Gerresheimer

We started building a position in our European Value Fund in German midcap Gerresheimer AG in April 2025. The long-term investment case is compelling: a global leader in pharmaceutical packaging and drug delivery systems like prefillable syringes and insulin pens, operating in a market driven by structural healthcare trends — ageing populations, chronic disease, and injectable biologics.

Then came a sharp profit warning in June. Execution setbacks, digestion issues of the recent Bormioli acquisition and weakness in certain segments like cosmetics triggered a sell-off, with the stock losing over 20% in a single day. The reaction was brutal with investor confidence shaken, and the company had to drastically cut its dividend to preserve financial flexibility.

But markets often overshoot. After a careful review, we decided to increase our position. The long-term fundamentals remain intact. Gerresheimer still holds a unique position at the heart of regulated, high-barrier medical packaging — a business that isn’t going away.

We believe valuation now offers a rare opportunity: the stock trades not only at a steep discount to its own history, but also to peers in the broader European packaging sector — including those exposed to far less resilient markets like coffee capsules and plastic bottles.

Management knows it has homework to do. But at this valuation, we believe the downside is largely priced in — while the upside, should execution improve or strategic interest materialize, could be substantial especially with rumours of PE taking the company private.

In investing, moments of doubt often create the best opportunities. We’re staying the course.