Gerresheimer AG (GRRMF) (Q3 2026) Earnings Call Highlights: Revenue Growth and ...

Negative Points

• Adjusted EBITDA was EUR103 million, EUR3 million below the prior year quarter, impacted by inventory reduction and higher exceptional items.

• Free cash flow before M&A was negative EUR20 million in Q3 2026, reflecting negative working capital movements and increased advisory costs.

• Primary Injectable Solutions segment saw adjusted EBITDA decline by EUR4 million to EUR15 million due to continued weak profitability in Tubular Glass.

• Moulded Glass adjusted EBITDA declined by EUR12 million to EUR17 million, mainly due to inventory reduction and lower margin.

• The BaFin investigation remains ongoing with no clear timeline, creating uncertainty, and the CEO search is still underway, leaving co-CEOs in charge.

Q & A Highlights

Q: What gives you confidence that Gerresheimer can still reach its adjusted EBITDA margin guidance for this year, and is the midpoint still doable? A: CFO Wolf Lehmann explained that the full-year guidance is EUR2.3 billion to EUR2.35 billion in sales and a 17% to 18% organic EBITDA margin. Nine months in, organic adjusted EBITDA stands at EUR281 million. To reach the lower end of the range (roughly EUR400 million at EUR2.35 billion sales and 17% margin), the company needs around EUR120 million of organic adjusted EBITDA in Q4, which it has visibility to, supported by seasonally stronger Q4 and year-end settlements.

Q: What is driving the sharp EBITDA decline in Moulded Glass, and is the inventory reduction largely over? A: CFO Wolf Lehmann attributed the roughly EUR12 million EBITDA drop (from EUR29 million to EUR17 million) mainly to strict cash and inventory management. Q3 2025 saw a EUR14 million inventory build (positive P&L impact), while Q3 2026 saw a roughly EUR10 million reduction (negative P&L impact), a EUR24 million swing that at ~50% contribution margin explains the decline. He said the company is through most of the inventory impact and does not expect the same effect in Q4.

Q: How will the Centor and Primary Packaging Plastics divestitures affect leverage and refinancing? A: CFO Wolf Lehmann said gross debt is just under EUR2.3 billion and net debt just under EUR2.1 billion. The two divestitures should reduce gross debt to below EUR0.9 billion, bringing leverage to around 3x adjusted EBITDA. About 90% of Centor's gross proceeds (excluding transaction costs and taxes) will go to debt reduction, enabling repayment of close to EUR700 million of debt by year-end. PPP closing is now expected in Q1 2027, positioning the company for a fulsome long-term refinancing.

Q: What are the key 2027 tailwinds and headwinds, particularly on energy costs? A: CFO Wolf Lehmann said it is too early for detailed 2027 guidance, but higher energy costs are a headwind, especially for Moulded Glass. The company had roughly 80% hedged in 2026 but less than 50% hedged for 2027. He noted this is an industry-wide issue affecting competitors and customers, and Gerresheimer intends to mitigate it through GTO/transformation measures, cost management, operational efficiency, and price actions where appropriate.

Q: What is the status of the GLP-1 revenue target and the Syringe Systems and Tubular Glass trends? A: Board Member Achim Schalk said the company does not comment on individual customers or products, but the prior ~EUR350 million GLP-1 revenue target remains, with exact contribution depending on execution and timing of customer programs. He noted strong customer arrangements and that the company is "in the ballpark" of the target. The overall market is expected to grow above GDP on biologics and biosimilars trends, with Syringe Systems progressing well while Tubular Glass, especially in Europe, still requires restructuring.

Q: What drove the 9% revenue growth in Containment & Delivery Systems, and how much came from pricing versus volume? A: Board Member Achim Schalk said most of the growth was volume-driven, mainly from the ramp-up of Medical Devices at the Peachtree City site, with a smaller contribution from Primary Packaging Plastics, which is a smaller business than Medical Devices. He also noted Peachtree's revenue is expected to more than double in fiscal 2026 to a triple-digit million euro level.

Q: What is the outlook for CapEx as a percentage of sales? A: CFO Wolf Lehmann said nine-month CapEx was EUR149 million, about 40% base CapEx and 60% growth, and 37% below the prior year. That equals roughly 9% of sales, and the company expects to finish the year around that level, translating to around EUR200 million on a cash basis. He said it is too early to guide outer years but capital allocation rigor is improving, aligned with the grow, fix, and sell strategy.

Q: What is the status of the CEO search, and why is it taking so long? A: Board Member Achim Schalk said he and CFO Wolf Lehmann are currently sharing leadership as co-CEOs with strong support from business unit experts, and the final decision rests with the supervisory board. CFO Wolf Lehmann added that nothing is being left undone and that executing the company's priorities remains their focus.

Q: Can you provide an update on the timeline of the BaFin investigation? A: CFO Wolf Lehmann said there is little he can add. Gerresheimer is fully cooperating with the BaFin investigation in full transparency, but the timing is uncertain because BaFin runs the investigation on its own timeline, making it difficult to put a timestamp on completion.

Q: What utilization improvements are needed in Tubular Glass, and what is the headroom at Peachtree? A: Board Member Achim Schalk said Tubular Glass improvement is not only a matter of utilization but also performance-related, including product portfolio mix and moving into higher-value solutions. At Peachtree, the plant is ramping up nicely with double-digit percentage headroom remaining on utilization, though the recent run rate is where the company wants it going forward.

Q: How should we think about the Q4 free cash flow needed to hit the full-year guidance? A: CFO Wolf Lehmann said free cash flow before M&A is roughly negative EUR140 million after nine months, against a full-year guidance of negative EUR50 million to EUR100 million. He expressed confidence in landing within the range, citing visibility, but declined to quantify how much of the Q4 improvement comes from special or seasonal settlements.

Q: Is there a timeline for exiting the Moulded Glass business, and can you comment on reports of third-party interest in the group? A: CFO Wolf Lehmann said the focus is on completing the transformation and improving profitability rather than committing to a specific transaction date. Moulded Glass currently runs at an annualized EBITDA of around EUR80 million to EUR85 million, with an ambition to

For the complete transcript of the earnings call, please refer to the full earnings call transcript .