SCHOTT Pharma delivers strong third quarter results and raises FY 2024 revenue guidance

“We achieved strong results in the third quarter, in both of our segments leading to our highest ever quarterly revenues and EBITDA. Based on the first nine months results, we have increased our revenue guidance for the fiscal year 2024. Despite the challenging market environment, which we are all facing, we now expect revenue growth of 11% to 13%,” said Dr. Almuth Steinkühler, CFO of SCHOTT Pharma.

Further acceleration of growth through consistent implementation of strategy

In the third quarter of 2024, SCHOTT Pharma maintained its focus on its strategic building blocks of innovation and expansion in order to accelerate growth.

In the field of innovation, SCHOTT Pharma has introduced its new 10ml ready-to-use (RTU) cartridges as the latest addition to the cartriQ® family, designed to store highly sensitive biologics used to treat cancer, metabolic disorders, cardiovascular conditions, genetic disorders, and immunological diseases. These large-volume cartridges are compatible with devices that allow patients to self-administer drugs at home via subcutaneous self-injection, enhancing patient convenience and reducing healthcare costs. In collaboration with Ypsomed, the fully assembled system, featuring the on-body device YpsoDose, is the first prefilled and pre-loaded solution on the market, significantly reducing handling steps for patients. The new commercially available large-volume cartridges for human use are already used in first clinical trials. With this, SCHOTT Pharma is expanding its product range in line with the market trend towards subcutaneous injections and homecare solutions and is highlighting its role as a trusted partner to the pharma industry.

In addition, the company launched SCHOTT TOPPAC® Nest 160 in the third quarter, marking a major step towards sustainability and efficiency. By increasing the number of prefillable polymer syringes from 100 to 160 syringes per nest, SCHOTT Pharma allows customers to streamline their production processes, significantly reducing time and labor costs. This improved density not only enhances efficiency by up to 67% but also significantly reduces manufacturing costs, and cuts carbon footprint by 17% which contributes to a better environmental impact of the product. The reduction in waste and the optimized storage and transport options benefit not only the customers but also SCHOTT Pharma in its production. This innovation highlights the advantage of SCHOTT Pharma’s strong and longstanding customer relationships, which enable the company to understand their customers’ needs and offer tailored solutions to address current market trends and demands. Further to this significant contribution to sustainability, another clear sign is SCHOTT Pharma’s commitment to taking responsibility for climate protection in order to meet requirements of the Paris Agreement based on a roadmap for emission reduction that was validated by the Science Based Targets initiative (SBTi) for the whole SCHOTT Group. SCHOTT Pharma will fulfil the same validated targets and report its progress transparently.

All expansion projects of SCHOTT Pharma are proceeding, underscoring its commitment to addressing the high demand, especially in the Drug Delivery Systems (DDS) segment. In Germany, capacities for prefillable syringes have been increased, which are expected to support the company’s short- to mid-term growth trajectory. In Hungary, progress continues following the start of production. Customer qualifications for prefillable glass syringes are underway, with further expansion plans in development. In the U.S., planning for a new facility for prefillable syringes in North Carolina has begun, with operations expected to start in the mid-term. The construction of the new best-cost production site in Serbia has advanced significantly. The installation of machines for the new production lines is underway, marking the next step towards the start of production in early 2025.

Accelerated revenue growth due to record DDS quarter drive Q3 growth

The main driver of SCHOTT Pharma’s overall revenue growth in Q3 2024 was the strong performance of the DDS segment. Revenues were the highest quarterly result ever achieved in this segment with an increase of 39% yoy to EUR 115m at constant currencies. This was driven by the ongoing strong demand for prefillable syringes. In the first nine months of the fiscal year, the intact market dynamics and consistently high demand, which is met by the capacity expansions, led to a further increase of HVS revenue share to 53%, bringing the company closer to the mid-term target of 60%. Revenues in the Drug Containment Solutions (DCS) segment showed strong growth with an increase of 11% yoy to EUR 153m at constant currencies. This development reflects the gradual improvement in demand for vials and the ongoing growth in the other product categories.

Continued high profitability alongside investment in expansion projects

SCHOTT Pharma remained highly profitable in Q3 2024 with an overall EBITDA margin of 28.2% at constant currencies (Q3 2023: 25.1%). With an increase of 50% compared to the previous year Q3, EBITDA growth in the DDS segment accelerated even faster than the already strong revenues growth, which is remarkable especially given the ramp-up in Hungary. EBITDA in the DDS segment thus totaled EUR 43m at constant currencies, resulting in an EBITDA margin of 36.9%. EBITDA in the DCS segment amounted to EUR 34m, leading to an EBITDA margin of 22.1%, which was roughly in line with the development in revenues. The performance was temporarily impacted by underutilization in vials on the customer side and planned ramp-up costs for capacity relocations in Serbia.

For Q3 2024, the company’s profit came in at EUR 46m, resulting in 52% growth year-on-year. Ongoing investments in the first nine months of the fiscal year amounted to EUR 81m, of which the largest share were growth investments. Despite these investments, the free cash flow for the first nine months came in at EUR 68m, an increase of EUR 14m compared to the same period in fiscal year 2023. SCHOTT Pharma’s strong cash generation enabled the company to self-fund its high-growth investments.

Outlook

Based on the first nine months of the fiscal year, SCHOTT Pharma increases its full year guidance to 11% to 13% (previously 9% to 11%) revenue growth and confirms its EBITDA margin guidance at approximately prior year’s level (FY 2023: 26.6%), both at constant currencies. This takes into account a seasonally weaker fourth quarter due to the annual summer break.

The major pharma trends that SCHOTT Pharma addresses with its products remain intact as the most important growth drivers. The company consistently pursues its strategic pillars of innovation and expansion to build on these market trends which include GLP-1, mRNA, homecare, ADCs, subcutaneous administration of drugs, and the ready-to-use manufacturing transformation of pharma companies. That is why SCHOTT Pharma reiterates its mid-term outlook of organic revenue growth above 10% CAGR and an EBITDA margin in the low 30% range at constant currencies.

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Key figures Q3 2024

Key figures 9M 2024

¹The fiscal year runs from October to September. Q3 2024 therefore relates to the period from April 2024 to June 2024.
²CC = at constant currencies

Webcast

Andreas Reisse (CEO) and Dr. Almuth Steinkühler (CFO) will speak at an analyst and investor conference call at 11:00 a.m. CET on 29 August 2024 to discuss the Q3 2024 results. The audio webcast can be followed via a conference call. The accompanying presentation can also be downloaded on the IR website.

About SCHOTT Pharma

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