Dear ladies and gentlemen. Welcome to the Q1 2019 conference call of Gerresheimer AG. At our customer's request, this conference will be recorded. As a reminder, all participants will be in a listen-only mode. After the presentation, there will be an opportunity to ask questions. If any participant has difficulties hearing the conference, please press star key followed by zero on your telephone for operator assistance. May I now hand you over to Severine Combe, investor relations, who will start the meeting today. Please go ahead.
Hi, everyone. Thank you very much, operator. Thank you for joining us to review our first quarter results of 2019. With me today are Dietmar Siemssen, our CEO, and Rainer Beaujean, our CFO. As we did in the past, we are presenting a set of slides to accompany our remarks on this conference call. The interim report, the slide presentation, and the press release are posted on the investor relations page of our website at gerresheimer.com/investorrelations. Please note that this call is being webcast live and will also be archived on our website. Before we start, I would like to remind you that the presentations and discussions are conducted subject to the disclaimer. We will not read the disclaimer, but propose we take it as read into the records for the purpose of this conference call.
Our agenda for today starts with the presentation by Dietmar Siemssen and Rainer Beaujean, and after that we will enter into a Q&A session. It's now my pleasure to turn the call over to Dietmar.
I start again. It's getting better. Thank you, Severine. Good afternoon, ladies and gentlemen, and good morning to those joining us from the U.S. Welcome to our Q1 2019 conference call. With me today, and actually for the last time as CFO of Gerresheimer, is Rainer Beaujean, who will cover the financials in a few seconds or more minutes. Let it be minutes. If you look into our first quarter, the short version of the message is the year has started well, and we are delivering along expectations, and we are executing our CapEx plan and are on track. Please move to slide four for some more detailed information, because the short version is probably a bit short. Slide four regarding our top line and profitability in Q1. Revenues grew by 6.3% to EUR 308.5 million.
This includes close to EUR 7 million for Sensile, which comes on top of the Q1 2018 revenues. The adjusted EBITDA stood for EUR 145.9 million. This is the sum of EUR 53.6 million from the operation, plus EUR 92.3 million of additional income. These EUR 92.3 million are linked to the contingent purchase price for Sensile after the project stopped with sc Pharma. We already discussed in our year-end conference that the purchasing price of Sensile Medical is reduced by this amount due to this effect. As a consequence and further positive side effect, the adjusted EBITDA leverage decreased to 2.4 times as of February 28th, this year. Looking into the rest of the year 2019 and also the following years 2020- 2022, we confirm our guidance and expectations. The 2019 adjusted EBITDA is updated with the before-mentioned EUR 92.3 million.
We bring our attention to the external environment of our business, there's not much change. It remains pretty stable at the beginning of the year. Worth to mention is probably the FX impact, as we in contrary to the last year, at present enjoy a slight tailwind. Let's have a look at the operations. We have to switch the charts. Let's have a look into the operations. We had a very good start into the year in Primary Packaging Glass division across all businesses. We see growth in syringes, even better than expected, which confirms that it's right to further focus on this business and extend our capacities. Primary plastic packaging also delivered a good quarter, especially in Brazil and Europe. The U.S. prescription business was lower than in Q1 2018, since the flu season in Q1 2018 was stronger and created high demand.
Nothing that worries me much, as they will catch up over the year. Business with medical plastics systems was slightly above prior year. Within the Advanced Technologies division this quarter, we have added a new startup technology in electronic and connectivity area, and are herewith able to scale up our product competencies. I will talk more about this in a few minutes. All of our growth and CapEx projects are on schedule and are laying the base for our growth and profitability improvements for the coming years. More details in the following charts. During our last conference call, I said that I absolutely saw the rationale for spending 12% of sales of CapEx in year 2019 and also in 2020. Why?
Most of these investments are directly linked to growth projects and to customer demand, or will drive productivity improvements in the short term. On this slide, we are providing you with an overview of main CapEx projects. Do not worry, I will not go into each and every detail of every sentence, it shows that a lot of things are ongoing in the company at the moment, and let me pick some examples. Increasing the capacity for new business wins, especially in inhalation and syringes. Relevant projects on the slide, for example, is the extension of Horšovský Týn, our Czech Republic facility, to host the new inhaler project, as well as the new plant we are setting up in North Macedonia. I have the next chart showing more details on this specific topic.
Another new facility is set up in Brazil to cover the increased capacity needs of South America. We invest and extend our capacities with a new furnace in Essen, line upgrades in various facilities, as well as our decoration line capacities. Improving product mix by moving up the value chain is an important point for us. For example, you see the invest in Gx InnoSafe, a safety device for syringes, or sterile, ready-to-fill products. Relevant projects on the slide you see, for example, is the second ready-to-fill line in Mexico. Other invests we have in focus are to increase the productivity, where we invest in further automation, standardization, also digitalization. Relevant projects on the slide, for example, is all the automation that we are driving in the glass business. If you look at the next slide, I have more details on actually the new plant facility in Skopje, North Macedonia.
We very clearly need more space and capacity at competitive price and cost levels for medical plastic systems and also syringes. The new facility in Skopje will address these needs. The construction work actually begins in June. The start of production is planned for the second half of 2020. We will start at the beginning with the production of medical plastic systems and later also use the plant for prefillable syringes. Why did we choose Skopje, North Macedonia? Here, we could find a good fulfillment of our requirements as good infrastructure, good cost structure, availability of well-trained personnel, and as good support we get from the authorities. Out of the different locations we have screened for the new facility, North Macedonia offers the best opportunity.
All in all, we will invest an amount of mid-double-digit million EUR and plan to have up to 400 employees in the facility in the midterm. Another important aspect was for us, the location offers enough opportunity for further growth in the following years as we need it. With the next chart, we go over to the new technology chart. You might remember during our last conference call, we talked about our new division, Advanced Technologies, how future trends will shape our industry in the future. Digitalization and electronics will pave the way for more efficient healthcare systems and user convenience and compliance.
The whole health ecosystem, you might call this like this, that is the patient, the pharma companies, the doctors or healthcare systems, will require a high degree of convenience when it comes to drug delivery, and most of all, how to use the data and getting value out of it. With the acquisition of Sensile, we started a new division, Advanced Technologies, it was always planned to add more technology into this division step by step. When it comes to more add-on, the question you have to raise is always: when do you actually invest? If you start to look at the technology or company that already has contracted customers or where devices are already sold, the valuation will become very high and the price, as a consequence, also very high. An alternative approach is to invest at a very early stage.
Here, your exposure is reduced, but of course, there's no guarantee that the concept transfers into real sales at the end. You might or we might need to buy a few of those assets to get your next Sensile Medical. We should not forget what these acquisitions are bringing beside the pure business opportunity. This is an immediate effect. It brings young, fresh, open-minded thinking into our organization. It brings the dynamic of a startup, a can-do mentality that we so urgently need in our culture in order to win in the field of smart devices. Honestly spoken, also in all other segments of our business. During the quarter, we have added another entity called Respimetrix to Advanced Technologies. It is definitely in an early stage, but highly interesting from the technology and very complementary to Advanced Technologies.
What it does, I will describe on the next slide, but essentially, we are partially funding the development on a demonstrator and the cost of clinical studies. Let's look at the next chart. I go a little bit more into detail what we just acquired. Back in February, during our earnings call, we spoke about the megatrends in the industry. Digitalization, connectivity, and electronics are of increasing relevance in the healthcare systems, supporting user-friendliness, self-medication, or also the correct use of the drug. The patient, doctors, the pharma industry, and the whole healthcare systems have a very high interest that the treatment is done correctly and also that the expected effect of the medication is reached. That requires intelligent drugs or better devices because it's significantly easier to bring the intelligence into the device, able to feel and to feedback useful information on usage. What do I talk about?
Let's assume we are able to develop an intelligent mouthpiece that, attached to an inhaler, is able to measure the flow of the breathing. What it then allows is twofold. First, it can measure if the patient has really inhaled the medication and in the correct way. Second, it can also measure if there are changes in the respiratory status of the patient. In other words, an indication that the medication is working. Of course, digitalization comes into play. The data collected has to be measured but also transferred somewhere. The solution is digitalized via a patient-centric app. It will be of valuable input for the patient, the doctors, the insurance companies, and so on to make something out of this data.
This project is, as I said, in a very early stage. We regard this as a very interesting field and a very strong complement for Gerresheimer for the future. This actually concludes the operational review of the quarter. I'm now handing over to Rainer for the financial details. Thank you so much.
Many thanks, Dietmar, and good afternoon or good morning, everybody, from my end as well. Let's start with the top-line review on slide number 11. This slide shows the revenue bridge from Q1 2018- Q1 2019 on a currency-neutral basis. This is why Q1 2018 reported revenues are first adjusted to the 2019 currency assumptions to compare apples with apples. To allow a more relevant comparison, as communicated in our year-end presentation, we also adjust Q1 2018 for the inhalation contract loss. In the first quarter of 2018, we still recorded EUR 3.1 million of revenues from this contract, which was terminated later in the year. The relevant base for our revenue commentary and our 2019 guidance on this slide is therefore EUR 289.1 million. Year-on-year revenues grew accordingly by 6.3% on a currency-neutral basis to EUR 307.4 million.
In plastics and devices, in the bottom left corner, we are giving you the revenue growth on a constant currency basis, both including and excluding the impact from the lost inhalation contract in 2018. The main revenue drivers for the growth in plastics and devices were the syringe business, where we saw a good start of the year, among others, due to the production takeoff for the contract won last year. We also saw a good performance on the plastic packaging business during the quarter. In the U.S. prescription business, the comparison was unfavorable year-on-year because Centor saw a strong flu season in Q1 2018. This is only temporary, and our current forecast shows an uptick, especially in Q4 2019, which should compensate the negative Q1 effects.
Within devices, the business grew very moderately on a like-for-like basis if one excludes the revenues generated with the lost inhalation contract in Q1 2018. Tooling revenues were slightly up year-on-year. The division Primary Packaging Glass saw strong growth over the first quarter of this year across all its business units. With injectables, cosmetics, European pharma glass, and emerging markets displayed growth year-on-year. Finally, Q1 2019 includes revenues from the Advanced Technologies division, which were nil last year, as Sensile Medical was not yet part of the group. Sensile posted revenues in the amount of EUR 6.6 million during the quarter. These were almost exclusively development revenues. Please move with me to the next slide to review our adjusted EBIT average.
Here we apply the same logic as in the precedent slides and look at the profitability drivers on a currency-neutral basis and excluding the impact from the lost inhalation contract in Q1 2018. What we will also adjust in the 2018 base for in the next quarters of 2019 will be the one-offs recorded in the course of last year with regards to the impact of the evaluation of the Triveni put option and the network charges. In Q1, there was a zero impact. When looking at the adjusted EBIT average, it is important to have in mind that it includes the EUR 92.3 million for the derecognition of liabilities.
This is why, as a whole, our adjusted EBITDA on a currency-neutral basis amounted to EUR 145.5 million in Q1 2019. On top, we already know that the dividend for the year 2019, based on our current definition of 20%-30% of adjusted net income after non-controlling interest, will increase again with a reasonable amount per share. Within plastics and devices, the revenues mix, namely the lower contribution from Centor year-on-year, was one of the main reasons for the decrease in profitability. Same for tooling, where revenues were higher year-on-year, but which is a lower margin business. Syringes and primary packaging delivered in line with expectations. Within devices, the profitability was stable to slightly up year-on-year, if one excludes the EBITDA generated with the lost inhalation contract in Q1 2018.
Within Primary Packaging Glass, the increase in profitability is directly linked to the higher volumes, higher capacity utilization, and hence, operating leverage. Within Advanced Technologies, the adjusted EBITDA development was in line with expectation, given the nature of the revenues, namely development revenues in Q1 2019 and Sensile Medical. Let's look at currency impacts on slide number 12. With small currency tailwinds in Q1 2019, EUR 1.1 million at revenue levels, EUR 0.4 million at the adjusted EBITDA level. The impact on a divisional level is detailed on the slide, and the figures are here as reported for both periods. As a reminder, the table on page 105 of our annual report outlines how we have budgeted currencies for our 2019 currency neutral guidance, and more generally, our midterm planning. Moving on to our net income bridge.
We are presenting here a net income bridge starting with Q1 2018 and showing the year-on-year variation of all main items that lead to the Q1 2019 adjusted net income. Starting with the adjusted EBITDA delta of EUR 93.3 million, which is, as said before, including the derecognition of liabilities linked to Sensile Medical. As just said on the precedent slide, the currency tailwind here was minimal. Moving on to the other blocks of the bridge. In Q1 2019, we had limited one-off items. The delta of EUR 4.5 million is linked to the high amount of one-off items in Q1 2018. The increase in amortization of a value adjustment as a result from the acquisition of Sensile Medical.
The positive delta on the finance expenses is linked to lower interest expenses in Q1 2019 compared with the same period last year, due to the redemption of our bond in May 2018. Lastly, in Q1 2018, we recorded a positive one-off in the amount of EUR 43.6 million as a consequence of the U.S. tax reform of late 2017. By the way, to be clear, the EUR 92.3 million recorded in other operating income are not taxable too. These are the main items that lead to a net income of EUR 99.3 million for Q1 2019. On an adjusted basis, the adjusted net income after non-controlling interest was higher by EUR 51.1 million in Q1 2019 compared with the same period last year. In fair share, it translates into EUR 3.48 after EUR 1.85 last year. Moving on to net debt and the free cash flow review.
On this net debt bridge, we show the contribution from operating cash flow and free cash flow. In essence, the increase in net debt since November 30th, 2018, is essentially a function of a further payment related to Sensile Medical and temporarily higher net working capital during the first quarter of this year. A technical remark, the derecognition of liabilities in the amount of EUR 93.3 million is a non-cash item. For sure, we are paying lots less than we originally planned for Sensile. Overall, it is very cash relevant. However, it is included in our operating cash flow, as you can see on the chart, according to our definition of operating cash flow. It is deducted later to calculate free cash flow. A few comments on the various items you can see on this slide.
On the cash outflow resulting from the change in net working capital since November 30th, 2018, it is primarily driven by an increase in inventory, which is quite typical in our first quarter. First, to anticipate customer demand in the next quarters, and second, to prepare the necessary stock ahead of a major furnace repair in Essen later this year. I think CapEx is pretty self-explanatory. Out of the total of EUR 70 million of cash outflow included in other on the bridge, the main positions are taxes, pensions, and interest expenses. Regarding Sensile, as confirmed during our last conference call, we have now paid a further EUR 25 million in December 2018, and therefore, during our first quarter. As a whole, net debt increased by EUR 53 million since November 28, 2018. Moving on to the next slide on our capital structure.
Most relevant commentary on the slide is the decrease of the adjusted EBITDA leverage as a function of the high adjusted EBITDA in Q1 2019. We expect leverage to remain low this year due to the EUR 92.3 million, which will be part of our covenant calculation for the next 12 months, means including Q1 2020. This helps on the revolving credit facility related interest payments. A final remark from my end, as Dietmar pointed out, it is my last conference call in Gerresheimer, and I would like to take the opportunity to thank all our investors and analysts for the regular and open dialogue for these more than six years. As some of you might know, I'm moving to ProSiebenSat.1 as CFO in a couple of months.
I'm looking forward to meeting some of you again in the future, and wish Dietmar and the rest of the Gerresheimer team lots of success for the future. I'm now handing back to Dietmar for the conclusion and outlook.
Yeah, thank you, Rainer. Back to me. As said at the outset of the call, our focus is to deliver on 2019, on the plan we outlined in February. We are fully committed and confirm our guidance for 2019. The revenue range has not changed. We have updated the adjusted EBITDA guidance for the year and take into account the many time mentioned EUR 92.3 million from the recognition of liabilities recorded in the first quarter. The indication we have given for the year 2020- 2022 remain unchanged and are outlined on this slide. Actually, I'm confident into 2019 and also into the guidance for the following years. With that in mind, I'm handing back to Severine for the Q&A sessions. Thank you so much.
Thank you very much. We're going to now enter in our Q&A sessions, the lines are now open for any questions you might have. To register for a question, you just need to press zero one on your telephone keypad. In case you want to cancel your question, you have to press zero two. We're going to just pause for a few seconds, we're going to go back to the line for Q&A. We're going to take the first question from Falko Friedrichs from Deutsche Bank.
Hello. Thanks for taking my questions. Three, please. Firstly, can you provide an update on the Sensile Medical pipeline projects, especially how the project with Sanofi is progressing? Secondly, on the Respimetrix investment, could you tell us more about the development timelines? Meaning, when could the product be ready for a market launch? Thirdly, the Primary Packaging Glass business has posted very strong growth now for a few quarters, certainly above the levels we're used to for this business. Can you tell us how much of this growth in Q1 was still related to a market rebound, or if this is actually an organic growth level that could be sustainable?
Sorry, it took me a second to push the button. I think these questions are all to me, Rainer. Yeah, the first one, Sensile, I think it's a quite relevant one. I think it's a good one, because one of the key projects that we're working on at the moment is, of course, Sanofi. This project looks very good. I think Sanofi confirmed the relevance of the project six weeks ago at one of the-- was it diabetes? Not shows, maybe not the right thing, but a big meeting with all key players. They made a press release where they spoke about this pump, the future, and the cooperation of Sanofi, Gerresheimer, and also Google that was involved there. I think the project is now fully on plan.
I cannot say too much about the start of the production, because this is something that has to come from Sanofi. I think all this project looks very nice and good, and I think I'm very optimistic about this one. Further projects within Sensile are in strong discussion at the moment. I think it's too early to disclose, to talk about them, especially the ones that were not in the pipeline when we acquired Sensile. There are a couple of very interesting projects we are actually discussing at the moment. Respimetrix, I think, as I mentioned, it's an early stage. The technology is really, really cool. We really see a lot of opportunity in there. I think it's too early to really talk about when we can expect the product launch, because I think we have to transfer this technology into a product first.
I think we have to wait for the next 12- 18 months to be able to talk about this next step. Glass, strong growth. I think I spoke about this during the road shows. Very clearly, we will bring glass back on growth track. A lot of work has been done during 2018 already by Dr. Dr. Burkhardt, the board member responsible for this area. I think it's the clear plan to further keep the momentum into glass and grow further into the next years. I don't see any reason why we wouldn't be able to do so. A lot of the CapEx you see is going into the glass facilities. It's not only all increase of capacity, it's very clearly also the transfer of the capabilities of the lines to be competitive also for the next years.
We're talking improvement of the capabilities of the lines, which in the end is also quality, but we are talking automation that leads to higher productivity, better cost structure, and better competitiveness. I hope that answers your questions.
Yes. Thanks a lot.
Okay. as far I can see, we're going to take the next question from Scott Bardo from Berenberg.
just like to follow on, please, on the glass division. we've seen some nicer growth off of a relatively weak base, you're calling out North America as being strong, that seems a little bit contrary to some of the commentary from Pfizer, which, I think is still somewhat capacity constrained at the McPherson sites, which I know you have called out as being, if you like, an impact in the past. I wonder, actually, are you expecting are we now at a more normalized level? Are you expecting some potential volatility from big customer demand in the North American market? Perhaps if you can just share some thoughts there. Following on, I think you mentioned in your Q1 report that one of the factors driving increased profitability in the glass business was not just capacity utilization, but an improvement of product quality.
I think, Dietmar, you just touched upon it there, this wasn't something I had in my memory for a reason for poor margins in the past. can you just talk about some of these quality issues and perhaps where we are now in resolving some of those? That would be helpful. just with respect to the plastics business, I appreciate lots of moving parts this quarter, a strong business for Gerresheimer has been your asthma inhalation business. I wonder if you can give us some feeling and sense, given the moving parts of that business, when you expect that to return to some sort of growth dynamic. Thank you.
Long questions. I take them step by step. They're all very good questions because I think we have good answers. I take them step by step. I pick the first one. I don't think that I wanted to say that North America is so strong in growth for glass. I think the strongest growth we see in glass is not America, it's Europe. I agree. We all know that there's one Pfizer facility that is in trouble, that clearly has certain impact on our sales, also the U.S., it's clearly overcompensated by other areas. Why is this the case? I think a lot of work has been done last year already in 2018, increasing our competitiveness, what you clearly see is that we are winning business, new business and winning market shares, especially in the areas where we have shared customers.
Our share wallets are increasing, that's what we benefit from. You also should see, some of the growth will also come, it may be linked to the second question with a stepwise increase of our value chain. With investments that we do at the moment into ready-to-fill, not only syringes, but also vials. We are upgrading our products, and we are generating more value to the customers by delivering of sterile, washed, ready-to-fill, that's the name, what it says, products. That's something where we clearly see also the opportunity to increase both sales, but also the margins. The quality issues you have to see in the following way. There's always two sets, since I see in the qualities. The one thing is what you deliver to the customer. Here, Gerresheimer is extremely strong.
How can we reach this if the capability of the process is not delivering the necessary quality, we do a sorting, which has an impact on the margin. What we need to do, that's the investments you see in the CapEx, we're improving the processes to make them better, higher visibility, as such, in the consequence, improving the quality as a whole. It's not necessarily quality towards the customer, which is very good, but it's our quality cost that will go down and will improve our profitability as a whole. I hope that this concludes the second question.
Thank you.
The third one goes towards the asthma inhalation. I think, when does it return to growth? I think it's ongoing as we talk. We have to see that one of the big inhalers that we have in the U.S., Peachtree, is now transferred into real business in Europe. The big investments we do in Horšovský Týn, in Czech Republic, is exactly for this project. No doubt, the lost contract here, you're talking about the Teva contract, which was in the end the reason for closing of Küssnacht. I think this is, from my point of view, history. We hear this a lot. I think we overcome this very clearly. The inhalation is, for us in Gerresheimer, a very important business segment. We are very strong in this regard, you will clearly see the significant growth in the near future in this regard.
Very good. Thank you very much. I obviously would like to wish Rainer all the best of success in his new role at ProSiebenSat.1. Before I let him go, I'd just like to ask him a specific financial question, please. We're seeing a lot of companies now addressing their accounts for the new IFRS 16. This doesn't seem to be something that Gerresheimer is highlighting. Can you perhaps just indicate whether you're immune to this effect or whether this is something to follow? Thank you.
Yeah, for sure. Leasing will have an impact on net financial debt going down. It won't be big for us. This is not something I would be worried about.
Have you got any sense or proportion of leasing business within the company to help us make some estimates for-
Yeah. I think EUR 40 million impact is that what we had based on the 30th of November 2018.
Okay. Thank you very much.
That means the EBITDA goes up on a certain amount, that's the situation. Yeah. It's approximately EUR 40 million we are talking about.
When will you encapsulate these accounting changes, actually? Are we waiting for the new CFO to have that pleasure? When will we know?
Yeah. No, it will happen from the December 1st, 2019.
Okay. Thank you very much.
Thank you. We're going to take the next questions from Oliver Ebel from Warburg Research.
Taking my questions. Three quick questions and one request, if I may. Firstly, in the fifth slide that you had in your presentation, you talked about this kind of major expansion projects. Can you just help me to reconcile that with the development of depreciation, which was EUR 23.2 billion, was actually bang in line with the Q1 2018 number despite this massive investments, and it was even down sequentially. Was there any kind of special effect involved, or how should we think about the development of depreciations going forward? Secondly, in terms of phasing of earnings goals for the full year, obviously, you just talked about the kind of termination of the Teva contract. I think the base effect from the earnings that you still generated last year, the toughest comps will be the second and the third quarter.
Can you just talk about how we should think about the earnings goals developing over the course of the year? The third question, you talked about one of the effects on the margin in Q1 was due to the kind of Centor business in the U.S. Was it already anticipated when you provided guidance and you said you have good visibility for Q4 recovery here? I'm a bit surprised. I thought this is more kind of spontaneous or spot business. Do you already have the orders in your book for the fourth quarter? Any color around the visibility you have here would be appreciated.
The last point, if I just may, kind of request, I find it really helpful that you give us this kind of adjustments between adjusted EBITDA and reported EBITDA, which are partly adjusting for numbers less than EUR 1 million, but the bigger EUR 93 million number is actually not adjusted for. This is obviously distorting some factors like the leverage. If you could reconsider to also adjust for these at some stage in the future, would be appreciated. Thanks so much.
I think lots of these questions are for me.
I appreciate that you don't make his life easy.
I do appreciate the earnings pictures you're actually providing. These are quite helpful.
No. Let me start with the sales and EBITDA for the next quarters, which you have to adjust for in the different quarters for the loss inhalation. As you could see, sales in Q1 was approximately EUR 3 million, adjusted EBITDA, EUR 1 million. For Q2, it will be another EUR 1 million of sales, approximately EUR 5.2 million adjusted EBITDA, as a positive effect. As a negative effect, that's one of the compensations which we had in Q3. It's approximately minus EUR 3.7 million, and the adjusted EBITDA effect in Q3 was minus EUR 5.6 million. You have a small amount in Q4. At the end of the year, we have shown there sales of approximately EUR 8 million less, and for the adjusted EBITDA overall, minus EUR 12 million. That would be the comparable figures for the different quarters in these lines.
Centor, how sure are we that what we have lost in the first quarter will come back in the last quarter? We expected this weakness already in the Q1, when we made our planning, because last year the flu season was really big. That was anticipated, and we know that the demand of our customers in these kind of businesses is pretty stable during the year. We feel pretty confident that this will come back, and that's the reason why overall it will be a different split in the different quarters, and especially Q4 will take it up like it ended in years where we had a similar situation. It will be there because the stocks are down. That's normal, the pattern which we have seen in the past, and that's the reason why we also forecast that and why we have also planned it like that.
The expansion project depreciation, here it's the normal situation. These are projects which are coming in the next years. CapEx infrastructure has a depreciation of approximately 20+ years, so you should not expect a big effect coming out of that. For sure, the depreciation starts when the assets are in place. For sure, also old assets will run out of service. Therefore, the numbers which we have given here in percentage of sales, for the model, which were approximately between 6.8%-7% during the next years, is in line with that what we have as a long-term guidance also for our CapEx, which is approximately 8% as a realistic figure. We have these two outstanding years, 2019 and 2020, with up to 12%, but thereafter, after we have done these huge CapEx investments, it should come back to a normal situation.
That's how we would like to work. The adjustment for reported EBITDA, and especially then this effect of EUR 92.3 million, is in our adjusted EBITDA included due to the clear definition which we have defined since 2013. I give you the other reason for that. Last year, similar situation for the tax change in the U.S. We also put in the EUR 44 million, also as a normal, in our adjusted net income after taxes. If you would change that every quarter, every year, you would ask me, "Why are you changing it all the time?" We keep that stable. It's in our definition, everybody can work with that.
That's the reason why I also said in our speech that you already know then that our dividends will increase next year due to the fact that it also will be EUR 92.3 million more for this theoretical dividend payout on the adjusted EBITDA and also on the net income, due to the fact that there is no tax related with it.
Great. Last follow-up, if I may. If I put together the first two ones you made in terms of the Teva compensation payments and Centor being Q4 loaded, is it fair to assume that a significant part of the full year earnings growth will be geared towards Q4?
Sorry, perhaps you can repeat the first part of your question because we couldn't hear it, perhaps due to technical problem. I don't know.
Sorry. Can you hear me now?
Yeah, now I can hear you.
Okay. I mean, if I put together the comps effects from Teva are the toughest one in Q1 to Q3, plus you expect the kind of catch up from Centor in Q4, is it fair to assume that the earnings growth in the full year is significantly geared towards Q4 this year?
Honestly, that's not the case. I would assume when we look on all these kind of numbers, that we have a good start. We already can see also that the next months are totally in line with our expectations. I wouldn't assume that everything comes in Q4. For sure, you have this effect, that you have this high compensation payment in Q2, Q3. For sure that has an effect, because that's what you have to adjust for. I would assume that the normal way of which we normally have on a seasonality is also that what will happen in 2019. No special pattern, everything is end loaded in Q4. I wouldn't assume that.
Great. Thanks so much, and all the best for your next assignment.
Thank you very much.
In the interest of time, I think we have time maybe for one or two questions more. We have somebody Sorry, we couldn't read the name. Somebody from Credit Suisse? Apologies for that. Chris?
Hi, Severine. Thank you. I assume you say no, you mean two analysts instead of two questions, because I have three questions. The first is actually.
Good try.
At least I can try. The first relates to Northern Macedonia. I was slightly surprised by the choice, to be honest, because I am not aware of any other kind of healthcare medical device company actually with manufacturing there. Could you elaborate on, particularly the labor cost levels you have there, for example, compared to Czech Republic or even to Switzerland. I think that would be interesting. Secondly, on the resin prices. Could you maybe update us on how that has been going on with passing these increased resin prices on to customers? The third question relates to the new technologies. I think the slide you had, what was it, number seven? Could you define the boundaries for these new technologies? Is it basically only for existing products, so inhalers, injectables?
Can we assume that we would go way beyond into other administration forms of medication, for example, like blistering or things like that? That would be great. Thank you.
I take the Macedonia one. Skopje. I tell you, I am now five months with the company. When I started, it was one of the locations that were investigated, and I built in my former assignments, a lot of facilities also in East Europe, and I did not consider Macedonia either. Looking at the details of the analysis actually convinced me a lot. We should not forget, it is not only the labor cost we are looking for, it is a mix of different requirements that we really have to fulfill. One of the aspects that was really important to me is the availability of trained people long-term. This means I am not only looking for a great facility for the next three, four years. We need to have a site, a low-cost site in Europe, where we, in 10 years, might be able to make another decision.
What you clearly see in a lot of locations, Europe, East Europe, which is including Romania as well, is increasing the competition with other facilities, and you do not get the people in the right amount anymore. Here in Macedonia, especially this area around Skopje, gives us great opportunity. Skopje is really extremely supportive. We will go into a specific industry zone very close to the airport that is offering us opportunities that are absolutely comparable to normal European standards, to a cost level that I would rather go into. What is it? Compared with Germany, maybe a tenth. You can say a tenth and a third of what we see in Czech Republic, for example. Swiss, I am not expert now at the moment. It should be similar to Germany, probably.
All right. Is there also a tax incentive, actually, scheme in-
We enjoy certain support coming from the government and the industry zone that is helpful, especially in the starting period. That is supportive. That, of course, completed the total package. One more time, I was not only looking for pure cost optimization. We need the additional space, the additional capacities, and we have to put it into the right areas.
Okay.
Maybe coming to the next question. Do you want to take the resin prices? The Ad-tech questions, I always push over to Rainer. I think I could do the same, but I think you can do this as well, yeah.
Yeah, let me start. Let me answer the resin prices. We can see currently stable to declining resin prices. We have pass-through clauses in place, which do have delays of up to three months. For sure, we also work with the selling price, and especially last year in some areas. Don't forget the energy cost, too, because last year we had also the energy costs, which were increasing in the second half of last year. Here we have hedged approximately more than, or approximately 65%. We believe that we are pretty well positioned for this year on resin price and energy costs, that there shouldn't be a surprise coming out of that because we have done here a good job in saving that pretty well and also asking our customers, you can say, for help, in that situation.
We renegotiated several contracts and also had the opportunity to also certainly increase, sometimes increase also our prices.
I take the third one. New tech, it's, of course, one of my favorite questions. Yeah, what are we looking at? I think what we see is the mega trends we spoke about is the increase of necessity of having intelligent drugs. Now, all of us, we know it is extremely difficult to bring the intelligence into the drug. We have to bring it into the device. If we talk device, we talk Gerresheimer. That's the area where we see potential future technologies and also the further add-ons to our advanced technology. As you spoke about blisters, that's maybe not really intelligent, and I am also not so sure whether the margins are interesting for us and accretive. I think that's actually not the areas we are, at the moment, looking into.
Okay, thank you. For that.
Dietmar, let me add, if you really want to have that, you have a look in our annual report, and here you clearly can find what we are strategically interested in on page number 101. As Dietmar said, blisters are out. Rule's there as one of the areas where we are interested in.
Okay. All the best to you, Rainer, as well, in your new challenge.
Thank you very much.
We're going to take the last questions from J.P. Morgan.
Hi, good afternoon. This is Craig McDonald from J.P. Morgan. Just two questions, please. On plastic and devices, you pulled out the new plant in Czech Republic as a drag on margin. Are you able to quantify that impact? I'm just trying to understand the underlying margin dynamics. Secondly, on Sensile, on the last quarterly call, you stated that the Parkinson's pump had received CE approval. Can you confirm whether the regulatory approval on the pump for use with the accompanying drug has now been given and whether that project is now commercialized? Thank you.
I think the most easy is the second one because it's a yes. Project is ongoing and we've got the CE approval, so it's done. I'm not fully sure I understood fully the first question. Roskirchen is not a new facility. What we are doing at the moment is we are extending the facility for this inhaler project I spoke about coming from Peachtree. I've got some support here, but you can dig in, Rainer, if you can help.
Yes. We have some temporary higher costs in Roskirchen for inhalation, especially for training and all the other stuff, and that's fully included also now with some guidance. That's what we originally said. We don't want to quantify how much it is due to the fact that it's all included in our guidance. We normally don't give segment guidances going down further to different units and different products because here, this information is sensitive due to also competing to others, again, in other projects, and therefore, we don't want to open our cost base here.
Thank you. Just to be clear on the Parkinson's pump point. Regulatory approval has now been given for the combination of the drug with the pump and that product-
No, it's out in the market. It's out in the market, it's commercialized. The product is sold in the market, everything is there. This is like it's fully done. There's nothing which is missing. Customer is selling this product in the market, and I'm sure after the small sizes which is given out in the market to test the product, he's very happy with the product, that he will make a bigger announcement later during this year. Then you also will know the name, but as you can imagine, we are not allowed to say the name up to the point that the customer is communicating that to the market. It will happen during the course of the year.
Thank you. That's clear.
I can just confirm this. Yeah, the Parkinson's pump you can buy. I hope you don't need it, but you could buy it on the market.
Thank you.
Okay, well, this will conclude our first quarter call. The next call will take place on the July 11th. If in the meantime you have any questions, you can address these to Investor Relations. Thank you. Ladies and gentlemen, thank you for your attendance. This call has been concluded. You may disconnect.