Gerresheimer Aktie

Ladies and gentlemen, welcome to the publication preliminary Q1 2026 Results of Gerresheimer [Foreign Language] Conference Call. I'm [ Mathilde, ] the Chorus Call operator. [Operator Instructions] The conference is being recorded. [Operator Instructions] The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Mr. Guido Pickert, Vice President, Corporate Investor Relations. Please go ahead.

Thank you, operator.

This earnings call is based on preliminary figures for our first quarter 2026. Wolf Lehmann and Achim Schalk will explain the Q1 2026 performance to you and will give you an update on the company development. On Page 1 of the presentation, please let me remind you that the disclaimer you can find there will apply throughout this earnings call, and we assume your consent to this. I will, therefore, not read it out loud. You can download the slide deck from our website under Presentations at our Investor Relations section.

Now let me hand you over to Wolf Lehmann, our CFO. Wolf?

Thank you, Guido.

Before we discuss the quarter, a few comments upfront. With me today is my Board colleague, Achim Schalk, who will present to you our focus and progress towards high-value primary packaging and drug delivery solutions, including the sale of our business unit Centor and Primary Packaging Plastics. As announced earlier this week, Uwe Rohrhoff has stepped down from his position as Interim CEO for personal reasons, a few weeks earlier as maybe you anticipated. We sincerely thank him for his leadership and contributions during an important period for Gerresheimer. Comparing when he joined in November last year to today, we achieved significant progress, which we will walk you through.

The Management Board remains fully focused on the priorities we have communicated. One, completing the announced portfolio transactions, the sale of Centor and Primary Packaging Plastics; two, reduce debt, strengthening our balance sheet, including a complete refinancing; three, deliver the operational transformation and restoring sustainable profitable growth. I would like to reemphasize that integrity, compliance and strong financial controllership remain nonnegotiable priorities for Gerresheimer.

We're completing the additional review procedures required for the final Q1 financial statements, including, amongst others, a, the presentation and disclosure of so-called discontinued operations related to the sale of the 2 business units, Centor and Primary Packaging Plastics; and b, the regular quarterly assessment of potential impairment indicator with any such adjustment would be noncash relevant. These procedures are supported by external advisers and are part of our commitment to maintaining the highest standards of financial reporting. We expect to publish the final Q1 financials in September and focus today on the key financial KPIs, which we do not expect to change anymore.

Thank you for your patience, and please turn to Page 3 with selected recent company highlights. We have signed the sale of our business unit Centor and Primary Packaging Plastics to Apax. We expect the closing of the Centor sale by November 2026 and the closing of the PPP sale in the first half of 2027. Once both processes have closed, we reduce our debt significantly and expect to have deleveraged to below 3x net debt-to-EBITDA ratio on a sustainable basis. We are working on a full refinancing of our debt and expect that to be finalized once we have closed the sales processes.

I want to stress again that this marks a key turning point for Gerresheimer. Our portfolio strategy is clear, and we are driving progress using a classic grow, fix, sell approach. On grow, we will continue to grow our business units, Medical Device Systems, Syringe Systems and Tubular Glass North America. Our growth investments are paying off and are delivering results. On fix, contrary to Tubular Glass North America, which is profitable and growing, Tubular Glass Europe needs a full turnaround and restructuring. In addition, we are rightsizing our SG&A footprint and processes to, a, match the new reduced size Gerresheimer post the sale of Centor and PPP; and b, align with top-tier competitors.

On sell, we focus on fixing, carving out and selling Moulded Glass. We remain committed to execute the divestiture. However, we still have quite some work to do improving operations. On our GTO transformation, we are executing and are targeting an improvement in EBITDA totaling EUR 50 million to EUR 70 million, about half of the underlying run rate savings we expect to execute in 2026 and the other half in 2027. By 2028, we target the full benefit in our financials.

As expected, Q1 is our lowest quarter in 2026. In our first quarter of this year, we deliberately prioritized cash and working capital discipline. We materially reduced capital expenditures and limited the seasonal inventory build. The associated production adjustments temporarily reduced asset utilization and EBITDA, particularly in Moulded Glass. This was a conscious near-term trade-off to strengthen cash flow. For the remaining quarters of the year, we expect result improvements, supporting a stronger second versus first half of the year.

Before we cover first quarter in more detail, please turn to Page 4 with the corrections of Q1 last year. In Q1 2025, the impact of the restatement and other corrections summed up to EUR 1 million revenue reduction from EUR 520 million to EUR 519 million and EUR 10 million EBITDA reduction from EUR 91 million to EUR 81 million. Just like at our last earnings call for the full year, we split the corrections into bill and hold related adjustments and other corrections on the right.

The BaFin investigation is ongoing. Unfortunately, we cannot comment on the timing, yet we continue to fully cooperate with the authorities to ensure transparency, support the process and drive progress towards closure. We will continue to ensure that our 2026 accounts are correct and that we provide those to the highest standards. Even if this takes more time than usual, I will take you later in the presentation through the latest targeted reporting time line of our quarterly financials.

Now turn to Page 5, please, for a deeper look at our first quarter performance. In first quarter 2026, as promised, we very much focused on cash. We halved CapEx spending, and we reduced our inventory buildup significantly compared to last year's first quarter. We managed production volume carefully, including prolonged temporary production halts at some of our production sites to avoid inventory buildup and related cash consumption. This was a conscious choice and came at the price of lower capacity utilization, resulting in lower EBITDA generation.

As a result, revenues in the first quarter 2026 grew slightly by EUR 5 million, while EBITDA went down by EUR 15 million. However, free cash flow before M&A improved significantly by almost EUR 110 million year-on-year to minus EUR 32 million. Again, this was mainly driven by an inventory buildup of just EUR 5 million, which was EUR 41 million lower than first quarter '25 and a sizable reduction of net CapEx to EUR 56 million, which represents a EUR 57 million reduction or half compared to the same quarter last year. Please note that this represented the best free cash flow figure in any first quarter since 2019.

With this, I would like to hand over to Achim to explain our progress towards high-value solutions and results of our segments.

Achim, please?

Thank you, Wolf.

Please turn to Page 7 for an overview of our portfolio measures. As highlighted, we have signed an agreement to sell our business unit Centor and Primary Packaging Plastics to an affiliate of fund advised by Apax Partners. Under the terms of the agreements, Apax Funds will acquire a total of 15 production sites from Primary Packaging Plastics in 9 countries in addition to the production site of Centor in the U.S. The purchasing price is based on an enterprise value of approximately EUR 1.5 billion. This is a great step towards deleveraging, targeting a sustainable leverage of below 3x EBITDA. In addition to that, we will continue to target the sale of our Moulded Glass segment.

The future portfolio of Gerresheimer will be concentrated on high-value primary packaging and drug delivery solutions where technological expertise, regulatory requirements and long-term customer partnerships create meaningful differentiation and barriers to entry. Medical Device Systems and Syringe Systems provide attractive growth opportunities, while the transformation of Tubular Glass is intended to improve profitability and its competitiveness. Combined with lower leverage and a leaner cost base, this should support a more resilient margin and cash flow profile over time.

Let me take you through the results of our new segments on Page 8. Containment and Delivery Systems achieved organic revenue growth of 8.8%. Therefore, revenue increased to EUR 296 million in Q1 2026 from EUR 281 million in Q1 2025. The main driver of the revenue growth was the performance of our business unit Medical Device Systems with the ramp-up in Peachtree contributing positively. In addition, we saw a very positive performance of our Eastern European plants. The business unit, Primary Packaging Plastics, or PPP as well as Centor were approximately flat year-over-year.

In Q1 2026, the adjusted EBITDA of the whole segment grew to EUR 61 million from EUR 51 million the year before. This reflects the contribution from higher Medical Device Systems volumes and the benefit of resource reductions implemented in Advanced Technologies. PPP and Centor were broadly stable year-on-year, while cash and inventory measures also temporarily affected PPP earnings.

With that, let's move to Slide 9 and our segment report on Primary Injectable Solutions. In Primary Injectable Solutions, or PIS, strong growth in Syringe Systems more than offset lower revenues in Tubular Glass Europe and Asia at the top line level. Total revenue of the segment grew to EUR 101 million from EUR 94 million with 14.2% organically. Adjusted EBITDA declined by EUR 1 million to EUR 6 million, reflecting the lower contribution from Tubular Glass Europe and Asia. We have changed the divisional leadership and initiated a restructuring plan focused on footprint optimization, operational excellence and SG&A savings as part of the GTO program in Tubular Glass Europe. Now let's move to our third and final segment, Moulded Glass on Slide 10. For this, I hand over back to Wolf.

Thank you, Achim.

In Moulded Glass, lower revenues resulting mainly from the furnace repair in Chicago Heights and lower revenues from pharma containers, oral liquids in combination with weak market demand in the area of cosmetics. This led to a decline of revenues to EUR 144 million in the quarter, down from EUR 160 million the year before. Adjusted EBITDA in first quarter '26 declined over proportionately to EUR 6 million from EUR 32 million in Q1 '25.

As explained upfront, this was mainly driven by our strong focus on cash, achieving a much lower inventory buildup through rigorous production volume management, including extended temporary production halts which combined with the lower revenue led to an underutilization of assets in Q1 this year with a high fall-through to adjusted EBITDA. To improve our performance in this space, amongst others, we have initiated the closure of the Chicago Heights plant in first quarter, which we target to complete in the fourth quarter of this year. The qualification of our U.S. customers for delivery from our Type 1 plants in Italy and India will carry on.

Furthermore, we have a comprehensive set of transformation GTO measures in Moulded Glass to improve operational performance. We have upgraded our Moulded Glass leadership team with our new Moulded Glass CEO, Daniel Winkler, to drive and accelerate the transformation. Let's take a look at the overall cash flow for the company on the next page, Page 12, please. The main drivers for the development from the EUR 66 million of preliminary EBITDA in the first quarter of 2026 to an operating cash flow of EUR 25 million were the changes in net working capital and our interest payments.

On net working capital, as explained, we successfully managed to limit our inventory buildup to EUR 5 million compared to EUR 46 million in first quarter '25. Our payables went down by EUR 54 million, around half driven by less reverse factoring lines available to us due to our lower credit rating at the beginning of this year. Collections worked well with EUR 46 million receivables reduction. On interest, on average, we paid around 4.4% interest on our gross debt of EUR 2.2 billion, resulting in a net interest payment of around EUR [ 16 ] million for the quarter.

On CapEx, as mentioned earlier, we significantly cut CapEx in half to EUR 57 million from EUR 113 million in the first quarter of '25. Please note that despite our better and very rigorous capital allocation, we spent EUR 37 million or 2/3 of the EUR 57 million total CapEx for growth projects. The operating cash flow of EUR 25 million less the CapEx spend resulted in a negative free cash flow before M&A of EUR 32 million. As mentioned, the best first quarter cash flow results since 2019 and more than EUR 100 million better versus first quarter last year. Our cash focus paid off.

On Page 13, I'll give you an update on our capital structure and financing status. On the left-hand side, you see our net financial debt of close to EUR 2 billion and our liquidity of EUR 342 million. This very solid liquidity level is fully sufficient and compliant with the covenants agreed with our banks under our stabilization agreement. On the right-hand side, you can see our maturity profile. Maturities at the end of this as well as at the end of next year will be more than covered by the expected proceeds from the divestitures of our business unit Centor and PPP. This gives us a very solid base for our debt refinancing, which we are executing with the support of our financial adviser, Lazard and of course, with the continued strong support of our current group of banks and debt holders.

Please turn to Page 14 for an overview of our upcoming events. On Tuesday of next week, we will be holding our Annual General Meeting. In September, we target to publish our final Q1 financials. In November, we expect to publish our half year results as well as our Q3 report. On the right-hand side of the page, we show selected Investor Relations events. And during September, we hope to meet you in person at one or the other of the listed investor conferences. Please turn to Page 15 for our closing remarks. Achim, please.

Thanks, Wolf. And let me close with the 3 priorities against which we expect to be measured. First, we will execute the signed Centor and PPP transaction on time and we will use the proceeds to reduce leverage and support the refinancing of the group. Second, we will deliver the operational transformation, including the targeted EUR 50 million to EUR 70 million annualized EBITDA improvement with implementation across 2026 and 2027 and the full run rate impact expected from 2028.

Third, we will continue to reshape the portfolio with the preparation of Moulded Glass for divestiture. However, as Wolf mentioned, there is still a lot of work ahead of us to do so. These actions are designed to, over time, create a more focused Gerresheimer with lower leverage, a leaner cost base, stronger cash generation and attractive positions in high-value primary packaging and drug delivery solutions. With that, I pass it back to Guido for our Q&A session. Guido, please?

Thank you, Achim. Operator, please open the floor for the Q&A session.

[Operator Instructions] The first question comes from the line of Oliver Reinberg from Kepler Cheuvreux.

Three questions from my side. First, on this transformation savings of EUR 50 million to EUR 70 million, can you just talk to -- is there any change to that? Because when you talked about earlier 200 to 400 basis points overall, I thought it's a bit more like EUR 50 million to EUR 100 million. So just getting some color, has there anything changed? Secondly, can you just provide some kind of details what actually happened in Tubular Glass, what these issues are?

And thirdly, I wonder if you can provide any kind of sneak preview of the future of Gerresheimer. I mean you will basically sell down half of the kind of business. What is actually the next step beyond that? And can you provide any kind of comment on the search for a new CEO?

Thank you very much, Oliver, for the 3 questions. I'll take the first one. Transformation savings, yes, quite frankly, nothing has changed here. The EUR 50 million to EUR 70 million that we are referring to indeed are somewhere worth around 200 to 400, 250 to 400 basis points margin improvement. Nevertheless, here, we're taking into consideration that Centor and PPP are divested. As such, you need to take the EUR 50 million to EUR 70 million rather to a reduced portfolio of roughly EUR 1.8 billion of sales. And then that margin improvement point range that you quoted, Oliver, is correct, right? Tubular Glass, maybe I hand it over to Achim that's in his basket.

Yes. Thanks, Wolf, and thanks, Oliver, for the question. On Tubular Glass, specifically in Europe, obviously, we have a comparably complex footprint of smaller plants. While the business is largely successful in the U.S. and North America as well as in China, there is necessity of restructuring and reshaping the footprint as well as refocusing the portfolio within Europe.

Great. And then maybe I take or start with the third question, which was on strategy, future of Gerresheimer, et cetera. I think we can only reiterate that both the divestiture of Centor and PPP as well as what we mentioned in terms of Moulded Glass, preparing carve-out, preparing a divestiture, still lots to do, to be very frank, lots to do, but still strategically divestiture of Moulded Glass will continue to drive the focus on high-value primary packaging solutions as well as drug delivery solutions. That's where Gerresheimer is going. That's where all our strategic work is aiming for, and that's the future of Gerresheimer.

And the CEO search...

Yes. I think I wanted to add, Oliver, on your question. Obviously, that's not in the Management Board's hands, but in the Supervisory Board's hands, and we will hear from them going forward.

The next question comes from the line of Falko Friedrichs from Deutsche Bank.

Firstly, you have not mentioned the full year guidance in your presentation. Is the adjusted EBITDA margin target still realistic after these Q1 results that were significantly below it? Then my second question, were you able to sustain your market shares while you were in cash preservation mode earlier this year? And my third question is, could you give us an indication on how much of the Tubular Glass business is in Europe and how much is coming from the U.S.?

Thank you, Falko. On guidance, correct, we're not commenting on guidance because there is no change on guidance. As such, guidance is intact. What we did comment on, obviously, is that step by step by step, we do see an improvement in second half versus first half, and we do see the first quarter results clearly in the low point of the year, right? Market share, that would take a little bit longer here.

Really, as you -- as we commented on the different segments, clearly, some grew nicely, for example, what Achim walked you through. On the other hand, in Moulded Glass, sales went down. And as such, that's the mix basket, we're happy to set up a follow-up meeting with you on that. Then in terms of moulded -- I think your question...

Tubular Glass.

Achim, maybe you can answer that.

Yes. Normally, we don't share details around the split of the regions. But clearly, the European region is much smaller than the U.S.

We now have a question from the line of Olivier Calvet from UBS.

Just a couple left for me. Maybe just starting with the EBITDA margin levels. Obviously, you're using new segments. We had some disclosures in June with your full year report. But we still have some pretty big deviations in margin levels also from the comparative period relative to the averages you've shown over the full year. So I just wanted to ask if you could perhaps give us some color on the margin developments you saw last year as a basis for forecasting for us for this year, perhaps in each of the segments, if you're able to do that?

And then secondly, just curious if you could give us a sense of the level of total CapEx you expect for the year. So I think base CapEx, if I recall correctly, you were calling around EUR 100 million or so. And just to give us a sense of how much growth CapEx as well you expect on top of that?

Thank you very much, Olivier. I'll start with, I think, the first question, which was EBITDA margin development. And I think the question out there or where you have the largest deviation year-over-year is Moulded Glass. So why don't I start with Moulded Glass and we take it from there, which also clearly had the biggest impact on the total Gerresheimer results. So quite frankly, to understand the EBITDA decrease year-over-year from first quarter '25 of EUR 32 million to first quarter [ '26 of EUR 6 ] million, one has to normalize to ensure an apples-to-apples view. So Olivier, if you don't mind, let's start with first quarter '25.

In the first quarter '25, as I mentioned, we increased inventory for the total company by EUR 46 million. And a good part of it was in Moulded Glass, which has favorably -- has a favorable P&L impact. So from the EUR 32 million EBITDA margin in the first quarter, I think you have to normalize around EUR 12 million or so. So you go from EUR 32 million, minus EUR 12 million to EUR 20 million as a normalized level for first quarter '25 for the inventory buildup. So if you take then the EUR 20 million, year-over-year, I mentioned that in Moulded Glass, we have faced around EUR 16 million lower sales impact. So that is around, I would say, EUR 8 million to EUR 10 million lower EBITDA comes out of that, especially since the sales decrease was in the higher-margin areas of pharma and cosmetics.

So you go normalization inventory build from EUR 32 million to minus EUR 12 million to EUR 20 million. And then really for lower sales, you go from EUR 20 million to roughly EUR 10 million to EUR 12 million first quarter last year, apples-to-apples view. The remaining EUR 4 million to EUR 6 million or so that to complete the walk to the EUR 6 million that we achieved in Moulded Glass in the first quarter '26, that is really negative cost leverage due to the low capacity utilization. It's a bit of mix and some other cost and efficiency items. That, I would say, completes the walk.

So in summary, of the EUR 32 million to EUR 6 million difference or EUR 26 million on a normalized basis, yes, around EUR 12 million is very strong cash management and inventory management in the first quarter of this year, EUR 8 million to EUR 12 million is volume related with pharma and cosmetics, including some mix and the remaining 5-ish or so is negative cost leverage, low capacity utilization, all of which I think are addressable. So I think one thing is to describe the first quarter. But if you don't mind, Olivier, I'll give you also a little bit what's going on in Moulded Glass going forward in terms of improvement of EBITDA.

I'd like to point out 5 drivers. One, I mentioned already, first quarter is seasonally our lowest sales quarter. Number two, we got a good part of our inventory reduction completed, some more to come, clearly, yet not with an as high impact as we have seen in the first quarter over first quarter last year. Number three, market recovery, as mentioned, especially pharma and cosmetic were down year-over-year, which we do expect step-by-step a gradual recovery towards the end of the year. Number four, mix with the pharma and cosmetics are higher-value products where there's food and beverage, thus the recovery in those markets improves mix.

And finally, number five, very important, the transformation, which both Achim and I walked you through, EUR 50 million to EUR 70 million EBITDA improvement for the total company fully by 2028. And I would say of that EUR 50 million to EUR 70 million, let's say, 1/3, even up to half of this is the potential in Moulded Glass. And a good example of this is closure of our site at Chicago Heights, where we lost EBITDA and cash over the last years clearly. So in summary, those 5 drivers we are focusing on. Those will help to improve results at Moulded Glass step by step. Lots of work ahead of us. We have our hands full, yet our Moulded Glass team led by Daniel Winkler is up to the challenge. Quite frankly, I think Moulded Glass is very central to the story of the first quarter and the margin impact. I'm not sure, Olivier, if you need the same picture here in also the other segments, up to you...

But I can add the positive note, Olivier, on Containment and Delivery Systems, where we've been able to improve margins by more than 2 points despite the strong measures that we also took, especially in PPP on the inventory side. And we expect that margin to further increase through the year. And if you look at Primary Injectable Solutions, where margin was more or less flat, we also see recovery opportunity as we flagged for the second half of the year. And I think your second question was around CapEx. So for the full year, we still continue to invest, and we split CapEx almost 50-50 in maintenance CapEx to restore the performance of our plants and productivity and 50%, we will continue to invest in growth.

No major change there, Olivier. You can do the math.

Okay. And just if I can -- I really appreciate the color. Just if I can come back to the levels you've published for the new segments in 2025. So from what you're saying, it sounds like sort of the EUR 20 million base in Moulded Glass as a base for Q1 at EBITDA and then essentially, you posted EUR 87 million for the full year. So no specific seasonality or any big moves that you saw as you were redrawing the segments is kind of the question I was getting to. And similarly for the other segments, just trying to understand a little bit how you're thinking of their potential seasonality, right, thinking of Primary Injectable in particular as well.

Yes. I think, Olivier, so I think the numbers that we put there for first quarter, as we mentioned, adjusted for bill and hold as well as the other corrections. So that's why that -- all of those adjustments and the cleanup work, which we're completely done with, that's included. And then secondly, in terms of seasonality, I think, as you know, the first quarter, as I mentioned, is our seasonal weakest quarter, because, as you know, we're -- you have that one month difference.

So for us, the first quarter, it is December, January and February. And those are, in many areas, those are just weaker, slower business activity months. And furthermore, I think we provided guidance and we just walked you through improvements that are underway. So where we clearly see that the second half of the year is stronger than the first half of this year, right? So that gives you hopefully some flavor for seasonality, margins you have, and we gave you some indication on various matters that we're working on.

Yes. Just a final one, sorry, but just on Primary Injectable Solutions, right? Basically, you've posted in Q1 last year, EUR 7 million EBITDA. You did EUR 70 million over the full year. So just wanted to understand how the year shaped up last year, right, as those are new segments.

Yes. I think as was said, Olivier, traditionally, Q1 has always been the weakest and Q4 being the highest with a little bit of a dip in summer, so the third quarter. So we expect definitely a much stronger second half also for Primary Injectable Solutions.

Yes. And then, Olivier, we ask for your patience. As promised, every time that we publish a quarter for this year, we'll give you again the full transparency towards the same quarter last year. As you know, we've adjusted the full year for all -- for order bill and hold and all the corrections. And then we now, every time we provide transparency towards exactly that picture for the same quarter last year. So we ask for your patience. And then when we discuss second quarter, first half, we can go into this in more detail.

The next question comes from the line of Delphine Le Louet from Bernstein.

Thank you very much both for the visibility you're giving us. But just to be sure and fully clarified on my side, when we think about the other impact that we have on both the revenue and the adjusted EBITDA, is it strictly linked to what we discussed about the Moulded Glass division? Or is there any other stuff we need to keep into the consideration? And secondly, previously, you were talking a lot about the ramp-up in Peachtree. Can we know exactly where we are now, how we are in terms of efficiency and yield? And if you do have anything for us to think about the rest of the year?

All right. I hope I got the question correctly. So I'm on the cash flow page, where we show adjustments. I think that's probably what you're referring to where we do the walk...

Yes. Well, I was more referring to the other, which is on the beginning of the page for the adjustment in between Q1 -- I mean, Q1 '25 and the new restated Q1 '25. So we have minus EUR 15 million on the EBITDA coming out from others. And so -- yes.

Thank you very much. I think we won't provide all the line item details. But already when we did the overall adjustment and restatement, we mentioned on the one hand side, you have bill and hold. And then in the other bucket, you basically have all other accounts, whether it is rebate accruals, other accruals, valuations and end. And as such, you clearly see bill and hold, the balance between revenue impact of EUR 11 million and EUR 5 million adjusted EBITDA impact is kind of what you would expect.

Obviously, in the other bucket, you have some adjustments, corrections that, yes, impact revenue, like I mentioned, for example, rebate accounting or other matters. But then you have also items that are purely having an impact on EBITDA, on earnings, but not on revenue, such as any inventory accounting or accruals or such matters, yes. We scrubbed fulsome through all the accounts and all of that is captured in this view. Good question.

And on the second...

Sorry for that, but just another clarification needed. Is it definitely more linked to what is happening into Moulded Glass? Or was it more linked to what is going to be sold in a way?

Sorry, I couldn't understand.

The rebates. No, but all the rebates you're talking about or all the activity, the commercial, let's say, restatement you have to do, which have an impact into the EBITDA, are they linked to the PPP mostly or mostly to the Moulded Glass? Or is it something that is really cross over the business in all the, let's say, 3 entities we used to have?

Fair question. No, quite frankly, we have adjustments to revenue and EBITDA spread across most segments. So I won't go into all those details. But yes, we really took our time to make sure everything is fairly stated across all segments and across the entire company.

And on the second question regarding the Peachtree ramp-up and efficiency improvements, obviously, it's a very complex ramp-up. We are making quarter-to-quarter improvements, and I'm happy to say that we have seen record months very recently. So you can expect also Q2 being better than Q1 Peachtree and then second half being better than first half.

We now have a question from the line of Edward Hall from Stifel.

I think one would just first of all be on asset utilization, which you've talked about. And I guess on Tubular and Moulded Glass, more specifically. I mean, obviously, now you've also got Q2 and Q3 sort of already almost historical. Could you talk about the asset utilization year-over-year and how this has changed even throughout this year? That would be my first question. And then second question would just be on the preliminary free cash flow number. And obviously, it mentions that this is including the business units under sale process.

So appreciate any guidance there with sort of the underlying business ex these divestments as well. And then just finally, more of a clarification for me, but you talked about high-value products. I guess it's been a while since this has been discussed at length, but maybe just to provide another sort of definition from your view and the mix in Primary Injectable Solutions.

All right. Edward, thank you very much for the question. So on asset utilization, I think it's tied to our cash focus, right? As I mentioned, a, you have seasonally, the first quarter is our lowest quarter in the year. And b, we were laser focused, as I mentioned, on cash. And with cash, that included also inventory management, as I pointed out, instead of a seasonal inventory increase that if you look at last year, EUR 46 million, we managed that deliberately to only EUR 5 million this year, right? And that, together with, in certain areas, a lower sales load clearly had an impact on asset utilization, which I think I gave you an example for Moulded Glass, where step by step by step, we see that improving.

And that is how -- I think that's probably fair across the entire company that because first quarter is our lowest point in the year, we do see a stronger second half versus the first half also for asset utilization. And we can think about providing a little bit more color at the next earnings call when we talk about first half results. And then I think what -- could you repeat, Edward line was a bit bad, your second question, please?

Yes. Sorry. Just on the preliminary free cash flow number and any comments you could provide on how that number would be different without the business units that are being divested?

I would say, Edward, let's do that when we've completed the transactions. Good question. But as you know, we don't provide guidance on a BU-by-BU basis. We provide on a segment level. And as such, we want to stick with those reporting lines. But I understand your interest, but we can't disclose that right now.

That's clear. And then just to follow up on the final question, just on higher-value products or solutions. Again, just maybe just to get your definition because there are different ones in the market and again, the mix that you guys currently have.

Yes, very good question, Edward. And yes, that's obviously out there in the market from different peers. I would say when it comes to our delivery solutions, we consider almost all our portfolio a high-value solution where we have high levels of differentiation within that segment. And when it comes to syringes and tubular, I think there is a more standardized division on, definition of what is considered RTU, RTF and products for biologics, but also GLP-1. Here, we are still working through the right definition ourselves and the percentages of our portfolio. So hang in there with us before we can disclose.

The next question comes from the line of Odysseas Manesiotis from BNP Paribas.

Could you help me arrive to the below 3 leverage target post Centor and Plastics sale? Or just if you could give me a feeling of what the net cash proceeds from the EUR 1.5 billion EV will be? And if you could give us a feeling on the EBITDA margin for the RemainCo implication of that below 3 target, it would be very helpful as well. And lastly, could you give us a feeling of whether that's a late '27 target or something that you can achieve right after the sale? And secondly, on -- could you remind us what percentage of your COGS are related to oil prices? And to what extent you're hedged for this year and next year?

All right. Thank you very much. I'll take the first question here. So how do we get to leverage below 3? And when do we expect to -- timing-wise to complete our refinancing. I'll start with the last question first. Refinancing, I think you're right. We target to complete that absolutely in parallel to closing Centor and PPP. As you know, we target to close Centor first and then PPP next. And as we mentioned, it would be PPP closing in the first half of 2027. So that would also be my answer completely aligned upon closing PPP, we'll have our refinancing ready to go. So we're already heavily working on this.

In terms of leverage, well, you know where the leverage is today, right? And you know we have a page in there what our debt is. So you can do the math what it takes to get below 3. I think Achim mentioned that the enterprise value is at or slightly above EUR 1.5 billion for the 2 businesses combined. And then you can do the usual gross to net adjustments for some taxes, obviously, as well as for some transaction costs. But rest assured that the gross to net is fully sufficient in order to get our leverage below 3.

I think the second question was on EBITDA RemainCo, right? So obviously, we are disposing 2 parts of the Containment and Delivery Solutions. And we're selling 1/4 of the company, there's also a duty to reduce SG&A in line with the size of the business that is disposed. However, the target of our EBITDA percentages and the improvements that Wolf laid out from the transformation programs are aligned, so expectations are that we're going to land at a sustainable level and grow from there.

And when it comes to the percentage of cost of goods sold based on oil price, around 50-50 of our business is directly connected to polypropylene, polyethylene, polyester raw materials. 50% is more glass-based. Also there, of course, you have the impacts from energy costs. But if we stick to the raw materials, 50%. However, a lot of that is going to be disposed, and we have protections through pass-through agreements with our customers.

Thank you for the question.

Can I sneak in a last one? One of the 2 pharmas leading the GLP-1 space announced a few supply contract cancellations on lower demand expectations and potentially some recent unfavorable clinical readouts. Do you expect this to be any -- to have any impact on your hopes of utilizing recently added capacity?

Sorry, Edward. -- no, sorry, we could barely understand it. The line was very bad. Could you repeat the question a little bit slower? Maybe the line will get better.

Yes. Can you hear me now?

We can hear you just slowly and then that would be great.

Of course, yes. So one of the 2 pharmas leading the GLP-1 space announced several supply contract cancellations on lower demand expectations and potentially unfavorable clinical readouts. I wanted to ask whether that has impacted your expectations on growth and utilization for recently added capacity.

Okay. Good question. So far, we have not seen demand cancellation. Also, as you know, I think at one of the other call before, we have clearly pointed out that we have strong commercial contracts, particularly in the GLP-1 space with take-or-pay structures. So we do expect our growth to continue. As we mentioned, right at the very beginning, I walked you through our grow, fix, sell structure. And so on the growth, we have Medical Device Systems. We also have Syringe, and we have Tubular Glass North America. And that's where we see continued growth and also clearly see growth over the next years. So I can't confirm that we see here cancellations based on what you described.

[Operator Instructions] We now have a question from the line of Christian Ehmann from Berenberg.

One for the history of, let's say, looking back. The Centor sale and the PPP sale were, let's say, above the -- what you initially guided on, so only selling Centor. I was just curious about the strategic rationale to now sell both. Obviously, you had a good price for both, but maybe you can give us an idea how you then decided to sell both of those businesses.

And the second one would be going forward, appreciating the CapEx rate, let's say, 11%, 12% of sales going forward. Is this a level you can maintain to keep, for example, Moulded Glass in a sellable state? And the third one would be of refinancing. Maybe you could give us a guidance about the interest rate you expect to refinance for.

Thanks, Christian. Let me take the first question on the combined sale of Centor and PPP with 2 separate contracts. I'd say that was an opportunistic play that was offered by Apax as part of the process of the Centor sale and helped us to reduce debt in one shot by around 70%. So therefore, we took that opportunity based on good valuation in the current market environment.

Great. And then CapEx spend and going forward CapEx spend, particularly in Moulded Glass. So Christian, I think it's fair to say that you've seen in the last years or so an elevated spend of CapEx also in Moulded Glass. As you know, we have completely overhauled and invested in a hybrid technology at our Moulded Glass facility, for example, in Lohr in the south of Germany. Nevertheless, if you look at the top peers or so in that space in Moulded Glass, they managed to spend 10% of sales as CapEx on a sustainable basis, and we strive to do the same and align with the top peers.

Ladies and gentlemen, that was the last question. I would now like to turn the conference back over to Mr. Guido Pickert for any closing remarks.

Well, thank you very much for your interest. And if you have remaining questions open, you know where to find us. And as said before, we would be happy to meet one or the other of you in person on the conferences and our activities going on in September and October. And with that, thank you very much, and bye-bye.

Ladies and gentlemen, the conference is now over. Thank you for choosing Chorus Call, and thank you for participating in the conference. You may now disconnect your lines. Goodbye.

Thank you, operator. First of all, I would like to impress a thank you, a very big thank you for your continued support of Gerresheimer. We have not had an earnings call for quite some time as we fully focused on completing our investigations and ensuring clean, robust and especially compliant set of 2025 financials. This was accomplished today, and we were able to publish our audited 2025 annual report. Our Management Board will explain our results in more detail.

First, on the disclaimer. Please let me remind you that the disclaimer you can find in our full year 2025 slide deck will apply throughout this earnings call, and we assume your content to this -- consent to this. I will, therefore, not read it out loud. Please allow me some selected clarification. Due to rounding, numbers presented throughout this report may not add up precisely to the totals indicated and percentages may not precisely reflect the absolute figures for the same.

Organic revenue and organic adjusted EBITDA include the revenues and adjusted EBITDA of Bormioli Pharma in both 2024 and 2025, which we acquired in December 10, 2024, and fully consolidate from the beginning of the financial year 2025, translated at the budgeted exchange rates for the financial year 2025.

Thank you. And now let me introduce today's speakers on Page -- I'm glad that we have all three members of the new Management Board with us today: our CEO, Uwe Röehrhoff; our CFO, Wolf Lehmann; and Achim Schalk, the third member of our Executive Board. Our new Management Board is setting the tone from the top with a clear focus on governance, disciplined execution and transformation. Please note that the Q&A session will be opened at the end of the presentation.

Now let me turn over to Uwe Röehrhoff, CEO of Gerresheimer, who returned to Gerresheimer in November of last year. Uwe?

Thank you, Guido. Good afternoon, everybody. Please turn to Page 4 of the presentation. I can only echo what Guido mentioned. As a new Management Board, our main focus right from day 1 has been on governance, cleaning up and driving transformation. It took quite some time and resources to complete all compliance investigations very thoroughly, whether on bill and hold or various investigations on different compliance controllership concerns, including extensive forensic investigations.

We shared progress transparently as required along the way in our ad hocs. Please note, all findings have also been shared transparently with our auditors, KPMG, as well as with the authorities, BaFin. All investigations are now completed, fully booked and reflected in the financials we filed earlier today. Our banks, our creditors recognized we needed some extra time that clearly acknowledge our efforts and supported us broadly.

They have given us time up to Q4 '26 before the leverage covenant becomes effective again. We are using this time rigorously to sell Centor and refinance the debt of the company. We are on track to sign and close Centor in our financial year 2026, latest by November '26. On the refinancing, we are working together with our adviser, Lazard, and of course, our supporting banking partners. Selling Centor and refinancing goes hand in hand and is vital to improve our capital structure. So far, we can report good progress. Our transformation initiative, Gerresheimer Transformation Offensive, gto is essential to improve our overall competitive position. We have more detail on our approach for you later in the day, below on guidance. We have a dedicated page coming up.

Let me turn it over to Wolf to tell you more about the findings and corresponding corrections.

Thank you, Uwe. Let's turn to Page 5 on the corrections of 2024, our 2024 restatement. All corrections have a net impact on 2024 restated revenue of minus 2% or EUR 45 million and EBITDA of minus 7% or EUR 31 million. This is slightly higher impact compared to the prior announced interim status update of EUR 35 million revenue and EUR 24 million EBITDA impact back on 10th of February.

Findings from all investigations are included, bill and hold supported with external specialists, various investigations also including forensic investigation as well as our own findings. Similarly, we had already communicated we would impair selected assets for around EUR 220 million to EUR 240 million, mainly stemming from impairing certain development projects of Sensile Medical AG, that is our business unit, Advanced Technologies as well as assets of our Chicago plant. The final amount is EUR 258 million, also a slightly higher final amount as we completed the analysis.

Note for parts of this complex impairment analysis, especially around Sensile, we hired an external accounting expert to get an appraisal to ensure we state the accounts correctly. We truly took matters seriously, invested time and resources to get matters right. On the BaFin investigation, we continue to fully cooperate with the authorities. We work very transparently and have shared and are sharing the results of the now completed investigations and our final accounts. We have received three requests from BaFin for information around year-end 2024 and one on first half of '25 so far, yet we expect a fourth and second request, respectively, which makes sense to us to push progress towards closure. Again, we fully and transparently cooperate with the BaFin authorities. Next to correcting 2024, we focus on ensuring 2025 is correct, and we will provide our annual accounts to the highest standards.

Please move to Page 6, the corrected as-reported numbers for 2024 as well as 2025. Please remember, Bormioli was acquired in December 2024 with the first month of financial year 2025. Remember, we are one month ahead, which means 2024 is shown excluding Bormioli and 2025, including the acquisition. Also numbers are shown with the foreign exchange [ as is ] actual. On revenues, as reported, we grew sales to EUR 2.3 billion, up by around EUR 330 million. The top line growth is net-net driven by the acquisition of Bormioli. The organic growth was approximately flat, up 0.3%. The growth by segment varied. Organic growth of up plus 5% in Plastics & Devices was largely offset through around 6% lower revenues in Primary Packaging Glass due to the weaker sales in oral liquids and cosmetics as reported multiple times last year.

On EBITDA, the positive revenue trend did not fall through to EBITDA. The results, including the acquisition was approximately flat year-over-year, slightly down EUR 4 million. In Primary Packaging Glass, moulded glass volumes were down. At our Chicago plant, we had operational issues running the furnace. As you know, this year, 2026, we made the decision to close the plant at Chicago Heights. Also at our largest glass plant at Lohr, we faced challenges during the ramp-up period for the new furnace causing inefficiencies.

In Plastics & Devices, EBITDA in most business units was flattish, yet Syringe sales increased, including GLP-1 related sales yet were offset by Primary Packaging Plastics with a decrease due to lower oral liquid volumes, which we have explained before. These downsides mainly at Primary Packaging Glass offset the roughly EUR 60 million contribution coming from the addition of Bormioli.

Let's move on to Page 8 with the pro forma 2024 numbers, including Bormioli already in 2024 to get closer to an apples-to-apples view, similar to the basis for our guidance. Upfront, let me cover how results came in with our -- versus our last guidance for 2025. Organic revenue growth, we expected negative 2% to negative 4%. We came in quite flat, up 0.3% organically, thus on a normalized as planned FX rate basis. Adjusted EBITDA margin, we guided towards 16.5% to 17.5%. And our final results are 16.8% within the range. On earnings per share, EPS, we had estimated high double-digit decline or negative earnings per share. And finally, we are at a negative EUR 1.65 earnings per share.

On the next two pages, we will go in more details referring to revenue on EBITDA drivers by segment. Yet quickly on the overall company. Revenue reduced from approximately EUR 2.340 billion to EUR 2.320 billion, with Plastics & Devices up around EUR 50 million and Primary Packaging Glass down around EUR 70 million for a net decrease of around EUR 20 million. EBITDA year-over-year pro forma Primary Packaging Glass down EUR 56 million and Plastics & Devices and GAT combined down EUR 10 million year-over-year. For transparency, as 2025 is the first year of the acquisition of Bormioli Pharma, we show the year-over-year trend of Bormioli pro forma marked in the dotted line area. Revenue decreased for Bormioli Pharma pro forma from EUR 349 million to EUR 331 million, down EUR 18 million, mainly on the Plastics Packaging side. EBITDA quite flat from EUR 62 million to EUR 61 million adjusted EBITDA. Please note, Bormioli is split up and fully integrated into our segments. As such, we show this onetime for transparency reasons, but we won't do this going forward.

Let's talk about the results by segments [ please ]. Let's move on to Page 9, showing the results of the Plastics & Devices segment. Just to remind you, this includes syringes, Medical Devices, Centor and Primary Packaging Plastics. Overall, Plastics & Devices grew year-over-year by around EUR 50 million to just under EUR 1.35 billion. Yet the revenue growth did not fall through and EBITDA came in slightly down by minus EUR 5 million and ended with EUR 315 million. EBITDA margin reduced to 23.5%, yet still a decent level of profitability. This reflects a mixed performance across the segments. By business unit, syringes, the EUR 32 million year-over-year revenue fell through to EBITDA and yielded plus EUR 8 million.

Medical Devices delivered year-over-year EUR 25 million growth from major projects like autoinjectors and pens, yet as we ramped up, especially our U.S. Peachtree facility and are fully staffed, we have not yet seen sufficient incremental plant loading and revenue to fully cover the incremental year-over-year cost, resulting net in year-over-year EUR 2 million less EBITDA. Primary Packaging Plastics year-over-year revenue was down by EUR 8 million, driven mostly by oral liquids and EBITDA by EUR 10 million since next to less revenue falling through, also reducing inventory and therefore, production as well as unfavorable mix impacted earnings. Finally, Centor finished with pretty stable year-over-year trends.

Uwe, would you mind covering Primary Packaging Glass segment, please?

Yes. Let's move on to Page 10. The results of Primary Packaging Glass segment for the old segmentation, Primary Packaging Glass is moulded glass and tubular glass. Overall, year-over-year in Primary Packaging Glass '24 to '25, we recorded about minus EUR 70 million less sales, down to EUR 983 million and less EBITDA of EUR 56 million year-over-year, down to EUR 126 million. Subsequently, adjusted EBITDA margin reduced to 13% Clearly, PPG performance is not at an acceptable level. Looking at the drivers by BU. Moulded glass reduced revenues by around EUR 52 million, driven by declines mainly in cosmetics and oral liquids. The EBITDA was even slightly higher -- the EBITDA effect was even slightly higher with minus EUR 54 million.

Next to the lower sales and earnings falling through, significant operational issues at the U.S. plant at Chicago Heights as well as ramp up challenges at the largest glass plant in Lohr resulted in meaningful inefficiencies and lower EBITDA. In tubular glass, lower revenues with standard ampoules, vials and cartridges were not fully compensated by growth with higher-value products. However, the favorable product mix helped to keep the EBITDA flat year-over-year despite the revenue decline.

Let me hand it back over to Wolf to walk you through cash flow.

Let's move on to Page 11, the usual EBITDA to cash flow walk. From EUR 384 million adjusted EBITDA down to operating cash flow at EUR 210 million, a 55% conversion rate. The main drivers in this walk are the just over EUR 70 million adjustments or exceptionals and EUR 101 million interest paid. Under adjustments, we grouped items that are so-called exceptional items on a run rate basis view. Main drivers are roughly EUR 18 million restructuring and reorganization, mainly the closure of our site at Bad Königshofen, EUR 27 million plant and furnace ramp up costs, capturing mainly Peachtree and Lohr ramp ups. Also around EUR 12 million M&A and refinancing costs, mostly around the acquisition of Bormioli.

Net working capital was up EUR 22 million and taxes down EUR 31 million as well as others up EUR 7 million, more or less offset each other, leaving EUR 101 million interest to get down to operating cash flow of EUR 210 million, as mentioned. CapEx stood at EUR 295 million. We show the split between base and growth of around 1/3 base, 2/3 growth. And also for the two main segments, Plastics & Devices and Primary Packaging Glass, resulting in negative EUR 86 million free cash flow before M&A. On the next page, we review how the financial results, including cash flow, impacted our capital structure and financing status.

Please turn to Page 12. On the left side, you see our usual update on financial debt and our adjusted EBITDA leverage shown in the left lower corner, stood at year-end at 4.95. The adjusted EBITDA leverage covenant is no longer applicable up to and including third quarter of 2026, yet we would have been compliant at year-end. Looking on the right side of the page, we show the upcoming maturities over the next quarters and years. As explained earlier, we're working on improving our capital structure through divesting Centor as well as a fulsome debt refinancing for which we mandated Lazard to support us. In our next chapter, we would like to review the latest guidance with you, talk about our transformation initiative and various housekeeping items before Uwe Röehrhoff closes with a summary and next steps.

Please turn to Page 14, our latest guidance. As you know, we closed last year at around EUR 2.3 billion and 16.8% EBITDA margin. Due to the challenging economic environment, some project delays on the part of our customers and operational challenges, among others, those related to production ramp ups, we now expect revenues to be in the lower half of the EUR 2.3 billion to EUR 2.4 billion range, an adjusted EBITDA margin of approximately 17% to 18% and taking into account, amongst others, a reduced factoring volume, free cash flow before M&A between negative EUR 50 million to negative EUR 100 million.

During the last 6 months, our focus has been on cash generation, and this is going to be our priority #1 for this year. We expect to deliver an acceleration of revenue growth and margin improvement during the second half of the year with first contributions of our transformation initiative, our gto initiative. Our customers have continued to support us during this phase of challenging news and uncertainty, and we'd like to use this opportunity to thank all of them. Next, we want to give you an update on our transformation initiative, gto, where we expect first impacts to come through in this year, which is one of the main drivers improving our profitability margin year-over-year from 16.8% to around 17% to 18% in this year. Achim, please.

Please turn to Page 15. We had to refocus the program on fast payback and cash conversion until the sale of Centor and our targeted refinancing is completed. With this focus, we expect to yield EUR 10 million to EUR 20 million EBITDA, equaling 50 to 100 basis points EBITDA margin improvement during this year. This is an important first step, however, with significantly larger potential midterm. Overall, the project covers five work streams, of which four are focused on profitability improvement.

A few examples. For operations, optimizing our global footprint is part of this work stream, fewer sites in the right locations. The Bad Königshofen site was already closed last year. The Chicago closure announced for this year, and we are currently analyzing additional measures. Having the right staffing levels at our sites, but also as addressed in workstream 2 for SG&A and our administrative functions will drive cost efficiency. In procurement, immediate focus is the bundling of our purchases across our segments and business units, which we have not leveraged enough in the past. Our transformation partner, BCG INVERTO brings valuable expertise in this field.

Finally, on Work stream 5, cash optimization. Immediate focus is on strict capital discipline as more CapEx rigor is key. In addition, classic work with a short-term focus on collections, adequate supplier terms as well as reducing slow-moving inventory, which is tying up cash. We have fully staffed our gto initiative and are executing. The program will accompany us through the entire next year '27 and also into '28.

Turn over to page 16, the new segmentation since 1st of December '25, our start of the financial year 2026. Starting on the left with our largest segment, Containment and Delivery Systems, covering currently around 50% of sales. Included are Primary Packaging Plastics, Medical Device Systems, Advanced Technologies and Centor. As we are selling Centor, after the divestiture, the segment still represents a bit over 40% of the total sales of Gerresheimer. Primary Injectable solutions covering syringes and tubular glass represents around 20% of our sales, focusing on serving our customers through high-quality glass-based drug delivery solutions.

Finally, moulded glass, we separated and run as our third segment. We have not yet decided on the timing of the announced divestiture, yet are progressing on forming a stand-alone moulded glass business. We have refreshed and upgraded the leadership team significantly and have hired a commercial leader, a new CIO. And just this month, our new business unit CEO, Daniel Winkler, started. Our first quarter '26 reporting will follow the new segmentation.

Talking about next reporting time lines, I hand it back to Wolf with Page 17. Let's please go to the next page.

Thank you, Achim. On Page 17, on the left is our financial calendar and on the right, selected investor conferences we plan to attend. Q1, we estimate earliest July or rather August publication. The challenge is to ensure all findings and corrections in 2025 get properly accounted for by quarter. First half, we estimate for September or October. And third quarter for October might be a bit tight, but hopefully then back at our usual reporting rhythm.

Our Annual General Meeting, we have currently planned for 1st September, details to follow. Referring to the new -- referring to the investor conferences, you see selected ones we plan to attend on the right side of the page. We sincerely apologize for various cancellations of participations at conference over the last month, yet we had to fully focus on getting all investigations done and obtain audited financials.

Let me turn it back to our CEO, Uwe Röehrhoff, for closing remarks and next steps.

Yes. Please turn to Page 18. So we have cleaned up. We have completed all investigations transparently, and that is why we have achieved an unqualified audit opinion for 2025. Nevertheless, it is very clear, as written in the auditor's report as so-called emphasis of matter, we have two must rules, sell Centor and refinance our debt. We are laser focused on those two. Both go hand-in-hand and both we want to get done this year.

On gto, we are getting first impacts coming through in the second half of '26, supporting our margin improvement year-over-year with much more potential in sight to get Gerresheimer performance back to the levels of the top performers in the industry. And beyond selling Centor and moulded glass on a total portfolio level, we are continuing our strategic review process and dialogue, including our Supervisory Board. I would like to again thank you for your support of Gerresheimer during these demanding times.

Guido, please open the call for Q&A.

Thank you, Uwe. Thank you, gentlemen. Before we open the Q&A session, we would like to ask you to limit the number of your questions to two in order to allow everyone to ask their questions. Operator, please open the Q&A session with the instructions. Operator?

The first question is from Olivier Calvet from UBS.

He's disconnected. I continue with the next question. Please try again. I don't know what happened. The next question is from Oliver Reinberg, Kepler Cheuvreux.

Can you hear me?

Yes. Please go ahead.

That's perfect. A few questions on my side. One on free cash flow. With the free cash flow guidance for 2026, can you just provide any kind of color, a, like what is the contribution here from Centor that is still embedded in this kind of guidance? And also any kind of color when you expect to turn free cash flow positive?

Secondly, on the BaFin investigation, is there any kind of insights you can share with us?

And thirdly, on a potential rights issue, would you still rule out any kind of use of equity going forward?

Okay. Can you hear us again?

Yes, I can hear you.

Mr. Oliver? Okay.

So back to your question on free cash flow. So currently, we have the negative EUR 50 million to negative EUR 100 million is excluding proceeds of Centor. And as we mentioned, we assumed Centor signing and closing in this year towards the end of the year or so, right? Then, BaFin...

Does it include the cash flow from Centor or not? Independent, I'm not talking about the divestment gains. I'm just talking about the...

Yes, it includes the operational cash flow of Centor, but it does not include the proceeds from selling Centor. Correct.

And any color on what contribution you expect from Centor because that's going to go? I mean, are we talking EUR 50 million roughly?

Say that again, Oliver?

Sorry, can you just give us any kind of color what would be the kind of cash flow contribution from Centor just to get a kind of feeling where cash flow would be without the Centor.

No, Oliver, we -- as you know, we don't provide financials down to the BU level. We stay on the segment level.

Then your second question on BaFin. As I mentioned in the discussion, we fully cooperate with BaFin, and we're making great progress. And we take it from there, and we continue to do so. All I can only repeat, we are completely done with our investigations, whether it is our external investigations, whether it's on bill and hold, various other matters as well as our internal investigations, we're entirely done. All of those findings are reflected in the 2024 restatement as well as our 2025 financial accounts. And all the findings we have very, very transparently shared with BaFin with the authorities.

And your third question was around rights issuance. As mentioned, currently, we're looking at a debt refinancing where we have mandated Lazard to support us, and that's our focus. Thank you, Oliver.

Can I just ask in terms of when you expect free cash flow positive, any kind of breakeven cash flow, any kind of color on that?

That's fair. I think we had our last guidance for 2026 that was for this year. I would say if it weren't for the lower factoring that we're now seeing, it would have already been the result. So we take it from there. We're not yet providing further midterm guidance. As such, let's see next time when we provide midterm guidance, let's talk about it then.

[Operator Instructions] The next question is from Olivier Calvet from UBS. The floor is yours, Olivier.

Hopefully, second time works better. Yes, just could you highlight specific areas of weakness that were the additional driver to the 2026 guidance cut? And then I just wanted to also come back on the free cash flow guidance. So I think your EBITDA guidance at the midpoint means about EUR 30 million cut. You mentioned less factoring. The CapEx, you didn't really touch on, but for the full year, you had talked to at least a base CapEx of close to EUR 100 million at the last results. So just wondering if you could add a bit of detail there.

Thank you very much, Olivier. Good to talk to you again. I think in terms of guidance, I think we have mentioned that due to what we saw so far in the first half of the year, a challenging economic environment and also some project delays with our customers and some operational challenges that had to do with finalizing the ramp ups. That is why we now lowered the guidance to the lower half of the range that we mentioned before, right? This is on revenue.

And then you had mentioned cash flow also. Cash flow, the reason for changing the guidance is very much and mainly driven by our latest expectations on factoring and factoring goes one-to-one against working capital, and that impacts the cash flow.

On the rest, if you say, on CapEx, no, on CapEx, we have a very strict capital discipline that we've much improved. And there, we rather spend less than previously planned.

Any sort of ballpark level you're looking to spend this year on CapEx?

No, we don't provide guidance on that right now.

Okay. And just on the revenue side of things, could you perhaps specify -- I mean, you changed the segments. There's just a question on what is kind of deteriorating? Is it within containment, within primary injectables, within moulded glass or a combination?

I think what we can do is you're right. Achim walked you through the new segmentation. We'll provide more details when we publish our first quarter results. That will be the first time when we publish results by the new segmentation.

Operator, next question.

Next question is from Richardson from Jefferies. Mr. Richardson, the floor is yours.

Just checking you can hear me.

You coming?

Can you hear me okay?

Very well.

Okay. Super. Maybe just two from my end, if that's okay. In the annual report, it details that the covenants while suspended for the rest of this financial year should have a target of 4.75x by the end of the year, which you will be held to us. I was just wondering whether this is an upper limit and what management's attitude as to how far below this target you hope to decrease the leverage?

And just a second question, the decline in the PPG business margin was quite significant despite the Bormioli portion of that business increasing its margin from 14% to 18%, which implied the underlying business declined margin-wise to the degree of around 6.5%. I was just wondering what the causal factors were there because sort of a weaker end market seems like only a small portion of that contribution.

Thank you, Chris. Let me take the first question. I hope I got it right. The voice was a little low. But I think your question was that by year-end, we mentioned that we should have an EBITDA leverage covenant at 4.75 and how far below we would be against that. So good question. Now it's a very theoretic question, quite frankly, Chris, because as we mentioned multiple times, our current focus is we're going to sell Centor, and we're going to do a fulsome debt refinancing. And as such, it's a very theoretic question as to where we're going to be against those prior applicable debt covenants.

So as I mentioned, we were debt even if we were under the old covenants, we were compliant at year-end of '25. As such, that's a very theoretical question. Again, our full focus is on selling Centor and then that would be a big step forward for the capital structure. And then we do a fulsome debt refinancing where I think we see very good opportunities in the institutional market as well as on the private side, and we will keep you posted on progress. And then I believe there was a second question on PPG.

Maybe I'll hand it over to Uwe to answer that one.

Yes. Thanks, Chris, for the question. I think that was a very good observation. Obviously, the businesses in the legacy PPP businesses are the ones that cause us the largest amount of headache. And therefore, those businesses are also in the focus of our restructuring activities. We made a very quick decision on shutting down the Chicago plant that still operates for a significant part of this year, but it has -- it is clear that this plant has had a negative contribution on our performance.

Secondly, we have a very strong focus on inventory reduction in our businesses that have led us in combination with our cash focus to tighten the production policy to address the inventory part. So -- but to where the margin needs to be, we have taken significant steps in the restructuring. First of those will hit in the second half of this year and mainly then also in '27 to bring the margin of the tubular glass legacy business and particularly the moulded glass business was the main driver back to up to respectable levels. But that is going to take a bit time.

[Operator Instructions] The next question is from Falk Sinß from FINANCE.

My name is Falk Sinß from FINANCE Magazin. I have two questions for the sale of Centor. How much do you hope to raise from the sale of Centor? And do you have a plan B in case the sale doesn't generate the desired proceeds?

I think Mr. Richardson has a follow-up question. Mr. Richardson, the floor is yours if you have any follow-up questions.

Yes. Sorry, I thought I would ask a follow-up. Just staying on Bormioli, I thought I'd query the decline in the margin of the Bormioli business in Plastics & Devices, which was 22.5% in FY '24 and is now 18% this year. And if I could squeeze in just another one after that, the decline in free cash flow to EUR 50 million to EUR 100 million is -- well, EUR 50 million plus versus the moderately positive free cash flow previously. I was just wondering what proportion of that is due to the reduction in the factoring activity as well? Is it the majority? Or is it quite a minor impact with the rest coming through from the operating performance of the business?

Yes. I think let me take the last question first. So absolutely, the majority is due to that due to factoring. And this is a combination of also within the factoring bucket, the majority, 80% we see in reverse factoring, so-called Cflox program that are not fully available to us. And then the rest is regular receivables factoring where we do less. We expect to do less in this year.

And then your other question, I believe, was on Bormioli.

In the Plastics & Devices module.

Was it on Plastics & Devices? Yes, I can comment also, if you like, a little bit on that and then also Achim and Uwe can chime in. But I think if you go to our Page 8, sorry. You see in the dotted line, you see year-over-year Plastics & Devices, a negative EUR 16 million of revenue. And you do see for Plastics & Devices correspondingly a negative EUR 11 million EBITDA. So that is -- I think your question is that seems to be a quite high sales to EBITDA fall-through.

I think that's correct to lose EUR 11 million EBITDA on EUR 16 million revenue is high. But you need to understand there that we partially have very modern, very automated plants. If you were to visit, for example, our operation in Rivanazzano in Italy, this is a very highly automated operation. And the fact that if you have then a little bit less plant loading, it really falls through at a high EBITDA range. On the other hand, please note, obviously, the other way around too. Once our growth initiatives are kicking in, you will see exactly the opposite.

Thank you. With that, we will close our call today. We are very happy to have follow-up calls with you. You know where to find us. Thank you, and bye-bye.

Good morning, everyone, and welcome to our presentation of our preliminary Q3 2025 results. With us today are our CEO, Dietmar Siemssen; and our new CFO, Wolf Lehmann, who will lead you through our Q3 development and the financials. The slide deck is available on our website. At the end of the presentation, we will be available for Q&A. But now let's start and I hand over to Dietmar Siemssen. Dietmar?

Yes. Thank you Guido. And welcome, everybody, and thank you for joining us for this call. Yes, you have all seen the news, and they are not positive. We unfortunately had to revise our guidance for 2025. Yes, Q3 came in lower than expected. The organic revenues were 1.2% below the previous year's quarter, and the adjusted EBITDA was 9.4% below. The adjusted EBITDA margin was 18.8% and thus 1.7% lower than in the previous year's period. We won't be able to compensate this until the end of the year, even though we expect Q4 to be stronger than the third quarter. And we did not expect this development.

It is disappointing to say at least, and we clearly have to increase our measures to get back on track. We will -- and also Wolf will elaborate on this later. Our performance in the first 9 months of this financial year is clearly below our expectations, and we can't sugarcoat this. Yes, there have been a number of markets -- there have been a number of market influences, but the development in total is disappointing.

On a reported base, our revenues grew in the first 9 months by 14.6%. Our EBITDA grew by 7.2%, both increases due to the first-time consolidation of Bormioli Pharma. On an organic basis, however, revenues declined by 1.8% and adjusted EBITDA by 7.5% compared to the previous year's pro forma figures. We had expected an earlier market recovery of the cosmetic and also the oral liquid market. Instead, the weakness of the markets prevail. Overall, operative performance in Q3 lagged clearly behind. On a positive note, our focus on being more selective with CapEx is beginning to pay off. We recorded positive free cash flow of EUR 21 million in the third quarter, and we expect a stronger fourth quarter in comparison to Q3 2025 with the ramp-up of new lines for drug delivery systems.

The disappointing operative performance in the first 9 months and Q3 is particular -- or in particular, does not change the strategic rationale behind our growth investments or the Bormioli Pharma acquisition. We are still convinced that broadening our portfolio with new high-value solutions, particularly for the growing biologic market has been the right strategic decision.

The Bormioli Pharma acquisition brought Gerresheimer to a new level in terms of revenues and EBITDA and is strengthening our market position. It was also a prerequisite for building a strong moulded glass powerhouse and being able to take the next steps to separate it and initiate a sales process afterwards.

But looking at the pure numbers, we understand we need to act, and we already have by initiating measures to reduce costs and improve our performance, as you can see from our restructuring costs in our third quarter report. We will leave no stone unturned to recover our margins and get back on a profitable growth path.

And with this, I will now hand over to our new CFO, Wolf Lehmann, for a closer look on our financials. Wolf?

Thank you, Dietmar. Following up on the revenue and EBITDA driver year-over-year on Q3 in more detail. We show the numbers in the prior year pro forma adjusted for the Bormioli Pharma acquisition. Numbers are not adjusted for FX. On revenue left side, year-over-year, the anticipated market recovery after the first half and growth did not happen. Instead, net, we're down EUR 18 million from EUR 579 million to EUR 561 million, with a mixed picture between the segments. Plastics & Devices slightly up EUR 3 million and Primary Packaging Glass down EUR 20 million.

Let me turn to the segments. Within Plastics & Devices, net up EUR 3 million is a mixed bag. Medical devices, we grew around EUR 13 million, slower growth and not as much as we would have liked, but at least initial growth in devices such as auto-injectors. This is partly offset through plastics packaging down EUR 5 million, driven by continued less oral liquid containment demand. And in addition, negative EUR 6 million from foreign exchange, mainly the unfavorable U.S. dollar to euro exchange rates impacting our U.S. business.

On the Primary Packaging Glass segment, PPG side, revenue is down EUR 20 million, mainly driven by around EUR 13 million decline in moulded glass with again, disappointing weak cosmetics and oral liquid markets. Also around EUR 2 million decline in tubular glass. Here, standard products are down, yet higher-value products up. Finally also negative around EUR 5 million from foreign exchange, again, mainly U.S. dollar to euro exchange.

On EBITDA, in the middle chart, year-over-year, EBITDA is down EUR 14 million from EUR 117 million to EUR 103 million. Now EBITDA down EUR 14 million on a revenue down EUR 18 million, obviously, is a high unfavorable fall-through. Let me explain the main drivers. On Plastics & Devices, EBITDA is down EUR 7 million on sales up EUR 3 million.

Main impacts are medical devices did have growth in revenue, up EUR 13 million, as explained, but EBITDA is down EUR 4 million since especially our new assets like at our Peachtree site in the U.S. are partly up, partly still in ramp-up, but underutilized or insufficiently loaded to cover all the additional costs as we invested ahead of demand.

Plastics packaging is down EUR 1 million year-over-year, which is simply less volume falling through. The rest is some impact from FX of around negative EUR 1 million.

Turning to EBITDA of Primary Packaging Glass. EBITDA is down EUR 8 million on sales down EUR 20 million. Also in PPG, the sales to EBITDA fall-through dynamics vary. Moulded Glass is down EUR 9 million in EBITDA on EUR 13 million less sales, a high fall-through. This is, a, the volume effect, but also, b, our site at Lohr, Germany coming back into production after the significant furnace renewal and step-by-step gaining back productivity.

Tubular glass shows a very different picture. As on lower sales, we get around EUR 2 million higher EBITDA. Amongst others, our focus on high-value product growth comes through.

On adjusted earnings per share on the right-hand side. This will be easier to follow, quite frankly, when we publish the full and final financials tomorrow, Friday morning. Still already as a heads-up, the decline from EUR 1.20 to EUR 0.77 adjusted EBITDA is negatively impacted by the EBITDA falling through after taxes to EPS and in addition, higher depreciation and certainly higher interest expense, mainly stemming from the financing of the Bormioli Pharma acquisition. This explains the main drivers in third quarter. Very similar dynamics are impacting our 9 months results year-over-year.

Please turn to the next page, Page 7. Overall, revenue is down year-over-year by EUR 47 million, EUR 1, 728 million to EUR 1,681. EBITDA is down EUR 27 million, EUR 341 million to EUR 314 million. So overall, a high fall-through of EUR 27 million EBITDA versus EUR 47 million revenue.

In the interest of time, I'll focus on the fall-through, sales to EBITDA. Plastics & Devices, similar to Q3, positive sales growth on the left of EUR 15 million, yet a negative year-over-year EBITDA growth of EUR 18 million. Medical devices with sales up EUR 36 million, driven by our growth projects, example in pens and auto-injectors, yet delivering no EBITDA growth yet as new assets are still underutilized.

Plastics packaging, sales down EUR 12 million year-over-year due to the mentioned Oral Liquids market downside, is falling through to EBITDA with a high around EUR 8 million impact. These partly highly automated plants producing our high-value Plastics Packaging parts are sensitive to a suboptimal capacity loading level.

On Primary Packaging Glass, PPG, moulded glass is as explained for third quarter, mostly sales decline of EUR 44 million from cosmetics, oral liquids, et cetera, falling through to be expected around EUR 11 million EBITDA. Tubular glass, the sales decrease of EUR 11 million (sic) [ EUR 10 million ] does not show up in EBITDA, mostly due to less standard and more high-value growth focused like ready-to-fill vials.

On the right, adjusted earnings per share. Similar, we can explain more on Friday, tomorrow, after providing the final and fulsome financials. Some heads up again as in Q3. EBITDA decline falls through after tax and impact from higher depreciation and interest, mainly driven by the Bormioli Pharma acquisition.

In summary, before we talk guidance, 2 to 3 main issues: one, more market decline and continued longer market softness versus expectations; and two, growth projects starting to deliver, but clearly slower and this leads to three, suboptimal capacity utilization levels with new assets post or still in the middle of ramp-up and similar post renewal of old assets like the glass furnace renewal mentioned. And those issues do clearly impact profitability levels.

We first talk guidance on the next page, and then we share some thoughts on initiatives to deal with the issues. Guidance. Our revised guidance is clearly impacted by the much lower-than-expected Q3. The guidance is done on an organic growth level, meaning prior year pro forma, including Bormioli Pharma and normalized for foreign exchange.

Our last or old guidance is from July. We estimated flat 0% to 2% growth for the full year, around 20% margin and a low double-digit decline adjusted EPS. Thus, on the lower end, no growth, versus our EUR 2.4 billion sales in 2024 or midpoint 1% equal to around EUR 24 million growth year-over-year. This was after delivering a first half of around EUR 25 million decline year-over-year.

Thus, we estimated and targeted against the midpoint offsetting EUR 25 million year-over-year first half decline with EUR 50 million growth in the second half to yield net 1% growth for the full year midpoint to yield the midpoint requiring both, a, market demand recovering cosmetic on the glass side, oral liquids both on the glass and plastic side; and, b, growth projects, new assets being loaded with demand quickly.

Thus midpoint, we expected round numbers, EUR 50 million second half growth, roughly half and half, EUR 25 million in Q3 year-over-year and EUR 25 million in Q4 year-over-year to come out at the midpoint.

Now we have one more quarter behind us, the third quarter. And in hindsight, we overestimated both the market recovery and also ramping up and loading our new asset with customer demand. So looking at Q3, Q3 did not bring around EUR 25 million growth year-over-year, but rather close to EUR 10 million decline year-over-year. Thus round numbers, we are against the midpoint last guidance around EUR 35 million behind, down EUR 10 million versus expected up EUR 25 million.

So our last guidance on revenue take the slower growth into consideration. The midpoint or negative 3% is around EUR 70 million year-over-year decline. Half of this already happened and the other portion we estimate in Q4, assuming very little recovery on the market side and growth projects delivering, but clearly slower. Or another triangulation we can provide is the midpoint or negative 3% year-over-year on EUR 2.4 billion sales requires fourth quarter to come in around roughly EUR 50 million higher versus the last quarter versus Q3. That's around EUR 50 million quarter-over-quarter growth.

Again, this is assuming very little market recovery and slower progress on the growth projects and maybe also a touch of more conservative planning, still to be seen. On adjusted EBITDA guidance, the first 9 months, we are at 18.8% adjusted EBITDA margin. We are estimating to be around 18.5% to 19%, so very similar to the current profitability levels. On adjusted earnings per share, it is handing down the EBITDA guidance adjustment post taxes to earnings per share, which gets us rather into the mid-double-digit decline versus low double digit.

So before I turn to our last initiatives or latest initiatives to counteract some of the issues we faced, please note that midterm guidance -- we are not providing any new midterm guidance for 2026 and beyond as we are still in the middle of our budget planning for next year for 2026. Thus, it does not make sense to cover midterm guidance right now.

Let's go to the next page, please, and cover leadership team changes to accelerate our initiatives. Starting from the right, Norbert Topp joined us in August. He is in charge of carving out the combined Moulded Glass operations. Gerresheimer legacy and Bormioli Pharma, integrating the 2 businesses and carving it out. Consequently, we would like to sell Moulded Glass. Moulded Glass will be a new segment within Gerresheimer. We take the opportunity, and we plan to transfer to a new segmentation for the start of the new year.

Achim Schalk joins us in November and will play a vital role in this new segmentation. We just went through the financials still in the old segmentation, yet we know many of you brought forward to take the opportunity towards a revised segmentation. Thus, we're working on this for the start of our new year from 1st of December onwards.

Finally, myself as a new CFO, next to finance, I can help to accelerate our transformation, addressing key issues mentioned around growth, cost as well as cash when explaining our financial results. In operational excellence, the example given with focus -- focuses on, a, sourcing efficiently, where we rather have a decentralized approach currently; and, b, cost of nonquality where we still have quite some room against best-in-class. In commercial excellence, a, we drive price rigor and segment the portfolio thoroughly by customer, product, region to improve profitability; b, we chase volume to fill existing capacity to improve utilization.

Referring footprint consolidation, we drive a classic grow, fix, close or sell approach. We also consider external help, both particularly in commercial and sourcing to start with. Timing-wise, this is not just a quarter or 2. This will be a focus for us for the next 2 years at least to start with to improve our run rate step by step. Organizationally, we implement the transformation office reporting to the CFO, myself, to have a focal point and Board level and resolve bottlenecks. Also, we ensure to approach the highest paybacks first. Thank you. Back to Dietmar.

Yes. Thank you so much, Wolf. A rough start for you, but I think we are driving the right initiatives as we speak. So before we open our round for you -- or for your questions, let me summarize the key takeaways one more time. Q3 and the first 9 months were clearly below our expectations. We expect a stronger Q4, in particular, due to ramp-ups of new production lines for drug delivery systems, yet this will not fully compensate for the development in the 2025 financial year to date.

We, therefore, needed to revise our guidance and expect an organic revenue decline between minus 4% and minus 2% and an adjusted EBITDA margin around 18.5% to 19%. The adjusted earnings per share will decrease by a mid-double-digit percentage. We will have a new leadership team in place going forward with Wolf Lehmann as our new CFO and Achim Schalk as a new member of the Management Board starting November.

Hans-Norbert Topp now heads up the business unit Moulded Glass and drives the separation forward. Starting with the 2026 financial year, we will implement a new segmentation with Moulded Glass being a separate division. And most importantly, we take severe actions. We are now implementing a comprehensive transformation program with a transformation office driving all measures and reporting directly to the CFO.

With this, I hand back to [ Guido ].

Thank you very much, Wolf. Thank you very much, Dietmar. We will now begin the question and answer session. [Operator Instructions]. The first question comes from Ed Hall, Stifel.

Sort of any loss of market share to SGD Pharma. Any dual source dynamics you see in the market and how this would affect.

We haven't understood the part of your question. Can you repeat that, please, the initial part?

Sorry. Can you hear that better now?

Yes, very good.

Perfect. Sorry about that. So just first question, could you quantify any loss of market share that you see to SGD Pharma or other competitors, any dual source dynamics that are happening in the market and how this should persist into next year?

Second question would be on sort of what caused the positive free cash flow from a weaker EBITDA. Is there any one-offs in here that have caused this? And then finally, just on the margin guide, 18.5% to 19%. Q4 is seasonally higher than sort of Q3. So I was wondering what's caused this range? And what's the downside risk to EBITDA in Q4?

Market share, I think we are pretty confident that the market is down at present, but there's no loss of market share neither to SGD or any other player.

Great. And then on cash flow, yes, the cash flow in the third quarter was positive at EUR 21 million. There's no one-offs in there. This resulted in a leverage of 4.15. I think it's important to stress that we are fully compliant with our debt covenants. And referring guidance down -- potential downside in the fourth quarter to EBITDA, I think that's why we provide the range. We feel comfortable in that range, as explained, EBITDA or EBITDA margin. As I mentioned, we are forecasting between 18.5% to 19% EBITDA for the full year. We are 9 months into the game, we are at 18.8%. So we're staying in that range. So we're not forecasting a major improvement in profitability for the fourth quarter, but rather coming in around the same profitability levels. And again, that range reflects either up or downside against those forecasts, okay?

That was very clear. And maybe just go back to the first question. So you're saying that you haven't seen any loss in market share. But I was just wondering if you could just comment on the extent of which you see the market declining or staying at this sort of suppressed level.

Yes, Ed, you have to say that because [indiscernible] SGD. The point is the areas where we actually lose at present is the cosmetic. Here, we also do not see shifts in the market share. We see our clear competitors that, by the way, is not SGD in cosmetic are having the same challenges are facing the same challenges as we. So the market is really down. We see in this area, if you want to see something positive, at least that the market is not going down further.

It's a kind of stabilization at this moment, where the recovery that we've been waiting for in the second half of the year, obviously, is not visible before the beginning of '26 as we see it at the moment. Because the pharma business is not so -- is not -- also noted not so bad. It's primarily the -- and you hear it again and again, it's the cosmetic and it's the oral liquids, the classic areas where you have this coughing syrups [ ibuprofen ] and so on. And as bad as it sounds, we are looking at the flu season now coming. And it's first time, I think in my life, I'm happy if I hear people coughing because it might push the sales and we see this more positive now.

And Ed, if I may, first, if you run across your colleague, Michael Hoffman, please tell me my best regards. I think I worked for many, many years with him.

Secondly, back to cash flow, just in full transparency. So yes, EUR 21 million of positive cash flow, and there is no one-offs in there, yes. But I think for us, quite frankly, you've seen our first half. It's too early to call in victory here. Cash rigor, CapEx rigor stays absolutely at the forefront for the business. Too early to call in victory again, and this still -- is still absolutely a focus in the fourth quarter, will be a focus for us for next year. Quite in simple terms, we just have to deliver more with less point. And that is absolutely a change that we're driving and we're laser focused on.

Next questioner is Olivier Calvet.

I hope you can hear me...

Yes.

Yes, both, good to hear you again, but pretty tough timing for you. I have a couple of questions. Firstly, on the news flow 2 weeks ago, could you perhaps confirm that the bid and hold transactions that are subject of the current BaFin audit were at the customer request? And any further color on your stance relative to that audit timing to a resolution perhaps and any first step?

Sure, Olivier. Yes. Also, thank you. It's great to hear you again, Olivier. Now referring to the BaFin audit. Number one, look, we fully support the audit of the BaFin. In order to most effectively do this and understand, we would like to understand the rationale for the audit, and we have requested access to the files. This access has not been granted nor do we have yet an answer whether and when access will be granted.

One topic, as you mentioned, of interest is still involved. Bill and hold follows strict rules and regulations to ensure accurate accounting. We are fully aware of those rules and regulations and believe we follow those also at year-end 2022. At year-end 2024, we accounted for a low double-digit euro million amount of bill and hold or you're talking less than 2% of annual revenue. Those are the facts, and we'll keep you up to date on any material developments. And we're working on putting a landing page up to facilitate communication.

That's helpful. Just sorry, you said one topic. Is there others or...

No, I think this is the topic that is currently mentioned, right? And again, we want to fully support the audit. And for us to do that most effectively, we would like to understand the rationale for this audit. And as such, we have requested access to the files and then we can understand better.

Okay. Then second question would be on free cash flow in particular. So essentially -- and maybe I missed this in the prepared a bit, but you're pointing towards the -- still pointing towards the negative EUR 100 million or so for this year? And also any thoughts on required maintenance CapEx you have next year would be helpful as well.

All right. Let me see whether I understood it correctly. So Olivier, in the -- I think what I commented on based on Ed's question was the free cash flow in the third quarter. The free cash flow in the third quarter, and you will see it better tomorrow when we file the full financials is around EUR 21 million free cash flow in the third quarter. And you know that we were not positive full free cash flow in the first half of the year. So that is positive.

And with closing the third quarter, we achieved a leverage of 4.15x. And my comment was 4.15 -- 4.5x leverage. And as such, we're fully compliant with all debt covenants Nevertheless, what I mentioned to Ed also was it's too early to plan victory over here. We have to stay laser-focused on cash, and we are doing that, whether it's on CapEx rigor or whether it's just -- cash is absolutely [indiscernible].

And on your question on base CapEx, growth CapEx, et cetera, look, this is now my sixth week in the company. I think roughly, you're talking about -- annually about EUR 100 million or so of base CapEx. And I think going forward, we'll probably do a good job in explaining those differences base growth, et cetera, because, again, we're absolutely focused...

Okay. Just on the free cash flow again for '25, I think your predecessor was pointing towards a negative EUR 100 million or so for full year '25 [indiscernible] EUR 121 for first 2 months...

I don't know at the top of my head, Olivier, let me -- it's a good question. Let me come back to that tomorrow.

Okay. And then finally, just on the financial flexibility, there was a renegotiation of the acquisition debt right before you joined. Can you tell us more on the -- how you're comfortable with covenant levels and so on because, obviously, you're at elevated leverage levels.

Yes. So as I mentioned, Olivier, good question. As I mentioned, we closed the third quarter, and we have now a leverage of 4.15x. With that we have the headroom that we need. We're fully compliant with our debt covenants...

The next questioner is Oliver Metzger from ODDO BHF. Oliver, I think we lost you. Can you come back in please? In order to don't have to wait. Next questioner is David Adlington from JPMorgan.

Adlington, can you hear me?

Yes.

Perfect. Great.

Yes, coming back to the balance sheet again. So I think the 4.15x is on historic. I think on our math, you're close to 4.5x with the new guidance. Maybe just in terms of -- you mentioned in the presentation that the reset covenants you're happy with. Maybe you could just disclose what those covenants are?

And secondly, connected to that, with respect to the sale of Moulded Glass, just wondered if you have any thoughts on potential timing there and how that will help you with your indebtedness?

Thank you, David. So I can only repeat again, yes, you're right, 4.15x is the current leverage ratio based on third quarter results. And with that, we're fully compliant with our debt covenants. We haven't disclosed yet all the details around the latest covenants. But yes, due to the covenant reset, we have sufficient headroom, and we're comfortable with that.

Then your second question was the Moulded Glass. Yes, look, at the end of the day, the rationale for separation of Moulded Glass is that with the acquisition of Bormioli Pharma, we're bringing 2 parts of the business together, legacy Gerresheimer Glass as well as Bormioli Pharma glass into one and separating that. We think that makes sense. And then we have a consolidated focus on the Moulded Glass business, especially now on the new leadership of Norbert Topp.

And then we take it from there. As you know, we're committed to the separation. We also would like to sell the company, and we take it from there. The impact on leverage obviously depends on the sale price, and that would be speculation right now, okay? We'll take it from there.

We are having Olivier back your line.

Do you hear me now?

Yes, very good now.

So 3 questions I have. The first one is on moulded glass about the turnaround or to a better. So there are still weakness in Cosmetics and Oral Liquids. So is it really that you now look for the annualization of these headwinds? Or do you see any fundamentals which could be better apart from the flu season?

Second question, can you also give a brief update about the Plastics and Device dynamics? And lastly, how should we think about next year? I know it's too early to give a guidance right now, but some dynamics will spill over into '26, which basically you already sold technical automotive glass, how long does the pattern will last in your view?

It's a difficult discussion. But in the end, it comes back to the 2 topics we mentioned. It's the oral liquid and the cosmetic. Cosmetic or moulded Glass [indiscernible] positive light, also the light at the tunnel but different than we expected a strong recovery in especially the fourth quarter, we believe that this will only take place in -- over the loop of '26.

For the oral liquid market, this hits both the moulded Glass side, classic bottles we deliver for coughing syrups, but it also now affecting us in the area of Bormioli Pharma where we have the closures for this. And this is also stabilization of the market, also first indications that it might get better and we are here more optimistic that the market comes back a bit earlier than in the area of the cosmetic. But honestly spoken, after the hitbacks I had to swallow here in the third and fourth quarter, I'm a bit conservative now on my expectation of recovery. Nevertheless, Oral Liquid will come back better. We have to see the flu season now, how it recovers, the cosmetic, we have to see over the loop of '26.

And maybe Olivier, I can add a little to it. So your question was how long will the headwind last? It's a good question. What we experienced in this year so far was that it took longer than we initially expected and it still continues. Quite frankly, taking a different approach now, we're not waiting. What we're now doing is, and that's what Dietmar and I tried to explain is we're taking -- we're not waiting for that recovery. And for that reason, we do a transformation.

That transformation is also one-to-one, also happening at moulded Glass under the lead of Norbert Topp. So we do the same rigor for moulded Glass, operational excellence, commercial excellence, cash rigor, the full program, and that will ultimately improve the results and a market recovery in our growth efforts will come on top or complement that. But again, most importantly is now the focus is on complementing growth efforts with cost rigor, cash rigor, et cetera, full transformation as explained.

Next question is coming from Anna Snopkowski of KeyBanc.

Can you hear me okay?

Yes, very good.

Maybe just first on the biologic market. What percent of revenue in 3Q was biologics? And how did this market develop in the quarter? And then on the GLP-1 side, you've mentioned in the past the possibility of over EUR 200 million in GLP-1s for the year. Do you still view this as a possibility? And would this mainly be on the medical device side? And then lastly, just on capacity expansions. Could we get an update there? Which sites are still ramping? And overall, what's the revenue-generating capacity in these sites?

Yes, I can take the first one. Actually, I do not know exactly for the quarter the share of the biologic, but maybe the answer of your question answers the following is where we are growing is all in the -- primarily in the large molecule biologic area. And that probably also answers your question regarding of the GLP-1. Key drivers of the growth is actually in the area of GLP-1.

As you know, we have a wide portfolio of GLP-1, which goes in plastic containment, syringes, devices of various forms, pens, autoinjectors. That's actually the areas that are strongly growing. And thus coming back to the question of do we believe that we can reach the EUR 200 million in GLP-1 in 2025? The answer is yes. When you see the slide, we are also in some areas. You see the tubular glass. We are not growing in tubular glass third quarter at the moment, but we see the margins getting better. Why is this pipeline is under pressure in the volume. We clearly are growing into the very different high value [indiscernible] that's biologics. All the growth in devices at present is biologics.

Perfect. And then just around the capacity expansions, maybe which sites are still ramping going into the fourth quarter?

That's right. We also have further capacity start of productions that we will see in the fourth quarter that will also drive some of the positive things in the fourth quarter. But what we've tried to explain it will not be enough to compensate the first 3 quarters, but the ramps up are ongoing. Not all will fully contribute in the fourth quarter that will come -- that will ramp up over the loop of '26, but these things are ongoing and that affects syringes, especially here [indiscernible] facility, but it also affects pens in Europe and all the injectors in the U.S.

And also -- and Anna to the fact we post for tomorrow's call, the final results also will provide an update on the latest bigger projects. So have a look at that too if you can.

Okay. Thank you very much. As we have no more questions in the queue, we would end today's call and wish you a good day. Thank you very much.

Thank you.

Thank you.