Investor and Analyst Presentation Q3 2017

Transcription

1 Investor and Analyst Presentation Q3 2017

2 Disclaimer 1. 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. 2. 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. 3. 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. 2

3 Agenda 1. Introduction 2. Strategic objectives 3. Q highlights 4. Outlook 5. Backup 3

4 A leading international manufacturer for the global pharma and healthcare industry Pharmaceutical packaging solutions made out of glass and plastics Primary packaging products and medical devices for storage, dosage and safe administration of drugs as well as packaging for the cosmetics industry 4

5 Strong business foundations, efficient and lean organisation with a strong track record Solid financial profile Leading market positions in attractive niche markets Well invested assets & factories, solid customer basis Homogenous business portfolio with clear strategic focus Revenues FY 2016 EUR 1,375.5m adj. EBITDA FY 2016 EUR 307.8m Strong Cash Flow generation and lower capital intensity Adj. EPS after non-controlling interests in FY 2016 (excl LSR) EUR 4.07 #1 in Europe for plastic packaging and inhalation #2 in Europe for diabetes, pens and syringes #1 in the US for prescription and injectables Strong emerging market presence in South America, India and China for plastic packaging, pens, moulded glass, ampoules, vials and cartridges 36 plants in 14 countries Over 1500 customers Delivering to 97 countries over 5 continents Supplying all Top 10 Pharma customers Largest customer make up for less than 7% of total revenues Focus on Pharma and Cosmetics Greater revenue diversification post LSR disposal Stable and balanced customer basis Plastics & Devices Andreas Schütte Revenues 2016 EUR 765.4m adj. EBITDA 2016 EUR 204.0m Margin % Primary Packaging Glass Christian Fischer Revenues 2016 EUR 610.6m adj. EBITDA 2016 EUR 124.7m Margin % REVENUE SPLIT BY SECTOR Pharma & Healthcare: 83% Cosmetics: 12% Others: 5% REVENUE SPLIT BY REGIONS Europe (ex. GER): 33% Germany: 24% Americas: 26% Emerging markets 1 : 15% Other regions: 2% 1. According to IMS Health definition of emerging markets for FY For further details see note 8 of consolidated financial statements within FY 2016 annual report 5

6 Leading market positions in attractive niche markets DIVISION PLASTICS & DEVICES PRIMARY PACKAGING GLASS PRODUCT Plastic Packaging 1 Inhalation (DPI) 2 Diabetes Diagnostics 3 Pens Syringe 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 6

7 We provide solutions across all key product categories DIVISION PLASTICS & DEVICES PRIMARY PACKAGING GLASS PRODUCT Plastic Packaging Inhalation (DPI) 2 Diabetes Diagnostics 3 Pens Syringe Systems MG Pharma (Type I) OTC Liquids and Syrups (Type II & III) TG Injectables Gerresheimer Schott Becton Dickinson 1 Nipro 1 Ompi Jabil Circuit (Nypro) 1 Consort Medical 1 West Pharma 1 Nemera Berry Plastics 1 Facet Ypsomed 1 Desjonquères Rocco Bormioli Duran Corning 1 1. Public company // 2. DPI = Dry Powder Inhaler (World market) // 3. Lancets and lancing devices Source: Company estimates 7

8 Scale underpins leading market position and operating leverage 15.5bn products produced every year nearly 500 per second SYRINGES PLASTIC BOTTLES (INCL. CENTOR) PHARMA GLASS BOTTLES COSMETICS ~ 400m pieces ~ 5.5bn pcs ~ 2.5bn pcs ~ 1bn pcs INJECTION VIALS AMPOULES INHALERS CARTRIDGES ~ 3bn pcs ~ 2bn pcs ~ 100m pcs ~ 1bn pcs 8

9 Working on 3 main levers to protect and build margins MIX VOLUME GROWTH PRODUCTIVITY AND EFFICIENCY Mix management Higher value products Direct impact on operational leverage Increase contribution margin through higher volumes Increasing productivity Labour Machines Higher yields Driving manufacturing efficiencies PRICING Pricing as a function of volumes COST INFLATION Cost inflation mainly through personal costs Pass through clauses as mitigating actions 9

10 Ability to deliver solid earnings growth due to our robust business model despite fluctuations in revenues growth Revenues growth ex. LSR 1 % yoy Adj. EBITDA ex. LSR 1 (EUR m) Adj. EPS 1,2 ex. LSR (EUR ) CAGR % CAGR % CAGR % 11.5% % 6.2% 7.2% % Combination of organic growth, productivity gain, accretive M&A and portfolio improvements deliver superior earnings growth Relentless focus on driving profitable growth whilst keeping patient safety and innovation as a priority Organic expansion and M&A are both pillars of our growth strategy Solid revenues increase over the past 5 years despite annual fluctuations, outpaced by superior profitability and earnings growth 1. As reported 2. After non-controlling interests 10

11 Agenda 1. Introduction 2. Strategic objectives 3. Q highlights 4. Outlook 5. Backup 11

12 Long term growth drivers such as globalization and population increase underpinned by megatrends in pharma and healthcare GENERICS HEALTHCARE SYSTEMS PHAMERGING MARKETS SELF MEDICATION Seizing opportunity to participate in any market trends RISE OF CHRONIC DISEASES NEW MEDICINES MARKET ENTRIES INCREASING REGULATORY REQUIREMENTS 12

13 Targeted market approach Large pharma companies Segmenting Customer Landscape Understanding specific clients requirements Generics producers Small and medium Specialty and Biotech companies QUALITY MARKET ACCESS Zero defects requirements Productivity and supply chain reliability Reliable support across the globe Global capacities and production network Continuing to synchronise our strategy to meet the needs of our customers AGILITY Largest range of product solutions Technical and regulatory expertise 13

14 Syringe offering for specialty pharma market opportunity further bolstered in July 2017, through the addition of safety devices Glass product portfolio systematically upgraded Elite & Valor RTU Vials & cartridges Syringes product range continuously enhanced Gx Baked-on RTF syringes Metal-free glass syringes Plastic COP syringes Tamper evident closures / Needle shields Safety devices New value proposition for Biotech & new organisation 14

15 Agenda 1. Introduction 2. Strategic objectives 3. Q highlights 4. Outlook 5. Backup 15

16 A challenging quarter revenue-wise, whilst stringent cost control and operational efficiencies supported margin stability Q3 revenues down 5.4% year-on-year at EUR 331.5m Down 4.3% organically Some of the unfavorable customer dynamics which impacted revenues in the first half of 2017 have lingered in the third quarter Adj. EBITDA margin slightly improved to 23.4%, despite the revenues decrease Adjusted EBITDA margin in Plastics & Devices improved by 80 bps year-on-year reaching 28.7% Adjusted EBITDA margin in Primary Packaging Glass at 20.1% compared to 20.6% in Q Current indications towards a good Q4 Coordination and execution of all parties required Entire organization currently focused on enabling full execution in Q4 Drivers of Q outperformance clearly identified 16

17 Customer dynamics within Inhalation Devices and Primary Packaging Glass US as main impact on Q sales WHAT WE KNOW: We have not seen any structural changes in the market Underlying trends are still healthy EVOLUTION OF REVENUES AND ADJ. EBITDA MARGIN IN Q3 17 VS Q3 16 % Adj. EBITDA Margin REVENUES EUR M 23.2% 23.4% % % 20.6% 20.1% Q3 16 Q3 17 Q3 16 Q3 17 Q3 16 Q3 17 GROUP P&D PPG COMPARISON OF OUR Q3 PERFORMANCE VS. TRENDS HIGHLIGHTED IN H1 2017: P&D COMPARISON OF OUR Q3 PERFORMANCE VS. TRENDS HIGHLIGHTED IN H1 2017: PPG X Devices sales continued to be affected by lower customer demand and some postponements into Q4 FURTHER IMPACTED Q3 X Pick up by our customers in PPG US DID NOT MATERIALIZE Stable developments for Plastic Packaging AS EXPECTED Tooling revenues down year-on-year BULK OF REVENUES EXPECTED IN Q4, AS PREVIOUSLY INDICATED IN H Lower tooling revenues and pricing mechanisms support margin stability year-on-year AS EXPECTED X Revenues outside the US broadly stable AS EXPECTED Profitability maintained as a result of operational efficiencies AS EXPECTED 17

18 Agenda 1. Introduction 2. Strategic objectives 3. Q highlights 4. Outlook 5. Backup 18

19 Drivers of Q outperformance versus Q IDENTIFIED DRIVERS Q P&D IDENTIFIED DRIVERS Q PPG Large uptick in volumes, e.g. Peachtree project Bulk of tooling revenues to be generated in Q4 Solid performance in Plastic Packaging Moderate growth expectation in the US and European Pharma sales Improved performance in Emerging Asian markets Stronger seasonal uptake in cosmetics ahead of the Christmas season Supporting factors: To watch for : Good level of committed orders for year-end Capacity available to deliver on high volumes Shipping to occur from many different plants accross the world Overall customer dynamics Supply chain swings in the US Coordination and execution of all parties required 19

20 Modelling 2017 Metrics 2017 Revenues Adj. EBITDA Adj. EPS (after non-controlling interests) Capex (% sales, FXN) 1 LAST GUIDANCE FY 2017 ~ EUR 1.4bn (FXN) 1 ~ EUR 320m (FXN )1 ~ EUR 4.25 (FXN) 1 ~ 8% CURRENT RISK SCENARIO FY 2017 ESTIMATED DELTA ~ EUR -30m (FXN) 1 ~ EUR -10m (FXN) 1 ~ EUR (FXN) 1 UNCHANGED FRAMEWORK FOR 2018 PRINCIPALLY UNCHANGED Metrics FY 2018 Organic 2 sales growth Adj. EBITDA margin Capex (% sales, FXN) 1 Avg. NWC (% sales, FXN) 1 Op. CF margin (% sales, FXN) 1 BUT CONTINGENT UPON 2017 END RESULTS 4 to 5% ~ 23% ~ 8% ~ 16% ~ 13% 1. At const. FX rates, based on FY 2016 reported numbers - Average budgeted exchange rate assumption for FY 2017: EUR 1.00 = USD Organic growth: Adjusted for exchange rate effects, acquisitions and divestments 20

21 Backup Q3 2017

22 P&D margins improved at a high level, PPG margins impacted by lower production output during the quarter Revenues by division EUR M Q Q GROWTH IN % Organic Growth in % Total Group Of which P&D Of which PPG Adjusted EBITDA by division Q Q EUR M MARGIN IN % EUR M MARGIN IN % Total Group Of which P&D Of which PPG

23 Development of net working capital AUG 31, 2017 EUR M NOV 30, 2016 EUR M AUG 31, 2016 EUR M 3 Inventories thereof prepayments made Trade receivables Trade payables Payments received on account of orders Net working capital Average NWC in % of LTM revenues % 15.8% % 2 1. In percentage of FXN revenues 2. Excluding LSR 3. Including LSR as of August

24 Development of inventories AUG 31, 2017 EUR M NOV 30, 2016 EUR M AUG 31, 2016 EUR M 1 Raw materials, consumables and supplies Work in progress Finished goods and merchandise Prepayments made on inventories Inventories Including LSR as of August

25 GXI Key Data in EUR per share Adjusted EPS after non-controlling interests Cash flow from operating activities per share Dividend Dividend yield 1.5% 1.8% 1.9% 1.7% 1.4% 1.7% 1.2% 1.5% Payout ratio 22% 26% 25% 25% 1 23% 26% 25% 25% Share price high Share price low Share price at FY end Book value per share P/E ratio Market cap in EUR m ,238 1,560 1,395 2,321 2,162 MDAX weighting year end Number of shares in million 11.48% % 1.24% 1.40% 1.47% 1.33% 1.01% 1.42% 1.33% Retrospective restatement due to the early adoption of IAS 19 (amended in 2011) from December 1, Excluding LSR 3. Based on adj. EPS after non-controlling interests 4. SDAX weighting at year end 25

26 Overview of Abbreviations and Definitions Abbreviations and Definitions Adj. EBITDA Adjusted EPS Adjusted net income CAGR Capex EBIT EBITA EBITDA FXN Leverage Net debt Net finance expense Net working capital (NWC) Op. CF margin Operating cash Flow Organic growth P/E Ratio RCF ROCE yoy Earnings 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 net income divided by 31.4m shares Consolidated net income before non-cash amortization of fair value adjustments, restructuring expenses, impairment losses, one-off income and expenses (including non-cash expenses) and the related tax effects. Compound Annual Growth Rate Investments in tangible and intangible assets Earnings before interest and taxes Earnings before interests, taxes and amortization Earnings before interests, taxes and depreciation and amortization "Foreign currency neutral" - based on budgeted FX-rates The relation of net financial debt to adjusted EBITDA of the preceding twelve months, according to the current credit facility agreement. Short and long term debt minus cash and cash equivalents Interest income and expenses and 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. Inventories plus trade receivables minus trade payables plus/minus prepayments Adjusted EBITDA plus/minus the change in net working capital, minus capex and in relation to revenues Adjusted EBITDA plus/minus change in net working capital, minus capex Sales growth, adjusted for exchange rate effects, acquisitions and divestments Company's share price divided by the adj. EPS after non-controlling interests Revolving credit facility 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) year-on-year 26

27 Financial calendar and contact details FINANCIAL CALENDAR February 22, 2018 Annual Report Financial Year 2017 April 12, 2018 Interim Report 1st Quarter 2018 April 25, 2018 Annual General Meeting 2018 July 12, 2018 Interim Report 2nd Quarter 2018 October 11, 2018 Interim Report 3rd Quarter 2018 CONTACT DETAILS Name Corporate Investor Relations Phone Fax IR website 27

28 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.