Gerresheimer AG, a maker of packaging for medicines and cosmetics, said an external investigation it commissioned has found evidence of probable accounting issues from last year and that the probe will continue.
After disagreeing with findings by Germany's financial watchdog last month, Gerresheimer now says that it is "more likely to assume" that it did indeed fail to properly recognize sales during the 2024 financial year.
An initial external probe by a law firm hired by Gerresheimer centered on roughly €3 million ($3.5 million) in booked revenue from a contract last year, the company said. The law firm will now investigate a further €25 million or so in income from similar contracts, it said.
The admission comes a month after Germany's watchdog BaFin said that Gerresheimer may have booked revenue for some client contracts despite the sales not having been realized. The probe of the accounts, set to last through Nov. 30, started because of "concrete indications," BaFin said. That revelation caused shares in the Dusseldorf-based company to plunge by as much as 38% on Sept. 24.
The government audit focuses on orders for so-called "bill-and-hold" agreements and seeks to clarify whether sales should have been recognized in financial statements for the 2024 or 2025 financial year, Gerresheimer said. Revenue from such agreements reached €28 million in the 2024 financial year, a small portion of the company's €2.04 billion total sales, the company said.
Gerresheimer will continue to fully cooperate with BaFin's audit, it added.
Germany's markets watchdog has taken a tougher tack on policing company accounts after being given more powers in the wake of the Wirecard AG scandal. The 2020 collapse of the payments company highlighted shortcomings at the regulator and undermined confidence in Germany as a place to do business.
Gerresheimer's shares have fallen about 65% in the past year amid the investigation and cuts to its outlook and dividend. The company has also been the subject of takeover speculation and seen as a prime breakup candidate due to the different nature of its two businesses.
