Morning, ladies and gentlemen, and welcome to the Gerresheimer conference regarding the publication of the Q2 2025 results. At this time, all participants have been placed on a listen-only mode. The floor will be open for your questions following the presentation. Now, I hand over to Guido Pickert, VP of Investor Relations at Gerresheimer. Mr. Pickert?
Thank you very much. Welcome, everyone, to our Q2 H1 2025 results earnings call. Our CEO, Dietmar Siemssen , will lead you through the business development and the guidance, our CFO, Dr. Bernd Metzner, will lead you through the financials. To start with, I hand over to our CEO, Dr. Bernd Metzner.
Yeah, thank you, Guido. Good morning, everybody. Thank you for joining in. We had already given you a Q2 trading update on June 2, the day we issued our announcement adjusting our guidance for 2025. You already had a big picture about the development in the second quarter. Today, we will elaborate on the actual second quarter numbers and put some more color on the main growth drivers for the second half of the year. On a reported level, you see once again a significant increase in revenues and earnings in Q2 2025 compared to the same period last year, thanks to the consolidation of Bormioli Pharma. The acquisition of Bormioli Pharma has taken us to a completely new level in terms of revenue and adjusted EBITDA. Reported revenues grew by 19.6% to EUR 691 million, the adjusted EBITDA by 10.8% to EUR 119 million.
We also returned to revenue growth on an organic level in the second quarter as announced, but at a slower pace than previously expected. Revenues grew in Q2 2025 compared to the previous year pro forma figures of Gerresheimer and Bormioli Pharma, and they came in at 1.9%. The lower fixed cost absorption weighed on our adjusted EBITDA development and thus our margins. The adjusted EBITDA declined thus by 4.1%. In Q2, we were able to realize the shifted revenues from the syringe business. Our plastic and device division delivered robust growth as we had expected, and the order book developed positively, supporting a stronger second half of the year. However, the weakness in the cosmetic market prevailed and affected, in particular, our molded glass business.
This was compounded by a significant decline in demand for containment solutions for oral liquid medications, affecting our results in both primary packaging plastic as well as molded glass. The first half year altogether was clearly below our expectations. The second half will be stronger. We will continue to grow profitably in the course of 2025, but less or much less dynamically than previously anticipated. The return to normal operations in Morganton following the repair of the flood damage and in Lohr following the replacement of the furnace will contribute to our growth in the second half of 2025. The biggest growth drivers in the second half of the year will be the ramp-up of new lines for the successful implementation of our growth projects, and I will elaborate on this in a minute.
Also, systems and solutions for biologics and the expanded portfolio for high-value solutions will clearly contribute to our growth in the second half of the year and also the improvement of the margins. The integration of Bormioli Pharma is progressing, and we are realizing the planned synergies. Some of you, I can assure you that despite the unexpected market headwinds we are currently facing, acquiring Bormioli Pharma was exactly the right strategy move. It brought Gerresheimer to a different and new level, strengthened our market position, and opened new strategic options. We are establishing our molded glass powerhouse and adding new integrated high-value plastic solutions to our portfolio. Our strategic review of whether and if so when a spin-off of the combined molded glass business might make sense is ongoing. We expect results in the second half of the year.
Without the acquisition of Bormioli Pharma, we would not be talking about a strategic review. 2025 will be a consolidation and integration year for Gerresheimer. However, we have significantly strengthened our foundation, which will enable us to return to growth that is notably stronger than that of the overall market. What did we do when we were confronted with the disappointing developments in the second quarter? Yes, we adjusted our guidance for 2025, and the annual general meeting signed off on our proposal to cut the dividend to EUR 0.04 instead of EUR 1.25 per share. Thank you for this support here. We know that this was unexpected, but we believe that in view of the lower than expected EBITDA contribution, it was the right measure to maintain the company's financial flexibility. There are also several measures already underway to optimize processes, streamline our organization, and cut costs.
Our capital structure is robust. The bridge financing of the purchase price has been already extended by a further 12 months, and we have ample headrooms with unused credit lines. Our growth strategy remains valid, and our long-term positive outlook remains unchanged. Our transformation into a system and solution provider has made us a key partner for the global pharma and biotech industry. This positioning is a key to sustainable, profitable growth. We are already today growing strongly in system and solution for large molecule biologic, including, for example, GLP-1. We have a broad portfolio of high-value solutions that improve and will further improve our profitability. With the acquisition of Bormioli Pharma, we have expanded our product portfolio and created the basis for new integrated high-value solutions.
Given the weak first half of the year, the most pressing question, of course, is how we will achieve the necessary growth in the second half of the year to reach our guidance for 2025. We have shown you this slide already with our Q1 results. The key growth drivers in the second half of 2025 will be the return to normal operations, new ramp-ups, and a continued shift to high-value products. The return to operations refers to our plants in Lohr am Main, Germany, after the furnace exchange, and of course, Morganton in the United States after the flooding in fall 2024. The ramp-up of new production lines for medical devices refers to Skopje, North Macedonia, and Peachtree , Georgia, United States. The last two pictures you see on this slide are examples for the continuous shift to high-value products.
Our plant in Bünde has an example for high-value syringes, mainly driven by the demand for solutions for large molecule biologics, and of course, our plant in Querétaro, Mexico, as an example for ready-to-fill vials and cartridges. All of these growth drivers on this slide will contribute to our revenues and earnings in the second half of 2025 and beyond. We picked three examples: Lohr , Peachtree , and Querétaro to make this a bit more tangible. Lohr , we gave you a status update on the project in our plant in Lohr when we presented our Q1 figures. We were able to successfully complete the furnace exchange in May 2025 and have restarted the flint glass production, contributing to our growth in the second half of the year.
The new furnace, it is, by the way, the world's first oxy-hybrid furnace in this size, has a higher capacity and can be operated with up to 50% electricity. This will enable us to reduce our carbon emissions by up to 40% compared to a furnace with conventional technology. The project also included infrastructure measures for the power supply, the expansion of production buildings, new production facilities, and a new environmentally friendly cooling system. With a total investment volume of around EUR 100 million, the project in Lohr is one of Gerresheimer's largest investments in molded glass in recent years, if not ever. Investment in the latest technology is extremely important to future-proof our production and ensuring our long-term competitiveness.
Instead of just going for the bare minimum of maintenance, CapEx in Lohr, we consciously invested in top-notch energy-efficient technology, including new lines to support our high-quality standards as well as customized solutions for our customers. Peachtree , the second example of a significant growth driver for the second half of 2025 and of course the following years, is the ramp-up of our new production lines in our plant in Peachtree , Georgia. At our Peachtree City site, we produce medical devices such as inhalers, components for infusion sets, microinjectors, test cards for microbiologic tests, and also autoinjectors, which can be used in diabetes and obesity therapy, among other things. The growth project in Peachtree has been a two-stage expansion. For the first expansion stage, we have built new facilities literally right next to the existing plant.
The smaller buildings on the left of the upper picture are the original Peachtree One, you can call it Peachtree One plant. The large halls to the right are the first expansion stage. Construction is finished, and the ramp-up of the production in the new hall has already started in Q2 and will be a strong contributor to our growth in the second half of 2025. The second expansion stage, Peachtree Two, is a completely new facility, roughly 2.5 km or miles from the original plant. The qualification of the new lines in Peachtree Two will start in Q3, late Q3. First contributions from commercial productions are expected in fourth quarter 2025, more to come in 2026 and beyond. We have built the Peachtree One and Two expansions based on long-term customer contracts.
That means that the CapEx spend on the expansion was not based on hope that we would be able to utilize production capacity at some point in the future, but on actual contractual order intake. Considering the current development and tariff discussions in the United States, our principle to produce in the region for the region pays off once more, although the decision was made before and independently of these discussions. Querétaro in Mexico is one of our production facilities for tubular glass products such as vials, ampoules, cartridges, and we have recently expanded the facility to become our hub in the Americas for our syringe production. In Querétaro, we are currently setting up the first production line for EZ-fill Smart, the next-generation packaging platform for ready-to-fill vials.
EZ-fill Smart is an advanced version of the platform solution for ready-to-fill vials that offers several advantages, including environmentally-friendly sterilization with vaporized hydrogen peroxide. Until now, ethylene oxide has mostly been used for sterilization. When used with our Gerresheimer Elite vials, EZ-fill Smart significantly reduces the total cost of ownership and the risk involved in the fill and finish processes, which is a significant important aspect, especially for expensive, innovative biologics for our customers. Commercial production will start in the second half of the year, contributing to our growth and margin expansion in 2025. We are continuously increasing our share of high-value vials, including ready-to-fill Elite vials, building on a strong market position in bulk. Revenues from ready-to-fill vials have now been growing several quarters in a row. EZ-fill Smart has the potential to accelerate the market's transition to ready-to-fill vials.
At the end of 2023, ground was broken for the planned expansion in Querétaro, Mexico. Now the first new syringe-forming lines are being ramped up as part of our preparation for the qualification process. In the midterm, we will increase our production capacity for ready-to-fill syringes in the North American market by several hundred million syringes annually. The pre-fillable glass syringes manufactured here are suitable for injectable biologics, among other things. These include GLP-1-based drugs for the treatment, for example, of obesity. In total, we have invested around $100 million in the expansion of the plant and the respective equipment for long-term customer orders, and it will start to pay off already in Q4 2025. Thank you for attending at the moment. Thank you very much. With this, I will hand over to our CFO, Bernd Metzner, for a deep dive into our financials of the second quarter.
Bernd, it's on you.
Thank you, Dietmar, and welcome, everybody, also from my side. Let's dive into the analysis of the key financials for the second quarter 2025. On a pro forma basis, revenues grew from EUR 596 million to EUR 601 million. This leads us to organic revenue growth by 1.9%. In our Plastics and Devices division, especially the growth in syringes and medical devices compensated for weaker development in our plastics business linked to oral liquids. In primary packaging glass, molded glass developed weaker, especially in the end market of cosmetics, while our tubular glass business grew, driven by a continued solid demand for ready-to-fill products, our high-value vials. Adjusted EBITDA went from EUR 125 million to EUR 119 million on a pro forma basis. This leads us to an organic adjusted EBITDA decline by 4.1%.
Organically adjusted EBITDA margin declined by 120 basis points to 19.9%, which is a touch better than we expected five weeks ago with around 19%. Adjusted EPS went from EUR 1.24 to EUR 0.90. This leads us to an FX neutral adjusted EPS decline by 27.9%, which I will explain on a more granular level later. Let's move on to the divisional development in Q2 2025. Plastics and devices. Pro forma revenues went from EUR 332 million to EUR 354 million. This leads us to an organic revenue growth of 8%. Growth was driven by the phasing effect in our syringes business, as well as continued growth of our medical devices business, compensating for weaker demand in our plastics business regarding oral liquids. Pro forma adjusted EBITDA declined from EUR 91 million to EUR 88 million. Organically adjusted EBITDA declined by 2.4%, and the according margin went from 27.4% to 24.8%.
The decline is impacted by lower revenues related to plastic closure systems with very high contribution margins and where the lower fixed cost absorption hit us especially. Furthermore, we had an outlier EBITDA margin last year. Primary packaging glass. Pro forma revenues went from EUR 264 million to EUR 248 million. This leads us to an organic revenue decline of 5.1%, as a weakness in our molded glass business could not be fully compensated with a strong development in tubular glass. In the most recent quarters, we anticipated that tubular glass will recover in the course of the current fiscal year, and Q2 speaks a clear language. Our vials business was growing in Q2. We had a better product mix, which was supportive for the margin development. In particular, the margin accretive ready-to-fill vials recorded for the third consecutive quarter a very, very strong top-line development.
Regarding the development of molded glass, I will provide further information on the next slide. Pro forma adjusted EBITDA remained at the previous year's level at EUR 45 million. This leads us to a very slight organic adjusted EBITDA decline of 1.1%. Consequently, organic adjusted EBITDA margin increased from 17.5% by 70 basis points to 18.2%. Advanced technologies. The operating performance was unchanged compared to the previous year's level. We are on track to start marketing of our on-body drug device in October 2025 and are conducting further feasibility studies with leading pharma companies for own IP-based drug delivery devices. Let us now move on to the development of our molded glass powerhouse in the quarter in detail. Pro forma revenues went from EUR 185 million to EUR 167 million. This led us to a decline in organic revenues of 9.3%.
The reason for the decline is predominantly based on a continued weakness in cosmetics. In addition, the development was also negatively driven by a decline in demand for containment solutions for oral liquid medications. Pro forma adjusted EBITDA margin went from around 19% to around 18%, driven by operating leverage. Net CapEx stood at EUR 27 million, which is about EUR 6 million higher than last year's pro forma net CapEx figure due to the current furnace overhaul projects. As a reminder, for molded glass, CapEx in 2025 is mainly driven by furnace overhaul projects in Lohr and Momignies, as well as investments into state-of-the-art furnace technologies. The next slide shows the reconciliation of the reported to the adjusted financials for Q2 2025. Revenues increased organically by 1.9%, and the adjusted EBITDA declined by 4.1% as discussed in all detail earlier.
Adjusted depreciation increased year-over-year due to the increased CapEx spend in the recent past, as well as the consolidation of Bormioli . For full year 2025, we expect the nominal growth rate to accelerate hand in hand with growth projects being executed and new capacities going online. We expect to end between EUR 210 million- EUR 220 million for adjusted depreciation. Regarding income taxes, the adjusted tax rate in Q2 2025 was 33.5% compared to 24.5% in Q2 2024. The tax rate in Q2 is not representative for the second half of the year. For the second half of 2025, we expect a lower tax rate compared to that of the first half. FX neutral adjusted net income after non-controlling interest decreased by 27.9% compared to Q2 2024. Coming now to the important cash flow development in the second quarter.
This is the highest operating and free cash flow since 2020 for a single second quarter of a year. The adjusted EBITDA increased from EUR 107 million to EUR 119 million. Regarding networking capital, the build-up was only EUR 15 million in Q2 and was supported by cash effective factoring in the amount of around EUR 16 million compared to around EUR 8 million in Q2 2024. The increase in net interest paid reflects the higher net debt level. Others improved due to insurance compensation received related to the flooding of our Morganton factory in the second half of 2024. Cash out related to net CapEx stood at EUR 60 million. Around 40% of this amount was allocated to molded glass. The remaining amount of approximately EUR 35 million relates to Gerresheimer, excluding molded glass. The majority of these EUR 35 million went into growth CapEx, such as our biological expansion projects related to GLP-1.
With these investments, we are laying the foundation for sustainable, profitable growth. As usual, we expect a strong improvement in free cash flow for the second half of the year compared to the first half. For the total year, we expect to end the year with a free cash flow of not more negative than minus EUR 100 million. Coming now to our financial position in detail. Our leverage per Q2 2025 stands at 4.03x , and we currently focus on deleveraging. Our liquidity currently stands at EUR 736 million and consists of our cash position of EUR 177 million and the undrawn revolving credit facility of EUR 558 million. Our net financial debt increased from EUR 1.033 million to EUR 1.943 million and was driven by the payment of the purchase price for Bormioli .
Looking at our liquidity and maturity profile of our net financial debt, end of May 2025, we extended our Bormioli acquisition bridge to September 2027. Until then, there's no need for additional external funding. We are focused on improving our free cash flow, as mentioned by Dietmar before, and strive for the full year 2026 to achieve a positive figure. With this, I hand back to Dietmar.
Yeah, thank you, Bernd. You see, this is not an easy year for our Gerresheimer. In some of the markets, we are really facing cold headwinds. Due to ongoing uncertainties in the cosmetic and oral liquid markets, we are widening the range of our expected organic revenue growth for the 2025 financial year to 0%- 2%. The organic adjusted EBITDA margin is expected to be around 20%.
The adjusted earnings per share will decline in the low double-digit percentage range compared to the previous year. We also said that we would give you an update on our midterm guidance together with our Q2 results. Development in the first half of 2025 has forced us to take an even closer look at our processes, structures, and costs, and to put an even stronger focus on free cash flow. We decided to have a clear goal here, and the clear goal is to be cash flow positive in 2026, and with this to accelerate the deleveraging. This influences our investment planning. Going forward, we decided to be even more selective with our investment project, accepting a slightly slower growth pace while maintaining our margin goals. This now leads to expected organic revenue growth of 6%- 9% and margin expansion to 23%- 25% in the midterm.
We expect the adjusted earnings per share to grow at a level of at least 10%+ . How do we get to midterm growth significantly above the overall market growth? Three main growth drivers will support us to achieve our midterm revenue guidance: the solid base growth in our classic portfolio, our high-value solutions, including ready-to-fill vials, cartridges, and syringes, and new integrated systems, and to an even larger extent, medical devices for biologics. This includes pens and autoinjectors, as well as our own IP solutions, such as our Inbeneo autoinjector or our on-body drug delivery devices. The next opportunity to check in will be our third quarter results for our fiscal year 2025, which will be published on October 10th. Please note that going forward, we will adjust the time of our conference call from 10:00 A.M. to 3:00 P.M.
Central European Time in order to better accommodate our U.S. investors and enable them to follow the call live. With this, I'm at the end of my short presentation. Thank you very much. We will now take your questions.
Ladies and gentlemen, if you would like to ask a question, please press nine and the star key on your telephone keypad. In case you wish to withdraw your question, please press nine and star again. Please press nine and star to register for a question. One moment for the first question, please. First up is Ed Hall from Stifel. Over to you.
Good morning, guys. Thank you very much for taking my questions. I just have a couple. The first one would be on your new facilities, and thank you for sharing some light there. I guess the question would be on utilization rates that you run these facilities at. How long does it take to ramp up this facility? I guess what I'm trying to get at is what utilization rate could we think of before these facilities start to be margin accretive? I know this is dependent on products, but a broad level would be really appreciated. I guess the second question would just be on sort of the notes to your financial statements. I saw you're making amendments to, sort of different lease liabilities and current and non-current assets.
I'm just curious if you could just talk through these changes, why you're making these changes, and what these changes are. That would be really helpful. Thank you.
Oh, good. It was hard to understand you. I understood the first question was around the ramp-up of the furnace and whether it's margin accretive.
Yeah, I think I'm more focused on Morganton and Peachtree , let's say. Peachtree .
Okay, that's easy. I can go through very quickly. The new furnace in Lohr is clearly ramping up from dawn on and will, of course, very clearly add to the growth in the second quarter. Also, the margins are good because we are actually expanding our capabilities in high-end food and beverage formats here. Peachtree is very clearly, it's a ramp-up of the autoinjector that takes place over the second half and has contributed already now in the last months, and it's very positive. The next level Peachtree is Peachtree Two. That will add to the sales and profits, late fourth quarter because we are in the ramp-up at the moment. The most added value we'll actually see from 2026 on. They are both, sale top line and bottom line accretive. You are referring to Morganton.
Morganton, very clearly after the flooding was down and we restarted production from May, and they are now, steadily ramping up and adding to the party. I hope this answers your question. The second one?
The second one was thanks for asking about the notes in our half-year financial report. The changes here in the current and non-current assets have various reasons. The key point is basically linked to our PPA for Bormioli . Actually, the accounting for the purchase price for the acquisition of Bormioli . Do you think also that we have disclosed here the bridge as non-current assets are concerned? It's very much linked to the PPA of Bormioli and the acquisition. I hope it helps for the time being.
That's clear. Thank you very much.
Next up is David Adlington from JP Morgan. Over to you.
Thanks for the questions. Maybe the first one just on the midterm revenue guidance. I understand there's not a compound growth the whole period. Maybe you could just talk us through how you're thinking about the cadence of growth period. You mentioned that the reduced revenue guidance was down to your decision to lower investment and you have not changed your underlying market assumptions with respect to growth. Second question, just wondered if you get an update into where we are in terms of potential divestment from all the glass business. Finally, do we have a date for the capital markets date, please?
Yeah, I'm actually happy to take the first question. I hope I got it right. It's about our midterm guidance. We have to clearly see, yes, we are even more selective in the CapEx, but you should not forget that a lot of the CapEx that we put into the ground in the last years is the CapEx that will contribute to the growth in the next years. Even though you don't see this at the moment, as a matter of fact, these investments already show growth and they will ramp as they ramp up over this year, and 2026 will clearly contribute to the business. I think we mentioned them several times. We are talking large volume autoinjectors, pens. We are talking syringes, high-end syringes. We are talking high-value tubular glass solutions like cartridges, vials, and these will actually pay off. The next was?
Molded glass.
Oh, molded glass review. Yeah. I think there's no major change. We will probably accelerate our strategic review on the molded glass business. We believe that we will be at a stage to inform the capital market after the summer. In the capital market after the summer, probably in fall, we will finally define the capital markets day. At the capital markets day, we are actually eager to not only present you the result of the strategic review, but also probably also the next segmentation, the new segmentation of Gerresheimer.
Maybe I could just come back to my first question. 6%- 9% revenue growth over the next sort of four years. Should we be thinking about the cadence of that? Is that going to be front half loaded because of the recent CapEx coming through, back half loaded because that's going to take some time to see the markets recover?
We are convinced that we will achieve this 6%- 9% over the loop of the planning period. It will not be necessary to believe that we will only achieve this at the end of the planning period.
Okay, thanks.
The next question comes from Oliver Metzger from ODDO BHF.
Good morning. Thanks a lot for taking my questions. First one, it's on your slightly adjusted organic growth guidance. Potentially, I've missed that, but can you tell us what has changed versus the beginning of June? Is it just of becoming even a notch more conservative, or has anything fundamental changed? The second one is on molded glass. About the turnaround, is it really that you see need for the analyzation of the cosmetics weakness, that basically growth will not be as negative as it is, or do you see already any fundamental turning to a better? The last one, very quick clarifying, you're at PD. You mentioned that the plastic closure business was weaker than expected. Is it correct that this business relates to Bormioli ? Thank you.
You take the first one.
I take the first. Oliver, thanks for asking regarding widening the range of our guidance short term for organic growth. This is basically very much linked to the fact that we have a certain backend loadedness in the second half of the year. Q4 will be definitely stronger than Q3. Due to the ongoing uncertainties in the cosmetic and oral liquid markets, actually, and given that we have relatively the visibility is not so high in these businesses, we thought for prudence, we are better off widening the range of the expected organic revenue growth from 1%- 2% to 0%- 2%. That's basically the background of it, Oliver.
Maybe to the second or third question, and they're all linked together. Yeah, in the end, I have to be very open. Why are we suffering in this cosmetic market and oral liquid market? Cosmetic is relatively clear because of Asia. It's a temporary thing. It will be over. The question is, what happens here with this oral liquid market? We actually always had an exposure to the oral liquid market, but it was not never relevant to really focus on this because the oral liquid market is a very, very stable, resilient market. This market is now at present really facing, similar to the injectables last year, a correction, a destocking, similar to the virus last year in injectables, just one year delayed. Our exposure to the oral liquid market was always there in the legacy Gerresheimer, if you might call it, in classic bottles, molded glass bottles.
With the acquisition of Bormioli , we actually increased our exposure to the oral liquid market because they have on the one side molded glass solutions. On the other side, that is pretty new to us in plastic packaging. They are doing most of the closures. Long answer to your questions, is this related to Bormioli ? The answer is the plastic packaging. It's correct because our exposure to oral liquids in the past primary plastic was pretty low and is now significantly increased because it's one facility of Bormioli that is very highly automated, very profitable, producing the closure systems, and they are, with the weakness of softness of this market at present, affected. I hope this answers your questions. It was a long answer, but I hope it helps.
No, absolutely, it does. Thank you very much.
Yeah.
Next up is Olivier Calvet from UBS.
Yeah, hi, morning. I've got two larger picture questions and then a couple of nitty-gritty. The first one, there's been a series of high-profile GLP-1 readouts year to date. You said you had a look as part of the midterm guide review, that your structures and pulls and pushes. Could you help us understand whether this has changed anything on your ramp from 2026? The second question was just beyond capital allocation and a dividend payout. It's helpful to see you guide now for positive free cash flow in 2026. Obviously, you are reviewing molded glass right now, which has deteriorated year to date. The acquisition drove your leverage up. You scrapped the dividend last month as a precaution, as you said.
Given where leverage is at, should you pay a dividend next year, or should we think of the dividend as something where you still see financial flexibility depending on where you are on group leverage? That's the second question. In terms of the nitty-gritties, I had one question just on the insurance compensation you received from Morganton in the second quarter and whether that was in your initial free cash flow guide. Secondly, you gave the revenue at Q1 for biologics. I was just wondering if you could do the same for the second quarter. Thirdly, you gave the pro forma revenue for P&D and PPG by quarter, which is super helpful. I'm just wondering if you had that as well for molded glass for Q3, Q4 last year, because we have that already for Q1, Q2, but not for Q3, Q4.
It would be helpful to explain what you're saying for the second half this year.
Yeah, maybe I start with the question, which I understood. If we miss something, please let us know. I start with the dividend. Regarding the dividend, basically, we keep this kind of routine. We decide about the dividend next year when we finalize our financial result. The decision is basically taken by the Board of Management, obviously, and then also by the Supervisory Board. We have not yet a decision on this topic. We cannot further comment on this topic. It will be decided next year in February, end of February. Regarding the increase of the compensation, second question, which I take is the insurance compensation. Yes, it was already included in our cash flow. One thing, Olivier, what you need to understand, we had really a damage. We really lost a lot of money. That was the reason why we actually get this compensation for.
We have an insurance, and therefore, we get compensated for that. What should not be forgotten, you have a certain threshold where you need to pay on your own. This is obviously, ultimately, such a damage hurts us, obviously. Indeed, we had, I think, in Q2, if I'm all close to EUR 20 million compensation of the insurance here. Now, I hand over regarding the midterm guidance topic. Guidance, I would hand over to you, and then I make number crunching for the other questions. Yeah.
Yeah, I have to repeat the question because it was so hard to understand. It was obviously around midterm guidance, whether the ramp-up of the new lines actually affects this. Honestly spoken, the ramp-ups are in plan. There was a smaller softness in the ramp-ups that actually is visible. 2025, for 2026, 2027, 2028, we are fully in plan. The ramp-ups are one of the reasons why the midterm guidance seems to be strong for you, but we are pretty confident that they will come. It's, by the way, not only because you always talk about GLP-1. It's not only GLP-1, but other lines that are ramping up. Yeah.
Sorry, just to confirm, acoustically, you said small softness in 2025, but then getting better in 2026, 2027, 2028?
It's actually not even softness. Sometimes if you see these ramp-ups are very steep, and if there is a one or two months delay by customer, by us, by whatever, then you, of course, see this. The ramp-ups are in plan now. The qualification is fully ongoing, and I'm confident for 2026 and the following years, of course.
One question was related to biologics. We have around EUR 100 million biologic revenues in the second quarter, 2025. Yeah, this kind of ballpark, just as a refresh, Q2 2024, it was EUR 75 million. You really see what Dietmar mentioned before, that really the growth is coming from especially biologics and also thereof. Obviously, GLP-1 is the main contributor for this kind of growth.
The point is, you have to see this. There is really a facing headwinds in some of the markets, and the result of this is that we are negatively growing. The compensation that we are growing at all comes actually very clearly from the growth areas, from the areas we invested in, from the high value, from the new devices, from the ramp-ups of the line. They clearly show the results, but it's just not enough to compensate for the negative growth in the areas where we are facing the headwinds. That's the point.
Yeah. Just the molded glass bit. I know last year was the last question. Last year was very two-H loaded. If I look at your EUR 735 million pro forma molded glass disclosure and what you've posted in H1, that implies around close to EUR 380 million of revenue in molded glass in H2. I was just wondering about the split between Q3 and Q4. I don't know if you have that. You're talking about the molded glass business, including, just to be precise, Bormioli and Gerresheimer. Okay. Maybe [Torsten], hand over to you because you are in the weeds. It's basically EUR 100 million for Q3 molded glass. It's including Bormioli , yeah?
It's pro forma, yes.
Okay, pro forma. It's actually EUR 179 million, is this correct?
Yes.
EUR 195 million for Q4. EUR 179 million Q3 pro forma molded glass, including Bormioli , Gerresheimer, and Q4 EUR 190 million.
Last year.
Last year, okay.
Yeah.
Got it. Thanks a lot.
The next question comes from Falko Friedrichs from Deutsche Bank.
Thank you. My first question is whether you could quantify how big this oral liquid container business is for you and also how much longer you think the destocking in that business could last. Secondly, on your cosmetics business, do you see any signs that this is in any shape or form improving somewhat so that it could be a little better in the second half? Lastly, on CapEx, and now that you said you're going to reprioritize a little bit, could you give us an idea how much CapEx should be as percentage of sales this year and also for the next few years? Thank you.
Yeah, maybe I start with the oral liquids. I would say we are on the oral liquids in the ballpark of 8%- 10% of sales, or total, including now plastic packaging and molded glass. What was the next?
Was regarding?
Cosmetic, yeah.
Oral liquid recovery.
We also here, we are back and loaded. It's one of the reasons why we expanded the bandwidth of the guidance, because exactly these areas of oral liquids and cosmetics are the areas with very low visibility. We are back and loaded in the fourth quarter. We became more prudent here. The recovery of the oral liquid, we see first indications, and we hope that the fourth quarter with the flu season and so on will get stronger again. Also, the destocking is coming to a certain slowdown or even finalized. For cosmetics, we expect a recovery over the loop of 2026.
Maybe to tackle your CapEx question, just to start with, as you know, we don't guide specifically for CapEx midterm. Actually, the reason for this is that we just want to have also opportunities, and that's basically why we are not precisely on the CapEx guidance. However, having this said, it's crystal clear. We will, this year, 2025, including Bormioli , not spend more CapEx than what we have spent last year. Last year, it was around EUR 350 million. We will be basically at max at this level this year, if not lower even. For the next year, as mentioned by Dietmar, we have a clear idea that we will also not be beyond EUR 350 million, but below EUR 350 million to make sure that we really have a positive free cash flow 2026. We are strongly committed for that. I hope it helps you.
That helps a lot. Thank you. One quick clarification question. Which year do you use as the starting point for this new midterm guidance? Is 2025 the base from which you want to grow 6%- 9% as a CAGR, or is it 2024?
I didn't get. It's definitely not 2024. The CAGR, I mean, it's a midterm guidance. Within the planning period, we will achieve, we are seeing that we achieve these figures that we are guiding for.
The logic comes based on 2025 and not 2024, which in the end doesn't make a big difference. That's the truth. As frustrating as it is, the growth in 2025 will not be so strong. The figures 2024 or 2025 will not be significantly different. Don't remind us on this topic.
Yeah.
Okay, got it. Thank you.
Let's finish. I said, sorry.
Next up is Curtis Moiles from BNP Paribas Exane. Over to you.
First one, I just wanted to get a little bit more color on the ready-to-fill vials, which sounded to be pretty strong so far this year. Can you talk a little bit more about what you're expecting through the rest of the year there? Is it going to be continued strong growth? Will we see a meaningful impact here on margins from this favorable mix? Secondly, talking about the net leverage currently around 4x , do you have any kind of, I know you're focused more on deleveraging here, do you have any kind of idea or thoughts on the timeline or the target level that you want to be at in the short to midterm? Any kind of comments there would be helpful. Thank you.
Yeah, I take the first one. It's an easy one. Do you want to do it?
No, no, no, please.
Because it's an easy answer. The ready-to-fill vials are growing, actually double digit, clearly contributing. If you look at the glass side, you also see an improvement of the margin. A driver of this margin improvement is actually coming from the high-value glass side. Just to tackle your question regarding the leverage, today we are at 4.0x. You know that our free cash flow, we have a second half of the year, which is always contributing positive free cash flow. Based on this, we will be sure that our leverage will not be at a max at 4.0x end of this year, lower even slightly than 4.0x end of this year, 2025. It is obvious, we don't think that this kind of leverage is healthy. We want to bring this leverage down. We have a leverage target of around 2.5x–3.0x.
This remains our, let's say, our guide or our logic where we want to strive for going forward.
Great. Thank you.
We're coming to the next questioner. It is Marleen Kaesebier from Reuters.
Hi. Thank you very much for taking my question. In regards to your review of the molded glass spin-off, I was wondering if there's anything specifically that would make you keep it and not sell it. What are you looking for in terms of that?
We are evaluating the different options and will come to a conclusion as promised over the course of the next month.
Okay. There's no details you can give in terms of what exactly you're evaluating?
That's correct.
Okay. Thank you.
There are no further questions.
Thank you very much for joining in to everyone. This ends our call today, our Q2 H1 earnings call. As mentioned by Dietmar, the next call will be on Friday, October 10th, scheduled for our Q3 2025 earnings release. Please note again that we will then hold our conference call at 3:00 P.M. in the afternoon to better allow our U.S. investors to participate on our earnings call. Thank you. With that, we'll end our call. Thank you and bye-bye.
Thank you.
Thank you.
The recording has been stopped.