By Isabel Demetz and Marleen Kaesebier (Reuters) -German packaging and medical equipment maker Gerresheimer's will decide in the second half of the year if it should spin off its moulded glass
Gerresheimer to Make Decision on Moulded Glass Spinoff in H2
By Isabel Demetz and Marleen Kaesebier
(Reuters) -German packaging and medical equipment maker Gerresheimer's will decide in the second half of the year if it should spin off its moulded glass business, CEO Dietmar Siemssen told analysts on a conference call on Thursday.
"Our strategic review of whether, and if, a spin-off of the combined moulded glass business might make sense is ongoing," Siemssen said on the call to discuss the company's second-quarter earnings.
Gerresheimer has struggled due to ongoing low demand in the cosmetics and oral liquids markets, which led it to cut the lower end of its revenue growth forecast for 2025 for the second time in a row on Thursday, now estimating a range of 0-2% growth, down from the previous range of 1% to 2%.
Following the previous guidance cut in June, activist Asset Value Investor published an open letter in which it urged the company to take steps to improve its business. Those steps included potentially divesting its moulded glass business, a move supported by two other top-30 investors.
The moulded glass business, which produces glass packaging for the food and beverage and cosmetic industry, is considered to be reducing growth, margins and returns, analysts at JP Morgan said in a research note.
Gerresheimer also cut its mid-term guidance on Thursday, now expecting revenue growth in a range of 6-9%, down from a previous range of 8-10%, based on its outlook for 2025 and a stronger focus on cash flow, which led it to revise its investment planning.
Gerresheimer shares, which are down 29% year-to-date, fell sharply at the open, before recovering and were trading up 3% at 0835 GMT as investors digested the update.
"It depends on whether you look at the sales forecast for this year, which has been revised downwards again, or...still believe in the medium-term forecast, which is not bad at all," a German trader said.
(Reporting by Isabel Demetz and Marleen Kaesebier; Editing by Matt Scuffham and Rachna Uppal)
