Verallia records strong business recovery in Q2

Verallia records strong business recovery in Q2

Revenue growth reported by Verallia at constant exchange rates and scope excluding Argentina was +5.6% in H1 2021 compared with H1 2020.

Net income includes an amortisation expense for customer relations, recognised upon the acquisition of Saint‐Gobain’s packaging business in 2015, of €22 million (net of taxes). Excluding this expense, the net income would be €155 million.

After a first quarter still adversely affected by the health restrictions, the reopening of cafés, hotels and restaurants in the second quarter allowed Verallia to record robust organic revenue growth over the six‐month period. Adjusted earnings rose sharply in the first half, with a full contribution from the Group’s three main pillars for improvement, namely the increase in business activity (operational lever), positive spread and mix, and improved industrial efficiency. In view of these solid results, Verallia can raise its adjusted EBITDA forecasts for 2021”, commented Michel Giannuzzi, Chairman and CEO.

Revenue in the first half of 2021 totalled €1,328 million, a 4.2% increase on a reported basis compared with the same period in the previous year.

The impact of exchange rates was ‐3.5% in H1 2021 (‐€45 million), mostly linked to the depreciation of the Argentine peso and Brazilian real, and to a lesser extent, the depreciation of the Ukrainian hryvnia and the Russian rouble.

All product categories posted strong sales in the second quarter compared with last year, except for food jars, which were particularly buoyant in 2020 during the lockdowns in the second quarter. Spirits rebounded sharply in the second quarter as exports to Asia and the United States picked up.

Verallia generated a positive spread in all regions, with prices remaining stable in Europe and increasing in Latin America to offset cost inflation.

A particularly favourable product mix and a net reduction in production costs of €21 million also made a significant contribution to the improvement.

These positive developments largely offset the slight dip in activity attributed to continued destocking in the context of five furnace repairs and the successful start‐up of two new furnaces (in Spain and Italy) during the first half.

Almost 3,200 employees took part in the Group’s sixth employee shareholding offer. In France, the operation was well received, with nearly 75% of eligible employees subscribing.

As a result, employee shareholders now hold 3.54% of Verallia’s share capital, directly and through Verallia’s FCPE (corporate mutual fund). The percentage of employee shareholders is approximately 41%.

Provided there are no new widespread Covid lockdowns, the strong business performance in the first half of 2021 means that Verallia’s net sales should reach around €2.6 billion with volumes in 2021 returning to 2019 level.

The company also expects 2021 adjusted EBITDA to be higher than initially expected at around €675 million (compared with €650 million forecast in February 2021).

www.verallia.com

Image: Verallia’s employee shareholding aims to be 5% by 2025

Published: 
29/07/2021

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