By Ulrike Dauer
FRANKFURT (Dow Jones)–Gerresheimer wants to continue to grow profitably this year and next and also improve its margins. CFO Bernd Metzner sees the MDAX group on track for its medium-term margin targets.
Gerresheimer shares were up a good 10 percent in the morning, with a peak of a good 11 percent. According to Jefferies analysts, 2024 targets are at the high end and newly released 2025 targets are above expectations.
The packaging manufacturer is planning the increase in sales for the current year for the pharmaceutical, biotech and cosmetics sectors to be somewhat more restrained than in the previous year, at 5 to 10 percent, after 10.4 percent. Adjusted earnings per share are expected to increase by 8 to 12 percent, after 7.1 percent last year. In contrast to the target for 2023 and 2025 and beyond, the group is not setting an EBITDA margin target for 2024, but rather a specific EBITDA target range. The target is a currency-adjusted EBITDA of between 430 and 450 million euros (2023: 412.2 million euros).
According to CFO Metzner, the reason for the different 2024 target is transparency towards investors. The reason for deviating from the margin target in 2024 is that the margin depends on sales, “and we have certain volatility when it comes to the destocking issue in the first half of the year,” said Metzner in an interview with Dow Jones Newswires. It is important that the group wants to increase its margin every year, “also in 2024 and then 2025”.
Gerresheimer supplies injection vials for vaccines, which have been in high demand for Covid-19 vaccines over the past three years. According to Metzner, the Covid-19 vaccine-related sales, which would have amounted to an average of 7 to 8 million euros each quarter over the past three years, will now be eliminated. In addition, customers in the pharmaceutical and biotech industries must first reduce their inventories of injection vials. This is expected to take the first half of 2024. “The fact that customers need injection bottles will become apparent by the second half of the year at the latest,” said Metzner.
Gerresheimer does not see itself affected by the current delivery problems as a result of the political disputes on the Red Sea, which are forcing cargo ships to take detours via the southern tip of Africa and leading to significant delivery delays in some sectors. “We source very locally, we produce regionally for the region at our sites that we have everywhere,” said Metzner. “This of course helps us to insulate ourselves a bit from global supply chain problems.”
Gerresheimer has again set a margin target for 2025; an adjusted EBITDA margin of at least 22 percent should be achieved. In 2023, the currency-adjusted EBITDA margin was 20.8 percent, after 19.6 percent a year earlier. In the “medium term” the group wants to continue to achieve an adjusted EBITDA margin of between 23 and 25 percent. According to Metzner, the medium-term planning period extends until 2028. “Within this period, we will achieve our EBITDA margin target of 23 to 25 percent,” said the CFO.
Contact the author: [email protected]; @UlrikeDauer_
DJG/uxd/jhe
(END) Dow Jones Newswires
February 22, 2024 04:42 ET (09:42 GMT)
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