Schott Pharma Faces Headwinds in Fiscal 2024/25 with Revenue and Profit Declines
Mainz, Germany – Schott Pharma, the Mainz-based pharmaceutical supplier, has announced a challenging start to its fiscal year 2024/25, marked by revenue and earnings declines. The company cited high startup costs and currency effects as the primary reasons behind this performance.
"We anticipate increased momentum in the second half of the year, supported by additional capacities for glass syringes and sterile cartridges, coupled with existing contractual obligations," explained Almuth Steinkühler, Schott Pharma’s CFO.
Schott Pharma specializes in manufacturing syringes, pre-fillable polymer syringes, and sterilized glass vials for pharmaceutical use.
First Quarter Results Show Declines
In the first quarter, the company’s revenue dropped by 1% year-over-year to €230 million. Earnings before interest, taxes, depreciation, and amortization (EBITDA) decreased by 20% to €58 million. Net income also declined, from €45 million to €29 million, a year-over-year difference.
Andreas Reisse, CEO of Schott Pharma, reaffirmed the company’s guidance for high single-digit revenue growth in constant currency terms for the entire fiscal year. Regarding operating profit, Reisse indicated a goal of growth without specifying a target value.
Factors Impacting Performance
Schott Pharma attributed the disappointing first quarter results to several factors:
- High startup costs: The company has recently invested heavily in expanding its production capacities. These upfront costs have impacted profitability.
- Währungseffekte: The strong US dollar has negatively affected Schott Pharma’s revenue and earnings. The majority of the company’s revenue is generated in foreign currencies, and the depreciation of the euro has reduced the value of these revenues when converted back to euros.
- Increased competition: The global pharmaceutical supply market is highly competitive, and Schott Pharma is facing increased competition from both established and emerging players.
Outlook and Mitigation Strategies
Despite the challenges, Schott Pharma remains optimistic about its long-term prospects. The company is implementing several strategies to mitigate the impact of headwinds and drive future growth:
- Capacity expansion: Schott Pharma is investing in expanding its production capacity to meet growing demand for its products.
- Innovation: The company is committed to developing and launching innovative products to meet the evolving needs of its customers.
- Operational efficiency: Schott Pharma is focused on improving its operational efficiency to reduce costs and improve profitability.
"We are confident that our strategic initiatives, combined with the support of our customers, will enable us to navigate the current challenges and emerge as a stronger company," stated Reisse.
