Slide 1: Q2 2018 Earnings Presentation: Accelerating our Journey
Q2 2018 Earnings Presentation Accelerating our Journey Rainer Beaujean, Speaker of the Management Board and CFO July 12, 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: Accelerating our journey: Agenda
Accelerating our journey: Agenda 1. Highlights 2. Sensile Medical 3. Recent operational developments 4. Q2 2018 financials & FY 2018 outlook 5. Conclusion 6. Appendix July 2018 Q2 2018 Earnings 3
Slide 4: Highlights
GERRESHEIMER Highlights
Slide 5: Gerresheimer enhances business model and increases revenues projections
Gerresheimer enhances business model and increases revenues projections Strategic enhancement of our business model through the acquisition of Sensile Medical Gerresheimer now positioned as platform partner for Pharma and Sensile Medical Biotech/Biosimilars customers with digital & electronic soluti
Slide 6: Sensile Medical
SENSILE‘S DRUG DELIVERY PLATFORM @ Corp Comm JK: Do you think we could get a better image ? Sensile Medical
Slide 7: 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 8: Self-administration
Disposal delivery systems balancing requirements for viscosity & volumes still considered today as unmet needs in the industry DRUG DELIVERY DESCRIPTION BENEFITS physician control Under Drugs are delivered directly into the vein with a Fastest way to deliver drugs throughout the IV-line injections s
Slide 9: 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 10: 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 11: Strong customer relationships and attractive product pipeline already in place
Strong customer relationships and attractive product pipeline already in place 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 authorities authorities of d
Slide 12: 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 13: 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 14: 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 15: Transaction summary: Closing expected for July 17, 2018
Transaction summary: Closing expected for July 17, 2018 Total consideration Initial payment of EUR 175m for 100% of company Up to EUR 175m consideration mainly subject to achievement of defined milestones over the next 3 years. The acquisition will be fully cash and debt funded out of our existing R
Slide 16: Digital Health now impacts the entire patient journey
Digital Health now impacts the entire patient journey New: Sensile July 2018 Q2 2018 Earnings 16
Slide 17: 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 18: Recent operational developments
Recent operational developments
Slide 19: Two significant customer contracts awarded
Two significant customer contracts awarded First time ever to become main Confirming #1 position in Inhalation Syringe supplier to large Pharma customer Track record in Inhalation Continuing systematic execution rewarded of our Syringes strategy New contract won in Europe with existing New long-term
Slide 20: Expecting superior organic revenues growth and profitability in the mid term
Expecting superior organic revenues growth and profitability in the mid term1 Assessing for the mid term : Assessing for the mid term : DELTA IMPACT ON REVENUES DELTA IMPACT ON PROFITABILITY Anticipating superior organic growth … … Leading to improved operating leverage Estimated FXN revenues growth
Slide 21: Growth facilitated by additional capex and ramp-up investment in the short term
Growth facilitated by additional capex and ramp-up investment in the short term1 Assessing for the short term : Assessing for the short term : DELTA IMPACT ON CAPEX DELTA IMPACT ON PROFITABILITY Growth capex required Ramp up costs expected Estimated Capex delta Estimated margin impact 2019 & 2020 fo
Slide 22: Adapting our manufacturing footprint in Medical Devices and Systems
Adapting our manufacturing footprint in Medical Devices and Systems to new customer requirements Growth projects Footprint reorganisation INHALATION: SYRINGES SYSTEMS: INHALATION: Horsovsky Tyn Buende Küssnacht (Czech Republic) (Germany) (Switzerland) Peak revenues: ~EUR 30m Peak revenues: ~EUR
Slide 23: Q2 2018 financials & FY 2018 outlook
Q2 2018 financials & FY 2018 outlook
Slide 24: FY 2018 FXN revenues guidance narrowed to the upper end parameters
FY 2018 FXN revenues guidance narrowed to the upper end parameters Strict monitoring of all business and macro drivers Markets & Macro Operations FY 2018 Guidance1 Overall, current assessment on Pharma Modest growth in Q2, driven by US FY 2018 FXN2 revenues guidance and Healthcare customers and mark
Slide 25: Q2 saw encouraging trends in Primary Packaging Glass
Q2 saw encouraging trends in Primary Packaging Glass GROUP Plastics & Devices +2.1% Primary Packaging Glass + 1.3% 343.0 335.8 3.1% 183.8 186.2 152.0 156.8 2017 2018 2017 2018 2017 2018 Performance achieved in Q2 2018 Performance achieved in Q2 2018 Performance achieved in Q2 2018 + EUR 2.4m YoY + E
Slide 26: FXN adj. EBITDA stable YoY, supported by good performance in Primary Packaging Glass
FXN adj. EBITDA stable YoY, supported by an overall good performance in Primary Packaging Glass GROUP Plastics & Devices +0.1% Primary Packaging Glass 2 - 4.3% 74.9 75.0 +7.3% EUR 49.7 47.5 2 1.1m EUR 31.1 33.4 1.1m 2017 2018 2017 2018 2017 2018 Performance achieved in Q2 2018 Performance achieved i
Slide 27: FX-Impact of EUR 14.1m on Q2 2018 Revenues and EUR 3.7m on Adjusted EBITDA
FX-Impact of EUR 14.1m on Q2 2018 Revenues and EUR 3.7m on Adjusted EBITDA Group Q2 2018 review EUR M Q2 2018 Q2 2017 Change in % Revenues 332.6 339.5 -2.0 - of which FX effect -10.4 3.7 N.A. Adj. EBITDA 71.11 75.8 -6.1 - of which FX effect -2.8 -0.9 N.A. - Adj. EBITDA margin % 21.41 22.3 -90bps P&D
Slide 28: Decrease in Adjusted EBITDA and slight increase in depreciation drive Adjusted Net Income variation
Decrease in Adjusted EBITDA and slight increase in depreciation as main drivers for Adjusted Net Income variation EUR M Q2 2018 Q2 2017 CHANGE in EUR Adjusted EBITDA 71.1 75.8 -4.7 Depreciation -25.41 -22.8 -2.6 Adjusted EBITA 45.7 53.0 -7.3 Total one-off items -1.0 -0.5 -0.5 Amortization of fair va
Slide 29: Dividend and last bond interest payments close to EUR 50m impact on net debt
Dividend and last bond interest payments close to EUR 50m impact on net debt in Q2 2018 EUR M MAY 31, 2018 NOV 30, 2017 MAY 31, 2017 CHANGE IN %2 Total assets 2,244.6 2,444.1 2,289.3 - 8.2% Equity 822.9 789.5 752.0 +4.2% Equity ratio 36.7% 32.3% 32.9% +440bps Net working capital 242.0 185.7 230.4 +3
Slide 30: FY 2018 FXN revenues guidance narrowed to the upper end parameters, other metrics unchanged
FY 2018 FXN revenues guidance narrowed to the upper end parameters, other metrics unchanged Organic (excluding Sensile Medical) and FXN: 2018 GUIDANCE PREVIOUS EXPECTED RANGE NEW EXPECTED RANGE Revenues EUR 1.348bn to approx. EUR 1.4bn (FXN1) EUR 1.38bn to approx. EUR 1.4bn (FXN1) Adj. EBITDA EUR 30
Slide 31: Conclusion
4 1 - GERRESHEIMER ~~ Af Conclusion
Slide 32: Gerresheimer enhances business model and increases revenues projections
Gerresheimer enhances business model and increases revenues projections Strategic enhancement of our business model through the acquisition of Sensile Medical Gerresheimer now positioned as platform partner for Pharma and Sensile Medical Biotech/Biosimilars customers with digital & electronic soluti
Slide 33: Appendix / Q&As
Appendix / Q&As >= GERRESHEIMER - 4 J . . A ; V4
Slide 34: The Sensile Medical opportunity
The Sensile Medical opportunity Established drug delivery market leader targeting large disease states through blue-chip biopharma partnerships Unique SenseCore technology platform for safe and reliable drug delivery Highly versatile and cost efficient technology with significant economic advantages
Slide 35: Adding Sensile Medical as separate Division going forward
Developing our business model beyond our current setup: Adding Sensile Medical as separate Division going forward Plastics & Devices Primary Packaging Glass New Division Incl. Sensile Medical Contract Design Manufacturing Medical Devices (incl. tooling) Moulded Glass Pharma Technology & Platform ope
Slide 36: Sensile Medical is uniquely positioned for high impact across the healthcare continuum
Sensile Medical is uniquely positioned for high impact across the entire healthcare continuum Cost efficient Precise Secure Scalable Flexible Accuracy of volumes Connectivity administered + Costs + Patient convenience + enhancements Increased drug regimen As cost effective as other Simple, intuitive
Slide 37: 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 20173 ~ 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
Slide 38: Negative translation effects of EUR -14.1 m, due to continued USD currency headwind
Negative translation effects of EUR -14.1 m, due to continued USD currency headwind Group: Revenues Q2 2018 vs. Q2 2017 (EUR m) Growth in % as reported: -2.0% FXN Growth in % : +2.1% 343 + 4.8 +2.4 - 343.0 -10.4 339.5 - 3.7 333 335.8 332.6 323 313 Q2 2017 Currency Impact Q2 2017 Δ P&D Δ PPG Δ Intern
Slide 39: Development of net working capital
Development of net working capital MAY 31, 2018 NOV 30, 2017 MAY 31, 2017 EUR M EUR M EUR M Inventories 180.7 148.4 172.5 thereof prepayments made 4.9 2.1 2.5 Trade receivables 224.3 242.7 222.9 Trade payables 131.6 176.3 126.7 Payments received 31.4 29.1 38.3 Net working capital 242.0 185.7 230.4 A
Slide 40: Development of inventories
Development of inventories MAY 31, 2018 NOV 30, 2017 MAY 31, 2017 EUR M EUR M EUR M Raw materials, consumables and supplies 56.1 49.9 51.0 Work in progress 17.5 15.0 20.1 Finished goods and merchandise 102.2 81.4 98.9 Prepayments made 4.9 2.1 2.5 Inventories 180.7 148.4 172.5 July 2018 Q2 2018 Earni
Slide 41: Technical guidance: EPS
Technical guidance: EPS ESTIMATED IMPLICATIONS ON MODELLING TOPIC STATUS QUO + FOR FY 2018 and FY 2019 US tax reform, the Tax Cuts and Jobs Positive one-off effect for the financial year 2018 Act passed on December 22, 2017 of USD 52.9m recognized in the first quarter of Revaluation of Triggered a.o
Slide 42: 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 43: 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 44: Financial calendar and contact details
Financial calendar and contact details FINANCIAL CALENDAR October 11, 2018 Interim Report 3rd Quarter 2018 CONTACT DETAILS Name Corporate Investor Relations Phone +49 211 6181 257 Fax +49 211 6181 121 E-mail Gerresheimer.ir@gerresheimer.com IR website www.gerresheimer.com/ir July 2018 Q2 2018 Earnin
Slide 45: 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.