

Yeah, I think I wanted to add, Oliver, on your question. Obviously, that's not in The next question comes from the line of Falco Friedrich from Deutsche Bank. Please go ahead. Thank you and good afternoon. Firstly, you have not mentioned the full year guidance in your presentation.

Is the adjusted EBITDA margin target still realistic after these Q1 results that were significantly below it? Then my second question, were you able to sustain your market shares while you were in cash preservation mode earlier this year? And my third question is, could you give us an indication how much of the tubular glass business is in Europe and how much is coming from the US? Thank you.

Thank you, Heiko. On guidance, correct, we're not commenting on guidance because there is no change on guidance. As such, guidance is intact. What we did comment on, obviously, is that step by step by step, we do see an improvement in second half versus first half, and we do see the first quarter results clearly in the low point of the year. Market share, that would take a little bit longer here. Really, as we commented on the different segments, clearly some grew nicely. For example, what Achim walked you through. On the other hand, in molded glass, sales went down. And as such, at the next basket, we're happy to set up a follow-up meeting with you on that. Then in terms of mold, I think your question, tubular glass? Achim, maybe you can answer that.

Normally we don't share details around the split of the regions, but clearly the European region is much smaller than the U.S.

Okay, thank you.

We now have a question from the line of Olivier Calvé from UBS. Please go ahead.

Hi, good afternoon, Wolf and Achim. Just a couple left for me. Maybe just starting with the EBITDA margin levels, you know, obviously you're using new segments. We had some disclosures in June with your full year report, but we still have some pretty big deviations in margin levels, also from the comparative period relative to the averages you've shown over the full year. So I just wanted to ask if you could perhaps give us some color on the margin developments you saw last year as a basis for forecasting for this year, perhaps in each of the segments, if you're able to do that. And then secondly, I'm just curious if you could give us a sense of the level of total capex you expect for the year. You know, I think base capex, if I recall correctly, you were calling around 100 million or so. And just to give us a sense of how much growth capex as well you expect on top of that. Thank you.

Thank you very much, Olivier. I'll start with, I think, the first question, which was EBITDA margin development. And I think the question out there or where you have the largest deviation year over year is molar glass. So why don't I start with molded glass and we take it from there, which also clearly had the biggest impact on the total Gersheimer results. So quite frankly, to understand the EBITDA decrease year-over-year from first quarter 25 of 32 million to first quarter 26 million, one has to normalize to ensure an apples-to-apples view. So Olivier, if you don't mind, let's start with first quarter 25. In the first quarter 25, as I mentioned, we increased inventory for the total company by 46 million, and a good part of it was in molded glass, which has a favorable P&L impact. So from the 32 million EBITDA margin in the first quarter, I think you have to normalize around 12 million or so. So you go from 32 minus 12 to 20 million as a normalized level for first quarter 25 for the inventory buildup. So if you take then the 20 million, year over year I mentioned that in molded glass we have faced around 16 million lower sales impact. So that is around, I would say, 8 to 10 million lower EBITDA comes out of that, especially since the sales decrease was in the higher margin areas of pharma and cosmetics. So you go normalization inventory build from 30 to minus 12 to 20. And then really for lower sales, you go from 20 to roughly 10 to 12 million first quarter last year, apples to apples for you. the remaining four to six million or so that to complete the walk to the six million that we achieved the molded glass in the first quarter 26 that is really negative cost leverage due to the low capacity utilization it's a bit of mix and some other uh cost and efficiency items yeah that i would say completes the walk so in summary of the 32 to 6 difference or 26 million on a normalized basis. Around 12 is very strong cash management and inventory management in the first quarter of this year. Eight to 12 is volume related with pharma and cosmetics, including some mix. And the remaining five-ish or so is negative cost leverage, low capacity utilization. All of which I think are addressable. So I think one thing is to describe the first quarter, but if you don't mind, Olivier, I'll give you also a little bit, you know, what's going on in Moldeglass going forward in terms of improvement of EBITDA. I'd like to point out five drivers. One I mentioned already, first quarter is seasonally our lowest sales quarter. Number two, we got a good part of our inventory reduction completed, some more to come, clearly. Yet not with an as high impact as we have seen in the first quarter or first quarter last year. Number three, market recovery. As mentioned, especially pharma and cosmetic were down year over year, which we do expect step by step a gradual recovery towards the end of the year. Number four, mix with the pharma and cosmetics are higher value products, whether it's food and beverage. Thus, the recovery in those markets improves mix. And finally, number five, very important, the transformation, which both Achene and I walked you through. 50 to 70 million EBITDA improvement for the total company fully by 2028. And I would say of that 50 to 70 million, let's say a third, even up to half of this is the potential in molded glass. and a good example of this is closure of our site at Chicago Heights where we lost EBITDA and cash over the last years clearly. So in summary, those five drivers we are focusing on, those will help to improve results at Molded Glass step by step. Lots of work ahead of us, we have our hands full, yet our Molded Glass team led by Daniel Winkler is up to the challenge. Quite frankly, I think molar glass is very central to the story of the first quarter and the margin impact. I'm not sure, Olivier, if you need the same picture here in also the other segments. Up to you.

I can obviously add the positive note, Olivier, on containment and delivery systems, where we've been able to improve margins by more than two points, despite the strong Thank you very much. Thank you very much.

So from what you're saying, it sounds like, you know, sort of the 20 million days in molded glass as a, you know, base for Q1 at EBITDA. And then essentially, you know, you posted 87 million for the full year. So, you know, no specific seasonality or any, you know, big moves that you made. So, you know, as you were redrawing the segments, this is kind of the question I was getting to. And, you know, similarly for the other segments, just trying to understand a little bit how you're thinking of their potential seasonality, right? Thinking of primary injectables in particular as well.

Yeah, I think, Olivier, so I think the numbers... that we put there for first quarter as we mentioned adjusted for bill and hold as well as the other corrections so that's why that all of those adjustments and the cleanup work which were completely done with that's included and then secondly in terms of seasonality I think as you know the first quarter as I mentioned is our seasonal weakest quarter yeah because as you know we're You have that one month difference. So for us, the first quarter, it is December, January, and February. And those are, in many areas, those are just weaker, slower business activity months. And furthermore, I think we provided guidance, and we just walked you through improvements that are underway. So where we clearly see that the second half of the year is stronger than the first half of this year, right? So that gives you hopefully some flavor for seasonality, margins you have, and we gave you some indication on various methods that we're working on.

Thank you. Just a final one, sorry, but just on primary injectable solutions, right? Basically, you've posted in Q1 last year 7 million EBITDA. You did 70 million over the full year. So just wanted to understand that. Thank you for joining us.

We ask for your patience. As promised, every time that we publish a quarter for this year, we'll give you again the full transparency towards the same quarter last year. As you know, we've adjusted the full year for all the bill and hold and all the corrections. And then we now, every time, we provide transparency towards exactly that picture for the same quarter last year. So we ask for your patience and then When we discuss second quarter, first half, we can go into that in more detail. Thank you.

The next question comes from the line of Delphine Lelouet from Bernstein. Please go ahead.

Yes, hello, hi, good afternoon. Thank you very much both for the visibility you're giving us. But just to be sure and fully clarified on my side, when we think about the other impacts that we have on both the revenue and the adjusted EBITDA, is it strictly linked to what we discussed about the world class division, or is there any other stuff we need to keep into the consideration? And certainly, Previously, you were talking a lot about the ramp-up in Fitch Free. Can we know exactly where we are now, how we are in terms of efficiency and yield, and if you do have anything for us to think about the rest of the year?

All right. I hope I got the question correctly. So I'm on the cash flow page. I was more referring to the other, which is on the beginning of the page for the adjustment in between Q125 and the new restated Q125.

So we have minus 15 million on the EBITDA coming out from others. Thank you very much.

I think we won't provide all the line item details, but already when we did the overall adjustment and restatement, we mentioned on one hand side you have bill and hold, and then in the other bucket, you basically have all other accounts, whether it is rebate accruals, other accruals, evaluations, and, and, and, and, and as such, you clearly see bill and hold The balance between revenue impact of 11 and 5 million adjusted EBITDA impact is kind of what you would expect. Obviously, in the other bucket, you have some adjustments, correctments that yes, impact revenue, like I mentioned, for example, rebate accounting or other matters. But then you have also items that are purely having an impact on EBITDA, on earnings, but not on revenue, such as any inventory accounting or accruals or Dutch matters. We scrapped fulsome through all the accounts and all of that is captured in this view. Good question, thank you.

Sorry for that, but just another clarification you did. Is it definitely more linked to what is happening into mold glass or was it more linked to What is going to be sold in a way?

Sorry, I couldn't understand the question.

No, but all the rebates you're talking about or all the activity, the commercial, let's say, restatements you have to do which have an impact into the EBITDA, are they linked to the PPP mostly or mostly to the multi-glass or is it something that is really Thank you. Thank you.

And on the second question, regarding the PH3 ramp-up and efficiency improvements, obviously it's a very complex ramp-up. We are making quarter-to-quarter improvements, and I'm happy to say that we have seen record months very recently, so you can expect also Q2 being better than Q1 PH3, and then second half being better than first half.

Thank you. We now have a question from the line of Edward Hall from Stiefel. Please go ahead.

Thank you very much for taking my questions. I think one would just first of all be on asset utilization, which you've talked about, and I guess on tubular and molded glass more specifically. I mean, obviously now you've also got Q2 and Q3 sort of already almost historical could you talk about the asset utilization year over year and how this has changed even throughout this year that would be my first question and then second question would just be on on the preliminary free cash flow number and obviously it mentions that this is including the business units under sell process so appreciate any guidance there with sort of the underlying business x these divestments as well and then just finally more of a clarification to me but you talked about high value products I guess it's been a while since this has been discussed at length but maybe just to provide another sort of definition from your view and the mix in primary injectable solutions. Thank you.

Alright, Edward, thank you very much for the question. So on acid utilization I think It's tied to our cash focus, right? As I mentioned, A, you have seasonally the first quarter is our lowest quarter in the year, and B, we were later focused, as I mentioned, on cash. And with cash, that included also inventory management, as I pointed out. Instead of a seasonal inventory increase that, if you look at last year, 46 million, We managed that deliberately to only 5 million this year, right? And that together with, in certain areas, a lower sales load clearly had an impact on asset utilization, which I think I gave you an example for molar glass, where step by step by step, we see that improving. And that is how I think that's probably fared across the entire company. that because first quarter is our lowest point in the year, we do see a stronger second half versus the first half also for asset utilization. And we can think about providing a little bit more color at the next earnings call when we talk about first half results. And then I think, could you repeat, Edward? Line was a bit bad. Your second question, please.

Yeah, sorry, just on the free cash flow preliminary number and any comments you could provide on how that number would be different without the business units that are being divested.

I would say, Edward, let's do that when we've completed the transactions. Good question. But as you know, we don't provide guidance on a BU by BU basis. Yeah, we provide on a segment level. And as such, we want to stick with those reporting lines. But I understand your interest, but we can't disclose that right now. Thank you.

That's clear. And then just to follow up on the final question, just on higher value products or solutions. Again, maybe just to get your definition, because there are different ones in the market. And again, the mix that you guys currently have.

Yeah, very good question, Edward. And yes, that's obviously... out there in the market from different peers. I would say when it comes to our delivery solutions, we consider almost all our portfolio a high-value solution where we have high levels of differentiation within that segment. And when it comes to syringes and tubular, I think there is a more standardized division on definition on what is considered RTU, RTF, and products for biologics, but also GLP-1. Here we are still working through the right definition ourselves and the percentages of our portfolio. So hang in there with us before we can disclose. Thank you. Thank you.

The next question comes from the line of Odysseas Manisiotis from BNP Paribas. Please go ahead.

Hi, good afternoon. Thanks for taking my questions. Could you help me arrive to the below three leverage target post center and plastic sale? Or just if you could give me a feeling of what the net cash proceeds from the 1.5 billion EV will be. And if you could give us a feeling on the EBITDA margin for the remain call implication of that below three leverage target. And lastly, could you give us a feeling of whether that's a late 27 target or something that you can achieve right after the sale? And secondly, could you remind us what percentage of your cogs are related to oil? and to what extent you're hedged for this year and next year. Thank you.

All right. Thank you very much. I'll take the first question here. So how do we get to leverage below three and when do we expect to timing wise to complete our refinancing? I start with the last question first. Refinancing, I think you're right. We target to complete that absolutely in parallel to closing center and PPP. As you know, we target to close center first and then PPP next. And as we mentioned, it would be PPP closing in the first half of 2027. So that would also be my answer completely aligned upon Closing PPP will have our refinancing ready to go. So we're already heavily working on this. In terms of leverage, well, you know where the leverage is today, right? And you know, we have a page in there, what our depth is. So you can do the math, what it takes to get below three. Yeah. I think Achim mentioned that the enterprise value is at or slightly above 1.5 billion euros for the two businesses combined. And then you can do the usual gross to net adjustments for some taxes, obviously, as well as for some transaction costs. But rest assured that the gross to net is fully sufficient Thank you.

I think the second question was on EBITDA Remainco, right? So obviously we are disposing two parts of the containment delivery solutions and We're selling a quarter of the company. There's also a duty to reduce SG&A in line with the size of the business that is disposed. However, the target of our EBITDA percentages and the improvements that Wolf laid out from the transformation programs are aligned. So expectations are that we're going to land at a sustainable level and grow from there. And when it comes to the percentage of costs of goods sold based on oil price, you know, around 50-50 of our business is directly connected to polypropylene, polyethylene, polyester, raw materials. 50% is more glass-based. Also there, of course, you have the impact from energy costs, but if we stick to the raw materials, 50%, however, A lot of that is going to be disposed and we have protections through pass-through agreements with our customers. Correct. Thank you for the question.

Thank you very much. Can I sneak in the last one? One of the two farmers leading the GLP-1 space announced a few supply contract cancellations on lower demand expectations and potentially some recent unfavorable clinical readouts. Do you expect this to have any impact on your hopes of utilizing recently added capacity?

Sorry, Edward. No, sorry. We could barely understand it. The line was very bad. Could you repeat the question a little bit slower? Maybe the line will get better.

Yes. Can you move on now?

We can hear you just Okay, good question. So, so far, We have not received a demand cancellation. Also, as you know, I think at one or the other call before, we have clearly pointed out that we have strong commercial contracts, particularly in the GOP-1 space with take-or-pay structures. So we do expect our growth to continue. As we mentioned right at the very beginning, I walked you through our grow, fixed, Thank you. Very clear, thank you.

As a reminder, if you wish to register for a question, please press star and 1 on your telephone. We now have a question from the line of Christian Ehmann from Bärenberg. Please go ahead.

Hello everyone, thanks for taking my questions. One for the history of Black Sail, looking back, the Centaur Sail and the PPP Sail were Let's say above what you initially guided on, so only selling center, I was just curious about the strategic rationale to sell both. Obviously, you had a good price for both, but maybe you can give us an idea how you then decided to sell both of those businesses. The second one would be going forward. appreciating the capex rate let's say 11 12 percent of sales going forward is this a level you can maintain to keep for example molded glass in a sellable state and the third one would be of refinancing maybe you give us a guidance about the interest rate you expect to refinance for thank you very much

Thanks, Christian. Let me take the first question on the combined sale of center and PPP with two separate contracts. I'd say that was an opportunistic play that was offered by Apex as part of the process of the center sale and helped us to reduce that in one shot by around 70%. So therefore, we took that opportunity based on good valuation in the current market environment. Great.

And then CapEx spent and going forward CapEx spent particularly in molar glass. So Christian, I think it's fair to say that you've seen in the last years or so in elevated spend of capex, also in molded glass. As you know, we have completely overhauled and invested in a hybrid technology at our molded glass facility, for example, in Lohr in the south of Germany. Nevertheless, if you look at the top peers or so in that space in molded glass, they managed to spend 10% of sales as CAPEX on a sustainable basis, and we strive to do the same and align with the top peers.

Thank you.

Ladies and gentlemen, that was the last question. I would now like to turn the conference back over to Mr. Guido Pickert for any closing remarks.

Well, thank you very much for your interest. And if you have remaining questions open, you know where to find us. And as said before, we would be happy to meet one or the other of you in person on the conferences and our activities going on in September and October. And with that, thank you very much and bye-bye.

Ladies and gentlemen, the conference is now over. Thank you for choosing Chorus Call and thank you for participating in the conference. You may now disconnect your lines. Goodbye.