Institutional Investors Signal Confidence in Gerresheimer Amid Accounting Review

Institutional investors buy in as Gerresheimer sells assets and faces legal probes over accounting irregularities. Key financials and audits delayed.

As the German packaging specialist Gerresheimer navigates a complex accounting review, a notable shift is occurring. Two institutional investors, CastleKnight Master Fund and Deka Investment, have recently established new positions in the company. Their move, executed while the share price remains under significant pressure, is being interpreted by market observers as a potential signal that the worst-case scenario may already be reflected in the stock's valuation.

Management's Stabilization Strategy

In response to the ongoing crisis, Gerresheimer's executive team has initiated several structural measures. A key decision involves the planned divestment of its US subsidiary, Centor, a profitable segment specializing in prescription drug packaging with a book value of 292 million euros. The company has engaged Morgan Stanley to oversee the sale. Concurrently, operations at the Chicago Heights facility are slated to wind down by the end of 2026, with production shifting to existing plants in Italy and India.

For the full 2026 fiscal year, management has provided guidance anticipating revenues between 2.3 and 2.4 billion euros. They project an adjusted EBITDA margin in the range of 18% to 19%, alongside a moderately positive free cash flow. The company has explicitly cautioned, however, about a weak performance in the first half of the year. This outlook has led to the postponement of both the Q1 results announcement and the Annual General Meeting, with new dates yet to be confirmed.

The Depth of the Accounting Crisis

The situation stems from an independent legal review which identified that revenues from so-called "bill-and-hold" agreements were systematically recognized prematurely, constituting a breach of IFRS accounting standards. The scope of the issue is now under a dual examination. Two audit firms, KPMG and Grant Thornton, are concurrently reviewing the financial statements for 2024 and 2025. Notably, KPMG only replaced the previous auditor, Deloitte, in the 2024 fiscal year.

Germany's financial regulator, BaFin, expanded its own investigation on March 6, 2026. Its probe extends beyond the erroneous revenue recognition to include unrecorded asset impairments, an inaccurate risk assessment related to the Bormioli Pharma financing, and potentially misstated lease liabilities totaling 65.5 million euros. Additionally, capitalized development costs of 29.4 million euros are under scrutiny.

Legal Repercussions Loom

The financial discrepancies are escalating into potential legal action. The shareholder association DSW has commissioned an expert report on the liability of former executives. Based on this, it is evaluating damage claims against ex-CEO Dietmar Siemssen, ex-CFO Bernd Metzner, and certain members of the company's supervisory board.

The pivotal moment for the company is expected in June 2026, with the anticipated release of the audited annual financial statements. Analysts agree that only once reliable figures are published and ongoing credit negotiations are finalized can the true extent of the accounting errors be assessed. This will also determine whether the recent investment moves by CastleKnight and Deka were founded on a sustainable basis for recovery.