SCHOTT Pharma continues growth path in the second quarter of fiscal year 2024

SCHOTT Pharma continues growth path in the second quarter of fiscal year 2024

• Q2 2024 revenues up 11% yoy to EUR 247m at constant currencies
• Q2 2024 EBITDA margin of 27.0% at constant currencies
• Share of strong-margin high-value solutions (HVS) at 53% in the first half of FY 2024
• Guidance for fiscal year 2024 confirmed

SCHOTT Pharma, a pioneer in pharma drug containment solutions and delivery systems, recorded good results in the second quarter and continued its profitable growth trajectory in the fiscal year 2024¹. In Q2 2024, the company’s revenues grew by 11% to EUR 247m at constant currencies (Q2 2023: EUR 224m). The company’s EBITDA declined slightly compared to the prior year as expected due to ramp-up cost from the continued investments in capacity expansion and a strong comparable base resulting in an EBITDA margin of 27.0% (Q2 2023: 30.7%) at constant currencies. Revenues and EBITDA on a reported basis were impacted by strong currency headwinds in the second quarter of 2024. “Demand for our products has remained strong in the 2024 financial year to date. This underlines not only our growth ambitions but also shows that the market dynamics are intact. Thanks to our long-standing partnerships with customers and our broad portfolio, we’re ideally positioned to benefit from the attractive injectables market,” said Andreas Reisse, CEO of SCHOTT Pharma. 

“We have achieved good quarterly results and are satisfied, especially with the strong momentum in revenue growth. This is particularly true for the high demand for our strong-margin high-value syringes, which has been a key driver of our overall growth. With the first half of the year in the books, we have increased our revenue share from HVS to 53% and are well on track to exceed our guidance for 2024,” said Dr. Almuth Steinkühler, CFO of SCHOTT Pharma.

Further growth driven by strategy execution

In the second quarter of 2024, SCHOTT Pharma continued the execution of its strategy focusing on innovation and expansion.

On the product innovation side, the company advanced a promising application for prefillable polymer syringes, namely large volume drug administration. This field is just one example of a broad range of applications that drive further growth in this segment. The recent announcement of the collaboration with KORU Medical Systems to advance large volume subcutaneous infusion therapies is therefore another step to further expand SCHOTT Pharma’s leading position in the market. Together, the companies offer a pump system with SCHOTT Pharma’s large volume prefillable polymer syringes available in formats ranging from 10mL to 50mL. The joint solution simplifies the administration of treatments that require recurring dosing regimens, such as chronic diseases or cancer. The collaboration underlines the broad demand for applications, where high-quality prefillable polymer syringes are the preferred drug delivery solution.

Further innovation efforts of the company included the introduction of a broader service offering: with PartnerLab, SCHOTT Pharma is offering drug developers a one-stop shop covering the full range of analytical tests needed for drug submission. This helps customers to accelerate the complex, time- and cost-intensive drug registration process and bring their products to market faster. This broad service offering reiterates SCHOTT Pharma’s extensive scientific expertise and strengthens its role as a trusted partner to the pharma industry. By working together closely from the very beginning, the company deepens its collaboration with the pharma customers throughout the entire lifecycle of the drug starting at the early development stages.

SCHOTT Pharma continues to expand its global production capacities in response to continued high customer demand for solutions in both the Drug Delivery Systems (DDS) and the Drug Containment Solutions (DCS) segments. In March, the company announced its expansion into the U.S., one of its strongest growth markets. With the USD 371m investment (approximately EUR 340m), SCHOTT Pharma wants to increase its manufacturing capabilities for prefillable glass and polymer syringes required to safely store and deliver critical medications and vaccines, including biologics, such as GLP-1 and mRNA drugs. The new site in North Carolina will allow the company to triple its contribution of glass and polymer syringes to the U.S. market by 2030, thereby relieving stress on the entire pharmaceutical industry supply chain.

As part of its expansion strategy addressing the structural demand for HVS, SCHOTT Pharma also inaugurated a new state-of-the-art production facility in Lukacsházá, Hungary on June 11. With the commenced commercial production of prefillable glass syringes, the company will strengthen its competitiveness and serve the fast and dynamically growing global market.

High HVS demand and positive developments in DDS and DCS segments drive Q2 growth

The revenue growth in Q2 2024 was mostly driven by the strong performance of SCHOTT Pharma’s DDS segment. At constant currencies, DDS revenues accounted for EUR 96m, an increase of 33% yoy due to high demand for prefillable syringes and the ongoing expansion of capacities for HVS. As a result, the cumulative share of HVS in total revenues was 53% in the first half of the year and therefore ~8 percentage points higher than in the previous year. Revenues in the DCS segment developed as expected and amounted to EUR 151m at constant currencies. With that, revenues were roughly in line with the previous year and thus returned to the high level of Q2 2023.

Profitability remains strong despite strategic ramp-up costs

SCHOTT Pharma remained highly profitable in Q2 2024 with an EBITDA margin of 27.0% at constant currencies, which was below the previous year mainly due to ramp-up costs for new production capacities. The DDS segment contributed EUR 37m of EBITDA, an increase of 21% compared to the previous year at constant currencies. This led to an EBITDA margin of 38.1%, which was impacted by ramp-up costs for Hungary, as expected. At constant currencies, EBITDA in DCS came in below prior year at EUR 31m and a margin of 20.6%. The margin decline of more than 5 percentage points compared to the previous years’ quarter resulted from destocking for vials on the customer side and planned ramp-up costs for capacity relocations to Serbia.

As a globally operating company with production and sales activities in various markets, SCHOTT Pharma is exposed to foreign currency effects, which the company hedges to a large extent. In Q2 2024, however, strong currency headwinds impacted reported results, more than offsetting the positive currency effects from Q1 2024. Currency effects had an impact of EUR 23m on Q2 2024 reported EBITDA. The company’s profit for Q2 2024 declined to EUR 25m, which was mainly impacted by the adverse currency effects.

In line with the strategy, the majority of the total investments of EUR 57m in H1 2024 were growth investments. Despite those investments in the first half of fiscal year 2024, free cash flow remained strong at EUR 34m in the first half of the year.

Outlook

Based on the first half of fiscal year 2024, SCHOTT Pharma is well on track to achieve its full year guidance of 9% to 11% revenue growth and an EBITDA margin approximately at prior year’s level, both at constant currencies. The most important growth drivers for SCHOTT Pharma remain major pharma trends that the company meets with its products. These include primarily GLP-1, mRNA, homecare, ADCs, subcutaneous administration of drugs, and the ready-to-use manufacturing transformation of pharma companies, additionally supported by the recent revision of the EU GMP Annex-1. Moreover, the company continues the development of new solutions to ensure the safe and easy storage and administration of injectable drugs to patients all over the world.

SCHOTT Pharma remains committed to its guidance for fiscal year 2024 and mid-term outlook of organic revenue growth above 10% CAGR and an EBITDA margin in the low 30% range at constant currencies.

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Key figures Q2 2024

Key figures H1 2024

¹The fiscal year runs from October to September. Q2 2024 therefore relates to the period from January 2024 to March 2024.
²CC = at constant currencies

Webcast

Andreas Reisse (CEO) and Dr. Almuth Steinkühler (CFO) will speak at an analyst and investor conference call at 11:00 a.m. CET on 27 June 2024 to discuss the Q2 2024 results. The audio webcast can be followed via a conference call. The accompanying presentation can also be downloaded on the IR website: https://www.schott-pharma.com/investor-relations/

About SCHOTT Pharma

Human health matters. That is why SCHOTT Pharma designs solutions grounded in science to ensure that medications are safe and easy to use for people around the world. The portfolio comprises drug containment solutions and delivery systems for injectable drugs ranging from prefillable glass and polymer syringes to cartridges, vials, and ampoules. Every day, a team of over 4,600 people from over 60 nations works at SCHOTT Pharma to contribute to global healthcare. The company is represented in all main pharmaceutical hubs with 16 manufacturing sites in Europe, North and South America, and Asia. With over 1,000 patents and technologies developed in-house and a state-of-the-art R&D center in Switzerland, the company is focused on developing innovations for the future. SCHOTT Pharma AG & Co. KGaA is headquartered in Mainz, Germany and listed on the Frankfurt Stock Exchange as part of the SDAX. It is part of SCHOTT AG, which is owned by the Carl Zeiss Foundation. In light of this spirit, SCHOTT Pharma is committed to sustainable development for society and the environment and has the strategic goal of becoming climate-neutral by 2030. Currently, SCHOTT Pharma has over 1,800 customers including the top 30 leading pharma manufacturers for injectable drugs and generated revenue of EUR 899 million in the fiscal year 2023.

Press contact

Joana Kornblum
Media Relations
Tel.: +49 151/29223552
E-Mail: joana.kornblum@schott.com 

Jasko Terzic, CFA
Senior Manager Investor Relations
E-Mail: ir.pharma@schott.com