Gerresheimer's stock collapsed on Wednesday after the German medical equipment manufacturer disclosed that an expanded accounting review will negatively affect its 2025 performance and prompted a reduction in its outlook. The company also revealed plans to sell its U.S. packaging business Centor to bolster its balance sheet.
By 08:56 GMT, shares in Germany had fallen about 32%.
The intensified scrutiny stems from a decision by Germany's financial regulator BaFin in September to review the company's financial statements as of November 30, 2024, amid concerns that revenue may have been recognized prematurely on certain customer contracts. In response, Gerresheimer has appointed a second audit firm to examine revenue recognition and broader accounting practices for 2024 and 2025.
Gerresheimer said the results of that additional review will influence its 2025 outlook. In a statement, the company noted: "According to the findings to date, the new investigations initiated by the company indicate that individual employees have violated internal guidelines and IFRS (International Financial Reporting Standards) requirements."
The group has postponed the release of its results that had been set for February 26; it said a new publication date will be agreed with its auditor.
Executives at the company have already changed since the accounting issues came to light. Former CEO Dietmar Siemssen has left the company following a sequence of profit warnings and a significant fall in the share price, and CFO Bernd Metzner had resigned several months earlier.
In light of the ongoing reviews, Gerresheimer revised its 2025 expectations. It now anticipates revenue to move toward the weaker end of its prior guidance range - which covered a decline of minus 4% to minus 2% - or slightly better. The company also reduced its forecast for adjusted EBITDA margin to a range of 16.5% to 17.5%, down from its earlier projection of 18.5% to 19.0%.
Adjusted earnings per share for 2025 are now expected to fall by a high-double-digit percentage and could potentially turn negative.
Looking beyond 2025, Gerresheimer provided a revenue outlook for 2026 of about 2.3 billion to 2.4 billion. The company also said it will not proceed with a sale of its moulded glass business in 2026.
Immediate developments
- Gerresheimer has engaged a second audit firm to review revenue recognition and accounting practices for 2024 and 2025.
- The company announced plans to sell its U.S. packaging unit Centor to strengthen its balance sheet.
- Publication of the group's results scheduled for February 26 has been delayed pending agreement with the auditor on a new date.
This situation has triggered executive departures and a material downgrade to near-term profitability and earnings expectations, while the company sets out a modest revenue target for 2026 and halts a planned disposal of its moulded glass segment.