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• Revenue: EUR268 million in Q3, a 21% increase year-over-year at constant currencies.

• EBITDA Margin: 28.2% at constant currencies, an increase of more than 3 percentage points year-over-year.

• HVS Revenue Share: 53% in the first nine months, aiming for over 60% midterm.

• Revenue Growth Guidance: Raised from 9%-11% to 11%-13% for fiscal year 2024.

• EBITDA: EUR76 million in Q3, a 37% increase year-over-year at constant currencies.

• Capital Expenditures: EUR24 million in Q3.

• Earnings Per Share (EPS): EUR0.31 in Q3, a 52% increase year-over-year.

• DDS Segment Revenue: EUR150 million in Q3, a 39% increase year-over-year.

• DCS Segment Revenue: EUR154 million in Q3, an 11% increase year-over-year at constant currencies.

• Free Cash Flow: EUR68 million in the first nine months.

• Investments: EUR81 million in the first nine months, mainly for capacity expansion.

• Warning! GuruFocus has detected 1 Warning Sign with WBO:1SXP.

Release Date: August 29, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Schott Pharma AG & CO KGaA (WBO:1SXP) reported a 21% year-over-year revenue growth in the third quarter, reaching EUR268 million at constant currencies.

• The company achieved a significant increase in profitability, with an EBITDA margin of 28.2%, up by more than 3 percentage points year-over-year.

• The company's HVS (High Value Solutions) revenue share reached 53% in the first nine months, aligning well with its midterm goal of over 60%.

• Schott Pharma raised its full-year revenue growth guidance from 9%-11% to 11%-13%, reflecting strong performance and market demand.

• The company is actively expanding its production capacities, with new facilities in Hungary and Germany, and a planned USD371 million investment in a new facility in the US to meet growing demand.

Negative Points

• The company anticipates a seasonally weaker fourth quarter due to the annual summer break, which may impact revenue growth and margins.

• There is ongoing underutilization in certain production areas, such as vials, which the company is working to address.

• Currency fluctuations have impacted reported sales growth, with a noted 6% negative impact from currency effects in the first nine months.

• The company faces ramp-up costs associated with expanding production capacities, which could affect short-term profitability.

• The market for GLP-1 therapies and mRNA treatments is still evolving, presenting uncertainties in demand and competitive dynamics.

Q & A Highlights

Q: Given we're one month away from your fiscal year end, why is there still a wide range for Q4 growth guidance? Also, how much of the EUR10 million to EUR15 million ramp-up spend has been completed at nine months? A: We delivered a strong growth of 13.1% at constant currencies for the first nine months, allowing us to increase the guidance for the full year. However, due to the ramp-up included in the fourth quarter, we anticipate some volatility, hence maintaining the guidance range of 11% to 13%. Regarding the ramp-up spend, specifics were not disclosed, but the impact is factored into our guidance.