investor presentation - gerresheimer · this presentation may contain certain forward-looking...

Investor Presentation

May 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 206/05/2020

3

Gerresheimer at a glance

Operational Update Q1 2020

Financial Update

Guidance

Market Environment

3

2

1

Agenda

4

5

33%

22%

27%

16%1%

Strong business foundations, developing our business model

beyond our current setup to capture longer term potential

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 2.4x as of Nov 30, 2019

#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


Revenues

EUR 1.40bn

06/05/2020

5



Financial Update

Guidance

Market Environment

3

2

1

Agenda

4

5

2

1

Key Take-aways Q1 2020

6

Q1 performance according to plan

Reported Revenues of EUR 304 m

Adjusted EBITDA of EUR 51 m

Minor impact from Covid-19 on operations in Q1

The Pandemic takes attention and is well managed;

resilience of our business model becomes evident

On track to deliver our Guidance for 2020

Secured refinancing of EUR 190 m promissory loan with maturity in Nov 20

Investor Presentation06/05/2020

Our role as key supplier for Pharma and

Healtcare makes us resilient

We are seen as essential manufacturer in

all relevant jurisdictions

Global footprint with 37 plants in 14

countries reduces the "cluster risk" of few

centralized global plants

Sufficient liquidity buffer: Currently around

EUR ~110 m headroom with high

discretionary spent potential to be managed

Our Business Model confirms its Robustness in Times of Crisis

7Investor Presentation

Global plant network

Revenue split by end market

Food, Beverage and Hygiene 6%

Cosmetics 13%

Pharma and Healthcare 81%

2019

06/05/2020

The four most important Aspects during the Pandemic


Business Continuity

Demand / Customers

Supply Chain

Balance Sheet Strength

1

2

3

4

06/05/2020

Business Continuity: We are essential for critical Infrastructure


Ensuring the health and safety of our employees is our priority

Global pandemic plan activated with dedicated crisis teams at the end of February

Hygiene rules, travel and visitor bans, containment of groups, home office where applicable

Our plants are regarded as essential manufacturers in all countries

We live up our responsibility for pharma and healthcare

Our plants are fully operational and running

We ensure our business continuity to provide essential products for pharma and healthcare

06/05/2020

Guarantee Business Continuity for our Customers


Our customers are essential in critical

infrastructure in all countries, i.e.

Pharma and Health Care Industry

Additional demand in Pharma

packaging as an opportunity

High demand for packaging in Food,

Beverage and Hygiene

Demand Side

No shortage of raw materials, cullets,

granulate, glass tubes

Key suppliers of us also defined as

essential manufacturer

We work very closely with all our

supply chain partners

Supply Side

Sufficient sources of

liquidity available

Financial headroom

of EUR ~110 m

Cost and capex phasing

adjustments if necessary

Balance Sheet

Strength

06/05/2020


Growth levers

Underlying

Market Growth

Growth

segments

New products

4 65

Enablers

Mindset for Growth

/ Excellence

Investment

program

Innovation

1 32

The Pandemic needs Management Attention; nevertheless the

Focus on the long-term profitable Growth Story is unchanged

06/05/2020

Implementing a Mindset for Growth

12

1

Mindset

for Growth

One Gerresheimer

Leverage our full portfolio

Create Synergies across the Group

Customer focus

Global Key Account Management

Customer touchpoint optimization

Quality

Quality Excellence in all aspects

One global Quality Standard

Performance culture

Clear ambition for growth

Deliver to your commitment

Enablers

Mindset for Growth

/ Excellence

Investment

program

Innovation

1 32

Excellence

Strive for Excellence in all we do

Driving automation and digitization

Resource allocation

Transforming Capex into growth

Efficient & lean spending of Capex


Enablers

Mindset for Growth

/ Excellence

Investment

program

Innovation

1 32

Investing for Future Growth

13

2

Base Capex~ 4%

Growth~ 6%

Efficiency~ 2%

Investments for 2019-2020 (~ 12% of revenues)

Capex formula

Primary Packaging Glass

New furnaces & capacity increase in Essen and Lohr,

Germany

Medical Devices & Syringes

Small batch production in Wackersdorf, Germany

Extension of lines in Buende, Germany

Medical Devices

Extension Horsovsky Tyn, Czech Republic

Capacity expansion


14

Innovative Products increasing Customer Value3

Ready-to-fill, washed and sterile Type I Glass vials

Highest Quality

Perfect for immediate filling at customer filling line

Several packaging solutions, trays, nest & tub

RTF manufacturing sites in Europe and North

America

Example: Gx® RTF Vials

Clear and amber glass

in 2ml - 30ml sizes

Reducing customer’s total

cost of ownership

Type I Borosilicate glass vial

with market leading features

No need to re-file

Cosmetically Flawless

Breakage resistance

Dimensionally Superior

Delamination Resistant

Registered for patent

Example: Gx® Elite Glass

Moving up the value chain Creating new perspectives

Enablers

Mindset for Growth

/ Excellence

Investment

program

Innovation

1 32


Enablers

Mindset for Growth

/ Excellence

Investment

program

Innovation

1 32

15

3 Leveraging the Technology of Sensile Medical

Excellent

technology

Future pipeline

Full solution provider to the Pharma Industry

in various applications / therapies

Innovation competence

Connectivity and digitization platform

Modular approach

Develop our own solutions

Attractive

business field Clear roadmap

SQ Innovation (game changer potential)

fully on track

EVER Pharma already launched

Sound pipeline and demand

Merging the industrialization competence of

Medical Systems and the Product

Development expertise of Sensile

Building the future with our own IP

+


Plastic Packaging

(SOP H1 ‘20)

Anapolis, Brazil

Plastic Packaging

(SOP Q1 ‘20)

Changzhou, ChinaPlastic Packaging

(SOP H1 ‘20)

Berlin, USA

Growth Segments: Increasing the Footprint &

closing the white Spots in fast growing Markets

16

5

Plastic Packaging

(SOP Q2 ‘20)

Kosamba, India

Medical Devices & Syringes

(SOP H2 ‘20)

Skopje, North Macedonia

Latest additions in 2019 & 2020

Growth levers

Underlying

Market Growth

Growth

segments

New products

4 65


Growth Segments: Biotech

17

5

Fastest growing segment is biotech with large

molecules

High demand for specialized solutions

Our Offer: Large portfolio of innovative products

and solutions for biotech drugs

Our Service: lab services, regulatory and

qualification support

Gx Biological Solutions: Full-service provider

for small, mid and large biotech companies

Launch of Gx Biological Solutions

Growth levers

Underlying

Market Growth

Growth

segments

New products

4 65


New Products as Growth Drivers

18

6

Gx InnoSafe® Strenghtened Glass New finishing

technologies

Gx RTF® ClearJect® (COP) Duma® Standard Child

Resistant

Micro pumps /

Smart devices

Gx® Elite Glass Vials Irradiated dropper

bottles

Gx® RTF Vials

Examples:

Growth levers

Underlying

Market Growth

Growth

segments

New products

4 65


19



Financial Update

Guidance

Market Environment

3

2

1

Agenda

4

5

3

1

Q1 2020 – robust as expected

20

(EUR m) Q1 2020 Q1 2019 YoY Analysis

Revenues 303.9 308.5 -1.8%2) Due to revenue model change at Sensile

Adj. EBITDA 51.1 53.61) -8.9%2) Due to revenue model change at Sensile

One-off effects -1.1 0.1

EBITDA 50.0 53.71)

Depreciation, amortization & impairment -38.2 -37.0

Net finance expense -4.9 -7.0 Favourable refinancing in EUR

Income taxes -2.7 -2.7

Net income 4.2 7.01)

Adjustment +9.4 +10.3

Adj. net income 13.6 17.31)


1. Excl. EUR 92.3m 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.

06/05/2020

34.231.4

Q1 2019 Q1 2020

Adj. EBITDA

25.2

29.5

Q1 2019 Q1 2020Adj. EBITDA

21

— Centor impacted by one-off destocking effects

— P&D w/o Centor one-off generated mid-single digit

growth with higher margin

— Centor back on track in Q2 2020: Solid growth and

higher Adj. EBITDA contribution

— Tubular glass in the US developed well

— Strong growth in Europe

— Efficiency gains support margin expansion

— Margin 20.1% (vs. 17.8% in Q1 2019)

— Change of Revenue model: From contract developer for

PharmaCo to a revenue sharing partner of PharmaCo

— Advanced Technologies as innovation driver and long

term investment case

— Negative Adj. EBITDA front-end loaded in FY 2020

— Development of micro pump for chronic heart failure

treatment with SQI according to plan

P&D

PPG

GAT

EUR m

Organic

growth

-1.3%

Organic

growth

+2.2%

Q1 2020 Divisions: Robust core business


160.7 158.0

Q1 2019 Q1 2020

Revenues

141.9

146.5

Q1 2019 Q1 2020

Revenues

6.6

0.8

Q1 2019 Q1 2020

Revenues

1.0

-4.2

Q1 2019 Q1 2020

Adj. EBITDA

Organic

growth

-11.8%

Organic

growth

14.4%

06/05/2020

22

(EUR m) Q1 2020 Q1 2019 Change Analysis

Adjusted EBITDA 51.1 53.61) -2.5

Change in net working capital -81.8 -49.4 -32.4Phasing effects in Q1 with compensating

quarters ahead

Capex -32.3 -16.7 -15.6 Capex program according to plan

Net interest paid -1.7 -2.7 +1.0

Net taxes paid -7.7 -8.2 +0.5

Pension benefits paid -2.7 -2.6 -0.1

Other -2.8 -3.11) +0.3

Free cash flow before M&A -77.9 -29.1 -48.8

Q1 2020: Cash flow performance not representative



06/05/2020

23

Net financial debt according to credit agreement in force

In EUR m Nov 2019 Feb 2020

Revolving credit facility 302.3 369.6

Promissory loans (2017) 250.0 250.0

Promissory loans (2015) 425.0 425.0

Local borrowings 40.9 42.7

Cash and cash equivalents (85.8) (72.4)

Net financial debt according to

credit agreement in force1) 932.4 1,014.9

NET FINANCIAL DEBT1) AND ADJ. EBITDA LEVERAGE

Net financial debt according to the credit agreement in force1)

Adj. EBITDA leverage (x)

EXPIRY DATE MAIN FACILITIES

550.0

189.5

305.5

109.0

25.5 45.5

FY2020

FY2021

FY2022

FY2023

FY2024

FY2025

FY2026

FY2027

RCF

Promissory loans


932.4

1,014.9

3.1x2)

3.4x

Nov 30 2019 Feb 29 2020

1. Without lease liabilities and liabilities from installment purchases.


End of Q1 2020: Financial StatusPromissory loan of EUR 189.5m due Nov 2020

06/05/2020

Status refinancing of promissory loan due Nov 2020Already secured by firm bank credit commitment

24

SECURE REFINANCING

▪ Safeguarding the redemption of promissory loans maturing in Nov 2020 in a volatile market environment

▪ Firm credit commitment by core banks to secure refinancing in the amount of EUR 190.5m

▪ Maturity: 24 month starting from April 2020

KEY REFINANCING POINTS

▪ Planned: Issuance of new promissory loans

▪ Purpose: Redemption of promissory loans in the amount of EUR 189.5m maturing Nov 2020

▪ Timing: Opportunistically


25



Financial Update

Guidance

Market Environment

3

2

1

Agenda

4

5

4

1

26

Outlook Q2 2020

Running on schedule with growth above 5%

Plastic prescription container in high demand in the US

Pharma: Running on plan with strong growth

Cosmetics: Lower in perfume, robust in skincare

Covid-19 might lead to attractive business opportunities

SQ Innovation project on track

Clinical trials schedule on plan


P&D

PPG

GAT

06/05/2020

Guidance confirmed

27

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 sales)

Mid-single digit

growth

~21%1

~ 12%

Mid-single digit

growth

~ 23%

8 - 10%

FY 2020 Mid-term


Guarantee Business Continuity

28

Our Priorities


Deliver according to plan

Be prepared for the day after tomorrow

06/05/2020

29



Financial Update

Guidance

Market Environment

3

2

5

Agenda

4

1

Leading market positions in attractive niche markets

30

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


We provide solutions across all key product categories

31

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

32

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


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 %)

06/05/2020

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

06/05/2020

… 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

06/05/2020

Underyling market growth

36

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%


37

Financial Calendar 2020

FINANCIAL CALENDAR

June 24, 2020 Annual General Meeting 2020

July 14, 2020 Publication 2nd Quarter 2020

October 13, 2020 Publication 3rd Quarter 2020

End of 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 3806/05/2020

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 · this presentation may contain certain forward-looking...

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