Gerresheimer Cuts Outlook, Proposed Dividend Due To Weak Demand; Stock Plunges

(RTTNews) - Shares of Gerresheimer AG (GRRMF.PK) were losing around 16 percent in the mid-day trading in Germany after the manufacturer of primary packaging products for medication and drug delivery devices on Monday trimmed its first half and fiscal 2025 outlook amid weak demand. The company also reduced its proposed dividend.

According to the company, the revision in outlook particularly reflects continuing subdued demand in the cosmetics market and a decline in demand for containment solutions for oral liquid medications, which the company considers to be temporary.

Due to the guidance adjustment, Gerresheimer said its Executive Board has decided to submit a new dividend proposal to the Annual General Meeting on June 5 to maintain the company's financial flexibility. According to the proposal, the dividend to be paid for the 2024 financial year will be reduced to the minimum of 4 percent of the share capital, corresponding to 0.04 euro per share instead of the previous 1.25 euros per share.

The Supervisory Board will promptly discuss the adjustment to the dividend proposal.

For the second quarter, the company now expects organic revenue growth to be in the low single-digit percentage range compared to the same period of the previous year, while the adjusted EBITDA margin will be around 19 percent. With this, overall growth in the first half of 2025 will be lower than anticipated.

Even though the company projects significantly stronger second half of 2025, the original guidance for the 2025 financial year will therefore not be achievable, the firm said.

In the 2025 financial year, Gerresheimer now expects adjusted earnings per share to decline in the low double-digit percentage range compared to the previous year, while previous estimate was a growth in a high single-digit percentage range.

Adjusted EBITDA margin is now projected around 20 percent, lower than earlier estimate of 22 percent.

The company now expects organic revenue growth of 1 to 2 percent from the previous year, compared to previously expected growth of 3 percent to 5 percent.

Gerresheimer plans to provide second-quarter results as well as the mid-term guidance on July 10, as scheduled.

On the XETRA in Germany, Gerresheimer shares were trading at 53 euros, down 16.4 percent.