investor presentation - gerresheimer.com€¦ · countries over 6 continents over 1,500 customers...

Investor Presentation

July 2020

This presentation may contain certain forward-looking statements, including assumptions, opinions and views of the

Company or cited from third party sources. Various known and unknown risks, uncertainties and other factors could

cause the actual results, financial position, development or performance of the Company to differ materially from the

estimations expressed or implied herein.

The Company does not guarantee that the assumptions underlying such forward-looking statements are free from

errors nor does the Company accept any responsibility for the future accuracy of the opinions expressed in this

presentation or the actual occurrence of the forecast development.

No representation or warranty (express or implied) is made as to, and no reliance should be placed on, any

information, including projections, estimates, targets and opinions, contained herein, and no liability whatsoever is

accepted as to any errors, omissions or misstatements contained herein, and, accordingly, none of the Company or

any of its parent or subsidiary undertakings or any of such person‘s officers, directors or employees accepts any

liability whatsoever arising directly or indirectly from the use of this document.

Disclaimer

Investor Presentation 216.07.2020

3

Gerresheimer at a Glance

Operational Update Q2 2020

Financial Update

Guidance

Market Environment

3

2

1

Agenda

4

5

16.07.2020 Investor Presentation

33%

22%

27%

16%1%

Strong and robust Business: Growth Strategy capturing long-

term Opportunities

4

Plastics & Devices

REVENUE SPLIT BY SECTOR

Pharma & Healthcare: 81%

Cosmetics: 13%

Others: 6%

81%

13%6%

1. According to IQVIA definition of emerging markets for FY 2019. For further details see note 8 of consolidated financial statements within FY 2019

annual report

2. Underlying revenues and adjusted EBITDA differ due to effects from Sanofi cancellation. For more details prefer refer to our AR 2019.

Primary Packaging Glass

Revenues

2019

EUR 631.6m

Adj. EBITDA

2019

EUR 122.9m

Margin

2019

19.5%

Revenues

2019

EUR 758.3m

Adj. EBITDA

2019

EUR 196.4m

Margin

2019

25.9%

Solid financial profile Leading market positions in

attractive niche markets

Adj. EBITDA

EUR 297m

Strong Cash Flow generation

and lower capital intensity

Leverage at 3.2x as of May 31, 2020

#1 in Europe for plastic

packaging and

inhalation

#1 in the US for

prescription and

injectables

#2 in Europe for

diabetes, pens

and syringes

Strong emerging market

presence in South America,

India and China for plastic

packaging, pens, moulded

glass, ampoules, vials and

cartridges

REVENUE SPLIT BY REGIONS

Europe (ex. GER): 33%

Germany: 22%

Americas: 27%

Emerging markets1: 16%

Other regions: 1%

Well invested assets &

factories, solid customer

basis

37 plants in

15 countries

Delivering to

91 countries over 6

continents

Over

1,500customers

Supplying all

Top 10 Pharma customers

Advanced Technologies2)

Largest customer makes up for ~7% of total

revenues

Clearly identified

revenues streams

Technology & Platform operator

Revenues

2019

EUR 6.4m

Adj. EBITDA

2019

EUR -23.4m

Investor Presentation

Revenues

EUR 1.40bn

16.07.2020

5



Financial Update

Guidance

Market Environment

3

2

1

Agenda

4

5

2

1


Key Take Aways Q2 2020

6

Strong performance in Q2:

accomplishing growth mode despite Covid-19

Financial highlights in Q2

Revenues of EUR 363m

Organically +4.6% in core business1)

Adjusted EBITDA of EUR 84m, EBITDA margin 23.2%

Strong free cash flow in Q2: EUR 45m representing

strong earnings quality

AGM approved dividend payment: EUR 1.20 per share


1. The core business consists of the Plastics & Devices and the Primary Packaging Glass Division; for adjusted EBITDA purposes also including head office/consolidation.

Reliable Business Partner – Also in Challenging Times

Covid-19 Update

7

1More than Business Continuity

Looking beyond Covid-19, we are preparing

for the day after tomorrow

Long-term tailwind due to global increase in

vaccinations as well as higher adherence for

healthcare products2

3 One-time effect in parts of our cosmetics business

Recovery expected within the next months


Promising Growth Prospects in Vials

The Vials Story

8

Tailwind from global Covid-19 vaccination possible:

Facing the global pandemic:

We support any Covid-19 vaccine campaign in close cooperation with our customers

Expansion of global vials market translating into possible sales tailwind in 2021/2022

Investments in additional volumes brought forward

Growth in vials supported by Gx® Elite Glass

Highest quality product increasing filling speed up to 25%

Reduced total cost of ownership for our customers

First significant sales effects in 2020

Gx® RTF vials as long-term growth

accelerator

Ready-to-fill: immediate filling at the customers

Moving up the value chain enhancing

customers’ benefits


Short &

mid

term

Long

term

9

Break down our growth strategy is well on track – significant steps taken

Strong

mindset

for growth

Investment

program

Innovation

Gro

wth

En

ab

lers

1

3

2

◼ Robust pharma business

◼ High utilization of global

molded glass capacities

through optimized

production planning

◼ Tailwind in plastic

packaging due to higher

demand for over the

counter drugs as well as

hygiene products

The “right”

product solutions

Solid underlying

market growth

Growth

segments

Growth Levers

Roll-out of investment

strategy unchanged

Focus on Asia:

◼ Ramp-up of new plants

for plastic packaging

◼ Business continuity in

India secured despite

lockdown

Gx Biological Solutions:

new customers and orders

Implementation of Global

Key Account Management:

Key positions filled

◼ Gx® Elite Glass:

Commercial delivery

started

◼ Cosmetics: Enhancing

product portfolio by

tubular glass and plastics

◼ SQ Innovation project

enters next phase

◼ Smart products:

Another key expert for

smart devices hired


Translating Gx Strategy into Profitable Growth

Q2 Initiatives to Drive Growth Levers

10

Gerresheimer at a glance


Financial Update

Guidance

Market Environment

3

2

1

Agenda

4

5

3

1


11

(EUR m) Q2 2020 Q2 2019 YoY Analysis

Revenues 362.9 356.5 +2.6%2)

Strong Organic growth of +4.6% in core

business despite Covid-19 one-time hit in

cosmetics business

Adj. EBITDA 84.2 74.21) +6.9%2)

Profitability increase due to strong core

business performance; excellent organic

growth of +13.7% in core business

One-off effects -4.5 -1.6

EBITDA 79.7 72.61)

Depreciation, amortization & impairment -33.3 -37.4 Due to lower fair value amortization

Net finance expense -5.6 -6.3

Income taxes -11.3 -8.0

Net income 29.5 20.91)

Adjustment 8.2 12.2

Adj. net income 37.7 33.11)

Adj. EPS 1.18 1.041) +13.5%

1. Excl. EUR 26.2m other operating income in connection with the derecognition of contingent purchase price components connected to the acquisition of Sensile Medical.

2. Organically, adjusted for exchange rate effects and acquisitions and divestments as well as regarding Adj. EBITDA excluding the effects from the first-time application of

IFRS 16.


Q2 2020 – Growth Mode turning in

P&L Overview

Robust Core Business: Growth despite Covid-19

Q2 2020 Divisions


EUR m

46.7

56.0

Q2 2019 Q2 2020Adj. EBITDA

P&D

Organic

growth

+9.0%187.6

Q2 2019 Q2 2020Revenues

Organic

growth

+16.3% — Centor back on track, strong revenue growth

(>10%) in all other units

— Margin improvement to 27.9% on the back of

organic EBITDA growth of 16.3%

200.6

32.3

Q2 2019 Q2 2020Adj. EBITDA

PPG

Organic

growth

-0.5%

162.1 162.4

Q2 2019 Q2 2020Revenues

Organic

growth

+8.8%— Negative Covid-19 one-time hit of around

EUR 8m in the cosmetics business

— Organic revenue growth of +4.9% excluding

one-time hit

— Margin improvement to 23.3% on the back of

organic EBITDA growth of 8.8%

37.8

7.2

1.1

Q2 2019 Q2 2020

Revenues

Q2 2019 Q2 2020

Adj. EBITDA

GAT

— Advanced Technologies as innovation driver and

long-term investment case

— Change of revenue model: From contract

developer for PharmaCo to a revenue sharing

partner of PharmaCo

1.2

-3.4

13

(EUR m) Q2 2020 Q2 2019 Change Analysis

Adjusted EBITDA 84.2 74.21) +10.0 Driven by strong core business

Change in net working capital 6.1 -16.7 +22.8 Supported by factoring

Capex -30.7 -28.4 -2.3

Net interest paid -3.0 -3.2 +0.2

Net taxes paid -1.8 -9.4 +7.6 Tax refund in Germany

Pension benefits paid -3.0 -2.5 -0.5

Other -6.8 -10.81) +4.0

Free Cash Flow before M&A 45.0 3.2 41.8

1. Excl. EUR 26.2m other operating income in connection with the derecognition of contingent purchase price components connected to the acquisition of Sensile Medical.


Strong Outperformance in Free Cash Flow

Cash Flow in Q2 2020

14

1. Without lease liabilities


NET FINANCIAL DEBT AND ADJ. EBITDA LEVERAGE

Net financial debt according to the credit agreement in force1)

Adj. EBITDA leverage (x)

1,016.5976.0

3.4x3.2x

Feb 29 2020 May 31 2020

NET FINANCIAL DEBT ACCORDING TO CREDIT

AGREEMENT IN FORCE1)

In EUR m Feb 2020 May 2020

Revolving credit facility 369.6 360.2

Promissory loans (2017) 250.0 250.0

Promissory loans (2015) 425.0 425.0

Local borrowings 42.7 33.1

Installment purchase liabilities 1.6 1.7

Cash and cash equivalents (72.4) (94.0)

Net financial debt according to credit

agreement in force1) 1,016.5 976.0

EXPIRY DATE MAIN FACILITIES

550.0

189.5

305.5

109.0

25.545.5

FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 FY 2025 FY 2026 FY 2027

RCF Promissory loans

— 2Y-Bridge loan agreement signed on April 22, 2020

securing repayment of promissory loan of

EUR 189.5m due in November 2020

— High flexibility and headroom for refinancing

BRIDGE FINANCING SECURED

Leverage decreased – Financial Flexibility increased

End of Q2 2020: Financial Status

15



Financial Update

Guidance

Market Environment

3

2

1

Agenda

4

5

4

1


16

Running on schedule with mid-single digit growth

Production start of Skopje plant in summer 2020

P&D

Mid-single digit growth

Recovery of cosmetics business

Preparing for capacity increase in vials

PPG

Exploration of further technologies, opportunities and

new projects

SQ Innovation project enters new phase

GAT


Accelerating Growth

Outlook 2nd Half 2020

17

At Group

level

(FXN)

1. Including a positive effect of EUR 9m to EUR 11m from the transition to IFRS 16.


Revenue Growth

Adjusted EBITDA

Capex

(% of revenues)

FY 2020

Mid-single

digit growth

~21%1

~ 12%

Mid-term

Mid-single

digit growth

~ 23%

8 - 10%

Guidance confirmed

Focus on Growth

18

Gerresheimer long-term profitable growth journey has

successfully started

Q2 2020: Core business on track

We are prepared for the time after Covid-19 securing additional

sales opportunities and implementing lessons learned


19

Gerresheimer at a glance


Financial Update

Guidance

Market Environment

3

2

5

Agenda

4

1


Leading market positions in attractive niche markets

20

DIVISION PLASTICS & DEVICESPRIMARY

PACKAGING GLASS

PRODUCTPlastic

Packaging1Inhalation

(DPI)2Diabetes

Diagnostics3 PensSyringe

Systems

MG Pharma

(Type I)

Ampoules,Vials,

Cartridges

EUROPE #1 #1 #2 #2 #2 #2 #3

NORTH

AMERICA#1 #1 #2 #1 #1

EMERGING

MARKETS

#1(South America

and India)

#1(South

America)

#2(India)

#1(China)

1. North America: plastic vials for oral prescription drugs

2. DPI = Dry Powder Inhaler (World market)

3. Lancets and lancing devices

Investor Presentation16.07.2020

We provide solutions across all key product categories

21

DIVISION PLASTICS & DEVICES PRIMARY PACKAGING GLASS GAT

PRODUCTPlastic

PackagingInhalation

(DPI)2Diabetes

Diagnostics3 PensSyringe

Systems

MG Pharma

(Type I)

OTC Liquids and

Syrups (Type II &

III)

TGInjectables

Sensile Medical

Gerresheimer ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓

Schott ✓ ✓

Becton

Dickinson1 ✓ ✓

Nipro1✓ ✓

Ompi ✓ ✓

Jabil Circuit

(Nypro)1 ✓ ✓ ✓ ✓

Consort Medical1 ✓

West Pharma1✓ ✓

Nemera ✓ ✓

Berry Plastics1✓

Facet ✓

Ypsomed1✓ ✓

Desjonquères ✓ ✓

Rocco Bormioli ✓ ✓ ✓

Insulet ✓

1. Public company // 2. DPI = Dry Powder Inhaler (World market) // 3. Lancets and lancing devices

Source: Company estimates


Current customer overview 1

22

ABOUT 7% generated

with our Top 1 customer

48% of revenues generated with

our Top 20 Pharma & Generics

customers in 2018

35% of revenues generated with

our Top 10 Pharma & Generics

customers in 2018

Mylan

Boehringer Ingelheim

Bayer

Roche

Fresenius

Pfizer

Avon

L‘Oreal

Sanofi

Novartis

Teva

Merck

Beiersdorf

J&J

Novo

Nordisk

Astra

P&G

Coty

GsK

1. Customers names have been inputted randomly and clock-wise presentation does not correspond to revenues ranking


1. Tubular Glass + Moulded Glass Pharma

2. Strategic relevant markets, Gerresheimer estimates

Gerresheimer is operating in large and attractive markets

23Investor Presentation

The strategic relevant core market for Gerresheimer is today ~ € 15bn

CosmeticsGlass

PharmaGlass1

PharmaPlastic

Syringes

Drug DeliveryDevices

~ 1.8

LOW SINGLE DIGIT

~ 2.2 ~ 5.8 ~ 0.9

MID SINGLE DIGIT

~ 4.0Estimated Market

Size 2017² (in € bn)

Market CAGR '17-’22²

(in %)

16.07.2020

Clear definition of target markets in Pharma & Healthcare …


Filling machines

Formulation

PHARMA

VALUE

CHAINResearch

Product &

Process

Development

ProductionPrimary

PackagingLogistics

Marketing &

SalesServices

Delivery

Systems &

Assembly

Blisters

Su

pp

lie

rs

MUST

HAVESSuperior product and

Technologies1 Cost leadership2 Min. #3 for market shares3

HA

RD

WA

RE

CO

NS

UM

AB

LE

SS

ER

VIC

ES

Tools, Assembly lines for devices

Primary packaging glass & plastic,syringes,closures

Inhalation,injection

Device design& dev.

Gx

stra

teg

ic re

leva

nt m

ark

et

(Pre-) assembly

Logistics

Infusion, trans-dermal, implants, eye treatment, ear-nose-throat

Product analytics(e.g. sterility)

Filling

Gx accessible market

16.07.2020

… as well as in Cosmetics


Filling machines

Moulded Glass Packaging Samples & Decoration

Components

(Pumps & Caps)

Formulation Innovative bottle design & development

COSMETIC

VALUE

CHAINResearch

Product &

Process

Development

Production

Primary

Packaging &

Decoration

LogisticsMarketing &

SalesServices

Delivery

Systems &

Assembly

Gx

stra

teg

ic

rele

va

nt m

ark

et

Componentpre-assembly & sealing

Plastic

Bottles

Product analytics

Filling

Gx accessible marketSu

pp

lie

rs

MUST

HAVESSuperior product and

Technologies1 Cost leadership2 Min. #3 for market shares3

HA

RD

WA

RE

CO

NS

UM

AB

LE

SS

ER

VIC

ES

16.07.2020

Underlying market growth

26

1. IQVIA (former Quintiles IMS) January 2020.

2. Generic units are included in Medicine units.

Expected development of Pharma market volumes1

CAGR ’20-‘24 (in %)

Medicine

standard

units

Generic

standard

units2

Global 1.5% 1.9%

Developed markets -0.3% 0.1%

Pharmerging markets 2.6% 3.1%

ROW 0.6% 0.9%

Global volume growth ‘19 1.4% 2.6%


27

Financial Calendar 2020

FINANCIAL CALENDAR

October 13, 2020 Publication 3rd Quarter 2020

December 2020 Capital Markets Day


Overview of Abbreviations and Definitions

ABBREVIATIONS AND DEFINITIONS

Adj. EBITDA Net income before income taxes, net finance expense, amortization of fair value adjustments, depreciation and amortization, impairment losses,

restructuring expenses and one-off income and expenses

Adjusted EPS Adjusted earnings per share after non-controlling interests, divided by 31.4m shares

Adjusted net income Net income before non-cash amortization of fair value adjustments, non-recurring effects of restructuring expenses, portfolio adjustments, the balance of

one-off income and expenses – including significant non-cash expenses – and the related tax effects

CAGR Compound Annual Growth Rate

Capex Investments in tangible and intangible assets

EBIT Earnings before interest and taxes

EBITA Earnings before interest, taxes and amortization

EBITDA Earnings before interest, taxes, depreciation and amortization

FXN "Foreign currency neutral" - based on budgeted FX-rates

Gx ROCE Adjusted EBITA divided by capital employed (total assets minus investments, investments accounted for using the equity method and other loans, minus

cash and cash equivalents, minus pensions (without pension provisions), deferred tax liabilities, and income tax liabilities, minus prepayments received,

trade payables, and other non- interest bearing liabilities)

Gx RONOA The ratio of adjusted EBITA to average net operating assets, comprising the sum of property, plant and equipment and net working capital

Adj. EBITDA Leverage The relation of net financial debt to adjusted EBITDA of the last twelve months, according to the credit facility agreement currently in place

Net financial debt Short and long term debt minus cash and cash equivalents

Net finance expense Interest income and expenses related to the net financial debt of the Gerresheimer Group. It also includes net interest expenses for pension provisions

together with exchange rate effects from financing activities and from related derivative hedges.

Net working capial

(NWC) Inventories plus trade receivables minus trade payables plus/minus prepayments

Op. CF margin Adjusted EBITDA plus/minus the change in net working capital, minus capex and in relation to revenues

Operating cash flow Adjusted EBITDA plus/minus change in net working capital, minus capex

P/E Ratio Company's share price divided by the adj. EPS

RCF Revolving credit facility

yoy year-on-year

Investor Presentation 2816.07.2020

Our Vision

Gerresheimer will become the leading global partner

for enabling solutions that improve health and well-being.

Our success is driven by the passion of our people.

investor presentation - gerresheimer.com€¦ · countries over 6 continents over 1,500 customers...

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