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Gerresheimer Holds its own in Difficult Environment

Saturday, September 19, 2009 General News J E 4
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In the first half of 2009, Gerresheimer AG achieved sales at the prioryear level despite the continuing worldwide economic crisis. This result wasmainly attributable to sales growth for pharmaceutical packaging and systems,with which Gerresheimer today makes more than 70% of Group sales. Incontrast, sales declines were recorded in the more cyclical segments ofcosmetics and laboratory glassware. In comparison with the prior year, salesin the second quarter of 2009 declined by 4.3% on a nominal basis to EUR264.4m and, excluding the Technical Plastics business just sold, by 2.2% toEUR 251.6m. The operating margin (adjusted EBITDA margin) excluding thebusiness just sold reached a high level in the second quarter of 2009 at18.9%. For the year as a whole, Gerresheimer expects the sales trendexcluding Technical Plastics to be +1% to -3% with an adjusted EBITDA marginof 18.0% to 18.5%.

In the course of its continued focus on the markets of pharma & lifescience the sale of the Technical Plastics business was successfullycompleted as per July 1, 2009. The transaction price including debts takenover was around EUR 12m.

"Growth in our core markets of pharma & life science has been and remainsthe basis of our profitable business development. This applies all the moreat a time of economic crisis," says Dr. Axel Herberg, CEO of Gerresheimer AG."With the successful sale of the peripheral business of Technical Plastics wehave taken another important step in focusing the business," Herberg adds.

Growth for pharmaceutical products

Regardless of the continued trend towards inventory reductions by somepharma companies, Gerresheimer achieved sales growth with products for thepharma industry once again in the second quarter of 2009. Major contributionswere made by Medical Plastic Systems, which continue to be a particulargrowth generator, and good sales of pharmaceutical primary packaging such asampoules and vials in Europe and China. Installation of the third RTF(R)syringe line was completed according to plan so that customer-specificvalida­tions could be commenced.

As in the first quarter, however, continuing weak demand in the cosmeticssegment led to a decline in sales of cosmetic packaging. A similar situationapplies for laboratory glassware products, where a temporary sales declinewas experienced because of inven­tory reductions and purchasing cautiousnessby customers.

Outlook for 2009

Despite the imponderable factors with regard to further world economicdevelopment Gerresheimer continues to expect growth in the field ofpharmaceutical packaging and systems. In the more cyclical segments cosmeticsand laboratory glassware, Gerresheimer experienced a marked decline in demandin the first half year. Fore­casts for the further course of the financialyear are difficult. Gerresheimer AG does not however assume any short-termrecovery of these markets. The sound balance sheet and long term financ­ingstructure as well as a good operating performance will enable Gerresheimer tocontinue the growth strategy in the pharma & life science segment goingforward.

About Gerresheimer

Gerresheimer employs around 10,000 people in 40 locations in Europe,America and Asia. In the financial year 2008, worldwide sales totaled EUR1.06bn. The product portfolio ranges from pharma­ceu­tical vials made ofglass and plastic through to complex drug-delivery systems for the pharma &life science industry. These include sterile syringes, inhalers and othersystem-based approaches for safe dosage and application of medications. TheGroup enjoys a leading position in markets which are characterized by hightechnical and regulatory barriers.

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(1) Net sales of the recently divested Technical Plastics business (soldwith effect from July 1, 2009) include the sales of the Technical Plasticstool business and amounted to EUR 74.2m in FY 2008

(2) Adjusted EBITDA: Earnings before income taxes, financial result,amortization of fair value adjustments, extraordinary depreciation,depreciation and amortization, restructuring expenses and one-off income andexpenses

(3) The adjusted EBITDA of the Technical Plastic Systems business of thecomparative prior year period is not available due to the fact that thedivestment was carried out in the course of the financial year and istherefore included in the Plastic Systems segment

(4) Adjusted net income: Consolidated profit before non-cash amortizationof fair value adjustments, special effects from restructuring expenses,extraordinary depreciation, the balance of one-off income and expenses(including significant non-cash expenses) and the related tax effects- Sales in the First Half of 2009 (Excluding Technical Plastics) at Prior Year Level - Growth in the Pharma Business - Sales Decline in the Cyclical Segments of Cosmetics and Laboratory Glassware

SOURCE Gerresheimer AG
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