Growth Trend for Gerresheimer Continues Unabated - Debt Reduction

DUSSELDORF, Germany, October 17 /PRNewswire/ --

- For the Nine Months (to 31 August) a 46% Sales Increase to EUR697m

- For Nine Months Almost Six-Fold Growth in EBIT to EUR34.8m (EUR6.2m)

- Marked Improvement in Adjusted EBITDA by 50% to EUR124m

- Substantial Debt Reduction and Fall in Interest Charges Since the IPO

- CEO Dr. Axel Herberg: "The Gratifying Q3 Result Confirms Our Full-Year Forecast for 2007."

In the first nine months of its financial year (to 31 August), Gerresheimer AG has continued its dynamic earnings and sales trend unabated. Total sales including the consolidated Gerresheimer Wilden Group increased by 46.3% to EUR697.4m (9M 2006: EUR476.7m). Adjusted EBITDA actually improved by 50.1% to EUR124.4 (EUR82.9m), with a margin improvement by 0.4 percentage points to 17.8% (17.4%). In the result from ordinary activities (EBIT) there was almost a six-fold increase in the comparable period to EUR34.8m (EUR6.2m). Cash net income(1) increased due to one-off expenses (EUR21.0m before tax) for the IPO by EUR16.6m to EUR0.8 (EUR-15.8m).

"The gratifying operating development has completely fulfilled our expectations," says Dr. Axel Herberg, CEO of Gerresheimer AG. "Looking at our target for the year to achieve organic growth of 8% to 9% and an EBITDA margin of close to 19%, we are right on track. We will continue to work to expand our position as a globally active pharma and life-science company."

In the third quarter (June to August) total sales grew strongly by 60.2% to EUR250.1m (third quarter of 2006: EUR156.1m). The substantial sales growth was largely attributable to the acquisition of the Wilden Group and the positive turnover trend in the pharma and cosmetics segments. In the comparable period, Adjusted EBITDA improved by 55.3% to EUR44.1m (EUR28.4m). The development in the result from ordinary activities (EBIT), which improved to EUR11.0m (EUR-1.2m), was also gratifying. The consolidated result increased by EUR7.4m to EUR-5.1 (EUR-12.5m) despite the negative one-off effects of EUR21.0m in connection with the IPO and refinancing of the Gerresheimer Group. In the comparative period, cash net income(2) was EUR5.8m up at EUR-1.4 (EUR-7.2m) despite these one-off charges.

Earnings development of the business divisions per 31 August 2007:

In the Tubular Glass Division sales in the first nine months of the financial year 2006/2007 increased by 10.1% to EUR199.0m (9M 2006: EUR180.8m) thanks in particular to sales growth for RTF syringes and higher turnover of ampoules and vials. The growth in Adjusted EBITDA was slightly weaker, with an increase of 4.4% to EUR47.8m (EUR45.8m), because of a routine general overhaul of furnaces in the USA and Italy and one-off start-up costs for the second RTF syringe line. The Adjusted EBITDA margin, although still high, therefore fell slightly to 24.0% (25.3%) as expected.

The sales increase to EUR218.6m (EUR34.9m) in the Plastic Systems Division largely reflects the acquisition of the Wilden Group, which contributed sales of EUR180m, but we also achieved strong growth in the segment of pharmaceutical packaging. Adjusted EBITDA in the first nine months totalled EUR38.2m (EUR7.9m). The transfer of production to Poland in the segment of dropper-bottle systems also contributed to the improvement in results. Integration of the Wilden Group is progressing completely to plan.

Sales in the Moulded Glass Division increased by 7.0% to EUR234.3m (EUR219.0m) against the favourable background of worldwide growth in sales of pharmaceutical bottles and of perfume flacons and cream jars in the cosmetics segment in Europe. Adjusted EBITDA increased substantially by 33.3% to EUR45.2m (EUR33.9m). Continuous quality improvements and higher productivity led to an improvement of 3.8 percentage points in the Adjusted EBITDA margin to 19.3% (15.5%).

In the Life Science Research Division the life-science business contributed by Thermo Fisher Scientific with sales of EUR7.5m for two months was consolidated for the first time as per 2 July 2007. Sales improved by 12.5% to EUR47.7m (EUR42.4m) while Adjusted EBITDA increased by only 2.2% to EUR4.6m (EUR4.5m) because of the integration costs for the new joint venture and delays in merchandise deliveries until the fourth quarter as a result of problems with the introduction of new IT systems, which have now been resolved. The Adjusted EBITDA margin was therefore also down slightly at 9.6% (10.6%). In the fourth quarter we expect clear growth rates.

Gerresheimer on course with its full-year forecast for 2007

For the remaining three months of the financial year 2006/2007 ending on 30 November, Gerresheimer expects business to continue on a positive trend with organic sales growth of 8% to 9% and an Adjusted EBITDA margin close to 19%. The latest upsets in the capital markets and the strength of the euro over recent weeks and months have had little impact on Gerresheimer. Since almost all products for the important US market are manufactured by Gerresheimer in North America (including Mexico), the strong euro exchange rate has hardly any effect on results.

Gerresheimer has used the proceeds from the IPO to reduce debt. While net financial debt at the end of the second quarter of 2007, i.e. shortly before the IPO, still totalled around EUR840m, it fell to around only EUR414m at the end of the third quarter of 2007. The equity ratio is a sound 34%. The substantially improved capital structure will in the future continue to have a positive effect on earnings and cash flow since interest expenses are significantly reduced.

The new capital structure gives us the financial flexibility to continue our strategy of growth through selective acquisitions and investments in profitable segments. Thus, for example, in the third quarter of 2007 - earlier than originally planned - the investment decision was made to construct a third RTF syringe line because of the high level of demand. In the field of medical plastic packaging, investment is being channelled into insulin pen production, a new growth segment for Gerresheimer, on the basis of a newly won long-term customer order.

The interim report as of 31 August 2007 can be downloaded on our home page http://www.gerresheimer.com/ir. An analysts' presentation can also be downloaded on the Internet.

Cross reference: Key figures of the Gerresheimer Group and Segment report are available at: http://www.presseportal.de/pm/9072/gerresheimer_ag/?keygroup=dokument

About Gerresheimer

Gerresheimer today employs about 10,000 people in 34 locations across Europe, America and Asia. The firm's product range stretches from glass and plastic medicine bottles to complex drug delivery systems. Its product range includes sterile syringes, inhalers and other solutions for safer dosage and the administering of medication. The group has a leading position in a market that is characterised by high technical and regulatory barriers and where Gerresheimer's products must satisfy the strictest quality standards of the international pharmaceutical supervisory bodies.

The group posted 2006 pro-forma sales of about EUR893m, of which about EUR240m came from Wilden AG, a European market and technology leader in plastic systems acquired at the beginning of 2007. The pro-forma Adjusted EBITDA for the group in 2006 was about EUR151m.

(1) Cash net income is defined as the consolidated result after minority interests and before non-cash fair-value amortisation and related income tax effects.

(2) Cash net income is defined as the consolidated result after minority interests and before non-cash fair-value amortisation and related income tax effects.

    
    Contact
    Burkhard Lingenberg
    Director Corporate PR & Marketing
    Telephone +49-211-6181-250
    Telefax +49-211-6181-241
    e-mail b.lingenberg@gerresheimer.com