Mainz When Schott boss Frank Heinricht reports on the past 2022 financial year at the headquarters of the Mainz-based glass specialist Schott this Wednesday morning, he knows that one question is of particular interest: will the foundation company still list its pharmaceutical packaging division on the stock exchange? After United Internet announced at the beginning of the week that it was planning an IPO for its subsidiary Ionos in the first quarter, the Schott subsidiary is considered another stock market candidate.
It should stay that way, although Heinricht prefers to leave the topic to his chief financial officer, Jens Schulte. “There’s absolutely still something imaginable this year,” Schulte made clear. Two rounds of talks with the banks are scheduled for February and March. “We’ll take a look at the situation there,” added the manager. The economic environment has recently improved somewhat.
Last summer, the Schott management announced that it was considering an IPO for the pharmaceutical packaging business. According to information from financial circles, the company intends to sell up to 30 percent of the shares. Alternatively, it is also possible for an investor to get involved – for example another company, said Schulte. The legal spin-off of the division took place on August 1, 2022. Since then it has been called Schott Pharma AG & Co. KGaA.
But because of the poor general conditions, the Schott management initially refrained from the schedule to have the daughter listed at the beginning of 2023. Just a few months ago, the consequences of the war in Ukraine and high inflation had fueled concerns about a severe recession.
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Schott – the company belongs to the Carl Zeiss Foundation – manufactures glass and plastic packaging, such as ampoules and pharmaceutical bottles, at its subsidiary. In which, for example, the Covid vaccine is distributed. However, the corona business only accounts for a fraction of the total turnover. Much more important are, for example, syringes or bottles that are pre-sterilized and can be filled with active ingredients by the respective customer without much effort.
>> Read about this: Ionos, Euro Group, Stepstone: Companies consider IPO for 2023
The postponed IPO has not changed the growth plans for the pharmaceutical business. Heinricht emphasized that the division had double-digit growth in the past fiscal year (until September 2022). Precise figures are to be published shortly for the now independent subsidiary. Investments are also continuing, including a plant for polymer injections that recently went into operation in Müllheim (Baden-Württemberg).
Solid financed
51
percent
Schott can show an equity ratio. There is no time pressure when going public because the glass specialist is well financed.
There is no time pressure when going public because the glass specialist is well financed. The equity ratio rose from 41 to 51 percent in the last financial year. “This means that the value is over 50 percent for the first time, and we’re a little bit proud of that,” said Heinricht. Net liquidity increased from 170 million to 192 million euros. Sales rose by ten percent to EUR 2.5 billion, while earnings before interest and taxes (EBIT) increased by eight percent to EUR 422 million.
High energy and material costs are a burden
The financial year was very challenging with the high energy and material costs, said Heinricht. CFO Schulte put the additional costs in the mid three-digit million range. Nevertheless, the company intends to continue investing heavily. Investments are expected to increase from EUR 426 million to around EUR 500 million in the current financial year. “We won’t let ourselves be diverted from the path. There are many ideas that we believe we can use to generate good growth for Schott,” says Heinricht.
The most recent breakthrough in nuclear fusion in the USA was also achieved with special glass from Schott. The Mainz-based company supplied, among other things, laser glass, technical glass and filter glass. Another example is porous glass used in satellite engines. Schott is also working on making glass usable as a carrier material for semiconductors.
Precisely because there are so many ideas, the IPO of the pharmaceuticals division remains important. Because that would free up additional funds that the company could put to good use, also for the transformation to a climate-neutral company by 2030. In addition, the challenges remain great. Despite the gas price brake, energy costs are still too high. “So high that companies from the USA, for example, can compete with us,” said Heinricht. Nevertheless, sales are expected to grow between five and eight percent in the current year.
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