Slide 1: Investor and Analyst Presentation Q3 2018
Investor and Analyst Presentation Q3 2018
Slide 2: Disclaimer
Disclaimer 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
Slide 3: Agenda
Agenda Gerresheimer at a glance P.4 Strategic Direction P.10 Sensile Medical P.17 Q3 2018 financials & FY 2018 outlook P.26 Appendix P.37 Q3 2018 IR Presentation 3
Slide 4: Gerresheimer at a glance
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Slide 5: A leading international manufacturer for the global pharma and healthcare industry
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 Q3
Slide 6: Strong business foundations, developing our business model beyond our current setup
Strong business foundations, developing our business model beyond our current setup to capture longer term potential Solid financial profile Leading market positions in Well invested assets & Clearly identified attractive niche markets factories, solid customer revenues streams basis Delivering to A
Slide 7: Leading market positions in attractive niche markets
Leading market positions in attractive niche markets PRIMARY DIVISION PLASTICS & DEVICES PACKAGING GLASS Ampoules, Plastic Inhalation Diabetes Syringe MG Pharma PRODUCT Packaging1 (DPI)2 Diagnostics3 Pens Systems (Type I) Vials, Cartridges EUROPE #1 #1 #2 #2 #2 #2 #3 NORTH AMERICA #1 #1 #2 #1 #1 EME
Slide 8: We provide solutions across all key product categories
We provide solutions across all key product categories DIVISION PLASTICS & DEVICES PRIMARY PACKAGING GLASS GAT OTC Liquids and Plastic Inhalation Diabetes Syringe MG Pharma TG PRODUCT Packaging (DPI)2 Diagnostics3 Pens Systems (Type I) Syrups Injectables Sensile Medical (Type II & III) Gerresheimer
Slide 9: 15.5bn products produced every year – nearly 500 per second
Scale underpins leading market position and operating leverage 15.5bn products produced every year – nearly 500 per second SYRINGES PLASTIC BOTTLES PHARMA GLASS COSMETICS (INCL. CENTOR) BOTTLES ~ 400m pieces ~ 5.5bn pcs ~ 2.5bn pcs ~ 1bn pcs INJECTION VIALS AMPOULES INHALERS CARTRIDGES ~ 3bn pcs ~ 2
Slide 10: Strategic Direction
a ceseesuciner ; +4 jC Strategic Direction
Slide 11: Social and macroeconomic trends supporting growth in the Healthcare Packaging Sector
Social and macroeconomic trends supporting growth in the Healthcare Packaging Sector Rise of chronic diseases Faster growth of Increasing access to healthcare & aging population generic drugs in Emerging Countries Increasing day to day medication Increasing addressable market More people with access
Slide 12: Gerresheimer is operating in large and attractive markets
Gerresheimer is operating in large and attractive markets Drug Cosmetics Pharma Pharma Syringes Delivery Glass Glass1 Plastic Devices Estimated Market Size 2017² ~ 1.8 ~ 2.2 ~ 5.8 ~ 0.9 ~ 4.0 (in € bn) Market CAGR '17-’22² LOW SINGLE DIGIT MID SINGLE DIGIT (in %) The strategic relevant core market f
Slide 13: Regional dynamics and packaging requirements set market trends
Regional dynamics and packaging requirements set market trends ESTIMATED IQVIA VOLUMES GLOBAL PHARMA MARKET TRENDS IMPACT CAGR ’17-‘221 (IN %) ON PACKAGING REQUIREMENTS Global Pharmerging 3.5% ROW 3.00% 3.10% 3.0% 2.70% 2.5% 2.00% 2.0% 1.70% 1.70% 1.5% End user Biocompatibility 1.0% safety 0.5% 0.0%
Slide 14: Continued investments in growth are necessary when operating in long term cycles
Continued investments in growth are necessary when operating in long term cycles Our industry cycles are within 5 to 10 9 years 4.0% 2008 - 2016 years Average organic revenues growth We have grown on average by 4.0% 7 years 4.1% 2010 - 2016 per year – excluding 2017 On average we re-invest about 4%
Slide 15: Priority is on deploying growth levers, whilst continuing to drive quality improvement
Priority is on deploying growth levers, whilst continuing to drive quality improvement and adequate returns Expand into new markets Expand strategically to Regional Products & build new position and gain critical mass through Expansion Innovation products, customization and innovation Unlock new and
Slide 16: Disciplined approach to capital allocation: New long term Gx ROCE goal
Disciplined approach to capital allocation: New long term Gx ROCE goal of ~15% from above 12% previously ORGANIC INVESTMENT M&A Capex spend at ~8% of sales for Stringent and selective approach to growth and maintenance projects acquisitions Controlled capacity extension Strategic fit, management pro
Slide 17: Sensile Medical
SENSILE‘S DRUG DELIVERY PLATFORM @ Corp Comm JK: Do you think we could get a better image ? Sensile Medical
Slide 18: Sensile Medical at a glance
Sensile Medical at a glance GENERALINFORMATION GENERAL INFORMATION 3 P l a t f o r m s ; U n i q u e Te c h n o l o g y ; C u s t o m i z e d p r o d u c t s HISTORY 3 PLATFORMS ROTARY PISTON TECHNOLOGY SECURED PATENTS Small volume patch pump >140 patents Founded in 2004 to develop a Large vol
Slide 19: Patch pumps are highly precise drug delivery devices
Patch pumps are highly precise drug delivery devices Provide several benefits Can self-administrated by patients over a over traditional self- designated time period administration devices Reusable Injectable volume 6 Safety precautions Disposable Patient comfort 1. Primary drug container 4. Pump Dr
Slide 20: An asset light business model with a focus on revenues generation through licences and royalties
An asset light business model with a focus on revenues generation through licences and royalties Pharma customer CMO Model Drug R&D IP and licensing of the technology Classical contract manufacturing Definition of requirements for Adapting device to customers‘ Delivers to Pharma Customer users and p
Slide 21: Earlier involvement in customers' pipeline provides new opportunities
Earlier involvement in customers’ pipeline provides new opportunities and shapes business model for Gerresheimer up to 3 years Gerresheimer positioning in Pharma value chain before commercial launch Tool revenues Parts revenues Prototype & Design Parts Pharma Pharma industrialisation Pharma Producti
Slide 22: Modelling assumptions Sensile Medical
Modelling assumptions Sensile Medical PRELIMINARY TARGETS Revenues and Adj. EBITA Other modelling considerations Assuming all milestones achieved with all key projects: No material tangible assets on the balance sheet EUR m FY 20181 FY 2020 FY 2022 FY 2027 NWC ~5% of sales long term Revenues ~ 1
Slide 23: Cash out schedule based on achievement of specific milestones
Cash out schedule based on achievement of specific milestones EARN OUT MODEL FINANCING STRUCTURE EUR m Maximum consideration: 350 Consideration to be exclusively financed through drawing of existing Revolving Initial payment at Closing (Q3/18) 175 Credit Facility and use of cash at hands 2nd. Paymen
Slide 24: Digital Health now impacts the entire patient journey
Digital Health now impacts the entire patient journey New: Sensile Q3 2018 IR Presentation 24
Slide 25: Through Sensile Medical, Gerresheimer is radically enhancing its business approach
Through Sensile Medical, Gerresheimer is radically enhancing its business approach towards Pharma and Biotech/Biosimilar Becoming a partner of choice for both Pharma & Biotech/Biosimilars with competencies in electronic/connected devices as major long-term lever Customer Groups Biotech/Biosimilar Co
Slide 26: Q3 2018 financials & FY 2018 outlook
Q3 2018 financials & FY 2018 outlook
Slide 27: Strong revenues performance in Q3 2018 as expected; network charges and macro factors impact profitability
Strong revenues performance in Q3 2018 as expected; network charges and macro factors impact profitability Strict monitoring of all business and macro drivers Q3 2018 Financials Markets & Macro Operations Strong revenues increase YoY Weaknesses in particular of Brazilian Sensile Medical integration
Slide 28: Micro Pump for Parkinson's treatment from Sensile Medical received CE declaration of conformity
Micro Pump for Parkinson’s treatment from Sensile Medical received European CE declaration of conformity Global market Selected Lead & Design phase Registration with drug Approved by drug Customer Therapeutic area size, in EUR, Supplier Feasibility (if disclosed) including value partners examples au
Slide 29: Key operational focus in the short and mid term across all Divisions and regions
Key operational focus in the short and mid term spans across all Divisions and regions Horsovsky Tyn, new Inhalation contract SOME EXAMPLES Bünde, Syringes Emerging markets Brazil, China and India Chicago Upcoming furnace overhaul and upgrade in Q4 18 Immediate capacity expansion groundwork required
Slide 30: Organic revenues growth of 7.8% in Q3 2018
Organic revenues growth of 7.8% in Q3 2018 or 3.5% for the first nine months of 2018 FXN1 growth YoY: +8.8% EUR m Organic growth YoY: +7.8% FXN1 14.5 0.2 360.9 + 3.5 364.4 11.2 335.0 Q3 2017 Revenues FXN Δ P&D Δ PPG Δ Internal Sales Q3 2018 Revenues FXN Δ GAT Q3 2018 FXN excl. GAT P&D Q3 2018 perfor
Slide 31: FXN Adj. EBITDA slightly up year-on-year excluding GAT and network charges
FXN Adj. EBITDA slightly up year-on-year excluding GAT and network charges EUR m FXN1 2.1 79.5 78.2 76.1 (0.6) (0.2) (1.4) (2.0) Q3 2017 Δ P&D Δ PPG Δ HQ Q3 2018 Network Δ GAT Q3 2018 Adjusted EBITDA Adjusted EBITDA charges related Adjusted EBITDA FXN FXN excl. to PPG FXN network charges and GAT P&D
Slide 32: FX-Impact of EUR 14.2m on Q3 2018 Revenues and EUR 3.0m on Adjusted EBITDA
FX-Impact of EUR 14.2m on Q3 2018 Revenues and EUR 3.0m on Adjusted EBITDA Group Q3 2018 review EUR M Q3 2018 Q3 2017 Change in % Revenues 353.7 331.5 +6.7% - of which FX effect -10.7 -3.5 N.A. Adj. EBITDA 73.71 77.6 -4.9% - of which FX effect -2.4 -0.6 N.A. - Adj. EBITDA margin % 20.91 23.4 -250bps
Slide 33: Adjusted net income after non-controlling interest slightly better year-on-year
Adjusted net income after non-controlling interest slightly better year-on-year EUR m 35 13.5 32.0 31.3 30 26.3 (0.5) 25 3.9 19.0 20 (0.7) 1.8 (3.9) 15 10 (5.0) (3.4) 5 0 Net Income Q3 Adj. EBITDA Depreciation Total one - off Amortization Net finance Income taxes Net Income Q3 Total one-off Adjusted
Slide 34: Net debt and leverage impacted by acquisition of Sensile Medical
Net debt and leverage impacted by acquisition of Sensile Medical EUR M AUG 31, 2018 NOV 30, 2017 AUG 31, 2017 CHANGE IN %2 Total assets 2,651.1 2,444.1 2,255.9 +8.5% Equity 824.6 789.5 750.7 +4.4% Equity ratio 31.1% 32.3% 33.3% -120bps Net working capital 233.7 185.7 223.9 +25.9% NWC in % of LTM rev
Slide 35: 2018 Outlook
2018 Outlook FY 2018 FY 2017 EXCL. SENSILE MEDICAL GROUP METRICS GROUP METRICS Revenues (FXN1) Approx. EUR 1.38bn to EUR 1.4bn EUR 1,348.3m Adj. EBITDA (FXN1) Approx. EUR 305m to EUR 315m EUR 307.23 Depending on the degree of advancement reached with our Inhalation growth project and on macro factor
Slide 36: Looking ahead
Looking ahead Systematic execution of strategic priorities: Foundation of the Advanced Technologies Division underpins ambition to bring intelligent drug delivery systems and value added devices for the entire Gerresheimer Group, under an innovation umbrella Clear identification of operational chall
Slide 37: Appendix / Q&As
Appendix / Q&As >= GERRESHEIMER - 4 J . . A ; V4
Slide 38: Development of net working capital
Development of net working capital AUG 31, 2018 NOV 30, 2017 AUG 31, 2017 EUR M EUR M EUR M Inventories 176.3 148.4 163.5 thereof prepayments made 5.4 2.1 5.1 Trade receivables 245.3 242.7 221.6 Trade payables 152.1 176.3 119.1 Payments received 35.8 29.1 42.1 Net working capital 233.7 185.7 223.9 A
Slide 39: Development of inventories
Development of inventories AUG 31, 2018 NOV 30, 2017 AUG 31, 2017 EUR M EUR M EUR M Raw materials, consumables and supplies 57.8 49.9 51.5 Work in progress 18.0 15.0 20.5 Finished goods and merchandise 95.1 81.4 86.4 Prepayments made 5.4 2.1 5.1 Inventories 176.3 148.4 163.5 Q3 2018 IR Presentation
Slide 40: Technical guidance: EPS
Technical guidance: EPS ESTIMATED IMPLICATIONS ON MODELLING TOPIC STATUS QUO FOR FY 2018 and FY 2019 + Revaluation of deferred tax assets US tax reform, the Tax Cuts and Jobs Act passed on December 22, 2017 Triggered a.o. immediate revaluation of Positive one-off effect for the financial year 2018 o
Slide 41: GXI Key Data
GXI Key Data in EUR per share 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Dividend 0.40 – 0.50 0.60 0.65 0.70 0.75 0.85 1.05 1.10 Dividend yield 1.5% – 1.8% 1.9% 1.7% 1.4% 1.7% 1.2% 1.5% 1.6% Payout ratio 22% – 26% 25% 25%1 23% 26% 25% 25% 27% Share price high 38.20 27.05 29.85 36.62 41.34 50.
Slide 42: Overview of Abbreviations and Definitions
Overview of Abbreviations and Definitions ABBREVIATIONS AND DEFINITIONS Adj. EBITDA 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 EPS Adjuste
Slide 43: Financial calendar and contact details
Financial calendar and contact details PRELIMINARY FINANCIAL CALENDAR February 14, 2019 Annual Report Financial Year 2018 April 11, 2019 Interim Report 1st Quarter 2019 July 11, 2019 Interim Report 2nd Quarter 2019 October 10, 2019 Interim Report 3rd Quarter 2019 CONTACT DETAILS Name Corporate Inves
Slide 44: Our Vision
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.