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Gerresheimer Q2 Results Down, Sees Strong H2; Warns On Margin - Quick Facts

German drug delivery devices maker Gerresheimer AG (GRRMF.PK) reported Thursday that its second-quarter results of operations declined 15.6 percent to 37.1 million euros from last year's 43.9 million euros.

Earnings per share fell 23.1 percent to 0.60 euro from 0.78 euro a year ago.

Adjusted net income was 26.5 million euros or 0.83 euro per share, compared to 31 million euros or 0.97 euro per share last year.

Adjusted EBITDA, a key earnings metric, dropped 6.1 percent to 71.1 million euros, and adjusted EBITDA margin dropped to 21.4 percent from 22.3 percent in the prior year.

Revenues for the quarter declined 2 percent to 332.6 million euros from 339.5 million euros last year. Revenues at constant exchange rates grew 2.1 percent.

Gerresheimer said it has secured two major orders for the manufacture of inhalers and prefillable syringes but lost a significantly smaller order for inhalers resulting in restructuring affecting the plant in Kuessnacht, Switzerland.

Looking ahead, for the current year, Gerresheimer anticipates a strong second half—without consideration of Sensile Medical—and has narrowed its revenue forecast to the upper end of the guidance range.

For the financial years 2019 and 2020, without consideration of Sensile Medical, the adjusted EBITDA margin will be temporarily reduced by approximately one percentage point, compared with the financial year 2017. This is a consequence of proportionately higher revenues in the low margin engineering and tooling business for the new major orders as well as increased expenditures for relocation, employee training and production start-up/ramp-up.

In the years 2021 and 2022, revenues, without consideration of Sensile Medical, are expected to increase by two percentage points beyond the usual rate of growth, as is the adjusted EBITDA margin. Capital expenditure will then return to approximately 8%.

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