Gerresheimer AG (GXI) Earnings Call Transcript & Summary

Welcome, everybody, to our Capital Markets Day 2022, generating sustainable value. I'm so happy and excited that so many of you dialed in today. It has already been 2 years since our last Capital Markets Day and be assured, a lot has changed within the company. The transformation from a commodity provider towards a growth company as innovation leader, solution provider and system integrator clearly advances. Today, we will explain what sustainable value generation means for us. Our Management Board, CEO, Dietmar Siemssen, Dr. Lukas Burkhardt as well as our CFO, Dr. Bernd Metzner, will give a strategy update, elaborate on formula G execution as well as our value creation model. Afterwards, we will have a short break before we enter our Q&A session. And now, it's my pleasure to start our short introduction video before I hand over to Dietmar. [Presentation]

Yes. Hello also from my side, and welcome to our Virtual Capital Markets Day 2022. I hope you enjoyed the video. You will have the chance to see it one more time just before we go into the question and answers. Yes. The first Capital Markets Day after 2020, and the second actually since I'm with the company in Gerresheimer. A lot has happened in Gerresheimer since we met here in this virtual level at the last Capital Markets Day at the end of exactly 2020 and actually, it's 4 years since we have started with our transformation, started with the implementation of our strategy. formula G. Our strategy process and its implementation has changed the company into a strong profitable growth mode and today, that's at least our intention. We will share with you the status of the achievements and the further dynamics within Gerresheimer. This is like Carolin already said about how we generate sustainable value. So the disclaimer, right? I just go over it, yes? And it's not only about value. It's also delivering the status on the transformation. Yes. Let me go back to the start 4 years ago when we started with a new fresh management team in 2019. And actually, we started with a very simple goal: How can we bring the company into what we call a sustainable, profitable growth path? How can we develop a base capability for our Gerresheimer company total different size, EUR 3 billion, EUR 4 billion size? How can we inject the capability of a core growth -- organic growth of 6% to 8% per year? And how can we bring the company into a level of 23%, 24%, 25% EBITDA margin? This is why we started to look for a vehicle, as we call it, a strategy, the strategy process that we call formula G. It's only then when we recognized it's going to be hard. How can we do this in a company where you have a commodity volume approach? How can you grow into a market over proportion strong where the market is growing probably 2%, and you want to grow 6% to 8%, especially together with the clear goal of bringing the company into a different profitability margin. This will not work if you just push into the commodity market. That's something you have to change. It's clear that you have to go into new segments of the business, into new niches, into areas where the market itself is growing much stronger, and the profitability of the products you can gain is higher. So it became clear that we have to transform Gerresheimer not only into a growth company, but you have to come up with new innovational products. We have to become innovation leader. We have to go deeper into the value chain of our customers. We have to get into the area of solution provider and also system integrator. And this is why we set up, and this is how we set up our strategy. So this chart makes it relatively easier. You said, okay, it's easy. You have to go from commodity provider with a fast follow approach. You have to go into this growth company, as I just mentioned, innovation leader, system solution provider. We have the vehicle of formula G, and we are using it. So what we did was pretty basic. We set ourselves very impetus goals in 5 -- no 5, 4 -- 5 key areas, guided really very strong vision. And the 5 areas are growth, which is clear. If you want to grow, you have to put a clear goal for growth. But innovation, as I mentioned, you have to make sure that you have the right products and the right topics to discuss with your customer if you want to have a different level of interest. The excellence is basic homework, but essential to work on this. Also the leadership was important because if you want to bring the company in a different level of growth, you have to have the mindset, the understanding, the empowered employees that are intensively working on exactly the mission you are bringing the company on to. Sustainability, fifth, very important goal where we set very ambitious goals. Why? Because it was clear to us in 2019, 2020, you're setting up a strategy for a company for the next 10 years. It must be clear, sustainability as a core part of this. And that's how we proceeded with these five goals. Before I go further into detail, maybe especially for the ones that listened to us for the first time, some basic facts about Gerresheimer. What is Gerresheimer? You have this on the headline here, we're a -- system and solution provider. You could also see that the old Gerresheimer was seen, they have some plastic vials, they have some glass vials, they have syringes, they have devices like inhalers and pens, pumps and this is Gerresheimer, but that's not the way I would see it. I would rather frame it in the way as you see at the topic [ simple liner ]. We actually are the company that is bringing the drug to the patient and also into the patient. So there's no doubt, we have a very strong focus. Our prime focus is the pharma and the biotech markets where we have the vast majority of our sales, more than 80%. We also have some high-end cosmetics and some others, which is food, beverage and so on. The portfolio of Gerresheimer is very broad. And in many of the markets, we actually have very strong and leading positions. You have here on the right side of this chart a couple of -- or left side of the chart, a couple of examples. We are worldwide #1 in inhalation devices and pens. We are #2 in syringe systems. #1, unbeaten, ampoules, vials, cartridges and #1 in plastic packaging. The company itself is completely global 36 plants, 16 countries, 98 countries where we have sales activities across all 6 continents. Very strong customer relationships and 1,500 customers, and as I mentioned and indicated before, and you will see this all over the presentation today, more and more growth, especially in high-value solutions. The last topic is a pretty interesting one is actually the marketing department and found out, I didn't know this. I knew that we actually produced roughly 17 billion, 18 billion of products every year, but this actually means that we are producing 500 products every single second, 24/7 by the way. That's a basic information on Gerresheimer. So it was good to set up an ambitious strategy that's how we started, as I indicated. But we recognized very fast, it's nice to have a good strategy and work on a great future, but it will not work and it will not be successful if you're lacking a very solid, healthy foundation. But what does it mean, a healthy and solid foundation? Health and solid foundation means something that is not so super strategic because I call it, you have to do your homework. You have to do your homework. That means you have to permanently, continuously working on the improvement of your competitiveness and your resilience. And what does it mean in detail? You have to make sure that your pipeline is filled with innovative products, with a broad product portfolio, addressing the megatrends, we will come to this in a second, and of course, the interest of the customer. So the customer centricity, cross-divisional, innovation, sales leveraging on your synergies is something the company was missing. We've significantly improved this and as such, have a significantly better perception coming from our customers. And I mentioned it at one of the earlier charts, the leadership, the full commitment and empowerment of your employees with the right growth mindset needed to be developed, and then basic homework, homework. Your operational excellence. We always use the operational excellence as it would be the quality in the plants, but that's not all. Aside the quality, your processes have to be in shape to be able to quote aggressively. This means your cost efficiency has to be top notch. The business is more fun if you are the cost leader. If you're not the cost leader, usually business is lesser fun. So that's the basic things that we also improved in Gerresheimer. That's what we call, we have to make sure the foundation is under control. So let me come to this basic picture, and it's very simple, yes? We have a very strong strategy, very good, and we are building this very strong strategy on a solid foundation. You might now say everything is fine. Everything is fine, and this is enough. But as always, and very often in business in a normal life, there is always a but. So the but is coming very soon, and it came actually with the start of 2020. 2020, all of a sudden, we had COVID pandemic rolling over the world. And with this step by step, several challenges actually came up. So the world is changing around us. A lot of global challenges. Actually, learned a new word last year which is scarcity. I did never use this. It was not part of my business English. And there's now kind of scarcity everywhere, but there's one thing that is very clear, we don't see any scarcity of crisis. Sort of what are we doing, and how does this look like? As I said, 2019, we started with a strategy. 2020, the pandemic. We said, oh, pandemic, that's a tough year. We have to manage this. 2021, we still have the pandemic but in parallel, the first inflation topics came in, resin materials, also the energy. Actually, everyone talks about the energy inflation, 2022. We actually saw this already coming up strongly in '21, which helped us a lot, one of the reasons why we have this very stable 5 years hedge. But then in '22, you still have the pandemic, you have the inflation. You have on top, if you didn't have this enough before, geopolitical tensions in between different regions that needs to be considered. Supply chain change challenges coming up and what I said before, the scarcity. There's no labor, there's no transport, there's no raw material. So you see there's a lot of challenges that actually needs to be managed. We did this very well, and we do this very well. How do we see this? We will -- I cannot say for the total year, but you saw this we will go in the clear record year 2022, which is a clear confirmation that we are able to show that we are managing these topics very well. To come back to the earlier picture with a nice strategy based on a solid foundation, you see now a third picture coming on top. It means we have a strong strategy based on a solid foundation. With the help of both strategy and solid foundation, it's, of course, easier to manage the external challenges, and we actually manage them very well. And again, you could say, fantastic. My world is easy. I do whatever it takes. I have the strategy, solid foundation and manage the external challenges, everything is nice. Again, we see a but. The geopolitical challenges, and the other challenges that come along are not only a concern to what we call the base business and needs managed. They actually are also concerned to the market, to our investors. And what we see as a consequence is quite a challenge because there's volatility in the share price. Where does it come from? The geopolitical developments, for example, in regard of the gas supplier, makes the market nervous. Our comparatively high energy intensity makes the market nervous. Our comparatively high debt levels in an environment of now rising interest rates make the market nervous. And a consequence, the market is looking at a strong focus on free cash flow in times of war and geopolitical challenges. It's something that is pretty interesting to see, not a surprise, but it's interesting to see. What does it mean for us? The classic challenges in principle all attacking my base business, I have to manage them because they are threatening my cost levels, my availability of components and so on. They need to be managed. This topic here is for the first time in principle questioning, our general strategy. And this is what we actually did. We raised the question: In a time where the market is nervous of war and geopolitical tensions, should we continue to push forward with our growth strategy? Or should we instead freeze it or any other alternatives? And we definitely raised this question internally in the strategy discussions and evaluated different scenarios. So take the left side here, and there are a couple of more scenarios we actually investigated, but take the left side here. Freeze of the growth strategy. Is it possible to bring the company back to the old commodity approach? Yes, it might be possible? Absolutely. But you might not generate the necessary value because you will not be able to get the margins up again and you will definitely do not generating the necessary amount of margin improvement. So the short-term effect would be visible, but the value generation would be gone. We even investigated scenarios like shutdown of individual business units or de-invest, but we all came to a conclusion that this is far too short term. So I would like to bring your focus on the right side here of this chart, the push forward of the growth strategy. There's one thing which is very important, and we needed to understand it ourselves. The strategy itself is not about growth -- classic growth. The strategy is about to grow the company into different product mix, into different margin levels. This means grow over proportion in areas where the margins are much stronger and also if the markets are growing in a stronger way. Otherwise, we will lose this focus on profitable growth. So the shift to higher value, higher-margin product mix requires the growth into these segments of the business. So the conclusion, and you probably heard it already, was relatively clear, we clearly saw a commitment to our formula G, reaffirmed the commitment. The strategy is proven strong. It's a valid strategy. It's proven as a strong vehicle, is delivering all key elements. This mix shift I spoke about towards high-value solution is not something on PowerPoint, something we were dreaming about for the future because it happens now and it becomes visible more and more with every single month. There's no doubt we have to consider the market dynamics, geopolitical changes. Some of them are so dynamic, you have to go in German, you would say you have to see them on site. This means careful short-term activities. And a couple of areas where we are a bit more careful to invest at the moment to see what happens over the loop over the next months and years. But not everything is kind of negative. There's also opportunities coming up with these different challenges and crisis that we see in the markets. The last two topics are good examples. Take our switch of our open technology in the motor plants to hybrid -- with hydrogen, green hydrogen utilization. The support of a government towards this technology, the chances for support have now significantly accelerated and improved. You also see this, but clearly on the last point here, the pandemic itself. More and more of the governments are actually protecting the sales for this, or actually the next pandemic. And you get government support for investments in capacity in Germany, in France and U.S., and Lukas will later talk about especially this invest in more detail. So another -- try to bring this to a conclusion. We have a very strong strategy for sustainable profitable growth. We have a strong foundation as a basis for the strategy. Both are actually necessary to master also very successful, the external challenges. And on top, we actually still successfully implemented the transformation process. So with this -- with this first part of the presentation, we wanted to explain the strategy, logic behind our activities and the rationale. We, means me and later also Lukas and Bernd will now, I call it, lower the helicopter a little bit, and share with you what the implementation of our strategy actually means in much more detail, and give you more insights in the progress of the implementation. So let me look at the picture 4 years of formula G. And this picture just shows the growth. We come from a long period, we have here 2015, but you can expand the period over many years of what I call stagnation. Flattish behavior, no growth, 1 or 2 -- a CAGR of 1% or 2% every year. 2019, we started with formula G with the strategy. And in 2020, in spite of COVID, we had the first time, what we call beginning of a start of reasonable organic growth, 3.5%. '21, 7.6%, should not forget, we had the first impacts of the inflation, so 2% out of this probably were driven by a tailwind coming from cost adjustments. Nevertheless, mid-single growth. In 2022, and we have just finalized the year, but we will come out at 15%, 16% organic growth, which is definitely above the 10%. That will be 6% driven by price increases, tailwind, but it still remain a very solid high single-digit volume growth. This means we are on a growth path, very successful. And the chart actually is pretty impressive, especially as you see the planning for the next years that also will be pretty strong at least in a ballpark, as indicated here in this chart. So again, you could raise the question, what did they do in detail to actually achieve this? And it's not so much rocket science. As we showed to you at the last Capital Markets Day, we started a strategy relatively simple. Where are the markets that are growing over proportionally strong? Where are the markets where I can gain better margins? And we looked at the megatrends in a changing world, and I -- don't worry, I will not go through all the megatrends on this chart, but I would like to bring your attention to the ones that are here dark highlighted -- highlighted dark. A couple of them as examples. The increasing importance of biotech, and it's obvious to each and every one, we and Gerresheimer, never had a really strong access to this market because we were so driven in thinking product by product, silo by silo. The biotech market needs a full utilization of the full portfolio and the skill set of the total company. Doing this so with the right focus on this market, we are growing very strongly, and it's one of the key drivers of our growth. I will show this in a couple of more charts later on in the presentation. The key driver of our growth is the biotech market. To the left here from my side, the increasing level of outsourcing of PharmaCos. Noncore for the PharmaCos. The cost pressure in the health care and pharma industry is pushing the PharmaCos to look for release. So they are pushing responsibility down into the value chain. A good opportunity for us to gain parts of this value chain, deliver higher-value products, expand our value chain and benefit from this. Then in the middle here, you see more self-medication and individual medicine, and Lukas will later elaborate on this topic a lot. What does it mean more self-medication, home care? You have probably a multi-morbid patient at home. The device you need for this patient needs to be very robust and very simple to use. But on the other side, it also needs to become, and be very smart because it has to communicate with the patient, with the patient aid, maybe with a doctor, with the hospital, with the payment system. And this is what we work on. That's an area where definitely we have a good opportunity. It's not the drug that will become smart. It's a device that has to carry the intelligence for the drug. And another trend some might see, others not, it's pretty interesting, and it's helpful for us, the cosmetic becomes health. All of our cosmetic customers are steadily upgrading their products in more and more higher standards, health care standards, which is fantastic for us because that's what we do for living every day. We live in the pharma health care world, and it's significantly easier for us to upgrade the products instead of some of the competitors that are not active within the pharma industry. That just as a couple of examples on this chart. So with this, I come to another chart, looks very busy. Ignore this because it's not even a fraction of the activities that we've really successfully implemented. But along with the strategy implementation, a lot of changes have to take place because the transformation of the company, an upgrade of the capability level is in the end, nothing else than successful implemented change, hopefully in the right direction. And here are a couple of examples. 2018, everyone knows we acquired the company, Sensile. It was before our time. But what we did out of this acquisition, as we build the new division advanced technology. 2019 -- and what you hear now it's really just picked examples to give you an indication of the dynamics that is going on in the company. New facility in North Macedonia for the Medical Systems, a new facility in India for plastic packaging, acquisition of the smart inhaler respimetrix. Then 2020, another capacity expansion in Pfreimd, another new facility, Changzhou, Plastic Packaging and expansion of Small Batch Production in Wackersdorf. Why is this so important? It's important because we started to focus on smaller lot size businesses with higher values. But of course, if you run the small lot size business on your highly automated, highly fancy lines, it's actually bringing your OEE down. So you have to have the capability to successfully do fast changeovers, and that's what requires a small batch production capabilities for syringes and also devices. That's what we set up in Wackersdorf. 2021, and one more time, it's just examples here, the new pump, large molecule biologic pump, SensAir, their own IP -- own IPG injector new auto-injector, Gerresheimer-owned. The expansion of the vial capacity that we injected or started in 2021. And the construction of a new plant in Kosamba, which opens the door for us in India and Asia for type 1 glass. In 2022, a couple of further examples on the direction of extension of our technology network. Acquisition of parts of portal instrument, the needle-free injector and Adamant Health, the sensor that we need for the Parkinson applications. Partnership with Merck also here, Lukas will talk about in a few minutes. The strategic partnership with Zollner to get access to the electronic capability, and Nelson Labs for all the services in the biologic. The launch of the new EZ-fill smart, another topic that Lukas will address, and expansion of the mild capacity in Morganton supported by BARDA. And another example here, the expansion of a new facility, or expanding of a facility in Berlin, Ohio for plastic packaging. So significantly dynamic in spite of one or other crisis took place and boosted the company into a different level. But it's not only internally in the company where you see change is taking place. But from my point of view, our most successful and significant change happened actually on the customer side. The way the customers actually are perceiving Gerresheimer has changed significantly. There are more and more customers that is using Gerresheimer as a one-stop shop, enjoying the highest quality standards, using the value add of our solutions and services, benefiting and giving us business with new innovation ideas, new innovational product and the flexibility we are now generating in the customization of the products. The scalability, size of the facility, the global footprint and its flexibility is something that is adding to the story. Impressive to me is that we are now perceived as a strategic partner and solution provider already today by many of our customers. Why is this relevant? And why is this important? It's relevant and important because we are now discussing on a total different level with our customers. It's not only the purchasing department we are talking to, but it's the technical department, the strategy department and the Board about strategic partnership into the future, which leads to much earlier start of our partnerships and negotiations, but it also leads to a lot of different businesses that we, I have to be honest, never had access to in the past. And something that's also very helpful, the terms and conditions that we are now negotiating and we are closing the businesses are significantly better and different to what we had in the past. So it's another busy chart. I have to drink a glass of water before I go to this. It looks a bit busy. But what we try to do here is to show you the value chain of the pharma industry. You see here the top line, the drug development process which is clearly, the PharmaCo you have there, API invention, you have, of course, the formulation, you have the drug manufacturing. Then you go over into the process like marry the whole thing with the packaging, washing and sterilization, fill and finish, the marketing and sales, and then also the whole topic of patient adherence, physician support. Then on the lower side, you have here the development of the, call it, primary packaging. From concept design, prototyping the clinical trials, visibility testing, the commercial production itself of the packaging, the washing and sterilization. If you look into the old Gerresheimer, the nice circle that we created here, this is indicating the activities that the old Gerresheimer use. Commercial production of the drug -- sorry, of the primary packaging of the product itself, and for syringes, the washing and sterilization. And that's -- that was our old activity. If you look at the changes over the loop over the last 4 years is actually pretty significant. It gets more tricky now, but just focus on the two red line bubbles or three, actually, three red line bubbles. The part of the process that we are now involved in is significantly broader. We are involved in the very early phase in concept and design phase. We are involved in prototyping, in clinical trials, stability testing, which does not mean that we are actually doing the clinical trials, but we are strongly supporting the clinical trials with stability test, documentation and, and, and. So the project and quality management, clinical, regulatory services and classic engineering and equipment line support is coming from Gerresheimer. The washing and sterilization has now expanded away from just syringes to vials, cartridges as well. And the last point is a pretty important one. The patient adherence and physician support. And here, as I indicated before, Lukas will talk about. This is the area which is absolutely key. This is the area of, for example, patients compliance. Did the patient take the drug for information? When did he actually take the drug? And how come the next level, does -- did he take enough drug? Or more complicated, did the drug actually arrive in the body? Does the medication actually have an effect on the patient? That's the important information. And then, of course, further informations, Lukas will talk about this, about the health condition, does he need to be treated? Does he need drug? How much drug does he need? Does the patient have to go into the hospital? Is he in order? And these information will come from smart devices, a very important wide area that Gerresheimer is intensively working on. So where does this bring us? Actually brings us to a strategic partner of choice for global pharma and biotech solutions, which -- and that's important, a continuous expansion of our margin because the product mix is shifting towards higher-value solutions. So the thinking, as I indicated before, goes now into we bring a drug to the patient, the containment solution with all the challenges you have in the process to bring the drug to the patient. It's cold and warm, and light and dark. It shocks as all these kinds that are covered within the various products we have in the portfolio. But then you have to come to the next area, which is we bring the drug into the patients, the drug, the device and delivery systems. It's easy to imagine because when you, for example, take the syringe because I can imagine, okay, the syringe is kind of bringing the drug into the patient. But it's significantly more within our portfolio. It could be a syringe. It could be an oral injector. It could be a pen. It could be a pump, but it also could be an inhaler. It also could be a nose spray, an eye dropper, an ear dropper, and that's all in this segment of drug to the patient. And then the digital ecosystem of digital therapy support, and I will not do the presentation of Lukas. He will not be happy if I do this, but he will do this in a few minutes from now. So with this, I come to a different point, which is kind of just explaining what we mean if we talk about high-value solutions in Gerresheimer. What we rate in high-value solutions is not just because it's a nice name. It's because it's generating a higher value to the customer, but it's also generating higher value to us because we have higher sales but also higher margin. So we conclude all products that we serve into the biologics. The biologics, we also have all the high-value vials, which could be valor, ready-to-fill, elite, the other products ready-to-fill, like syringes, for example. We have the products for the advanced technology, the pumps, but also the other own IP solutions. And we have a couple of new glass-plastic combination solutions -- complete solutions that are definitely falling into this group of high-value solutions and selected others as well. So with this, I come to another busy chart. It's a bit busy, but it's very, very interesting. And you will see this chart a couple of more times because both Lukas and also Bernd will use it. I would like to highlight your focus a little bit on the left side. What is this actually showing this chart? What we did is instead of focusing on individual products, we actually looked at individual end markets, the biopharma diagnostic markets and, of course, beauty and cosmetics. We looked at the biologics and injectables, and the other end market like diagnostics or therapies, for example ophthalmic or respiratory. If you look into the growth pattern of this market, you see that, for example, antibody on proteins, and on the very left side of the chart, the market is actually growing 5% to 10%. Cell and gene therapy is growing 30% plus. The vaccines and [ ImRNAs ] or mRNAs, actually growing by 10% plus, and the insulin by 2%. That's important because our intention was, and is to grow with the areas that are growing the best because that's where it's easy to grow. And you see our share of total sales within Gerresheimer, where we are today at 39% for this biological and injectables will grow over the loop of the next years to more than 50%. So we are growing in this segment with high-value solutions and especially the biologics. And you see here on the last line of the chart, the high-value solutions in share of amount of sales, total sales, Gerresheimer, the high-value solutions go up from 24% to 35%, very important because that's where we want to grow. The biologics grow from 14% today to 25%. And that, of course, results in a strong growth, as I already mentioned, of the injectables from 39% to more than 50%. That's why it is so important to focus on these high-value solutions and biologics and injectables. And over the loop of the next charts, I will go into detail of a special group of this, which is the biologics. Let me do a deep dive into the biologics and explain why they are a key driver for the injectables. The biologics are pretty relevant within the pharmaceutical industry. And I don't think I need to explain this to each and everyone here because I think it's common knowledge. It's the fastest-growing sector of the pharmaceutical industry. Already today, 7 out of 10 top-selling drugs in the world are biologics. But what are these biologics? What does that mean for us? And what does it mean for the primary packaging solution? You could also call this biologic large molecule formulations, the divas of the business, because on the one side, they are extremely sensitive. They're sensitive to temperature, to light, to our kind of ingredients, to metal, to the wrong surface, very sensitive. On the other side, they're pretty aggressive. They are so aggressive that they are even delaminating certain glass if you don't take the right packaging. But what does it mean? This means the demands, the challenges for the selection of the right solution is a high-value containment solution. It's a segment where the fulfillment of these demands is significantly more important than the price, which leads to better margin. So the demands in direction of the drug delivery systems are very high, which is perfect for us because we believe we have the right solutions for this. On top, of course, the services give us another area of additional opportunities to do good sales and serve the customers better than we do in the past, or did in the past. We are continuously expanding our biological solution portfolio. We have a very broad solution portfolio, and some of this you see here. You have the syringes, you have medical devices and you have the vial cartridge. I will -- this from my side, concentrate syringes and then turn over to Lukas, who will talk about vials and cartridges as well. Let's start [indiscernible] this jump into the -- in the middle of the syringe business. We have a very broad -- portfolio for high values in -- so if you take your eye on the right side here, we have the right solutions for biologics for these highly sensitive drugs. We have metal-free systems, silicon-free systems, we have all the systems that we actually need. We have the bypass dual chamber syringe, which is, by the way, a very relevant topic for GLP-1. I will come to this in a couple of minutes. We have the needle protection system here for the InnoSafe and we have the right solution for the very sensitive topic of ophthalmic, if you think about a syringe into the eyes, that's usually not something where you would like to mess up. And we have the right solution with COP syringes for the deep cold storage for new type of drugs. For example, the mRNAs and vaccines that we spoke about. So this is actually the portfolio and the solutions we can provide to the customers. That's what is actually driving our capacity, but also global expansion with the syringes and also, of course, the mix effect. And it's pretty obvious if you see this on the next chart. We will over the loop of the next years, actually double the capacity within syringes. But and that's what you see with higher value syringes. We will actually more than triple our revenues for syringes. The footprint optimization and capacity expansion is pretty significant. Today, we are primarily with some [indiscernible] we have the business in Buende with all the high-tech lines, and that's where the center of excellence is. On top on the very right side here, it Wackersdorf another center of excellence for the industrialization plus we have now established a small lot sizes, as I spoke about before in Wackersdorf, Pfreimd is the location where we have the biologic hub where we produce these [ UP ] syringes. And Skopje will be the next site as low-cost facility for the volume syringes because it's important. You have to have -- be the technical leader with innovation of solutions, in parallel, you should not forget, you have to have the right cost-efficient solutions for the volume syringes that you provide your customers in a very efficient, cost-efficient way, and we will be able to produce them profitable in Skopje. And also Querétaro, strong new site will build significant capacities for biologic syringes over the next years. And the [ fleet ] capacity for Buende which we relocated in the Skopje, you actually will also be fully utilized by biologic syringes. On top, in the discussion, that's why I'm a bit careful we disclosed this. We have kind of delayed the Asia expansion for syringes at the moment for a couple of years, looking at the global situation and the greenfield expansion in North America is something that is not finally decided, but it's on the horizon. But one more time, the capacity increase is significant. We will double the capacity and triple the revenue, confirming the strong mix shift towards higher value products. And let me come to the medical devices. You have the classic medical devices, which is own IP, the autoinjector in the middle, autoinjector that is able to deliver higher volumes, but also drugs with higher viscosity perfect for biological requirements. And of course, the pump solutions we have on the lower part here, the SenseCore, but also the SenseAir with both are very good solutions for either high volume or high viscosity or the combination of both. I will here talk about the contract manufacturing because significant business wins are done in the contract manufacturing over the loop of the last years. If you look at the contract manufacturing, where the order intake in '17, '18 was very low, the business was in a kind of downturn, and we had to turn it, which we did very successfully. We have very mature and established markets, for example, for inhalers and pens. But the contract manufacturing is what I call back in attack mode with a different focus on quality with different focus on the global footprint with a different focus on the flexibility of your customers and the need of your customers. We are now back in what I call full attack mode. We will further expand our market share with pens from 35% today to 40%, the inhalers from 40% to 50%. It's all booked business. That's not a plan, by the way. And we were not so strong in autoinjectors. We were pretty strong in pens, inhalers, and not so strong in auto injector. And we've been successful, especially here with the focus on biologics with autoinjectors. And wherein '22, we are very small, but the booked orders that we have now in the books will bring our market share very soon to 10%. And by 2028, we expect market share of roughly 20% for the auto injectors. With we are in a key position for the auto injectors and pen for GLP-1. We have very strong and stable demands and the own IP business is actually increasing in relevance day by day. The growth CapEx, and Bernd will talk about this is coming with a significantly lower risk profile, especially to the terms of conditions that we are negotiating now. So let me come to another topic of the pharma industry, which you might be able to call the next big blockbuster of the pharmaceutical industry. And a key driver of some of the growth in medical devices and also syringes for biologics. Innovating for a better life is also means fighting obesity. We bring the drug to and into the patient and the market potential of fighting obesity is seemed to be above EUR 50 billion market, by not only the packaging but for the total market as well. So it's clearly seen as the next blockbuster within the pharmaceutic industry and it's called GLP-1. Obesity is seen to be a pre-stage of diabetes. More than 650 million people worldwide suffer from obesity. We believe chronic obesity is considered a precursor of diabetes and thus in the next widespread disease, but it's not only diabetes. Obesity is associated with more than 200 possible health complications, whether it's strokes, heart attacks, kidney disease, [indiscernible] and so on. So the fighting obesity are considered absolutely, especially drugs that considered the next blockbuster of the pharma industry. But why do I tell you this most likely pretty interesting information. It's not because the market, as I indicated, is more than EUR 50 billion. It's because we, in Gerresheimer are actually extremely well positioned to serve the key winners of this GLP-1 race with our solutions, the syringes, the vials, the pens, the order injector capabilities, our close relationship and access to the key customers here and our strong and global footprint. The impact only on the contract manufacturing with some other business wins as well, is significant. Significant large business opportunities leads to expansion of global footprint, the risk return profile with limited downside risk is extremely attractive. It confirms our leading position in pens and inhalers, but now also in autoinjectors and leads to the expansion of the facilities, as you can read in this chart. It will actually boost up the sales in the contract manufacturing from 2020 to EUR 350 million to above clearly above EUR 600 million in 2028. That's why you have to ever see it because in contract manufacturing, you're always aiming for the big idle platforms. And we've been very successful over the loop of the last months and years to win and secure these platforms for Gerresheimer. And with this, actually, I'm at the end of my part of the presentation which does not mean the presentation is over. It's still some ongoing activities. Lukas, you have to warm up a little bit now. And that's because I will hand over to Lukas now, who will give us further details on the execution on the strategy, and I'm happy to be able to relax now for a couple of minutes, and you have to do work Lukas. Thank you so far for your attention.

Yes. Thank you. Thank you very much. So Dietmar started to elaborate on the execution formula. I will continue that, and I will mainly focus on three topics: first, high-value products in glass vials and cartridges second digitalization. And the last one, not least, I will give you an update on sustainability. Vials and cartridges are playing a very important role in our high-value product strategy, especially what we call RTF vials and cartridges and also elite vials are playing an important role of our growth story. And obviously, they are also crucial for our increasing market success with biologic customers. Yes, and I have good news for you today. with the EZ-fill -- EZ-fill smart platform, we basically have the best-in-class product in our hands over the last couple of years. We developed EZ-fill smart, and we filed some significant IP around it, by the way. And we launched it this year at the CPHI in Frankfurt, and we believe that it will be a very strong market success for several reasons. First, EZ-fill smart will set the market standard for RTF, vials and cartridge products because it was developed in very close collaboration with all the main fill and finish machine vendors. Second, it provides the optimal cost of total ownership to our customers, which is crucial, obviously, for the transformation from bulk to sterile vials. And first -- third, last but not least, it significantly improves the quality level that is on the market available today as the level of particulate. The load of particulate is significantly lower than any other product, which is available today in the market. Dietmar mentioned at our pharma customers and as our biologic customers, they will focus on outsourcing, they will outsource all the noncore competencies, including manufacturing to other players like [ Gerresheimer ] They will focus and invest their money on drug development. Sterile vials, cartridges and syringes. They offer a significant total cost of ownership advantage to our customers. However, it is, I think, remarkable that accept vials and cartridges, actually all primary packaging components in the pharma space have already transformed from bulk to sterile. But wires and cartridges not yet. You can see here on the chart on the left side, what happened with syringes. Syringe is about 20 years ago, have started at a very low level of sterile ranges or RTF syringes about 20%. And over the look of the next 20 years, till today, almost all syringes are now in an RTF format. With our EZ-fill smart platform, we will actively drive the market transformation also in the viral space from bulk to RTF which obviously will bring us a lot of more value and a lot growth potential over the next years. The only difference to syringes, and I think that's important to understand -- the only difference to syringes is that the vial market with about 15 billion pieces is almost 4x as big as the syringe market. So the potential is even bigger. We have successfully managed to capture the leading position in the vials market over the last two to three years by our significant capacity expansion that we did. And we are now having more than 30% of the total vial market. Together with the EZ-fill smart platform, this brings us to the perfect position to be at the forefront of the transformation from bulk to RTF vials. Conservatively, we estimate the market in 2030 to be about USD 1.2 billion. And I can guarantee you, Gerresheimer will have a significant portion of that market. And that's only the starting point because that is by far not yet the EUR 15 billion [indiscernible] market in 2030. The transformation from bulk to RTF is will go on and will give us long-term growth potential. And the trick with the RTF vials is obviously it is higher value, but also for us, much higher margin than the brown market. So what does that mean? We are significantly investing in RTF vials and cartage capacity over the next couple of years. We're actually increasing the capacity by 10x compared to 2021. We believe this will -- or we are convinced that this will not only lead to disproportionate sales growth but also at the same time, to disproportionate margin growth. We see significant potential in Europe, in the U.S. and already even in Asia. So this is one of the major growth drivers that we are moving forward with. Short term, midterm, but even long term. Now let's move to the to a second major growth driver that Dietmar already touched upon, which is the digitalization. Digitalization will be the next transformation in the health care system, databased connection between doctors, hospitals and patients will both improve therapy outcome, health outcome, how we call it here and at the same time, help to manage the exploding health care costs on a global level. If you have a look at the costs only, you can see that the costs for non adherence to therapy prescriptions globally is about USD 300 million to USD 500 billion. We believe that with digitalization, we can bring this USD 300 million to USD 500 billion down by about 10%. At the same time, digitalization will also help to reduce unnecessary hospital stays and reduce costs also with this measure. On the other side, but equally important, digitalization in health care will enable personalized drug dosing, will enable patient monitoring and will also improve the diagnostic potential that we have. And with this, we'll also increase the health outcome, therapy outcome, therapy efficacy but also the quality of life of many, many patients around the globe. Gerresheimer is committed to play a very important role on that transformation of digital health care. And because of that, we are right now setting up our Gx health care platform that you can see here. It basically has three levels: first patient adherence second, patient monitoring and third, emergency prediction and also prevention. We will connect all our products sooner or later, devices, but also primary packaging to the cloud. And with this connection, we will connect patients and doctors and hospitals. It is clear for us that we will not do this alone. We will do this with very strong partners, and I will introduce some of them during the course of my presentation. Now let's jump into business fields that we are currently developing. Respimetrix, we call it here valuable data from every single breath, yes, this is true. We are expected to go with respimetrix now in 2025 to the market. The estimated solution automatically connects COPD patients with doctors and hospitals and also with disease managers to ensure correct patient compliance. We have done intense market testing of the value of this solution. And I can tell you today, it was extremely promising. We believe, for example, that COPD caused hospital stays which, by the way, account only in the U.S. for about USD 13 billion of costs. We can reduce the COPD cost of hospital stays by 80%. On top of that, we also can help disease managers and care organizations to significantly reduce their processing costs. So this is another value that respimetrix brings. You can see the immense potential that only this digital solution has for Gerresheimer. The next important project is revolutionizing the Parkinson's treatment. We have announced to the market earlier this year that we have invested and partnered up with Adamant Health, which is the most sophisticated biomarker that is available in the Parkinson's field today. The life of Parkinson's patients today is characterized by ups and also by downs. And the biomarker of demand can actually monitor the condition of the patients throughout the day, throughout every single minute. And our personalized solution together with our pump ensure then the exactly right drug dosing at the right time to the patients via our pump. And these signals are let's say, triggered by the biomarker. What is this -- what can this be used for? This will actually lead to a significant reduction of hospital stays. Once again, here, we estimate about 20% in Germany. And also decrease significantly the side effect and symptoms. Altogether, this solution will significantly reduce the treatment cost for Parkinson for every single patient in the U.S., but also, for example, in Germany. The revenue stream of that solution will be very similar, by the way, to respimetrix that we get paid by doctors or hospitals for every connected patient a certain amount per month. So that allows us to add very high margin. And by the way, lower CapEx investments grow our top line further. And this will go to the market already in a couple of years. It's not a vision which is far out there. It's something very concrete that we are working on, and we have a very clear path to market, and this will hit our top line already in three to four years. Another important project is what we call a digital twin or can also call it track and trace, where for every single Gerresheimer product, individual parts-specific product, production and also quality data is stored on our products and can be shared via the cloud with our pharma customers. This solution will optimize some of the very costly business processes at our customers, for example, incoming inspection, goods receipt process or also the complaint handling. It has a significant value to our customers. And we are very proud that we are developing this or we are partnering up to bring this to the market also with Merck. So how can we bring all these different business fields and different initiatives together. How can we create our Gerresheimer digital health platform. As I mentioned before, we know that we cannot do everything by ourselves. So we partner up with strong partners. I mentioned a few of them, like Adamant Health. But another one on the platform side of it is Philips HealthSuite. And this has not yet been announced to the market. We have partnered up with Philips HealthSuite who already has a very established platform and is present in many, many hospitals around the globe in Europe, but also in the U.S. And there are already thousands of devices are connected via Philips HealthSuite to hospitals. So we have partnered up with Philips HealthSuite to in the end, reduce the time to market and also reduce the investment, which is necessary to bring our solutions to the market. What you can see there on the middle here is extremely important because Philips HealthSuite is providing to us the base to connect our products to the hospitals but the individual disease-specific solutions will be created by ourselves that will be added on top of the Philips HealthSuite. This gives us a significant advantage because we can use an existing platform, but we can still customize our solutions to the respective disease field or to the respective solution that we are providing to our customers. So altogether, we can say in digitalization, it will be the next growth driver for Gerresheimer. We have made huge steps forward in the last two years, and we are now to a point where we have much more certainty on the market potential on the individual business fields and we are convinced that this will drive our growth from 2025 onwards on top of all the other initiatives that we are taking. Now I come to last but not least, I'll come to give you an update on sustainability. We have already communicated our sustainability strategy to the market. But I'm very proud today to announce to you also that our efforts are rewarded in the market. For example, a couple of weeks ago, we got awarded with EcoVadis gold which has never happened to Gerresheimer before. It will put us on the top leading companies in terms of sustainability. And also customers give us a very positive feedback on our sustainability strategy. Actually, we are winning RFQs, thanks to our clear road map and commitment to ESG. So it's not something that we only do to be a good citizen, but also gives us a clear competitive advantage. And one more important message on the back of the energy crisis, many other companies are forced to invest again in oil or in LPG with a significantly higher footprint. We are not doing this -- we are sticking to our CO2 target minus 50% by 2030 and also to our CO2 reduction targets over the next years because we believe that the energy crisis actually accelerates our investment into new technologies that will make us less and less dependent on gas. And it's also obviously clear that our long-term hedge that has been communicated already gives us an absolutely competitive advantage. But this long-term hedge is also important for sustainability because it's exactly the hedge that helps us to not be enforced to invest a lot of money back into the past in the times of oil and LPG with a higher CO2 footprint. So what are the key takeaways of my presentation today. First, shift from volume to value, we will accelerate our investments into high-value products in tubular glass. This will lead to disproportionate growth, but at the same time, to a disproportionate increase of the margin in tubular glass. Second, the next big on top growth potential that we are elaborating is the digitalization. And we are on a very good track, and we have a clear path to market. And this will hit our P&L in the next years. Third, we stick to our sustainability strategy. It has strengthened our market position, our competitive position and we are seeking and still committed to the CO2 footprint reduction. Thank you very much. And with this, I will now hand over to Bernd.

Thank you, Lukas. And welcome also from my side. Today, I will talk about three topics: First, our investment program; second, our financial guardrails and third how we want to maximize shareholder value. For the investment program, I would come back to the market niches as a starting point on which basis we're actually investing. This is a slide and a brief recap from what Dietmar already said before. Dietmar illustrated based on this slide, the attractiveness of our markets where we are in and which we serve is a unique product portfolio. The core of the analysis was around biologics and injectables with an approximately growth in average of more than 10%, 10% per year. This area was, is and will be one of our core focuses of our investment program also going forward. We are leveraging on the global megatrends with investments. We are catching the wave and investing into these right niches. We are doing this with high-value solutions, capacity and regional expansion and contract manufacturing. One of our areas where we are also investing in are obviously R&D investments. To expand our innovative product portfolio, we invest around 2% to 3% of our sales per year into R&D. We innovate for a better life. We put our money where our mouth is. Not new. We followed the path of catching up the waves, which were described before with formula G over the last four years with a quite good result. What you see here is actually the EBITDA payback over the years, the development here. And what you see is that the EBITDA payback was significantly reduced over the last couple of years. What does it mean? EBITDA payback shows how long it takes to match the investments with traditional EBITDA. The underlying assumption is you invest today and you start seeing the first EBITDA contributions to a year with a delay of almost two years. The key message is our investments since we started our formula G really paid off. And you see very nicely year-by-year that we could reduce based on this formula G, our payback. For example, we started first with our CapEx in 2019. In this investment cycle from 2017 to 2019, we could reduce them based on this, our EBITDA payback from 60 to 32. We see two investments years 2019 and '20. So basically, this investment cycle 2018 to '20, we could adjust this further from 32 to 8 years. And now in the full cycle of our stewardship of our formula G program from 2019 to '21, where we had CapEx to sales ratio of 12%. We had an EBITDA payback, I expect 1 of 6 to 7 years. With the new investment cycle going forward, so '22 to '24 or '23 to '26. We expect EBITDA payback of 4 to 5 years. Quite interesting to note is that actually, if you take out the base CapEx, I'll come later to this, the real EBITDA payback of our actual initiatives and our future investment program is almost the growth CapEx is almost only three years. How it comes? It comes basically with a very rigorous and targeted capital allocation management system, which we have here at Gerresheimer. I just elaborated on this, we invest into attractive growth markets with a priority on margin, strong high-value solutions. We're doing this and apply a very rigorous and holistic capital allocation process. We look at internal rate of returns. We look at payback period and net present value. And we are continuously improving our CapEx to sales ratio with less CapEx-intense business models. What is very important, this drive for ROCE over the next couple of years of 15%. So after tax, it would be 11%. In the last couple of years, we moved slightly and get slightly better. We are now at 10.2%, something like this. And we expect in the next couple of years to steadily improve the ROCE over this year based on this targeted capital allocation model. We are doing this on the back of our CapEx formula. Which you see here. What you see here is actually our CapEx formula in real-time application. Before I showed you that we have invested in the investment cycle 2019 to 2021, 12% CapEx to sales. And you can basically split this CapEx to sales into 4 percentage points base CapEx to sustain the actual revenues, which we have and 8 percentage points in gross CapEx where you really invest into your growth opportunities. As the CapEx formula is, in the end, the demand and the formula to convert growth CapEx 1:1 into sales growth. Practical terms, if you invest 8 percentage point of sales into your company, you could expect 8 percentage points of growth. Quite remarkable. And by the way, investment cycle under formula G, the first one in full from 2019 to 2021, where we had, as mentioned before, 12%, we had a CAGR not of 8 what you should have expected 8 percentage point of growth, but in reality, one on CAGR of 11 percentage points per year. And we are convinced. We are convinced that this formula will also apply going forward with our attractive niches where we are active in. Now comes a new growth accelerator project, which we -- which I would dig into more detail -- in detail deeper later on. We got on top on our percent of CapEx to sales, unique business opportunity, which we want to capture. As Dietmar mentioned before, we won a large Eagle contract, which confirmed our leading position in both syringes and also contract manufacturing. This development is pushed by diabetes, GLP-1 and the therapeutic area of obesity. We are investing in addition, around EUR 150 million CapEx for the next two years for this unique business opportunity. On the back of this, growth opportunity and growth accelerator project, we will lift our guidance from high single-digit growth to a growth of at least 10%. What is it? What is this growth accelerator project? We cannot go in too much details for secrecy reasons. But in the end, what you see is these are new orders with a particular focus on biologics solutions. The contracts that we are talking about relates to biologics in both contract manufacturing as well as syringes. It has a very, very attractive risk return profile. It's a long-term contract. It's basically evergreen contracts behind it. It has limited downside risks, and it's also based partially at least on customer financing. The internal rate of return is beyond 20% and we will invest EUR 150 million over the next two years. Obviously, it will basically accelerate and be accretive to our EBITDA margin significantly and will be one of our steps to go into a margin range of 23 to 25 percentage points. And this also demonstrates that we really hand-picked and we had picked our strategy and handpicked our CapEx project to really be able to get into unique profitable business opportunities. Ladies and gentlemen, we should not miss this game-changing opportunity for Gerresheimer and invest into this growth accelerated projects. On the back of this, project in total, what you see is that we really put our money where our mouth is. After this investment cycle or in this investment cycle, 2023 to 2025 we invest more than 50% of our growth CapEx in high-value solutions. We invest around 25% in capacity expansion and 25% in our contract manufacturing area to execute on our record order book. What does it all mean for our profitability. Let's deep dive into high-value solutions. The share, the high-value solutions sales share of our total sales is increasing steadily from 21% to 20% and over and beyond 35%. High solutions has different various features. We explained before that this has a significant high underlying market growth. The EBITDA margin is beyond 30%. It comes with all these attractive innovative products which we have be it in the area of syringes with ready-to-fill ClearJect platform. Be it high-end syringes or our bypass dual chamber syringes. In the area of vials, it's EZ-fill smart. In Elite Glass vials and obviously, and also mentioned by Lukas before, our smart and connected devices. What have all these innovative products in common. They deliver in total a margin of more than 30%. What we should not miss and what is also important, an important feature for us, one path or one aspect is that we increase our high-value solutions and with this comes a higher EBITDA margin. We should not forget that we have also to do our homework with operational excellence and further expand our margin also in this regard. Partially, it's homework, the measures to increase the productivity. But partially, it's also areas which are quite new and where we are pretty strong. For example, this area of implementation of smart factory. We want to use the data in the factory, smarter and more intelligent. This based on prescriptive and predictive use of data up to a closed loop system, we will be able to really reduce our scrap rates and our downtimes. Also in the area of cost of non-quality, we believe that we can do better going forward and basically improve also in this regard and based on this, our bottom line. How does it elaborate now all to our new guidance? I will show you in the next slide. On the left, you see the current guidance that we have in place. On the right, I will now explore where our new guidance is heading to. With our investment program, we improving and increasing our revenue growth from high single digit revenue growth to more than at least 10%. And speeding up the revenue growth also midterm and long term, having revenue growth double digit. In the area of EBITDA guidance, we also increased our EBITDA guidance. So far, we always guided for high single-digit growth. We expect that we will be able to at least grow also 10% in 2023, at least 10% in 2023 EBITDA growth. And by the way, we should be a little bit growing faster than our sales growth. Why? Because in the long and midterm especially, we want to go to an EBITDA margin of 23% to 25%, which we are confirming. Now let's go to the guidance for the earnings per share. The midterm guidance didn't change. And also for the year 2024, we expect to have a double-digit EPS growth. In the year 2023, however, we expect this requirement that we will have a low single-digit growth in earnings per share, how comes? We have in 2022, financial expenses of around EUR 25 million for the total year. We will increase our financial expenses to EUR [ 40 ] million. Why? Very simple. The underlying interest is basically significantly went up in the last 12 months. Just for reflection, you can -- we have around gross financial debt of EUR 1.2 billion, so EUR 1.2 billion gross financial debt. And in the end, in the average, our interest went up compared to the previous year 2022 and 2023 by 100 to 200 bps. That's basically the reason why you have an increase in the interest by EUR 15 million in 2023. And therefore, we can only guide for a low single-digit growth regarding EPS. It's not surprisingly, by the way, because today, in the morning, I looked at the development of the three months [indiscernible]. It's really quite remarkable 12 months ago, it was almost minus 1 percentage points three months [indiscernible] now he is almost at 11% of plus 2%, so an increase of 3%. Now with this, I would like to come to a relevant feature as far as our funding of our investment program is concerned. We as you know, we launched promissory by loan and we successfully issuance this promissory loan and two weeks ago. And they were totally oversubscribed 2x almost over the stride. We wanted to have EUR 100 million. And actually, we got EUR 300 million with three maturities, three years, five years, seven years. What is very important and makes us really proud is that we have done this based on an investment-grade rating by our debt investors. Actually, we paid around 170 bps for our 5-year maturity. And this will basically full fund our investment program on attractive terms. Just as a side remark, our debt profile, 60% of our total financial debt is actually based on fixed rates. If you look at our target leverage, which is between 2.5 and 3.0, we should reach this by the end of 2024. We have now end of 2022, we should have around 3x leverage -- financial leverage, we should get lower of this in the end of 2024. Now I would like to come to the summary slide and bring the key concept back to your mind. We want to deliver on investment proven in front of us, which is really basically supported by a significant attractive megatrends, typically selection of attractive event opportunities. We really accelerated our Gx value generation model with our impact CapEx formula,-- base CapEx, 4% plus growth CapEx of 8% and our unique growth accelerator projects. We are maximizing our shareholder value by strict investment criteria, margin accretive investments, IRR beyond 20%, for example, in this case of growth accelerator projects where we are striving for ROCE of 15% midterm and significantly having reduced our payback period. We are doing this margin improvement basically on a much better product mix and today and operational excellence initiative in our bottom line. The whole thing, whole our activities are backed basically on a solid balance sheet and reliable business performance, which is really facilitating our growth strategy. We recently issued a promissory loan with divinding integrated rating, and we got a lot of support by the credit markets. And for this, our investment program is fully funded at attractive terms. With this, I would like to hand over back to Dietmar.

Yes. Thank you, Bernd. And don't worry, I would just sum up the summary, conclude a little bit before we finally go into the Q&A and let me go for the outlook and guidance, yes. Sum up. What does it mean? With the successful implementation, our strategy, formula G and the successful transformation of our business, we are now generating sustainable value for Gerresheimer, but we're also generating sustainable value for our stakeholders. What does it mean? The transformation, the repositioning of our business is leading to higher value. Continuous executing on our strategy, as we showed over the loop of the presentation, the strength that we are building through a very solid foundation where we've done our homework, the sizing of unique growth opportunities that are coming on top is the fact that innovation, the digitalization and sustainability are actually open new opportunities, which we are grabbing. We have a very strong value creation model. And as Bernd just indicated, we have secured the refinancing on pretty attractive terms. That is leading to, and I think there's nothing new because just Bernd showed it, and I just will reconfirm it, yes. If you look at 2023 outlook and guidance, we clearly see another double-digit year 2023 in terms of growth. The EBITDA will grow by more than 10%. It's also very clearly the goal and the adjusted earnings per share and a single year, '23 hit by a single impact as just Bernd elaborated. In the midterm, and this is clearly an upgrade to the former guidance. The revenue growth will stay in the ballpark of double-digit sales growth of the group of the whole planning period and makes us very proud. The adjusted EBITDA will move towards the indicated 23% to 25% margin and the adjusted earnings per share from '24 onwards will stay ahead of the 10%. With this, actually, we came to the end of the presentations. Thank you for your interest and after 1.75 hours, also your interest in your patience in the presentation. I wanted to say we now take 5 minutes break, but I think it's better as we are a little bit ahead of time, we take a break until 4:00 German time, and then we meet back here in a different forum together with Bernd -- Carolin, Bernd and Lukas and we are ready and looking forward to your question and answer. So far, so good. Thank you so much, and see you in a few. [Break]

All right. Welcome back to this year's Capital Markets Day and to our Q&A session. And I'm very happy that some of our analysts dialed in and that we have them, obviously, live here within the room, and I hope that everything works. For all the others, our chat tool is still open, and you're absolutely invited to submit your questions there. So let's start, and I hope that the operator can hear me right now. And please open the line for Falko Friedrichs from Deutsche Bank. Falko,very happy to have you.

Can you hear me?

Yes.

Perfect. Thank you very much for the event and all the info. So my first question is I'm trying to understand your CapEx guidance a little bit better. So on Slide 65, so I'm not understanding it correctly that over the next 3 years for '23 and '24, you plan to spend 12% plus EUR 150 million. So that comes out at about 15% to 16% of sales in '23 and '24. And then in '25 and '26, we plan to spend 12% again. That's my first question.

I would take it. I would take the question. Basically, for the next few years is correct. We -- we plan to invest 12% CapEx to sales plus how we've been over the period of 2 years. In the planning period, however, we expect in total, so we have the planning period from 2023 to 2027, we expecting the average to have a CapEx to sales ratio of around 12%, including also the investment just meant 12.5% or something like this.

Okay. Perfect.

Can I add, I don't know whether my microphone is on. I think Falko you have to see it in this way this EUR 150 million are for excellent business opportunities that are actually very accretive to the story itself. Over the loop of the planning period of the last year, in principle, nothing is changing on our base rule, which is 4% base plus growth. So over the loop of the next years, you will clearly see the growth plus 4%. As we are now guiding for double-digit growth, and we will deliver double-digit growth, that would be 10% or 11%. You can expect that the average CapEx is over the period is more in the ballpark of the 14%.

Okay. My second question is whether you can provide some kind of free cash flow outlook for 2023 and 2024? It sounds like this will be more weighted towards '24, but can you provide a bit more color here?

Yes, Falko, the -- in the end of the day, it's quite difficult to -- we don't guide for free cash flow for '23 and '24. As you know, because a lot of, let's say, variables included, especially you cannot predict precisely when you can invest what and how much customer loans to actually get. So it's quite difficult to really guide on the free cash flow. Yes, that's basically the key thing. What we expect if the plan is working. The most likely assumption is that we will be moderately negative in 2023, but then very positive in 2024 again. But again, it can be a shift from 1 year to the other. So it's really quite difficult to really pinpoint it down to precise amount today.

Okay. And then my last question is your 2023 guidance doesn't point to a lot of margin expansion, adjusted EBITDA margin expansion. Can you talk a bit more about the moving parts here and why there shouldn't be a bit more margin expansion next year?

Didn't you guide 10% plus or double-digit loss.

Yes, we -- no, indeed, as -- basically, to take -- basically, we are guiding here with -- at least 10% EBITDA growth and what we also can say is that we will grow faster with our EBITDA growth than our revenue growth. So we expect really year-by-year to really improve our EBITDA margin. And quite interesting. Just to come back also to your first question, the EBITDA growth. You have seen in the EBITDA payback how we really are able to improve our EBITDA back. So with this increment of EBITDA based on our investments and the CapEx program, this EUR 150 million, for example, or the growth CapEx now in the next 2 years, '23 and '24 will have an average an EBITDA payback of 3, 3.5 years. So very attractive projects for us.

All right. Next question comes from Oli Reinberg. Oli, can you hear us?

Can you hear me?

Yes.

Perfect. The first question would be on the EG projects. Can you just talk about when you expect the first sales contribution from these? Is this just a 2025 event? Or will this be coming earlier. Any kind of color in terms of the sales and the margin ramp here, please?

Yes. Actually, we are already benefiting from mega projects that we did win successfully in '19 and especially '20. That's expansions of Fokion of find. And these are actually the businesses that are launched this summer, ramping up now steadily, for example. So we will see clearly strong growth in the contract manufacturing this year, especially next year, but also over the loop of all the next years, then contract manufacturing were growing strongly and contribute strongly to both top but also bottom line increase.

Right. Perfect. And on the midterm guidance, generally in terms of framework, you talked about stronger EBITDA growth and top line growth. Can we also see that adjusted EPS growth if you expected to grow stronger than EBITDA on the fact that we have now done with kind onetime step-up in terms of interest cost and the tax rate should come down?

Yes, most likely, but only slightly, at least in our plan, but it should be slightly better, taking aside the year 2023, taking the next year aside, then it's accurate that we see a stronger growth in EPS and EBITDA.

Perfect. And just in terms of housekeeping, can you just put any kind of color what is the fair assumption now for clean depreciation rolls in percentage terms place, not as the percentage of sales, but how much depreciation is going to increase on average? And also, can you just provide a color on the tax rate for '23 and midterm, please?

As for the -- just to start with the tax rate, as a tax consultant, I'm always happy to talk about it. We have no you can expect with a tax rate of 25 percentage points, 26 in this ballpark and depreciation and I would always calculate between 8 and 9 percentage points of sales. And this should be basically -- if I would make the model, I would do it like that.

Okay. So just to clarify, the 25% midterm or for next year?

Basically, 26% for the next year, and then we should strive for 25% going forward beyond 2023.

Okay. And so this depreciation is it fair to assume rather 12% growth or 15% growth going forward?

It's basically -- it depends from revenues because we have the ratio here. So I would always assume you're growing with revenues and we are growing stronger then at least 10% and then you have to make a bet and you should do this in the range of 8% to 9% depreciation to sales is how we structured the as a budget.

Okay. Perfect. And if I can squeeze in last question moving away from boring financials. The growth potential synergies and while you talk about is actually quite encouraging. Can you just talk about the visibility that you have in terms of any kind of hard commitment from clients? And also how you think about the kind of pricing development in this kind of area?

Yes. I think I'll take this. It's actually always really very nice to talk about this. That's what I tried to indicate when I spoke, we are discussing on a different level with our customers now. So the contracts that we are signing now are under complete different conditions. This means they have a couple of clauses in where even in the case the business would not come. We have a very high level of protection against any downside. So the visibility that we have is many years, long years contracts with high volumes and this business are a little bit what Bernd tried to say, game changers in the business. It's not that we just doubled the capacity in syringes and 3 double sales but it also has a very positive impact on the bottom line as well. We are really moving in a different field. It's actually a similar with a new business that we are bringing in for the contract manufacturing. We always spoke about this CapEx in high values and then we -- the share of the CapEx we put into the contract manufacturing. Meanwhile, though, more and more of the so-called eagles that you heard about in the questions before, are developing in a direction where the margin profile is more and more similar to what we also achieved in the high-value products. So the businesses you might see the CapEx now, but what we're doing at the moment is really moving the company in a different ballpark of fields in both top but especially also the top line. And that's really fun what we see here.

All right. And then we take the next question by of Sven Kuerten. Sven, can you hear us?

Yes. Just 2 questions. The first one is on the contract...

I'm sorry, can you speak up speak a little bit?

Already not mute, there's some technical problem. The question is on EBITDA margin development and contract manufacturing. Can you hear me?

It's a little bit unclear here.

Can you repeat the question?

Yes. Just -- I'll send it on the chat.

All right. Thank you. I'm sorry, Sven. Then we move forward and take the next question from Oliver Metzger. Oliver, can you hear us?

Yes, I hear you very well. So good afternoon, everybody. First question is on the segment focus. So you provided a short time line to extend going with 81% and costs we expect 12%. So you haven't talked a lot about cosmetics and the related growth potential you see there. So where do you see the distribution in sales over next years? Second question is about your manufacturing footprint. Right now, you're operating 36 plants in 16 countries. I know there are some limitations of transportation of classes and also the respective technologies you offer, could you also elaborate about the potential to streamline your manufacturing footprint? And my last question is just a quick one. What do you expect on energy cost in '23 compared to '22?

I can start with cosmetic and then for sure, Lukas will take over. We have to see that there are 2 aspects that are helping our competitiveness in the cosmetic. One of them, we actually started in 2020 to move up the sustainability story. And we have a lot of customers that are -- very happy to have someone that is serving the sustainability story. We should not forget, we are the player in the world that can use the highest amount of post-consumer resides within our facilities, and that really brings business in. So that's one factor of competitiveness. The other thing is something that we have to look at. We have since end of 2021, 5 years hedge, which is very important and relevant, for example, for the motor facilities. Everyone was kind of in a certain way hedged in '22, but few of our competitors are actually hedged in '23, and we have to see how our competitiveness, how we can benefit in our competitiveness in the cosmetic business segment from '23 onwards with the strength of our hedge.

Maybe to add on that, I think our clear strategy in cosmetics is very much in line with pharma, where we add -- we go up in the segment. So from a, let's say, rather mass production segment to a higher value segment, that's what we are doing at the moment, which will help us also hear to improve and increase margins in the future. And on top of that, I think our unique position in front of the customers is that we can actually leverage our entire product portfolio, which we are only doing now is about 2 to 3 years, and we have really a big momentum as we are selling not only the all the glass, but also glass, plastic packaging, so we can really offer a solution to the customers, which others cannot and that also helps to gain additional business, by the way. We gained very profitable business in that other segments besides smaller as well on cosmetics. So this is kind of where we are in the cosmetic business segment. So very promising as well.

But do you expect the share to be higher 10% to 12% right now or at a similar level?

No, we expect it to be at a similar level growing in a similar level than in the other businesses.

Yes. The lack of if there is a reduction of share, as I showed in what this broad chart, the high-value products are going up, the [indiscernible] going up. That does not necessarily mean that the other businesses are not growing. But as we are growing very strongly and over push strong in the area of biologic and injectables, I think this is kind of shifting the share into this area. Now we always forget about -- it's also cosmetic, but we also forget about our plastics business, which is, by the way, this is where we are highly competitive. It's a very attractive business, and we are growing maybe not 10% plus, but solid mid-single digit with good margins and low CapEx, it's a pretty good and attractive business.

All right. So now I received your question, Sven. And it's about contract manufacturing and the margins. So the EBITDA margin development and contract manufacturing over the next years, this was his question, if you can elaborate on that. And the second question is, if you look at the digitalization features, do you think that we are leading there? So -- or are we close to the competition? Can you give a little bit more color on the competitive landscape?

You take the second part or -- yes. I think Lukas has had to take I could take it, but I can't take it away from Lukas. Maybe to the contract manufacturing. I think it's similar to what we see in the whole business, what Bernd tried to say, there will be a solid, strong CAGR over the loop of the next years on the top line in all businesses, and it's exactly the same in the contract manufacturing where you see -- clearly see double-digit growth on the top line over the loop of the next years. But if you look at the bottom line and the CAGR growth of the bottom line will be clearly stronger than the top line, which is exactly the right direction. And that is what we wanted in the strategy, but we now see with the businesses that are in the pockets or in the books that things become reality, and that's very important.

There on the digitalization question, yes, I absolutely believe that we are ahead of competition in that area. We started probably 4 to 5 years ago. And we should not underestimate that we really have a competitive advantage because most of our competitors, they focus on one product or the other product, but the player in the market that really serves both own devices, contract manufacturing but also primary packaging. We have here an advantage to our competitors that we can actually offer the platform that others cannot. We have focused on very specific business models, which we believe have-- has the highest value in the market. And that we believe is the key to success that they really go from the top, let's say, from a high level, really to specific business models and bring them to the market like we introduced today. So we are on track to do that with respimetrix but also in the Parkinson's field and in other fields that we have not disclosed today. So yes, we are -- as I mentioned before, we are here very confident that we are ahead here against competition, and we will see that revenue and bottom line contribution already very soon.

All right. Then we move to the next and the next question comes from Thomas Schießle. Hello. So maybe you have to unmute. If you cannot hear us, actually, we cannot hear you. I'm happy to provide you with the chat tool and that you can provide your question over the chat tool. Okay. Then we have actually some questions left in the chat, and I will move forward with these. One question comes from an investor and it's about our investments into high-value solutions. The question is as follows, if more than 50% of the growth CapEx is invested into high-value solutions, which are margin accretive, can you examine what the impact on group EBITDA margins will be? And why did not make you increase the midterm EBITDA guidance?

In the end of the day, you should not forget that we stand now at an EBITDA level, EBITDA margin level of 20% in 2022, and we steadily want to bring it to a level of 23% to 25%. And as you know, and as you always know, we never overpromise, but we really are doing this in a very let's say, realistic but very confident manner that we really can bring this margin to the table. That's basically the background. We should also not forget, we've talked about it before in the P&L line. We also need always some cushion to invest into our R&D. We should not forget this, and this is also a feature that you should take into consideration. So step by step, we come with this high-value solutions projects and products into a level and territory of 23% to 25% plus we need to do our homework, especially in the area of operational excellence to also make sure that we can here and there, improve our bottom line. And this brings us to this EBITDA margin level of 23% to 25% in a very realistic and robust way.

All right. Next question. A number of large players are expanding capacities in vial, syringes, cartridges and auto injection devices. How much of your expansion is backed by firm contracts? And how do you think about potential overcapacity in the market once all these capacities come online?

Syringes and audiences, that's easy because it's completely covered by orders, including some downside protections that are actually provided by the customers and in the contract. So it's what Bernd tried to say very protected investments. The -- it was slightly different with some of the investments we are not doing now, but we did in the past for vials, for example, cartridges. But here, we -- by the experience of the business, we clearly see the demand also long term.

You can also see the numbers of vials quarter-over-quarter that despite the reduction of COVID demand, the market is still very strong. And we can see the continuous growth that is there. So at the moment, and also into the future, we don't see an overcapacity in the market.

And you might not see this because you say, "Oh, these guys are spending a lot of CapEx." But as a matter of fact, the reputation and the customer perception. The base we are discussing with our customers now actually leads to the fact that we are in the luxury position to become more selective. So we can set the business that we are going to take which is, of course, very helpful for the conditions and then we close the deals.

All right. And then we have a rather long question from our analysts Beatrice from Berenberg, who has actually worth line. So quite a few questions on molded glass. Obviously, not a core growth area for you. But how should we think about pricing going forward? Given your strong hedge which protects your cost base, what do you expect to happen regarding competitive landscape? Are you seeing others already push prices higher than you? Do you expect this into '23? Would you rather take volume share or also raise prices and take margin? And if volume, could you give us some sense of how long it would take for pharma customers to shift from a competitor to Gerresheimer given the regulatory. Could this already contribute to strong volume growth in the first half of '23? Or would this take longer? I'm sorry, this was a question I just wanted to give you some time to think about that.

What we definitely don't do and don't have to do is to buy a volume or market share. That's not something that is our intention, and we actually are completely sold out. So that's not our intention to do about pricing. We -- there is a market pricing and we increase -- it's obviously a different customer by customer segment by segment, but I think we have a very strong market position. And can also increase pricing according to the market.

Yes right is that the regulatory in pharma does not give us too many opportunities to immediately switch back and forth in between the customers. Nevertheless, and that was referring to the question we heard earlier in the direction of cosmetics that might be different. So we have to see all the different protectors that different governments are now working on energy with gas price cap something is working. We have to see how this develops with the beginning of 2023 and then see and then we will act accordingly.

All right. I can still see Oliver Reinberg in the line, Oliver. Is there any follow-up questions from you -- from your end? Obviously, no. Yes.

Do you hear me?

Yes.

No, basically, I ask for 3 questions. On the first 1 was answered more intensively, but I also asked about the 36 plants and 16 countries. I know there are some limitations of the transportation of glass, also the differences of respective products. But could you still elaborate about the potential to streamline the overall manufacturing footprint? And the other question was on the expected energy costs in '23 versus '22?

A tricky question. I think the transport topic is not a topic. We are producing in the region for the region, serving the customers in the region, for the region, we even supply in our supply basis in the region for the region. That global footprint is kind of a natural hedge and gives us wider protection, it's the right thing to do. Streamline the facilities is something we always look at. It's not so easy in a regulated market, but you have to see it's not a one product company with a very broad portfolio that we actually have, you clearly see the need of more than one plant or on plant per region. Nevertheless, the growth that we will see over the loop of the next years will generate a total different challenge for us. It's not about reducing cost and streamlining things. It's really how can we manage the growth, how can set up the lines, how can we ideally set up the footprint and optimize the footprint. That will be core challenge of the next years. And that's exactly the problems I love to have because that's growth problems. That's my favorite challenges to face.

And don't forget, when we are not adding additional facilities and actually making the existing ones larger with the growth that also helps to improve the overhead absorption and in the end, improve the bottom line. So that's also kind of streamlining. If you make the existing plants much bigger than in the past, and that also helps, of course, but here and there, like Dietmar mentioned, for sure, there are some opportunities to streamline, and we are continuously working on that.

And the topic refers very much to the basic questions of our strategy. How can you get the company into a real growth mode? And how can you really bring the profitability level significantly up? There's no doubt, and I try to explain it. You have to do your homework. You have to have your cost under control and work on this. But the cost control, the cost cautiousness and the working on your productivity will always help and you have to do this, but this will not bring the company into a level of 23% to 25%. This EBITDA improvement will only be achieved with a mix of the product mix or the switch of the product mix. And this is the reason why the company is so strongly focused on higher-value products and higher-margin products.

Maybe Oliver to come back to your second question regarding the development of the energy cost. We have actually a long-term hedge in place and which covers the significant portion of our actual energy costs. So on this -- on the back of this, we just expect a moderate increase for the energy costs on the back of the fact that we have the majority -- much more than the majority already hedged and fixed going forward. So it's not really a thing that is really at our core of our concerns.

Okay. That's helpful.

Now we have an ESG-related question. Can you expand on your approach to decarbonization. You mentioned a hybrid solution briefly during your presentation?

Lukas?

Yes, I think we are -- the main contributor to our CO2 footprint are obviously the furnaces that we are running, not only, but it's the main one. So in all businesses, we -- or for the furnaces, we will go into 2 directions. One is certainly that we go away from the gas and will use more and more electricity. And the other one, like you mentioned, we are elaborating also the use of hydrogen for the furnaces. And then for the existing for the power consumption that we have basically in all businesses, we are focusing on renewable sources. Yes, that-- that's basically our decarbonization strategy. This has 2 main measures that I just explained.

All right. And then we have a more financial question related to Q4. Obviously, we are reporting our results in February. So nobody expects a precise answer, but maybe you can give an indication how Q4 developed?

Indeed, we release our numbers in mid of February. And expect that this trend, what you have seen now in the first 9 months is continuing as we have actually -- as they've actually predicted it and guided it for 2022. So from our side as we stand today, there are no surprises, all good.

All right. Yes. Just give me 1 second. As this is a live event, I have to read the questions upfront. This challenges me a little bit at the moment. Well, okay, with regards to your patient-based revenue model for digital solutions, for example, charging per connected patient, I understand the ultimate payer will be health insurers. They are known for being reluctant to pay for something where the benefit is not crystal clear. Have you had discussions with health insurers where you could obtain reassurance that this type of revenue model will be accepted?

Maybe this is a misunderstanding the main. I mean, there are 2 types of customers that we are looking for, for the digital business models. One is certainly the doctors and hospitals. So they will pay per connected patient because they have the benefit. In the end, they have the benefit of the reduced cost. And they then partly will gain through reimbursement, the money from the insurance. But our direct customers in the end will be mainly hospitals and doctors and in parts like respimetrix, the care organizations like this -- it's not -- the direct customer in the end is not the insurance because the beneficiary of the value of our solutions are actually the doctors and hospitals mainly and not the insurance companies.

But who's planning to pay for it. And we see this -- you have to see, it's not necessarily like in Germany, we can spend a lot of product planning to launch them in the first. Why is this the case? Because here, you have a slightly different system. You have so-called disease managers. You have call centers with 250 people, but I'm not doing anything else just calling the patients every day, asking them, did you take your drug? Is it okay? Because the pain state it pays off to make sure that the compliance or adherence of the patient is something relevant. And meanwhile, you have also opportunities that are now distributed and given out where the adherence and the control of the adherence is actually a payment method in the U.S., and that's what we are also calculating on and speculating on that we get a certain share of this.

And maybe just to add on that, I mean, we -- and I mentioned it in the presentation, but we extensively had tested the market with interviews with other types of objects. We have tested the market disease managers, but also hospitals and doctors, we check what is the value of our solution and are they ready to pay for it. And this interviews have been extremely promising and have ensured -- reassured us that we are exactly on the right track to bring this solution to the market very soon.

Can you give a bit of insight on what to expect in the Advanced Technologies segment in the next years? How much CapEx and R&D is attributed to it? And do you have any royalty target in the midterm?

Yes, I can take this question. And I think we have the business that we have -- and we can talk about with customers that we have in place are going to be launched over the loop of '23 than '24. These businesses are all more or less extremely attractive, extremely attractive in a total different ballpark of the margin and with royalties, there's no doubt about them. And they will be changing not only the top line but also the bottom line. That, by the way, is not included in the guidance today.

All right. There is 1 more question on integrated solutions. Maybe you can elaborate a little bit more on what integrated solutions are. And the question is related to additional capabilities. So do we feel comfortable with the capabilities we have in the company? Or is there still capability missing?

I feel comfortable, it's a good question. I think about one of the one boss I once had and I told him because we were very successful in achieving a goal and older we were very successful, but I'm still not satisfied and he said me that's good because if you're ever satisfied, you have to fire you. So do we have enough capabilities of the company? I'm not satisfied yet. And we are permanently adding up capabilities and further development to requirements, and that's very clear that we are working on this. The integrated solution, they can start pretty simple. If you have an auto injector, you need the cartridge, if you need the cartridge, you probably need the stoppers. And that's already an integrated system. But integrated system that we are doing is not also the integration work, all the regulation, the testing, the documentations work that we are doing in these solutions. Very good example we spoke about solutions in cosmetics, where we have a competitive advantage. I think we can talk about the new, what is this an English, the -- the dropper, the small droppers of the pet. We only be used in cosmetic only to do the molded glass portion. Now we do the droppers, where you have a tubular glass part with a plastic pump. And you actually feel this in a molded glass container. And this is an integrated solution, a simple one, but it's an integrated solution that, for example, we are able to provide. And there's not many others that can do those, this.

All right. Let me check back if there are any further open questions in the line and the conference line, please let us know. And otherwise, I would say we have been very happy to have you here in this virtual Capital Markets Day. I would love to leave some more words to Dietmar to close this event, and this is it from my end.

Yes, again, another sum up, I'm happy to do so. Actually, I have to thank you for the patience for the interest in the company. I think we are on an extremely interesting path. The next years will prove and show that our transformation is in place. And from my point of view, the development is still underestimated by the market. It's good that the customers are seeing it, though. It's a very exciting journey that we are taking, and I would be happy if you join us. And for the team here, thank you for the work I think we've done a good job so far, and I wish everyone a very good and successful rest of the week. Thank you so much.

Thank you very much.

Thank you very much. Bye-bye.