Earnings Call: Q2 2021

Jul 13, 2021

Hi, everybody. Welcome, and thank you for joining us today for our Q2 Conference Call. With me today are, again Dietmar Simson, our CEO and Doctor. Bernd Metzner, our CFO. As usual, we are presenting a set of slides accompanying the management's notes, the half year financial report and the presentation as well as the press release are posted on our Investor Relations website. Please note this call is being webcast live and will be filed on our website, too. Before we start, I have to remind you that the presentations and discussions are conducted subject to the disclaimer. We will not read the disclaimer, but propose taking it as read into the records for the purpose of this call. Now it's my pleasure to hand over to Dietmar. Edith Smith. Go ahead. Yes. Thank you, Caroline, and good afternoon, ladies and gentlemen. Of course, good morning to those of you joining us from overseas. Welcome to our Q2 conference call. The Q2 of the running fiscal year, we have proven our strength and accelerated our growth. The implemented measures for growth alongside our strategy formula G are now bearing fruits, and we are seeing clear We are on track for sustainable growth and are delivering to our promises. Let us start with the key takeaways of the Q2. In the Q2, we showed organic growth of 7.5% on group level and 7.1% Organic Revenue Growth for the First Half of the Running Year. This is actually the best first half of our company's history in regard organic revenue growth and it is time that we get used to these and hopefully even better figures Let us take a look at the bottom line. The organic adjusted EBITDA margin reached 22.8%, a good result on the back of increasing raw material and also energy costs. Adjusted earnings per share increased on FX neutral base by 19.1%. Our high value solutions are key growth drivers and showed again impressive growth rates and increased by roughly 40%. Especially in the areas of retrofit products like syringes, vials and biological solutions, which showed very good results. Yes, ladies and gentlemen, as we are already in the middle of the third quarter, we are looking confident into the second half of the year and into Q3 in particular to confirm our guidance for the fiscal year 2021 and also for the midterm. Why are we so confident to further accelerate the growth? It is all about innovative solutions. With our broad portfolio and capabilities, we enable our customers to be more successful and to offer better solution to their patients. Transforming our Gerasana into a solution provider and innovation leader. We're going to make this tangible With the implementation of our strategy, our future growth path is driven by innovation. I'm talking innovation in all areas of the business. Today, we'll deep dive into 3 focus areas: 1 GX Biological Solution. GX Biological Solution underlines our cross our approach and the importance of working as 1 garrison. The biological solution unit is a booster for growth in a dynamic growth market. 2nd point is digital solution. We leverage innovation through digital solution, identifying and anticipating new business opportunities of the future and third, we focus on sustainability. We secure competitive advantages and long term relationships through joint sustainable initiatives. Let us start with a deep dive into the GX Biological Solutions. Chart number 6 represents some of our current product portfolio, which we are steadily enhancing through innovation. Important for me to underline is Our base and volume business is rock solid as we are actually able to prove right now during the global COVID-nineteen pandemic. Are Innovation Solutions. Innovation becomes visible in 2 key areas Garo Sharma. On the one hand, we are expanding the value chain by taking over additional production steps or services for Our customers often in areas they don't define as their core business. For example, the washing and sterilization process are: With our joint approach as 1 Gerasama, we are looking for new combined solutions. That means that we will innovate in a cross divisional way, establishing combined solutions of glass Sande Glasten and offer our solutions with our global sales approach. On the other side, we move into smart products, defining digital business models and developing smart and connected devices. As announced, are: We are developing GX SenseAir, a platform for This is a major step forward and a milestone in the work of GEEX Biological Solutions. Are serving our biological customers alongside the whole development and production lifecycle of their products, starting with a standard vial or cartridge over a retrofit syringe in a small batch production for instance or to an injection device and a pump. In an early phase, we offer small batch volumes are: the very early beginning with highest quality availability and maximum reliability. This is what creates long term and sustainable customer relationships and partnerships. Sensia is one innovative example and proof that we are already today working on the earning Anticipating global megatrends in Pharma and Healthcare, such as the growing trend for more self medication. On body pumps like Sensia will improve the life of our patients worldwide. This is what Gerasama stands for, innovating for a better life every day. Global megatrends in Pharma and Healthcare offer new business opportunities and digital solutions will be the door opener for new business models. One example for a pharma megatrend, the global health care cost. They will continue to increase. Already today, about 30% of the global health care costs, that means about, for example, USD 700,000,000 in the U. S. Alone are caused by the lack of therapy adherence and patient monitoring. Through smart, digital and connected solutions, we increased the success of the therapeutics and help to reduce global health care costs. This is the innovation we are working on. And this is no future talk. It's something we're working on today. We implemented a digital innovation hub. Experts are forming a dedicated team with a particular focus on different disease fields. This is a key element in implementing our digitalization strategy, a deep understanding of critical diseases, impacts for patients and their doctors and the implications for global health care systems. This aspect is essential Let's have a closer look at RespirMetrix being one very good example for digital solutions. RespirMatrix is our first smart inhaler connecting patients with their doctors or disease managers through platform services. Mobile application allows the safe monitoring Also correct inhalation and the analysis of healthcare data. By that, we will increase adherence the Seize processes on our path to transform this into a growth company Garisama into a growth company as innovation leader and solution provider will continuously increase our capability in technology and data analytics with an irrevocable focus on customers and patient needs. The 3rd deep dive is about sustainability and our progress in the implementation of our sustainability strategy in the Q2. We are clearly committed to our sustainability future. This is reflected in our ambitious sustainability goals alongside our 3 strategic sustainable pillars, GX Pure, GX Circular and GX Care. We describe environmental, economic and social targets. For us, sustainability is a core pillar and a core strategic direction of our strategy Formula G. We see significant growth opportunities arising from joint sustainability initiatives, clearly aiming for innovation leadership and excellence. CO2 reduction is key in our sustainability strategy, and it is key for us to win new business. We invest into hybrid furnaces with next generation technology, replacing gas with green electricity and thus reducing our carbon footprint significantly. Additionally, we look and our leading market position in this innovative segment in pharma and more and more cosmetics as well. In the Q2, for example, we also signed the United Nations Global Compact. We joined the world's largest sustainability initiatives. Together with more than 9,005 and other companies, We are committed to support the 10 sustainability targets with regard to human rights, labor, environment and also anti corruption. Through our sustainability strategy, we support our customers in reaching their own sustainability targets. With that, I thank you for the moment and hand over to Bernd to elaborate on the financials. Thank you. Bernd, please go ahead. Thank you, Dietmar, and welcome everybody also from my side. Before we go into the analysis of our Q2 2021 speakers, I want to briefly summarize our achievements. First, the second quarter was strong, reaching more than 7% organic revenue growth, marking the strongest first half in Gareseimer's history With regards to organic revenue growth, we are well on track regarding our full year 2021 revenue growth guidance. 2nd, our revenues were particularly boosted by our key growth drivers. High Value Solutions grew again by 40% and Biological Solutions by around 50%. And very important, Adjusted EBITDA margin of 22.8 percent in Q2, in line with our guidance of 20 22% to 23% EBITDA margin for the full year. All in all, after the good start into the year, We managed to accelerate our organic revenue growth rate. And even more important, we expect this positive momentum at to continue in the second half of the financial year twenty twenty one. Now let's dive into the analysis of the key financials for the second Quarter 2021. Reported revenues in Q2 2021 increased to 3.7 EUR 7,000,000 translating into growth of 3.9% compared to Q2 2020. Adjusted for FX of around €12,000,000 we achieved strong organic growth of 7.1% year over year in our core business at 7.5% and 7.5% for the group. This is an impressive accomplishment in light of tough comps. Both divisions, Plastic and Devices and Primary Packaging Glass, contributed to the strong achievement, doubling the organic growth rate we achieved in the last quarter. Now let's turn to earnings. In our core business, we managed to reach an organic growth rate of 3.1 percentage points year over year For the adjusted EBITDA, we have with a corresponding organic margin of 22.8%. This is a strong achievement taking into account somehow higher input costs as well as tough comps in Q2 2020. For the group, the reported adjusted EBITDA reached €82,000,000 This includes FX headwinds of €3,000,000 Compared to previous year. For the first half, we achieved an organic adjusted EBITDA margin of 21.2%, which is on par to previous year's level of 21.4%. Bottom line, the adjusted net income increased by 8.5 percent to €40,000,000 or 1 point €28 per share. Adjusted for ex FX, the annual growth rate of the adjusted EPS amounted to 19.1 Now let's have a closer look into the divisions. Plastics and Devices. Revenues in Q2 amounted to €202,000,000 and were on par with Q2 D20. Adjusted for negative FX effects of €7,000,000 organic revenue growth was strong and reached 4.4%. Please keep in mind that we had a very high organic growth rate of 9% in Q2 2020. This was especially driven by a last year's COVID-nineteen related boost in the demand for plastic packaging and inhalers. Our RTF Syringes business again showed double digit revenue growth and we also achieved a strong Development in Primary Plastic Packaging, including Centaur. The adjusted EBITDA at Plastics and Devices reached €53,000,000 in the 2nd quarter. Given €2,000,000 FX headwind, the FX adjusted EBITDA was in line with last year's Q2, a quarter which faced significant tailwind by the aforementioned COVID-nineteen related boost with a favorable product mix. Against this background, we achieved a strong organic adjusted EBITDA margin of 26.2%, Much better than our 24.9 percent if you take our Q2 2019 as a reference the Primary Packaging Glass division reached an impressive organic revenue growth of 10.3%, fueled by mid Growth in our Tubular Glass business. The reported revenues in Q2 2021 amounted to €174,000,000 Due to FX effects, we lost almost €5,000,000 compared to Q2 2020. The strong performance in our Tubular Glass business once again benefited from high demand in high value solutions. Our high value solutions increased by 40% in Q2 2021 compared to Q2 20 20, mainly driven by Biologic Solutions, Elite and RTF. The adjusted EBITDA reached €38,000,000 in Q2 2021. Adjusted for FX effects, the organic adjusted EBITDA growth amounted to 7.8% year over year. This growth rate was achieved despite increasing energy costs amounting to a couple of 1,000,000. The organic adjusted EBITDA margin amounted to 22.3%. Now let's turn to Advanced Technologies. Revenues amounted to €2,000,000 in Q2 2021 and were in line with our expectations. Further, adjusted EBITDA loss in Q2 totaled minus €3,000,000 also as planned. Please note that GAT is not part of our full year 2021 and midterm guidance. For Q2 2021. Reported group revenues in Q2 came in at €377,000,000 adjusted for FX, we achieved a strong organic revenue growth of 7.5% year over year. EUR 82,000,000 Our main adjustments at the EBITDA level was for exceptional items mainly related Finally, I would like to conclude the review of the reconciliation slide with a comment on the reduction of our tax rate. In the Q2 2021, we were able to bring down our tax expenses both in absolute and relative terms. The underlying tax compared to the Q2 last year. The same is true for the first half. We were able to reduce the tax rate by 1 0.8 percentage points to 25.4%. This achievement shows that we are well on track to reducing the tax rate The key of the free cash flow in a single isolated quarter, a quarter is regularly not representative for the underlying performance. This was especially true for the Q2 2021 with a free cash flow of minus €26,000,000 with, as usual, a strong second half of the financial year. Depending on the execution of our CapEx plan, we expect positive free cash flow for the full year 2021. Just for the recollection, in the second Half of twenty twenty, we generated almost €100,000,000 free cash flow. Let me now explain the 3 drivers of our cash flow performance. 1st, working capital. The largest impact comes from the net working capital increase and the delta amounted to almost €40,000,000 in Q2 2021. This is a pure phasing effect. In Q1 2021, we were at EUR 40,000,000 better than in Q1 2020. Now we are EUR 40,000,000 worse. Be assured next quarter we will be better again, 2nd, taxes. The tax bill in Q2 2021 reflects a more normalized level than our tax payment last year. Last year, we had a tax benefit which reduced our payments one time. 3rd, CapEx program. We are executing on our unique business opportunities. As you know, we are sizing attractive business opportunities to accelerate our profitable growth performance. So we are investing, for example, Into the capacity extension for injectables and building up the capacity to accommodate the announced and attractive auto injector contract. All in all, the net financial debt stands at €1,000,000,000 The leverage amounts to 3.3 times compared to 3.2 times last year. As a reminder, the financial covenant for our revolving credit facility stands unchanged at 3.75 times. This covenant gives us solid financial headroom. To sum it up, We have doubled organic growth rates compared to the good start into Q1 2021. We expect the positive momentum At least to continue in the second half of the financial year twenty twenty one. Our structural growth and profitability drivers, namely High Value Solutions and Biologic Solutions are sustainable and will further contribute to profitable growth. With this positive outlook, I now hand back to Deepma. Deepma? Thank you, Bernd. Yes. Let me also sum it up a bit and look into the future. We are looking into a strong second half of the year. We will keep the momentum for growth with further large contribution from high value solutions. We see also growth from our capacity increase in syringes and vials as well as positive impulses from cosmetics. The growth drivers defined at the beginning of the year are developing as expected. To sum this up, You confirm our full year guidance and stick to our plan to deliver mid single digit organic revenue growth high single digit organic growth with an adjusted EBITDA margin of around 23%, 23 plus percent. The 3rd guidance KPI is on adjusted EPS, where we confirm to strive for growth of at least 10% per year. Ladies and gentlemen, we at Geras Hammer are on a mission. We are transforming our Garisama into a growth company as innovation leader and solution provider. With an intense focus on profitable, sustainable growth, we will consistently prove that the transformation is happening, And we will bring evidence to our long term guidance for high single digit revenue growth from 2022 onwards. With that, I hand back to Caroline and look forward to your questions. Thank you. Thank you for your presentation, both. So let's enter into our Q and A session. The lines are now open for your questions. The first question comes from David Ellington from JPMorgan. Please David, go ahead. Good morning, guys. Good afternoon, guys. Thanks for taking the question. 2, please. Just firstly, just wondered the sales growth benefits from price rises as you take through the price rises when you pass through pricing on are Just wondering how that impacted the second quarter and how we should be thinking of that being a tailwind into the second half and into next year. And the flip side of that is how much of the cost increase impacted you through this Q2 and for the rest of the year, please? Yes, I can take the first I didn't get the second part of the question actually, but I take the first part Easily, I think it's probably 1%, 1.5% of the growth that is driven by cost inflation. Are the cost inflation that we are handing over into price increases. Basically and then, David, for the What is left over, it's really a couple of 1,000,000, which basically we cannot compensate via higher Perhaps the price increase. But what is important, it's a pure temporary effect. So the reality is that in the end, you are able Our strong market position, and this is we see and this is backed also in the history of our company that we are able really are to hand over the cost inflation to our customers. And therefore, for the next year, actually, we think that we can compensate for 100% of the inflation if there might be inflation impact from this perspective. I hope it helps you, David. It does. Thank you. Maybe in terms of your when you gave guidance at the start of the year, how much have you baked into the revenue guidance for that basically, one in the end, this is 1 percentage point of growth, Which is now fueled into this kind of price increases, which we have not planned for. That's something like this 1 percentage point for the full year. Perfect. Great. Thanks, guys. Next question comes from Veronika Dubeyova from Goldman Sachs. Hi, Veronika. Hi, guys. Good afternoon and thank you for taking my questions. I have 2, please. First one is just on your confidence of further growth acceleration as we move into the second half of the year. Both, I guess, sort of a 2 part question, both in the second half holistically and then as you think about phasing 3Q versus 4Q. And then my second question, and apologies, both of these are very financial, but the free cash flow, I was wondering, Vern, whether you can give slightly more detailed bridge on how you get to stronger free cash flow generation, in particular when it relates to the various working capital elements And what your expectations are for where they should end up in the second half of the year? Thanks. Yes, Veronika, I take I'm happy to take the first question. The further growth, yes, I think in the second half are You will see further the high value products to proceed and very good. We have on top of this, there's a couple of launches we've planned earlier that are now taking place in summer, and we will benefit from them. And then there is a couple, of course, areas where We set up new equipment, new capacities, and they are steadily now coming in place, and they will also support us in the second half of 2021. Example is the ready to fill line, for example, in Brunde for the syringes that is now set up, And it will stand a steady ramp up over the loop of the next 6 months until it's then finally bringing the full capacity by end of 2021. But are We will definitely also see the volumes here before. And for the syringes, whatever you produce at the moment, you can easily sell. It's are The market is much stronger in demand than it is in capacity. Maybe just to take up your Your second question by Onica, thanks for that. As in the first, basically the trick is working capital for the second half of the year. For the 1st 6 months, we actually invested, in addition, around €80,000,000 in net working capital. And we think that we will have a release here of around €70,000,000 €65,000,000 for the second half of the year to end maybe with €15,000,000 buildup of working capital, which is almost in line with our organic growth. That's basically the trick. And here, you really get the release from and obviously contributing our strong EBITDA what we see for the next half of the year. That's basically the key of the answer. And obviously, 12% CapEx of sales is the assumption underlying. Next question comes from Chris Gritla from Credit Suisse. Yes. Hi, Carlin. Good afternoon, Dietmar Bernd. Actually, I have now a few questions. And first on the high value solution. If I remember right at the Capital Markets Day, that was indicated around 15% of sales of pharma sales. So if it grew at 40%, it's Largely kind of the large majority of the overall organic growth. Is this about correct? And the rest, like Manufacturing, etcetera, is not growing much. Would be that fair analysis? That would be a bit too much, but there's no doubt. The high value products are strongest contribution. Are Everyone is talking about the COVID vials. We should not forget that in Q2, for example, just by Eliteglass, we did twice the sales of the COVID sales. So The high value solutions are definitely performing strongly. In Q2 was a very special quarter for the contract manufacturing are As the 2020 Q2 was extremely strong because we benefited from the COVID strong demand in inhalers and diagnostic systems, but are also here in principle, we are well underway. And there will be quite some contribution coming with the second half of the year because we have a couple of launches that Support us in the yes, principle from August on. Okay. And then just on the gross project, not kind enough that you broke out at the time. Could you I think you already kind enough indicated that like the are The ES line in Boente is on track and also auto injector. And maybe could you give us a broader update on the growth Projects and how they track relative to expectation, particularly and if there is no any extensions to come that you're working on maybe? Yes, the growth projects are, of course, fully ongoing. And we should not forget, our Gerasim, the company we are talking about, is a company that actually in the last Never grew properly. And we are now we were disappointed in the Q1 showing 3 point what was it, 3.2? It was actually one of the best first quarters we've shown. We are now in the first half year 5.2%. It's a very strong value for the old Garasama. It's still not where we want to bring the company in the new Garasama, and we will get used These figures. But the growth so what I mean with this is the growth projects are clearly showing the first And it's like I spoke about in my speech, it's a combination, of course, of high value products on That we with a better sales structure, better customer on focus on customer, better excellence levels are more successful Selling to our customers. There's no doubt, not everything here moves as fast as I want. That's why it takes are But the order books are filling very nicely this year and gives us a lot of confidence into the guidance actually gave into the future. So I always talk about this growth path we are bringing the gallows hammer on. To be Honest, this is not future. We are there now. I don't know if you want to add something, Bernd, yes? Yes. Maybe Christoph, it's are You remember very well when we last year were in the Capital Markets Day. It was after our budget process. We basically predicted midterm that we have are growth, the CAGR growth mid term for High Value Solutions of around 20 percentage points, something like this, until 20 25, 2026. We will basically, we make now a new plan, midterm plan. And based on The experiences which we have now with this kind of strong growth contribution of value products, we probably have to adjust for the better. But that's basically where we are And it's too early to talk about because we have to revise now our plan, but the input data which we have are very And encouraging. Okay. And my final question would be on recipe metrics. Actually, Do you have any lead customer on that? And what's actually the time line to get that technology to the market? There's a couple of things I can't disclose, but actually the Respimatrix, our smart inhaler is working is developing very promising. Actually, it's one of the projects which we really like because it's actually ahead of the time plan. And it is not Unlikely, I have to say this very careful. It's not unlikely that we might see first sales also from this new product in the end of Okay. Good. Thanks. Now let me step back. Appreciate your comments. Yes. Now we have Odysseus Vanusiotis from Berenberg. Very happy to take your questions. Thank you very much, Carlin. Good afternoon. So I have three questions. Firstly, for the last several years, I mean, your 2nd half margins have been on average 300 basis points higher than the first half. So with this in mind and considering that You had 21% core business margins this half. What has changed to, Let's say necessitate a change of messaging in your full year 2022, 2023 percent margin guidance, Given that you might be suggesting the longer here. Second question, You did describe strong double digit growth in the syringes part of your plastics business, but Your overall growth was about 4%. What is pulling you back here? And when will the auto injector contract Manufacturing contract. You mentioned in the CMB will start kicking in, maybe this is something you can provide color. And thirdly, so profitability for the Glass division seems to be going A bit backwards compared to the last half despite some favorable growth and mix effects you had from your high value solutions. Do you have a margin outlook for this division for 2021? And is there anything also pulling you back Thanks a lot for the questions. I will take up the first question regarding the margin. Just to start with, We don't have a crystal ball, and therefore, it's very difficult to predict now how the inflation are continue, but what I just want to tell you, we have a margin range for the full year of 22 to 23 percentage points. And somehow, it depends whether we are going into the direction of 2023 or whether we are going into the direction of 2022. It depends somehow also about The development of the input costs, that's actually the situation as we see because as mentioned before, You have in a certain way temporary effect is the energy prices, for example, in CO2 certificates are increasing. But I can assure you that we will have in the second half of are Definitely a much stronger margin than in the first half of the year as we are used to it that the second half of the year is somehow stronger are in the first half of the year. Yes, Deepak? Yes, I would have answered this There's no change in the guidance and that's what we expect. But through the second, yes, you're right, double digit in the syringes and 4.4 in the plastic are The device divisions gives you the impression that the other areas are not growing. That's not completely right. That's what I said before. There's Tough comparison because the Q2 2020 was a 9. Something percent growth quarter, very strong with some tailwinds coming out of inhalers and diagnostic units that helped us a lot. But actually, the plastic packaging is also developing nicely at the moment. And The contract manufacturing looks in the second quarter flattish. This will look quite different already in the 3rd Q4 Back on the fact that we will also benefit from the auto injector that you are referring to that is in principle launching In August, yes, or now. And the 3rd question to the profit of glass that goes in the wrong direction is something I can't Confirm. Yes, that's why, Bernd, can you repeat the question again? Because I was concentrated on the first to answer the first one, Can you repeat the question regarding class again? Yes, of course. So I mean, you For the quarter speaking, you did mention a much higher growth compared to the rest of the division For your high value solutions in particular, but I don't think we saw a respective Change in the margins as in we didn't see a big lift in the margins, so to say, or end to be honest. So is there anything putting your margins back here? Are you having the mix effect that you expected here? There's no change in the margin. The run margin is developing nicely. Basically, if I look at the numbers, FX adjusted, you have 22 point 8% EBITDA margin in the Q2 of last year. Now we have 1 of 22.3 percentage points. And if you really zoom into, you could debate that certain energy prices We could not pass on to the increases. We could not pass on to the customers, but it's really only a temporary effect, as mentioned before. So really nothing to keep note of and we see that our margin will improving also in the next couple of quarters. So all good Andrew Soetor. Okay. Thank you very much for the clear answers. Jan Koch from Deutsche Bank. This is Jan Krog on behalf of Falko. Thanks for taking my questions. Firstly, you just mentioned the COVID vials. Could you provide an update on your current order book and your expectations for the next few years? Do you expect another increase in demand for potential booster shots? And in terms of pricing, have you noticed or do you expect any pressure here? And then secondly, on your cosmetic business, How is this business currently progressing? As this business was a headwind in 2020 and should now turn into a tailwind this year, are what can we expect from it in 2021? Yes, Cor, thank you for your questions. Maybe to the COVID-nineteen rough status, we've permanently built up additional capacities. I was reluctant In the beginning, no doubt about this because I was afraid that we wouldn't be able to use the machines after 2 years. But that is Different because we changed our strategy and we clearly see a long term demand not only for COVID virus, but as soon as the COVID demand runs out, We will switch this into most likely high value products like ready to fill wires. As such, we have built The lines in a way that we can either use them today or easily upgrade them to high value products and that's the right strategy. For the COVID vials, we are shipping constantly to our customers, serving the markets. We have in the first half of the year sold probably a bit more than 300,000,000 units, and you can in principle proceed with this along the year 2021, this means also for the second half in a similar ballpark. We have actually received, You're right. Demands in quite some sizable demand for 23 for COVID-nineteen virus, which indicates to me that also our key customers do not see that the whole thing is over. But we are happy to serve this market. It's good business. But as I said before, we should not forget that the key driver of the growth not comes from the COVID virus, but also from other areas. You also spoke about the price pressure. It's something we get a reasonable price for the COVID virus. We are not using the situation to get especially higher prices because I don't think that would be fair and it would not be appreciated by our customers. But it's a reasonable normal price are That we are receiving for these products. The bigger value you have with the COVID vials is significantly improved access to the customers. We have really significantly upgraded the performance of Gary Sheimer in the last, let it be 18 months during the COVID pandemic because we have different access to the players of the customers where you then in these meetings are not only talking COVID virus, but especially also the full portfolio. And that has really boosted the things that we anyhow planned without within the strategy. The cosmetic business, I could answer very short yes To your question, because yes, we are seeing cosmetic steadily coming back with the headwinds we received Last year, we're now seeing, of course, positive impacts, and it's coming back, the cosmetic business. And as I, in an earlier call, indicated, We are in principle from our market position today stronger than we were before. We have upgraded some of our facilities, a strong sustainability strategy, Increased capacities in decoration that really puts us in a different position. And cosmetic something we will probably see quite some positive news, not only in the second half, but also in the are Okay. Thanks a lot. Then we have Daniel Arthbank. Hi, Daniel. Hi, and thanks for taking my questions. 3, if I may. First one is, Can you talk about how the Centaur business performed in Q2? My second question would be Basically a clarification question on the time lines for your different input costs over what time you can pass them on to customers. I think there were differences between the different input costs. Can you clarify this? And then a last question refers to the support program by the German government for building up corona vaccine manufacturing capacity, including required products such as vials. Are Has this come into effect yet? Have you applied for grants here? How is this adding to your P and L, if at all and when? Thank Maybe Daniel, thanks for the further question. Just to take on your first or your second question Regarding the import costs, how we are managing this towards our customers, we actually have 2 topics. 1 is raw material, the other is energy. And regarding raw material, more or less, you are able significantly to translate this immediately based on contractual agreements to the customers. This is one piece. Then you have the other are the areas that are energy. And especially, if you have input cost increases in the energy, also here it's a temporary effect. But it lasts especially in the area molded glass, it lasts actually 6 months until you really can pass this on to the customers. It's basically this is basically the are So in the end, you have maybe a onetime effect, but not lasting. And I think this The key message other regarding Centaur. Bottom line is in line with previous year. The you see, however, some sales increases Because of the topic just mentioned, resin price goes up, you're passing a significant chunk to our customers. And this basically also are the sales and as mentioned by Deepma before, 1 to 1.5 percentage points overall for the company, you can basically attribute to this I can take the 3rd one, the support program of the government. The point is there is there will obviously be a support program coming from the government. If there is program, we will definitely apply for it and go for it. And this is in principle status I can give to you. Okay. So there has not been any Session taken, basically, yes. No. Okay. Thank you. Then we have a follow-up from Veronika Beyova from Goldman Sachs. Hi, guys. Thank you for taking my follow-up. Just sort of a big picture question And to slightly challenge you, obviously, you've seen some nice benefits from pricing this quarter that were a bit unexpected. And I think The growth rate is good, but if we strip out that pricing benefit, it doesn't seem to have accelerated meaningfully versus last year. So I guess kind of bigger question, what is not going to plan? And how confident are you still when you think about not just the second half of the year, but as I'm thinking about 22% and 23%, where you do have this high single digit growth ambition. Stripping out the pricing benefit from the first half, you're still only at about 4% to 5%. It seems quite Dan. And I guess along those lines, kind of what the path looks like to get to that high single digit growth rate. Thank you for the challenge, but I'm cool here. This challenge is easy to answer. In the Q1, actually, we didn't see Any price increases because here we didn't see them. It was in the Q2 and the 7.5% we showed, If you take this 1%, 1.5% price increase off, you're still at a solid level of 6%. So I don't think that there's Anything that goes wrong, we are very well underway. We have planned a stronger second half this year from the very beginning because we knew about the additional and new launches in the second half of the year, and that gives me a relatively solid confidence into The growth guidance that we gave for this year. Okay. Thanks very much. Are there any further questions? Yes, this is not the case. We would like to say thank you for joining us today. All the best. Stay healthy. Goodbye.