Gerresheimer AG again achieved a substantial increase in sales...

Gerresheimer AG again achieved a substantial increase in sales and operating results in the third quarter of 2008. Overall, sales by the globally operating manufacturer of special products for the pharma & life science industry totalled EUR268.0m (Q3 2007: EUR250.1m). This is equivalent to growth of 7.2%. On a like-for-like exchange-rate basis sales actually increased by 10.2%. Operating results (Adjusted EBITDA) improved by 14.1% to EUR50.3 m (prior year: EUR44.1m). The adjusted EBITDA margin increased to 18.8% from 17.6%. In the third quarter the sale process for the Technical Plastics business was commenced. This led to non-scheduled depreciation of EUR33.0m, resulting in a negative consolidated result of EUR22.8m for the third quarter. Gerresheimer takes this charge in anticipation of the possible book loss on the sale. The depreciation has no effect on cash flow or operating results. The adjusted net income, which reflects the company's operating profitability, more than doubled in comparison with the prior-year quarter to EUR16.5m (Q3 2007: EUR7.4m). The same applies for adjusted earnings per share, which were substantially higher in the third quarter of 2008 at EUR0.52 (Q3 2007: EUR0.22).
"By focussing on the markets of pharma & life science we have again realised above-average growth this quarter. Gerresheimer is bucking the current negative trend in the global economy and shows that we are a strong company which continues to grow profitably even in difficult times," says Dr. Axel Herberg, Chief Executive Officer of Gerresheimer AG.
The positive result for the third quarter of 2008 is also reflected in the nine-month figures. In the first three quarters of the current financial year Gerresheimer achieved sales of EUR783.4m (Q1-Q3 2007: EUR697.4m). This is equivalent to sales growth of 12.3%. Operating results (Adjusted EBITDA) improved by 18.1% to EUR146.9m (prior year: EUR124.4 m). The Adjusted EBITDA margin was 1.0 percentage point higher than in the first nine months of the prior year and reached 18.8%.
Growth in all divisions
In the third quarter of 2008, sales by the Tubular Glass Division rose by 14.0%, or 19.1% on a like-for-like exchange-rate basis, to EUR77.6 m (prior year: EUR68.1m). The main growth generator in this Division was RTF (Ready-to-Fill) syringe systems, sales of which rose by 54%. Production capacity for RTF syringes is now fully utilised. In order to cover the sustained high level of demand, a substantial investment is being made in this Division and a further production line will be commissioned in early 2009. Growth was also achieved by the Tubular Glass Division in the American market for pharma-ceutical vials and in the Chinese market. Operating results (Adjusted EBITDA) improved by 12.4% to EUR19.1m (Q3 2007: EUR17.0m).
Sales by the Plastic Systems Division increased by 6.2%, or 5.5% on a like-for-like exchange-rate basis, to EUR87.8m (Q3 2007: EUR82.7m). Adjusted EBITDA totalled EUR15.4m, 11.6% up on the prior year (EUR13.8m). A particularly strong contribution to this result was made by the segment of Medical Plastic Systems, with double-digit growth. Integration of the companies acquired at the beginning of 2008 in Spain (today Gerresheimer Zaragoza S.A.) and Brazil (today Gerresheimer Plasticos Sao Paulo Ltda.) has been successfully completed. Both of the companies made a positive contribution to the Division's development. In parallel, the sales process for the segment of Technical Plastic Systems was commenced as part of the company's concentration strategy, under which the Consumer Health Care segment which was also not part of the core business was already sold with effect on June 1, 2008.
The Moulded Glass Division again achieved above-market-average sales growth of 5.0%, or 7.7% on a like-for-like exchange-rate basis, to EUR83.7m (Q3 2007: EUR79.7m). This was attributable in particular to higher sales of pharmaceutical bottles in the USA and Europe. A further growth contributor was cosmetic products. Adjusted EBITDA improved by 14.5% to EUR17.4m (prior year: EUR15.2m).
Sales by the Life Science Research Division increased markedly by 10.1% or 26.4% on a like-for-like exchange-rate basis to EUR22.9m (Q3 2007: EUR20.8m). Adjusted EBITDA of EUR2.9m (Q3 2007: EUR1.8m) even increased by 61.1% compared to prior year.
Growth despite the financial crisis
"Supported by the sustained high level of demand for our products and the stable growth in our core markets of pharma & life science, we confirm our outlook for the current financial year", says Dr. Axel Herberg. Gerresheimer continues to forecast a sales growth of 9% to 11%. In terms of operating results the company expects to achieve an adjusted EBITDA margin of approximately 19.5%.
The company will at the same time continue its successful focus on the markets of pharma & life science. A solid long-term financial structure will allow it to continue to invest in the core markets in the future.