Gerresheimer recorded 14 per cent year-on-year revenue growth, with the tubular glass and, in particular, plastic systems units driving the upturn. Within these units Gerresheimer singled out ready-to-fill (RTF) syringes and insulin pens as strong performers.
“We’ve got off to a very good start and are able to report excellent growth in revenues. Global demand for pharmaceutical packaging and products for the safe and reliable administration of medications is very high”, Uwe Röhrhoff, CEO of Gerresheimer, said.
Weakening margins dragged on earnings though, causing a year-on-year dip in the tubular glass unit. Gerresheimer attributed the margin decline to “higher RTF syringe production capacity utilisation [which] is currently generating high quality costs”.
Installation of a fourth RTF-line led to a 70 per cent increase in capital costs at the tubular glass unit. Investment in plastic systems also rose, doubling year-on-year, due to investments in capacity at a production plant in Pfreimd, Germany.
Despite the first quarter dip to 17 per cent, Gerresheimer is still projecting full year margins of 20 per cent. First quarter revenue performance prompted Gerresheimer to raise its sales growth outlook for the full year by two percentage points, bringing its outlook up to a seven to eight per cent increase.
In a note seen by Bloomberg, Edouard Aubery, an analyst at Equinet Bank AG in Frankfurt, said the improved outlook “is a positive surprise” and comes mainly from “strength in operating business”.
Aubery picked up on the weakening margins in tubular glass and said improving profitability is key to full-year performance. The biggest earnings gains are expected to happen in the second half of the year.
Shares in Gerresheimer were up more than five per cent following release of the results.