Gerresheimer Q3 Earnings Call Highlights

Key Points

• Third-quarter revenue increased to €605 million, with growth across all three segments, but adjusted EBITDA was broadly stable at €103 million as inventory reductions weighed on earnings. Free cash flow before M&A was negative €20 million.
• Gerresheimer maintained its full-year guidance of €2.3–€2.35 billion in revenue, a 17%–18% organic adjusted EBITDA margin and negative €50–€100 million in free cash flow before M&A, supported by expectations for a stronger fourth quarter.
• The completed Centor divestiture and planned Primary Packaging Plastics sale are expected to materially reduce debt, with nearly €700 million targeted for repayment by year-end and leverage projected to fall to about three times adjusted EBITDA after both transactions.

Gerresheimer ETR: GXI reported preliminary third-quarter 2026 revenue growth across all three business segments, while adjusted EBITDA was broadly stable as inventory reductions weighed on profitability and free cash flow remained negative.

Revenue rose by €46 million year over year to €605 million in the quarter, CFO Wolf Lehmann said. Adjusted EBITDA totaled €103 million, down €3 million from the adjusted prior-year figure and approximately flat from the preceding quarter. The company reduced inventories by €20 million during the quarter, compared with a €14 million inventory build in the prior-year period, creating a year-over-year headwind to earnings.

Free cash flow before mergers and acquisitions was negative €20 million. Lehmann cited working-capital movements, including lower use of reverse factoring that affected payables, as well as higher exceptional costs related to stabilization, financing, transformation efforts and divestitures. Lower inventory and reduced net capital expenditures did not fully offset these factors.

Company Maintains Full-Year Outlook

Management said it expects to remain within its full-year guidance ranges for revenue, adjusted EBITDA margin and free cash flow before M&A. Gerresheimer’s guidance calls for revenue of €2.3 billion to €2.35 billion, an organic adjusted EBITDA margin of 17% to 18%, and free cash flow before M&A of negative €50 million to negative €100 million.

Lehmann said the company expects a seasonally stronger fourth quarter, including year-end settlements under certain customer and supplier agreements. Supplier-related settlements, such as volume rebates, are expected to support both EBITDA and cash flow.

At the lower end of the company’s revenue and margin guidance, Gerresheimer would need roughly €120 million of organic adjusted EBITDA in the fourth quarter, Lehmann said, adding that management has visibility supporting its expectation to meet the guidance range.

The company does not expect a significant additional reduction in inventory during the fourth quarter. In Moulded Glass specifically, Lehmann said Gerresheimer believes it has moved through most of the inventory-related pressure that affected third-quarter earnings.

Divestitures and Debt Reduction

Gerresheimer completed the sale of Centor on Oct. 1, two months after signing the transaction agreements. The proceeds were not included in third-quarter debt figures because the transaction closed on the first day of the fourth quarter.

Excluding transaction costs and taxes, approximately 90% of Centor’s gross sale proceeds will be used for debt reduction, enabling Gerresheimer to repay close to €700 million of debt by the end of the fiscal year, according to Lehmann. The company intends to use proceeds to reduce debt and repay promissory notes maturing in 2026.

Preparations for the sale of Primary Packaging Plastics are progressing, with the deal now expected to close in the first quarter of 2027. Following the completion of both divestitures, Gerresheimer expects leverage to decline to about three times adjusted EBITDA.

At the end of the third quarter, net financial debt stood at approximately €2.1 billion and liquidity was €208 million. Lehmann said gross debt was just under €2.3 billion and could decline to below €900 million following the two divestitures.

The company said the lower leverage would provide a stronger foundation for a longer-term refinancing.

Segment Performance Mixed

Containment & Delivery Systems delivered the strongest performance among Gerresheimer’s segments. Revenue increased €27 million year over year to €313 million, while adjusted EBITDA rose €13 million to €77 million. The adjusted EBITDA margin improved to 24.5%.

Achim Schalk, a member of the management board, said growth was primarily driven by volume in Medical Devices, including the ramp-up of the Peachtree facility. Gerresheimer expects Peachtree revenue to more than double in fiscal 2026 and reach a triple-digit million-euro level. Primary Packaging Plastics also contributed, supported by sales-pricing actions.

Primary Injectable Solutions posted revenue of €123 million, up €9 million from the prior-year quarter. Syringe Systems was the main growth driver, while Tubular Glass revenue was flat. Adjusted EBITDA fell €4 million to €15 million, as improvement in Syringe Systems was more than offset by weak profitability in Tubular Glass.

Schalk said the broader market for syringes and tubular glass is expected to grow faster than GDP, supported by biologics and biosimilars. He also said Gerresheimer continues to see GLP-1-related growth in both syringes and medical devices, though the company did not provide individual customer or product details. Management said it remains in the range of a previously communicated target of around €350 million in GLP-1 revenue, with the eventual contribution dependent on customer-program execution and timing.

In Moulded Glass, revenue was broadly stable at €169 million. Adjusted EBITDA declined €12 million to €17 million, resulting in an approximately 10% margin. The segment’s inventory reduction was a major factor: inventory fell by €10 million in the quarter, compared with a €14 million increase a year earlier. Excluding the inventory movements, Lehmann said the business was operating at an annualized EBITDA run rate of roughly €80 million to €85 million.

Transformation and Operating Priorities

Management said Gerresheimer continues to implement its transformation program, including footprint optimization, operating improvements, overhead savings and product-portfolio actions. The company has completed the closure of its Chicago Heights facility and is now focused on combining its Forest Grove operation into Morgantown.

For Tubular Glass and Moulded Glass, management identified footprint optimization, operational excellence, selling, general and administrative savings, and product-portfolio management as key priorities. Schalk said the challenge in Tubular Glass is not solely plant utilization; performance improvements and a shift toward higher-value solutions are also required.

The company’s GTO operational transformation is targeted to deliver €50 million to €70 million in annualized EBITDA improvement. Implementation is planned across 2026 and 2027, with the full run-rate impact expected in 2028.

Gerresheimer spent €149 million on capital expenditures during the first nine months, down 37% from the prior-year period. Lehmann said the company expects full-year CapEx to remain near 9% of sales, while noting it was too early to provide a detailed outlook for subsequent years.

Management also said the BaFin investigation remains ongoing. Lehmann said Gerresheimer is cooperating fully and transparently with the regulator but could not provide a timeline for its conclusion. The company plans to publish its final first-half financial report at the end of November and its final third-quarter statement in December, including IFRS 5 reporting details related to the divestitures.

About Gerresheimer (ETR:GXI)

Gerresheimer AG, together with its subsidiaries, manufactures and sells medicine packaging, drug delivery devices, and solutions in Germany and internationally. It operates through three divisions: Plastics & Devices, Primary Packaging Glass, and Advanced Technologies. The company offers prefillable syringes, plastic and glass packaging solutions, vials, glass cartridges and ampoules, bottles and containers, and glass bottles and jars, as well as caps, closures, applicators, and accessories; development, industrialization and contract manufacturing of drug delivery programs; project and quality management; and drug delivery systems, including inhalers, injection/auto injectors, pen injectors, infusion systems, and inhalation assessment, autoinjector, and other services.

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