Good morning, ladies and gentlemen, and welcome to the SCHOTT Pharma Q1 2026 Conference Call. At this time, all participants have been placed on a listen-only mode. The floor will be open for questions following the presentation. Let me now turn the floor over to your host, Tobias Erfurth.
Thank you, Anna. Good morning, everyone, and welcome to SCHOTT Pharma's earnings call for the first quarter of financial year 2026. My name is Tobias Erfurth, Head of Investor Relations, and I will be guiding you through today's call and webcast. I'm joined by our CEO, Andreas Reisse, and our CFO, Reinhard Mayer. Andreas will start by sharing strategic and business updates, followed by Reinhard, who will present our financial performance in detail. Afterwards, we open the floor for your questions. Please take a moment to review our disclaimer. As a quick note, our financial year 2026 has started on October 1st, 2025, so the Q1 results we are presenting today cover the period from October 1st to December 31st, 2025. With that, I will hand over to our CEO, Andreas Reisse.
Thanks, Tobias. Warm welcome to everyone joining us for today's call. I'm pleased to present an overview of our strategy and recent business developments. We had a good start to the financial year 2026. The first quarter performed better than expected in terms of both revenue and earnings. Revenue for Q1 2026 increased by 4.8% at constant currencies to EUR 240 million. The stronger demand was broad-based across our portfolio, with continued high demand for our high-margin, high-value solutions, SCHOTT HVS. Our EBITDA grew significantly by 11% to EUR 65 million, resulting in a strong margin of 27.1%. This profitability improvement was mainly driven by our HVS, especially in drug containment solutions.
Overall, demand for HVS remains strong, enabling us to reach a revenue share of 57%, and that marks an increase of 2 percentage points compared to the last year, and it is consistent with the high level we achieved in financial year 2025. The key factor behind the success of our high-value solutions is our growth strategy, which is built on innovation, expansion, and trustworthy partnerships. We are seeing a continuous increase in the share of HVS, and within our total revenues reaching 57% in the first quarter, 2 percentage points higher than last year, we are well on track to reach our midterm goal of exceeding 60%. HVS products are essential for further profitable growth. They are developed to address evolving industry trends and regulatory needs, allowing us to achieve higher prices and stronger margins.
So now let me highlight some of the recent innovations, partnerships, and expansion projects. We have just launched EVERIC lyo in amber vials , an innovative solution for the safe storage of light-sensitive antibody drug conjugates, or ADCs, that need lyophilization. Amber vials is essential for today's light-sensitive biologics and some ADCs because they provide reliable protection against light-induced degradation, something clear glass simply cannot deliver. So ADCs, for example, belong to the most complex and most expensive medicines on the market, which makes protection from the very first fill-and-finish step critical. Also, we just pre-validated our new TOPPAC polymer cartridge in 3 ml and 5 ml with SHL's Maggie large volume autoinjectors. With our new polymer cartridge, we are again setting an industry benchmark. It is the first ISO-compliant sterile polymer cartridge on the market, and this unlocks new possibilities for pharma companies working with sensitive biologics.
So with highest dimensional precision, optimized geometry, and ready-to-use, it ensures maximum device compatibility while reducing process risk. This lays the foundation for the next generation of large volume subcutaneous therapies, a genuine innovation step that brings together efficiency, safety, and future readiness. Subcutaneous delivery via autoinjectors is transformative because it allows patients to self-administer treatments at home instead of spending hours in clinics. We also expand our capacities for HVS with a particular focus on large volume solutions, glass syringes, and ready-to-use cartridges at our sites in Switzerland and Hungary. With that, I'll hand over to Reinhard, who will provide you with an update on our financials for the first quarter.
Thank you, Andreas, and good morning, everyone. I'm pleased to walk you through our financials for the first quarter of financial year 2026 in more detail. As Andreas outlined, we had a positive start to the financial year. We generated revenues of EUR 240.2 million, representing growth of 3.8% year-over-year or 4.8% at constant currencies. Our Drug Containment Solutions segment, represented by the gray bar, was the main driver of the positive overall revenue development, achieving elevated growth of 9.4% at constant currencies, reaching EUR 137.2 million. This was propelled by continued strong demand for HVS products, especially for sterile cartridges and specialty vials. Drug Delivery Systems, represented by the blue bar, remained at the level of the prior year quarter at EUR 103.1 million. At constant currencies, the development was slightly negative at -0.8%.
While we saw strong demand for prefillable glass syringes, particularly for GLP-1 applications, the reduced use of mRNA vaccines continued to have a negative effect on polymer syringes. Now let's take a closer look at our bottom-line performance. The group EBITDA grew 11.1% to EUR 65.2 million, with margin expanding from 25.4% to 27.1%. Looking at the segments, DCS delivered remarkable EBITDA growth of 18.9% to EUR 33.4 million, with margins improving significantly from 21.9% to 24.3%. This was driven by volume and product mix effects. In DDS, EBITDA declined by 7.3% to EUR 32.6 million, in line with our expectations. The margin decreased from 34.1% in Q1 2025 to 31.6% in Q1 2026, primarily due to product mix effects, lower production utilization for polymer syringes, and ramp-up costs for our new glass syringe capacities in Hungary. Despite this decline, the DDS segment continues to deliver strong profitability.
EBIT grew by 9% to EUR 43.8 million, up from last year's EUR 40.2 million, driven by volume growth, contributions by equity participations, and positive foreign exchange effects. The financial result improved by EUR 1.6 million compared with Q1 2025 to EUR -1.8 million. This was mainly driven by lower interest expenses from cash pool financing as a result of an intra-group refinancing carried out in the first quarter of 2026. Income taxes increased to EUR 8.8 million, which results in an effective tax rate of 20.8%, up from 19.1% in the prior year. The rise in the tax rate is mainly driven by a change in country mix. Overall, net income reached EUR 33.3 million, up EUR 3.5 million from last year. This represents an increase of 12% year-on-year. Earnings per share amounted to EUR 0.22. And now let me take you through our cash flow and investments on the next slide.
In the first quarter of 2026, our cash flow from operating activities came in at EUR 3.4 million, significantly below prior year. This change was primarily driven by working capital, largely due to a deferred payment by a major customer at the end of the quarter. Adjusting for this effect, operating cash flow would have remained at the prior year level. The deferred payment was realized in January. Cash flow from investing activities reflected our continued strategic investments in capacity expansion, particularly for High-Value Solutions in Switzerland and Hungary. Capital expenditure was EUR 23.4 million, slightly above the prior year level. Our free cash flow amounted to EUR -20 million in the first quarter, mainly impacted by the deferred payment, as already mentioned. Despite ongoing uncertainties, we remain optimistic about the current financial year for 2026 and continue to expect revenue growth of 2%-5% at constant currencies.
We are also confirming our EBITDA margin guidance of around 27%. In addition to our guidance, I would like to mention two further key metrics for the financial year 2026. We expect our planned capital expenditure to range between EUR 140 million-EUR 160 million. We are confident in achieving an HVS revenue share at the robust 57% level, and we assume a tax rate as in the previous year, which was around 22%. This concludes now our financial update. I will now hand it back to Tobias before we start with the Q&A session.
Thank you very much, Andreas. Thank you very much, Reinhard. We are now open to the Q&A session. Anna, our operator, will assist with the registration. Anna, please go ahead.
Thank you very much. Dear ladies and gentlemen, if you would like to raise a question, please press nine and then the star key on your telephone keypad now to enter the queue. If you dialed in, please press nine star now to raise a question. If you wish to cancel your question again, please press three and then the star key, but for now, the combination is nine star. Thank you very much. A few moments for the first question, please.
Thank you, Anna. The first question comes from Giang Nguyen from Citibank. Please go ahead.
Thanks for taking my question. Hope you can hear me. I have two, please, and I'll just ask one at a time. So the first question is, you called out Q1 as better than expected, both on revenues and earnings. Can you talk to the level of confidence in the full-year outlook now following the very positive start to the year, and how do you expect revenues and margins to trend through the remaining three quarters, considering that the comps organic growth kicked in in Q2 but will ease again in the second half? And then I'll ask my second questions after.
Okay. As you said, as we have, of course, we have confirmed our guidance. So because the volatility in the market is still high, and therefore I would say we keep it as is. It's a good start, definitely, but now let's see how the rest of the year will develop. And as Reinhard has already mentioned during his speech, we are confident to achieve our guidance.
Let me just add. I mean, as we are not guiding quarter by quarter, we will not issue, let's say, specific guidances around that. And that is, so to say, the conclusion on your question.
Thank you. Then my second question is more specifically on the DCS. Very strong performance in the HVS segment again. Can you talk about your expectations for the rest of the year and whether you can say that this portion of DCS is getting maybe less lumpy or you're having better visibility on it, considering that it's now grown to nearly 25% of your DCS rather than in the teens like a couple of years ago?
My expectation is that in DCS, that HVS remains strong because it's really following our strategy, which we have defined, of course, years back, and now we have to pay back because the market is having that demand for these products, also mainly sterile solutions, which is sterile vials and cartridges, but as well as special vials, for example, for the ADCs, which I mentioned already in my speech. So we expect a higher value share, a higher share of high-value solutions in DCS for the rest of the year, definitely.
Okay. The next question comes from Olivier Calvet from UBS. Please go ahead.
Yeah. Hi. Good morning. I have one question for you, Andreas, and one for Reinhard. Maybe, Andreas, have there been any changes to demand in core DCS? I think it was up probably low single digit organically in the quarter. And also curious if the growth in the quarter in HVS DCS was more in cartridges or vials. And then maybe for you, Reinhard, so glass syringes, I think we were pretty positively surprised given your comments in December at the performance in the quarter. But just given the news flow from peers today and the deferred payment in your cash from operations, could you maybe comment on, A, maybe bill-and-hold revenue? How much does that account in your sales? And, B, controls in place to avoid the kind of issues we've seen elsewhere with revenue recognition?
Okay. Olivier, in DCS, the core segment, of course, we don't disclose precise numbers, but as always, we are expecting something like that we are growing with the market, either in the low single digit amount. And that is, as you know, it's our base business, if you want to say so. So it's okay. And then it differs a lot from region to region. But it's always the same. That's something which we had also the past years. This year, EMEA is strong, and North America is weaker. But that is more or less in line with expectation. And the main growth driver is definitely these HVS solutions.
Yeah. Within HVS, can you break out maybe if the growth was more cartridges or vials?
Cartridges, you can imagine, is, of course, one of the growth drivers at the moment due to GLP-1. There's high demand, and that is, of course, pushing the growth. But on the other hand side, it's also the smallest product group within DCS. But of course, it's growing faster. That's true.
Olivier, to your point, can you repeat the question regarding glass syringes? I didn't fully capture that. What was that?
I mean, yeah, it's more just on accounting. If you could give us a sense of the share of your revenue that might be bill-and-hold. And given the deferred payment in your cash flow, I just wanted to get a bit of comfort on the controls you have in place to avoid early revenue recognition, if you see what I mean.
Okay. Understand the question. Obviously, let me start first to say we do not have bill-and-hold arrangements at all. That is the first part. The second part, we obviously have, according to IFRS 15, some contractual assets. And we have intensively reviewed those processes back in 2025. And we have verified that together with the auditors. So I'm feeling very confident that we have a strong setup here.
Yeah. Okay. Thanks. I'll go back in the queue.
Thank you very much. The next question comes from Odysseas Manesiotis from BNP Paribas. Please go ahead.
Hi. Thanks for taking my questions. I understand you don't guide by quarter, but in Q4, you made it quite clear that Q1 would be the worst quarter of the year. We're already at the top end of your growth guide. Could you please explain why we could see a deceleration for growth from here, or at least what your guidance implies, or whether there was a particular area of weakness you were expecting in Q1, which has been postponed to another quarter?
Well, thank you, Odysseas. Well, true, we had expectation at the Q4 level that Q1 will be somewhat the weakest. Most likely, it is in revenue level, absolute numbers, the weakest. That's one thing. The other thing is, as we have highlighted, we have seen a broad-based growth in most of the segments apart from the polymer side. That was truly better than expected, carried by GLP-1, but also carried by vaccination. That is a driver. The other side is the larger impact from the in-Q4-mentioned glass syringe client will be seen more in Q2, Q3, and Q1, as it was not really visible yet in the Q1 side. We are still in negotiations. But at the time, this was a risk, which we had reflected.
Very clear. Thank you.
Welcome.
The next question comes from Charles Weston, RBC, Royal Bank of Canada. Please go ahead.
Hello. Just to clarify something you just said, you've mentioned GLP-1 as a key driver, but you also mentioned vaccinations in your last comment. Has that sort of not declined as much as expected or is still growing? And then I wanted to ask just in terms of Q1 performance. As you said in Q4, you expected Q1 to be weaker. But clearly, you were guiding this relatively late in the quarter. So can you just explain were there some very quick turn orders that sort of came in, I don't know, December that had to be actually delivered by the end of December? It seems like a very quick improvement versus what you were expecting. I have one follow-up as well. Maybe I'll stop there for a second.
Thank you, Charles, for the questions. On the first one, well, GLP-1 continues to be a growth driver for us and even very much visible in the Q1. Vaccination was also a growth driver, clearly visible in the glass syringe business, while so to say the mRNA side and polymer sees the expected decline, which we also had highlighted. So that is one topic. But the second topic, why was now at a, let's say, December communication for the Q4, the strong turn on the Q1 not visible? Well, we had actually good orders coming in, which we worked through also with additional shifts between Christmas and New Year. And those were, let's say, supplemental volumes, which we didn't see at that point in time. So it's a better momentum in the market, but not necessarily a momentum which can sustain.
That's why we remain with the framing of there's still uncertainty in the market.
Okay. Great. Well, congratulations on delivering on that. I wanted to ask on the guide as well, please. You've guided to 2%-5%. You've guided, therefore, on the range on revenue, but not on margin. Can we assume that that 27% I think you may have clarified this earlier, but can you just confirm that 27% would be at the low end, and it would therefore be exceeding 27% potentially at the higher end, depending on, I guess, product mix?
Obviously, Charles, this is a question where you will, let's say, have a political answer. In the end, we have a perspective of that the margin sustains. That's why we confirmed the margin. But we also say when we are at the lower end of the revenue level, we assume to reach a 27% EBITDA margin. A lot of it depends on the share of HVS, which we are continuously working on. And with that, I mean, I would leave my answer towards your question.
Okay. Thank you very much.
Thank you, Charles. I do not see any more people in. Oh, Olivier comes with a second question. Olivier Calvet, UBS. Please go ahead.
Yeah. Just one follow-up. On polymer syringe, particularly in non-mRNA, do you see any changes to the outlook for that business for you in the quarter or for the full year, to be more precise?
Olivier, I don't think so because we said when we had this downturn from mRNA, as you said, it will take us one, two, no, two, three years to start refilling and to see growth. And that is what's happening today with polymer is, from my point of view, it's really okay or positive, but significant changes we will see, from my point of view, not this year that will come the years after because we are working on opportunities at the moment to fill the lines. And you heard just one example, which was the polymer cartridge, which we have just introduced to the market. So these things will happen, but they will not happen immediately.
Yeah. Maybe just to be more precise, you were saying at the full year that you were expecting, basically, if I recall correctly, polymer flattish in the year with mRNA down, so the non-mRNA business offsetting that. So that was the question I was asking, is sort of the non-mRNA part, you still expect it up or to offset the losses in mRNA in 2026, right?
Yeah. That's what we said. Polymer this year will be flattish at constant currency. So that is something which is happening. Of course, we are a little bit more positive now also with the latest news about flu vaccinations and also combined flu/COVID, yeah. But I cannot comment on that because that is not completely clear and transparent to us what that means. So we have to wait for that. And then, as said, we are working on other applications to increase polymer sales in the future, but too early.
Okay. Actually, maybe on that specifically, sorry, there was news flow on that recently. Can you just also make clear if your guidance of declining mRNA revenue in 2026 does not reflect any new products coming to the market, or you do incorporate something there?
No, that's correct. The declining mRNA doesn't assume, let's say, new vaccination products to uplift. But what we say is that there is underlying growth in the other segments, whether it's long-acting injectables, surgery, mental health, aesthetics, animal health. Those are the drivers which will bring the polymer syringe business to, let's say, a flattish business performance for the full year.
Okay. Thank you. And all the best, Andreas.
Thank you. Was it already sent over to me?
No, no, no, no. We have more people online here. Thanks, Olivier. Next question comes from Stephan Wulf, ODDO BHF. Please go ahead.
Yes. Thanks. Good morning, everybody. So firstly, on the ramp-up process you are in. So my understanding is that you are currently still in a ramp-up process. Switzerland and Hungary. So could you please share your expectations with us on the incremental yield from this additional capacity in the current fiscal year? So this would be my first one. And a second one goes to a statement you did earlier, Andreas, when you mentioned the volatility in the market, which is still pretty high. And for that reason, you are not touching your guidance for the full fiscal year, which I totally understand after only the first quarter. But where is this volatility coming from? So destocking is over for already quite a while. We know that mRNA is weak. GLP-1 is stronger. So what are the main challenges in the market currently?
As I said, where is the volatility you are mentioning coming from predominantly?
Okay. I'll start with the first part. So it's the ramp-up processes in Switzerland and Hungary. In Switzerland, it's mainly today. It's mainly sterile cartridges where the demand is high and definitely demand is exceeding capacity at the moment. So that is very positive. It's really on us what we can realize. Hungary is basically two things. On the one hand side, we are still having lines in validation, for example, for glass syringes. And then, of course, the next big step is sterile cartridges where we have had groundbreaking past financial year. So these two things, they have definitely an influence on our sales so far, so good, I would say. The projects are in plan. And then I would hand over the volatility to Reinhard. Yeah?
Yeah. Stefan, thank you for that question. Well, volatility on one side, obviously, sits together with a better-than-expected, let's say, drive within the vaccination side. A part of it sits together that this one account, which has addressed syringes to reduce, has not seen the effect. We still expect that to come in the coming three quarters. So that's one element. The other element is we had a better overall vaccination glass syringe business from various different accounts across the globe. And that has obviously a momentum effect, which might be seasonal. This needs to be confirmed. So we cannot rule out that this maintains. And then the other element is we actually see good demand, even slightly better demand in Q1 on GLP-1. Is that sustainable in a competitive environment? We need to see. And those are the three main drivers.
Obviously, a good start to the year, and too early to speak about more.
Okay. Perfect. Thanks.
Welcome. Next question or another question comes from Giang Nguyen from Citibank. Please go ahead.
I have one follow-up to Reinhard, please. Earlier, you talked about a large or larger order having come through towards the back end of last year. Could I just confirm whether this is incrementally new order, or did you mean an order coming through faster that would have come later on in this fiscal year? And then my second follow-up question is, do you have any update for us on the plan for the U.S. manufacturing facility at this stage? Thank you.
Thank you, Giang. Yes, the large order was incremental to our expectations. But obviously, to be seen in the overall context and sometimes and that's why we also spoke about that in Q4, things change with larger accounts. But it was incremental in this specific one. Then to your second question, we are still in discussions internally about our capacity plans for the United States. So we cannot today give an update there. We expect soon, though. But this is an ongoing discussion. And obviously, as we are capital-sensitive and mindful about returns, many considerations need to be taken into account, especially in a volatile market. Thank you.
Thank you.
Another follow-up coming from Charles Weston, Royal Bank of Canada. Please go ahead.
Hi. Just a couple of modeling follow-ups, if I can. Should we be using the financial results and the tax rate from Q1 as a guide for the full year? And do you expect any sort of changes in working capital movements through the year? Thank you.
Thank you, Charles. Well, tax rate, I think I have outlined that we assume full-year tax rate on the same level as in the previous year, which is around 22%. We had a more positive start, which was more a country-mix effect. So slightly below the 22%, but assume the 22% for your modeling topic. The topic around financing, well, yes, assume that we will have overall lower financing cost. But can you run rate exactly the financing cost of Q1? I would not say so. But we are constantly working on optimizing our internal financing within the group. So it will be a better, so to say, result than last year, but we are not guiding on how much better. And what was the third question?
It was on working capital, any changes we should expect?
Well, in working capital, obviously, we had a peak in Q1 for the aforementioned, and I call it cut-off topic, in the accounts receivable side, which was paid in January, as mentioned. We expect working capital to come down over the course of the year with a slightly positive contribution overall to cash flow. And that means below a double digit. So let's say mid-single digit contribution from working capital to be assumed for cash flow.
Thank you.
Thank you, Charles. I do not see any more people in the queue here. So I think that's it for the moment. Thank you, everyone, for your questions and for the good discussion, of course. And before we come to the end of this call, I would like to hand over to Andreas.
Thanks. Last words.
As you all know, Christian Mias will take over as the new CEO in May. So while I will be with the company for another couple of weeks, this is definitely my last analyst call before I go into retirement after some 40 years within the SCHOTT Group. So I've been managing the pharma systems business unit, which is now SCHOTT Pharma, since 2010. And I have always enjoyed working in and for this business a lot. So we are operating in a growth market where there's much scope for shaping and building things. We are a world leader in our business. And over the past five years, we have grown our sales by an average of around 10% per year and improved our profitability by almost 7 percentage points to 28.4% past year.
However, maybe even more importantly, we are contributing to the health of billions of people around the world. This has always been a great motivation for me to drive things forward together with the SCHOTT Pharma team. I'm also very much convinced that the positive development of our company will continue under the strong leadership of Christian Mias and Reinhard Mayer. I will definitely stay tuned from the outside. Thanks a lot for your trust and take care.
Thank you, Andreas. Thank you, Reinhard. Many thanks to all the participants for taking part in our today's conference call. We look forward to seeing you at the upcoming conferences. Our half-year results will be published on May 13th. Thank you very much and goodbye. Have a good day.