Packaging firm Verallia has said that 'agility and discipline' in terms of both cost management and business efficiency helped it navigate through a challenging second quarter.
Revenue at the Paris-based firm was down 9.6% to €630 million in the quarter, or down 5.4% at constant exchange rates.
Market Performance
Across the first half of the year, Verallia saw a revenue decline of 4.1% to €1.275 billion (-0.9% at constant exchange rates), while adjusted EBITDA fell marginally to €299 million (compared to €313 million in the corresponding period the previous year).
“Despite the expected impact of the COVID‐19 pandemic on activity in the second quarter, Verallia confirmed its resilience by posting a limited decrease in its revenue and a slight decline in its adjusted EBITDA margin over the first half of the year, while continuing to reduce its net debt," commented Michel Giannuzzi, chairman and CEO of Verallia.
"This performance reflects our agility and discipline in terms of both cost management and industrial efficiency."
In its Southern and Western Europe (SWE) region, comprising France, Spain, Portugal and Italy, half-year revenue was down 5.2%, with all markets impacted. France, where its exposure to the premium market is greatest, took the most significant hit, the group said.
In Northern and Eastern Europe (NEE), comprising Germany, Russia, Ukraine and Poland, revenue rose by 3.1% (+3.4% at constant exchange rates), while in Latin America, revenue was down by 12.2% on a reported basis but up 20.8% if foreign exchange effects are excluded.
Transformation Plan
Verallia said that it has implemented a transformation plan in France, to both adjust its production capacity and improve its performance.
The business is also facing competition from more competitive foreign glassmakers in neighbouring markets, a decline in exports, and a drop in sales in still wine.
The transformation plan will see the introduction of new 'flow-based' systems at the group's offices, and the decommissioning of a furnace at its site in the Cognac region, which is approaching the end of its service life.
Commenting on the business' future prospects, as well as its ability to trade during the COVID-19 pandemic, Giannuzzi added, "Once again, I would like to thank all our teams for their mobilisation throughout the crisis which enabled us to continue to serve our customers whose role is essential throughout the food industry supply chain.
"Lastly, we are permanently adapting the measures necessary to guarantee our teams’ safety and health."
© 2020 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: The European Supermarket Magazine.
