Ladies and gentlemen, welcome to the earnings call SCHOTT Pharma H1 2026. 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.
Thank you very much, Viara. Good morning, everyone, and welcome to SCHOTT Pharma's earnings call for the first half of financial year 2026. My name is Tobias Erfurth, Head of Investor Relations, and I will guide you through today's session. With me on the call are our CEO, Christian Mias, and our CFO, Reinhard Mayer. As a reminder, and as announced in November 2025, Christian joined SCHOTT Pharma as new CEO on May 1st. Christian, welcome once again. We are very happy to have you with us, and together with Reinhard, you bring extensive experience and fresh perspectives to SCHOTT Pharma.
Christian will begin with a brief introduction and a business update, followed by Reinhard, who will walk you through our financial performance in more detail. After that, we will open the call for your questions. Before we begin, please take a moment to review our disclaimer. As a quick note, our financial year 2026 runs from October 1st, 2025 to September 30, 2026. So, the H1 results we are presenting today cover the period from October 1st last year to March 31st this year. I would now like to hand over to Christian. Christian, the floor is yours.
Thank you for the introduction, Tobias. Yeah, good morning, everyone. It is a pleasure to join you today for the first time as CEO of SCHOTT Pharma. I'd like to take the opportunity to briefly introduce myself before we turn to the business update. I studied in Berlin and Tokyo and received a PhD in Industrial Engineering. My professional career then started at Siemens, where I worked in M&A and project management, an experience that has shaped how I think about strategy and operational performance to this day. From there, I joined SCHOTT, where I have spent more than 18 years in leadership roles across Brazil, the U.S., and Germany. I led the tubing plant in Rio de Janeiro, restructured the American plants of Flat Glass, and headed the Lighting and Imaging division.
Most recently, I was responsible for electronic packaging, driving global performance, strategic development, and cultural change. While SCHOTT Pharma is a new chapter for me, SCHOTT itself is not. I know the culture, I know the people, and I have a deep appreciation for what this organization is capable of. I'm very much looking forward to what lies ahead and to getting to know many of you better over the coming months.
Now let's directly jump into the business update on slide five. SCHOTT Pharma delivered a resilient performance in the first half of the financial year 2026. Overall, both quarters developed in line with our expectations. Revenues for the first half reached EUR 488 million, representing growth of 2.3% at constant currencies. Growth was mainly driven by our Drug Containment Solutions segment, while Drug Delivery Systems faced temporary headwinds.
Coming in at EUR 130 million, our EBITDA remained at a high level, corresponding to a margin of 26.6%. The strong contribution from DCS largely offset the temporary pressure in DDS. Demand for high-value solutions remained robust throughout the period, with HVS increasing year-over-year by 1 percentage point to a revenue share of 56% in line with our plan. Let's now take a closer look at that. The continued growth of our high-value solutions reflects the strength of our strategy built on three pillars: innovation, capacity expansion, and long-term partnerships with the world's leading pharmaceutical companies as well as industry peers for product development. As just mentioned, HVS account for 56% of our revenues impacted by a temporary decline in DDS. The commercial logic is straightforward.
High-value solutions address specific and evolving customer needs, growing regulatory requirements, complex biologics, the trend towards home care settings, and the industry-wide shift toward ready-to-use formats for leaner and more efficient fill and finish processes. That translates into stronger pricing, better margins, and more resilient customer relationships. Shown on slide seven is the most recent example of innovations we are bringing to market. At the end of April, we announced the upcoming launch of cartriQ BioPure, which is a new sterile glass cartridge based on the new FIOLAX Pro glass for the safe storage and delivery of complex biologics also for self-injection systems. It directly addresses two of the most important trends in our industry: the ongoing growth of complex and highly sensitive biologic therapies, and the shift toward subcutaneous self-administration at home.
Detail about the product's features, however, the slide demonstrates that what looks like a simple glass container comprises a great deal of know-how and engineering that is not visible to the naked eye. These features make a big difference to customers as they solve urgent pain points such as long-term drug stability, accurate dosing, reliable integration into various self-administration devices, and plungers that provide a good balance between integrity and smooth injectability. We are planning to bring cartriQ BioPure to market by the end of 2026.
Just as we do in research and development, we also focus on high-value solutions in the expansion of our manufacturing capacities. In the reporting period, we continued to invest, particularly at our sites in Switzerland and Hungary for glass syringes and RTU cartridges to ensure we can serve the growing demand for sophisticated primary packaging also going forward. With that, I hand over to Reinhard starting on slide nine for our financial update.
Thank you, Christian, and a good day to everyone. I'm pleased to walk you through our financials for the first half of 2026 in more detail. A brief note on the chart structure in advance. The gray bar represents our Drug Containment Solutions segment, which we refer to as DCS. The blue bar represents the Drug Delivery System segment, or DDS. As Christian outlined, the first half of 2026 was resilient and developed alongside our plans. Let me start with the second quarter before turning to the half-year picture. In Q2 2026, group revenues amounted to EUR 247.9 million, which represents a flat development at constant currencies and a decline of 1.5% on a reported basis. Keep in mind that Q2 was the strongest quarter in the financial year 2025.
The actual quarter was shaped by two opposing dynamics: continued strong momentum in the DCS segment on the one hand and temporary unfavorable effects in DDS on the other. In DCS, revenues grew to EUR 149.2 million in Q2, an increase of 7.3% at constant currencies and 4.5% reported. Growth was again boosted by sterile solutions and specialty vials, consistent with the trend we saw in Q1. In DDS, revenues were at EUR 98.8 million in Q2, down 9.8% in constant currencies and 9.5% on a reported basis. This reflects two factors: continued weakness in polymer syringes and the lower glass syringe volume as anticipated. Coming to the first half-year period.
H1 group revenues amounted to EUR 488.1 million, representing an increase of 2.3% at constant currencies and 1% as reported. DCS was the driver of our revenue development. Revenues increased to EUR 286.4 million, representing an 8.3% growth at constant currencies or 5.7% on a reported basis. As discussed before, this dynamic increase was mainly due to strong demand for our high-value solutions. The DDS segment recorded revenues of EUR 201.8 million, down 5.4% at constant currencies or 4.9% as reported. As outlined, the decline mainly occurred in Q2. We expect DDS momentum to improve in the second half for both glass and polymer syringes.
Let's take a closer look at our profitability, again starting with Q2 before turning to the half year. In Q2 2026, group EBITDA amounted to EUR 64.6 million, a decline of around EUR 7 million year-over-year. This resulted in an EBITDA margin of 26% compared to 28.5% in Q 2025. Just like in revenues, we have opposing dynamics in the segments. DCS EBITDA increased to EUR 38.4 million in Q2, up 15.7% year-over-year, with the margin improving more than 2 percentage points to 25.7%. This strong growth was driven by volume and the favorable product mix towards high-value solutions. In DDS, EBITDA was at EUR 26.9 million in Q2, down 28% year-over-year, with the margin decreasing to 27.2%.
The reason for this development were a one-off inventory impairment on a customer-specific glass syringe, which was in the high single-digit million euro range. We had lower utilization in polymer syringes. Adjusted for the one-off effect, the DDS margin would have been on par with prior year. Turning to the first half-year. Group EBITDA amounted to EUR 129.8 million, broadly on last year's level, resulting in an EBITDA margin of 26.6%. In DCS, EBITDA increased 17.2% year-over-year to EUR 71.8 million, with the margin improving significantly to 25.1%. Growth was driven by volume improvements and favorable product mix effects. Particularly high-value solutions were again the main driver of margin expansion. In DDS, EBITDA came in at EUR 59.5 million, resulting in a margin of 29.5%.
As outlined, this decline mainly occurred in the second quarter, resulting from a one-off effect. There are no structural changes in DDS profitability, and we expect the margin profile to improve in the second half year. Turning to the rest of the P&L. EBIT amounted to EUR 86.5 million, 6.9% below the prior year, mainly due to the one-off inventory impairment as well as higher depreciation following our growth investments. The depreciation and amortization increased by 15% to EUR 43 million. The financial result improved by EUR 2.4 million to EUR -4.1 million, mainly due to lower interest expenses resulting from the optimization of our financing structure. Income taxes amounted to EUR 17.9 million compared to EUR 18.3 million in the prior year period.
The tax rate of 21.8% is marginally higher than last year and in line with our expectations. Overall net income amounted to EUR 64.4 million compared to EUR 68.1 million last year. This corresponds to earnings per share of EUR 0.43. Let's turn to our cash flow and investments. In the first half of 2026, cash flow from operating activities amounted to EUR 95.1 million compared with EUR 72.6 million in the prior year period. This development was primarily driven by working capital improvements, in particular, a reduction in receivables. This offsets higher inventories to support higher customer demand anticipated for the second half of 2026. Cash flow from ongoing investing activities was on last year's level at around EUR 50 million.
This reflects our continued strategic investments in capacity expansion, especially for high-value solutions in Switzerland and Hungary. Free cash flow more than doubled year-over-year to EUR 45.4 million. Based on our first half-year performance and our current visibility from a strong order book, we confirm our guidance for the full financial year 2026. We continue to expect revenue growth of 2%-5% at constant currencies and an EBITDA margin of around 27% for the full year.
In addition to our guidance, I would like to mention two further key metrics for the financial year 2026. Expect our planned CapEx to range between EUR 140 million and EUR 160 million. We are confident in achieving an HVS revenue share at prior year's level, which was a robust 57%, and we assume a tax rate consistent with the previous year at around 22%. This concludes our financial update. I will now hand it back to Tobias before we start with the Q&A session.
Thank you very much, Christian and Reinhard. We will now open the Q&A session. Viara, our operator, will assist with registration.
Ladies and gentlemen, if you would like to ask a question, please press star nine and the pound key on your telephone keypad. If you would like to cancel your question, press star three and the pound key. You can also use the dial-in function in the webcast if you would like to ask a question by phone and raise your hand to ask a question.
Okay. The first question comes from Giang Nguyen at Citi. Giang, the floor is yours.
Thanks, Tobias. Christian, nice to virtually meet you. I'm curious to see what are your impressions of the company since joining at the beginning of this month, and what do you see as the key levers to value creation for the company? More specifically, we have seen quite a fair bit of contractual changes in the last sort of one, two years as it relates to both polymer and more recently, glass syringes. What's your initial view on the outlook for the business? I have a second question for Reinhard, but I will ask after this one. Thanks.
Yeah, Giang, thank you very much for your question, and yes, nice to meet you virtually as well. Well, when it comes to my impression after the first, I have to say couple of days, I would first of all say there is nothing too spectacular. I feel that SCHOTT Pharma is a highly innovative company being well-prepared to meet the demands of the pharma industry in the future. When it comes to the structural contractual changes that you have seen at this point, I would say the changes you are referring to are specific for the one customer I think you have in mind there.
It's a situation that where we are in a positive and a cooperative discussion, and I'm I fully believe that we will have this under control on short notice. The initial view on the business itself is that as we have said earlier, I do confirm the guidance for current fiscal year and what comes with that is the expectation of a stronger second half of the year.
Thank you. Second question for Reinhard. I think in DDS specifically, excluding the inventory impairment, profitability appeared quite solid despite the underutilization related to polymer syringes. Could you talk to the driver of margin for DDS in the quarter and expectations for the remainder of the year? Follow-up is, can you confirm that the glass syringe impairment was truly a one-off topic and there's no risk in the coming quarters? Thanks.
Thank you, Giang, for your questions. Maybe I start with the last part of your question first. Yes, it is a contained impact in Q2 taken from impairments as there's not yet, let's say clarification with this one single customer. Other than that, we really have seen a good financial performance in DDS, which is, as I said, on prior years level. As said as well, we see growth momentum in both glass and polymer syringes for the second half of the year, which shall support, let's say, a strong operating profit in this segment.
Thank you.
Thank you. The next question comes from Falko Friedrichs at Deutsche Bank. Falko, please go ahead.
Thank you. Good morning. My first question is on the top line phasing of growth between the third and the fourth quarter. How much of an acceleration could we already see in the third quarter, or is this really mostly expected to happen in the fourth quarter? Secondly, do you believe that the full range, guidance range on sales growth is still in play or should we rather look at the lower half of it, considering where your first half growth landed? Lastly, could you give a little bit more color on where you stand with this one large syringe customer? Is there potentially further downside risk in terms of how much that customer orders for you? Do you have any early indication how business from that customer might shape up into 2027? That would be very helpful. Thank you.
Falko, thank you for your questions. I think I will take the first two parts and then Christian will chip in on the customer perspectives part again. Towards your question Q3 and Q4, obviously, we are not guiding by the quarter as such, though we have a second half which will be stronger. When you look to the comps, last year, third quarter was certainly at a lower growth rate than the fourth quarter. That means we will expect to see already growth showing up in the third quarter, but I'm not giving you a specific guidance. Both quarters will deliver growth to our expectation today. To the second point, that goes right into the guidance. We have the full guidance range still there. Hence we are not at the lower end.
As we have seen the growth, especially in the first half, impacted by glass syringe business and blend on the polymer, but strong in the DCS. The momentum change we are seeing also through the order book towards the second half-year is a good confidence base we have. With the one-time impact, you can see that the underlying operating profit in the second quarter is also strong. That gives us confidence that the given guidance will hold and has, so to say, the right range also for the profitability perspective. Now maybe Christian.
Yeah. Thank you, Reinhard. Regarding your third question, with that specific glass syringe customer, I said before we are in very constructive negotiations with that customer. As a matter of fact, do not see a significant downside risk. On the contrary, I see more chances than risks in the future, especially when it comes to 2027.
Okay, thank you.
Welcome. The next question comes from Olivier Calvet at UBS. Olivier, over to you.
Yes. Hi. Nice to hear you, Christian. Hi, Reinhard. I just wanted to firstly put the sort of reiteration of the full year guidance in perspective. You know, is your expectation in DDS overall still that sort of both glass and polymer are flat on a full year basis? I guess that's question one. Can you talk a little bit about the development of the order book or, you know, what gives you confidence that you're gonna grow in, you know, the second half? Thirdly, if you could come back to this one-off inventory impairment. You know, is this a specific type of syringe? Any kind of color you could give us there also in terms of, you know, when you decided an impairment was needed, just would be helpful. Thank you.
Thank you, Olivier. Well, as we have said, we expect the DDS segment to be flat over the full year. Obviously we have seen the downside. Obviously we expect a upside in the second half. Being flat means obviously flattish. It could be slightly negative, slightly positive, and that so to say, obviously in still the making. On the other side, the order book, and that's really the point, is positive, let's say driver. We have clearly better book-to-bill ratio this year. Hence, the visibility in DCS as well as DDS gives us this confidence that the aforementioned growth aspiration for the second half is there, but also the growth to come in DDS in 2027 is supported.
The growth is expected to continue in glass syringe, but as well for polymer for the years, 2027, 2028 onwards. On the glass syringe impairment, yes, it was an impairment for customer specific glass syringes, which we took in Q2 for the aforementioned reasons. No specific further risk we assume at this moment in time for any other glass syringe or other product impairments. This is a pure one-off, and I think Christian gave a little bit of a flavor that we have not yet a conclusion. Hence, this is the reason.
Okay. Thank you. Just maybe one follow-up on the order intake. Essentially there, your visibility or the book, the visibility you have, could you quantify it, maybe, you know, in months or sort of until when you have visibility?
I mean, we do not specifically give the order book value as such.
Yeah
It's several months ahead, and would even go into 2027.
That's the same across both segments?
The book-to-bill ratio is growth.
Sorry, that's the same across both segments or?
That's across both segments.
Okay. Thank you.
Welcome. The next question comes from Charles Weston at RBC, Royal Bank of Canada. Charles, please go ahead.
Hello. Thanks for taking my questions. My first is on looking at the revenue growth from a different lens in terms of the regions. The EMEIA grew 14%, but APAC and North America were both down mid-teens. I was just wondering if you could help us understand which of the drivers from a DCS, DDS perspective were the key drivers on a regional basis. You also mentioned that one customer is now over 10% of revenue that wasn't at that level in the prior year. If you could perhaps give us any color around what that might be, is it GLP for example? That would be helpful. My second question. That was kind of two. Maybe it's my third question would be on polymer.
I think I just wanted to clarify, you are expecting growth in the second half in polymer, and I think you've just said, Reinhard Mayer, that you are expecting that to grow in 2027 and 2028. We should be thinking that we're at the bottom, if I'm not mistaken. Just one last question on modeling, if I can, please. Could you give us some guidance on the D&A charge for this year and perhaps next year, given the plant openings? Thank you.
Thank you, Charles. A lot of questions, but good questions. Obviously, when we look at the growth in the regions, obviously sticks out EMEIA with 16.6% growth. That is clearly driven by the strong momentum in DCS, especially on the high value solutions offerings we have there. Whilst obviously the negative impact on North America has to do with the aforementioned glass syringe impact. The other regions are in a way following what I would call a regional tender-driven business impact. That is not to be seen as a critical point. The Americas is more towards the impact we have been talking now for two quarters about a specific glass syringe customer.
You had addressed, what do we see as a 10% customer. Yes, there is now since first half-year, one client surpassing 10% of revenue shares. This client is largely active in the GLP-1 sector. Obviously is one of our growth drivers, which we see in the glass syringe and in DDS to continue. Polymer, to your third question. Yes, I think we have been talking about polymer development. We see 2026 as the plateauing year, having, so to say, eaten through the massive decline on mRNA, having other applications, five other applications capturing that. That we foresee to be largely over in 2026. Then, let's say the positive momentum in the other applications than mRNA taking over and bringing polymer back to a growth.
Not giving you a guidance for what growth, but obviously bringing back to growth, at, let's say, a good level. Our expectation is, yes, that we see polymer to develop well in 2027, 2028, 2029 onwards. More to hear on this one towards Q4 reporting. D&A charges, obviously, I mean, the D&A charge will, let's say, continue to increase given the additional amortizations or let's say depreciations for capacities we bring online. That's following, so to say, our increased CapEx levels in 2025 and 2026. That's a trend which will continue in a way. Obviously, the point is there is a certain time frame where we see a tapering off of investments to come. That's more towards 2028, 2029, 2030.
Thank you. Just to clarify on D&A, is there any chance you could put a euro number on it or a percentage of sales or something like that for this and next year?
I will not put a euro number to it. I think if you take the numbers we have seen now so far in Q1, Q2 and take so to say a algorithm to it, you can see what will be the next half year. Obviously, we are not guiding beyond that.
Okay. Thanks very much.
Thank you, Charles. The next question comes from Christian Ehmann at Berenberg. Christian, the floor is yours.
Good morning. Thanks for taking my question. A lot of they have been as-answered so far. You singled out RTU vials. Could you give us more color on the prospects you see over there and what kind of growth we could expect over the next years coming from that one? Thank you.
Christian, thank you for your question. When it comes to RTU vials, I think we do address several needs of the pharma industry, whether that is leaner processes and better solutions and more cost-effective solution for the fill and finish process. The intention is to more and more convert our typical bulk products into RTU vials, and we see this over the upcoming years as a very significant growth driver overall.
Thank you.
Welcome. Next question comes from Sven Kürten at DZ Bank. Please go ahead.
Yes, hi. Thanks for taking my question. I have two. First one is on GLP-1. Did you receive any feedback from the customers regarding your oral weight loss indications, specifically whether on how they are already affecting sales injectable weight loss medications? The second one goes to Christian. Could you please outline the top three strategic priorities for SCHOTT Pharma, and are there any potential shift in strategy we might anticipate under your leadership? Thank you.
Yeah. Sven, I will take your first question first, when it comes to feedback regarding how oral is affecting the injectable demand for GLP-1. When it comes to our conversations with customers and our view on that market, we do see those basically two applications to develop alongside, not having a significant impact. The market growth is expected to be that strong that there are basically two separate segments developing very positively moving forward. We of course want to participate in the injectable development. When it comes to the strategy of SCHOTT Pharma, I can share with you that through the last couple of weeks I've had the opportunity to look into the strategy of the group already. Overall I feel pretty comfortable with it.
I think especially the priorities of further growing by innovation will stay one of the top priorities for the upcoming years as well as the look at cost efficiency and operational excellence. Those are two main pillars and that will remain two main pillars for our strategy moving forward. Whether let me say further adjustments or refining and improving will be necessary from my perspective right now after two weeks with SCHOTT Pharma a little early to say. I will certainly look further into that and make adjustments along the way if needed.
Okay. Thank you.
Thanks. Next question comes from Ed Hall at Stifel. Please go ahead.
Hi guys. Thank you for taking my questions. Just a couple. I think the majority have been asked. I've heard some recent reports of destocking glass syringes at least maybe very near term, with excess inventory held by pharma. Could you confirm or deny this statement as my first question?
Ed, thanks for the question. We do not see a destocking effect on glass syringes. Obviously, and this goes more to the broader base. We see a strong demand from first of all the GLP-1 trends, but also the standard demand in vaccinations. Apart from the one topic we discussed now many times on one specific account. No destocking effect we see on our side.
Okay. Perfect. That's super clear. Thank you. Then just you, I think you touched on it recently just on the mRNA polymer growth or I'm thinking for the other applications. I was wondering if you could talk through the growth you've seen for the other applications at least you've seen for this year initially, and then sort of an outlook, maybe a guidance range there. If you could be more specific, that'd be really helpful. Thanks.
Yeah. Thank you for that question. Obviously we are still in a downward trend on the mRNA side, but this one is slowing down. We talked now in the last year that we were in the high single-digit % to revenue for mRNA-based products. Today we are at mid-single-digit and obviously this trend may further bring the value down but has substantially slowed down. Then the other applications, and that's five major applications for us, amongst them aesthetics, animal health, long-acting injectables, IV or mental health. Those have high single-digit growth we have seen and obviously is on a broader base than with the mRNA. That gives us confidence, that the plateauing effect in 2026, is, I would say a solid one and then going forward we will see growth in polymer again.
Perfect. That's great. My final question is just on the GLP-1 growth you're seeing, and I'm thinking of it from a geographical perspective. Obviously, U.S. is a strong market, but we're seeing growth now in emerging markets in other regions. I was curious if you could provide some insight into where you're seeing the growth from that particular indication. Thanks.
I think one area of growth obviously comes in the, let's say, the originator growth. This is where we see the strongest growth. Obviously with some patent cliffs to come, the growth will more to be towards 2030, 2031. Obviously we have discussions there as well. Our current focus is participate in the growth of the GLP-1 originators strong. We have seen, let's say a double-digit growth in our sector. Last year we were at, let's say, higher single-digit numbers. This year, first half, we are clearly a double-digit revenue number. That shall show you that there are strong growth underneath in the GLP-1 application.
Perfect. Thank you very much, guys.
Thank you very much. The next question, or let's say it this way, it's likely the final question comes from Christopher Richardson at Jefferies. Chris, thank you very much for your patience. Please go ahead.
Hi. Thank you for taking my questions. In the annual report, you cite the IQVIA assessment that the primary packaging market grew 1%-2% in 2025, and 3% is expected in 2026. I was just wondering how this relates to your initial expectations prior to those figures for the respective years, and how do you expect to grow relative to this? Just as a second one, on the operating cash improvement receivables inflow improved, I just wanted to confirm whether any factoring was involved in that. On the liability side, there was an outflow of cash. Just wondering if there are any changing as to payment term policies or anything we should be aware of on the liability side. Thank you very much.
Christopher, thanks for your question. Obviously, as addressed in the annual report, we see this low single-digit growth in our business segment, and that's what we expect for mainly our bulk products, whether it's bulk vials, or bulk cartridges or bulk ampoules. Still, obviously, we have a very strong market-leading position in these segments and obviously participate with this underlying growth. I hope this answer now, so to say, your questions in a way. We are not specifying now how much share of our growth in 2027-2029 stems from that because it's a composition.
Obviously, we participate and expect growth as well in our bulk products. We do see growth in the bulk products already today. That's one part of DCS growth numbers for the first half-year. The second point regarding your receivable question, we are not doing factoring, so it's a true improvement versus a prior year ending level. As working capital is for me, let's say, a discipline within the finance area, we need to, let's say, contribute with cash also from a working capital side. This is something that we continue to work on.
Okay. Super. Thank you.
Thanks, Chris. It seems there are no additional questions, which brings us to the end of our today's conference call. Thank you very much, Christian. Thank you very much, Reinhard. Thanks to everybody, every participant in the call today. We look forward to seeing you at the upcoming conferences in New York, Frankfurt, and London, and our nine-month results will be published on August 12th. That's it for today. Thank you very much. Have a good day. Bye-bye.